Comdisco Announces Fiscal Third Quarter and Nine-Month Financial Results.Business Editors ROSEMONT Rosemont can have many meanings, including: Places
Comdisco (Comdisco, Inc., Rosemont, IL, www.comdisco.com) A technology services company, originally founded as Computer Discount Company in 1969 by Ken Pontikes. By the mid-1990s, Comdisco had become one of the largest independent computer and electronics equipment leasing companies as well as a Holding Company, Inc. today reported operating results for its fiscal third quarter and nine months ended June June: see month. 30, 2002. (The per share results stated in this press release are based on common stock outstanding as of June 30, 2002. Such common stock has been cancelled can·cel v. can·celed also can·celled, can·cel·ing also can·cel·ling, can·cels also can·cels v.tr. 1. To cross out with lines or other markings. See Synonyms at erase. 2. in connection with the company's emergence from Chapter 11. Therefore, per share results are for historic comparative purposes only.) Operating Results: For the fiscal third quarter, Comdisco reported a loss from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of $ 94 million, or $.62 per common share, as compared with a loss from continuing operations of $168 million, or $1.10 per common share, for the year earlier period. Total revenue for the fiscal third quarter was $326 million, a decrease of 44 percent from the $585 million for the prior year quarter. The decrease in total revenue in the current year compared to the year earlier period is due to lower revenues across all of its businesses as Comdisco continues the orderly orderly /or·der·ly/ (or´der-le) an attendant in a hospital who works under the direction of a nurse. or·der·ly n. An attendant in a hospital. sale or runoff Runoff The procedure of printing the end-of-day prices for every stock on an exchange onto ticker tape. Notes: If the "tape is late" then it can take a long time to print off all the closing prices. of all its existing asset portfolios. For the third quarter, Comdisco reported a loss from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. of $3 million, or $.02 per common share, compared to earnings from discontinued operations of $4 million, or $.02 per share, for the prior year period. During the current quarter, the telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. industry continued to decline and, as a result, the company recorded a charge of $3 million, or $.02 per common share, to write down Prism's assets to current fair market value. Overall for the fiscal third quarter, the company had a net loss of $97 million, or $.64 per common share diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. , as compared with a net loss of $164 million, or $1.08 per common share diluted, for the year earlier period. For the nine months ended June 30, 2002, Comdisco reported a loss from continuing operations of $404 million, or $2.69 per common share, as compared to a loss of $94 million, or $.62 per common share, for the year earlier period. This loss is primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the loss on the sale of the majority of the company's electronic and lab and scientific leased assets. Net earnings from discontinued operations for the nine months ended June 30, 2002 were $201 million, or $1.34 per common share, compared to a net loss of $38 million, or $.25 per common share, for the year earlier period. Approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $199 million, or $1.32 per common share, of the net earnings from discontinued operations for the current period relates to the gain on the sale of the company's Availability Solutions business to SunGard (SunGard Data Systems Inc., Wayne, PA, www.sungard.com) A computer software and services company specializing in financial services, investment support systems and business continuity. SunGard was formed in 1983 from four subsidiaries of the Philadelphia-based Sun Company. (NYSE NYSE See: New York Stock Exchange :SDS 1. (company) SDS - Scientific Data Systems. 2. (tool) SDS - Schema Definition Set. ) on November November: see month. 15, 2001. Also included in the current year discontinued operations is $5 million of net earnings, or $.04 per common share, from Availability Solutions prior to the sale, as well as the Prism charge discussed above. Overall, the company had a net loss of $203 million, or $1.35 per common share diluted, for the nine months ended June 30, 2002, compared to a net loss of $130 million, or $.86 per common share, for the year earlier period. Total revenue for the nine months ended June 30, 2002 was $1.3 billion versus $2.2 billion for the prior year period. Plan of Reorganization The process of carrying out, through agreements and legal proceedings, a business plan for winding up the affairs of, or foreclosing a mortgage upon, the property of a corporation that has become insolvent. Becomes Effective: On August 12, 2002, Comdisco's First Amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. Joint Plan of Reorganization became effective and the company emerged from Chapter 11. The newly emerged company, called Comdisco Holding Company, Inc., is the successor 1. SuccessoR - A language for distributed computing derived from SR. ["SuccessoR: Refinements to SR", R.A. Olsson et al, TR 84-3, U Arizona 1984]. 2. successor - daughter to Comdisco, Inc. The Plan provides for an up to three-year orderly runoff or sale of the company's remaining assets. The distribution of net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). realized from such runoff or sale and the cash accumulated ac·cu·mu·late v. ac·cu·mu·lat·ed, ac·cu·mu·lat·ing, ac·cu·mu·lates v.tr. To gather or pile up; amass. See Synonyms at gather. v.intr. To mount up; increase. to date is anticipated to result in an approximately 90 percent recovery to creditors. Comdisco expects to make an initial distribution under the Plan of Reorganization prior to the close of its current fiscal year, which ends on September September: see month. 30, 2002. Comdisco's old common stock, traded on the NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). under the symbol CDSOQ, was cancelled on August 12, 2002, the Effective Date of the Plan of Reorganization. Prior to making the initial distribution, the company will issue new common stock and expects that the new common stock will trade on the NASDAQ:OTC under the symbol CDCOV. About Comdisco The purpose of reorganized re·or·gan·ize v. re·or·gan·ized, re·or·gan·iz·ing, re·or·gan·iz·es v.tr. To organize again or anew. v.intr. To undergo or effect changes in organization. Comdisco is to sell, collect or otherwise reduce to money the remaining assets of the corporation in an orderly manner. Rosemont, IL-based Comdisco (www.comdisco.com) previously provided equipment leasing Equipment Leasing is a financing option to lease equipment for a certain amount of time. Leasing Benefits
Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. The foregoing contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. regarding Comdisco. They reflect the company's current views with respect to current events and financial performance, are subject to many risks, uncertainties and factors relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the company's operations and business environment which may cause the actual results of the company to be materially different from any future results, express or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by such forward-looking statements. The company intends that such forward-looking statements be subject to the Safe Harbor created by Section 27(a) of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. The words and phrases Words and Phrases® A multivolume set of law books published by West Group containing thousands of judicial definitions of words and phrases, arranged alphabetically, from 1658 to the present. "expect," "estimate," and "anticipate" and similar expressions identify forward-looking statements. Certain factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following: Adjustments arising in the course of completing the analysis of information with respect to the review of the company's businesses and evaluation of impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charges; continuing volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the in the equity markets, which can affect the availability of credit and other funding sources to the high technology sector companies in the Ventures portfolio, resulting in the inability of those companies to satisfy their obligations in a timely manner and an increase in bad debt experience beyond current reserves; continued consolidation in the telecommunications industry and curtailment Curtailment The act of contracting or reducing operations of a company in the hope of bringing it financial or operational stability. This management technique is often used when a company has grown too fast and is unable to effectively manage its operations. of the growth plans of the remaining companies in that sector. Other risk factors are listed from time to time in the company's SEC reports, including, but not limited to, the report on Form 10-Q Form 10-Q See 10-Q. for the quarter ended June 30, 2002. Comdisco disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Comdisco, Inc.
Consolidated Statements of Earnings (Loss)
For the Three and Nine Months Ended June 30, 2002 and 2001
(dollars in millions except per share data)
Three Months
Ended Nine Months Ended
June 30, % June 30, %
2002 2001 +/- 2002 2001 +/-
-------- -------- ----- -------- -------- -----
Revenue
Leasing
Operating $ 169 $ 377 -55% $ 763 $ 1,158 -34%
Direct financing 23 40 -43% 86 131 -34%
Sales-type 13 18 -28% 36 104 -65%
-------- -------- ----- -------- -------- -----
Total leasing 205 435 -53% 885 1,393 -36%
Equipment sales 84 66 27% 263 241 9%
Technology services 21 29 -28% 70 112 -38%
Other 16 55 -71% 47 451 -90%
-------- -------- ----- -------- -------- -----
Total revenue 326 585 -44% 1,265 2,197 -42%
-------- -------- ----- -------- -------- -----
Costs and expenses
Leasing
Operating 143 302 -53% 619 918 -33%
Sales-type 12 20 -40% 32 71 -55%
-------- -------- ----- -------- -------- -----
Total leasing 155 322 -52% 651 989 -34%
Equipment sales 90 72 25% 255 199 28%
Technology services 12 30 -60% 43 106 -59%
Selling, general and
administrative 28 126 -78% 163 292 -44%
Write-down of equity
securities 27 68 -60% 70 101 -31%
Bad debt expense:
Leasing 22 36 -39% 30 49 -39%
Ventures 13 81 -84% 115 292 -61%
Reorganization
items:
Estimated loss on
sale of leased
assets 6 - N/A 271 - N/A
Other 51 - N/A 78 - N/A
Interest 11 112 -90% 51 315 -84%
-------- -------- ----- -------- -------- -----
Total costs and
expenses 415 847 -51% 1,727 2,343 -26%
-------- -------- ----- -------- -------- -----
Earnings (loss) from
continuing operations
before income taxes
(benefit) and
cumulative effect of
change in accounting
principle (89) (262) -66% (462) (146) 216%
Income taxes (benefit) 5 (94) -105% (58) (52) 12%
-------- -------- ----- -------- -------- -----
Earnings (loss) from
continuing operations
before cumulative
effect of change in
accounting principle (94) (168) -44% (404) (94) 330%
Earnings (loss) from
discontinued
operations, net of tax (3) 4 -175% 201 (38) -629%
-------- -------- ----- -------- -------- -----
Earnings (loss) before
cumulative effect of
change in
accounting principle (97) (164) -41% (203) (132) 54%
Cumulative effect of
change in accounting
principle, net of tax - - N/A - 2 -100%
-------- -------- ----- -------- -------- -----
Net earnings (loss) to
common stockholders $ (97) $ (164) -41% $ (203) $ (130) 56%
======== ======== ===== ======== ======== =====
Retained earnings at
beginning of period $ 666 $ 1,078 $ 772 $ 1,051
Net (loss) to common
stockholders (97) (164) (203) (130)
Cash dividends paid on
common stock - - - (7)
-------- -------- -------- --------
Retained earnings at
end of period $ 569 914 $ 569 $ 914
======== ======== ======== ========
Basic earnings (loss)
per common share:
Earnings (loss)
from continuing
operations $ (0.62) $ (1.10) -44% $ (2.69) $ (0.62) 334%
===== =====
Net earnings
(loss) from
discontinued
operations (0.02) 0.02 1.34 (0.25)
Cumulative
effect of
change in
accounting
principle - - - 0.01
-------- -------- -------- --------
Net earnings
(loss) $ (0.64) $ (1.08) $ (1.35) $ (0.86)
======== ======== ======== ========
Diluted earnings (loss)
per common share:
(Loss) from
continuing
operations $ (0.62) $ (1.10) -44% $ (2.69) $ (0.62) 334%
===== =====
Net earnings
(loss) from
discontinued
operations (0.02) 0.02 1.34 (0.25)
Cumulative
effect of
change in
accounting
principle - - - 0.01
-------- -------- -------- --------
Net earnings
(loss) $ (0.64) $ (1.08) $ (1.35) $ (0.86)
======== ======== ======== ========
Common shares
outstanding:
Average common
shares
outstanding--
basic 151 152 151 152
Average common
shares
outstanding--
diluted 151 152 151 152
Comdisco, Inc.
Revenue and Earnings (Losses) Breakdown
By Lines of Business
Below are the results by lines of business for the three and nine
months ended June 30, 2002 and 2001 (dollars in millions):
Three Months Ended Nine Months Ended
6/30/02 6/30/01 6/30/02 6/30/01
-------- -------- -------- --------
Revenue
Leasing $ 239 $ 449 $ 970 $ 1,450
Technology services 21 29 70 112
Ventures 66 107 225 635
-------- -------- -------- --------
Total $ 326 $ 585 $ 1,265 $ 2,197
======== ======== ======== ========
Pretax Earnings (Loss) from continuing operations
Leasing $ (10) $ (142) $ 23 $ (113)
Technology services 9 (1) 27 6
Ventures (31) (119) (163) (39)
Reorganization items (57) - (349) -
-------- -------- -------- --------
Total $ (89) $ (262) $ (462) $ (146)
Comdisco, Inc.
Consolidated Balance Sheets
June 30, 2002 and September 30, 2001
(Dollars in millions)
June 30, September 30,
2002 2001
--------------- ---------------
ASSETS
Cash and cash equivalents $ 2,577 $ 543
Cash - legally restricted 53 54
Receivables, net 274 587
Inventory of equipment 47 95
Net leased assets 1,832 4,003
Property, plant and equipment, net 46 60
Equity securities 58 138
Net assets of discontinued
operation held for sale 2 433
Other assets 149 215
--------------- ---------------
$ 5,038 $ 6,128
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities not subject to compromise
-------------------------------------
Secured:
--------
Term notes payable $ 79 $ 360
Discounted lease rentals 354 964
Unsecured:
----------
Notes payable 146 179
Accounts payable 76 110
Income taxes 104 35
Deferred income 67 159
Other liabilities 219 191
--------------- ---------------
1,045 1,998
Liabilities subject to compromise
---------------------------------
Unsecured:
----------
Notes payable 917 917
Senior debt 2,639 2,639
Accounts payable 17 19
Other liabilities 146 108
--------------- ---------------
3,719 3,683
--------------- ---------------
4,764 5,681
--------------- ---------------
Stockholders' equity:
Common stock 23 23
Additional paid-in capital 365 365
Accumulated other comprehensive
income (loss) (63) (93)
Retained earnings 569 772
--------------- ---------------
894 1,067
Common stock held in
treasury, at cost (620) (620)
--------------- ---------------
Total stockholders' equity 274 447
--------------- ---------------
$ 5,038 $ 6,128
=============== ===============
Comdisco, Inc.
Condensed Consolidated Statements of Cash Flows
For the Nine Months Ended June 30, 2002 and 2001
(in millions)
2002 2001
(Unaudited) (Unaudited)
--------------- ---------------
Increase (decrease) in cash and
cash equivalents:
Cash flows from operating activities:
Leasing $ 1,623 $ 1,608
Technology services 26 30
Ventures 447 907
--------------- ---------------
Cash flows from continuing
operations 2,096 2,545
Prism - (63)
Availability Solutions and
Network Services 879 89
--------------- ---------------
Net cash provided by
operating activities 2,975 2,571
--------------- ---------------
Cash flows from investing activities:
Leasing (265) (913)
Services - 2
Ventures (30) (466)
--------------- ---------------
Cash flows from
continuing operations (295) (1,377)
Prism - 8
Availability Solutions
and Network Services (4) (137)
Net cash used in investing activities (299) (1,506)
--------------- ---------------
Net cash used in financing activities (642) (907)
--------------- ---------------
Net increase in cash and
cash equivalents 2,034 158
Cash and cash equivalents at
beginning of period 543 315
--------------- ---------------
Cash and cash equivalents
at end of period $ 2,577 $ 473
============== ===============
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