Convergys Corporation Reports Record Net Income and EPS in Second Quarter.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)--July 25, 2001 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 SECOND QUARTER: -- Revenues increased 8 percent to $571.2 million -- Operating income increased 15 percent to $89.2 million -- Net income increased 17 percent to a record $53.6 million and diluted earnings per share increased 19 percent to a record $0.31 -- Cash earnings per share of $0.35 -- Geneva Technology Ltd. acquisition successfully completed Convergys Corporation (NYSE:CVG), the global leader in integrated billing and customer care, announced today its financial results for the second quarter ended June June: see month. 30, 2001. During the second quarter 2001, total revenues increased 8 percent to $571.2 million compared to $530.9 million reported in the second quarter of 2000. 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. , excluding special items, increased 15 percent to $89.2 million from $77.8 million. Operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: increased to 15.6 percent from 14.7 percent, excluding special items. The company's cellular partnership investment contributed earnings of $2.8 million or about $0.01 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, down from $5.4 million or about $0.02 per diluted share in the second quarter of 2000. Net income increased to a record $53.6 million from $45.9 million, and earnings per share (diluted) increased 19 percent to a record $0.31 per share from $0.26 per share last year, excluding special items. Cash earnings per share excluding goodwill amortization and special items increased 13 percent to $0.35 from $0.31 in the second quarter of 2000. During the second quarter of 2001, Convergys completed its acquisition of 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. Technology Ltd., in a pooling-of-interests transaction. All prior year amounts have been restated to include Geneva Technology's operations. Results for the second quarter include one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. , pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta costs associated with the Geneva Technology acquisition totaling $31.8 million which consists of transaction costs Transaction Costs Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). of $20.6 million and post acquisition, integration costs of $11.2 million. The after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. impact of these costs was $26.3 million or $0.15 per share. Including these one-time charges, operating income was $57.4 million, net income was $27.3 million, and earnings per share (diluted) were $0.16. 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, 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, "We are pleased to have reported such solid earnings in what has been a clearly difficult economic environment. While the Information Management Segment continued its strong performance in the second quarter, as expected, the Customer Management Segment experienced continued revenue softness reflecting general economic weakness. Nonetheless, our results in the quarter showed record net income and earnings per share." Second Quarter 2001 Highlights During the second quarter of 2001, Convergys: -- Signed an agreement with AT&T Wireless to support its deployment of Third Generation (3G) wireless service, a positive vote of confidence for our 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. , 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. , and 3G capability. Convergys will provide billing software and services using its Atlys(R) billing and customer care solution -- Closed a two-year contract with AT&T Wireless to provide integrated contact center services in support of its fixed wireless digital broadband technology broadband technology Telecommunications devices, lines, or technologies that allow communication over a wide band of frequencies, and especially over a range of frequencies divided into multiple independent channels for the simultaneous transmission of different signals. , marketed as AT&T Digital 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). -- Successfully completed its acquisition of Geneva Technology Ltd. -- Signed a new five-year contract with NetZero for 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. bill processing and Web-based customer management services using Catalys(TM) -- Continued its European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. expansion with four new client contract wins utilizing the Geneva solution: -- Netsize, a French two-way messaging company -- Genie, BritishTelecom's mobile telephone unit -- Broadnet, a Belgian Belgian having some relationship to Belgium. Belgian barge dog see schipperke. Belgian black pied cattle black, Belgian dairy cattle. Belgian blue dual-purpose cattle; blue, white or blue roan. wireless broadband High-speed wireless transmission of data. What is "high" speed is always a changing number. Wireless systems are typically slower than land-based, wireline networks. In the past, wireless broadband started at 250 Kbps, whereas land-based broadband was generally considered to start at T1 provider -- Xfera, a 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. UMTS (Universal Mobile Telecommunications System) The GSM implementation of the 3G wireless phone system. Part of IMT-2000, UMTS provides service in the 2 GHz band and offers global roaming and personalized features. mobile phone operator -- Announced an industry first -- the availability of convergent network-based prepaid pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. and postpaid post·paid adj. With the postage having been paid in advance. postpaid Adverb, adj with the postage prepaid Adj. 1. billing within Atlys, the company's wireless billing and customer care solution -- Introduced Catalys Release 7.0, Convergys' global IP billing and customer care solution. Key functionality of the new release includes an advanced collections capability, which facilitates customer payments and helps manage overdue OVERDUE. A bill, note, bond or other contract, for the payment of money at a particular day, when not paid upon the day, is overdue. 2. The indorsement of a note or bill overdue, is equivalent to drawing a new bill payable at sight. 2 Conn. 419; 18 Pick. accounts and bad debt. -- Was named to the BusinessWeek's Info Tech 100, the magazine's annual listing of the best technology companies in the United States, and the only company of its type to be named to the Info Tech 100. -- Received the Billing Excellence Award for Best Wireless Billing Platform for Atlys at Telestrategies' Billing World 2001 Conference & Exhibition in June. Mr. Orr continued, "Clearly, the second quarter was very productive from a business development standpoint The Standpoint is a newspaper published in the British Virgin Islands. It was originally published under the name Pennysaver, largely as a shopping-coupon promotional newspaper, but since emerged as one of the most influential sources of journalism in the . We completed the Geneva acquisition, expanded relationships with our largest billing clients, released a new version of our Catalys solution, and secured several important international client wins. We have wasted no time building on this momentum, announcing early in the third quarter a major contract with Orange France, the first Atlys contract in Europe, a contract renewal with FedEx, a long time and valued customer management client, and a significant business alliance with Siebel Systems Siebel is a brand name of Oracle Corporation. Siebel Systems, Inc., founded by Thomas Siebel in 1993, was principally engaged in the design, development, marketing and support of CRM applications. ." For the first half of 2001, revenues increased 11 percent over the same period last year to $1.16 billion. Operating income increased 19 percent to $179.7 million and net income increased 18 percent to $105.7 million, excluding special items. The company's cellular partnership contributed earnings of $4.6 million, down from $11.3 million in the first half of 2000. 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 , excluding special items, increased 15 percent to $0.60. July 2001 Highlights -- Announced our first major European wireless billing contract licensing the Atlys solution to Orange France (formerly known as France Telecom Mobile), part of the Orange / France Telecom Group (NYSE:FTE FTE Full-Time Equivalent FTE Full-Time Employee FTE Full-Time Equivalency FTE Full Time Employment FTE Foundation for Teaching Economics FTE Full Time Enrollment FTE For the Enterprise (SQL) FTE Fund for Theological Education ). Convergys will also manage implementation and integration of the Atlys solution. In addition, the contract contains a significant international provision -- a framework agreement establishing a special relationship between Convergys and France Telecom that would allow the Orange Group to use Atlys in its numerous global affiliates. Orange France, France's leading mobile operator, will use Atlys to launch its UMTS service, and will migrate its more than 15 million existing subscribers to the Atlys solution within three years. Importantly, this is the fourth Atlys win since the introduction of the product and the second that supports a major carrier with its 3G deployment. AT&T Wireless Services and Orange France have now selected Atlys to help them deliver the next-generation of wireless services. -- Released Atlys 7.0, which provides extensive additional functionality and flexibility. For example, it incorporates clearly defined, open APIs Open API (often referred to as OpenAPI) is a word used to describe sets of technologies that enable websites to interact with each other by using SOAP, Javascript any other web technology. that adhere to adhere to verb 1. follow, keep, maintain, respect, observe, be true, fulfil, obey, heed, keep to, abide by, be loyal, mind, be constant, be faithful 2. the CORBA (Common Object Request Broker Architecture) A software-based interface from the Object Management Group (OMG) that allows software modules (objects) to communicate with each other no matter where they are located on a private network or the global standard and enable data exchange via XML XML in full Extensible Markup Language. Markup language developed to be a simplified and more structural version of SGML. It incorporates features of HTML (e.g., hypertext linking), but is designed to overcome some of HTML's limitations. (extensible markup language See XML. (language, text) Extensible Markup Language - (XML) An initiative from the W3C defining an "extremely simple" dialect of SGML suitable for use on the World-Wide Web. http://w3.org/XML/. ). -- Announced a three-year contract renewal to provide technical support services support services Psychology Non-health care-related ancillary services–eg, transportation, financial aid, support groups, homemaker services, respite services, and other services for FedEx Corporate Services Activities that combine or consolidate certain enterprise-wide needed support services, provided based on specialized knowledge, best practices, and technology to serve internal (and sometimes external) customers and business partners. , Inc. Convergys will provide direct customer support for FedEx platform PCs, software, and printers through the FedEx Customer Technical Support organization. -- Announced a strategic alliance with Siebel Systems to create a unified solution for customer care and billing. -- Announced an eight-year employee services contract with Sodexho, one of the leading food and facility management service companies in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , to provide Sodexho employees with full health and welfare administration services. -- Named the 2001 Ohio Exporter of the Year. This honor As a verb, to accept a bill of exchange, or to pay a note, check, or accepted bill, at maturity. To pay or to accept and pay, or, where a credit so engages, to purchase or discount a draft complying with the terms of the draft. is presented by the Governor and the Department of Development to honor an Ohio company Ohio Company, organization formed (1747) to extend settlements of Virginia westward. The members were mostly Virginia planters interested in land speculation and the fur trade. that has distinguished itself in the international marketplace, especially 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 Europe. Operating Performance Information Management Group (IMG IMG International medical graduate, see there including Geneva Technology) Excluding intercompany sales, second quarter 2001 IMG revenues increased 19 percent to $229.4 million, from $193.2 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 12 percent to $129.9 million from $116.3 million, reflecting subscriber growth at our key wireless clients. Professional and consulting revenues increased 50 percent to $51.1 million from $34.1 million, reflecting an increase in enhancement projects for two large wireless clients. License and other revenues increased 33 percent to $16.4 million from $12.3 million due to growth in revenues from cable and broadband clients. International revenues, which include Geneva Technology, increased 5 percent to $32.0 million, reflecting increased revenues from Geneva Technology, partially offset by the completion of the implementation of Atlys for Telesp Celular. Operating income for IMG increased 21 percent to $46.6 million from $38.4 million. This increase reflects earnings associated with revenues which more than offset increased investments in sales and marketing and research and development. Operating margin for IMG in the second quarter was 20.3 percent, up slightly from 19.9 percent in the second quarter last year. 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 ) CMG revenues were $341.8 million, a 1-percent increase compared to $337.7 million in the second quarter of 2000, reflecting a weak economy leading to service level reductions and volume cutbacks by several clients. Operating income for CMG increased 6 percent to $43.8 million from $41.3 million in last year's second quarter. CMG reported a 12.8 percent operating margin in the second quarter of 2001, up from the 12.2 percent reported in the comparable year-ago period. This marked the twelfth consecutive quarter of margin improvement since we reported a 6.3 percent margin in the second quarter of 1998 following the American Transtech acquisition. Business Outlook The following forward looking-statements reflect Convergys Corporation's expectations as of July 25, 2001. 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. Fiscal 2001 Expectations -- IMG revenues continue to show strong growth and, excluding Geneva Technology, should be at or above 14 percent and CMG revenue is expected to be flat when compared to last year. -- Both CMG and IMG operating margins are expected to increase slightly when compared to last year. -- 2001 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. should end the year in the $1.24 to $1.27 range. In the third quarter, we intend to begin rationalizing our contact center network. Under this plan, we expect to take a third quarter charge of $35 - 45 million to reflect the reduction of less efficient, higher cost capacity. This will accelerate our migration to more efficient, technology-rich contact centers. Mr. Orr concluded, "These expectations reflect the continuing 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. which, in the short term, impacts CMG's revenue growth but should lead to accelerated growth when the economy rebounds. We have invested heavily in technology and have made sound strategic acquisitions and alliances that further strengthen our competitive posture posture /pos·ture/ (pos´choor) the attitude of the body.pos´tural pos·ture n. 1. A position of the body or of body parts. 2. . In times like this, truly outstanding companies remain focused on executing their strategy. We remain focused on high growth areas such as next generation wireless applications, cable and broadband, IP telephony The two-way transmission of voice over a packet-switched IP network, which is part of the TCP/IP protocol suite. The terms "IP telephony" and "voice over IP" (VoIP) are synonymous. , and geographic expansion particularly for the EMEA (Europe, Middle East, Africa) Refers to that region of the world. For example, one might see products packaged differently for the UK, EMEA and Asia Pacific markets. and Latin American markets, and we are convinced this strategy is correct." 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 (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. 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 30 countries. We bring together world-class 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 over 45,000 people in 50 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, Latin America, Israel, and Europe. On the net at www.convergys.com, Convergys' world headquarters is located 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. , USA. (Convergys, the Convergys logo, and Catalys are trademarks and Atlys is a registered trademark of Convergys Corporation.) CONFERENCE CALL NOTE: Convergys will host an hour-long conference call on Wednesday, July 25 at 10:00 A.M., Eastern Time, to discuss the company's second quarter results. It will feature Jim Orr, chairman, president, & CEO, and Steve Rolls, CFO See Chief Financial Officer. . This call will be carried live (with scheduled repeats) on the Internet on www.streetfusion.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 loss of a significant client, difficulties in completing or integrating acquisitions, 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, 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. (Financial Tables Follow)
CONVERGYS CORPORATION
Revenues, Net Income and Earnings Per Common Share
In Millions Except Per Share Amounts
(Unaudited)
Second Quarter
------------------------------------------
Change
--------------
2001 2000 Amount %
--------- --------- ------- ---
Revenues:
Information Mgmt. Grp. $ 232.3 $ 197.4 $ 34.9 18
Customer Mgmt. Group 341.8 337.7 4.1 1
Eliminations (2.9) (4.2) 1.3 (31)
--------- --------- -------
Total $ 571.2 $ 530.9 $ 40.3 8
Operating Income:
Information Mgmt. Grp. $ 46.6 $ 38.4 $ 8.2 21
Customer Mgmt. Group 43.8 41.3 2.5 6
Corporate & Other (33.0)(a) (1.9) (31.1) -
--------- --------- -------
Total $ 57.4 (a) $ 77.8 $(20.4) (26)
Net Income $ 27.3 (a) $ 45.9 $(18.6) (41)
Earnings Per Common Share
- Basic $0.16 (a) $0.27 $(0.11) (41)
- Diluted $0.16 (a) $0.26 $(0.10) (38)
Weighted Average Common Shares Outstanding
- Basic 169.8 167.1 2.7
- Diluted 175.5 173.9 1.6
(a) Includes one-time transaction and integration costs related to
the Geneva acquisition totalling $31.8 ($26.3 after tax) or
$0.15 per diluted share.
Six Months
------------------------------------------
Change
--------------
2001 2000 Amount %
--------- --------- ------- ---
Revenues:
Information Mgmt. Grp. $ 454.9 $ 381.8 $ 73.1 19
Customer Mgmt. Group 714.0 677.7 36.3 5
Eliminations (6.2) (10.4) 4.2 (40)
--------- --------- -------
Total $1,162.7 $1,049.1 $113.6 11
Operating Income:
Information Mgmt. Grp. $ 91.3 $ 73.1 $ 18.2 25
Customer Mgmt. Group 91.2 82.0 9.2 11
Corporate & Other (34.6)(a) (3.8) (30.8) -
--------- --------- -------
Total $ 147.9 (a) $ 151.3 $ (3.4) (2)
Net Income $ 79.4 (a) $ 89.4 $(10.0) (11)
Earnings Per Common Share
- Basic $0.47 (a) $0.54 $(0.07) (13)
- Diluted $0.45 (a) $0.52 $(0.07) (13)
Weighted Average Common Shares Outstanding
- Basic 169.6 167.1 2.5
- Diluted 175.5 173.5 2.0
(a) Includes one-time transaction and integration costs related to
the Geneva acquisition totalling $31.8 ($26.3 after tax) or
$0.15 per diluted share.
Convergys Corporation
Consolidated Statements of Income
In Millions Except Per Share Amounts
(Unaudited)
For the Three Months For the Six Months
Ended Jun. 30, % Ended Jun. 30, %
2001 2000 Chg. 2001 2000 Chg.
---- ---- ---- ---- ---- ----
Revenues:
Information Mgmt. Grp.
Data Processing $129.9 $116.3 12 $ 256.3 $ 229.2 12
Prof. & Consulting 51.1 34.1 50 92.3 68.0 36
License & Other 16.4 12.3 33 31.6 26.2 21
International 32.0 30.5 5 68.5 48.0 43
----- ------ ------- -------
External Revenues 229.4 193.2 19 448.7 371.4 21
Interco. Svcs. for CMG 2.9 4.2 (31) 6.2 10.4 (40)
----- ------ ------- -------
Total IMG Revenues 232.3 197.4 18 454.9 381.8 19
Customer Management Grp.
Communications 215.2 231.3 (7) 442.0 454.3 (3)
Technology 57.1 40.7 40 122.5 83.0 48
Financial Services 18.7 22.0 (15) 40.1 47.3 (15)
Other 50.8 43.7 16 109.4 93.1 18
----- ------ ------- -------
Total CMG Revenues 341.8 337.7 1 714.0 677.7 5
Eliminations & Other (2.9) (4.2) (31) (6.2) (10.4)(40)
----- ------ ------- -------
Total Revenues 571.2 530.9 8 1,162.7 1,049.1 11
----- ------ ------- -------
Costs & Expenses:
Cost of Providing
Services & Products Sold 311.5 301.2 3 634.7 595.8 7
Selling, General & Admin. 97.8 88.0 11 204.3 175.7 16
Research & Development 28.5 24.1 18 54.6 48.4 13
Depreciation 31.0 27.2 14 63.0 52.5 20
Amortization 13.2 12.6 5 26.4 25.1 5
Acquisition & Integration
Costs 31.8 - - 31.8 - -
Year 2000 Programming - - - - 0.3 -
----- ------ ------- -------
Total Costs and Expenses 513.8 453.1 13 1,014.8 897.8 13
----- ------ ------- -------
Operating Income 57.4 77.8 (26) 147.9 151.3 (2)
Equity in Earnings of
Cellular Partnership 2.8 5.4 (48) 4.6 11.3 (59)
Other Income/(Exp.), Net 0.6 0.2 - 0.7 0.2 -
Interest Expense (5.3) (8.8) (40) (12.5) (16.9)(26)
----- ------ ------- -------
Income Before Inc. Taxes 55.5 74.6 (26) 140.7 145.9 (4)
Income Taxes 28.2 28.7 (2) 61.3 56.5 8
----- ------ ------- -------
Net Income $ 27.3 $ 45.9 (41) $ 79.4 $ 89.4 (11)
===== ====== ======= =======
Earnings Per Common Share
-Basic $ 0.16 $ 0.27 (41) $ 0.47 $ 0.54 (13)
-Diluted $ 0.16 $ 0.26 (38) $ 0.45 $ 0.52 (13)
Weighted Average Common Shares Outstanding (millions)
-Basic 169.8 167.1 169.6 167.1
-Diluted 175.5 173.9 175.5 173.5
Other Data
Operating Margin (a) 15.6% 14.7% 15.5% 14.4%
Market Price Per Share
High $ 44.350 $ 51.922 $ 50.250 $ 51.922
Low $ 27.800 $ 30.500 $ 27.800 $ 26.625
Close $ 30.250 $ 51.875 $ 30.250 $ 51.875
(a) Excludes the one-time acquisition and integration costs from the
Geneva acquisition during the second quarter of 2001.
Convergys Corporation
Consolidated Balance Sheets
In Millions
(Unaudited)
Jun. 30, Dec. 31,
2001 2000
--------- ---------
Assets
Cash and Cash Equivalents $ 30.5 $ 49.3
Receivables - Net 332.6 395.7
Other Current Assets 78.9 71.2
Property & Equipment - Net 368.8 397.6
Other Assets 899.4 890.3
--------- ---------
Total Assets $ 1,710.2 $ 1,804.1
========= =========
Liabilities and Shareowners' Equity
Debt Maturing in One Year $ 1.2 $ 0.6
Other Current Liabilities 294.0 370.8
Other Liabilities 17.9 17.3
Long-Term Debt 169.8 291.4
Common Shareowners' Equity 1,227.3 1,124.0
--------- ---------
Total Liabilities
& Shareowners' Equity $ 1,710.2 $ 1,804.1
========= =========
Convergys Corporation
Information Management Group
Operating Segment Data
In Millions
(Unaudited)
For the Three Months For the Six Months
Ended Jun. 30, % Ended Jun. 30, %
2001 2000 Chg. 2001 2000 Chg.
---- ---- ---- ---- ---- ----
Revenues:
Data Processing $129.9 $116.3 12 $256.3 $229.2 12
Prof. & Consulting 51.1 34.1 50 92.3 68.0 36
License & Other 16.4 12.3 33 31.6 26.2 21
International 32.0 30.5 5 68.5 48.0 43
----- ------ ----- -----
External Revenues 229.4 193.2 19 448.7 371.4 21
Interco. Svcs. for CMG 2.9 4.2 (31) 6.2 10.4 (40)
----- ------ ----- -----
Total IMG Revenues 232.3 197.4 18 454.9 381.8 19
Costs & Expenses:
Cost of Providing
Services & Products Sold 112.8 100.0 13 220.0 194.4 13
Selling, General & Admin. 33.9 24.1 41 67.6 45.1 50
Research & Development 25.0 20.4 23 48.0 40.4 19
Depreciation 9.5 9.8 (3) 19.0 19.2 (1)
Amortization 4.5 4.7 (4) 9.0 9.3 (3)
Year 2000 Programming - - - - 0.3 -
----- ------ ----- -----
Total Costs and Expenses 185.7 159.0 17 363.6 308.7 18
----- ------ ----- -----
Operating Income $ 46.6 $ 38.4 21 $ 91.3 $ 73.1 25
====== ====== ====== =====
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 10-Q for
the quarterly period ended June 30, 2001.
Convergys Corporation
Customer Management Group
Operating Segment Data
In Millions
(Unaudited)
For the Three Months For the Six Months
Ended Jun. 30, % Ended Jun. 30, %
2001 2000 Chg. 2001 2000 Chg.
---- ---- ---- ---- ---- ----
Revenues:
Communications $215.2 $231.3 (7) $ 442.0 $ 454.3 (3)
Technology 57.1 40.7 40 122.5 83.0 48
Financial Services 18.7 22.0 (15) 40.1 47.3 (15)
Other 50.8 43.7 16 109.4 93.1 18
------ ------ ------- -------
Total CMG Revenues 341.8 337.7 1 714.0 677.7 5
Costs & Expenses:
Cost of Providing
Services & Products Sold 201.6 205.4 (2) 420.9 411.8 2
Selling, General & Admin. 64.2 63.0 2 137.2 128.1 7
Research & Development 3.6 3.7 (3) 6.6 8.0 (18)
Depreciation 20.0 16.4 22 40.7 32.0 27
Amortization 8.6 7.9 9 17.4 15.8 10
------ ------ ------- -------
Total Costs and Expenses 298.0 296.4 1 622.8 595.7 5
------ ------ ------- -------
Operating Income $ 43.8 $ 41.3 6 $ 91.2 $ 82.0 11
====== ====== ======= =======
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 10-Q for
the quarterly period ended June 30, 2001.
Convergys Corporation
Supplemental Pro Forma Schedule of Operating Results
Excluding Goodwill Amortization (Unaudited)
Operating Income
--------------------------------
Diluted
Net Earnings
IMG CMG Corporate Total Income Per Share
----- ----- --------- ------ ------ ---------
2001
First Quarter $47.8 $53.7 ($1.6) $99.9 $59.7 $0.34
Second Quarter $49.7 $49.7 ($1.2)(a) $98.2(a) $61.0(a) $0.35(a)
2000
First Quarter $37.9 $46.5 ($1.9) $82.5 $50.5 $0.29
Second Quarter $41.7 $47.1 ($1.9) $86.9 $53.1 $0.31
Third Quarter $42.7 $47.9 ($1.9) $88.7 $54.8 $0.31
Fourth Quarter $47.5 $53.1 ($1.6) $99.0 $59.8 $0.34
------ ------ ------ ------ ------ -----
Total 2000 $169.8 $194.6 ($7.3) $357.1 $218.2 $1.25
====== ====== ====== ====== ====== =====
(a) Excludes one-time transaction and integration costs related to
the Geneva acquisition totalling $31.8 ($26.3 after-tax) or
$0.15 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 first half of 2001 assuming the new accounting had been
effective at the beginning of 2000.
NOTE: Multimedia assets relating to this story will be available for journalists to download beginning today at www.newstream.com and at www.businesswire.com Note: A Photo is available at URL URL in full Uniform Resource Locator Address of a resource on the Internet. The resource can be any type of file stored on a server, such as a Web page, a text file, a graphics file, or an application program. : http://www.businesswire.com/cgi-bin/photo.cgi?pw.072501/bb3 |
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