awesome earnings.....check this out:
Thursday January 28, 04:16 PM Eastern time
Company Press Release
Sapient Corporation Announces Year-End Financial Results
CAMBRIDGE, Mass.--(BUSINESS WIRE)--Jan. 28, 1999--
Quarterly revenue growth of 95 percent and annual revenue growth of 77 percent cap another strong year
Sapient Corporation (NASDAQ:SAPE) today announced financial results for its fourth quarter and year ended Dec. 31, 1998. For the year, consolidated revenues increased 77 percent to 160,372,000, from 90,360,000 for 1997. Net income for the year would have been 20,725,000 or 0.74 per share, excluding a one-time charge of 11,100,000 (offset by a tax benefit of 4,074,000) associated with the acquisition of Studio Archetype Inc., compared to 12,705,000 or 0.49 per share, excluding a one-time charge of 560,000 (offset by a tax benefit of 213,000) associated with the acquisition of EXOR Technologies, Inc. for the year ended 1997. Including the one-time charges, net income for 1998 was 13,699,000 or 0.49 per share, compared to 12,358,000 or 0.47 per share for the year ended 1997.
Consolidated revenues for the quarter ended December 31, 1998 increased 95 percent to 52,454,000 from 26,965,000 for the same period in 1997. Diluted earnings per share for the quarter was 0.21, compared to 0.14 for the same period of 1997, excluding the one-time charge associated with the acquisition of EXOR Technologies, Inc. Net income for the quarter ended December 31, 1998 was 6,012,000, representing a 68 percent increase over the fourth quarter of 1997, excluding the one-time charge associated with the acquisition of EXOR Technologies, Inc.
Although the Company reported its third quarter results of 1998 in accordance with established accounting practice and valuations of acquired in-process research and development provided by independent valuations, the Company has taken the initiative to conform its accounting for acquisition-related in-process research and development charges in response to recent SEC interpretative guidelines. Accordingly, the Company has reduced this charge from 14,800,000 it recorded in the third quarter of 1998 to reflect the acquisition of Studio Archetype, Inc to 11,100,000. The 3,700,000 reduction in the value of the in-process technology will be capitalized as goodwill and amortized over 7 years. Amortization of intangibles related to the Studio acquisition for the fourth quarter and total year amounted to 559,000 and 687,000, respectively. The impact on this restatement for the third quarter of 1998 is to reduce the previously reported net loss from 3,969,000 to 1,627,000.
"The continued strength in our revenue growth was due, in part, to two key factors: the tremendous demand for our Internet business and e-commerce consulting services, and our ability to handle large, complex integration and consulting projects," said Jerry A. Greenberg, Sapient co-chairman and co-chief executive officer. "This has led to a high degree of repeat business as well as strategic long-term relationships with large clients in our industry segments."
1998 Highlights
Following are some of Sapient's achievements in fiscal 1998.
-- Leadership in Internet Consulting
With the acquisition of Studio Archetype, Inc. in August 1998, Sapient greatly expanded its already strong Internet and e-commerce consulting capabilities. Today, Sapient is one of the few firms capable of offering complete, end-to-end Internet consulting -- the seamless integration of technology, integrated brand and business strategy and user-centered design. According to Cambridge, Mass.-based market research firm Forrester Research, Inc., the e-commerce and Internet/Intranet services market is estimated to grow to nearly 33 billion by 2002, a compounded annual growth rate of over 60.
-- Employee Hiring and Retention
In a market where competition for excellent people is fierce, Sapient continued to be very successful in attracting and retaining highly qualified employees. Due to the commitment of the entire company to hiring, Sapient grew from approximately 800 employees at year-end 1997 to 1,450 employees at year-end 1998. Significantly contributing to this growth was Sapient's ability to maintain an annualized voluntary turnover rate well below the industry average.
-- Focus On Industry Segments
In 1998, Sapient deepened its commitment to the company's target industry segments: energy services, communications, financial services, healthcare, manufacturing and government. Particularly noteworthy was the momentum seen in the energy services segment, which increased revenues by nearly 200 percent over 1997 levels due to the need for companies to rapidly respond to changes brought about by business trends such as deregulation and globalization. In addition, strong growth was seen in the financial services sector, which increased revenues by more than 80 percent in 1998, reflecting primarily that industry's continuing focus on Internet and e-commerce initiatives.
-- Integrated Management Consulting Capabilities
Sapient continued to build its integrated management consulting team and expanded its core services to include such areas as rapid business solution workshops, rapid business assessment, business strategy development, enterprise transformation, business process innovation, change integration and management and technology-driven business change. As Sapient continues to help companies respond to the challenges and opportunities of the Internet, the integration of business, technology, brand and customer strategy will continue to be central to the value Sapient provides its clients.
-- Delivery of Strategic Solutions
In 1998, Sapient designed and delivered a number of high-impact solutions for its clients. A sampling includes:
For BankBoston, Sapient created and launched two new Internet
banking services, HomeLink(TM) and OfficeLink(TM). With the
introduction of these online services, BankBoston became one of
the first major banks in New England to offer banking
transactions over the Internet. Customers visiting BankBoston's
Web site at www.bankboston.com can perform all their banking
transactions from opening an account and checking balances to
transferring funds and paying bills from any computer, seven
days a week, 24 hours a day. For Answer Financial, Inc., Sapient built a unique Internet
technology infrastructure that helped launch the world's first
virtual insurance agency. Sapient combined its technology savvy
with Answer Financial, Inc.'s unique business approach to help
create the Insurance Answer Center (IAC), a robust Internet
application integrated with a 24hour call center that allows
affinity group members to compare and buy auto, life and annuity
insurance from more than 56 carriers. To deliver the IAC
solution, Sapient leveraged a mix of custom and packaged
software, including a management system, quoting engines,
application filing software and middleware, to act as the
connective tissue among multiple technologies. For E*TRADE(R), the pioneering online investing service, Studio
Archetype, Inc. completed the recent site redesign that
encompassed branding, content, user tools, ease of use and speed.
Through user research and extensive collaboration with
E*TRADE's(R) staff, Studio Archetype, Inc. helped refine the
company's site strategy and architecture. More like a software
application than a homepage, the new E*Trade(R) interface design
allows users to quickly and easily perform tasks. The site has
received numerous accolades, including being named one of the
best Web sites of 1998 by BusinessWeek. For SIGECO, an energy services company that serves more than
120,000 retail electric customers and 104,000 natural gas
customers in southwest Indiana, EXOR, Sapient's ERP division,
needed to implement an ERP system in a short period of time due
to energy deregulation. With EXOR's proven methodology and
teambased approach, the system was implemented in less than one
year, ensuring that SIGECO had a bestofbreed ERP system in
place for deregulation. For Southern Company, the largest producer of electricity in the
United States, Sapient codeveloped and implemented a new
business solution for automating and managing energy interchange
transactions. In less than five months, Sapient delivered a new
system called Transaction Analysis & Scheduling System (TASS),
which manages the energy schedules between the Southern Company's
system and other electrical systems and assists in the account
and realtime execution of these energy transactions.
About Sapient
Sapient Corporation is an innovative provider of integrated management consulting services, Internet commerce solutions and systems implementation services. Using a proven, fixed-price model designed to ensure on-budget and on-time delivery, Sapient offers a variety of integrated services to help clients rapidly achieve their critical business objectives. Founded in 1991, Sapient has experienced strong and consistent revenue growth in each of the last seven years. The company currently has more than 1,400 employees in offices in Cambridge, Mass., the company's headquarters, as well as New York, San Francisco, Chicago, Atlanta, Dallas, Los Angeles, Portland (Maine) and London. More information on Sapient can be found on the World Wide Web at www.sapient.com.
This press release contains forward-looking statements that involve a number of risks and uncertainties, including the company's ability to take advantage of an expected growing market. 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 attract and retain high quality employees, accurately set fees for and timely complete its current and future client projects, the actual level of client demand for Internet consulting services, 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 most recent Registration Statements on Form S-3 and its Annual Report on Form 10-K filed with the SEC.
Sapient, Studio Archetype and EXOR are registered trademarks of Sapient Corporation. HomeLink and OfficeLink are registered trademarks of BankBoston. ETRADE is a registered trademark of ETRADE Securities, Inc.
NOTE TO EDITORS: The name ETRADE has an asterisk between the E and TRADE which may not appear on some systems.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts) Three Twelve
Months Ended Months Ended
December 31, December 31,
1998 1997 1998 1997
Revenues $52,454 26,965 160,372 90,360
Operating expenses:
Project personnel costs 25,437 12,997 77,565 43,816
Selling and marketing 3,692 2,090 11,129 5,893
General and administrative 13,583 6,483 40,489 22,108
Amortization of intangibles 559 687
Acquisition Costs 560 560
Charge for in process research
and development 11,100
Total operating expenses 43,271 22,130 140,970 72,377
Income from operations 9,183 4,835 19,402 17,983
Interest income 724 507 2,957 2,078
Income before income taxes 9,907 5,342 22,359 20,061
Income tax expense 3,895 2,106 8,660 7,703
Net income $ 6,012 3,236 13,699 12,358Basic net income per share $ 0.23 0.13 0.54 0.52Diluted net income per share $ 0.21 0.12 0.49 0.47Proforma net income (1) $ 6,012 3,583 20,725 12,705Proforma basic
net income per share (1) $ 0.23 0.15 0.82 0.53Proforma diluted
net income per share (1) $ 0.21 0.14 0.74 0.49Weighted average
common shares 26,151 24,176 25,323 23,996
Weighted average
common stock equivalents 2,393 2,156 2,578 2,083
Weighted average
common shares and stock
equivalents outstanding 28,544 26,332 27,901 26,079
(1) Proforma amounts exclude the impact of the onetime charge
related to inprocess research and development associated with
the acquisition of Studio Archetype, Inc. in 1998 and acquisition
costs related to Exor Technologies, Inc. in 1997.CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, December 31,
1998 1997
ASSETS
Current assets:
Cash and marketable securities $ 91,260 64,406
Accounts receivable 41,533 16,217
Unbilled receivables 10,306 9,071
Other current assets 3,689 1,674
Total current assets 146,788 91,368
Net fixed assets 13,620 6,645
Intangible and other assets 19,694
Total assets $180,102 98,013
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long term debt $ 208
Accounts payable and accrued expenses 12,212 5,392
Income taxes payable and deferred 2,351 3,196
Deferred revenues on contracts 9,830 6,308
Other current liabilities 1,327 910
Total current liabilities 25,720 16,014
Stockholders' equity 154,382 81,999
Total liabilities and stockholders' equity $180,102 98,013
--------------------------------------------------------------------------------
Contact:
Investor Contact ----------
Sapient Corporation
Michael Todisco
(617) 679-6993
mtodis@sapient.com
or
Press Contact
FitzGerald Communications
Keith Figlioli
(617) 494-9500
kfiglioli@fitzcomm.com
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