INFT Infinity Bancorp (QB)

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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