Convergys Corporation Earns $0.31 on Slightly Higher Revenue.To download 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 NOTE: Multimedia assets available CINCINNATI--(BUSINESS WIRE)--Oct. 21, 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 THIRD QUARTER: -- Revenue increased 2 percent to $570.7 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. decreased to $74.2 million versus $89.8 million last year. -- Net income decreased to $45.5 million or $0.31 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 $55.6 million or $0.34 per diluted share 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 third quarter of 2003. Total revenues increased 2 percent to $570.7 million compared to $561.2 million reported in the third quarter of 2002. Operating income decreased 17 percent to $74.2 million from $89.8 million as operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: declined to 13.0 percent from 16.0 percent in the prior year. The company's cellular partnership investment contributed pre-tax earnings of $0.2 million, down from $1.0 million in the third quarter of 2002. Interest expense decreased to $1.8 million from $3.1 million in the prior year, partially offsetting the decline in operating income. Net income was $45.5, down 18 percent from $55.6 million in the third quarter of 2002, while earnings per diluted share decreased 9 percent to $0.31 from $0.34. Average diluted shares outstanding decreased by 18.5 million shares to 145.2 million. Convergys repurchased approximately 250,000 shares during the quarter. For the first three-quarters of 2003, revenues of $1.69 billion were down 2 percent versus prior year. Operating income decreased to $213.7 million versus $282.8 million in 2002. 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 $11.0 million compared to pre-tax earnings of $4.9 million in the first nine months of 2002. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). net income was $123.2 or $0.82 per diluted share versus $174.3 or $1.03 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 $0.86. Average diluted shares outstanding decreased by 19.0 million shares to 150.0 million. Convergys repurchased approximately 13.6 million shares during the first nine months of 2003. "The third quarter reflects a continuation of the business trends we spoke about in our first and second quarter conference calls. The business environment for our Information Management Group remains challenging 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. . Convergys remains aggressive in the pursuit of new business with focused sales efforts, leading software products like Infinys, and an expanded geographic presence. Solid top-line growth in Convergys' Customer Management and Employee Care businesses is partially helping to offset these challenging conditions, " 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. "In the customer service market, today's economy has become a catalyst for companies seeking greater efficiencies to outsource larger pieces of their customer service operations. In the human resource market, the trend to outsource HR administrative services continues to grow as companies look for comprehensive solutions to improve their HR processes, deliver enhanced HR systems, gain better access to information for both employees and managers, and reduce their costs. Accordingly, given these trends, we remain optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about the current business conditions in our Customer Management and Employee Care businesses." Third Quarter 2003 Highlights Contracts/Contract Extensions Convergys and DIRECTV, Inc., the nation's leading digital 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 television service provider, announced the execution of a Master Service contract which provides for Convergys to continue the delivery of world-class customer service to DIRECTV's more than 11.8 million customers. Convergys signed a three-year contract to provide 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. ) with an 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. , 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. . One of the largest drug store chains in 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. , 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). . Convergys announced a customer care agreement with Yahoo! Inc., a leading global Internet company. Under the agreement, Convergys will manage general inquiries and billing-related questions for many of Yahoo!'s premium products and services. Additionally, Convergys will help support Yahoo!'s e-mail and inbound in·bound 1 adj. Bound inward; incoming: inbound commuter traffic. Adj. 1. inbound calls. Convergys announced an 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. contract to provide the interactive voice response (IVR (Interactive Voice Response) An automated telephone information system that speaks to the caller with a combination of fixed voice menus and data extracted from databases in real time. ) system for Monster Government Solutions' new project with the U.S. government. Monster Government Solutions, a division of Monster Worldwide Monster Worldwide NASDAQ: MNST is the parent company for Monster.com; it also owns other well-known websites such as Military.com, Tickle.com and Fastweb.com. Company Overview (Nasdaq:MNST MNST Maximum Network System Throughput ), signed a contract to upgrade the U.S. Office of Personnel Management's USAJOBS Web site (www.usajobs.opm.gov) and handle daily maintenance of the site. Convergys announced it has signed 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. China Unicom has 61.7 million cellular service subscribers. Convergys announced two new Infinys wins: Servei de Telecomunicacions d'Andorra (STA (STAtion) Shorthand for a client node in a network. In a wireless network, the STA typically communicates with the AP (access point). See wireless LAN. ),the national carrier of Andorra, has selected Convergys' Infinys(tm) rating and billing component, 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), to support its entire business including wireline, wireless, and IP, and to achieve greater convergence across its comprehensive service portfolio. Visage Mobile, the first U.S. enabler of private label wireless services, has signed a multi-year Infinys (tm) contract as part of an alliance with Convergys to support North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. mobile virtual network operator A Mobile Virtual Network Operator (MVNO) is a company that provides mobile (sometimes called wireless or cellular) telephone service but does not have its own allocation of the radio frequency spectrum nor all of the infrastructure required to provide mobile telephone service. (MVNO (Mobile Virtual Network Operator) A reseller of wireless services. MVNOs do not own licensed spectrum and typically do not have any of their own wireless network infrastructure. ) clients with outsourced billing services. Convergys will be Visage Mobile's exclusive billing services provider, operating its Infinys rating and billing component, Geneva (tm), from a Convergys data center. Visage Mobile will be Convergys' exclusive partner in outsourcing MVNO operations. Honors Convergys announced that it was named the #1 provider of global inbound teleservices by Customer Inter@ction Solutions for the third consecutive year. Additionally, Convergys ranked as the #1 U.S. domestic inbound teleservices agency for the sixth consecutive time since 1998. Convergys received the 2003 Global Marketing Strategy Award from Frost & Sullivan, a global growth consulting firm Noun 1. consulting firm - a firm of experts providing professional advice to an organization for a fee consulting company business firm, firm, house - the members of a business organization that owns or operates one or more establishments; "he worked for a . Frost & Sullivan analysts praised Convergys' global expansion over the past several years in honoring Convergys with this year's award. Technology To help carriers ensure they're fully prepared for the arrival of WNP WNP Wireless Number Portability (FCC) WNP White Nationalist Party WNP Washington Nuclear Power WNP Will Not Proceed , Convergys has developed a comprehensive care program to address pending service, retention, and acquisition challenges resulting from wireless number portability See NP. . It is designed to convince customers not to switch providers or to ensure the change goes smoothly. Intended primarily for Tier I and Tier II carriers serving the top 100 U.S. metropolitan service areas, the Convergys program consists of Basic Care, Technical Care, and Smart Care components. Specific Convergys services range from answering questions about WNP to delivering number porting-related technical support and providing knowledge management services and providing upgrades to its wireless solutions that support number portability. October 2003 Highlights to Date There have been two additional announcements concerning the Infinys business support system so far this month: Convergys announced it has signed a 5-year renewal and expansion of its billing software license agreement with Cox Communications Cox Communications is a privately owned subsidiary of Cox Enterprises providing digital cable television and telecommunications services in the United States. It is the third-largest[2] cable television provider in the United States, serving more than 6. , Inc. (NYSE:COX), a leading national provider of broadband communications services. Not only did Cox renew its license for Convergys' ICOMS ICOMS Integrated Communications Operations Management system ICOMS Improved Conventional Mine System convergent voice, video, and high-speed data billing and subscriber management solution, it expanded its billing software agreement to license Infinys(tm), Convergys' recently announced convergent business support system. Convergys announced it has joined with Intel (Nasdaq:INTC INTC Intel (NASDAQ symbol) INTC Intercept INTC Interrupt Controller ), a recognized global leader in the Wi-Fi market space, to make available a Convergys Infinys(tm) solution to manage the complexities of Wi-Fi roaming The ability to use a communications device such as a cellphone or PDA and be able to move from one cell or access point to another without losing the connection. , partner management, and convergent billing for mainstream mobile and fixed service operators. This Infinys solution - which joins Infinys for wireline carriers announced in June - enables partner care and settlement for digital content providers and venue hosts, as well as inter-carrier settlement among wireless Internet service providers Internet service provider (ISP) Company that provides Internet connections and services to individuals and organizations. For a monthly fee, ISPs provide computer users with a connection to their site (see data transmission), as well as a log-in name and password. (WISPs) that manage service for individual Wi-Fi "hotspots" (i.e., public Internet access See how to access the Internet. points like retail outlets retail outlet n → punto de venta retail outlet n → point m de vente retail outlet retail n → , hotels, airports, etc.) For Employee Care, Convergys announced a five-year contract to provide 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. and payroll administration services to Fifth Third Bancorp (Nasdaq:FITB FITB Fill In The Blank FITB Future Income Tax Benefit FITB Fédération Internationale de Tchoukball (International Tchoukball Federation) ), a leading diversified financial The diversified financial services segment includes a range of consumer and commercially-oriented companies offering a wide variety of products and services, including various lending products (such as home equity loans and credit cards), insurance, and securities and investment services company with approximately 20,000 employees and $89 billion in assets. Convergys will also provide compensation administration, performance management support, knowledge management services, benefits administration, time and attendance management, recruitment technology, and a comprehensive self-service, user-friendly Web portal See portal. . Convergys announced enhanced capability to simplify and accelerate the development of 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. ) applications using industry-leading VoiceXML software tools. Convergys will apply these tools to reduce client development costs, speed time-to-market for new automated customer care systems, and create application components for reuse reuse - Using code developed for one application program in another application. Traditionally achieved using program libraries. Object-oriented programming offers reusability of code via its techniques of inheritance and genericity. across its own outsourced SpeechPort platform. As a result of this effort, Convergys and its Solutions "Challenge" ally Audium, a leading developer of VoiceXML server and application software, won the People's Choice Award recognizing the winner of the first Speech Solutions Challenge , at SpeechTEK 2003. Convergys opened two state-of-the-art contact centers in the Philippines and announced plans to open a third in 2004. Located in Metro Manila's suburbs Makati and Pasig City The City of Pasig (Filipino: Lungsod ng Pasig) is one of the cities and municipalities that make up Metro Manila in the Philippines. It used to be the capital of the province of Rizal before Metro Manila was formed. , the integrated contact centers provide both customer care support and advanced technical help desk services via e-mail, voice, and Web chat as well as "back office" application and document processing Processing text documents, which includes indexing methods for text retrieval based on content. See document imaging. Orr continued, "I want to reiterate re·it·er·ate tr.v. re·it·er·at·ed, re·it·er·at·ing, re·it·er·ates To say or do again or repeatedly. See Synonyms at repeat. re·it Convergys continuing strategy of delivering superior value to our clients. Just as Convergys is continuing to drive costs down by being very cost-effective ourselves, I believe the current economy is prompting companies to search for the most cost-effective method of delivering quality service to their customers, and that search is accelerating the movement toward outsourcing. But whether our clients choose fully-outsourced services, licenses, or our unique build-operate-transfer business model, Convergys is well-positioned to take advantage of the market demands, and this adds significantly to our growth potential." Operating Performance by Segment Information Management Group (IMG IMG International medical graduate, see there ) Excluding intercompany sales, third quarter 2003 Convergys IMG revenues decreased 16 percent to $188.9 million, from $224.6 million in the same period last year. Compared to the second quarter of 2003, revenues decreased by only 3 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 19 percent to $109.3 million from $135.5 million, representing an 8 percent year-over-year decrease in wireless subscribers processed and lower average per-wireless-subscriber processing rates. The decrease in wireless subscribers resulted from conversions off Convergys systems, partially offset by slight subscriber growth among Convergys' other wireless clients. Professional and consulting revenues decreased 33 percent to $25.0 million from $37.1 million reflecting a reduction in system enhancement requests and implementations of new systems from Convergys' cable and wireless clients. License and other revenues decreased 28 percent to $12.9 million as a result of a large up-front license recognized in the prior year in connection with the expansion of a license arrangement with one of Convergys' largest cable clients. On a positive note, international revenues increased 22 percent to $41.7 reflecting combined revenue growth of approximately $10 million resulting from Convergys' expansion in the Asia Pacific and Latin American markets. This was partially offset by lower revenues resulting from the suspension of Orange France's 3G implementation. Convergys IMG third quarter operating income decreased 38 percent to $29.0 million from $46.4 million. Operating margin was 15.4 percent compared with 20.7 percent from the third quarter of last year reflecting lower revenues and higher benefit costs, 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). initiatives that Convergys began in the fourth quarter of 2002. Customer Management Group Convergys 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 $381.8 million, a 13 percent increase compared to $336.6 million in the third quarter of 2002, primarily reflecting increased levels of business with many of Convergys' top 20 clients as well as revenues resulting from customer care services provided to the United States 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 employee care services provided to the State of Florida. Compared to the second quarter of 2003, revenues increased 4 percent. Convergys CMG third quarter operating income increased 5 percent to $46.3 million compared to $44.1 million in the prior year, while it reported a 12.1 percent operating margin in the third quarter of 2003, down from the 13.1 percent reported in the third quarter of 2002. This reflects increases in wage and benefit costs as well as 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 October 21, 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, Convergys IMG revenue could decline by 11 to 12 percent from 2002 levels, and operating margin could slightly exceed 15 percent. For the full year of 2003, Convergys CMG revenue could increase 8 to 9 percent from the 2002 level, and operating margin could be approximately 12 percent. We expect fourth quarter EPS to be in the range of $0.31 to $0.34. Including the cellular partnership settlement in the first quarter, for the full year of 2003 we expect EPS to be in the range of $1.13 to $1.16. For the full year of 2004, Convergys IMG revenue could decline by 10 to 15 percent from the 2003 level, and operating margin could be down for the year. For the full year of 2004, Convergys CMG revenue could increase 7 to 12 percent from the 2003 level, and operating margin could be down slightly. For the full year 2004, EPS could be in the range of $0.85 to $1.00. 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 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. , 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 50 customer contact centers and in our data centers and other offices in the United States, Canada, 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. , 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 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, October 22, 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 third 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)
Third Quarter
------------------------------------------
Change
-------------
2003 2002 Amount %
--------- --------- ------- ---
Revenues:
Information Mgmt. Grp. $ 190.1 $ 227.2 $(37.1) (16)
Customer Mgmt. Group 381.8 336.6 45.2 13
Eliminations (1.2) (2.6) 1.4 (54)
--------- --------- -------
Total $ 570.7 $ 561.2 $ 9.5 2
Operating Income:
Information Mgmt. Grp. $ 29.0 $ 46.4 $(17.4) (38)
Customer Mgmt. Group 46.3 44.1 2.2 5
Corporate & Other (1.1) (0.7) (0.4) 57
--------- --------- -------
Total $ 74.2 $ 89.8 $(15.6) (17)
Net Income $ 45.5 $ 55.6 $(10.1) (18)
Earnings Per Common Share
Basic $0.32 $0.34 $(0.02) (6)
Diluted $0.31 $0.34 $(0.03) (9)
Weighted Average Common Shares Outstanding
Basic 141.6 161.3 (19.7) (12)
Diluted 145.2 163.7 (18.5) (11)
Nine Months
------------------------------------------
Change
-------------
2003 2002 Amount %
--------- --------- ------- ---
Revenues:
Information Mgmt. Grp. $ 583.6 $ 695.2 $(111.6) (16)
Customer Mgmt. Group 1,114.1 1,034.3 79.8 8
Eliminations (3.4) (8.1) 4.7 (58)
--------- --------- --------
Total $1,694.3 $1,721.4 $ (27.1) (2)
Operating Income:
Information Mgmt. Grp. $ 86.3 $ 153.2 $ (66.9) (44)
Customer Mgmt. Group 133.1 133.8 (0.7) (1)
Corporate & Other (5.7) (4.2) (1.5) 36
--------- --------- --------
Total $ 213.7 $ 282.8 $ (69.1) (24)
Net Income $ 123.2 $ 174.3 $ (51.1) (29)
Earnings Per Common Share
Basic $0.84 $1.05 $ (0.21) (20)
Diluted $0.82 $1.03 $ (0.21) (20)
Weighted Average Common Shares Outstanding
Basic 146.9 165.6 (18.7) (11)
Diluted 150.0 169.0 (19.0) (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 September 30, 2003.
Convergys Corporation
Consolidated Statements of Income
In Millions Except Per Share Amounts
(Unaudited)
For the Three Mo.s For the Nine Mo.s
Ended Sept. 30, % Ended Sept. 30, %
2003 2002 Chg. 2003 2002 Chg.
----- ------ -- ------- ------- --
Revenues:
Information Mgmt. Grp.
Data Processing $109.3 $135.5 (19) $ 339.9 $ 408.5 (17)
Prof. & Consulting 25.0 37.1 (33) 78.4 140.7 (44)
License & Other 12.9 17.8 (28) 41.9 43.1 (3)
International 41.7 34.2 22 120.0 94.8 27
----- ------ ------- -------
External Revenues 188.9 224.6 (16) 580.2 687.1 (16)
Interco. Svcs. for CMG 1.2 2.6 (54) 3.4 8.1 (58)
----- ------ ------- -------
Total IMG Revenues 190.1 227.2 (16) 583.6 695.2 (16)
Customer Management Grp.
Communications 225.8 220.2 3 682.2 676.1 1
Technology 45.2 49.6 (9) 147.2 153.6 (4)
Financial Services 36.5 26.5 38 102.3 69.1 48
Other 74.3 40.3 84 182.4 135.5 35
----- ------ ------- -------
Total CMG Revenues 381.8 336.6 13 1,114.1 1,034.3 8
Eliminations & Other (1.2) (2.6) (54) (3.4) (8.1)(58)
----- ------ ------- -------
Total Revenues 570.7 561.2 2 1,694.3 1,721.4 (2)
----- ------ ------- -------
Costs & Expenses:
Cost of Providing
Services & Products Sold 329.8 308.1 7 976.0 949.1 3
Selling, General & Admin. 113.7 97.7 16 342.1 300.6 14
Research & Development 22.9 29.8 (23) 69.6 85.2 (18)
Depreciation 26.4 32.1 (18) 81.6 92.9 (12)
Amortization 3.7 3.7 - 11.3 10.8 5
----- ------ ------- -------
Total Costs & Expenses 496.5 471.4 5 1,480.6 1,438.6 3
----- ------ ------- -------
Operating Income 74.2 89.8 (17) 213.7 282.8 (24)
Equity in Earnings of
Cellular Partnership 0.2 1.0 (80) (11.0) 4.9 -
Other Income (Exp.), Net (0.7) (0.8) (13) (2.7) (2.1) 29
Interest Expense (1.8) (3.1) (42) (5.0) (9.0)(44)
----- ------ ------- -------
Income Before Inc. Taxes 71.9 86.9 (17) 195.0 276.6 (30)
Income Taxes 26.4 31.3 (16) 71.8 102.3 (30)
----- ------ ------- -------
Net Income $ 45.5 $ 55.6 (18) $ 123.2 $ 174.3 (29)
===== ====== ======= =======
Earnings Per Common Share
Basic $ 0.32 $ 0.34 (6) $ 0.84 $ 1.05 (20)
===== ====== ======= =======
Diluted $ 0.31 $ 0.34 (9) $ 0.82 $ 1.03 (20)
===== ====== ======= =======
Weighted Average Common Shares Outstanding
Basic 141.6 161.3 146.9 165.6
Diluted 145.2 163.7 150.0 169.0
Other Data
Operating Margin 13.0% 16.0% 12.6% 16.4%
Market Price Per Share
High $ 19.60 $ 19.47 $ 19.60 $ 37.98
Low $ 15.23 $ 13.38 $ 11.30 $ 13.38
Close $ 18.34 $ 15.03 $ 18.34 $ 15.03
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 September 30, 2003.
Convergys Corporation
Consolidated Balance Sheets
In Millions
(Unaudited)
Sept. 30, Dec. 31,
2003 2002
--------- ---------
Assets
------
Cash and Cash Equivalents $ 48.7 $ 12.2
Receivables - Net 289.2 315.2
Other Current Assets 87.5 90.8
Property & Equipment - Net 284.8 298.0
Other Assets 981.3 903.3
--------- ---------
Total Assets $ 1,691.5 $ 1,619.5
========= =========
Liabilities and Shareholders' Equity
------------------------------------
Debt Maturing in One Year $ 97.0 $ 50.7
Other Current Liabilities 453.9 411.3
Other Liabilities 39.5 26.6
Long-Term Debt 8.1 4.6
Common Shareholders' Equity 1,093.0 1,126.3
--------- ---------
Total Liabilities
& Shareholders' Equity $ 1,691.5 $ 1,619.5
========= =========
Convergys Corporation
Information Management Group
Operating Segment Data
In Millions
(Unaudited)
For the Three Mo.s For the Nine Mo.s
Ended Sept. 30, % Ended Sept. 30, %
2003 2002 Chg. 2003 2002 Chg.
------ ------ ---- ------ ------ ---
Revenues:
Data Processing $109.3 $135.5 (19) $339.9 $408.5 (17)
Prof. & Consulting 25.0 37.1 (33) 78.4 140.7 (44)
License & Other 12.9 17.8 (28) 41.9 43.1 (3)
International 41.7 34.2 22 120.0 94.8 27
----- ------ ----- -----
External Revenues 188.9 224.6 (16) 580.2 687.1 (16)
Interco. Svcs. for CMG 1.2 2.6 (54) 3.4 8.1 (58)
----- ------ ----- -----
Total IMG Revenues 190.1 227.2 (16) 583.6 695.2 (16)
Costs & Expenses:
Cost of Providing
Services & Products Sold 91.5 104.5 (12) 284.7 321.8 (12)
Selling, General & Admin. 39.5 35.5 11 119.9 106.1 13
Research & Development 21.3 27.5 (23) 65.2 77.0 (15)
Depreciation 7.3 11.6 (37) 22.8 32.6 (30)
Amortization 1.5 1.7 (12) 4.7 4.5 4
----- ------ ----- -----
Total Costs & Expenses 161.1 180.8 (11) 497.3 542.0 (8)
----- ------ ----- -----
Operating Income $ 29.0 $ 46.4 (38) $ 86.3 $153.2 (44)
====== ====== ====== ======
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
September 30, 2003.
Convergys Corporation
Customer Management Group
Operating Segment Data
In Millions
(Unaudited)
For the Three Mo.s For the Nine Mo.s
Ended Sept. 30, % Ended Sept. 30, %
2003 2002 Chg. 2003 2002 Chg.
------ ------ ---- ------ ------ ---
Revenues:
Communications $225.8 $220.2 3 $ 682.2 $ 676.1 1
Technology 45.2 49.6 (9) 147.2 153.6 (4)
Financial Services 36.5 26.5 38 102.3 69.1 48
Other 74.3 40.3 84 182.4 135.5 35
------ ------ ------- -------
Total CMG Revenues 381.8 336.6 13 1,114.1 1,034.3 8
Costs & Expenses:
Cost of Providing
Services & Products Sold 239.5 206.2 16 695.8 635.4 10
Selling, General & Admin. 74.9 63.6 18 220.6 196.2 12
Research & Development 1.6 2.3 (30) 4.4 8.2 (46)
Depreciation 17.3 18.4 (6) 53.6 54.4 (1)
Amortization 2.2 2.0 10 6.6 6.3 5
------ ------ ------- -------
Total Costs & Expenses 335.5 292.5 15 981.0 900.5 9
------ ------ ------- -------
Operating Income $ 46.3 $ 44.1 5 $ 133.1 $ 133.8 (1)
====== ====== ======== ========
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 September 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
------- -------- ------- -------
Third Quarter 2003:
--------------------
Results as reported
under U.S. GAAP $ 71.9 $(26.4) $ 45.5 $ 0.31
Less: Special items - - - -
------ ------ ------ ------
Results excluding
special items (a
non-GAAP measure) $ 71.9 $(26.4) $ 45.5 $ 0.31
====== ====== ====== ======
Year to Date 2003:
--------------------
Results as reported
under U.S. GAAP $195.0 $(71.8) $123.2 $ 0.82
Less: Special items (a) (9.9) 3.5 (6.4) (0.04)
------ ------ ------ ------
Results excluding
special items (a
non-GAAP measure) $204.9 $(75.3) $129.6 $ 0.86
====== ====== ====== ======
Third Quarter 2002:
--------------------
Results as reported
under U.S. GAAP $ 86.9 $(31.3) $ 55.6 $ 0.34
Less: Special items - - - -
------ ------ ------ ------
Results excluding
special items (a
non-GAAP measure) $ 86.9 $(31.3) $ 55.6 $ 0.34
====== ====== ====== ======
Year to Date 2002:
--------------------
Results as reported
under U.S. GAAP $276.6 $(102.3) $174.3 $ 1.03
Less: Special items - - - -
------ ------- ------ ------
Results excluding
special items (a
non-GAAP measure) $276.6 $(102.3) $174.3 $ 1.03
====== ======= ====== ======
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.
NOTE TO MEDIA: Multimedia assets relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc this story will be available for journalists to download beginning today at www.newstream.com and at www.businesswire.com Note: A photo is available at URL URL in full Uniform Resource Locator Address of a resource on the Internet. The resource can be any type of file stored on a server, such as a Web page, a text file, a graphics file, or an application program. : http://www.businesswire.com/cgi-bin/photo.cgi?pw.102103/bb11 |
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