CHICAGO, July 26 /PRNewswire-FirstCall/ -- Inforte Corp. (NASDAQ:INFT) announced today that revenue for the quarter ending June 30, 2006 was $10.5 million. Net revenue, which is revenue less reimbursements, was $9.6 million. Diluted earnings per share (EPS) were four cents compared to three cents last quarter.
Steve Mack, Inforte's chief executive officer and president, commented, "Over the last year and particularly this quarter we have seen our customer analytics business grow significantly. It has increased more than four-fold in the year, which reinforces our belief that it will be a major part of our growth strategy." Actual earnings results for the quarter ending June 30, 2006, and financial highlights, are as follows: -- Net income for the quarter was $420,000 compared to $328,000 last
quarter. -- Net income as a percentage of net revenue was 4.4 percent compared to
3.3 percent last quarter. -- Operating income for the quarter increased to $443,000 compared to
$362,000 last quarter. -- Operating income as percentage of net revenue was 4.6 percent,
compared to 3.6 percent in the first quarter of the year. -- Gross income as a percentage of net revenue was 43.2 percent. -- Cash flow from operations for the quarter was positive. -- As of June 30, 2006, cash and marketable securities were
$29.8 million. -- Consultant utilization was 63 percent. -- Annualized quarterly net revenue per consultant and net revenue per
employee were $215,000 and $171,000 respectively. -- At the end of the quarter there were 238 employees in total, 192 of
which were billable. Last quarter's figures include the expense related to the chief executive officer transition, the detail for which can be found in the first quarter press release and 10Q.
Net revenue guidance for the next quarter is set at a range of $8.8 million to $9.8 million and EPS guidance is set at a range of negative three cents to three cents.
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; (vii) integrate acquired businesses; (viii) grow new areas of its business, such as business intelligence and managed analytics; and (ix) 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 helps companies acquire, develop and retain profitable customers with a unique combination of strategic, analytic and technology deployment services. Our approach enables clients to improve their understanding of customer behavior; successfully apply this insight to customer interactions; and continually analyze and fine-tune their strategies and tactics. Founded in 1993, Inforte is headquartered in Chicago with offices in Atlanta; Dallas; Delhi, India; Hamburg, Germany; Los Angeles; London; San Francisco; and Washington, D.C. For more information, call 800.340.0200 or visit http://www.inforte.com/ .
CONTACT: , or Visit http://www.inforte.com/investor/ to access the July 26, 2006, 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 SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------------------------------------
2005 2006 2005 2006
---------- ---------- ---------- ----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues: Revenue before
reimbursements
(net revenue) $9,794 $9,573 $18,449 $19,526
Reimbursements 1,099 889 1,990 1,886
---------- ---------- ---------- ----------
Total revenues 10,893 10,462 20,439 21,412 Cost of services:
Project personnel
and related expenses 5,321 5,442 11,080 10,787
Reimbursed expenses 1,099 889 1,990 1,886
---------- ---------- ---------- ----------
Total cost of services 6,420 6,331 13,070 12,673
---------- ---------- ---------- ----------
Gross profit 4,473 4,131 7,369 8,739 Other operating expenses:
Sales and marketing 691 554 1,304 1,226
Recruiting, retention
and training 262 471 461 844
Management and
administrative 2,958 2,663 6,594 5,864
---------- ---------- ---------- ---------
Total other operating
expenses 3,911 3,688 8,359 7,934 Operating income (loss) 562 443 (990) 805
Loss on investment in
affiliate - (61) - (136)
Interest income, net and
other 196 344 457 624
---------- ---------- ---------- ----------
Income (loss) before
income tax 758 726 (533) 1,293
Income tax expense
(benefit) 304 306 (217) 544
---------- ---------- ---------- ----------
Net income (loss) $454 $420 $(316) $749
========== ========== ========== ========== Earnings per share:
-Basic $0.04 $0.04 $(0.03) $0.06
-Diluted $0.04 $0.04 $(0.03) $0.06 Weighted average common
shares outstanding:
-Basic 11,234 11,363 11,184 11,323
-Diluted 11,711 11,687 11,184 11,725 Expenses as a percentage
of net revenue
Project personnel
and related
expenses 54.3% 56.8% 60.1% 55.2%
Sales and marketing 7.1% 5.8% 7.1% 6.3%
Recruiting, retention,
and training 2.7% 4.9% 2.5% 4.3%
Management and
administrative 30.2% 27.8% 35.7% 30.0%
Income tax rate 40.1% 42.2% 40.7% 42.1% Margins
Gross income 43.2% 39.9% 44.8%
Operating income 4.6% -5.4% 4.1%
Pretax income 7.6% -2.9% 6.6%
Net income 4.4% -1.7% 3.8% Year-over-year change
Net revenue -2% 6%
Gross income -8% 19%
Operating income -21% -
Pretax income -4% -
Net income -7% -
Diluted EPS 0% -
NON-GAAP SUPPLEMENTAL INFORMATION (UNAUDITED) (1)
STATEMENTS OF OPERATIONS
(000's, except per share data)
SIX MONTHS ENDED
June 30, 2005
----------
(Unaudited) Operating income (loss) (990)
Tender offer related charges 1,316
Termination of employment charges -
Loss on investment in affiliate -
Interest income, net and other 457
--------
Non-GAAP income before income tax 783
Non-GAAP income tax expense 304
--------
Non-GAAP net income $479
Non-GAAP earnings per share:
-Basic $0.04
-Diluted $0.04 Weighted average common shares outstanding:
-Basic 11,184
-Diluted 11,459 Non-GAAP margins as a percentage of net revenue:
Pretax income 4.2%
Net income 2.6%
(1) The Non-GAAP supplemental information shows results excluding the
impact of the capital restructuring 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. Of
the total expense of $1,316, $292 was charged to Project personnel
and related expenses, $119 was charged to sales and marketing, $8 was
charged to recruiting, retention and training and $897 was charged to
the management and administrative line of the Consolidated Statement
of Operations. 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) JUNE 30, SEPT 30, DEC 31, MAR 31, JUNE 30,
2005 2005 2005 2006 2006
-------- -------- -------- -------- --------
(Unaudited) (Unaudited) (Unaudited) (Unaudited) ASSETS
Current assets:
Cash and
cash
equivalents $9,471 $12,107 $10,353 $12,217 $10,569
Short-term
marketable
securities 20,022 18,996 22,591 17,844 19,266
Accounts
receivable 7,875 8,707 8,460 8,078 7,683
Allowance for
doubtful
accounts (450) (450) (400) (400) (400)
-------- -------- -------- -------- --------
Accounts
receivable,
net 7,425 8,257 8,060 7,678 7,283
Note
receivable
from affiliate 50 429 684 1,122 1,537
Prepaid
expenses
and other
current
assets 1,162 1,066 1,023 1,211 1,147
Interest
receivable
on investment
securities 261 204 199 164 133
Deferred income
taxes 1,053 1,073 484 371 351
Income taxes
recoverable 1,013 218 124 124 13
-------- -------- -------- -------- --------
Total
current
assets 40,457 42,350 43,518 40,731 40,299 Computers,
purchased
software and
property 2,602 2,111 1,862 1,865 2,303
Less
accumulated
depreciation
and
amortization 1,754 1,091 881 805 893
-------- -------- -------- -------- --------
Computers,
purchased
software and
property, net 848 1,020 981 1,060 1,410
Long-term
marketable
securities 3,543 492 - - -
Intangible
assets - 64 42 27 14
Goodwill 11,726 14,307 15,238 15,238 15,126
Deferred
income taxes 1,495 1,565 2,758 2,754 2,748
Investment in
affiliate 2,000 1,924 1,857 11,78 1,721
-------- -------- -------- -------- --------
Total
assets $60,069 $61,722 $64,394 $61,593 $61,318
======== ======== ======== ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts
payable $413 $666 $357 $406 $1,152
Income taxes
payable 260 359 920 992 306
Accrued
expenses 2,890 3,012 3,595 3,850 3,195
Accrued loss
on disposal
of leased
property 1,492 1,106 845 635 486
Current
portion of
deferred
acquisition
payment 3,150 3,650 3,650 500 500
Dividends
declared - - - - -
Deferred
revenue 1,166 1,084 1,679 1,456 1,197
-------- -------- -------- -------- --------
Total
current
liabilities 9,371 9,877 11,046 7,839 6,836 Non current liabilities:
Non-current
portion of
deferred
acquisition
payment - 500 1,500 1,500 1,500
Stockholders'
equity:
Common stock,
$0.001 par
value authorized
- 50,000,000
shares; issued
and outstanding
(net of treasury
stock)-
11,853,576
as of Jun. 30, 2006 12 12 13 12 12
Additional
paid-in
capital 74,170 74,168 74,204 74,204 74,146
Cost of
common stock
in treasury
(2,720,823
shares as
of Jun. 30,
2006) (24,997) (24,997) (24,997) (24,997) (24,997)
Stock-based
compensation 823 1,011 1,265 1,257 1,341
Retained
earnings 454 999 1,307 1,636 2,056
Accumulated
other
comprehensive
income 236 152 56 142 424
-------- -------- -------- -------- --------
Total
stock-
holders'
equity 50,698 51,345 51,848 52,254 52,982
-------- -------- -------- -------- --------
Total
liabilities
and
stock-
holders'
equity $60,069 $61,722 $64,394 $61,593 $61,318
======== ======== ======== ======== ======== Total
cash
and
marketable
securit-
ies $33,036 $31,595 $32,944 $30,061 $29,835 INFORTE CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS
(000's)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------------------------------
2005 2006 2005 2006
--------- -------- --------- --------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Cash flows from
operating activities
Net income (loss) $454 $420 $(316) $749 Adjustments to reconcile
net income to net cash
provided by (used in)
operating activities:
Depreciation and
amortization 302 242 686 470
Loss on investment
in affiliate - 61 - 136
Stock-based compensation 238 14 642 6
Deferred income taxes 242 (5) 321 112
Changes in operating
assets and liabilities
Accounts receivable (1,115) 395 (384) 777
Prepaid expenses and
other current assets 139 63 (166) (109)
Accounts payable (297) 298 (343) 347
Income taxes 141 (422) (1,037) (350)
Accrued expenses and
other 282 (805) (260) (760)
Deferred revenue 81 (259) (501) (482)
-------- -------- -------- ---------
Net cash provided by
(used in) operating
activities 467 2 (1,358) 896 Cash flows from investing
activities
Acquisition of
Compendit, net of cash - - (3,150) (3,150)
Note receivable from
affiliate (50) (382) (50) (803)
Investment in
affiliate (2,000) - (2,000) -
(Increase) Decrease
in marketable
securities 6,375 (1,492) 12,734 3,246
Purchases of property
and equipment (25) (109) (162) (365)
--------- --------- --------- ---------
Net cash provided by
(used in) investing
activities 4,300 (1,983) 7,372 (1,072) Cash flows from
financing activities
Proceeds from stock
option and purchase
plans 156 - 202 -
Dividends (17,375) - (17,375) -
--------- --------- --------- ---------
Net cash used in
financing
activities (17,219) - (17,173) -
--------- --------- --------- ---------
Effect of changes in
exchange rates on
cash (118) 333 (187) 392
Increase (decrease)
in cash and cash
equivalents (12,570) (1,648) (11,346) 216
Cash and cash
equivalents, beg. of
period 22,041 12,217 20,817 10,353
--------- --------- --------- ---------
Cash and cash
equivalents, end of
period $9,471 $10,569 $9,471 $10,569
========= ========= ========= =========
DATASOURCE: Inforte Corp.
CONTACT: Kelly Richards of Inforte Corp., , or Web site: http://www.inforte.com/ http://www.inforte.com/investor
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