AnswerThink Reports 1999 Results.Business Editors MIAMI--(BUSINESS WIRE)--February 8, 2000 - 1999 revenues increased 55% to $260 million - 1999 net income excluding non-recurring items increased 351% to $14 million - Q4-99 revenues top $71 million, up 45% vs. Q4-98 - Q4-99 EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. increased to $0.11 from $0.01 in Q4-98, excluding non-recurring items AnswerThink Consulting Group, Inc. (Nasdaq:ANSR ANSR Autonomous Naval Support Round ANSR Adaptive Network Solutions Research, Inc. ANSR Advanced Neutron Source Reactor ANSR Active No Swashplate Rotor (Army) ) (the &uot;Company&uot;) today announced financial results for its fiscal year and fourth quarter ended December December: see month. 31, 1999. Net revenues for 1999 increased to $260.5 million, up 55% from the $167.5 million of net revenues reported in 1998. Net income excluding non-recurring items increased in 1999 to $14.1 million, or $0.33 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, from $3.1 million, or $0.08 per diluted share, in 1998. Including the non-recurring items, the Company reported net income for 1999 of $1.1 million, or $0.03 per diluted share. For the fourth quarter ended December 31, 1999, the Company reported net revenues of $71.1 million, up 45% from the $48.9 million of net revenues reported during the fourth quarter of 1998. Net income excluding non-recurring merger costs for the fourth quarter of 1999 increased to $4.8 million, or $0.11 per diluted share, compared with $500,000, or $0.01 per diluted share, in the fourth quarter of last year. Including the merger costs, the Company reported a net loss of $2.5 million, or $0.07 per diluted share, in the fourth quarter of 1999. &uot;We are very proud of our achievements in 1999,&uot; stated Ted A. Fernandez, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of AnswerThink. &uot;We aggressively positioned AnswerThink as a leading provider of e-business (Electronic-BUSINESS) Doing business online. The term is often used synonymously with e-commerce, but e-business is more of an umbrella term for having a presence on the Web. solutions. More importantly, we believe we assembled as·sem·ble v. as·sem·bled, as·sem·bling, as·sem·bles v.tr. 1. To bring or call together into a group or whole: assembled the jury. 2. the comprehensive skills that will be required to design, architect and build the most complex business-to-business  This article or section needs copy editing for grammar, style, cohesion, tone and/or spelling.You can assist by [ editing it] now. e-solutions.&uot; Highlights for the Company during 1999 included: - The merger with THINK New Ideas "New Ideas" is the debut single by Scottish New Wave/Indie Rock act The Dykeenies. It was first released as a Double A-side with "Will It Happen Tonight?" on July 17, 2006. The band also recorded a video for the track. in November November: see month. 1999 creating one of the largest and comprehensive providers of e-business solutions with over 1,600 associates across 16 offices. The merger adds strong branding and interactive marketing skills, strong U.S. West coast sales and delivery teams, and a European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. presence. - The announcement of several comprehensive engagements to build the following business-to-business Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the solutions:
- e-Visa - an Internet portal to make Visa the currency of
choice for the Internet economy.
- Samsung Securities - a new Internet trading and investment
portal to facilitate foreign investment in Korea.
- World Commerce Online - Internet portals focused on the
floral and perishable food industries.
- e-Bricks.com - an Internet portal focused on the procurement
of construction materials and equipment.
- Nextel Online - a Web interface and the corresponding supply
chain management functions for several sales and customer initiatives
that will enable Nextel to increase service levels for its existing
customer base.
- Farmbid.com - a specialized Internet portal for the farming
and agricultural industries.
- The launch of an e-business study which benchmarks corporate progress in adopting e-business practices. Other benchmarking
Benchmarking (also "best practice benchmarking" or "process benchmarking") is a process used in management and particularly strategic studies released included &uot;best practice&uot; e-business models for contact centers, procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. , strategic planning Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. , human resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees. and finance. - The initiation initiation, the transition and attendant ceremonies, such as ordeals and rites, involved in passing from one state or status to another, often from childhood to adulthood. It was among the most important social institutions of early humans. of e-Technology Transformation and e-Procurement (Electronic-PROCUREMENT) Purchasing online. E-procurement systems are used to obtain materials and parts via the Web or using traditional EDI standards either for internal manufacturing (direct procurement) or office supplies and equipment (indirect procurement). solution offerings which help clients address the new e-business model and leverage new technologies. - The announcement of a joint effort with IBM's e-Business Services Group to offer next generation e-business solutions in the financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , retail, automotive and health care sectors. The Company and IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) also agreed to co-develop an e-CRM (&uot;customer relationship management&uot;) benchmark A performance test of hardware and/or software. There are various programs that very accurately test the raw power of a single machine, the interaction in a single client/server system (one server/multiple clients) and the transactions per second in a transaction processing system. study for the retail industry. Fernandez concluded, &uot;The key to our success in 1999 was the commitment of our associates. We continue to attract and retain bright, highly energized individuals that enjoy collaborating with our clients to create and build solutions that make the Internet economy The Internet Economy refers to conducting business through markets whose infrastructure is based on the Internet and World-Wide Web. An Internet economy differs from a traditional economy in a number of ways, including: communication, market segmentation, distribution costs, and price. a reality.&uot; About AnswerThink AnswerThink (www.answerthink.com) is a leading e-business solutions provider. With its recent merger with THINK New Ideas, the Company now helps design, build, market and support the e-business efforts of a growing list of Global 1000 and dot-com (1) Refers to the period (dot) followed by the abbreviation of the commercial domain (.com) at the end of an Internet address. Since the .com domain is so widely used, the Internet became known as the "dot-com" world, and dot-com companies are those formed to offer services or clients. AnswerThink offers a wide range of integrated solutions, including e-business strategy, interactive marketing, Web design, best practices benchmarking and business modeling, custom application development, software package implementation, e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. and decision support technology. The Company's end-to-end end-to-end a pattern of anastomosis in which severed ends are matched and united, in contrast with other patterns such as end-to-side or side-to-side. Usually applied to anastomosis of the intestine. focus provides its clients with a unique combination of marketing, business and technology expertise that spans multi-functional areas that include brand and product development, supply chain, sales and marketing, customer support, finance, human resources and information technology. Certain statements in this press release are &uot;forward looking statements&uot; within the meaning 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 and involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results, performance or achievements to be materially different from the results, performance or achievements expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by the forward looking statements. Factors that impact such forward looking statements include the ability of the Company to attract additional business, changes in expectations regarding the information technology industry, the ability of the Company to attract skilled employees, possible changes in collections of accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying , risks of competition, price and margin trends, changes in general economic conditions and interest rates as well as other risks detailed in the Company's reports filed with the Securities and Exchange Commission.
ANSWERTHINK CONSULTING GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Quarter Ended Year Ended
Dec. 31, Jan. 1, Dec. 31, Jan. 1,
1999 1999 1999 1999
(unaudited)
Net revenues $71,052 $48,884 $260,460 $ 167,517
Costs and expenses:
Project personnel
and expenses 42,171 29,013 154,531 99,054
Selling, general
and administrative
expenses 21,091 18,905 82,672 62,609
Stock compensation
expense(1) -- -- -- 63,886
Merger related
expenses(2) 9,200 -- 11,700 --
Impairment of
capitalized software(3) -- -- 989 --
Purchased research
and development
expense(4) -- -- -- 5,200
Restructuring costs(5) -- -- -- 921
Total costs and
operating expenses 72,462 47,918 249,892 231,670
Income (loss) from
operations (1,410) 966 10,568 (64,153)
Other income (expense):
Litigation settlement -- -- -- 2,500
Interest income 263 304 926 958
Interest expense (91) (437) (645) (1,589)
Income (loss) before
income taxes and
extraordinary loss (1,238) 833 10,849 (62,284)
Income taxes 1,212 (1,116) 7,602 (870)
Income (loss) before
extraordinary loss
on early extinguishment
of debt (2,450) 1,949 3,247 (61,414)
Extraordinary loss
on early extinguishment
of debt (net of taxes
of $1,409) -- -- 2,113 --
Net income (loss) $(2,450) $ 1,949 $ 1,134 $ (61,414)
Basic net income (loss)
per common share:
Income (loss) before
extraordinary loss $ (0.07) $ 0.06 $ 0.09 $ (2.47)
Extraordinary loss
on early extinguishment
of debt $ -- $ -- $ (0.06) $ --
Net income (loss) per
common share $ (0.07) $ 0.06 $ 0.03 $ (2.47)
Weighted average
common shares outstanding 36,962 30,574 34,953 24,844
Diluted net income
(loss) per common share:
Income (loss) before
extraordinary loss $ (0.07) $ 0.05 $ 0.08 $ (2.47)
Extraordinary loss on
early extinguishment
of debt $ -- $ -- $ (0.05) $ --
Net income (loss) per
common share $ (0.07) $ 0.05 $ 0.03 $ (2.47)
Weighted average
common and common
equivalent shares
outstanding 36,962 41,485 43,098 24,844
Supplemental net income
(loss) and diluted
per share data:
Net income $(2,450) $ 1,949 $ 1,134 $ (61,414)
Non-recurring items(6) $ 7,227 $(1,449) $ 12,989 $ 64,548
Net income excluding
non-recurring items $ 4,777 $ 500 $ 14,123 $ 3,134
Diluted net income
per common share
excluding non-recurring
items(7) $ 0.11 $ 0.01 $ 0.33 $ 0.08
(1) Stock compensation expense of $63.9 million included $40.8
million relating to the vesting of AnswerThink's common shares
held by seven of AnswerThink's senior managers and one director
that were subject to certain performance vesting criteria, $21.7
million from the release to certain stockholders of THINK New
Ideas of common shares, which were placed in escrow at the time
of THINK New Ideas' initial public offering, and $1.4 million
relating to the acceleration of the exercise dates of options
granted to a former officer of THINK New Ideas upon his
resignation.
(2) Merger related expenses related to AnswerThink's mergers with
triSpan in February 1999 and THINK New Ideas in November 1999,
which were each accounted for as a pooling-of-interests.
(3) Impairment of capitalized software costs was a result of the
write-off to net realizable value of previously capitalized
software development costs acquired as a result of THINK New
Ideas' acquisition of Interweb, Inc. in June 1998.
(4) Purchased research and development expense related to the
write-off of research and development costs of certain acquired
companies of THINK New Ideas at the time of their acquisition.
(5) Restructuring costs related to THINK New Ideas' disposition of
its traditional graphic design departments in April 1998.
(6) Non-recurring items include stock compensation expense, merger
related expenses, impairment of capitalized software, purchased
research and development expense, restructuring costs, litigation
settlement, extraordinary loss and an adjustment to normalize tax
expense.
(7) The 1999 4th quarter and the 1998 year to date diluted net income
excluding non-recurring items per common share were calculated
based on 44,163 shares and 38,518 shares, respectively, of common
stock and common stock equivalents outstanding during the
respective periods.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, January 1,
1999 1999
ASSETS
Current assets:
Cash and cash equivalents $ 27,124 $ 36,931
Short-term investments 2,432 1,000
Accounts receivable and unbilled
revenue, net 72,655 44,040
Other receivables 5,340 10,766
Prepaid expenses and other current assets 8,058 2,746
Total current assets 115,609 95,483
Property and equipment, net 11,191 9,373
Other assets 3,362 7,897
Goodwill, net 70,551 40,641
Total assets $200,713 $153,394
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 8,982 $ 11,558
Accrued expenses and other liabilities 28,372 16,110
Media payable 16,500 12,092
Income taxes payable 4,693 1,229
Current portion of notes and other debts
payable 1,896 4,783
Total current liabilities 60,443 45,772
Long-term liabilities -- 6,833
Total liabilities 60,443 52,605
Shareholders' equity 140,270 100,789
Total liabilities and shareholders'
equity $200,713 $153,394
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