Market Snapshot
  • U.S.
  • Europe
  • Asia
Ticker Volume Price Price Delta
DJIA 16,438.31 29.77 0.18%
S&P 500 1,866.02 1.17 0.06%
NASDAQ 4,106.34 10.83 0.26%
Ticker Volume Price Price Delta
STOXX 50 3,155.81 16.55 0.53%
FTSE 100 6,625.25 41.08 0.62%
DAX 9,409.71 91.89 0.99%
Ticker Volume Price Price Delta
NIKKEI 14,512.38 -3.89 -0.03%
TOPIX 1,171.40 -1.97 -0.17%
HANG SENG 22,760.24 64.23 0.28%

Sapient Reports Third Quarter 2012 Results



  Sapient Reports Third Quarter 2012 Results

        Service Revenues Up 9.8% Over Q3 2011 and Up 3.4% Sequentially

               Third Quarter Non-GAAP Operating Margin of 14.7%

Business Wire

BOSTON -- November 07, 2012

Sapient (NASDAQ: SAPE) today reported the following financial results for the
third quarter ended September 30, 2012:

  * Service revenues were $288.5 million compared to $262.7 million in the
    third quarter of 2011, an increase of $25.7 million, or 9.8%.
    Sequentially, service revenues were up $9.5 million, or 3.4%, from $279.0
    million in the second quarter of 2012. On a constant currency basis,
    revenues increased 10.9% over the third quarter of 2011 and increased 3.3%
    sequentially.
  * GAAP income from operations was $32.8 million, or 11.4% of service
    revenues, compared to $29.9 million, or 11.4% of service revenues,
    reported in the third quarter of 2011.
  * Non-GAAP income from operations was $42.4 million, or 14.7% of service
    revenues, compared to $38.9 million,  or 14.8% of service revenues,
    reported in the third quarter of 2011.
  * GAAP diluted net income per share was $0.15, compared to $0.14 in the
    third quarter of 2011.
  * Non-GAAP diluted net income per share was $0.20, compared to $0.18 in the
    third quarter of 2011.

“We are pleased with our strong performance this quarter as clients continue
to partner with us due to our highly differentiated capabilities,” said
Sapient Chief Executive Officer and Co-Chairman Alan J. Herrick. “We are in a
strong market position and excited about the future, despite the uncertain
economic environment. The strategic addition of the teams from Iota and Second
Story extends SapientNitro’s capabilities in the areas of consumer insights
and interactive storytelling.”

The company generated cash from operations of $37.1 million in the third
quarter of 2012, compared to $43.5 million in the third quarter of 2011. As of
September 30, 2012, the company had cash, cash equivalents and marketable
securities of $212.4 million. Days sales outstanding was 67 days for the third
quarter of 2012, up from 66 days in the second quarter of 2012 and 66 days for
the third quarter of 2011.

Outlook

Sapient management provided the following guidance:

  * Prior to the impact of Hurricane Sandy, the company was expecting service
    revenues to be in the range of $289 million to $294 million for the
    quarter ending December 31, 2012. While the company is still assessing the
    storm’s impact, it currently estimates that revenues for the fourth
    quarter will be $1 to $2 million less.
  * Fourth quarter 2012 non-GAAP operating margin is expected to be 14.3% to
    15.3%, including an estimated negative impact of approximately 30 basis
    points due to the effects of Hurricane Sandy.

Webcast and Conference Call

Sapient will host a discussion of its third quarter results at 4:30 p.m. ET
today, which will be broadcast live on the Internet. The dial-in information
for the conference call is:

US: (877) 291-1296
International: (720) 259-9209

To access the live webcast of the event, please click on the link below:

http://sape.client.shareholder.com/events.cfm

In addition, a re-broadcast of the webcast will be available in the investors
section of www.sapient.com.

Adjusted (Non-GAAP) Financial Measures

Sapient provides non-GAAP financial measures to complement reported GAAP
results. Management believes these measures help illustrate underlying trends
in the company's business and uses the measures to establish budgets and
operational goals, communicated internally and externally, for managing the
company’s business and evaluating its performance. The company anticipates
that it will continue to report both GAAP and certain non-GAAP financial
measures in its financial results, including non-GAAP results that exclude
stock-based compensation expense, restructuring and other related charges,
amortization of purchased intangible assets, acquisition costs and other
related charges, and income tax benefits or provisions resulting from changes
in the valuation allowance. In addition, the company may present service
revenues in constant currency terms, which excludes the effect of currency
fluctuations between the U.S. dollar and the functional currency of the entity
in which the revenue was transacted. The effect is excluded by translating the
current period's local currency service revenues into U.S. dollars using the
average local currency exchange rates that were in effect during the prior
period of comparison. Because the company’s reported non-GAAP financial
measures are not calculated according to GAAP, these measures are not
comparable to GAAP and may not necessarily be comparable to similarly
described non-GAAP measures reported by other companies within the company’s
industry. Consequently, Sapient’s non-GAAP financial measures should not be
evaluated in isolation or supplant comparable GAAP measures, but, rather,
should be considered together with its consolidated financial statements,
which are prepared according to GAAP.

Safe Harbor Statement

This press release contains forward-looking statements – in particular, the
financial guidance for the fourth quarter of 2012, including expected service
revenues, expected non-GAAP operating margin, and the impact of Hurricane
Sandy – that involve a number of risks and uncertainties. All forward looking
statements are based upon current expectations and beliefs and various
assumptions. Actual results could differ materially from management’s
expectations and the forward-looking statements contained in this release. A
number of factors could cause actual events to differ materially from those
indicated, including, without limitation: the continued acceptance of the
company’s services; a reduction in the demand for the company’s services in
light of the current economic environment; the company’s ability to accurately
set fees for and complete its current and future client projects on a timely
basis, successfully manage risks associated with its international operations,
manage its growth and projects effectively, successfully integrate and achieve
anticipated benefits from acquisitions, including Iota and Second Story, and
continue to attract and retain high-quality employees; the impact of Hurricane
Sandy; and other risks and uncertainties as set forth in the company’s filings
with the SEC, including without limitation the most recent Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q. Any forward-looking statement
speaks only as of the date on which it is made, and the company undertakes no
obligation to update any forward-looking statements for any reason, including
to reflect events or circumstances after the date on which such statements are
made or to reflect the occurrence of anticipated or unanticipated events or
circumstances, except as required by law.

About Sapient

Sapient is a global services company that helps clients transform in the areas
of business, marketing, and technology. The company operates three divisions
that enable clients to gain a competitive advantage and succeed in an
increasingly digital world. SapientNitro, Sapient Global Markets and Sapient
Government Services fuse insight, creativity and technology to drive
innovation and to help clients navigate complex business problems. Our
approach is the subject of case studies used by MBA programs at Harvard and
Yale. The company has operations in North America, Europe, and Asia-Pacific.
For more information, visit www.sapient.com.

Sapient is a registered service mark of Sapient Corporation.

 
Sapient Corporation
Consolidated Unaudited Condensed Statements of Operations
                                                  
                                                    
                   Three Months Ended September    Nine Months Ended September
                   30,                             30,
                      2012              2011          2012             2011
                   (in thousands, except per share amounts)
Revenues:
Service revenues   $  288,467        $  262,730    $  827,835        $ 758,686
Reimbursable          10,801            11,152        29,690           30,548
expenses
Total gross           299,268           273,882       857,525          789,234
revenues
Operating
expenses:
Project
personnel             194,175           175,789       569,760          520,274
expenses
Reimbursable          10,801            11,152        29,690           30,548
expenses
Total project
personnel
expenses and          204,976           186,941       599,450          550,822
reimbursable
expenses
Selling and
marketing             11,221            8,632         33,146           29,104
expenses
General and
administrative        46,450            44,429        141,017          126,666
expenses
Restructuring
and other
related               (19      )        1,191         (109     )       6,777
(benefits)
charges
Amortization of
purchased             2,744             1,725         8,111            4,286
intangible
assets
Acquisition
costs and other       1,121             1,082         2,714            1,305
related charges
Total operating       266,493           244,000       784,329          718,960
expenses
Income from           32,775            29,882        73,196           70,274
operations
Interest and
other income,         812               2,037         3,713            4,752
net
Income before         33,587            31,919        76,909           75,026
income taxes
Provision for         12,100            12,168        31,258           29,336
income taxes
Net income         $  21,487         $  19,751     $  45,651         $ 45,690
                                                                      
Basic net income   $  0.16           $  0.14       $  0.33           $ 0.33
per share
Diluted net        $  0.15           $  0.14       $  0.32           $ 0.32
income per share
                                                                      
Weighted average      136,883           138,679       138,544          137,539
common shares
Weighted average
dilutive common       3,275             3,929         3,979            4,221
share
equivalents
Weighted average
common shares
and dilutive          140,158           142,608       142,523          141,760
common share
equivalents
                                                                        
                                                                        
                                                                        
                                                                        
                                                                        

Sapient Corporation
Consolidated Unaudited Condensed Balance Sheets
                                                            
                                                              
                                        September 30, 2012   December 31, 2011
                                        (in thousands)
ASSETS
Current assets:
Cash and cash equivalents               $      199,521       $     212,406
Marketable securities, current                 6,496               7,748
portion
Restricted cash, current portion               2,074               426
Accounts receivable, net of allowance          174,334             156,109
for doubtful accounts
Unbilled revenues                              69,891              61,712
Deferred tax assets, current portion           19,003              19,495
Prepaid expenses and other current             38,812              22,734
assets
Total current assets                           510,131             480,630
Restricted cash, net of current                3,024               3,779
portion
Marketable securities, net of current          1,290               1,290
portion
Property and equipment, net                    81,617              64,877
Purchased intangible assets, net               29,643              36,822
Goodwill                                       110,259             107,971
Deferred tax assets, net of current            1,433               1,840
portion
Other assets                                   8,253               8,591
                                                              
Total assets                            $      745,650       $     705,800
                                                              
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable                        $      26,639        $     25,389
Accrued restructuring costs, current           125                 324
portion
Accrued compensation                           79,403              77,721
Deferred revenues                              20,790              25,356
Other current liabilities                      43,082              49,484
Total current liabilities                      170,039             178,274
Accrued restructuring costs, net of            267                 407
current portion
Other long-term liabilities                    78,784              60,757
Total liabilities                              249,090             239,438
                                                              
Stockholders' equity                           496,560             466,362
                                                              
Total liabilities and stockholders’     $      745,650       $     705,800
equity
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    

Sapient Corporation
Consolidated Unaudited Statements of Cash Flows
                                                                  
                                                                    
                         Three Months Ended          Nine Months Ended
                         September 30,               September 30,
                           2012          2011          2012          2011     
                         (in thousands)
Cash flows from
operating activities:
  Net income             $ 21,487      $ 19,751      $ 45,651      $ 45,690
  Adjustments to
  reconcile net income
  to net cash used in
  operating
  activities:
      Loss recognized
      on disposition       91            32            253           42
      of fixed assets
      Unrealized
      (gain) loss on       (435    )     (28     )     (580    )     150
      financial
      instruments
      Depreciation and
      amortization         8,771         7,080         25,270        18,229
      expense
      Deferred income      (1,700  )     3,448         9,430         9,467
      taxes
      Stock-based
      compensation         5,773         5,018         17,386        14,237
      expense
      Non-cash
      restructuring        -             -             -             4,564
      charges
      Changes in
      operating assets
      and liabilities,
      net of impact of
      acquisitions:
         Accounts          (23,105 )     (2,435  )     (16,665 )     (4,439  )
         receivable
         Unbilled          11,354        1,430         (7,709  )     (24,280 )
         revenues
         Prepaid
         expenses and      (764    )     479           (10,837 )     (5,954  )
         other current
         assets
         Other assets      1,113         (62     )     625           (670    )
         Accounts          1,365         2,275         (1,639  )     8,318
         payable
         Accrued           12,829        9,008         (8,452  )     (3,621  )
         compensation
         Accrued
         restructuring     (78     )     361           (340    )     (1,539  )
         costs
         Deferred          1,038         4,500         (4,705  )     (844    )
         revenues
         Other current     (3,147  )     (11,188 )     (14,681 )     (2,242  )
         liabilities
         Other
         long-term         2,534         3,847         8,131         5,831    
         liabilities
      Net cash
      provided by          37,126        43,516        41,138        62,939   
      operating
      activities
                                                                    
Cash flows from
investing activities:
  Cash paid for
  acquisitions, net of     -             (44,602 )     -             (44,602 )
  cash acquired
  Proceeds from sale
  of property and          32            -             32            -
  equipment
  Purchases of
  property and
  equipment and cost       (4,865  )     (9,101  )     (27,521 )     (28,711 )
  of internally
  developed software
  Proceeds from sales
  and maturities of
  marketable               -             2,258         1,900         4,470
  securities
  classified as
  available-for-sale
  Purchases of
  marketable
  securities               (120    )     (2,311  )     (326    )     (4,783  )
  classified as
  available-for-sale
  Cash received (paid)
  on financial             102           (1      )     (78     )     (193    )
  instruments, net
  Change in restricted     831           (188    )     (887    )     654      
  cash
      Net cash used in
      investing            (4,020  )     (53,945 )     (26,880 )     (73,165 )
      activities
                                                                    
Cash flows from
financing activities:
  Principal payments
  under capital lease      (7      )     (18     )     (47     )     (54     )
  obligations
  Proceeds from credit     -             5,967         -             10,387
  facilities
  Repayment of amounts
  borrowed under           -             (8,619  )     -             (14,807 )
  credit facilities
  Proceeds from stock      206           531           1,073         8,388
  option plans
  Tax benefits from        7,240         -             10,611        -
  stock plans
  Repayment of             -             (3,766  )     -             (3,766  )
  acquired debt
  Dividends paid on        -             (48,873 )     -             (48,873 )
  common stock
  Repurchases of           (7,583  )     -             (44,603 )     -        
  common stock
      Net cash used in
      financing            (144    )     (54,778 )     (32,966 )     (48,725 )
      activities
                                                                    
Effect of exchange
rate changes on cash       6,600         (7,857  )     5,823         (5,203  )
and cash equivalents
                                                                    
Increase (decrease) in
cash and cash              39,562        (73,064 )     (12,885 )     (64,154 )
equivalents
Cash and cash
equivalents, at            159,959       228,358       212,406       219,448  
beginning of period
Cash and cash
equivalents, at end of   $ 199,521     $ 155,294     $ 199,521     $ 155,294  
period
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              

Sapient Corporation
Unaudited Reconciliation of Non-GAAP Financial Measures
                                                                  
                                                                    
                    Three Months Ended September     Nine Months Ended
                    30,                              September 30,
                       2012              2011          2012          2011     
                    (in thousands, except per share amounts)
                                                                    
Service revenues    $  288,467        $  262,730     $ 827,835     $ 758,686  
                                                                    
GAAP income from    $  32,775         $  29,882      $ 73,196      $ 70,274
operations
   Stock-based
   compensation        5,773             5,018         17,386        14,237
   expense
   Restructuring
   and other
   related             (19      )        1,191         (109    )     6,777
   (benefits)
   charges
   Amortization
   of purchased        2,744             1,725         8,111         4,286
   intangible
   assets
   Acquisition
   costs and           1,121             1,082         2,714         1,305
   other related
   charges
   Stock-based
   compensation
   review and          -                 -             -             (3,500  )
   restatement
   benefit
Non-GAAP income     $  42,394         $  38,898      $ 101,298     $ 93,379   
from operations
                                                                    
GAAP operating         11.4     %        11.4    %     8.8     %     9.3     %
margin
   Effect of
   adjustments         3.3      %        3.4     %     3.4     %     3.0     %
   detailed above
Non-GAAP               14.7     %        14.8    %     12.2    %     12.3    %
operating margin
                                                                    
                                                                    
GAAP net income     $  21,487         $  19,751      $ 45,651      $ 45,690
   Stock-based
   compensation        3,641             3,112         10,932        8,903
   expense, net
   of tax
   Restructuring
   and other
   related             (11      )        709           (73     )     4,172
   (benefits)
   charges, net
   of tax
   Amortization
   of purchased
   intangible          2,183             1,344         6,458         3,405
   assets, net of
   tax
   Acquisition
   costs and
   other related       737               750           1,877         901
   charges, net
   of tax
   Stock-based
   compensation
   review and          -                 -             -             (2,085  )
   restatement
   benefit, net
   of tax
Non-GAAP net        $  28,037         $  25,666      $ 64,845      $ 60,986   
income
                                                                    
                                                                    
GAAP basic income   $  0.16           $  0.14        $ 0.33        $ 0.33
per share
   Effect of
   adjustments         0.04              0.05          0.14          0.11     
   detailed above
Non-GAAP basic      $  0.20           $  0.19        $ 0.47        $ 0.44     
income per share
                                                                    
GAAP and Non-GAAP
weighted average       136,883           138,679       138,544       137,539  
common shares
                                                                    
                                                                    
GAAP diluted        $  0.15           $  0.14        $ 0.32        $ 0.32
income per share
   Effect of
   adjustments
   noted above         0.05              0.04          0.13          0.11     
   and change in
   dilution noted
   below
Non-GAAP diluted    $  0.20           $  0.18        $ 0.45        $ 0.43     
income per share
                                                                    
GAAP and Non-GAAP
weighted average
common shares and      140,158           142,608       142,523       141,760  
dilutive common
share equivalents
                                                                              

Contact:

Investor Relations Contact:
Sapient
Dean Ridlon, +1-617-963-1598
dridlon@sapient.com
or
Media Contact:
Sapient
David LaBar, +1-646-478-9846
dlabar@sapient.com
Sponsored Links
Advertisement
Advertisements
Sponsored Links
Advertisement