computer sciences FY 1999 Q1
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computer sciences FY 1999 Q1 Document Transcript

  • 1. Investor Relations 1st Quart Report Fiscal 1999 Investor Highlights -- Fiscal 1999 (Quarter Ended July 3, 1998) Letter To Shareholders Research Coverage Condensed Balance Sheets Condensed Statements of Cash Flows Condensed Statement of Income Revenues By Market Sector CSC's Business LETTER TO SHAREHOLDERS - July 3, 1998 Computer Sciences We reported earnings per share for the fiscal 1999 first quarter (ended July 3, Corporation provides a full 1998) of 40 cents per share (diluted), a 25% increase from the prior year's first range of services to industry quarter earnings of 32 cents per share (excluding last year's net special credit of and government: $1.7 million, or 1 cent per share). Prior year earnings per share results reflect a Management q 2-for-1 stock split in the form of a 100% stock dividend paid on March 23, consulting/ 1998. professional services Information systems Revenue for the quarter rose 17.8% to $1.75 billion from $1.49 billion for the q consulting, design and first quarter of last year. Net income for the first quarter was $64.3 million, an integration increase of 22.2% over the $52.6 million reported a year ago. Systems operations q U.S. commercial revenue rose to $717.9 million, an increase of 18.7% over the and outsourcing year ago's $604.8 million. The growth came primarily from outsourcing Corporations enlist CSC's revenue increases and continued expansion in our financial services and expertise to attain strategic healthcare vertical markets, as well as consulting and systems integration goals, and both industry and services. We signed strategic alliances during the quarter with several key governments use its services vendors in support of our consulting and systems integration activities and to increase productivity and announced two new licensing agreements with major insurance companies for efficiency. use of our proprietary COLOSSUS software. CSC operates in a strong, global market environment Important new contract awards announced during the quarter in Europe and is continuing to benefit included commercial outsourcing contracts with Elsag Bailey Process from the growing demand for Automation N.V. and E.B. Hartmann & Braun, as well as an infrastructure management consulting and information technology development contract with ICO Global Communications and a global strategic solutions worldwide. alliance with Nokia. These four contracts are indicative of the marketplace's increasing requirement for a wide assortment of skills such as network CSC had $6.9 billion in infrastructure, workstation support, software development, help desk, revenue for the 12 months ended 7/3/98. The company enterprise-wide solutions, anti-fraud manage- ment, billing services and data has more than 45,000 http://www.csc.com/invest/hilites8_99.html (1 of 8) [03/29/2001 9:40:23 PM]
  • 2. Investor Relations 1st Quart Report Fiscal 1999 employees and more than 700 warehousing, as well as data center management. offices worldwide. U.S. federal revenue for the quarter increased 9.9% to $443.5 million from $403.6 million for the fiscal 1998 first quarter. The increase in revenue came from new contracts, additional revenue from previously announced contracts and from the fiscal 1998 fourth quarter purchase of Information Technology Solutions, Inc. Contracts contributing additional revenue included those with the Ballistic Missile Defense Organization, Department of Transportation Volpe Center, Patrick Air Force Base and the Federal Systems Integration and Management Center (FEDSIM). Significant contract awards announced during the current quarter include the Department of Army, Defense Supply Service-Washington; the U.S. Navy; and the National Aeronautics and Space Administration (NASA). We announced $2.8 billion in new contract awards and all of our major service categories expanded during the quarter, including outsourcing, federal contracting, and consulting and systems integration. Our consulting and systems integration activities continued to reflect a strong market for services such as enterprise-wide solutions, digital commerce, supply chain, client-server, internet/intranet, data warehousing, and systems integration applications designed to support revenue growth strategies. Our first quarter results represent an excellent start for fiscal 1999. Van B. Honeycutt Chairman, President and Chief Executive Officer INVESTMENT DATA NYSE: CSC Recent Closing Price: $60 1/8 (8/13/98) 52-Week Range: $33 5/8 - 68 7/8 Shares Outstanding: 157.8 million Shareholders: Approx. 85,000 Total Institutional Ownership: 74% Average Daily Trading Volume: 1st Quarter FY99 - 692,526 Market Cap: $9.5 billion (8/13/98) http://www.csc.com/invest/hilites8_99.html (2 of 8) [03/29/2001 9:40:23 PM]
  • 3. Investor Relations 1st Quart Report Fiscal 1999 MANAGEMENT CONSULTING AND PROFESSIONAL SERVICES Dramatically improves client organizations' operations. Often streamlines basic business processes. Examples: MidCon Corp. -- CSC was engaged by MidCon, a large mid-western natural gas company, to formulate a growth strategy and implement a plan to realign the company. The team built the idea of a quot;newquot; MidCon, or mc2, which would sell energy to a completely new market. CSC's consultants realigned the company, helping the entire organization build its capacity and grow quickly. Motor Coach Industries (MCI) -- Tour bus maker, MCI, engaged CSC to perform a complete business diagnosis and develop strategies to gain back lost market share. The result was the successful launch of a new product line and the return to a leading position in the industy. SYSTEMS CONSULTING, DESIGN AND INTEGRATION Designs, develops and builds information technology systems. Combines hardware, software and communications into more productive systems. Examples: British Aerospace (BAe) -- CSC is implementing a Baan enterprise resource planning (ERP) system for a division of BAe that aims to help the company cut costs, decrease time to market and increase on-time delivery. The system replaces all of the old custom systems and will be released to seven sites with up to 10,000 users over the next three years. Immigration and Naturalization Service (INS) -- CSC will develop and maintain information technology (I/T) systems in support of the INS' Service Technology Alliance Resources (STARS) Program. The program will provide the agency with a new, integrated approach to meeting its technology needs into the 21st century. http://www.csc.com/invest/hilites8_99.html (3 of 8) [03/29/2001 9:40:23 PM]
  • 4. Investor Relations 1st Quart Report Fiscal 1999 SYSTEMS OPERATIONS AND OUTSOURCING Directly operate clients' information systems. CSC often acquires clients' systems and employees. Examples: Raytheon -- CSC is playing a key role in I/T initiatives for Hughes Electronics (HE) and Raytheon, now under two separate contracts. After CSC signed its initial contract with HE, its defense subsidiary, Hughes Aircraft Company, was spun off and merged with Raytheon. EB Hartmann & Braun Group -- CSC will provide all internal I/T to EB Hartmann & Braun, a leading European process automation and measurement services firm. CSC will also support an SAP upgrade and implementation. General Dynamics -- General Dynamics opted to extend its original 10-year outsourcing contract with CSC to sign a new 7-year contract through 2004. The contract also names CSC the exclusive provider of I/T services for all of General Dynamics' business units, as well as future acquisitions. National Aeronautics and Space Administration (NASA) -- CSC has been selected as one of seven vendors to provide desktop computers and local communications services to NASA under the Outsourcing Desktop Initiative for NASA (ODIN). CSC will provide long-term outsourcing in support of aeronautics, space exploration and scientific missions. INVESTMENT CHARACTERISTICS Dynamic Industry -- Industry experts estimate that I/T services will grow at high-teens to mid-twenties growth rates through at least the year 2002. Global Presence -- Substantial operations in key international markets have positioned CSC to serve a growing global marketplace. Competitive Advantage -- CSC brings a flexible approach to each client situation; more than 70% of CSC's revenue base is built on multi-year contracts. Growth History -- Acquisitions, outsourcing contracts and other internal growth have played equal roles in driving CSC's growth and securing its position as an industry leader. RESEARCH COVERAGE A.G. Edwards (Mark Jordan) Bear, Stearns (Jim Kissane) Brown Brothers Harriman (Greg Gieber) BT Alex. Brown (Ed Caso) CIBC Oppenheimer & Co. (Andrew Burns) CS First Boston (Mark Wolfenberger) Donaldson, Lufkin & Jenrette (Thomas Rooney) Furman Selz http://www.csc.com/invest/hilites8_99.html (4 of 8) [03/29/2001 9:40:23 PM]
  • 5. Investor Relations 1st Quart Report Fiscal 1999 (Brian Maimone) Goldman Sachs (Greg Gould) J.P. Morgan Securities (Raimundo Archibold) Lehman Brothers (Patrick Burton/Karl Keirstead) Merrill Lynch (Steve McClellan) Morgan Stanley (David Togut) Prudential Securities (Thomas E. Browne, Jr.) Robinson Humphrey (David Keil) SG Cowen & Co. (Hugh Shytle) Sound View Financial Group (Gary Helmig) Standard & Poors Corporation (Brian Goodstadt) Value Line (David Rosenfield) Volpe Brown Whelan Co. (Chris Paul) Warburg Dillion Road (Moshe Katri) Wheat, First Securities (Jeff Newman) Condensed Balance Sheets http://www.csc.com/invest/hilites8_99.html (5 of 8) [03/29/2001 9:40:23 PM]
  • 6. Investor Relations 1st Quart Report Fiscal 1999 Condensed Statements of Cash Flows (unaudited) Condensed Statements of Income (unaudited) (a) As previously disclosed, the results for the first quarter ended June 27, 1997 included a net special credit of $1.7 million, or 1 cent per share (diluted). The net credit resulted from a $208.4 million special charge ($133.3 million after tax) and a $135.0 million income tax benefit, both of which related to developments at an affiliated joint venture during the first quarter. (b) All of the earnings per share amounts reflect a 2-for-1 stock split in the form of a 100 percent stock dividend paid March 23, 1998 to shareholders of record as of March 2, 1998. http://www.csc.com/invest/hilites8_99.html (6 of 8) [03/29/2001 9:40:23 PM]
  • 7. Investor Relations 1st Quart Report Fiscal 1999 Revenues By Market Sector (unaudited) SHAREHOLDER SERVICES FINANCIAL COMMUNITY INFORMATION Registered shareholders with questions concerning the Inquiries from institutional investors, financial analysts, and transfer or registration of their shares may call our portfolio managers should be directed to: Shareholder Relations office at (800) 542-3070. Spencer Davis (310) 615-1700 Director, Investor Relations For prompt assistance on address changes, consolidation of duplicate accounts or related matters, shareholders should Inquiries from individual shareholders and registered write or call CSC's transfer agent: representatives should be directed to: ChaseMellon Lisa M. Prukop (310) 615-1680 Shareholder Services LLC Supervisor, Investor Relations P.O.Box 3315 S. Hackensack, NJ 07660 LITERATURE REQUESTS USA (201) 329-8660 To receive reports recent financial reports, press (800) 526-0801 releases and other corporate information please call: CSC's automated request line: (310) 615-4455 or CSC's facsimile service at: (800) 962-7328 INTERNET INQUIRIES CSC's home page address on the Internet: Investor Highlights is designed for individual investors and professionals who advise them, and does not constitute an http://www.csc.com offer to buy or sell securities. To obtain additional information, e-mail or write: E-Mail inquiries are also welcomed at: Spencer Davis InvestorRelations@csc.com Director, Investor Relations Computer Sciences Corporation 2100 East Grand Avenue El Segundo, California 90245, USA ABOUT THIS ISSUE This issue of Investor Highlights marks CSC's inaugural effort to provide a more quot;user-friendlyquot; quarterly report. http://www.csc.com/invest/hilites8_99.html (7 of 8) [03/29/2001 9:40:23 PM]
  • 8. Investor Relations 1st Quart Report Fiscal 1999 [About CSC] [Industries] [Solutions] [Career Opportunities] [Investor Relations] [Press Releases] [Contact CSC] [Search] [Home] Copyright © 2000 Computer Sciences Corporation. All rights reserved. http://www.csc.com/invest/hilites8_99.html (8 of 8) [03/29/2001 9:40:23 PM]