DALLAS, Nov. 5 /PRNewswire-FirstCall/ -- SOURCECORP(TM) (Nasdaq: SRCP),
one of the nation's leading providers of business process outsourcing
solutions, today reported 2003 third quarter revenue of $100.9 million and
diluted earnings per share of $.40.
Third Quarter Summary
Ed H. Bowman, Jr., President and CEO of SOURCECORP said, "SOURCECORP's
third quarter revenue and earnings per share were within the range of
financial guidance we provided in August. Compared with Q2,
2003, SOURCECORP's net income and earnings per share rose 15.8% and 14.3%
respectively, principally due to increased volumes within our Legal Claims
Administration business and lower employee medical expense. Compared to Q3,
2002 results, revenue and earnings per share were lower as a result of higher
comparables in Q3, 2002, which were principally driven by strong project
revenue."
The Company closed sales during the third quarter of 2003 anticipated to
produce total revenue of approximately $26.3 million, including amounts that
the Company expects to recognize in future years. These new sales included
four large sales, each for more than $1 million in total expected revenue.
Summary of Financial Highlights
(in $ millions, except for earnings per share data)
Q2 2003 Q3 2002
Q3 2003 Amount Change Amount Change
Revenue $100.9 $101.8 - 0.8 % $107.5 - 6.1 %
Operating Income $11.5 $10.1 13.7 % $14.0 - 17.8 %
Net Income $6.6 $5.7 15.8 % $7.7 - 14.5 %
Diluted EPS $.40 $.35 14.3 % $.44 - 9.1 %
The Company produced cash flow from operations of $13.4 million during the
third quarter of 2003, a decrease of approximately 31 percent from the third
quarter of 2002, principally due to higher collections of past due accounts
receivable in 2002. Days sales outstanding remained at 43 business days
during the third quarter, consistent with Q2, 2003 and within the Company's
expected range. As of September 30, the Company's debt to total capital ratio
decreased to 19%, compared with Q2, 2003. The outstanding balance on the
Company's credit facility was reduced to $71.7 million.
Company Financial Outlook
For fourth quarter of 2003, the Company is expecting revenue and earnings
per share summarized as follows:
-- Expected revenue of between $101 and $103 million, which would result
in full year revenues of between $414 and $416 million, and
-- Expected earnings per share of between $.41 and $.44, which would
result in full year earnings per share of between $1.63 and $1.66.
Looking ahead to 2004, the Company expects improved revenue growth to be
the primary catalyst for earnings growth.
ABOUT SOURCECORP(TM)
SOURCECORP, Incorporated provides business process outsourcing solutions
to clients throughout the U.S. SOURCECORP focuses on business processes in
information-intensive industries including healthcare, legal, financial
services, government and transportation & logistics. Headquartered in Dallas,
the Company has offices in 24 states and operates in approximately 40 states,
Washington D.C., Mexico and both domestically and far offshore through
alliances.
SOURCECORP is a component of both the S&P SmallCap 600 Index and the
Russell 2000 Index. The Company has been cited among the Top 100 Hot Growth
Companies by BusinessWeek magazine. SOURCECORP has also 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 legal and regulatory changes that could impact
our ability to deliver our services, 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, of the
impact to margins resulting from a change in revenue mix 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)
Condensed Consolidated Statements of Operations
In Thousands (Except Earnings Per Share)
(Unaudited)
Three Months Ended
September 30, June 30,
2003 2003
Total Revenue $100,926 $101,770
Cost of Services 59,657 61,647
Depreciation 3,607 3,467
Gross Profit 37,662 36,656
SG&A 26,098 26,479
Amortization 89 88
Operating Income 11,475 10,089
Other expense, net 555 661
Income before income taxes 10,920 9,428
Provision for income taxes 4,368 3,771
Net Income $6,552 $5,657
Weighted Avg. Shares
Basic 16,188 16,319
Diluted 16,355 16,381
Earnings Per Share
Basic $0.40 $0.35
Diluted $0.40 $0.35
SOURCECORP(TM)
Condensed Consolidated Statements of Operations
In Thousands (Except Earnings Per Share)
(Unaudited)
Three Months Ended
September 30,
2003 2002
Total Revenue $100,926 $107,465
Cost of Services 59,657 64,683
Depreciation 3,607 3,578
Gross Profit 37,662 39,204
SG&A 26,098 25,154
Amortization 89 89
Operating Income 11,475 13,961
Other expense, net 555 1,602
Income before income taxes 10,920 12,359
Provision for income taxes 4,368 4,696
Net Income $6,552 $7,663
Weighted Avg. Shares
Basic 16,188 17,358
Diluted 16,355 17,369
Earnings Per Share
Basic $0.40 $0.44
Diluted $0.40 $0.44
SOURCECORP(TM)
Condensed Consolidated Statements of Operations
In Thousands (Except Earnings Per Share)
(Unaudited)
Nine Months Ended
September 30,
2003 2002
Total Revenue $312,221 $316,536
Cost of Services 185,816 190,216
Depreciation 10,610 10,672
Gross Profit 115,795 115,648
SG&A 79,010 76,182
Amortization 266 267
Operating Income 36,519 39,199
Other expense, net 2,540 5,052
Income before income taxes 33,979 34,147
Provision for income taxes 13,592 12,976
Net Income $20,387 $21,171
Weighted Avg. Shares
Basic 16,571 17,319
Diluted 16,654 17,688
Earnings Per Share
Basic $1.23 $1.22
Diluted $1.22 $1.20
SOURCECORP(TM)
CONDENSED CONSOLIDATED BALANCE SHEETS
In Thousands
(Unaudited)
September 30, December 31,
ASSETS 2003 2002
CURRENT ASSETS
Cash $618 $3,217
Accounts receivable (net) 68,696 78,834
Deferred tax asset 6,648 9,012
Other current 6,016 6,247
Total current assets 81,978 97,310
Property, plant & equipment (net) 41,355 40,575
Goodwill and other intangibles (net) 326,814 321,340
Other noncurrent 9,672 8,382
Total Assets $459,819 $467,607
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $55,851 $58,029
Current maturities of long-term obligations 184 113
Income taxes payable 4,892 180
Total current liabilities 60,927 58,322
Long-term debt 71,480 89,640
Deferred taxes and other long-term
liabilities 22,482 16,969
Total Liabilities 154,889 164,931
STOCKHOLDERS' EQUITY
Common stock 163 175
Additional paid-in-capital 195,192 206,843
Treasury stock (982) (982)
Deferred compensation (2,592) 0
Other comprehensive loss 0 (329)
Retained earnings 113,149 96,969
Total Stockholders' Equity 304,930 302,676
Total Liabilities and
Stockholders' Equity $459,819 $467,607
SOURCECORP(TM)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
Nine Months Ended
September 30,
2003 2002
Net Income $20,387 $21,171
Adjustments to reconcile net income to
cash provided by operating activities
Depreciation and amortization 10,876 10,939
Deferred tax provision 6,177 6,512
Compensation expense on restricted
stock grants 358 0
(Gain)/loss on sale of property, plant
and equipment (361) 242
Changes in working capital 16,227 4,171
Net cash provided by operating activities 53,664 43,035
Net cash used for investing activities (19,443) (28,053)
Net cash used for financing activities (36,820) (16,188)
Net decrease in cash and cash equivalents (2,599) (1,206)
Cash and cash equivalents, beginning of
period 3,217 7,182
Cash and cash equivalents, end of period $618 $5,976
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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