As of December 31, 2004, INFT had approximately $5.18 in cash backing up each share. On January 27, the company announced a cash distribution of $1.50 per share. I don't think that they have announced a date for the distribution. The stock, which closed Friday at $6.51 per share, is down a bit from the January 26 close of $6.57.
biz.yahoo.com
Inforte Corp. Announces 2004 Results, a Capital Restructuring
Including a Special One-Time Dividend of $1.50 per Share and CEO Transition
Thursday January 27, 6:00 am ET
CHICAGO, Jan. 27 /PRNewswire-FirstCall/ -- Enterprise Business Intelligence consultancy Inforte Corp. Nadaq: INFT - News) announced today that revenue and diluted earnings per share (EPS) were both within the guidance ranges for the quarter ending December 31, 2004.
In addition, Inforte today announced that its board of directors has approved a capital restructuring plan that includes (1) a special one-time dividend of $1.50 per share and (2) a program to offer employees, with respect to certain stock options, the opportunity to convert stock options to restricted stock or to cash out stock options.
Fourth quarter revenue was $11 million, and net revenue was $9.8 million, representing 14% growth year over year. Pro forma diluted earnings per share were $0.00. Pro forma information excludes the impact of a one-time write-off of lease costs in the fourth quarter and 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.
For 2004, revenue was $50.1 million; net revenue was $43.9 million, up 35% from 2003 and representing organic growth of 7%. Pro forma diluted earnings per share were $0.07, compared to $0.16 for the previous year. Phil Bligh, Inforte's chairman and chief executive officer, commented, "We had a good year of revenue growth. We grew 35% over last year, and we had four consecutive quarters with year-over-year revenue growth. This is our best growth achievement since 2000 and best revenue year since 2001. We were also profitable from operations for the full year. In the coming year we will aim to continue to transform more of our revenue base to our target Business Intelligence and Customer Management markets and focus on producing higher operating margins."
Actual revenue and earnings results for the quarter and year ended December 31, 2004, and financial highlights, are as follows:
-- Pro forma net income for the quarter was $16,000 and for the year was
$0.7 million.
-- As of December 31, 2004, employees totaled 250, of which 205 were
billable.
-- Cash and marketable securities were $57.6 million; this represents
$5.18 of cash and marketable securities per share, based upon
11,107,413 actual shares outstanding.
-- Quarterly net revenue per consultant and per employee were both up from
last quarter at $180,000 and $153,000 annualized, respectively.
Guidance is as follows:
-- Inforte's net revenue guidance for 1Q05 is a range of $8.0 million to
$9.5 million. EPS guidance for 1Q05 is a range of $-0.06 to $0.02
excluding the impact of any capital restructuring charges.
-- Net revenue guidance for 2Q05 is a range of $8.5 million to $9.5
million. 2Q05 EPS guidance is a range of $0.00 to $0.02
Certain employee stock options presently lack significant compensation or motivating benefits due to their strike prices significantly exceeding the current stock price. These employee stock options will contribute significantly, however, to compensation expense beginning July 1, 2005 under new accounting rules. Therefore, the board has approved a program that will allow employees to decide if they want to cash out certain vested and unvested stock options. In addition the program will allow employees to convert certain unvested stock options into restricted shares. As the company's employee option plan does not contemplate a one-time special dividend, the board has also approved the issuance of additional restricted stock to employees holding certain vested stock options reflect the value of the special dividend.
It is anticipated that the offer to exchange or cash out employee options, as described, will commence during the first two weeks of February and will remain open for 20 business days after commencement. The record date for the special dividend will be established at a later date and publicly announced at least 10 days prior to the record date to allow for completion of the offer prior to the record date. It is anticipated that the special dividend will be paid approximately 10 business days after the record date.
Under the offer to exchange or cash out employee options, approximately 980,000 stock options could be converted to approximately 360,000 shares of restricted stock and approximately 580,000 stock options could be cashed out by employees for approximately $900,000 dependent on the choices made by employees and the market price when the stock is granted. If employees do not elect to convert or cash out their stock options, such options, to the extent unvested, will be subject to immediate vesting. There are approximately 1,000,000 unvested stock options that will be subject to the offer. The additional stock granted to certain vested option holders could be up to an additional 35,000 shares dependent on the choices made by employees and the market price when the stock is granted. Inforte will incur a one-time charge of up to $220,000 for these additional shares dependent on the choices made by employees.
Phil Bligh, Inforte's chairman and chief executive officer, commented, "The capital restructuring plan benefits shareholders and employees. We are going above and beyond simply accelerating options in response to the new accounting rules by sending a message that the company is confident in its strategy, is willing to invest in employees and desires to create a real sense of ownership and share profits. The plan reduces the firm's total potential future share count by allowing employees to sell back their 'unproductive' options and receive cash compensation for those options. In addition, by replacing the most 'productive' options with restricted stock we will be strengthening stock ownership among employees. We are right-sizing the firm's cash position in line with its future needs and returning the excess cash to investors through the one-time dividend. We are also reducing the firm's exposure to FAS 123 expense by eliminating the majority of options that qualify."
We are also announcing that as of today, Inforte COO and President David Sutton will be assuming the role of CEO. Inforte's founder, current CEO and chairman, Phil Bligh will remain active with the firm in the chairman role. He will focus on the firm's overall strategy and its acquisition growth plan. Phil and Dave will continue to work closely together on Inforte's strategic plan and its transition to profitable business intelligence and customer management markets. Dave will relinquish the COO title, and Inforte does not plan any appointment to this role at this time.
Phil Bligh, Inforte's chairman and chief executive officer also commented, "Inforte has made many important changes in the past year in terms of positioning ourselves for new markets and adapting to a changing industry landscape. Dave has been the key driving force behind this continuing transition to a future of profitable growth. Dave and I have worked closely on the firm's transition and its plan for 2005 and beyond. I am convinced he is the right person to lead our team through the rest of our transition and into the future. Dave and I have an excellent working relationship, and I will continue to work closely with him, lending support when needed and leading the firm's acquisition growth plan. We both have tremendous confidence in our growth plan, our team and the potential in our target markets. We are excited about 2005 and the next phase of growth for the firm".
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