**********TO ALL****STELLAR EANINGS REPORT********
BASED on earnings estimates of .50/share for 1997, this co.is now trading at a forward PE of, what, ...11 ?! BUY!
CLEARWATER, Fla.--(BUSINESS WIRE)--Feb. 27, 1997--Information Management Resources, Inc. (IMR),
(NASDAQ:IMRS) a leading provider of application software development, maintenance, migration and Year 2000
services to Fortune 500 companies and their international affiliates and subsidiaries, today announced that it ended
1996 with a strong fourth quarter performance. "During the fourth quarter, IMR continued its pattern of
accelerating revenue growth and maintained the gross margin produced in the first three quarters of 1996 of 42%,
which is one of the highest returns in the industry, testimony to the effectiveness of our unique business model
and delivery model," stated Satish K. Sanan, Chairman, President and Chief Executive Officer.
Total revenue for the 1996 fourth quarter ended December 31, 1996, reached $8.5 million, up 36% from $6.3
million in the 1995 comparable quarter. Pro forma net income increased 122% to $1.0 million from $455,000 in
the 1995 fourth quarter. Pro forma earnings per share for the 1996 fourth quarter amounted to $0.08 on 13.1
million weighted average number of shares outstanding, versus $0.03 based on 14.2 million weighted average
number of shares outstanding in the same period of 1995.
Total revenue for the year ended December 31, 1996 increased to $27.9 million, a 23% increase over $22.7
million in 1995. Pro forma net income rose 58% to $2.5 million, or $0.22 per share from $1.6 million, or $0.12
per share in 1995. The weighted average number of shares outstanding was 11.7 million in 1996, compared to
13.7 million in 1995, a 14% decline mainly due to the Company's repurchase of approximately 2.6 million shares
in January 1996 from certain shareholders, partially offset by the Company's successful IPO in November 1996.
"Record total revenue in the 1996 fourth quarter reflects extremely strong growth in IMR's Year 2000 projects, up
to $3.7 million from $268,000 in the same quarter a year ago," noted Mr. Sanan. "Clearly our strategy to
capitalize on the growing trend to outsource intensive IT projects such as the fast approaching Year 2000 problem
is working very well. IMR currently has more than 40 active Year 2000 engagements under way. In particular, we
have been able to convert many of our initial analysis and planning engagements into contracts for Year 2000
backend conversion projects. Also important is that as demand for the Company's Year 2000 services accelerate,
our focus is on selecting those customers with the greatest potential for IMR to develop into long-term client
relationships. In short, our objective is to evolve our Year 2000 projects into long-term maintenance work."
Mr. Sanan continued, "With respect to IMR's core transitional outsourcing business (software development,
application maintenance and migration and re-engineering services) fourth quarter 1996 revenues were $3.6
million, down 6% from the same quarter of 1995, reflecting the Company's opportunistic strategy to redeploy
selected resources to Year 2000 projects. Programming and consulting services revenues for the fourth quarter of
1996 declined 48% to $893,000 as the Company's resources were reallocated from short-term, time-and-
materials contract programming projects to higher- margin, multi-year, turnkey Year 2000 and application
maintenance engagements.
"We are very pleased to report that in 1996, in spite of increased salaries and employee benefits for personnel
dedicated to client projects, IMR brought more of every sales dollar to the bottom line than we did in 1995. As a
percentage of total revenue, the annual gross profit margin improved to 42% for 1996 as compared with 40% for
1995. This improvement in our profitability reflects the Company's ability to reduce the cost and cycle time of
delivering IT services through the utilization of the IMR's proprietary TSQM software engineering process, our
methodologies and toolsets, and our offshore software development facility." Mr. Sanan went on to note that,
"IMR's gross profit margin, was 42% for the 1996 fourth quarter compared with the gross profit margin of 47%
in the fourth quarter of 1995 when the Company's Indian subsidiary achieved an exceptional level of profitability
due to the consolidation of operations in Bangalore and higher than normal utilization of resources."
"In summary, 1996 was a year of tremendous achievement for IMR. The Company raised net proceeds of $40.7
million in its successful initial public offering. We generated our third consecutive year of increased revenues and
earnings. The Company has been able to gain prominence as a leading provider of full life cycle Year 2000
compliance services, and, as a consequence, has built a solid client base of Fortune 500 Companies. Further, IMR
was able to realize these achievements while continuing to provide considerable
transitional outsourcing services.
"Looking forward, we believe IMR is well positioned for continued, strong growth in 1997 and beyond given our
large backlog of approximately $60 million in committed, contracted projects, the large amount of potential new
business in the pipeline and the closing of the Link acquisition in February this year," concluded Mr. Sanan. The
Company noted that it had closed its previously announced agreement to acquire 100% of Link Group Holdings
Ltd. on February 10, 1997. |
