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January 21, 2004 First Fiscal Quarter Earnings Conference.

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Presentation on theme: "January 21, 2004 First Fiscal Quarter Earnings Conference."— Presentation transcript:

1 January 21, 2004 First Fiscal Quarter Earnings Conference

2 Safe Harbor Statement Certain statements in this presentation constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements are based on current expectations, estimates, forecasts and projections of future company or industry performance based on management's judgment, beliefs, current trends and market conditions. Forward- looking statements made or to be made by or on behalf of the company may be identified by the use of words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" and similar expressions. Forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Actual outcomes and results may differ materially from what is expressed, forecasted or implied in the forward-looking statements. See also the discussion of factors that may affect future results contained in the company's Current Report on Form 8-K filed with the SEC on August 11, 2000, which we incorporate herein by reference. The company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

3 Company Update First quarter EPS was $.34 compared to $.36 last year Revenues were slightly higher year-over-year; core software business grew 5% REY ranked first in NADA dealership satisfaction survey among major dealer system providers International division off to a fast start Web Solutions added 858 dealerships; the combination with Third Coast Media is on plan Consulting Services business delivered double-digit revenue growth We strengthened our management team

4 Market Trends Automotive retailer optimism remains positive Improving “front-of-store processes” is becoming a high priority by automotive retailers and car companies There is a growing recognition by the industry that technology platforms need upgraded The general outlook for IT spending is improving

5 Q1 Summary Revenues EPS $ in millions, except EPS EPS restated for stock compensation expense

6 Backlog $ in millions

7 Implementation History Recession ERA Introduced Y2K Upgrades 9/11; RGS Modules Introduced RGS Suite Introduced Recession; Gulf War Coin Acquisition revenues in thousands

8  Web Solutions  3308 dealerships; added 858  Customer Management  503 dealerships on Contact Management; added 73  Over 2,000 dealerships using Internet Lead Management  Over 800 dealerships using Prospect Management  Finance & Insurance  Desking solution in controlled release  Credit Services continue to grow The Reynolds Generations Series

9 Business Segments SegmentsRepresentative Solutions FY03 Revenues ($ in millions) Associates Software RGS Suite ERA Family Contact Management Web Solutions Dealer Communications $5411000 Services Consulting Services Reynolds University Credit Services Installation & Maintenance Network Car $2572000 Documents Promotional Materials Purchase Contracts Parts Tickets Repair Orders $174600 Financing Systems Leasing Upgrade Financing $3620

10 Q1 Income Summary $ in millions Results include pre-tax charge of $6.0 or $0.05 per share and $.03 of income tax benefits

11 Q1 Revenue Summary by Segment $ in millions

12 Q1 Operating Income by Segment $ in millions

13 Q1 Cash Flow Summary $ in millions

14 Financial Outlook FY04 EPS to be in the $1.60 - $1.66 range, Q2 about $0.36 Revenue growth to be slightly ahead of last year, about 2 - 4% Operating margins to be 17 - 18% Return on equity to exceed 20% Capital expenditures to total about $40M Depreciation and amortization to total about $45M R&D expenses to be about $85M Tax rate to be 39 - 40%, excluding Q1 one-time benefits Shares outstanding to calculate fiscal year EPS to be 68M

15 Company Summary Positives  Excellent market position  Strong financial model  Management team in place  Incentive plans aligned  Solution portfolio strongest in years  Expanding globally Opportunities  Consulting Turnaround  Reynolds Generations Series rollout  Front-end processes / systems improvements  Sales focus on “Hedgehog”

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