Kate Wagner, USWeb/CKS, 408/987-3268
[email protected]
Jessica McNulty, USWeb/CKS, 415/369-6722
[email protected]
Whittman-Hart and USWeb/CKS Describe Financial Presentation for Companies After Merger
CHICAGO, IL - February 18, 2000 - Whittman-Hart, Inc. (Nasdaq: WHIT) and USWeb/CKS (Nasdaq: USWB) today provided guidance on the accounting presentations and policies to be adopted by the combined companies, provided Whittman-Hart and USWeb/CKS shareholder approval is received and the merger is closed. Shareholders of both firms will vote Monday February 28, 2000, to approve the merger, which would create one of the industry's largest Internet services providers.
�Since we announced our intention to merge with USWeb/CKS, more than 100 clients of both firms have expressed their desire to utilize all the strategic, creative, marketing and technological solution capabilities that the combined company can offer,� said Robert Bernard, Chairman and Chief Executive Officer of Whittman-Hart, who will be CEO of the merged organization. �While we expect to have only have one month of USWeb/CKS' operations included in our first-quarter results, we remain excited about the opportunities for the combined company in terms of attaining targeted historical goals of 40 percent annual growth for revenues and earnings.�
Bert Young, Whittman-Hart Chief Financial Officer, who will be CFO of the merged organization said, �These guidelines clarify the financial metrics by which the yet-to-be-named company can be measured.�
For illustrative purposes only, both firms have prepared a presentation of combined historical financial information of the two companies for 1998 and 1999. This information is adjusted to conform with the accounting policies to be adopted for the combined companies' financial reports. The combination will be accounted for under the purchase accounting method. Historical financial statements of the two firms will not be combined. Following is more discussion of these adjustments.
Revenues
Total revenues for the two firms, presented as if they had been combined throughout the applicable period, totaled $991.8 for fiscal year 1999 compared to $562.1 in fiscal year 1998, representing a 76 percent year-over-year increase.
Cost of Services
The combined company will conform to Whittman-Hart's accounting method for cost of services. Cost of services will include salaries, benefits and other incentives for employees engaged in delivering professional services.
Sales and Marketing
Going forward, the combined company will conform to USWeb/CKS's approach to accounting for sales and marketing expenses. Direct sales costs, which include salaries, benefits, incentives and commissions, as well as advertising, branding and other costs will be recorded as sales and marketing expenses.
Recruiting
Recruiting expenses will be recorded as General & Administrative Expenses
Depreciation and Amortization of Operating Assets
Going forward, depreciation and amortization of operating assets such as furniture, computers, leaseholds, etc. will be recorded as general and administrative expenses. USWeb/CKS did not previously account for operating assets in this manner.
Stock Compensation, Amortization of Goodwill, Other Intangible Assets
These non-cash items will continue to appear as separate expense lines below G&A expenses.
Supplemental Data
Supplemental Data will be provided to state net income before transactional costs. Transactional costs will include amortization of goodwill and other intangible assets, business combination costs, stock compensation and provision for loss on contract. Supplemental net income as previously reported by USWeb/CKS was not reduced for depreciation of operating assets.
Safe Harbor Provision
This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including the statement regarding Whittman-Hart's future growth expectations. These forward-looking statements are subject to numerous assumptions, risks and uncertainties that may cause actual results to be materially and adversely different from any future results expressed or implied in those statements. Other forward-looking statements may be found by looking for words such as �believes,� �expects,� �anticipates� or �estimates.� Factors that could cause actual results to differ materially include but are not limited to: risks and difficulties of integrating Whittman-Hart and USWeb/CKS and managing the combined businesses, risk of client loss as a result of the merger, competition, acquisitions, attracting and/or retaining highly skilled employees including key employees of both companies, managing risks associated with client projects as well as other risks detailed in our reports filed with the Securities and Exchange Commission.
We do not undertake any obligation to review or confirm analysts' expectations or estimates or to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date of this press release or for any other reasons.
Financial Statement Disclaimer
The merger will be accounted for under the purchase method of accounting. Historical financial statements will not be restated or combined. These financial statements are presented for illustrative purposes only and are not necessarily indicative of the combined financial position or results of operations in future periods or the results that actually would have been realized had Whittman-Hart and USWeb/CKS been a combined company during the periods presented.
About USWeb/CKS and Whittman-Hart
USWeb/CKS seeks to transform businesses in the digital economy and create sustainable market leadership for its clients. As the leading Internet professional services firm, USWeb/CKS has created a new standard for success in the digital economy -- Time-to-Value. Time-to-Value means USWeb/CKS applies its extensive insight, experience and scale to deliver breakthrough results quickly. The Company is headquartered in San Francisco, California, with more than 4,500 professionals in 13 countries around the world. Additional information about USWeb/CKS is available by calling 415/284-7070.
Headquartered in Chicago, Whittman-Hart helps clients improve marketplace performance by creating the essential connections between digital strategy, creative marketing and technology. In 1999, FORTUNE ranked Whittman-Hart as one of America's Fastest-Growing Companies. In 1998 and 1997, Forbes named Whittman-Hart one of the 200 Best Small Companies in America. Whittman-Hart has approximately 4,100 employees in 23 branch offices throughout the United States and the United Kingdom. Its Web site is www.whittman-hart.com.