|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.
Clearly the way forward is to move to cloud be it bare metal, VMs or containers. One aspect of the current public clouds that is slowing this cloud migration is cloud lock-in. Every cloud vendor is trying to make it very difficult to move out once a customer has chosen their cloud. In his session at 17th Cloud Expo, Naveen Nimmu, CEO of Clouber, Inc., will advocate that making the inter-cloud migration as simple as changing airlines would help the entire industry to quickly adopt the cloud wit...
Oct. 8, 2015 02:30 PM EDT Reads: 623
The Internet of Things (IoT) is growing rapidly by extending current technologies, products and networks. By 2020, Cisco estimates there will be 50 billion connected devices. Gartner has forecast revenues of over $300 billion, just to IoT suppliers. Now is the time to figure out how you’ll make money – not just create innovative products. With hundreds of new products and companies jumping into the IoT fray every month, there’s no shortage of innovation. Despite this, McKinsey/VisionMobile data...
Oct. 8, 2015 02:30 PM EDT Reads: 117
There are so many tools and techniques for data analytics that even for a data scientist the choices, possible systems, and even the types of data can be daunting. In his session at @ThingsExpo, Chris Harrold, Global CTO for Big Data Solutions for EMC Corporation, will show how to perform a simple, but meaningful analysis of social sentiment data using freely available tools that take only minutes to download and install. Participants will get the download information, scripts, and complete en...
Oct. 8, 2015 02:15 PM EDT Reads: 213
Today’s connected world is moving from devices towards things, what this means is that by using increasingly low cost sensors embedded in devices we can create many new use cases. These span across use cases in cities, vehicles, home, offices, factories, retail environments, worksites, health, logistics, and health. These use cases rely on ubiquitous connectivity and generate massive amounts of data at scale. These technologies enable new business opportunities, ways to optimize and automate, al...
Oct. 8, 2015 02:15 PM EDT
IT data is typically silo'd by the various tools in place. Unifying all the log, metric and event data in one analytics platform stops finger pointing and provides the end-to-end correlation. Logs, metrics and custom event data can be joined to tell the holistic story of your software and operations. For example, users can correlate code deploys to system performance to application error codes.
Oct. 8, 2015 02:15 PM EDT Reads: 173
There are many considerations when moving applications from on-premise to cloud. It is critical to understand the benefits and also challenges of this migration. A successful migration will result in lower Total Cost of Ownership, yet offer the same or higher level of robustness. Migration to cloud shifts computing resources from your data center, which can yield significant advantages provided that the cloud vendor an offer enterprise-grade quality for your application.
Oct. 8, 2015 02:00 PM EDT Reads: 214
Overgrown applications have given way to modular applications, driven by the need to break larger problems into smaller problems. Similarly large monolithic development processes have been forced to be broken into smaller agile development cycles. Looking at trends in software development, microservices architectures meet the same demands. Additional benefits of microservices architectures are compartmentalization and a limited impact of service failure versus a complete software malfunction....
Oct. 8, 2015 02:00 PM EDT Reads: 138
Manufacturing has widely adopted standardized and automated processes to create designs, build them, and maintain them through their life cycle. However, many modern manufacturing systems go beyond mechanized workflows to introduce empowered workers, flexible collaboration, and rapid iteration. Such behaviors also characterize open source software development and are at the heart of DevOps culture, processes, and tooling.
Oct. 8, 2015 02:00 PM EDT Reads: 1,057
In their session at DevOps Summit, Asaf Yigal, co-founder and the VP of Product at Logz.io, and Tomer Levy, co-founder and CEO of Logz.io, will explore the entire process that they have undergone – through research, benchmarking, implementation, optimization, and customer success – in developing a processing engine that can handle petabytes of data. They will also discuss the requirements of such an engine in terms of scalability, resilience, security, and availability along with how the archi...
Oct. 8, 2015 02:00 PM EDT Reads: 374
Containers are revolutionizing the way we deploy and maintain our infrastructures, but monitoring and troubleshooting in a containerized environment can still be painful and impractical. Understanding even basic resource usage is difficult - let alone tracking network connections or malicious activity. In his session at DevOps Summit, Gianluca Borello, Sr. Software Engineer at Sysdig, will cover the current state of the art for container monitoring and visibility, including pros / cons and li...
Oct. 8, 2015 02:00 PM EDT Reads: 156
Any Ops team trying to support a company in today’s cloud-connected world knows that a new way of thinking is required – one just as dramatic than the shift from Ops to DevOps. The diversity of modern operations requires teams to focus their impact on breadth vs. depth. In his session at DevOps Summit, Adam Serediuk, Director of Operations at xMatters, Inc., will discuss the strategic requirements of evolving from Ops to DevOps, and why modern Operations has begun leveraging the “NoOps” approa...
Oct. 8, 2015 02:00 PM EDT Reads: 108
Mobile, social, Big Data, and cloud have fundamentally changed the way we live. “Anytime, anywhere” access to data and information is no longer a luxury; it’s a requirement, in both our personal and professional lives. For IT organizations, this means pressure has never been greater to deliver meaningful services to the business and customers.
Oct. 8, 2015 02:00 PM EDT Reads: 318
Between the compelling mockups and specs produced by analysts, and resulting applications built by developers, there exists a gulf where projects fail, costs spiral, and applications disappoint. Methodologies like Agile attempt to address this with intensified communication, with partial success but many limitations. In his session at DevOps Summit, Charles Kendrick, CTO and Chief Architect at Isomorphic Software, will present a revolutionary model enabled by new technologies. Learn how busine...
Oct. 8, 2015 01:45 PM EDT Reads: 226
DevOps has often been described in terms of CAMS: Culture, Automation, Measuring, Sharing. While we’ve seen a lot of focus on the “A” and even on the “M”, there are very few examples of why the “C" is equally important in the DevOps equation. In her session at @DevOps Summit, Lori MacVittie, of F5 Networks, will explore HTTP/1 and HTTP/2 along with Microservices to illustrate why a collaborative culture between Dev, Ops, and the Network is critical to ensuring success.
Oct. 8, 2015 01:45 PM EDT Reads: 101