Sapient (SAPE) to Delay Q1 Release; Prelim. EPS Results Top Views, Revs Light

Sapient (Nasdaq: SAPE) today announced that it will delay the full release of its first quarter financial results and conference call from Thursday, May 9, as originally scheduled. The earnings announcement and conference call are now expected to take place on Wednesday, May 15 after the close of regular market hours. The earnings release and call are being rescheduled because the company requires additional time to complete a self-initiated review and analysis of tax liabilities resulting from cross–border mobility of employees into various countries in prior periods extending back to 2006. The company estimates the total of such liabilities for those years to be in the range of $12 million to $18 million, subject to finalization of the company’s review and evaluation. In the interest of providing the investment community with relevant information, the company is providing the following preliminary unaudited financial results for the first quarter ended March 31, 2013, which are subject to change: * Service revenues are expected to be $292.6 million compared to guidance of $295 million to $300 million. Revenues reflect a slower-than-expected ramp in client spending in SapientNitro and the adverse effect of movements in foreign currency exchange rates. * GAAP operating margin is expected to be 4.1%, which includes a one-time restructuring charge and impairment of intangible assets totaling approximately $3.5 million. GAAP operating margin also includes $7.2 million of stock-based compensation, $3.7 million of amortization of purchased intangible assets and $0.9 million of acquisition costs. * Non-GAAP operating margin is expected to be 9.3%. * The effective tax rate for the quarter is expected to be approximately 49%, which reflects quarterly fluctuation similar to that of past years. * GAAP diluted net income per share is expected to be $0.04. Non-GAAP diluted net income per share is expected to be $0.12. * The results above include an estimated impact of $500,000 of net expense for tax liabilities associated with the review. *** The Street is looking for Q1 revs of $297.2 million and EPS of $0.09. The company also provided the following guidance for the second quarter ending June 30, 2013: * Service revenues are expected to be in the range of $300 million to $310 million. Both SapientNitro and Sapient Global Markets are expected to grow sequentially, with the majority of the growth coming from SapientNitro. * Non-GAAP operating margin is expected to be 12% or higher. The company is working diligently to resolve the tax review and analysis, and to file its Form 10-Q on Wednesday, May 15. Because the assessment is ongoing, the company can give no assurances that the expected timing for the filing of its Form 10-Q will be met. The company will file with the Securities and Exchange Commission a Form 12b-25, Notification of Late Filing, on Monday, May 13. When the assessment is complete and the company files its Form 10-Q, the financial statements may differ materially from the results disclosed in this press release. In addition, the assessment may impact prior-period financial statements.

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