-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, QTJ50oZOoPSj8VSCnE7fi1z37nQyiBVKq+YGEmDzrIx9BBG3YObldP3n/LMEdQNp 3X9K3JE+b8ylm9kNvN1wSA== 0000023082-95-000012.txt : 19950814 0000023082-95-000012.hdr.sgml : 19950814 ACCESSION NUMBER: 0000023082-95-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950811 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMPUTER SCIENCES CORP CENTRAL INDEX KEY: 0000023082 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 952043126 STATE OF INCORPORATION: NV FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-04850 FILM NUMBER: 95562031 BUSINESS ADDRESS: STREET 1: 2100 E GRAND AVE CITY: EL SEGUNDO STATE: CA ZIP: 90245 BUSINESS PHONE: 3106150311 MAIL ADDRESS: STREET 1: 2100 EAST GRAND AVE CITY: EL SEGUNDO STATE: CA ZIP: 90245 10-Q 1 10Q 1RST QTR FY96 Form 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 QUARTER ENDED JUNE 30, 1995 Commission File No. 1-4850 COMPUTER SCIENCES CORPORATION Incorporated in the State of Nevada Employer Identification No. 95-2043126 2100 East Grand Avenue El Segundo, California 90245 Telephone (310) 615-0311 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] 55,469,048 shares of Common Stock, $1.00 par value, were outstanding on June 30, 1995. COMPUTER SCIENCES CORPORATION Index to Form 10-Q Page Number Part I. Financial Information Consolidated Condensed Balance Sheets - June 30, 1995 and March 31, 1995 3 Consolidated Condensed Statements of Income - First quarter ended June 30, 1995 and July 1, 1994 4 Consolidated Condensed Statements of Cash Flows - First quarter ended June 30, 1995 and July 1, 1994 5 Notes to Consolidated Condensed Financial Statements 6 Management's Discussion and Analysis of Results of Operations and Financial Condition 8 Part II. Other Information Item 6 - Exhibits and Reports on Form 8-K 10 Exhibit 11 - Calculation of Earnings Per Share 11 Exhibit 27 - Financial Data Schedule 12 Exhibit 28 - Additional Information - Revenues by Market Sector 13 Signatures 14 - 2- PART I. FINANCIAL INFORMATION COMPUTER SCIENCES CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS ($ in thousands)
ASSETS June 30 March 31 1995 1995 (unaudited) CURRENT ASSETS: Cash and cash equivalents $27,239 $155,310 Receivables 930,740 824,963 Prepaid expenses and other current assets 114,429 101,232 ____________ ____________ Total current assets 1,072,408 1,081,505 ____________ ____________ PROPERTY AND EQUIPMENT, at cost 945,441 905,469 Less-Accumulated depreciation and amortization 408,145 375,330 ____________ ____________ Net property and equipment 537,296 530,139 ____________ ____________ EXCESS OF COST OF BUSINESSES ACQUIRED OVER RELATED NET ASSETS, NET 436,735 431,074 OTHER ASSETS 310,924 290,942 ____________ ____________ 2,357,363 2,333,660
LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Short-term debt $149,883 $126,317 Current maturities of long-term debt 11,271 11,111 Accounts payable 151,849 181,983 Accrued payroll and related costs 152,716 152,438 Other accrued expenses 230,421 227,852 Advance contract payments 30,010 30,329 Income taxes payable 42,172 47,882 ____________ ____________ Total current liabilities 768,322 777,912 ____________ ____________ LONG-TERM DEBT, NET 309,918 310,317 ____________ ____________ OTHER LONG-TERM LIABILITIES 100,194 96,872 ____________ ____________ STOCKHOLDERS' EQUITY (Note A): Common stock issued, par value $1.00 per share 55,753 55,386 Other stockholders' equity 1,123,176 1,093,173 ____________ ____________ Total stockholders' equity 1,178,929 1,148,559 ____________ ____________ 2,357,363 2,333,660 See accompanying notes. - 3-
COMPUTER SCIENCES CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF INCOME (unaudited) ($ in thousands except earnings per share)
Three Months Ended ___________________________ June 30, July 1, 1995 1994 ____________ ____________ Revenues $966,783 $738,145 ____________ ____________ Costs of services 774,381 583,661 Selling, general and administrative 85,893 75,962 Depreciation and amortization 54,588 37,904 Interest expense 8,663 6,234 Interest income (1,559) (812) ____________ ____________ Total costs and expenses 921,966 702,949 ____________ ____________ Income before taxes 44,817 35,196 Taxes on income 17,100 13,374 ____________ ____________ Net earnings $27,717 $21,822 ============ ============ ____________ ____________ Earnings per common share (Note B) $0.49 $0.42 ============ ============ See accompanying notes. - 4-
COMPUTER SCIENCES CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (unaudited) ($ in thousands)
Three Months Ended ___________________________ June 30, July 1, 1995 1994 ____________ ____________ Cash flows from operating activities: Net earnings $27,717 $21,822 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 54,588 37,904 Provision for losses on accounts receivable 6,412 3,983 Changes in assets and liabilities, net of effects of acquisitions: Increase in assets (99,960) (76,911) (Decrease) increase in liabilities (47,519) 33,713 ____________ ____________ Net cash (used in) provided by operating activities (58,762) 20,511 ____________ ____________ Investing activities: Purchases of property, plant and equipment (41,641) (37,726) Acquisitions, net of cash acquired (22,377) (9,228) Purchases of outsourcing assets (21,108) Purchased and internally developed software (3,933) (5,001) Other investing cash flows (6,291) (9,275) ____________ ____________ Net cash used in investing activities (95,350) (61,230) ____________ ____________ Financing activities: Paydown of commercial paper, net (1,338) (113,474) Borrowing under lines of credit, net 25,524 25,651 Proceeds from term debt issuance 150,000 Payment of outsourcing financing (114,403) Principal payments on long-term debt (715) (426) Proceeds from exercise of stock options 3,493 2,793 Other financing cash flows (923) 2,928 ____________ ____________ Net cash provided by (used in) financing activities 26,041 (46,931) ____________ ____________ Net decrease in cash and cash equivalents (128,071) (87,650) Cash and cash equivalents at beginning of year 155,310 126,820 ____________ ____________ Cash and cash equivalents at end of period $27,239 $39,170 ============ ============ See accompanying notes. - 5-
COMPUTER SCIENCES CORPORATION NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS ($ in thousands except per share amounts) (A) No dividends were paid during the periods presented. There were 55,752,630 shares at June 30, 1995 and 55,385,555 shares at March 31, 1995 of $1.00 par value common stock issued with 283,582 and 215,047 shares, respectively, of treasury stock. (B) Primary earnings per common share are based on the weighted average number of common stock and common stock equivalent shares (dilutive stock options) outstanding of 56,829,000 and 52,192,000 respectively, for the quarters ended June 30, 1995, and July 1, 1994 (see Part II - Exhibit 11). Fiscal 1996 amounts include the effect of a four-million-share common stock offering completed February 15, 1995. (C) Cash payments for interest on indebtedness were $12,084 and $2,185, respectively, for the quarters ended June 30, 1995, and July 1, 1994. Cash payments for taxes on income were $12,637 and $9,131, respectively, for the quarters ended June 30, 1995, and July 1, 1994. (D) The financial information reported, which is not necessarily indicative of the results for a full year, is unaudited but includes all adjustments which the Company considers necessary for a fair presentation. All such adjustments are normal recurring adjustments. - 6- MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION First Quarter of Fiscal 1996 Versus First Quarter of Fiscal 1995 Revenues During the quarter ended June 30, 1995, the Company's total revenues of $966.8 million increased 31.0%, or $228.7 million, over the same period last year. Federal revenue totaled $382.7 million, up 16.5% from last year's $328.4 million. The increase is due principally to the inception over the past year of a number of contracts, including the provision of information systems support to the NASA Marshall Space Flight Center. Commercial revenue of $345.5 million from domestic operations rose 30.4% from $264.9 million last year, principally due to the inception of operations on outsourcing contracts with Hughes Aircraft Company (February 1995) and Scott Paper Company (November 1994). The Company's U.S. consulting operations also contributed to the growth with a 32.8% increase in revenues over the same quarter of fiscal 1995. International revenue increased 64.8% from $144.8 million to $238.6 million. Nearly one half of the international growth is attributable to the acquisition of Ploenzke AG effective January 2, 1995. The remaining growth includes new outsourcing contracts with Autoglass, ICI Paints, United Distillers U.K. and Lucas Industries PLC, as well as the acquisition of Lucas software and consultancy businesses. The Company announced approximately $1.2 billion of federal business during the first quarter of the current fiscal year, including an eight-year, $756 million (if all options are exercised) contract to provide support services at the Air Force Arnold Engineering Development Center. During the quarter, the Company also announced approximately $1.2 billion of multi-year commercial business, including a $750 million, 10-year outsourcing contract with Lucas Industries PLC. Costs and Expenses Costs of services increased by $190.7 million from $583.7 million during the first fiscal quarter of 1995 to $774.4 during the first quarter of 1996. As a percentage of revenue, costs of services were 80.1% for the quarter ended June 30, 1995, up from 79.1% for the same quarter last year. The rise in costs of services as a percent of revenue is largely attributable to the inception of outsourcing contracts and the integration of acquisitions having costs of services above the overall company rate. Selling, general and administrative (SG&A) expenses increased to $85.9 million for the quarter ended June 30, 1995, up from $76.0 million for the same period last year. The first quarter SG&A as a percentage of revenues decreased to 8.9% during 1996 from 10.3% during 1995 as revenues grew more rapidly than these costs. The Company's depreciation and amortization expense increased 44% to $54.6 million for the current quarter, up from $37.9 million last year. The increase is primarily related to assets purchased in connection with outsourcing contracts and the Ploenzke acquisition. - 7- Interest expense increased to $8.7 million for the current quarter from $6.2 million for the same quarter last year. The increase is primarily due to increased borrowings to fund the German acquisition and purchases of outsourcing assets and other equipment. The increase in interest expense also reflects higher interest rates compared to the same quarter of the prior year, partially offset by higher interest income during the first quarter of fiscal 1996. Income Before Taxes Income before taxes was $44.8 million, up $9.6 million, or 27.3%, over last year's first quarter, reflecting continued revenue growth. As a percentage of revenue, increases in costs of services and depreciation expense were partially offset by the decrease in SG&A as described above. Net Earnings Net earnings were $27.7 million for the quarter ended June 30, 1995, up $5.9 million, or 27.0%, over the same quarter last year. The effective tax rate was 38.2%, versus 38.0% for the same quarter last year. This year's first quarter earnings per share of 49 cents increased 16.7% over the 42 cents for last year's first quarter. The current quarter includes the effect of a four-million-share common stock offering completed February 15, 1995. Cash Flows Cash used in operating activities was $58.8 million for the quarter ended June 30, 1995, compared to an inflow of $20.5 million during the same period last year. The operating cash outflow is principally the result of higher accounts receivable in the Company's federal and international operations, as well as a decrease in accounts payable, principally in its federal business. The Company's cash expenditures for investing activities totaled $95.4 million for the current quarter versus $61.2 million during the first quarter of last year. The increase principally reflects greater investments in acquisition and outsourcing related assets, as described above. Cash provided by financing activities was $26.0 million for the quarter versus a cash outflow of $46.9 million during the same period last year. The increase is primarily due to additional borrowing on available lines of credit during the current quarter, as compared to the same quarter of the prior year when financing activities included the paydown of $114.4 million of outsourcing related financing. Financial Condition During the first quarter of fiscal 1996, the Company's capital needs included $85.1 million of business investments in the form of fixed asset purchases, outsourcing asset purchases and acquisitions, as well as $147.5 million for additional working capital. These needs were met by the use of operating cash flow, additional debt and existing cash, which decreased from $155.3 million to $27.2 million. As a result of the net increase in borrowings, the Company's debt-to-total capitalization ratio increased to 29% at June 30, 1995 versus 28% at March 31, 1995. - 8- The Company's financial condition has not changed significantly since the fiscal year-end. It is management's opinion that the Company will be able to fund its cash needs from operating activities and from short-term borrowings. It is also management's opinion that any major additional requirements can be financed by the use of unused borrowing capacity or by the issuance of new CSC securities. - 9- Part II. Other Information Item 6. Exhibits and Reports on Form 8-K a. Exhibits Exhibit No. 11 - Calculation of Earnings Per Share Exhibit No. 27 - Financial Data Schedule Exhibit No. 28 - Additional Exhibits (i) Revenues by Market Sector b. Reports on Form 8-K: There were no Form 8-K reports filed for the first quarter of fiscal 1996. -10- Signatures Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. COMPUTER SCIENCES CORPORATION Registrant Date: August 11, 1995 By:/s/Denis M. Crane Denis M. Crane Vice President and Controller Chief Accounting Officer -11- EX-11 2 > EXHIBIT 11 COMPUTER SCIENCES CORPORATION CALCULATION OF EARNINGS PER SHARE (In thousands except earnings per share)
Three Months Ended ___________________________ June 30, July 1, 1995 1994 ____________ ____________ Net earnings $27,717 $21,822 ============ ============ Shares: Weighted average shares outstanding 55,302 50,700 Common stock equivalents 1,527 1,492 ____________ ____________ Total for primary and fully diluted calculation 56,829 52,192 Earnings Per Share: ____________ ____________ Primary and fully diluted* $0.49 $0.42 ============ ============ * The fully diluted calculation is submitted in accordance with Regulation S-K item 601 (b) (11) although not required by footnote 2 to paragraph 14 of APB Opinion No. 15 because it results in dilution of less than 3%.
EX-27 3
5 1000 Mar-29-1996 Apr-1-1995 Jun-30-1995 3-MOS 27,239 0 949,437 18,697 0 1,072,408 945,441 408,145 2,357,363 768,322 309,918 55,753 0 0 1,123,176 2,357,363 0 966,783 0 767,969 54,588 6,412 7,104 44,817 17,100 27,717 0 0 0 27,717 0.49 0.49
EX-28 4 EXHIBIT 28 COMPUTER SCIENCES CORPORATION REVENUES BY MARKET SECTOR ($ in millions)
Fiscal Period Ended % of Total _________________________ ___________________________ June 30, July 1, June 30, July 1, 1995 1994 1995 1994 ___________ ___________ ____________ ____________ Three Months U.S. Federal Government: Department of Defense $224.6 $185.2 23 % 25 NASA 79.0 60.7 8 8 Civil agencies 79.1 82.5 8 11 ___________ ___________ _____________ ____________ Total 382.7 328.4 39 44 ___________ ___________ _____________ ____________ Commercial: Domestic 345.5 264.9 36 36 International 238.6 144.8 25 20 ___________ ___________ _____________ ____________ Total 584.1 409.7 61 56 ___________ ___________ _____________ ____________ Total revenues $966.8 $738.1 100 % 100 =========== =========== ============= ============ First Quarter U.S. Federal Government: Department of Defense $224.6 $185.2 23 % 25 NASA 79.0 60.7 8 8 Civil agencies 79.1 82.5 8 11 ___________ ___________ ____________ ____________ Total 382.7 328.4 39 44 ___________ ___________ ____________ ____________ Commercial: Domestic 345.5 264.9 36 36 International 238.6 144.9 25 20 ___________ ___________ ____________ ____________ Total 584.1 409.7 61 56 ___________ ___________ ____________ ____________ Total revenues $966.8 $738.1 100 % 100 =========== =========== ============ ============
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