INFOCROSSING, INC. [LOGO]
FOR RELEASE AT 4:05 PM EDT
CONTACTS:
Chairman and Chief Executive Officer Chief Financial Officer
Zach Lonstein William McHale
Infocrossing, Inc. Infocrossing, Inc.
(201) 840-4726 (201) 840-4732
zach.lonstein@infocrossing.com william.mchale@infocrossing.com
Investor Relations Media Relations
Michael Wilczak Polly Wade
Infocrossing, Inc. Infocrossing, Inc.
(201) 840-4941 (678) 728-1654
michael.wilczak@infocrossing.com polly.wade@infocrossing.com
INFOCROSSING REPORTS FINANCIAL RESULTS FOR
THE SECOND QUARTER ENDED JUNE 30, 2007
COMPANY REPORTS REVENUES OF $62.0 MILLION AND EPS OF $0.10
LEONIA, NJ, AUGUST 9, 2007 -- INFOCROSSING, INC. (NASDAQ: IFOX), a provider of
selective IT infrastructure, enterprise application and business process
outsourcing services, announced today its financial results for the second
quarter and six months ended June 30, 2007. (Amounts other than EPS are in
thousands.)
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
-------------------------------------- --------------------------------------
2007 2006 2007 2006
---------------- ---------------- ---------------- ----------------
(UNAUDITED) (UNAUDITED)
REVENUES $ 61,980 $ 56,836 $ 121,138 $ 112,757
---------------- ---------------- ---------------- ----------------
EBITDA (A) 11,313 9,900 21,489 18,365
Depreciation and amortization 4,645 4,129 9,181 8,260
Interest expense (net) 2,417 2,455 4,781 4,872
---------------- ---------------- ---------------- ----------------
INCOME BEFORE
INCOME TAXES 4,251 3,316 7,527 5,233
Income tax expense 1,828 1,366 3,311 2,272
---------------- ---------------- ---------------- ----------------
NET INCOME $ 2,423 $ 1,950 $ 4,216 $ 2,961
================ ================ ================ ================
BASIC EARNINGS PER SHARE:
Net income $ 0.11 $ 0.09 $ 0.19 $ 0.14
================ ================ ================ ================
Weighted average number of
Common shares outstanding 22,123 21,266 22,066 21,012
================ ================ ================ ================
DILUTED EARNINGS PER SHARE:
Net income $ 0.10 $ 0.09 $ 0.18 $ 0.14
================ ================ ================ ================
Weighted average number of
common shares and share equivalents
outstanding 23,598 22,214 23,503 21,858
================ ================ ================ ================
(A) A reconciliation of EBITDA to net income follows in Appendix A, and
descriptions of this measure and the reasons for presenting it, as well as
its limitations, are explained below.
On August 6, 2007, the Company announced that it had signed a definitive
agreement to be acquired by Wipro Technologies, the global IT services business
of Wipro Limited (NYSE:WIT), for $18.70 per share in cash. The acquisition will
be conducted by means of a tender offer for all of the outstanding shares of
Infocrossing, followed by a merger of Infocrossing with a Wipro subsidiary. The
tender offer is subject to a number of customary closing conditions, including
regulatory approvals.
The Company met its previously announced guidance for the second quarter with
respect to EBITDA, net income, and earnings per share, and exceeded guidance
with respect to revenue. Due to the announcement of the acquisition and the
uncertainty of the actual closing date of the acquisition, the Company believes
it is no longer appropriate to continue to issue guidance.
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 on a supplemental basis.
ABOUT INFOCROSSING (WWW.INFOCROSSING.COM)
Infocrossing, Inc. (NASDAQ:IFOX) is a provider of selective IT infrastructure,
enterprise application and business process 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 STATEMENT
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: successful completion of the tender offer for all
of the Company's shares followed by the merger with a subsidiary of Wipro
Technologies; incomplete or preliminary information; changes in government
regulations and policies; continued acceptance of the Company's products and
services in the marketplace; competitive factors; closing contracts with new
customers and renewing contracts with existing customers on favorable terms;
expanding services to existing customers; new products; technological changes;
the Company's dependence upon third-party suppliers; intellectual property
rights; difficulties with the identification, completion, and integration of
acquisitions; 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.
ADDITIONAL INFORMATION
The tender offer described in this press release has not yet commenced, and this
press release is neither an offer to purchase nor a solicitation of an offer to
sell Infocrossing, Inc.'s ("Infocrossing") common stock. INVESTORS AND SECURITY
HOLDERS ARE URGED TO READ BOTH THE TENDER OFFER STATEMENT AND THE
SOLICITATION/RECOMMENDATION STATEMENT REGARDING THE TENDER OFFER DESCRIBED IN
THIS PRESS RELEASE WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION. The tender offer statement will be filed by Wipro Limited
("Wipro") with the Securities and Exchange Commission ("SEC"), and the
solicitation/recommendation statement will be filed by Infocrossing with the
SEC. Investors and security holders may obtain a free copy of these statements
(when available) and other documents filed by Infocrossing or Wipro with the SEC
at the website maintained by the SEC at www.sec.gov. The tender offer statement
and related materials, solicitation/recommendation statement, and such other
documents may be obtained for free by directing such requests to Infocrossing,
Inc., Investor Relations, 2 Christie Heights Street, Leonia, New Jersey 07605,
(201) 840-4700.
(financial tables follow)
INFOCROSSING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED, IN THOUSANDS EXCEPT
NUMBERS OF SHARES AND PER SHARE AMOUNTS)
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
------------------------------------------ -----------------------------------------
2007 2006 2007 2006
-------------------- ------------------- ------------------- -------------------
(UNAUDITED) (UNAUDITED)
REVENUES $ 61,980 $ 56,836 $ 121,138 $ 112,757
---------------- ---------------- ---------------- ----------------
COSTS and EXPENSES:
Costs of revenues, excluding depreciation
and amortization shown below 42,442 39,829 83,424 79,705
Selling and promotion costs 3,066 2,446 6,110 4,738
General and administrative expenses 5,159 4,661 10,115 9,949
Depreciation and amortization 4,645 4,129 9,181 8,260
---------------- ---------------- ---------------- ----------------
55,312 51,065 108,830 102,652
---------------- ---------------- ---------------- ----------------
INCOME FROM OPERATIONS 6,668 5,771 12,308 10,105
---------------- ---------------- ---------------- ----------------
Interest income (177) (142) (288) (247)
Interest expense 2,594 2,597 5,069 5,119
---------------- ---------------- ---------------- ----------------
2,417 2,455 4,781 4,872
---------------- ---------------- ---------------- ----------------
INCOME BEFORE
INCOME TAXES 4,251 3,316 7,527 5,233
Income tax expense 1,828 1,366 3,311 2,272
---------------- ---------------- ---------------- ----------------
NET INCOME $ 2,423 $ 1,950 $ 4,216 $ 2,961
================ ================ ================ ================
BASIC EARNINGS PER SHARE:
Net income $ 0.11 $ 0.09 $ 0.19 $ 0.14
================ ================ ================ ================
Weighted average number of
common shares outstanding 22,123,392 21,266,019 22,066,034 21,011,521
================ ================ ================ ================
DILUTED EARNINGS PER SHARE:
Net income $ 0.10 $ 0.09 $ 0.18 $ 0.14
================ ================ ================ ================
Weighted average number of
common shares and share
equivalents outstanding 23,598,479 22,213,539 23,502,616 21,857,723
================ ================ ================ ================
See Notes to Consolidated Financial Statements.
INFOCROSSING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT SHARE AMOUNTS)
JUNE 30, 2007 DECEMBER 31, 2006
-------------------- --------------------
(UNAUDITED)
CURRENT ASSETS:
Cash and equivalents $ 15,051 $ 22,324
Trade accounts receivable, net of allowances for doubtful accounts of
$226 at June 30, 2007 and $380 at December 31, 2006 25,456 23,000
Due from related parties 127 167
Prepaid software costs 10,005 8,399
Deferred income taxes 2,447 2,447
Current deferred customer acquisition costs 1,174 1,039
Other current assets 8,812 7,584
---------------- ----------------
Total current assets 63,072 64,960
Property, equipment and purchased software, net 52,850 45,049
Deferred software, net 3,035 2,826
Goodwill 157,454 157,454
Other intangible assets, net 15,194 16,819
Deferred income taxes 1,766 4,184
Deferred customer acquisition costs 2,604 2,658
Deferred financing costs 2,313 2,836
Other non-current assets 1,328 1,339
---------------- ----------------
TOTAL ASSETS $ 299,616 $ 298,125
================ ================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 10,969 $ 11,065
Current portion of long-term debt and capitalized lease obligations 22,441 18,749
Accrued expenses 11,591 13,596
Income taxes payable 2,023 1,544
Current deferred revenue 3,616 4,334
---------------- ----------------
Total current liabilities 50,640 49,288
Notes payable, long-term debt and capitalized lease obligations,
net of current portion 106,526 113,202
Deferred revenue, net of current portion 5,486 6,067
Other long-term liabilities 4,705 4,326
---------------- ----------------
TOTAL LIABILITIES 167,357 172,883
---------------- ----------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock; $0.01 par value; 3,000,000 shares authorized; none issued - -
Common stock; $0.01 par value; 50,000,000 shares authorized; shares issued of
22,919,616 and 22,675,811 at June 30, 2007 and December 31, 2006,
respectively 229 227
Additional paid-in capital 176,483 173,684
Accumulated deficit (40,832) (45,048)
---------------- ----------------
135,880 128,863
Less 668,969 shares at June 30, 2007 and December 31, 2006,
of common stock held in treasury, at cost (3,621) (3,621)
---------------- ----------------
TOTAL STOCKHOLDERS' EQUITY 132,259 125,242
---------------- ----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 299,616 $ 298,125
================ ================
See Notes to Consolidated Financial Statements.
SUPPLEMENTARY INFORMATION
APPENDIX A - RECONCILIATIONS OF HISTORICAL INFORMATION
EBITDA RECONCILIATION
The reconciliation of EBITDA with net income for the quarters ended June 30,
2007 and 2006, respectively, is as follows (in thousands):
RECONCILIATION - IN THOUSANDS
- ---------------------------------------------------------------------------------------------------------------------------
QUARTER ENDED JUNE 30,
------------------------------------------------------------
2007 2006
--------------------------- ----------------------------
NET INCOME $ 2,423 $ 1,950
Add back:
Tax expense 1,828 1,366
Interest expense 2,417 2,455
Depreciation and amortization 4,645 4,129
---------------------- -----------------------
EBITDA $ 11,313 $ 9,900
====================== =======================
The reconciliation of EBITDA with net income for the six months ended June 30,
2007 and 2006, respectively, is as follows (in thousands):
RECONCILIATION - IN THOUSANDS
- ---------------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED JUNE 30,
------------------------------------------------------------
2007 2006
--------------------------- ----------------------------
NET INCOME $ 4,216 $ 2,961
Add back:
Tax expense 3,311 2,272
Interest expense 4,781 4,872
Depreciation and amortization 9,181 8,260
---------------------- -----------------------
EBITDA $ 21,489 $ 18,365
====================== =======================
EBITDA is a measure of our performance that is not required by, or presented in
accordance with, GAAP. EBITDA is not a measurement of our financial performance
under GAAP and should not be considered as an alternative to net income, income
from operating activities or any other performance measures derived in
accordance with GAAP.
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