INFT Infinity Bancorp (QB)

Inforte Corp. Announces First Quarter 2005 Results CHICAGO, April 21 /PRNewswire-FirstCall/ -- Business and Customer Intelligence consultancy Inforte Corp. (NASDAQ:INFT) announced today that revenue and diluted earnings per share (EPS) excluding capital restructuring expenses were both within the guidance ranges for the quarter ending March 31, 2005. First quarter revenue was $9.5 million, net revenue was $8.7 million and pro forma diluted earnings per share (EPS) were $0.00. Pro forma information excludes the costs of the capital restructuring during the first quarter, which included an exchange of outstanding options for cash and restricted stock and the granting of additional common stock. This information is provided to enhance the understanding of the Company's financial performance and is reconciled to the Company's GAAP information in the accompanying tables. Dave Sutton, Inforte's chief executive officer and president, commented, "Over the last few months we have restructured our facilities, executed a capital restructuring program and successfully completed the integration of the Compendit acquisition into the rest of our business. We now have a sound foundation for maximizing our earnings potential as we progress through the balance of the year and beyond." Actual earnings results for the quarter and year ended March 31, 2005, and financial highlights, are as follows: -- Pro forma net income for the quarter was $25,000. -- Employees totaled 223, of which 180 were billable. -- Cash and marketable securities were $52.2 million before reflecting the special one-time distribution which was paid in April, 2005; this represents $4.55 of cash and marketable securities per share, based upon 11,453,734 actual shares outstanding. -- Quarterly net revenue per consultant and per employee were both improved from last quarter at $194,000 and $161,000 annualized, respectively. Guidance is as follows: -- Inforte's net revenue guidance for 2Q05 is a range of $8.5 million to $9.5 million compared to actual of $8.7 million in 1Q05. -- EPS guidance for 2Q05 is a range of $0.00 to $0.04 compared to actual of $0.00 in 1Q05. -- Net revenue guidance for 3Q05 is a range of $8.5 million to $9.5 million. 3Q05 EPS guidance is a range of $0.00 to $0.04. This year Inforte completed its capital restructuring program. There were 2.6 million options outstanding at the end of 2004 compared to 739,751 at the end of the first quarter. Approximately $17.4 million of cash has been distributed to stockholders. Nick Heyes, Inforte's chief financial officer, commented, "So far this year we have been able to give back $1.50 per share to stockholders and we still have enough cash to execute against our growth plans. We have eliminated more than 1.85 million dilutive and potentially dilutive options and we have immaterial exposure to option expensing when we have to adopt it next year." This press release contains forward-looking statements that involve risks and uncertainties. Actual results may differ from forward-looking results for a number of reasons, including but not limited to, Inforte's ability to: (i) effectively forecast demand and profitably match resources with demand during a period of tight client budgets and lower spending levels, and when worldwide economic and geopolitical uncertainty is high; (ii) attract and retain clients and satisfy our clients' expectations; (iii) recruit and retain qualified professionals; (iv) accurately estimate the time and resources necessary for the delivery of our services; (v) build and maintain marketing relationships with leading software vendors while occasionally competing with their professional services organizations; (vi) compete with emerging alternative economic models for delivery, such as offshore development; and (vii) identify and successfully offer the solutions that clients demand; as well as other factors discussed from time to time in our SEC filings. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. All forward-looking statements included in this document are made as of the date hereof, based on information available to Inforte on the date thereof, and Inforte assumes no obligation to update any forward-looking statements. About Inforte Corp. Inforte Corp. increases the competitive strength of its Global 1000 clients by providing them with insight, intelligence and an infrastructure to close the fact-gap and enable more timely and profitable decision-making. Inforte consultants combine real-world industry, functional and analytical expertise with innovative go-to-market strategies and technology solutions, ensuring that our clients can drive transformational, measurable results in their customer interactions. Inforte executives are the authors of several leading books on enterprise-grade business intelligence, customer insight and marketing transformation including Mastering the SAP Business Information Warehouse; CRM Unplugged: Releasing CRM's Strategic Value; and Enterprise Marketing Management: The New Science of Marketing. Founded in 1993, Inforte is headquartered in Chicago and has offices in Atlanta; Dallas; Delhi, India; Hamburg, Germany; London; Los Angeles; New York; San Francisco; Walldorf, Germany; and Washington, D.C. For more information, contact Inforte at 800.340.0200 or visit http://www.inforte.com/ . CONTACT: Kelly Richards, +1.312.233.9567, , or . Visit http://www.inforte.com/investor/ to access the April 21, 2005, Investor Conference Call web cast, which begins at 8:30 a.m. Eastern. CONSOLIDATED STATEMENTS OF OPERATIONS (000's, except per share data) THREE MONTHS ENDED MARCH 31, 2004 2005 (Unaudited) (Unaudited) Revenues: Revenue before reimbursements (net revenue) $10,662 $8,655 Reimbursements 1,413 891 Total Revenues 12,075 9,546 Operating expenses: Project personnel and related expenses 5,580 5,759 Reimbursed expenses 1,413 891 Sales and marketing 1,186 613 Recruiting, retention and training 364 199 Management and administrative 2,907 3,636 Total operating expenses 11,450 11,098 Operating income 625 (1,552) Interest income, net and other 233 261 Income (loss) before income tax 858 (1,291) Income tax expense (benefit) 343 (521) Net income (loss) $515 $(770) Earnings (loss) per share: -Basic $0.05 $(0.07) -Diluted $0.05 $(0.07) Weighted average common shares outstanding: -Basic 10,990 11,132 -Diluted 11,328 11,132 Expenses as a percentage of net revenue Project personnel and related expenses 52.3% 66.5% Sales and marketing 11.1% 7.1% Recruiting, retention, and training 3.4% 2.3% Management and administrative 27.3% 42.0% Income tax rate 40.0% 40.3% Margins Gross income 47.7% 33.5% Operating income 5.9% (17.9)% Pretax income 8.0% (14.9)% Net income 4.8% (8.9)% Year-over-year change Net revenue (19)% Gross income (43)% Operating income (loss) (349)% Pretax income (loss) (250)% Net income (loss) (240)% Diluted EPS NON-GAAP SUPPLEMENTAL INFORMATION (UNAUDITED) (1) STATEMENTS OF OPERATIONS (000's, except per share data) THREE MONTHS ENDED MARCH 31, 2004 2005 (Unaudited) (Unaudited) Operating income 625 (1,552) Tender offer related charges - 1,316 Interest income, net and other 233 261 Income before income tax 858 25 Income tax expense (benefit) 343 - Net income $515 $25 Earnings per share: -Basic $0.05 $0.00 -Diluted $0.05 $0.00 Weighted average common shares outstanding: -Basic 10,990 11,132 -Diluted 11,328 11,279 Expenses as a percentage of net revenue Project personnel and related expenses 52.3% 63.2% Sales and marketing 11.1% 5.7% Recruiting, retention, and training 3.4% 2.2% Management and administrative 27.3% 31.6% Margins Gross income 47.7% 36.8% Operating income 5.9% (2.7)% Pretax income 8.0% 0.3% Net income 4.8% 0.3% Year-over-year change Net revenue -19% Gross income -37% Operating income -138% Pretax income -97% Net income -95% Diluted EPS -100% (1) The Non-GAAP supplemental information shows results excluding the impact of one-time charges related to the tender offer to convert certain stock options into cash and restricted stock and a one-time cash distribution to stockholders that occurred in the first quarter of 2005. The total expense of $1,316 included: (i) $848 for charges related to the exchange of stock options for cash; (ii) $378 for common stock grants to employees who had chosen not to exercise options prior to the one-time cash distribution; and (iii) $90 for professional services. The non-GAAP results are provided in order to enhance the user's overall understanding of the company's current and future financial performance by excluding certain items that management believes are not indicative of its core operating results and by providing results that provide a more consistent basis for comparison between quarters. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with accounting principles generally accepted in the United States of America. INFORTE CORP. CONSOLIDATED BALANCE SHEETS (000's) MAR 31, JUN 30, SEPT 30, DEC 31, MAR 31, 2004 2004 2004 2004 2005 (Unaudited) (Unaudited) (Unaudited) (Unaudited) ASSETS Current assets: Cash and cash equivalents $18,630 $17,767 $18,889 $20,817 $22,041 Short-term marketable securities 15,860 22,273 25,457 24,657 24,036 Accounts receivable 8,633 8,893 7,469 7,491 6,760 Allowance for doubtful accounts (500) (500) (500) (450) (450) Accounts receivable, net 8,133 8,393 6,969 7,041 6,310 Prepaid expenses and other current assets 1,273 1,144 985 875 1,163 Interest receivable on investment Securities 403 314 389 383 399 Deferred income taxes 643 656 622 2,662 2,424 Income taxes recoverable 401 460 501 1,025 1,042 Total current assets 45,343 51,007 53,812 57,460 57,415 Computers, purchased software and property 2,525 2,682 3,113 3,218 2,642 Less accumulated depreciation and amortization 1,572 1,690 1,907 2,125 1,623 Computers, purchased software and property, net 953 992 1,206 1,093 1,019 Long-term marketable securities 24,457 18,441 14,136 12,106 6,086 Intangible assets 127 78 38 - - Goodwill 5,378 5,434 11,737 11,726 11,726 Deferred income taxes 317 309 295 207 366 Total assets $76,575 $76,261 $81,224 $82,592 $76,612 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $1,554 $1,341 $995 $756 $710 Income taxes payable - - - 1,309 148 Accrued expenses 3,146 3,315 2,738 2,364 2,274 Accrued loss on disposal of Leased property 489 419 346 2,278 1,826 Current portion of deferred acquisition payment 500 - 3,150 3,150 3,150 Dividends declared - - - - 17,375 Deferred revenue 2,657 2,778 2,209 1,667 1,085 Total current liabilities 8,346 7,853 9,438 11,524 26,568 Non current liabilities: Non-current portion of deferred acquisition payment - - 3,150 3,150 - Stockholders' equity: Common stock, $0.001 par value authorized- 50,000,000 shares; issued and outstanding (net of treasury stock)- 11,453,734 as of Mar. 31, 2005, excluding option grants 11 11 11 11 11 Additional paid-in capital 80,113 80,206 80,384 80,652 74,015 Cost of common stock in treasury (2,720,823 shares as of Mar. 31, 2005) (24,997) (24,997) (24,997) (24,997) (24,997) Stock-based compensation 60 161 180 181 585 Retained earnings 12,541 12,737 12,742 11,462 - Accumulated other comprehensive income 501 290 316 609 430 Total stockholders' equity 68,229 68,408 68,636 67,918 50,044 Total liabilities and stockholders' equity $76,575 $76,261 $81,224 $82,592 $76,612 Total cash and marketable securities $58,947 $58,481 $58,482 $57,580 $52,163 INFORTE CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS (000's) THREE MONTHS ENDED MARCH 31, 2004 2005 (Unaudited) (Unaudited) Cash flows from operating activities Net income (loss) $515 $(770) Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 355 384 Non-cash compensation 60 404 Deferred income taxes 31 79 Changes in operating assets and liabilities Accounts receivable (1,628) 731 Prepaid expenses and other current assets (539) (305) Accounts payable (48) (46) Income taxes (1,042) (1,178) Accrued expenses and other (1,272) (542) Deferred revenue (108) (582) Net cash provided by (used in) operating activities (3,676) (1,825) Cash flows from investing activities Acquisition of Compendit, net of cash (5,120) (3,150) Decrease in marketable securities 3,155 6,359 Purchases of property and equipment (253) (137) Net cash provided by (used in) investing activities (2,218) 3,072 Cash flows from financing activities Proceeds from stock option and purchase plans 322 46 Net cash provided by financing activities 322 46 Effect of changes in exchange rates on cash 131 (69) Increase (decrease) in cash and cash equivalents (5,441) 1,224 Cash and cash equivalents, beg. of period 24,071 20,817 Cash and cash equivalents, end of period $18,630 $22,041 DATASOURCE: Inforte Corp. CONTACT: Kelly Richards of Inforte Corp., +1-312-233-9567, , or Web site: http://www.inforte.com/ http://www.inforte.com/investor

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