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 $0.05 PER SHARE ON RECORD REVENUE
FOR THE FIRST QUARTER ENDED MARCH 31, 2004
LEONIA, NJ, MAY 12, 2004 -- INFOCROSSING, INC. (NASDAQ: IFOX), a provider of
selective IT outsourcing and business processing solutions, announced today
financial results for the first quarter ended March 31, 2004. Infocrossing
reported record revenue of $15.2 million, a 16 percent increase over the revenue
of $13.1 million reported for the first quarter of 2003, and a 6 percent
increase over the revenue of $14.4 million reported for the previous quarter.
Revenue growth was driven entirely by new sales and the expansion of existing
outsourcing engagements, including the addition of The Reader's Digest
Association, which signed a multi-year agreement announced in January. Other new
contract awards totaled $12.5 million over terms of up to 5 years in length,
including $5.8 million in contracts signed by ITO Acquisition Corporation, doing
business as Systems Management Specialists ("SMS"), prior to the close of the
previously announced acquisition by Infocrossing on April 2, 2004.
For the first quarter of 2004, Infocrossing reported net income to common
stockholders of $0.8 million, or $0.05 per diluted common share, compared with a
net loss to common stockholders of $2.2 million, or $0.40 per common share for
the same period last year. Infocrossing had 17.1 million fully diluted shares
outstanding as of March 31, 2004 compared with 5.4 million fully diluted shares
outstanding as of March 31, 2003. This marks the second consecutive quarter of
positive earnings. The Company expects to report positive earnings for 2004.
Earnings before interest, taxes, depreciation, and amortization (EBITDA)
increased 25% in the first quarter of 2004 to $2.9 million, compared with $2.3
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 to net income follows
in the Summary Consolidated Statements of Operations.
For the first quarter of 2004, Infocrossing reported the following additional
highlights:
o Infocrossing assumed the management of Reader's Digest's mainframe data
center operations under a multi-year outsourcing agreement in the first
quarter, and is planning for a June 2004 migration of the client's
computing infrastructure to Infocrossing's data center.
o On March 30, 2004, the Company completed a $30.6 million private placement
of 2,917,000 shares of its common stock. The Company used a portion of the
net proceeds of the private placement and a new $15 million term loan to
finance the cash component of the SMS acquisition.
o As a result of the private placement, shareholders' equity nearly doubled
to $61.2 million at March 31, 2004, compared with $30.8 million at December
31, 2003.
o In the first quarter, Infocrossing announced the planned acquisition SMS, a
California-based data center outsourcing company. On April 2, 2004,
Infocrossing closed the acquisition for approximately $35 million in cash
and 135,892 shares of Infocrossing stock. SMS provides computing
operations, business process outsourcing, and managed application services
to nearly forty clients primarily in the western United States. The
transaction combined 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 $33 million to
Infocrossing's revenue in the first 12 months following the close of the
transaction.
"I'm very pleased with the results for the first quarter of 2004," stated Zach
Lonstein, Infocrossing's Chairman and Chief Executive Officer. "The value of our
selective outsourcing services continued to push revenue to new heights, with
more companies recognizing they could gain the benefits of outsourcing without
losing control over their operations," Mr. Lonstein continued. "The
recapitalization completed last year and the leverage of our data center
infrastructure translated the revenue growth into another quarter of positive
earnings. With the expanding record of positive results and the recently
completed acquisition of Systems Management Specialists, we are positioned to
continue our growth and realize our vision of becoming a recognized leader among
providers of selective outsourcing services in the United States," Mr. Lonstein
concluded.
Infocrossing will hold a teleconference to discuss first quarter results with
the financial community today, May 12, 2004, at 11 a.m. Eastern Daylight Time.
Anyone interested in participating in the call can join via the Company's
website, www.infocrossing.com, or dial into the call at 1-800 475-2151 or
973-582-2710 for international callers, at least ten minutes before the start of
the call. A telephone replay will also be available until May 19, 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
4754637.
"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 selective IT 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; difficulties 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 MARCH 31,
-----------------------------------
2004 2003
--------------- ----------------
Revenues $ 15.2 $ 13.1
------------ ------------
Costs of revenues, excluding
Depreciation shown below 10.2 8.8
Selling and administrative expenses 2.1 2.0
Depreciation and amortization 1.6 1.4
------------ ------------
Income from operations 1.3 0.9
Net interest expense 0.7 0.6
------------ ------------
Income before income taxes 0.6 0.3
Income tax expense (benefit) (0.2) -
------------ ------------
Net income 0.8 0.3
Accretion and dividends on
redeemable preferred stock - (2.5)
------------ ------------
Net income (loss) to common stockholders $ 0.8 $ (2.2)
============ ============
Basic earnings per share:
Net income (loss) to common stockholders $ 0.05 $ (0.40)
============ ============
Weighted average number of
common shares outstanding 15.2 5.4
============ ============
Diluted earnings per share:
Net loss to common stockholders $ 0.05 $ (0.40)
============ ============
Weighted average number of common shares
and equivalents outstanding 17.1 5.4
============ ============
The basic and diluted net loss to common stockholders per share for 2003 are
equal. Common stock equivalents are excluded from the computation of diluted net
loss per share for the three months ended March 31, 2003 since the inclusion of
such equivalents would be anti-dilutive.
Certain reclassifications have been made to prior periods to conform to the
current presentation.
The reconciliation of EBITDA with net income for the quarters ended March 31,
2004 and 2003 is as follows (in millions):
THREE MONTHS ENDED MARCH 31,
------------------------------------------
2004 2003
------------------- -------------------
$ 0.8 $ 0.3
Net income
Add back:
Income tax expense (benefit) (0.2) -
Net interest expense 0.7 0.6
Depreciation and amortization 1.6 1.4
---------------- ----------------
EBITDA $ 2.9 $ 2.3
================ ================
INFOCROSSING, INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED BALANCE SHEETS
(IN MILLIONS)
MARCH 31, DECEMBER 31,
2004 2003
--------------- ---------------
ASSETS:
Cash and equivalents $ 39.6 $ 10.1
Other current assets 8.2 6.5
------------- -------------
Total current assets 47.8 16.6
Property and equipment, net 17.4 18.3
Other non-current assets 32.5 31.8
------------- -------------
Total assets $ 97.7 $ 66.7
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities $ 9.3 $ 8.4
Long-term liabilities 27.3 27.5
Stockholders' equity 61.1 30.8
------------- -------------
Total liabilities and stockholders' equity $ 97.7 $ 66.7
============= =============