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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 19, 1999
DIAMOND TECHNOLOGY PARTNERS INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 000-26970 36-4069408
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification Number)
John Hancock Center
875 North Michigan Avenue, Suite 3000 60611
Chicago, Illinois 60611 (Zip Code)
(Address of principal executive offices)
312-255-5000
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
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ITEM 2. At the close of the financial markets on October 19, 1999, the
registrant issued a press release announcing the results of the second
quarter of its fiscal year 2000 and a 3 for 2 stock split. The record date
for the stock split was incorrectly reported as October 29, 1999; the
correct record date is October 25, 1999. A copy of the press release is
attached hereto as Exhibit 99. The registrant also stated that it expected
earnings per share for the fiscal year 2000 to be $0.88 per share and
revenues for the year to be approximately $127 million. These statements
and some of the statements contained in the attached press release that are
not historical are considered to be forward looking and represent the
registrant's best estimate based on the facts known to it to date. Actual
results could differ materially and are subject to a number of risks and
uncertainties which are highlighted in the registrant's filings with the
Securities Exchange Commission, including the registrant's Annual Report on
Form 10-K for the fiscal year ended March 31, 1999, which hereby is
incorporated by reference, as well as the following assumptions: (i) the
registrant's ability to continue to attract and retain qualified
professionals in the highly competitive e-commerce business; (ii) the
continued growth in and acceptance of the use of the Internet by the
registrant's clients, prospective clients and their customers; (iii) the
continued and sustained development in the e-commerce business; (iv) the
ability to continue to maintain and develop operating and financial
systems, procedures and controls that are adequate to support the
registrant's rapid growth; (v) the ability to deliver error-free services
in client engagements involving the creation, implementation and
maintenance of its clients' e-commerce systems and other applications that
are often critical to its clients' businesses; and (vi) the registrant's
ability to protect its intellectual property and proprietary rights.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements: Not applicable
(b) Pro Forma Financial Information: Not applicable
(c) Exhibits
EXHIBIT NO. DOCUMENT
---------- --------
99 Press Release dated October 19, 1999
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DIAMOND TECHNOLOGY PARTNERS
INCORPORATED
By:/s/ Karl E. Bupp
Chief Financial Officer/ Treasurer
October 20, 1999
-3-
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EXHIBIT INDEX
EXHIBIT NO. DOCUMENT PAGE
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99 Press Release dated October 19, 1999 5
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Exhibit 99
NEWS RELEASE
FOR IMMEDIATE RELEASE
CONTACT: Julia Wallace Potter
(312) 255-5055
[email protected]
DIAMOND TECHNOLOGY PARTNERS REPORTS SECOND QUARTER
FISCAL YEAR 2000 RESULTS
ANNOUNCES 3 FOR 2 STOCK SPLIT, STRENGTH IN WEB BUILDING BUSINESS
CHICAGO, October 19, 1999--Diamond Technology Partners Incorporated (Nasdaq:
DTPI), an e-business services firm, today announced revenues for its second
quarter fiscal year 2000 (ended September 30, 1999) increased to $30.5 million,
a 51% increase over $20.1 million reported for the second quarter of fiscal year
1999. Net income for the quarter increased 52% to $3.6 million, or $0.22 per
share, from $2.4 million, or $0.15 per share, reported for the second quarter of
the prior fiscal year.
For the first half of fiscal year 2000, revenues were $56.2 million, a 46%
increase over $38.5 million for the first half of fiscal year 1999. Net income
for the first half was $6.6 million, or $0.41 per share, a 46% increase over
$4.5 million, or $0.29 per share, for the first half of last year.
"The market for Diamond's services is extremely robust," said Diamond's Chairman
and CEO Mel Bergstein. "Fortune 500 companies are stepping up to the Internet
game. They have invaluable resources in customer information, relationships and
industry expertise. What they need to compete with the dot com startups is
imagination, the ability to think and act like a startup, and the execution
capability to convert the strategy into reality. That is what we provide."
Diamond's client-serving professionals grew to 378 at September 30, 1999, up 149
people from 229 at September 30, 1998. Annualized revenue per professional was
$362 thousand for the second quarter and consultant turnover was 10% for the
last 12 months. Diamond served 70 clients in its second quarter of fiscal year
2000. This compares to 39 clients served in the second quarter of fiscal year
1999.
"The addition of Diamond Marketspace Solutions(SM) (DMS) has been very
significant for us," said Mike Mikolajczyk, Diamond's president. "We are ahead
of our hiring plan in this highly competitive Web-development market, and we are
already doing DMS implementation work at 15 clients. DMS was a key driver in
doubling, from 5 to 10, the number of clients billing over one million dollars
in the quarter."
"Diamond's differentiation," explained Bergstein, "lies in its ability to do
more than simply put a Web face on a current business model, but instead to use
Internet technology to redefine
(more)
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DIAMOND TECHNOLOGY PARTNERS SECOND QUARTER FY2000 RESULTS/page 2
competition and create breakthrough killer apps. That takes skills from deep
strategy, through technology implementation and the associated change
management. TheSauce.com, a client in the restaurant industry that was recently
announced, is one such example."
3 FOR 2 STOCK SPLIT EFFECTIVE NOVEMBER 1
Diamond's Board of Directors approved a three for two stock split of the
company's Class A and Class B common stock, effective November 1, 1999. The
split will be effected in the form of a stock dividend. Shareholders of record
at the close of business on October 29, 1999 will receive three shares for every
two shares of Diamond's Class A or Class B common stock held. Based on the
number of shares outstanding on September 30, 1999, following the effective date
of the split Diamond will have approximately 20.5 million shares outstanding.
Bergstein noted, "Diamond has built an excellent infrastructure and track record
of execution that allows us to meet the strong demand in the market by providing
senior management with complete e-business building services. This stock split
will allow a broader group of investors to benefit from Diamond's opportunity to
take advantage of the corporate shift towards e-business."
ADDITIONAL WEB BUILDING CAPABILITIES, NEW SAN FRANCISCO OFFICE
The company today announced that it has signed a definitive agreement to acquire
Leverage Information Systems Inc., a 3-year old San Francisco-based web
development firm. Terms of the agreement were not disclosed, but the acquisition
is expected to be nondilutive for this fiscal year.
"This small acquisition will add 12 highly skilled Internet and e-commerce
architects and developers that we can build teams around within our DMS service
line," said Bergstein. "Leverage also will provide us an opportunity to create a
West Coast presence in San Francisco. We are very excited about bringing this
talented group of people into Diamond."
ABOUT DIAMOND
Diamond Technology Partners Incorporated is an e-business services firm that
helps clients develop and implement Digital Strategies(SM)--business strategies
for the digital age. Headquartered in Chicago, the Company serves clients across
the United States and internationally in the financial services, consumer
products, consumer services, telecommunications, utilities, insurance and health
care industries. Diamond's web site can be found at www.diamtech.com.
Investors will have the opportunity to listen to the conference call over the
Internet through Vcall at http://www.vcall.com. To listen to the live call,
please go to the web site at least fifteen minutes early (by 7:45am central time
on October 20, 1999) to register, download, and install any necessary audio
software. For those who cannot listen to the live broadcast, a replay will be
available shortly after the call and a transcript will be available 24 to 48
hours
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DIAMOND TECHNOLOGY PARTNERS SECOND QUARTER FY2000 RESULTS/page 3
later.
Statements in this press release that do not involve strictly historical or
factual matters are forward-looking statements within the meaning of the "safe
harbor" provisions of the federal securities laws. Forward-looking statements
involve risks and uncertainties and speak only as of the date of this release.
Actual results may differ materially due to such factors as the ability of the
Company to successfully integrate acquisitions, possible termination of projects
by major clients, variations in the timing, initiation or completion of client
assignments, recruitment and retention of personnel, absence of long-term
contracts with clients, growth management, project risks, and technological
advances. Material risks and uncertainties are highlighted in our filings with
the SEC including the form 10K for the fiscal year ended March 31, 1999.
# # #
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DIAMOND TECHNOLOGY PARTNERS SECOND QUARTER FY2000 RESULTS/Page 4
DIAMOND TECHNOLOGY PARTNERS INCORPORATED
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
September 30, March 31,
ASSETS 1999 1999
---------------- ----------------
(unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 38,107 $ 47,698
Accounts receivable, net of allowance of $628 and $419
as of September 30 and March 31, 1999 respectively 12,431 10,434
Prepaid expenses and other 3,373 2,525
---------------- ----------------
Total current assets 53,911 60,657
Computers, equipment and training software, net 6,125 3,419
Other assets 4,939 3,010
Intangible assets, net 6,638 -
---------------- ----------------
Total assets $ 71,613 $ 67,086
================ ================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,754 $ 1,468
Accrued expenses and other 7,809 12,317
---------------- ----------------
Total current liabilities 10,563 13,785
Note payable, less current portion 500 -
---------------- ----------------
Total liabilities 11,063 13,785
---------------- ----------------
Stockholders' equity:
Common stock, 13,699 shares outstanding as of September 30, 1999
and 13,350 shares outstanding as of March 31, 1999
Retained earnings 37,482 36,850
23,068 16,451
---------------- ----------------
60,550 53,301
Total stockholders' equity ---------------- ----------------
Total liabilities and stockholders' equity $ 71,613 $ 67,086
================ ================
</TABLE>
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DIAMOND TECHNOLOGY PARTNERS SECOND QUARTER FY2000 RESULTS/page 5
DIAMOND TECHNOLOGY PARTNERS INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
-----------------------------------------------------------------------
September 30, September 30, September 30, September 30,
1999 1998 1999 1998
--------------- ---------------- ---------------- ------------------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
NET REVENUES $ 30,467 $ 20,136 $ 56,185 $ 38,511
--------------- ---------------- ---------------- ------------------
OPERATING EXPENSES:
Project personnel and related expenses 16,198 10,583 30,143 20,482
Professional development and recruiting 3,052 2,305 5,137 4,256
Marketing and sales 1,534 1,113 3,132 2,157
Management and administrative support 4,165 2,846 7,704 5,395
--------------- ---------------- ---------------- ------------------
TOTAL OPERATING EXPENSES 24,949 16,847 46,116 32,290
--------------- ---------------- ---------------- ------------------
INCOME FROM OPERATIONS 5,518 3,289 10,069 6,221
INTEREST INCOME, NET 413 649 778 1,246
--------------- ---------------- ---------------- ------------------
INCOME BEFORE INCOME TAXES 5,931 3,938 10,847 7,467
INCOME TAXES 2,313 1,555 4,230 2,949
--------------- ---------------- ---------------- ------------------
$ 3,618 $ 2,383 $ 6,617 $ 4,518
NET INCOME =============== ================ ================ ==================
$ 0.27 $ 0.18 $ 0.49 $ 0.34
BASIC EARNINGS PER SHARE =============== ================ ================ ==================
$ 0.22 $ 0.15 $ 0.41 $ 0.29
DILUTED EARNINGS PER SHARE =============== ================ ================ ==================
COMMON SHARES OUTSTANDING 13,610 13,258 13,573 13,203
</TABLE>
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DIAMOND TECHNOLOGY PARTNERS SECOND QUARTER FY2000 RESULTS/page 6
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
-----------------------------------------------------------------------
September 30, September 30, September 30, September 30,
1999 1998 1999 1998
--------------- ---------------- ---------------- ------------------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
COMMON SHARES ASSUMING DILUTION 16,672 15,507 16,305 15,579
</TABLE>
