EX-99.1 2 c87112exv99w1.htm PRESS RELEASE exv99w1
 

Exhibit 99.1

DIAMONDCLUSTER INTERNATIONAL REPORTS FIRST QUARTER
FISCAL YEAR 2005 RESULTS

Strong Growth in North America Drives 32% Year-over-Year Net Revenue Increase

CHICAGO, July 29, 2004—DiamondCluster International, Inc. (Nasdaq: DTPI), a premier global management consulting firm, today announced results for its first quarter of fiscal year 2005 (ended June 30, 2004).

Net revenue (revenue before reimbursable expenses) for the first quarter was $44.9 million, compared with $34.0 million for the first quarter of fiscal year 2004 and $43.0 million for the prior quarter. The Company reported net income of $3.4 million or $0.10 per diluted share for the first quarter of fiscal year 2005, compared with a loss of ($10.1) million or a loss of ($0.31) per diluted share for the first quarter of fiscal year 2004 and net income of $3.2 million or $0.09 per diluted share for the prior quarter. The Company ended the first quarter of fiscal year 2005 with a cash balance of $72.7 million.

“Our strong performance in the June quarter was the result of continued improving demand in North America,” said Mel Bergstein, chairman and CEO of DiamondCluster International. “Companies continue to look to us to help them grow their business, improve productivity, and comply with new regulations.”

DiamondCluster served 79 clients in the first quarter of fiscal year 2005, up from 66 in the year-ago period. The company added 23 new clients in the quarter. North American clients represented 61% of net revenue in the first quarter of fiscal year 2005.

As of June 30, 2004, DiamondCluster had 487 client-serving professionals, compared with 481 at June 30, 2003. Annualized revenue per professional was $371 thousand in the first quarter of fiscal year 2005, up from $367 thousand in the prior quarter and up from $267 thousand in the year-ago period.

“We are returning to the practice of giving fiscal year, as well as quarterly guidance, reflecting our improved confidence in the business.” said Bergstein. “We are expecting the September quarter to be another strong quarter, driven primarily by demand in North America. We are expecting net revenue for the September quarter to be in the range of $46 million to $48 million and earnings to be $0.11 to $0.12 per diluted share. For the full fiscal year (ending March 31, 2005), we are expecting net revenue in the range of $189 million to $198 million, in line with our 25% annual net revenue growth target, and earnings of $0.46 to $0.50 per diluted share.”

1

 

About DiamondCluster International

DiamondCluster International (Nasdaq: DTPI) is a premier global management consulting firm that helps leading organizations develop and implement growth strategies, improve operations, and capitalize on technology. Mobilizing multidisciplinary teams from our highly skilled strategy, technology, and operations professionals worldwide, DiamondCluster works collaboratively with clients, unleashing the power within their own organizations to achieve sustainable business advantage. DiamondCluster is headquartered in Chicago, with offices across Europe, North America, and South America. To learn more, visit www.diamondcluster.com.

Conference Call

Management from DiamondCluster International will host a conference call today, July 29, 2004 at 8:00 am CT to discuss the results of the quarter. The call will be broadcast live and archived on DiamondCluster’s web site at www.diamondcluster.com.

Forward-Looking Statement

Statements in this press release that do not involve strictly historical or factual matters are forward-looking statements within the meaning of the “safe harbor” provisions of the federal securities laws. Forward-looking statements involve risks and uncertainties and speak only as of the date of this release. Actual results may differ materially due to such factors as the ability of the Company to maintain its pricing and utilization rates and control its costs, the sustainability of the economic recovery in the U.S. and Northern European markets, recruitment and retention of personnel, possible termination of projects by major clients, variations in the timing, initiation or completion of client assignments, absence of long-term contracts with clients, growth management, project risks, and technological advances. Material risks and uncertainties are highlighted in our filings with the SEC, including the Form 10-K for the fiscal year ended March 31, 2004.

###

2

 

DIAMONDCLUSTER INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)

                 
    For the Three Months
    Ended June 30,
    2004
   2003
    (Unaudited)   (Unaudited)
REVENUE:
                
Net revenue
   $ 44,865     $ 34,030  
Reimbursable expenses
     6,686       5,187  
 
    
 		      
 		  
Total revenue
     51,551       39,217  
OPERATING EXPENSES:
                
Project personnel costs before reimbursable expenses
     27,766       23,013  
Reimbursable expenses
     6,686       5,187  
 
    
 		      
 		  
Total project personnel expenses
     34,452       28,200  
Professional development and recruiting
     1,312       709  
Marketing and sales
     786       523  
Management and administrative support
     8,195       9,475  
Stock-based compensation
     3,521       6,021  
Restructuring charge
     —       4,233  
 
    
 		      
 		  
Total operating expenses
     48,266       49,161  
 
    
 		      
 		  
INCOME (LOSS) FROM OPERATIONS
     3,285       (9,944 )
OTHER INCOME, NET
     315       402  
 
    
 		      
 		  
INCOME (LOSS) BEFORE INCOME TAXES
     3,600       (9,542 )
INCOME TAX EXPENSE
     159       511  
 
    
 		      
 		  
NET INCOME (LOSS)
   $ 3,441     $ (10,053 )
 
    
 		      
 		  
BASIC INCOME (LOSS) PER SHARE OF COMMON STOCK
   $ 0.10     $ (0.31 )
 
    
 		      
 		  
DILUTED INCOME (LOSS) PER SHARE OF COMMON STOCK
   $ 0.10     $ (0.31 )
 
    
 		      
 		  
SHARES USED IN COMPUTING BASIC INCOME (LOSS) PER SHARE
     33,385       32,046  
SHARES USED IN COMPUTING DILUTED INCOME (LOSS) PER SHARE
     35,299       32,046  

3

 

DIAMONDCLUSTER INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

                 
    June 30,   March 31,
    2004
   2004
    (Unaudited)   (Unaudited)
ASSETS
                
Current assets:
                
Cash and cash equivalents
   $ 72,701     $ 81,304  
Accounts receivable, net of allowance of $1,421 and $1,650 as of June 30, 2004 and March 31, 2004, respectively
     29,085       23,219  
Income taxes receivable
     349       569  
Prepaid expenses
     6,748       10,373  
 
    
 		      
 		  
Total current assets
     108,883       115,465  
Computers, equipment, leasehold improvements and software, net
     5,897       6,473  
Other assets
     686       729  
 
    
 		      
 		  
Total assets
   $ 115,466     $ 122,667  
 
    
 		      
 		  
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
Current liabilities:
                
Accounts payable
   $ 4,974$     $ 6,250  
Restructuring accrual, current portion
     3,347       3,528  
Accrued expenses and other
     17,786       26,102  
 
    
 		      
 		  
Total current liabilities
     26,107       35,880  
Restructuring accrual, less current portion
     5,200       6,000  
 
    
 		      
 		  
Total liabilities
     31,307       41,880  
Stockholders’ equity:
                
Common stock, 34,354 shares outstanding as of June 30, 2004 and 34,347 shares outstanding as of March 31, 2004
     563,066       563,585  
Unearned compensation
     (5,289 )     (6,324 )
Accumulated other comprehensive income
     2,273       2,858  
Accumulated deficit
     (475,891 )     (479,332 )
 
    
 		      
 		  
Total stockholders’ equity
     84,159       80,787  
 
    
 		      
 		  
Total liabilities and stockholders’ equity
   $ 115,466     $ 122,667  
 
    
 		      
 		  

4

 

DIAMONDCLUSTER INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

                 
    For the Three Months
    Ended June 30,
    2004
   2003
    (Unaudited)   (Unaudited)
Cash flows from operating activities:
                
Net income (loss)
   $ 3,441     $ (10,053 )
Adjustments to reconcile net income (loss) to net cash used in operating activities:
                
Restructuring charge
     —       4,233  
Depreciation and amortization
     875       1,219  
Write-down of net book value of property, plant, and equipment
     16       163  
Stock-based compensation
     3,521       6,021  
Tax benefits from employee stock plans
     42       133  
Changes in assets and liabilities:
                
Accounts receivable
     (6,055 )     (6,636 )
Prepaid expenses and other
     3,576       (508 )
Accounts payable
     (1,216 )     1,051  
Restructuring accrual
     (982 )     (2,961 )
Other assets and liabilities
     (8,440 )     (3,521 )
 
    
 		      
 		  
Net cash used in operating activities
     (5,222 )     (10,859 )
 
    
 		      
 		  
Cash flows from investing activities:
                
Capital expenditures, net
     (345 )     (55 )
Other assets
     54       416  
 
    
 		      
 		  
Net cash provided by (used in) investing activities
     (291 )     361  
 
    
 		      
 		  
Cash flows from financing activities:
                
Common stock issued, net
     678       2,660  
Purchase of treasury stock
     (3,725 )     —  
 
    
 		      
 		  
Net cash provided by (used in) financing activities
     (3,047 )     2,660  
 
    
 		      
 		  
Effect of exchange rate changes on cash
     (43 )     147  
 
    
 		      
 		  
Net decrease in cash and cash equivalents
     (8,603 )     (7,691 )
Cash and cash equivalents at beginning of period
     81,304       75,328  
 
    
 		      
 		  
Cash and cash equivalents at end of period
   $ 72,701     $ 67,637  
 
    
 		      
 		  

5