ChoicePoint's net income falls in 2006
ChoicePoint Inc.'s net profit dropped 88 percent as revenue rose in 2006, impacted by charges related to a data breach and facility consolidation.
ChoicePoint, an Alpharetta, GA-based provider of identification and credential verification services provider, said it had a net income of $16.9 million on about $1.1 billion in revenue. This compares with net income of $140.7 million on $1 billion in revenue in 2005.
ChoicePoint collects data on individuals, including Social Security numbers, real estate holdings and current and former addresses. It also offers businesses, government agencies and nonprofit organizations software technology and information designed to anticipate and respond to economic and physical risk, and analyzes information for the insurance sector. The company holds about 19 billion records.
The results for 2006 include $11.8 million in charges from a Federal Trade Commission settlement. The financial penalty related to a data breach by identity thieves that was disclosed in February 2005. It involved thieves posing as small business customers and gaining access to ChoicePoint's database, possibly compromising the personal information of 163,000 Americans.
The results also included $2.6 million in charges for lease abandonment, impairment and the consolidation of facilities.
Results also included a benefit of $10.6 million related to the reversal of estimated future selling costs associated with the company's decision to retain its marketing services business.
In December, the company's board of directors had decided to retain its marketing services business after in July said it intended to divest this business as part of a companywide strategic review. ChoicePoint Precision Marketing, a provider of direct marketing technologies and services, has about 670 employees in offices nationwide.
In the fourth quarter, the company had net income of $23.7 million on $266.6 million in revenue for the three months ending Dec. 31, compared with a net income of $27.7 million on $248 million in revenue in the same period of 2005.