EX-99 3 dex99.txt PRESS RELEASE Exhibit 99 News Release FOR IMMEDIATE RELEASE Investor Contacts: Julia Wallace Potter (312) 255-5055 julia.potter@diamondcluster.com Margaret Boyce (312) 255-5487 margaret.boyce@diamondcluster.com Media Contact: David Moon 312-255-4560 david.moon@diamondcluster.com DIAMONDCLUSTER INTERNATIONAL REPORTS SECOND QUARTER FISCAL YEAR 2002 RESULTS Results in Line with Prior Guidance CHICAGO, October 24, 2001--DiamondCluster International, Inc. (Nasdaq: DTPI), a business strategy and technology solutions firm, today announced results in line with guidance for its second quarter fiscal year 2002 (ended September 30, 2001). Revenue for the second quarter was $50.1 million, compared with $59.9 million reported for the second quarter of fiscal year 2001 and pro forma revenue of $84.2 million for the second quarter of last fiscal year. Cash EPS was $0.00 per diluted share for the second quarter, compared with $0.29 per diluted share reported for the second quarter of the prior fiscal year. On a GAAP basis, the company reported a net loss of $28.2 million, or a $0.92 loss per diluted share, due primarily to the amortization of goodwill and non-cash compensation costs associated with the Cluster Consulting transaction that closed on November 28, 2000. The company increased its cash balance to $122.2 million as of September 30, 2001. For the first half of fiscal year 2002, revenue was $107.3 million compared with $112.0 million reported for the first half of fiscal year 2001 and pro forma revenue of $156.0 million for the first half of the last fiscal year. Cash EPS for the first half was $0.02 per diluted share, compared with $0.54 per diluted share for the first half of the prior fiscal year. On a GAAP basis, the company reported a net loss of $1.92 for the first half of fiscal year 2002. "We delivered results in line with our guidance in what is a very challenging time for nearly all businesses," said DiamondCluster Chairman and CEO Mel Bergstein. "Based on the further deterioration of the macro-economic environment, we have modified our planning assumptions and now anticipate an economic recovery, and thus a recovery in our business, beginning in late spring at the earliest. While near-term economic conditions worldwide remain weak, we remain confident about the long-term prospects for our (more) DIAMONDCLUSTER INTERNATIONAL SECOND QUARTER FY02 RESULTS/PAGE 2 business. We are managing expenses in concert with demand while protecting our core assets, which are our people, our clients and our intellectual capital." The company ended the September quarter with 1,095 client-serving professionals, compared with 632 on September 30, 2000 and 1,110 on June 30, 2001. Total (voluntary and involuntary) annualized consultant turnover in the quarter was 19%. The company performed work for 77 clients in the quarter, an increase over the 61 served in the second quarter of the prior year. The company served 32 new clients in the quarter, representing 13% of second quarter revenue, compared to 24 new clients or 7% of revenue in the first quarter fiscal year 2002. In the second quarter, the top five clients represented 35% of revenue and European and Latin American clients represented 50% of revenue. As a result of various personnel and other expense management actions the company plans to take in the third fiscal quarter, it expects to take a charge of approximately $12-14 million in the December quarter. The charge will consist of severance and related expenses, and other expenses related to operational restructuring. The company expects expense savings from these actions to be approximately $4 million in the December quarter, and $22 million on an annualized basis. "This is a fundamentally solid and enduring business model," continued Bergstein. "Values, discipline and focus will drive our success. We are confident in our ability to deliver value to our clients and our shareholders." Conference Call Management from DiamondCluster International will host a conference call on Wednesday, October 24, 2001 at 9:00am EDT to discuss the results of the quarter. The call will be webcast live and archived on DiamondCluster's web site at www.diamondcluster.com/investors. About DiamondCluster International DiamondCluster International, Inc. (Nasdaq: DTPI) is a premier business strategy and technology solutions firm delivering value to clients worldwide by developing and implementing innovative digital strategies that capitalize on the opportunities presented by new technologies. Headquartered in Chicago, DiamondCluster also has offices in Barcelona, Boston, Dusseldorf, Lisbon, London, Madrid, Munich, New York, Paris, San Francisco and Sao Paulo. Visit www.diamondcluster.com for more information. # # # DIAMONDCLUSTER INTERNATIONAL SECOND QUARTER FY02 RESULTS/PAGE 3 DIAMONDCLUSTER INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data)
For the Three Months Ended For the Six Months Ended -------------------------- ------------------------ Sept 30, Sept 30, Sept 30, Sept 30, 2001 2000 2001 2000 -------------------------- ------------------------ (unaudited) (unaudited) (unaudited) (unaudited) NET REVENUES $ 50,128 $ 59,878 $107,335 $112,036 -------- -------- -------- -------- OPERATING EXPENSES: Project personnel and related expenses 33,667 31,758 70,719 59,458 Professional development and recruiting 3,564 6,337 7,226 11,136 Marketing and sales 1,871 2,981 4,512 6,250 Management and administrative support 11,934 8,006 25,681 14,962 -------- -------- -------- -------- 51,036 49,082 108,138 91,806 -------- -------- -------- -------- INCOME (LOSS) FROM OPERATIONS BEFORE GOODWILL AMORTIZATION AND NONCASH COMPENSATION (908) 10,796 (803) 20,230 -------- -------- -------- -------- Goodwill amortization 15,453 396 30,883 704 Noncash compensation 13,159 - 26,976 - -------- -------- -------- -------- TOTAL OTHER EXPENSES 28,612 396 57,859 704 -------- -------- -------- -------- INCOME (LOSS) FROM OPERATIONS (29,520) 10,400 (58,662) 19,526 OTHER INCOME (EXPENSE), NET (365) 3,282 (786) 6,005 -------- -------- -------- -------- INCOME (LOSS) BEFORE INCOME TAXES (29,885) 13,682 (59,448) 25,531 INCOME TAXES (1,698) 5,336 (813) 9,957 -------- -------- -------- -------- NET INCOME (LOSS) $(28,187) $ 8,346 $(58,635) $ 15,574 ======== ======== ======== ======== BASIC EARNINGS (LOSS) PER SHARE $ (0.92) $ 0.34 $ (1.92) $ 0.64 ======== ======== ======== ======== DILUTED EARNINGS (LOSS) PER SHARE $ (0.92) $ 0.28 $ (1.92) $ 0.52 ======== ======== ======== ======== COMMON SHARES OUTSTANDING 30,775 24,231 30,553 24,198 COMMON SHARES ASSUMING DILUTION 30,775 29,859 30,553 29,768
DiamondCluster International Second Quarter FY02 Results/page 4 DIAMONDCLUSTER INTERNATIONAL, INC. CONSOLIDATED BALANCE SHEETS (In thousands)
Sept 30, March 31, 2001 2001 ----------- ---------- (unaudited) ASSETS Current assets: Cash and cash equivalents $ 122,168 $ 151,358 Accounts receivable, net of allowance of $2,333 and $2,028 as of September 30, 2001 and March 31, 2001, respectively 30,532 32,879 Prepaid expenses and deferred taxes 8,428 18,153 ---------- ---------- Total current assets 161,128 202,390 Computers, equipment and training software, net 17,490 16,182 Other assets and deferred taxes 11,693 8,084 Goodwill, net 265,149 295,600 ---------- ---------- Total assets $ 455,460 $ 522,256 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 6,538 $ 7,824 Note payable - 500 Accrued expenses and other 30,012 61,565 ---------- ---------- Total current liabilities 36,550 69,889 Stockholders' equity: Common stock, 30,988 shares outstanding as of September 30, 2001 and 30,394 shares outstanding as of March 31, 2001 609,339 611,179 Unearned compensation (149,409) (177,375) Accumulated other comprehensive income (2,197) (1,249) Retained earnings (deficit) (38,823) 19,812 ---------- ---------- Total stockholders' equity 418,910 452,367 ---------- ---------- Total liabilities and stockholders' equity $ 455,460 $ 522,256 ========== ==========
DIAMONDCLUSTER INTERNATIONAL SECOND QUARTER FY02 RESULTS/PAGE 5 DIAMONDCLUSTER INTERNATIONAL, INC. CALCULATION OF CASH EPS (In thousands, except per share data)
For the Three Months Ended For the Six Months Ended -------------------------- ---------------------------- Sept 30, Sept 30, Sept 30, Sept 30, 2001 2000 2001 2000 ----------- ----------- ----------- ----------- (unaudited) (unaudited) (unaudited) (unaudited) NET REVENUES $50,128 $59,878 $107,335 $112,036 ------- ------- -------- -------- INCOME (LOSS) FROM OPERATIONS BEFORE GOODWILL AMORTIZATION AND NONCASH COMPENSATION (908) 10,796 (803) 20,230 OTHER INCOME, NET (1) 1,039 (1) 3,282 2,005 (2) 6,005 ------- ------- -------- -------- CASH INCOME BEFORE INCOME TAXES 131 14,078 1,202 26,235 INCOME TAXES (assuming 39% effective rate) 51 5,490 469 10,232 ------- ------- -------- -------- CASH NET INCOME $ 80 $ 8,588 $ 733 $ 16,003 ======= ======= ======== ======== DILUTED CASH EARNINGS PER SHARE $ 0.00 $ 0.29 $ 0.02 $ 0.54 ======= ======= ======== ======== COMMON SHARES ASSUMING DILUTION 32,167 29,859 32,518 29,768 PRO FORMA NET REVENUES $50,128 $84,234 $107,335 $156,016
(1) Three months ended September 30, 2001 excludes a foreign exchange loss of $1.4 million. (2) Six months ended September 30, 2001 excludes a non-operating charge for a write down of equity investments of $3.6 million, and a foreign exchange gain of $0.8 million.