Sapient Announces Strong Third Quarter Results;Integrated Management Consulting and IT Solutions Company IncreasesRevenue by 71 Percent
October 15, 1998 04:01 PM
CAMBRIDGE, Mass.--(BUSINESS WIRE)--Oct. 15, 1998--Sapient Corporation SAPE today announced financial results for its third quarter and nine months ended September 30, 1998. Revenues for the third quarter were $41,837,000, a 71 percent increase compared to revenues of $24,416,000 for the third quarter of 1997. Net income and diluted net income per share for the quarter would have been $5,399,000 and $0.19 per share, excluding a one-time charge for in-process research and development of $9,368,000, net of a deferred tax benefit of $5,432,000, associated with the acquisition of Studio Archetype, Inc. This represents a 63 percent increase over net income of $3,320,000 for the third quarter of last year. Including the one-time charge, net loss and diluted net loss per share for the quarter were $3,969,000 and $0.14 per share.
For the nine months ended September 30, 1998, revenues were $107,917,000, a 70 percent increase compared to revenues of $63,395,000 for the first nine months of 1997. Net income and diluted net income per share for the first three quarters of 1998 totaled $14,713,000 and $0.53 per share, excluding the one-time charge, a 61 percent increase from net income of $9,122,000 for the same period in 1997. Including the one-time charge, net income and diluted net income per share for the nine months ended were $5,345,000 and $0.19 per share.
"Our unwavering focus on key elements of our business -- providing added value based on expertise in specific industries, creating leadership capabilities in the emerging Internet market, and attracting and keeping great people --continued to support Sapient's growth again this quarter," said Jerry A. Greenberg, Sapient co-chairman and co-chief executive officer. "We believe our strategy will help us continue to create a compelling value proposition for clients seeking rapid, forward-looking solutions to their critical business problems."
Throughout 1998, Sapient has concentrated on expanding its business in six target industry segments: Energy Services, Healthcare, Government, Manufacturing, Communications and Financial Services. Several recent projects illustrate Sapient's ability to provide strategic value to help clients set new directions in their industries.
In Energy Services, Sapient has created and implemented complex systems that allow companies such as Williams and Southern Company to uniquely distinguish themselves in the fast-changing deregulated energy market. Three different energy services companies are working with Sapient to prepare for the November 1, 1998 deregulation of the natural gas market in the State of Georgia.
In Healthcare, Sapient helped to create a first-of-its-kind, Internet-based immunization registry system for the states of Maine and New Hampshire. This system is part of a comprehensive well-child program and is expected to serve as a model for similar systems in other states.
In the insurance segment of Financial Services, Sapient helped one of its clients, Answer Financial, Inc., create an entirely new distribution channel for evaluating and buying insurance over the Internet. In less than one year, Sapient developed the technology infrastructure that, combined with Answer Financial's unique business model, helped create the Insurance Answer Center, a robust Internet application integrated with a 24-hour call center that allows affinity group members to compare and buy auto, home and life insurance and annuity products from more than 50 carriers.
In response to growing demand for end-to-end Internet services, during the quarter Sapient acquired Studio Archetype, a San Francisco-based leader in the integration of brand strategy, design and interactive technology. The combined organization leverages the Internet experience of both companies -- Sapient's expertise in Web strategy and rapid systems implementation and Studio Archetype's 10 years of experience in brand consulting and user-centered design -- to create a best-in-class organization capable of providing a complete range of integrated Internet consulting services, delivered on a fixed-price/fixed-time basis.
"Studio Archetype's expertise complements Sapient's capabilities in Web strategy development, business consulting and technology implementation," Greenberg said. "Most importantly, we are driven by the same vision: to be the very best at what we do in order to help our clients develop revolutionary products and services."
Sapient's success in attracting and retaining very qualified and motivated people has continued to be an important element in the company's growth. During the third quarter, Sapient continued to experience a voluntary turnover rate well below the industry average. In addition, Sapient's hiring team was again successful in attracting a number of highly qualified individuals, bringing the total number of employees, including employees of Studio Archetype, to 1,348 as of September 30, 1998.
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