CompuCom Reports 4th Quarter and Full Year 2001 Operating Results.Business Editors/High-Tech Writers DALLAS--(BUSINESS WIRE)--Feb. 5, 2002 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 provider of outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. and systems integration services, today announced operating results for the fourth quarter and year ended December December: see month. 31, 2001. Full year 2001 net earnings were $6.7 million, up 30.1% when compared to 2000 net earnings of $5.1 million, with 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 of $.12 compared to $.09. Full year revenues were $1.82 billion compared to $2.71 billion for the prior year, representing a decline of 33.0%. The 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 $281.9 million increased 3.8% when compared to last year and as a percentage of total revenue increased to 15.5% from 10.0%. Total gross margin as a percentage of total revenue increased to 13.4% compared to 10.5% in 2000, while services gross margin dollars as a percentage of total gross margin dollars grew to 40.9%, up from 34.9% in the prior year. Fourth quarter net earnings were $1.7 million, or $.03 diluted earnings per share. This compares to third quarter 2001 net earnings of $1.2 million, or $.02 diluted earnings per share and fourth quarter 2000 net earnings of $7.7 million, or $.15 diluted earnings per share. Fourth quarter net revenues were $367.7 million, down approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 48.1% when compared to fourth quarter 2000. The decline in revenue was primarily attributable to product related revenue. Services revenue of $69.1 million declined approximately 7.6% when compared to the fourth quarter 2000 but as a percentage of total revenue increased to 18.8% compared to 10.6%. Total gross margin as a percentage of total revenue increased to 15.1% compared to 11.5% in the fourth quarter last year, while services gross margin dollars as a percentage of total gross margin dollars grew to 44.0% compared to 40.0% in the prior year. J. Edward Coleman Edward Coleman may refer to:
American composer and theatrical producer whose best known Broadway productions include Sweet Charity (1966) and The Will Rogers Follies (1991). continued, "Not only do these services reduce our dependency dependency In international relations, a weak state dominated by or under the jurisdiction of a more powerful state but not formally annexed by it. Examples include American Samoa (U.S.) and Greenland (Denmark). on the personal computer market, but when coupled with continued strength in our IT outsourcing business, they move us closer to our goal of becoming a full scope IT services provider." Mr. Coleman concluded, "The importance of our transformation from a product-lead to a services-lead business is underscored by the continued weakness in product demand, as shown by the steep decline in our product revenue in the fourth quarter and for the full year. Although we have not yet seen evidence of a turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. in product demand, we believe our expense reduction initiatives position us well for an eventual economic recovery." "We ended 2001 with $123 million in cash," said M. Lazane Smith, CompuCom's senior vice president and chief financial officer. "During the quarter we continued to focus on operations management Operations management is an area of business that is concerned with the production of goods and services, and involves the responsibility of ensuring that business operations are efficient and effective. , resulting in the highest level of product inventory turns in our history, strong trade and vendor 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 and lower financing costs. Fourth quarter financing expense was $3.1 million less than a year ago. In addition, we recorded a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. adjustment to our balance sheet of $2.1 million, the majority of which was the result of improved aging in trade and vendor accounts receivable. 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 $11.9 million compared to the fourth quarter 2000 and were $4.6 million less than last quarter." Management from CompuCom Systems, Inc. will host a conference call on February February: see month. 6, 2002 at 10:00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy to discuss the results of the fourth quarter and full year. To access the call, please dial 800/374-1413 and reference conference ID No. 3064002. 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. 3064002 through February 13, 2002. 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 provider of outsourcing and systems integration services. CompuCom's clients include Fortune 1000 enterprises, Federal, state and local government, 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 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; the potential impact of the proposed Compaq (Compaq Computer Corporation, Houston, TX, www.compaq.com) Compaq was the leading PC manufacturer when it was acquired by HP in 2002. Founded in 1982 by Rod Canion, Jim Harris and Bill Murto, one year later the company shipped 53,000 PC-compatible COMPAQ Portables, resulting in $111 and Hewlett Hewlett may refer to: People with the surname Hewlett:
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; potential impact of 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 Dec. 31,
--------------------------------------
2001 2000
------------------ ------------------
Revenue
Product $ 298,611 $ 633,618
Service 69,136 74,821
---------------- ----------------
Total revenue 367,747 708,439
---------------- ----------------
Gross Margin
Product 31,081 48,857
Service 24,428 32,623
---------------- ----------------
Total gross margin 55,509 81,480
---------------- ----------------
Gross Margin Percentage
Product 10.4% 7.7%
Service 35.3% 43.6%
---------------- ----------------
Total gross margin
percentage 15.1% 11.5%
Operating expenses
Selling 13,382 19,711
Service 12,644 12,581
General and administrative 20,205 26,163
Depreciation and amortization 6,135 5,519
Restructuring charges -- 248
---------------- ----------------
Total operating expenses 52,366 64,222
---------------- ----------------
Earnings from operations 3,143 17,258
Other income (loss) -- (968)
Financing expense 376 3,481
---------------- ----------------
Earnings before income taxes 2,767 12,809
Income taxes 1,106 5,124
---------------- ----------------
Net earnings $ 1,661 $ 7,685
================ ================
Earnings per common share
Basic $ .03 $ .15
Diluted $ .03 $ .15
Average common shares outstanding
Basic 48,171 48,962
Diluted 48,254 51,420
Twelve Months Ended Dec. 31,
---------------------------------------
2001 2000
------------------ ------------------
Revenue
Product $ 1,533,567 $ 2,439,106
Service 281,937 271,531
---------------- ----------------
Total revenue 1,815,504 2,710,637
---------------- ----------------
Gross Margin
Product 144,150 184,976
Service 99,847 99,244
---------------- ----------------
Total gross margin 243,997 284,220
---------------- ----------------
Gross Margin Percentage
Product 9.4% 7.6%
Service 35.4% 36.5%
---------------- ----------------
Total gross margin
percentage 13.4% 10.5%
Operating expenses
Selling 65,411 84,224
Service 54,318 49,958
General and administrative 87,129 99,940
Depreciation and amortization 22,729 21,863
Restructuring charges -- 5,417
---------------- ----------------
Total operating expenses 229,587 261,402
---------------- ----------------
Earnings from operations 14,410 22,818
Other income (loss) -- 990
Financing expense 3,308 15,278
---------------- ----------------
Earnings before income taxes 11,102 8,530
Income taxes 4,441 3,412
---------------- ----------------
Net earnings $ 6,661 $ 5,118
================ ================
Earnings per common share
Basic $ .12 $ .09
Diluted $ .12 $ .09
Average common shares outstanding
Basic 48,034 48,703
Diluted 48,445 48,937
COMPUCOM SYSTEMS, INC.
SUMMARY BALANCE SHEET
(All amounts in thousands)
(unaudited)
December 31, December 31,
2001 2000
------------ ------------
Cash and cash equivalents $ 123,150 $ 14,857
Receivables 134,980 224,639
Inventories 29,608 77,207
Other current assets 8,131 7,626
------------ ------------
Total current assets 295,869 324,329
Property and equipment, net 31,566 24,304
Other assets 116,648 87,727
------------ ------------
Total assets $ 444,083 $ 436,360
============ ============
Accounts payable $ 120,173 $ 112,485
Accrued liabilities 88,598 94,323
------------ ------------
Total current liabilities 208,771 206,808
Stockholders' equity 235,312 229,552
------------ ------------
Total liabilities and
stockholders' equity $ 444,083 $ 436,360
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