EX-99.1 4 ih1172097c.txt PRESS RELEASE EXHIBIT 99.1 FOR IMMEDIATE RELEASE --------------------- Information Holdings Reports Results for Fourth Quarter and Year Ended December 31, 2002 and Announces Agreement to Sell CRC Press Unit STAMFORD, Conn., Feb. 28, 2003--Information Holdings Inc. (NYSE: IHI) Fourth Quarter EPS $0.14, Excluding Impairment Charge Information Holdings Inc. (NYSE: IHI) today announced results for the quarter ended December 31, 2002. The Company incurred a loss per common share of $0.91 in the fourth quarter of 2002, compared to earnings per diluted common share of $0.07 in the fourth quarter of 2001. Excluding impairment charges related to the carrying value of certain long-lived assets, earnings per diluted common share were $0.14 in the fourth quarter of 2002, compared to $0.08 in the fourth quarter of 2001. Earnings per diluted common share excluding impairment charges and amortization of intangible assets, net of tax, were $0.22 in the three-month periods ended December 31, 2002 and 2001. The Company also announced that it reached a definitive agreement to sell its CRC Press business to Taylor & Francis Group plc. Under the terms of the agreement, the Company will sell essentially all of the assets of CRC Press for cash consideration of approximately $95 million. The transaction is expected to be completed during the second quarter of 2003. The closing of the transaction will result in revisions to the Company's estimate of diluted earnings per common share of $0.65 in 2003. Fourth Quarter Results Revenues for the fourth quarter of 2002 increased 30.3% to $38.2 million from $29.4 million in the fourth quarter of 2002, primarily due to revenues from businesses acquired in the Company's intellectual property segment, as well as growth in patent subscription, IP management, IP licensing and scientific reference product revenues. These increases were partially offset by decreased revenues in the Company's IT learning segment, due to continued difficult overall IT market conditions. Gross profit margin for the fourth quarter of 2002 was 70.1% compared to 72.3% for the comparable prior year period. The decrease in gross margin is due primarily to the inclusion of acquired businesses that have lower gross margins than other IHI units, and decreased contributions from Transcender, which has higher gross margins than other IHI units. -1- EBITDA (earnings before interest, taxes, depreciation and amortization) approximated $9.3 million in the fourth quarter of 2002, excluding impairment charges of $36.3 million related to the carrying value of intangible assets in the Company's IT Learning segment. Operating results in this segment have been adversely impacted by difficult market conditions and unfavorable product release cycles in the information technology market. EBITDA in the fourth quarter of 2001, excluding impairment charges, approximated $8.4 million. The increase in EBITDA reflects strong growth in both the IP and Scientific information segments, partially offset by decreased earnings in the IT segment and higher corporate expenses. Fiscal 2002 Full Year Results Revenues for the year ended December 31, 2002 increased 34.6% to $141.8 million compared to $105.3 million for the year ended December 31, 2001. EBITDA in 2002 increased 15.1% to $36.4 million from $31.6 million in 2001, excluding impairment charges in both periods. The Company had a loss per common share of $0.63 in 2002, compared to earnings per diluted common share of $0.36 in 2001. Excluding impairment charges, net income for the year ended December 31, 2002 increased to $10.7 million, or $0.49 per diluted common share, from $8.1 million, or $0.37 per diluted common share, for the year ended December 31, 2001. Earnings per diluted common share excluding impairment charges and amortization of intangible assets, net of taxes, were $0.84 for the year ended December 31, 2002, compared to $0.85 in the comparable prior year period. Commenting on the results, Mason Slaine, President & CEO said, "We made significant progress during the fourth quarter, both with respect to operating results and product development initiatives. Excluding impairment charges, we improved earnings by over 60% from the third quarter to the fourth quarter, while continuing to invest significantly in new product development. We begin 2003 with $67 million in cash, no debt, strong operating cash flow and excellent progress relative to our major product initiatives. We believe the sale of CRC Press will allow us to increase focus on our highest growth areas and provide us with significant financial flexibility. We believe our business is well positioned to generate growth and we remain committed to increasing shareholder value." Information Holdings will broadcast its fourth quarter earnings conference call via the Internet on Friday, February 28, 2003 at 10:00 a.m. est. The broadcast can be accessed through the Company's web site www.informationholdings.com. About Information Holdings Inc. Information Holdings Inc. is a leading provider of information products and services to scientific, technical, medical, intellectual property and IT learning markets. Through its Intellectual Property Group, which includes MicroPatent(R), Master Data Center(TM), Liquent and LPS Group, IHI provides a broad array of databases, information products and complementary services for intellectual property and regulatory professionals. IHI is recognized as a leading provider of intellectual property information over the Internet. IHI's CRC Press(R) business publishes professional and academic books, journals, newsletters and electronic databases covering areas such as life sciences, environmental sciences, engineering, -2- mathematics, physical sciences and business. IHI's Transcender(R) unit is a leading online provider of IT certification test-preparation products. Its products include exam simulations for certifications from major hardware and software providers. The statements in this press release that are not historical facts are forward-looking statements. Forward-looking statements are typically statements that are preceded by, followed by or include the words "believes," "plans," "intends," "will," "expects," "anticipates," or similar expressions. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. These forward-looking statements involve risks and uncertainties that could render them materially different. More information about factors that could potentially affect IHI's financial results is included in IHI's filings with the SEC, including its quarterly report on Form 10-Q for the quarter ended September 30, 2002 and its Annual Report on Form 10-K for the year ended December 31, 2001. The forward-looking information in this release reflects management's judgment only on the date of this press release. Information Holdings Inc. Consolidated Statements of Operations (Unaudited) Three Months Ended Twelve Months Ended December 31, December 31, (in thousands, except per ------------------- --------------------- share data) 2002 2001 2002 2001 --------- --------- ---------- ---------- Revenues $ 38,249 $ 29,351 $ 141,767 $ 105,336 Cost of sales 11,434 8,136 41,990 26,676 --------- --------- ---------- ---------- Gross profit 26,815 21,215 99,777 78,660 --------- --------- ---------- ---------- Operating expenses: Selling, general and administrative 18,464 13,521 66,909 49,831 Depreciation and amortization 4,044 5,403 16,917 18,769 Impairment of long-lived assets 36,317 400 39,380 400 --------- --------- ---------- ---------- Total operating expenses 58,825 19,324 123,206 69,000 --------- --------- ---------- ---------- (Loss) income from operations (32,010) 1,891 (23,429) 9,660 --------- --------- ---------- ---------- Other income (expense): Interest income 230 531 996 4,046 Interest expense (121) (134) (523) (541) Other income (expense) (3) (16) 5 (16) --------- --------- ---------- ---------- (Loss) income before income taxes (31,904) 2,272 (22,951) 13,149 (Benefit) provision for income taxes (12,365) 810 (9,227) 5,311 --------- --------- ---------- ---------- Net (loss) income $(19,539) $ 1,462 $ (13,724) $ 7,838 ========= ========= ========== ========== Net (loss) income per common -3- share amounts: Basic $ (0.91) $ 0.07 $ (0.63) $ 0.36 ========= ========= ========== ========== Diluted $ (0.91) $ 0.07 $ (0.63) $ 0.36 ========= ========= ========== ========== Information Holdings Inc. Consolidated Balance Sheets (in thousands) December December 31, 31, 2002 2001 ---------- ---------- Assets (Unaudited) Current assets: Cash and cash equivalents $ 53,910 $ 38,612 Investments 13,056 17,762 Accounts receivable, net 41,827 35,130 Inventories 7,451 7,323 Prepaid expenses and other current assets 5,385 7,268 Current portion of deferred income taxes 4,589 3,423 ---------- ---------- Total current assets 126,218 109,518 Property and equipment, net 7,946 9,868 Pre-publication costs, net 5,812 4,750 Identified intangible assets, net 94,627 111,463 Goodwill, net 88,967 102,666 Other assets 5,267 8,292 ---------- ---------- Total assets $ 328,837 $ 346,557 ========== ========== Liabilities and Stockholders' Equity Current liabilities: Current portion of capitalized lease obligations $ 553 $ 490 Accounts payable 29,120 21,598 Accrued expenses 16,431 17,793 Royalties payable 2,601 1,625 Deferred subscription revenue 27,069 18,293 ---------- ---------- Total current liabilities 75,774 59,799 Capital leases 1,406 1,959 Deferred income taxes 1,227 16,826 Other long-term liabilities 690 1,023 ---------- ---------- Total liabilities 79,097 79,607 ---------- ---------- Stockholders' equity: Preferred stock $ - $ - Common stock 218 218 Additional paid in capital 247,026 245,911 Treasury stock (5,227) - Retained earnings 7,097 20,821 Accumulated other comprehensive gain 626 - ---------- ---------- Total stockholders' equity 249,740 266,950 ---------- ---------- -4- Total liabilities and stockholders' equity $ 328,837 $ 346,557 ========== ========== ---------- Contact: Information Holdings Inc., Stamford Vincent A. Chippari, 203/961-9208 vchippari@informationholdings.com -5-