<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000 OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER: 000-26303
DIGITAS INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 04-3494311
(State or Other Jurisdiction (I.R.S. Employer
Incorporation or Organization) Identification No.)
The Prudential Tower
800 Boylston Street, Boston, Massachusetts 02199
(Address of Principal Executive (Zip Code)
Offices)
617-867-1000
(Registrant's Telephone Number, Including Area Code)
NA
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [x] No [ ].
As of September 30, 2000 there were 57,595,535 shares of Common Stock,
$.01 par value, outstanding.
--------------------------------------------------------------------------------
<PAGE>
DIGITAS INC.
Form 10-Q
Table of Contents
September 30, 2000
<TABLE>
<CAPTION>
PAGE
NUMBER
------
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Statement of Operations for the Three and Nine Months
Ended September 30, 2000 and 1999............................. 3
Balance Sheet as of September 30, 2000 and
December 31, 1999............................................. 4
Statement of Cash Flows for the Nine Months
Ended September 30, 2000 and 1999............................. 5
Notes to Financial Statements................................. 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations..................................... 7
Item 3. Quantitative and Qualitative Disclosures about Market Risk.... 9
PART II. OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds...................... 10
Item 6. Exhibits and Reports of Form 8-K............................... 10
Signatures............................................................. 11
</TABLE>
--------------------------------------------------------------------------------
Page 2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
DIGITAS INC.
STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenue..................................................... $ 75,540 $ 51,047 $ 208,692 $133,907
Operating expenses:
Professional services costs............................... 42,286 28,847 113,219 73,238
Selling, general and administrative expenses.............. 25,164 16,336 71,473 45,834
Stock-based compensation.................................. 4,037 751 11,816 5,948
Amortization of intangible assets......................... 9,172 9,172 27,515 27,516
--------- --------- --------- ---------
Total operating expenses.................................. 80,659 55,106 224,023 152,536
Loss from operations........................................ (5,119) (4,059) (15,331) (18,629)
Other income (expense):
Interest income........................................... 792 12 1,747 12
Interest expense.......................................... (156) (1,823) (1,791) (5,344)
Realized and unrealized gain (loss) on investment......... - - 447 -
Other miscellaneous income................................ - - 116 -
--------- --------- --------- ---------
Loss before provision for income taxes...................... (4,483) (5,870) (14,812) (23,961)
Provision for income taxes.................................. (439) (90) (1,267) (367)
--------- --------- --------- ---------
Loss from continuing operations............................. (4,922) (5,960) (16,079) (24,328)
Extraordinary loss relating to early extinguishment of
debt (net of tax benefit of $175)......................... - - (1,653) -
--------- --------- --------- ---------
Net loss.................................................... $ (4,922) $ (5,960) $ (17,732) $ (24,328)
========= ========= ========= =========
Net loss per share (Note 2)- basic and diluted
Loss from continuing operations........................... $ (0.09) $ (0.12) $ (0.29) $ (0.48)
Extraordinary loss........................................ - - $ (0.03) -
--------- --------- --------- ---------
Net loss.................................................. $ (0.09) $ (0.12) $ (0.32) $ (0.48)
========= ========= ========= =========
Weighted average common shares outstanding (Note 2)
Basic and diluted......................................... 57,536 50,452 55,683 50,225
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
--------------------------------------------------------------------------
Page 3
<PAGE>
DIGITAS INC.
BALANCE SHEET
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
------------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents...................................... $ 41,784 $ 441
Accounts receivable, net of allowance for doubtful accounts
of $1,829 and $1,053 at September 30, 2000 and December 31,
1999, respectively............................................ 66,423 40,296
Accounts receivable, unbilled.................................. 50,457 25,521
Other current assets........................................... 2,079 1,999
-------- --------
Total current assets.......................................... 160,743 68,257
Fixed assets, net................................................ 29,556 20,237
Intangible assets, net........................................... 134,657 162,172
Other assets..................................................... 7,367 2,223
-------- --------
Total assets.................................................. $332,323 $252,889
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable............................................... $ 16,024 $ 15,352
Current portion of long-term debt.............................. 204 7,530
Billings in excess of cost and estimated earnings on
uncompleted contracts......................................... 32,707 17,761
Accrued expenses............................................... 15,388 12,717
Accrued compensation........................................... 14,734 16,369
Capital lease obligations...................................... 321 398
-------- -------
Total current liabilities..................................... 79,378 70,127
Long-term debt, less current portion............................. 1,098 62,422
Capital lease obligation, long-term portion...................... 399 456
Other long-term liabilities...................................... - 48
-------- --------
Total liabilities............................................. 80,875 133,053
Commitments
Shareholders' equity:
Preferred shares, $.01 par value per share; 25,000,000 shares
authorized and none issued and outstanding at September 30,
2000.......................................................... - -
Common shares, no par value per share, 50,703,480 shares
authorized, issued and outstanding at December 31, 1999....... - -
Common shares, $.01 par value per share, 175,000,000 shares
authorized and 57,595,535 shares issued and outstanding at
September 30, 2000............................................ 576 -
Additional paid-in capital..................................... 364,425 208,153
Accumulated deficit............................................ (57,760) (40,028)
Deferred compensation.......................................... (55,793) (48,289)
-------- -------
Total shareholders' equity.................................... 251,448 119,836
-------- --------
Total liabilities and shareholders' equity.................... $332,323 $252,889
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
---------------------------------------------------------------------------
Page 4
<PAGE>
DIGITAS INC.
STATEMENT OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
--------------------------
2000 1999
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net loss ...................................................................... $ (17,732) $(24,328)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization ................................................. 34,549 32,304
Gain on disposal of fixed assets .............................................. - 74
Stock-based compensation ...................................................... 11,816 5,948
Provision for doubtful accounts ............................................... 840 929
Extraordinary loss ............................................................ 1,653 -
Changes in operating assets and liabilities:
Accounts receivable .......................................................... (26,967) (11,049)
Accounts receivable, unbilled ................................................ (24,936) (17,257)
Other current assets ......................................................... (80) (122)
Other assets ................................................................. (1,413) (282)
Accounts payable ............................................................. 672 (1,321)
Billings in excess of costs and estimated
earnings on uncompleted contracts ........................................... 14,946 8,365
Accrued expenses ............................................................. (680) 4,531
Accrued compensation ......................................................... 686 (677)
Other long-term liabilities .................................................. (48) -
--------- --------
Net cash used in operating activities ....................................... (6,694) (2,885)
--------- --------
Cash flows from investing activities:
Purchase of fixed assets ...................................................... (16,083) (5,398)
Business acquired net of cash ................................................. - (65,200)
--------- --------
Net cash used in investing activities .......................................... (16,083) (70,598)
--------- --------
Cash flows from financing activities:
Principal payments under capital lease obligations ............................ (326) (132)
Net proceeds from line of credit, bank ........................................ - 8,000
Proceeds from note payable, bank, net of debt issuance
costs ........................................................................ - 70,558
Payment of note payable, tenant allowances .................................... (145) (114)
Payment of notes payable, bank ................................................ (68,505) (2,446)
Payment of notes payable, shareholders ........................................ (4,432) -
Distributions to shareholders ................................................. - (2,461)
Proceeds from issuance of common stock ........................................ 137,528 1,407
--------- --------
Net cash provided by financing activities ...................................... 64,120 74,812
--------- --------
Net increase in cash and cash equivalents ...................................... 41,343 1,329
Cash and cash equivalents, beginning of period ................................. 441 37
--------- --------
Cash and cash equivalents, end of period ....................................... $ 41,784 $ 1,366
========= ========
Supplemental disclosure of cash flow information:
Cash paid for taxes ........................................................... $ 1,376 $ 1,011
Cash paid for interest ........................................................ 1,872 4,622
Supplemental disclosures of noncash investing and financing activities:
Issuance of notes payable to shareholders (Note 4) ............................ $ 4,432 $ -
Change in par value of common stock ........................................... 507 -
Assets acquired under capital lease obligations ............................... 192 606
</TABLE>
The accompanying notes are an integral part of these financial statements.
--------------------------------------------------------------------------------
Page 5
<PAGE>
DIGITAS INC.
NOTES TO FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
by Digitas Inc. (the "Company") in accordance with generally accepted accounting
principles. Accordingly, they do not include all of the information and
footnotes required for complete financial statements and should be read in
conjunction with the audited financial statements and notes thereto for the year
ended December 31, 1999 included in the Company's Registration Statement on Form
S-1, as amended. The accompanying unaudited financial statements reflect all
adjustments (consisting solely of normal, recurring adjustments) which are, in
the opinion of management, necessary for a fair presentation of results of
operations for the interim periods presented. The results for these periods are
not necessarily indicative of the results to be expected for any future period
or the full fiscal year.
2. NET LOSS PER SHARE
Basic and diluted earnings per share are computed in accordance with Statement
of Financial Accounting Standards ("SFAS") No. 128, "Earnings per Share". SFAS
No. 128 requires both basic earnings per share, which is based on the weighted
average number of common shares outstanding, and diluted earnings per share,
which is based on the weighted average number of common shares outstanding and
all dilutive potential common equivalent shares outstanding. The dilutive effect
of options is determined under the treasury stock method using the average
market price for the period. Common equivalent shares are included in the per
share calculations where the effect of their inclusion would be dilutive.
As of September 30, 1999 and 2000, no options and warrants were included in the
above calculation as their effect would have been antidilutive.
3. CAPITAL STOCK
On March 16, 2000, the Company completed an initial public offering of Common
Stock which resulted in the issuance of 6,200,000 shares of Common Stock.
Proceeds to the Company, net of underwriting discounts and costs of the
offering, were approximately $134.7 million.
During the nine months ended September 30, 2000, the Company granted
approximately 2.4 million (net) stock options to employees at exercise prices,
which at the time of grant were below the fair market value of the Company's
common stock. We have estimated the cumulative compensation on these options to
be approximately $21.6 million, which is being recognized over the vesting
period of the underlying stock options.
4. DEBT
At December 31, 1999, the Company had outstanding $68,505,000 of a $73,399,000
term loan with a bank. Upon the completion of the initial public offering, the
Company repaid the $68,505,000 balance.
In addition, the Company repaid a total of $4,432,000, $2,111,000 of which was
included in accrued expenses and $2,321,000 of which was included in accrued
compensation at December 31, 1999, to shareholders of the Company. Prior to
repayment in March 2000, these amounts were converted to formal note payable
agreements.
In July 2000, The Company entered into a Credit Agreement (the "New Agreement")
that replaced the existing Credit Agreement. The New Agreement includes a
revolving line of credit and a standby letter of credit facility. Under the line
of credit terms, the maximum line is equal to $30 million less outstanding
standby letters of and credit and expires on July 25, 2003. Amounts borrowed
under the revolving credit
--------------------------------------------------------------------------------
Page 6
<PAGE>
facility bear interest at either the prime rate or at a Eurocurrency rate
plus an applicable margin of 1.25% - 2.00%, depending on the Company's
leverage ratio. Additionally, the company is required to pay a commitment fee
of 0.125% or 0.25% of the average daily unused amount of the revolving
credit, depending on the Company's leverage ratio. The credit facility
contains certain financial and non-financial restrictive covenants. At
September 30, 2000 the Company had no borrowings under the revolving credit
and approximately $12.1 million outstanding standby letters of credit,
leaving $17.9 million available for future borrowings.
5. EXTRAORDINARY LOSS
In March 2000, an extraordinary loss of $1,653,000 (net of a tax benefit of
$175,000) was recognized upon the early retirement of the $68,505,000 of debt.
6. NEW ACCOUNTING PRONOUNCEMENTS
In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin No. 101, "Revenue Recognition in Financial Statements," ("SAB 101"),
which is required to be adopted in the fourth calendar quarter of 2000. SAB 101
sets forth certain criteria, including the existence of persuasive evidence of
an arrangement, which must be met in order that revenue be recognized. The
Company anticipates that the adoption of SAB 101 will not have a significant
effect on the financial condition or results of operations of the Company.
In March 2000, the Financial Accounting Standards Board issued FASB
Interpretation No. 44, "Accounting for Certain Transactions involving Stock
Compensation, an Interpretation of APB Opinion No. 25" ("FIN 44"). FIN 44
clarifies the application of Accounting Principles Board ("APB") Opinion No.
25 and among other issues clarifies the following: the definition of an
employee for purposes of applying APB Opinion No. 25; the criteria for
determining whether a plan qualifies as a noncompensatory plan; the
accounting consequences of various modifications to the terms of previously
fixed stock options or awards; and the accounting for an exchange of stock
compensation awards in a business combination. FIN 44 was effective July 1,
2000, but certain conclusions in FIN 44 cover specific events that occurred
after either December 15, 1998 or January 12, 2000. The application of FIN 44
has not had a significant effect on the financial condition or results of
operations of the Company.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 2000
Revenue. Net revenues for the third quarter of 2000 increased by 48% to $75.5
million from $51.0 million for the third quarter of 1999. The $24.5 million
increase in revenue is attributable to new clients, growth of existing clients,
as well as higher average billing rates. Certain of our contracts contain
discretionary bonus provisions whereby we get additional compensation based on
our performance as evaluated by our clients. We recognize bonus revenue in the
period we are informed that the bonus has been awarded.
Professional service costs. Professional service costs for the third quarter of
2000 increased $13.5 million, or 47%, to $42.3 million from $28.8 million in the
third quarter of 1999. As a percentage of revenue, professional service costs
decreased from 57% of revenue in the third quarter of 1999 to 56% of revenue in
the third quarter of 2000. We continue to expand operations and hire
professionals to keep up with client demand, yet at the same time we are
profitably growing the business.
--------------------------------------------------------------------------------
Page 7
<PAGE>
Selling, general and administrative expense. Selling, general and administrative
expenses increased $8.9 million, or 55%, to $25.2 million from $16.3 million in
the third quarter of 1999. The increase is due to increased personnel costs,
growth in administrative headcount, and rent and other expenses related to
regional office expansions. As a percentage of revenue, selling, general and
administrative expenses increased slightly from 32% of revenue in the third
quarter of 1999 to 33% in the third quarter of 2000. The increase is a direct
result of expanding operations.
Stock-based compensation. Stock-based compensation consists of non-cash
compensation arising from stock options granted to employees at exercise prices
below the estimated fair value of the underlying common stock. The Company
recognized $4.0 million of stock-based compensation expense for the quarter
ended September 30, 2000.
Amortization of intangible assets. In connection with the recapitalization in
January 1999, the Company recorded $198.9 million of goodwill and other
intangible assets. This amount is being amortized over two to seven years.
Provision for income taxes. In accordance with accounting principles generally
accepted in the United States, the Company provides for income taxes on an
interim basis, using the estimated annual effective income tax rate. The
effective income tax rate is lower than the combined federal and state statutory
rates due primarily to an increase in the valuation allowance for deferred tax
assets.
COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 2000
Revenue. Net revenues for the first nine months of 2000 increased by 56% to
$208.7 million from $133.9 million for the first nine months of 1999. The $74.8
million increase in revenue is attributable to new clients, growth of existing
clients, as well as higher average billing rates. Certain of our contracts
contain discretionary bonus provisions whereby we get additional compensation
based on our performance as evaluated by our clients. We recognize bonus revenue
in the period we are informed that the bonus has been awarded.
Professional service costs. Professional service costs for the first nine months
of 2000 increased $40.0 million, or 55%, to $113.2 million from $73.2 million in
the first nine months of 1999. As a percentage of revenue, professional service
costs decreased from 55% of revenue for the first nine months of 1999 to 54% for
the first nine months of 2000. We continue to expand operations and hire
professionals to keep up with client demand, yet at the same time we are
profitably growing the business.
Selling, general and administrative expense. Selling, general and administrative
expenses increased $25.7 million, or 56%, to $71.5 million from $45.8 million in
the first nine months of 1999. The increase is due to increased personnel costs,
growth in administrative headcount, and rent and other expenses related to
regional office expansions. As a percentage of revenue, selling, general and
administrative expenses remained level at 34%.
Stock-based compensation. Stock-based compensation consists of non-cash
compensation arising from stock options granted to employees at exercise prices
below the estimated fair value of the underlying common stock. The Company
recognized $11.8 million of stock-based compensation expense for the nine months
ended September 30, 2000.
Amortization of intangible assets. In connection with the recapitalization in
January 1999, the Company recorded $198.9 million of goodwill and other
intangible assets. This amount is being amortized over two to seven years.
Provision for income taxes. In accordance with accounting principles generally
accepted in the United States, the Company provides for income taxes on an
interim basis, using the estimated annual effective income tax rate. The
effective income tax rate is lower than the combined federal and state statutory
rates due primarily to an increase in the valuation allowance for deferred tax
assets.
--------------------------------------------------------------------------------
Page 8
<PAGE>
Liquidity and Capital Resources
From inception through the recapitalization, which occurred in January 1999, the
Company funded its operations primarily through cash provided by operations,
notes from shareholders and bank borrowings. In connection with the
recapitalization, the Company established credit facilities totaling $93.4
million to repay its existing bank borrowings, repay its notes to shareholders,
make transaction payments and repurchase shares in connection with the
recapitalization and provide working capital to fund ongoing operations, as well
as build out our Boston office for costs incurred in excess of the lease
allowance.
The Company's cash and cash equivalents increased from $0.4 million at the end
of 1999 to $41.8 million as of September 30, 2000. This increase is primarily
from the net proceeds totaling approximately $134.7 million from the issuance of
6,200,000 shares of common stock in the initial public offering on March 13,
2000. These proceeds were used to pay off a $68.5 million debt balance with the
bank and notes payable to shareholders totaling $4.4 million. Proceeds from the
issuance of common stocks subsequent to the initial public offering have totaled
$2.3 million. In addition, proceeds have been used to fund $6.7 of operations
and purchase $16.1 million of fixed assets.
The Company believes that its current cash and cash equivalents and funds
available under the revolving line of credit will be sufficient to meet the
Company's working capital and capital expenditure requirements for at least the
next 12 to 18 months.
Forward-looking Statements
This Form 10-Q contains forward-looking statements. You can identify these
statements by forward looking words such as "may," "will," "expect,"
"anticipate," "believe," "estimate," and "continue" or similar words. You should
read statements that contain these words carefully because they discuss our
future expectations, certain projections of our future results of operation or
of our financial condition or state other forward-looking information. We
believe that it is important to communicate our future expectations to our
investors. However, there may be events in the future that we are not able to
accurately predict or control and that may cause our actual results to differ
materially from the expectations we described in our forward-looking statements.
Investors are cautioned that all forward-looking statements involve risks and
uncertainties, and actual results may differ materially from those discussed as
a result of various factors, including the loss of a significant client, failure
to meet client expectations, failure to create a worldwide network of offices,
failure to attract and retain qualified professionals, loss of key personnel,
failure to manage our growth, failure to maintain our reputation and expand our
name recognition, failure to keep up with technological advances, evolving
industry standards and changing client requirements, failure of the Internet to
expand as a means of conducting business, failure to compete, actual or
perceived conflicts of interest restricting our ability to obtain new clients,
failure to effectively integrate acquisitions, failure to raise additional
capital if necessary, failure to successfully defend future lawsuits, failure to
protect our intellectual property and proprietary rights and changes in
government regulation of the Internet. These factors should be considered
carefully and readers should not place undue reliance on the forward-looking
statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Under the terms of our 1999 credit agreement, the Company utilized interest
rate swap agreements to fix interest rates on portions of the rate term loan
and to mitigate the effect of changes in interest rates on earnings. We
entered into separate agreements on February 22 and 24, 1999, each for a
notional amount of $20.0 million and each having a maturity date of February
2001. Under the terms of the agreements, we locked in fixed rates of 5.36%
and 5.30% on the notional amounts and we compensated the financial
institution or were compensated by the financial institution for the
differential between
--------------------------------------------------------------------------------
Page 9
<PAGE>
the fixed rates and the current LIBOR rate. Through March 14, 2000, the interest
rate differential payable or receivable on the agreements was recognized on an
accrual basis as an adjustment to interest expense. At December 31, 1999 the
fair values of the interest rate swaps, which represent the amounts we would
have received or paid to terminate the respective agreements, were net
receivables of $240,000 and $273,000 based on dealer quotes. The variable rates
at December 31, 1999 were 6.5% and 6.1%. Immediately following the initial
public offering, the Company repaid the entire outstanding term loan balance
with the bank. As a result, the interest rate swap agreements were no longer
considered necessary as a hedge. These interest rate swap agreements were
terminated in April 2000 at a total value of $447,000. A realized gain on
investments of $447,000 is included in the income statement for the nine months
ended September 30, 2000.
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
On March 13, 2000, the Securities and Exchange Commission declared Digitas'
Registration Statement on Form S-1 (File No. 333-93585) effective. On March
16, 2000, Digitas closed its offering for an aggregate of 6,200,000 shares of
the Digitas Common Stock at an offering price of $24.00 per share. The
managing underwriters for the offering were Morgan Stanley Dean Witter,
Deutsche Banc Alex. Brown, Salomon Smith Barney, Banc of America Securities
LLC and Bear, Stearns & Co, Inc. Net proceeds to Digitas were approximately
$134,700,000 after deducting underwriting discounts and commissions of
$10,400,000 and offering expenses of $3,700,000. Except for approximately
$2,300,000 used to repay an outstanding note issued in connection with the
repurchase of options from an officer and director and approximately
$2,100,000 used to repay an outstanding note issued in connection with the
repurchase of options and warrants from a 10% holder of common shares, none
of these net proceeds were paid directly or indirectly to any of our
directors or officers or their associates, or to persons owning 10% or more
of any class of our equity securities or our affiliates.
The primary purposes of the initial public offering were to increase the
Company's equity capital, create a public market for its common stock and to
facilitate future access by Digitas to public equity markets. Digitas used $72.9
million of the net proceeds to repay long-term debt and notes payable to
shareholders and plans to use the remainder of the proceeds for working capital
and general corporate uses.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
10.1 Copley Place Office Lease, dated as of March 3, 2000, by and
between Copley Place Associates, LLC and Digitas LLC.
10.2 First Amendment to Copley Place Office Lease, dated as of
June 15, 2000, by and between Copley Place Associates, LLC
and Digitas LLC.
10.3 Second Amendment to Copley Place Office Lease, dated as of
October 6, 2000, by and between Copley Place Associates, LLC
and Digitas LLC.
10.4 London Office Lease, dated as of July 27, 2000, by and
between the Mayor and Commonality and Citizens of the City of
London and Digitas (Europe) Inc. and Digitas Inc.
10.5 Revolving Credit Agreement, dated as of July 25, 2000, by and
among Digitas LLC. (as borrower); The Lenders listed therein
(as lenders); Fleet National Bank (as agent); and Digitas,
Inc., Vesuvio, Inc., Bronner Slosberg Humphrey Co., and BSH
Holding LLC (as guarantors).
11.1 Computation of shares used in computing Basic and Diluted Net
Income (Loss) per Share.
--------------------------------------------------------------------------------
Page 10
<PAGE>
27.1 Financial data schedule.
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the quarter for which
this report is filed.
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 thereunto duly authorized.
DIGITAS INC.
Date: November 13, 2000 By /s/ David W. Kenny
-------------------------------------
David W. Kenny
Director, Chairman and Chief Executive
Officer
Date: November 13, 2000 By /s/ Michael Goss
-------------------------------------
Michael Goss
Executive Vice President and
Chief Financial Officer
--------------------------------------------------------------------------------
Page 11
