Ann Mulcahy, Chairman & CEO of Xerox

This is a partial transcript from Your World with Neil Cavuto, October 23, 2002, that was edited for clarity. Click here for complete access to all of Neil Cavuto's CEO interviews.

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NEIL CAVUTO, HOST: Xerox is on track, out of the red, back in the black. The copier company is posting a profit of a nickel a share, a few cents better than expected. But revenues continuing to slide. So is the worst over for Xerox? Earlier, I spoke with CEO Anne Mulcahy.


ANN MULCAHY, CHMN. & CEO, XEROX (XRX): We are here to stay. This is certainly sustainable profitability. And we have taken a lot of actions and decisions over the last two years that have really flowed through to the bottom line of the results of the company, and the whole intent was to change the business model for sustainable profitability.

CAVUTO: All right. Now, of course, through no fault of your own, a lot people equate and remember Xerox for the accounting irregularities and billions in misstated revenue, so for the cynic out there who might look at these numbers, can they be trusted?

MULCAHY: Yes, they can be trusted. I think we have been operating with a great deal of transparency with regard to our results. Certainly, we have been disclosing all of the details with regard to our results for quite a while now, and we've really worked hard to resolve those issues and put them behind us.

CAVUTO: But let's talk about the company going forward. The accounting issues in the past not withstanding, you have got very real technology spending problems today, a lot companies simply are not opening up their wallets to buy the type of stuff that you have. How do you convince them otherwise?

MULCAHY: Well, I think there are a couple of areas that really are opportunities for us. Our revenue trends have been improving. And we introduced a whole fleet of new products and services over the last few months that are absolutely helping drive revenue. In addition to that, we are really trying to be responsive to our customers by helping them with solutions that actually reduce their overall costs as it relates to their document processes.

CAVUTO: But can you see from any of the prior cynicism on the part of companies for IT spending of any sort, that that is changing. Can you start seeing light now or is it still bad?

MULCAHY: Well, I wouldn't suggest that we are seeing significant improvements in the economy or IT spending. I think we are seeing our revenue trends improve more due to the value that we are providing our customers with some of the new technologies and services that we are bringing to market. But I haven't seen any significant improvement from an IT spend at all.

CAVUTO: Do you know, Ms. Mulcahy, I just want to get a sense of where the SEC stands with you guys now, I know they had been looking at some of your former executives, Richard Thoman and Paul Allaire, they updated you on where those investigations stand?

MULCAHY: No, they really haven't, you know, we settled as a company.  And really that was the end of communication as it related to the SEC, and Xerox on those past issues.

CAVUTO: But not necessarily on those individuals?

MULCAHY: No, not necessarily. But that is not the company.

CAVUTO: All right. How do you convince investors, though, who look at you now and still, despite the improvement, see a company that has yet to prove itself?

MULCAHY: Well, I think we need to continue doing what we are doing, which is setting expectations, delivering against them, improving our results, really improving all of the fundamentals of the company. Our cash flow is dramatically improved, revenue trends are improving. Our margins are, our costs are down. So we are trying to hit on all cylinders and that is the reason we are exceeding expectations. And we expect to continue to do that and rebuild confidence in the company.


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