SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Filed pursuant to Section 13 or 15(d) of
THE SECURITIES EXCHANGE ACT OF 1934
July 26,2000
Date of Earliest Event Reported
COMDISCO, INC.
(a Delaware Corporation)
6111 North River Road
Rosemont, Illinois 60018
Telephone (847) 698-3000
Commission file number 1-7725
I.R.S. Employer Identification Number 36-2687938
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Item 5 Other Events
On July 26, 2000, Comdisco, Inc announced third quarter and nine months
ended June 30, 2000 operating results.
Item 7 Financial Statements and Exhibits
(c) Exhibits
99.1 Safe Harbor Statement
99.2 Consolidated Statements of Earnings For the Three and Nine Months
ended June 30, 2000 and 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Current Report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.
COMDISCO, INC.
Date: July 26, 2000 by: /s/David J. Keenan
------------------
David J. Keenan
Senior Vice President
and Controller
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Exhibit 99.1
Note on Forward-Looking Information
The company believes that certain statements herein and in the future filings by
the company with the Securities and Exchange Commission and in the company's
written and oral statements made by or with the approval of an authorized
executive officer constitute "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, and the company intends that such forward-looking
statements be subject to the safe harbors created thereby. The words and phrases
"looking ahead," "we are confident," "should be," "will be," "predicted,"
"believe," "expect" and "anticipate" and similar expressions identify
forward-looking statements.
These forward-looking statements reflect the company's current views with
respect to future events and financial performance, but are subject to many
uncertainties and factors relating to the company's operations and business
environment which may cause the actual results of the company to be materially
different from any future results expressed or implied by such forward-looking
statements.
The following lists some of the factors, which could cause results to differ
from expectations.
As a result of the evolving nature of its services business, the company has
limited meaningful historical data in which to base its planned operating
expenses. A significant portion of the company's expense levels are based in
part on its expectations as to future services revenues, and, to a large extent,
are fixed.
To attain its services earnings contribution goals for fiscal 2000, the company
will have to meet its obligations under the agreements underlying its sales
backlog. Also, the company must expand its contract subscription base (through
new contract signings and contract renewals), increase its revenues through
other technology services, primarily managed network services, web availability
services, and IT CAP Solutions, and contain costs.
The company's ability to obtain new business and realize revenue on its sales
backlog depends on its ability to anticipate technological changes, develop
services to meet customer requirements on a global basis and achieve delivery of
services that meet customer requirements on a domestic and global basis. In
addition, with respect to new business opportunities, the company must
successfully compete with organizations offering similar services.
Securities held by Comdisco Ventures are generally subject to lockups
restricting its ability to sell until several months after an initial public
offering. The public market for high technology and other emerging growth
companies is extremely volatile. Such volatility may adversely affect the
ability of the company to dispose of the securities held by Comdisco Ventures
and the value of those securities on the date of sale.
Prism is a start up company that has incurred operating losses since inception
and the company expects that Prism's operating losses will continue to increase
as it constructs its communications network. There can be no assurance that in
the future Prism will be profitable on a quarterly or annual basis. In addition,
Prism will require substantial additional capital to support its data network,
to expand its services, to increase its sales and marketing efforts and to
support its growth. Prism operates in a highly regulated environment and changes
in regulatory policy could adversely impact Prism.
Additional factors that would cause results to differ are discussed in the
company's Form 10-Q for the quarter ended March 31, 2000. The company undertakes
no obligation to publicly update or revise any forward-looking statement whether
as a result of new information, future events or otherwise.
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Exhibit 99.2
Comdisco, Inc.
Consolidated Statements of Earnings
For the Three and Nine Months Ended June 30, 2000 and 1999
(dollars in millions except per share data)
<TABLE>
<CAPTION>
Three months ended Nine months ended
June 30, June 30, % June 30, June 30, %
2000 1999 +/- 2000 1999 +/-
---- ---- ---- ----- ----- ----
<S> <C> <C> <C> <C> <C> <C>
Revenue
Leasing
Operating ................................... $ 414 $ 443 -7% $1,288 $1,481 -13%
Direct financing ............................ 44 40 10% 130 120 8%
Sales-type .................................. 75 91 -18% 281 442 -36%
---- ---- ---- ----- ----- ----
Total leasing .............................. 533 574 -7% 1,699 2,043 -17%
Equipment Sales ............................... 142 62 129% 308 187 65%
Mainframe and medical sale (1) ................ -- 503 -100% -- 503 -100%
Continuity and network services ............... 173 133 30% 476 376 27%
Other ......................................... 105 30 250% 360 66 445%
---- ---- ---- ----- ----- ----
Total revenue ............................... 953 1,302 -27% 2,843 3,175 -10%
---- ---- ---- ----- ----- ----
Costs and expenses
Leasing
Operating ................................... 332 358 -7% 1,039 1,195 -13%
Sales-type .................................. 50 53 -6% 211 337 -37%
---- ---- ---- ----- ----- ----
Total leasing .............................. 382 411 -7% 1,250 1,532 -18%
Equipment Sales ............................... 115 50 130% 243 159 53%
Mainframe and medical sales <F1> ............... -- 503 -100% -- 503 -100%
Continuity and network services ............... 161 112 44% 424 317 34%
Selling, general and administrative ........... 116 77 51% 375 219 71%
Interest ...................................... 88 82 7% 259 253 2%
Prism ......................................... 65 11 491% 135 14 864%
Other <F2>..................................... -- -- N/A -- 150 -100%
---- ---- ---- ----- ----- ----
Total costs and expenses .................... 927 1,246 -26% 2,686 3,147 -15%
---- ---- ---- ----- ----- ----
Earnings before income taxes .................. 26 56 -54% 157 28 461%
Income taxes .................................. 9 20 -55% 56 10 460%
---- ---- ---- ----- ----- ----
Net earnings to common stockholders ........... $ 17 $ 36 -53% $ 101 $ 18 461%
==== ==== === ===== ===== ====
Retained earnings at beginning of period ...... $ 1,210 $ 1,075 $1,134 $1,101
Net earnings to common stockholders ........... 17 36 101 18
Cash dividends paid on common stock ........... (4) (4) (12) (12)
---- ---- ----- -----
Retained earnings at end of period ............ $ 1,223 $ 1,107 $1,223 $1,107
===== ===== ===== =====
Net earnings per common share:
Earnings per common share--basic ......... $ 0.11 $ 0.23 -52% $ 0.66 $ 0.12 450%
===== ===== ==== ===== ===== ===
Earnings per common share--diluted ....... $ 0.10 $ 0.22 -55% $ 0.62 $ 0.11 464%
===== ===== ==== ===== ===== ===
Common shares outstanding:
Average common shares outstanding--basic 151 152 152 152
===== ===== ===== =====
Average common shares outstanding--diluted 161 164 162 162
===== ===== ===== =====
<FN>
<F1> The sale of the mainframe portfolio and the sale of the medical
refurbishing business were both concluded in the fiscal quarter ended June 30,
2000.
<F2> In the second quarter of fiscal 1999, the company recorded a pre-tax
charge of $150 million ($96 million after-tax, or $.59 per common share) related
to the divestiture of low-margin businesses and the realignment of the company's
service businesses.
</FN>
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</TABLE>
