Convergys Corporation Earns $0.33 on Solid Revenue Growth.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 high-res·o·lu·tion adj. 1. Relating to an image that has fine detail. 2. a. Of or relating to an output device that produces images that contain a large number of dots per unit of area and are therefore sharp and , 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 MULTIMEDIA AVAILABLE: http://www.businesswire.com/cgi-bin/mmg.cgi?eid=4553421 CINCINNATI--(BUSINESS WIRE)--Jan. 20, 2004 Convergys Convergys (NYSE: CVG) is a multi-national corporation that provides management consulting services, outsourced billing, customer care and employee care, and transaction management software. 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 Fourth Quarter: -- Convergys' revenue increased 5 percent to $594.5 million versus one year ago. -- Convergys' revenue increased 4 percent and 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. 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. increased 6 percent versus the third quarter. -- Customer Management Group revenue grew 8 percent from last year's fourth quarter. -- The Information Management Group continued the successful introduction of its Infinys(tm) software with four additional contract announcements. Convergys Corporation (NYSE:CVG), the global leader in integrated billing, employee care, and customer care services, announced today its financial results for the fourth quarter of 2003. Total revenues increased 5 percent to $594.5 million compared to $564.8 million reported in the fourth quarter of 2002. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). 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. and operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: were $78.7 million and 13.2 percent versus an 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. of $29.5 million in the prior year. 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 operating income decreased 1 percent to $77.7 versus $78.2 million in 2002. GAAP net income was $48.4 million or $0.33 per diluted share compared with a net loss of $28.4 million or $0.18 in the fourth quarter of 2002. Pro forma net income decreased 1 percent to $47.8 million, while pro forma earnings pro forma earnings Income not necessarily calculated in accordance with generally accepted accounting principles. For example, a company might report pro forma earnings that exclude depreciation expense and nonrecurring expenses such as restructuring costs. per diluted share increased 6 percent to $0.33. "Our fourth quarter was highlighted by strong execution, solid operating performance, and important long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. strategic progress," said Jim Orr Orr , Robert Gordon Called "Bobby." Born 1948. Canadian-born hockey player. He led the National Hockey League in scoring in 1970 and 1975 and was the first defenseman to score more than 100 points in a season. Noun 1. , 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. "Our Information Management Group continued the successful introduction of Infinys, our new, fully convergent billing and customer management solution. IMG IMG International medical graduate, see there also expanded its relationship with Sprint, and gained share in both the wireline and wireless markets. Our Customer Management Group further expanded its trend of revenue growth as more companies discovered that 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. is the most cost-effective cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. method of delivering quality service to their customers. Convergys is well positioned to take advantage of this trend toward outsourcing in all of our businesses." Fourth Quarter 2003 Highlights Contracts/Contract Extensions Convergys announced several significant contracts during the quarter: -- a seven-year agreement with Sprint (NYSE:FON Fon People of southern Benin and adjacent parts of Togo. They speak a dialect of Gbe, a Kwa language of the Niger-Congo language family. Numbering about 3 million, the Fon are mainly farmers. , 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. ) to support Sprint's business and consumer wireless subscribers on Convergys' billing platform. Convergys has provided billing support to Sprint's wireless consumers since 1996, and the new contract allows Sprint to use Infinys, Convergys' portfolio of convergent, pre-integrated, fully supported software applications and modules. Sprint may use Infinys as a standalone stand·a·lone adj. Self-contained and usually independently operating: a standalone computer terminal. solution or in combination with existing systems to address its specific billing needs. -- a seven-year renewal and expansion of a 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), the nation's fourth largest cable television company serving approximately 6.5 million customers nationwide. As part of the agreement, Cox renewed its license for Convergys' ICOMS ICOMS Integrated Communications Operations Management system ICOMS Improved Conventional Mine System software - the industry-leading convergent voice, video, and high-speed high-speed adj. 1. Operated or designed for operation at high speed: a high-speed food processor. 2. Taking place at high speed: a high-speed chase. 3. data billing and subscriber management solution for cable and broadband service providers An ISP, telephone company, cable company or other carrier that offers high-speed communications to homes and businesses, typically for Internet access. Cable modems, DSL and T1 lines are the common technologies. See broadband, cable modem, DSL and T1. . Additionally, Cox expanded its billing software agreement to license Infinys. The advanced capabilities of Infinys provide Cox with the opportunity to broaden its multi-service bundling, pricing, and billing capabilities to better support the company's voice, video, and data customers. -- a five-year contract with 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, to provide a broad range of human resource services. Convergys is supporting Fifth Third with advanced capabilities in payroll processing and administration, compensation administration, performance management support, knowledge management services, benefits administration, time and attendance management, human resources information systems (HRIS HRIS Human Resource Information System HRIS High-Resolution Imaging Spectrometer HRIS Highway Research Information Service HRIS High Resolution Infrared Sounder ) and recruitment technology, and a comprehensive self-service, user-friendly user-friendly - Programmer-hostile. Generally used by hackers in a critical tone, to describe systems that hold the user's hand so obsessively that they make it painful for the more experienced and knowledgeable to get any work done. Web portal See portal. . -- a contract to license Infinys to PT Satelit
Satelit (Сателит) is a neighborhood of the city of Novi Sad, the capital of the Serbian province of Vojvodina. Palapa pa·la·pa n. 1. An open-sided dwelling with a thatched roof made of dried palm leaves. 2. A structure, such as a bar or restaurant in a tropical resort, that is open-sided and thatched with palm leaves. Indonesia Indonesia (ĭn'dənē`zhə), officially Republic of Indonesia, republic (2005 est. pop. 241,974,000), c.735,000 sq mi (1,903,650 sq km), SE Asia, in the Malay Archipelago. (Satelindo), Indonesia's second-largest cellular operator with more than 3.6 million subscribers. The Indonesian cellular operator, a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of PT Indonesian Satellite Corporation (PT Indosat PT Indosat Tbk (NYSE: IIT) is an Indonesian telecommunications company. It was established in 1967 as a foreign investment company. It is the second largest provider of wireless services in Indonesia through its three brands, Matrix, Mentari, and IM-3. ), is using 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 Infinys application for rating and billing, with the Infinys application for order management, to support Satelindo's postpaid post·paid adj. With the postage having been paid in advance. postpaid Adverb, adj with the postage prepaid Adj. 1. services and introduce 2.5G mobile services. -- a contract with Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. mobile network operator SmarTone. SmarTone is the first operator in Hong Kong to deploy Geneva, the Infinys application for rating and billing, to support current and next-generation offerings. SmarTone is Hong n. 1. A mercantile establishment or factory for foreign trade in China, as formerly at Canton; a succession of offices connected by a common passage and used for business or storage. Kong's leading mobile data services network operator serving approximately 1 million customers. Acquisitions/Expansions Convergys announced it has acquired certain billing and customer care assets from ALLTEL ALLTEL Corporation (NYSE: AT) is an American telecommunications company with headquarters in Little Rock, Arkansas. Alltel provides wireless services to residential and business customers in 35 states. Telecom Services, a division of ALLTEL (NYSE:AT). This transaction reinforces and accelerates Convergys' leadership position in the billing and customer care marketplace and fuels the growth of its Professional Services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. business. The acquisition closed on December December: see month. 31. As part of the acquisition, Convergys nearly doubled the number of wireline access lines it serves and has begun providing managed billing services for more than 10.5 million additional wireless and wireline telephony Meaning "sound over distance," it refers to electronically transmitting the human voice. In the beginning, telephony dealt only with analog signals in the circuit-switched networks of the telephone companies. subscribers. In addition, Convergys added several new corporations to its list of billing and customer care clients. Convergys opened two state-of-the-art contact centers in the Philippines Philippines officially Republic of the Philippines Island country, western Pacific Ocean, on an archipelago off the southeast coast of Asia. Area: 122,121 sq mi (316,294 sq km). Population (2005 est.): 84,191,000. . Located in two of Metro Manila's premier business districts, 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" applications and document processing Processing text documents, which includes indexing methods for text retrieval based on content. See document imaging. . January 2004 Highlights to Date Convergys announced an Infinys contract with TV Cabo, the leading provider of cable TV services to residents of Portugal. TV Cabo will use Infinys to enhance its operation and support the introduction of new innovative interactive services. Operating Performance by Segment 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 ) Convergys CMG's revenues were $390.8 million, an 8 percent increase from the fourth quarter of 2002, and a 2 percent increase from the prior quarter. The increase from last year was due to the increased levels of business from both customer management and employee care clients. 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, as well as growth with many of CMG's top clients including those in the financial sector, led to this increase. The increase from the prior quarter was principally due to the seasonal trend that CMG typically experiences. Convergys CMG's fourth quarter GAAP operating income and operating margin were $46.2 million and 11.8 percent, respectively, compared with $0.9 million in the prior year. On a pro forma basis, CMG's operating income decreased 2 percent to $46.2 million from $47.2 million, while operating margin decreased to 11.8 percent from 13.0 percent in the prior year. This reflects increased investment in the employee care business, increases in wage and benefit costs, as well as increased pricing pressure, partially offset by the increase in revenues. Information Management Group (IMG) Excluding intercompany sales, fourth quarter 2003 Convergys IMG's revenues increased 1 percent to $203.7 million from $201.6 million in the same period last year. Compared to the prior quarter, Convergys IMG's revenues increased 8 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 of $118.1 million decreased 3 percent from the prior year, but increased 8 percent from the prior quarter. The decrease from prior year reflects lower average wireless subscriber processing rates as well as the transition of Verizon subscribers from Convergys' billing system during the second quarter of 2003. These pressures were partially offset by revenues realized through the resolution of two client matters and the revenues from the ramping up of a new wireless client in the fourth quarter. Despite the transition of Verizon subscribers, the number of wireless subscribers supported by Convergys increased 3 percent from last year's fourth quarter. Professional and consulting revenues of $17.4 million decreased 40 percent from the prior year and 30 percent from the prior quarter. These declines reflect a reduction in system enhancement requests and implementations of new systems from Convergys' wireless and cable clients. License and other revenues of $16.4 increased 16 percent from the prior year and 27 percent from the prior quarter. These increases are principally due to expanded relationships with several of Convergys' largest cable clients. International revenues of $51.8 million increased 42 percent from the prior year and 24 percent from the prior quarter. The increases in revenue resulted from the continued expansion in 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 Asia Pacific regions as well as a new license arrangement with a European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. wireless client. In addition, the increases reflect a termination fee termination fee The one-time charge for terminating or transferring an individual retirement account. If a financial institution charges a termination fee, the fee must be spelled out in the original agreement that is signed when the account is opened. associated with the suspension of a European client implementation. Convergys IMG's fourth quarter GAAP operating income and operating margin were $33.1 million and 16.2 percent, respectively, compared with an operating loss of $21.5 million in the prior year. Pro forma operating income increased 3 percent to $33.1 million. Pro forma operating margin was 16.2 percent compared with 15.9 percent in the fourth quarter of last year. These increases reflect the increase in revenues as well as savings realized through 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 and lower research and development costs. This was partially offset by higher benefit costs. Non Operating Items -- The company's cellular partnership investment contributed a pre-tax loss of $1.6 million, compared to pre-tax earnings of $1.5 million in the fourth quarter of 2002. -- Interest expense was $1.9 million versus $2.0 million in the prior year. -- The company recorded other income of $1.4 million versus other expense of $2.2 million last year reflecting foreign currency exchange gains. -- Average diluted shares outstanding decreased by 12.2 million shares to 145.1 million as a result of share repurchases Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. . -- Convergys repurchased 13.6 million shares during the first nine months of 2003. No shares were repurchased during the fourth quarter of 2003. Business Outlook The following forward looking-statements reflect Convergys' expectations as of January 20, 2004. 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. 2004 Financial Guidance For the full year 2004, Convergys CMG's revenue is expected to increase by 7 percent to 12 percent from the 2003 level, and operating margin is expected to be down slightly. For the full year 2004, Convergys IMG's revenue is expected to decline by 5 percent to 10 percent from the 2003 level, and operating margin will be down for the year. For the full year 2004, EPS is expected to be in the range of $0.85 to $1.00. For the first quarter of 2004, Convergys CMG's revenue is expected to be flat to down slightly, and operating margin will be down moderately from fourth quarter 2003 levels. For the first quarter of 2004, Convergys IMG's revenue is expected to decline by 10 percent to 15 percent and operating margin will be down from fourth quarter 2003 levels. Generally, Convergys' first quarter earnings are below average quarterly earnings for the year. We expect 2004 to be consistent with this trend and expect the first quarter of 2004 EPS to be in the range of $0.20 to $0.22. 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 Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the , 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 50,000 people in 52 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 and the Convergys logo are registered trademarks of Convergys Corporation.) NON-GAAP MEASURES: This news release contains non-GAAP financial measures, including pro forma operating income, 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. For the periods reported, pro forma results exclude the effect of the $107.7 million restructuring and impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charges recorded in the fourth quarter of 2002 and the related reversal of $1.0 million from the fourth quarter of 2003. Additionally, pro forma results exclude the effects of the first quarter 2003 equity loss of $9.9 million resulting from a legal settlement by the cellular partnership. These non-GAAP financial measures should not be construed as being more important than comparable GAAP measures. They are presented because Convergys' management uses this information when evaluating current results of operations and cash flow, and we believe that this information provides the users of the financial statements with an additional and useful comparison of Convergys' current results of operations and cash flows with past and future periods. CONFERENCE CALL NOTE: Convergys will host a one-hour conference call on Wednesday, January 21, at 10:00 AM, EST EST electroshock therapy. EST abbr. electroshock therapy , to discuss the company's fourth quarter results. It will feature Jim Orr, Chairman, President, & CEO, and Earl Shanks
The shanks and tattlers are wading bird species in a number of genera characterised by a medium length bill and long, often brightly coloured legs. , 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 cash flows from operations to free cash flows 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, difficulties in 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. , changes in the regulatory environment in which Convergys and its clients operate, 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, and subsequent filings 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)
Fourth Quarter
Change
2003 2002 Amount %
Revenues:
- Customer Mgmt. Group $ 390.8 $ 363.2 $ 27.6 8
- Information Mgmt. Grp. 205.1 204.0 1.1 1
- Eliminations (1.4) (2.4) 1.0 (42)
--------- --------- ------- ---
--Total $ 594.5 $ 564.8 $ 29.7 5
Operating Income (Loss):
- Customer Mgmt. Group $ 46.2 $ 0.9 $ 45.3 -
- Information Mgmt. Grp. 33.1 (21.5) 54.6 -
- Corporate & Other (0.6) (8.9) 8.3 (93)
--------- --------- ------- ---
--Total $ 78.7 $ (29.5) $108.2 -
Net Income (Loss) $ 48.4 $ (28.4) $ 76.8 -
Earnings Per Common Share
- Basic $0.34 $(0.18) $0.52 -
- Diluted $0.33 $(0.18) $0.51 -
Weighted Average Common Shares Outstanding
- Basic 141.9 155.0 (13.1) (8)
- Diluted 145.1 157.3 (12.2) (8)
Twelve Months
Change
2003 2002 Amount %
Revenues:
- Customer Mgmt. Group $1,504.9 $1,397.5 $ 107.4 8
- Information Mgmt. Grp. 788.7 899.2 (110.5) (12)
- Eliminations (4.8) (10.5) 5.7 (54)
--------- --------- -------- ---
--Total $2,288.8 $2,286.2 $ 2.6 -
Operating Income (Loss):
- Customer Mgmt. Group $ 179.3 $ 134.7 $ 44.6 33
- Information Mgmt. Grp. 119.4 131.7 (12.3) (9)
- Corporate & Other (6.3) (13.1) 6.8 (52)
--------- --------- -------- ---
--Total $ 292.4 $ 253.3 $ 39.1 15
Net Income $ 171.6 $ 145.9 $ 25.7 18
Earnings Per Common Share
- Basic $1.18 $0.90 $ 0.28 31
- Diluted $1.15 $0.88 $ 0.27 31
Weighted Average Common Shares Outstanding
- Basic 145.7 162.9 (17.2) (11)
- Diluted 148.8 166.1 (17.3) (10)
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-K for the annual
period ended December 31, 2003.
Convergys Corporation
Consolidated Statements of Income
In Millions Except Per Share Amounts
(Unaudited)
For the Three Mo.s For the Twelve Mo.s
Ended Dec. 31, % Ended Dec. 31, %
2003 2002 Chg. 2003 2002 Chg.
Revenues:
Customer Management Grp.
Communications $234.2 $235.5 (1) $ 916.3 $ 911.6 1
Technology 44.9 54.4 (17) 192.2 208.0 (8)
Financial Services 35.2 28.1 25 137.5 97.2 41
Other 76.5 45.2 69 258.9 180.7 43
------ ------ -- ------- ------- --
Total CMG Revenues 390.8 363.2 8 1,504.9 1,397.5 8
Information Mgmt. Grp.
Data Processing 118.1 122.1 (3) 458.0 530.6 (14)
Prof. & Consulting 17.4 28.8 (40) 95.8 169.5 (43)
License & Other 16.4 14.1 16 58.3 57.2 2
International 51.8 36.6 42 171.8 131.4 31
------ ------ -- ------- ------- --
External Revenues 203.7 201.6 1 783.9 888.7 (12)
Interco. Svcs. for CMG 1.4 2.4 (42) 4.8 10.5 (54)
------ ------ -- ------- ------- --
Total IMG Revenues 205.1 204.0 1 788.7 899.2 (12)
Eliminations & Other (1.4) (2.4) (42) (4.8) (10.5)(54)
------ ------ -- ------- ------- --
Total Revenues 594.5 564.8 5 2,288.8 2,286.2 -
Costs & Expenses:
Cost of Providing
Services & Products 344.9 315.8 9 1,320.9 1,264.9 4
Selling, General & Admin. 116.1 108.9 7 458.2 409.5 12
Research & Development 24.7 28.5 (13) 94.3 113.7 (17)
Depreciation 27.3 29.8 (8) 108.9 122.7 (11)
Amortization 3.8 3.6 6 15.1 14.4 5
Restructuring & Impair. (1.0) 107.7 - (1.0) 107.7 -
------ ------ -- ------- ------- --
Total Costs & Expenses 515.8 594.3 (13) 1,996.4 2,032.9 (2)
Operating Income (Loss) 78.7 (29.5) - 292.4 253.3 15
Equity in Earnings of
Cellular Partnerships (1.6) 1.5 - (12.6) 6.4 -
Other Income (Exp.), Net 1.4 (2.2) - (1.3) (4.3)(70)
Interest Expense (1.9) (2.0) (5) (6.9) (11.0)(37)
------ ------ -- ------- ------- --
Income (Loss) Before Tax 76.6 (32.2) - 271.6 244.4 11
Income Taxes 28.2 (3.8) - 100.0 98.5 2
------ ------ -- ------- ------- --
Net Income (Loss) $ 48.4 $(28.4) - $ 171.6 $ 145.9 18
===== ====== ======= =======
Earnings Per Common Share
-Basic $ 0.34 $(0.18) - $ 1.18 $ 0.90 31
===== ====== ======= =======
-Diluted $ 0.33 $(0.18) - $ 1.15 $ 0.88 31
===== ====== ======= =======
Weighted Average Common Shares Outstanding
-Basic 141.9 155.0 145.7 162.9
-Diluted 145.1 157.3 148.8 166.1
Other Data
-Operating Margin 13.2% (5.2)% 12.8% 11.1%
Market Price Per Share
High $ 20.80 $ 17.90 $ 20.80 $ 37.98
Low $ 13.71 $ 12.50 $ 11.30 $ 12.50
Close $ 17.46 $ 15.15 $ 17.46 $ 15.15
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-K for the
annual period ended December 31, 2003.
Convergys Corporation
Consolidated Balance Sheets
In Millions
(Unaudited)
Dec. 31, Dec. 31,
2003 2002
Assets
Cash and Cash Equivalents $ 37.2 $ 12.2
Receivables - Net 298.1 315.2
Other Current Assets 84.2 90.8
Property & Equipment - Net 360.0 298.0
Other Assets 1,030.7 903.3
--------- ---------
Total Assets $ 1,810.2 $ 1,619.5
========= =========
Liabilities and Shareholders' Equity
Debt Maturing in One Year $ 71.0 $ 50.7
Other Current Liabilities 466.7 411.3
Other Liabilities 65.2 26.6
Long-Term Debt 63.8 4.6
Common Shareholders' Equity 1,143.5 1,126.3
--------- ---------
Total Liabilities
& Shareholders' Equity $ 1,810.2 $ 1,619.5
========= =========
Convergys Corporation
Customer Management Group
Operating Segment Data
In Millions
(Unaudited)
For the Three Mo.s For the Twelve Mo.s
Ended Dec. 31, % Ended Dec. 31, %
2003 2002 Chg. 2003 2002 Chg.
Revenues:
Communications $234.2 $235.5 (1) $ 916.3 $ 911.6 1
Technology 44.9 54.4 (17) 192.2 208.0 (8)
Financial Services 35.2 28.1 25 137.5 97.2 41
Other 76.5 45.2 69 258.9 180.7 43
------ ------ -- ------- ------- --
Total CMG Revenues 390.8 363.2 8 1,504.9 1,397.5 8
Costs & Expenses:
Cost of Providing
Services & Products 247.7 222.9 11 943.5 858.3 10
Selling, General & Admin. 75.6 70.6 7 296.2 266.8 11
Research & Development 2.1 2.5 (16) 6.5 10.7 (39)
Depreciation 17.0 17.6 (3) 70.6 72.0 (2)
Amortization 2.2 2.4 (8) 8.8 8.7 1
Restructuring & Impair. - 46.3 - - 46.3 -
------ ------ -- ------- ------- --
Total Costs & Expenses 344.6 362.3 (5) 1,325.6 1,262.8 5
------ ------ -- ------- ------- --
Operating Income $ 46.2 $ 0.9 - $ 179.3 $ 134.7 33
====== ====== ======== ========
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-K for the annual period ended December 31, 2003.
Convergys Corporation
Information Management Group
Operating Segment Data
In Millions
(Unaudited)
For the Three Mo.s For the Twelve Mo.s
Ended Dec. 31, % Ended Dec. 31, %
2003 2002 Chg. 2003 2002 Chg.
Revenues:
Data Processing $118.1 $122.1 (3) $458.0 $530.6 (14)
Prof. & Consulting 17.4 28.8 (40) 95.8 169.5 (43)
License & Other 16.4 14.1 16 58.3 57.2 2
International 51.8 36.6 42 171.8 131.4 31
----- ------ -- ----- ----- --
External Revenues 203.7 201.6 1 783.9 888.7 (12)
Interco. Svcs. for CMG 1.4 2.4 (42) 4.8 10.5 (54)
----- ------ -- ----- ----- --
Total IMG Revenues 205.1 204.0 1 788.7 899.2 (12)
Costs & Expenses:
Cost of Providing
Services & Products 98.5 95.3 3 383.2 417.1 (8)
Selling, General & Admin. 41.5 39.1 6 161.4 145.2 11
Research & Development 22.6 26.0 (13) 87.8 103.0 (15)
Depreciation 7.8 10.3 (24) 30.6 42.9 (29)
Amortization 1.6 1.2 33 6.3 5.7 11
Restructuring & Impair. - 53.6 - - 53.6 -
------ ------ -- ------ ----- --
Total Costs & Expenses 172.0 225.5 (24) 669.3 767.5 (13)
------ ------ -- ------ ------ --
Operating Income (Loss) $ 33.1 $(21.5) - $119.4 $131.7 (9)
====== ====== ====== ======
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-K for the annual period ended December 31, 2003.
Convergys Corporation
Reconciliation of Pro Forma Operating Results
(In Millions Except Per Share Amounts)
CMG IMG Corp. Consol.
Operating Operating Operating Operating
Income Income Income Income
(Loss) (Loss) (Loss) (Loss)
--------- -------- ------- -------
Fourth Quarter 2003:
--------------------
Results as reported
under U.S. GAAP $ 46.2 $ 33.1 $ (0.6) $ 78.7
Less: Special items (a) - - 1.0 1.0
------ ------ ------ ------
Results excluding
special items
(a non-GAAP measure) $ 46.2 $ 33.1 $ (1.6) $ 77.7
====== ====== ====== ======
Year to Date 2003:
--------------------
Results as reported
under U.S. GAAP $179.3 $119.4 $ (6.3) $292.4
Less: Special items (a) - - 1.0 1.0
------ ------ ------ ------
Results excluding
special items
(a non-GAAP measure) $179.3 $119.4 $ (7.3) $291.4
====== ====== ====== ======
Fourth Quarter 2002:
--------------------
Results as reported
under U.S. GAAP $ 0.9 $(21.5) $ (8.9) $(29.5)
Less: Special items (b) (46.3) (53.6) (7.8) (107.7)
------ ------ ------ ------
Results excluding
special items
(a non-GAAP measure) $ 47.2 $ 32.1 $ (1.1) $ 78.2
====== ====== ====== ======
Year to Date 2002:
--------------------
Results as reported
under U.S. GAAP $134.7 $ 131.7 $(13.1) $253.3
Less: Special items (b) (46.3) (53.6) (7.8) (107.7)
------ ------- ------ ------
Results excluding
special items
(a non-GAAP measure) $181.0 $ 185.3 $ (5.3) $361.0
====== ======= ====== ======
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 reversal of the excess restructuring accrual
that was initially recorded in the fourth quarter of 2002.
(b) In the fourth quarter of 2002, the Company recorded $107.7
in restructuring and impairment charges at IMG, CMG and
Corporate of $53.6, $46.3 and $7.8, respectively.
Convergys Corporation
Reconciliation of Pro Forma Operating Results
(In Millions Except Per Share Amounts)
Income
(Loss) Net
Before Income Diluted
Tax (Loss) EPS
-------- ------- -------
Fourth Quarter 2003:
--------------------
Results as reported
under U.S. GAAP $ 76.6 $ 48.4 $ 0.33
Less: Special items (a) 1.0 0.6 -
------ ------ ------
Results excluding
special items
(a non-GAAP measure) $ 75.6 $ 47.8 $ 0.33
====== ====== ======
Year to Date 2003:
--------------------
Results as reported
under U.S. GAAP $271.6 $171.6 $ 1.15
Less: Special items (a & b) (8.9) (5.8) (0.04)
------ ------ ------
Results excluding
special items
(a non-GAAP measure) $280.5 $177.4 $ 1.19
====== ====== ======
Fourth Quarter 2002:
--------------------
Results as reported
under U.S. GAAP $(32.2) $(28.4) $(0.18)
Less: Special items (c) (107.7) (76.8) (0.49)
------ ------ ------
Results excluding
special items
(a non-GAAP measure) $ 75.5 $ 48.4 $ 0.31
====== ====== ======
Year to Date 2002:
--------------------
Results as reported
under U.S. GAAP $244.4 $145.9 $ 0.88
Less: Special items (c) (107.7) (76.8) (0.46)
------ ------ ------
Results excluding
special items
(a non-GAAP measure) $352.1 $222.7 $ 1.34
====== ====== ======
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 reversal of the excess restructuring accrual
that was initially recorded in the fourth quarter of 2002.
(b) Reflects the $9.9 equity loss generated from the Company's
investment in the Cincinnati SMSA Limited Partnership that
resulted from the partnership's settlement of its lawsuit
with West Side Cellular Communications, Inc. during the
first quarter of 2003.
(c) In the fourth quarter of 2002, the Company recorded $107.7
in restructuring and impairment charges at IMG, CMG and
Corporate of $53.6, $46.3 and $7.8, respectively.
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