Perot Systems Reports a 56% Increase in Third Quarter EPS

Dallas (PROTEXT) - Perot Systems Corporation (NYSE: PER) reported its third consecutive quarter with 50% or higher EPS growth. For its third quarter, ended September 30, 1999, Perot Systems reported Earnings per share (diluted) of $.18, which includes a pretax contract gain of $8.0 million, or $.04 per share. Excluding this gain, EPS (diluted) was $.14 per share, 56% higher than $.09 per share for the same quarter in 1998. For the third quarter ended September 30, 1999, Perot Systems reported: -- Revenue of $304.8 million, an increase of 12% over revenue of $271.5 million reported in the same period for 1998. -- EBIT grew to $30.8 million and 10.1% of revenue, an increase of 78% over the same period in the prior year. -- Net income for the quarter of $20.1 million versus $9.1 million for the same period in the prior year, an increase of 121%. -- Net cash flow was $55.3 million, up 63% over cash flow of $33.9 million reported in the same period for 1998. -- Cash balances grew to $263.2 million from $102.2 million as of September 30, 1998, an increase of $161.0 million or 158%. For the nine months ended September 30, 1999, Perot Systems reported: -- Earnings per share (diluted) of $.47 as compared to $.29 per share for the same period in 1998, an increase of 62%. -- Revenue of $861.4 million, an increase of 19% over revenue of $724.2 million reported in the same period for 1998. -- EBIT grew 66% over the same period in 1998 to $81.4 million ending the first nine months of 1999 at 9.4% of revenue. -- Net income of $53.2 million versus $28.2 million for the same period in the prior year, an increase of 89%. Business Update "My primary focus is on building and strengthening our sales force," said Ross Perot, Chairman and CEO of Perot Systems. "We are making great progress and expect the new sales momentum from the third quarter to continue into the fourth quarter. Our goal is to have repeatable and predictable new sales growth in every quarter." Perot Systems signed the second largest contract in its history, a 10-year contract with Harvard Pilgrim Health Care that should exceed $700 million of revenue. Perot Systems has been working with Harvard Pilgrim on its turnaround plan since June. Perot Systems entered into the next phase of the relationship, where they will team with Harvard Pilgrim on strategic systems integration and health services initiatives. The plan includes new technology, Internet, and e-commerce initiatives focused on increasing operational efficiencies, improving financial performance, and streamlining healthcare provider services. Additionally, Perot Systems signed a five-year technology services agreement worth approximately $50 million with a major Nasdaq listed healthcare services firm. "We are pleased with our earnings growth and the direction our business is going," said Perot. "Our high value e-commerce and business consulting units are generating opportunities for long- term relationships like Harvard Pilgrim. Their growing presence in the marketplace has been a factor in growing our sales pipeline to an all-time high." Time0, Perot Systems' business-to-business e-commerce unit, hosted its second annual CEO Roundtable in September. The conference, which brought together numerous top executives from leading companies, focused on the economic vitality of digital marketplaces and their ability to create and sustain customer value. Time0, formed in mid-1997, focuses entirely on the next generation of high-value, high growth businesses known as digital marketplaces. Time0 has already been instrumental in the development of leading digital marketplaces such as Metalsite.com, Industry.net, and Orderzone.com, and is currently working with clients in many industries. "Opportunities in the business-to-business marketplace are vast," said Perot. "We currently have projects or prospects worldwide in areas such as logistics and trade finance, electronic bill presentment and payment, travel and hospitality, and transaction-enabled content. These and relationships like Harvard Pilgrim, based on high-value services, are the kind of opportunities which are increasingly responsible for our long- term growth." Perot Systems Corporation Income Statement Quarter and Nine Months Ended September 30 (Millions of USD, except per share amounts) Quarter Ended September 30, 1998 1999 % Change Revenue $271.5 $304.8 12% Direct Cost of Services 215.2 231.2 7% Gross Profit 56.3 73.6 31% Selling, General & Admin. 40.9 44.4 9% Other Income/(Expense) 1.9 1.6 (16%) EBIT 17.3 30.8 78% Interest, net 1.3 2.7 108% Pretax Income 18.6 33.5 80% Taxes 9.5 13.4 41% Net Income $9.1 $20.1 121% EPS (diluted) $.09 $.18 100% Nine Months Ended September 30 1998 1999 % Change Revenue $724.2 $861.4 19% Direct Cost of Services 575.1 660.5 15% Gross Profit 149.1 200.9 35% Selling, General & Admin. 107.0 125.4 17% Other Income/(Expense) 7.0 5.9 (16%) EBIT 49.1 81.4 66% Interest, net 2.8 7.3 161% Pretax Income 51.9 88.7 71% Taxes 23.7 35.5 50% Net Income $28.2 $53.2 89% EPS (diluted) $.29 $.47 62% Perot Systems Corporation Balance Sheet Highlights As of September 30 (Millions of USD) As of September 30 1998 1999 % Change Cash $102.2 $263.2 158% Total Assets 390.5 592.0 52% Total Liabilities 261.4 235.4 (10%) Stockholders' Equity 129.1 356.6 176% Perot Systems, based in Dallas, TX, is a leading global information technology services and business solutions company. Perot Systems offers clients custom business solutions that transform the way they conduct business by integrating services that draw upon three core disciplines: business integration, systems integration and application development, and information technology infrastructure services. Perot Systems, with revenue of approximately one billion dollars, has more than 7,000 employees in North America, Europe, and Asia serving clients in the financial services, healthcare, energy, and travel and transportation industries. Additional information on Perot Systems is located at http://www.perotsystems.com. Statements contained within this press release may contain forward-looking statements, which involve risks and uncertainties. Among many factors that could affect our business and cause actual results to differ materially are the following: the loss of major clients; the company's ability to achieve future sales; changes in our relationship with our largest customer, UBS, and variability of profits from UBS; our ability to recruit, train, and retain skilled personnel; the loss of key personnel; our ability to manage growth; the highly competitive market in which we operate; the variability of quarterly operating results; changes in technology; possible challenges to proprietary rights or intellectual property rights; risks related to international operations; risks related to potential Year 2000 problems; and general economic conditions. Perot Systems disclaims any intention or obligation to revise any forward- looking statements whether as a result of new information, future developments or otherwise. Please refer to Perot Systems Prospectus dated February 1, 1999, Perot Systems Annual Report on Form 10-K for the fiscal year ended December 31, 1998, and Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1999 as filed with the U.S. Securities and Exchange Commission for risk factors that may cause actual events to differ from those contained in the forward-looking statements. ots Original Text Service: Perot Systems Corporation Internet: http://www.newsaktuell.de Contact: Investors, John Lyon (USA) 972-340-6132, or fax, 972-340-6100, or email, John.Lyon@ps.net, or Press, Kim Testa (USA) 972-340-6727, or fax, 972-340-6788, or email, Kim.Testa@ps.net, both of Perot Systems Corporation Web site: http://www.perotsystems.com Subscribers please note that material bearing the slug "PROTEXT" is not part of CTK's news service and is not to be published under the "CTK" slug. 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