EXHIBIT 99
INFOCROSSING LOGO
Contacts:
Chairman and CEO SVP Finance
Zach Lonstein William McHale
Infocrossing, Inc. Infocrossing, Inc.
201-840-4941 201-840-4732
zlonstein@infocrossing.com wmchale@infocrossing.com
Media Relations Investor Relations
Laura Turtzer Matthew Hayden
Infocrossing, Inc. Hayden Communications, Inc.
714-986-8397 858-456-4533
lturtzer@infocrossing.com
INFOCROSSING TO HOLD CONFERENCE CALL TODAY
TO DISCUSS RECENTLY COMPLETED HEALTHCARE CLAIMS PROCESSING ACQUISITION
LEONIA, NJ, OCTOBER 12, 2004 - INFOCROSSING, INC. (NASDAQ: IFOX), a provider of
selective IT and business process outsourcing solutions, has scheduled a
conference call for today, October 12, 2004 at 4:00 PM Eastern Daylight Time to
discuss the Company's previously announced acquisition of the healthcare
processing business of Verizon Information Technologies, Inc. (VITI).
Infocrossing paid $43.5 million in cash to acquire the segment of VITI that
provides managed care, Medicare, and Medicaid processing services. Immediately
following the closing of the transaction, VITI's name was changed to
Infocrossing Healthcare Services, Inc. (IHS), and Michael J. Luebke was
appointed President of the new subsidiary.
Infocrossing funded the transaction by drawing the entire available balance of
approximately $24.4 million from an existing acquisition line with CapitalSource
Finance LLC, and paid the remainder from available cash. The Company acquired
net assets of more than $10 million consisting primarily of accounts receivable.
IHS is expected to contribute more than $35 million to Infocrossing's revenue
over the next twelve months, be immediately accretive on an earnings per share
basis, and become more accretive as the IT operations are integrated. After an
approximately six-month integration period, IHS is expected to add more than $10
million in annual earnings before interest, taxes, depreciation and amortization
(EBITDA) from its existing business. A reconciliation of IHS' projected EBITDA
to projected net income is provided below.
Over the past three years, Infocrossing has implemented a growth strategy aimed
at establishing the Company as a leading provider of selective IT and business
processing services in the United States. During this time, Infocrossing has
completed several acquisitions that have expanded the Company's data centers to
a national footprint, added customers and capabilities in mid-range and open
system computing operations, and extended the Company's services into
vertically-focused transaction services such as claims processing and email
security.
IHS provides outsourced information technology and claims processing services to
commercial and government healthcare claims administrators. The company's
revenue base is comprised of long-standing contracts to support the processing
of Medicaid, Medicare, and commercial healthcare claims. The acquisition expands
Infocrossing's revenue base and forms a foundation for growth through providing
IT and business process outsourcing services to commercial and government
customers.
"We're pleased to have concluded this acquisition," stated Zach Lonstein,
Chairman and Chief Executive Officer of Infocrossing, Inc. "IHS accelerates our
growth and positions us to exceed our previously stated goal of becoming one of
the leading providers of selective outsourcing services in the United States
with $250 million in annual revenue. Further, the acquisition provides the
platform for continued growth and targeted acquisitions of companies with a
recurring revenue base for services delivered from an IT infrastructure," Mr.
Lonstein concluded.
Michael J. Luebke, the President of IHS, formerly served as the President of
Verizon Information Technologies, Inc. until November 2003, and has over thirty
years of experience working for GTE and Verizon, where he held various positions
in operations, information technology, and senior management. His extensive
knowledge of the VITI healthcare business, its customers and employees will
enable a smooth transition of responsibilities to Infocrossing and strongly
positions the Company for future growth in the claims processing space.
The Company will host a conference call today at 4:00 PM to discuss the
acquisition, introduce Michael Luebke and discuss plans for growing Infocrossing
Healthcare Services. Anyone interested in participating in the conference call
should call 800-475-2151 when calling within the United States or 973-582-2710
when calling internationally, at least ten minutes prior to the start of the
call. This call is being webcast by ViaVid Broadcasting and can be accessed at
Infocrossing's website at www.infocrossing.com, and at ViaVid's website at
www.viavid.net. To access the webcast, you will need to have the Windows Media
Player on your desktop. For the free download of the Media Player please visit:
www.microsoft.com/windows/windowsmedia/en/download/default.asp.
EBITDA represents net income before interest, taxes, depreciation and
amortization. The Company presents EBITDA because it considers such information
an important supplemental measure of operating 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.
EBITDA has limitations as an analytical tool, and you should not consider it in
isolation, or as a substitute for analysis of results as reported under GAAP.
Some of these limitations are: (a) EBITDA does not reflect changes in, or cash
requirements for, working capital needs; (b) EBITDA does not reflect the
significant interest expense, or the cash requirements necessary to service
interest or principal payments; 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.
The reconciliation of EBITDA with net income for Infocrossing Healthcare
Services, Inc. is as follows (in thousands):
NET INCOME $ 3,100
Add (deduct):
Income tax expense 2,050
Net interest expense 2,150
Depreciation and amortization 2,700
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EBITDA $ 10,000
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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, regardless of industry, 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.
SAFE HARBOR FOR FORWARD-LOOKING AND CAUTIONARY STATEMENTS
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; technological
changes; retention of customers; the Company's dependence upon third-party
suppliers; retention of customers; intellectual property rights; difficulties
with the integration of Infocrossing West, Inc. f/k/a ITO Acquisition
Corporation d/b/a Systems Management Specialists and Infocrossing Healthcare
Services, Inc. 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.
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