<PAGE> 1
- --------------------------------------------------------------------------------
UNITED STATES
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 QUARTER ENDED JUNE 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 0-26970
DIAMOND TECHNOLOGY PARTNERS INCORPORATED
(Exact name of registrant as specified in its charter)
DELAWARE 36-4069408
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
875 N. MICHIGAN AVENUE, SUITE 3000, CHICAGO, ILLINOIS 60611
(Address of Principal Executive Offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (312) 255-5000
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
--- ---
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date:
As of July 31, 1997, there were 6,687,999 shares of Class A Common Stock
and 4,917,622 shares of Class B Common Stock of the Registrant outstanding.
- --------------------------------------------------------------------------------
<PAGE> 2
DIAMOND TECHNOLOGY PARTNERS INCORPORATED
QUARTERLY REPORT ON FORM 10-Q FOR THE FISCAL QUARTER ENDED
JUNE 30, 1997
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION:
Item 1: Financial Statements
<TABLE>
<S> <C>
Consolidated Balance Sheets as of June 30, 1997 and March 31, 1997 .................... 3
Consolidated Statements of Operations for the Three Months Ended June 30, 1997 and 1996 4
Consolidated Statements of Cash Flows for the Three Months Ended June 30, 1997 and 1996 5
Notes to Consolidated Financial Statements ............................................ 6
Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations 7
PART II - OTHER INFORMATION:
Item 6: Exhibits and Reports of Form 8-K ....................................................... 11
SIGNATURES ...................................................................................... 12
</TABLE>
2
<PAGE> 3
DIAMOND TECHNOLOGY PARTNERS INCORPORATED
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
JUNE 30, MARCH 31,
1997 1997
------- -------
ASSETS
------
<S> <C> <C>
Current assets:
Cash and cash equivalents ................................................. $18,683 $8,184
Cash in escrow from subscribed stock ...................................... - 9,363
Accounts receivable, net of allowance of $660 and $566 as of June 30, 1997
and March 31, 1997, respectively ........................................ 4,719 4,496
Prepaid expenses .......................................................... 407 564
Deferred income taxes ..................................................... 312 312
------- -------
Total current assets ........................................................ 24,121 22,919
Computers, equipment, and training software, net ............................ 1,872 1,989
Other assets ................................................................ 529 476
Deferred organization costs, net ............................................ 98 110
------- -------
Total assets ................................................................ $26,620 $25,494
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Notes payable ............................................................. $ - $2,000
Accounts payable .......................................................... 1,887 1,609
Accrued compensation ...................................................... 802 -
Income taxes payable ...................................................... 419 562
Deferred revenue .......................................................... 822 710
Accrued stock issuance costs .............................................. - 609
Other accrued liabilities ................................................. 1,929 1,704
------- -------
Total current liabilities ................................................... 5,859 7,194
------- -------
Stockholders' equity:
Preferred Stock, $1.00 par value, 2,000 shares authorized, no shares issued - -
Class A common stock, $.001 par value, 40,000 shares authorized, 6,669
issued as of June 30, 1997 and 4,594 issued as of March 31, 1997 ........ 7 5
Class B common stock, $.001 par value, 20,000 shares authorized, 4,918
issued as of June 30, 1997 and 4,967 issued as of March 31, 1997 ........ 5 5
Class A common stock subscribed, 1,755 shares ............................. - 8,476
Additional paid-in capital ................................................ 19,338 9,329
Notes receivable from sale of common stock (63) (122)
Retained earnings ......................................................... 1,474 607
------- -------
Total stockholders' equity .................................................. 20,761 18,300
------- -------
Total liabilities and stockholders' equity .................................. $26,620 $25,494
======= =======
See accompanying notes to consolidated financial statements
</TABLE>
3
<PAGE> 4
DIAMOND TECHNOLOGY PARTNERS INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FOR THE QUARTER ENDED JUNE 30,
------------------------------
1997 1996
---- ----
<S> <C> <C>
Net revenues .......................................................... $12,101 $7,753
------- ------
Operating expenses:
Project personnel and related expenses ............................... 6,726 5,423
Professional development and recruiting .............................. 1,476 1,515
Marketing and sales .................................................. 817 470
Management and administrative support ................................ 1,822 1,560
------- -------
Total operating expenses .............................................. 10,841 8,968
------- -------
Income (loss) from operations ......................................... 1,260 (1,215)
Interest income ....................................................... 219 43
Interest expense ...................................................... (8) (21)
------- --------
Income (loss) before taxes ............................................ 1,471 (1,193)
Income taxes .......................................................... (604) 479
------- --------
Net income (loss) ..................................................... $ 867 $ (714)
======= ========
Net income (loss) per share of common stock ........................... $0.06 $(0.07)
Shares used in computing net (income) loss per share of common stock .. 13,822 10,194
See accompanying notes to consolidated financial statements
</TABLE>
4
<PAGE> 5
DIAMOND TECHNOLOGY PARTNERS INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE QUARTER ENDED JUNE 30,
------------------------------
1997 1996
---- ----
<S> <C> <C>
Cash flows from operating activities
Net income (loss) ................................................ $ 867 $ (714)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Depreciation and amortization .................................. 211 190
Changes in assets and liabilities:
Accounts receivable .......................................... (223) (836)
Prepaid expenses and other ................................... 156 (818)
Accounts payable ............................................. 279 108
Deferred compensation ........................................ -- (132)
Accrued compensation ......................................... 803 (682)
Deferred revenue ............................................. 112 --
Income taxes payable ......................................... (144) (83)
Other accrued liabilities .................................... 101 (116)
------ ------
Net cash provided by (used in) operating activities ............... 2,162 (3,083)
------ ------
Cash flows from investing activities:
Capital expenditures, net ..................................... (82) (311)
Other assets .................................................. (54) --
Notes receivable .............................................. -- (48)
------ ------
Net cash (used in) investing activities ............................ (136) (359)
------ ------
Cash flows from financing activities:
Proceeds from notes payable ................................... -- 250
Repayment of notes payable .................................... (2,000) (48)
Stock issuance costs .......................................... (649) --
Common stock issued and subscribed ............................ 1,819 1,380
Repurchase of common stock .................................... (60) --
------ ------
Net cash provided by (used in) financing activities ................ (890) 1,582
------ ------
Net increase (decrease) in cash and cash equivalents 1,136 (1,860)
Cash and cash equivalents at beginning of year 17,547 4,635
------ ------
Cash and cash equivalents at end of quarter $ 18,683 $ 2,775
======== =======
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 8 $ 4
Cash paid during the period for income taxes 748 184
Supplemental disclosure for noncash investing and financing activities:
Issuance of common stock for notes $ -- $ 145
Deferred and incentive compensation applied to payment for
common stock -- 130
See accompanying notes to consolidated financial statements
</TABLE>
5
<PAGE> 6
DIAMOND TECHNOLOGY PARTNERS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
A. BASIS OF REPORTING
The accompanying consolidated financial statements of Diamond Technology
Partners Incorporated (the "Company") include the accounts of the Company and
its wholly owned subsidiary. All significant intercompany transactions and
balances have been eliminated in consolidation. Certain prior period amounts
have been reclassified to conform with current period presentation. In the
opinion of management, the consolidated financial statements reflect all normal
and recurring adjustments, which are necessary for a fair presentation of the
Company's financial position, results of operations, and cash flows as of the
dates and for the periods presented. The consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information. Consequently, these statements do not
include all the disclosures normally required by generally accepted accounting
principles for annual financial statements nor those normally made in the
Company's Annual Report on Form 10-K. Accordingly, reference should be made to
the Company's Annual Report on Form 10-K for additional disclosures, including
a summary of the Company's accounting policies, which have not changed. The
consolidated results of operations for the three months ended June 30, 1997,
are not necessarily indicative of results for the full year.
B. NET INCOME PER SHARE
Net income per share data is computed using the weighted average number of
common shares outstanding, the assumed exercise of stock options and warrants
(using the treasury stock method), and the assumed issuance of a stock dividend
at the beginning of the quarter ended June 30, 1996 to effect a stock split.
Primary and fully diluted income per share are the same for each period
presented.
C. NEW ACCOUNTING PRONOUNCEMENTS
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings Per Share" (SFAS
128), which is effective for fiscal years ending after December 15, 1997,
including interim periods. SFAS 128 establishes standards for computing and
presenting earnings per share (EPS) and requires a dual presentation of basic
and dilutive EPS. The Company is currently assessing the impact of SFAS 128.
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income (SFAS
130)." The Company is required to adopt the new standard for interim and
annual periods beginning after December 15, 1997, with earlier application
permitted. SFAS 130 establishes standards for reporting and display of
comprehensive income and its components in a full set of general purpose
financial statements. The standard requires all items that are required to be
recognized under accounting standards as components of comprehensive income be
reported in a financial statement that is displayed in equal prominence with
the other financial statements. The Company is currently evaluating the impact
of SFAS 130.
In June 1997, the Financial Accounting Standards Board also issued
Statement of Financial Accounting Standards No. 131, "Disclosures about
Segments of an Enterprise and Related Information (SFAS 131)." The Company is
required to adopt this new standard for financial statements issued for periods
beginning after December 15, 1997, with earlier application encouraged. SFAS
131 establishes standards for the way companies are to report information about
operating segments in annual financial statements and requires those companies
to report selected information about operating segments in interim financial
reports issued to shareholders. It also establishes standards for related
disclosures about products and services, geographic areas, and major customers.
The Company is currently evaluating the impact of SFAS 131.
6
<PAGE> 7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following information should be read in connection with the
information contained in the Consolidated Financial Statements and notes
thereto appearing elsewhere in this Quarterly Report on Form 10-Q. This
Quarterly Report on Form 10-Q contains forward-looking statements that involve
risks and uncertainties. See "Forward Looking Statements" below.
OVERVIEW
Diamond is a management consulting firm that devises and implements
business strategies enabled by information technology ("IT") to improve its
clients' competitive positions. Diamond was founded upon, and continues to
stress, a business culture in which strategic consulting and IT expertise are
integrated to provide client solutions. The Company has experienced
substantial revenue growth as its net revenues have increased from $12.8
million in its first full fiscal year of operations ended March 31, 1995 to
$37.6 million in fiscal 1997 while growing its client base from 16 clients
served in fiscal 1995, to 24 clients in fiscal 1996 and 45 clients in fiscal
1997. The number of the Company's client-serving professionals has also grown
during this three-year period from 69 to 115 and 146 at the end of fiscal 1995,
1996 and 1997, respectively.
The Company's revenues are comprised of professional fees for services
rendered to clients which are billed either monthly or semi-monthly in
accordance with the terms of the client engagement. Prior to the commencement
of a client engagement, the Company and its client agree on fees for services
based upon the scope of the project, Diamond staffing requirements and the
level of client involvement. The Company recognizes revenues as services are
performed in accordance with the terms of the client engagement. Out-of-pocket
expenses are reimbursed by clients and offset against expenses incurred and are
not included in recognized revenues. Provisions are made for estimated
uncollectible amounts based on the Company's experience. Although the Company
from time to time has been required to make revisions to its clients' estimated
deliverables, to date none of such revisions has had a material adverse effect
on the Company's operating or financial results.
The largest portion of the Company's costs consist primarily of
employee-related expenses for its client-serving professionals and other direct
costs, such as third-party vendor costs and unbilled travel costs associated
with the delivery of services to clients. The remainder of the Company's costs
are comprised of the expenses associated with the development of the business
and the support of its client-serving professionals, such as professional
development and recruiting, marketing and sales, and management and
administrative support. Professional development and recruiting expenses
consist primarily of recruiting and training costs. Marketing and sales
expenses consist primarily of the costs associated with the Company's
development and maintenance of its marketing materials and programs, in
addition to other marketing programs. Management and administrative support
expenses consist primarily of the costs associated with operations, finance,
information systems, facilities and other administrative support for project
personnel.
The Company regularly reviews its fees for services, professional
compensation and overhead costs to ensure that its services and compensation
are competitive within the industry. In addition, Diamond monitors the
progress of client projects with client senior management on a periodic basis.
The Company manages activities of its professionals by closely monitoring
engagement schedules and staffing requirements for new engagements. Because
most of the Company's client engagements are, and may be in the future,
terminable by the client without penalty, an unanticipated termination of a
client project could require the Company to maintain underutilized employees,
resulting in a higher than expected percentage and number of inactive
professionals. While professional staff must be adjusted to reflect active
engagements, the Company must maintain a sufficient number of senior
professionals to oversee existing client engagements and participate in the
Company's sales efforts to secure new client assignments.
7
<PAGE> 8
RECENT DEVELOPMENTS
The Company completed its offering of 3,675,000 shares of Class A Common
Stock on April 8, 1997 (the "Initial Public Offering"). In connection with
this offering, holders of Safeguard Scientifics, Inc., ("Safeguard") Common
Stock and certain other direct purchasers received rights to purchase 3,355,000
shares of Class A Common Stock. 1,755,000 of these shares were offered by the
Company and were subscribed as of March 31, 1997 and the remaining 1,600,000 of
these shares were offered by Safeguard and certain other companies affiliated
with Safeguard. Additionally, the underwriters elected to exercise their
option to purchase 320,000 shares of Class A Common Stock from the Company at
the closing on April 8, 1997, to cover over-allotments. The net proceeds for
the subscribed shares totaling $8.5 million were realized on March 31, 1997.
The Company also realized $1.6 million of net proceeds from the Underwriters,
pursuant to their exercise of the overallotment option on April 8, 1997.
RESULTS OF OPERATIONS
The following table sets forth for the periods indicated, selected
statements of operations data as a percentage of net revenues:
<TABLE>
<CAPTION>
FOR THE QUARTER ENDED JUNE 30,
------------------------------
1997 1996
------ ------
<S> <C> <C>
Net revenues .............................. 100.0% 100.0%
----- ------
Operating expenses:
Project personnel and related expenses ... 55.6 70.0
Professional development and recruiting .. 12.2 19.5
Marketing and sales ...................... 6.7 6.1
Management and administrative support .... 15.1 20.1
----- ------
Total operating expenses ................ 89.6 115.7
----- ------
Income (loss) from operations ............. 10.4 (15.7)
Interest income, net ...................... 1.8 0.3
----- ------
Income (loss) before taxes ................ 12.2 (15.4)
Income taxes .............................. (5.0) 6.2
----- ------
Net income (loss) ......................... 7.2% (9.2)%
===== ======
</TABLE>
QUARTER ENDED JUNE 30, 1997 COMPARED TO QUARTER ENDED JUNE 30, 1996
The Company's net income improved $1.6 million during the current quarter
as compared to the same period in the prior year. Fundamentally, the Company's
income of $867,000 during the quarter ended June 30, 1997 improved from the net
loss of $714,000 during the same period in the prior year as a result of
increased revenues combined with an improvement in the utilization of
unassigned professionals, partially offset by an increase in expenses required
to support the Company's current and anticipated growth during the period.
The Company's net loss in the year-earlier period resulted from two
clients' cancellations of significant business initiatives during the last
quarter of fiscal 1996 and the first quarter of fiscal 1997. The Company's
revenues from these two clients declined significantly as a result of these
cancellations. At the time of these project cancellations, the Company was in
the process of increasing the number of its client-serving professionals to
support anticipated revenue growth. Accordingly, the lost revenue associated
with these projects, together with the expanded capacity for future anticipated
revenue growth, resulted in a higher than expected percentage of unassigned
professionals and a net loss of $714,000 during the quarter ended June 30,
1996.
8
<PAGE> 9
The Company responded to these project cancellations and the resulting
business circumstances during the quarter ended September 30, 1997, effectively
reducing spending levels, while maintaining the consulting capacity required to
support future growth. In the aggregate the Company reduced, or will reduce,
its expense levels by approximately $800,000 in the quarter ended September 30,
1996, $1.1 million in each of the quarters ended December 31, 1996, and March
31, 1997, $200,000 in the quarter ended June 30, 1997 and $200,000 in the
quarter ending September 30, 1997 as compared to the expense levels included in
the quarter ended June 30, 1996.
The Company will be required to award bonuses to Partners and employees at
the end of the fiscal year ending March 31, 1998 under its bonus programs if
the Company's overall performance during the quarter ended June 30, 1997 is
sustained for the remainder of the fiscal year. The Company has recognized
bonus expense of $803,000 during the quarter ended June 30, 1997 as compared to
$407,000 during the same period in the prior year.
The Company's net revenues increased 56.1% to $12.1 million during the
quarter ended June 30, 1997 as compared to the same period in the prior year.
The increase in the Company's net revenues reflects an increase in the volume
of services delivered to new clients, as well as the leveraging of the
Company's existing client base by undertaking additional projects for these
clients. For the quarter ended June 30, 1997, $1.2 million of revenue was
derived from services delivered to new clients and $10.9 million related to the
completion of projects or undertaking additional projects from the Company's
client base of the previous fiscal year. The Company served 33 clients during
the quarter ended June 30, 1997 (of which 23 were clients during the prior
fiscal year) as compared to 17 clients during the same period in the prior
year.
Project personnel and related expenses increased $1.3 million to $6.7
million during the quarter ended June 30, 1997 as compared to the same period
in the prior year. In aggregate, project personnel and related expenses
increased 24.0% from the same period in the prior year due to the increase in
the number of its client-serving professionals hired during the period to
respond to anticipated future growth, combined with the increase in bonus
expense during the current period. The Company increased its client-serving
professional staff from 116 at June 30, 1996 to 146 at June 30, 1997. As a
percentage of net revenues, project personnel and related expenses decreased
from 70.0% to 55.6% during fiscal 1997, reflecting the improvement in the
utilization of unassigned professionals.
Professional development and recruiting expenses were relatively unchanged
during the quarter ended June 30, 1997 as compared to the same period in the
prior year. The Company has continued its recruiting, training and development
programs to support the growth of the business. As a percentage of net
revenues, these expenses decreased to 12.2% as compared to 19.5% during the
same period in the prior year as a result of the Company's improved operating
leverage resulting from the Company's net revenue growth.
Marketing and sales expenses increased from $470,000 to $817,000 during
the quarter ended June 30, 1997 as compared to the same period in the prior
year as a result of the Company's expanded investment in its brand image and
the promotion of intellectual capital through the Diamond Exchange, the
Company's executive learning forum for senior executives. As a percentage of
net revenues, these expenses increased from 6.1% to 6.7%.
Management and administrative support expenses increased from $1.6 million
to $1.8 million during the quarter ended June 30, 1997 as compared to the same
period in the prior year or 16.8% as a result of the additional facilities,
equipment and personnel necessary to support the Company's growth and increased
consulting capacity. As a percentage of net revenues, these expenses
decreased from 20.1% to 15.1% as a result of the Company's improved operating
leverage resulting from the Company's net revenue growth.
LIQUIDITY AND CAPITAL RESOURCES
The Company finalized the Initial Public Offering on April 8, 1997, as
previously noted. In connection with the Initial Public Offering, the Company
sold 2,075,000 shares of Class A Common Stock generating net proceeds totaling
approximately $10.1 million. The remaining 1,600,000 shares of Class A Common
Stock were sold by Safeguard and companies affiliated with Safeguard. The
Company used $2.0 million of the proceeds from the Initial Public Offering to
repay a loan from Safeguard. The remaining $8.1 million of these proceeds will
be used for working capital, general corporate purposes and capital
expenditures.
9
<PAGE> 10
Historically, the Company has used proceeds from the private sales of
common stock and cash from operations to fund its operating and capital
requirements. The Company expects that cash from operations and the proceeds
from the Initial Public Offering will provide the principal sources of future
liquidity for the Company. Variations in the Company's operating results have
occurred in the past and any significant decreases in net income could
adversely affect liquidity.
The Company also maintains a revolving line of credit pursuant to the
terms of a secured credit agreement from a commercial bank under which the
Company may borrow up to $3.0 million at an annual interest rate based on the
prime rate or based on the LIBOR rate plus 2.5%, at the Company's discretion.
As of June 30, 1997, the Company had approximately $2.8 million available under
this line of credit.
The Company's billings for the quarter ended June 30, 1997 totaled $15.4
million. These amounts include billings to clients for out-of-pocket expenses
that are reimbursed by clients which are not included in recognized revenues.
The Company's gross accounts receivable of $5.4 million at June 30, 1997,
represents 31 days of billings for the quarter.
The Company may expand its capabilities through the acquisition of other
businesses that are complementary to the Company's business. A portion of net
proceeds from the Initial Public Offering may be used in the future for such
acquisitions, although the Company is not currently engaged in active
discussions with respect to any acquisitions.
The Company currently anticipates that the net proceeds received by the
Company from the Initial Public Offering, together with amounts available under
its current revolving line of credit, cash generated from operations and
existing cash balances will be sufficient to satisfy its operating cash needs
for fiscal 1998. Should the Company's business expand more rapidly than
expected, the Company believes that additional bank credit would be available
to fund such operating and capital requirements. In addition, the Company
could consider seeking additional public or private debt or equity financing to
fund future growth opportunities.
FORWARD-LOOKING STATEMENTS
Statements contained anywhere in this report that are not historical facts
contain forward-looking statements including such statements identified by the
words "anticipate", "believe", "estimate", "expect" or similar terminology used
with respect to the Company and its management. These forward-looking
statements are subject to risks and uncertainties which could cause the
Company's actual results, performance and prospects to differ materially from
those expressed in, or implied by, the forward-looking statements. The
forward-looking statements speak only as of the date hereof and the Company
undertakes no obligation to revise or update them to reflect events or
circumstances that arise in the future. Readers are cautioned not to place
undue reliance on forward-looking statements. Among the risks and
uncertainties affecting the forward looking statements are the Company's
ability to manage its rapid growth and keep pace with evolving technology, and
the variability of the Company's quarterly operating results due to, among
other things, variations in the number of active client projects.
10
<PAGE> 11
PART II. OTHER INFORMATION
Item 1 - 5 None
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibits
11. Statement Regarding Computation
of Earnings per Share
27. Financial Data Schedule
(b) Reports on Form 8-K
None
11
<PAGE> 12
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.
DIAMOND TECHNOLOGY PARTNERS INCORPORATED
DATE: August __, 1997 BY: /s/ MELVYN E. BERGSTEIN
--------------------------------------------
Melvyn E. Bergstein
Chairman, Chief Executive Officer, President
DATE: August __, 1997 BY: /s/ MICHAEL E. MIKOLAJCZYK
--------------------------------------------
Michael E. Mikolajczyk
Senior Vice President, Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer) and Director
12
<PAGE> 13
DIAMOND TECHNOLOGY PARTNERS INCORPORATED
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
11 Computation of Earnings Per Share
27 Financial Data Schedule
13
<PAGE> 1
EXHIBIT 11
DIAMOND TECHNOLOGY PARTNERS INCORPORATED
STATEMENT REGARDING COMPUTATION OF NET INCOME (LOSS)
PER SHARE OF COMMON STOCK
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
FOR THE QUARTER ENDED JUNE 30,
------------------------------
1997 1996
------ -------
<S> <C> <C>
Net income (loss) .......................................... $ 867 $ (714)
====== =======
Weighted average common shares outstanding ................. 11,578 8,560
Dilutive effect of common equivalent shares of stock options
and warrants .............................................. 2,244 --
Additional shares pursuant to SAB83 computation ............ -- 1,634
------ -------
Shares used in computing net income (loss) per share of
common stock .............................................. 13,822 10,194
====== =======
Net income (loss) per share of common stock ................ $0.06 $ (0.07)
====== =======
</TABLE>
14
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> APR-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 18,683
<SECURITIES> 0
<RECEIVABLES> 5,379
<ALLOWANCES> 660
<INVENTORY> 0
<CURRENT-ASSETS> 24,121
<PP&E> 3,358
<DEPRECIATION> 1,485
<TOTAL-ASSETS> 26,620
<CURRENT-LIABILITIES> 5,859
<BONDS> 0
0
0
<COMMON> 12
<OTHER-SE> 20,749
<TOTAL-LIABILITY-AND-EQUITY> 26,620
<SALES> 0
<TOTAL-REVENUES> 12,101
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 10,841
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8
<INCOME-PRETAX> 1,471
<INCOME-TAX> 604
<INCOME-CONTINUING> 867
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 867
<EPS-PRIMARY> .06
<EPS-DILUTED> .06
</TABLE>
