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EXHIBIT 20
LOGO SCB COMPUTER TECHNOLOGY, INC.
Contact: T. Scott Cobb Michael J. Boling, CPA
President and Executive Vice President and
Chief Executive Officer Chief Financial Officer
901-754-6577 901-754-6577
SCB COMPUTER TECHNOLOGY, INC. SELLS TWO NON-CORE BUSINESS UNITS
AS A PART OF RESTRUCTURING TO FOCUS ON CORE COMPETENCIES
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EXPECTS TO INCUR ONE-TIME CHARGES FOR ITS SECOND QUARTER
MEMPHIS, Tenn. -- (December 1, 2000) -- SCB Computer Technology, Inc.
(OTCBB:SCBI) today announced that as part of its strategy to focus its
operations on core competencies, the Company has completed the sales of two
computer hardware business units, Proven Technology and Global Services. These
non-core business units, based in New York and Arizona, represented less than 3%
of fiscal year 2000 annual sales and contributed in excess of 25% of the
operating loss in fiscal 2000. The Company also announced that it expects to
close its only other hardware/software sales business unit and does not plan to
accept any new leases in its computer leasing business unit. These two business
units represented less than 5% of SCB's fiscal 2000 annual sales and contributed
in excess of 10 percent of the operating loss in fiscal year 2000.
T. Scott Cobb, president and chief executive officer, said, "We are
aggressively moving our company toward our core competencies. As a result of
these actions, SCB expects to incur one-time charges for discontinued operations
of approximately $10.0 million ($9.2 million of which are non-cash) in its
second quarter that ended October 31, 2000. Approximately $8.2 million of the
total charges represent the non-cash write-down of goodwill and residual values
booked in the computer leasing business unit. The remainder is for a loss on the
sales of the two computer hardware business units and a discontinued operations
reserve to cover other costs in the computer leasing and hardware/software sales
business units. The sales of these two business units and the other
restructuring actions are consistent with our strategy to focus SCB on its core
competencies of providing information technology staffing, consulting and
outsourcing services."
Mr. Cobb went on to say, "Since our annual shareholders' meeting on
October 18, 2000, SCB's management and Board of Directors have completed an
extensive analysis of all of the Company's assets and business units. Based upon
this analysis, we intend to take additional one-time charges of $29.8 million in
the second quarter. Of these charges, $26.9 million represent the write-down of
previously recorded goodwill from the acquisition of two business units. We have
concluded that the operating results of these operations will no longer support
the goodwill originally recorded."
-MORE-
3800 Forest Hill-Irene Road, Suite 100 - Memphis, TN 38125 - (901) 754-6577
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SCBI Announces Sales of Two Business Units
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December 1, 2000
"We continue to work to improve our operations and expect to report a
small profit from continuing operations for the second quarter before these
unusual and discontinued operations charges," Mr. Cobb indicated.
The Company expects to release its unaudited results for the second
quarter on December 6, 2000.
Certain statements contained in this press release and related
statements by management of SCB may be deemed to be forward-looking statements.
These forward-looking statements involve a number of risks and uncertainties,
including those relating to SCB's future operations and results and the other
risks and uncertainties described in SCB's filings with the Securities and
Exchange Commission. SCB undertakes no obligation to update this forward-looking
information except as required by law.
SCB Computer Technology, Inc., is a leading provider of information
technology management and technical services to Fortune 1000 companies, state
and local governments, and other large organizations. For additional
information, visit SCB's home page at: HTTP://WWW.SCB.COM
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