Pomeroy Computer Resources, Inc. - Financial Results, Third Quarter Ended October 5, 2002.Business Editors HEBRON Hebron, city (2003 est. pop. 155,000), the West Bank, called Al-Khalil in modern Arabic. Hebron is situated at an altitude of 3,000 ft (910 m) in a region where grapes, cereal grains, and vegetables are grown. , Ky.--(BUSINESS WIRE)--Nov. 6, 2002 Pomeroy Pomeroy may refer to:
in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :PMRY PMRY Pomeroy IT Resources (stock symbol) ), today announced results for the quarter and nine months ended October October: see month. 5, 2002. For the quarter, the Company recorded revenues of $170.9 million, 16.1% less than revenues of $203.7 million in Q3, 2001. For the nine months ended October 5, 2002, revenues decreased 8.4% to $553.8 million from $604.7 million in the first nine months of 2001. 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 of $.40 for the quarter ended October 5, 2002 were flat to $.40 in Q3, 2001. For the same period, diluted earnings per share, excluding a restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. , a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. tax benefit and a one-time charge for a litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. settlement (the adjustments) decreased 25% to $0.30. The adjustments for Q3, 2002, after taking into account the tax effect were: $0.141 million for the restructuring charge, $0.186 million for the litigation settlement and $1.6 million for the tax benefit. For the nine months ended October 5, 2002, diluted earnings per share of $1.12 represent a 15.5% increase from $.97 (which included a one time $1 million charge for a litigation settlement). For the same period, diluted earnings per share of $1.05, excluding the adjustments, represent a 2.9% increase from $1.02, excluding the charge for a litigation settlement ($0.610 million after tax effect), in the comparable period in 2001. The adjustments for the nine-month period in fiscal 2002, after taking into account the tax effect were: $0.438 million for the restructuring charge, $0.186 million for the litigation settlement and $1.6 million for the tax benefit. The restructuring charge is related to consolidation of business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets . The tax benefit is associated with an increase in the tax basis of leased assets as a result of an accounting method change for tax purposes. The litigation settlement reported in Q3 2002 consists of a settlement for a single bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most preference claim. For its 2002 fiscal year, the Company has adopted FASB's Statement of Financial Accounting Standards No. 142 pursuant to which goodwill is no longer amortized. The 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 impact of applying FAS 142 to the financial results for 2001 is that diluted earnings per share would have been $.45 instead of $.40 for Q3, 2001, and $1.12 instead of $.97 for the nine months ended October 5, 2001. The Company also announced that its Board of Directors has authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: a program to repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. up to an additional 200,000 shares of the Company's outstanding common stock, which represents less than 1.6 % of its outstanding common stock, in open market purchases made from time to time at the discretion of the Company's management. The time and extent of the repurchases will depend on market conditions. The acquired shares will be held in treasury or cancelled can·cel v. can·celed also can·celled, can·cel·ing also can·cel·ling, can·cels also can·cels v.tr. 1. To cross out with lines or other markings. See Synonyms at erase. 2. . The Company anticipates financing the stock redemption The liberation of an estate in real property from a mortgage. Redemption is the process by which land that has been mortgaged or pledged is bought back or reclaimed. It is accomplished through a payment of the debt owed or a fulfillment of the other conditions. program out of working capital and the redemption program will be effectuated over the next 12 months. The Company recently completed the purchase of 150,000 shares of the Company's outstanding common stock pursuant to the previously announced stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program. "We continue to work on improving our business fundamentals business fundamentals The general background within which an economy operates including earnings, sales, wage rates, taxes, and inflation. Improving business fundamentals are generally viewed as bullish for stocks, although stock prices at any given point and feel success is demonstrated by our strong balance sheet, our enhanced return on assets Return on assets (ROA) Indicator of profitability. Determined by dividing net income for the past 12 months by total average assets. Result is shown as a percentage. ROA can be decomposed into return on sales (net income/sales) multiplied by asset utilization (sales/assets). ratio and our record $121.9 million working capital position," said President Stephen Stephen, 1097?–1154, king of England (1135–54). The son of Stephen, count of Blois and Chartres, and Adela, daughter of William I of England, he was brought up by his uncle, Henry I of England, who presented him with estates in England and France and E. Pomeroy. "Our continued profitability, despite depressed Depressed A description of a market, security, or product that is experiencing weak demand and lowering prices. Notes: A depressed market, security, or product implies that prices and volume are low. There are many reasons for a depressed market, security, or product. sales, is testament that our efforts to reduce expenses and increase operating efficiencies are paying off. We expect our focus on existing and potential customer relationships to produce results when the economy rebounds and there is an improvement in IT spending." As a service solution provider, Pomeroy offers three categories of service: enterprise consulting group, enterprise architecture solutions and client management services. The Pomeroy Companies have clientele across a broad spectrum of industries, governments and educational organizations. The Pomeroy Companies employ approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 1,600 individuals, more than half of whom are technical personnel, and maintain 28 regional facilities in Alabama Alabama, indigenous people of North America Alabama (ăləbăm`ə), indigenous people of North America whose language belongs to the Muskogean branch of the Hokan-Siouan linguistic stock (see Native American languages). , Florida Florida, state, United States Florida (flôr`ĭdə, flŏr`–), state in the extreme SE United States. A long, low peninsula between the Atlantic Ocean (E) and the Gulf of Mexico (W), Florida is bordered by Georgia and , Georgia Georgia, country, Asia Georgia (jôr`jə), Georgian Sakartvelo, Rus. Gruziya, officially Republic of Georgia, republic (2005 est. pop. 4,677,000), c.26,900 sq mi (69,700 sq km), in W Transcaucasia. , Indiana Indiana, state, United States Indiana, midwestern state in the N central United States. It is bordered by Lake Michigan and the state of Michigan (N), Ohio (E), Kentucky, across the Ohio R. (S), and Illinois (W). , Iowa, 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. , Minnesota Minnesota, state, United States Minnesota (mĭn'ĭsō`tə), upper midwestern state of the United States. It is bordered by Lake Superior and Wisconsin (E), Iowa (S), South Dakota and North Dakota (W), and the Canadian provinces , North Carolina North Carolina, state in the SE United States. It is bordered by the Atlantic Ocean (E), South Carolina and Georgia (S), Tennessee (W), and Virginia (N). Facts and Figures Area, 52,586 sq mi (136,198 sq km). Pop. , Ohio, Pennsylvania Pennsylvania (pĕnsəlvā`nyə), one of the Middle Atlantic states of the United States. It is bordered by New Jersey, across the Delaware River (E), Delaware (SE), Maryland (S), West Virginia (SW), Ohio (W), and Lake Erie and New York , South Carolina South Carolina, state of the SE United States. It is bordered by North Carolina (N), the Atlantic Ocean (SE), and Georgia (SW). Facts and Figures Area, 31,055 sq mi (80,432 sq km). Pop. (2000) 4,012,012, a 15. , Tennessee Tennessee, state, United States Tennessee (tĕn`əsē', tĕn'əsē`), state in the south-central United States. and West Virginia West Virginia, E central state of the United States. It is bordered by Pennsylvania and Maryland (N), Virginia (E and S), and Kentucky and, across the Ohio R., Ohio (W). Facts and Figures Area, 24,181 sq mi (62,629 sq km). Pop. . For the year ended January January: see month. 5, 2002, the Pomeroy Companies reported revenues of $809 million. Certain statements that are not purely historical constitute "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. " for purposes of the Securities Act of 1933 and the Securities and Exchange Act of 1934, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , and as such they involve known and unknown risks, uncertainties and other factors which may cause actual results to be materially different from those projected or anticipated. These statements are based on information available to the Company as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" and the Company disclaims any intention or obligation to update any such forward-looking statements. Factors which could cause actual results to differ materially from current expectations include, but are not limited to, the estimated needs of customers as conveyed to the Company, existing market conditions including the overall demand for IT products and services, the terms of applicable agreements and certification programs and the assumptions regarding the Company's performance thereunder, the Company's ability to attract and retain technical personnel and to identify and develop expertise in future-demanded services, the Company's ability to identify suitable acquisition candidates and successfully integrate acquired companies, the nature and volume of products and services anticipated to be delivered and the Company's ability to obtain sufficient volumes of products and provide services.
POMEROY COMPUTER RESOURCES, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands) January 5, October 5,
2002 2002
----------- ---------
ASSETS
Current assets:
Cash $ 2,875 $ 17,669
Accounts receivable:
Trade, less allowance of $627 and
$1,546 at January 5, 2002
and October 5, 2002, respectively 142,356 116,789
Vendor receivables, less allowance
of $16,112 at both January 5, 2002
and October 5, 2002 24,219 12,720
Net investment in leases 35,809 1,803
Other 5,413 647
-------- --------
Total receivables 207,797 131,959
-------- --------
Inventories 20,876 16,870
Other 8,468 9,504
-------- --------
Total current assets 240,016 176,002
-------- --------
Equipment and leasehold improvements:
Furniture, fixtures and equipment 29,920 31,622
Leasehold improvements 5,700 6,353
-------- --------
Total 35,620 37,975
Less accumulated depreciation 17,070 17,901
-------- --------
Net equipment and leasehold
improvements 18,550 20,074
-------- --------
Net investment in leases 22,438 1,578
Goodwill 57,454 60,528
Intangible assets 1,060 840
Other assets 2,200 3,107
-------- --------
Total assets $341,718 $262,129
======== ========
See notes to consolidated financial statements.
POMEROY COMPUTER RESOURCES, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands) January 5, October 5,
2002 2002
---------- ---------
LIABILITIES AND EQUITY
Current Liabilities:
Current portion of notes payable $ 27,190 $ 1,864
Accounts payable 86,447 39,620
Bank notes payable 11,882 --
Deferred revenue 2,751 2,278
Other current liabilities 11,908 10,349
-------- --------
Total current liabilities 140,178 54,111
-------- --------
Notes payable 10,213 --
Deferred taxes 565 2,714
Equity:
Preferred stock, $.01 par value;
authorized 2,000 shares
(no shares issued or outstanding) -- --
Common stock, $.01 par value;
authorized 20,000 shares
(12,759 and 12,847 shares issued
at January 5, 2002 and
October 5, 2002, respectively 128 128
Paid in capital 80,487 81,534
Retained earnings 110,979 125,363
-------- --------
191,594 207,025
Less treasury stock, at cost
(75 and 143 shares at January 5,
2002 and October 5, 2002, respectively) 832 1,721
-------- --------
Total equity 190,762 205,304
-------- --------
Total liabilities and equity $341,718 $262,129
======== ========
See notes to consolidated financial statements.
POMEROY COMPUTER RESOURCES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data) Three Months Ended
----------------------
October 5, October 5,
2001 2002
--------- ---------
Net sales and revenues:
Sales-equipment, supplies and leasing $ 167,948 $ 136,976
Service 35,761 33,945
--------- ---------
Total net sales and revenues 203,709 170,921
--------- ---------
Cost of sales and service:
Sales-equipment, supplies and leasing 152,393 125,777
Service 24,755 23,692
--------- ---------
Total cost of sales and service 177,148 149,469
--------- ---------
Gross margin 26,561 21,452
--------- ---------
Operating expenses:
Selling, general and administrative 14,455 12,551
Rent expense 936 786
Depreciation 1,149 1,158
Amortization 1,398 328
Provision for doubtful accounts 60 400
Litigation settlement -- 300
Restructuring charge -- 227
--------- ---------
Total operating expenses 17,998 15,750
--------- ---------
Income from operations 8,563 5,702
--------- ---------
Other expense (income):
Interest expense 197 112
Miscellaneous (66) (45)
--------- ---------
Net other expense 131 67
--------- ---------
Income before income tax 8,432 5,635
Net income tax expense 3,288 541
--------- ---------
Net income $ 5,144 $ 5,094
========= =========
Weighted average shares outstanding:
Basic 12,634 12,745
========= =========
Diluted 12,713 12,772
========= =========
Earnings per common share:
Basic $ 0.41 $ 0.40
========= =========
Diluted $ 0.40 $ 0.40
========= =========
See notes to consolidated financial statements.
POMEROY COMPUTER RESOURCES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data) Nine Months Ended
-----------------------
October 5, October 5,
2001 2002
--------- ---------
Net sales and revenues:
Sales-equipment, supplies and leasing $ 500,024 $ 453,352
Service 104,717 100,497
--------- ---------
Total net sales and revenues 604,741 553,849
--------- ---------
Cost of sales and service:
Sales-equipment, supplies and leasing 453,038 414,955
Service 75,251 69,520
--------- ---------
Total cost of sales and service 528,289 484,475
--------- ---------
Gross margin 76,452 69,374
--------- ---------
Operating expenses:
Selling, general and administrative 43,477 39,475
Rent expense 2,744 2,550
Depreciation 3,436 3,485
Amortization 4,114 824
Provision for doubtful accounts 120 900
Litigation settlement 1,000 300
Restructuring charge -- 714
--------- ---------
Total operating expenses 54,891 48,248
--------- ---------
Income from operations 21,561 21,126
--------- ---------
Other expense (income):
Interest expense 1,563 437
Miscellaneous (185) (53)
--------- ---------
Net other expense 1,378 384
--------- ---------
Income before income tax 20,183 20,742
Net income tax expense 7,871 6,358
--------- ---------
Net income $ 12,312 $ 14,384
========= =========
Weighted average shares outstanding:
Basic 12,600 12,729
========= =========
Diluted 12,700 12,799
========= =========
Earnings per common share:
Basic $ 0.98 $ 1.13
========= =========
Diluted $ 0.97 $ 1.12
========= =========
See notes to consolidated financial statements.
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