Perot Systems 8K Reports Fourth Quarter 2008 Financial Results | SEC 10 Feb 09

Exhibit 99.1

Perot Systems Corporation
2300 West Plano Parkway
Plano, TX 75075
+1 972 577 0000
www.perotsystems.com

Media Contacts:
Perot Systems Corporation

Joe McNamara
+1 972 577-6165
joe.mcnamara@ps.net

Investor Contact:

John Lyon
+1 972 577-6132
+1 972-577-6791 fax
john.lyon@ps.net

—Perot Systems News Release —

Perot Systems Reports Fourth Quarter 2008
Financial Results

Plano, TX — February 10, 2009 — Perot Systems Corporation (NYSE: PER) today announced fourth quarter 2008 financial results:

•		Revenue was $683 million, a decrease of 7% year-to-year over fourth quarter 2007 revenue of $732 million. In the fourth quarter of 2007, Perot Systems recognized revenue of $59 million related to a client termination. For the full year of 2008, revenue was $2.8 billion, an increase of 6% over 2007 full year revenue of $2.6 billion.

•		Earnings per share (diluted) was $.24 as compared to $.35 for the fourth quarter of 2007. In the fourth quarter of 2007, Perot Systems realized a benefit to earnings per share (diluted) of approximately $.23 related to a client termination, partially offset by expense equal to approximately $.09 per share (diluted) related to cost reduction activities. For the full year of 2008, earnings per share (diluted) was $.97 as compared to $.92 for full year of 2007.

•		Operating profit margin was 6.9% for the fourth quarter of 2008 and was 6.7% for full year 2008.

•		Total bookings, which include contract renewals, totaled $508 million for the fourth quarter of 2008, bringing the total value of bookings during 2008 to $2.9 billion. New contract signings totaled $27 million for the fourth quarter of 2008, bringing the total value of new contracts signed during 2008 to $871 million. Through the date of this release, Perot Systems has signed total bookings in 2009 of approximately $350 million, including new contracts valued at approximately $200 million.

•		Operating Cash Flow and Capital Expenditures for the fourth quarter of 2008 totaled $79 million and $17 million, respectively. For the full year of 2008, Operating Cash Flow and Capital Expenditures were $217 million and $55 million, respectively.

•		As of December 31, 2008, Cash, Short-term Investments, and Debt totaled $234 million, $36 million, and $184 million, respectively.

Page 1


Perot Systems Earnings Release		2 of 10

•

During the fourth quarter of 2008, Perot Systems repurchased approximately 1.7 million shares of its Class A common stock at an average purchase price of $11.60 for a total of $20 million. For the full year of 2008, Perot Systems repurchased approximately 3.5 million shares of its Class A common stock at an average purchase price of $12.71 for a total of $44 million.

“2008 was a productive year for our company with accomplishments in all major facets of our business,” said Peter Altabef, president and CEO for Perot Systems. “Strategically, we continued to build upon our capabilities, while expanding geographically. Operationally, we delivered strong contract profit improvement, while having an outstanding year of contract renewals that demonstrate our clients’ continuing trust in our team and the services we provide. Financially, we expanded profit margins over the course of the year, grew net income and earnings per share to their highest levels ever, and produced strong cash flow. Overall, it was a very good year for our company, even as macro-economic events caused sales cycles to lengthen late in the year. While the macro-economic environment is challenging, the experience of our leadership, the robust level of interest in our solutions, our strong client relationships, and our solid financial position make this a very resilient business.”

Business Outlook

Currency movements had approximately a $10 million sequential impact to fourth quarter 2008 revenue, with this impact carrying forward to the first quarter.

For the first quarter of 2009, Perot Systems expects a reduction of pass-through revenue of approximately $20 million, a portion of which relates to previously disclosed renewals. In addition, Perot Systems expects a net revenue reduction of $15 million to $20 million because the normal course of task orders ending will be greater than the addition of revenue from new sales and project starts in the quarter. With the overall level of sales activity Perot Systems is experiencing and its early 2009 new contract wins, Perot Systems believes it is well positioned to increase new contract signings and associated revenue as the year progresses. Cost management actions will help Perot Systems mitigate the impact of lower revenue in the first quarter.

For the first quarter of 2009, Perot Systems expects revenue to range from $635 million to $655 million and earnings per share (diluted) to range from $.23 to $.25.


Perot Systems Earnings Release		3 of 10

Conference Call

Perot Systems will hold a conference call to review fourth quarter 2008 results of operations on February 10, 2009, at 10:15 a.m. EST. Parties interested in participating may join the conference call via the Internet at www.perotsystems.com. Additionally, Perot Systems has published a downloadable summary of its fourth quarter 2008 financial results at www.perotsystems.com.


Perot Systems Earnings Release		4 of 10

Perot Systems Corporation
Condensed Consolidated Income Statements
For the Three Months Ended December 31, 2007 and 2008
(Millions of USD, except per share amounts)
Unaudited


	Three Months Ended
	December 31
	2007¹⁾			2008

Revenue	$	732		$	683
Direct cost of services		574			559

Gross profit		158			124
Selling, general & admin		86			77

Operating income		72			47
Interest expense, net		(1	)		—

Income before taxes		71			47
Provision for income taxes		27			18

Net income	$	44		$	29


Earnings per share (diluted) data:
Earnings per share (diluted)	$	.35		$	.24
Shares outstanding (diluted)		124			121


Perot Systems Earnings Release		5 of 10

Perot Systems Corporation
Revenue Summary
For the Three Months Ended December 31, 2008
(Millions of USD)
Unaudited


	Revenue
4Q 2007	$	732
Growth/(Decrease) Related to:
New major contract signings		11
TTM acquisitions^{2) 3)}		8
Existing Accounts and Projects⁴⁾		(11	)
End of a Client Contract⁵⁾		(74	)

Industry Solutions		(66	)

Government Services		16

Inter-segment eliminations⁶⁾		1


4Q 2008	$	683


			Year-to-
			Year			% of
	Revenue		Growth			Total
Healthcare^{3) 5)}	$	324		(18	%)		47	%
Commercial²⁾		195		2	%		29	%

Industry Solutions		519		(11	%)		76	%

Government Services		164		11	%		24	%


Total	$	683		(7	%)		100	%


Perot Systems Earnings Release		6 of 10

Perot Systems Corporation
Condensed Consolidated Balance Sheets
As of December 31, 2007 and December 31, 2008
(Millions of USD)
Unaudited


	As of		As of
	12/31/2007		12/31/2008
Cash and cash equivalents	$	187	$	234
Short-term investments		23		36
Accounts receivable, net		477		443
Prepaid expenses and other		70		94

Total current assets		757		807
Property, equip. & software, net		235		221
Goodwill		713		730
Other non-current assets		195		222

Total assets	$	1,900	$	1,980


Current liabilities	$	330	$	363
Long-term liabilities		327		312
Stockholders’ equity		1,243		1,305

Total liabilities & stockholders’ equity	$	1,900	$	1,980


Perot Systems Earnings Release		7 of 10

Perot Systems Corporation
Condensed Consolidated Statements of Cash Flows
For the Three Months Ended December 31, 2007 and 2008
(Millions of USD)
Unaudited


	Three Months Ended
	12/31/2007			12/31/2008
Net income	$	44		$	29
Depreciation and amortization		28			27
Changes in assets and liabilities (net of effects from acquisitions of businesses) and other non-cash items		11			23

Net cash provided by operating activities		83			79

Purchases of property, equipment & software		(9	)		(17	)
Purchase of short-term investments, net		(23	)		(36	)
Acquisitions of businesses, net		—			(15	)
Other investing, net		5			—

Net cash used in investing activities		(27	)		(68	)

Repurchases of treasury stock		(47	)		(20	)
Proceeds from issuance of common stock		4			2
Other financing activities		(2	)		1

Net cash used in financing activities		(45	)		(17	)

Effect of exchange rate changes on cash		1			(6	)


Net cash flow	$	12			($12	)


Perot Systems Earnings Release		8 of 10

Perot Systems Corporation
Financial Highlights
For the Twelve Months Ended December 31, 2007 and 2008
(Millions of USD, except per share amounts)
Unaudited


	2007¹⁾		2008		% Change
Revenue	$	2,612	$	2,779		6	%
Income before taxes		182		187		3	%
Net income		115		117		2	%
Earnings per share (diluted)	$	.92	$	.97		5	%
Net cash provided by operating activities		118		217		84	%
Capital expenditures		75		55		(27	%)
Shares outstanding (diluted)		125		122		(2	%)


Perot Systems Earnings Release		9 of 10

Footnotes

In the fourth quarter of 2007, Perot Systems recognized revenue of $59 million, pretax income of $46 million, and approximately $.23 earnings per share (diluted) related to a client termination, all of which is reported within the Healthcare group of the Industry Solutions line of business. In addition, Perot Systems recorded $18 million of expense, equal to approximately $.09 per share (diluted) related to cost reduction activities, which is reported in the Other segment. Combined, these two items provided a 3.3 percentage point benefit to operating margin reported in the fourth quarter of 2007.

During the past twelve months, Perot Systems acquired HighQ^IT for the manufacturing industry GmbH and Original Solutions Limited. These acquisitions contributed $6 million of revenue for the fourth quarter of 2008 and $16 million of revenue for the full year of 2008, which is reported in the Commercial area of our Industry Solutions line of business.

In the fourth quarter of 2008, Perot Systems acquired Tellurian Networks, Inc. This acquisition contributed $2 million of revenue for the fourth quarter and for the full year of 2008, which is reported in the Healthcare group of our Industry Solutions line of business.

Existing account and project decreases of $11 million as compared to the fourth quarter of 2007 include a $12 million decrease related to the impact of the weakening of certain European currencies against the U.S. Dollar.

The Healthcare group year-to-year revenue decrease for the fourth quarter of 18% includes revenue of $74 million reported in the fourth quarter of 2007 related to the end of a client contract, including $59 million of termination-related revenue described in footnote 1 and $15 million of services revenue.

Inter-segment eliminations relate to the revenue associated with services provided by delivery organizations within our Industry Solutions line of business to clients in our Government Services line of business.


Perot Systems Earnings Release		10 of 10

About Perot Systems

Perot Systems is a worldwide provider of information technology services and business solutions. Through its flexible and collaborative approach, Perot Systems integrates expertise from across the company to deliver custom solutions that enable clients to accelerate growth, streamline operations and create new levels of customer value. Headquartered in Plano, Texas, Perot Systems reported 2008 revenue of $2.8 billion. The company has more than 23,000 associates located in the Americas, Europe, Middle East and Asia Pacific. Additional information on Perot Systems is available at http://www.perotsystems.com/.

This press release contains forward-looking statements that are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. For factors that could affect our business and cause actual results to differ materially, please refer to our Annual Report on Form 10-K for the fiscal year ended December 31, 2007, as filed with the U.S. Securities and Exchange Commission and available at http://www.sec.gov/, as updated in our Quarterly Reports on Form 10-Q filed after such Form 10-K, for additional information regarding risk factors. We disclaim any intention or obligation to revise any forward-looking statements whether as a result of new information, future developments, or otherwise.

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Perot Systems Inactive 8-KPerot Systems Reports Fourth Quarter 2008 Financial Results