Exhibit 99.1
[LETTERHEAD OF INCENTRA SOLUTIONS, INC.]
NEWS RELEASE for August 02, 2006
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CONTACTS FOR INCENTRA SOLUTIONS:
Allen & Caron Inc. Incentra Solutions, Inc.
Rene Caron (investors) Tom Sweeney
rene@allencaron.com Chief Executive Officer
Len Hall (financial media) tsweeney@incentrasolutions.com
len@allencaron.com (303) 449-8279
(949) 474-4300
INCENTRA SOLUTIONS SELLS BROADCAST AND MEDIA DIVISION
INCREASES STRATEGIC FOCUS ON RAPIDLY GROWING, ENTERPRISE IT SERVICES MARKET
BOULDER, CO, AUGUST 2, 2006 - Incentra Solutions, Inc. (OTCBB: ICNS), a provider
of complete IT and storage management solutions to enterprises and managed
service providers in North America and Europe, today announced that as part of
its strategy to increase its focus on the rapidly growing, IT Services market it
has sold its Front Porch Digital Broadcast and Media division to Toronto-based
Genuity Capital Partners in an all-cash transaction valued at $38 million. The
purchase price consisted of $33 million in cash at closing and up to an
additional $5 million in royalty payments based upon future sales of Front Porch
Digital software through the end of 2008. The sale, which is final, is subject
to certain post-closing adjustments typical for this type of transaction;
however, no significant adjustments are expected. Genuity Capital Partners is a
privately-held equity group and investment bank.
Chairman and CEO Thomas P. Sweeney said that both the Incentra Solutions
enterprise IT business and the Front Porch broadcast and media business have
grown significantly over the past two years. Front Porch Digital revenues and
profit contributions have increased solidly each year and it has become the
global leader within the broadcast digital archive market. At the same time,
Incentra's Enterprise business has experienced even more rapid growth as its
revenues have increased to 80 percent of the Company's current annualized
revenues and it is now well positioned for continued substantial growth in a
very large and expanding market.
"We believe this is a win-win situation for Incentra and its shareholders, for
Front Porch Digital and its entire team and for Genuity Equity Partners,"
Sweeney said. "The timing was right for this transaction. We feel it was the
ideal opportunity to maximize the value of Front Porch Digital for our
shareholders and to position the Company to be able to re-invest the resources
gained from the sale into further expansion of our Enterprise IT services
business. At the same time, Front Porch will be able to concentrate on its
broadcast market supported by new financial resources.
"Over the last two years we have been investing in two growing businesses, but
we believe the best strategy for Incentra and its shareholders going forward is
to focus on growing our Enterprise business, which represents 80 percent of our
current annualized revenues," Sweeney said. "Sustaining the growth of Front
Porch in the long run would have limited our ability to invest in the expansion
of our Enterprise business, which we believe addresses a significantly larger
global market with far greater upside potential."
The completion of the sale of Front Porch Digital has significantly improved the
Incentra balance sheet. After deducting expenses for the transaction and paying
off substantially all of its secured long term and revolving debt, Incentra has
approximately $17 million of cash and cash equivalents with a substantial
working capital balance, positive net tangible assets and positive shareholders'
equity.
"Our substantial cash position and the availability of our unused $10 million
revolving line of credit provide us access to the resources needed to invest in
the growth of our Enterprise business, both organically and through
acquisitions," Sweeney said. "I am also very pleased that our improved balance
sheet and financial strength positions us to seek a listing of the Incentra's
common stock on a national exchange, which we will aggressively pursue over the
coming months."
Sweeney noted that Incentra will increase its investments in expanding its
Enterprise business. It will continue to expand its line of higher end storage
solutions, will add additional managed service capabilities, and will increase
the geographic scope of its marketing reach to achieve its goal of becoming the
most comprehensive provider of complete IT solutions for enterprise customers in
North America and Europe. The results of the last several quarters have
demonstrated that the synergies expected from its recent acquisitions in the
Enterprise business are being realized. Sales of higher margin solutions and
recurring revenue services are increasing and we believe this trend will
continue to drive growth and position Incentra to reach its goal of
profitability.
Front Porch Digital, which will operate as an independent, private corporation
with headquarters in Boulder, will continue with its existing management team.
Front Porch Digital CEO Mike Knaisch said, "We are proud of our accomplishments
to date and are most appreciative of our long and mutually beneficial
relationship with Incentra, its senior management and its entire team. We
believe our greatest opportunities, however, still lay before us as the
inevitable migration to the digital broadcast workflow is just beginning. With
the support of Genuity, Front Porch Digital will address the opportunities by
investing more aggressively in product research and development, customer
support and expansion of our global service platform. These are positive changes
that will directly benefit our customers worldwide."
ABOUT FRONT PORCH DIGITAL
Front Porch Digital is the global market leader in total digital archive
management and transcoding solutions. The company has long been an innovator in
delivering unique software, services, and integrated hardware solutions for
digital archive management to broadcasters and media companies worldwide. Visit
the company's Web site at www.fpdigital.com.
ABOUT INCENTRA SOLUTIONS, INC.
Incentra Solutions, Inc. (www.incentrasolutions.com, OTCBB:ICNS) is a provider
of complete IT & storage management solutions to enterprises, managed service
providers worldwide. Incentra's complete solution includes professional
services, hardware & software products with first call support, IT outsourcing
solutions and financing options.
INCENTRA SOLUTIONS FORWARD LOOKING STATEMENTS
CERTAIN INFORMATION DISCUSSED IN THIS PRESS RELEASE MAY CONSTITUTE
FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995 AND THE FEDERAL SECURITIES LAWS. ALTHOUGH THE
COMPANY BELIEVES THAT THE EXPECTATIONS REFLECTED IN SUCH FORWARD-LOOKING
STATEMENTS ARE BASED UPON REASONABLE ASSUMPTIONS AT THE TIME MADE, IT CAN GIVE
NO ASSURANCE THAT ITS EXPECTATIONS WILL BE ACHIEVED. READERS ARE CAUTIONED NOT
TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS. FORWARD-LOOKING
STATEMENTS ARE INHERENTLY SUBJECT TO UNPREDICTABLE AND UNANTICIPATED RISKS,
TRENDS AND UNCERTAINTIES SUCH AS THE COMPANY'S INABILITY TO ACCURATELY FORECAST
ITS OPERATING RESULTS; THE COMPANY'S POTENTIAL INABILITY TO ACHIEVE
PROFITABILITY OR GENERATE POSITIVE CASH FLOW; THE AVAILABILITY OF FINANCING; AND
OTHER RISKS ASSOCIATED WITH THE COMPANY'S BUSINESS. FOR FURTHER INFORMATION ON
FACTORS WHICH COULD IMPACT THE COMPANY AND THE STATEMENTS CONTAINED HEREIN,
REFERENCE SHOULD BE MADE TO THE COMPANY'S FILINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION, INCLUDING ANNUAL REPORTS ON FORM 10-KSB, QUARTERLY REPORTS
ON FORM 10-QSB AND CURRENT REPORTS ON FORM 8-K. THE COMPANY ASSUMES NO
OBLIGATION TO UPDATE OR SUPPLEMENT FORWARD-LOOKING STATEMENTS THAT BECOME UNTRUE
BECAUSE OF SUBSEQUENT EVENTS.
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