Convergys Corporation Earns $0.29 on Slightly Higher Sequential Revenue.To download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. high-resolution, print-ready JPEG JPEG in full Joint Photographic Experts Group Standard computer file format for storing graphic images in a compressed form for general use. JPEG images are compressed using a mathematical algorithm. images, click on the thumbnail A miniature representation of a page or image that is used to identify a file by its contents. Clicking the thumbnail opens the file. Thumbnails are an option in file managers, such as Windows Explorer, and they are found in photo editing and graphics program to quickly browse multiple image above. WARNING: these images are very large (800K+) Click here for caption Business Editors/High-Tech Writers NOTE TO MEDIA: Multimedia assets available CINCINNATI--(BUSINESS WIRE)--July 22, 2003 Convergys Corporation (NYSE NYSE See: New York Stock Exchange :CVG CVG Convergys Corp CVG Corporación Venezolana de Guayana CVG Clear Vertical Grain (woodworking) CVG Carrier Group CVG Corporacion Venezolana de Guyana CVG Comprehensive Video Group (South Hackensack, NJ, USA) ): IN THE SECOND QUARTER: -- Revenues were up slightly sequentially and decreased 2 percent to $563.2 million versus one year ago. -- Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. was up 4 percent sequentially but decreased to $71.0 million versus $94.5 million one year ago. -- GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). net income decreased to $42.8 million or $0.29 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 versus $59.1 million or $0.35 in 2002. Convergys Corporation (NYSE:CVG), the global leader in integrated billing, employee care, and customer care services, announced today its financial results for the second quarter of 2003. Total revenues were $563.2 million compared to $572.7 million reported in the second quarter of 2002. Compared to $560.4 million in the first quarter of 2003, revenues were up slightly sequentially. Operating income decreased 25 percent to $71.0 million from $94.5 million as operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: dropped to 12.6 percent from 16.5 percent in the prior year. Convergys' cellular partnership investment generated a pre-tax loss of $1.3 million versus pre-tax earnings of $3 million in the second quarter of 2002. Net income for the quarter was $42.8 million or $0.29 per diluted share versus $59.1 million or $0.35 per diluted share in the second quarter of 2002. Average diluted shares outstanding decreased by 22.4 million shares to 148.5 million. Convergys repurchased approximately 8.5 million shares during the quarter. For the six months that ended on June 30, 2003, revenues of $1.12 billion were 3 percent lower compared to the prior year. Operating income decreased to $139.5 million versus $193.0 million. Including the first quarter 2003 equity loss of $9.9 million resulting from a legal settlement by the cellular partnership, the company's cellular partnership generated a pre-tax loss of $11.2 million compared to pre-tax earnings of $3.9 million in the first six months of 2002. GAAP net income was $77.7 or $0.51 per diluted share versus $118.7 or $0.69 per diluted share in the prior year. Excluding the loss resulting from the cellular partnership settlement, Convergys' 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 diluted 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. decreased to $0.55. Average diluted shares outstanding decreased by 19.3 million shares to 152.4 million. Convergys repurchased approximately 13.4 million shares during the first six months of 2003. "The second quarter reflected a continuation of challenging business trends for our Information Management Group in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . The tight business controls over 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. and capital expenditures imposed by many communication companies are continuing while they delay decisions on new billing systems or postpone post·pone tr.v. post·poned, post·pon·ing, post·pones 1. To delay until a future time; put off. See Synonyms at defer1. 2. To place after in importance; subordinate. customization work for their current systems," said Jim Orr, Chairman, President, 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 Convergys. "However, revenue growth in our Customer Management, Employee Care, and International Information Management businesses is partially helping to offset these challenging conditions. In these segments we continue to grow with many of our current clients and we are in various stages of implementation for two significant BPO BPO Business Process Outsourcing BPO Benevolent & Protective Order (of Elks of the USA) BPO Benzoyl Peroxide BPO Business Process Optimization BPO Broker Price Opinions BPO Buffalo Philharmonic Orchestra contracts - the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Postal Service postal service, arrangements made by a government for the transmission of letters, packages, and periodicals, and for related services. Early courier systems for government use were organized in the Persian Empire under Cyrus, in the Roman Empire, and in medieval and the State of Florida." Second Quarter 2003 Highlights Contracts/Expansions/Acquisitions In a major international expansion for our Employee Care business, Convergys announced it acquired Avaya's global employee service operations serving EMEA (Europe, Middle East, Africa) Refers to that region of the world. For example, one might see products packaged differently for the UK, EMEA and Asia Pacific markets. (Europe, Middle East, Africa) and Asia Pacific. In addition, Avaya signed a multi-year contract extension under which Convergys is providing expanded human resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees. support services support services Psychology Non-health care-related ancillary services–eg, transportation, financial aid, support groups, homemaker services, respite services, and other services to Avaya's more than 17,000 employees located in approximately 50 countries throughout EMEA, Asia Pacific, CALA CALA Citizens Against Lawsuit Abuse CALA Chinese American Librarians Association CALA College of Architecture and Landscape Architecture CALA Central America / Latin America CALA Center on Animal Liberation Affairs CALA California Assisted Living Association (Caribbean and Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. ), and Canada. Continuing the expansion of its offshore customer management capacity, Convergys announced that it would open a second large integrated contact center in India and two such facilities in the Philippines. When these three new contact centers are fully developed within the next 12 months, Convergys' offshore customer care facilities will provide nearly 4,000 additional seats and employ more than 7,000 trained professional agents. Convergys announced that Comcast (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 : CMCSA), the leading cable and broadband communications provider in the United States, has signed a multi-year customer care agreement for its High-Speed Internet See broadband. and Digital Phone operations. In addition, Triton PCS (1) (Personal Communications Services) Refers to wireless services that emerged after the U.S. government auctioned commercial licenses in 1994 and 1995. This radio spectrum in the 1. (NYSE: TPC (Transaction Processing Performance Council, San Francisco, CA, www.tpc.org) An organization devoted to benchmarking transaction processing systems. In order to derive the number of transactions that can be processed in a given time frame, TPC benchmarks measure the total performance of ), a leading provider of wireless communication services in the southeastern United States, signed a three-year customer care contract renewal. Convergys also announced that it has deployed the latest version of its WIZARD(R software for Israeli multichannel Using two or more paths for transmission or processing. It can refer to a variety of architectures including (1) multiple I/O channels between the CPU and peripheral devices, (2) multiple wires in a cable, (3) multiple "logical" channels within a single wire or fiber or (4) multiple , satellite operator, YES. Recognitions For the third consecutive year, Fortune magazine named Convergys as one of "America's Most Admired" companies. The honor is based on eight key attributes of reputation: Innovation, financial soundness, employee talent, use of corporate assets, long-term investment value, social responsibility, quality of management and quality of products and services. Convergys also received the "Call Center of the Year" Award from Call Center. The publication's editorial staff recognized Convergys for the success of its India-based operations and the attention given to national cultural practices and its overall investment in and use of technology, ability to meet or exceed sales and services goals, effectively train and evaluate agents, provide a good work environment, and deliver continuous productivity improvements. Convergys won the Billing World Excellence Award for "Best Integration Project" for implementation of its ICOMS ICOMS Integrated Communications Operations Management system ICOMS Improved Conventional Mine System convergent voice, video, and data services billing product at one of its large cable clients. Technology Convergys announced Infinys(TM), a fully convergent billing and customer management solution for wireline communications companies Communications Company is a communications unit of the United States Marine Corps. They are part of Combat Logistics Regiment 37 , 3rd Marine Logistics Group (3MLG) and III Marine Expeditionary Force (III MEF). The unit is based out of the Marine Corps Base Camp Smedley D. enabling them to automate To turn a set of manual steps into an operation that goes by itself. See automation. and integrate their order fulfillment Order fulfillment (in BE also: order fulfilment) is in the most general sense the complete process from point of sales inquiry to delivery of a product to the customer. Sometimes Order fulfillment , customer service management, and billing functions across multiple product and service offerings. Convergys' Infinys solution features a customer-focused, service management approach, enabling providers to automate and integrate their product, customer, fulfillment ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. , and revenue management functions across multiple products. At the base of the Infinys solution is the integration of Cygent(R), Convergys' automated au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. order management module, and Geneva Geneva, canton and city, Switzerland Geneva (jənē`və), Fr. Genève, canton (1990 pop. 373,019), 109 sq mi (282 sq km), SW Switzerland, surrounding the southwest tip of the Lake of Geneva. (TM), the award winning convergent rating and billing module. Convergys also announced an enhanced, end-to-end Advanced Technical Support Program that brings together existing Convergys customer management services and expertise into a complete outsourced solution designed specifically to address the unique technical support needs of advanced technology companies. Convergys joined with BenchmarkPortal to announce the availability of the industry's first benchmark to measure customer experience. The Customer Experience Benchmark (CEB CEB Chief Executives Board (United Nations) CEB Council of Europe Development Bank CEB Corporate Executive Board CEB Ceylon Electricity Board (Sri Lanka) ) offers a universal standard to measure and benchmark caller Caller may refer to one of the following:
July 2003 Highlights to Date Convergys announced its first contract in the People's Republic People's Republic n. A political organization founded and controlled by a national Communist party. of China. Convergys is licensing its Activation activation /ac·ti·va·tion/ (ak?ti-va´shun) 1. the act or process of rendering active. 2. the transformation of a proenzyme into an active enzyme by the action of a kinase or another enzyme. 3. Manager to China Unicom China Unicom, full name China United Telecommunications Corporation, 中国联通, HKSE: 0762 NYSE: CHU, is a telecommunication operator in the People's Republic of China. 52. Guangdong, a provincial operator of China Unicom Ltd. (NYSE: CHU), the second-largest wireless carrier in China, and one of the largest wireless carriers in the world. Convergys announced a customer care agreement with Yahoo! Inc., a leading global Internet company. Convergys will manage general inquiries and billing-related questions for many of Yahoo!'s premium products and services. Yahoo! serves businesses and consumers worldwide with 25 world properties and is available in 13 languages. Convergys announced a three-year contract with Rite Aid Rite Aid (NYSE: RAD) is a United States retailer and pharmacy chain, operating over 5,000 stores in 31 states and the District of Columbia. Rite Aid Corporation is one of the nation's leading drugstore chains. (NYSE: RAD (1) (Rapid Application Development) Developing systems incrementally and delivering working pieces every three to four months, rather than waiting until the entire project is programmed before implementing it. ) to provide automated, speech-enabled store locator service An IN (Intelligent Network) service for retail outlets that transfers the caller to the nearest store based on the calling telephone number. This allows the business to advertise only one telephone number. See call routing service. and to access the Convergys-designed advanced speech recognition (ASR (Automatic Speech Recognition) Using voice recognition to replace keypad entry for telephone voice menus. Typically used to speak the digits 0 through 9 insted of keying them, ASR systems may be able to recognize a limited vocabulary. See voice recognition and AVSR. ) system. One of the largest drug store chains in the United States, Rite Aid operates more than 3,400 locations in 28 states and the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). . In the honors category, Convergys announced it was named the No. 1 provider of global inbound in·bound 1 adj. Bound inward; incoming: inbound commuter traffic. Adj. 1. inbound teleservices by Customer Inter@ction Solutions for the third consecutive year. Convergys also ranked as the No. 1 U.S. domestic inbound teleservices agency for the sixth consecutive time since 1998. Orr continued, "The current difficult economic environment is likely to continue to pressure our results through the remainder of 2003; however, I continue to be confident in Convergys' long-term prospects for growth. We have a strong balance sheet, a business model that generates significant cash, and we have a strong management team focused on well-defined, strategic initiatives that are expanding our leading position in the marketplace. We continue to advance our technological leadership through investment in research and development. The markets we serve in all of our businesses are very large and I believe demand for our world class technology and 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. capabilities will accelerate when the economy and the telecommunication telecommunication Communication between parties at a distance from one another. Modern telecommunication systems—capable of transmitting telephone, fax, data, radio, or television signals—can transmit large volumes of information over long distances. industry recover." Operating Performance by Segment Information Management Group (IMG IMG International medical graduate, see there ) Excluding intercompany sales, second quarter 2003 IMG revenues decreased 15 percent to $194.6 million, from $229.2 million in the same period last year. Compared to the first quarter of 2003, IMG revenues decreased by only 1 percent. Data processing data processing or information processing, operations (e.g., handling, merging, sorting, and computing) performed upon data in accordance with strictly defined procedures, such as recording and summarizing the financial transactions of a revenues decreased 20 percent to $111.7 million from $139.1 million, representing an 8 percent year-over-year decrease in wireless subscribers processed, and lower average per-wireless-subscriber processing rates, partially offset by an increase in cable data processing revenues. The decrease in wireless subscribers resulted from conversions off Convergys systems during the third quarter of 2002 and the second quarter of 2003, partially offset by slight subscriber growth among Convergys' other wireless clients. Professional and consulting revenues decreased 47 percent to $26.6 million from $50.5 million reflecting a reduction in system enhancement requests and implementations of new systems from Convergys' wireless and cable clients as communications companies continued their constraints CONSTRAINTS - A language for solving constraints using value inference. ["CONSTRAINTS: A Language for Expressing Almost-Hierarchical Descriptions", G.J. Sussman et al, Artif Intell 14(1):1-39 (Aug 1980)]. on IT spending. License and other revenues increased slightly to $15.4 million from $12.5 million reflecting the expanded relationships with several cable clients. In addition, international revenues increased 51 percent to $40.9 reflecting growth in license and professional and consulting revenues generated from the company's European and Middle Eastern operations and combined revenue growth of approximately $10 million resulting from both the July, 2002, acquisition of TelesensKSCL and Convergys' expansion in the Asia Pacific and Latin American markets. Second quarter operating income for IMG decreased 42 percent to $29.1 million from $50.4 million. Operating margin was 15.0 percent compared with 22.0 percent from the second quarter of last year reflecting lower revenues, higher medical and pension benefit costs, and IMG's further international expansion. This was partially offset by savings realized through the restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). Convergys began in the fourth quarter of 2002. Compared to the first quarter of 2003, second quarter operating income for IMG increased 3 percent as operating margin increased to 15.0 percent compared with 14.3 percent. Customer Management Group CMG CMG Coastal & Marine Geology (USGS) CMG Chipotle Mexican Grill, Inc. (stock symbol) CMG Companion (of the Order Of) St Michael and St George CMG Computer Measurement Group revenues were $368.6 million, a 7 percent increase compared to $343.5 million in the second quarter of 2002, primarily reflecting increased levels of business with many of Convergys' top 20 clients including several clients in the financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. sector as well as revenues resulting from customer care services provided to the United States Postal Service and employee care services provided to the State of Florida. CMG's second quarter operating income declined 4 percent to $43.8 million compared to $45.7 million in the prior year. CMG reported an 11.9 percent operating margin in the second quarter of 2003, down from the 13.3 percent reported in the second quarter of 2002. The decline reflects increases in wage, medical, and pension benefit costs, and increased investment in the Employee Care business, partially offset by the increase in revenues. Business Outlook The following forward looking-statements reflect Convergys Corporation's expectations as of July 22, 2003. Given the various risk factors discussed below, actual results may differ materially. The company intends to continue its practice of not updating 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. until its next quarterly results announcement, other than in publicly available statements. 2003 Financial Guidance For the full year of 2003, IMG revenue could decline by 10 to 15 percent from 2002 levels, and IMG operating margin could be approximately 15 percent. IMG third quarter revenue could remain relatively flat from second quarter levels. For the full year of 2003, CMG revenue could increase 6 to 11 percent from the 2002 level, and CMG operating margin could be from 11 to 13 percent. CMG third quarter revenue could increase moderately from the second quarter. We expect third quarter EPS to be in the range of $0.28 to $0.31. Including the cellular partnership settlement in the first quarter, for the full year of 2003 we expect EPS to be in the range of $1.05 to $1.20. ABOUT CONVERGYS Convergys Corporation (NYSE: CVG), a member of the S&P 500 and the Forbes' Platinum 400, is the global leader in integrated billing, employee care, and customer care services provided through outsourcing or licensing. We serve top companies in telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. , Internet, cable and broadband services See broadband and broadband service provider. , technology, financial services, and other industries in more than 40 countries. We also provide integrated, outsourced, human resource services to leading companies across a broad range of industries. We bring together world-class resources, software, and expertise to help create valuable relationships between our clients and their customers and their employees. This commitment is validated val·i·date tr.v. val·i·dat·ed, val·i·dat·ing, val·i·dates 1. To declare or make legally valid. 2. To mark with an indication of official sanction. 3. by the more than 1.5 million individual bills our software produces each day to support more than 120 million subscribers, and by the more than 1.7 million separate customer and employee contacts we manage each day, both live and via electronic interaction. Convergys(R) employs more than 48,000 people in 48 customer contact centers and in our data centers and other offices in the United States, Canada, Latin America, Europe, the Middle East, and Asia. Convergys is on the net at www.convergys.com, and has world headquarters in Cincinnati. (Infinys and Geneva are trademarks and Convergys, Cygent, WIZARD, and the Convergys logo are registered trademarks of Convergys Corporation.) NON-GAAP MEASURES: This news release contains non-GAAP financial measures, including pro forma net income and pro forma 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 , which are not prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP. A reconciliation of these non-GAAP measures to the comparable GAAP measures is included in the attached financial tables. CONFERENCE CALL NOTE: Convergys will host a one-hour conference call on Wednesday, July 23, at 10:00 AM, 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 company's second quarter results. It will feature Jim Orr, Chairman, President, & CEO, and Steve Rolls, CFO See Chief Financial Officer. . This call will be carried live (with scheduled repeats) on the Internet. A link to the conference call is available at www.convergys.com. In addition to the non-GAAP financial measures contained in this news release, during this conference call Convergys will disclose free cash flow, which is a non-GAAP financial measure defined as cash flows from operations less the change in the balance of the 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 securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. and capital expenditures. A reconciliation of free cash flow is available at www.convergys.com in the section "Invest in Convergys." "SAFE HARBOR Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " NOTE: Information included in this news release may contain forward-looking statements that involve potential risks for Convergys Corporation. The future results of Convergys could differ materially from those discussed herein. Factors that could cause or contribute to such differences include, but are not limited to, the loss of a significant client or significant business from a client, difficulties in completing a contract or implementing its provisions, or completing or implementing an acquisition, potential terrorist activities and the United States' response thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. , and competitive and other factors disclosed in the 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. for the year ended December 31, 2002, filed with the SEC by Convergys Corporation. The company has no current intention of updating any forward-looking statements that may be included herein.
CONVERGYS CORPORATION
Revenues, Net Income and Earnings Per Common Share
In Millions Except Per Share Amounts
(Unaudited)
Second Quarter
Change
2003 2002 Amount %
Revenues:
- Information Mgmt. Grp. $ 195.7 $ 231.8 $(36.1) (16)
- Customer Mgmt. Group 368.6 343.5 25.1 7
- Eliminations (1.1) (2.6) 1.5 (58)
--------- --------- ------- ---
--Total $ 563.2 $ 572.7 $ (9.5) (2)
Operating Income:
- Information Mgmt. Grp. $ 29.1 $ 50.4 $(21.3) (42)
- Customer Mgmt. Group 43.8 45.7 (1.9) (4)
- Corporate & Other (1.9) (1.6) (0.3) 19
--------- --------- ------- ---
--Total $ 71.0 $ 94.5 $(23.5) (25)
Net Income $ 42.8 $ 59.1 $(16.3) (28)
Earnings Per Common Share
- Basic $0.29 $0.35 $(0.06) (17)
- Diluted $0.29 $0.35 $(0.06) (17)
Weighted Average Common Shares Outstanding
- Basic 145.3 167.3 (22.0) (13)
- Diluted 148.5 170.9 (22.4) (13)
Six Months
Change
2003 2002 Amount %
Revenues:
- Information Mgmt. Grp. $ 393.5 $ 468.0 $(74.5) (16)
- Customer Mgmt. Group 732.3 697.7 34.6 5
- Eliminations (2.2) (5.5) 3.3 (60)
--------- --------- ------- ---
--Total $1,123.6 $1,160.2 $(36.6) (3)
Operating Income:
- Information Mgmt. Grp. $ 57.3 $ 106.8 $(49.5) (46)
- Customer Mgmt. Group 86.8 89.7 (2.9) (3)
- Corporate & Other (4.6) (3.5) (1.1) 31
--------- --------- ------- ---
--Total $ 139.5 $ 193.0 $(53.5) (28)
Net Income $ 77.7 $ 118.7 $(41.0) (35)
Earnings Per Common Share
- Basic $0.52 $0.71 $(0.19) (27)
- Diluted $0.51 $0.69 $(0.18) (26)
Weighted Average Common Shares Outstanding
- Basic 149.6 167.7 (18.1) (11)
- Diluted 152.4 171.7 (19.3) (11)
The above amounts reflect the Company's results of operations, as
reported under U.S. Generally Accepted Accounting Principles (U.S.
GAAP), that will be presented in the Convergys 10-Q for the quarterly
period ended June 30, 2003.
Convergys Corporation
Consolidated Statements of Income
In Millions Except Per Share Amounts
(Unaudited)
For the Three Mo.s For the Six Mo.s
Ended June 30, % Ended June 30, %
2003 2002 Chg. 2003 2002 Chg.
Revenues:
Information Mgmt. Grp.
Data Processing $111.7 $139.1 (20) $ 230.6 $ 273.0 (16)
Prof. & Consulting 26.6 50.5 (47) 53.4 103.6 (48)
License & Other 15.4 12.5 23 29.0 25.3 15
International 40.9 27.1 51 78.3 60.6 29
----- ------ -- ------- ------- --
External Revenues 194.6 229.2 (15) 391.3 462.5 (15)
Interco. Svcs. for CMG 1.1 2.6 (58) 2.2 5.5 (60)
----- ------ -- ------- ------- --
Total IMG Revenues 195.7 231.8 (16) 393.5 468.0 (16)
Customer Management Grp.
Communications 226.5 224.4 1 456.4 455.9 -
Technology 47.9 50.0 (4) 102.0 104.0 (2)
Financial Services 34.8 22.7 53 65.8 42.6 54
Other 59.4 46.4 28 108.1 95.2 14
----- ------ -- ------- ------- --
Total CMG Revenues 368.6 343.5 7 732.3 697.7 5
Eliminations & Other (1.1) (2.6) (58) (2.2) (5.5)(60)
----- ------ -- ------- ------- --
Total Revenues 563.2 572.7 (2) 1,123.6 1,160.2 (3)
Costs & Expenses:
Cost of Providing
Services & Products 322.6 315.0 2 646.2 641.0 1
Selling, General & Admin. 115.0 99.8 15 228.4 202.9 13
Research & Development 23.5 29.2 (20) 46.7 55.4 (16)
Depreciation 27.2 30.6 (11) 55.2 60.8 (9)
Amortization 3.9 3.6 8 7.6 7.1 7
----- ------ -- ------- ------- --
Total Costs & Expenses 492.2 478.2 3 984.1 967.2 2
Operating Income 71.0 94.5 (25) 139.5 193.0 (28)
Equity in Earnings of
Cellular Partnership (1.3) 3.0 - (11.2) 3.9 -
Other Income (Exp.), Net (0.3) 0.2 - (2.0) (1.3) 54
Interest Expense (1.7) (2.3) (26) (3.2) (5.9)(46)
----- ------ -- ------- ------- --
Income Before Inc. Taxes 67.7 95.4 (29) 123.1 189.7 (35)
Income Taxes 24.9 36.3 (31) 45.4 71.0 (36)
----- ------ -- ------- ------- --
Net Income $ 42.8 $ 59.1 (28) $ 77.7 $ 118.7 (35)
===== ====== == ======= ======= ==
Earnings Per Common Share
-Basic $ 0.29 $ 0.35 (17) $ 0.52 $ 0.71 (27)
-Diluted $ 0.29 $ 0.35 (17) $ 0.51 $ 0.69 (26)
Weighted Average Common Shares Outstanding
-Basic 145.3 167.3 149.6 167.7
-Diluted 148.5 170.9 152.4 171.7
Other Data
-Operating Margin 12.6% 16.5% 12.4% 16.6%
Market Price Per Share
High $ 18.38 $ 30.79 $ 18.38 $ 37.98
Low $ 12.75 $ 18.14 $ 11.30 $ 18.14
Close $ 16.00 $ 19.48 $ 16.00 $ 19.48
The above results reflect the Company's results of operations, as
reported under U.S. Generally Accepted Accounting Principles (U.S.
GAAP), that will be presented in the Convergys 10-Q for the
quarterly period ended June 30, 2003.
Convergys Corporation
Consolidated Balance Sheets
In Millions
(Unaudited)
June 30, Dec. 31,
2003 2002
Assets
Cash and Cash Equivalents $ 34.1 $ 12.2
Receivables - Net 318.1 315.2
Other Current Assets 111.0 90.8
Property & Equipment - Net 284.8 298.0
Other Assets 948.9 903.3
--------- ---------
Total Assets $ 1,696.9 $ 1,619.5
Liabilities and Shareholders' Equity
Debt Maturing in One Year $ 166.5 $ 50.7
Other Current Liabilities 443.1 411.3
Other Liabilities 28.4 26.6
Long-Term Debt 4.7 4.6
Common Shareholders' Equity 1,054.2 1,126.3
--------- ---------
Total Liabilities
& Shareholders' Equity $ 1,696.9 $ 1,619.5
Convergys Corporation
Information Management Group
Operating Segment Data
In Millions
(Unaudited)
For the Three Mo.s For the Six Mo.s
Ended June 30, % Ended June 30, %
2003 2002 Chg. 2003 2002 Chg.
Revenues:
Data Processing $111.7 $139.1 (20) $230.6 $273.0 (16)
Prof. & Consulting 26.6 50.5 (47) 53.4 103.6 (48)
License & Other 15.4 12.5 23 29.0 25.3 15
International 40.9 27.1 51 78.3 60.6 29
----- ------ -- ----- ----- --
External Revenues 194.6 229.2 (15) 391.3 462.5 (15)
Interco. Svcs. for CMG 1.1 2.6 (58) 2.2 5.5 (60)
----- ------ -- ----- ----- --
Total IMG Revenues 195.7 231.8 (16) 393.5 468.0 (16)
Costs & Expenses:
Cost of Providing
Services & Products 94.2 107.1 (12) 193.2 217.3 (11)
Selling, General & Admin. 41.0 35.7 15 80.4 70.6 14
Research & Development 22.0 26.2 (16) 43.9 49.5 (11)
Depreciation 7.7 11.0 (30) 15.5 21.0 (26)
Amortization 1.7 1.4 21 3.2 2.8 14
------ ------ -- ------ ----- --
Total Costs & Expenses 166.6 181.4 (8) 336.2 361.2 (7)
------ ------ -- ------ ----- --
Operating Income $ 29.1 $ 50.4 (42) $ 57.3 $106.8 (46)
====== ====== ====== ======
The operating segment data for the Information Management Group
(IMG) shown above reflects the detailed revenue and expense data
for IMG, as reported under U.S. GAAP, that will be presented in
the Convergys 10-Q for the quarterly period ended June 30, 2003.
Convergys Corporation
Customer Management Group
Operating Segment Data
In Millions
(Unaudited)
For the Three Mo.s For the Six Mo.s
Ended June 30, % Ended June 30, %
2003 2002 Chg. 2003 2002 Chg.
Revenues:
Communications $226.5 $224.4 1 $ 456.4 $ 455.9 -
Technology 47.9 50.0 (4) 102.0 104.0 (2)
Financial Services 34.8 22.7 53 65.8 42.6 54
Other 59.4 46.4 28 108.1 95.2 14
------ ------ -- ------- ------- --
Total CMG Revenues 368.6 343.5 7 732.3 697.7 5
Costs & Expenses:
Cost of Providing
Services & Products 230.6 210.5 10 456.3 429.2 6
Selling, General & Admin. 72.6 64.2 13 145.7 132.6 10
Research & Development 1.5 3.0 (50) 2.8 5.9 (53)
Depreciation 17.9 17.9 - 36.3 36.0 1
Amortization 2.2 2.2 - 4.4 4.3 2
------ ------ -- ------- ------- --
Total Costs & Expenses 324.8 297.8 9 645.5 608.0 6
------ ------ -- ------- ------- --
Operating Income $ 43.8 $ 45.7 (4) $ 86.8 $ 89.7 (3)
====== ====== ======== ========
The operating segment data for the Customer Management Group (CMG)
shown above reflects the detailed revenue and expense data for CMG,
as reported under U.S. GAAP, that will be presented in the Convergys
10-Q for the quarterly period ended June 30, 2003.
Convergys Corporation
Reconciliation of Pro Forma Operating Results
(In Millions Except Per Share Amounts)
Income Income
(Loss) Tax Net
Before (Expense)/ Income Diluted
Tax Benefit (Loss) EPS
------- -------- ------- -------
Second Quarter 2003:
--------------------
Results as reported
under U.S. GAAP $ 67.7 $(24.9) $ 42.8 $ 0.29
Less: Special items - - - -
------ ------ ------ ------
Results excluding
special items
(a non-GAAP measure) $ 67.7 $(24.9) $ 42.8 $ 0.29
====== ====== ====== ======
Year to Date 2003:
--------------------
Results as reported
under U.S. GAAP $123.1 $(45.4) $ 77.7 $ 0.51
Less: Special items (a) (9.9) 3.5 (6.4) (0.04)
------ ------ ------ ------
Results excluding
special items
(a non-GAAP measure) $133.0 $(48.9) $ 84.1 $ 0.55
====== ====== ====== ======
Second Quarter 2002:
--------------------
Results as reported
under U.S. GAAP $ 95.4 $(36.3) $ 59.1 $ 0.35
Less: Special items - - - -
------ ------ ------ ------
Results excluding
special items
(a non-GAAP measure) $ 95.4 $(36.3) $ 59.1 $ 0.35
====== ====== ====== ======
Year to Date 2002:
--------------------
Results as reported
under U.S. GAAP $189.7 $(71.0) $118.7 $ 0.69
Less: Special items - - - -
------ ------ ------ ------
Results excluding
special items
(a non-GAAP measure) $189.7 $(71.0) $118.7 $ 0.69
====== ====== ====== ======
The schedule above provides a reconciliation of the Company's
results of operations, as reported under U.S. Generally Accepted
Accounting Principles (U.S. GAAP), to the pro forma results of
operations (non-U.S. GAAP), which excludes special items.
(a) Reflects the $9.9 equity loss generated from the Company's
investment in the Cellular Partnership, that resulted from
the partnership's settlement of its lawsuit with West Side
Cellular Communications, Inc. during the first quarter of
2003.
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