Convergys Corporation Reports Record Fourth Quarter and Year-End Financial Results.Business Editors CINCINNATI--(BUSINESS WIRE)--Jan. 25, 2000 Fourth quarter financial results, excluding one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. special items: -- Revenues increased 20 percent and net income increased 26 percent -- 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. up 36 percent -- 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 increased 27 percent 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) ), the global leader in providing outsourced, integrated, customer care and billing, announced today its financial results for its fourth quarter and full-year ended December December: see month. 31, 1999. During the fourth quarter 1999, the company reported revenues of $486.7 million which represents an increase of 20 percent over $404.7 million reported in the fourth quarter 1998. Operating income, excluding one-time special items, increased 36 percent to $73.1 million, up from $53.8 million. Operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: increased to 15.0 percent from 13.3 percent, excluding the special items. Net income, excluding the special items, increased 26 percent to $43.0 million or $0.28 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, up from net income of $34.1 million or $0.22 per diluted share. Strong performance in the company's core operations offset lower results from the Cellular Partnership. The Cellular Partnership produced equity income of $5.5 million, excluding special items, or $0.02 per share compared to $9.7 million, or $0.04 per share, last year. Special items recorded in the quarter by the Cellular Partnership combined with those recorded by the company reduced earnings by approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $0.07 per diluted share. Including special items recorded in the fourth quarter, the company reported operating income of $66.2 million and net income of $32.1 million, or $0.21 per diluted share. Commenting on the company's fourth quarter results, 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. , 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 said, &uot;We are very pleased with our operating performance this past quarter. Revenues again increased over 20 percent as we continued to add new clients in both our Information Management (IMG IMG International medical graduate, see there ) and Customer Management (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 ) Groups. Increasing demand for new Web-based customer service and the introduction of two new global products - - Catalys (SM), an 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 billing software system, and Atlys (SM), a next-generation billing and customer care software system created for all major wireless protocols, including GSM (Global System for Mobile Communications) A digital cellular phone technology based on TDMA that is the predominant system in Europe, but also used worldwide. Developed in the 1980s, GSM was first deployed in seven European countries in 1992. - - provide significant opportunities to continue this strong growth trend. As we add Internet Protocol See Internet and TCP/IP. (networking) Internet Protocol - (IP) The network layer for the TCP/IP protocol suite widely used on Ethernet networks, defined in STD 5, RFC 791. IP is a connectionless, best-effort packet switching protocol. (IP) functionality to our key products, we believe we are well positioned to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the growing need for outsourced billing and customer care software systems both domestically and around the world.&uot; Fourth Quarter 1999 Highlights During the fourth quarter 1999, Convergys made three important announcements: -- Introduction of Catalys, a comprehensive Internet billing software system created specifically for IP Service Providers for both the domestic and international markets. -- Introduction of Atlys, a next-generation billing and customer care software system created for all major wireless protocols including GSM -- Signing of its first utility billing contracts -- a five-year outsourced billing and customer care contract with Nicor Nicor Scandinavian sea monster; whence, “Old Nick.” [Br. Folklore: Espy, 44] See : Monsters Energy, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control ., and a five-year managed services An umbrella term for third-party monitoring and maintaining of computers, networks and software. The actual equipment may be inhouse or at the third-party's facilities, but the "managed" implies an ongoing effort; for example, making sure the equipment is running at a certain quality billing contract with Northern Kentucky Kentucky, state, United States Kentucky (kəntŭk`ē, kĭn–), one of the so-called border states of the S central United States. It is bordered by West Virginia and Virginia (E); Tennessee (S); the Mississippi R. Water. Full-Year 1999 Results For the full-year ended December 31, 1999, the company reported revenues of $1.76 billion which represents an increase of 22 percent over $1.45 billion reported in 1998. Operating income, excluding special items, increased 34 percent to $244.1 million, up from $182.5 million reported last year. Operating margin increased to 13.8 percent from 12.6 percent. Net income, excluding special items, increased 40 percent to $149.9 million or $0.97 per diluted share, up from net income of $107.4 million or $0.75 per diluted share reported in the full-year 1998. Excluding special items, the Cellular Partnership contributed $32.4 million, or $0.13 per share, compared to $0.11 per share in 1998. Including special items, the company reported 1999 operating income of $235.2 million, Cellular Partnership income of $20.0 million, and net income of $137.0 million, or $0.89 per diluted share. January January: see month. 2000 Highlights to Date Convergys announced an agreement with Level 3 Communications
Level 3 Communications NASDAQ: LVLT is a communications and information services company headquartered in Broomfield, Colorado, USA. and three contract wins in January aimed at increasing the company's global presence in the billing and IP sectors, including: -- Signing of a six-year contract with 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, SA., the largest cellular operator in South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. , to provide a unique and comprehensive billing service. Convergys will customize, manage, and operate its comprehensive new Atlys billing and customer care software platform in state-of-the-art data centers staffed and equipped in Sao Paulo Paulo is the Portuguese form of the given name Paul:
-- Entering into an agreement with Level 3 Communications, LLC, to address the explosive global demand for IP-enabled services and networks. Convergys and Level 3 will jointly develop and market an end-to-end solution (jargon) end-to-end solution - (E2ES) A term that suggests that the supplier of an application program or system will provide all the hardware and/or software components and resouces to meet the customer's requirement and no other supplier need be involved. Compare: turn-key solution. for a broad range of IP service providers, simplifying access to IP networks with turnkey See turnkey system. implementation of IP services on a scale never before achieved. -- Signing of an eighteen-month Internet-based customer service contract with Hewlett-Packard's new hpshopping.com. Convergys will supply hpshopping.com with a robust suite of CybeResponse(R) Internet-based technology Refers to the communications infrastructure of the Internet, which is based on the IP protocol. IP is part of the TCP/IP protocol suite. It may also refer to voice over IP (VoIP), which uses the Internet to make telephone calls. See VoIP, IP and TCP/IP. and services to complement and strengthen its traditional customer service programs. These will include collaborative col·lab·o·rate intr.v. col·lab·o·rat·ed, col·lab·o·rat·ing, col·lab·o·rates 1. To work together, especially in a joint intellectual effort. 2. Internet browsing See browse. , Internet text chat, and web-callback. -- Signing of a three-year contract with Triton PCS (1) (Personal Communications Services) Refers to wireless services that emerged after the U.S. government auctioned commercial licenses in 1994 and 1995. This radio spectrum in the 1. , Inc. to provide support for customer inquiries during peak calling periods, service 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. , and technical assistance on an as-needed basis, as well as with customer satisfaction programs and telesales telesales Noun the selling of a commodity or service by telephone telesales npl → televentas fpl telesales npl → . Orr continued, &uot;Year 2000 has already proved to be productive for Convergys. Our agreement with Telesp Celular marks a milestone “Milemarker” redirects here. For the American indie rock band, see Milemarker (band). A milestone or kilometre sign is one of a series of numbered markers placed along a road at regular intervals, typically at the side of the road or in a median. in our corporate evolution as it adds critical mass and increased opportunities for continued growth in Brazil Brazil (brəzĭl`), Port. Brasil, officially Federative Republic of Brazil, republic (2005 est. pop. 186,113,000), 3,286,470 sq mi (8,511,965 sq km), E South America. , throughout South America, and globally. It also establishes Atlys as the leading software system to meet the scaleability requirements of very large carriers. Additionally, our new alliance with Level 3 Communications brings together two leaders in their respective fields to address the rapidly expanding global IP opportunity. Operating Performance by Segment Excluding inter-company sales, fourth quarter 1999 IMG revenues increased 10 percent to $171.2 million, from $155.2 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 23 percent, primarily as a result of 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. growth at our key wireless clients. Professional and consulting revenues decreased about 9 percent, reflecting reduced enhancement opportunities with 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. and cable projects offsetting increased support for other clients. License and other revenues decreased by nearly $6 million due to the recognition of approximately $10 million in initial license and equipment revenues from MediaOne MediaOne was a cable company created by U S WEST in 1995. The cable service started as a division of U S WEST Media Group. In time the service also included pay-per-view, and a self-branded high-speed cable modem internet service named Hiway1 ("Highway One"). in the fourth quarter of 1998. International revenues increased about $4 million or 35 percent, primarily reflecting the acquisition of Wiztec Solutions, Ltd. Operating income for IMG increased 12 percent to $37.0 million from $33.0 million reported in the fourth quarter 1998. Operating margin in the fourth quarter was 21.6 percent compared to 21.3 percent in the fourth quarter last year. Profit flow-through from higher subscriber levels offset price reductions in a large wireless contract and incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. spending on IP development. Additionally, fourth quarter 1998 results included contributions from MediaOne's initial license fee and equipment purchase. Net losses associated with the company's IP initiative impacted the fourth quarter results by about $0.01 per diluted share. Quarterly IP investment is expected to double on average during 2000. For the full-year ended December 31, 1999, IMG reported revenues of $652.0 million, excluding inter-company sales, up 13 percent from last year. Excluding special items, IMG operating income increased about 15 percent in 1999 to $134.3 million. Strong wireless subscriber growth and new clients contributed to the increases. CMG revenues were $315.5 million, up 26 percent compared to $249.5 million in the fourth quarter of 1998, primarily fueled by substantial subscriber growth by wireless and DBS (Direct Broadcast Satellite) A one-way TV broadcast service from a communications satellite to a small round or oval dish antenna no larger than 20" in diameter. clients and increasing demand from web-centric Having to do with the Web. A Web-centric view of something means that the application or system has been designed for the Web. See Webified. clients. Operating income, excluding special items, for CMG increased 64 percent to $37.2 million, up from $22.7 million in the same period last year. Operating margin, excluding special items, improved to 11.8 percent in the fourth quarter 1999 marking the sixth consecutive quarter of improvement since the 6.3 percent margin in the second quarter of 1998. The strong margin expansion was primarily a result of revenue mix shifts and ongoing operating efficiency programs. For the full-year ended December 31, 1999, CMG reported revenues of $1.1 billion, up 28 percent from last year. CMG operating income excluding special items increased about 70 percent to $115.6 million in 1999. The strong performance reflects solid subscriber growth by key communications clients, the successful introduction of web-based customer service products and market share gains in employee care. The special items referred to above and announced earlier this month include: -- Charges associated with the consolidation of Convergys' three data centers into two, centralization cen·tral·ize v. cen·tral·ized, cen·tral·iz·ing, cen·tral·iz·es v.tr. 1. To draw into or toward a center; consolidate. 2. of certain functional units, and write-offs of purchased software the company has decided it will not deploy. These charges totaled $6.9 million and reduced earnings by about $0.03 per diluted share. The consolidation activities are expected to produce annual costs savings of about $5 million. -- The realization (specification) realization - A UML semantic relationship between a classifier that specifies a contract and another classifier that guarantees to carry it out. [Handout by Mr. David Gillibrand]. of non-recurring investment gains totaling $1.9 million that increased earnings by $0.01 per diluted share. -- Charges relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the company's 45 percent equity interest in a Cellular Partnership with SBC (1) (SBC Communications Inc., San Antonio, TX, www.sbc.com) A large, national telecommunications company that grew from a multitude of local and regional companies, including Southwestern Bell, Pacific Bell and Nevada Bell, into a single, unified brand by 2002. . The one-time charges recorded by the partnership result from the merger of SBC Communications and Ameritech AMERITECH American Information Technologies that closed in October October: see month. 1999. The charges primarily reflect losses on equipment sold that reduced Convergys' earnings from the partnership for the fourth quarter of 1999 by $12.4 million or about $0.05 per diluted share. Orr concluded, &uot;In summarizing 1999, we have made great progress on our continuing goal to increase value for our shareholders by delivering superior products and services to our clients. Revenue growth and earnings growth along with new strategic alliances with leading organizations around the world and solidified so·lid·i·fy v. so·lid·i·fied, so·lid·i·fy·ing, so·lid·i·fies v.tr. 1. To make solid, compact, or hard. 2. To make strong or united. v.intr. 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. relationships with major clients all contributed to this progress. We are confident that the strategy we are pursuing will foster additional growth in 2000 as we focus on expansion in existing markets and penetration of new markets. Convergys is committed to enhancing shareholder value over the long-term and we are confident that, with the many initiatives underway, 2000 will be a year of continued progress.&uot; ABOUT CONVERGYS Convergys Corporation(SM) is the global leader in providing outsourced, integrated, customer care and billing services, bringing 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 and expertise to help clients transform customer relationships into a competitive advantage. Convergys software produces more than one million bills each day, and Convergys call centers handle more than one million calls each day. Convergys provides customer care, billing and employee care services to the top companies in a wide range of industries, including communications, Internet, cable and 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). , technology, consumer products, 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. , utilities, healthcare and hospitality. Headquartered in Cincinnati, Ohio “Cincinnati” redirects here. For other uses, see Cincinnati (disambiguation). Cincinnati is a city in the U.S. state of Ohio and the county seat of Hamilton County. , Convergys employs over 41,000 people in its 36 call centers and in its 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 , and 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). . Convergys is on the Internet
at www.convergys.com
(Convergys is pronounced &uot;kun VER Ver personification; portrayed as infantile and tender. [Rom. Myth.: LLEI, I: 322] See : Spring jis.&uot; Convergys, Atlys, Catalys, and the Convergys logo are service marks and CybeResponse is a registered service mark of Convergys Corporation.) NOTE: Information included in this news release contains 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. 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, difficulties in completing or integrating acquisitions, Year 2000 compliance, 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, 1998, filed with the SEC by Convergys Corporation.
CONVERGYS CORPORATION
Revenues, Net Income and Earnings Per Common Share
In Millions Except Per Share Amounts
(Unaudited)
Fourth Quarter
Change
1999 1998 Amount %
Revenues:
- Information Mgmt. Grp. $ 179.8 $ 164.1 $ 15.7 10
- Customer Mgmt. Group 315.5 249.5 66.0 26
- Eliminations &Other (8.6) (8.9) 0.3 (3)
--------- --------- ------- ---
--Total $ 486.7 $ 404.7 $ 82.0 20
Operating Income:
- Information Mgmt. Grp. $ 37.0 $ 33.0 $ 4.0 12
- Customer Mgmt. Group 30.3 (b) 22.7 7.6 33
- Eliminations &Other (1.1) (1.9) 0.8 (42)
--------- -------- -------- ---
--Total $ 66.2 $ 53.8 $ 12.4 23
Net Income $ 32.1 (c) $ 34.1 $ (2.0) (6)
Earnings Per Common Share (c) (d)
- Basic $0.21 $0.22 $(0.01) (5)
- Diluted $0.21 $0.22 $(0.01) (5)
Weighted Average Common Shares Outstanding (d)
- Basic 151.5 152.0 (0.5)
- Diluted 155.2 152.6 2.6
Twelve Months
Change
1999 1998 Amount %
Revenues:
- Information Mgmt. Grp. $ 687.1 $ 602.0 $ 85.1 14
- Customer Mgmt. Group 1,110.9 869.9 241.0 28
- Eliminations &Other (35.1) (24.7) (10.4) 42
--------- --------- ------- ---
--Total $1,762.9 $1,447.2 $315.7 22
Operating Income:
- Information Mgmt. Grp. $ 132.3 (a) $ 116.5 $ 15.8 14
- Customer Mgmt. Group 108.7 (b) 25.6 (a) 83.1 -
- Eliminations &Other (5.8) (2.2) (3.6) 164
--------- --------- ------- ---
--Total $ 235.2 $ 139.9 $ 95.3 68
Net Income $ 137.0 (c) $ 81.0 (a) $ 56.0 69
Earnings Per Common Share (c)(d)
- Basic $0.90 $0.57 $ 0.33 58
- Diluted $0.89 $0.57 $ 0.32 56
Weighted Average Common Shares Outstanding (d)
- Basic 151.6 142.7 8.9
- Diluted 154.5 142.9 11.6
(a) Includes purchased research and development costs of
$2.0 (before and after tax) at IMG for the twelve months ended
December 31,1999 and of $42.6 ($26.4 after tax) at CMG for the
twelve months ended December 31, 1998.
(b) Includes facility consolidation costs of $6.9 ($4.3 after tax)
for the three and twelve months ended December 31, 1999.
(c) Net income includes the special items included in operating
income above as well as $12.4 ($7.8 after tax) in one time
charges associated with the Company's interest in a cellular
partnership and a non-recurring realized investment gain of
$1.9 ($1.2 after tax) in the three months ended
December 31, 1999. Excluding these special items, earnings per
diluted common share were $0.97 and $0.75 for the twelve months
ended December 31, 1999 and 1998, respectively, and $0.28 for the
three months ended December 31, 1999.
(d) Effective August 4, 1998, the Company approved a share split,
which increased the number of then outstanding common shares
to 137.0 million. On August 13, 1998, the Company issued an
additional 14,950,000 common shares to the public in an initial
public offering. Basic and diluted earnings per share for the
periods prior to the initial public offering have been
calculated using the 137.0 million common share total.
Convergys Corporation
Consolidated Statements of Income
In Millions Except Per Share Amounts
(Unaudited)
For the Three Months For the Twelve Months
Ended Dec. 31, % Ended Dec. 31, %
1999 1998 Chg. 1999 1998 Chg.
Revenues:
Information Mgmt. Grp.
Data Processing $112.6 $ 91.6 23 $ 418.0 $ 358.5 17
Prof. &Consulting 31.2 34.1 (9) 141.1 137.8 2
License &Other 13.9 19.5 (29) 41.7 39.3 6
International 13.5 10.0 35 51.2 41.8 22
----- ------ -- ------ ------ --
External Revenues 171.2 155.2 10 652.0 577.4 13
Interco. Svcs. for CMG 8.6 8.9 (3) 35.1 24.6 43
----- ------ -- ------ ------ --
Total IMG Revenues 179.8 164.1 10 687.1 602.0 14
Customer Management Grp.
Dedicated Services 258.5 190.7 36 874.4 651.0 34
Traditional Services 42.0 45.3 (7) 178.6 181.2 (1)
International 15.0 13.5 11 57.9 37.7 54
----- ------ -- ------ ------ --
Total CMG Revenues 315.5 249.5 26 1100.9 869.9 28
Eliminations &Other (8.6) (8.9) - (35.1) (24.7) -
----- ------ -- ------ ------ --
Total Revenues 486.7 404.7 20 1762.9 1447.2 22
Costs &Expenses:
Cost of Providing
Services &Products Sold 270.2 228.9 18 996.1 826.4 21
Selling, General &Admin. 79.6 65.7 21 291.3 226.0 29
Research &Development 25.2 19.1 32 87.2 81.9 6
Depreciation 23.8 19.5 22 86.0 68.1 26
Amortization 12.1 9.3 30 44.3 33.2 33
Year 2000 Programming 2.7 8.4 (68) 13.9 29.1 (52)
Purchased R& Costs - - - 2.0 42.6 (95)
Special Charges 6.9 - - 6.9 - -
----- ----- -- ------ ------ --
Total Costs and Expenses 420.5 350.9 20 1527.7 1307.3 17
Operating Income 66.2 53.8 23 235.2 139.9 68
Equity in Earnings of
Cellular Partnership (a) (6.9) 9.7 (171) 20.0 25.1 (20)
Other Inc.(Exp.), Net (b) 0.7 (1.0)(170) (0.2) (0.5)(60)
Interest Expense 8.1 7.2 13 32.5 33.9 (4)
----- ----- --- ------ ------ ---
Income Before Income Taxes 51.9 55.3 (6) 222.5 130.6 70
Income Taxes 19.8 21.2 (7) 85.5 49.6 72
----- ------ --- ------ ------ ---
Net Income $ 32.1 $ 34.1 (6) $ 137.0 $ 81.0 69
------ ------ --- ------- ------ ---
------ ------ --- ------- ------ ---
Earnings Per Common Share (c)
-Basic $ 0.21 $ 0.22 (5) $ 0.90 $ 0.57 56
-Diluted $ 0.21 $ 0.22 (5) $ 0.89 $ 0.57 54
Weighted Average Common Shares Outstanding (millions) (c)
-Basic 151.5 152.0 151.6 142.7
-Diluted 155.2 152.6 154.5 142.9
Other Data
-Operating Margin (d) 15.0% 13.3% 13.8% 12.6%
Market Price Per Share
-High $31.750 $23.750 $31.750 $23.750
-Low $17.250 $ 9.625 $14.500 $ 9.625
-Close $30.750 $22.375 $30.750 $22.375
(a) The Company's equity earnings from the Cellular Partnership for
the three and twelve months ended December 31, 1999 were reduced
by $12.4 ($7.8 after tax) by special charges recorded by the
partnership.
(b) Includes a non-recurring realized investment gain of $1.9 ($1.2
after tax) for the three and twelve months ended December 31,
1999.
(c) Effective August 4, 1998, the Company approved a share split,
which increased the number of then outstanding common shares
to 137.0 million. On August 13, 1998, the Company issued an
additional 14.9 million common shares to the public in an initial
public offering. Basic and diluted earnings per share for the
periods prior to the initial public offering have been
calculated using the 137.0 million common share total.
(d) Excludes purchased research and development costs of $2.0 for
the twelve months ended December 31, 1999 and of $42.6 for the
twelve months ended December 31, 1998 and facility consolidation
costs of $6.9 million for the three and twelve months ended
December 31, 1999.
Convergys Corporation
Consolidated Balance Sheets
In Millions
(Unaudited)
Dec. 31, Dec. 31,
1999 1998
Assets
Cash and Cash Equivalents $ 30.8 $ 3.8
Receivables - Net 214.8 314.3
Other Current Assets 52.3 42.4
Property &Equipment-Net 335.6 249.8
Other Assets 946.0 840.6
--------- ---------
Total Assets $ 1,579.5 $ 1,450.9
--------- ---------
--------- ---------
Liabilities and Shareowners' Equity
Debt Maturing in One Year $ 48.0 $ 466.8
Other Current Liabilities 339.4 239.6
Other Liabilities 14.6 12.7
Long-Term Debt 250.3 0.3
Common Shareowners' Equity 927.2 731.5
--------- ---------
Total Liabilities
&Shareowners' Equity $ 1,579.5 $ 1,450.9
--------- ---------
--------- ---------
Convergys Corporation
Information Management Group
Operating Segment Data
In Millions
(Unaudited)
For the Three Months For the Twelve Months
Ended Dec. 31, % Ended Dec. 31, %
1999 1998 Chg. 1999 1998 Chg.
Revenues:
Data Processing $112.6 $ 91.6 23 $418.0 $ 358.5 17
Prof. &Consulting 31.2 34.1 (9) 141.1 137.8 2
License &Other 13.9 19.5 (29) 41.7 39.3 6
International 13.5 10.0 35 51.2 41.8 22
----- ------ -- ----- ------ --
External Revenues 171.2 155.2 10 652.0 577.4 13
Interco. Svcs. for CMG 8.6 8.9 (3) 35.1 24.6 43
----- ------ -- ----- ------ --
Total IMG Revenues 179.8 164.1 10 687.1 602.0 14
Costs &Expenses:
Cost of Providing
Services &Products Sold 89.1 87.2 2 356.0 308.6 15
Selling, General &Admin. 19.6 16.8 17 76.7 66.6 15
Research &Development 19.6 14.4 36 67.9 61.1 11
Depreciation 8.0 6.6 21 29.7 23.9 24
Amortization 4.2 1.5 - 12.8 6.0 113
Year 2000 Programming 2.3 4.6 (50) 9.7 19.3 (50)
Purchased R& Costs - - - 2.0 - -
------ ------ -- ------ ------ --
Total Costs and Expenses 142.8 131.1 9 554.8 485.5 14
------ ------ -- ------ ------ --
Operating Income $ 37.0 $ 33.0 12 $132.3 $116.5 14
------ ------ ------ ------
------ ------ ------ ------
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, 1999.
Convergys Corporation
Customer Management Group
Operating Segment Data
In Millions
(Unaudited)
For the Three Months For the Twelve Months
Ended Dec. 31, % Ended Dec. 31, %
1999 1998 Chg. 1999 1998 Chg.
Revenues:
Dedicated Services $258.5 $190.7 36 $ 874.4 $651.0 34
Traditional Services 42.0 45.3 (7) 178.6 181.2 (1)
International 15.0 13.5 11 57.9 37.7 54
------ ------ -- ------- ------ --
Total CMG Revenues 315.5 249.5 26 1110.9 869.9 28
Costs &Expenses:
Cost of Providing
Services &Products Sold 189.9 150.4 26 675.3 542.3 25
Selling, General &Admin. 58.9 47.1 25 209.9 157.5 33
Research &Development 5.5 4.7 17 19.2 20.7 (7)
Depreciation 15.7 12.9 22 55.2 44.2 25
Amortization 7.9 7.8 - 31.5 27.2 16
Year 2000 Programming 0.4 3.9 (90) 4.2 9.8 (57)
Purchased R& Costs - - - - 42.6 -
Special Charges 6.9 - - 6.9 - -
------ ------ -- ------- ------ --
Total Costs and Expenses 285.2 226.8 26 1002.2 844.3 19
------ ------ -- ------- ------ --
Operating Income $ 30.3 $ 22.7 33 $ 108.7 $ 25.6 -
------ ------ ------- -------
------ ------ ------- -------
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, 1999.
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