EXHIBIT 99.1
IFOX LOGO
Contacts:
Chief Executive Officer SVP Finance
Zach Lonstein William McHale
Infocrossing, Inc. Infocrossing, Inc.
201-840-4710 201-840-4732
zlonstein@infocrossing.com wmchale@infocrossing.com
Media Relations Investor Relations
Michael Wilczak Matthew Hayden
Infocrossing, Inc. Hayden Communications, Inc.
201-840-4941 (760) 487-1137
mwilczak@infocrossing.com
INFOCROSSING REPORTS EARNINGS OF $0.08 PER SHARE
FOR FOURTH QUARTER
2003 REVENUE AND EBITDA REACH RECORD LEVELS
LEONIA, NJ, MARCH 18, 2004 -- INFOCROSSING, INC. (NASDAQ: IFOX), a provider of
strategic information technology and business process outsourcing solutions,
announced today financial results for the fourth quarter and full year ended
December 31, 2003.
For the fourth quarter, Infocrossing reported revenue of $14.4 million, a 7.5
percent increase compared with the $13.4 million reported for the fourth quarter
of 2002. Revenue growth was driven by sales to both new and existing clients
amid continued demand for the Company's strategic outsourcing services. Net
income to common stockholders was $1.2 million, or $0.08 per diluted common
share, compared to a net loss of $1.8 million, or $0.34 per common share for the
fourth quarter of 2002. The fourth quarter of 2003 marks the first time
Infocrossing has reported positive earnings since the third quarter of 1999.
Earning before interest, taxes, depreciation and amortization (EBITDA) increased
24.2% to $2.8 million in the fourth quarter of 2003, compared with $2.2 million
reported in the same quarter last year. Infocrossing uses EBITDA because it
considers such information an important supplemental measure of the Company's
performance and believes it is frequently used by securities analysts, investors
and other interested parties in the evaluation of companies with comparable
market capitalization to the Company, many of which present EBITDA when
reporting their results. A reconciliation of EBITDA with net income follows in
the Summary Consolidated Statements of Operations.
Fourth quarter earnings include a credit to accretion of $0.6 million, or $0.04
per diluted common share, recorded in connection with the redemption of the
Company's Series A Preferred Stock during the fourth quarter of 2003. The
weighted average number of shares for 2003 reflects the issuance of 13,147,800
shares and equivalents in a private placement completed in October 2003.
Earnings for the fourth quarter benefited from increased revenue, operating
leverage and the elimination of $2.4 million in accretion and dividends to
preferred shareholders as a result of the redemption.
"I'm very pleased with our results for the fourth quarter," stated Zach
Lonstein, Infocrossing's Chairman and Chief Executive Officer. "Our revenue
continued to grow on the strength of our strategic outsourcing value
proposition, and the effects of the private placement and redemption enabled
Infocrossing to report positive earnings per share for the first time in 16
quarters. We expect to use earnings per share as the measure of our success
going forward."
For the full year ended December 31, 2003, Infocrossing reported record revenue
and EBITDA results on the strength of sales to new and existing clients.
Highlights of fiscal 2003 performance include:
o Delivered positive earnings per share of $0.08 in the fourth quarter of
2003
o Increased net cash provided by operations to $5.9 million in 2003, a 374%
increase compared with the $1.3 million in cash from operations during
2002.
o Increased cash by 43% to $10.1 million at December 31, 2003.
o Achieved record revenue of $55.2 million, an 8.8% increase compared with
revenue of $50.8 million in fiscal 2002.
o Reported net income of $1.4 million for 2003, compared with $1.1 million
for 2002. Excluding a $2.8 million non-recurring expense credit in the
first quarter of 2002, 2002 results would have been a net loss of $1.7
million.
o Achieved record EBITDA of $10.0 million. In 2002, Infocrossing reported
EBITDA of $8.8 million including a $2.8 million non-recurring expense
credit recorded in the first quarter related to the settlement of a dispute
with a software licensor. Excluding this one-time expense credit, EBITDA
would have been $6.0 million in 2002.
o Raised $76.5 million through a private placement of the Company's common
stock.
o Recapitalized the Company's balance sheet to improve shareholders' equity
by $43.0 million to positive $30.8 million at December 31, 2003 compared
with a negative $12.2 million at December 31, 2002. As a result of the
recapitalization, Infocrossing reported positive earnings per share in the
fourth quarter of 2003, and expects to report positive earnings per share
in 2004.
Net loss to common stockholders for 2003 was $5.5 million, or $0.76 per common
share, taking into account the effect of the recapitalization announced in
October 2003. This compares with a net loss of $8.2 million, or $1.52 per common
share, for 2002. Excluding the effect of the $2.8 million of expense credits
recorded in the first quarter of 2002 related to the settlement of a dispute
with a software licensor, net loss to common stockholders would have been $11.0
million, or $2.05 per common share, for 2002. The net loss to common
stockholders includes non-cash items for accretion on redeemable preferred stock
and accumulated preferred stock dividends totaling $6.9 million, or $0.94 per
common share, for 2003, versus $9.3 million, or $1.74 per common share, for
2002.
Building on the success of 2003, on March 4, 2004 Infocrossing announced the
planned acquisition of Systems Management Specialists (SMS) for $36.5 million in
cash and Infocrossing stock. SMS, headquartered in Orange County, California,
provides computing operations, business process outsourcing and managed
application services to nearly forty clients primarily in the western United
States. The deal will combine two strong regional service providers with
complementary services to create a single outsourcing company with national
scale, an impressive client base, multi-platform expertise and a full complement
of outsourcing solutions. SMS is expected to add approximately $33 million to
Infocrossing's gross revenue during the first twelve months following the close
of the transaction, and be accretive on an earnings per share basis in 2004.
"This was an impressive year for Infocrossing and its shareholders," added Mr.
Lonstein. "Growth in revenue throughout the year and the leverage of our data
center infrastructure enabled Infocrossing to improve shareholder equity and
return the Company to positive earnings in the fourth quarter. With the planned
addition of SMS and the continued growth of our business, we are positioned to
deliver even greater results in 2004, and realize our vision of becoming a
recognized leader among providers of strategic outsourcing services in the
United States," Mr. Lonstein concluded.
Infocrossing will hold a teleconference to discuss fourth quarter and full year
results with the financial community today, March 18, 2004, at 11:00 a.m.
Eastern. Dial in: 1-800 475-2151 or 973-582-2710 for international callers, at
least ten minutes before the start of the call. Or to access a simultaneous
listen-only webcast of the call, you can do so via the Infocrossing website
(www.infocrossing.com). A telephone replay will also be available until March
25, 2004 starting one hour after the conclusion of the teleconference.
Interested persons may listen to the playback of the teleconference by calling
1-877-519-4471 toll free or 973-341-3080 for international callers and entering
the pass code number 4597874.
"EBITDA" is defined as earnings before interest, income taxes, depreciation, and
amortization. EBITDA has limitations as an analytical tool, and you should not
consider it in isolation, or as a substitute for analysis of our results as
reported under GAAP. Some of these limitations are: (a) EBITDA does not reflect
changes in, or cash requirements for, the Company's working capital needs; (b)
EBITDA does not reflect the significant interest expense, or the cash
requirements necessary to service interest or principal payments, on the
Company's debts; and (c) Although depreciation and amortization are non-cash
charges, the assets being depreciated and amortized may have to be replaced in
the future, and EBITDA does not reflect any cash requirements for such capital
expenditures. Because of these limitations, EBITDA should not be considered as a
principal indicator of the Company's performance. The Company compensates for
these limitations by relying primarily on its GAAP results and using EBITDA only
supplementally.
ABOUT INFOCROSSING, INC. (http://www.infocrossing.com)
Infocrossing, Inc. (IFOX) is a provider of strategic outsourcing services,
delivering the computing platforms and proprietary systems that enable companies
to process data and share information within their business, and between their
customers, suppliers and distribution channels. Leading companies leverage
Infocrossing's robust computing infrastructure, skilled technical team, and
process-driven operations to reduce costs and improve service delivery by
outsourcing the operation of mainframes, mid-range, open system servers,
networks and business processes to Infocrossing.
This release contains forward-looking statements within the meaning of Section
21E of the Securities Exchange Act of 1934, as amended. As such, final results
could differ from estimates or expectations due to risks and uncertainties,
including, but not limited to: incomplete or preliminary information; changes in
government regulations and policies; continued acceptance of the Company's
products and services in the marketplace; competitive factors; new products;
technological changes; the Company's dependence upon third-party suppliers;
intellectual property rights; difficulty with the integration of SMS; and other
risks. For any of these factors, the Company claims the protection of the safe
harbor for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995, as amended.
INFOCROSSING, INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED, IN MILLIONS,
EXCEPT PER SHARE AMOUNTS)
----------------------------------- -----------------------------------
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
----------------------------------- -----------------------------------
2003 2002 2003 2002
--------------- ---------------- --------------- ----------------
Revenues $ 14.4 $ 13.4 $ 55.2 $ 50.8
------------ ------------ ------------ -------------
Costs of revenues, excluding
depreciation shown below 9.4 8.8 36.7 33.4
Selling and administrative expenses 2.2 2.4 8.5 8.9
Leased facilities & office closings - - - (0.3)
Depreciation and amortization 1.6 1.5 6.1 5.9
------------ ------------ ------------ -------------
Income from operations 1.2 0.7 3.9 2.9
Net interest expense 0.7 .04 2.5 2.0
------------ ------------ ------------ -------------
Income before income taxes 0.5 0.3 1.4 0.9
Income tax expense (benefit) (0.1) (0.3) - (0.2)
------------ ------------ ------------ -------------
Net income (loss) 0.6 0.6 1.4 1.1
Accretion and dividends on
redeemable preferred stock 0.6 (2.4) (6.9) (9.3)
------------ ------------ ------------ -------------
Net income (loss) to common stockholders $ 1.2 $ (1.8) $ (5.5) $ (8.2)
============ ============ ============ =============
Basic earnings per share:
Net income (loss) to common stockholders $ 0.09 $ (0.34) $ (0.76) $ (1.52)
============ ============ ============ =============
Weighted average number of
common shares outstanding 12.9 5.4 7.3 5.4
============ ============ ============ =============
Diluted earnings per share:
Net income (loss) to common stockholders $ 0.08 $ (0.34) $ (0.76) $ (1.52)
============ ============ ============ =============
Weighted average number of common
shares and equivalents outstanding 14.2 5.4 7.3 5.4
============ ============ ============ =============
The basic and diluted net loss to common stockholders per share for 2002 and for
the full year ended December 31, 2003 are equal. Common stock equivalents are
excluded from the computation of diluted net loss per share for these periods
since the inclusion of such equivalents would be anti-dilutive.
Certain reclasses have been made to prior periods to conform to the current
presentation.
The reconciliation of EBITDA with net income for the quarter and year ended
December 31, 2003 and 2002 is as follows (in millions):
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
2003 2002 2003 2002
--------------- ---------------- ---------------- ---------------
Net income (loss) $ 0.6 $ 0.6 $ 1.4 $ 1.1
Add back:
Income tax expense (benefit) (0.1) (0.3) - (0.2)
Net interest expense 0.7 0.4 2.5 2.0
Depreciation and amortization 1.6 1.5 6.1 5.9
------------- ------------- ------------- ------------
EBITDA $ 2.8 $ 2.2 $ 10.0 $ 8.8
============= ============= ============= ============
INFOCROSSING, INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED BALANCE SHEETS
(IN MILLIONS)
DECEMBER 31, DECEMBER 31,
2003 2002
------------------ ------------------
ASSETS:
Cash and equivalents $ 10.1 $ 7.0
Other current assets 6.5 6.7
--------------- ---------------
Total current assets 16.6 13.7
Property and equipment, net 18.3 19.5
Other non-current assets 31.8 32.3
--------------- ---------------
Total assets $ 66.7 $ 65.5
=============== ===============
LIABILITIES, REDEEMABLE PREFERRED STOCK,
AND STOCKHOLDERS' EQUITY (DEFICIT):
Current liabilities $ 8.4 $ 11.6
Long-term liabilities 27.5 12.9
Redeemable preferred stock - 53.2
Common stockholders' equity (deficit) 30.8 (12.2)
--------------- ---------------
Total Liabilities, redeemable preferred stock and
common stockholders' equity (deficit) $ 66.7 $ 65.5
=============== ===============