INFT Infinity Bancorp (QB)

CHICAGO, Oct. 25 /PRNewswire-FirstCall/ -- Inforte Corp. (NASDAQ:INFT) announced today that revenue for the quarter ending September 30, 2006 was $11.2 million. Net revenue, which is revenue less reimbursements, was $10.3 million. Diluted earnings per share (EPS) were three cents. Stephen Mack, Inforte's chief executive officer and president, commented, "We had a good quarter, exceeding our revenue guidance and meeting our earnings expectations." Actual results for the quarter ending September 30, 2006, and financial highlights, are as follows: -- Net revenue was $10.3 million, representing year over year growth of six percent and sequential growth of seven percent. -- SAP net revenue grew seventeen percent sequentially going from $3.7 million in the second quarter to $4.4 million this quarter. -- Customer analytics added a significant new client and net revenue more than tripled year over year. -- Cash flow from operations was $792,000, continuing a trend of positive cash flow over the last six quarters. Cash flow from operations was $3.5 million over the last twelve months. -- EPS were three cents. EPS for the first nine months in 2006 were nine cents and compares to two cents last year. -- Net income for the quarter was $302,000. -- As of September 30, 2006, cash and marketable securities were $29.6 million. -- Days sales outstanding were 54, down from 67 in the third quarter last year. -- At the end of the quarter there were 258 employees in total of which 210 were billable. This compares to 237 total employees last quarter of which 191 were billable. -- Consultant utilization was 69 percent compared to 63 percent last quarter. -- Annualized quarterly net revenue per consultant and net revenue per employee were $214,000 and $174,000 respectively. Net revenue guidance for the fourth quarter is set at a range of $8.8 million to $9.8 million and EPS guidance is set at a range of negative four cents to positive two 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; (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 customer 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; London; Los Angeles; 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 October 25, 2006, Investor Conference Call web cast, which begins at 4:30 p.m. Eastern. CONSOLIDATED STATEMENTS OF OPERATIONS (000's, except per share data) THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------------------------------------- 2005 2006 2005 2006 ---------- ---------- ---------- ---------- (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues: Revenue before reimbursements (net revenue) $9,711 $10,252 $28,160 $29,778 Reimbursements 922 961 2,912 2,847 ---------- ---------- ---------- ---------- Total revenues 10,633 11,213 31,072 32,625 Cost of services: Project personnel and related expenses 5,187 6,051 16,267 16,838 Reimbursed expenses 922 961 2,912 2,847 ---------- ---------- ---------- ---------- Total cost of services 6,109 7,012 19,179 19,685 ---------- ---------- ---------- ---------- Gross profit 4,524 4,201 11,893 12,940 Other operating expenses: Sales and marketing 638 641 1,942 1,867 Recruiting, retention and training 324 576 785 1,420 Management and administrative 2,788 2,776 9,382 8,640 ---------- ---------- ---------- ---------- Total other operating expenses 3,750 3,993 12,109 11,927 Operating income (loss) 774 208 (216) 1,013 Loss on investment in affiliate (76) (90) (76) (226) Interest income, net and other 214 414 671 1,038 ---------- ---------- ---------- ---------- Income before income tax 912 532 379 1,825 Income tax expense 367 230 150 774 ---------- ---------- ---------- ---------- Net income $545 $302 $229 $1,051 ========== ========== ========== ========== Earnings per share: -Basic $0.05 $0.03 $0.02 $0.09 -Diluted $0.05 $0.03 $0.02 $0.09 Weighted average common shares outstanding: -Basic 11,260 11,411 11,209 11,353 -Diluted 11,694 11,811 11,516 11,826 Expenses as a percentage of net revenue Project personnel and related expenses 53.4% 59.0% 57.8% 56.5% Sales and marketing 6.6% 6.2% 6.8% 6.3% Recruiting, retention, and training 3.3% 5.6% 2.8% 4.8% Management and administrative 28.7% 27.1% 33.3% 29.0% Income tax rate 40.2% 43.2% 39.6% 42.4% Margins Gross income 46.6% 41.0% 42.2% 43.5% Operating income 8.0% 2.0% -0.8% 3.4% Pretax income 9.4% 5.2% 1.3% 6.1% Net income 5.6% 2.9% 0.8% 3.5% Year-over-year change Net revenue 6% 6% Gross income -7% 9% Operating income -73% - Pretax income -42% 381% Net income -45% 358% Diluted EPS -40% 350% NON-GAAP SUPPLEMENTAL INFORMATION (UNAUDITED) (1) STATEMENTS OF OPERATIONS (000's, except per share data) NINE MONTHS ENDED SEPTEMBER 30, 2005 ---------- (Unaudited) Operating income (loss) (216) Tender offer related charges 1,316 Loss on investment in affiliate (76) Interest income, net and other 671 -------- Non-GAAP income before income tax 1,695 Non-GAAP income tax expense 671 -------- Non-GAAP net income $1,024 Non-GAAP earnings per share: -Basic $0.09 -Diluted $0.09 Weighted average common shares outstanding: -Basic 11,209 -Diluted 11,516 Non-GAAP margins as a percentage of net revenue: Pretax income 6.0% Net income 3.6% (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) SEPT 30, DEC 31, MAR 31, JUNE 30, SEPT 30, 2005 2005 2006 2006 2006 -------- -------- -------- -------- -------- (Unaudited) (Unaudited) (Unaudited) (Unaudited) ASSETS Current assets: Cash and cash equivalents $12,107 $10,353 $12,217 $10,569 $13,583 Short-term marketable securities 18,996 22,591 17,844 19,266 16,037 Accounts receivable 8,707 8,460 8,078 7,683 7,453 Allowance for doubtful accounts (450) (400) (400) (400) (400) -------- -------- -------- -------- -------- Accounts receivable, net 8,257 8,060 7,678 7,283 7,053 Note receivable from affiliate 429 684 1,122 1,537 1,784 Prepaid expenses and other current assets 1,066 1,023 1,211 1,147 895 Interest receivable on investment securities 204 199 164 133 125 Deferred income taxes 1,073 484 371 351 371 Income taxes recoverable 218 124 124 13 - -------- -------- -------- -------- -------- Total current assets 42,350 43,518 40,731 40,299 39,848 Computers, purchased software and property 2,111 1,862 1,865 2,303 2,324 Less accumulated depreciation and amortization 1,091 881 805 893 955 -------- -------- -------- -------- -------- Computers, purchased software and property, net 1,020 981 1,060 1,410 1,369 Long-term marketable securities 492 - - - - Intangible assets 64 42 27 14 7 Goodwill 14,307 15,238 15,238 15,126 15,118 Deferred income taxes 1,565 2,758 2,754 2,748 2,786 Investment in affiliate 1,924 1,857 1,783 1,721 1,631 -------- -------- -------- -------- -------- Total assets $61,722 $64,394 $61,593 $61,318 $60,759 ======== ======== ======== ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $666 $357 $406 $1,152 $458 Income taxes payable 359 920 992 306 320 Accrued expenses 3,012 3,595 3,850 3,195 3,349 Accrued loss on disposal of leased property 1,106 845 635 486 408 Current portion of deferred acquisition payment 3,650 3,650 500 500 500 Deferred revenue 1,084 1,679 1,456 1,197 944 -------- -------- -------- -------- -------- Total current liabilities 9,877 11,046 7,839 6,836 5,979 Non current liabilities: Non-current portion of deferred acquisition payment 500 1,500 1,500 1,500 1,000 Stockholders' equity: Common stock, $0.001 par value authorized- 50,000,000 shares; issued and outstanding (net of treasury stock)- 11,905,374 as of Sept. 30, 2006 12 13 12 12 12 Additional paid-in capital 75,179 75,469 75,461 75,487 75,795 Cost of common stock in treasury (2,720,823 shares as of Sept. 30, 2006) (24,997) (24,997) (24,997) (24,997) (24,997) Retained earnings 999 1,307 1,636 2,056 2,358 Accumulated other comprehensive income 152 56 142 424 612 -------- -------- -------- -------- -------- Total stockholders' equity 51,345 51,848 52,254 52,982 53,780 -------- -------- -------- -------- -------- Total liabilities and stockholders' equity $61,722 $64,394 $61,593 $61,318 $60,759 ======== ======== ======== ======== ======== Total cash and marketable securities $31,595 $32,944 $30,061 $29,835 $ 29,620 INFORTE CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS (000's) THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ----------------------------------------------- 2005 2006 2005 2006 -------- --------- -------- -------- (Unaudited) (Unaudited) (Unaudited) (Unaudited) Cash flows from operating activities Net income $545 $302 $229 $1,051 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 293 228 979 698 Loss on investment in affiliate 76 90 76 226 Stock-based compensation 188 191 830 197 Deferred income taxes (90) (58) 231 54 Changes in operating assets and liabilities Accounts receivable (722) 230 (1,106) 1,007 Prepaid expenses and other current assets 158 210 (8) 101 Unbilled revenue 463 - 463 - Accounts payable (78) (269) (421) 78 Income taxes 894 44 (143) (306) Accrued expenses and other current assets (264) 77 (524) (683) Deferred revenue (82) (253) (583) (735) -------- --------- -------- -------- Net cash provided by operating activities 1,381 792 23 1,688 Cash flows from investing activities Acquisitions, net of cash (2,177) (392) (5,327) (3,542) Note receivable from affiliate (375) (198) (425) (1,001) Investment in affiliate - - (2,000) - Decrease in marketable securities 3,981 3,223 16,715 6,469 Purchases of property and equipment (116) (597) (278) (962) -------- --------- -------- -------- Net cash provided by investing activities 1,313 2,036 8,685 964 Cash flows from financing activities Proceeds from stock option and purchase plans - - 202 - Dividends - - (17,375) - -------- --------- -------- -------- Net cash used in financing activities - - (17,173) - -------- --------- -------- -------- Effect of changes in exchange rates on cash (58) 186 (245) 578 Increase (decrease) in cash and cash equivalents 2,636 3,014 (8,710) 3,230 Cash and cash equivalents, beg. of period 9,471 10,569 20,817 10,353 -------- -------- -------- -------- Cash and cash equivalents, end of period $12,107 $13,583 $12,107 $13,583 ======== ======== ======== ======== DATASOURCE: Inforte Corp. CONTACT: Kelly Richards of Inforte Corp., , or Web site: http://www.inforte.com/

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