SAPE...Sapient Revenues Jump 74% in First Quarter
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Quarterly Revenue Surpasses $100 Million For The First Time As Pro Forma Net Income Rises 83%
CAMBRIDGE, Mass.--(BUSINESS WIRE)--April 24, 2000--Sapient (NASDAQ:SAPE - news) today announced strong financial results for its first quarter ended March 31, 2000. For the three months, consolidated revenues were $100,334,000, a 74% increase over revenues of $57,793,000 in the first quarter of 1999. Sequential revenue growth over the prior quarter was 23%. Pro forma net income (before amortization of intangibles, acquisition costs and stock based compensation charge) was $12,652,000 or $0.19 per diluted share for the first quarter of 2000, compared to $6,901,000 or $0.11 per diluted share for the first quarter of 1999. Net income for the quarter (including the above costs) totaled $11,890,000 or $0.18 per diluted share, compared to net income of $4,279,000 or $0.07 per diluted share for the first quarter of 1999.
``Clients are continuing to reward us for our insight and analysis of the future marketplace. They value the way our people bring the skills needed to help them succeed in the New Economy,'' said Jerry A. Greenberg, Sapient's co-chairman and co-chief executive officer. ``This combination of insight and strong people led to accelerated demand in Europe as well as new opportunities in Asia and South America.''
``We have made solid progress on our key business drivers during the first quarter,'' said Edward G. Goldfinger, Sapient's chief financial officer. ``In particular, the initiatives we have undertaken to be more effective in the areas of pricing and collection have paid off in strong top line growth, earnings and cash flow.''
Highlights from the first quarter follow.
-- Sapient's efforts in the areas of wireless and broadband have been
accelerating, with fifteen projects underway around the world.
-- Sapient continued to expand its presence outside the US:
-- As Sapient's office in Milan gains momentum and the London
office continues to grow, the company now has approximately
200 people located in Europe.
-- Sapient developed Internet Gratis, a Brazil-based ISP and
portal, which grew to become the largest ISP in Brazil within
four weeks of its January launch.
-- Bolstering Sapient's ability to serve its global clients, Alan
J. Herrick was appointed to lead European operations and
expansion efforts.
-- Sapient received accolades from the creative community for its
smart, user-focused approach to problem solving and design. The
company was ranked number one on Adweek's fifth annual list of
"Top 100 Interactive Agencies," and placed first in the
interaction design competition at the CHI (Computer Human
Interaction) 2000 Conference in The Hague, The Netherlands.
-- Sapient further enhanced its executive and industry-focused
leadership teams with experienced professionals who are tasked
with developing and implementing many of Sapient's most critical
initiatives:
-- Merle Sprinzen joined Sapient as chief marketing officer,
underscoring the company's commitment to become better
recognized for the new style of consulting it is creating and
the benefits this approach delivers to its clients.
-- James R. Anthony was appointed managing director of Sapient's
Media, Entertainment and Communications (MEC) business unit.
-- Andrew R. Easter has taken the reins as managing director of
Sapient's Energy Services business unit.
About Sapient
Sapient is a leading e-services consultancy providing Internet strategy consulting and sophisticated Internet-based solutions to Global 1000 companies and startup businesses. As Architects for the New Economy, Sapient helps clients define their Internet strategies and design, architect, develop and implement solutions to execute those strategies. Founded in 1991, Sapient has been providing Internet solutions since 1994 and employs approximately 2,300 people in offices in Cambridge, Mass., the company's headquarters, as well as London, Sydney, Milan, New York, San Francisco, Chicago, Atlanta, Dallas, Los Angeles, Washington D.C., Denver and Houston. More information on Sapient can be found at www.sapient.com.
This press release contains forward-looking statements that involve a number of risks and uncertainties. There are a number of factors that could cause actual events to differ materially from those indicated. Such factors include, without limitation, the Company's ability to continue to attract and retain high quality employees, accurately set fees for and timely complete its current and future client projects, the continued acceptance of the Company's services, the ability of the Company to manage its growth and projects effectively, and the other factors set forth in the Company's Form 10-K with the SEC.
Sapient and Architects for the New Economy are registered servicemarks of Sapient Corporation. All other product, service and company names are trademarks or servicemarks of their respective owners.
Consolidated Statements of Income
(in thousands) Three months ended March 31,
(Unaudited) 2000 1999
Revenues $ 100,334 $ 57,793
Operating Expenses:
Project personnel costs 48,575 28,334
Selling and marketing 7,885 3,974
General and administrative 25,253 14,648
Stock-based compensation 110 1,699
Amortization of intangible assets 884 569
Acquisition costs -- 2,340
Total operating expenses 82,707 51,564
Income from operations 17,627 6,229
Interest Income 2,473 820
Income before income taxes and equity in
net loss from unconsolidated affiliate 20,100 7,049
Income taxes 7,857 2,770
Income before equity in net loss
from unconsolidated affiliate 12,243 4,279
Equity in net loss from
unconsolidated affiliate 353 --
Net income $ 11,890 $ 4,279
Basic net income per share $ 0.20 $ 0.08
Diluted net income per share $ 0.18 $ 0.07
Weighted average common shares 58,104 54,278
Weighted average common share-equivalents 8,416 6,870
Weighted average common shares and
common share equivalents 66,520 61,148
Pro forma Data:(1)
Income before income taxes and
equity in net loss from
unconsolidated affiliate 20,100 7,049
Non-cash & merger-related charges 994 4,608
Equity in net loss from
unconsolidated affiliate (353) --
Pro forma income before taxes 20,741 11,657
Pro forma tax expense 8,089 4,756
Pro forma net income $ 12,652 $ 6,901
Pro forma basic net income per share $ 0.22 $ 0.13
Pro forma diluted net income per share $ 0.19 $ 0.11
Weighted average common shares 58,104 54,278
Weighted average common stock equivalents 8,416 6,870
Weighted average common shares
and stock equivalents 66,520 61,148
(1) The pro forma data excludes merger and acquisition related
expenses, including stock-based compensation, the amortization of
purchased intangible assets and other non-recurring items. This
does not purport to be prepared in accordance with Generally
Accepted Accounting Principles.
Consolidated Balance Sheets (in thousands)
March 31, Dec. 31,
2000 1999
Assets (Unaudited)
Current Assets:
Cash and short-term investments $219,832 $196,109
Accounts receivable, net 77,917 75,170
Unbilled revenues on contracts 15,773 13,474
Deferred income taxes 1,311 1,311
Prepaid expenses and other current assets 10,415 7,928
Total current assets 325,248 293,992
Net fixed assets and other assets 41,521 32,615
Net intangibles 15,698 16,582
-------- --------
57,219 49,197
Total assets $382,467 $343,189
Liabilities and stockholders' equity
Current Liabilities:
Accounts payable and accrued expenses $ 26,292 $ 20,657
Income taxes payable 4,172 948
Deferred revenues on contracts 17,824 15,136
Total current liabilities 48,288 36,741
Other long term liabilities 1,877 1,489
Stockholders' equity 332,302 304,959
Total liabilities and stockholders' equity $382,467 $343,189
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