Pomeroy IT Solutions, Inc. - Financial Results, Third Quarter Ended October 5, 2004.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. -- 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 third quarter and nine months ended October October: see month. 5, 2004. For the third quarter, the Company's total net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight and revenues increased $42.4 million, or 26.8%, to $200.5 million in the third quarter of fiscal 2004 from $158.1 million in the third quarter of fiscal 2003. 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 $0.15 for the quarter ended October 5, 2004, represent a decline of 28.6% from $0.21 in the third quarter of fiscal 2003. For the same period, diluted earnings per share, excluding the non-recurring items described below, increased 28.6% to $0.27 from $0.21 in the comparable period. For the nine months ended October 5, 2004, the Company's total net sales and revenues increased $98.5 million, or 22.6%, to $533.9 million in the first nine months of fiscal 2004 from $435.4 million in the first nine months of fiscal 2003. For the nine months ended October 5, 2004, diluted earnings per share of $0.58 represent an 18.4% increase from $0.49 in the comparable period in 2003. For the same period, diluted earnings per share, excluding the non-recurring items in 2004 described below and excluding a $92 thousand 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 in 2003, increased 40.0% to $0.70 from $0.50 in the comparable period. As previously reported in Form 8-K/A filed October 6, 2004, the Company has recorded 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. , in conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with certain Pomeroy IT Solutions exit costs. This charge is related to the acquisition of Alternative Resources Corporation ("ARC arc, in electricity arc, in electricity, highly luminous and intensely hot discharge of electricity between two electrodes. The arc was discovered early in the 19th cent. by the English scientist Sir Humphry Davy, who so named it because of its shape. "). In addition, the Company accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. for a severance package A severance package is pay and benefits an employee receives when they leave employment at a company. In addition to the employee's remaining regular pay, it may include some of the following:
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. "We are pleased that the process of integrating operations and cultures with our merger partner ARC has not slowed down our momentum as indicated by our sequential One after the other in some consecutive order such as by name or number. and year over year revenue and earnings growth. Our balance sheet remains strong with a solid working capital position and a virtually untapped credit facility," 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. As a national solutions provider, Pomeroy is uniquely positioned to provide services that span consulting, infrastructure and life cycle services. Pomeroy maintains a technical workforce of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 4,000 skilled employees with the capabilities and expertise to plan, design, implement, support all categories of its solution offerings. Pomeroy has the ability to leverage its extensive portfolio of services to assist clients in reducing their total cost of ownership, allowing these savings to be reinvested back into the customer's core business. Pomeroy has clientele across a broad spectrum of industries, governments and educational organizations. For the year ended January January: see month. 5, 2004, Pomeroy IT Solutions reported revenues of $598 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 IT SOLUTIONS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands) October 5, January 5,
2004 2004
----------- -----------
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $9,599 $40,200
Accounts receivable:
Trade, less allowance of $1,564 and $2,556
at October 5, 2004 and January 5, 2004,
respectively 117,477 111,324
Vendor receivables, less allowance of $100
at October 5, 2004 and January 5, 2004 5,052 7,226
Net investment in leases 4,377 2,056
Other 2,148 2,043
----------- -----------
Total receivables 129,054 122,649
Inventories 17,680 12,453
Other 6,444 5,193
----------- -----------
Total current assets 162,777 180,495
Equipment and leasehold improvements:
Furniture, fixtures and equipment 30,746 29,517
Leasehold improvements 6,304 6,438
----------- -----------
Total 37,050 35,955
Less accumulated depreciation 21,158 19,696
----------- -----------
Net equipment and leasehold
improvements 15,892 16,259
Net investment in leases,
net of current portion 2,219 2,935
Goodwill, net 120,403 67,664
Intangible assets, net 3,864 436
Other assets 3,509 1,410
----------- -----------
Total assets $308,664 $269,199
=========== ===========
POMEROY IT SOLUTIONS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data) October 5, January 5,
2004 2004
----------- ----------
(unaudited)
LIABILITIES AND EQUITY
Current Liabilities:
Current portion of notes payable $912 $912
Accounts payable 63,325 50,051
Bank notes payable 2,853 -
Deferred revenue 3,487 3,988
Accrued restructuring and severance charges 8,875 -
Other current liabilities 16,387 8,758
----------- ----------
Total current liabilities 95,839 63,709
Notes payable, less current portion 250 913
Deferred income taxes 5,446 4,780
Commitments and contingencies
Equity:
Preferred stock, $.01 par value;
authorized 2,000 shares,
(no shares issued or outstanding) - -
Common stock, $.01 par value;
authorized 20,000 shares,
(13,021 and 12,943 shares issued at
October 5, 2004 and
January 5, 2004, respectively) 130 130
Paid-in-capital 83,297 82,696
Accumulated other comprehensive loss (36) -
Retained earnings 132,484 125,250
----------- ----------
215,875 208,076
Less treasury stock, at cost
(778 and 738 shares at
October 5, 2004 and January 5, 2004,
respectively) 8,746 8,279
----------- ----------
Total equity 207,129 199,797
----------- ----------
Total liabilities and equity $308,664 $269,199
=========== ==========
POMEROY IT SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data) Three Months Ended
--------------------------
October 5, October 5,
2004 2003
-------------- -----------
(unaudited) (unaudited)
Net sales and revenues:
Sales-equipment, supplies and leasing $139,403 $125,698
Service 61,101 32,374
-------------- -----------
Total net sales and revenues 200,504 158,072
Cost of sales and service:
Sales-equipment, supplies and leasing 129,621 116,825
Service 44,433 23,612
-------------- -----------
Total cost of sales and service 174,054 140,437
-------------- -----------
Gross profit 26,450 17,635
Operating expenses:
Selling, general and administrative 18,818 11,331
Rent expense 906 802
Depreciation 1,052 1,228
Amortization 122 63
Restructuring and severance charges 2,423 -
-------------- -----------
Total operating expenses 23,321 13,424
-------------- -----------
Income before other expense (income) and
income tax 3,129 4,211
Other expense (income):
Interest, net 32 (7)
Other 4 16
-------------- -----------
Total other expense, net 36 9
-------------- -----------
Income before income tax 3,093 4,202
Income tax expense 1,221 1,639
-------------- -----------
Net income $1,872 $2,563
============== ===========
Weighted average shares outstanding:
Basic 12,240 12,226
============== ===========
Diluted 12,366 12,369
============== ===========
Earnings per common share:
Basic $0.15 $0.21
============== ===========
Diluted $0.15 $0.21
============== ===========
POMEROY IT SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data) Nine Months Ended
--------------------------
October 5, October 5,
2004 2003
-------------- -----------
(unaudited) (unaudited)
Net sales and revenues:
Sales-equipment, supplies and leasing $407,724 $341,879
Service 126,149 93,523
-------------- -----------
Total net sales and revenues 533,873 435,402
Cost of sales and service:
Sales-equipment, supplies and leasing 377,638 316,186
Service 91,685 67,887
-------------- -----------
Total cost of sales and service 469,323 384,073
-------------- -----------
Gross profit 64,550 51,329
Operating expenses:
Selling, general and administrative 44,570 34,777
Rent expense 2,451 2,397
Depreciation 2,968 3,643
Amortization 201 360
Provision for doubtful accounts - 200
Restructuring and severance charges 2,423 -
-------------- -----------
Total operating expenses 52,613 41,377
-------------- -----------
Income before other expense (income) and
income tax 11,937 9,952
Other expense (income):
Interest, net 1 (21)
Other 27 1
-------------- -----------
Total other expense, net 28 (20)
-------------- -----------
Income before income tax 11,909 9,972
Income tax expense 4,675 3,889
-------------- -----------
Net income $7,234 $6,083
============== ===========
Weighted average shares outstanding:
Basic 12,243 12,340
============== ===========
Diluted 12,419 12,390
============== ===========
Earnings per common share:
Basic $0.59 $0.49
============== ===========
Diluted $0.58 $0.49
============== ===========
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