|By Business Wire||
|February 18, 2014 05:30 PM EST||
Sapient (NASDAQ: SAPE) today announced preliminary unaudited financial results for the fourth quarter and year ended December 31, 2013.
The results are preliminary while the company works to complete a self-initiated assessment of newly-discovered employment-related tax liabilities associated with the movement of employees globally. This is expected to result in an approximately $3.1 million, or 25 basis point, reduction to 2013 GAAP and non-GAAP operating income and margin. The company currently estimates it will have additional liabilities totaling $10 to $15 million ($7 to $11 million on an after-tax basis) to be recorded for the years ended 2010 through 2012, subject to finalization of the company’s assessment.
“We saw strong growth in the fourth quarter and are very pleased with our full year operating results with revenues growing 12% and meaningful operating margin expansion over 2012,” said Sapient Chief Executive Officer and Co-Chairman Alan Herrick.
In the interest of providing the investment community with relevant information, the company is providing the following preliminary unaudited financial results, which are subject to change.
For the fourth quarter ended December 31, 2013:
- Service revenues are expected to be $328.7 million, an increase of 12% over the fourth quarter of 2012. On a constant currency basis, revenues increased 13% over the fourth quarter of 2012.
- GAAP operating income is expected to be $37.2 million, or 11.3% of revenues.
- Non-GAAP operating income is expected to be $49.4 million or 15.0% of revenues. (Non-GAAP operating income excludes $7.6 million of stock-based compensation, $2.9 million of amortization of purchased intangible assets and $1.8 million of acquisition costs.)
- The effective tax rate for the quarter is expected to be approximately 43%.
- The results above include an estimated impact of $0.8 million of net expense in the quarter for tax liabilities described above.
- GAAP diluted net income per share is expected to be $0.15, inclusive of the impact from the additional tax liabilities detailed above.
- Non-GAAP diluted net income per share is expected to be $0.21, inclusive of the impact of the additional tax liabilities detailed above. (Non-GAAP diluted net income per share excludes $0.03 of stock-based compensation, $0.02 of amortization of purchased intangible assets and $0.01 of acquisition costs.)
For the year ended December 31, 2013:
- Service revenues are expected to be $1.259 billion, up 12% from 2012. On a constant currency basis, revenues increased 13% over 2012.
- GAAP operating income is expected to be $119.6 million, or 9.5% of revenues.
- Non-GAAP operating income is expected to be $167.3 million or 13.3% of revenues. (Non-GAAP operating income excludes $30.7 million of stock-based compensation, $12.8 million of amortization of purchased intangible assets, impairment of intangible assets of $2.1 million and $2.0 million of restructuring costs.)
- The effective tax rate for the year is expected to be approximately 38%.
- The results above include an estimated impact of $3.1 million of net expense in the year for tax liabilities described above.
- GAAP diluted net income per share is expected to be $0.54, inclusive of the impact from the additional tax liabilities detailed above.
- Non-GAAP diluted net income per share is expected to be $0.76, inclusive of the impact of the additional tax liabilities detailed above. (Non-GAAP diluted net income per share excludes $0.14 of stock-based compensation, $0.06 of amortization of purchased intangible assets, $0.01 of impairment of intangible assets and $0.01 of restructuring costs.)
“As we look at 2014, we see the opportunity to deliver strong results in a similar demand environment to what we have experienced over the last several years,” said Mr. Herrick.
Sapient management provided the following guidance:
- For the year ending December 31, 2014, non-GAAP operating income is expected to be in the range of $186 million to $203 million, which represents approximately 11% to 21% growth, including approximately $4 million of expenses as the company redesigns its global people mobility operations to be more cost effective.
- For the year ending December 31, 2014, service revenues are expected to grow 11% to 15%.
- For the first quarter ending March 31, 2014, non-GAAP operating income is expected to be in the range of $30.2 million to $34.5 million, including approximately $1.7 million of expenses as the company redesigns its global people mobility operations to be more cost effective.
- For the first quarter ending March 31, 2014, service revenues are expected to be in the range of $328 million to $338 million.
The company will hold a conference call to discuss the preliminary results and outlook on Wednesday, February 19, 2014 at 5:00 p.m. ET. Dial-in and webcast information for the call can be found below.
The company is working diligently to resolve the tax review and analysis. Because the assessment is ongoing, the company can give no assurances that it will file timely its Form 10-K for the year ended December 31, 2013. When the assessment is complete and the company files its Form 10-K, the financial statements may differ materially from the results disclosed in this press release. In addition, the assessment is expected to impact prior-period financial statements.
Webcast and Conference Call
Sapient will host a discussion of the preliminary results and outlook at 5:00 p.m. ET on Wednesday, February 19, 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
To access the live webcast of the event, please click on the link below:
In addition, a re-broadcast of the webcast will be available in the investors section of www.sapient.com.
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 The Americas, Europe, and Asia-Pacific. For more information, visit www.sapient.com.
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 may present 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. 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, preliminary unaudited financial results for the fourth quarter and full-year 2013; financial guidance for the first quarter and full-year 2014, including expected service revenues, and expected non-GAAP operating income; estimated tax liabilities associated with global people mobility; expected effect of such tax liabilities to 2013 GAAP and non-GAAP operating income and effective tax rate; expected impact of such tax liabilities on prior period financial statements; and expected filing of its annual report on Form 10-K for the year ended December 31, 2013 — 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; the company’s ability to timely complete its review and analysis of potential tax liabilities and the filing of its periodic reports; 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 Reports 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.
Sapient is a registered service mark of Sapient Corporation.
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at @ThingsExpo, James Kirkland, Red Hat's Chief Arch...
Jul. 30, 2015 07:30 PM EDT Reads: 1,388
For IoT to grow as quickly as analyst firms’ project, a lot is going to fall on developers to quickly bring applications to market. But the lack of a standard development platform threatens to slow growth and make application development more time consuming and costly, much like we’ve seen in the mobile space. In his session at @ThingsExpo, Mike Weiner, Product Manager of the Omega DevCloud with KORE Telematics Inc., discussed the evolving requirements for developers as IoT matures and conducte...
Jul. 30, 2015 07:15 PM EDT Reads: 294
Providing the needed data for application development and testing is a huge headache for most organizations. The problems are often the same across companies - speed, quality, cost, and control. Provisioning data can take days or weeks, every time a refresh is required. Using dummy data leads to quality problems. Creating physical copies of large data sets and sending them to distributed teams of developers eats up expensive storage and bandwidth resources. And, all of these copies proliferating...
Jul. 30, 2015 06:30 PM EDT Reads: 878
Malicious agents are moving faster than the speed of business. Even more worrisome, most companies are relying on legacy approaches to security that are no longer capable of meeting current threats. In the modern cloud, threat diversity is rapidly expanding, necessitating more sophisticated security protocols than those used in the past or in desktop environments. Yet companies are falling for cloud security myths that were truths at one time but have evolved out of existence.
Jul. 30, 2015 06:00 PM EDT Reads: 1,796
Digital Transformation is the ultimate goal of cloud computing and related initiatives. The phrase is certainly not a precise one, and as subject to hand-waving and distortion as any high-falutin' terminology in the world of information technology. Yet it is an excellent choice of words to describe what enterprise IT—and by extension, organizations in general—should be working to achieve. Digital Transformation means: handling all the data types being found and created in the organizat...
Jul. 30, 2015 05:00 PM EDT Reads: 1,083
Public Cloud IaaS started its life in the developer and startup communities and has grown rapidly to a $20B+ industry, but it still pales in comparison to how much is spent worldwide on IT: $3.6 trillion. In fact, there are 8.6 million data centers worldwide, the reality is many small and medium sized business have server closets and colocation footprints filled with servers and storage gear. While on-premise environment virtualization may have peaked at 75%, the Public Cloud has lagged in adop...
Jul. 30, 2015 04:00 PM EDT Reads: 2,196
SYS-CON Events announced today that HPM Networks will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. For 20 years, HPM Networks has been integrating technology solutions that solve complex business challenges. HPM Networks has designed solutions for both SMB and enterprise customers throughout the San Francisco Bay Area.
Jul. 30, 2015 03:45 PM EDT Reads: 441
The time is ripe for high speed resilient software defined storage solutions with unlimited scalability. ISS has been working with the leading open source projects and developed a commercial high performance solution that is able to grow forever without performance limitations. In his session at Cloud Expo, Alex Gorbachev, President of Intelligent Systems Services Inc., shared foundation principles of Ceph architecture, as well as the design to deliver this storage to traditional SAN storage co...
Jul. 30, 2015 03:00 PM EDT Reads: 1,735
The Software Defined Data Center (SDDC), which enables organizations to seamlessly run in a hybrid cloud model (public + private cloud), is here to stay. IDC estimates that the software-defined networking market will be valued at $3.7 billion by 2016. Security is a key component and benefit of the SDDC, and offers an opportunity to build security 'from the ground up' and weave it into the environment from day one. In his session at 16th Cloud Expo, Reuven Harrison, CTO and Co-Founder of Tufin,...
Jul. 30, 2015 03:00 PM EDT Reads: 478
MuleSoft has announced the findings of its 2015 Connectivity Benchmark Report on the adoption and business impact of APIs. The findings suggest traditional businesses are quickly evolving into "composable enterprises" built out of hundreds of connected software services, applications and devices. Most are embracing the Internet of Things (IoT) and microservices technologies like Docker. A majority are integrating wearables, like smart watches, and more than half plan to generate revenue with ...
Jul. 30, 2015 02:30 PM EDT
The Cloud industry has moved from being more than just being able to provide infrastructure and management services on the Cloud. Enter a new era of Cloud computing where monetization’s services through the Cloud are an essential piece of strategy to feed your organizations bottom-line, your revenue and Profitability. In their session at 16th Cloud Expo, Ermanno Bonifazi, CEO & Founder of Solgenia, and Ian Khan, Global Strategic Positioning & Brand Manager at Solgenia, discussed how to easily o...
Jul. 30, 2015 01:45 PM EDT Reads: 373
The Internet of Everything (IoE) brings together people, process, data and things to make networked connections more relevant and valuable than ever before – transforming information into knowledge and knowledge into wisdom. IoE creates new capabilities, richer experiences, and unprecedented opportunities to improve business and government operations, decision making and mission support capabilities.
Jul. 30, 2015 01:45 PM EDT Reads: 259
In their session at 17th Cloud Expo, Hal Schwartz, CEO of Secure Infrastructure & Services (SIAS), and Chuck Paolillo, CTO of Secure Infrastructure & Services (SIAS), provide a study of cloud adoption trends and the power and flexibility of IBM Power and Pureflex cloud solutions. In his role as CEO of Secure Infrastructure & Services (SIAS), Hal Schwartz provides leadership and direction for the company.
Jul. 30, 2015 01:30 PM EDT
Rapid innovation, changing business landscapes, and new IT demands force businesses to make changes quickly. The DevOps approach is a way to increase business agility through collaboration, communication, and integration across different teams in the IT organization. In his session at DevOps Summit, Chris Van Tuin, Chief Technologist for the Western US at Red Hat, will discuss: The acceleration of application delivery for the business with DevOps
Jul. 30, 2015 12:45 PM EDT Reads: 1,111
Growth hacking is common for startups to make unheard-of progress in building their business. Career Hacks can help Geek Girls and those who support them (yes, that's you too, Dad!) to excel in this typically male-dominated world. Get ready to learn the facts: Is there a bias against women in the tech / developer communities? Why are women 50% of the workforce, but hold only 24% of the STEM or IT positions? Some beginnings of what to do about it! In her Opening Keynote at 16th Cloud Expo, S...
Jul. 30, 2015 12:00 PM EDT Reads: 2,046