DALLAS, Dec. 28 /PRNewswire-FirstCall/ -- SOURCECORP, Inc. (Nasdaq: SRCP)
a leading provider of business process outsourcing solutions and specialized
high value consulting services announced today that it has received the final
payment that was owed the Company under the settlement agreement it announced
September 27, 2005. The settlement agreement settled the Company's claims
against the former owners of the Company's operating subsidiary that was the
subject of its internal investigation and financial restatement. The Company
also provided an update on an agency termination payment to the Company, which
impacts its earnings per share guidance.
Settlement Agreement Final Payment
As previously announced, the terms of the settlement agreement provided
that SOURCECORP would be paid $30 million consisting of (i) $20 million in
cash, which was paid in September 2005, (ii) 89,888 shares of SOURCECORP's
common stock (valued under the terms of the settlement agreement at
approximately $1.84 million), which were received and canceled in September
2005 and (iii) the remainder being approximately $8.16 million (less
approximately $300,000 of rental payments previously withheld by the Company
in accordance with the settlement agreement), which has now been received.
"We believe that receipt of this final payment is yet another important
step in moving beyond the Company's restatement and focusing on our operations
for the benefit of all stakeholders," stated Mr. Ed H. Bowman, Jr., President
and CEO.
The Company used the settlement proceeds to reduce outstanding debt.
Contract Termination Payment Update
Additionally, as previously announced, earlier in the year the Company
received notice from a large government customer of its intent to cancel a
contract in connection with a substantial change in their operational plans.
As previously indicated, the Company's guidance, which was most recently
updated on November 4, 2005, included approximately $0.09 per share, that
represented an estimate of the anticipated termination payment relating to
such contract and that the timing and exact amount of that payment was
uncertain. As year-end approaches, it currently appears that based on the
volume of information that the agency has yet to review, it will most likely
be at least until early 2006 before this matter will be settled, and as such,
will not be reflected in the Company's 2005 results of operation. The Company
expects that the actual termination payment amount, or an updated estimate,
will be included in the Company's 2006 guidance when it is provided. Except
as otherwise provided in this press release, the Company is not commenting on
its prior guidance.
About SOURCECORP(R)
SOURCECORP, Incorporated provides business process outsourcing solutions
and specialized high value consulting services to clients throughout the
U.S. SOURCECORP focuses on business processes in information-intensive
industries including commercial, financial, government, healthcare, and legal.
Headquartered in Dallas, the Company serves clients throughout the United
States through a network of locations in the U.S., Mexico and India.
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 (2001). SOURCECORP has also been recognized
twice by Forbes magazine as one of the 200 Best Small Companies (1998, 1999),
based on return equity, sales growth, and EPS growth, and by FORTUNE magazine
as one of America's 100 Fastest Growing Public Companies (1999). For more
information about SOURCECORP's solutions, including case-study examples, visit
the SOURCECORP website at http://www.sourcecorp.com
The statements in this press release, which are not historical fact, are
forward-looking statements that involve risks and uncertainties that 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, projections, included in this press release,
including without limitation the timing and amount of the contract termination
payment discussed herein. The aforementioned risks and uncertainties include,
without limitation, the length of time the agency ultimately determines it
needs to review the termination payment submission, the amount that such
agency ultimately determines is so owed, as well as the timing and result of
the Company's ongoing SEC investigation, remediation costs relating to the
Company's completed internal investigation, the potential customer impact of
the results of the Company's completed investigation, the outcome of the
Company's pending putative securities class action matters, the risks of
integrating the Company's operating companies, of the timing and magnitude of
technological advances, of the occurrences of a diminution in the Company's
existing customers' needs for our services (including without limitation
through "in-sourcing" of such work), of a change in the amount companies
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.
SOURCE SOURCECORP
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Related links:
http://www.sourcecorp.com
CONTACT:
Barry L. Edwards, Executive Vice President
and Chief Financial Officer of SOURCECORP, +1-214-740-6690, or
barryedwards@srcp.com
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