-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, I30Wi5eOW+2XWE+w2mA2vTVX9fMoeLClxy5u3QmOe00VZAb+xPAMLlPN0wkEOTZN NY6XmEfD/IHyXZ2IU8TyCQ== 0000893816-05-000045.txt : 20050809 0000893816-05-000045.hdr.sgml : 20050809 20050809162812 ACCESSION NUMBER: 0000893816-05-000045 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050809 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050809 DATE AS OF CHANGE: 20050809 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INFOCROSSING INC CENTRAL INDEX KEY: 0000893816 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 133252333 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-20824 FILM NUMBER: 051010258 BUSINESS ADDRESS: STREET 1: 2 CHRISTIE HEIGHTS STREET CITY: LEONIA STATE: NJ ZIP: 07605 BUSINESS PHONE: 2018404700 MAIL ADDRESS: STREET 1: 2 CHRISTIE HEIGHTS STREET CITY: LEONIA STATE: NJ ZIP: 07605 FORMER COMPANY: FORMER CONFORMED NAME: COMPUTER OUTSOURCING SERVICES INC DATE OF NAME CHANGE: 19930328 8-K 1 k8_2q05e.txt EARNINGS ANNOUNCEMENT FOR JUNE 2005 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported) August 9, 2005 -------------- INFOCROSSING, INC. ------------------------------------------------------ (Exact Name of Registrant as Specified in Its Charter) DELAWARE 0-20824 13-3252333 ------------------------------- ----------- ------------------ (State or other Jurisdiction of Commission (IRS Employer Incorporation or Organization) File Number Identification No.) 2 Christie Heights Street Leonia, New Jersey 07605 ------------------------------------------------------ (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (201) 840-4700 -------------- N/A ------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) SAFE HARBOR FOR FORWARD-LOOKING AND CAUTIONARY STATEMENTS This report may contain 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; 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, including the integration of Infocrossing Healthcare Services, Inc., f/k/a Verizon Information Technologies 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. ITEM 2.01 RESULTS OF OPERATIONS AND FINANCIAL CONDITION On August 9, 2005, the Company announced its results of operations and financial condition for the three and six-month periods ended June 30, 2005 by means of the press release attached hereto as exhibit 99. The press release also announced that since the market price of the Company's common stock was less than $10.48 for 20 of 30 consecutive trading days, a provision of the $72 million of 4.00% Convertible Senior Notes due 2024 required the conversion price to be reduced from $15.36 to $12.69 as of the close of trading on August 5, 2005. Accordingly, the notes are now convertible into 5,673,759 common shares, an increase of 986,259, or approximately 21% over the initial number of 4,687,500 shares. The indenture does not require any additional adjustments to the conversion price based on the market price of the Company's common shares. The Company also announced a conference call for investors and analysts on Tuesday, August 9, 2005 at 4:30 p.m. EDT to discuss results for the Company's first quarter of 2005. The call-in number for the live audio call beginning at 4:30 p.m. EDT is 1-973-409-9259. A live web cast of the conference call will also be available on Infocrossing's website at http://www.infocrossing.com. An audio replay of the conference call will be available from 6:30 p.m. EDT on Tuesday, May 10, 2005, for seven days at 973-341-3080. The pass code for the replay is 5984285. A webcast of the conference call will be available for 30 days following the call at http://www.infocrossing.com. ITEM 9.01(c) EXHIBITS. 99 Press release of the Company dated August 9, 2005 SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. INFOCROSSING, INC. Date: August 9, 2005 By: /s/ WILLIAM J. McHALE ---------------------------------- William J. McHale SVP-Finance, CFO & Treasurer EX-99 2 x99_q205e.txt PRESS RELEASE INFOCROSSING, INC. [LOGO] FOR RELEASE 4:10 PM EDT Contacts: Chairman/CEO Chief Financial Officer Zach Lonstein William McHale Infocrossing, Inc. Infocrossing, Inc. (201) 840-4726 (201) 840-4732 zlonstein@infocrossing.com wmchale@infocrossing.com Investor Relations Matthew Hayden Hayden Communications, Inc. (858) 704-5065 INFOCROSSING REPORTS EARNINGS OF $0.01 PER SHARE FOR SECOND QUARTER ENDED JUNE 30, 2005 LEONIA, NJ, August 9, 2005 -- Infocrossing, Inc. (Nasdaq: IFOX) a provider of selective IT outsourcing and business processing solutions announced today financial results for the second quarter ended June 30, 2005. KEY FINANCIAL RESULTS (All numbers in thousands, except percentages and per share amounts) THREE MONTHS ENDED JUNE 30, 2005 2004 Increase %Change Revenues $ 35,194 $ 24,611 $ 10,583 43% EBITDA $ 4,521 $ 4,269 $ 252 6% Income from operations $ 1,850 $ 2,141 $ (291) (14%) Net income $ 124 $ (262) $ 386 N/A EPS - diluted $ 0.01 $ (0.01) $ 0.02 N/A Diluted shares 22,114 18,323 3,791 21% SIX MONTHS ENDED JUNE 30, 2005 2004 Increase %Change Revenues $ 72,721 $ 39,787 $ 32,934 83% EBITDA $ 12,664 $ 7,120 $ 5,544 78% Income from operations $ 7,373 $ 3,388 $ 3,985 118% Net income $ 2,561 $ 513 $ 2,048 399% EPS - diluted $ 0.11 $ 0.03 $ 0.08 267% Diluted shares 22,415 19,019 3,396 18% THREE MONTHS ENDED JUNE 30, 2005 For the second quarter of 2005, Infocrossing reported revenues of $35,194,000, an increase of $10,583,000 or 43%, compared with revenues of $24,611,000 reported for the second quarter of 2004. This growth reflects $12,537,000 from acquisitions completed in 2004. Excluding revenues from acquisitions, revenues declined by $1,954,000. Earnings before interest, taxes, depreciation and amortization (EBITDA) increased $252,000, or 6% from $4,269,000 for the second quarter of 2004 to $4,521,000 during the second quarter of 2005. EBITDA for the second quarter includes an unusual addition of $1,000,000 to the allowance for doubtful accounts and higher professional fees of $430,000 relating to increased compliance costs with respect to the Sarbanes-Oxley Act and increased audit fees related to acquisitions and growth of the Company. Infocrossing uses EBITDA because it considers such information an important supplemental measure of its operating performance and believes EBITDA 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. A reconciliation of EBITDA to net income follows in Appendix A. Income before taxes increased by $635,000 from a loss of $275,000 for the second quarter of 2004 to income of $360,000 for the second quarter of 2005. Accordingly, the Company had a tax provision of $236,000 for the current quarter compared with a tax benefit of $13,000 for the comparable quarter in 2004. Income taxes were accrued at an effective rate of 66% in the quarter ended June 30, 2005. Net income for the current quarter was $124,000, or $0.01 per diluted share, compared with a net loss of $262,000, or $0.01 per diluted share, for the comparable quarter last year. The weighted average number of shares and share equivalents used to calculate diluted EPS was 22,114,000 shares for the current quarter compared with 18,323,000 for the comparable quarter last year. The share count increase was a result of the issuance of 1.8 million shares for the exercise of stock options in the twelve months ended June 30, 2005, 123,000 shares issued as part of an acquisition in the second half of 2004 and in-the-money options to purchase 913,000 shares were granted during the twelve months ended June 30, 2005. The share count at June 30, 2005 does not include shares to be issued upon the potential conversion of the Company's convertible debt, because the effect of such inclusion would be anti-dilutive. SIX MONTHS ENDED JUNE 30, 2005 Infocrossing reported revenues of $72,721,000 for the six months ended on June 30, 2005, an increase $32,934,000, or 83%, compared with revenues of $39,787,000 for the comparable period in 2004. This growth reflects $33,623,000 from acquisitions completed in 2004. Excluding revenues from acquisitions, revenues declined by $689,000. Earnings before interest, taxes, depreciation, and amortization (EBITDA) increased by $5,544,000, or 78%, to $12,664,000 for the six months ended June 30, 2005 from $7,120,000 for the comparable period in 2004. EBITDA for the six-month period for 2005 includes an unusual addition of $1,000,000 to the allowance for doubtful accounts and higher professional fees of $821,000 relating to increased compliance costs with respect to the Sarbanes-Oxley Act and increased audit fees related to acquisitions and growth of the Company. A reconciliation of EBITDA to net income follows in Appendix A. Income before taxes increased by $4,111,000 to $4,418,000 for the six months ended June 30, 2005 from $307,000 for the comparable period in 2004. Tax expense was $1,857,000 for the six months ended June 30, 2005 compared with a benefit of $206,000 for the comparable period in 2004. Tax expense for the six months ended June 30, 2004 includes a benefit of $234,000 from the sale of New Jersey net operating loss carry-forwards. Although income taxes were accrued for the period at a rate of 42%, they are payable at a rate of 13% because of the utilization of deferred tax assets available to offset a portion of the Company's taxable income. The Company will continue to enjoy the cash benefit of these deferred assets through lower taxes payable in the future. Net income for the six months ended June 30, 2005 was $2,561,000, or $0.11 per diluted share, compared with net income of $513,000, or $0.03 per diluted, share for the comparable period in 2004. The weighted average number of shares and share equivalents used to calculate diluted EPS was 22,415,000 shares for the six months ended June 30, 2005 compared with 19,019,000 shares in 2004. The share count increase was a result of the issuance of 1.8 million shares for the exercise of stock options in the twelve months ended June 30, 2005, 123,000 shares issued as part of an acquisition in the second half of 2004 and in-the-money options to purchase 913,000 shares were granted during the twelve months ended June 30, 2005. The share count at June 30, 2005 does not include shares to be issued upon the potential conversion of the Company's convertible debt, because the effect of such inclusion would be anti-dilutive. In certain instances, the conversion price of the Company's 4.00% Convertible Senior Notes due 2024, having a principal balance off $72 million, may be adjusted. Since the market price of the Company's common stock was less than $10.48 for 20 of 30 consecutive trading days, the conversion price of the notes was reduced from $15.36 to $12.69 as of the close of trading on August 5, 2005. Accordingly, the notes are now convertible into 5,673,759 common shares, an increase of 986,259, or approximately 21% over the initial number of 4,687,500 shares. The indenture does not require any additional adjustments to the conversion price based on the market price of the Company's common shares. Zach Lonstein, Chairman and Chief Executive Officer of Infocrossing, said "Our EPS for the quarter ended June 30, 2005 met the revised estimate we had issued one month ago. As previously announced, we are optimistic that we will be successful in building our business through the addition of new customers, the expansion of our services to existing customers, and the acquisition of companies which fit our strategic requirements. Since the first quarter, we've been notified that we have been awarded approximately $12 million in new outsourcing engagements over terms between three to five years in length. Furthermore, we have been notified by other potential customers that we have been selected as finalists for additional outsourcing awards, and we are confident that we will win some number of these deals. However, we are encountering longer sales cycles, and proposed transactions that we had expected to close and implement by this time have not occurred. With our strong cash position, which has grown by more than 50% during the first half of 2005, and an unwavering commitment to building value for our customers and shareholders, we remain confident in the Company's prospects for growth." Infocrossing will hold a conference call for investors and analysts on Tuesday, August 9, 2005 at 4:30 p.m. EDT to discuss results for the Company's first quarter of 2005. The call-in number for the live audio call beginning at 4:30 p.m. EDT is 1-973-409-9259. A live web cast of the conference call will also be available on Infocrossing's website at http://www.infocrossing.com. An audio replay of the conference call will be available from 6:30 p.m. EDT on Tuesday, May 10, 2005, for seven days at 973-341-3080. The pass code for the replay is 5984285. A webcast of the conference call will be available for 30 days following the call at http://www.infocrossing.com. This call is being webcast by ViaVid Broadcasting and can be accessed at Infocrossing's website at www.infocrossing.com. The webcast may also be accessed at ViaVid's website at www.viavid.net. The webcast can be accessed through June 9, 2005 on either site. 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 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, 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: 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, including the integration of Infocrossing Healthcare Services, Inc., f/k/a Verizon Information Technologies 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. (financial tables follow)
INFOCROSSING, INC. & SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED, IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30, ---------------------------------------- --------------------------------------- 2005 2004 2005 2004 ------------------ ------------------ ------------------ ----------------- REVENUES $ 35,194 $ 24,611 $ 72,721 $ 39,787 --------------- --------------- --------------- -------------- COSTS and EXPENSES: Costs of revenues, excluding depreciation shown below 25,506 17,567 51,353 27,790 Selling and promotion costs 1,156 905 2,114 1,641 General and administrative expenses 4,011 1,870 6,590 3,236 Depreciation and amortization 2,671 2,128 5,291 3,732 --------------- --------------- --------------- -------------- 33,344 22,470 65,348 36,399 --------------- --------------- --------------- -------------- INCOME FROM OPERATIONS 1,850 2,141 7,373 3,388 --------------- --------------- --------------- -------------- Interest income (126) (37) (252) (80) Fees related to loans repaid - 1,347 - 1,347 Interest expense 1,616 1,106 3,207 1,814 --------------- --------------- --------------- -------------- 1,490 2,416 2,955 3,081 --------------- --------------- --------------- -------------- INCOME (LOSS) BEFORE INCOME TAXES 360 (275) 4,418 307 Income tax (benefit) expense 236 (13) 1,857 (206) --------------- --------------- --------------- -------------- NET INCOME (LOSS) $ 124 $ (262) $ 2,561 $ 513 =============== =============== =============== ============== BASIC INCOME (LOSS) PER SHARE: Net income (loss) $ 0.01 $ (0.01) $ 0.13 $ 0.03 =============== =============== =============== ============== Weighted average number of common shares outstanding 20,247 18,323 20,167 16,757 =============== =============== =============== ============== DILUTED INCOME (LOSS) PER SHARE: Net income (loss) $ 0.01 $ (0.01) $ 0.11 $ 0.03 =============== =============== =============== ============== Weighted average number of common shares and share equivalents outstanding 22,114 18,323 22,415 19,019 =============== =============== =============== ==============
Certain reclassifications were made to prior period amounts to conform to the current presentation.
INFOCROSSING, INC. & SUBSIDIARIES SUMMARY CONSOLIDATED BALANCE SHEETS (IN THOUSANDS) JUNE 30, DECEMBER 31, 2005 2004 -------------- -------------- (UNAUDITED) ASSETS Cash and equivalents $ 40,283 $ 26,311 Trade accounts receivable, net of allowances for doubtful accounts of $1,420 and $249 at June 30, 2005 and December 31, 2004, respectively 19,404 26,707 Other current assets 8,585 7,733 ----------- ----------- Total current assets 68,272 60,751 Property, equipment and purchased software, net 27,101 25,113 Goodwill 104,228 103,177 Other non-current assets 26,119 27,609 ----------- ----------- TOTAL ASSETS $ 225,720 $ 216,650 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities $ 20,963 $ 22,569 Long-term debt and capitalized lease obligations, net of current portion 101,674 100,432 Other long-term liabilities 2,711 2,412 ----------- ----------- TOTAL LIABILITIES 125,348 125,413 Common stockholders' equity 100,372 91,237 ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 225,720 $ 216,650 =========== ===========
Certain reclassifications were made to prior period amounts to conform to the current presentation. SUPPLEMENTARY INFORMATION APPENDIX A EBITDA RECONCILIATION The reconciliation of EBITDA with net income for the quarters and six-month periods ended June 30, 2005 and 2004, respectively, is as follows (in thousands):
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30, ---------------------------------------- --------------------------------------- 2005 2004 2005 2004 ------------------ ------------------ ------------------ ----------------- Net income (loss) $ 124 $ (262) $ 2,561 $ 513 Add (deduct): Income tax provision (benefit) 236 (13) 1,857 (206) Net interest expense 1,490 2,416 2,955 3,081 Depreciation and amortization 2,671 2,128 5,291 3,732 --------------- --------------- --------------- -------------- EBITDA $ 4,521 $ 4,269 $ 12,664 $ 7,120 =============== =============== =============== ==============
Certain reclassifications were made to prior period amounts to conform to the current presentation. -----END PRIVACY-ENHANCED MESSAGE-----