COMMERCE CLEARING HOUSE, INC. REPORTS SECOND QUARTER FINANCIAL RESULTS
RIVERWOODS, Ill., July 22 /PRNewswire/ -- Tax and business law publisher Commerce Clearing House, Inc. (NASDAQ-NMS: CCLR A & B) said today that due primarily to a $36 million charge for restructuring and continued weakness in the legal and accounting industries, it had a second quarter net loss of $(17,536,000), or $(.51) per share, for the period ending June 30, 1993. Also, the company reported consolidated revenues of $132,010,000, down 18 percent from the same period in 1992. In the past two years, Commerce Clearing House (CCH) has undertaken a complete overhaul of its business units in an effort to reduce its cost structure, development products across a broader range of media, improve selling and marketing efforts and increase the quality of customer service. "We continue to move aggressively in response to the changing needs of our customers," said Edward L. Massie, president, CCH. "We are committed to our re-engineering efforts. It is critical to our continued growth, market leadership and profitability." During the second quarter of 1993, the company recorded a $36 million provision for costs related to workforce and facility reductions associated with the restructuring of its operations. The charge included the estimated costs for consolidating U.S. printing, shipping and compiling operations by the end of 1994, and streamlining and automating operations at its Legal Information Services (LIS) Business Unit during 1993. In addition, the provision included the final consolidation of the publishing and computer tax processing sales organizations (CCH Computax) in 1993 and elimination of a data processing center in Torrance, Calif. at the end of 1994. For the six-month period ending June 30, the company reported a net loss of $(10,030,000), or $(.29) per share, compared to a net loss of $(62,802,000), or $(1.80) per share, in 1992. For the six-month period, consolidated revenues of $296,410,000 decreased 19 percent from 1992. COMPUTAX Over the last year, CCH has moved its computax business away from mainframe service bureau tax return processing, to PC-based tax compliance software. As anticipated, these changes resulted in a significantly smaller business with revenues generated primarily in the fourth and first quarters. PUBLISHING Sales of the company's print product lines resulted in publishing revenues of $95,078,000 and $196,941,000 for the quarter and six-month period, down 4 percent from 1992, due to erosion in the accounting and legal markets.
However, this was partially offset by increases in electronic product revenue.
Operating results before the provision for restructured operations
decreased $7,190,000 for the quarter and $8,186,000 for the six-month period as compared to 1992. Operating expenses in the second quarter of 1993 included $4.7 million to cover the cost of problems associated with an Australian tax software product and related customer service issues.
LEGAL INFORMATION SERVICES Revenues for the company's Legal Information Services Unit increased 4 percent for the quarter. Operating results before provision for restructured operations decreased $569,000 and $3,347,000 for the quarter and the six-month periods, respectively. LIS operating results for 1993 were affected adversely by increased allocations of corporate data processing charges, costs incurred by accelerating development and implementation of administration systems in support of re-engineered operations and expansion of customer management functions. After completing its first phase of re-engineering, the unit is expected to benefit by greater use of automation and improved customer management, with improved operating earnings anticipated in the third and, particularly, the fourth quarters. Included in other income is a pre-tax gain of approximately $13 million that was realized on the sale of National Quotation Bureau and Facts On File, Inc. Effective Jan. 1, 1992, the company changed its method of accounting for post-retirement benefits, post-employment benefits and income taxes to comply with new Financial Accounting Standards Board pronouncements. The company recorded an after-tax charge of $50,502,000, or $1.45 per share, in 1992 for the cumulative effects of these changes in accounting methods. THE FUTURE "We're definitely beginning to see the results of our re-engineering effort and they will be increasingly visible in the next two quarters," said Massie. "Electronic products are doing well, LIS revenues are up and we are confident we'll see some good results from Computax. In addition, we are positioned to capitalize on the demands for products created by the pending tax legislation and health care reform." Commerce Clearing House, located in Riverwoods, is the leader in tax and business law publishing, software and services for the accounting and legal markets. The company currently publishes more than 300 print and electronic publications in the United States. In addition, CCH operates worldwide subsidiaries in Canada, Australia, New Zealand, Asia and Europe. COMMERCE CLEARING HOUSE, INC. Consolidated Summary Of Operations (Unaudited, in thousands, except share data) Three months Six months Periods ended June 30 1993 1992 1993 1992 Revenues: Publishing $ 95,078 $ 98,847 $ 196,941 $ 204,903 Computer processing services 11,817 37,958 50,368 111,954 Legal information services 25,115 24,088 49,101 48,064 Total $ 132,010 $ 160,893 $296,410 $364,921 Operating (loss) earnings before provision for restructured operations: Publishing $ (2,442) $ 4,748 $ 4,379 $ 12,565 Computer processing services (7,216) (705) (568) 20,620 Legal information services 222 791 (2,165) 1,182 Total (9,436) 4,834 1,646 34,367 Provision for restructured operations (36,000) (50,000) (36,000) (50,000) Operating loss (45,436) (45,166) (34,354) (15,633) Other income, net 15,460 2,491 17,209 4,473 Loss before income taxes and cumulative effect of accounting changes (29,976) (42,675) (17,145) (11,160) Income taxes (benefit) Expense (12,440) (12,280) (7,115) 1,140 Earnings before cumulative effect of accounting changes (17,536) (30,395) (10,030) (12,300) Cumulative effect of changes in method of accounting for: Postretirement and postemployment benefits other than pensions -- -- -- (51,675) Income taxes -- -- -- 1,173 Net (loss) earnings $ (17,536) $ (30,395) $ (10,030) $(62,802) (Loss) earnings per share of Class A and B common stock $(.51) $(.87) $(.29) $(1.80) Weighted average number of shares outstanding 34,745,732 34,786,239 34,747,809 34,811,322 -0- 7/22/93 /CONTACT: John I. Abernethy of Commerce Clearing House, 312-463-0074, ext. 2134/ (CCLR)
CO: Commerce Clearing House, Inc. ST: Illinois IN: PUB SU: ERN
WB -- NY095 -- 4788 07/22/93 16:54 EDT
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|Date:||Jul 22, 1993|
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