-----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, WBhK438Z3L6fNsI5J+zdrLS9avljSmfk+Vq1Mt3x03eoVT4QkrF63zT7WmOsuSan sPs8uznZAen1cNkgNuVSOQ== 0000893816-04-000045.txt : 20040623 0000893816-04-000045.hdr.sgml : 20040623 20040623160632 ACCESSION NUMBER: 0000893816-04-000045 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040623 ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20040623 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: 04877471 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 k8gd04.txt GUIDANCE FOR 2004-05 U. S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 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 in the Initial Report): JUNE 23, 2004 -------------- INFOCROSSING, INC. ------------------ (Exact name of issuer 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) (201) 840-4700 (Issuer's telephone number) N/A (Former name or former address, if changed since last report.) ITEM 9. REGULATION FD DISCLOSURE This report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These statements include the projections set forth below and, in some cases, can otherwise be identified terminology such as "may," "will," "should," "expect," "anticipate," "intend," "plan," "believe," "estimate," "potential," or "continue," the negative of these terms or other comparable terminology. These statements involve a number of 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; new products; technological changes; the Company's dependence on third party suppliers; intellectual property rights; difficulties with the integration of acquired businesses; and other risks. For any of these statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, Public Law 104-67, as amended. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report and based on information currently and reasonably known. The Company undertakes no obligation to release any revisions to or update these forward-looking statements to reflect events or circumstances that occur after the date of this report or to reflect the occurrence or effect of anticipated or unanticipated events. The Company elects to make public the following forward-looking information:
SUMMARY CONSOLIDATED PROJECTED INCOME STATEMENTS (IN MILLIONS EXCEPT PER SHARE DATA) QUARTERS ENDING YEARS ENDING ------------------------------------------------------------- -------------------------------------- MARCH JUNE SEPTEMBER DECEMBER DECEMBER DECEMBER 31, 2004 (A) 30, 2004 30, 2004 31, 2004 31, 2004 31, 2005 ------------- ------------- ------------- ------------- -------------- -------------------- Revenues $ 15.2 $ 24.4 $ 26.2 $ 29.6 $ 95.4 $ 132.0 - 135.0 --------- --------- --------- ---------- ---------- ----------------- Net income (b) $ 0.8 $ 1.0 $ 1.9 $ 3.9 $ 7.6 $ 17.9 - 18.6 ========= ========= ========= ========== ========== ================= Net income per diluted common share $ 0.05 $ 0.05 $ 0.09 $ 0.19 $ 0.40 $ 0.86 - 0.89 ========= ========= ========= ========== ========== ================= Weighted average common shares and equivalents outstanding 17.1 20.8 20.8 20.8 19.2 20.8 ========= ========= ========= ========== ========== =================
SUMMARY CONSOLIDATED PROJECTED INCOME STATEMENTS RECONCILIATION OF NET INCOME TO EBITDA (IN MILLIONS EXCEPT PER SHARE DATA) QUARTERS ENDING YEARS ENDING ------------------------------------------------------------- ---------------------------------- MARCH JUNE SEPTEMBER DECEMBER DECEMBER DECEMBER 30, 2004 (A) 30, 2004 30, 2004 31, 2004 31, 2004 31, 2005 -------------- ------------ ----------- ------------ -------------- ----------------- Net income (b) $ 0.8 $ 1.0 $ 1.9 $ 3.9 $ 7.6 $ 17.9 - 18.6 Income tax provision (benefit) (0.2) 0.1 0.2 0.3 0.4 6.9 - 7.2 Interest expense (b) 0.7 1.1 1.1 1.1 4.0 3.8 Depreciation and amortization expense 1.6 2.1 2.2 2.3 8.2 8.1 ---------- ---------- ---------- ---------- ---------- ------------- Earnings before interest, taxes, and depreciation and amortization (EBITDA) $ 2.9 4.3 5.4 7.6 20.2 36.7 - 37.7 ========== ========== ========== ========== ========== ============= (a) Actual results. (b) Excludes the effect of a proposed financing. See Forecast Assumptions.
2 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. FORECAST ASSUMPTIONS The Company's forecasted operations are consolidated and include the operating results of ITO Acquisition Corporation, doing business as Strategic Management Specialists ("SMS"), acquired in April 2004. The Company is forecasting earnings of $0.40 per diluted share for 2004 and earnings between $0.86 and $0.89 per diluted share for 2005. Diluted earnings per share are computed using the anticipated number of shares and equivalents to be outstanding during 2004 and 2005. Projected revenues for 2004 consists of revenues from customer contracts including contracts secured through acquisitions. Projected operating costs and expenses reflect current expense levels plus forecasted incremental costs to support the new revenues. Forecasted operating costs and expenses in 2004 reflect planned synergistic savings from the integration of SMS. Operating results also reflect depreciation and interest on projected new capital leases for additional equipment required to support new clients. Increasing economies of scale are expected to enhance operating margins in 2004 and 2005. Taxes are provided for state income taxes in 2004. The Company believes that it can utilize between $6.5 and $7.0 million of Federal net operating loss carryforwards ("NOLs") in 2004 and 2005, and it expects to incur no Federal income tax in 2004. In addition, the Company realized a tax benefit of $0.2 million from the sale of certain state NOLs in the first quarter of 2004. As a result, the Company is forecasting a combined Federal and state income tax rate of 5% for 2004. In 2005, it is anticipated that approximately 60% of the Company's pre-tax income will be in excess of the NOLs it can utilize for the year and therefore, it will be subject to Federal income tax. Accordingly, the Company is forecasting a combined Federal and state income tax rate of 28% for 2005. This forecast was announced today by means of the press release attached as Exhibit 99. 3 The Company's forecast for 2004 and 2005 does not reflect a proposed offering announced separately, subject to market conditions and other factors, of $60 million of Convertible Senior Notes due in 2024. The Company intends to use approximately $40 million of the net proceeds from the offering to redeem its senior secured debt,s which currently bears an interest rate of 9%, and to use the remaining net proceeds for general corporate purposes, including potential acquisitions. As a result of the repayment of the existing indebtedness, the Company will no longer have principal payment obligations of $0.3 million in 2004, and at least $3.8 million in 2005. If the proposed private offering closes, as expected in the second quarter of 2004, the Company will incur a one-time, non-cash charge of approximately $1.3 million, or approximately $.06 per diluted share, in additional expenses related to the write-off of previously deferred financing costs. This one-time, non-cash charge is not reflected in the forecast for 2004. The Pro Forma Summary Consolidated Projected Income Statement below reflects the impact of the proposed offering:
PRO FORMA SUMMARY CONSOLIDATED PROJECTED INCOME STATEMENTS (IN MILLIONS EXCEPT PER SHARE DATA) QUARTERS ENDING YEARS ENDING ----------------------------------------------------------------- ---------------------------------- MARCH JUNE SEPTEMBER DECEMBER DECEMBER DECEMBER 31, 2004 (C) 30, 2004 30, 2004 31, 2004 31, 2004 31, 2005 -------------- -------------- -------------- -------------- -------------- ------------------ Revenues $ 15.2 $ 24.4 $ 26.2 $ 29.6 $ 95.4 $ 132.0 - 135.0 ---------- ---------- ---------- ---------- ----------- -------------- Net income (d) $ 0.8 $ (0.2) $ 2.1 $ 4.0 $ 6.7 $ 17.8 - 18.5 ========== ========== ========== ========== =========== ============== Net income per diluted common share $ 0.05 $ (0.01) $ 0.10 $ 0.19 $ 0.35 $ 0.86 - 0.89 ========== ========== ========== ========== =========== ============== Weighted average common shares and equivalents outstanding 17.1 20.8 20.8 20.8 19.2 20.8 ========== ========== ========== ========== =========== ============== (c) Actual results. (d) Includes the effect of the proposed financing in the amount of $60 million.
These forecasts should be read together with the Company's audited consolidated financial statements in the Annual Report on Form 10-K for December 31, 2003, and the unaudited consolidated financial statements in the Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2004, respectively, that can be obtained from the Securities and Exchange Commission on its Internet website (www.sec.gov) or the Company's Internet website (www.infocrossing.com). The projections were not prepared with a view to compliance with published guidelines of the Securities and Exchange Commission nor the guidelines established by the American Institute of Certified Public Accountants regarding projections or forecasts. The projections do not purport to present operations in accordance with generally accepted accounting principles, and the Company's independent auditors have not examined, compiled or performed any procedures with respect to the projections presented herein, nor have they expressed any opinion or any other form of assurance of such information or its achievability, and accordingly assume no responsibility for them. 4 SIGNATURES Pursuant to the requirements of the Securities 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: June 23, 2004 /s/ WILLIAM J. McHALE -------------------------------- William J. McHale Senior Vice President of Finance 5 EX-99 2 x99gd04.txt PRESS RELEASE - GUIDANCE EXHIBIT 99 Contacts: Chief Executive Officer SVP Finance Zach Lonstein William McHale Infocrossing, Inc. Infocrossing, Inc. 201-840-4710 201-840-4732 zlonstein@infocrossing.com wmchale@infocrossing.com Media Relations Investor Relations Michael Wilczak Matthew Hayden Infocrossing, Inc. Hayden Communications, Inc. 201-840-4941 (760) 487-1137 mwilczak@infocrossing.com INFOCROSSING ISSUES FINANCIAL GUIDANCE FOR 2004 AND 2005 LEONIA, NJ, JUNE 23, 2004 --INFOCROSSING, INC. (NASDAQ: IFOX), a provider of selective IT outsourcing and business processing solutions, announced today financial guidance for the remainder of 2004 and the full-year 2005. For the full year ending December 31, 2004, Infocrossing forecasts record revenue of $95.4 million and net income of $7.6 million, or $0.40 per diluted share. During the same period, the Company forecasts earnings before interest, taxes, depreciation and amortization (EBITDA) to reach $20.2 million. Infocrossing 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. For the full year ending December 31, 2005, Infocrossing forecasts revenue between $132.0 million and $135.0 million and net income between $17.9 million to $18.6 million, or between $0.86 - $0.89 per diluted share. EBITDA for 2005 is projected to grow to between $36.7 million to $37.7 million. A reconciliation of net income to EBITDA is included in the table below. Additional information about the Company's financial guidance for 2004 and 2005 was disclosed in a Form 8-K filed today with the Securities and Exchange Commission.
SUMMARY CONSOLIDATED PROJECTED INCOME STATEMENTS (IN MILLIONS EXCEPT PER SHARE DATA) QUARTERS ENDING YEARS ENDING ------------------------------------------------------------- -------------------------------------- MARCH JUNE SEPTEMBER DECEMBER DECEMBER DECEMBER 31, 2004 (A) 30, 2004 30, 2004 31, 2004 31, 2004 31, 2005 ------------- ------------- ------------- ------------- -------------- -------------------- Revenues $ 15.2 $ 24.4 $ 26.2 $ 29.6 $ 95.4 $ 132.0 - 135.0 --------- --------- --------- ---------- ---------- ----------------- Net income (b) $ 0.8 $ 1.0 $ 1.9 $ 3.9 $ 7.6 $ 17.9 - 18.6 ========= ========= ========= ========== ========== ================= Net income per diluted common share $ 0.05 $ 0.05 $ 0.09 $ 0.19 $ 0.40 $ 0.86 - 0.89 ========= ========= ========= ========== ========== ================= Weighted average common shares and equivalents outstanding 17.1 20.8 20.8 20.8 19.2 20.8 ========= ========= ========= ========== ========== =================
SUMMARY CONSOLIDATED PROJECTED INCOME STATEMENTS RECONCILIATION OF NET INCOME TO EBITDA (IN MILLIONS EXCEPT PER SHARE DATA) QUARTERS ENDING YEARS ENDING ------------------------------------------------------------- ---------------------------------- MARCH JUNE SEPTEMBER DECEMBER DECEMBER DECEMBER 30, 2004 (A) 30, 2004 30, 2004 31, 2004 31, 2004 31, 2005 -------------- ------------ ----------- ------------ -------------- ----------------- Net income (b) $ 0.8 $ 1.0 $ 1.9 $ 3.9 $ 7.6 $ 17.9 - 18.6 Income tax provision (benefit) (0.2) 0.1 0.2 0.3 0.4 6.9 - 7.2 Interest expense (b) 0.7 1.1 1.1 1.1 4.0 3.8 Depreciation and amortization expense 1.6 2.1 2.2 2.3 8.2 8.1 ---------- ---------- ---------- ---------- ---------- ------------- Earnings before interest, taxes, and depreciation and amortization (EBITDA) $ 2.9 4.3 5.4 7.6 20.2 36.7 - 37.7 ========== ========== ========== ========== ========== ============= (a) Actual results. (b) Excludes the effect of a proposed financing. See Forecast Assumptions.
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. Infocrossing's forecasts for 2004 and 2005 do not reflect a proposed offering of $60 million of 4% Convertible Senior Notes due 2024, announced in a separate press release issued today. The initial purchaser will also have a 30-day option to purchase up to an additional $12 million of such notes. Net proceeds from the private offering will be used to repay approximately $40 million of outstanding indebtedness which currently bears an interest rate of 9%, to fund potential acquisitions and for general corporate purposes. The exact timing and terms of the financing will depend upon market conditions and other factors. If the proposed private offering closes as expected in the second quarter of 2004, Infocrossing will incur a one-time non-cash charge of approximately $1.3 million, or approximately $.06 per diluted share, in additional expenses related to the write-off of previously deferred financing costs. As a result of the repayment of the existing indebtedness, the Company will no longer have principal payment obligations of $0.3 million in 2004, and at least $3.8 million in 2005. The table below reflects the impact of the proposed offering.
PRO FORMA SUMMARY CONSOLIDATED PROJECTED INCOME STATEMENTS (IN MILLIONS EXCEPT PER SHARE DATA) QUARTERS ENDING YEARS ENDING ----------------------------------------------------------------- ---------------------------------- MARCH JUNE SEPTEMBER DECEMBER DECEMBER DECEMBER 31, 2004 (C) 30, 2004 30, 2004 31, 2004 31, 2004 31, 2005 -------------- -------------- -------------- -------------- -------------- ------------------ Revenues $ 15.2 $ 24.4 $ 26.2 $ 29.6 $ 95.4 $ 132.0 - 135.0 ---------- ---------- ---------- ---------- ----------- -------------- Net income (d) $ 0.8 $ (0.2) $ 2.1 $ 4.0 $ 6.7 $ 17.8 - 18.5 ========== ========== ========== ========== =========== ============== Net income per diluted common share $ 0.05 $ (0.01) $ 0.10 $ 0.19 $ 0.35 $ 0.86 - 0.89 ========== ========== ========== ========== =========== ============== Weighted average common shares and equivalents outstanding 17.1 20.8 20.8 20.8 19.2 20.8 ========== ========== ========== ========== =========== ============== (c) Actual results. (d) Includes the effect of the proposed financing in the amount of $60 million.
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 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. 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; new products; technological changes; the Company's dependence upon third-party suppliers; intellectual property rights; difficulties with the integration of SMS, 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. -----END PRIVACY-ENHANCED MESSAGE-----