CompuCom Reports 4th Quarter and Full Year 2002 Results.Business Editors & High-Tech high-tech also hi-tech adj. Informal Of, relating to, or resembling high technology. high-tech Adjective same as hi-tech Adj. 1. Writers DALLAS--(BUSINESS WIRE)--Jan. 29, 2003 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 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, 2002. Fourth quarter 2002 net earnings grew to $5.49 million, or $.10 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 , an increase over the same period in 2001 when net earnings were $1.66 million with diluted earnings per share of $.03. Fourth quarter net revenues were $403.9 million, up 9.8% when compared to fourth quarter 2001. The growth in revenue was attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to increases in both product and service revenue. Product revenue of $326.5 million increased 9.3% over the fourth quarter 2001. Service revenue of $77.4 million was 12.0% higher than the same period a year ago and as a percentage of total revenue increased to 19.2% compared to 18.8%. Total gross margin as a percentage of revenue was 12.2% compared to 15.1% in the fourth quarter last year. Service gross margin dollars as a percentage of total gross margin dollars increased to 48.6%, up from 44.0% a year ago. Full year 2002 net earnings grew to $18.32 million, or $.34 diluted earnings per share, excluding the cumulative effect of a change in accounting principle for negative goodwill of $0.7 million. Including the cumulative effect of a change in accounting principle, net earnings were $19.02 million, or $.35 diluted earnings per share. This compares to net earnings of $6.66 million, or $.12 diluted earnings per share, for the full year 2001. Full year net revenues were $1.57 billion compared to $1.82 billion for the prior year, representing a decline of 13.5%. The decline was attributable to product related revenue. Service revenue of $302.0 million increased 7.1% when compared to last year and as a percentage of total revenue increased to 19.2% from 15.5%. Total gross margin as a percentage of total revenue was 13.1% compared to 13.4% in 2001, while services gross margin dollars as a percentage of total gross margin dollars grew to 49.4%, up from 40.9% in the prior year. Fourth quarter and full year 2001 results include goodwill amortization of $.72 million and $3.2 million, respectively, or $.01 and $.07 diluted earnings per share, that is no longer required to be recorded under new SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 142 accounting requirements for goodwill and intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. adopted this year. J. Edward Coleman Edward Coleman may refer to:
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, "As clients look to consolidate Consolidate To combine the assets, liabilities, and other financial items of two or more entities into one. Notes: This term is generally used in the context of consolidated financial statements. the number of suppliers and service providers they use, we believe CompuCom is well-positioned to bring increased value to our outstanding set of clients by providing an expanded set of higher value-added services A value-added service (VAS) is a telecommunications industry term for non-core services or, in short, all services beyond standard voice calls and fax transmissions. and enterprise solutions." "We ended the year with $128 million in cash, with continued strong results in both 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 inventory management," said M. Lazane Smith, CompuCom's senior vice president and chief financial officer. "In addition, our continued focus on reducing costs, together with greater leverage of our infrastructure, resulted in fourth quarter operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. as a percentage of revenue decreasing to 10.0%, down from 14.2% a year ago." Management from CompuCom Systems, Inc. will host a conference call on January January: see month. 30, 2003 at 10 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy to discuss the results of the fourth quarter and full year. To access the conference call, please dial 800/875-6883 and reference conference ID No. 7856109. The conference call will also be broadcast on World Investor Link's Vcall web site at www.vcall.com. A replay will be available approximately two hours following the call through February February: see month. 7, 2003 by dialing 800/642-1687 and referencing Conference ID No. 7856109. 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; declines in product revenue and product gross margin may occur and may be greater than anticipated; 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 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; 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 Twelve Months Ended
December 31, December 31,
------------------- -----------------------
2002 2001 2002 2001
--------- --------- ----------- -----------
Revenue
Product $326,486 $298,611 $1,269,126 $1,533,567
Service 77,447 69,136 302,002 281,937
--------- --------- ----------- -----------
Total revenue 403,933 367,747 1,571,128 1,815,504
--------- --------- ----------- -----------
Gross Margin
Product 25,305 31,081 104,441 144,150
Service 23,921 24,428 101,878 99,847
--------- --------- ----------- -----------
Total gross margin 49,226 55,509 206,319 243,997
--------- --------- ----------- -----------
Gross Margin Percentage
Product 7.8% 10.4% 8.2% 9.4%
Service 30.9% 35.3% 33.7% 35.4%
--------- --------- ----------- -----------
Total gross margin
percentage 12.2% 15.1% 13.1% 13.4%
--------- --------- ----------- -----------
Operating Expenses
Selling 10,696 13,382 45,801 65,411
Service 9,691 12,644 41,830 54,318
General and administrative 15,439 20,205 69,704 87,129
Depreciation and
amortization 4,378 6,135 18,232 22,729
--------- --------- ----------- -----------
Total operating
expenses 40,204 52,366 175,567 229,587
--------- --------- ----------- -----------
Earnings from operations 9,022 3,143 30,752 14,410
Financing expense, net (46) 376 477 3,308
--------- --------- ----------- -----------
Earnings before income
taxes and cumulative
effect of a change in
accounting principle for
negative goodwill 9,068 2,767 30,275 11,102
Income taxes 3,577 1,106 11,958 4,441
--------- --------- ----------- -----------
Earnings before cumulative
effect of a change in
accounting principle for
negative goodwill 5,491 1,661 18,317 6,661
Cumulative effect of a
change in accounting
principle for negative
goodwill, net of
income taxes - - 707 -
--------- --------- ----------- -----------
Net earnings $ 5,491 $ 1,661 $ 19,024 $ 6,661
========= ========= =========== ===========
Basic earnings per common share:
Earnings before cumulative
effect of a change in
accounting principle
for negative goodwill $.11 $.03 $.36 $.12
Cumulative effect of a
change in accounting
principle for
negative goodwill,
net of income taxes - - .01 -
--------- --------- ----------- -----------
Net earnings $.11 $.03 $.37 $.12
========= ========= =========== ===========
Diluted earnings per common
share:
Earnings before cumulative effect
of a change in accounting
principle for
negative goodwill $.10 $.03 $.34 $.12
Cumulative effect of a
change in accounting
principle for
negative goodwill,
net of income taxes - - .01 -
--------- --------- ----------- -----------
Net earnings $.10 $.03 $.35 $.12
========= ========= =========== ===========
Average common shares
outstanding:
Basic 49,043 48,171 48,647 48,034
Diluted 52,069 48,254 50,654 48,445
COMPUCOM SYSTEMS, INC.
SUMMARY BALANCE SHEET
(All amounts in thousands)
(unaudited)
December 31, December 31,
2002 2001
----------- -----------
Cash and cash equivalents $ 128,039 $ 123,150
Receivables 146,732 134,980
Inventories 27,732 29,608
Other current assets 6,899 8,131
----------- -----------
Total current assets 309,402 295,869
Property and equipment, net 23,924 31,566
Other assets 111,532 116,648
----------- -----------
Total assets $ 444,858 $ 444,083
=========== ===========
Accounts payable $ 117,252 $ 120,173
Accrued liabilities 71,115 88,598
----------- -----------
Total current liabilities 188,367 208,771
Stockholders' equity 256,491 235,312
----------- -----------
Total liabilities and stockholders' equity $ 444,858 $ 444,083
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