BearingPoint Reports Increased Revenue, Profit for First Fiscal Quarter

Rand Blazer, CEO of BearingPoint, told analysts during an early morning conference call that business grew through a combination of internal actions, including the continued efforts to integrate strategic acquisitions into a solid business model moving forward.

"Obviously, we're leaning forward and being very aggressive in the marketplace," said Blazer. "Our win rate has taken a shift up [15.3 percent over last year, and we look forward to keeping that up."

For its first fiscal 2003 quarter ended Sept. 30, BearingPoint reported net income of $15.2 million, or 9 cents per share, on sales of $747.6 million. That compares with a loss of $57.6 million, or 36 cents per share, on sales of $608.9 million for the same quarter last year.

The company's results during the quarter included $180 million in revenue attributable to various acquisitions and the hiring and integration of former Andersen Business Consulting resources in the United States. The former KPMG Consulting made its debut as Bearing Point on the New York Stock Exchange Oct. 3.

The results were also in line with Wall Street expectations of 9 cents per share, according to Thomson Financial/First Call. Shares of BearingPoint were trading up 10 cents following the earnings announcement, to $6.76 per share, in early morning trading Wednesday. BearingPoint shares closed Tuesday at $6.66 per share.

The strongest revenue growth continues to come from Public Services, BearingPoint's largest business unit, which is up 17.4 percent, excluding the effect of acquisitions and tempered by year-over-year revenue decline in the High Technology and Communications and Content business units. Clients that are connected with those business units, said Blazer, have been hit hard by uncertain economic conditions.

Blazer said the company is focusing on improving utilization rates and margins, both of which were down when compared with last quarter and due, in part, to seasonality and acquisition of about 1,500 consultants from Andersen during the summer. The company reported utilization and efficiency rates in North America for the quarter were 64 percent and 72 percent, respectively.

Days sales outstanding was 69 days as of Sept. 30, consistent with the 70 days during the same quarter last year. Blazer told analysts the company remains focused on getting those numbers back down to the 50s during the next quarter through a number of internal actions, including improvement of the utilization rates as the company continues to integrate former Andersen business units.

Bob Lamb, executive vice president and CFO of BearingPoint, told analysts the company expects a relatively flat environment and results through the next quarter and estimated income of 9 cents to 12 cents per share.