Xerox Corporation (NYSE:XRX) reported today that it has
completed the previously announced reverse stock split of Xerox
common stock at a ratio of one-for-four shares, together with a
proportionate reduction in the authorized shares of its common
stock from 1,750,000,000 shares to 437,500,000 shares.
The reverse stock split and authorized share reduction were
approved by Xerox shareholders at the company’s annual shareholder
meeting on May 23, 2017. The certificate of amendment was accepted
for filing by the New York Department of State on June 14,
2017.
Xerox common stock will begin trading on a split-adjusted basis
at market open on June 15, 2017. Xerox common stock continues to
trade on the New York Stock Exchange under the symbol “XRX”,
although a new CUSIP number (984121 608) has been assigned to the
common stock because of the reverse stock split.
As a result of the spin-off of the company’s business process
outsourcing business, now Conduent Incorporated, Xerox’s market
capitalization was divided. Consequently, the company proposed the
reverse stock split, which is intended to increase the per share
trading price of Xerox common stock and should improve its
liquidity and facilitate its trading.
As a result of the reverse stock split, every four shares of
Xerox common stock issued and outstanding or held as treasury
shares were automatically combined and reclassified into one share
of Xerox common stock. The reverse stock split also affected all
outstanding Xerox equity awards and outstanding convertible
securities.
No fractional shares have been issued in connection with the
reverse stock split. Shareholders otherwise entitled to receive a
fractional share as a result of the reverse stock split will
receive a cash payment in lieu of such fractional shares.
The company’s transfer agent, Computershare Inc., is acting as
exchange agent for the reverse stock split. Xerox shareholders
holding their shares of common stock in book entry form or in
“street name” through a bank, broker or other nominee do not need
to take any action in connection with the reverse stock split.
Xerox shareholders holding their shares of common stock in
certificated form will receive a letter of instructions from
Computershare shortly following the effective date. Computershare
can be contacted at 1-800-828-6396.
The company’s common stock dividend has been adjusted on a
proportional basis. Xerox’s next quarterly cash dividend, payable
on July 31, 2017, will be 25 cents per share on Xerox common stock.
The company’s second quarter reported EPS results as well as the
company’s full-year 2017 per share guidance will be correspondingly
adjusted to reflect the one-for-four reverse stock split.
Additional information concerning the reverse stock split can be
found in Xerox’s definitive proxy statement dated April 10, 2017
filed with the Securities and Exchange Commission (the “SEC”),
available free of charge at the SEC’s website, www.sec.gov, or at
Xerox’s website, www.xerox.com.
About Xerox
Xerox Corporation is an $11 billion technology leader that
innovates the way the world communicates, connects and works. Our
expertise is more important than ever as customers of all sizes
look to improve productivity, maximize profitability and increase
satisfaction. We do this for small and mid-size businesses,
large enterprises, governments, graphic communications providers,
and for our partners who serve them.
We understand what’s at the heart of work – and all of the forms
it can take. We embrace the increasingly complex world of paper and
digital. Office and mobile. Personal and social. Every day across
the globe – in more than 160 countries – our technology, software
and people successfully navigate those intersections. We automate,
personalize, package, analyze and secure information to keep our
customers moving at an accelerated pace. For more information,
visit www.xerox.com.
Forward-Looking Statements
This Report contains “forward-looking statements” as defined in
the Private Securities Litigation Reform Act of 1995. The words
“anticipate”, “believe”, “estimate”, “expect”, “intend”, “will”,
“should” and similar expressions, as they relate to us, are
intended to identify forward-looking statements. These statements
reflect management’s current beliefs, assumptions and expectations
and are subject to a number of factors that may cause actual
results to differ materially. Such factors include but are not
limited to: our ability to address our business challenges in order
to reverse revenue declines, reduce costs and increase productivity
so that we can invest in and grow our business; changes in economic
conditions, political conditions, trade protection measures,
licensing requirements and tax laws in the United States and in the
foreign countries in which we do business; changes in foreign
currency exchange rates; our ability to successfully develop new
products, technologies and service offerings and to protect our
intellectual property rights; the risk that multi-year contracts
with governmental entities could be terminated prior to the end of
the contract term and that civil or criminal penalties and
administrative sanctions could be imposed on us if we fail to
comply with the terms of such contracts and applicable law; the
risk that partners, subcontractors and software vendors will not
perform in a timely, quality manner; actions of competitors and our
ability to promptly and effectively react to changing technologies
and customer expectations; our ability to obtain adequate pricing
for our products and services and to maintain and improve cost
efficiency of operations, including savings from restructuring
actions; the risk that individually identifiable information of
customers, clients and employees could be inadvertently disclosed
or disclosed as a result of a breach of our security systems;
reliance on third parties, including subcontractors, for
manufacturing of products and provision of services; our ability to
manage changes in the printing environment and markets and expand
equipment placements; interest rates, cost of borrowing and access
to credit markets; funding requirements associated with our
employee pension and retiree health benefit plans; the risk that
our operations and products may not comply with applicable
worldwide regulatory requirements, particularly environmental
regulations and directives and anti-corruption laws; the outcome of
litigation and regulatory proceedings to which we may be a party;
the risk that we do not realize all of the expected strategic and
financial benefits from the separation and spin-off of our Business
Process Outsourcing business; and other factors that are set forth
in the “Risk Factors” section, the “Legal Proceedings” section, the
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” section and other sections of our 2016
Annual Report on Form 10-K, as well as in our Quarterly Reports on
Form 10-Q and Current Reports on Form 8-K filed with the Securities
and Exchange Commission (“SEC”). Xerox assumes no obligation to
update any forward-looking statements as a result of new
information or future events or developments, except as required by
law.
Fuji Xerox Co., Ltd. (“Fuji Xerox”) is a joint venture between
Xerox Corporation and Fujifilm Holdings Corporation (“Fujifilm”) in
which Xerox holds a 25% equity interest and Fujifilm holds the
remaining equity interest. On April 20, 2017, Fujifilm publicly
announced it had formed an independent investigation committee to
conduct a review of the appropriateness of the accounting practices
at Fuji Xerox’s New Zealand subsidiary related to the recovery of
receivables associated with certain sales leasing transactions that
occurred in, or prior to, Fuji Xerox’s fiscal year ending March 31,
2016. In first quarter 2017, we recognized a charge of
approximately $30 million, which represented our share of the
Fujifilm total adjustments from this initial review, as publicly
disclosed by Fujifilm.
On June 12, 2017, Fujifilm released the redacted Japanese
language version of the independent investigation committee’s
report and stated that an English language version of the report
would be made available shortly. Among other information, the
summary English language report disclosed: (a) a higher level of
adjustments than earlier disclosed by Fujifilm (JPY37.5 billion
versus JPY22 billion; approximately $340 million versus
approximately $200 million based on JPY110.29 to $1.00), (b) a
broader geographic scope of accounting issues (e.g., now includes
transactions at Fuji Xerox’s Australian subsidiary), (c) the time
period to which the adjustments relate (full year March 2011
through full year March 2016) and (d) internal control issues at
Fuji Xerox. We are currently analyzing the information contained in
the report, as well as seeking additional information from Fujifilm
and Fuji Xerox. As a result of this new information, we anticipate
having to reflect the increase in the adjustments in our financial
statements, the amount of which and applicable reporting periods
with respect thereto will be able to be determined and disclosed
when we receive the additional information we requested, and our
analysis and re-evaluation of materiality are complete.
Given our status as a minority investor, we have limited
contractual and other rights to information with respect to Fuji
Xerox matters. We were not involved in the investigation, including
in determining its scope and timing, and are therefore reliant on
Fuji Xerox and Fujifilm to provide information to us. Although the
independent investigation committee’s report has been issued and we
are not aware of any additional adjustments, additional issues may
be identified that may require material adjustments to the amount
and timing of charges that we have already recognized or expect to
recognize. We can provide no assurances relative to the outcome of
any potential governmental investigations or any consequences
thereof.
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Xerox® and Xerox and Design® are trademarks of Xerox in the
United States and/or other countries.
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version on businesswire.com: http://www.businesswire.com/news/home/20170614006165/en/
XeroxBill McKee, +1-585-423-4476bill.mckee@xerox.com
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