Posts Tagged ‘Xerox’

November 23rd, 2009

Xerox ACS Settle Shareholder Claims Related To Pending Merger.

A shareholder filed suit demanding temporary or permanent injunction to the pending Xerox ACS merger was settled after both parties agreed to the following changes:


1. If ACS’ board received a “superior” proposal and changed their recommendation on Xerox’s proposal, Xerox would not “enforce” their voting agreement with ACS CEO Darwin Deason to vote his shares in favor of Xerox’s acquisition.


2. Xerox will not enforce ACS to hold the ACS stockholder meeting, to vote on the Xerox acquisition.


3. If requested by ACS, Xerox will “terminate” the merger agreement in accordance with the terms of the agreement.


So what does this mean? With all regulatory approvals in the bag, the merger appears to be zipping ahead in full steam although we are not quite sure what to make of this settlement.


Has the ACS board received a “superior” proposal as the settlement terms envisage? Any thoughts?


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October 22nd, 2009

Xerox Q3 2009 Earnings

Xerox announced its Q3 2009 earnings on October 22nd.


To make short work of Xerox’s Q3 earnings, here is a list of key figures:


Basic EPS down to $0.14 for 3 months ended September 30, 2009 from $0.30 for the same period ended September 30, 2008.


Total Revenues at $3.7 billion are down 16 percent from third-quarter 2008


Equipment sale revenue declined 29 percent


Xerox has taken a charge of $9 million over its previously announced pending acquisition of ACS.


Restructuring and other cost actions including reduction in marketing and commission contributed to a third-quarter selling, administrative and general expenses (SAG) reducing year over year by $131 million.


However, even with reduced SAG expenses, SAG as a percentage of revenue for Q3 2009 has increased to 27.4% as compared to the same period 2008 which stood at 26.04%.


Bad Debts continued to be 1% of receivables.


As with most earnings announcements these days, Xerox too has attributed cost savings to employment reductions. Employment at September 30, 2009 stood at 54,100 decreased by 3000 as compared to December 31 2008.


CEO Ursula Burns expressed her confidence in the pending ACS acquisition to give Xerox the “revenue growth, cash and earnings expansion”.


In spite of the bleak earnings report, Xerox has increased its full year earnings expectations to 55 to 57 cents for the year, excluding ACS acquisition costs.


On the Governance front, concerns exist over a lack of a specific Board level oversight on R&D matters. In addition, CEO Ursula Burns is also on the Board of another public company. Glenn Britt another Board Xerox Board member on the Audit Committee is also the CEO of Time Warner Cable. Taking on additional responsibility as a Board member of another public company runs the risk of making the CEO incapable of concentrating on either of these responsibilities.


Board Interlocks with Time Warner Cable Inc. as well as Procter and Gamble are a cause of concern. The CEO of both these companies is on Xerox’s Board whereas other members of Xerox’s Board are on the Board of these 2 companies.


For more on Xerox’s governance rating, click FREE Registrationtoday.


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