Cambridge, Mass. — Sapient (NASDAQ: SAPE), today announced financial results for its first quarter ended March 31, 2005.
Financial Highlights
- Consolidated service revenues were $76.8 million, up 30% from the first quarter of 2004
- Earnings per share increased to $0.05, from $0.01 in the first quarter of 2004
- Operating margin increased to 8.0% of net revenues, compared to 1.7% of net revenues in the first quarter of 2004
"We are off to great start in 2005. Service revenues, net income, and revenue from long-term engagements are all up significantly over last year. Our strong financial performance is a direct result of our people’s unequaled commitment to our clients’ success," said Jerry A. Greenberg, co-chairman and co-chief executive officer of Sapient. "I am pleased with the financial growth we achieved this quarter, and I am also excited about the number of new people who joined our team and the fact that turnover remains low."
Consolidated service revenues for the first quarter of 2005 were $76.8 million, an increase of 16% from the fourth quarter of 2004, and a 30% increase from the first quarter of 2004. Gross revenues for the first quarter of 2005 were $80.4 million, which included $3.5 million of reimbursable expenses.
Operating income for the first quarter of 2005 was $6.2 million, or an operating margin of 8.0%. This compared to operating income of $8.7 million, or a 13.2% operating margin, for the fourth quarter of 2004, and operating income of $1.0 million, or a 1.7% operating margin, for the first quarter of 2004.
Net income for the first quarter of 2005 was $6.2 million, or $0.05 per diluted share. This compared to net income of $8.0 million, or $0.06 per diluted share, for the fourth quarter of 2004, and net income of $1.3 million, or $0.01 per diluted share, for the first quarter of 2004.
"The continued improvement in Sapient's profitability reflects our success in creating a leveragable cost structure," said Scott Krenz, chief financial officer of Sapient. "We will continue to focus on improving our cost structure and expect it to be a significant factor in Sapient's continued net income growth."
Stock Repurchase Program
During the first quarter of 2005, Sapient repurchased 373,359 shares of common stock at an average price of $6.98 per share. The repurchase plan, which was announced Dec 2, 2004, authorizes the company to purchase up to $25.0 million worth of shares. The company has not set a target for the number of shares it intends to repurchase under this plan.
Acquisition of Business Information Solutions
In a press release issued separately today, Sapient announced it has entered into an agreement to acquire Business Information Solutions, LLC (BIS), a provider of SAP-related professional services, specializing in business intelligence solutions. The acquisition, which is expected to be completed late in the second quarter of this year, is subject to certain closing conditions and approvals. With the acquisition, Sapient will be positioned to capitalize on the rapidly growing market for SAP’s next generation of applications.
Conference Call
Sapient will host a discussion of the first quarter results in a conference call today at 4:30 p.m. (ET), which will be broadcast live on the Internet. For webcast registration information, please go to http://www.sapient.com/earnings.htm. It is advisable to register at least 15 minutes prior to the call to download and install any necessary audio software. A re-broadcast of the call will be available from April 28 at 7:30 p.m. (ET) through May 5 at 11:59 p.m. (ET) by dialing 877-660-6853 (within the U.S.) or 201-612-7415 (outside the U.S.) and entering account number 286 and conference ID 145868 when prompted.
You may download the Consolidated Statements of Operations and Consolidated Balance Sheets in PDF format.
About Sapient
Sapient helps businesses innovate to achieve extraordinary results from their customer relationships, business operations and technology. Leveraging a unique approach, breakthrough thinking and disciplined execution, Sapient leads its industry in delivering the right business results on time and on budget. Sapient works with clients that are driven to make a difference, including BP, Citadel Investment Group, Essent Energy, Harrah’s Entertainment, Hilton International, Janus, National Institutes of Health (NIH), Nextel Communications, Sony Electronics, the U.S. Marine Corps, and Verizon.
Founded in 1991, Sapient is headquartered in Cambridge, Massachusetts, and operates across North America, Europe and India.
More information about Sapient can be found at www.sapient.com
Sapient is a registered service mark of Sapient Corporation.
# # #