Convergys Corporation Reports Fourth Quarter & Full Year Financial Results With 2001 Revenues Up 6 Percent and Net Income Up 14 Percent.Business Editors NOTE: 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 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. beginning today at www.newstream.com and at www.businesswire.com CINCINNATI--(BUSINESS WIRE)--Jan. 24, 2002 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: -- Operating income increased 7 percent to $96.1 million on nearly flat revenues -- Net income increased 8 percent to $56.4 million and diluted earnings per share increased 10 percent to $0.33 -- Earnings per share, excluding goodwill amortization, of $0.37 Convergys Corporation (NYSE:CVG), the global leader in integrated billing and customer care services, announced today its financial results for the fourth quarter and year ended December December: see month. 31, 2001. During the fourth quarter 2001, total revenues of $590.7 million were relatively flat compared to $594.0 million reported in the fourth quarter of 2000. Importantly, our fourth quarter revenues were 4 percent ahead of third quarter revenues reflecting positive momentum in both the Information and Customer Management Groups. 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. increased 7 percent to $96.1 million, up from $89.6 million and operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: increased to 16.3 percent from 15.1 percent. The company's cellular partnership investment contributed pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta earnings of $0.5 million or less than $0.005 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 which is down compared to $3.2 million or $0.01 per diluted share in the fourth quarter of 2000. Net income increased 8 percent to $56.4 million or $0.33 per share (diluted), an increase over net income of $52.2 million or $0.30 per share (diluted) last year. Earnings per share, excluding goodwill amortization, increased 9 percent to $0.37 from $0.34 in the fourth quarter of 2000. For the full year ended December 31, 2001, total revenues increased 6 percent to $2.32 billion compared to $2.20 billion reported in 2000. Excluding special items recorded in 2001, operating income increased 14 percent to $366.4 million, up from $320.6 million recorded in 2000. Operating margin increased to 15.8 percent from 14.6 percent. Excluding special items, net income increased 14 percent to $215.5 million or $1.24 per share (diluted) compared to net income of $189.2 million or $1.09 per share (diluted) last year. Earnings per share, excluding goodwill amortization, increased 12 percent to $1.40 from $1.25 in 2000. The company's cellular partnership investment contributed pre-tax earnings of $6.4 million or $0.02 per diluted share versus $20.5 million or $0.07 per diluted share in 2000. Earnings per share excluding the company's non-core cellular partnership increased 20 percent compared to 2000. Commenting on the company's financial performance, 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, & 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 said, "Given the weak U.S. economy and its impact on many industries we serve, I am pleased with our fourth quarter and full year financial results. Beyond our financial results, the quarter and the year reflect solid contract wins in billing, customer service, and employee care. In addition, our international presence continues to grow as evidenced by new contract wins in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). and by the Asia-Pacific The term Asia-Pacific generally applies to littoral East Asia, Southeast Asia and Australasia near the Pacific Ocean, plus the states in the ocean itself (Oceania). joint venture we announced in the
fourth quarter. Our focus for faster growth is contributing
significantly to our ability to increase shareholder value."
Fourth Quarter 2001 Highlights Convergys continued its significant international expansion and its first entry into the Asia-Pacific market by announcing: -- The formation of Convergys Broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). Asia, Pte. Ltd., a joint venture with Olympus Olympus (ōlĭm`pəs), Gr. Ólimbos, mountain range, c.25 mi (40 km) long, N Greece, on the border of Thessaly and Macedonia, near the Aegean coast. It rises to c.9,570 ft (2,920 m) at Mt. Olympus, the highest point in Greece. Capital Holdings Asia, to target the rapidly growing market for billing and customer care services in Asia -- The signing of the first contract for the joint venture: a seven-year agreement with Tomen Mediacom Mediacom Communications (NASDAQ: MCCC; usually called just Mediacom) is a cable television and communications provider in the United States. Originally founded as an analog network in 1995, Mediacom is currently the 8th largest cable company in the United States. (under the Mediatti brand) a leading Japanese Japanese (jăp'ənēz`), language of uncertain origin that is spoken by more than 125 million people, most of whom live in Japan. There are also many speakers of Japanese in the Ryukyu Islands, Korea, Taiwan, parts of the United States, and broadband provider, for the WIZARD Instructional help in an application or system development environment that guides the user through a series of multiple choice questions to accomplish a task. For the most part, wizards are more effective than the help menus found in most applications, which often border on the atrocious. (R) convergent con·ver·gence n. 1. The act, condition, quality, or fact of converging. 2. Mathematics The property or manner of approaching a limit, such as a point, line, function, or value. 3. video, voice, and data billing and subscriber subscriber, n the person, usually the employee, who represents the family unit in relation to the prepayment plan. Other family members are dependents. Also called certificate holders or enrollees. management software -- The opening of Convergys' first integrated contact center in India India, officially Republic of India, republic (2005 est pop. 1,080,264,000), 1,261,810 sq mi (3,268,090 sq km), S Asia. The second most populous country in the world, it is also sometimes called Bharat, its ancient name. India's land frontier (c. , a facility that has a production capacity of 1,900 seats and is one of the largest US company-owned contact centers in India Convergys extended its series of significant new customer care contracts and contract renewals by announcing: -- Two new customer care contracts with AT&T Broadband (NYSE:T), the nation's largest broadband service See broadband and broadband service provider. company and leading provider of local telephone service over hybrid hybrid (hī`brĭd), term applied by plant and animal breeders to the offspring of a cross between two different subspecies or species, and by geneticists to the offspring of parents differing in any genetic characteristic (see genetics). fiber-coaxial networks. One contract provides customer care for AT&T's 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. customers and the other provides technical support for AT&T's 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 customers. -- The renewal of a customer care contract with Schering For the American pharmaceutical company created by seizure of assets from Schering AG during World War II, see . Schering AG was a research-centered pharmaceutical company founded in 1851 that merged with Bayer in December 2006. Laboratories (NYSE:SGP SGP Singapore (ISO Country code) SGP Schering-Plough (stock symbol) SGP Stability and Growth Pact SGP Southern Great Plains SGP Staatkundig Gereformeerde Partij SGP Speedway Grand Prix ), to provide patient and consumer telephone support -- A three-year renewal agreement with TeleCorp 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. Inc. (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 :TLCP TLCP Thermotropic Liquid Crystalline Polymer TLCP Toxicity Characteristic Leaching Procedure ), AT&T Wireless' largest affiliate Affiliate Relationship between two companies when one company owns substantial interest, but less than a majority of the voting stock of another company, or when two companies are both subsidiaries of a third company. See: Subsidiaries, parent company. , to provide customer care services to TeleCorp's SunCom SunCom is a wireless carrier that has operated in the southeastern United States since 1999 and in parts of the Caribbean since 2004. SunCom provides digital wireless communications services to more than 1,000,000 customers, employs more than 1,900 people and offers international, digital wireless subscribers. (In September September: see month. Convergys announced TeleCorp had signed a five-year billing agreement to implement its Atlys(R) solution.) Convergys continued its successful penetration The successful unauthorized breach of a security perimeter. See penetration test. of the European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. market and won its first business in Africa, signing several new client agreements for its 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) software product. These included contracts with: -- Aliatel, the Czech telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. operator, to bill for a range of different services including voice, data, and the 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 in the burgeoning Central European market. -- Leading French operator, FirstMark Communications France, for a full set of business and operations support systems Operations Support Systems (also called Operational Support Systems or OSS) are computer systems used by telecommunications service providers. The term OSS most frequently describes "network systems" dealing with the telecom network itself, supporting processes such working with Telecom Media Networks, an industry practice of Cap Gemini Gemini (jĕm`ənī, –nē) [Lat.,=the twins], northern constellation lying on the ecliptic (the sun's apparent path through the heavens) between Taurus and Cancer, N of Canis Minor; it is one of the constellations of the zodiac. Ernst & Young -- Spanish Spanish, river, c.150 mi (240 km) long, issuing from Spanish Lake, S Ont., Canada, NW of Sudbury, and flowing generally S through Biskotasi and Agnew lakes to Lake Huron opposite Manitoulin island. There are several hydroelectric stations on the river. telecom operator Sky Point S.A. to support its rollout of voice, data, and Internet services over its Wireless Local Loop network. -- SWIFT (the Society for Worldwide Financial Telecommunications), the world's leading provider of mission-critical messaging services to the financial industry, to bill its product portfolio. -- Vodacom, a Vodafone Vodafone Group Plc is a mobile network operator headquartered in Newbury, Berkshire, England, UK. It is the largest mobile telecommunications network company in the world by turnover and has a market value of about £84.7 billion (July 2007). (NYSE:VOD See video-on-demand. VoD - video on demand ) affiliate and South Africa's largest mobile operator with over a million contract (post-paid Adv. 1. post-paid - having the postage paid by the sender; "I will send it post-paid" post-free post-paid adj → porte pagado post-paid adj (Brit ) and four million pre-paid customers, to support the rollout of all future service offerings, including GPRS (General Packet Radio Service) The first high-speed digital data service provided by cellular carriers that used the GSM technology. GPRS added a packet-switched channel to GSM, which uses dedicated, circuit-switched channels for voice conversations. . Convergys continued its market-leading innovation by offering new and enhanced products and services and new delivery methods by announcing: -- The expansion of its global billing product portfolio based on a fully-convergent and proven Next-Generation Framework where clients benefit from maximum flexibility, rapid time to market, and product investment assurance. New or enhanced software products include mediation mediation, in law, type of intervention in which the disputing parties accept the offer of a third party to recommend a solution for their controversy. Mediation has long been a part of international law, frequently involving the use of an international commission, and 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. modules, Geneva, Geneva's Distributed Revenue Processing, Geneva's ARM initiative, and ICOMS ICOMS Integrated Communications Operations Management system ICOMS Improved Conventional Mine System -- Enhanced integrated contact management solutions for e-service providers, offered independently or pre-integrated with Catalys(R) IP billing solution -- That for the second consecutive year, Convergys' Geneva software was presented with the Overall Best Contribution to Billing award from IIR IIR - Infinite Impulse Response , a leading global information provider January January: see month. 2002 Highlights to Date In addition to the news releases distributed in the fourth quarter, during January Convergys announced that: -- One 2 One, the UK network of T-Mobile International, a leading worldwide provider of mobile telecommunications services In telecommunication, the term telecommunications service has the following meanings: 1. Any service provided by a telecommunication provider. 2. , has signed a contract for Convergys' new Mediation Manager -- The Atlys solution is supporting next-generation wireless voice and data services on Telesp Telesp - Telecomunicações de São Paulo S.A. (NYSE: TSP) is a telecommunications company in São Paulo state, Brazil. The company was originally formed as part of Telebrás, the state-owned telecom monopoly at the time. Celular's (NYSE:TCP (1) (Transmission Control Protocol) The reliable transport protocol within the TCP/IP protocol suite. TCP ensures that all data arrive accurately and 100% intact at the other end. ) new 2.5G network in an operating region that is among the world's 10 largest cellular markets with more than 36 million people -- Convergys has been named to Forbes' Platinum platinum (plăt`ənəm), metallic chemical element; symbol Pt; at. no. 78; at. wt. 195.08; m.p. 1,772°C;; b.p. 3,827±100°C;; sp. gr. 21.45 at 20°C;; valence +2 or +4. 400 list for the second consecutive year for its industry leadership in long- long- Adverb (in combination) for or lasting a long time: long-established, long-lasting and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. return on capital, growth in sales and earnings, and other measures of financial success, as scored against their industry peers. -- Convergys has successfully completed the implementation of ICOMS for AT&T Broadband (NYSE:T), the nation's largest broadband service company and leading provider of local phone service over hybrid fiber-coaxial networks -- Triton PCS has signed a new contract to use the Atlys billing product in a service bureau environment. The contract replaces an agreement signed in 1998 and extends the relationship with Convergys through 2006. Mr. Orr continued, "The fourth quarter was highlighted by several important developments at Convergys including the announcement of our Next Generation Framework. It substantially enhances the rapid deployment Installing, setting up, testing and running. This military term, which means the placement of troops and equipment in the field, is widely used with computers as an alternate to the word "implementation. of modular and fully convergent billing and customer care products for our clients and underscores the valuable return on our annual $100 million research and development investment. This software development also resulted in new capabilities and enhancements to keep our existing software platforms state-of-the-art." Operating Performance by Segment Information Management Group (IMG IMG International medical graduate, see there ) Excluding intercompany sales, fourth quarter 2001 Information Management Group revenues increased 10 percent to $241.6 million, from $218.9 million in the same period last year. 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 increased 12 percent to $147.5 million from $131.6 million, primarily as a result of a 32 percent subscriber growth at the company's wireless clients. Professional and consulting revenues increased 3 percent to $42.2 million reflecting continued enhancement requests from wireless carriers. License and other increased to $14.8 million from $14.6 million. International revenues increased 17 percent to $37.1 million, primarily from implementation services provided to Orange France and higher European cable license revenues. Operating income for IMG increased 26 percent to $55.7 million from $44.3 million. Operating margin for IMG in the fourth quarter was 23.1 percent compared to 20.2 percent in the fourth quarter last year. IMG's results reflect earnings from higher revenues partially offset by increased spending on research and development and higher depreciation from data center upgrades. For the full-year ended December 31, 2001, IMG reported revenues of $925.9 million, excluding intercompany sales, compared to $801.1 million, or an increase of 16 percent versus last year. IMG's operating income increased 26 percent to $197.7 million, excluding a special item recorded in 2001. 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 ) Customer Management Group fourth quarter revenues were $349.1 million, down 7 percent compared to $375.1 million in the fourth quarter of 2000, but up 5 percent versus the third quarter of 2001, reflecting continued general weakness in the global economy and reduced spending by communications clients. Operating income for CMG decreased 12 percent to $41.3 million, down from $47.0 million in last year's fourth quarter. Operating margin declined to 11.8 percent in the fourth quarter 2001 versus 12.5 percent reported in the comparable year-ago period. For the full-year ended December 31, 2001, CMG reported revenues of $1.39 billion, which is flat compared to revenues from last year. Excluding special items recorded in 2001, CMG operating income increased slightly to $172.5 million, from $171.1 million last year. Mr. Orr concluded, "While the economy begins 2002 in a recession, we continue to believe that, over time, the economic slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. will stimulate stimulate /stim·u·late/ (stim´u-lat) to excite functional activity. stim·u·late v. To arouse a body or a responsive structure to increased functional activity. accelerated movement toward 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. as companies realize it 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. We are continuing to increase our marketing and sales efforts to enhance Convergys' distinctive leadership role as the leading provider of end-to-end end-to-end a pattern of anastomosis in which severed ends are matched and united, in contrast with other patterns such as end-to-side or side-to-side. Usually applied to anastomosis of the intestine. billing and customer care solutions." Business Outlook The following forward looking-statements reflect Convergys Corporation's expectations as of January 24, 2002. 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. 2002 Financial Guidance -- IMG revenue should increase between 13 and 15 percent for all of 2002 and CMG revenue is expected to increase between 7 and 10 percent when compared to 2001. -- Operating margin for IMG should increase slightly; however, CMG's operating margin is expected to remain relatively flat. This margin guidance reflects the new accounting rules that exclude goodwill amortization expense applied to both 2001 and 2002. -- Excluding the highest and lowest sell side analysts' forecasts, Convergys is comfortable with the range of 2002 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. estimates of $1.57 to $1.65. -- Convergys expects first quarter EPS of $0.34 to $0.36. 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 and customer care services provided through outsourcing or licensing. We serve top companies in telecommunications, Internet, cable and broadband services, 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 30 countries. We also provide integrated, outsourced Outsourced is a modern day comedy of cross-cultural conflict and romance, directed by John Jeffcoat, released in 2007. Synopsis Todd Anderson (Josh Hamilton) spends his days managing a customer call center for American Novelty Products in Seattle, until his job, , human resource services to leading companies across a broad range of industries. We bring together world-class world-class adj. 1. Ranking among the foremost in the world; of an international standard of excellence; of the highest order: a world-class figure skater. 2. resources, software, and expertise to help create valuable relationships between our clients and their customers. 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 1.3 million individual bills our software produces each day to support more than 100 million subscribers, and by the more than 1.2 million separate customer contacts we manage each day, both live and via electronic interaction. Convergys(TM) employs nearly 44,000 people in 46 customer contact centers and in our data centers and other offices 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. , Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , 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. , Israel Israel, in the Bible Israel (ĭz`rēəl, ĭz`rāəl) [as understood by Hebrews,=he strives with God], according to the book of Genesis, name given to Jacob as eponymous ancestor of the Hebrews, the chosen people of God. , Europe, and Asia. Convergys is on the net at www.convergys.com, and has world headquarters in Cincinnati Cincinnati (sĭnsənăt`ē, –năt`ə), city (1990 pop. 364,040), seat of Hamilton co., extreme SW Ohio, on the Ohio River opposite Newport and Covington, Ky.; inc. as a city 1819. . (Convergys, Geneva, and the Convergys logo are service marks and Atlys, Catalys, and WIZARD are registered trademarks of Convergys Corporation.) CONFERENCE CALL NOTE: Convergys will host a 60-minute conference call on Thursday Thursday: see week. , January 24 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 Steve v. t. 1. To pack or stow, as cargo in a ship's hold. See Steeve. 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 "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 contains 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 consequences of the September 11, 2001, attacks on the United States and the U.S. response to those attacks, the loss of a significant client, difficulties in completing or integrating acquisitions, and other factors disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). 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, 2000, filed with the SEC by Convergys Corporation. The company intends to continue its practice of not updating forward-looking statements until its next quarterly results announcement, other than in publicly available statements.
CONVERGYS CORPORATION
Revenues, Net Income and Earnings Per Common Share
EXCLUDING SPECIAL ITEMS
In Millions Except Per Share Amounts
(Unaudited)
Fourth Quarter
Change
2001 2000 Amount %
Revenues:
- Information Mgmt. Grp. $ 244.5 $ 222.6 $ 21.9 10
- Customer Mgmt. Group 349.1 375.1 (26.0) (7)
- Eliminations (2.9) (3.7) 0.8 (22)
--------- --------- ------- ---
--Total $ 590.7 $ 594.0 $ (3.3) (1)
Operating Income:
- Information Mgmt. Grp. $ 55.7 $ 44.3 $ 11.4 26
- Customer Mgmt. Group 41.3 47.0 (5.7) (12)
- Corporate & Other (0.9) (1.7) 0.8 (47)
--------- --------- ------- ---
--Total $ 96.1 $ 89.6 $ 6.5 7
Net Income $ 56.4 $ 52.2 $ 4.2 8
Earnings Per Common Share
- Basic $0.33 $0.31 $0.02 6
- Diluted $0.33 $0.30 $0.03 10
Weighted Average Common Shares Outstanding
- Basic 168.5 168.3 0.2
- Diluted 172.5 175.1 (2.6)
Twelve Months
Change
2001 2000 Amount %
Revenues:
- Information Mgmt. Grp. $ 937.9 $ 818.8 $119.1 15
- Customer Mgmt. Group 1,394.7 1,395.5 (0.8) -
- Eliminations (12.0) (17.7) 5.7 (32)
--------- --------- ------- ---
--Total $2,320.6 $2,196.6 $124.0 6
Operating Income:
- Information Mgmt. Grp. $ 197.7 $ 156.9 $ 40.8 26
- Customer Mgmt. Group 172.5 171.1 1.4 1
- Corporate & Other (3.8) (7.4) 3.6 (49)
--------- --------- ------- ---
--Total $ 366.4 $ 320.6 $ 45.8 14
Net Income $ 215.5 $ 189.2 $ 26.3 14
Earnings Per Common Share
- Basic $1.27 $1.13 $ 0.14 12
- Diluted $1.24 $1.09 $ 0.15 14
Weighted Average Common Shares Outstanding
- Basic 169.4 167.6 1.8
- Diluted 174.4 174.2 0.2
NOTE: The above results exclude special items. In the third quarter of
2001, the Company recorded restructuring charges at CMG and IMG of
$53.3 and $4.7, respectively. Combined these charges reduced operating
income for the twelve months ended December 31, 2001 by $58.0. The
Company also recorded a one-time write-down of equity investments of
$6.5 in the third quarter of 2001. The equity investment write-down,
combined with the restructuring charges, totaled $64.5 pre-tax ($50.4
after tax) or $0.29 per diluted share. Additionally, in the second
quarter of 2001, a charge of $31.8 ($26.3 after tax) was recorded in
the Corporate and Other line above related to the Geneva acquisition
and integration costs. Accordingly, the special items recorded in the
twelve months ended December 31, 2001 totaled $96.3 pre-tax ($76.7
after tax) or $0.44 per diluted share.
Convergys Corporation
Consolidated Statements of Income
EXCLUDING SPECIAL ITEMS
In Millions Except Per Share Amounts
(Unaudited)
For the Three Mo.s For the Twelve Mo.s
Ended Dec. 31, % Ended Dec. 31, %
2001 2000 Chg. 2001 2000 Chg.
Revenues:
Information Mgmt. Grp.
Data Processing $147.5 $131.6 12 $ 543.6 $ 486.1 12
Prof. & Consulting 42.2 41.1 3 184.0 153.5 20
License & Other 14.8 14.6 1 60.3 53.6 13
International 37.1 31.6 17 138.0 107.9 28
----- ------ -- ------- ------- --
External Revenues 241.6 218.9 10 925.9 801.1 16
Interco. Svcs. for CMG 2.9 3.7 (22) 12.0 17.7 (32)
----- ------ -- ------- ------- --
Total IMG Revenues 244.5 222.6 10 937.9 818.8 15
Customer Management Grp.
Communications 224.2 233.1 (4) 882.8 919.8 (4)
Technology 57.3 57.0 1 233.2 183.0 27
Financial Services 17.8 19.4 (8) 74.0 86.2 (14)
Other 49.8 65.6 (24) 204.7 206.5 (1)
----- ------ -- ------- ------- --
Total CMG Revenues 349.1 375.1 (7) 1,394.7 1,395.5 -
Eliminations & Other (2.9) (3.7) (22) (12.0) (17.7)(32)
----- ------ -- ------- ------- --
Total Revenues 590.7 594.0 (1) 2,320.6 2,196.6 6
Costs & Expenses:
Cost of Providing
Services & Products 328.6 328.3 - 1,268.7 1,237.4 3
Selling, General & Admin. 93.3 104.4 (11) 393.3 374.5 5
Research & Development 29.1 28.3 3 115.9 102.0 14
Depreciation 31.0 30.5 2 125.5 111.5 13
Amortization 12.6 12.9 (2) 50.8 50.6 -
----- ------ -- ------- ------- --
Total Costs & Expenses 494.6 504.4 (2) 1,954.2 1,876.0 4
Operating Income 96.1 89.6 7 366.4 320.6 14
Equity in Earnings of
Cellular Partnership 0.5 3.2 (84) 6.4 20.5 (69)
Other Income (Exp.), Net (1.2) 0.8 - (1.6) 2.2 -
Interest Expense (3.5) (8.0) (56) (20.0) (33.1)(40)
----- ------ -- ------- ------- --
Income Before Inc. Taxes 91.9 85.6 7 351.2 310.2 13
Income Taxes 35.5 33.4 6 135.7 121.0 12
----- ------ -- ------- ------- --
Net Income $ 56.4 $ 52.2 8 $ 215.5 $ 189.2 14
===== ====== == ======= ======= ==
Earnings Per Common Share
-Basic $ 0.33 $ 0.31 6 $ 1.27 $ 1.13 12
-Diluted $ 0.33 $ 0.30 10 $ 1.24 $ 1.09 14
Weighted Average Common Shares Outstanding (millions)
-Basic 168.5 168.3 169.4 167.6
-Diluted 172.5 175.1 174.4 174.2
Other Data
-Operating Margin 16.3% 15.1% 15.8% 14.6%
Market Price Per Share
High $ 38.500 $ 52.250 $ 50.250 $ 55.438
Low $ 24.460 $ 30.750 $ 24.460 $ 26.625
Close $ 37.490 $ 45.312 $ 37.490 $ 45.312
Convergys Corporation
Consolidated Balance Sheets
In Millions
(Unaudited)
Dec. 31, Dec. 31,
2001 2000
Assets
Cash and Cash Equivalents $ 41.1 $ 49.3
Receivables - Net 413.6 395.7
Other Current Assets 68.4 71.2
Property & Equipment - Net 350.4 397.6
Other Assets 869.4 890.3
--------- ---------
Total Assets $ 1,742.9 $ 1,804.1
Liabilities and Shareholders' Equity
Debt Maturing in One Year $ 129.9 $ 0.6
Other Current Liabilities 362.5 370.8
Other Liabilities 20.3 17.3
Long-Term Debt 3.6 291.4
Common Shareholders' Equity 1,226.6 1,124.0
--------- ---------
Total Liabilities
& Shareholders' Equity $ 1,742.9 $ 1,804.1
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, %
2001 2000 Chg. 2001 2000 Chg.
Revenues:
Data Processing $147.5 $131.6 12 $543.6 $486.1 12
Prof. & Consulting 42.2 41.1 3 184.0 153.5 20
License & Other 14.8 14.6 1 60.3 53.6 13
International 37.1 31.6 17 138.0 107.9 28
----- ------ -- ----- ----- --
External Revenues 241.6 218.9 10 925.9 801.1 16
Interco. Svcs. for CMG 2.9 3.7 (22) 12.0 17.7 (32)
----- ------ -- ----- ----- --
Total IMG Revenues 244.5 222.6 10 937.9 818.8 15
Costs & Expenses:
Cost of Providing
Services & Products 117.4 106.7 10 446.3 410.5 9
Selling, General & Admin. 30.3 32.8 (8) 133.2 106.8 25
Research & Development 26.4 24.4 8 103.8 86.6 20
Depreciation 10.1 9.7 4 38.7 39.3 (2)
Amortization 4.6 4.7 (2) 18.2 18.7 (3)
Restructuring & Impair. - - - 4.7 - -
------ ------ -- ------ ----- --
Total Costs & Expenses 188.8 178.3 6 744.9 661.9 13
------ ------ -- ------ ----- --
Operating Income $ 55.7 $ 44.3 26 $193.0 $156.9 23
====== ====== ====== ======
Note: The operating segment data for the Information Management Group
(IMG) shown above reflects the detailed revenue and expense
data for IMG that will be presented in the Convergys Annual
Report for the twelve months ended December 31, 2001.
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, %
2001 2000 Chg. 2001 2000 Chg.
Revenues:
Communications $224.2 $233.1 (4) $ 882.8 $ 919.8 (4)
Technology 57.3 57.0 1 233.2 183.0 27
Financial Services 17.8 19.4 (8) 74.0 86.2 (14)
Other 49.8 65.6 (24) 204.7 206.5 (1)
------ ------ -- ------- ------- --
Total CMG Revenues 349.1 375.1 (7) 1,394.7 1,395.5 -
Costs & Expenses:
Cost of Providing
Services & Products 214.1 225.3 (5) 834.4 844.6 (1)
Selling, General & Admin. 64.4 71.4 (10) 263.8 264.2 -
Research & Development 2.7 3.9 (31) 12.1 15.4 (21)
Depreciation 18.5 19.3 (4) 79.3 68.3 16
Amortization 8.1 8.2 (1) 32.6 31.9 2
Restructuring & Impair. - - - 53.3 - -
------ ------ -- ------- ------- --
Total Costs & Expenses 307.8 328.1 (6) 1,275.5 1,224.4 4
------ ------ -- ------- ------- --
Operating Income $ 41.3 $ 47.0 (12) $ 119.2 $ 171.1 (30)
====== ====== ======== =======
Note: The operating segment data for the Customer Management Group
(CMG) shown above reflects the detailed revenue and expense
data for CMG that will be presented in the Convergys Annual
Report for the twelve months ended December 31, 2001.
Convergys Corporation
Supplemental Pro Forma Schedule of Operating Results
Excluding Goodwill Amortization
In Millions
(Unaudited)
Operating Income
------------------------------------------
IMG CMG Corporate Total
------ ------ --------- ------
2001
First Quarter $ 47.8 $ 53.7 ($1.6) $ 99.9
Second Quarter $ 50.0 $ 49.7 ($1.2) (a) $ 98.5 (a)
Third Quarter $ 53.8 (b) $ 46.0 (c) ($0.1) $ 99.7 (c)
Fourth Quarter $ 58.8 $ 47.3 ($0.9) $105.2
------ ------ ------ ------
Total 2001 $210.4 $196.7 ($3.8) $403.3
====== ====== ====== ======
2000
First Quarter $ 37.9 $ 46.5 ($1.9) $ 82.5
Second Quarter $ 41.7 $ 47.1 ($1.9) $ 86.9
Third Quarter $ 42.7 $ 47.9 ($1.9) $ 88.7
Fourth Quarter $ 47.5 $ 53.1 ($1.6) $ 99.0
------ ------ ------ ------
Total 2000 $169.8 $194.6 ($7.3) $357.1
====== ====== ====== ======
Diluted
Net Earnings
Income Per Share
2001 ------ ---------
First Quarter $ 59.7 $0.34
Second Quarter $ 61.0 (a) $0.35 (a)
Third Quarter $ 60.8 (d) $0.35 (d)
Fourth Quarter $ 63.4 $0.37
------ -----
Total 2001 $244.9 $1.40
====== =====
2000
First Quarter $ 50.5 $0.29
Second Quarter $ 53.1 $0.31
Third Quarter $ 54.8 $0.31
Fourth Quarter $ 59.8 $0.34
------ -----
Total 2000 $218.2 $1.25
====== =====
(a) Excludes $31.8 in one-time charges recorded in the second quarter
of 2001 for transaction and integration costs from the Geneva
acquisition.
(b) Excludes a $4.7 one-time restructuring charge recorded in the
third quarter of 2001.
(c) Excludes $53.3 in one-time charges for restructuring activities
recorded in the third quarter of 2001.
(d) Excludes the items noted in (b) and (c) as well as a $6.5 one-time
charge to write-down equity investments recorded in the third
quarter of 2001. Combined these items reduced net income by $76.7
or $0.44 per diluted share.
NOTE: In June 2001, the Financial Accounting Standards Board (FASB)
approved prospective changes to the accounting for acquisitions and
goodwill resulting from acquisitions. Under this new accounting,
beginning January 1, 2002, goodwill resulting from Convergys'
acquisitions will no longer be amortized. The above pro forma schedule
provides summary segment and consolidated results for Convergys for
2000 and the year ended December 31, 2001 assuming the new accounting
had been effective at the beginning of 2000.
CONVERGYS CORPORATION
Revenues, Net Income and Earnings Per Common Share
INCLUDING SPECIAL ITEMS
In Millions Except Per Share Amounts
(Unaudited)
Fourth Quarter
Change
2001 2000 Amount %
Revenues:
- Information Mgmt. Grp. $ 244.5 $ 222.6 $ 21.9 10
- Customer Mgmt. Group 349.1 375.1 (26.0) (7)
- Eliminations (2.9) (3.7) 0.8 (22)
--------- --------- ------- ---
--Total $ 590.7 $ 594.0 $ (3.3) (1)
Operating Income:
- Information Mgmt. Grp. $ 55.7 $ 44.3 $ 11.4 26
- Customer Mgmt. Group 41.3 47.0 (5.7) (12)
- Corporate & Other (0.9) (1.7) 0.8 (47)
--------- --------- ------- ---
--Total $ 96.1 $ 89.6 $ 6.5 7
Net Income $ 56.4 $ 52.2 $ 4.2 8
Earnings Per Common Share
- Basic $0.33 $0.31 $0.02 6
- Diluted $0.33 $0.30 $0.03 10
Weighted Average Common Shares Outstanding
- Basic 168.5 168.3 0.2
- Diluted 172.5 175.1 (2.6)
Twelve Months
Change
2001 2000 Amount %
Revenues:
- Information Mgmt. Grp. $ 937.9 $ 818.8 $119.1 15
- Customer Mgmt. Group 1,394.7 1,395.5 (0.8) -
- Eliminations (12.0) (17.7) 5.7 (32)
--------- --------- ------- ---
--Total $2,320.6 $2,196.6 $124.0 6
Operating Income:
- Information Mgmt. Grp. $ 193.0 (a) $ 156.9 $ 36.1 23
- Customer Mgmt. Group 119.2 (b) 171.1 (51.9) (30)
- Corporate & Other (35.6)(c) (7.4) (28.2) -
--------- --------- ------- ---
--Total $ 276.6(a,b,c) $ 320.6 $(44.0) (14)
Net Income $ 138.8 (d) $ 189.2 $(50.4) (27)
Earnings Per Common Share
- Basic $0.82 (d) $1.13 $(0.31) (27)
- Diluted $0.80 (d) $1.09 $(0.29) (27)
Weighted Average Common Shares Outstanding
- Basic 169.4 167.6 1.8
- Diluted 174.4 174.2 0.2
(a) Includes a $4.7 one-time restructuring charge recorded in the
third quarter of 2001.
(b) Includes $53.3 in one-time charges for restructuring activities
recorded in the third quarter of 2001.
(c) Includes $31.8 in one-time charges recorded in the second quarter
of 2001 for transaction and integration costs from the Geneva
acquisition.
(d) Includes the items discussed in (a) - (c) above as well as a $6.5
one-time charge to write-down equity investments recorded in the
third quarter of 2001. Combined these items reduced net income by
$76.7 or $0.44 per diluted share.
Convergys Corporation
Consolidated Statements of Income
INCLUDING SPECIAL ITEMS
In Millions Except Per Share Amounts
(Unaudited)
For the Three Mo.s For the Twelve Mo.s
Ended Dec. 31, % Ended Dec. 31, %
2001 2000 Chg. 2001 2000 Chg.
Revenues:
Information Mgmt. Grp.
Data Processing $147.5 $131.6 12 $ 543.6 $ 486.1 12
Prof. & Consulting 42.2 41.1 3 184.0 153.5 20
License & Other 14.8 14.6 1 60.3 53.6 13
International 37.1 31.6 17 138.0 107.9 28
----- ------ -- ------- ------- --
External Revenues 241.6 218.9 10 925.9 801.1 16
Interco. Svcs. for CMG 2.9 3.7 (22) 12.0 17.7 (32)
----- ------ -- ------- ------- --
Total IMG Revenues 244.5 222.6 10 937.9 818.8 15
Customer Management Grp.
Communications 224.2 233.1 (4) 882.8 919.8 (4)
Technology 57.3 57.0 1 233.2 183.0 27
Financial Services 17.8 19.4 (8) 74.0 86.2 (14)
Other 49.8 65.6 (24) 204.7 206.5 (1)
----- ------ -- ------- ------- --
Total CMG Revenues 349.1 375.1 (7) 1,394.7 1,395.5 -
Eliminations & Other (2.9) (3.7) (22) (12.0) (17.7)(32)
----- ------ -- ------- ------- --
Total Revenues 590.7 594.0 (1) 2,320.6 2,196.6 6
Costs & Expenses:
Cost of Providing
Services & Products 328.6 328.3 - 1,268.7 1,237.4 3
Selling, General & Admin. 93.3 104.4 (11) 393.3 374.5 5
Research & Development 29.1 28.3 3 115.9 102.0 14
Depreciation 31.0 30.5 2 125.5 111.5 13
Amortization 12.6 12.9 (2) 50.8 50.6 -
Restructuring & Impair. - - - 58.0 - -
Acquisition & Integration - - - 31.8 - -
----- ------ -- ------- ------- --
Total Costs & Expenses 494.6 504.4 (2) 2,044.0 1,876.0 9
Operating Income 96.1 89.6 7 276.6 320.6 (14)
Equity in Earnings of
Cellular Partnership 0.5 3.2 (84) 6.4 20.5 (69)
Other Income (Exp.), Net (1.2) 0.8 - (8.1) 2.2 -
Interest Expense (3.5) (8.0) (56) (20.0) (33.1)(40)
----- ------ -- ------- ------- --
Income Before Inc. Taxes 91.9 85.6 7 254.9 310.2 (18)
Income Taxes 35.5 33.4 6 116.1 121.0 (4)
----- ------ -- ------- ------- --
Net Income $ 56.4 $ 52.2 8 $ 138.8 $ 189.2 (27)
===== ====== == ======= ======= ==
Earnings Per Common Share
-Basic $ 0.33 $ 0.31 6 $ 0.82 $ 1.13 (27)
-Diluted $ 0.33 $ 0.30 10 $ 0.80 $ 1.09 (27)
Weighted Average Common Shares Outstanding (millions)
-Basic 168.5 168.3 169.4 167.6
-Diluted 172.5 175.1 174.4 174.2
Market Price Per Share
High $ 38.500 $ 52.250 $ 50.250 $ 55.438
Low $ 24.460 $ 30.750 $ 24.460 $ 26.625
Close $ 37.490 $ 45.312 $ 37.490 $ 45.312
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