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Sapient Reports Third Quarter 2010 Results

^{Published on 2010-11-04 13:40:47 - Market Wire}
 

BOSTON--([ BUSINESS WIRE ])--Sapient (NASDAQ: SAPE) today reported the following financial results for the third quarter ended September 30, 2010:

"We continue to deliver strong top-line growth across all of our business segments"

• Service revenues were $217.1 million compared to $165.5 million in the third quarter of 2009, an increase of 31%. Sequentially, service revenues were up $16.7 million, or 8%, from $200.4 million in the second quarter of 2010. On a constant currency basis, revenues increased 32% over the third quarter of 2009 and 7% sequentially.
• GAAP income from operations was $20.0 million, or 9.2% of service revenues, up 158% from $7.8 million, or 4.7% of service revenues, reported in the third quarter of 2009.
• Non-GAAP income from operations was $25.6 million, or 11.8% of service revenues, up 52% from $16.8 million,or 10.2% of service revenues, reported in the third quarter of 2009.
• GAAP diluted net income per share was $0.10, compared to $0.04 in the third quarter of 2009.
• Non-GAAP diluted net income per share was $0.13, compared to $0.08 in the third quarter of 2009.

aWe continue to deliver strong top-line growth across all of our business segments,a said Sapient President and Chief Executive Officer Alan J. Herrick. aSapient Global Markets posted another outstanding quarter with 33% year-over-year revenue growth, while SapientNitro continues to set the benchmark for organic revenue growth in the marketing services industry at 30%. We are excited about our leadership position in the marketplace as our clients continue to recognize our unique abilities to help them navigate their changing business environments.a

The company generated cash from operations of $26.5 million in the third quarter of 2010, compared to $16.8 million in the third quarter of 2009. For the nine months ended September 30, 2010, cash from operations was $43.3 million, compared to $17.7 million for the first three quarters of 2009. As of September 30, 2010, the company had cash, cash equivalents and marketable securities of $193.9 million. Days sales outstanding was 68 days for the third quarter of 2010, down from 69 days in the second quarter of 2010 and up from 66 days for the third quarter of 2009.

Outlook

Sapient management provided the following guidance:

• For the fourth quarter ending December 31, 2010, service revenues are expected to be $219 to $224 million.
• Fourth quarter non-GAAP operating margin is expected to be 12% to 14%.

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:

Please use the following link to pre-register for the conference call:

[ https://cossprereg.btci.com/prereg/key.process?key=PCBDTNHUN ]

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=3439375 ]

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 November 4 at 7:30 p.m. ET through November 11 at 11:59 p.m. ET. The replay information is as follows:

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 companya™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 local functional currencies in countries where the company operates. 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 companya™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 companya™s industry. Consequently, Sapienta™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 a" in particular, the financial guidance for the fourth quarter of 2010 a" that involve a number of risks and uncertainties. Actual results could differ materially from managementa™s expectations. A number of factors could cause actual events to differ materially from those indicated, including, without limitation: the continued acceptance of the companya™s services; a reduction in the demand for the companya™s services in light of the current economic environment; the companya™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 companya™s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, as filed with the SEC.

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.