QuickLinks -- Click here to rapidly navigate through this document




Filed by the Registrant ý

Filed by a Party other than the Registrant o

Check the appropriate box:



Preliminary proxy statement



Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))



Definitive Proxy Statement



Definitive Additional Materials



Soliciting Material Pursuant to Rule 14A-12


(Name of registrant as specified in its charter)


(Name of person(s) filing proxy statement, if other than the registrant)
Payment of Filing Fee (Check the appropriate box):



No fee required



Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
    (1)   Title of each class of securities to which transaction applies:

    (2)   Aggregate number of securities to which transaction applies:

    (3)   Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

    (4)   Proposed maximum aggregate value of transaction: $                  

    (5)   Total fee paid: $                  



Fee paid previously with preliminary materials:



Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing.





Amount previously paid:





Form, Schedule or Registration Statement No.:





Filing Party:





Date Filed:

Information Holdings Inc.
2004 Second Quarter Conference Call Outline

Introduction & Forward Looking Statement (Vinny)

Good morning and welcome to Information Holding's second quarter 2004 conference call.

Joining me today is IHI's president and chief executive officer, Mason Slaine.

Before we begin, I'd like to read the following standard safe harbor statement:
Mason will begin today's call with a discussion of the recently announced acquisition of IHI by Thomson, then review of our second quarter operating highlights.

Then I will comment of second quarter financial results.

We will conclude this call with a question and answer session. The Q&A session will be limited to a discussion of second quarter results. We will not be discussing the transaction with Thomson, other than through the overview provided by Mason.
Now I would like to turn the call over to Mason Slaine, IHI's CEO—Mason...


Thanks Vinny

On June 28, 2004 we signed an agreement to be acquired by the Thomson Corporation through a cash merger. The merger agreement provides for cash consideration of $28 per share to IHI stockholders. The IHI board of directors unanimously approved the merger agreement and we believe it is in the best interests of the Company and its stockholders.

As I had indicated on previous conference calls, the Company has looked for significant acquisitions and considered other alternatives for use of our cash and investments. The Board considered that, among other things, the certainty of the $28.00 cash consideration to be received by our stockholders in the merger is preferable to alternatives to increase stockholder value reasonably available to us.


Completion of the transaction is subject to stockholder approval and required regulatory approvals. With respect to stockholder approval we have scheduled a special meeting of stockholders for August 31, 2004 to consider and vote on the merger agreement. The record date is July 26th and the final proxy statement is expected to be mailed to stockholders on or about July 30, 2004.

With respect to regulatory approvals, the Hart Scott Rodino, or HSR, filing was submitted to US authorities on July 13th. The waiting period expires at 11:59 p.m. on August 12th, unless earlier terminated or extended through the issuance of a second request. We have also made all applicable foreign filings.

I should also point out that a purported class-action lawsuit was recently filed in Delaware against the Company and its directors related to the proposed merger agreement. We believe the complaint is without merit and we intend to vigorously contest it.

Turning now to operating results...

Last night we reported second quarter earnings of $0.10 per share from continuing operations, including charges equal to $0.02 per share for costs associated with the Thomson merger. EPS from continuing operations of $0.12 per share excluding these charges compares to $0.07 per share in the second quarter of 2003.

Our revenues for the quarter exceeded $23 million and EBITDA was approximately $6.3 million, excluding the merger costs. Our data businesses, MicroPatent, MDC and IDRAC, continue to generate strong growth in both revenues and profits. Liquent, our life science solutions business, has successfully integrated CDC Solutions and significantly improved operating efficiencies. It did, however, experience software license sales below expected levels in the second quarter. I will discuss this in more detail later in the call.

Our data businesses continued a trend of strong growth—generating revenue growth of 11% and ebitda growth of 22% in the quarter.

Our MicroPatent business realized ebitda margins of nearly 40% in the quarter, with strong growth fueled by Internet-based patent information subscriptions and our Aureka line of analytical tools.

We are also seeing strong growth in our file history product line, as we continue to transform this service from primarily paper-based products to electronic searchable files.

Trends are largely unchanged at Master Data Center, with growth in patent annuity payment services driving ebitda margins to approximately 50%.

Our data segment overall continues to perform well—with double-digit organic revenue growth and ebitda margins in excess of 42%.

Our Liquent business performed below expected levels, but remained profitable and had several positive developments in the quarter.

Because a large number of potential second quarter license sales were delayed, we have a good pipeline of license sales as we enter the second half of the year.

Subsequent to the initial announcement by the Company in late May that it was exploring alternatives, including a potential sale of the Company, approximately $6 million of transactions in negotiation to close in the second quarter were delayed. The vast majority of these transaction remain in negotiation and represent potential second half license sales. In addition to delayed Q2 deals, we have a significant number of additional transactions in the second half pipeline.


While we believe the second quarter was impacted by delayed license sales following our initial announcement of a potential sale of the Company, our business overall remains quite healthy. Our data businesses are generating strong growth in revenue and profits, while Liquent has improved operating efficiencies and positioned itself for a stronger second half, including initial sales of its new InSight Manager products.

Now I will turn the call over to Vinny for a review of our second quarter financial results and we will then then questions regarding operations and second quarter results. Vinny...

Financial Summary (Vinny)

Thanks, Mason.

First I would like to briefly address items reported as discontinued operations, then focus the discussion on results from continuing operations

During the second quarter of 2004 we recorded after-tax charges of approximately $1.3 million, or $0.06 per share, related to our remaining obligations from the divestiture of Transcender. The charge relates to real estate lease obligations and includes an estimate of future sublease income on the property. We do not currently expect additional charges in discontinued operations this year.

During the second quarter of 2003 we recorded a gain in discontinued operations of approximately $1.39 per share, primarily related to the gain on the sale of our CRC Press business.

Moving on to continuing operations—starting with revenue:

Third quarter revenues increased by $3.3 million, or 17%, to $23.1 million.

Revenues in the Data Segment increased $1.6 million, or 11%, to $16.0 million.

The strongest product areas in the quarter were:

Internet-based patent subscriptions and Aureka subscriptions—both up 14% in the quarter;

Patent file history sales—up 16%;

IP annuity payment services—up 19%; and

IDRAC database subscriptions—up 11%


Overall gross margins improved to 70.0% in the quarter compared to approximately 68% in the prior year. Gross margins in the data segment were relatively consistent at 71% while Liquent gross margins improved to 68% from 60% in the prior year. The improvement in Liquent gross margins reflects cost reduction initiatives and improved operating efficiencies following the integration of CDC Solutions.

The Company evaluates segment profitability based primarily on EBITDA. A reconciliation of EBITDA to income from operations for each segment was included in last night's press release. Included as a charge against EBITDA in the second quarter of 2004 is approximately $575 thousand of non-operating expenses related to the merger agreement with Thomson—primarily professional fees and SEC filing fees associated with the deal.

EBITDA overall increased $1.4mm, or 34%, to $5.7 million—or $6.2 million excluding deal costs.

Data segment EBITDA increased $1.3 million, or 22%, to $6.9 million

Each business in this segment had strong EBITDA growth with EBITDA margins reaching 42.7% in the quarter compared to 39% in the prior year quarter.

Software segment EBITDA increased to $0.6 million from breakeven in the prior year quarter.

EBITDA margins of 8% in the quarter were below expected levels due to the delayed license sales. License sale increases and decreases impact profit margins significantly because of the operating leverage associated with this revenue stream. We continue to target overall ebitda margins of 25-30% for Liquent.

Other Ebitda loss—comprised of corporate costs—approximated $1.8 million in the quarter, including the deal related charges.

Our overall EBITDA margin was 25% for the second quarter or 27% excluding the deal costs. We believe longer term ebitda margins of 30-35% are achievable based on improved software license sales at Liquent.

Moving down to net income:

From EBITDA of $5.7 million we have depreciation and amortization of $3.1 and interest income of $0.7 million, giving us pre-tax income of $3.3 million. Approximately $2.0 million of the depreciation and amortization balance relates to amortization of intangible assets.

Our tax provision in the quarter was nearly $1.15 million, or approximately 35% of pre-tax income.

EPS from continuing operations is then $0.10 per share, after deal costs approximating a charge of $0.02 per share.

That completes the financial overview. We will now be happy to answer any questions related to operations or financial results. As a reminder we are not taking questions related to the proposed transaction with Thomson and encourage investors to read the proxy statement and related materials filed with the SEC.


Following Q&A Session (Mason)

Thank you all for participating and we will continue to keep you updated on our progress as the year moves forward. We will provide updates about the merger process as events requiring disclosure occur.

Thank you for your support and continued interest in Information Holdings.



Information Holdings Inc. 2004 Second Quarter Conference Call Outline