-- Full-Year 2011 Service Revenues Up 24% Over 2010 Led By 33% Growth in SapientNitro --
-- Full-Year 2011 Non-GAAP Operating Margin Increased to 13.2% Resulting In a 54% Increase in Non-GAAP Operating Profit Dollars --
BOSTON --February 14, 2012 -- Sapient (NASDAQ: SAPE) today reported the following financial results for the fourth quarter and year ended December 31, 2011. For the fourth quarter of 2011:
• Service revenues were $262.2 million compared to $222.9 million in the fourth quarter of 2010, an increase of $39.3 million or 18%. Sequentially, service revenues were flat with the third quarter of 2011. On a constant currency basis, revenues increased 18% over the fourth quarter of 2010 and 1% sequentially.
• GAAP income from operations was $33.4 million, or 12.8% of service revenues, up 52% from $22.1 million, or 9.9% of service revenues, reported in the fourth quarter of 2010.
• Non-GAAP income from operations was $41.3 million, or 15.7% of service revenues, up 50% from $27.6 million, or 12.4% of service revenues, reported in the fourth quarter of 2010.
• GAAP diluted net income per share was $0.19, compared to $0.11 in the fourth quarter of 2010.
• Non-GAAP diluted net income per share was $0.23, compared to $0.14 in the fourth quarter of 2010.
For the year ended December 31, 2011, service revenues were $1.02 billion compared to $823.5 million for 2010, an increase of 24%. GAAP income from operations for full-year 2011 was $104.2 million, an increase of $40.3 million or 63%, from $63.9 million in 2010. Non-GAAP income from operations was $135.1 million for 2011, an increase of $47.4 million or 54%, from $87.7 million in 2010.
“I’m very pleased with our 2011 performance. Revenue growth of 24% coupled with a 54% increase in non-GAAP profit dollars is excellent performance in any environment,” said Sapient President and Chief Executive Officer Alan J. Herrick. “Exceeding $1 billion in revenue is a significant milestone in Sapient’s history and is evidence of the value we create for our clients. Our unique culture and passionate teams across the world continue to deliver great work further enhancing our leadership position.”
The company generated cash from operations of $69.7 million in the fourth quarter of 2011, an increase of 58% from $44.0 million generated in the fourth quarter of 2010. For the year ended December 31, 2011, cash flow from operations was $132.6 million, up 87% from $70.9 million for the year ended December 31, 2010. As of December 31, 2011, the company had cash, cash equivalents and marketable securities of $225.6 million. Days sales outstanding was 63 days for the fourth quarter of 2011, down from 66 days in the third quarter of 2011 and 65 days for the fourth quarter of 2010.
Outlook
Sapient management provided the following guidance:
• For the first quarter ending March 31, 2012, service revenues are expected to be in the range of $262 million to $266 million.
• First quarter 2012 non-GAAP operating margin is expected to be 9.5% or higher.
• For the year ending December 31, 2012, service revenues are expected to grow by 13% to 16%.
• Non-GAAP operating margin for 2012 is expected to be 13% or modestly higher.
Webcast and Conference Call
Sapient will host a discussion of its fourth 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
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 has presented 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. However, 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 first quarter and full-year 2012, including expected service revenues and expected non-GAAP operating margin – 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, and continue to attract and retain high-quality employees; 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 Report 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.