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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 JUNE 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 June 30, 2000 there were 57,537,234 shares of Common Stock, $.01 par
value, outstanding.
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DIGITAS INC.
Form 10-Q
Table of Contents
June 30, 2000
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PAGE
NUMBER
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Statement of Operations for the Three and Six Months
Ended June 30, 2000 and 1999.................................. 3
Balance Sheet as of June 30, 2000 and
December 31, 1999............................................. 4
Statement of Cash Flows for the Six Months
Ended June 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.... 10
PART II. OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds...................... 10
Item 6. Exhibits and Reports on Form 8-K............................... 10
Signatures............................................................. 11
</TABLE>
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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 Six Months Ended
June 30, June 30,
---------------------- ----------------------
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenue .............................................. $ 70,058 $ 44,047 $ 133,152 $ 82,860
Operating expenses:
Professional services costs ....................... 37,520 24,350 70,933 44,391
Selling, general and administrative expenses ...... 24,660 15,593 46,309 29,498
Stock-based compensation .......................... 4,118 5,197 7,779 5,197
Amortization of intangible assets ................. 9,172 9,172 18,343 18,344
--------- --------- --------- ---------
Total operating expenses .......................... 75,470 54,312 143,364 97,430
Loss from operations ................................. (5,412) (10,265) (10,212) (14,570)
Other income (expense):
Interest income ................................... 725 -- 955 --
Interest expense .................................. (125) (1,874) (1,635) (3,521)
Realized and unrealized gain (loss) on investment . (57) -- 447 --
Other miscellaneous income ........................ 18 -- 116 --
--------- --------- --------- ---------
Loss before provision for income taxes ............... (4,851) (12,139) (10,329) (18,091)
Provision for income taxes ........................... (422) (186) (828) (277)
--------- --------- --------- ---------
Loss from continuing operations ...................... (5,273) (12,325) (11,157) (18,368)
Extraordinary loss relating to early extinguishment of
debt (net of tax benefit of $175) ................. -- -- (1,653) --
--------- --------- --------- ---------
Net loss ............................................. $ (5,273) $ (12,325) $ (12,810) $ (18,368)
========= ========= ========= =========
Net loss per share (Note 2)- basic and diluted
Loss from continuing operations ................... $ (0.09) $ (0.25) $ (0.20) $ (0.37)
Extraordinary loss ................................ -- -- $ (0.03) --
--------- --------- --------- ---------
Net loss .......................................... $ (0.09) $ (0.25) $ (0.23) $ (0.37)
========= ========= ========= =========
Weighted average common shares outstanding (Note 2)
Basic and diluted ................................. 57,436 50,132 54,746 50,109
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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DIGITAS INC.
BALANCE SHEET
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
--------- ---------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ................................... $ 42,638 $ 441
Accounts receivable, net of allowance for doubtful accounts
of $2,039 and $1,053 at June 30, 2000 and December 31, 1999,
respectively ............................................... 63,301 40,296
Accounts receivable, unbilled ............................... 42,492 25,521
Other current assets ........................................ 1,861 1,999
--------- ---------
Total current assets ....................................... 150,292 68,257
Fixed assets, net ............................................. 22,838 20,237
Intangible assets, net ........................................ 143,829 162,172
Other assets .................................................. 1,472 2,223
--------- ---------
Total assets ............................................... $ 318,431 $ 252,889
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable ............................................ $ 13,086 $ 15,352
Current portion of long-term debt ........................... 199 7,530
Billings in excess of cost and estimated earnings on
uncompleted contracts ...................................... 31,296 17,761
Accrued expenses ............................................ 9,129 12,717
Accrued compensation ........................................ 11,274 16,369
Capital lease obligations ................................... 362 398
--------- ---------
Total current liabilities .................................. 65,346 70,127
Long-term debt, less current portion .......................... 1,155 62,422
Capital lease obligation, long-term portion ................... 477 456
Other long-term liabilities ................................... -- 48
--------- ---------
Total liabilities .......................................... 66,978 133,053
Commitments
Shareholders' equity:
Preferred shares, $.01 par value per share; 25,000,000 shares
authorized and none issued and outstanding at June 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 57,537,234 shares issued and outstanding at
June 30, 2000 .............................................. 575 --
Additional paid-in capital .................................. 364,213 208,153
Accumulated deficit ......................................... (52,838) (40,028)
Deferred compensation ....................................... (60,497) (48,289)
--------- ---------
Total shareholders' equity ................................. 251,453 119,836
--------- ---------
Total liabilities and shareholders' equity ................. $ 318,431 $ 252,889
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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DIGITAS INC.
STATEMENT OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
----------------------
2000 1999
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net loss ............................................................. $ (12,810) $ (18,368)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization ........................................ 22,811 21,421
Gain on disposal of fixed assets ..................................... -- (11)
Stock-based compensation ............................................. 7,779 5,197
Provision for doubtful accounts ...................................... 1,051 614
Extraordinary loss ................................................... 1,653 --
Changes in operating assets and liabilities:
Accounts receivable ................................................. (24,056) (5,534)
Accounts receivable, unbilled ....................................... (16,971) (16,494)
Other current assets ................................................ 138 (275)
Other assets ........................................................ (1,155) (282)
Accounts payable .................................................... (2,266) 561
Billings in excess of costs and estimated
earnings on uncompleted contracts .................................. 13,535 7,427
Accrued expenses .................................................... (1,302) 3,670
Accrued compensation ................................................ (2,774) (2,222)
Other long-term liabilities ......................................... (48) --
--------- ---------
Net cash used in operating activities .............................. (14,415) (4,296)
--------- ---------
Cash flows from investing activities:
Purchase of fixed assets ............................................. (6,799) (3,538)
Business acquired net of cash ........................................ -- (65,200)
--------- ---------
Net cash used in investing activities ................................. (6,799) (68,738)
--------- ---------
Cash flows from financing activities:
Principal payments under capital lease obligations ................... (207) (80)
Net proceeds from line of credit, bank ............................... -- 6,000
Proceeds from note payable, bank, net of debt issuance
costs ............................................................... -- 70,558
Payment of note payable, tenant allowances ........................... (93) (70)
Payment of notes payable, bank ....................................... (68,505) --
Payment of notes payable, shareholders ............................... (4,432) --
Distributions to shareholders ........................................ -- (2,461)
Proceeds from issuance of common stock ............................... 136,648 151
--------- ---------
Net cash provided by financing activities ............................. 63,411 74,098
--------- ---------
Net increase in cash and cash equivalents ............................. 42,197 1,064
Cash and cash equivalents, beginning of period ........................ 441 37
--------- ---------
Cash and cash equivalents, end of period .............................. $ 42,638 $ 1,101
========= =========
Supplemental disclosure of cash flow information:
Cash paid for taxes .................................................. $ 968 $ 966
Cash paid for interest ............................................... 1,710 2,895
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 --
</TABLE>
The accompanying notes are an integral part of these financial statements.
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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 June 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 six months ended June 30, 2000, the Company granted approximately 2.4
million 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 $21.8
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.
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.
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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 is 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 Company anticipates that the application of FIN 44 will
not have 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 JUNE 30, 1999 AND 2000
Revenue. Net revenues for the second quarter of 2000 increased by 59% to $70.1
million from $44.0 million for the second quarter of 1999. The $26.1 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
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that the bonus has been awarded. Contractually we are informed of bonuses in the
first and second quarters and accordingly, we expect that our quarterly revenue
in these quarters will be positively impacted compared to the third and fourth
quarters.
Professional service costs. Professional service costs for the second quarter of
2000 increased $13.1 million, or 54%, to $37.5 million from $24.4 million in the
second quarter of 1999. As a percentage of revenue, professional service costs
decreased from 55% of revenue in the second quarter of 1999 to 54% of revenue in
the second 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.
Selling, general and administrative expense. Selling, general and administrative
expenses increased $9.1 million, or 58%, to $24.7 million from $15.6 million in
the second 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 remained level at 35%.
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 $4.1 million of stock-based compensation expense for the quarter
ended June 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 SIX MONTHS ENDED JUNE 30, 1999 AND 2000
Revenue. Net revenues for the first half of 2000 increased by 61% to $133.2
million from $82.9 million for the first half of 1999. The $50.3 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. Contractually we are
informed of bonuses in the first half of the fiscal year and accordingly, we
expect that our revenue during the first half of the fiscal year will be
positively impacted compared to the second half of the year.
Professional service costs. Professional service costs for the first half of
2000 increased $26.5 million, or 60%, to $70.9 million from $44.4 million in the
first half of 1999. As a percentage of revenue, professional service costs
remained level at 54% of revenue from the first half of 1999 to the first half
of 2000. We continue to expand operations and hire professionals to keep up with
client demand.
Selling, general and administrative expense. Selling, general and administrative
expenses increased $16.8 million, or 57%, to $46.3 million from $29.5 million in
the second 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 remained level at 35%.
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
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recognized $7.8 million of stock-based compensation expense for the six months
ended June 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.
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 $42.6 million as of June 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. In
addition, the proceeds have been used to fund $14.4 million of operations and
purchase $6.8 million of fixed assets.
At June 30, 2000, the Company had no cash borrowings under its revolving credit
and $10.3 million outstanding letters of credit under its $25.0 million
revolving credit facility, which expires on December 31, 2004.
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
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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 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 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 six months ended June 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 Tenth Amendment to Lease, dated as of April 20, 2000, by and
between BP Prucenter Acquisition, LLC and Digitas LLC,
formerly known as Bronnercom, LLC, formerly known as Bronner
Slosberg Humphrey, LLC.
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10.2 First Amendment to Office Lease, dated as of April 27, 2000,
by and between Mosten Management Company, Inc. and Digitas
LLC, formerly known as Bronnercom, LLC.
11.1 Computation of shares used in computing Basic and Diluted Net
Income (Loss) per Share.
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: August 11, 2000 By /s/ David W. Kenny
-------------------------------------
David W. Kenny
Director, Chairman and Chief Executive
Officer
Date: August 11, 2000 By /s/ Michael Goss
-------------------------------------
Michael Goss
Executive Vice President and
Chief Financial Officer
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