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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): October 20, 1999
Scient Corporation
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(Exact Name of Registrant as Specified in Charter)
Delaware 000-25893 94-3288107
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
One Front Street, 28th Floor, San Francisco, California 94111
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(Address of Principal Executive Offices) (Zip Code)
Company's telephone number, including area code: (415) 733-8200
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(Former Name or Former Address, if Changed Since Last Report.)
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ITEM 5. OTHER EVENTS
The Company has announced that Morgan Stanley Dean Witter, the lead
underwriter for the Company's initial public offering, has agreed to an early
release of the underwriters' lock-up restrictions on up to 535,995 shares of the
Company's common stock. These shares will be available for sale starting on
October 25, 1999.
Further details regarding this announcement are contained in the
Company's press release dated October 20, 1999, attached as an exhibit hereto.
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ITEM 7. EXHIBITS.
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<CAPTION>
Exhibit
Number Description
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<S> <C>
99.1 Press release, dated October 20, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SCIENT CORPORATION
Date: October 21, 1999 By: /s/ William H. Kurtz
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Name: William H. Kurtz
Title: Chief Financial Officer,
Executive Vice President
and Treasurer
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EXHIBIT INDEX
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<CAPTION>
Exhibit
Number Description
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<S> <C>
99.1 Press release, dated October 20, 1999.
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EXHIBIT 99.1
Contacts:
Jeb Miller Meredith McGann
Director of Business Development Public Relations Manager
Scient Scient
415/591-3907 415/733-8849
[email protected] [email protected]
SCIENT REPORTS FISCAL SECOND QUARTER RESULTS
Strong Execution and High-Value Systems Innovation Focus
Drives Record Sequential Growth
SAN FRANCISCO, October 20, 1999 - Scient (NASDAQ: SCNT), The eBusiness
Systems Innovator(TM), today reported results for its second fiscal quarter
(FY2000) ended September 30, 1999.
Revenues for the second fiscal quarter were $30.8 million, a sequential
increase of 88% from revenues of $16.4 million for the first quarter ended June
30, 1999, and an increase of 895% from revenues of $3.1 million for the same
period a year ago. Total headcount grew to 661 colleagues, up from 415 at the
end of the first fiscal quarter and up significantly from 120 at the end of the
same period a year ago. Professional services headcount grew to 484 colleagues,
up from 291 at the end of the first fiscal quarter.
Professional services margins were approximately 54%, versus 52% in the
first fiscal quarter and 42% in the same period a year ago. Pro forma net loss
(excluding stock compensation charges) narrowed by 59% in the second quarter to
$1.6 million, representing a pro forma net loss per diluted share of $0.04,
compared to the first quarter's pro forma net loss (excluding stock compensation
charges) of $4.0 million, or pro forma net loss per diluted share of $0.11.
Before pro forma adjustments, net loss for the second quarter was $5.8 million,
representing a net loss per share of $0.21.
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Commenting on the quarter, Bob Howe, president and CEO of Scient, said,
"By any measure, we are pleased with our results this quarter. By maintaining
our focus on the high-value systems innovation market and continuing to execute
on the delivery of superior client and colleague satisfaction, we were able to
achieve record sequential revenue growth and strengthen our industry-leading
position."
"Scient began to realize substantial operating leverage this quarter
from the infrastructure investments we are making," noted Bill Kurtz, executive
vice president and CFO of Scient. "We are continuing to invest aggressively to
expand our capacity and operations infrastructure to serve clients globally and
position Scient for long-term sustainable growth. We are also pleased to
announce the formation of Scient Capital, a strategic investment vehicle that
provides the opportunity to strengthen long-term client relationships and
participate in the value-creation potential of our clients."
"In addition to delivering strong results, this quarter we focused on
building out our six vertical industry business units and increasing the breadth
and depth of our innovation centers," added Bob Howe. "In particular, we
expanded our customer experience and innovation capabilities through the launch
of our Innovation Acceleration Lab and the addition of several key design
professionals to augment our customer experience strategy, design, information
architecture, content strategy and customer research skill sets."
Concurrent with this announcement, Morgan Stanley Dean Witter, the lead
underwriter for Scient's initial public offering, has authorized the release of
an aggregate of 535,995 shares from IPO lockup agreements. The released shares
are held by Scient colleagues and certain participants in the IPO directed share
program, exclusive of Scient's executive officers. These shares will be
available for sale no earlier than October 25, 1999.
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FISCAL Q2 OPERATIONAL HIGHLIGHTS
o Served 40 clients, including 11 new clients such as:
- Fasturn.com (global business-to-business internet textile
exchange)
- Hambrecht & Quist
- Johnson & Johnson
- PointServe (eCommerce solutions provider for mobile service
industries)
- Washington Mutual Bank
o Validation of our value proposition with the successful IPOs of
homestore.com and PlanetRx.com and the successful launches of Miadora
(fine jewelry and gifts provider) and Sephora.com (retail beauty
products provider)
o Deepening relationships with clients such as BenefitPoint, Chase
Manhattan Bank, Hewitt Associates, homebid.com, Inacom, NASDAQ and
Starwood Hotels
o Expanded customer experience and innovation capabilities
- Launched the Scient Innovation Acceleration Lab
- Announced the hiring of Garry Van Patter as Master Information
Architect and John Rheinfrank as Master Architect, Customer
Experience
o Marketing programs emphasized continued brand building and thought
leadership in the business and trade press as well as through industry
event participation and Scient conferences
- eBusiness Innovation Day in New York City
- eBriefing in Boston
o Opened fourth office in Boston
o Launched Scient Capital to provide the opportunity to strengthen
long-term client relationships and participate in the value-creation
potential of our clients
- Invests minority positions in Scient clients
- Investments made exclusive of engagement fees
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ABOUT SCIENT(R): THE EBUSINESS SYSTEMS INNOVATOR(TM)
Scient is the premier firm in the new category of professional services called
systems innovation. Scient delivers electronic business solutions to create
market leadership and shareholder value for clients. Scient provides:
1. eBusiness strategy.
2. eBusiness systems that are rapidly architected, engineered, and
delivered.
3. Just-in-time innovations that enhance and extend eBusinesses.
Headquartered in San Francisco with offices in New York, Dallas and Boston,
Scient can be reached at www.scient.com or 415.733.8200 in San Francisco and
917.534.8200 in New York.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995 The statements contained in this press release that are not purely
historical are forward-looking statements within the meaning of Section 21E of
the Securities Exchange Act of 1934, as amended, including statements regarding
the Company's expectations, beliefs, hopes, intentions or strategies regarding
the future. All forward-looking statements included in this press release are
based upon information available to the Company as of the date hereof and the
Company assumes no obligation to update any such forward-looking statement.
Actual results could differ materially from the Company's current expectations.
Factors that could cause or contribute to such differences include but are not
limited to, our ability to attract, train and retain qualified personnel; the
highly competitive market in which we operate; our ability to manage growth; our
ability to establish international operations; the development and
sustainability of a market for systems innovation services; our ability to keep
pace with technological changes; our ability to integrate potential future
acquisitions; and Year 2000 issues. In evaluating this information, you should
specifically review and consider the risks outlined in our Form 10-Q for the
quarter ended June 30, 1999 and our final prospectus dated May 13, 1999, both on
file with the Securities and Exchange Commission.
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SCIENT CORPORATION
BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 31, 1999 SEPT. 30, 1999
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<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 11,261 $ 14,277
Short-term investments 16,868 35,709
Accounts receivable, net 6,141 25,882
Prepaid expenses and other current
assets 864 7,737
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Total current assets 35,134 83,605
Long-term investments -- 22,740
Notes receivable 160 --
Property and equipment, net 3,410 5,687
Other assets 108 258
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$ 38,812 $ 112,290
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Bank borrowings, current $ 413 $ 1,106
Accounts payable 832 1,598
Accrued expenses 4,632 15,838
Deferred revenue 524 1,427
Capital lease obligations, current 625 721
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Total current liabilities 7,026 20,690
Bank borrowings, long-term 1,129 1,424
Capital lease obligations, long-term 680 604
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Total liabilities 8,835 22,718
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Commitments
Stockholders' equity
Convertible preferred stock 1 --
Common stock 2 4
Additional paid in capital 70,056 137,577
Unearned compensation (27,222) (20,935)
Accumulated deficit (12,860) (27,074)
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Total stockholders' equity 29,977 89,572
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$ 38,812 $ 112,290
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SCIENT CORPORATION
STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
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SEPT 30, 1998 SEPT 30, 1999 SEPT 30, 1998 SEPT 30, 1999
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<S> <C> <C> <C> <C>
Revenue $ 3,094 $ 30,805 $ 5,018 $ 47,209
Operating expenses
Professional services 1,795 14,233 2,738 22,173
Selling, general and administrative 1,630 19,212 2,855 32,315
Stock compensation 1,143 4,173 1,501 8,522
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Total operating expenses 4,568 37,618 7,094 63,010
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Loss from operations (1,474) (6,813) (2,076) (15,801)
Interest income, net 186 992 265 1,588
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Net loss $ (1,288) $ (5,821) $ (1,811) $ (14,213)
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Net loss per share
Basic and diluted $ (0.21) $ (0.21) $ (0.30) $ (0.61)
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Weighted average shares 6,155 27,924 6,068 23,414
Pro forma information
Pro forma net loss(a) $ (145) $ (1,648) $ (310) $ (5,691)
Pro forma net loss per diluted $ (0.01) $ (0.04) $ (0.01) $ (0.15)
share(a)(b)
Shares used in computing pro forma
net loss per diluted share(b) 25,776 38,938 23,961 37,390
</TABLE>
(a) Excludes stock compensation charges
(b) Includes all common stock equivalents including the conversion of
Scient's preferred stock, which converted to common stock upon the
closing of Scient's initial public offering, as if the conversion
occurred as of the beginning of the period or the date of issuance, if
later
