Press release from Business Wire India
Source: Sapient
Friday, February 19, 2010 03:40 PM IST (10:10 AM GMT)
Editors: General: Consumer interest, Economy; Business: Business services, Financial Analyst, Information technology, Stock exchanges; Technology
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Sapient Reports Fourth Quarter 2009 Results and Declares $0.35 Special Dividend
Service Revenues Up 11% Both Year Over Year and Sequentially Fourth Quarter Non-GAAP Operating Margin of 13.5%
Bangalore, Karnataka, India and Gurgaon, Noida, Friday, February 19, 2010 -- (Business Wire India) -- Sapient (NASDAQ: SAPE) today reported the following financial results for the fourth quarter ended December 31, 2009:
-- Service revenues were $183.5 million compared to $164.7 million in the fourth quarter of 2008, an increase of 11%. Sequentially, service revenues were up $17.9 million, or 11%, from $165.5 million in the third quarter of 2009. On a constant currency basis, revenues increased 8% over the prior year's quarter and increased 10% sequentially.
-- GAAP income from operations was $19.2 million, down from the $26.0 million, reported in the fourth quarter of 2008.
-- Non-GAAP income from operations was $24.8 million, or 13.5% of service revenues. This compared to non-GAAP income from operations of $27.9 million, or 16.9% of service revenues, in the fourth quarter of 2008.
-- GAAP diluted net income per share was $0.51, compared to $0.20 in the fourth quarter of 2008.
- During the quarter, the company released its valuation allowance on U.S. deferred tax assets, resulting in a tax benefit of $58.3 million, as well as recorded a provision of $3.4 million related to realignment of its international tax structure, resulting in a net tax benefit in the quarter of $54.8 million, or $0.40 per share.
-- Non-GAAP diluted net income per share was $0.11, compared to $0.21 in the fourth quarter of 2008.
"We finished the year strongly and are very proud of our accomplishments given the difficult economic conditions last year," said Sapient President and Chief Executive Officer Alan J.Herrick. "As we look to 2010, we believe we are well positioned to grow our business and improve our operating performance as we help our clients succeed."
Added Karandeep Singh, Managing Director of Sapient Corporation Private Limited, a subsidiary of Sapient Corporation Inc, in India: "With more than 4,000 of Sapient's global employees in India, our scale and experience here support Sapient in delivering great results. In the fourth quarter, we attracted several hundred people to join Sapient India for the ability to build careers and to be active participants in solving client's business problems. We plan to continue to scale our global delivery operations and shared services in India to support Sapient's overall business growth in 2010."
The company generated cash from operations of $21.0 million in the fourth quarter of 2009, compared to $36.7 million of cash in the fourth quarter of 2008. As of December 31, 2009, the company had cash, cash equivalents and marketable securities of $215.8 million. Days sales outstanding was 66 days for the fourth quarter of 2009, unchanged from the third quarter of 2009 and up from 61 days for the fourth quarter of 2008.
Special Dividend
The company also announced that its Board of Directors has declared a special dividend in the amount of $0.35 per share payable on March 15, 2010 to shareholders of record at the close of business on March 1, 2010.
"We are pleased that we are able to return excess capital to shareholders based on our solid financial position and confidence in our performance outlook," continued Herrick.
Outlook
Sapient management provided the following guidance:
-- For the first quarter ending March 31, 2010, service revenues are expected to be in the range of $177 million to $181 million.
-- First quarter non-GAAP operating margin is expected to be 7% or more.
-- For the year ending December 31, 2010, service revenues are expected to grow by 20% or more.
-- Non-GAAP operating margin for 2010 is expected to be in the range of 11% to 12%.
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:
U.S.: (888) 713-4216
International: (617) 213-4868
Passcode: 66331011
Please use the following link to pre-register for the conference call:
https://www.theconferencingservice.com/prereg/key.process?key=PDVWH3ANU
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=2710000
The link to the webcast will also be posted at:
http://phx.corporate-ir.net/phoenix.zhtml?c=65979&p=irol-stockquote
In addition, a re-broadcast of the conference call will be available from February 18 at 7:30 p.m. ET through February 25 at 11:59 p.m. ET. The replay information is as follows:
U.S.: (888) 286-8010
International: (617) 801-6888
Passcode: 59734261
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 and income tax benefits or provisions resulting from changes in the valuation allowance. In addition, the company's results of operations may include a comparison of service revenues and operating expenses in constant currency terms, which exclude 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 and operating expenses 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 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 first quarter and full-year 2010 - 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 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.
CONTACT DETAILS
Pragya Goel, Gutenberg Communications, +91 (11) 4132 4969, +91 9810486705, pragya@gutenbergpr.com
KEYWORDS
CONSUMER, ECONOMY, BUSINESS SERVICES, Financial Analyst, IT, STOCK EXCHANGES, TECHNOLOGY, SAPE.O
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