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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 24, 2000
INFORMATION HOLDINGS INC.
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(Exact Name of Registrant as specified in its Charter)
Delaware 1-14371 06-1518007
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(State or other jurisdiction (Commission File No.) (I.R.S. Employer
of corporation) Identification No.)
2777 Summer Street, Stamford, Connecticut 06905
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(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code: (203) 961-9106
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N/A
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
On February 24, 2000, Information Holdings Inc. (the "Company") reported
the results for the fourth quarter of 1999 and the year ended December 31 ,1999.
A copy of the press release is attached hereto as Exhibit 99.1 and is
incorporated herein by reference.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business acquired: None
(b) Pro Forma Financial Information: None
(c) Exhibits:
99.1 Press Release dated February 24, 2000
-2-
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Current Report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.
INFORMATION HOLDINGS INC.
Date: February 28, 2000 By: /s/ Vincent A. Chippari
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Name: Vincent A. Chippari
Title: Executive Vice President and
Chief Financial Officer
-3-
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EXHIBIT INDEX
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The following Exhibit is filed herewith.
Exhibit Number Description
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99.1 Press Release dated February 24, 2000.
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INFORMATION HOLDINGS INC. REPORTS RESULTS FOR FOURTH QUARTER
AND YEAR ENDED DECEMBER 31, 1999
Fourth quarter revenues increase 34% to $18.9 million
Fourth quarter EBITDA increases 55% to $7.1 million
NEW YORK, FEBRUARY 24, 2000 - Information Holdings Inc. (NYSE: IHI) today
announced results for the three months and year ended December 31, 1999.
Revenues for the fourth quarter of 1999 increased 34.4% to $18.9 million
from $14.1 million in the fourth quarter of 1998. EBITDA (earnings before
interest, taxes, depreciation and amortization) increased 54.9% to $7.1 million
from $4.6 million in the prior year period. Net income decreased to $2.5 million
in the fourth quarter of 1999, or $0.15 per share, from $3.2 million, or $0.19
per share, in the fourth quarter of 1998. The Company did not record a provision
for federal income taxes in the prior year period due to the full reversal of
deferred tax valuation allowances.
Revenues for the year ended December 31, 1999 increased 26.0% to $58.8
million from $46.7 million in the prior year. EBITDA increased 51.7% to $17.3
million in fiscal 1999 from $11.4 million in fiscal 1998. Net income increased
to $6.0 million, or $0.36 per share, from $4.8 million, or $0.28 per share on a
pro forma basis, in prior year. The Company did not record a provision for
federal income taxes in fiscal 1998 due to the full reversal of deferred tax
valuation allowances.
Commenting on the results, Mason Slaine, President & CEO said, "Our
excellent results in the fourth quarter complete a very successful 1999 for IHI.
We achieved strong growth in our core businesses, completed and successfully
integrated four strategic acquisitions and announced the formation of
CorporateIntelligence.com, our B2B Internet portal for the intellectual property
market. We believe the strong performance of our existing businesses, our
excellent financial position and our B2B Internet opportunities leave us well
positioned as we enter the year 2000."
Fourth Quarter Results:
Revenues increased $4.8 million, or 34.4%, due primarily to: revenues of
$2.5 million at Master Data Center (MDC), which was acquired in August 1999; an
increase of $1.3 in Internet sales at MicroPatent; an increase of $1.2 million
in sales of patents and files histories at Optipat and Faxpat, businesses
acquired in 1999; and an increase of $0.5 million in book sales at CRC Press.
These increases were partly offset by a decline of $0.4 million at CRC's
Auerbach unit, due in part to a transition to a web-based product line; and a
decline of $0.2 million in CD-ROM sales at MicroPatent, due primarily to a
migration to Internet sales.
Gross profit margins were 72.8%, compared to 74.6% in the fourth quarter of
1998. Gross margins declined primarily as a result of the inclusion of MDC,
which has lower gross margins than the other IHI units. Gross margins decreased
slightly at MicroPatent due to its
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acquisitions of Optipat and Faxpat, which have lower gross profit margins than
MicroPatent. CRC Press gross margins increased in the quarter, primarily related
to book publishing operations.
EBITDA increased $2.5 million to $7.1 million due primarily to increased
gross profits of $3.3 million, partly offset by higher selling, general and
administrative (SG&A) expenses of $0.6 million. Increased SG&A expenses relate
primarily to operating expenses of businesses acquired in 1999.
Net income decreased $0.7 million to $2.5 million, compared to $3.2 million
in the fourth quarter of 1998. The decline in net income is a result of an
increase in the provision for income taxes of $1.9 million. The Company did not
record a provision for federal income taxes in the prior year period due to full
reversal of deferred tax valuation allowances. Income before income taxes
increased by $1.2 million, or 39%. This pre-tax increase is due primarily to the
increase in EBITDA of $2.5 million, partly offset by higher amortization of
intangible assets of $0.8 million and decreased interest income of $0.6 million.
Full Year Results:
Revenues increased $12.1 million, or 26.0%, due primarily to: an increase
of $4.0 million in book sales at CRC Press; revenues of $3.8 million at MDC; an
increase of $3.3 million in sales of patents and files histories at Optipat and
Faxpat; and an increase of $3.2 million in Internet sales at MicroPatent. These
increases were partly offset by a decline of $1.6 million at CRC's Auerbach
unit; and a decline of $0.9 million in CD-ROM sales at MicroPatent.
Gross profit margins were 73.2%, compared to 74.9% in the prior year, due
primarily to the inclusion of recently acquired businesses which have lower
gross margins than the existing businesses. EBITDA increased $5.9 million to
$17.3 million due to increased gross profits of $8.1 million, partly offset by
higher SG&A expenses of $2.2 million. Increased SG&A expenses relate primarily
to operating expenses of businesses acquired in 1999 and normal cost increases,
offset by a decline of $1.1 million related to one-time charges incurred in
1998.
Net income increased $1.2 million to $6.0 million, compared to $4.8 million
in 1998. The improvement is due primarily to the increase in EBITDA of $5.9
million and an increase in interest income of $0.2 million. These increases were
partly offset by increased depreciation and amortization of $0.6 million and an
increase in the provision for income taxes of $4.2 million. The Company did not
record a provision for federal income taxes in the prior year period due to the
full reversal of deferred tax valuation allowances.
Information Holdings Inc. is a leading provider of information products and
services, primarily to the intellectual property and scientific markets. Through
its CorporateIntelligence.com unit, which includes MicroPatent and Master Data
Center, the Company provides a broad array of databases, information products
and complementary services for intellectual property professionals. The Company
is recognized as a leading
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provider of intellectual property information over the Internet. In addition,
the Company's CRC Press(R) business publishes professional and academic books,
journals, newsletters and electronic databases covering areas such as life
sciences, environmental sciences, engineering, mathematics, physical sciences
and business. Information Holdings Inc. is listed on the New York Stock Exchange
and trades under the symbol IHI.
This press release includes statements which may constitute forward-looking
statements made pursuant to safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Although the Company believes the expectations
contained in such forward-looking statements are reasonable, it can give no
assurance that such expectations will prove to be correct. This information may
involve risks and uncertainties that could cause actual results to differ
materially from the forward-looking statements. Factors which could cause or
contribute to such differences include, but are not limited to, factors detailed
in the Company's Securities and Exchange Commission filings.
(Financial Tables Follow)
For further information, contact:
Vincent A. Chippari Chris Plunkett
Executive Vice President & Chief Financial Officer Brainerd Communicators
Information Holdings Inc. 212-986-6667
203-961-9208
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<TABLE>
Information Holdings Inc.
Consolidated Statement of Operations
(Unaudited)
<CAPTION>
Three Months Ended Year Ended
December 31, December 31,
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(in thousands, except per share data) 1999 1998 1999 1998
----------------- ----------------- --------------- ---------------
<S> <C> <C> <C> <C>
Revenues $ 18,913 $ 14,067 $ 58,778 $ 46,651
Cost of Sales 5,152 3,579 15,742 11,707
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Gross Profit 13,761 10,488 43,036 34,944
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Operating expenses:
Selling, general and administrative 7,252 6,671 28,142 24,871
Depreciation and amortization 2,221 1,386 5,962 5,313
Severance and special bonuses - - - 1,050
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Total operating expenses 9,473 8,057 34,104 31,234
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Income from operations 4,288 2,431 8,932 3,710
Other Income (expense):
Interest income 148 753 1,687 1,444
Interest expense (147) (99) (357) (327)
Other expense - - (18) -
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Income before income taxes 4,289 3,085 10,244 4,827
Provision (benefit) from income taxes 1,778 (93) 4,227 42
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Net income $ 2,511 $ 3,178 $ 6,017 $ 4,785
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Net income per common share amounts:
Basic earnings $0.15 $0.19 $0.36
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Diluted earnings $0.15 $0.19 $0.35
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Pro forma income data:
Income before income taxes, as reported $ 4,827
Pro forma income taxes 42
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Pro forma net income $ 4,785
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Pro forma basic and diluted net income per share $ 0.28
===============
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Information Holdings Inc.
Consolidated Balance sheets
(in thousands)
December 31 December 31
1999 1998
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(Unaudited)
Assets
Current Assets:
Cash and cash equivalents $ 7,551 $57,270
Accounts receivable, net 16,997 9,286
Inventories 5,078 4,832
Prepaid expenses and other current assets 2,173 1,945
Deferred income taxes 2,137 777
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Total current assets 33,936 74,110
Property and equipment, net 4,377 4,173
Pre-publication costs, net 3,478 3,474
Publishing rights and other intangible assets, net 78,260 21,265
Goodwill, net 15,629 336
Other assets 2,978 1,433
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Total assets $138,658 $104,791
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Liabilities and Stockholders' Equity
Current liabilities:
Current portion of capitalized lease obligations $279 $261
Accounts payable 13,339 4,074
Accrued expenses 5,479 1,821
Royalties payable 1,304 1,935
Deferred subscription revenue 9,280 8,530
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Total current liabilities 29,681 16,621
Capital leases 2,415 2,694
Deferred income taxes 14,976 -
Other long-term liabilities 651 683
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Total liabilities 47,723 19,998
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Shareholders equity:
Preferred stock $ - $ -
Common stock 170 169
Additional paid in capital 84,874 83,750
Retained earnings (deficit) 5,891 (126)
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Total shareholders equity 90,035 84,793
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Total liabilities and shareholders equity $138,658 $104,791
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