Answerthink Announces Third Quarter Results.Business Editors/High Tech Writers MIAMI--(BUSINESS WIRE)--Oct. 29, 2002 Answerthink, 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) ): -- Q3 Revenue and Pro Forma EPS In Line With Previously Provided Guidance -- Cash Flow From Operations of $1.5 Million Resulted in Cash Balances Over $61 Million -- Company Records Non-Cash Charge of $20.0 Million for Goodwill Impairment Answerthink, Inc. (Nasdaq:ANSR) today announced financial results for the third quarter ended September September: see month. 27, 2002. Revenues for the third quarter of 2002 were $42.9 million compared to $67.5 million in the comparable period of 2001. The pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net loss (pro forma results are before amortization and impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. , non-cash compensation, changes in accounting principles and non-recurring items) for the third quarter of 2002 was $600,000, or $0.01 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, compared to pro forma net income of $1.8 million, or $0.04 per diluted share, in the third quarter of 2001. On a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis, the Company's net loss for the third quarter of 2002 was $20.6 million, or $0.44 per diluted share, compared to a net loss of $2.2 million, or $0.05 per diluted share, in the third quarter of last year. During the third quarter of this year the Company recorded a non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. of $20.0 million for the impairment of goodwill resulting primarily from the decline in stock price for both the Company and its peer group during the quarter. The Company's cash balances were $61.4 million at the end of the third quarter of 2002. The Company also reported that it used approximately $1.5 million in cash during the third quarter of 2002 to repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. approximately 777,000 shares of common stock under the previously announced share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. program. For the first nine months of 2002, revenues were $143.7 million compared to $222.6 million reported for the first nine months of 2001. The pro forma net loss for the first nine months of 2002 was $3.1 million, or $0.07 per diluted share compared to pro forma net income of $6.2 million, or $0.13 per diluted share for the first nine months of 2001. On a GAAP basis, the net loss for the first nine months of 2002 was $54.3 million, or $1.17 per diluted share, and includes non-cash charges related to a change in accounting principle of $31.2 million during the first quarter of 2002 and $20.0 million for the impairment of goodwill during the third quarter of 2002 discussed above. The Company's net loss on a GAAP basis for the first nine months of 2001 was $2.3 million, or $0.05 per diluted share. "In a challenging economic environment we continue to deliver operating results in line with our guidance," said 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. "We are also pleased with the strength of our balance sheet and our ability to generate operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. while making significant investments in our "best practices" focused Business Process Intelligence (BPI (Bits Per Inch) The measurement of the number of bits stored in one linear inch of a track (storage channel) on a disk or tape. Bit density on magnetic disks has reached 800,000 bpi (800 Kbpi). See tpi, areal density and magnetic disk. BPI - bits per inch ) implementation framework and in expanding our Hackett Hackett may refer to: In places:
Fernandez continued, "Our new BPI framework which integrates Hackett best practices knowledge to optimize optimize - optimisation business process and software implementation decisions provides our clients with a very powerful value proposition. We also made great progress in expanding our Hackett Group offerings to include a broader range of subscription based best practice diagnostic and collaborative learning Collaborative learning is an umbrella term for a variety of approaches in education that involve joint intellectual effort by students or students and teachers. Collaborative learning refers to methodologies and environments in which learners engage in a common task in which each services. We are introducing BPI and the expanded Hackett offerings in the fourth quarter." Third quarter highlights: Service Expansion: Business Process Intelligence (BPI) Delivery Framework - Answerthink's BPI service delivery framework incorporates the renowned best practice metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. and business process knowledge from Answerthink's Hackett Group to optimize business processes and configure See configuration. (software) configure - A program by Richard Stallman to discover properties of the current platform and to set up make to compile and install gcc. Cygnus configure was a similar system developed by K. enterprise software for world-class world-class adj. 1. Ranking among the foremost in the world; of an international standard of excellence; of the highest order: a world-class figure skater. 2. performance. Using BPI, Answerthink consultants take a coordinated approach to designing business and technology architectures, which results in significantly greater benefit realization. In the third quarter, Answerthink's business transformation and application specialists completed detailed fit/gap analyses of most modules from PeopleSoft (PeopleSoft, Inc., Pleasanton, CA, www.peoplesoft.com) A software company that specialized in enterprise-wide applications for client/server environments. Initially specializing in human resources, its package offerings covered the gamut including financial, distribution, manufacturing , SAP, Oracle and Lawson The name Lawson can refer to a number of different things: People
BPI Research for a Leading Business Application Provider - Answerthink and The Hackett Group were commissioned to conduct a best practices study of a leading business application, analyzing the software's ability to enable Hackett best practices and the corresponding benefit realization that may be achieved by configuring and implementing the application's financial module with those best practices. The Hackett Group - In September, Bruce Bruce, Scottish royal family descended from an 11th-century Norman duke, Robert de Brus. He aided William I in his conquest of England (1066) and was given lands in England. Barlag was named president of The Hackett Group. Barlag was a former member of the executive management team and chief marketing officer of the Gartner Group (company) Gartner Group - One of the biggest IT industry research firms. Address: Connecticut, USA. . With the addition of Barlag, Hackett will expand its current benchmarking
Benchmarking (also "best practice benchmarking" or "process benchmarking") is a process used in management and particularly strategic and collaborative learning programs as well as launch a series of new research and advisory services advisory services advisory services provided to the public, in their capacity as owners and managers of animals, are an important part of veterinary science. They may be provided by government bureaux, by commercial companies who deal in pharmaceuticals or animals or animal offerings. The new Hackett strategy will be supported by the aggressive expansion of the Hackett sales force. Research and Analysis: Best Practices in Sales, General and Administration (SG&A) - in a series of geographic seminars held in key East coast markets, Answerthink and its Hackett Group shared findings evaluating the effectiveness, quality, cost and productivity of corporate SG&A functions. Attendees learned how the world's leading companies leverage Hackett best practices to optimize SG&A costs, as well as methods to reduce SG&A costs, while increasing business value and performance. Enterprise Portal See corporate portal. and Intranet Study - a study conducted by Answerthink found that while many companies are implementing enterprise portals, most are finding it difficult to move beyond the most basic levels of implementation. None of the companies surveyed are creating portal environments offering full business integration, which delivers increased return on investment, and few said their portals support key capabilities, such as collaboration Working together on a project. See collaborative software. , business process management, a single search capability, or a defined taxonomy taxonomy: see classification. taxonomy In biology, the classification of organisms into a hierarchy of groupings, from the general to the particular, that reflect evolutionary and usually morphological relationships: kingdom, phylum, class, order, for content organization. The study can be found on the Answerthink Web site. Representative new client engagements: Global electronics manufacturer - to implement and strategically deploy Oracle Financials and Shared Services shared services, n.pl the administrative, clinical, or other service functions that are common to two or more hospitals or their health care facilities and used jointly or cooperatively by them. enterprise-wide, across multiple geographies. The effort will integrate systems and data from nearly 50 different business units into a single shared services center Shared Services Center is the entity responsible for the execution and the handling of specific operational tasks Accounting, human resources, payroll, IT, legal, compliance, purchasing, security. , standardizing procurement and accounts payable processes. By configuring Oracle with BPI tools that leverage Hackett Best Practices, Answerthink will help the company improve productivity while reducing error rates and cycle times. Pharmaceutical company - to implement SAP Version 4.6C to address regulatory, compliance, and business strategy issues and lay the foundation for corporate growth as the company completes clinical trials for an important new product. Answerthink will implement SAP for financials and manufacturing to enable direct integration of quality systems data from the manufacturing floor into SAP, utilizing an extensive wireless networking See wireless network. implementation. Technology products manufacturer - to provide offshore application maintenance and database support for a global implementation of Oracle iProcurement, through Answerthink's HCL-Answerthink joint venture. The mission-critical Oracle system provides 24/7 support to nearly 40,000 users worldwide and facilitates more than $7 billion in purchasing annually, a number which is expected to triple in the next three years. Under this contract, Answerthink will help the company lower overall application support costs. Automotive 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. - to create comprehensive development and implementation plans for an enterprise-wide business intelligence platform for improved strategic decision making about credit risk and collections. Through advanced data mining, predictive analytics Predictive analytics encompasses a variety of techniques from statistics and data mining that process current and historical data in order to make “predictions” about future events. and customer interaction management, the new platform will allow the company to proactively manage risk and minimize losses due to customer bad debts. Global home care and food products manufacturer - to upgrade the company to PeopleSoft Version 8, and integrate the company's North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. employee information into a global PeopleSoft database, in an effort to reduce internal operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . Leveraging Answerthink's extensive best practices knowledge, the project will maximize reporting efficiency and increase employee productivity. Telecommunications service provider A Telecommunications Service Provider or TSP is a type of Communications Service Provider that has traditionally provided telephone and similar services. This category includes ILECs, CLECs, and mobile wireless companies. - to provide planning and strategy for the company's external online presence. The effort is designed to increase revenue and reduce costs, and map online activities more closely to core business goals. A separate project involves support for a new wireless product launch, with online presence development and vital marketing activities. Industry Recognition: Answerthink won four awards in the Web Marketing Association's 2002 WebAward Competition. These included "Best Portal Web Site" and "Standard of Excellence" awards for Fannie Mae Fannie Mae: see Federal National Mortgage Association. Foundation's KnowledgePlex(TM) Web site (http://www.knowledgeplex.org See .org. (networking) org - The top-level domain for organisations or individuals that don't fit any other top-level domain (national, com, edu, or gov). Though many have .org domains, it was never intended to be limited to non-profit organisations. RFC 1591. ) and two additional "Standard of Excellence" awards for Answerthink's own corporate Web site (http://www.answerthink.com) and the Fannie Mae Foundation site (http://www.fanniemaefoundation.org). These awards recognize Answerthink's leadership in the area of strategic enterprise portal development. Investor call information: Answerthink will host a conference call for investors today at 5:00PM EST EST electroshock therapy. EST abbr. electroshock therapy to further discuss the earnings results for the third quarter and future outlook. To participate in the conference call, please dial 1-800-475-0212 approximately 5-10 minutes before the call. International callers may dial 1-712-271-0730. The pass code for the call is "third quarter" and the conference leader is Ted A. Fernandez. The call will also be webcast at (http://www.answerthink.com) and (http://www.streetevents.com). A replay of this call will be available today beginning at 8:00PM EST through 5:00PM EST November November: see month. 5, 2002 by dialing 1-888-568-0091. About Answerthink Answerthink, Inc. (http://www.answerthink.com) is a leading business and technology consulting firm Noun 1. consulting firm - a firm of experts providing professional advice to an organization for a fee consulting company business firm, firm, house - the members of a business organization that owns or operates one or more establishments; "he worked for a that enables companies to achieve world-class business performance. By leveraging the comprehensive database of The Hackett Group, the world's leading repository of enterprise best practice metrics and business process knowledge, Answerthink's business and technology solutions help clients significantly improve performance and maximize returns on technology investments. Answerthink's capabilities include benchmarking, business transformation, business applications, technology integration and offshore application maintenance and support. Founded in 1997, Answerthink has more than 800 associates and offices in 12 cities throughout 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 in 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). .
Certain statements in this press release are "forward looking statements" 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 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.
TABLES FOLLOW
Answerthink, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Quarter Ended Nine Months Ended
------------------- -------------------
September September September September
27, 2002 28, 2001 27, 2002 28, 2001
---------------------------------------
Revenues:
Revenues before
reimbursements (Net
revenues) $ 38,461 $60,016 $127,552 $197,307
Reimbursements 4,444 7,525 16,189 25,281
-------- ------- -------- --------
Total revenues (1) 42,905 67,541 143,741 222,588
Costs and expenses:
Project personnel and
expenses:
Project personnel and
expenses before reimbursable
expenses 25,537 36,955 88,008 123,004
Reimbursable expenses 4,444 7,525 16,189 25,281
-------- ------- -------- --------
Total project personnel
and expenses 29,981 44,480 104,197 148,285
Selling, general and
administrative expenses 14,041 22,122 45,024 70,123
Impairment of goodwill (3) 20,000 - 20,000 -
Stock compensation expense (2) - 211 - 4,855
-------- ------- -------- --------
Total costs and
operating expenses 64,022 66,813 169,221 223,263
-------- ------- -------- --------
Income (loss) from operations (21,117) 728 (25,480) (675)
Other income (expense):
Interest income 220 250 574 985
Interest expense (103) (42) (196) (126)
-------- ------- -------- --------
Income (loss) before income
taxes (21,000) 936 (25,102) 184
Income taxes (400) 3,131 (2,041) 2,514
-------- ------- -------- --------
Loss before cumulative effect of
change in accounting principle (20,600) (2,195) (23,061) (2,330)
Cumulative effect of change in
accounting principle (3) - - (31,200) -
-------- ------- -------- --------
Net loss $(20,600) $(2,195) $(54,261) $ (2,330)
-------- ------- -------- --------
Basic and diluted net loss per
common share: (4)
Loss before cumulative
effect of change in
accounting principle $ (0.44) $ (0.05) $ (0.50) $ (0.05)
Cumulative effect of
change in accounting
principle $ - $ - $ (0.67) $ -
Net loss per
common share $ (0.44) $ (0.05) $ (1.17) $ (0.05)
Weighted average
common shares
outstanding 46,879 44,682 46,431 43,631
Pro Forma Data: (5)
Income (loss) before
income taxes $(21,000) $ 936 $(25,102) $ 184
Non-cash and
non-recurring
expenses 20,000 2,021 20,000 10,002
-------- ------- -------- --------
Pro forma income (loss)
before income taxes (1,000) 2,957 (5,102) 10,186
Pro forma income taxes (400) 1,168 (2,041) 4,023
-------- ------- -------- --------
Pro forma income (loss)
before cumulative
effect of change in
accounting principle $ (600) $ 1,789 $ (3,061) $ 6,163
-------- ------- -------- --------
Pro forma basic net income
(loss) per common share $ (0.01) $ 0.04 $ (0.07) $ 0.14
Pro forma diluted net income
(loss) per common share $ (0.01) $ 0.04 $ (0.07) $ 0.13
Weighted average common shares
outstanding 46,879 44,682 46,431 43,631
Weighted average common and
common equivalent shares
outstanding 46,879 46,661 46,431 46,323
(1) During the first quarter of 2002, the Company adopted Emerging
Issues Task Force Topic No. D-103, "Income Statement Characterization
of Reimbursements Received for "Out-of-Pocket" Expenses Incurred". In
accordance with the provisions of Topic No. D-103, reimbursements
received for out-of-pocket expenses incurred are classified as
revenue. The Company has historically accounted for reimbursements
received for out-of-pocket expenses incurred as a reduction to project
personnel and expenses. The statements of operations for the quarter
and nine months ended September 28, 2001 were reclassified to comply
with the guidance in Topic No. D-103. Adoption of the provisions had
no impact on the reported net income (loss) or net income (loss) per
share.
(2) During 2001, the Company granted stock options to participants
in the Company's Employee Stock Purchase Plan. These stock options
were granted in lieu of the Employee Stock Purchase Plan shares that
could not be issued because the plan was oversubscribed. The Company
recorded a non-cash stock compensation charge ($-0- for the third
quarter and $4,218 for the nine months in 2001) for the difference
between the fair market value of the stock on the option grant date
and the exercise price.
(3) The Company adopted Statement of Financial Accounting
Standards No. 142, "Goodwill and Other Intangible Assets", during the
first quarter of 2002. The new accounting rule eliminates the
amortization of goodwill and changes the method of determining whether
there is a goodwill impairment from an undiscounted cash flow method
to a fair value method. As a result of the adoption of this standard,
the Company incurred a non-cash transitional charge of $31.2 million
in the first quarter of 2002 due to the cumulative effect of the
change in accounting principle. The new statement also requires that
goodwill be tested for impairment on an annual basis and between
annual tests in certain circumstances. The Company performed an
impairment test during the quarter ended September 27, 2002 and
recorded an impairment charge of $20.0 million, primarily as a result
of the decline in stock prices for the Company and its peer group.
(4) Potentially dilutive shares were excluded from the diluted loss
per share calculation for the quarters and nine months ended September
27, 2002 and September 28, 2001 as their effects would have been
anti-dilutive to the loss incurred by the Company. The total number of
weighted average common and common equivalent shares outstanding,
including any anti-dilutive shares, for the quarters ended September
27, 2002 and September 28, 2001 were 47,068 shares and 46,661 shares,
respectively, and for the nine months ended September 27, 2002 and
September 28, 2001, were 47,207 shares and 46,323 shares,
respectively.
(5) Pro forma data in the third quarter and nine months of 2002
excludes a goodwill impairment charge of $20.0 million. Pro forma data
in the third quarter and first nine months of 2001 excludes non-cash
stock compensation of $211 and $4,855, respectively, and goodwill
amortization of $1,810 and $5,147, respectively. Pro forma data does
not purport to be prepared in accordance with Generally Accepted
Accounting Principles.
Answerthink, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
September December
27, 28,
2002 2001
----------------------------------------------------------------------
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $ 58,515 $ 59,888
Restricted cash 2,901 -
Accounts receivable and unbilled revenue, net 28,781 39,164
Other receivables 734 851
Prepaid expenses and other current assets 16,183 15,628
-------- --------
Total current assets 107,114 115,531
Property and equipment, net 17,717 18,468
Goodwill, net 26,720 77,920
-------- --------
Total assets $151,551 $211,919
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,445 $ 5,187
Accrued expenses and other liabilities 18,319 27,992
Media payable 736 1,039
-------- --------
Total current liabilities 23,500 34,218
Shareholders' equity 128,051 177,701
-------- --------
Total liabilities and shareholders' equity $151,551 $211,919
-------- --------
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