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EXHIBIT 99
NEWS RELEASE
FOR IMMEDIATE RELEASE
Contact: Julia Wallace Potter
(312) 255-5055
[email protected]
Margaret Boyce
(312)-255-5784
[email protected]
DIAMOND TECHNOLOGY PARTNERS REPORTS SECOND QUARTER
FISCAL YEAR 2001 RESULTS
Revenue Increases 97%, Net Income Increases 131%
CHICAGO, October 19, 2000--Diamond Technology Partners Incorporated (Nasdaq:
DTPI), an e-business services firm, today announced results for the second
quarter fiscal year 2001 (ended September 30, 2000). Revenue for the second
quarter increased to $59.9 million, a 97% increase over $30.5 million reported
for the second quarter of fiscal year 2000, and a 15% sequential increase over
first quarter fiscal 2001. Net income for the quarter increased 131% to $8.3
million, or $0.28 per diluted share, from $3.6 million, or $0.14 per diluted
share, reported for the second quarter of the prior fiscal year. On a cash EPS
basis, which excludes goodwill amortization, Diamond reported $0.29 per diluted
share.
For the first half of fiscal year 2001, revenue was $112.0 million, a 99%
increase over $56.2 million for the first half of fiscal year 2000. Net income
for the first half was $15.6 million, or $0.52 per diluted share, a 135%
increase over $6.6 million, or $0.27 per diluted share, for the first half of
fiscal year 2000.
"We delivered another strong quarter, marked by superior execution and continued
strong demand for our digital strategy and solutions delivery capabilities. The
Global 2000 are increasingly seeking our expertise to transform their
businesses. This demand is for innovation, not optimization of current
businesses. And, we are at the very early stages of this cycle. This is not a
time for CEOs to be complacent," said Diamond's Chairman and CEO Mel Bergstein.
"We are also pleased with the strong levels of demand we are seeing in Europe
for our digital strategy consulting work. In the second quarter, 7% of our
revenue was generated by international clients. This is up from 4% last
quarter."
(more)
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DIAMOND TECHNOLOGY PARTNERS SECOND QUARTER FY2001 RESULTS/PAGE 2
Diamond added net 126 client-serving professionals in the second quarter,
bringing total consultant headcount to 632 as of September 30, 2000. The
majority of these new consultants were campus recruits from last year's
recruiting efforts. Annualized revenue per professional was $421,000 in the
second quarter. Total (voluntary and involuntary) annualized consultant turnover
in the quarter was 11%.
Nineteen clients billed over $1 million in the quarter, an increase from 17 in
the prior quarter and 10 clients a year ago. The average revenue generated from
each client increased 26% from last quarter to $982,000 in the second quarter of
fiscal year 2001 and 126% from $435,000 in the year-ago period. The company did
work for 61 clients in the quarter, with the top five clients representing 35%
of revenue. Concentration for the top five clients is up slightly from 31% in
the first quarter, but down significantly from 42% for the year-ago period.
Eighty-seven percent of the revenue in the quarter was from repeat clients.
"We historically have seen the largest jump in professional headcount in our
second quarter because of the seasonality of our campus recruiting programs,"
explained Bergstein. "And the class of new consultants we added this quarter is
the largest since the company was founded. In addition, our DMS solutions
delivery capability continues to thrive, resulting in deeper, more meaningful
client relationships, which are reflected in the increased revenue per client
numbers."
On September 11, 2000, Diamond announced that it had signed an agreement to
merge with European-based Cluster Consulting. The combined company, which will
be known as DiamondCluster International, will leverage Diamond's innovative
work in creating and implementing digital strategies with Cluster Consulting's
leading-edge broadband wireless and application expertise.
"The reaction to our merger announcement has been overwhelmingly positive, from
clients and employees alike," said Diamond President Adam Gutstein. "While the
deal is not expected to close until the end of the calendar year, we have
already made great strides on the integration front and in many ways are working
together as a "one-firm" firm. We have more than a dozen joint proposals in the
works and are already working on four joint projects. We are also going to
campuses as DiamondCluster International in both the U.S. and in Europe, and are
getting a very positive response to the merger story there."
"While the integration is very important, we are not taking our eye off the
business," Bergstein continued. "We are continuing to excel at what we each do
today--creating and delivering leading-edge digital strategy solutions to our
clients and delivering industry leading results to our shareholders. Both firms
are enthusiastic and determined to integrate as quickly and efficiently as
possible, and we are very excited about the business potential of the combined
firm."
About Diamond
Diamond Technology Partners Incorporated is an e-business services firm that
helps clients develop and implement digital strategies--business strategies for
the digital age. These digital strategies typically transform client business
models and create dramatically different e-businesses that deliver sustained
market leadership. Headquartered in Chicago, the company serves clients
worldwide across a range of industries including financial services, consumer
and industrial products and
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DIAMOND TECHNOLOGY PARTNERS SECOND QUARTER FY2001 RESULTS/PAGE 3
services, telecommunications and energy, healthcare and insurance. Diamond's Web
site can be found at www.diamtech.com.
Conference Call
Management from Diamond Technology Partners and Cluster Consulting will host a
conference call on Thursday, October 19, 2000 at 9:00am ET to discuss the
results of the quarter. Domestic participants should call 888-890-6819, and
international callers should dial 847-619-6479. The call will also be broadcast
live and archived via Diamond's web site at www.diamtech.com.
(more)
Forward Looking Statements
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 10-Q for the quarter ended June 30, 2000, as well as
the preliminary Form S-4 associated with the proposed merger between Diamond and
Cluster, which we filed on October 12, 2000.
# # #
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DIAMOND TECHNOLOGY PARTNERS SECOND QUARTER FY2001 RESULTS/PAGE 4
DIAMOND TECHNOLOGY PARTNERS INCORPORATED
CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
September 30, March 31,
ASSETS 2000 2000
------------- ---------
(unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 209,973 $ 182,945
Accounts receivable, net of allowance of $1,620 and $1,279
as of September 30, 2000 and March 31, 2000, respectively
17,318 10,596
Taxes receivable
8,908 13,874
Prepaid expenses and deferred taxes
9,588 7,144
----------- -----------
Total current assets
245,787 214,559
Computers, equipment and training software, net
9,433 8,214
Other assets
21,167 15,981
Goodwill, net
15,525 10,656
----------- -----------
Total assets $ 291,912 $ 249,410
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 5,787 $ 3,759
Accrued expenses and other
38,853 26,833
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Total current liabilities
44,640 30,592
Note payable, less current portion
- 500
----------- -----------
Total liabilities
44,640 31,092
----------- -----------
Stockholders' equity:
Common stock, 24,559 shares outstanding as of September 30, 2000 and 23,889
shares outstanding as of March 31, 2000
198,068 185,100
</TABLE>
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DIAMOND TECHNOLOGY PARTNERS SECOND QUARTER FY2001 RESULTS/PAGE 5
<TABLE>
<CAPTION>
<S> <C> <C>
Unrealized gain on investments
1,012 539
Cumulative translation adjustment
(61) -
Retained earnings
48,253 32,679
--------- ---------
Total stockholders' equity
247,272 218,318
--------- ---------
Total liabilities and stockholders' equity $291,912 $249,410
========= =========
</TABLE>
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DIAMOND TECHNOLOGY PARTNERS SECOND QUARTER FY2001 RESULTS/PAGE 6
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
--------------------------- -------------------------
Sept 30, Sept 30, Sept 30, Sept 30,
2000 1999 2000 1999
-------- -------- -------- --------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
NET REVENUES $59,878 $30,467 $112,036 $56,185
------- ------- -------- -------
OPERATING EXPENSES:
Project personnel and related expenses 31,758 16,198 59,458 30,143
Professional development and recruiting 6,337 3,052 11,136 5,137
Marketing and sales 2,981 1,534 6,250 3,132
Management and administrative support 8,006 4,095 14,962 7,580
Goodwill amortization 396 70 704 124
------- ------- -------- -------
TOTAL OPERATING EXPENSES 49,478 24,949 92,510 46,116
------- ------- -------- -------
INCOME FROM OPERATIONS 10,400 5,518 19,526 10,069
OTHER INCOME, NET 3,282 413 6,005 778
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INCOME BEFORE INCOME TAXES 13,682 5,931 25,531 10,847
INCOME TAXES 5,336 2,313 9,957 4,230
------- ------- -------- -------
NET INCOME $ 8,346 $ 3,618 $ 15,574 $ 6,617
======= ======= ======== =======
BASIC EARNINGS PER SHARE $ 0.34 $ 0.18 $ 0.64 $ 0.33
======= ======= ======== =======
DILUTED EARNINGS PER SHARE $ 0.28 $ 0.14 $ 0.52 $ 0.27
======= ======= ======== =======
</TABLE>
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DIAMOND TECHNOLOGY PARTNERS SECOND QUARTER FY2001 RESULTS/PAGE 7
COMMON SHARES OUTSTANDING 24,231 20,415 24,198 20,359
COMMON SHARES ASSUMING DILUTION 29,859 25,009 29,768 24,457
