Earnings Releases
The SABRE Group Reports Fourth Quarter Results
FORT WORTH, Texas -- The SABRE Group Holdings Inc. (NYSE:TSG) today reported revenues of $440 million for the quarter, an increase of 17.1 percent over 1996 pro forma and actual fourth quarter results.
The company's net earnings, including certain special items described below, were $18 million ($0.14 per share) for the quarter, a decrease of 21.3 percent from 1996 pro forma fourth quarter results, and a decrease of 17.6 percent from 1996 actual fourth quarter results. Excluding the special items, the company's fourth quarter net earnings were $23 million ($0.18 per share), a decrease of 1.2 percent from 1996 pro forma fourth quarter results and an increase of 3.4 percent compared to 1996 actual fourth quarter results.
Operating income was $19 million for the quarter, a decrease of 54.6 percent from both pro forma and actual operating income for the same period in 1996. Excluding special items, the company's operating income was $29 million for the fourth quarter, a decrease of 28.7 percent from both 1996 pro forma and actual operating income.
Pro forma amounts reflect the impact of contracts with American Airlines, which were effective January 1, 1996, and the impact of certain other transactions resulting from the legal reorganization of the company in July 1996.
"Although revenue growth was very strong, fourth quarter net earnings, which were modestly stronger than our forecasts, were impacted by certain strategic investments," said Michael J. Durham, president and chief executive officer of The SABRE Group. "These investments were necessary to position The SABRE Group to achieve long-term recurring revenue streams, such as outsourcing, and to position our company to retain our technological leadership in the travel and transportation industries."
In the fourth quarter, the company recorded certain special items consisting of an $11 million ($7 million after tax) write-off of a capitalized software development project. The development project was intended to create a new order entry and billing system. This one time charge was partly offset by income recognition of $3 million ($2 million after tax) related to the company's joint venture operations.
1997 Fourth Quarter Results |
|
Impact of Special Items |
|
(in millions, except per share amounts) |
|
Amount |
|
Net Earnings as reported |
$18 |
Software Development Write-off |
7 |
Income from Joint Ventures |
(2) |
Net Earnings Before Special Items |
$23 |
The SABRE Group's fourth quarter results brought the full year 1997 revenue to $1.784 billion, an increase of 10.4 percent compared to 1996 pro forma revenue and an increase of 10.0 percent compared to 1996 actual revenue.
Full year 1997 net earnings, including the special items, were $200 million ($1.53 per share), an increase of 6.5 percent from 1996 pro forma results and an increase of 7.1 percent compared to 1996 actual results. Excluding the special items, the company's net earnings were $205 million ($1.56 per share), an increase of 9.0 percent over 1996 on a pro forma basis and an increase of 9.6 percent over 1996 actual results.
Operating income, including special items, for the year ended 1997 was $308 million, a decrease of 5.7 percent over 1996 pro forma results and a decrease of 5.8 percent over 1996 actual results. Operating income, excluding special items, was $318 million, a decrease of 2.4 percent over pro forma results for the prior year and a 2.6 percent decrease over actual results for 1996.
"We made substantial strides in 1997 toward our objectives, highlighted by the technology services agreement we signed in December with US Airways," Durham added. "This contract validates the business reasons for separating from American Airlines and better positions us to pursue and acquire similar deals. 1997 was a transition year for The SABRE Group; we believe we have positioned ourselves to realize significant revenue growth in 1998, and are prepared for long-term earnings growth for the future."
The SABRE Group is a world leader in the electronic distribution of travel and travel-related services around the globe, and is a leading provider of information technology solutions for the travel and transportation industry, including customized software development and software products, transaction processing, consulting and total information technology outsourcing.
Statements in this news release which are not purely historical facts, including statements regarding anticipations, beliefs, expectations, hopes, intentions or strategies for the future, may be forward looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements in this release are based upon information available to The SABRE Group on the date of this release. Any forward looking statements involve risks and uncertainties that could cause actual events or results to differ materially from the events or results described in the forward looking statements, including risks of: changes in relationships with American and its affiliates; competition and technological innovation by competitors; seasonality of the travel industry and booking revenues; sensitivity to general economic conditions and events that affect airline travel; risks associated with the Company's international operations; and legal and regulatory issues. The SABRE Group undertakes no obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on these forward-looking statements.
The SABRE Group - Condensed Statements of Income - Three Months Ended December 31, 1997
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