The Triple Threat | Article on Global Resession | Harsh Kumar
computer sciences FY 1997 Q2
1. Investor Relations 1st Quart Report Fiscal 1997
Investor Highlights -- Fiscal 1997 (Quarter Ended September 22, 1996)
SUMMARY FY 1997 (Six Months)
Letter To Shareholders
Research Coverage $1,020M in federal contracts
announced
Condensed Balance Sheets
$2,450M in commercial contracts
Condensed Statements of Cash Flows
announced
Condensed Statement of Income
(includes Pinnacle Alliance total).
Revenues By Market Sector
CSC provides a full range of services to
industry and government:
Management consulting and business
reengineering.
Systems consulting, design and
integration.
Systems operations and outsourcing
CSC had $5.2 billion in revenue for
the 12 months ended 9/27/96. The
company has more than 40,000
employees and over 600 offices
worldwide.
CSC operates in a strong market
environment. Growing demand
stems from the increasing use of
information technology.
Corporations enlist CSC's help to
attain strategic goals, and government agencies use its services to increase productivity and efficiency.
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2. Investor Relations 1st Quart Report Fiscal 1997
INVESTMENT DATA
NYSE: CSC
Recent closing price: $81 3/4 (10/15/96)
52-Week Range: $46 1/2 -- $82 1/8
Shares Outstanding: 75.9 million
Shareholders: Approx. 67,400 Total
Institutional Ownership: 77%
Average Daily Trading Volume:
2nd Quarter FY97 -- 238,588 Shares
LETTER TO SHAREHOLDERS -- February 7, 1996
We reported earnings per share of 63 cents for our second quarter before a merger-related, non- recurring
charge. The 63 cents is a 23.5% increase over the restated 51 cents earned for the same period last year.
All of our results reported for previous periods have been restated to reflect our August 1 acquisition of
The Continuum Company, Inc. -- which was accounted for on a pooling of interests basis. In connection
with the acquisition, a previously announced one-time charge equivalent to 45 cents per share was
provided during the second quarter of this year. After this charge, we earned 18 cents per share for the
quarter.
Excluding the non-recurring charge, our net income for the second quarter was $49.3 mil- lion, compared
with $39.6 million a year ago. Including the $48.9 million charge ($35.3 million after related income tax
effects), net income was $14.0 million. Revenue for the quarter rose to $1.36 billion, up 20.1% from the
$1.13 billion for the second quarter of last year.
Before the charge, net income for the first six months of this year was $94.6 million, versus last year's
$75.5 million. After the charge, net income was $59.3 million. Revenue for the first half was $2.66
billion, up 20.2% from the $2.21 billion for the prior year's first half.
Operationally, we had an excellent quarter, continuing our strong growth in both revenue and income.
Global commercial revenue for the quarter, including both domestic and international activities, totaled
$963.1 million, up 27.4% compared with the $755.7 million for the second quarter of fiscal 1996.
For the quarter just ended, U.S. commercial revenue rose to $524.1 million, an increase of 20.6% from
$434.4 million last year. Slightly more than half the growth was provided by information technology
outsourcing, with the remainder coming principally from consulting and systems integration activities.
International revenue for the quarter rose to $439 million, up 36.6% from $321.3 million. The increase
came principally from new outsourcing business signed last year, growth in revenue from our German
SAP consulting operations, and from our acquisition earlier this year of 75% of Datacentralen, a major
provider of information technology services in Denmark.
Our U.S. federal revenue for the second quarter was $392.2 million, up 5.2% from last year's $372.9
million. During the quarter, we announced nearly $1 billion in new federal contracts, one of the largest
quarterly totals in our history.
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3. Investor Relations 1st Quart Report Fiscal 1997
Van B. Honeycutt
President and Chief Executive Officer
MANAGEMENT CONSULTING AND BUSINESS REENGINEERING
Dramatically improves client organizations' operations. Often streamlines basic business processes.
Examples:
EMI Records -- Through reengineering, CSC helped one of the world's largest music
companies transform how it manufacturers and distributes compact discs, significantly
improving EMI's performance in a highly competitive industry.
Wells Fargo -- CSC helped reengineer the bank's lending operations and supporting systems,
doubling the number of its California small business loans.
SYSTEMS CONSULTING, DESIGN AND INTEGRATION
Consults on, designs and builds information technology systems. Combines hardware, software and
communications into more productive systems. Examples:
U.S. Navy -- CSC provides the hardware and system design, architectural studies and related
integration services in support of the Navy's Advanced Combat Direction System in San Diego,
California.
Omnipoint Communications Inc. -- With the award of this five-year, multi- million dollar
contract, CSC will provide billing and customer services to Omnipoint, which holds a license
for the New York Major Trading Area (MTA), the most significant telecommunications market
in the United States. PCS is the latest wave of the wireless communications network, and
Omnipoint is one of the major players.
U.S. Air Force -- As one of three prime contractors in this five-year, $929 million contract,
CSC has been selected to integrate the command, control, communications, computers and
intelligence systems at the Electronic Systems Center at Hanscom Air Force Base,
Massachusetts.
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4. Investor Relations 1st Quart Report Fiscal 1997
SYSTEMS OPERATIONS AND OUTSOURCING
Directly operate clients' information systems. CSC sometimes acquires clients' systems/employees.
Examples:
J.P. Morgan -- A CSC-led consortium known as The Pinnacle Alliance, including
Andersen Consulting, AT&T Solutions and Bell Atlantic Network Integration, announced
a seven-year, $2 billion agreement to manage parts of J.P. Morgan's global technology
infrastructure. The Pinnacle Alliance will manage data centers, distributing computing
operations and certain internal corporate applications in the United States and Europe.
Quaker Chemical Europe B.V. -- Under a ten-year outsourcing con-tract for a company
whose clients include Coca-Cola and the Campbell Soup Company, CSC will create a
standardized IT environment at six sites located across Europe.
Hyatt Hotels Corp. -- The Alliance, an initiative between CSC and the SABRE Group's
SABRE Decision Technologies division, will operate and enhance the state-of-the-art central
reservation system used by the Hyatt Hotel chain worldwide through a five-year, $72 million
outsourcing pact.
Bath Iron Works -- CSC has been selected to acquire and manage the IT operations of one of
the nation's leading shipbuilders and the largest private employer in the state of Maine with this
ten-year, $230 million contract.
RESEARCH COVERAGE
Alex Brown (Ed Caso)
Barrington Research (Alex Paris)
Bear Stearns
Cowen & Co. (Hugh Shytle)
Dean Witter (Marie Rossi)
Deutsche Morgan Grenfell
(Mark Wolfenberger)
Donaldson, Lufkin & Jenrette
(Thomas Rooney)
Duff & Phelps Equity Research
(Abhishek Gami)
Goldman Sachs (Greg Gould)
JP Morgan Securities (Bill Rabin)
Lehman Brothers (Patrick Burton/
(Karl Keirstead)
Merrill Lynch (Steve McClellan)
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5. Investor Relations 1st Quart Report Fiscal 1997
Morgan Stanley (David Togut)
Oppenheimer & Co. (Moshe Katri)
Robertson Stephens (Cathy Baker)
Salomon Brothers (Jim Kissane)
Smith Barney (Greg Gieber)
Sound View Financial Group
(Gary Helmig)
Standard & Poors Corporation
(Peter Wood)
Value Line (David Rosenfield)
Wheat, First Securities (Jeff Newman)
CONDENSED BALANCE SHEETS (unaudited)
CONDENSED STATEMENTS OF CASH FLOWS (unaudited)
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6. Investor Relations 1st Quart Report Fiscal 1997
CONDENSED STATEMENTS OF INCOME (unaudited)
REVENUES BY MARKET SECTOR (unaudited)
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7. Investor Relations 1st Quart Report Fiscal 1997
SHAREHOLDER SERVICES
Registered shareholders with questions concerning the transfer or registration of their shares
may call our Shareholder Relations office at (800) 542-3070.
For prompt assistance on address changes, consolidation of duplicate accounts or related
matters, shareholders should write or call CSC's transfer agent:
Chemical Mellon
Shareholder Services LLC
P.O.Box 590
Ridgefield Park, NewJersey 07660
USA
(212) 613-7427
(800) 526-0801
FINANCIAL COMMUNITY INFORMATION
Inquiries from institutional investors, financial analysts, and portfolio managers should be directed
to:
Spencer Davis (310) 615-1700
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![Investor Relations 1st Quart Report Fiscal 1997
Investor Highlights -- Fiscal 1997 (Quarter Ended September 22, 1996)
SUMMARY FY 1997 (Six Months)
Letter To Shareholders
Research Coverage $1,020M in federal contracts
announced
Condensed Balance Sheets
$2,450M in commercial contracts
Condensed Statements of Cash Flows
announced
Condensed Statement of Income
(includes Pinnacle Alliance total).
Revenues By Market Sector
CSC provides a full range of services to
industry and government:
Management consulting and business
reengineering.
Systems consulting, design and
integration.
Systems operations and outsourcing
CSC had $5.2 billion in revenue for
the 12 months ended 9/27/96. The
company has more than 40,000
employees and over 600 offices
worldwide.
CSC operates in a strong market
environment. Growing demand
stems from the increasing use of
information technology.
Corporations enlist CSC's help to
attain strategic goals, and government agencies use its services to increase productivity and efficiency.
http://www.csc.com/invest/hilites_996.html (1 of 8) [03/29/2001 9:48:54 PM]](https://image.slidesharecdn.com/1099221/85/computer-sciences-fy-1997-q2-1-320.jpg)
![Investor Relations 1st Quart Report Fiscal 1997
INVESTMENT DATA
NYSE: CSC
Recent closing price: $81 3/4 (10/15/96)
52-Week Range: $46 1/2 -- $82 1/8
Shares Outstanding: 75.9 million
Shareholders: Approx. 67,400 Total
Institutional Ownership: 77%
Average Daily Trading Volume:
2nd Quarter FY97 -- 238,588 Shares
LETTER TO SHAREHOLDERS -- February 7, 1996
We reported earnings per share of 63 cents for our second quarter before a merger-related, non- recurring
charge. The 63 cents is a 23.5% increase over the restated 51 cents earned for the same period last year.
All of our results reported for previous periods have been restated to reflect our August 1 acquisition of
The Continuum Company, Inc. -- which was accounted for on a pooling of interests basis. In connection
with the acquisition, a previously announced one-time charge equivalent to 45 cents per share was
provided during the second quarter of this year. After this charge, we earned 18 cents per share for the
quarter.
Excluding the non-recurring charge, our net income for the second quarter was $49.3 mil- lion, compared
with $39.6 million a year ago. Including the $48.9 million charge ($35.3 million after related income tax
effects), net income was $14.0 million. Revenue for the quarter rose to $1.36 billion, up 20.1% from the
$1.13 billion for the second quarter of last year.
Before the charge, net income for the first six months of this year was $94.6 million, versus last year's
$75.5 million. After the charge, net income was $59.3 million. Revenue for the first half was $2.66
billion, up 20.2% from the $2.21 billion for the prior year's first half.
Operationally, we had an excellent quarter, continuing our strong growth in both revenue and income.
Global commercial revenue for the quarter, including both domestic and international activities, totaled
$963.1 million, up 27.4% compared with the $755.7 million for the second quarter of fiscal 1996.
For the quarter just ended, U.S. commercial revenue rose to $524.1 million, an increase of 20.6% from
$434.4 million last year. Slightly more than half the growth was provided by information technology
outsourcing, with the remainder coming principally from consulting and systems integration activities.
International revenue for the quarter rose to $439 million, up 36.6% from $321.3 million. The increase
came principally from new outsourcing business signed last year, growth in revenue from our German
SAP consulting operations, and from our acquisition earlier this year of 75% of Datacentralen, a major
provider of information technology services in Denmark.
Our U.S. federal revenue for the second quarter was $392.2 million, up 5.2% from last year's $372.9
million. During the quarter, we announced nearly $1 billion in new federal contracts, one of the largest
quarterly totals in our history.
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