ARCADIS Reports Second Quarter 2000 Results.Business Editors ARNHEM Arnhem (är`nəm), Ger. Arnheim, city (1994 pop. 133,670), capital of Gelderland prov., E Netherlands, a port on the Lower Rhine. It is an industrial, transportation, and tourist center. , Netherlands--(BUSINESS WIRE)--Aug. 15, 2000 ARCADIS (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ARCAF; ASE (Adaptive Server Enterprise) A relational DBMS from Sybase that runs on Windows NT/2000, Linux and a variety of Unix platforms. ASE is a comprehensive and robust data management product with a long history dating back to the late 1980s. :ARCAD) today reported results for the second quarter and six-month period ended June June: see month. 30, 2000. Highlights - Gross revenues increased 26% to EUR 205.3 million. Net revenues increased 23% to EUR 143.2 million. - Operating income increased 32% to EUR 10.2 million. - Net income increased to EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 5.6 million, or EUR 0.28 per share. Results in euros, NL-GAAP Gross revenues in the 2000 second quarter increased 26% to EUR 205.3 million compared with EUR 162.8 million in the second quarter of 1999. Second quarter net revenues rose 23% to EUR 143.2 million compared with EUR 116.1 million in the same period in 1999. Second quarter 2000 operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. increased 32% to EUR 10.2 million compared with operating income of EUR 7.7 million in the second quarter of 1999. Net income for the second quarter of 2000 was EUR 5.6 million, or EUR 0.28 per share, an increase of 19% when compared to net income of EUR 4.7 million, or EUR 0.25 per share in the year ago period. For the 2000 six-month period, gross revenues increased 24% to EUR 370.7 million versus EUR 299.8 million in the first six months of 1999. Net revenues in the first half of 2000 increased 22% to EUR 266.1 million versus EUR 218.6 million in the same period last year. Operating income for the 2000 six-month period was EUR 16.3 million, an increase of 24% over operating income of EUR 13.1 million in year ago period. For the first half of 2000, the Company reported net income of EUR 8.8 million, or EUR 0.44 per share, an increase of 21% over net income of EUR 7.3 million, or EUR 0.38 per share in the first half of 1999. The Company's results reflect solid organic growth as a result of continued strong demand across the majority of the Company's markets, most notably the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and to a somewhat lesser extent The Netherlands Netherlands (nĕth`ərləndz), Du. Nederland or Koninkrijk der Nederlanden, officially Kingdom of the Netherlands, constitutional monarchy (2005 est. pop. 16,407,000), 15,963 sq mi (41,344 sq km), NW Europe. and Belgium Belgium (bĕl`jəm), Du. België, Fr. La Belgique, officially Kingdom of Belgium, constitutional kingdom (2005 est. pop. 10,364,000), 11,781 sq mi (30,513 sq km), NW Europe. . Results were also aided by the contribution of acquisitions made subsequent to the second quarter of 1999, and the impact of a stronger U.S. dollar exchange rate versus the euro. Of the total growth in gross revenues in the 2000 second quarter, 12% was related to acquisitions, 10% was related to organic growth, and 4% was related to the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. U.S. dollar exchange rate. Results were also positively impacted by the Company's continued focus on cost control in Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). and within ARCADIS Euroconsult, which is predominantly pre·dom·i·nant adj. 1. Having greatest ascendancy, importance, influence, authority, or force. See Synonyms at dominant. 2. active in the donor- financed market. Results in U.S. Dollars U.S. dollar results reflect the exchange rate of the dollar versus the euro. For the 2000 second quarter, gross revenues were $191.2 million compared to $172.0 million in the second quarter of 1999. Net revenues in the 2000 second quarter were $133.3 million compared to $122.7 million in the second quarter of 1999. Second quarter 2000 operating income was $9.5 million compared to operating income of $8.1 million in the same period a year ago. Net income for the second quarter of 2000 was $5.2 million, or $0.26 per share, compared to $5.0 million, or $0.26 per share, in the second quarter of 1999. For the 2000 six-month period, gross revenues were $354.4 million versus $325.6 million in the first six months of 1999. Net revenues for the first half of 2000 were $254.6 million versus $237.6 million in the same period last year. For the first six months of 2000, the Company reported operating income of $15.5 million versus $14.2 million a year ago. Net income for the first half of 2000 totaled $8.4 million, or $0.42 per share, versus $7.9 million, or $0.41 per share, in the same period last year. Market developments ARCADIS is active in four market segments: infrastructure, buildings, environment and real estate information & telecommunication telecommunication Communication between parties at a distance from one another. Modern telecommunication systems—capable of transmitting telephone, fax, data, radio, or television signals—can transmit large volumes of information over long distances. . In the first half of 2000 the building segment was the major growth market for ARCADIS, mainly due to the inclusion of ARCADIS Giffels in the United States. The building segment generated 21% of gross revenue. The Company's largest market segment remains infrastructure with 37% of gross revenue. Government investment in many of the markets in which ARCADIS is active supported significant growth in this segment. The environmental segment, which represents 25% of the Company's gross revenue, increased strongly, mainly in the United States, where the Company's Guaranteed Remediation products prove to be successful. In addition, the demand for environmental due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. services remains high due to the increased number of company mergers. Strong growth in real estate information & telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. kept pace with last year's improvement. Approximately 14% of the Company's gross revenue was generated in this segment. Harrie L.J. Noy, Chairman of the Executive Board commented, "We are very pleased with our second quarter results, which reflect ongoing strong demand for our products and services in many of the markets in which we are active. This demand has led to solid organic growth, which once again was particularly strong in our U.S., Dutch and Belgian Belgian having some relationship to Belgium. Belgian barge dog see schipperke. Belgian black pied cattle black, Belgian dairy cattle. Belgian blue dual-purpose cattle; blue, white or blue roan. operations. This organic growth was augmented by the contributions from our acquisitions of ARCADIS Giffels and ARCADIS Logos which have been included as of the fourth quarter of 1999. While market factors and acquisitions allowed us to grow the top line during the second quarter, our ongoing commitment to cost management allowed us to realize operating leverage Operating Leverage A measurement of the degree to which a firm or project relies on fixed rather than variable costs. Notes: The higher the degree of operating leverage, the greater the potential danger from forecasting risk. to drive more rapid growth in profits." Mr. Noy continued, "In the second quarter, demand within our markets followed similar trends to those seen in the first quarter of this year. In the United States, we continue to see positive market trends in both the infrastructure and environmental markets, and were pleased to have delivered fast-track fast track n. Informal The quickest and most direct route to achievement of a goal, as in competing for professional advancement: "Making complaints against the public is hardly the fast track to elective office" design services for a new, 742,000 square-foot body shop design facility for General Motors. Revenues from the U.S. represented 35% of ARCADIS' total revenues in the period versus 25% a year ago. Trends in the Netherlands, which represented 38% of ARCADIS' total revenues versus 44% a year ago, also remained solid, particularly in the infrastructure for buildings and railroads rail·road n. 1. A road composed of parallel steel rails supported by ties and providing a track for locomotive-drawn trains or other wheeled vehicles. 2. . During the quarter, ARCADIS became responsible for the project management, construction design, and parking management for a number of office buildings in a leading corporate complex in Amsterdam Amsterdam, city, Netherlands Amsterdam (ăm`stərdăm', Dutch ämstərdäm`), city (1994 pop. 724,096), constitutional capital and largest city of the Kingdom of the Netherlands, North Holland prov. , and became engaged in a feasibility study "A Feasibility Study" is an episode of the original The Outer Limits television show. It first aired on 13 April, 1964, during the first season. It was remade in 1997 as part of the revived The Outer Limits series with a minor title change. on behalf of the Dutch Ministry of Transport and Water Management for a railway line that will connect Schiphol Airport and the city of Groningen Groningen, city, Netherlands Groningen, city (1994 pop. 170,535), capital of Groningen prov., NE Netherlands. It is an important trade and transportation center. Manufactures include clothing, food products, furniture, and machinery. . "Demand for the majority of our services remains strong across most of our European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. markets. In Belgium, the Company became involved in a comparative study for a proposed railway between Antwerp Antwerp, city, Belgium Antwerp, Du. Antwerpen, Fr. Anvers, city (1991 pop. 467,518), capital of Antwerp prov., N Belgium, on the Scheldt River. and the German city of Duisberg. In the Spanish real The real was a unit of currency in Spain for several centuries. History The first real was introduced by King Pedro I of Castile at a value of 3 maravedíes. This rate of exchange increased until 1497, when the real was fixed at a value of 34 maravedíes. estate information and telecommunication market, ARCADIS signed contracts during the quarter with various large internet portals, including a major Spanish Spanish, river, c.150 mi (240 km) long, issuing from Spanish Lake, S Ont., Canada, NW of Sudbury, and flowing generally S through Biskotasi and Agnew lakes to Lake Huron opposite Manitoulin island. There are several hydroelectric stations on the river. multimedia group, for providing digital travel and location information on more than 100 Spanish cities. While market conditions remain soft in Germany, we have achieved some progress in improving the profitability of our German operations during the quarter, and we will continue to address this issue. Overall, revenues from Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). made up 19% of total
revenues in the quarter, compared with 25% a year ago.
"In developing markets, which represented 8% of total revenues versus 6% last year, we have begun to see improved profitability at ARCADIS Euroconsult as a result of the actions we have taken. In the Chinese Chinese, subfamily of the Sino-Tibetan family of languages (see Sino-Tibetan languages), which is also sometimes grouped with the Tai, or Thai, languages in a Sinitic subfamily of the Sino-Tibetan language stock. environmental market, the Company commenced work on the de-salinization of the country's second-largest oil field in the Yellow River Delta A delta is a landform where the mouth of a river flows into an ocean, sea, desert, estuary, lake or another river. It builds up sediment outwards into the flat area which the river's flow encounters (as a deltaic deposit , while in the Brazilian infrastructure market ARCADIS Logos has been commissioned by the Brazilian Ministry of Transport to assist in the privatization privatization: see nationalization. privatization Transfer of government services or assets to the private sector. State-owned assets may be sold to private owners, or statutory restrictions on competition between privately and publicly owned of highways in the state of Sao Paulo. Mr. Noy concluded, "Given the strength in the majority of our markets, we are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op as we move into the second half of 2000, and expect to post increases in operating income in the second half similar to those seen in the first. In the second half of this year, we expect a lower contribution from non-consolidated companies in comparison to last year, when we received additional dividends. In addition, we expect a slightly higher tax level for the 2000 full-year period as a larger percentage of total profits is being generated in the United States versus a year ago. Based on these factors and barring unforeseen circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or , we expect net income for the year 2000 to increase between 12% and 15% over the 1999 level." ARCADIS, with its head office in Arnhem, The Netherlands, is an international consulting/engineering and contracting company specializing in the fields of infrastructure, buildings and environment. Wherever the Company operates it aims to improve the physical quality of the living and working environment. ARCADIS has approximately 8,000 employees involved in thousands of public and private sector projects every year. Except for historical information contained herein, the statements in this release are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that are made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Forward-looking statements involve known and unknown risks and uncertainties that may cause the Company's actual results in future periods to differ materially from forecasted results. Those risks include, among others, risks associated with possible changes in environmental legislation and risks with regard to the Company's ability to acquire and execute projects. These and other risks are described in ARCADIS' filings with the Securities and Exchange Commission over the last 12 months, copies of which are available from the SEC or may be obtained upon request from the Company.
ARCADIS
CONSOLIDATED STATEMENT OF INCOME
(in millions, except share and per share data)
Three Months Ended June 30,
IN US$ IN US$ EUR EUR
2000 1999 2000 1999
---- ---- ---- ----
Gross revenue $ 191.2 $ 172.0 205.3 162.8
Materials, services of third
parties 57.9 49.3 62.1 46.7
------- ------- ------- -------
Net revenue 133.3 122.7 143.2 116.1
Operational cost 119.7 110.5 128.5 104.5
Depreciation 4.1 4.1 4.5 3.9
------- ------- ------- -------
Operating income 9.5 8.1 10.2 7.7
Financing income/expenses net (1.1) (0.7) (1.1) (0.7)
------- ------- ------- -------
Income before taxes 8.4 7.4 9.1 7.0
Taxes (3.2) (2.7) (3.5) (2.6)
------- ------- ------- -------
Income after taxes 5.2 4.7 5.6 4.4
Non-consolidated companies 0.2 0.5 0.2 0.5
------- ------- ------- -------
Group income after taxes 5.4 5.2 5.8 4.9
Minority interest (0.2) (0.2) (0.2) (0.2)
------- ------- ------- -------
Net income $ 5.2 $ 5.0 5.6 4.7
Net income per share (1) 0.26 0.26 0.28 0.25
Number of shares outstanding
(in thousands) 20,269 19,761 20,269 19,761
(1) Net income per share is based on the average number of outstanding
shares.
ARCADIS
CONSOLIDATED STATEMENT OF INCOME
(in millions, except share and per share data)
Six Months Ended June 30,
IN US$ IN US$ EUR EUR
2000 1999 2000 1999
---- ---- ---- ----
Gross revenue $ 354.4 $ 325.6 370.7 299.8
Materials, services of third
parties 99.8 88.0 104.6 81.2
------- ------- ------- -------
Net revenue 254.6 237.6 266.1 218.6
Operational cost 231.0 215.5 241.3 198.2
Depreciation 8.1 7.9 8.5 7.3
------- ------- ------- -------
Operating income 15.5 14.2 16.3 13.1
Financing income/expenses net (1.7) (1.3) (1.8) (1.2)
------- ------- ------- -------
Income before taxes 13.8 12.9 14.5 11.9
Taxes (5.3) (4.7) (5.6) (4.4)
------- ------- ------- -------
Income after taxes 8.5 8.2 8.9 7.5
Non-consolidated companies 0.2 (0.1) 0.2 0.0
------- ------- ------- -------
Group income after taxes 8.7 8.1 9.1 7.5
Minority interest (0.3) (0.2) (0.3) (0.2)
------- ------- ------- -------
Net income $ 8.4 $ 7.9 8.8 7.3
Net income per share (1) 0.42 0.41 0.44 0.38
Number of shares outstanding
(in thousands) 20,269 19,761 20,269 19,761
U.S.-dollar exchange rate
1st quarter $1.00 = 1.01 0.89
U.S.-dollar exchange rate
2nd quarter $1.00 = 1.07 0.95
U.S.-dollar exchange rate
3rd quarter $1.00 = 0.95
U.S.-dollar exchange rate
4th quarter $1.00 = 0.96
(1) Net income per share is based on the average number of outstanding
shares.
ARCADIS
CONSOLIDATED BALANCE SHEETS
(in millions)
June 30, 2000 December 31, 1999
US$ EUR US$ EUR
Amounts in accordance with NL-GAAP:
ASSETS:
Fixed assets $ 58.7 61.5 $ 63.4 63.1
Current assets 248.9 260.4 234.2 233.2
------- ------- ------- -------
TOTAL ASSETS $ 307.6 321.9 $ 297.6 296.3
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LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities $ 163.3 171.0 $ 177.8 177.0
Long-term debt 22.7 23.7 5.7 5.7
Provisions 15.1 15.8 16.5 16.4
Total equity 106.5 111.4 97.6 97.2
------- ------- ------- -------
Total liabilities and
shareholders' equity $ 307.6 321.9 $ 297.6 296.3
======= ======= ======= =======
Calculated with US dollar
rate of $1.00 = EUR 1.05 1.00
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