Computer Horizons Reports Fourth Quarter and Year End 2001 Results.Business/Technology Editors MOUNTAIN LAKES, N.J.--(BUSINESS WIRE)--Feb. 27, 2002 -- Balance Sheet Remains Strong -- Chimes Pipeline Grows -- 61 Percent Year-Over-Year Growth in Continuing Solutions Group -- Results in Line With Management Guidance Computer Horizons Corp. (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 : CHRZ), a strategic human capital services and 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 company, today announced financial results for its fourth quarter and year ended December December: see month. 31, 2001. Excluding the operations of assets held for sale, the Company recorded revenues for the fourth quarter of $85.6 million, a 3.5 percent decline over the fourth quarter of 2000, principally due to continued softness in the IT Services area. Excluding the operations of assets held for sale, restructuring charges 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. , special charges and a net gain on investments, 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) recorded a net loss of $1.5 million, or $(0.05) per share, for the period compared with a net loss of $4.4 million, or $(0.14) per share, in the fourth quarter of 2000. 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 intangibles Property that is a "right" such as a patent, Copyright, or trademark, or one that is lacking physical existence, such as good will. , the operations of assets held for sale, restructuring charges, special charges and a net gain on investments) was $(0.03) per share for the fourth quarter of 2001 compared with $(0.12) per share for the fourth quarter of the prior year. (See pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma income reconciliation table below). Excluding the operations of certain assets held for sale, revenues for the full year 2001 were $360.3 million, which were $3.4 million, or 1 percent, less than in the year 2000. Excluding the operations of assets held for sale, restructuring charges, special charges and a net gain on investments, the Company reported a net loss of $3.5 million, or $(0.11) per share, for the year 2001 compared with a net loss of $9.6 million, or $(0.30) per share, in the year 2000. The operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. for the year is the result of CHC's continued investment in its Chimes subsidiary. Cash EPS (excluding amortization of intangibles, the operations of assets held for sale, restructuring charges and a net gain on investments) was $(0.05) per share for the full year 2001. (See pro forma income reconciliation table below). Total Company revenues for the fourth quarter of 2001 were $95.1 million, a decrease of $13.5 million, or 12 percent, over the prior year. Net loss in the fourth quarter of 2001 was $3.0 million, or $(0.10) 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 of $50.2 million, or $(1.58), in the prior year. The 2001 net loss includes a net loss of $1.5 million, or $(0.05) per share, relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the operating results of assets held for sale, restructuring charges and a net gain on investments. The 2000 net loss of $50.2 million included a net loss of $45.7 million, or $(1.44) per share, relating to restructuring charges, special charges and operating results of assets held for sale. Total Company revenues for the full year 2001 were $400.8 million, a decrease of $44.7 million, or 10 percent, from the prior year. The Company recorded a net loss of $14.5 million or $(0.45) per diluted share, compared with a net loss of $57.8 million, or $(1.83) per diluted share, in the prior year. The 2001 net loss includes restructuring charges and operating results of assets held for sale of $11.0 million, equivalent to $(0.34) per share. The 2000 net loss includes restructuring charges, special charges and operating results of assets held for sale of $48.2 million, or $(1.53) per share. During the year 2001, CHC purchased 1.1 million of its common shares in the open market under its stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program at an aggregate cost of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $3.6 million. "Our aggressive efforts to reduce costs and strengthen our balance sheet, while paying down some $11 million in debt during the year, have positioned us well for a market and economic recovery," said 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. "During the fourth quarter, we closed three additional staffing offices, adhering ADHERING. Cleaving to, or joining; as, adhering to the enemies of the United States. 2. The constitution of the United States, art. 3, s 3, defines treason against the United States, to consist only in levying war against them or in adhering to their enemies, to our virtual model, powered by Chimes. At the same time, we continue to pursue the sale of the remainder of 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, and we anticipate a transaction in the current quarter. With $41 million in cash, a manageable debt level, and a strong working capital ratio, we are confident that CHC can weather the current economic malaise malaise /mal·aise/ (mal-az´) a vague feeling of discomfort. mal·aise n. A vague feeling of bodily discomfort, as at the beginning of an illness. . It is important to note that, despite the reported loss for the year, our continuing businesses were cash flow positive. In any event, we will continue to take appropriate cautionary fiscal steps while the economy remains soft, but we do feel that the worst is behind us." "It has been a challenging year for everyone in our space," 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. "And we continue to focus on cost containment cost containment, n the features of a dental benefits program or of the administration of the program designed to reduce or eliminate certain charges to the plan. to operate a lean enterprise. Due to the lagging Lagging Strategy used by a firm to stall payments, normally in response to exchange rate projections. economy and continued decline in headcount head count or head·count n. 1. The act of counting people in a particular group. 2. The number of people counted in this way. Noun 1. , revenue in our IT Services business decreased this quarter. The good news is that we have managed to keep this business at breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations , poised to take advantage of a recovering market. We are staying close to our customers and have successfully expanded several relationships to include work in CHC's Solutions business. "We had a successful year in our continuing Solutions business, with 61 percent quarterly revenue growth year-over-year and a 7 percent sequential One after the other in some consecutive order such as by name or number. increase," said Cassese. "In fact, many of our larger contracts were signed in 2001. During the fourth quarter, we won new and additional assignments totaling more than $20 million. These engagements include applications development and enhancements, Web support and maintenance, and content management. We are now managing many of our current projects through CHC/India and will continue to focus on our off-shore model as a growth area for our Solutions business in 2002. In addition, we have a number of other areas in the Solutions Group where we expect growth this year, even in light of the current economic climate. These include government services, security and HIPAA (Health Insurance Portability & Accountability Act of 1996, Public Law 104-191) Also known as the "Kennedy-Kassebaum Act," this U.S. law protects employees' health insurance coverage when they change or lose their jobs (Title I) and provides standards for patient health, practices. We offer first-rate service in these areas while creating cost efficiencies and a high return on investment for our customers. "The healthcare and public sectors are showing renewed re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. signs of life. And CHC's HIPAA and government practices are growing as a result. By leveraging the work we have completed for the City of New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , the New York Health and Hospitals Association, as well as others, our pipeline continues to expand. "And we are happy with the progress at Chimes. It is 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 and differentiates us in a highly competitive market. Corporate executives today want the option of self-service, accessing online information on contract and permanent labor, health and welfare benefits, and retirement programs, without the need of an administrator. Chimes enables companies to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. a holistic Holistic A practice of medicine that focuses on the whole patient, and addresses the social, emotional, and spiritual needs of a patient as well as their physical treatment. Mentioned in: Aromatherapy, Stress Reduction, Traditional Chinese Medicine solution, automating the management of contract and permanent labor. To maximize Chimes' growth potential, we have been expanding our product offering and establishing new marketing channels. As a result, we won several large engagements with multi-billion dollar corporations. Recently, the Allegis Group This article or section needs sources or references that appear in reliable, third-party publications. Alone, primary sources and sources affiliated with the subject of this article are not sufficient for an accurate encyclopedia article. , a large privately held staffing company, selected Chimes to power its human capital management engagement at General Motors. "The introduction of Chimes version 5.0 is on target for the first quarter and we just formally launched our newest product, Chimes Program Management (PM), in New York at the Human Assets and IT Vendor Management conferences this week. Chimes PM is designed to help procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. professionals streamline streamline, path of a fluid flowing steadily and without appreciable turbulence. A body is said to be streamlined if its shape offers the least possible resistance to a current of air, water, or other fluid. and control the RFP (Request For Proposal) A document that invites a vendor to submit a bid for hardware, software and/or services. It may provide a general or very detailed specification of the system. 1. (business) RFP - Request for Proposal. 2. process, vendor selection and manage human capital performance. "Business remains challenging but with our loyal customer base, and strong financial position, CHC is poised to respond favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. to a market rebound rebound (rē´bownd), n/v 1. a recovery from illness. n 2. an outbreak of fresh reflex activity after withdrawal of a stimulus rebound adjective ," concluded Cassese. Looking Forward Excluding the operations of our business unit held for sale, CHC expects revenue for the first quarter of 2002 to be in the range of $77 to $80 million and EPS in the range of a ($0.05) to ($0.07) loss. For the full year 2002, and excluding the operations of our business unit held for sale, we expect revenue to be approximately $315 to $320 million and EPS in the range of $0.02 to $0.05. The revenue estimates are largely influenced by assumptions made as to future IT spending levels of our customers and the uncertain economic environment.
Pro Forma Income Reconciliation
A reconciliation of reported operating results to pro forma income
amounts is as follows:
Three Months Ended
December 31,
2001 2000
$ EPS $ EPS
Net income (loss)
as reported $ (3,047) $ (0.10) $(50,174) $ (1.58)
Restructuring charges 739 0.02 29,365 0.92
Special charges- bad debt -- -- 14,476 0.46
Gain on Investments (63) -- -- --
Operating results-
assets held for sale 826 0.03 1,895 0.06
Pro forma net
income (loss)(a) (1,545) (0.05) (4,438) (0.14)
Amortization of
intangibles 461 0.02 575 0.02
Pro forma Cash EPS(a) $ (1,084) $ (0.03)$ (3,863) $ (0.12)
Year Ended
December 31,
2001 2000
$ EPS $ EPS
Net income (loss)
as reported $(14,450) $ (0.45)$ (57,827)$ (1.83)
Restructuring charges 4,362 0.13 27,408 0.87
Special charges- bad debt -- -- 14,262 0.45
Gain on Investments (60) -- -- --
Operating results-
assets held for sale 6,643 0.21 6,541 0.21
Pro forma net
income (loss)(a) (3,505) (0.11) (9,616) (0.30)
Amortization of
intangibles 1,937 0.06 2,345 0.07
Pro forma Cash EPS(a) $ (1,568) $ (0.05)$ (7,271)$ (0.23)
(a) Not a measurement in accordance with Generally Accepted Accounting
Principles.
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About Computer Horizons Corp.
Computer Horizons Corp. (Nasdaq: CHRZ) is a strategic human
capital services and e-Business solutions company with more than
thirty years of experience, specifically in information technology. As
a global leader in systems integration and managed services, CHC
enables companies to maximize technology investments. By leveraging
its core business in IT services and its proprietary technology
through Chimes, its wholly-owned subsidiary, CHC is enabling its
Global 2000 customer base to align and integrate business planning
with human resource management across an enterprise's business
functions. 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" (within the meaning of the Private
Securities Litigation Reform Act 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 contract
awards, service offerings, market opportunities, results, performance
expectations, expectations of cost savings, or proceeds from sale of
certain operations--may not materialize.
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.
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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,
2001 2000 2001 2000
Revenues:
IT Services $ 61,720 $ 73,900 $ 274,379 $ 303,713
Solutions Group 33,376 34,697 126,405 141,766
Total 95,096 108,597 400,784 445,479
Direct Costs 66,061 75,211 281,576 312,815
Gross Profit 29,035 33,386 119,208 132,664
Selling, General
& Admin 29,262 39,935 125,435 143,691
Bad Debt Expense 1,944 21,965 3,397 26,452
Restructuring
Charges 1,048 43,904 6,521 41,528
Amortization Expense 615 2,316 2,695 7,434
Income (Loss) from
Operations (3,834) (74,734) (18,840) (86,441)
Loss on Sale of
Assets (802) -- (3,197) --
Net Gain on
Investments 90 -- 90 --
Net Interest Income
(Expense) 225 (265) 349 (1,205)
Income (Loss) Before
Income Taxes $ (4,321)$ (74,999)$ (21,598)$ (87,646)
Income Taxes
(Benefit) (1,274) (24,825) (7,148) (29,819)
Net Income (Loss) $ (3,047)$ (50,174)$ (14,450)$ (57,827)
Earnings (Loss) per
Share:
Basic $ (0.10)$ (1.58)$ (0.45)$ (1.83)
Diluted $ (0.10)$ (1.58)$ (0.45)$ (1.83)
Weighted Average
Number
of Shares
Outstanding:
Basic 31,784,000 31,807,000 31,911,000 31,656,000
Diluted 31,784,000 31,807,000 31,911,000 31,656,000
CONSOLIDATED CONDENSED BALANCE SHEET INFORMATION
(Unaudited - In Thousands)
December 31, December 31,
2001 2000
ASSETS:
Current Assets:
Cash and cash equivalents $ 41,033 $ 17,559
Accounts receivable, less
allowance for doubtful 83,564 98,021
accounts
Net Assets Held for Sale 10,381 35,274
Other current assets 26,260 43,530
Total current assets 161,238 194,384
Property and equipment, net 12,473 14,042
Goodwill 48,725 51,264
Other assets 15,285 9,706
Total Assets $237,721 $269,396
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current Liabilities:
Accounts payable & accrued expenses $ 27,978 $ 32,139
Current portion - long-term debt -- 20,704
Other current liabilities 7,513 7,069
Total current liabilities 35,491 59,912
Long-Term Debt 10,000 --
Other long-term liabilities 2,375 1,560
Shareholders' equity 189,855 207,924
Total Liabilities & Shareholders'
Equity $237,721 $269,396
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