Cambridge Technology Partners Announces First Quarter 2001 Results

Business Wire, April 26, 2001

Business/Technology Editors

CAMBRIDGE, Mass.--(BUSINESS WIRE)--April 26, 2001

Plans Underway for Next Generation eSolutions Company With

Anticipated Acquisition of Cambridge by Novell

Cambridge Technology Partners (Massachusetts), Inc. (NASDAQ:CATP), a global eSolutions provider, today announced results for the first quarter ended March 31, 2001.

Revenues for the first quarter of 2001 were $116.5 million or 7% lower than fourth quarter revenue of $125 million and 21% lower than $147.6 million for the same period of 2000.

During the quarter, Cambridge continued to balance its delivery capacity with demand. As a result, the Company reduced its workforce by approximately 250 positions and took a restructuring charge of $11 million to cover severance and other costs associated with the restructuring.

Net loss for the first quarter of 2001 was $21.2 million, or $.34 per share (basic and diluted) versus a net loss of $4.3 million, or $.07 per share (basis and diluted) for the same period of 2000. Loss from operations for the first quarter of 2001 was $31.6 million including the restructuring charge of $11 million. This restructuring effort should result in annual cost savings of $28.0 million, once fully implemented.

"The anticipated merger with Novell will not distract us from our focus to return Cambridge to profitability as quickly as possible," said Jack Messman, President and Chief Executive Officer of Cambridge. "Although current market conditions have made balancing Cambridge's cost structure with expected revenue levels challenging, we continue to make progress in this area. We believe that synergies from the merger will help accelerate Cambridge's return to profitability.

"Novell's commitment to open systems and product innovation, combined with Cambridge's commitment to solve clients business problems via the best solutions, will establish the combined company as a leading eSolutions provider. Novell's ability to provide Cambridge with access to new markets and clients makes it an excellent fit with Cambridge's culture and business model," Messman continued. "The combined company holds great promise for the future.

"We will be able to provide clients with Internet solutions tailored to their specific vertical market needs with front to back-end system integration capability using best of breed products," Messman added. "It will be the model for the next generation of eSolutions companies. I am excited about the pending merger and I look forward to leading the new company."

Projects in Q1 2001

During the first quarter of 2001, Cambridge partnered with well-recognized brand name clients to deploy eSolutions across the globe. A few of Cambridge's client engagements during the quarter included:

Lockheed Martin Corporation

Cambridge has been engaged by Lockheed Martin Corporation's Management & Data Systems Division ("M&DS"), to help develop an enterprise-wide eBusiness strategy. The solutions being implemented leverage the company's internal business process analysis combined with technology insertion in order to enable the organization.

Toyota Motor Sales, USA

Cambridge worked with Toyota to define, integrate, prioritize and scope the requirements for a Corporate Customer Survey System to support the distinct business needs of the Toyota and Lexus divisions.

The Westfield Group

Cambridge was engaged to deliver the capability for fast, responsive, web-enabled access to rating and pricing information for the Westfield range of insurance products. The Westfield Group of Companies is a 150-year old privately held financial services group composed of 12 banking and insurance subsidiaries.

Canon

Cambridge was engaged by Canon DHPS to implement personalization and content management applications that will increase its level of business intelligence and provide more detailed information about its customers. In addition, Cambridge is helping Canon expand the capabilities of its e-Store, which Cambridge had previously built.

Vodafone

Cambridge was engaged by Vodafone's global platform and Internet services group (VGP) that designs, builds and maintains the global portal in Vodafone's territories outside of Europe. Cambridge will design regional, personalized sites with both an Internet and WAP solution.

Some other clients that Cambridge worked with during the first quarter included Washington Mutual, Independent Order of Foresters (IOF), Intuitive Surgical, Consors, Libertel, M6, Kaptech, Hewlett-Packard and HVB Direkt.

Outlook for Q2, 2001

For the second quarter of 2001, Cambridge expects to see revenue flat to slightly up from the first quarter. This modest increase will be primarily driven by the continued improvement in its CMC organization. Cambridge also expects a pre-tax operating loss of $11 to $13 million and would use a 35% tax rate for estimation of net loss.

About Cambridge Technology Partners

Cambridge Technology Partners provides strategic and management consulting as well as systems integration services to transform its clients into eBusinesses. Working in collaboration with Global 1000 and high-velocity middle market companies, Cambridge combines a deep understanding of New Economy issues with integrated, end-to-end services, and a proven track record of shared risk and rapid, guaranteed delivery. Cambridge generated $586.6 million in revenue in 2000. Cambridge has approximately 3,500 employees in 19 countries around the world. Cambridge is a Safeguard Scientifics (NYSE: SFE) partner company. Cambridge on the Web: (http://www.ctp.com).