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COMDISCO REPORTS SECOND QUARTER OPERATING RESULTS; MERGES LEASING AND DISASTER RECOVERY SALES ORGANIZATIONS; DECLARES QUARTERLY DIVIDEND

COMDISCO REPORTS SECOND QUARTER OPERATING RESULTS; MERGES LEASING AND DISASTER RECOVERY SALES ORGANIZATIONS; DECLARES QUARTERLY DIVIDEND
 ROSEMONT, Ill., April 27 /PRNewswire/ -- Comdisco, Inc. (NYSE, MSE: CDO) today reported operating results for its second fiscal quarter ended March 31, 1992.
 For the quarter, the company reported total revenues of $534 million, down 8 percent from the prior year period. The company reported a net loss for the quarter of ($35) million, compared with net earnings of $23 million for the prior year period. Per share results for the quarter were a net loss of ($.86) versus net earnings of $.56 for the prior year period.
 The earnings shortfall was primarily due to an $80 million pre-tax charge to earnings for the quarter, previously announced by the company on March 4, 1992. The charge breaks down as follows: (1) an addition of $25 million to the receivables reserve, (2) the establishment of a litigation expense reserve of $20 million, and (3) an organizational restructuring charge of $35 million. Excluding the $80 million pre-tax charge, earnings from continuing operations for the quarter were $13 million, or $.32 per share.
 For the six months ended March 31, 1992, the company reported total revenues of $1,087 million, down 2 percent from the prior year period. Net loss for the six months was ($15) million, versus net earnings of $46 million for the prior year period. Per share results for the six months were a net loss of ($.36) versus net earnings of $1.14 for the prior year period. Excluding the $80 million pre-tax charge, earnings from continuing operations for the six months were $33 million, or $.82 per share.
 Despite the shortfall in earnings for the quarter, remarketing activity was strong, particularly in the peripheral and high-tech areas. Because of the increase in remarketing activity as well as improvements related to the restructuring of the company, Comdisco anticipates improved earnings from continuing operations for the remainder of the fiscal year.
 The company also announced that it is reorganizing its business into two primary groups of products and services. The first is its traditional high-tech leasing and remarketing activities, headed by Bob Bardagy, executive vice president. The second is its business continuity group, headed by Ray Hipp, newly appointed executive vice president. Hipp has also been appointed a director of the company. The sales organizations of both groups now report to Jack Slevin, newly appointed executive vice president.
 Kenneth N. Pontikes, chairman of the board and president, cited changing customer requirements as the catalyst for the company's strategic realignment, noting especially the trends toward downsizing, decentralization, and cost reduction. "Technology -- and the way customers employ it -- is changing at an incredible speed," Pontikes said. "It is one of their most valuable and costly assets. The irony is that customers need to upgrade more frequently to remain competitive and keep pace with technology, yet at the same time they are under tremendous pressure to control costs."
 In light of the way the information technology market is changing, the company said it no longer makes sense to operate these groups separately.
 "Our new integrated organization should allow us to capitalize on the core strengths we already have in place, but deliver an array of services in a more efficient, effective and coordinated way -- for both Comdisco and our customers," Pontikes said.
 Pontikes said that in the months ahead customers can expect to see a new, focused, more efficient Comdisco. The company's current staff reductions, systems enhancements, internal procedural improvements, executive compensation revisions, and organizational changes are part of a new direction for Comdisco. Pontikes reiterated that the net result of these measures should reduce selling, general, and administrative costs by approximately $60 million for the remainder of fiscal 1992 and 1993 combined.
 The board of directors today declared a quarterly cash dividend of $.07 per share. The dividend will be payable on June 8, 1992, to stockholders of record as of May 22, 1992. Comdisco currently has 40,688,173 shares of common stock outstanding.
 Comdisco is one of the world's largest providers of solutions that help businesses acquire, manage, and protect their high-tech assets.
 COMDISCO, INC., AND SUBSIDIARIES
 Consolidated Statements of Earnings
 (In millions except per share data)
 (Unaudited)
 Periods ended Three Months Six Months
 March 31 1992 1991 1992 1991
 REVENUE
 Leasing:
 Operating $288 $289 $585 $572
 Direct financing 51 56 101 115
 Sales-type 49 82 139 144
 Total leasing 388 427 825 831
 Sales 88 110 150 193
 Disaster recovery 49 37 91 71
 Other 9 6 21 12
 Total revenue 534 580 1,087 1,107
 COSTS AND EXPENSES
 Leasing:
 Operating 215 209 430 416
 Sales-type 33 59 104 103
 Total leasing 248 268 534 519
 Sales 77 97 131 169
 Disaster recovery 45 33 83 63
 Selling, general and administrative:
 Recurring 51 51 102 97
 Litigation and loss reserves (A) 45 - 45 -
 Restucturing charge (B) 35 - 35 -
 Interest 91 93 181 185
 Total costs and expenses 592 542 1,111 1,033
 Earnings (loss) from continuing
 operations before income taxes (58) 38 (24) 74
 Income taxes (benefit) (23) 15 (9) 29
 Earnings (loss) from cont. opers. (35) 23 (15) 45
 Earnings from discontinued oil and
 gas activities (net of income taxes) - - - 1
 Net earnings (loss) (35) 23 (15) 46
 Retained earns. at beginning of period 649 594 632 574
 Net earnings (loss) (35) 23 (15) 46
 Stock dividend (30) - (30) -
 Dividends paid (2) (2) (5) (5)
 Retained earnings at end of period $582 $615 $582 $615
 Net earnings (loss) per common and
 common equivalent share:
 Earnings (loss) from cont. opers. $(.86) $.56 $(.36) $1.11
 Earnings from discontinued oil
 and gas activities - - - .03
 Net earnings (loss) $(.86) $.56 $(.36) $1.14
 Common and common equivalent shares
 outstanding 41 41 41 41
 (A) -- Litigation and Loss Reserves. In fiscal 1991 and 1992, International Business Machines ("IBM") and IBM Credit Corporation filed actions against the company. Additional costs associated with these lawsuits, including outside counsel and additional in-house personnel, increased selling, general and administrative expenses in fiscal 1991 and the first half of fiscal 1992. The company intends to vigorously defend itself in these matters and, accordingly, during the quarter ended March 31, 1992, established a $20 million litigation reserve ($12 million after-tax), to cover estimated costs associated with the ultimate resolution of these matters.
 During the quarter ended March 31, 1992, the company recorded a $25 million provision for receivable losses ($15 million after-tax), reflecting continued uncertainty in the U.S. economy and its impact on the credit quality of the company's lease portfolio.
 (B) -- Restructuring Charges. During the quarter ended March 31, 1992, the company took several actions to realign its businesses, reduce its overall cost structure and withdraw from the leasing of certain high technology equipment. These actions resulted in a restructuring charge of approximately $35 million ($21 million after-tax) for anticipated employee severance programs and excess facilities and lease termination costs, primarily related to planned reorganizations of the company's headquarters and U.S. marketing operations. The company established a target reduction in work force of 10 percent. Although the company continues to develop specific plans to implement these corporate-wide cost reductions, the company has taken significant steps toward its goals, including a 5 percent reduction in staff through March 31, 1992.
 -0- 4/27/92
 /CONTACT: James J. Hyland of Comdisco, 708-698-3000/
 (CDO) CO: Comdisco Inc. ST: Illinois IN: SU: ERN DIV


GK-HM -- NY023 -- 3031 04/27/92 10:37 EDT
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