Bangalore, Karnataka, Gurgaon, Haryana and Noida, Uttar Pradesh, India
Sapient (NASDAQ: SAPE) today reported the following financial results for the first quarter ended March 31, 2008:
-- Service revenues were $154.2 million, an increase of 27% from $121.3 million in the first quarter of 2007.
-- GAAP income from operations was $5.8 million, or 4% of service revenues, an increase of $5.9 million from a GAAP loss from operations of $0.1 million in the first quarter of 2007.
-- Non-GAAP income from operations (excluding stock-based compensation expense, restructuring and other related charges, amortization of purchased intangible assets, and expense relating to the stock-based compensation review and restatement) was $11.4 million, or 7.4% of service revenues. This compares to non-GAAP income from operations of $7.7 million, or 6.4% of service revenues, in the first quarter of 2007.
-- GAAP diluted income per share was $0.06, compared to $0.01 in the first quarter of 2007.
-- Non-GAAP diluted income per share was $0.10, compared to $0.07 in the first quarter of 2007.
"We are pleased with our first quarter results and we remain on track with our growth plan," said Sapient President and Chief Executive Officer Alan J. Herrick. "We see continued market demand for our unique blend of consulting and interactive marketing services despite the challenging economic environment. Our performance in Q1 is a solid start to the fiscal year and provides the foundation for continued growth in 2008."
The Company used cash from operations of $6.8 million in the first quarter of 2008, compared to an $18.0 million use of cash in the first quarter of 2007. Days sales outstanding was 63 days for the first quarter of 2008, up from 57 days in the fourth quarter of 2007 and down from 79 days in the first quarter of 2007. During the first quarter of 2008, the Company repurchased 304,000 shares of its common stock for $2 million.
Outlook
Sapient management provided the following guidance:
For the second quarter ending June 30, 2008:
-- Service revenues are expected to be $158 million or higher
-- Non-GAAP operating margin is expected to be 8% or higher
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 and expense relating to the stock-based compensation review and restatement. 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 future periods - 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; 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, 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, a global services firm, operates two groups—Sapient Interactive and Sapient Consulting—that help clients compete, evolve and grow in an increasingly complex marketplace. Sapient Interactive provides brand and marketing strategy, award-winning creative work, web design and development and emerging media expertise. Sapient Consulting provides business and IT strategy, process and systems design, package implementation and custom development, as well as outsourcing services such as testing, maintenance and support.
Sapient's passion for client success—evidenced by its ability to foster collaboration, drive innovation and solve challenging problems—is the subject of case studies on leadership and organizational behavior used by MBA students at both Harvard and Yale. Leading clients, including BP, Essent Energie, Harrah's Entertainment, Hilton International, Janus, Sony Electronics and Verizon, rely on the company's unique approach to drive growth and market momentum. Headquartered in Cambridge, Massachusetts, Sapient operates across North America, Europe and India. For more information, please visit www.sapient.com.
Source: Sapient (Business Wire India)
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