UNITED STATES
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): October 04, 1999
POLICY MANAGEMENT SYSTEMS CORPORATION
(Exact name of registrant as specified in its charter)
SOUTH CAROLINA 1-10557 57-0723125
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
ONE PMSC CENTER (PO BOX 10)
BLYTHEWOOD, SC (COLUMBIA, SC) 29016 (29202)
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (803) 333-4000
N/A
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(Former name or former address, if changed since last report.)
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ITEM 5. OTHER EVENTS.
On October 4, 1999, Policy Management Systems Corporation announced it
expects third quarter earnings to be in the range of $.31 to $.36 per share
before special and restructuring charges.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(A) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED. Not Applicable.
(B) PRO FORMA FINANCIAL INFORMATION. Not Applicable.
(C) EXHIBITS.
99.1. Press release dated October 04, 1999.
<PAGE>
SIGNATURES
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.
POLICY MANAGEMENT SYSTEMS CORPORATION
(Registrant)
Date: October 4, 1999 Timothy V. Williams
Executive Vice President
(Chief Financial Officer)
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EXHIBIT INDEX
Exhibit
Number
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99.1 Press release dated October 04, 1999.
Timothy V. Williams Charles T. Conway Jr.
Executive Vice President & Director, Corporate Communications
Chief Financial Officer (803) 333-5348
(803) 333-5638 E-mail: [email protected]
E-mail: [email protected] ----------------------
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POLICY MANAGEMENT SYSTEMS CORPORATION ANNOUNCES
THIRD QUARTERS EARNINGS WILL BE BELOW ESTIMATES
COMPANY CITES DELAYS IN TWO LARGE LICENSING AGREEMENTS AND WEAKNESS IN
INTERNATIONAL OPERATIONS;
COMPANY ANNOUNCES ANTICIPATED THIRD QUARTER RESTRUCTURING AND SPECIAL CHARGES
COLUMBIA, S.C., OCT. 4, 1999: Policy Management Systems Corporation
(NYSE: PMS) (PMSC) announced today that, due to delays in licensing decisions by
two potential clients and weak International results, it expects to report
earnings per share for the third quarter ended September 30 in the range of $.31
to $.36 per share before special and restructuring charges. This is 28 to 38
percent below the consensus estimate for the quarter of $.50 per share.
Most of the shortfall in the company's targeted earnings was caused by the
delay of two large licensing decisions. Despite these delays, the company said
revenue is expected to increase approximately 14 percent over the third quarter
of 1998.
Initial licensing revenue growth for the third quarter is expected to be
approximately 30 percent over the third quarter of 1998, with increases of
approximately 120 percent in U.S. Property and Casualty, and 60 percent in U.S.
Life system sales. Business Process Outsourcing revenues also are expected to
increase approximately 100 percent over the third quarter of 1998. Licensing
results from the lending systems division of the Life and Financial Solutions
Group are expected to be substantially lower than anticipated due to one of the
two delayed decisions. International operating results continued to lag behind
acceptable levels, but improvement is anticipated as a result of the company's
third quarter International restructuring.
(more)
<PAGE>
As expected, overall results continued to be impacted by weakness in U.S.
Property and Casualty and International professional services revenue primarily
due to the completion of Y2K services projects, weak enterprise systems
licensing activity in the last half of 1998 and early 1999, and a shift toward
easier-to-install claims and electronic commerce applications. Although U.S.
Life and Financial Solutions professional services revenues are expected to
increase approximately 30 percent over the third quarter of 1998, this increase
is expected to be offset by declines in U.S. Property and Casualty and
International professional services revenues.
As previously reported during the third quarter, the company commenced
assessment of all major aspects of its business based upon the increasing rate
of change in technology in its marketplace due to the Internet and the rapid
adoption of eCommerce. In connection with that process, the company also
initiated a number of international and domestic restructuring and cost
reduction initiatives that it estimates will result in after-tax charges of
approximately $8 million in the third quarter. Also during this assessment, the
company has been evaluating various international and domestic intangible assets
and capitalized software costs. These assessments are not complete, but the
company currently expects the resulting third quarter non-cash charges to be
between $35 million and $45 million, after taxes. These charges are expected to
include the write down of certain older versions of the company's enterprise
systems based upon the market's rapid move to new technologies. The company will
provide additional details with its third quarter earnings release.
In addition, during the third quarter, the company settled the previously
disclosed litigation matter with Liberty Life Insurance Company. While the terms
of the settlement are confidential, the company will have a special after-tax
charge in the third quarter of 1999 of
approximately $8 million to cover legal expenses associated with this matter and
the costs for other matters.
Although the company continues to expect improvement in the fourth quarter,
it does not believe that it can give estimates for fourth quarter or annual
performance at this time.
(more)
<PAGE>
Larry Wilson, chairman and chief executive officer, said, "We believe that
the emphasis on our new Internet and advanced technology-based enterprise
systems, claims and eCommerce solutions, and the restructuring of our
International operations position us for an exciting future."
In conclusion, the company emphasized that the results, including the
anticipated charges, are based upon currently available preliminary data and
final results may differ from the above.
PMSC, headquartered in Columbia, S.C., is the leader in providing
enterprise and electronic commerce application software, professional services,
and outsourcing designed to meet the needs of the global insurance and related
financial services industries. Information on PMSC and its products and services
can be found on the World Wide Web at http://www.pmsc.com
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The Private Securities Litigation Reform Act of 1995 provided a "safe
harbor" for certain forward-looking statements. The forward-looking statements
contained in this release are subject to certain risks and uncertainties. Actual
results could differ materially from current expectations. Among the factors
which could affect the company's actual results and could cause results to
differ from those contained in the forward-looking statements contained herein
are customer acceptance of the company's new products and services, the success
of the company's market penetration efforts, and timing of customers' decisions
to enter into agreements for the company's products and services.
