Convergys Corporation Reports Second Quarter Financial Results.Business Editors NOTE: Multimedia assets available CINCINNATI--(BUSINESS WIRE)--July 23, 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 SECOND QUARTER: Excluding Goodwill Amortization and Special Items in All Periods Presented: -- IMG revenue should decrease between 2 and 4 percent for all of 2002 and CMG revenue is expected to remain relatively flat when compared to 2001. -- Operating margin for IMG may decline by approximately one percentage point compared to last year, and CMG's operating margin could decline by one-half to one percentage point. This margin guidance reflects the new accounting rules effective January 1, 2002, that exclude goodwill amortization expense applied to both 2001 and 2002. -- Convergys' new 2002 EPS guidance is $1.35 to $1.41. -- Convergys expects third quarter EPS of $0.34 to $0.37. Convergys Corporation (NYSE:CVG), the global leader in integrated billing, employee care, and customer care services, announced today its financial results for the second quarter ended June June: see month. 30, 2002. For the second quarter 2002, total revenues of $572.7 million were slightly higher compared with $571.2 million reported in the second quarter of 2001. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. decreased 4 percent to $94.5 million from $98.5 million in the same period last year reflecting the impact of higher wage, salary, and medical benefits costs. Operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: decreased to 16.5 percent from 17.2 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 $3.0 million compared with $2.8 million from the prior year. Interest expense for the quarter was $2.3 million, which is down from $5.3 million in the second quarter of 2001 as a result of lower debt and lower interest rates. Net income of $59.1 million decreased 3 percent compared with $61.0 million reported in the second quarter of 2001, while 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 remained flat at $0.35, resulting from the company's share repurchases Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. . For the six months ended June 30, 2002, revenues of $1,160.2 million were down slightly compared with $1,162.7 million in the same period last year. Operating income decreased 3 percent to $193.0 million from $198.4 million in the same period last year. The company's cellular partnership investment contributed pre-tax earnings of $3.9 million compared with $4.6 million in the prior year. Net income of $118.7 million was slightly lower than the $120.7 million from the first six months of 2001, while earnings 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 remained flat at $0.69 as average shares outstanding dropped from 175.5 million to 171.7 million. As required by the new accounting rules related to business combinations, effective January January: see month. 1, 2002, Convergys no longer amortizes goodwill resulting from acquisitions. To provide comparative financial information, the 2001 results are presented here on a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma basis assuming the new accounting rules had been effective at the beginning of 2001. The results as reported under the old accounting rules for the second quarter 2001 and the six months ended June 30, 2001, included goodwill amortization of $9.3 million ($7.4 million after tax or $0.04 per diluted share) and $18.7 million ($15.0 million after tax or $0.08 per diluted share), respectively. Additionally, the 2001 pro forma financial information excludes the impact of a $31.8 million ($26.3 million after tax or $0.15 per diluted share) special item recorded in the second quarter of 2001 for the transaction and integration costs related to the 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) acquisition. Including goodwill amortization and the special item, operating income, net income and diluted earnings per share as reported were $57.4 million, $27.3 million and $0.16, respectively, for the second quarter 2001 and $147.9 million, $79.4 million and $0.45, respectively, for the six-months ended June 30, 2001. "The current business environment continues to be difficult for many of the clients we serve affecting their revenue generation and ability to invest in new customer services and technology, and that weakness is reflected in our flat earnings performance," said Jim Orr Orr , Robert Gordon Called "Bobby." Born 1948. Canadian-born hockey player. He led the National Hockey League in scoring in 1970 and 1975 and was the first defenseman to score more than 100 points in a season. Noun 1. , Chairman, President, and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Convergys. "We are meeting this business challenge by enhancing our product offerings through continuing investment in research and development (Next Generation Framework), expanding our international presence, especially 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 Asia Pacific, and acquiring new technology and capabilities. We are
positioning Convergys to benefit directly from the eventual economic
recovery with a return to strong growth rates Growth RatesThe compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. and improved market position." Second Quarter 2002 Highlights Convergys announced new and renewed re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. domestic contracts and implementations: -- IMG revenue should decrease between 2 and 4 percent for all of 2002 and CMG revenue is expected to remain relatively flat when compared to 2001. -- Operating margin for IMG may decline by approximately one percentage point compared to last year, and CMG's operating margin could decline by one-half to one percentage point. This margin guidance reflects the new accounting rules effective January 1, 2002, that exclude goodwill amortization expense applied to both 2001 and 2002. -- Convergys' new 2002 EPS guidance is $1.35 to $1.41. -- Convergys expects third quarter EPS of $0.34 to $0.37. Continuing to penetrate foreign markets with new and renewed international contracts, Convergys announced that: -- IMG revenue should decrease between 2 and 4 percent for all of 2002 and CMG revenue is expected to remain relatively flat when compared to 2001. -- Operating margin for IMG may decline by approximately one percentage point compared to last year, and CMG's operating margin could decline by one-half to one percentage point. This margin guidance reflects the new accounting rules effective January 1, 2002, that exclude goodwill amortization expense applied to both 2001 and 2002. -- Convergys' new 2002 EPS guidance is $1.35 to $1.41. -- Convergys expects third quarter EPS of $0.34 to $0.37. Convergys announced important employee care developments: -- IMG revenue should decrease between 2 and 4 percent for all of 2002 and CMG revenue is expected to remain relatively flat when compared to 2001. -- Operating margin for IMG may decline by approximately one percentage point compared to last year, and CMG's operating margin could decline by one-half to one percentage point. This margin guidance reflects the new accounting rules effective January 1, 2002, that exclude goodwill amortization expense applied to both 2001 and 2002. -- Convergys' new 2002 EPS guidance is $1.35 to $1.41. -- Convergys expects third quarter EPS of $0.34 to $0.37. Convergys continued its market-leading innovation by offering new and enhanced products and services: -- IMG revenue should decrease between 2 and 4 percent for all of 2002 and CMG revenue is expected to remain relatively flat when compared to 2001. -- Operating margin for IMG may decline by approximately one percentage point compared to last year, and CMG's operating margin could decline by one-half to one percentage point. This margin guidance reflects the new accounting rules effective January 1, 2002, that exclude goodwill amortization expense applied to both 2001 and 2002. -- Convergys' new 2002 EPS guidance is $1.35 to $1.41. -- Convergys expects third quarter EPS of $0.34 to $0.37. Convergys received two honors and additional recognition: -- IMG revenue should decrease between 2 and 4 percent for all of 2002 and CMG revenue is expected to remain relatively flat when compared to 2001. -- Operating margin for IMG may decline by approximately one percentage point compared to last year, and CMG's operating margin could decline by one-half to one percentage point. This margin guidance reflects the new accounting rules effective January 1, 2002, that exclude goodwill amortization expense applied to both 2001 and 2002. -- Convergys' new 2002 EPS guidance is $1.35 to $1.41. -- Convergys expects third quarter EPS of $0.34 to $0.37. July July: see month. 2002 Highlights to Date In addition to the news releases distributed in the second quarter, Convergys made the following announcements during July: -- IMG revenue should decrease between 2 and 4 percent for all of 2002 and CMG revenue is expected to remain relatively flat when compared to 2001. -- Operating margin for IMG may decline by approximately one percentage point compared to last year, and CMG's operating margin could decline by one-half to one percentage point. This margin guidance reflects the new accounting rules effective January 1, 2002, that exclude goodwill amortization expense applied to both 2001 and 2002. -- Convergys' new 2002 EPS guidance is $1.35 to $1.41. -- Convergys expects third quarter EPS of $0.34 to $0.37. Orr continued, "Convergys is a financially stable company with a solid balance sheet, excellent free cash flow, and low debt. Our ongoing stock repurchase plan stock repurchase plan 1. See buyback. 2. See self-tender. (under which we bought approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 2.5 million shares in the second quarter) confirms our confidence and enthusiasm for our strong fundamentals and continued growth, and is consistent with our focus on building and delivering value to shareowners. The second quarter of 2002 once again demonstrates our ability to produce solid financial results despite the challenging economic environment." Operating Performance by Segment Information Management Group (IMG IMG International medical graduate, see there ) Excluding intercompany sales, second quarter 2002 Information Management Group (IMG) revenues remained essentially flat at $229.2 million. 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 7 percent to $139.1 million from $129.9 million, reflecting 25 percent 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 the company's wireless clients, partially offset by lower contractual "per subscriber" rates. The data processing revenues also reflect an increase in cable telephony See cable telephone. processing for AT&T 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). and several smaller contract wins. Professional and consulting revenues decreased slightly to $50.5 million from $51.1 million. License and other revenues decreased 24 percent to $12.5 million reflecting the transition of IMG's license agreement with AT&T Broadband for residential and commercial 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. billing services to a data processing 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. agreement. International revenues decreased 15 percent to $27.1 million, resulting from lower software license revenues and the completion of the 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 Atlys implementation in the first half of 2001. Operating income of $50.4 million and operating margin of 22.0 percent for IMG were about the same as the $50.0 million and 21.8 percent, respectively, from the same period last year. Under the old accounting rules, where goodwill amortization of $3.4 million was recorded, IMG's operating income was $46.6 million in the second quarter of 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 (CMG) second quarter revenues were $343.5 million, up slightly compared to $341.8 million in the second quarter of 2001, reflecting strong growth in services provided to DirecTV DirecTV (trademarked as "DIRECTV") is a direct broadcast satellite (DBS) service based in El Segundo, California, USA, that transmits digital satellite television and audio to households in the United States, the Caribbean and Latin America except for Mexico. , Microsoft (Microsoft Corporation, Redmond, WA, www.microsoft.com) The most successful and influential software company. Microsoft's software and Intel's hardware pioneered the PC and revolutionized the computer industry. , Sprint, and other clients offset by reduced year-over-year spending by AT&T. Six of CMG's top ten clients posted double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. , year-over-year growth. Operating income for CMG decreased 8 percent to $45.7 million, from $49.7 million in last year's second quarter. Operating margin declined to 13.3 percent from 14.5 percent reported in the comparable year-ago period. CMG's results reflect the impact of higher wage, salary, and medical benefits costs, partially offset by the savings realized through continuous improvement programs and the restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). activities initiated during the third quarter of 2001. Under the old accounting rules, where goodwill amortization of $5.9 million was recorded, CMG's operating income was $43.8 million in the second quarter of 2001. Business Outlook The following forward looking-statements reflect Convergys Corporation's expectations as of July 23, 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 Given current economic factors including the continuing slowness of the global economy, the tight control of IT spending by telecom carriers, longer decision cycles, and slowing subscriber growth by leading wireless carriers, Convergys is modifying its 2002 Financial Guidance to the following: -- IMG revenue should decrease between 2 and 4 percent for all of 2002 and CMG revenue is expected to remain relatively flat when compared to 2001. -- Operating margin for IMG may decline by approximately one percentage point compared to last year, and CMG's operating margin could decline by one-half to one percentage point. This margin guidance reflects the new accounting rules effective January 1, 2002, that exclude goodwill amortization expense applied to both 2001 and 2002. -- Convergys' new 2002 EPS guidance is $1.35 to $1.41. -- Convergys expects third quarter EPS of $0.34 to $0.37. ABOUT CONVERGYS Convergys Corporation (NYSE:CVG), a member of the S&P 500 and the 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, is the global leader in integrated billing, employee care, and customer care services provided through outsourcing or licensing. We serve top companies in telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. , Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the , cable and broadband services See broadband and broadband service provider. , technology, financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , and other industries in more than 40 countries. We also provide integrated, outsourced 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 and their employees. This commitment is validated val·i·date tr.v. val·i·dat·ed, val·i·dat·ing, val·i·dates 1. To declare or make legally valid. 2. To mark with an indication of official sanction. 3. by the more than 1.5 million individual bills our software produces each day to support more than 120 million subscribers, and by the more than 1.7 million separate customer and employee contacts we manage each day, both live and via electronic interaction. Convergys(TM) employs more than 45,000 people in 47 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. , Europe, the Middle East, 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 and 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. are registered trademarks of Convergys Corporation.) CONFERENCE CALL NOTE: Convergys will host a 60-minute conference call on Wednesday Wednesday: see week. , July 24 at 10:00 AM, EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT , to discuss the company's second 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 may contain forward-looking statements that involve potential risks for Convergys Corporation. The future results of Convergys could differ materially from those discussed herein. Factors that could cause or contribute to such differences include, but are not limited to, the loss of a significant client, difficulties in completing or integrating acquisitions, potential terrorist activities and the United States' response thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. , and competitive and other factors disclosed 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 December: see month. 31, 2001, filed with the SEC by Convergys Corporation. The company has no current intention of updating any forward-looking statements that may be included herein.
CONVERGYS CORPORATION
Revenues, Net Income and Earnings Per Common Share
EXCLUDING GOODWILL AMORTIZATION AND SPECIAL ITEMS
In Millions Except Per Share Amounts
(Unaudited)
Second Quarter
Change
2002 2001 Amount %
Revenues:
- Information Mgmt. Grp. $ 231.8 $ 232.3 $ (0.5) -
- Customer Mgmt. Group 343.5 341.8 1.7 -
- Eliminations (2.6) (2.9) 0.3 (10)
--------- --------- ------- ---
--Total $ 572.7 $ 571.2 $ 1.5 -
Operating Income:
- Information Mgmt. Grp. $ 50.4 $ 50.0 $ 0.4 1
- Customer Mgmt. Group 45.7 49.7 (4.0) (8)
- Corporate & Other (1.6) (1.2)(a) (0.4) 33
--------- --------- ------- ---
--Total $ 94.5 $ 98.5 (a) $ (4.0) (4)
Net Income $ 59.1 $ 61.0 (a) $ (1.9) (3)
Earnings Per Common Share
- Basic $0.35 $0.36 (a) $(0.01) (2)
- Diluted $0.35 $0.35 (a) $ 0.00 -
Weighted Average Common Shares Outstanding
- Basic 167.3 169.8 (2.5)
- Diluted 170.9 175.5 (4.6)
Six Months
Change
2002 2001 Amount %
Revenues:
- Information Mgmt. Grp. $ 468.0 $ 454.9 $ 13.1 3
- Customer Mgmt. Group 697.7 714.0 (16.3) (2)
- Eliminations (5.5) (6.2) 0.7 (11)
--------- --------- ------- ---
--Total $1,160.2 $1,162.7 $ (2.5) -
Operating Income:
- Information Mgmt. Grp. $ 106.8 $ 97.8 $ 9.0 9
- Customer Mgmt. Group 89.7 103.4 (13.7) (13)
- Corporate & Other (3.5) (2.8)(a) (0.7) 25
--------- --------- ------- ---
--Total $ 193.0 $ 198.4 (a) $ (5.4) (3)
Net Income $ 118.7 $ 120.7 (a) $ (2.0) (2)
Earnings Per Common Share
- Basic $0.71 $0.71 (a) $ 0.00 (1)
- Diluted $0.69 $0.69 (a) $ 0.00 -
Weighted Average Common Shares Outstanding
- Basic 167.7 169.6 (1.9)
- Diluted 171.7 175.5 (3.8)
(a) Excludes one-time transaction and integration costs related to
the Geneva acquisition totaling $31.8 ($26.3 after tax) or $0.15 per
diluted share.
As a result of Financial Accounting Standards Board (FASB) new rules
related to the accounting for acquisitions, beginning January 1, 2002,
goodwill resulting from Convergys' acquisitions is no longer
amortized. Accordingly, in order to present comparative financial
information, the 2001 results are presented on a pro forma basis
assuming the new accounting had been effective at the beginning of
2001. The results as reported for the second quarter and six month
periods ended June 30, 2001 included $9.3 ($7.4 after tax or $0.04 per
diluted share) and $18.7 ($15.0 after tax or $0.08 per diluted share),
respectively, in goodwill amortization.
Convergys Corporation
Consolidated Statements of Income
EXCLUDING GOODWILL AMORTIZATION AND SPECIAL ITEMS
In Millions Except Per Share Amounts
(Unaudited)
For the Three Mo.s For the Six Mo.s
Ended June 30, % Ended June 30, %
2002 2001 Chg. 2002 2001 Chg.
Revenues:
Information Mgmt. Grp.
Data Processing $139.1 $129.9 7 $ 273.0 $ 256.3 7
Prof. & Consulting 50.5 51.1 (1) 103.6 92.3 12
License & Other 12.5 16.4 (24) 25.3 31.6 (20)
International 27.1 32.0 (15) 60.6 68.5 (12)
----- ------ -- ------- ------- --
External Revenues 229.2 229.4 - 462.5 448.7 3
Interco. Svcs. for CMG 2.6 2.9 (10) 5.5 6.2 (11)
----- ------ -- ------- ------- --
Total IMG Revenues 231.8 232.3 - 468.0 454.9 3
Customer Management Grp.
Communications 224.4 215.2 4 455.9 444.1 3
Technology 50.0 57.1 (12) 104.0 120.2 (13)
Financial Services 22.7 18.7 21 42.6 40.5 5
Other 46.4 50.8 (9) 95.2 109.2 (13)
----- ------ -- ------- ------- --
Total CMG Revenues 343.5 341.8 - 697.7 714.0 (2)
Eliminations & Other (2.6) (2.9) (10) (5.5) (6.2)(11)
----- ------ -- ------- ------- --
Total Revenues 572.7 571.2 - 1,160.2 1,162.7 -
Costs & Expenses:
Cost of Providing
Services & Products 315.0 311.5 1 641.0 633.6 1
Selling, General & Admin. 99.8 97.8 2 202.9 205.6 (1)
Research & Development 29.2 28.5 2 55.4 54.4 2
Depreciation 30.6 31.6 (3) 60.8 64.1 (5)
Amortization 3.6 3.3 9 7.1 6.6 8
----- ------ -- ------- ------- --
Total Costs & Expenses 478.2 472.7 1 967.2 964.3 -
Operating Income 94.5 98.5 (4) 193.0 198.4 (3)
Equity in Earnings of
Cellular Partnership 3.0 2.8 7 3.9 4.6 (15)
Other Income (Exp.), Net 0.2 0.6 (67) (1.3) 0.7 -
Interest Expense (2.3) (5.3) (57) (5.9) (12.5)(53)
----- ------ -- ------- ------- --
Income Before Inc. Taxes 95.4 96.6 (1) 189.7 191.2 (1)
Income Taxes 36.3 35.6 2 71.0 70.5 -
----- ------ -- ------- ------- --
Net Income $ 59.1 $ 61.0 (3) $ 118.7 $ 120.7 (2)
===== ====== == ======= ======= ==
Earnings Per Common Share
-Basic $ 0.35 $ 0.36 (2) $ 0.71 $ 0.71 (1)
-Diluted $ 0.35 $ 0.35 (2) $ 0.69 $ 0.69 -
Weighted Average Common Shares Outstanding (millions)
-Basic 167.3 169.8 167.7 169.6
-Diluted 170.9 175.5 171.7 175.5
Other Data
-Operating Margin 16.5% 17.2% 16.6% 17.1%
Market Price Per Share
High $ 30.79 $ 44.35 $ 37.98 $ 50.25
Low $ 18.14 $ 27.80 $ 18.14 $ 27.80
Close $ 19.48 $ 30.25 $ 19.48 $ 30.25
Excludes one-time transaction and integration costs related to the
Geneva acquisition totaling $31.8 ($26.3 after tax) or $0.15 per
diluted share.
As a result of Financial Accounting Standards Board (FASB) new rules
related to the accounting for acquisitions, beginning January 1, 2002,
goodwill resulting from Convergys' acquisitions is no longer
amortized. Accordingly, in order to present comparative financial
information, the 2001 results are presented on a pro forma basis
assuming the new accounting had been effective at the beginning of
2001. The results as reported for the second quarter and six month
periods ended June 30, 2001 included $9.3 ($7.4 after tax or $0.04 per
diluted share) and $18.7 ($15.0 after tax or $0.08 per diluted share),
respectively, in goodwill amortization.
Convergys Corporation
Consolidated Balance Sheets
In Millions
(Unaudited)
June 30, Dec. 31,
2002 2001
Assets
Cash and Cash Equivalents $ 23.8 $ 41.1
Receivables - Net 463.7 413.6
Other Current Assets 71.1 68.4
Property & Equipment - Net 330.9 350.4
Other Assets 863.2 869.4
--------- ---------
Total Assets $ 1,752.7 $ 1,742.9
Liabilities and Shareholders' Equity
Debt Maturing in One Year $ 118.0 $ 129.9
Other Current Liabilities 329.6 362.5
Other Liabilities 25.1 20.3
Long-Term Debt 4.1 3.6
Common Shareholders' Equity 1,275.9 1,226.6
--------- ---------
Total Liabilities
& Shareholders' Equity $ 1,752.7 $ 1,742.9
Convergys Corporation
Information Management Group
Operating Segment Data
Excluding Goodwill Amortization and Special Items
In Millions
(Unaudited)
For the Three Mo.s For the Six Mo.s
Ended June 30, % Ended June 30, %
2002 2001 Chg. 2002 2001 Chg.
Revenues:
Data Processing $139.1 $129.9 7 $273.0 $256.3 7
Prof. & Consulting 50.5 51.1 (1) 103.6 92.3 12
License & Other 12.5 16.4 (24) 25.3 31.6 (20)
International 27.1 32.0 (15) 60.6 68.5 (12)
----- ------ -- ----- ----- --
External Revenues 229.2 229.4 - 462.5 448.7 3
Interco. Svcs. for CMG 2.6 2.9 (10) 5.5 6.2 (11)
----- ------ -- ----- ----- --
Total IMG Revenues 231.8 232.3 - 468.0 454.9 3
Costs & Expenses:
Cost of Providing
Services & Products 107.1 112.8 (5) 217.3 216.2 1
Selling, General & Admin. 35.7 33.9 5 70.6 71.6 (1)
Research & Development 26.2 25.0 5 49.5 47.8 4
Depreciation 11.0 9.5 16 21.0 19.0 11
Amortization 1.4 1.1 27 2.8 2.5 12
------ ------ -- ------ ----- --
Total Costs & Expenses 181.4 182.3 - 361.2 357.1 1
------ ------ -- ------ ----- --
Operating Income $ 50.4 $ 50.0 1 $106.8 $ 97.8 9
====== ====== ====== ======
As a result of Financial Accounting Standards Board (FASB) new rules
related to the accounting for acquisitions, beginning January 1, 2002,
goodwill resulting from Convergys' acquisitions is no longer
amortized. Accordingly, in order to present comparative financial
information, the 2001 results are presented on a pro forma basis
assuming the new accounting had been effective at the beginning of
2001. The Information Management Group operating results as reported
for the second quarter and six month periods ended June 30, 2001
included $3.4 and $6.5, respectively, in goodwill amortization.
Convergys Corporation
Customer Management Group
Operating Segment Data
Excluding Goodwill Amortization and Special Items
In Millions
(Unaudited)
For the Three Mo.s For the Six Mo.s
Ended June 30, % Ended June 30, %
2002 2001 Chg. 2002 2001 Chg.
Revenues:
Communications $224.4 $215.2 4 $ 455.9 $ 444.1 3
Technology 50.0 57.1 (12) 104.0 120.2 (13)
Financial Services 22.7 18.7 21 42.6 40.5 5
Other 46.4 50.8 (9) 95.2 109.2 (13)
------ ------ -- ------- ------- --
Total CMG Revenues 343.5 341.8 - 697.7 714.0 (2)
Costs & Expenses:
Cost of Providing
Services & Products 210.5 201.6 4 429.2 423.6 1
Selling, General & Admin. 64.2 64.2 - 132.6 134.5 (1)
Research & Development 3.0 3.6 (17) 5.9 6.6 (11)
Depreciation 17.9 20.5 (13) 36.0 41.8 (14)
Amortization 2.2 2.2 - 4.3 4.1 5
------ ------ -- ------- ------- --
Total Costs & Expenses 297.8 292.1 2 608.0 610.6 -
------ ------ -- ------- ------- --
Operating Income $ 45.7 $ 49.7 (8) $ 89.7 $ 103.4 (13)
====== ====== ======== =======
As a result of Financial Accounting Standards Board (FASB) new rules
related to the accounting for acquisitions, beginning January 1, 2002,
goodwill resulting from Convergys' acquisitions is no longer
amortized. Accordingly, in order to present comparative financial
information, the 2001 results are presented on a pro forma basis
assuming the new accounting had been effective at the beginning of
2001. The Customer Management Group operating results as reported for
the second quarter and six month periods ended June 30, 2001 included
$5.9 and $12.2, respectively, in goodwill amortization.
NOTE TO MEDIA : Multimedia assets relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc this story will be available for journalists to download 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 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.072302/bb14 |
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