The earnings report is out. PCSS up 1/2 this morning. Here it is:
PC ServiceSource Reports Second Quarter and Six
Months Results
Business Wire
07-21-97
8:35 AM EST
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DALLAS--(BUSINESS WIRE)--July 21, 1997--PC ServiceSource
(NASDAQ:PCSS) reported that soft sales late in the second quarter impacted
results for the second quarter and six months ended June 30, 1997. For the
quarter, the Company reported net revenues of $31,711,000, an increase of 18
percent over the $26,786,000 reported for the same period in 1996. Revenues
decreased slightly compared to revenues of $32,421,000 in the first quarter
ended March 31, 1997.
Net earnings for the second quarter were $271,000, or $0.05 per share,
compared to $759,000, or $0.16 per share for the second quarter in 1996.
These results show a decrease from the $447,000, or $0.08 per share for the
quarter ending March 31, 1997. The decrease in net earnings was largely
attributable to increased selling, general and administrative expenses in
anticipation of stronger sales on existing business and significant new business
announced to start in the third quarter, partially offset by higher gross margin.
For the six months period ending June 30, 1997, PC ServiceSource reported
revenues of $64,132,000, an increase of 21 percent over the $53,067,000 of
revenue reported for the same period in 1996. Net earnings for the six months
period were $718,000 compared to net earnings of $1,413,000 for the first six
months of 1996.
"Positive aspects of these results include an improvement in our gross margin
which was a result of margin oriented efforts initiated during the first quarter,"
stated Mark Hilz, PC ServiceSource's President and CEO. "What we were
unable to anticipate was the sharp sales slump experienced in June, which was
not offset by new business growth, as we have historically accomplished. When
the soft sales occurred, we had already begun adding resources to support an
anticipated sales increase. Had the sales downturn not occurred, our SG&A
expense would have been more in keeping with our corporate goals."
Mr. Hilz continued, "The significant new business that PC ServiceSource
announced with Dell today will begin in the third quarter. Our subsidiary, Cyclix
Engineering Corporation, recently began repair operations for two new
customers and is expected to at least break even for the rest of the year. We are
very excited about the potential these new alliances offer. However, until the
timing and degree of new business revenues is more clearly understood, and the
direction of the overall industry sales environment becomes clear, we are
cautious in our third quarter outlook, expecting $33.5 million in sales and $.12
earnings per share."
PC ServiceSource supports a customer base of over 20,000 service providers,
providing services to more than 30 major computer manufacturers, and is widely
recognized as the largest supplier of service logistics to the PC industry. Cyclix
Engineering, the Company's remanufacturing subsidiary, offers a range of
services that strategically complements the distribution-oriented service logistics
offerings of PC ServiceSource. PC ServiceSource has implemented many
industry innovations, including PC SERVICE NET, the PC industry's first
real-time Internet ordering and information retrieval system for spare parts.
General and financial data is located on the Internet at www.pcservice.com.
Caution Regarding Forward-Looking Statements: The Company occasionally
makes forward-looking statements concerning its plans, goals, product and
service offerings, and anticipated financial performance. These forward-looking
statements may generally be identified by introductions such as "outlook" for an
upcoming period of time, or words and phrases such as "should," "expect,"
"hope," "plans," "projected," "believes," "forward-looking" (or variants of those
words and phrases) or similar language indicating the expression of an opinion
or view concerning the future. These forward-looking statements are subject to
risks and uncertainties based on a number of factors and actual results or events
may differ materially from those anticipated by such forward-looking statements.
These factors include, but are not limited to, those described under the heading
"Caution Regarding Forward-Looking Statements" in the Company's Report on
Form 10K for 1996 as it may be updated in any subsequent Report on Form
10Q, all as filed with the Securities and Exchange Commission.
PC Service Source, Inc.
Comparative Financial Data
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
Revenues $31,711 $ 26,786 $ 64,132 $53,067
Gross margin 9,472 8,316 18,458 15,889
Operating expenses:
Selling, general
and administrative 8,100 6,368 15,504 12,237
Depreciation and amortization 802 498 1,544 932
Total operating expenses 8,902 6,866 17,048 13,169
Earnings from Operations 570 1,450 1,410 2,720
Interest expense, net 141 242 270 471
Earnings before income taxes 429 1,208 1,140 2,249
Net earnings $ 271 $ 759 $ 718 $ 1,413
Earnings per share $ 0.05 $ 0.16 $ 0.12 $ 0.30
Weighted average common
shares outstanding 5,878 4,850 5,882 4,634
PC Service Source, Inc.
Supplemental Income Statement Data
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
June 30, 1997 March 31, 1997 Variance
Revenues $ 31,711 100.0% $32,421 100.0% $ -2.2
Gross margin 9,472 29.9 8,986 27.7 5.4
Operating expenses:
Selling 2,719 8.6 2,372 7.3 -14.6
Operating 1,955 6.2 1,872 5.8 -4.4
General and administrative 3,426 10.8 3,160 9.7 -8.4
Total Selling, general
& administrative 8,100 25.6 7,404 22.8 -9.4
Depreciation and amortization 802 2.5 742 2.3 -8.1
Total operating expenses 8,902 28.1 8,146 25.1 -9.3
Earnings from operations 570 1.8 840 2.6 -32.1
Interest expense, net 141 0.4 129 0.4 -9.3
Earnings before income taxes 429 1.4 711 2.2 -39.7
Net earnings $ 271 0.9% $ 447 1.4% $-39.4
Earnings per share $ 0.05 $ 0.08 $-37.5
Weighted average common
shares outstanding 5,878 5,886
PC Service Source, Inc.
Balance Sheet
(In thousands)
(Unaudited)
June 30, 1997 December 31, 1996
Assets
Cash $ 29 $ 3,650
Accounts receivable, net 15,116 12,978
Inventories 18,978 19,590
Other current assets 1,909 1,629
Property and equipment, net 12,379 10,418
Other assets, net 2,293 1,909
Total Assets $50,704 $ 50,174
Liabilities and Equity
Accounts payable $ 6,288 $ 7,821
Accrued liabilities 2,815 2,600
Income taxes payable - 38
Current Debt 1,034 841
Revolving line of credit 3,940 3,053
Long-term debt 3,328 3,059
Other liabilities 385 566
Shareholders' equity 32,914 32,196
Total Liabilities & Equity $50,704 $50,174
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Copyright 1997 Business Wire. |
