CompuCom Reports 1st Quarter 2001 Operating Results; Net Earnings Increase Significantly Over First Quarter 2000.Business/Technology Editors DALLAS--(BUSINESS WIRE)--April 24, 2001 CompuCom Systems, Inc. (Nasdaq:CMPC CMPC Classified Matter Protection and Control CMPC Compañia Manufacturera de Papeles y Cartones S.A. CMPC Cisco Multi-Path Channel CMPC Children's Media Policy Coalition CMPC Central Milk Producers Cooperative CMPC Connecticut Minority Purchasing Council ), a digital infrastructure solutions provider, today announced operating results for the first quarter ended March 31, 2001. First quarter net earnings of $1.8 million showed significant improvement when compared to the first quarter 2000 net loss of $7.2 million, excluding an after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of $3.1 million. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for the quarter were three cents compared to a net loss per share of 15 cents, excluding the effect of a restructuring charge of seven cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , in the comparable prior year period. First quarter revenues were $554.3 million, down approximately 3.7% when compared to first quarter 2000. The revenue decline was attributable to product related revenue. Services revenue of $71.9 million increased 12.3% when compared to a year ago. Total gross margin as a percentage of revenue increased to 11.8% compared to 9.5% in first quarter 2000, with both product and services gross margin of 8.7% and 32.8%, respectively, improving over prior year. These gross margin improvements more than offset the product revenue decline, as total gross margin dollars of $65.7 million exceeded last year's total gross margin dollars of $54.5 million by 20.6%. J. Edward Coleman Edward Coleman may refer to:
Mr. Coleman Cole·man , Cy Originally Seymour Kauffman. Born 1929. American composer and theatrical producer whose best known Broadway productions include Sweet Charity (1966) and The Will Rogers Follies (1991). continued, "Our expanded e-support offerings and our initiatives in support of mobile and wireless business requirements continue to attract new clients and partners and to broaden our relationships with existing ones." "Overall, our balance sheet has continued to strengthen as we finished the quarter with a cash balance of $62.1 million compared to $4.7 million at March 31, 2000 and $14.9 million at year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 2000," said M. Lazane Smith, CompuCom's senior vice president and chief financial officer. "Our ongoing efforts to improve inventory turns and accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying performance resulted in improved utilization of working capital as evidenced by a reduction in financing expense of $2.5 million when compared to last year. Also contributing to our positive performance was our continued focus on cost management. CompuCom's operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , excluding a $5.2 million restructuring charge (pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta ) incurred last year, were $1.1 million lower than a year ago and $3.0 million less than in the fourth quarter 2000." Management from CompuCom Systems, Inc. will host a conference call on Wednesday Wednesday: see week. , April 25, 2001 at 10:00 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT to discuss the results of the first quarter. To access the call, please dial 800/875-6883 and reference conference ID No. 670265. The call will also be broadcast on Investor Broadcast Networks' Vcall web site at www.vcall.com. A replay will be available by calling 800/642-1687 and referencing Conference ID No. 670265 through April 30, 2001. CompuCom Systems, Inc., (Nasdaq:CMPC) headquartered in Dallas Dallas, city (1990 pop. 1,006,877), seat of Dallas co., N Tex., on the Trinity River near the junction of its three forks; inc. 1871. The second largest Texas city, after Houston, and the eighth largest U.S. , is a leading digital infrastructure solutions provider. CompuCom's clients include Fortune 1000 enterprises, vertical industry leaders, major technology equipment providers, leading edge systems integrators An individual or organization that builds systems from a variety of diverse components. With increasing complexity of technology, more customers want complete solutions to information problems, requiring hardware, software and networking expertise in a multivendor environment. and wireless technology providers. CompuCom leverages people, process and technology to offer best in class solutions that enable, optimize optimize - optimisation and operate the digital technology infrastructure. As a Safeguard Scientifics (NYSE NYSE See: New York Stock Exchange :SFE See Sydney Futures Exchange. ) partner company, CompuCom's infrastructure initiatives leverage Safeguard Scientifics' leadership in identifying, developing and operating premier technology companies with a focus on three sectors: software, communications and e-Services. CompuCom is accessible via the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at www.compucom.com. This press release contains certain 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 revenues, gross margin, operating and financing expense, earnings, growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. and certain business trends that involve risks and uncertainties that could cause actual results to differ materially from the results discussed herein. Specifically, the following trends may not continue: the ability to grow product and services revenue and gross margins; the ability to continue to decrease costs including, among others, financing costs; the ability to improve operational efficiency; the ability to maintain product gross margin dollars at the same level as the first quarter; the ability to improve services gross margin dollars and services gross margin as a percentage of total gross margin; the ability to continue to improve the balance sheet; the ability to win new clients; the expansion of the services the Company provides may not be as broad as the Company currently expects or widely accepted by clients; the Company's wireless services offerings may not be widely accepted by clients; the manufacturers who use the Company's direct services may elect not to use those services. Other factors that could cause actual results to differ materially are: acquisition integration issues; competitive pricing and supply; lower demand than anticipated for the products and services the Company sells; the impact of the manufacturer's shift to direct marketing programs may be more significant than anticipated; changes to manufacturers' pricing, price protection, rebate rebate, partial refund of the total price paid for goods or services. In the United States, rebates were historically given by railroads to favored shippers as a return on transportation charges. and incentive programs; 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. interest rate fluctuations; general economic conditions; employee turnover; possible future litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. ; and the ability to collect trade and vendor accounts receivable, as well as the risks and uncertainties set forth from time to time in CompuCom's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and other public filings and disclosures. Readers should refer to those documents and should not place undue reliance on these forward-looking statements.
COMPUCOM SYSTEMS, INC.
CONDENSED COMPARATIVE FINANCIAL DATA
(All amounts in thousands except per share amounts)
(unaudited)
Three Months Ended March 31,
2001 2000
------ ------
Revenue:
Product $ 482,361 $ 511,645
Service 71,927 64,066
---------- ----------
Total revenue 554,288 575,711
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Gross Margin:
Product 42,090 35,518
Service 23,593 18,956
---------- ----------
Total Gross Margin 65,683 54,474
---------- ----------
Gross Margin Percentage:
Product 8.7% 6.9%
Service 32.8% 29.6%
---------- ----------
Total Gross Margin 11.8% 9.5%
Operating expenses:
Selling 19,549 23,298
Service 13,570 11,397
General and administrative 22,211 21,781
Depreciation and amortization 5,669 5,666
Restructuring related charges
-- 5,169
---------- ----------
Total operating expenses 60,999 67,311
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Earnings (loss) from operations 4,684 ( 12,837)
Financing expenses 1,729 4,265
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Earnings (loss) before income taxes 2,955 ( 17,102)
Income taxes 1,182 ( 6,841)
---------- ----------
Net earnings (loss) $ 1,773 ($ 10,261)
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Earnings (loss) per common share (excluding
restructuring related charges)
Basic $ .03 ($ .15)
Diluted $ .03 ($ .15)
Earnings (loss) per common share
Basic $ .03 ($ .22)
Diluted $ .03 ($ .22)
Average common shares outstanding
Basic 49,206 48,275
Diluted 49,368 48,275
CompuCom Financials 5 - 5
COMPUCOM SYSTEMS, INC.
SUMMARY BALANCE SHEET
(All amounts in thousands)
(unaudited)
March 31, December 31,
2001 2000
------------- -------------
Cash and cash equivalents $ 62,079 $ 14,857
Receivables 186,342 224,639
Inventories 64,235 77,207
Other current assets 5,837 7,626
------------- -------------
Total current assets 318,493 324,329
Property and equipment, net 27,491 24,304
Other assets 84,865 87,727
------------- -------------
Total assets $ 430,849 $ 436,360
============= =============
Accounts payable $ 118,484 $ 112,485
Accrued liabilities 82,170 94,323
------------- -------------
Total current liabilities 200,654 206,808
Stockholders' equity 230,195 229,552
------------- -------------
Total liabilities and
stockholders' equity $ 430,849 $ 436,360
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