Cambridge Technology Partners Announces Second Quarter 2000 Results
CAMBRIDGE, Mass.--(BUSINESS WIRE)--July 27, 2000--
Global E-Solutions Revenue Reaches $92.3 Million for Q2 2000; Up 60% Year-Over-Year and 20% Sequentially
Cambridge Technology Partners (Massachusetts), Inc. (NASDAQ:CATP)
(Cambridge), a global e-Solutions provider, today announced 60%
year-over-year and 20% sequential revenue growth in e-Solutions to
$92.3 million in the second quarter of 2000.
Revenues for the second quarter of 2000 were $159.9 million versus
$163.5 million for the same period of 1999 and $147.6 million for the
first quarter of 2000. Revenues for the second quarter of 2000 were 1%
higher than the same period of 1999, excluding the negative impact of
foreign exchange. The impact of the strong U.S. dollar was to reduce
Q2 `00 revenue by $5.6 million versus Q2 '99 and $4.0 million versus
Q1 '00. Revenues for the second quarter were driven by increased
demand for Cambridge's e-Solutions.
Net loss for the second quarter of 2000 was $11.0 million, or $.18
per share (basic and diluted) versus net income of $1.2 million, or
$.02 per share (diluted) for the same period in 1999.
Included in other income for the second quarter are losses from
equity investments resulting from Cambridge's 24% share in the
Cambridge Technology Capital Fund of $3.9 million or $.04 (diluted)
per share.
Revenues for the first six months of 2000 reached $307.4 million
versus $314.9 million for the same period in 1999. Revenues for the
first six months of 2000 were 1% higher than the same period of 1999,
excluding the negative impact of foreign exchange. Net loss for the
first six months was $15.3 million, or $.25 per share (basic and
diluted) compared with net income of $8.6 million, or $.14 per share
(diluted) for the same period in 1999.
Jack Messman, President and Chief Executive Officer of Cambridge
commented, "We are very excited about our momentum in the global
e-Solutions practice. With 58% of our revenues now e-solutions based,
we continue to transition Cambridge aggressively into the New Economy.
During the quarter we won important engagements with brand name
clients such as Vodafone, Publix Supermarkets, Honda and Textron.
We also are encouraged by the growth in our change-management
services, where Cambridge continues to outpace nearly all its rivals,"
Messman continued. Revenues from such services totaled $33.5 million
for the quarter. Revenues grew by 19% year over year, excluding the
negative impact of foreign exchange. "Today we are also announcing
that we are exploring strategic options to allow the management
consulting unit to operate as a more independent but majority-owned
business of the Company." (See separate press release.)
As expected, Cambridge's traditional services from custom
client/server applications and implementations of software such as
call centers and enterprise application planning (ERP) applications
continued to decline in revenue from $38.8 million in the first
quarter of 2000 to $34.0 million in the second quarter.
Total costs and expenses for the second three months of 2000 were
$175.3 million versus $165.0 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 Q2 2000
During the second quarter of 2000, Cambridge partnered with
well-recognized brand name clients to deploy e-Business solutions
across the globe. Some of Cambridge' s client engagements during the
first quarter of 2000 included:
Vodafone, the largest wireless services provider in the world,
engaged Cambridge to assist them with the development of their
Vodafone Internet Portal (VIP). VIP will provide customers access to
financial services (stocks), travel and lodging reservations and
information, personal information management tools, and many other
services currently available on the internet. The portal will support
access by web phones, PDAs, PCs and POTS. This engagement draws on a
wide range of Cambridge's services, including UX Design, e-Solutions,
and the European Cambridge Wireless Center (CWC).
Publix Supermarkets, the 10th largest volume supermarket chain in
the U.S. with 628 supermarkets across the southeastern U.S. and retail
sales of $13.1 billion in 1999, engaged with Cambridge to deploy a
highly efficient website that will enable its customers to purchase
groceries online and arrange for delivery directly to their homes or
to local Publix stores for pick-up. In addition, customers will have
access to a state-of-the-art customer care facility that provides
support services and can be accessed via e-mail, chat or phone.
Cambridge will also supply digital strategy, requirements development,
technical design, package selection, custom development, testing and
rollout support services.
Honda, the world's eighth largest automaker, engaged Cambridge to
build and launch a new customer site for American Honda Motors. The
customer site will serve car buyers and dealers in new and powerful
ways, allowing consumers to configure their own vehicles, price
different configurations and complete quick quotes via email, provide
leasing versus financing comparisons, and obtain applications for
pre-approval of online credit. The site also links Honda's dealer
network, allowing the Company to compete more effectively using the
Web.
Textron, an $11.6 billion global conglomerate and #154 in the
Fortune 500, has partnered with Cambridge to transform itself into an
e-leader across major industrial sectors.
Cambridge worked together with members of Textron's eBusiness
Council -- 22 cross-business-segment executives - to develop and
introduce initiatives that will allow Textron to take better advantage
of the opportunities created by the New Economy. Ultimately, these
initiatives will range from online procurement and sales and
distribution to Web-enabled applications and other solutions.
Textron, working with Cambridge's Digital Business Strategy group
and Management Lab, is now moving forward to launch a series of
e-Strategy Workshops and JumpSmarts across Textron's various business
units to ensure that key stakeholders are educated on the
opportunities presented by the Internet. These are critical in helping
each business unit set the direction for its own e-Business program -
moving toward sustainable approaches to give each unit a competitive
edge.
Outlook for FY 2000
Security Analysts' consensus estimates for Q3 2000 are for revenue
of $172 million and a net loss of $.01 per share (basic and diluted).
The Consensus revenue estimates for FY 2000 are $662 million with a
net loss of $.27 per share (basic and diluted). The Company's guidance
on its second quarter conference call, indicated that Cambridge would
grow e-Solutions in excess of 50% in 2000, off a base or $243.3
million in 1999. Based upon results for the first half of the year and
the current outlook, this guidance remains unchanged.
Cambridge previously stated that, for the year, its traditional
business should decline by 20%-30% 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 of
30%-40%, greater than previously expected. Cambridge expects its
Change Management Consulting practice to grow at 10-15% for the year.
The change in guidance is primarily due to the negative impact of
foreign exchange. Cambridge also indicated that it expects to return
to profitability in the December quarter.
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 in
1999, with $243.3 million from its global e-Business solutions.
Cambridge has approximately 4,000 employees and 53 offices worldwide.
Cambridge is a Safeguard Scientifics (NYSE: SFE) partner company.
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 second and
third quarters of 1999, and the first quarter of 2000. Cambridge
assumes no obligation to update the information contained in this
press release.
- global revenue breakdown and financials follow -
-0-
*T
CAMBRIDGE TECHNOLOGY PARTNERS (MASSACHUSETTS), INC.
REVENUE SUMMARY BY LINE OF BUSINESS
2Q 2000
%Change %Change
2Q99 to 1Q00 to
2Q99 1Q00 2Q00 2Q00 2Q00
E-Business $ 36,173 $ 49,456 $ 61,346 70% 24%
E-Integration $ 21,424 $ 27,573 $ 30,948 44% 12%
E-Solutions $ 57,597 $ 77,029 $ 92,294 60% 20%
Traditional $ 75,843 $ 38,769 $ 34,033 -55% -12%
Change
Management $ 30,056 $ 31,794 $ 33,523 12% 5%
Total Revenues $163,496 $147,592 $159,850 -2% 8%
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 Six Months
Ended June 30, Ended June 30,
2000 1999 2000 1999
Revenues $ 159,850 $ 163,496 $ 307,442 $ 314,869
Costs and expenses:
Project personnel 72,938 81,667 150,945 153,235
General and
administration 31,056 21,525 55,127 37,967
Sales and marketing 20,850 16,025 39,892 30,290
Other costs 50,432 45,817 97,599 83,777
Total operating
expenses 175,276 165,034 343,563 305,269
Income/(loss)
from operations (15,426) (1,538) (36,121) 9,600
Other income (expense):
Interest income, net 706 478 1,412 1,163
Gain (loss) on
equity investments (3,925) 3,367 1,188 3,649
Gain on sale of asset - - 7,661 -
Foreign exchange
gain (loss) 313 (390) 403 (464)
Total other income (loss) (2,906) 3,455 10,664 4,348
Income (loss) before
income taxes (18,332) 1,917 (25,457) 13,948
Provision (benefit)
for income taxes (7,333) 728 (10,183) 5,300
Net income (loss) $ (10,999) $ 1,189 $ (15,274)$ 8,648
Basic net income
(loss) per share $ (0.18) $ 0.02 $ (0.25)$ 0.15
Diluted net income
(loss) per share $ (0.18) $ 0.02 $ (0.25)$ 0.14
Weighted average
number of common
shares outstanding 62,426 59,654 62,347 59,480
Weighted average
number of common
and common equivalent
shares outstanding 62,426 60,813 62,347 62,588
CAMBRIDGE TECHNOLOGY PARTNERS (MASSACHUSETTS), INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, December 31,
2000 1999
(unaudited)
Cash and cash equivalents $ 61,982 $ 62,288
Investments held to maturity 27,932 28,659
Accounts receivable, net 152,596 126,842
Other current assets 64,230 51,893
Total current assets 306,740 269,682
Property and equipment, net 50,049 53,127
Other assets 26,368 44,865
Total assets $383,157 $367,674
Current liabilities $110,839 $ 90,535
Other liabilities 1,798 103
Total stockholders' equity 270,520 277,036
Total liabilities and stockholders' equity $383,157 $367,674
CONTACT:
Cambridge Technology Partners
John Gavin
Chief Financial Officer
617/914-8117
john.gavin@ctp.com
or
Cambridge Technology Partners
Claire Murphy
Assoc. Director, Investor Relations
617/914-8862
claire.murphy@ctp.com |
