[IMRGLOBAL LOGO]
[NEWS RELEASE] NASDAQ: IMRS
AT IMRGLOBAL CORP. AT THE FINANCIAL
Timothy J. Klahs RELATIONS BOARD
VP Investor Relations Julie Creed, Partner
727-467-8163 312-640-6724
e-mail: tklahs@imrglobal.com
IMRGLOBAL ANNOUNCES ACCOUNTING CHANGE FROM POOLING TO PURCHASE
FOR TWO PRIOR 1999 MERGERS, BOARD AUTHORIZATION FOR STOCK BUYBACK
AND THE RESTRUCTURING OF THE FUSION TRANSACTION.
CLEARWATER, FLORIDA, OCTOBER 22, 1999--IMRglobal Corp. ("IMRglobal" or the
"Company") (Nasdaq: IMRS), a leading global provider of IT services and
solutions, today announced that it will change its accounting treatment of its
mergers with Fusion Systems Japan Co., Ltd. ("Fusion") and Orion Consulting,
Inc. ("Orion") from the pooling of interests method to the purchase method of
accounting. The change in accounting treatment will be retroactive to the merger
dates of March 26, 1999 for Fusion and June 15, 1999 for Orion.
IMRglobal also announced today that its Board of Directors authorized the
purchase of up to 4 million shares of its outstanding common stock. This gives
the Company the ability to purchase the stock on the open market or through
negotiated or block transactions from time to time based on market and business
conditions over the next 12 months. "The Board has a high degree of confidence
in the future of IMRglobal and believes that this expectation is not reflected
in the current stock price," stated Satish K. Sanan, Chairman and CEO of
IMRglobal. "Purchasing our shares allows us to demonstrate this confidence, and
we believe it is an appropriate investment of the Company's excess cash."
The Company has agreed to restructure the Fusion merger from an all stock
transaction to a combination of stock and cash. This will result in the Company
reacquiring approximately 1.5 million (or 39%) of the shares it had issued as
part of the merger in March 1999. As part of the restructure, key Fusion
employees have entered into extended employment and non-compete agreements with
the Company and the restructure will allow the former Fusion shareholders to
meet certain time sensitive tax obligations in Japan.
The factors that led to the decision to change the accounting treatment included
a determination by the Company that certain affiliate stock transactions may
preclude the use of pooling of interests accounting treatment for the Fusion and
Orion mergers as well as the inability to restructure the Fusion transaction
while maintaining the pooling treatment for Fusion and Orion. In addition, the
use of the purchase method enables the Company to initiate the open market stock
buyback now.
100 SOUTH MISSOURI AVENUE, CLEARWATER, FL 33756-5763
TEL: 727-467-8000 --- FAX: 727-467-8001
WWW.IMRGLOBAL.COM
[IMRGLOBAL LOGO]
As a result of this accounting change, financial information reported in the
Company's Forms 10Q for the first and second quarters in 1999 and Form 8K filed
on August 26, 1999 will be restated. The Company believes that there will be no
impact on future cash flow from operations due to the accounting change. It is
expected that the overall affect on earnings per share due to the accounting
change will result in annual goodwill amortization charges of approximately $
.07 per share. In addition, as a result of the accounting change and
restructuring, it is expected that there will be adjustments to one-time charges
to 1999 earnings, the value of which is currently being ascertained, but is
expected to include acquisition costs, in process research and development, and
recognition of the reduced value of the repurchased stock.
FORWARD-LOOKING STATEMENTS
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995: With the exception of statements regarding historical matters and
statements regarding the Company's current status, certain matters discussed
herein are forward-looking statements that involve substantial risks and
uncertainties. Such forward-looking statements may be identified by the use of
the words "anticipate," "believe," "estimate," "expect," "intend" and similar
expressions. Such forward-looking statements include statements relating to the
impact on cash flow from operations, affect on annual earnings per share, the
expected goodwill amortization and the expected one-time charges to 1999
earnings. Actual results, performance or achievements could differ materially
from these forward-looking statements. A discussion of the risk factors that may
cause actual results to differ from these forward-looking statements can be
found in the Company's periodic filings with the SEC under the Securities
Exchange Act of 1934.
ABOUT IMRGLOBAL CORP.
IMRglobal is a leading international provider of business and information
technology solutions to Fortune 500 and Global 2000 companies in key vertical
industries. Those industries include insurance, capital markets, banking,
healthcare, utilities, retail, manufacturing & distribution and media &
communications. IMRglobal's services include IT-strategy consulting, e-business
services, component-based vertical industry solutions, application development,
application management and application modernization. IMRglobal delivers
projects using its unique delivery model consisting of multiple delivery centers
worldwide, providing clients a global "virtual 24x7" workday. For more
information on IMRglobal, visit www.imrglobal.com.
100 SOUTH MISSOURI AVENUE, CLEARWATER, FL 33756-5763
TEL: 727-467-8000 --- FAX: 727-467-8001
WWW.IMRGLOBAL.COM