BOSTON, Mass. — May 7, 2009 — Sapient (NASDAQ: SAPE) today reported the following financial results for the first quarter ended March 31, 2009:
• Service revenues were $142.4 million, compared to $154.2 million in the first quarter of 2008, a decrease of 7.7%. On a constant currency basis, revenues for the quarter increased 2.5% over the prior year’s quarter.
• GAAP income from operations was $5.0 million, or 3.5% of service revenues, down from the $5.8 million, or 3.8% of service revenues, reported in the first quarter of 2008.
• Non-GAAP income from operations was $11.2 million, or 7.9% of service revenues (excluding stock-based compensation expense, restructuring and other related charges, amortization of purchased intangible assets, acquisition costs and other related charges and a credit relating to the stock-based compensation review and restatement). This compared to non-GAAP income from operations of $11.4 million, or 7.4% of service revenues, in the first quarter of 2008.
• GAAP diluted net income per share was $0.03, compared to $0.06 in the first quarter of 2008.
• Non-GAAP diluted net income per share was $0.08, compared to $0.10 in the first quarter of 2008.
“I am pleased with our performance this quarter despite the economic headwinds,” said Sapient President and Chief Executive Officer Alan J. Herrick. “Our unique strategic position and value proposition continue to resonate as our clients face new challenges and new opportunities. We are excited to be positioned for a successful year."
The Company used cash from operations of $29.5 million in the first quarter of 2009, compared to a $6.8 million use in the first quarter of 2008. As of March 31, 2009, the Company had cash, cash equivalents and marketable securities of $159.5 million. Days sales outstanding was 78 days for the first quarter of 2009 compared to 63 days for the first quarter of 2008.
Outlook
Sapient management provided the following guidance:
• For the second quarter ending June 30, 2009, service revenues are expected to be flat or higher sequentially, assuming currency rates stay the same from today through the end of the quarter.
• Second quarter non-GAAP operating margin is expected to be 9% or higher.
Webcast and Conference Call
Sapient will host a discussion of its first quarter results at 4:30 p.m. (EDT) today, which will be broadcast live on the Internet. The dial-in information for the conference call is:
U.S.: (888) 713-4209
International: (617) 213-4863
Passcode: 31198722
Please use the following link to pre-register for the conference call:
https://www.theconferencingservice.com/prereg/key.process?key=P43ADF8WB
Please use the following link to access the live webcast of this event as well as an archive of the webcast:
http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=65979&eventID=2178443
The link to the webcast will also be posted at:
http://www.sapient.com/about+us/Investors.htm.
In addition, a re-broadcast of the conference call will be available from May 7 at 7:30 p.m. (EDT) through May 21 at 11:59 p.m. (EDT). The replay information is as follows:
U.S.: (888) 286-8010
International: (617) 801-6888
Passcode: 58470451
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 expense relating to the stock-based compensation review and restatement. However, because the Company’s reported non-GAAP financial measures are not calculated according to GAAP, these measures may not necessarily be comparable to GAAP or 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 second quarter of 2009 – that involve a number of risks and uncertainties. Actual results could differ materially from management’s expectations. 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, and continue to attract and retain high-quality employees; and other risk factors set forth in the Company’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, as filed with the SEC.
About Sapient
Sapient, a global services firm, operates two groups—Sapient Interactive and Sapient Consulting—that help clients compete, evolve and grow in an increasingly complex marketplace. Sapient Interactive provides brand and marketing strategy, award-winning creative work, web design and development and emerging media expertise. Sapient Consulting provides business and IT strategy, process and systems design, package implementation and custom development, as well as outsourcing services such as testing, maintenance and support.
Sapient’s passion for client success—evidenced by its ability to foster collaboration, drive innovation and solve challenging problems—is the subject of case studies on leadership and organizational behavior used by MBA students at both Harvard and Yale. Leading clients, including BP, Essent Energie, Hilton International, Janus, Sony Electronics and Verizon, rely on the company’s unique approach to drive growth and market momentum. Headquartered in Boston, Sapient operates across North America, Europe and India. For more information, please visit www.sapient.com.
To view the financial schedules that are part of this release, click here.