8-K

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 19, 2004

American Management Systems, Incorporated

(Exact name of registrant as specified in its charter)

Delaware	0-9233	54-0856778
(State or other Jurisdiction of	(Commission File No.)	(I.R.S. Employer Identification
Incorporation)		No.)

4050 Legato Road
Fairfax, Virginia	22033
	(Zip Code)
(Address of Principal Executive Offices)

Registrant’s telephone number, including area code: (703) 267-8000

Not Applicable

(Former name or former address, if changed since last report)

ITEM 12.    DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

     On February 19, 2004, the Registrant announced financial results for the fourth quarter and the year ended December 31, 2003. A copy of the press release announcing the results is attached hereto as Exhibit 99.1. The press release attached as Exhibit 99.1 is being furnished to the Securities and Exchange Commission and shall not be deemed filed.

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	AMERICAN MANAGEMENT SYSTEMS,
	INCORPORATED
By:	/s/ James C. Reagan James C. Reagan Executive Vice President and Chief Financial Officer

Date:  February 19, 2004

EX-99.1 3 w94405exv99w1.htm EXHIBIT 99.1

EXHIBIT 99.1

NASDAQ: AMSY

Investor Relations Contact:
Ronald Schillereff
703-267-5140
ronald.schillereff@ams.com

Media Relations Contact:
Robin Pence
703-449-2062
robin.pence@ams.com

AMS REPORTS Q4 AND 2003 YEAR END RESULTS

FAIRFAX, Va., February 19, 2004 — American Management Systems, Incorporated (NASDAQ: AMSY), a global business and IT consulting firm, today announced fourth quarter 2003 earnings of $5.5 million, $0.13 per diluted share, and a fiscal year 2003 loss of $26.3 million, ($0.62) per diluted share. The annual results include a $43.5 million pre-tax charge for a contract litigation settlement, which is net of a $2.0 million insurance recovery in the fourth quarter.

Revenues for the fourth quarter and fiscal year 2003 were $254.5 million and $961.6 million, respectively, compared with $236.1 million and $986.7 million for the comparable periods in 2002. Fourth quarter revenues in the Federal Government Agencies and State & Local Governments target markets exceeded previous guidance and were key drivers of growth as compared to the third quarter of 2003.

The Company’s fourth quarter results reflect a direct margin decline over the third quarter of 2003 due primarily to additional costs on certain projects in our Public Sector client base associated with the delivery of new web-based technology. The additional costs relate to adjustments on certain long-term fixed price contracts, additional costs incurred to support certain customer implementations for which no benefit was derived in the fourth quarter and increased maintenance costs with additional maintenance revenue expected to begin subsequent to the implementation phase of the projects.

AMS Chairman and Chief Executive Officer, Alfred T. Mockett said, “I am disappointed we did not meet earnings expectations for the quarter. Our underlying business is sound, revenue is up and our current backlog of business is stronger than any period in recent history. In 2004 we will leverage our investments in refreshing our product portfolio, driving bigger and longer term contracts and seizing large opportunities in managed services as the economic recovery takes hold.”

more

Selling, general and administrative expenses increased slightly in the fourth quarter over the third quarter of 2003 partially due to a full quarter’s worth of expenses associated with the acquisition of R.M. Vredenburg & Co. In addition, the Company spent more on business development, recruiting and staff development in support of significant new project wins during the quarter.

The Company generated positive cash flows from operations of $16.9 million for the fourth quarter of 2003. In addition, the Company continued its investment in its next generation of software products, spending approximately $16.5 million for expensed and capitalized development in the fourth quarter 2003.

Days sales outstanding increased from 89 to 91 days from the end of the third quarter to the end of the fourth quarter of 2003. This increase is almost entirely attributable to slowed collections from a large municipal customer, for which significant cash collections were made subsequent to the end of the year.

Conference Call
AMS will hold a conference call to review fourth quarter and year end results at 8:00 a.m. Eastern Time on February 19, 2004 that will be accessible by dialing 913-981-4900. The call may also be accessed via a live Webcast on the AMS Web site at www.ams.com. The Webcast will be available for replay through February 19, 2005. An audio replay of the call will be available from 11:00 a.m. Eastern Time on February 19, 2004 through midnight, March 4, 2004 by dialing 719-457-0820 and entering pass code 760759.

About AMS
AMS is a premier business and IT consulting firm to the government, financial services, and communications industries around the globe. AMS combines IT ingenuity and industry IQ to drive high-performance results. Known for its delivery and service excellence for more than 30 years, AMS specializes in enterprise resource planning, credit risk management, customer relationship management, and enterprise security. AMS applies both proprietary and partner technologies, and provides solutions through business consulting, systems integration, and outsourcing. Founded in 1970, AMS is headquartered in Fairfax, Va., and has offices worldwide. The company is traded on the NASDAQ National Market under the symbol AMSY. For detailed information about AMS, visit www.ams.com.

# # #

Investors are cautioned that this release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, relating to our operations that are based on management’s current expectations, estimates and projections. Words such as “anticipates,” “believes,” “expects,” “estimates,” “intends,” and similar expressions are used to identify these forward-looking statements. These statements are subject to risks, uncertainty and changes in circumstances. Forward-looking statements are based on assumptions as to future events that may not prove to be accurate. Actual results may differ materially from what is expressed or forecast in these forward-looking statements. The reasons for this include changes in general economic and political conditions, including fluctuations in exchange rates, and the factors discussed in AMS’s Annual Report on Form 10-K for the year ended December 31, 2002. The Company specifically disclaims any obligation to update these forward-looking statements. These forward-looking statements should not be relied upon as representing the Company’s estimates or views as of any subsequent date.

American Management Systems, Incorporated
CONSOLIDATED CONDENSED INCOME STATEMENTS
Unaudited
(In thousands, except per share data)

		For the Three Months						For the Twelve Months
		Ended December 31,						Ended December 31,
		2003			2002			2003			2002
REVENUES		$	254,515		$	236,088		$	961,620		$	986,695
EXPENSES:
	Cost of Revenues		165,238			144,091			601,190			581,958
	Selling, General and Administrative		79,658			76,201			311,857			315,708
	Research and Development		3,132			4,987			13,039			24,796
	Restructuring Charge		—			—			24,785			22,087
	Software Asset Impairments		—			19,608			9,555			19,608
	Gain on Sale of Utilities Practice		—			(19,922	)		—			(19,922	)
	Contract Litigation Settlement (Income) Expense		(2,000	)		—			43,489			—
INCOME (LOSS) FROM OPERATIONS			8,487			11,123			(42,295	)		42,460
OTHER (INCOME) EXPENSE, NET:
	Interest Expense		486			344			1,338			363
	Other Income		(726	)		(1,181	)		(1,152	)		(2	)
			(240	)		(837	)		186			361
INCOME (LOSS) BEFORE INCOME TAXES			8,727			11,960			(42,481	)		42,099
INCOME TAX EXPENSE (BENEFIT)			3,274			3,947			(16,185	)		13,893
NET INCOME (LOSS)		$	5,453		$	8,013		$	(26,296	)	$	28,206
WEIGHTED AVERAGE SHARES OUTSTANDING
	Basic		42,465			42,274			42,348			42,032
	Diluted		42,832			42,501			42,348			42,460
EARNINGS (LOSS) PER SHARE
	Basic	$	0.13		$	0.19		$	(0.62	)	$	0.67
	Diluted	$	0.13		$	0.19		$	(0.62	)	$	0.66

Certain amounts from prior year have been reclassified for comparative purposes.

American Management Systems, Incorporated
CONSOLIDATED REVENUES BY MARKET
Unaudited
(In thousands)

	For the Three Months				For the Three Months				For the Twelve Months
	Ended December 31,				Ended September 30,				Ended December 31,
	2003		2002		2003		2002		2003		2002
Federal Government Agencies	$	106,194	$	88,524	$	101,219	$	86,639	$	377,839	$	343,349
State and Local Governments		68,116		62,560		65,852		68,634		260,868		272,758
Communications, Media and Entertainment		44,334		41,438		44,790		45,689		174,880		193,304
Financial Services Institutions		29,574		31,631		30,132		30,366		121,636		121,581
Other Corporate Clients		6,297		11,935		6,129		16,152		26,397		55,703
Total Revenues	$	254,515	$	236,088	$	248,122	$	247,480	$	961,620	$	986,695

American Management Systems, Incorporated
CONSOLIDATED CONDENSED BALANCE SHEETS
Unaudited
(In thousands)

ASSETS			December 31,
			2003		2002
CURRENT ASSETS:
	Cash and Cash Equivalents		$	62,338	$	136,191
	Accounts Receivable, Net			256,840		212,098
	Prepaid Expenses and Other Current Assets			41,764		35,126
		Total Current Assets		360,942		383,415
NONCURRENT ASSETS:
	Property and Equipment (Net of Accumulated Depreciation and Amortization of $50,165 and $44,751)			22,023		24,518
	Purchased and Developed Computer Software (Net of Accumulated Amortization of $164,888 and $136,591)			121,414		90,797
	Intangible Assets (Net of Accumulated Amortization of $1,077 and $0)			16,270		—
	Goodwill, Net			64,271		24,331
	Cash Value of Life Insurance			19,288		29,830
	Other Assets			7,326		69,605
		Total Noncurrent Assets		250,592		239,081
TOTAL ASSETS			$	611,534	$	622,496

American Management Systems, Incorporated
CONSOLIDATED CONDENSED BALANCE SHEETS — continued
Unaudited
(In thousands, except share data)

LIABILITIES AND STOCKHOLDERS' EQUITY			December 31,
			2003			2002
CURRENT LIABILITIES:
	Accounts Payable		$	26,506		$	17,118
	Accrued Compensation and Related Items			50,558			52,674
	Deferred Revenues			29,001			26,115
	Accrued Liabilities			16,272			14,592
	Accrued Restructuring Charge			6,473			7,988
	Income Taxes Payable			686			1,061
	Deferred Income Taxes			8,639			17,159
		Total Current Liabilities		138,135			136,707
NONCURRENT LIABILITIES:
	Deferred Compensation and Other Noncurrent Liabilities			30,596			36,364
	Deferred Income Taxes			22,925			20,044
	Accrued Restructuring Charge			9,844			9,356
		Total Noncurrent Liabilities		63,365			65,764
TOTAL LIABILITIES				201,500			202,471
STOCKHOLDERS’ EQUITY:
	Preferred Stock ($0.10 Par Value; 4,000,000 Shares Authorized, None Issued or Outstanding)			—			—
	Common Stock ($0.01 Par Value; 200,000,000 Shares Authorized, 51,057,214 and 51,057,214 Issued and 42,625,776 and 42,324,218 Outstanding)			510			510
	Capital in Excess of Par Value			83,894			80,309
	Unearned Compensation			(653	)		(2,146	)
	Retained Earnings			358,767			385,063
	Accumulated Other Comprehensive Loss			(1,443	)		(14,915	)
	Treasury Stock, at Cost (8,431,438 and 8,732,996 Shares)			(31,041	)		(28,796	)
		Total Stockholders’ Equity		410,034			420,025
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY			$	611,534		$	622,496

American Management Systems, Incorporated
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
Unaudited
(In thousands)

			December 31,
			2003			2002
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (Loss) Income			$	(26,296	)	$	28,206
Adjustments to Reconcile Net (Loss) Income to Net Cash Provided by Operating Activities
	Depreciation			6,852			7,551
	Amortization			34,238			37,218
	Stock Compensation Expense			1,264			3,001
	Deferred Income Taxes			(8,453	)		8,368
	Increase in Cash Surrender Value of Life Insurance			(1,251	)		(168	)
	Loss on Disposal of Assets			481			765
	Software Asset Impairments			9,555			19,608
	Contract Litigation Asset Write-off			28,489			—
	Changes in Assets and Liabilities, Net of Acquisition:
		(Increase) Decrease in Accounts Receivable		(24,403	)		41,577
		Decrease (Increase) in Prepaid Expenses and Other Assets		10,395			(9,198	)
		Decrease in Accounts Payable and Accrued Liabilities		(1,805	)		(490	)
		Decrease in Accrued Compensation and Related Items		(16,070	)		(2,507	)
		Increase (Decrease) in Deferred Revenues		2,004			(7,050	)
		Decrease in Accrued Restructuring Charge		(1,027	)		(7,181	)
		Decrease in Income Taxes Payable		(1,098	)		(13,474	)
Net Cash Provided by Operating Activities				12,875			106,226
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Property and Equipment				(3,617	)		(1,273	)
Purchase and Development of Computer Software				(54,552	)		(28,279	)
Acquisition of R.M. Vredenburg & Co., Net of Cash Acquired				(44,947	)		—
Purchase Price Payment for Synergy Consulting, Inc.				(3,912	)		(1,250	)
Other Assets				11,542			(1,916	)
Net Cash Used in Investing Activities				(95,486	)		(32,718	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Employee Stock Purchase Plan and Common Stock Options Exercised				6,769			8,107
Payments to Acquire Treasury Stock				(5,019	)		(2,948	)
Payment of R.M. Vredenburg & Co. Debt Acquired				(2,660	)		—
Net Cash (Used in) Provided by Financing Activities				(910	)		5,159
Effect of Exchange Rate Changes on Cash				9,668			4,177
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS				(73,853	)		82,844
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD				136,191			53,347
CASH AND CASH EQUIVALENTS AT END OF PERIOD			$	62,338		$	136,191

Certain amounts from prior year have been reclassified for comparative purposes.

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EX-99.1

exv99w1