DALLAS, May 9 /PRNewswire-FirstCall/ -- SOURCECORP(TM) (Nasdaq: SRCP), one
of the nation's leading providers of business process outsourcing solutions,
today reported 2002 first quarter diluted earnings per share of $.34 on
revenues of $103.3 million. "SOURCECORP's first quarter earnings per share
results were in line with the financial guidance provided by the Company last
February," said Ed H. Bowman, Jr., President and CEO of SOURCECORP.
First Quarter Summary
Mr. Bowman continued, "During the first quarter of 2002, the Company made
significant progress towards the goals we established for the quarter. We
completed our cost reduction plan, announced in early January, on schedule; we
closed the acquisition of UIS; we achieved our targeted cash flows from
operations and continued to strengthen the balance sheet by reducing the ratio
of debt to total capital and decreasing receivables' days outstanding.
"The Company recorded slightly stronger than expected revenues during the
first quarter, with a sequential increase of approximately 3.4 percent from
the fourth quarter of 2001. The Company's revenue mix for the quarter
continued to reflect slightly lower than expected results from our Direct Mail
and Class Action Claims Administration businesses offset by stronger than
expected results from our Information Management business; and, the remainder
of our business continued to perform in line with expectations.
"New sales were strong during the quarter. The Company closed sales
expected to produce total revenues of approximately $47.7 million, a
sequential increase of 45 percent over sales during the fourth quarter of
2001. These new sales for the first quarter included nine large sales, each
for more than $1 million in total expected revenues, three of which were with
new customers. We were pleased with these 2002 first quarter new business
results."
Summary of Financial Highlights
(in $ millions, except for earnings per share data)
First Quarter
FY 2002 FY 2001 Change
Revenue $103.3 $103.9 -.6%
Operating Income $11.3 $19.2(A) -41.2%
Net Income $6.0 $10.8(A) -44.4%
Diluted EPS $.34 $.64(A) -46.9%
Note: For comparison purposes to the first quarter of 2002, the Company's
revenues and earnings per share discussed in this press release consist
of its results from ongoing operations and exclude the results of
operations for all units divested during the second and third quarters of
2001.
(A) Excludes goodwill amortization to reflect results comparable under
the new accounting rules for intangibles.
The Company continued to produce solid cash flow consisting of
$10.7 million in cash flow from operations for the first quarter of 2002, in
line with the Company's expectations. The ratio of outstanding debt to total
capital decreased to 29.8 percent for the quarter; and, days sales outstanding
during the first quarter decreased approximately 1.5 days from the fourth
quarter of 2001 to 49 days for ongoing operations.
Also as required by FASB, the Company adopted two accounting rules, which
became effective for the Company for the first quarter of 2002. The Company
adopted EITF Topic No. D-103, "Income Statement Characterization of
Reimbursements Received for 'Out-of-Pocket' Expenses Incurred" and
SFAS No. 142, "Goodwill and Other Intangible Assets". The effect of these
rules are included in the financial results described herein and are discussed
in more detail in the attached financial statement information and the
Company's Form 8-K being filed today.
Outlook for Second Quarter and Full Year of 2002
The Company is providing guidance consisting of estimated revenue and
earnings per share for its second quarter and full year of 2002 as follows:
-- Second quarter revenues and earnings per share of approximately $100 to
$103 million and $.41 to $.44, respectively.
-- The Company is increasing its full year revenue estimate to
$415 million, which includes the expected increase in revenue arising
from the Company's required adoption of the new accounting rules for
"pass through" expenses noted above, and reaffirming its earnings per
share estimates of $1.70. The Company is also updating its upside
estimates of potential full-year revenues and earnings per share to
approximately $435 million and $1.90, respectively, which may be
achieved principally through large projects, particularly with its
Class Action Claims business.
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.,
Puerto Rico, 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 rapid 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.
SOURCECORP(TM)
Summary of Financial Data
In Thousands (Except Earnings Per Share)
Three Months Ended
March 31,
2002 2001
(Unaudited)
Actual(B) Pro-Forma(A),(B)
Total Revenue $ 103,284 $103,935
Cost of Services 62,201 60,139
Depreciation 3,450 3,062
Gross Profit 37,633 40,734
SG&A 26,274 21,544
Amortization 89 ---(C)
Operating Income 11,270 19,190
Other (income) expense 1,587 2,256
Income before income taxes 9,683 16,934
Provision for income taxes 3,680 6,181(C)
Net Income $6,003 $10,753
Weighted Avg. Shares
Basic 17,296 16,212
Diluted 17,817 16,876
Earnings Per Share
Basic $0.35 $ 0.66(C)
Diluted $0.34 $ 0.64(C)
(A) Excludes operating results of businesses divested during the second
and third quarters of 2001. The results of these divested businesses
include $21,270 of Revenue, $14,980 of Cost of Services,
$851 of Depreciation, $5,911 of SG&A, $457 of amortization,
$54 of other income and $333 of related tax benefit.
(B) As required by the Financial Accounting Standards Board, the Company
adopted EITF Topic No. D-103, "Income Statement Characterization of
Reimbursements Received for 'Out-of-Pocket' Expenses Incurred." This
pronouncement states that certain reimbursements received for
"out-of-pocket" expenses incurred in connection with providing
services should be characterized as revenue in the income statement.
This pronouncement requires retroactive treatment. The effect of
adopting this pronouncement increased the Company's Revenues and Cost
of Services by $2,022 for the three months ended March 31, 2002 and
increased the Company's Revenues by $3,801, Cost of Services by $3,439
and SG&A by $362 for the three months ended March 31, 2001.
(C) Effective January 1, 2002, the Company adopted SFAS No. 142, "Goodwill
and Other Intangible Assets" which discontinues amortization expense
of goodwill and other intangible assets with indefinite lives. For
comparative purposes, goodwill amortization of $2,035 and the related
tax benefit of $519 is excluded from the three months ended
March 31, 2001.
SOURCECORP(TM)
Summary of Financial Data
In Thousands (Except Earnings Per Share)
Three Months Ended
March 31 December 31
2002 2001
(Unaudited)
Actual(B) Pro-Forma(A),(B)
Total Revenue $ 103,284 $99,930
Cost of Services 62,201 59,897
Depreciation 3,450 3,429
Gross Profit 37,633 36,604
SG&A 26,274 25,278
Amortization 89 ---(C)
Operating Income 11,270 11,326
Other (income) expense 1,587 1,825
Income before income taxes 9,683 9,501
Provision for income taxes 3,680 3,468(C)
Net Income $6,003 $6,033
Weighted Avg. Shares
Basic 17,296 17,271
Diluted 17,817 17,637
Earnings Per Share
Basic $0.35 $ 0.35(C)
Diluted $0.34 $ 0.34(C)
(A) There were no pro-forma adjustments required in the fourth quarter of
2001 related to the businesses divested during the second and third
quarters of 2001.
(B) As required by the Financial Accounting Standards Board, the Company
adopted EITF Topic No. D-103, "Income Statement Characterization of
Reimbursements Received for 'Out-of-Pocket' Expenses Incurred." This
pronouncement states that certain reimbursements received for
"out-of-pocket" expenses incurred in connection with providing
services should be characterized as revenue in the income statement.
This pronouncement requires retroactive treatment. The effect of
adopting this pronouncement increased the Company's Revenues and Cost
of Services by $2,022 for the three months ended March 31, 2002 and
increased the Company's Revenues by $2,228, Cost of Services by $1,214
and SG&A by $1,014 for the three months ended December 31, 2001.
(C) Effective January 1, 2002, the Company adopted SFAS No. 142, "Goodwill
and Other Intangible Assets" which discontinues amortization expense
of goodwill and other intangible assets with indefinite lives. For
comparative purposes, goodwill amortization of $2,526 and the related
tax benefit of $817 is excluded from the three months ended
December 31, 2001.
SOURCECORP(TM)
CONSOLIDATED BALANCE SHEETS
In Thousands
March 31, December 31,
ASSETS 2002 2001
(Unaudited)
CURRENT ASSETS
Cash $441 $ 7,182
Accounts receivable (net) 88,660 88,547
Deferred tax asset 10,754 9,805
Other current 8,589 8,999
Total current assets 108,444 114,533
Property, plant & equipment (net) 42,276 41,942
Goodwill and other intangibles (net) 320,427 298,519
Other noncurrent 9,132 8,077
Total Assets $480,279 $463,071
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $58,171 $51,087
Current maturities of long-term obligations 290 324
Income taxes payable, current and deferred 2,783 4,588
Total current liabilities 61,244 55,999
Long-term debt 117,876 116,055
Deferred taxes and other long-term liabilities 23,175 19,844
Total Liabilities 202,295 191,898
STOCKHOLDERS' EQUITY
Common stock 175 174
Additional paid-in-capital 204,599 204,086
Treasury stock (982) (982)
Other Comprehensive Income (948) (1,242)
Retained earnings 75,140 69,137
Total stockholders' equity 277,984 271,173
Total liabilities and stockholders' equity $480,279 $463,071
SOURCECORP(TM)
CONSOLIDATED STATEMENT OF CASH FLOWS
In Thousands
Three Months Ended
March 31,
2002 2001
(Unaudited)
Net Income $6,003 $8,695
Adjustments to reconcile net income to cash
provided by operating activities
Depreciation and amortization 3,539 6,405
Deferred tax provision (benefit) 2,040 (1,228)
Changes in working capital (841) 1,093
Net cash provided by operating activities 10,741 14,965
Net cash used for investing activities (14,095) (12,941)
Net cash used for financing activities (3,387) (6,324)
Net decrease in cash and cash equivalents (6,741) (4,300)
Cash and cash equivalents, beginning of period 7,182 9,504
Cash and cash equivalents, end of period $441 $5,204
SOURCE SOURCECORP, Incorporated
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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, Incorporated
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