SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (date of earliest event reported):
May 30, 2001
XEROX CORPORATION
(Exact name of registrant as specified in its charter)
New York 1-4471 16-0468020
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation) No.)
800 Long Ridge Road
P. O. Box 1600
Stamford, Connecticut 06904-1600
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code:
(203) 968-3000
Item 5. Other Events
This Current Report on Form 8-K consists of the following exhibit:
Exhibit 99 Registrant's Audited Consolidated Financial Statements
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Forward-Looking Statements
From time to time Xerox Corporation (the Registrant or the Company) and its
representatives may provide information, whether orally or in writing, including
certain statements in this Current Report on Form 8-K, which are deemed to be
"forward-looking" within the meaning of the Private Securities Litigation Reform
Act of 1995 ("Litigation Reform Act"). These forward-looking statements and
other information relating to the Company are based on the beliefs of management
as well as assumptions made by and information currently available to
management.
The words "anticipate", "believe", "estimate", "expect", "intend", "will", and
similar expressions, as they relate to the Company or the Company's management,
are intended to identify forward-looking statements. Such statements reflect the
current views of the Registrant with respect to future events and are subject to
certain risks, uncertainties and assumptions. Should one or more of these risks
or uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those described herein as anticipated,
believed, estimated or expected. The Registrant does not intend to update these
forward-looking statements.
In accordance with the provisions of the Litigation Reform Act we are making
investors aware that such "forward-looking" statements, because they relate to
future events, are by their very nature subject to many important factors which
could cause actual results to differ materially from those contained in the
"forward-looking" statements. Such factors include but are not limited to the
following:
Competition - the Registrant operates in an environment of significant
competition, driven by rapid technological advances and the demands of customers
to become more efficient. There are a number of companies worldwide with
significant financial resources which compete with the Registrant to provide
document processing products and services in each of the markets served by the
Registrant, some of whom operate on a global basis. The Registrant's success in
its future performance is largely dependent upon its ability to compete
successfully in its currently-served markets and to expand into additional
market segments.
Transition to Digital - presently black and white light-lens copiers represent
approximately 30% of the Registrant's revenues. This segment of the market is
mature with anticipated declining industry revenues as the market transitions to
digital technology. Some of the Registrant's new digital products replace or
compete with the Registrant's current light-lens equipment. Changes in the mix
of products from light-lens to digital, and the pace of that change as well as
competitive developments could cause actual results to vary from those expected.
Expansion of Color - color printing and copying represents an important and
growing segment of the market. Printing from computers has both facilitated and
increased the demand for color. A significant part of the Registrant's strategy
and ultimate success in this changing market is its ability to develop and
market machines that produce color prints and copies quickly and at reduced
cost. The Registrant's continuing success in this strategy depends on its
ability to make the investments and commit the necessary resources in this
highly competitive market.
Pricing - the Registrant's ability to succeed is dependent upon its ability to
obtain adequate pricing for its products and services which provide a reasonable
return to shareholders. Depending on competitive market factors, future prices
the Registrant can obtain for its products and services may vary from historical
levels. In addition, pricing actions to offset currency devaluations may not
prove sufficient to offset further devaluations or may not hold in the face of
customer resistance and/or competition.
Customer Financing Activities - On average, 75 - 80 percent of the Registrant's
equipment sales are financed through the Registrant. To fund these arrangements,
the Registrant must access the credit markets and the long-term viability and
profitability of its customer financing activities is dependent on its ability
to borrow and its cost of borrowing in these markets. This ability and cost, in
turn, is dependent on the Registrant's credit ratings. Currently the
Registrant's credit ratings are such as to effectively preclude its ready access
to capital markets and the Registrant is currently funding its customer
financing activity from cash on hand. There is no assurance that the Registrant
will be able to continue to fund its customer financing activity at present
levels. The Registrant is actively seeking third parties to provide financing to
its customers. In the near-term the Registrant's ability to continue to offer
customer financing and be successful in the placement of its equipment with
customers is largely dependent upon obtaining such third party financing.
Productivity - the Registrant's ability to sustain and improve its profit
margins is largely dependent on its ability to maintain an efficient, cost-
effective operation. Productivity improvements through process reengineering,
design efficiency and supplier cost improvements are required to offset labor
cost inflation and potential materials cost changes and competitive price
pressures.
International Operations - the Registrant derives approximately half its revenue
from operations outside of the United States. In addition, the Registrant
manufactures or acquires many of its products and/or their components outside
the United States. The Registrant's future revenue, cost and profit results
could be affected by a number of factors, including changes in foreign currency
exchange rates, changes in economic conditions from country to country, changes
in a country's political conditions, trade protection measures, licensing
requirements and local tax issues. Our ability to enter into new foreign
exchange contracts to manage foreign exchange risk is currently severely
limited, and we anticipate increased volatility in our results of operations due
to changes in foreign exchange rates.
New Products/Research and Development - the process of developing new high
technology products and solutions is inherently complex and uncertain. It
requires accurate anticipation of customers' changing needs and emerging
technological trends. The Registrant must then make long-term investments and
commit significant resources before knowing whether these investments will
eventually result in products that achieve customer acceptance and generate the
revenues required to provide anticipated returns from these investments.
Revenue Growth - the Registrant's ability to attain a consistent trend of
revenue growth over the intermediate to longer term is largely dependent upon
expansion of its equipment sales worldwide and usage growth (i.e., an increase
in the number of images produced by customers). The ability to achieve
equipment sales growth is subject to the successful implementation of our
initiatives to provide industry-oriented global solutions for major customers
and expansion of our distribution channels in the face of global competition and
pricing pressures. The ability to grow usage may be adversely impacted by the
movement towards distributed printing and electronic substitutes. Our inability
to attain a consistent trend of revenue growth could materially affect the trend
of our actual results.
Turnaround Program - In October 2000, the Registrant announced a turnaround
Program which includes a wide-ranging plan to generate cash, return to
profitability and pay down debt. The success of the turnaround program is
dependent upon successful and timely sales of assets, restructuring the cost
base, placement of greater operational focus on the core business and the
transfer of the financing of customer equipment purchases to third parties.
Cost base restructuring is dependent upon effective and timely elimination of
employees, closing and consolidation of facilities, outsourcing of certain
manufacturing and logistics operations, reductions in operational expenses and
the successful implementation of process and systems changes.
The Registrant's liquidity is dependent on the timely implementation and
execution of the various turnaround program initiatives as well as its ability
to generate positive cash flow from operations and various financing strategies
including securitizations. Should the Registrant not be able to successfully
complete the turnaround program, including positive cash generation on a timely
or satisfactory basis, the Registrant will need to obtain additional sources of
funds through other operating improvements, financing from third parties, or a
combination thereof.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant
has duly authorized this report to be signed on its behalf by the undersigned
duly authorized.
XEROX CORPORATION
/s/ MARTIN S. WAGNER
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By: MARTIN S. WAGNER
Assistant Secretary
Date: May 31, 2001