Comdisco Announces Fourth Quarter and Year End 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 , Inc., (NYSE NYSE See: New York Stock Exchange :CDO (Collaborative Data Objects) A programming interface from Microsoft for accessing MAPI-based e-mail, calendaring and scheduling servers. Originally called "OLE Messaging" and "Active Messaging," CDO wraps the Enhanced MAPI library into a COM object that provides the ) today reported operating results for its fourth quarter and fiscal year ended September September: see month. 30, 2001. Operating Results: For the fourth 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 $119 million, or $.79 per common share, compared with earnings of $62 million, or $.39 per common share, for the year earlier period. These results exclude its Availability Solutions business, which has been recorded as a discontinued operation discontinued operation A segment of a business that has been abandoned or sold or for which plans for one or another of these actions have been approved. See also continuing operations. following the sale of the 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:SDS 1. (company) SDS - Scientific Data Systems. 2. (tool) SDS - Schema Definition Set. ) on November November: see month. 15, 2001. The current period loss resulted primarily from additions to the allowance for credit losses, lower contribution from the company's equipment remarketing efforts and reduced equity-related gains from Comdisco's Ventures business. Overall, the company had a net loss for the fourth quarter of $142 million, or $.94 per common share, compared to a loss of $168 million, or $1.05 per common share, for the prior year period. Total revenue for the quarter was $509 million, compared to $901 million, for the prior year period. For the year ended September 30, 2001, the company reported a loss from continuing operations of $211 million, or $1.40 per common share, compared to earnings of $216 million, or $1.34 per common share, for the prior year period. Overall, the net loss for the year was $272 million, or $1.80 per share, compared with a loss of $67 million, or $.41 per share, for the prior year period. Total revenue for the twelve months was $2.7 billion, compared to $3.4 billion for the prior year. Sale of Availability Solutions: As announced on November 15, 2001, Comdisco completed the sale of its Availability Solutions business to Wayne Wayne, city (1990 pop. 19,899), Wayne co., SE Mich., a suburb of Detroit, on the Lower Rouge River; inc. as a village 1869, and with surrounding areas as a city 1960. It has automobile and aircraft industries and other varied manufactures. , PA-based SunGard for $825 million in cash, plus approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $25 million paid for working capital received in excess of agreed-upon levels, as part of its restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). efforts following its Chapter 11 filing. Included in the transaction were Comdisco's U.S.-based Availability Solutions unit and related operations in the U.K., Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of and France. Including the proceeds from this sale, Comdisco's cash position exceeded $1.4 billion as of November 15, 2001. Comdisco, Inc. and 50 domestic U.S. subsidiaries filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code Bankruptcy Code may refer to:
Illinois, river, 273 mi (439 km) long, formed by the confluence of the Des Plaines and Kankakee rivers, NE Ill., and flowing SW to the Mississippi at Grafton, Ill. It is an important commercial and recreational waterway. on July July: see month. 16, 2001. The filing allows the company to provide for an 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 of some of its businesses, while resolving short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. liquidity issues and enabling the company to reorganize 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. on a sound financial basis to support its continuing businesses. Comdisco's operations located outside of the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. were not included in the Chapter 11 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. cases. All of Comdisco's businesses, including those that filed for Chapter 11, are conducting normal operations Generally and collectively, the broad functions that a combatant commander undertakes when assigned responsibility for a given geographic or functional area. Except as otherwise qualified in certain unified command plan paragraphs that relate to particular commands, "normal operations" of . Comdisco is continuing to pursue other strategic alternatives to create value for its stakeholders Stakeholders All parties that have an interest, financial or otherwise, in a firm-stockholders, creditors, bondholders, employees, customers, management, the community, and the government. , including the restructuring of its businesses. The company has targeted emergence from Chapter 11 during the first half of 2002. About Comdisco Comdisco (www.comdisco.com) provides technology services worldwide to help its customers maximize In a graphical environment, to enlarge a window to the full size of the screen. See Win Maximize windows. technology functionality and predictability, while freeing them from the complexity of managing their technology. The Rosemont (IL) company offers leasing and other financial management services to key vertical industries, including semiconductor manufacturing and electronic assembly, healthcare, telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. , pharmaceutical and biotechnology biotechnology, the use of biological processes, as through the exploitation and manipulation of living organisms or biological systems, in the development or manufacture of a product or in the technological solution to a problem. . Through its Ventures division, Comdisco provides 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: successfully confirming and implementing a plan or plans of reorganization; 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, which could result in fewer buyers and reduced prices for available Prism assets, and a further reduction in the proceeds actually received from the sale of those assets compared to prior estimates and an increase in the losses associated with the discontinued operation. 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 June: see month. 30, 2001. 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 Twelve Months September 30, 2001 and 2000
(dollars in millions except per share data)
Three Months Ended Twelve Months Ended
September 30, % September 30, %
2001 2000 +/- 2001 2000 +/-
-------- -------- --- -------- -------- ---
Revenue
Leasing
Operating $ 342 $ 412 -17% $1,500 $1,700 -12%
Direct
financing 40 47 -15% 170 178 -4%
Sales-type 32 100 -68% 136 381 -64%
-------- -------- ------ -------- -------- ------
Total
leasing 414 559 -26% 1,806 2,259 -20%
Equipment sales 69 131 -47% 311 440 -29%
Technology
services 23 35 -34% 135 126 7%
Other 3 176 -98% 454 531 -15%
-------- -------- ------ -------- -------- ------
Total
revenue 509 901 -44% 2,706 3,356 -19%
-------- -------- ------ -------- -------- ------
Costs and expenses
Leasing
Operating 285 329 -13% 1,202 1,368 -12%
Sales-type 29 73 -60% 101 285 -65%
-------- -------- ------ -------- -------- ------
Total leasing 314 402 -22% 1,303 1,653 -21%
Equipment sales 67 115 -42% 265 358 -26%
Technology
services 22 34 -35% 129 122 6%
Selling,
general and
administrative 53 96 -45% 327 384 -15%
Write-down
of equity
securities 28 2 1300% 129 7 1743%
Bad debt expense:
Leasing 97 12 708% 145 36 303%
Ventures 73 48 52% 365 105 248%
Reorganization
items 16 - N/A 34 - N/A
Interest 38 95 -60% 354 354 0%
-------- -------- ------ -------- -------- ------
Total costs
and expenses 708 804 -12% 3,051 3,019 1%
-------- -------- ------ -------- -------- ------
Earnings (loss)
from continuing
operations
before income
taxes and
cumulative
effect of change
in accounting
principle (199) 97 -305% (345) 337 -202%
Income taxes
(benefit) (80) 35 -329% (134) 121 -211%
-------- -------- ------ -------- -------- ------
Earnings (loss)
from continuing
operations
before cumulative
effect of change
in accounting
principle (119) 62 -292% (211) 216 -198%
Loss from
discontinued
operations (23) (230) -90% (63) (283) -78%
-------- -------- ------ -------- -------- ------
Loss before
cumulative
effect of
change in
accounting
principle (142) (168) -15% (274) (67) 309%
Cumulative
effect of
change in
accounting
principle - - N/A 2 - N/A
-------- -------- ------ -------- -------- -----
Net loss to
common
stockholders $ (142) $ (168) -15% (272) (67) 306%
======== ======== ====== ======== ======== ======
Retained earnings
at beginning
of period $ 914 $1,223 $1,051 $1,134
Net loss to
common
stockholders (142) (168) (272) (67)
Cash dividends
paid on
common stock - (4) (7) (16)
-------- -------- -------- --------
Retained
earnings at
end of period $ 772 $1,051 $ 772 $1,051
======== ======== ======== ========
Basic earnings
(loss) per
common share:
Earnings (loss)
from continuing
operations $(0.79) $ 0.41 -293% $(1.40) $ 1.42 -199%
====== =======
Net loss from
discontinued
operations (0.15) (1.51) (0.41) (1.86)
Cumulative
effect of
change in
accounting
principle - - 0.01 -
-------- -------- -------- --------
Net loss $(0.94) $(1.10) $(1.80) $(0.44)
======== ======== ======== ========
Diluted earnings
(loss) per
common share:
Earnings (loss)
from continuing
operations $(0.79) $ 0.39 -303% $(1.40) $ 1.34 -204%
====== =======
Net loss from
discontinued
operations (0.15) (1.44) (0.41) (1.75)
Cumulative
effect of
change in
accounting
principle - - 0.01 -
-------- -------- -------- --------
Net loss $(0.94) $(1.05) $(1.80) $(0.41)
======== ======== ======== ========
Common shares
outstanding:
Average common
shares
outstanding--
basic 151 152 151 152
Average common
shares
outstanding--
diluted 151 160 151 162
Comdisco, Inc.
Revenue and Earnings (Losses) Breakdown
By Lines of Business
Below are the results by lines of business for the three and twelve
months ended September 30, 2001 and 2000 (dollars in millions):
Three Months Ended Twelve Months Ended
9/30/01 9/30/00 9/30/01 9/30/00
--------- --------- --------- ---------
Revenue
Leasing $ 397 $ 645 $ 1,847 $ 2,557
Technology services 23 35 135 126
Ventures 89 221 724 673
--------- --------- --------- ---------
Total $ 509 $ 901 $ 2,706 $ 3,356
========= ========= ========= =========
Pretax Earnings (Loss)
from continuing operations
Leasing $ (98) $ 28 $ (201) 87
Technology services 1 1 6 4
Ventures (102) 68 (150) 246
--------- --------- --------- ---------
Total $ (199) $ 97 $ (345) $ 337
========= ========= ========= =========
Comdisco, Inc. and Subsidiaries
Consolidated Balance Sheets
September 30, 2001 and September 30, 2000
(Dollars in millions)
September 30, September 30,
2001 2000
------------- -------------
ASSETS
Cash and cash equivalents $ 543 $ 315
Cash - legally restricted 54 54
Receivables, net 587 1,126
Inventory of equipment 95 127
Net leased assets 4,003 5,272
Property, plant and equipment, net 58 89
Equity securities 138 899
Net assets of discontinued
operation held for sale 435 491
Other assets 215 324
------------- -------------
$ 6,128 $ 8,697
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities not subject to compromise
-------------------------------------
Secured:
--------
Term notes payable $ 360 $ 695
Discounted lease rentals 964 794
Unsecured:
----------
Notes payable 179 1,314
Senior debt - 3,452
Accounts payable 110 182
Income taxes 35 415
Other liabilities 350 631
------------- -------------
1,998 7,483
Liabilities subject to compromise
---------------------------------
Unsecured:
----------
Notes payable 917 -
Senior debt 2,639 -
Accounts payable 19 -
Other liabilities 108 -
------------- -------------
3,683 -
------------- -------------
5,681 7,483
------------- -------------
Stockholders' equity:
Common stock 23 23
Additional paid-in capital 365 360
Accumulated other comprehensive
income (loss) (93) 317
Retained earnings 772 1,051
------------- -------------
1,067 1,751
Common stock held in treasury,
at cost (620) (537)
------------- -------------
Total stockholders' equity 447 1,214
------------- -------------
$ 6,128 $ 8,697
============= =============
Comdisco, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
For the Twelve Months Ended September 30, 2001 and 2000
(in millions)
2001 2000
Increase (decrease) in cash and (Unaudited) (Unaudited)
cash equivalents: ------------- -------------
Cash flows from operating activities:
Leasing $ 2,090 $ 2,374
Technology services 50 6
Ventures 1,044 826
------------- -------------
Cash flows from continuing
operations 3,184 3,206
Prism (64) (120)
Availability Solutions 148 143
Network Services (17) (11)
------------- -------------
Net cash provided by operating
activities 3,251 3,218
------------- -------------
Cash flows from investing activities:
Leasing (1,089) (2,179)
Technology services 3 (32)
Ventures (501) (1,206)
------------- -------------
Cash flows from continuing
operations (1,587) (3,417)
Prism 11 (257)
Availability Solutions (156) (174)
Network Services - (2)
------------- -------------
Net cash used in investing
activities (1,732) (3,850)
------------- -------------
------------- -------------
Net cash provided by (used in)
financing activities (1,291) 586
------------- -------------
Net increase (decrease) in cash
and cash equivalents 228 (46)
Cash and cash equivalents at
beginning of period 315 361
------------- -------------
Cash and cash equivalents at end
of period $ 543 $ 315
============= =============
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