-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VfaNtfY1iIR9cVFh3fMkRj4A5ArOOnye5L0THm8FCr4i6Ez8pna2rJvxlXF9Bgs6 WhrPTQpvPvfIbTIQdBU1JA== 0000950116-03-002235.txt : 20030409 0000950116-03-002235.hdr.sgml : 20030409 20030409161357 ACCESSION NUMBER: 0000950116-03-002235 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030404 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030409 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SYSTEMS & COMPUTER TECHNOLOGY CORP CENTRAL INDEX KEY: 0000707606 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC. [7370] IRS NUMBER: 231701520 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-11521 FILM NUMBER: 03644222 BUSINESS ADDRESS: STREET 1: GREAT VALLEY CORPORATE CTR STREET 2: 4 COUNTRY VIEW RD CITY: MALVERN STATE: PA ZIP: 19355 BUSINESS PHONE: 6106475930 MAIL ADDRESS: STREET 1: GREAT VALLEY CORP CTR STREET 2: 4 COUNTRY VIEW RD CITY: MALVERN STATE: PA ZIP: 19355 8-K 1 eight-k.txt 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): April 4, 2003 -------------- SYSTEMS & COMPUTER TECHNOLOGY CORPORATION - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Charter)
Delaware 000-11521 23-1701520 - ------------------------------------- ------------------------------- -------------------------------------- (State or Other Jurisdiction (Commission (I.R.S. Employer of Incorporation) File Number) Identification No.)
4 Country View Road, Malvern, Pennsylvania 19355 - ------------------------------------------------ ---------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code (610) 647-5930 -------------- Item 7. Financial Statements and Exhibits. (a) Financial Statements of Business Acquired. Not Applicable. (b) Pro Forma Financial Information. Not Applicable (c) Exhibits. Exhibit Number Description ---------- ----------------------------------------------------------- 99.1 Press Release dated April 4, 2003 entitled "SCT Estimates Second Quarter Earnings, Announces Conference Call." 99.2 Text of script for April 4, 2003 Conference Call. Item 9. Regulation FD Disclosure. This Current Report on Form 8-K is being furnished pursuant to Item 12. See "Item 12. Results of Operations and Financial Condition" below. Item 12. Results of Operations and Financial Condition. On April 4, 2003, Systems & Computer Technology Corporation, a Delaware corporation (the "Company"), issued a press release reporting estimated earnings for its second quarter ended March 31, 2003. The press release also contains other estimated financial information for the Company's second quarter ended March 31, 2003. The press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K. On April 4, 2003, the Company held a broadly accessible conference call with investors to discuss the Company's preliminary results announced in the press release. A script read by officers of the Company during the conference call is furnished as Exhibit 99.2 to this Current Report on Form 8-K. The press release and the disclosures by the Company during the conference call included one or more "non-GAAP financial measures" within the meaning of the Securities and Exchange Commission's Regulation G. These non-GAAP financial measures have been presented because management uses this information in monitoring and evaluating the Company's on-going financial results and trends and believes that as a result, this information will be useful to investors. The disclosure in this Form 8-K of any financial information shall not constitute an admission that such information is material. The following is a reconciliation of the Non-GAAP to GAAP financial measures:
Quarter Ended Quarter Ended Reconciliation of Non-GAAP to GAAP Financial Measures March 31, 2003 March 31, 2002 - ----------------------------------------------------- -------------- -------------- Estimated earnings per share from continuing operations, before restructuring charge (non-GAAP) $.02-$.05 $.10 Restructuring charge ($.03) ($.08) Earnings (loss) per share from continuing operations (GAAP) ($.01)-$.02 $.02
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 duly authorized. Date: April 9, 2003 Systems & Computer Technology Corporation By: /s/ Eric Haskell -------------------------------------- Eric Haskell Executive Vice President, Finance & Administration, Treasurer and Chief Financial Officer Exhibit Index Exhibit Number Description ---------- ----------------------------------------------------------- 99.1 Press Release dated April 4, 2003 entitled "SCT Estimates Second Quarter Earnings, Announces Conference Call." 99.2 Text of script for April 4, 2003 Conference Call. EX-99 3 ex99-1.txt EXHIBIT 99.1 Exhibit 99.1 SCT ESTIMATES SECOND QUARTER EARNINGS, ANNOUNCES CONFERENCE CALL MALVERN, Pa. -- April 4, 2003 -- SCT (NASDAQ:SCTC), the industry-leading provider of software and services supporting higher education worldwide, today announced it expects earnings per diluted share from continuing operations of approximately $.02 to $.05, before a restructuring charge, for its second fiscal quarter which ended March 31, 2003. Earnings (loss) per diluted share from continuing operations are expected to range between ($.01) and $.02. These figures compare to earnings per diluted share of $.10 reported in the same quarter of fiscal 2002. For the quarter, the Company will take a restructuring charge of $1.5 million or $.03 per diluted share. This charge is for severance payments related to a reduction in force, principally in professional services, at the end of February. Net income is estimated to be between $.10 and $.13 per diluted share and incorporates estimated income from discontinued operations of $.11 per diluted share that includes the gain on sale of the Utilities business in March. Revenues and license fees are estimated to be $65 million and $7.4 million respectively as compared to $58.5 million and $6.9 million in the second quarter of 2002. The preceding estimates are based upon preliminary results and are subject to review and adjustment. Mike Chamberlain, SCT President and CEO, stated, "We are disappointed with our second quarter results. There is strong evidence that the U. S. economy and global political climate have begun to impact spending by higher education. As the market leader, we believe the Company is very well positioned to ride out these uncertain times. We will continue to evaluate business conditions and take appropriate cost actions which will not adversely impact our long-term strategic objectives." SCT will hold a conference call today, April 4, at 4:00 p.m. EST to discuss these preliminary results. To participate, please call 212.346.6416 and use the reservation number 21139366. A recording of the call will be available for replay April 4 at 6:00 p.m. through April 11 at 6:00 p.m. To listen to the recording, please call 800.633.8284 (domestic) or 402.977.9140 (international) and use the reservation number 21139366. About SCT SCT is the leading global provider of e-education technology solutions for institutions of all sizes and complexity. The Company supports more than 1,300 client institutions worldwide with administrative and academic solutions, portal and community solutions, content management and workflow solutions, information access and integration solutions, and professional services. SCT works collaboratively with clients and partners to provide the e-Education Infrastructure that enables institutions to create the digital campuses that fulfill their unique missions. For more information visit www.sct.com. ### Statements made in this press release that state the Company's or management's intentions, beliefs, expectations, or predictions for the future are forward-looking statements and are subject to a number of risks, assumptions and uncertainties that could cause the Company's actual results to differ materially from those projected. Readers are cautioned that these statements are only predictions and may differ materially from actual future events or results. These risks, assumptions and uncertainties include, without limitation: the ability to complete and deliver products and services cost effectively and on a timely basis; technological shifts; economic and geopolitical conditions in the U.S. and abroad; the ability of the Company and its alliance partners to accomplish their integration plans and to meet development and implementation schedules cost-effectively and on a timely basis; the ability to develop and market innovative products and services offerings cost-effectively and on a timely basis; market acceptance of new products and services; continued acceptance of existing products and services; competitive and pricing pressures in the higher education market; the mix of products and services the Company sells; the Company's ability to efficiently integrate acquired businesses; maturing product life cycles; implementation of operating cost structures that align with revenue growth; the financial condition of our customers and alliance partners; the ability to achieve better services utilization rates and improve services margins; the continued ability to obtain or protect intellectual property rights; the Company's ability to attract and retain highly skilled personnel; and other risks and uncertainties referenced in the Company's filings with the Securities and Exchange Commission, including but not limited to the Company's annual report on Form 10-K and quarterly reports on Form 10-Q. All information in this release is as of April 4, 2003. The Company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company's expectations. Contacts: Investor Relations Media Relations Eric Haskell Laura Kvinge 610.578.5175 801.257.4158 ehaskell@sct.com lkvinge@sct.com EX-99 4 ex99-2.txt EXHIBIT 99.2 Exhibit 99.2 Text of Script for April 4, 2003 Conference Call Script of Michael Chamberlain, President and Chief Executive Officer: Q2 Conference Call - 4/4/03 Good afternoon! Thanks for joining us today. Before we get started I need to say that: The matters discussed during this conference call that are forward-looking statements are based on current management expectations that involve risks and uncertainties that could cause actual results to differ materially from those anticipated. Please refer to the discussion of the risks and uncertainties set out in the Company's press release and its filings with the Securities and Exchange Commission. I've asked our CFO, Eric Haskell, to review preliminary financial results for the quarter, but before I turn it over to him I'd like to comment on a couple of areas. First, please recognize that we are still dealing with preliminary results and we'll issue another press release in about 10 days when the results for the quarter have been finalized. As indicated in our press release earlier today, 2Q earnings were lower than expected. The shortfall can essentially be attributed to a miss in expected license fees of approximately $3 million for the quarter. Each of the other revenue lines came in pretty much as planned. In fact, professional services revenue was slightly better than plan. However, it has become evident over the past 60 days or so that the current economic and political climate is now having an impact on spending in higher education and we will continue to adjust our plans in recognition of this reality. With that I'd like to turn it over to Eric..... Script of Eric Haskell, Executive Vice President, Finance and Administration, and Chief Financial Officer: I would like to repeat some of the details in today's press release to make certain that we are all clear on our estimated results for the quarter. 1. Income from continuing operations is estimated to range between a loss per fully diluted share of $(.01) and a profit of $.02. In last year's second quarter we reported a $.10 profit per fully diluted share profit 2. These amounts include a restructuring charge of $1.5 million or $.03 per fully diluted share. On a non GAAP basis, earnings before that charge are expected to range between .02 and .05 per fully diluted share. 3. The profit from discontinued operations is estimated to be $.11 per fully diluted share as the result of our sale of the utilities business. 4. Revenues and license fees are estimated to be $65 million and $7.4 million, respectively. Last year's revenues were $58.5 million and license fees were $6.9 million. Script of Michael Chamberlain, President and Chief Executive Officer: I'd like to make a few more comments before we open the call for questions. Again, please remember that we are still early in the closing cycle and we have only preliminary results at this stage. Professional Services revenue was $22.5 million. You may recall that last quarter we saw Professional Services margins slip to 11%. We spent a fair amount of time in our previous conference call discussing the reasons for that slip. To refresh your memory we said that there was a mismatch between accessible backlog and professional services resources available. We expressed confidence in our ability to correct the situation. I'm pleased to report that Professional Services margins improved to approximately 21% in the current quarter, as a result of both improved utilization and reduced cost. The cost reduction was largely the result of the RIF at the end of February and so we only saw one month's impact in the quarterly results. Our medium term objective is to achieve margins in the mid 20% range in the professional services arena. One last comment on the financials: we achieved approximately the same EPS as we did in Q1 on $3.5 million less in license fees. This was principally the result of the above mentioned service margin improvement but also was the result of other operational efficiencies. The reduction in force occurred at the end of February so we only received one month's worth of benefit. We will continue to focus on improving productivity in services and other operational areas. Just a couple of further items that may be of interest: Our annual user group meeting is called SCT Summit. The Summit meeting was held in New Orleans in early March. By all accounts it was the best Summit ever! Over 5,000 SCT customers gathered for four days of meetings with over 600 individual sessions. The level of client satisfaction was high, and acceptance of new SCT products being introduced and demonstrated was terrific! The exhibit area housed 42 SCT business partners exhibiting their products. The SCT Summit is the largest gathering of higher education institutions anywhere. We also closed the sale of the SCT Utilities business during the quarter. This was the last of the planned divestitures which results in an SCT that is now solely focused on higher education. The associated organization changes and cost reductions were also made as planned. Finally, a comment on the outlook for the future: As recently as 60-90 days ago, we were not seeing any material impact of the overall economy and political climate on our business. It is now becoming increasingly clear that SCT will not escape the effect of this environment. However, as a company, we are stronger than ever. We have a strong balance sheet, excellent products, and domain expertise that is unmatched by any of our competitors. We now think that the overall political and economic environment will have an impact on our shorter term financial results and accordingly we are lowering our second half growth projections from the 15-20% range to the 10% range. As the market leader, now totally focused on the higher education market, we expect to do well against competition in a tough market environment. Historically the second half of the Company's fiscal year has always been stronger in terms of revenue growth and profitability than the first half. So as we make our projections we'll keep that historical fact in mind. On the other hand, we also want to be sure that we recognize we are in a discontinuous period with the economic and political climate the way it is. Finally, during this period of slower growth, we will continue to work on improving overall productivity and profitability and we'll exit the period I think in an even stronger position both competitively and financially as we move forward. With that, I'd like to open it for questions. Additional Information Regarding the Company's Results of Operations and Financial Condition Discussed by Messrs. Chamberlain and Haskell in the Conference Call during Question and Answer Period, Not Included in Prepared Script: We believe the Company was more impacted by the overall economic scenario at the lower end of the market, specifically the PowerCampus product line than in the higher end. We believe that smaller schools are under more immediate pressure from a financial standpoint and are deferring and in some cases cancelling procurement of ERP systems. In the higher end, one of our more significant wins against competition was the closing of Notre Dame. There, we are not seeing cancellation of the procurement process or any increase in competitive loss rate but a lengthening of the procurement process and more caution and due diligence by Boards of Trustees in these times. The Company's backlog of business is approximately $530 million, of which about $125 - $150 million is in professional services. The Company had too many resources for the amount of professional services work ready to move forward and as a result, margins in professional services were impacted last quarter. The margins in professional services were significantly improved this quarter and our objective is to get these margins in the mid 20s range. When you look at the three major acquisitions we completed - ABT, Matrix (the Sallie Mae student system) and Campus Pipeline, the revenue results for Campus Pipeline are better than the other two when measured against our expectations. There is a significant opportunity for us with the Campus Pipeline Luminis product and people resources acquired as we try to grow the business at a rate perhaps greater than we'll see ERP growth. Cash was down about $4 - $5 million from the end of the prior quarter excluding the $28 million received from the sale of the utilities business. With the proceeds from the utilities sale included, cash was in the $75 million range at the end of the second quarter. The purchaser of the utilities business is required to pay the Company another $10 million and the purchaser is seeking a mortgage on the property sold in the transaction. In addition, the Company has $35 million in debt that is due in October 2004. We are dissatisfied with our days sales and think we've made some progress which only reflected itself in March collections and we think we will see some significant reduction but not until the end of the Company's fiscal year. -----END PRIVACY-ENHANCED MESSAGE-----