Sapient Provides Preliminary Unaudited Fourth Quarter and Full Year 2013 Financial Results and Outlook for First Quarter and Full Year 2014
Preliminary Full-year 2013 Service Revenues up 12% Compared to 2012
BOSTON--(BUSINESS WIRE)--
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:
http://sape.client.shareholder.com/events.cfm
In addition, a re-broadcast of the webcast will be available in the
investors section of www.sapient.com.
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 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.
Investor Relations Contact:
Sapient
Dean Ridlon,
+1-617-963-1598
dridlon@sapient.com
or
Media
Contact:
Sapient
Stacy Simpson, +1-914-830-8510
stacy.simpson@sapient.com
Source: Sapient
News Provided by Acquire Media
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