COSI Reports Sharply Higher Q1 Earnings....
Tuesday March 10, 9:00 am Eastern Time
Company Press Release
SOURCE: Computer Outsourcing Services, Inc.
Computer Outsourcing Services, Inc. Reports Sharply Higher First Quarter Earnings
NEW YORK, March 10 /PRNewswire/ -- Computer Outsourcing Services, Inc. (Nasdaq: COSI - news), a provider of information technology outsourcing and Year 2000 testing services, today announced significant revenue and earnings increases for the first quarter of its 1998 fiscal year.
For the three months ended January 31, 1998, the Company's revenues from continuing operations rose 22% to approximately $7.2 million, compared with approximately $5.9 million in the first quarter of fiscal year 1997. Net income from continuing operations increased to $490,538, or $0.13 per share ($0.11 diluted), during the first quarter of fiscal year 1998, versus net income from continuing operations of $51,839, or $0.01 per share ($0.01 diluted), in the prior-year period. In addition, during the most recent quarter the Company realized a pretax gain of approximately $3.1 million ($1.6 million net of taxes), or $0.42 per share ($0.36 diluted) from the sale of its Payroll Division to Zurich Payroll Solutions LTD.
After inclusion of the gain and a $60,509 loss from discontinued operations (versus a profit of $94,648 from discontinued operations in the prior-year period), COSI reported total net income of $2,030,950, or $0.53 per share ($0.46 diluted), in the quarter ended January 31, 1998. This compared with net income of $146,487, or $0.04 per share ($0.04 diluted), in the first quarter of the previous fiscal year. The weighted average number of shares outstanding totaled 3,829,895 during the first quarter of fiscal 1998, compared with 3,740,285 average shares during the first quarter of fiscal 1997.
''We were very pleased with the more than ninefold increase in net income from operations during our first quarter,'' noted Zach Lonstein, Chairman and Chief Executive Officer of Computer Outsourcing Services, Inc. ''Following our recent sale of the Payroll Division for a $3.1 million pretax profit, we have focused on COSI's opportunities as a leading provider of Information Technology (IT) outsourcing services, along with the growing demand for Year 2000 computer system solutions. Revenues derived from our participation in CAMPUS2000(TM), a consortium of leading IT companies which provide evaluation, conversion, testing and redeployment of Year 2000-affected computer code, should increase as the year progresses and more organizations enter the remediation and testing stage of their Year 2000 conversion programs.''
''The consolidation of our computer operations into a new 67,000 square foot facility in Leonia, New Jersey, will provide COSI with additional productive capacity for growth and should result in substantial overhead savings and greater operating efficiencies in the future,'' continued Lonstein. ''Our balance sheet has been greatly strengthened by the sale of the Payroll Division, and we had more than $10 million in cash available for acquisitions and internal growth opportunities as of January 31, 1998.''
Computer Outsourcing Services, Inc. (''COSI'') provides information processing and other Information Technology services to companies, institutions, and government agencies throughout the United States. Through its outsourcing agreements, COSI manages some or all of its clients' Information Systems operations, which enables its clients to reduce operating costs and focus upon core activities. The Company also provides end-to-end testing facilities and services for organizations seeking to assure that their Information Technology systems are Year 2000-compliant.
The Company is headquartered in New York, NY and its common stock trades on the Nasdaq National Market under the symbol ''COSI''.
Forward-looking statements in this release that are not historical or current facts are ''forward-looking statements'' made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that actual results may differ substantially from such forward-looking statements. Forward-looking statements may be subject to certain risks and uncertainties, including, but not limited to, continued acceptance of the Company's products and services in the marketplace, competitive factors, new products, technological changes, the Company's dependence upon third-party suppliers, intellectual property rights and other risks detailed from time to time in the Company's periodic report filings with the Securities and Exchange Commission. Accordingly, the actual results of the Company could differ materially from such forward-looking statements.
For further information, please contact:
Zach Lonstein, Chairman and Chief Executive Officer, at 212-564-3730 (Ext. 238) or R. Jerry Falkner, CFA, Investor Relations Counsel at 800-377-9893.
Note: All trademarks or registered trademarks are those of their respective owners.
COMPUTER OUTSOURCING SERVICES, INC.
AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS (Unaudited)
Three Months Ended
Jan 31 Jan 31
1998 1997
Revenues $7,216,595 $5,899,895
Income from continuing operations
before provision for income taxes 874,884 92,139
Income tax expense 384,346 40,300
Income from continuing operations 490,538 51,839
Income (loss) from discontinued operations (60,509) 94,648
Gain on sale of Payroll Division
(net of taxes) 1,600,921 --
Net Income $2,030,950 $146,487
Per Common Share:
Income from continuing operations $0.13 $0.01
Income (loss) from discontinued
operations $(0.02) $0.03
Gain on sale of Payroll Division $0.42 $--
Net Income $0.53 $0.04
Weighted average number of
shares outstanding 3,829,895 3,740,285
Per Common Share (Diluted):
Income from continuing operations $0.11 $0.01
Income (loss) from discontinued
operations $(0.01) $0.03
Gain on sale of Payroll Division $0.36 $--
Net Income $0.46 $0.04
Weighted average number of diluted
shares outstanding 4,429,484 3,839,991
SOURCE: Computer Outsourcing Services, Inc. |
