| We provide global technology infrastructure solutions to help its customers maximize their technology's reliability, efficiency and flexibility. 2 We provide equipment leasing, continuity services, which include disaster recovery, contingency planning, and availability solution services, as well as managed network services, and desktop management solutions. These services are designed to provide integrated, long-term, cost effective asset and technological planning as well as data and voice availability and recovery to users of high technology equipment. We completed the acquisition of our majority owned subsidiary, Prism Communication Services, Inc., during the quarter ended March 31, 1999. Through Prism, we are developing a high-speed, always-on digital network, which will provide customers with leading-edge connectivity. Through our Comdisco Ventures division, we provide equipment leasing and other financing to venture capital-backed start-up companies. Comdisco was founded in 1969 and incorporated in Delaware in 1971. Since our inception, our markets and the services that we offer, and therefore, the way we conduct our business, have changed significantly. We expect these changes to continue. These changes are primarily the result of rapid changes in technology including declining prices, manufacturer consolidations, the rapid rise of industries such as telecommunications and the rise of new dominant technologies like the Internet and their related impact on customers' needs and requirements. Initially, we were engaged primarily in the procurement and placement of new and used computer equipment, principally mainframe and related peripherals. We developed disaster recovery and contingency planning services in 1980. In the mid-1980's we expanded our operations to include the leasing of non-computer equipment (office equipment, PBX, point-of-sale, and other high- technology equipment), eventually adding healthcare, communications, semiconductor manufacturing and other industry specific equipment leasing, remarketing and other services. In 1987, we formed Comdisco Ventures. Comdisco Ventures has grown significantly in the last three fiscal years and has become a significant and material contributor to our earnings. On March 24, 1999, we announced a major shift in corporate strategy, including our intent to focus on high-margin service businesses and shed low- margin businesses, such as our mainframe residual-based leasing and medical equipment refurbishing business. In conjunction with our repositioning, we recorded a one-time pre-tax charge of $150 million, or $96 million on an after tax basis, which is equal to approximately $0.59 per share, in the quarter ended March 31, 1999. The components of this pretax charge include $100 million associated with our plans to exit the mainframe residual-based leasing business, $20 million to exit the medical equipment refurbishing business and $30 million associated with a realignment of our service businesses. We completed the sale of our mainframe computer leasing portfolio and the sale of the medical equipment refurbishing business in the fiscal quarter ended June 30, 1999. In addition to these sales, we completed the sale of substantially all of our vendor lease portfolio in September, 1999. We recently introduced our web-availability services to provide one-stop hosting and recovery solutions that meet the availability needs of e-businesses of all sizes. By building on our significant business continuity experience, we believe we can deliver cost-effective availability solutions, offering advanced protection of our customer's data, servers, network and applications. |
