Ruling Will Not Impact Company's 2003 Financial Guidance Previously Provided
DALLAS, March 10 /PRNewswire-FirstCall/ -- SOURCECORP(TM) (Nasdaq: SRCP),
one of the nation's leading providers of business process outsourcing
solutions, today reported that a Missouri county court just announced a ruling
in a matter the Company previously disclosed in its 2002 third quarter Form
10-Q. The case involves a single marketing agreement with a third party
entered into by the Company, which expired in February 2000. The county
court's ruling is in favor of the third-party plaintiff, which alleged that it
was entitled to commissions on revenues generated from certain customers of
the Company after the expiration of the agreement. SOURCECORP intends to
aggressively pursue its defenses in this matter, including an appeal. If
upheld, the decision will cost the Company approximately $2.2 million, plus
legal and interest costs during the appeal period.
Barry L. Edwards, EVP and Chief Financial Officer of SOURCECORP said, "We
were surprised and very disappointed with the decision of the trial court in
this case and we will aggressively pursue our appeal of this decision.
However, given the ruling of the court, in accordance with GAAP we are
increasing our accrued litigation cost for this item to reflect the full
$2.2 million. As a subsequent event for 2002, the amount must be included in
our 2002 annual results reported in our Form 10-K, which will be filed later
this month. As a result, previously reported 2002 diluted earnings per share
will be reduced by $.07 per share to $1.58 and S, G & A will be increased by
the additional reserve amount."
Mr. Edwards added, "This decision will have no real impact on our expected
financial results for 2003 or future periods. Therefore, we are not changing,
in any manner, the 2003 financial guidance we issued last month."
ABOUT SOURCECORP(TM)
SOURCECORP, Incorporated is a leading provider of value-added business
process outsourcing solutions to clients nationwide. SOURCECORP targets
information intensive, technology oriented, application driven industry
segments, such as healthcare, legal, financial services and government,
leveraging its expertise and experience in business processes for these and
other similar business profiles. Headquartered in Dallas, the Company employs
approximately 9,000 people and operates in over 40 states, Washington D.C. and
Mexico.
SOURCECORP is a component of both the S&P SmallCap 600 Index and the
Russell 2000 Index. In June 2001, the Company was cited among the Top 100 Hot
Growth Companies by BusinessWeek magazine. SOURCECORP has previously been
recognized twice by Forbes magazine as one of the 200 Best Small Companies,
based on return equity, sales growth, and EPS growth, and by FORTUNE magazine
as one of America's 100 Fastest Growing Public Companies. For more
information about SOURCECORP's solutions, including case-study examples, visit
the SOURCECORP website at http://www.srcp.com .
The statements in this press release, which are not historical fact, are
forward-looking statements that involve risks and uncertainties, which could
cause actual results to differ materially from such forward-looking
statements. These forward-looking statements include, but are not limited to,
any financial estimates and projections included in this press release and the
Company disclaims any intention or obligation to update or revise such
estimates or forecasts, except as required by law. The aforementioned risks
and uncertainties include, but are not limited to, the risks of integrating
our operating companies, of managing our growth, of the timing and magnitude
of technological advances, of the occurrences of future events that could
diminish our existing customers' needs for our services, of a change in the
degree to which companies continue to outsource business processes, as well as
the risks detailed in SOURCECORP's filings with the Securities and Exchange
Commission, including without limitation, those detailed under the heading
"Risk Factors" in the company's most recent annual report on Form 10-K.
SOURCECORP disclaims any intention or obligation to revise any forward-
looking statements, including financial estimates, whether as a result of new
information, future events, or otherwise, except as required by law.
SOURCE SOURCECORP
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Related links:
http://www.srcp.com
Company News On-Call:
http://www.prnewswire.com/comp/117986.html
CONTACT:
Barry Edwards, EVP & Chief Financial Officer,
+1-214-740-6690, or Lon Baugh, Director, Investor Relations,
+1-214-740-6683, both of SOURCECORP
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