Nov. 5, 2009 (Business Wire) -- Sapient (NASDAQ: SAPE) today reported the following financial results for the third quarter ended September 30, 2009:

• Service revenues were $165.5 million, including revenue related to Sapient Nitro, which was acquired on July 1, 2009, compared to $177.7 million in the third quarter of 2008, a decrease of 7%. Sequentially, service revenues were up $18 million, or 12%, from $147.5 million in the second quarter of 2009. On a constant currency basis, revenues decreased 3% over the prior year’s quarter and increased 10% sequentially.
• GAAP income from operations was $7.8 million (reflecting a combined $3.6 million of charges related to the acquisition of Nitro and an adjustment to a previously reported real estate restructuring), down from the $20.7 million, reported in the third quarter of 2008.
• Non-GAAP income from operations was $16.8 million, or 10.2% of service revenues (excluding stock-based compensation expense, restructuring and other related charges, amortization of purchased intangible assets, acquisition costs and other related charges). This compared to non-GAAP income from operations of $26.1 million, or 14.7% of service revenues, in the third quarter of 2008.
• GAAP diluted net income per share was $0.04, compared to $0.14 in the third quarter of 2008.
• Non-GAAP diluted net income per share was $0.11, compared to $0.18 in the third quarter of 2008.

“We are pleased with our strong growth and profitability this quarter, despite the recessionary climate,” said Sapient President and Chief Executive Officer Alan J. Herrick. “We remain well positioned for the future. Clients’ reaction to the Sapient Nitro combination has been very positive and is already generating new business. We are also seeing new opportunities due to an improved level of client confidence in the business environment.”

The Company generated cash from operations of $16.8 million in the third quarter of 2009, compared to $33.2 million of cash in the third quarter of 2008. As of September 30, 2009, the Company had cash, cash equivalents and marketable securities of $195.9 million. Days sales outstanding was 66 days for the third quarter of 2009, compared to 75 days in the second quarter of 2009 and 60 days for the third quarter of 2008.

Outlook

Sapient management provided the following guidance:

• For the fourth quarter ended December 31, 2009, service revenues are expected to be in the range of $172 million to $175 million.
• Fourth quarter non-GAAP operating margin is expected to be 10% to 11%.

Webcast and Conference Call

Sapient will host a discussion of its first 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:

U.S.: (888) 713-4199

International: (617) 213-4861

Passcode: 38178807

Please use the following link to pre-register for the conference call:

https://www.theconferencingservice.com/prereg/key.process?key=PRHP4JWRG

Please use the following link to access the live webcast of this event as well as an archive of the webcast:

http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=65979&eventID=2505044

The link to the webcast will also be posted at:

http://www.sapient.com/about+us/Investors.htm.

In addition, a re-broadcast of the conference call will be available from November 5 at 7:30 p.m. ET through November 12 at 11:59 p.m. ET. The replay information is as follows:

U.S.: (888) 286-8010

International: (617) 801-6888

Passcode: 45294374

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 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 the fourth quarter of 2009 – 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 leverage technology to transform their businesses. The company operates two groups that enable clients to gain a competitive advantage and succeed in an increasingly digital world. Sapient's Brand Experience group combines best-of-breed digital marketing with world-class brand strategy, traditional advertising and deep technology to help clients create impactful marketing, commerce and customer care experiences. Sapient's Business and Technology group provides strategy, systems design and implementation, business intelligence and process solutions that enable companies to optimize their business processes, drive efficiencies and achieve greater profit growth.

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. Headquartered in Boston, Sapient operates across North America, Europe, Asia and Australia. For more information, please visit www.sapient.com.

Sapient is a registered service mark of Sapient Corporation.