BWI: Sapient Reports Second Quarter 2011 Results and Declares $0.35 Per Share Special Dividend

Press release from Business Wire India
Source: Sapient
Friday, August 05, 2011 03:22 PM IST (09:52 AM GMT)
Editors: General: Consumer interest, Economy; Business: Banking & financial services, Business services, Financial Analyst, Information technology, Stock exchanges; Technology
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Sapient Reports Second Quarter 2011 Results and Declares $0.35 Per Share Special Dividend
Service Revenues Up 27% over Q2 2010; Non-GAAP Operating Profit Increases 52% over Q2 2010

Gurgaon, Haryana, Noida, Uttar Pradesh and Bangalore, Karnataka, India, Friday, August 05, 2011 -- (Business Wire India) -- Sapient (NASDAQ: SAPE) today reported the following financial results for the second quarter ended June 30, 2011:

-- Service revenues were $254.6 million compared to $200.4 million in the second quarter of 2010, an increase of $54.2 million or 27%. Sequentially, service revenues were up $13.3 million, or 6%, from $241.3 million in the first quarter of 2011. On a constant currency basis, revenues increased 24% over the second quarter of 2010 and 5% sequentially.

-- GAAP income from operations was $23.1 million, or 9.1% of service revenues, up 80% from $12.9 million, or 6.4% of service revenues, reported in the second quarter of 2010.

-- Non-GAAP income from operations was $29.9 million, or 11.8% of service revenues, up 52% from $19.8 million, or 9.9% of service revenues, reported in the second quarter of 2010.

-- GAAP diluted net income per share was $0.11, compared to $0.06 in the second quarter of 2010.

-- Non-GAAP diluted net income per share was $0.14, compared to $0.09 in the second quarter of 2010.

"Our 27% year-over-year organic revenue growth and overall operating performance in the quarter demonstrate our success in the market," said Sapient President and Chief Executive Officer Alan J. Herrick. "We remain excited about the growth opportunities ahead and our unique position to capitalize on those opportunities. We are pleased to be able to return excess capital to our stockholders through a special dividend due to our strong financial position and confidence in our outlook."

The company generated cash from operations of $38.4 million in the second quarter of 2011, an increase of 153% from $15.2 million in the second quarter of 2010. As of June 30, 2011, the company had cash, cash equivalents and marketable securities of $242.6 million.

Days sales outstanding was 69 days for the second quarter of 2011, down from 73 days in the first quarter of 2011 and equal to the 69 days for the second quarter of 2010.

Special Dividend

The company's Board of Directors declared a special dividend in the amount of $0.35 per share payable on August 29, 2011 to stockholders of record at the close of business on August 15, 2011.

Outlook

Sapient management provided the following guidance:

-- For the third quarter ending September 30, 2011, service revenues are expected to be $260 million to $268 million.

-- Third quarter 2011 non-GAAP operating margin is expected to be 12.5% to 13.5%.

Webcast and Conference Call

Sapient will host a discussion of its second quarter results at 4:30 p.m. ET today, 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

Conference ID: 83850405

The link to the webcast will be posted at:

http://sape.client.shareholder.com/events.cfm

In addition, a re-broadcast of the conference call will be available from August 4 at 7:30 p.m. ET through September 4 at 11:59 p.m. ET. The replay information is as follows:

US: (855) 859-2056

International: (404) 537-3406

Conference ID: 83850405

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, acquisition costs and other related charges, and income tax benefits or provisions resulting from changes in the valuation allowance. In addition, the company has presented service revenues in constant currency terms, which excludes the effect of currency fluctuations between the U.S. dollar and the currencies 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. However, 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, the financial guidance for the third quarter of 2011 - 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; 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; 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 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 North America, Europe, and Asia-Pacific. For more information, visit www.sapient.com.

Sapient is a registered service mark of Sapient Corporation.


CONTACT DETAILS
Neha Pathak, Sapient, npathak@sapient.com
Prachi Sinha, Gutenberg Communications, prachi@gutenbergpr.com

KEYWORDS
CONSUMER, ECONOMY, BANKING, BUSINESS SERVICES, Financial Analyst, IT, STOCK EXCHANGES, TECHNOLOGY

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