|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.
Whether they’re located in a public, private, or hybrid cloud environment, cloud technologies are constantly evolving. While the innovation is exciting, the end mission of delivering business value and rapidly producing incremental product features is paramount. In his session at @DevOpsSummit at 19th Cloud Expo, Kiran Chitturi, CTO Architect at Sungard AS, will discuss DevOps culture, its evolution of frameworks and technologies, and how it is achieving maturity. He will also cover various st...
Sep. 27, 2016 06:45 PM EDT Reads: 1,781
Identity is in everything and customers are looking to their providers to ensure the security of their identities, transactions and data. With the increased reliance on cloud-based services, service providers must build security and trust into their offerings, adding value to customers and improving the user experience. Making identity, security and privacy easy for customers provides a unique advantage over the competition.
Sep. 27, 2016 06:30 PM EDT Reads: 3,554
There are several IoTs: the Industrial Internet, Consumer Wearables, Wearables and Healthcare, Supply Chains, and the movement toward Smart Grids, Cities, Regions, and Nations. There are competing communications standards every step of the way, a bewildering array of sensors and devices, and an entire world of competing data analytics platforms. To some this appears to be chaos. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, Bradley Holt, Developer Advocate a...
Sep. 27, 2016 06:30 PM EDT Reads: 2,164
SYS-CON Events announced today that Niagara Networks will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Niagara Networks offers the highest port-density systems, and the most complete Next-Generation Network Visibility systems including Network Packet Brokers, Bypass Switches, and Network TAPs.
Sep. 27, 2016 06:15 PM EDT Reads: 342
SYS-CON Events announced today that Secure Channels will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. The bedrock of Secure Channels Technology is a uniquely modified and enhanced process based on superencipherment. Superencipherment is the process of encrypting an already encrypted message one or more times, either using the same or a different algorithm.
Sep. 27, 2016 06:00 PM EDT Reads: 1,687
If you’re responsible for an application that depends on the data or functionality of various IoT endpoints – either sensors or devices – your brand reputation depends on the security, reliability, and compliance of its many integrated parts. If your application fails to deliver the expected business results, your customers and partners won't care if that failure stems from the code you developed or from a component that you integrated. What can you do to ensure that the endpoints work as expect...
Sep. 27, 2016 05:45 PM EDT Reads: 1,653
So, you bought into the current machine learning craze and went on to collect millions/billions of records from this promising new data source. Now, what do you do with them? Too often, the abundance of data quickly turns into an abundance of problems. How do you extract that "magic essence" from your data without falling into the common pitfalls? In her session at @ThingsExpo, Natalia Ponomareva, Software Engineer at Google, provided tips on how to be successful in large scale machine learning...
Sep. 27, 2016 05:30 PM EDT Reads: 1,988
In his general session at 18th Cloud Expo, Lee Atchison, Principal Cloud Architect and Advocate at New Relic, discussed cloud as a ‘better data center’ and how it adds new capacity (faster) and improves application availability (redundancy). The cloud is a ‘Dynamic Tool for Dynamic Apps’ and resource allocation is an integral part of your application architecture, so use only the resources you need and allocate /de-allocate resources on the fly.
Sep. 27, 2016 05:15 PM EDT Reads: 2,756
If you had a chance to enter on the ground level of the largest e-commerce market in the world – would you? China is the world’s most populated country with the second largest economy and the world’s fastest growing market. It is estimated that by 2018 the Chinese market will be reaching over $30 billion in gaming revenue alone. Admittedly for a foreign company, doing business in China can be challenging. Often changing laws, administrative regulations and the often inscrutable Chinese Interne...
Sep. 27, 2016 05:15 PM EDT Reads: 285
Enterprise IT has been in the era of Hybrid Cloud for some time now. But it seems most conversations about Hybrid are focused on integrating AWS, Microsoft Azure, or Google ECM into existing on-premises systems. Where is all the Private Cloud? What do technology providers need to do to make their offerings more compelling? How should enterprise IT executives and buyers define their focus, needs, and roadmap, and communicate that clearly to the providers?
Sep. 27, 2016 05:00 PM EDT Reads: 1,593
Complete Internet of Things (IoT) embedded device security is not just about the device but involves the entire product’s identity, data and control integrity, and services traversing the cloud. A device can no longer be looked at as an island; it is a part of a system. In fact, given the cross-domain interactions enabled by IoT it could be a part of many systems. Also, depending on where the device is deployed, for example, in the office building versus a factory floor or oil field, security ha...
Sep. 27, 2016 04:45 PM EDT Reads: 389
More and more companies are looking to microservices as an architectural pattern for breaking apart applications into more manageable pieces so that agile teams can deliver new features quicker and more effectively. What this pattern has done more than anything to date is spark organizational transformations, setting the foundation for future application development. In practice, however, there are a number of considerations to make that go beyond simply “build, ship, and run,” which changes ho...
Sep. 27, 2016 04:00 PM EDT Reads: 2,650
Using new techniques of information modeling, indexing, and processing, new cloud-based systems can support cloud-based workloads previously not possible for high-throughput insurance, banking, and case-based applications. In his session at 18th Cloud Expo, John Newton, CTO, Founder and Chairman of Alfresco, described how to scale cloud-based content management repositories to store, manage, and retrieve billions of documents and related information with fast and linear scalability. He addres...
Sep. 27, 2016 03:15 PM EDT Reads: 2,862
SYS-CON Events announced today that Commvault, a global leader in enterprise data protection and information management, has been named “Bronze Sponsor” of SYS-CON's 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Commvault is a leading provider of data protection and information management solutions, helping companies worldwide activate their data to drive more value and business insight and to transform moder...
Sep. 27, 2016 03:15 PM EDT Reads: 2,760
SYS-CON Events announced today that eCube Systems, a leading provider of middleware modernization, integration, and management solutions, will exhibit at @DevOpsSummit at 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. eCube Systems offers a family of middleware evolution products and services that maximize return on technology investment by leveraging existing technical equity to meet evolving business needs. ...
Sep. 27, 2016 03:15 PM EDT Reads: 1,393