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Thursday July 15, 8:07 am Eastern Time
Company Press Release
Cambridge Technology Partners Releases Second Quarter Results
Revenue Up Sequentially from First Quarter to $163.5M Driven by Global Demand for Customer Management Solutions and Interactive Solutions
CAMBRIDGE, Mass.--(BUSINESS WIRE)--July 15, 1999-- Cambridge Technology Partners (Massachusetts), Inc. (NASDAQ:CATP - news; Cambridge), an international e-business services provider, today announced that its second quarter 1999 net revenues were $163.5 million versus $156.6 million for the same period last year. Sequential revenue growth from the first quarter of 1999 increased by 8%. Revenue growth for the second quarter was driven by increased global demand for Cambridge's Customer Management Solutions (CMS) (up 45% over prior year) and Interactive Solutions services (up 41% over prior year).
For the second quarter, net income was $1.2 million, or $.02 per share (diluted). This compared to net income of $13.5 million, or $.21 per share (diluted) for the same period last year. Adjusted for certain items including a repositioning charge of $8.9 million (for a human resources repositioning and retention program to enable the Company to retain, retrain, relocate and strategically redeploy employees into its e-business service segments), charges for client receivables of $4.2 million and a gain of $2.2 million on the sale of an equity security (see attached supplemental financial information), net income would have been $7.9 million, or $.13 per share (diluted).
Revenues for the first six months of 1999 reached $314.9 million versus $298.8 million for the same period in 1998. Net income for the first six months was $8.6 million, or $.14 per share (diluted) compared with $26.0 million, or $.41 per share (diluted) for the same period in 1998. Excluding charges associated with the company's repositioning efforts, charges for client receivables and a gain on the sale of an equity security, adjusted net income for the first six months of 1999 would have been $15.4 million.
James K. Sims, President and Chief Executive Officer commented on today's announcement. ''The first part of Cambridge's realignment effort in North America was focused on building demand for Cambridge's end-to-end solutions. The sequential improvement in second quarter revenues indicates progress with the success of our realignment effort.''
Mr. Sims continued, ''Globally, demand was very strong in the Customer Management Solutions and Interactive Solutions service lines as evidenced by the number of customer implementations which were delivered during the quarter. We continue to see opportunities for Interactive Solutions and Customer Management Solutions to partner together on client engagements as the focus around the customer becomes increasingly important to our clients. The trend toward more complex projects, where time-to-market is critical, continues to play to Cambridge's strengths in rapidly deploying e-business solutions.''
''Sequentially from the first quarter of 1999, revenue for Custom Software Solutions remained at approximately 27% of total revenue. Of this, mission-critical applications accounted for 55% of total service line revenue and internet-related business was 11% of total service line revenue. Cambridge continues to experience solid demand for delivery of mission-critical applications, particularly in the transportation and financial services sectors.''
Mr. Sims concluded, ''Cambridge's longer-term strategy centered on developing relationships with our existing clients. Our repeat business rate improved this quarter over last quarter and over the second quarter of last year.''
Gerard Van Kemmel, Chief Operating Officer commented, ''The second part of Cambridge's reorganization efforts are focussed on achieving operational excellence. Having said that, we are working on several initiatives including rebalancing our project staffing model and reinforcing policies and procedures surrounding our sales force compliance systems and pricing structure.''
Examples of client wins and/or deliveries of our global e-business service offerings during the second quarter included:
Customer Management Solutions: Prodigy Communications Corp., The Gillette Company; Canon Inc.; American Honda Motor Corp.; PNC Bank; AirTouch Communications; Manulife Financial; The Hartford Insurance Group; Microsoft; SIGECO; Chevron Corp.; Sybase, Inc.; Cabletron Systems.
Interactive Solutions: E TRADE Group Inc.; Tandy; SelfCare; Sega of America; Visa International; BellSouth; Enron Corp.; Lucent Technologies; Security Dynamics Technologies; Deutshe Lufthansa AG; Lebertes.
Custom Software Solutions: Robertson, Stephens; CORDENA Call Management; Executive Jet.
Enterprise Resource Solutions: Alex Lee Inc.; Coventry Healthcare; Lone Star Steakhouse; Merck & Co.; Promus Hotel Corp.
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 2000 and high-velocity middle market 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 has more than 4,500 employees and 55 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 growth. These forward-looking statements 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 effectiveness of the realignment of Cambridge's North American operations, risks associated with management of growth, acquisitions, attraction and retention of employees, variability of quarterly operating results, including the effects of the client purchasing patterns due to Year 2000 issues, competitive factors, risks associated with international operations, changes in demand for third party products or solutions for which Cambridge performs integration services, and protection of intellectual property, as well as the risks identified in Cambridge's SEC filings, including information (i) under the heading ''Forward-looking Statements'' in its Form 10-K for the year ended December 31,1998 and (ii) in the Form 10-Q for the first quarter of 1999. Cambridge assumes no obligation to update the information contained in this press release.
CAMBRIDGE TECHNOLOGY PARTNERS (MASSACHUSETTS), INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1999 1998 1999 1998
Net revenues $ 163,496 $ 156,578 $ 314,869 $ 298,801
Costs and expenses:
Project personnel 75,021 71,852 146,589 137,387
General and
administration 19,652 17,664 36,094 33,552
Sales and marketing 15,790 15,722 30,055 29,030
Other costs 45,645 29,262 83,605 56,637
Repositioning costs 8,926 -- 8,926 --
Total operating
expenses 165,034 134,500 305,269 256,606
Income (loss) from operations (1,538) 22,078 9,600 42,195
Other income, net 3,455 499 4,348 911
Income before income taxes 1,917 22,577 13,948 43,106
Provision for income taxes 728 9,043 5,300 17,092
Net income $ 1,189 $ 13,534 $ 8,648 $ 26,014
Basic net income per share $ .02 $ .23 $ .15 $ .45
Diluted net income per share $ .02 $ .21 $ .14 $ .41
Weighted average number of
common shares outstanding 59,654 57,986 59,480 57,581
Weighted average number
of common and common
equivalent shares outstanding 60,813 63,403 62,588 63,014
Supplemental net income and diluted net income per share
information:
Reported income (loss)
from operations $ (1,538) $ 22,078 $ 9,600 $ 42,195
Repositioning costs 8,926 -- 8,926 --
Client receivable
provision 4,200 -- 4,200 --
Adjusted income from
operations 11,588 22,078 22,726 42,195
Reported other income, net 3,455 499 4,348 911
Less gain on sale of
marketable equity
security (2,228) -- (2,228) --
Adjusted income before
income taxes 12,815 22,577 24,846 43,106
Adjusted provision for
income taxes 4,870 9,043 9,442 17,092
Adjusted net income $ 7,945 $ 13,534 $ 15,404 $ 26,014
Adjusted diluted net income
per share $ .13 $ .21 $ .25 $ .41
CAMBRIDGE TECHNOLOGY PARTNERS (MASSACHUSETTS), INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, December 31,
1999 1998
(unaudited)
Cash and cash equivalents $ 60,446 $ 80,051
Investments held to maturity 27,334 24,918
Accounts receivable, net 145,293 133,583
Other current assets 59,014 46,427
Total current assets 292,087 284,979
Property and equipment, net 53,308 48,255
Other assets 17,957 16,786
Goodwill, net 773 1,186
Total assets $364,125 $351,206
Current liabilities 103,703 107,050
Other liabilities 1,191 2,006
Total stockholders' equity 259,231 242,150
Total liabilities and stockholders' equity $364,125 $351,206
Contact:
Cambridge Technology Partners
Director, Investor Relations
Donna L. LaVoie, 617/914-8073
dlavoi02@ctp.com |
