CompuCom Reports 3rd Quarter 2001 Operating Results.Business Editors & High Tech Writers DALLAS--(BUSINESS WIRE)--Oct. 23, 2001 CompuCom Systems, Inc. (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 : 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 third quarter ended September September: see month. 30, 2001. Third quarter net earnings were $1.16 million, or $.02 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 . This compares to third quarter 2000 net earnings of $5.10 million, or $.10 diluted earnings per share and second quarter 2001 net earnings of $2.07 million, or $.04 diluted earnings per share. For the nine months ended September 30, 2001, net earnings were $5.0 million, or $.09 diluted earnings per share compared to a net loss of $2.6 million, or $.07 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. loss per share in the previous year. Third quarter net revenues were $404.8 million, down approximately 44.2% when compared to third quarter 2000. The revenue decline was attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to product related revenue. Services revenue of $71.9 million increased almost 5% when compared to a year ago and as a percentage of total revenue nearly doubled to 17.8%. Total gross margin as a percentage of revenue increased to 14.7% compared to 10.9% in the third quarter 2000. Services gross margin dollars represented 44.2% of total gross margin dollars compared to 34.4% a year ago and 40.3% in the second quarter 2001. J. Edward Coleman Edward Coleman may refer to:
"We have continued to focus on controlling costs," said M. Lazane Smith, CompuCom's senior vice president and chief financial officer. "Our 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. were down $9.5 million compared to the third quarter 2000 and were $2.3 million less than last quarter. In addition, we have continued to improve certain elements of our balance sheet. Product inventory turns reached an all time high 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 remained strong. The improved utilization of working capital contributed to a reduction in financing expense of $3.9 million when compared to last year." 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). concluded, "In these difficult times our focus on operational management is providing CompuCom with the financial strength necessary for continued investments in growing our information technology professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. capabilities. As we do so, we are better able than ever to assist our clients in achieving their objectives for cost reduction, web-enabling their businesses and securing their enterprises." Management from CompuCom Systems, Inc. will host a conference call on Wednesday Wednesday: see week. , October October: see month. 24, 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 third quarter. To access the call, please dial 800/875-6883 and reference conference ID No. 2138137. The call will also be broadcast on World Investor Link's Vcall web site at www.vcall.com. A replay will be available by calling 800/642-1687 and referencing Conference ID No. 2138137 through November November: see month. 2, 2001. CompuCom Systems, Inc., (Nasdaq:CMPC - news) headquartered in Dallas, Texas “Dallas” redirects here. For other uses, see Dallas (disambiguation). The City of Dallas (pronounced [ˈdæl.əs] or [ˈdæl. , 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. 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 services revenue and gross margins; the decline in product revenue and product gross margin dollars may continue and may be greater than anticipated; the ability to grow product gross margin as a percentage of revenue; the ability to continue to decrease costs including, among others, financing costs; the ability to improve operational efficiency; 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; the impact of general economic conditions on investments the Company has in other businesses; 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 Nine Months Ended
Sept. 30, Sept. 30,
2001 2000 2001 2000
---- ---- ---- ----
Revenue
Product $ 332,877 $ 656,383 $ 1,234,956 $1,805,488
Service 71,883 68,493 212,801 196,710
--------- --------- ----------- ----------
Total revenue 404,760 724,876 1,447,757 2,002,198
--------- --------- ----------- ----------
Gross Margin
Product 33,085 51,979 113,069 136,119
Service 26,245 27,287 75,419 66,621
--------- --------- ----------- ----------
Total gross margin 59,330 79,266 188,488 202,740
--------- --------- ----------- ----------
Gross Margin Percentage
Product 9.9% 7.9% 9.2% 7.5%
Service 36.5% 39.8% 35.4% 33.9%
--------- --------- ----------- ----------
Total gross margin
percentage 14.7% 10.9% 13.0% 10.1%
Operating expenses
Selling 14,927 20,831 52,029 64,513
Service 14,359 12,985 41,674 37,377
General and
administrative 22,446 27,358 66,924 73,777
Depreciation and
amortization 5,205 5,265 16,594 16,344
Restructuring charges - - - 5,169
--------- --------- ------------ ---------
Total operating
expenses 56,937 66,439 177,221 197,180
--------- --------- ------------ ---------
Earnings from operations 2,393 12,827 11,267 5,560
Other income - - - 1,958
Financing expense 455 4,326 2,932 11,797
--------- --------- ------------ ---------
Earnings (loss) before
income taxes 1,938 8,501 8,335 (4,279)
Income taxes (benefit) 776 3,401 3,335 ( 1,712)
--------- --------- ------------ ---------
Net earnings (loss) $ 1,162 $ 5,100 $ 5,000 ($2,567)
========= ========= ============ =========
Earnings (loss) per common
share (excluding restructuring
charges and other income)
Basic $ .02 $ .10 $ .09 ($.03)
Diluted $ .02 $ .10 $ .09 ($.03)
Earnings (loss) per common share
Basic $ .02 $ .10 $ .09 ($.07)
Diluted $ .02 $ .10 $ .09 ($.07)
Average common shares outstanding
Basic 48,146 48,909 47,988 48,615
Diluted 49,355 49,238 48,557 48,615
COMPUCOM SYSTEMS, INC.
SUMMARY BALANCE SHEET
(All amounts in thousands)
(unaudited)
September 30, December 31,
2001 2000
------------ -----------
Cash and cash equivalents $ 100,583 $ 14,857
Receivables 144,632 224,639
Inventories 36,217 77,207
Other current assets 3,381 7,626
------------ -----------
Total current assets 284,813 324,329
Property and equipment, net 30,503 24,304
Other assets 104,405 87,727
------------ -----------
Total assets $ 419,721 $ 436,360
============ ===========
Accounts payable $ 100,904 $ 112,485
Accrued liabilities 85,356 94,323
------------ -----------
Total current liabilities 186,260 206,808
Stockholders' equity 233,461 229,552
------------ -----------
Total liabilities and stockholders'
equity $ 419,721 $ 436,360
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