Cambridge Technology Partners Announces First Quarter 2000 Results
CAMBRIDGE, Mass.--(BUSINESS WIRE)--April 28, 2000--
Global E-Solutions Reaches $77 Million for Q1 2000; 59% Year-Over-Year
& Up 11% Sequentially
Cambridge's Transition to E-Solutions Tracking Ahead of Plan
Cambridge Technology Partners (Massachusetts), Inc. (NASDAQ:CATP)
(Cambridge), a global e-Solutions provider, today announced 59%
year-over-year and 11% sequential revenue growth in e-Solutions to $77
million in the first quarter of 2000.
Revenues for the first three months of 2000 were $147.6 million
versus $151.4 million for the same period of 1999 and $145 million for
the fourth quarter of 1999. In the first quarter, Cambridge's
worldwide transition to an e-Solutions company accelerated ahead of
plan.
Net loss for the first quarter of 2000 was $4.3 million, or $.07
per share (basic and diluted) versus net income of $7.5 million, or
$.12 per share (diluted) for the same period in 1999 and a net loss of
$17.3 million, or $.28 (basic and diluted) per share for the fourth
quarter of 1999.
Included in other income for the first quarter are gains from
equity investments resulting from Cambridge's 24% share in the gains
in the Cambridge Technology Capital Fund of $5.1 million and, $7.7
million from the sale of Cambridge Information Network to EarthWeb, or
$.12 (diluted) per share.
Jack Messman, President and Chief Executive Officer of Cambridge
commented, "Overall, the first quarter's performance lived up to our
expectations. Our global e-Solutions growth of 59% was very strong.
Worldwide we're winning important e-projects with brand name clients
that are key to our future growth."
Mr. Messman said, "I am excited about the momentum we currently
have in e-Solutions and the quality of the e-Solutions engagements on
which we are working. Cambridge's strength continues to be in helping
established industry leaders like Textron, JM Family Enterprises and
Societe Generale de Surveillance transform their business models into
e-businesses."
Cambridge's traditional services from custom client/server
applications and implementations of software such as call centers and
enterprise application planning (ERP) applications continued its
decline with revenue decreasing from $73.9 million in the first
quarter of 1999 to $38.8 million in the first quarter of 2000.
Mr. Messman added, "Our traditional business continued to feel the
Y2K aftershocks during Q1. The transition of Cambridge to an
e-Solutions company also has had an impact on our traditional business
as we transitioned our staff to e-Solutions work. While traditional
solutions may bounce back later in the year, Cambridge's main focus
continues to be in the e-Solutions area, providing clients with
e-business and e-integration capabilities."
Cambridge's Management Consulting (CMC) practice grew 9% year over
year. Sequentially, this practice was flat due to the impact of
foreign exchange and the timing of contract signings with European
clients.
"Bright spots for the CMC practice included the strengthening of
demand for services in the Americas within the energy and chemicals
sectors and the development of the financial services sector in
Europe," Mr. Messman added.
Total operating expenses for the first three months of 2000 were
$168.3 million versus $140.2 million for the same period in 1999. The
increase in expenses was primarily related to increased salary
requirements, training costs, costs associated with hiring new
consultants with e-Solutions skill sets, and telecommunication and
facility expenses.
E-Business Projects in Q1 2000
During the first quarter of 2000, Cambridge partnered with
well-recognized brand name clients on several different e-Business
projects to deploy e-Business solutions across the globe. Some of
Cambridge's client wins and/or projects deployed in the first quarter
of 2000 included:
Textron - Textron, a global, multi-industry company with revenues
in excess of $11.6 billion includes businesses in aircraft,
automotive, industrial and finance. Cambridge, as a member of the
Safeguard family of companies, is helping Textron develop a
company-wide e-business strategy which will ultimately range from
on-line procurement, sales and distribution to web-enabled
applications and other solutions.
JM Family Enterprises, Inc. (JMFE) - JMFE, ranked by Forbes as the
18th largest privately-held company in the United States, is a
recognized leader in the automobile distribution industry. JMFE asked
Cambridge to help develop a strategy that would allow them to maximize
potential e-business opportunities. Cambridge created a roadmap and
business value justification for JMFE to succeed in the New Economy
and is now helping to implement it.
Societe Generale de Surveillance (SGS) - SGS is the world leader
in verification, testing, and certification services for international
trade and services to governments and international institutions.
Recognizing that building trust is a principal challenge of the new
economy, Cambridge's strategic recommendations included addressing
concerns about the quality of products that suppliers offer in
e-commerce. WWW.SGSonSite.com, which features SGS's new Internet Trade
Environment (SITE) services, is key result of that strategy.
1-2 Snap -1-2 Snap, a German start-up company, hired Cambridge to
develop a wireless e-customer relationship management solution with
1-2 Snap to facilitate online auctions in Germany using personal
mobile phones.
Outlook for FY 2000
The Security Analysts' consensus estimate for Q2 2000 is revenue
of $158 million and a loss of $.10 per share. The consensus revenue
estimate for FY 2000 is $670 million with a net loss of $.19 per
share. On the year end conference call, Cambridge indicated that the
Company would grow e-Solutions by 40%-50% in 2000, off a base or
$243.3 million in 1999. Cambridge reported that, based on its Q1 2000
performance and its outlook into the June quarter, its e-Solutions
revenue is growing more rapidly than originally planned.
Cambridge previously stated that, for the year, its traditional
business should decline by 15%-20% off of a base of $261 million in
1999. Considering the acceleration of its business to e-Solutions, the
Company now expects its traditional business to decline at a rate
greater than previously expected. Despite Q1 2000 flat sequential
revenue growth for its Change Management Consulting practice,
Cambridge has developed a strong pipeline of business, which should
result in revenue growth for the remainder of 2000. Cambridge also
reconfirmed that it continues to expect losses in the first half of
the year, profits in the second half of the year and a loss for the
total full year.
About Cambridge Technology Partners
Cambridge Technology Partners provides management consulting and
systems integration services to transform its clients into
e-Businesses. Working in collaboration with Global 1000, high-velocity
middle market companies and dot-com companies, Cambridge combines a
deep understanding of New Economy issues with integrated, end-to-end
services, and a proven track record of shared risk and rapid,
guaranteed delivery. Cambridge generated $628.1 million in revenue
in1999, with $243.3 million from its global e-Business solutions.
Cambridge has approximately 4,000 employees and 53 offices worldwide.
Cambridge on the Web: ctp.com.
FORWARD-LOOKING STATEMENTS
This Press Release includes forward-looking statements (statements
that are not historical facts and relate to future performance) that
involve risks and uncertainties. These forward-looking statements
include statements about future strategies and financial expectations,
and they are subject to risks and uncertainties. Actual results may
differ materially from those stated in any forward-looking statements
based on a number of factors, including the success of executing
Cambridge's planned transition to e-Business, the effectiveness of
Cambridge's efforts to identify and support appropriate NEWCO
investments, its reliance on key personnel to guide these efforts and
its ability to attract and retain qualified employees, competitive
forces in the labor markets in which Cambridge participates, general
stock market and economic conditions, and other risks identified in
Cambridge's SEC filings, including information under the heading
"Forward-looking Statements" in its Form 10-K for the year ended
December 31,1999 and in the reports on Form 10-Q for the first, second
and third quarters of 1999. Cambridge assumes no obligation to update
the information contained in this press release.
CAMBRIDGE TECHNOLOGY PARTNERS (MASSACHUSETTS), INC.
REVENUE SUMMARY BY LINE OF BUSINESS
1Q 2000
% Change %Change
1Q99 to 4Q99 to
1Q99 4Q99 1Q00 1Q00 1Q00
E-Business $ 30,753 $ 44,034 $ 49,456 61% 12%
E-Integration $ 17,591 $ 25,309 $ 27,573 57% 9%
E-Solutions $ 48,344 $ 69,343 $ 77,029 59% 11%
Traditional $ 73,943 $ 43,457 $ 38,769 -48% -11%
Change
Management $ 29,086 $ 32,207 $ 31,794 9% -1%
Total Revenues $151, 373 $145,007 $147,592 -3% 2%
The following table presents unaudited revenue data for the periods
indicated. This information was derived from management's estimate of
the allocation of net revenues among the revenue categories of
e-business, e-integration and change management services. This table
should be read in conjunction with the historical financial
information also presented in this press release. These estimates are
not necessarily indicative of results for any prior or future periods.
CAMBRIDGE TECHNOLOGY PARTNERS (MASSACHUSETTS), INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended March 31,
2000 1999
Net revenues $ 147,592 $ 151,373
Costs and expenses:
Project personnel 78,007 71,568
General and administration 24,071 16,442
Sales and marketing 19,042 14,265
Other costs 47,167 37,960
Total operating expenses 168,287 140,235
Income (loss) from operations (20,695) 11,138
Other income (expense):
Interest income, net 706 561
Gain on equity investment 5,113 407
Gain on sale of asset 7,661 --
Foreign exchange gain (loss) 90 (75)
Total other income 13,570 893
Income (loss) before income taxes (7,125) 12,031
Provision (benefit) for income taxes (2,850) 4,572
Net income (loss) $ (4,275) $ 7,459
Basic net income (loss) per share $ (.07) $ .13
Diluted net income (loss) per share $ (.07) $ .12
Weighted average number of
common shares outstanding 62,270 59,301
Weighted average number of common and
common equivalent shares outstanding 62,270 64,059
CAMBRIDGE TECHNOLOGY PARTNERS (MASSACHUSETTS), INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
March 31, December 31,
2000 1999
Assets
Cash and cash equivalents $ 57,950 $ 62,288
Investments held to maturity 28,785 28,659
Accounts receivable, net 132,066 126,842
Other current assets 64,375 51,893
Total current assets 283,176 269,682
Property and equipment, net 51,573 53,127
Other assets 41,429 44,865
Total assets $376,178 $367,674
Liabilities and Stockholders' Equity
Current liabilities $ 97,355 $ 90,535
Other liabilities 2,059 103
Total stockholders' equity 276,764 277,036
Total liabilities and stockholders' equity $376,178 $367,674
CONTACT:
Cambridge Technology Partners
Donna L. LaVoie
Vice President, Investor Relations
(617) 914-8073
dlavoi02@ctp.com
or
Claire Murphy
Assoc. Director, Investor Relations
(617) 914-8862
cmurph@ctp.com |
