<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________________ to _________________
Commission File # 0-15187
IFX CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 36-3399452
- -------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 West Adams Street, Suite 1500, Chicago, Illinois 60606
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(312) 419-9530
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
X Yes No
___ ___
As of the date of this report, the issuer had outstanding 31,395,649 shares of
common stock, $.004 par value per share.
1
<PAGE>
IFX CORPORATION AND SUBSIDIARIES
Part I - Financial Information
Item 1. Financial Statements
Immediately following this page, the following financial information of the
Registrant is filed as part of this report.
Page
----
Consolidated statements of financial condition
as of December 31, 1997 and June 30, 1997. 3
Consolidated statements of operations for the
three months and six months ended December 31,
1997 and 1996. 4
Consolidated statements of cash flows for the
six months ended December 31, 1997 and 1996. 6
Notes to consolidated financial statements. 7
2
<PAGE>
IFX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
ASSETS
<TABLE>
<CAPTION>
December 31, June 30,
1997 1997
------------- -------------
(Unaudited) (Audited)
<S> <C> <C> <C> <C>
Cash $ 94,100 $ 3,279,300
U.S. Government obligations 4,716,900 1,527,100
other short term investments 35,384,400 44,875,100
Receivables:
Brokers and dealers 2,314,100 2,911,600
December 31, June 30,
1997 1996
---------- ----------
Customers & counterparties $ 644,500 $1,422,900
Other 1,756,600 1,503,300
Less - Allowance for doubtful accounts (399,900) (430,000) 2,001,200 2,496,200
---------- ----------
Investments in and advances to affiliated partnerships 67,900 50,000
Notes receivable 820,400 618,900
Furniture, equipment, and leasehold improvements, net of
accumulated depreciation and amortization of $219,700
and $140,300, respectively 186,900 269,000
Other assets 527,600 616,000
----------- -----------
Total $46,113,500 $56,643,200
=========== ===========
</TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
<S> <C> <C>
Payables:
Brokers and Dealers $ 137,900 $ 1,068,200
Customers & counterparties 30,685,400 41,284,600
Affiliates and employees 41,100 57,900
Accounts payable and accrued expenses 3,033,800 3,406,600
Notes payable 836,600 1,586,600
----------- -----------
Total 34,734,800 47,403,900
----------- -----------
Minority Interest 1,513,900 1,035,600
----------- -----------
Stockholders' equity:
Common stock, $.004 par value; 150,000,000 shares authorized,
31,395,649 shares issued and outstanding respectively 125,600 125,600
Paid-in capital and retained earnings 9,784,900 8,123,800
Cumulative translation adjustment (45,700) (45,700)
----------- -----------
Total stockholders' equity 9,864,800 8,203,700
----------- -----------
Total $46,113,500 $56,643,200
=========== ===========
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
3
<PAGE>
IFX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
December 31,
-------------------------
1997 1996
---- ----
<S> <C> <C>
Revenues:
Commissions $ 319,200 $ 71,500
Interest 686,300 669,200
Trading gains, net 1,472,900 1,872,600
Earn-out from Sale of Assets 1,148,800 340,900
Other 10,400 274,000
----------- -----------
Total revenues 3,637,600 3,228,200
----------- -----------
Expenses:
Commission, floor brokerage and clearing costs 192,500 153,100
Compensation and related benefits 475,000 1,104,300
Communications 180,100 180,700
Interest 424,600 595,600
Rent and other occupancy costs 215,000 80,700
Business promotion 98,300 93,200
Professional and consulting fees 256,900 157,300
Depreciation 45,300 25,200
Other 154,900 332,400
----------- -----------
Total expenses 2,042,600 2,722,500
----------- -----------
Income before income taxes and minority interest 1,595,000 505,700
Income tax expense 598,800 158,400
----------- -----------
Net income before minority interest 996,200 347,300
Minority interest 222,800 -
----------- -----------
Net income 773,400 347,300
Assumed cumulative dividend on Class A preferred stock - (10,000)
----------- -----------
Net income applicable to common stock $ 773,400 $ 337,300
=========== ===========
Primary earnings per common share:
Net income $ .02 $ .01
=========== ===========
Weighted average number of common shares outstanding 31,395,649 33,624,530
=========== ===========
Fully diluted earnings per common share:
Net income $ .02 $ $.01
=========== ===========
Weighted average number of common shares outstanding 31,395,649 33,624,530
=========== ===========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
4
<PAGE>
IFX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
December 31,
-------------------------
1997 1996
---- ----
<S> <C> <C>
Revenues:
Commissions $ 432,100 $ 132,800
Interest 1,715,800 1,201,800
Trading gains, net 3,544,700 2,830,000
Earn-out from Sale of Assets 1,934,300 716,400
Other 10,400 932,100
----------- -----------
Total revenues 7,637,300 5,813,100
----------- -----------
Expenses:
Commission, floor brokerage and clearing costs 363,700 208,000
Compensation and related benefits 1,101,300 2,032,200
Communications 378,700 354,900
Interest 1,111,800 1,070,500
Rent and other occupancy costs 393,300 232,900
Business promotion 218,400 180,700
Professional and consulting fees 502,500 312,400
Depreciation 97,100 47,200
Other 306,000 451,000
----------- -----------
Total expenses 4,472,800 4,889,800
----------- -----------
Income before income taxes and minority interest 3,164,500 923,300
Income tax expense 965,100 310,600
----------- -----------
Net income before minority interest 2,199,400 612,700
Minority interest 538,300 -
----------- -----------
Net income 1,661,100 612,700
Assumed cumulative dividend on Class A preferred stock - (20,000)
----------- -----------
Net income applicable to common stock $ 1,661,100 $ 592,700
=========== ===========
Primary earnings per common share:
Net income $ .05 $ .02
=========== ===========
Weighted average number of common shares outstanding 31,395,649 33,624,530
=========== ===========
Fully diluted earnings per common share:
Net income $ .05 $ .02
=========== ===========
Weighted average number of common shares outstanding 31,395,649 33,624,530
=========== ===========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
5
<PAGE>
IFX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
December 31,
--------------------------------
1997 1996
---- ----
<S> <C> <C>
Cash Flows From Operating Activities:
Net income $ 1,661,100 $ 612,700
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation 97,100 47,200
Deferred taxes (6,000) 7,600
Doubtful accounts expense (benefit) (30,100) 6,500
Equity in net gain of affiliated partnerships (17,900) -
Gain on sale of exchange membership - (234,900)
Loss on the sale of exchange memberships - 22,300
Writedown of exchange membership - 180,100
Gain on the sale of clearing corporation stock - (664,000)
Changes in:
Cash segregated or secured under
Commodity exchange act, net - 1,953,200
U.S. government obligations (3,189,800) 140,141,000
Other short term investments 9,490,700 (7,563,200)
Deposits with clearing organizations - 40,911,700
Warehouse receipts - 959,500
Receivables 1,122,600 11,463,900
Other assets 94,500 353,800
Payables (11,546,400) (181,285,200)
Accounts payable and accrued expenses (372,800) (2,119,000)
----------- ------------
Cash provided by (used in) operating activities (2,697,000) 4,793,200
----------- ------------
Cash Flows From Investing Activities:
Investments in and advances to affiliated partnership, net - -
Increase in notes receivable (201,500) -
Decrease in notes receivable - 4,100
Purchase of furniture, equipment and leasehold
improvements (15,000) (63,100)
Proceeds from the sale of exchange memberships - 466,000
Proceeds from the sale of clearing corporation stock - 1,024,000
Proceeds from the sale of furniture and equipment - 115,900
----------- ------------
Cash provided by (used in) investing activities (216,500) 1,546,900
----------- ------------
Cash Flows From Financing Activities:
Repayment of notes payable (750,000) (900,000)
Repayment of liabilities subordinated to
claims of general creditors - (4,000,000)
Minority interest 478,300 -
----------- ------------
Cash provided by (used in) financing activities (271,700) (4,900,000)
----------- ------------
Effect of exchange rate changes on cash - (31,200)
----------- ------------
Increase (decrease) in cash (3,185,200) 1,408,900
Cash, beginning of period 3,279,300 1,587,300
----------- ------------
Cash, end of period $ 94,100 $ 2,996,200
=========== ============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
6
<PAGE>
IFX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Basis of Presentation
The consolidated financial statements include the accounts of IFX
Corporation (formerly Jack Carl/312-Futures, Inc.) and Subsidiaries,
(collectively, the "Company"). All material intercompany accounts and
transactions have been eliminated in consolidation. Until July 1, 1996, the
Company engaged principally in the business of effecting transactions in futures
and options on futures contracts for the accounts of customers and the operation
of commodity pools. Index Futures Group, Inc. ("Index"), until July 1, 1996, was
the principal operating subsidiary of JC/312. Effective July 1, 1996, Index
sold, transferred and assigned substantially all of its brokerage accounts
("Sale of Assets") to E.D. & F. Man International Inc. ("MINC"). Index ceased
being a registered futures commission merchant with the Commodity Futures
Trading Commission ("CFTC") in December, 1996. As a condition of the Sale, Index
changed its name to FX Chicago, Inc. IFX, Ltd. (formerly Index FX, Ltd.), a
British corporation and a majority owned subsidiary of IFX Corporation,
continues to conduct foreign exchange business as a registrant of the British
Securities and Futures Authority.
These consolidated financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to rule 10-01 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting only of normal recurring adjustments)
considered necessary for a fair presentation have been reflected in these
condensed consolidated financial statements. Operating results for the quarter
are not necessarily indicative of the results that may be expected for the year
ending June 30, 1998. Certain reclassifications have been made in the 1996
financial statements to conform to the 1997 presentation. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Company's financial statements on Form 10-K for the year
ended June 30, 1997.
Commitments and Contingencies
- -----------------------------
Litigation-
- -----------
The Company is a defendant in, and may be threatened with, various legal
proceedings arising from its regular business activities. Management, after
consultation with legal counsel, is of the opinion that the ultimate liability,
if any, resulting from any pending action or proceedings will not have a
material effect on the financial position or results of operations of the
Company.
On November 24, 1997, the trustee of a pension plan filed a Demand for
Arbitration with the National Futures Association against Index and several
other respondents, including an introducing broker guaranteed by Index, alleging
breach of fiduciary duty, churning, misrepresentation, failure to supervise,
breach of contract, aiding and abetting, and violation of ERISA. Claimant seeks
actual damages of $141,000 and punitive damages of approximately $460,000. The
Company believes the claim is without merit and will defend vigorously.
On May 16, 1996, Index filed suit in the Circuit Court of Cook County--Law
Division against Doug Niemann, a former customer, for breach of contract,
seeking to recover debit balance of $88,200 (Index Futures Group, Inc. v. Doug
Niemann, case no. 96L-5506). On January 14, 1997, Niemann filed a
7
<PAGE>
IFX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
counterclaim for $688,200. The Company believes that the counterclaim is without
merit and will defend vigorously.
In April, 1994, Index without admitting or denying the allegations, paid
$100,000 to the CFTC, settling an administrative action filed on September 29,
1992. In a related action, the equity receiver of an alleged commodity pool
operator brought an action to recover losses of approximately $600,000, alleging
various theories such as constructive trust, negligence, breach of fiduciary
duty and conversion. On May 29, 1996, the district judge dismissed the complaint
in its entirety. On December 4, 1997, the Court of Appeals affirmed the district
judge's dismissal of all claims against Index. On January 13, 1998, the Court of
Appeals denied the Supplemental Plaintiffs' request for a rehearing of its
appeal.
A former officer of Index whose employment was terminated as a result of
the Sale of Assets rejected Index's severance payment offer. The officer had
made a demand for $500,000. The Company settled this case in July, 1997 for
$75,000.
Other-
------
In connection with the Sale of Assets, if certain conditions occur over the
next year, the Company may be subject to additional severance payments of up to
$100,000.
The Company has also entered into a consulting contract which expires
during fiscal 1999, providing for aggregate minimum payments of $65,000
remaining as of December 31, 1997.
The Company had quaranteed performance under the Commodity Exchange Act of
certain introducing brokers with respect to their customer accounts. In
connection with the Sale of Assets, these introducing broker quarantees were
terminated or transferred to MINC effective July 1, 1996.
Index issued a limited indemnification agreement to MINC related to the
Sale of Assets. This agreement covers potential customer claims arising from
activity prior to the sale.
Stockholders' Equity
- --------------------
The Company effected a one-for-five reverse split of its common stock, par
value .004, effective on January 12, 1998 (the "Effective Date"). Each five
shares of such common stock were reclassified and reflected as one share of
common stock having a par value of $.02, as of January 12, 1998. Outstanding
shares of the Company's Common Stock were reduced to approximately 6,279,130
shares from 31,395,649 shares outstanding before the split.
Any holder of fractional shares resulting from this reverse split will be
paid an amount equal to the mean between the bid and the offer prices for the
Company's Common Stock on the NASDAQ SmallCap market on the Effective Date
multiplied by the amount of the fractional shares. The one-for-five reverse
8
<PAGE>
IFX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
split also resulted in certain shareholders owning "odd lots," that is, less
than one hundred shares of Common Stock. In order to reduce the
disproportionately high costs to the Company of servicing numbers of such
shareholder accounts, and to enable those shareholders to dispose of their
securities without incurring the brokerage fees that normally attend odd-lot
transactions, the Company has offered to purchase from its shareholders all odd
lots (i.e., less one hundred shares) for an amount based upon the number of
odd-lot shares multiplied by the mean between the bid and offer prices on the
date of purchase, without commissions. The Company will maintain its offer to
repurchase such odd-lots until February 26, 1998, forty-five days immediately
following the Effective Date.
Sale of Assets
- --------------
The purchase price payable by MINC in connection with the Sale of Assets is
based on a percentage of the net income, as defined in the Sales Agreement, of
the transferred activities during the sixty-six month period following the sale.
During the three months and six months ended December 31, 1997, the Company
earned $1,148,800 and $1,934,300, respectively from the Sale of Assets.
Capital Requirements
- --------------------
IFX Ltd. became a registrant of the British Securities and Futures
Authority ("SFA") during November, 1996. As such, IFX Ltd. is subject to the
financial resources requirements adopted and administered by the SFA. As of
December 31, 1997, IFX Ltd.'s financial resources, as defined by the SFA, were
$6,778,000, which was $2,043,000, in excess of its requirements.
Notes Payable - Subsequent Event
- --------------------------------
During February, 1998, the Company repaid $836,600 of notes payable
outstanding to its principle shareholder.
9
<PAGE>
IFX CORPORATION AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations for the Period Ended December 31, 1997.
IFX Corporation (formerly Jack Carl/312-Futures, Inc.), (which when
consolidated with its subsidiaries is henceforth referred to as the "Company")
is a holding company which operates its business through its subsidiaries. Index
Futures Group, Inc. ("Index"), until July 1, 1996, the Company's principal
operating subsidiary, provided a full range of futures brokerage, clearing and
back office services for institutional and public commodity traders. It was a
clearing member of all major U.S. commodity exchanges. effective July 1, 1996,
Index sold, transferred and assigned substantially all of its brokerage accounts
("Sale of Assets") to E.D.& F. Man International, Inc. ("MINC"). As a result of
the Sale of Assets, Index no longer acts as a futures commission merchant. It
immediately withdrew as a clearing member from all commodity exchanges, and
terminated its registration as a futures commission merchant in December, 1996.
As a condition of the Sale of Assets, Index changed its name to FX Chicago, Inc.
Operations at FX Chicago, Inc. are currently limited to activity relating to the
net income derived from the Sale of Assets. IFX Ltd. (formerly Index FX, Ltd.),
a British corporation and a subsidiary of IFX Corporation continues to conduct
foreign exchange business as a registrant of the British Securities and Futures
Authority ("SFA"). IFX Ltd. commenced trading operations in October, 1995 and
became an SFA registrant in November, 1996.
Financial Condition
- -------------------
The Company's cash and short-term investment portfolio totaled $40,195,400
at December 31, 1997. Included In this amount is $28,364,800 of funds from IFX
Ltd. customers, which have been invested by IFX Ltd. on the customers' behalf or
are held in segregated cash accounts, pursuant to rules of the SFA. The
Company's positions are generally liquid. The portfolio is invested primarily in
U.S. dollar denominated securities, but also includes foreign currency positions
deposited by IFX customers.
As a registrant, IFX Ltd. is subject to the financial resources
requirements adopted and administered by the SFA. As of December 31, 1997, IFX
Ltd.'s financial resources, as defined by the SFA, were $6,778,000, which was
$2,043,000 in excess of its requirements.
As of December 31, 1997, the Company had $836,600 of notes payable to its
principal stockholder. These notes payable were repaid in February, 1998.
Stockholders' equity at December 31, 1997 was $9,864,800. The Company
effected a one-for-five reverse split of its common stock, par value .004,
effective on January 12, 1998 (the "Effective Date"). Each five shares of such
common stock were reclassified and reflected as one share of common stock having
a par value of $.02, as of January 12, 1998. Outstanding shares of the Company's
common stock were reduced to approximately 6,279,130 shares from 31,395,649
shares outstanding before the split.
Any holder of fractional shares resulting from this reverse split will be
paid an amount equal to the mean between the bid and the offer prices for the
Company's common stock on the NASDAQ SmallCap market on the Effective Date
multiplied by the amount of the fractional shares. The one-for-five reverse
10
<PAGE>
IFX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
split also resulted in certain shareholders owning "odd lots," that is, less
than one hundred shares of Common Stock. In order to reduce the
disproportionately high costs to the Company of servicing numbers of such
shareholder accounts, and to enable those shareholders to dispose of their
securities without incurring the brokerage fees that normally attend odd-lot
transactions, the Company has offered to purchase from its shareholders all odd
lots (.i.e., less one hundred shares) for an amount based upon the number of
odd-lot shares multiplied by the mean between the bid and offer prices on the
date of purchase, without commissions. The Company will maintain its offer to
repurchase such odd-lots until February 26, 1998, forty-five days immediately
following the Effective Date.
For the six months ended December 31, 1997, cash used in operations was
$2,697,000 compared to cash provided by operations of $4,793,200 for the same
period in fiscal 1996. The majority of cash used in operations is related to
payments of customer funds made to customers of IFX Ltd. In addition, the
Company invests cash not needed for operations at FX Chicago, Inc. in U.S.
Government obligations. As of December 31, 1997, the Company held $4,716,900 in
U.S. Government obligations.
Management believes existing cash and short-term investments together with
operating cash flows, access to equity capital, and borrowing capacity, provide
adequate resources to fund ongoing operating requirements and future capital
expenditures related to the expansion of existing businesses and development of
new projects.
Results of Operations
- ---------------------
IFX Ltd., the Company's London-based operation, continues to grow. IFX
Ltd.'s target customer base is beginning to recognize it as an effective and
efficient alternative to the larger money center banks. In addition, the
Company's earnings from the Sale of Assets continue to increase as MINC
generates more and more business from the brokerage accounts it purchased from
Index. As such, revenues of the Company are increasing at a much greater rate
than are expenses.
Revenues were $3,637,600 and $7,637,300 during the three and six months
ended December 31, 1997, respectively, an increase of 13% and 31%, respectively,
from the same periods a year ago. Commission and trading revenues continue to
increase as the IFX Ltd. business continues to expand.
Revenues from the Sale of Assets increased by $807,900 and $1,217,900
during the three and six months ended December 31, 1997, respectively, compared
to the same periods a year ago. Reported revenues during previous quarters of
fiscal 1997 were subsequently adjusted and increased by $237,100 by MINC. These
adjustments are reflected in the earnings from the Sale of Assets for the
quarter ended December 31, 1997. The Company's earnings from the Sale of Assets
continue to increase as MINC generates more and more business from the brokerage
accounts it purchased from Index.
Other revenue decreased by $263,600 and $921,700 during the three and six
months ended December 31, 1997, respectively, compared to the same periods a
year ago. Included in other revenue during the quarter and six months ended
December 31, 1996 was a net gain of $234,900 and $876,600, respectively, on the
sale of exchange memberships and clearing corporation stock.
Total expenses were $2,042,600 and $4,472,800 in the three months and six
months ended December 31, 1997, respectively, representing a decrease of
11
<PAGE>
IFX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
25% and 9% from the same periods a year ago. The decrease in expenses as
resulting from the Sale of Assets has been somewhat offset by the increasing
expenses from the expanding operations of IFX Ltd.
As a result of the aforementioned revenues and expenses, net income for the
quarter ended December 31, 1997 is $773,400, or $.02 per share, compared to net
income of $337,300, or $.01 per share for the same period a year ago.
Net income for the six months ended December 31, 1997 is $1,661,100, or
$.05 per share, compared to net income of $592,700, or $.02 per share for the
same period a year ago.
The Board of Directors is exploring various business opportunities for the
Company now that FX Chicago, Inc. no longer acts as a futures commission
merchant, and as a result has capital available for investments.
12
<PAGE>
Item 1. Legal Proceedings
See Notes to Financial Statements.
Item 4. Submission of Matters to a Vote of Security Holders
On December 5, 1997, the annual meeting of stockholders of the Company was held.
At the meeting, Joel Eidelstein, George Myers, Zalman Lekach and Colleen Ruggio
were all reelected as directors of the Company. In addition, at the meeting, a
one-for-five reverse split of the Company's Common Stock was authorized and
approved and appointment of Arthur Andersen LLP as the independent auditors for
the Company for the year ending June 30, 1998 was ratified and approved. The
votes for, against and abstaining as to each matter were:
For Against Abstaining
--- ------- ----------
Election of Directors:
Joel Eidelstein 21,212,548 -- 10,183,101
George Myers 21,213,281 -- 10,182,268
Zalman Lekach 21,211,090 -- 10,184,559
Colleen Ruggio 21,212,340 -- 10,183,309
One-for-Five Reverse Stock Split 20,915,409 387,156 10,093,084
Appointment of Arthur Andersen LLP 20,300,775 815,479 10,279,395
Item 6. Exhibits and Reports on Form 8-K
(A) Exhibits
11.1 Computation of earnings per common Share
27 Financial Data Schedule (EDGAR only)
(B) REPORTS ON FORM 8-K
- No reports on Form 8-K were filed by the Company during the quarter
ended December 31, 1997.
- On January 8, 1998, the Company filed a report on Form 8-K
reporting the implementation of a one-for-five reverse split of the
Company's stock, effective January 12, 1998.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
IFX CORPORATION
--------------------------
(Registrant)
Dated: February 9, 1998 By: /S/ CHRISTINA S. DONKA
--------------------------
Christina S. Donka
Chief Financial Officer
15
<PAGE>
Exhibit 11.1
IFX CORPORATION AND SUBSIDIARIES
Computation of Earnings Per Common Share
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
--------------------------- -----------------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Earnings:
Net income $773,400 $347,300 $1,661,100 $612,700
Deduct assumed dividends
on Class A preferred stock - (10,000) - (20,000)
---------- ---------- ---------- ----------
Net income applicable
to common stock $773,400 $337,300 $1,661,100 $592,700
========== ========== ========== ==========
Shares:
Weighted average number
of common shares outstanding 31,395,649 33,624,530 31,395,649 33,624,530
========== ========== ========== ==========
Primary earnings
per common share:
Net income $ .02 $ .01 $ .05 $ .02
========== ========== ========== ==========
</TABLE>
Note: Fully diluted earnings per share have not been presented because the
effects are not material.
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information extracted from
the 12/31/97 Form 10-Q and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> DEC-31-1997
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0
0
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</TABLE>
