Computer Horizons Reports Fourth Quarter and Year End 2000 Results; Records Realignment and Special Charges of $43.9 Million or $1.38 Per Share, Net of Taxes.Business Editors MOUNTAIN LAKES, N.J.--(BUSINESS WIRE)--Feb. 22, 2001 Computer Horizons Corp. (Nasdaq: CHRZ), a professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. company, today announced revenues and financial results for its fourth quarter and year ended December December: see month. 31, 2000. In addition, the Company announced that it completed or instituted a number of previously announced realignment re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. initiatives during the fourth quarter of 2000, resulting in special charges of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $43.9 million or $1.38 per share, net of taxes, in an effort to strengthen its balance sheet and underpin its 2001 business model with profitability. Of the total special charges, $41.5 million, net of taxes, relates to non-cash write offs, including receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed . Revenues for the fourth quarter of 2000 were $108.6 million, an 8.4 percent decrease from the $118.5 million reported in the 1999 fourth quarter. The Company recorded a net loss for the fourth quarter of $50.2 million, or $(1.58) per 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. share, compared with a net loss for the fourth quarter of 1999 of $972,000, or $(0.03) per diluted share. Excluding realignment and special charges of $43.9 million or $1.38 per share in the fourth quarter of 2000, net loss was $6.3 million or $(0.20) per share. Diluted Cash EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. (excluding amortization of goodwill and special charges) was a loss of $(0.15) per share for the fourth quarter of 2000, compared with $0.01 per share in the prior year. Revenues for the year 2000 were $445 million, a 17 percent decrease from the $535 million reported in 1999. The Company recorded a net loss for the year of $57.8 million, or $(1.83) per diluted share, compared with net income in 1999 of $14.6 million, or $.46 per diluted share. Excluding realignment and special charges for the year totalling $41.7 million or $1.32 per share, net loss was $(16.1) million or $(0.51) per share. Diluted Cash EPS (excluding amortization of goodwill and special charges) was a loss of $(0.34) per share for the year, compared with $0.73 per share in the prior year. William William, crown prince of Germany William or Frederick William, 1882–1951, crown prince of Germany, son of William II. In World War I he commanded (1914) an army on the Western Front and was nominal commander in the German attack J. Murphy, chief financial officer of Computer Horizons, said that the Company has addressed each underperforming operation under the CHC CHC Chicago Cubs CHC Community Health Center CHC Chestnut Hill College (Philadelphia, Pennsylvania) CHC Congressional Hispanic Caucus CHC Community Health Council (UK National Health Service) umbrella umbrella, a small canopy used as a protection against the sun in China, Egypt, and elsewhere in remote antiquity. It was often an emblem of rank. During the Middle Ages the umbrella became almost extinct in Europe; its usefulness was not rediscovered until the late and has entered 2001 with a focus on higher-end, higher-margin businesses, baselining Analyzing network traffic to determine the normal traffic flow. Data are collected at various network devices as well as from network analyzers (probes) that are placed at appropriate points throughout the network. See NRP and network analyzer. the Company for profitability. He had indicated at the end of the third quarter that actions contemplated would require a material write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. as a result of exiting certain markets, discontinuing certain practices and reducing corporate overhead and other infrastructure costs. In addition, Murphy had said that CHC was exploring monetizing certain businesses. Murphy said that, accordingly, the following initiatives were completed or put into place during the fourth quarter as part of CHC's realignment plan The realignment plan (Hebrew: תוכנית ההתכנסות : - Closed five and reduced the size of other IT Services offices located in smaller and medium size markets. Total special charges for severance and continuing rents were $1.9 million. - Declared Princeton Softech, eB Networks and our UK IT Services business units as assets held for sale at December 31, 2000. Recorded a non-cash write down of $26.2 million relating to eB Networks. The other units are expected to generate a gain upon disposition. - Recorded a non-cash estimated loss of $6.4 million relating to the pending sale of Select Software, a Princeton Softech product line. - Exited the SAP certified training business and wrote off the associated goodwill of $8.2 million. - Reduced the capacity of our web development centers in response to a sharp decline in dot com business. Total special charges for severance and continuing rents were $800,000. - Realigned the eB Networks business to reduce costs and improve utilization rates. Total special changes for severance, continuing rents and other costs were $1.6 million. - Reduced CHC corporate overhead and infrastructure costs, including the write off and increase in the allowance for doubtful accounts. Total write-offs and special charges were $20.4 million. "We took a hard look at all our operations in light of market dynamics, just as we said we would," said John J. Cassese, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Computer Horizons. "We feel that the steps taken thus far put us in a much stronger position for a return to profitable growth in 2001 and enable us to focus on CHC's traditional strength - providing Strategic Technology consulting, E-Commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. Applications Development and Maintenance, and Systems Integration. "We are particularly impressed im·press 1 tr.v. im·pressed, im·press·ing, im·press·es 1. To affect strongly, often favorably: with the market acceptance of Chimes this year. We have created a new paradigm New Paradigm In the investing world, a totally new way of doing things that has a huge effect on business. Notes: The word "paradigm" is defined as a pattern or model, and it has been used in science to refer to a theoretical framework. in human capital management which has quickly been recognized as leading-edge by industry analysts. Chimes has grown four-fold Adj. 1. four-fold - having four units or components; "quadruple rhythm has four beats per measure"; "quadruplex wire" quadruple, quadruplex, quadruplicate, fourfold over the last two years, and we anticipate continued strong 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. going forward. We are currently achieving strong gross profit margins Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. in this business and with continued market acceptance we anticipate that Chimes will be profitable during the fourth quarter of 2001. Chimes creates numerous efficiencies for CHC, while clearly differentiating us from other professional services companies in the marketplace. It is fast becoming the cornerstone cornerstone Ceremonial building block, dated or otherwise inscribed, usually placed in an outer wall of a building to commemorate its dedication. Often the stone is hollowed out to contain newspapers, photographs, or other documents reflecting current customs, with a view to of the new CHC," Cassese concluded. Looking Forward Excluding the operations of our business units held for sale, we expect revenue for the first quarter of 2001 to be in the range of $86 million - $88 million and cash EPS in the range of $0.00 - $0.01. For the full year, we anticipate revenue in the range of $380 million - $405 million and cash EPS in the range of $0.21 - $0.28. The revenue estimates are largely influenced by assumptions made as to future IT spending levels at our customers. Our estimates are based on spending increases in the range of 2% to 9%. About Computer Horizons Corp. Computer Horizons Corp. (Nasdaq: CHRZ) is a strategic e-Business (Electronic-BUSINESS) Doing business online. The term is often used synonymously with e-commerce, but e-business is more of an umbrella term for having a presence on the Web. solutions and professional services company that is powering a new breed of rapid growth 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 developers. With thirty years of experience, CHC is a global leader in systems integration, migration and innovation, enabling companies to stay ahead of the technological curve. By leveraging its core business in IT services, CHC is powering its new breed of Internet companies, including e-Solutions, Chimes, eB Networks and Princeton Princeton, borough (1990 pop. 12,016) and surrounding township (1990 pop. 13,198), Mercer co., W central N.J.; settled late 1600s, borough inc. 1813, township est. 1838. A leading education center, it is the seat of Princeton Univ. Softech, to enable its Global 1000 customer base to compete in this new digital business environment. For more information on Computer Horizons, please visit our Web site at www.computerhorizons.com. Except for historical information, all of the statements, expectations and assumptions contained in the foregoing are "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. " (within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995) that involve a number of risks and uncertainties. It is possible that the assumptions made by management--including, but not limited to, those relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc contract awards, service offerings, market opportunities, results, performance expectations, expectations of cost savings, or proceeds from sale of certain operations--may not materialize ma·te·ri·al·ize v. ma·te·ri·al·ized, ma·te·ri·al·iz·ing, ma·te·ri·al·iz·es v.tr. 1. To cause to become real or actual: By building the house, we materialized a dream. . Actual results may differ materially from those projected or implied in any forward-looking statements. In addition to the above factors, other important factors include the risks associated with unforeseen technical difficulties, the ability to meet customer requirements, market acceptance of service offerings, changes in technology and standards, the ability to complete cost-reduction initiatives, the ability to execute the sale of certain operations or other initiatives, dependencies on key employees, customer satisfaction, availability of technical talent, dependencies on certain technologies, delays, market acceptance and competition, as well as other risks described from time to time in the Company's filings with the Securities Exchange Commission, press releases, and other communications.
Computer Horizons Corp. and Subsidiaries
Consolidated Condensed Statements of Income (Loss)
(Unaudited - In thousands, except per share data)
THREE MONTHS ENDED YEAR ENDED
--------------------- --------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2000 1999 2000 1999
--------- --------- --------- ----------
Revenues:
IT Services $ 73,900 $ 91,258 $ 303,713 $ 429,757
E-Solutions Group 34,697 27,260 141,766 104,837
---------- --------- --------- ---------
Total 108,597 118,518 445,479 534,594
Direct Costs 75,211 83,743 312,815 365,310
Gross Profit 33,386 34,775 132,664 169,284
Selling, General & Admin. 40,260 34,148 148,504 131,087
Special Charges 65,543 0 65,543 0
Restructuring
Charges (Credits) 0 0 (2,376) 6,355
Amortization
of Intangibles 2,317 1,861 7,434 6,202
---------- --------- --------- --------
Income (Loss)
from Operations (74,734) (1,234) (86,441) 25,640
Net Interest
Income (Expense) (265) (161) (1,205) (2)
Income (Loss)
Before Income Taxes (74,999) (1,395) (87,646) 25,638
Income Taxes (Benefit) (24,825) (423) (29,819) 11,013
----------- -------- --------- -------
Net Income (Loss) $(50,174) $(972) $(57,827) $14,625
----------- -------- --------- -------
Earnings (Loss) per Share:
Basic $(1.58) $(0.03) $(1.83) $0.47
Diluted $(1.58) $(0.03) $(1.83) $0.46
Weighted Average Number
of Shares Outstanding:
Basic 31,807,000 31,344,000 31,656,000 30,940,000
---------- ---------- ---------- ----------
Diluted 31,807,000 31,344,000 31,656,000 31,647,000
---------- ---------- ---------- ----------
CONSOLIDATED CONDENSED BALANCE SHEET INFORMATION
(Unaudited - In Thousands)
December 31, December 31,
2000 1999
---- ----
ASSETS:
Current Assets:
Cash and cash equivalents $17,559 $17,072
Accounts receivable, less allowance
for doubtful accounts 99,682 172,806
Net assets held for sale 35,353 0
Other current assets 42,358 18,903
--------- -----------
Total current assets 194,952 208,781
Property and equipment, net 14,041 20,221
Goodwill 48,322 94,349
Other assets 11,288 24,643
---------- -----------
Total Assets $268,603 $347,994
========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable & accrued expenses $29,197 $35,505
Current portion - long-term debt 20,704 19,502
Other current liabilities 9,282 23,917
---------- ----------
Total current liabilities 59,183 78,924
Long-term debt 0 4,100
Other long-term liabilities 1,560 2,318
Shareholders' equity 207,860 262,652
---------- ----------
Total Liabilities & Shareholders' Equity $268,603 $347,994
========== ==========
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion