Reynolds Earnings Per Share, Excluding Divested Businesses, Jump 27 Percent
Press release from the issuing company
DAYTON, Ohio-July 25, 2001-- The Reynolds and Reynolds Company today reported net income from continuing operations of $24.7 million or 33 cents per share for the quarter ended June 30, 2001. Earnings per share were at the high end of analysts' estimates and 27 percent ahead of last year's 26 cents per share from continuing operations. Revenues of $242.2 million for the quarter were up 3 percent over the prior year.
For the nine months, income from continuing operations was $70.8 million or 94 cents per share, versus $69.6 million, or 87 cents per share a year ago. Revenues of $727.0 million for the nine months were 7 percent higher than last year.
"Despite difficult economic conditions, we've delivered solid earnings performance. We continue to extend our market leadership position, winning a number of key orders during the quarter,'' President and CEO Lloyd "Buzz'' Waterhouse said. "We're executing our strategy to deliver a very powerful suite of operational and customer relationship management offerings that we've developed and acquired over the past two years. Our customers want highly-integrated solutions and we plan to deliver them.''
Sales were negatively impacted by the change in the Microsoft CarPoint business model, lower sales of forms and document management solutions, and a slowdown in our consulting business as customers deferred spending due to the uncertain business environment.
"Our strong business model and outstanding customer loyalty are delivering continued strong recurring revenue growth. We have effectively managed our cost structure while continuing with research and development expenditures as we execute our strategies to lead the transformation of automotive retailing,'' Waterhouse added.
A May 2001 Forrester Report entitled Auto's CRM Payoff described The Reynolds and Reynolds Company as having the CRM edge in the automotive retailing marketplace. "Our deep vertical automotive retail domain expertise is a major advantage for us over other providers who sell standard off-the-shelf sales automation solutions,'' Waterhouse said. "We understand this industry better than anyone. And, we plan to leverage that knowledge as we extend our leadership position in the automotive retailing marketplace.''
Highlights of the quarter include:
* Strong operating margins in Retail Management Solutions driven by high recurring services.
* Improved operating margins in Documents driven by manufacturing consolidation and other cost improvements.
* Several major wins including being selected as Web-technology partner by Southeast Toyota Distributors, LLC, and network services provider to Norm Reeves Inc., the world's largest Honda dealer.
* Strong momentum of ReySource(TM), Reynolds' Internet solution for automotive retailers that enables efficient procurement of business forms, office supplies and other products and services while freeing up Reynolds' sales representatives' time for value-added sales and account management activity.
* A previously announced write off of $3.2 million resulting from an announcement by Consumer Car Club Inc. that its carclub.com service, in which Reynolds had acquired a small equity position, had been closed.
* The repurchase of 1.5 million shares at an average price of $21.50 per share. Through nine months, the company has repurchased 4.1 million shares at an average price of $21.37 per share. Approximately 2.1 million shares remain authorized for repurchase.
"We are encouraged by our performance through the first nine months and we remain confident in our business model and our ability to manage costs,'' Dale Medford, executive vice president and chief financial officer, said. "The company is in healthy financial condition with strong cash flow, an excellent balance sheet, and a leading market position.''
For the 2001 fiscal year the company currently expects:
* Earnings from continuing operations to be in line with the consensus estimate of $1.31 per share, compared to $1.19 per share in fiscal year 2000 (excluding restructuring charges).
* Return on equity to approach 20 percent.
* Capital expenditures and capitalized software to total approximately $70 million.
* Depreciation and amortization expense is expected to total approximately $50 million.
* R&D expenses to be approximately $75 million.
* Dividends to remain at the rate of 11 cents per common share per quarter.
Reynolds and Reynolds, headquartered in Dayton, Ohio, is the leading provider of integrated information management solutions to the automotive retailing marketplace. The company's services include a full range of retail and enterprise management systems, networking and support, e-business applications, Web services, learning and consulting services, customer relationship management solutions, document management and leasing services. To find out more about the company, its vision, products and services, visit www.reyrey.com.
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