Investigative Services

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Presentation transcript:

Investigative Services Lender Services Multifamily Services Dealer Services Data Services Investigative Services Employer Services BUSINESS SOLUTIONS

Forward Looking Statement Certain statements made in this presentation, including those related to First Advantage’s product expansion in its business segments, organic growth, expansion of distribution channels, consolidation of operations and geographic are forward looking. Risks and uncertainties exist that may cause results to differ materially from those set forth in these forward-looking statements. Factors that could cause the anticipated results to differ from those described in the forward-looking statements include: interest rate fluctuations; changes in the performance of the real estate markets; limitations on access to public records and other data; general volatility in the capital markets; changes in applicable government regulations; consolidation among both companies’ significant customers and competitors; the companies’ continued abilities to identify and complete acquisitions and successfully integrate acquired businesses; the market price of First Advantage’s Class A common stock; First Advantage’s ability to successfully raise capital; increases in First Advantage’s expenses; unanticipated technological changes and requirements; First Advantage’s ability to identify suppliers of quality and cost-effective data, and other factors described in both companies’ Annual Reports on Form 10-K for the year ended December 31, 2004, as filed with the Securities and Exchange Commission. The forward-looking statements speak only as of the date they are made. First Advantage does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made. 2

Company Fundamentals First Advantage Is Ranked Among Top Three In All Major Business Lines  Global Risk Mitigation and Business Solutions Provider  Nasdaq: FADV Publicly Listed Since June 2003 Merged with US Search.com    Headquartered in St. Petersburg, Florida Offices in the U.S. and throughout Asia-Pacific Over 3,700 Employees Worldwide    Majority Shareholder – First American Corporation 76% of Total Outstanding Shares  3

Financial Overview Service Revenue $596,105 $472,142 $388,776 $291,215 $239,571 $181,621 4

Investigative Services Business Segments Lender Services Multifamily Services Dealer Services Data Services Investigative Services Employer Services 5

Lender Services Overview:        Quarterly Restated Segment Results %  #1 Mortgage Credit Re-Sell Provider 45%+ Market Share #1 Provider to Fannie Mae & Freddie Mac 18 Out of Top 20 Lenders as Customers Industry Leading Services Best in Class IT Infrastructure Exclusive Distribution through First American Corporation       Service Revenue Operating Income Operating Margin 6

Lender Services Financial Overview Fourth Quarter Full Year 2005 2004 Lender Services: Service Revenue $39,364 $31,721 Operating Margin 27.0% 22.2% Full Year 2005 2004 Lender Services: Service Revenue $168,327 $135,201 Operating Margin 28.6% 28.2% 7

Lender Services Products Product Expansion Credit Reports - Tri-merged credit reports Line item verification Non-traditional home-buyers assistance Account Monitoring – Creditor contact information Credit score updates Fraud & Identity Theft Prevention – Detection Tax Return Verification OFAC Alerts Social Security Screening Strategic Marketing Solutions – Event Alert Triggers Credit Trend Data Decisioning – Credit automation software and services, credit application analysis and decisioning ● Product diversification into underserved markets: Bankruptcy Emerging Mortgage Markets Subprime ● Leverage First American market and distribution resources through a partnership with the strategic sales team ● International credit opportunities 8

Multifamily Services Fundamentals:      Quarterly Restated Segment Results %  #1 Provider of Resident Screening Information Services Approximately 35%+ Marketshare The industry’s largest, proprietary database of ~ 34+ million landlord-tenant records The industry’s largest, proprietary criminal database The industry’s only statistical scoring model – which enables delivery of superior screening results and provides business metrics & reports to property owners and managers     Service Revenue Operating Income Operating Margin 9

Multifamily Services Financial Overview Fourth Quarter Full Year 2005 2004 Multifamily Services: Service Revenue $14,121 $12,297 Operating Margin 13.9% 18.6% Full Year 2005 2004 Multifamily Services: Service Revenue $ 63,254 $ 54,135 Operating Margin 25.5% 22.7% 10

Multifamily Services Products Product Expansion Resident Screening: Industry’s only statistical scoring model ● Nation’s most advanced and comprehensive resident screening tool ● Industry’s only results-based statistical scoring model ● Introduction of advanced scoring model ● Target smaller landlords and apartment associations Renters Insurance: Resident liability insurance program ● Underwritten by First American ● Paperless program ● Tenant’s are prequalified ● Continue to cross-sell with other FADV multifamily product offerings Property Management Software: Web-based software for all apartment management functions ● Streamlines workflow & integrates operations ● Enforces policies across portfolio ● Control / track resident interactions & transactions ● Integration of capabilities across product offerings (SafeRent form use at PMS) ● Integration with renter’s insurance 11

Dealer Services Overview:    Quarterly Restated Segment Results %  #1 Automotive Credit Information Reseller Leader in specialized credit reporting to the Automotive, Recreational Vehicle, Marine industry, and Manufactured Housing industry Leading loan origination system processor of credit applications on DealerTrack network   Service Revenue Operating Income Operating Margin 12

Dealer Services Financial Overview Fourth Quarter Full Year 2005 2004 Dealer Services: Service Revenue $26,105 $16,820 Operating Margin 11.6% 8.9% Full Year 2005 2004 Dealer Services: Service Revenue $ 98,357 $ 69,842 Operating Margin 13.8% 11.7% 13

Dealer Services Products Product Expansion ● Bankruptcy Lead Automotive Credit Reporting – Industry leading automotive credit reporting service: Single and triple merge credit reports Identity verification Fraud detection Credit report analysis FICO and Bankruptcy risk scores ● Bankruptcy Lead ● Cross-sell Bar None lead generation services to existing dealerships Specialty Credit – Credit reporting services provided to the Recreational Vehicle, Marine and Manufactured Housing markets operating in similar fashion to Automotive 14

Dealer Services Products Product Expansion Credit Automation Software – Manages flow of credit information in and out of lending institutions Scorecards to approve / decline loans Loan Documents Action Letters Management Reports Highly Configurable: Decision Criteria Tolerance Rules ● Continue to develop third party distribution relationships Bar None Brand name credit-based lead generation and application processing for auto dealers 15

Data Services Overview: Quarterly Restated Segment Results Transportation Credit Reporting  Leading provider of business credit information to the $500 billion trucking industry % Subprime Credit Reporting  Proprietary database of subprime consumers Motor Vehicle Record Reporting  Comprehensive point of sale software Consumer Services  US Search–Leader in public information since 1994 Membership Services  Membership & credit customer service Criminal Records Reselling  Approximately 165+ million records Service Revenue Lead Generation  Full service on-line lead generation Operating Income Operating Margin 16

Data Services Financial Overview Fourth Quarter Full Year 2005 2004 Data Services: Service Revenue $29,839 $18,111 Operating Margin 28.5% 32.2% Full Year 2005 2004 Data Services: Service Revenue $ 91,699 $ 74,905 Operating Margin 32.1% 19.2% 17

Data Services Products Product Expansion Transportation Credit Reporting: Truckload carrier business credit reporting ● Proprietary database of truckload carrier receivables business practices ● 80% of leading truckload carriers as clients ● 34,000 carriers contribute regularly to database Driving records from all 50 states, Canada, and Puerto Rico ● Private network of direct-to-DMV interfaces ● Expand commercial fleet product offerings through cross-sell opportunities: Employment Screening Drug Testing Employment History ● Added promotional activity in key segments ● Increase client product awareness ● Cross-sell Fleet Management Services: Fuel Tax Reporting Permitting Motor Vehicle Record Reporting: Second largest MVR information provider to insurance, transportation and employment screening industries in U.S., Canada and P.R. ● Industry-leading software ● Multiple delivery channels ● Expand vehicle based products ● Target fleet and driver management services ● Improve margins with regional and niche market products 18

Data Services Products Product Expansion ● ID verification tool ● Improved database elements: Multiple Scoring Models Positive Payment History Information ● Improve system architecture for more efficient future product integration ● International expansion – Canada, Europe Subprime Credit Reporting: Nation’s leading source of subprime consumer information with 155+ million records ● Proprietary database of subprime consumer records ● Unique data and decisioning solutions for: Payday Advance Companies Subprime Auto Lenders Subprime Credit Card Issuers Subprime Consumer Finance Companies Criminal Records Reselling: Proprietary database of 165+ million felony and misdemeanor records ● NationScan ● Utilizes multiple criminal record sources ● Continue to develop new features / services with business partners: Access to FADV SafeRent database ● Access tailored to volunteer agencies ● Access tailored to dating organizations 19

Data Services Products Product Expansion Consumer Services (US Search.com): Market leading internet public record location and background data services ● 1.2 Million customer database ● 42 Million unique consumer visitors per year ● Expand customer base through the addition of subscription based membership offerings: Example: Home Value Membership ● Pursue new advertising channels ● Integration into core products with added cross-sell opportunities Membership Services: Consumer credit reporting, credit monitoring, identity theft, and membership-based services ● Third Party Administrator ● Private Label ● Retail ● Expand and focus on membership retention and customer service 20

Data Services Products Product Expansion Lead Generation: On-line lead generation marketing tool targeting the automotive, mortgage and micro-loan vertical markets ● Sales lead generation ● List management ● Affiliate network marketing ● Poised to capitalize on increasing recognition of Internet marketing advertising influx ● Increase growth into Mortgage and Real Estate lead generation market coverage ● Continue to pursue relationships with publishers and advertisers 21

Investigative & Litigation Services Overview: ($ 000’s) Electronic Discovery  First to market in Asia and foreign languages  300 Years combined experience Quarterly Restated Segment Results % Computer Forensics  Largest commercial computer forensics lab on the east coast  Continuously trained staff Data Recovery  Industry leading R&D capabilities  16 Terabytes of data recovered monthly Due Diligence Reporting  Finest due diligence reports in the industry  Better priced reports, more complete, and more consistent Insurance Fraud Surveillance  National leader specializing in the detection and exposure of worker’s compensation, disability and liability insurance fraud Service Revenue Operating Income Operating Margin 22

Investigative & Litigation Services Financial Overview ($ 000’s) Fourth Quarter 2005 2004 Investigative Services: Service Revenue $11,438 $ 7,027 Operating Margin 9.4% 4.1% Full Year 2005 2004 Investigative Services: Service Revenue $ 34,580 $ 25,714 Operating Margin 6.1% 3.5% 23

Investigative & Litigation Services Products Product Expansion Electronic Discovery: ● Consulting ● Data collection and preservation ● Data conversion, delivery, review & production ● Office and employee expansion to provide a full array of service offerings  Unique foreign language conversion Computer Forensics: Over 30+ staff experts consisting of engineers and licensed forensic examiners ● Litigation support ● Proving or disproving fraudulent activity ● Intellectual property theft ● Continue to cross-sell with other FADV investigative product offerings 24

Investigative & Litigation Services Products Product Expansion Data Recovery: Information recovery from all types of media ● Disasters and accidental data loss ● Restore data to tapes and hard drives ● Broadened product reach through formal reseller program – computer stores and re- sellers are able to sell our service ● Established automotive intake system to accept client media at various FADV locations for transfer to clean rooms Due Diligence Reporting: Standardized due diligence process on the following: ● Hedge fund managers ● Investment banking backed business people ● Managers receiving private equity from funds ● Expand the breadth of service offerings through added staff and management 25

Investigative & Litigation Services Products Product Expansion Insurance Fraud Surveillance: Specializing in detection and exposure of worker’s compensation, disability and liability fraud ● Surveillance ● Fraud Investigations ● Background and database investigations ● Cross-sell fraud surveillance services to other First Advantage customers, i.e. large self-insured organizations ● Further diversify and expand into additional markets 26

Employer Services Overview: Quarterly Restated Segment Results 27 Background Screening Services  Third largest verification provider in the U.S. % Occupational Health Services  Second largest drug screening marketplace provider Tax Consulting Services  Hiring & Location, Transportation, and Sales & Use Tax Consulting Hiring Management Systems  Employer applicant tracking system Recruiting Solutions  Electronic job board distribution  Interactive advertising programs Assessment Solutions  Skills testing products & services Service Revenue Biometrics  Fingerprinting applications Operating Income Operating Margin 27

Employer Services Financial Overview Fourth Quarter Full Year 2005 2004 Employer Services: Service Revenue $39,388 $30,797 Operating Margin 11.2% 12.4% Full Year 2005 2004 Employer Services: Service Revenue $143,839 $115,461 Operating Margin 10.4% 9.2% 28

Employer Services Lifecycle 29

Employer Services Products Product Expansion Background Screening Services: Products and services that assist in screening applicants for jobs, and monitoring ongoing employment qualifications ● Over 80 various background searches ● Largest provider of pre-employment screening in Asia-Pacific ● New specialty product offerings: Vendor Check ● Cross-sell new product acquisitions: Biometrics Hiring Management Solutions Occupational Health Services: ● Substance abuse testing ● Compliance management ● Physical exam management ● Employee assistance programs ● FADV branded specialty testing products ● Introduction of compliance monitoring tool for industries requiring professional credentialing 30

Employer Services Products Product Expansion Tax Consulting Service: ● Hiring and location-based tax incentives consulting Work Opportunity Tax Credit/ Welfare to Work State Hiring Credit Enterprise Zone Credits Investment Credit Training Grants ● Transportation consulting services - Fleet management ensures trucking fleets are in compliance with state and federal regulations ● Sales and use tax consulting ● Continue to increase service offerings through acquisitions and organic growth ● Expand tax credit target market Manufacturing Processing Distribution Technology 31

Employer Services Products Product Expansion Hiring Management Systems: ● Web-based employer applicant tracking system Open-position management capability: Create job requisitions Post position openings Accepting applications Schedule interviews Evaluation of applicants Coordinate background checks ● System available in 12 languages ● Language translation capability for cross-sell opportunity with First Advantage Quest employee screening unit ● Bundle service opportunities with other FADV human resource services Recruiting Solutions: ● Electronic job board distribution in single input format ● Interactive advertising programs attract passive job seekers based on the websites they visit ● Strong fit with Hiring Management Systems 32

Employer Services Products Product Expansion Assessment Solutions: ● Pre-employment testing and educational skills assessment Over 800 products in 14 languages test for competency in the following areas: MicroSoft Office knowledge Clerical Computer literacy Information Technology Call Center Legal areas ● FADV sales force will offer skills assessment products to existing customers. ● Product will be offered through the FADV Hiring Management System Biometrics: Capture, store and transmit fingerprints to federal and local authorities for background screening purposes ● Cross-sell with related background screening services 33

Employer Services Cross Sell Initiatives  Employer Services cross sell business closed as of 1/31/06: Approximately $2 Million  Clients include 143 of Fortune 500 and 211 of Fortune 1000 companies  74 Cross sell team members  Cross sell pipeline currently at $20 Million and has grown 400% over last 6 months  82 Cross sell referrals within Employer Services in last 90 days  Target: Achieve 15% organic growth in 2006 through cross sell initiatives  Common salesforce automation platform for tracking segment sales activity 34

Employer Services Cross Sell Initiatives Cross Sell Compensation Program:  Salesperson must demonstrate active participation and support of customer to referral sales counterpart  Commission eligibility: 1% - 5% of net customer revenue billed Intra-Division Seller Awareness Training:  Salesperson training completed in: Tax Consulting Services Background Screening Drug Screening International Biometrics Recruiting Technologies  In-house and remote web-ex/virtual training on qualified lead referral subject matter: Outline rules of engagement, synergy building 35

Distribution Channels Operations Consolidation Maximize Shareholder Value Shareholder Value Platform for Continued Growth Capitalize on Segment Synergies Organic Growth Capitalize on Single Source Concept Capitalize on Client Relationships & Customer Service Distribution Channel Expansion Distribution Channels Continuing Development of Sales & Product Teams Increased Expense Control Efficiencies Operations Consolidation Continued Systems Integration and Functionality Target International Markets Geographic Expansion Foreign Language Translation Capability Increase Marketshare through Acquisitions Product Diversification Product Expansion Bundled Service Offerings Partnership Opportunities 36

Product Expansion  Product Diversification Online talent acquisition services: Recruitment advertising Applicant tracking Web-based skills testing Expand product offerings to unique customer base    Bundled Service Offerings Automotive Credit Reporting & Lead Generation: Bankruptcy Lead Generation Lifestyle Lead Generation     Partnership Opportunities Employer Services: Business Development teams used to strengthen alliances with partnerships such as payroll companies and job boards   37

Geographic Expansion  Target International Markets Implemented Subprime Expansion to Canada Market Leader in Asia-Pacific region India(4) ● Beijing ● Hong Kong ● Tokyo ● Singapore ● Philippines ● Perth Potential Growth Markets Europe Latin America     Unique Foreign Language Translation Capability Only eDiscovery firm to provide complete foreign language processing and translation service   Increase Marketshare through Acquisitions Presence in U.K. due to acquisition of applicant tracking system  38

Operations Consolidation  Increased Expense Control Efficiencies  Reduce IT maintenance costs by providing a single client interface  Continued Systems Integration & Functionality Employer Services: Migrate clients to improved system platform Improve webdesign to better showcase products Multifamily Services: Complete customer migration to First Advantage SafeRent Develop new features and services: Enhanced Scoring Model Property Performance Analytics       39

Distribution Channels  Distribution Channel Expansion Data Services – Lead Generation:   Drive additional lead generation through alternative channels (automotive, subprime, mortgage, payday stores) Entry into Student Lending and Education vertical markets Target leads on a state and regional level    Automotive Credit Reporting:  Utilize subprime Teletrack business to target bankruptcy lead generation  Continuing Development of Sales and Product Teams  Partnership with First American Strategic Account Sales Team 40

Organic Growth Potential  Projected Organic Growth Rate ~ 8.0% to 10.0% (2006 Consolidated)   Capitalize on Synergies Between Segments Cross-sell existing products Cross-sell products from recent acquisitions Shared sales force with First American     Capitalize on Single Source Concept Unification of corporate identity   Capitalize on Client Relationships Secure domestic business of multinational overseas clients No single customer represents more than 5% of FADV service revenue    Capitalize on Levels of Customer Service Strong customer base Broader coverage of service offerings   41

Summary  Ranked among Top 3 in all business lines  Maximize revenue and earnings potential through continued strategic initiatives: Acquisitions Product and Market Expansion Partnerships  Continue to seek global growth opportunities  Cross-sell opportunities across business lines  Seasoned management with proven expertise in executing growth strategies 42