EXHIBIT 99
INFOCROSSING 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 RECORD REVENUE FOR THE SECOND QUARTER
AND SIX MONTHS ENDED JUNE 30, 2004
LEONIA, NJ, AUGUST 11, 2004 -- INFOCROSSING, INC. (NASDAQ: IFOX), a provider of
selective IT outsourcing and business processing solutions, announced today
financial results for the second quarter and six months ended June 30, 2004.
For the second quarter of 2004, Infocrossing reported record revenue of $24.6
million, an increase of $11.0 million, or 81% over the $13.6 million reported
for the second quarter of 2003. Revenue growth for the quarter included $8.9
million from ITO Acquisition Corporation, a west coast based IT outsourcing
company doing business as Systems Management Specialists, Inc. ("SMS") acquired
on April 2, 2004. Excluding the acquisition of SMS, Infocrossing's revenue for
the second quarter of 2004 grew $2.1 million, or 16% compared with the revenue
reported for the same quarter last year. Revenue growth excluding the
acquisition of SMS, included the addition of new customer contracts and the
expansion of existing agreements.
For the quarter ended June 30, 2004, after the negative impact of a non-cash
write-off of $1.3 million, or $.06 per share, of unamortized financing costs
related to the previously announced repayment of a term loan of approximately
$40 million, Infocrossing reported a net loss of $0.3 million or $.01 per share.
The loss was consistent with the Company's previously announced financial
guidance for the quarter. For the second quarter last year, Infocrossing
reported a net loss to common stockholders of $2.4 million or $0.45 per share.
The weighted average number of shares and share equivalents was 18.3 million for
the quarter ended June 30, 2004, compared with 5.4 million shares for the same
period last year.
Earnings before interest, taxes, depreciation and amortization (EBITDA)
increased to $4.3 million for the second quarter of 2004, an increase of 93%
over the $2.2 million reported for the second quarter of 2003. On a sequential
quarterly basis, EBITDA increased $1.4 million, or 50% from the first quarter of
2004. 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.
"We're pleased with our results for the second quarter of 2004. We executed our
business plan and achieved our forecasted revenue, EBITDA, and earnings
objectives for the quarter," stated Zach Lonstein, Chairman and Chief Executive
Officer of Infocrossing. "Furthermore, we successfully completed the acquisition
of SMS and we're beginning to realize the benefits of the greater scale,
capabilities, and synergies of the acquisition on our ability to attract new
sales opportunities and continue our growth. Therefore, we are reaffirming our
previous guidance and expect 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.
For the six months ended June 30, 2004, Infocrossing reported the following
highlights:
o Revenue reached $39.8 million for the first six months of 2004, a 49%
increase over the first six months of 2003. Excluding $8.9 million in
revenue gained from the acquisition of SMS, Infocrossing's revenue grew
$4.2 million in the first half of 2004, or 16% over the $26.7 million
in revenue for the same period last year.
o Net income improved $5.1 million to $0.5 million or $.03 per share for
the first six months of 2004, compared with a net loss of $4.6 million
for the same period in 2003. Net income for the first six months
reflects a non-cash write-off of $1.3 million, or $.06 per share, of
unamortized financing costs related to the previously announced
repayment of a term loan of approximately $40 million.
o EBITDA for the first six months of 2004 reached $7.1 million, an
increase of $2.6 million or 58% over EBITDA of $4.5 million
reported for the first six months of 2003.
o Infocrossing completed a private placement of $60 million of 4%
convertible notes, replacing $39.9 million of debt carrying an interest
rate of 9%. Subsequent to the end of the second quarter, the initial
purchaser of the convertible notes exercised in full an option to
acquire an additional $12 million of the notes.
o The Company completed the acquisition of SMS on April 2, 2004 for
approximately $37 million consisting of $35 million in cash and
Infocrossing stock. The acquisition expanded Infocrossing's operations
to the western United States and established Infocrossing as a national
provider of outsourcing services with coast-to-coast data center
operations, extensive expertise, a robust client base, and a national
sales and marketing organization.
Infocrossing will hold a teleconference to discuss first quarter results with
the financial community today, August 11, 2004, at 11:00 AM. 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 1-888-243-3996 or
1-973-935-2404 for international callers, at least ten minutes before the start
of the call. A telephone replay will also be available until August 18, 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
5043180.
EBITDA represents net income before interest, taxes, depreciation and
amortization. The Company presents EBITDA because it considers such information
an important supplemental measure of its performance and believes it is
frequently used by securities analysts, investors and other interested parties
in the evaluation of companies with comparable market capitalization, many of
which present EBITDA when reporting their results. The Company also uses EBITDA
for the following purposes: (1) EBITDA is one of the factors used to determine
the total amount of bonuses available to be awarded to executive officers and
other employees; (2) the Company's credit agreement uses EBITDA (with additional
adjustments) to measure compliance with covenants such as interest coverage and
debt incurrence; (3) EBITDA is also used by prospective and current lessors as
well as potential lenders to evaluate potential transactions with the Company;
and (4) EBITDA is also used by us to evaluate and price potential acquisition
candidates.
EBITDA has limitations as an analytical tool, and you should not consider it in
isolation, or as a substitute for analysis of the Company's 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 the Company's 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 THOUSANDS,
EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
--------------------------------- --------------------------------
2004 2003 2004 2003
--------------- -------------- -------------- --------------
REVENUES $ 24,611 $ 13,582 $ 39,787 $ 26,711
------------ ----------- ----------- -----------
COSTS and EXPENSES:
Costs of revenues, excluding
depreciation shown below 17,567 9,129 27,790 17,903
Selling, general and administrative expenses 2,786 2,247 4,899 4,323
Depreciation and amortization 2,117 1,473 3,710 2,889
------------ ----------- ----------- -----------
22,470 12,849 36,399 25,115
------------ ----------- ----------- -----------
INCOME FROM OPERATIONS 2,141 733 3,388 1,596
------------ ----------- ----------- -----------
Debt fees related to loans repaid 1,347 - 1,347 -
Other net interest expense 1,069 620 1,734 1,193
------------ ----------- ----------- -----------
2,416 620 3,081 1,193
------------ ----------- ----------- -----------
INCOME BEFORE INCOME TAXES (275) 113 307 403
Income tax (benefit) expense (13) 8 (206) 28
------------ ----------- ----------- -----------
NET INCOME (262) 105 513 375
Accretion and dividends on redeemable
preferred stock - (2,501) - (4,949)
------------ ----------- ----------- -----------
NET INCOME (LOSS) TO COMMON
STOCKHOLDERS $ (262) $ (2,396) $ 513 $ (4,574)
============ =========== =========== ===========
BASIC INCOME (LOSS) PER SHARE:
Net income (loss) to common stockholders $ (0.01) $ (0.45) $ 0.03 $ (0.85)
============ =========== =========== ===========
Weighted average number of common
shares outstanding 18,323 5,383 16,758 5,381
============ =========== =========== ===========
DILUTED INCOME (LOSS) PER SHARE:
Net income (loss) to common stockholders $ (0.01) $ (0.45) $ 0.03 $ (0.85)
============ =========== =========== ===========
Weighted average number of
common shares and share equivalents
outstanding 18,323 5,383 19,019 5,381
============ =========== =========== ===========
Certain reclassifications have been made to prior periods to
conform to the current presentation.
The reconciliation of EBITDA with net income for the quarters and six-month
periods ended June 30, 2004 and 2003 is as follows (in thousands):
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
--------------------------------- --------------------------------
2004 2003 2004 2003
--------------- -------------- -------------- --------------
NET INCOME $ (262) $ 105 $ 513 $ 375
Add (deduct):
Income tax benefit (13) 8 (206) 28
Net interest expense 2,416 620 3,081 1,193
Depreciation and amortization 2,117 1,473 3,710 2,889
------------ ----------- ----------- -----------
EBITDA $ 4,258 $ 2,206 $ 7,098 $ 4,485
============ =========== =========== ===========
INFOCROSSING, INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
JUNE 30, DECEMBER 31,
2004 2003
------------------ -------------------
ASSETS:
Cash and equivalents $ 31,170 $ 10,073
Other current assets 13,491 6,543
--------------- ----------------
Total current assets 44,661 16,616
Property and equipment, net 22,388 18,249
Goodwill and other intangible assets 75,375 29,149
Other non-current assets 6,077 2,648
--------------- ----------------
Total assets $ 148,501 $ 66,662
=============== ================
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities $ 18,635 $ 8,401
Long-term liabilities 67,522 27,460
Stockholders' equity 62,344 30,801
--------------- ----------------
Total liabilities and stockholders' equity $ 148,501 $ 66,662
=============== ================