Bearingpoint (BGPTQ) 8-K BearingPoint, Inc. Reports Third Quarter FY04 Results

Exhibit 99.1

BearingPoint, Inc. Reports Third Quarter FY04 Results

Company Meets Revenue and Earnings Per Share Guidance

McLean, VA, November 4, 2004 - BearingPoint, Inc. (NYSE: BE) today reported revenue of $840.9 million for the third quarter ended September 30, 2004, an increase of $97.9 million, or 13.2%, over the quarter ended September 30, 2003. This increase in revenue was largely attributable to improved utilization of its global workforce and stabilizing economic conditions in most regions. The Company realized net income for the quarter ended September 30, 2004 of $11.9 million, or $0.06 per share, compared to a net loss of $39.2 million, or loss of $0.20 per share, in the quarter ended September 30, 2003.

“Our results continue to demonstrate solid year-over-year revenue growth,” commented Rand Blazer, chairman and chief executive officer. “We continue to see a gradual improvement in IT spending across many sectors, and we remain focused on managing the fundamentals of our business to capitalize on this spending and support our clients’ business needs.”

“Improvement in utilization is key for our business right now. We improved our global utilization to 67.3% this quarter, from 62.3% a year ago,” noted Bob Falcone, executive vice president and chief financial officer. “Now, we need to continue our progress in reducing our internal costs and improving operating efficiencies to further raise our level of financial performance.”

Quarterly Business Results

The current quarter results include the following key performance items and other information.

• Revenue for the quarter ended September 30, 2004 was $840.9 million, an increase of $97.9 million, or 13.2%, from revenue of $743.0 million for the three months ended September 30, 2003. This increase was mainly attributable to a $91.7 million increase in revenue within our North America operations and a $7.2 million increase in revenue within our international operations.

• Utilization improved on a consolidated basis, increasing to 67.3% for the quarter ended September 30, 2004 compared to 62.3% for the quarter ended September 30, 2003. Our utilization continued to improve even though we increased our average billable headcount by 10.0%. Utilization for our international operations improved to 62.3% during the quarter ended September 30, 2004, up from 54.5% during the quarter ended September 30, 2003, while utilization for our North America operations increased to 70.7% during the current period, up from 69.0% during the quarter ended September 30, 2003.

• Our consolidated gross billing rate declined to $167 for the quarter ended September 30, 2004 compared to $179 for the quarter ended September 30, 2003. Our consolidated gross billing rate declined due to our increased use of lower-cost service delivery personnel and sustained pricing pressures as competition for new engagements remains strong. Gross billing rates for our North America and international operations declined 7.0% and 10.7%, respectively, when compared to the quarter ended September 30, 2003.

• Operating income for the three months ended September 30, 2004 was $25.8 million, an increase of $76.1 million from an operating loss of $50.3 million for the three months ended September 30, 2003. Operating income improved to 3.1% of revenue during the three months ended September 30, 2004 compared to an operating loss of 6.8% of revenue during the prior year. Operating income was impacted favorably by decreases in amortization of purchased intangible assets and lease and facilities charges of $7.3 million and $59.2 million, respectively, for the three months ended September 30, 2004 as compared to the three months ended September 30, 2003.

• During the third quarter of calendar year 2004, the Company recognized income before taxes of $20.5 million and provided for an income tax expense of $8.6 million, resulting in an effective tax rate for the quarter of 41.9%. The Company anticipates reporting an effective tax rate for calendar year 2004 in the range of 50%-53%. Our effective tax rate exceeds our statutory tax rate because our profitable operations continue to be concentrated in relatively high tax rate jurisdictions, while losses in several of our foreign operations cannot be used to reduce taxes on earnings in other countries.

• Cash used in operations was $37.9 million for the quarter ended September 30, 2004.

Industry Business Unit Highlights

Key performance results for the Company’s major business segments include the following.

• Public Services revenue for the third quarter of 2004 was $330.4 million, representing an increase of $58.9 million, or 21.7%, compared to the three months ended September 30, 2003. The increase in revenue is attributable to growth in both the Federal and the State, Local and Education sectors.

• Communications & Content revenue for the quarter was $56.7 million, representing a decrease of $6.6 million, or 10.4%, compared to the three months ended September 30, 2003. Completion of several large contracts since last year involving Section 271 testing was a primary contributor to this decline.

• Financial Services revenue for the quarter was $87.9 million, representing an increase of $27.4 million, or 45.2%, compared to the three months ended September 30, 2003. The increase in revenue was primarily attributable to strength in the Banking & Insurance sector.

• Consumer, Industrial and Technology revenue for the quarter was $119.4 million, an increase of $12.0 million, or 11.2%, compared to the three months ended September 30, 2003. The increase in revenue is attributable to improving market conditions, which have led to an increase in technology spending despite increased pricing pressures.

• International revenue of $246.5 million during the quarter increased $7.2 million, or 3.0%, over the three months ended September 30, 2003. The increase in revenue from our international operations was primarily the result of the effect of currency exchange-rate fluctuations on reported revenue. Revenue for the EMEA region increased by $11.7 million, or 8.5%, when compared to the three months ended September 30, 2003, while revenue for the Asia Pacific and Latin America regions decreased by $4.2 million, or 5.2%, and $0.3 million, or 1.2%, respectively, when compared to the three months ended September 30, 2003.

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Year-to-Date Business Results

The current year-to-date results include the following key performance items and other information.

• Revenue for the nine months ended September 30, 2004 was $2,587.4 million, an increase of $245.4 million, or 10.5%, from revenue of $2,342.0 million for the nine months ended September 30, 2003. This increase was primarily attributable to a $188.8 million increase in revenue within our North America operations and a $51.0 million increase in revenue within our international operations.

• Utilization continued to improve on a consolidated basis, increasing to 67.8% for the nine months ended September 30, 2004 compared to 64.1% for the nine months ended September 30, 2003. Utilization for our North America operations was 71.2% during the nine months ended September 30, 2004, while utilization for our international operations was 63.1% for the same period.

• Operating income for the nine months ended September 30, 2004 was $80.6 million, an increase of $81.8 million from an operating loss of $1.2 million for the nine months ended September 30, 2003. Operating income improved to 3.1% of revenue during the nine months ended September 30, 2004 compared to an operating loss of 0.1% of revenue during the prior year. Operating income was impacted favorably by decreases in amortization of purchased intangible assets and lease and facilities charges of $30.6 million and $62.6 million, respectively, for the nine months ended September 30, 2004 as compared to the nine months ended September 30, 2003.

• Net income for the nine months ended September 30, 2004 was $28.7 million, or $0.14 per share, compared to a net loss for the nine months ended September 30, 2003 of $24.7 million, or a loss of $0.13 per share.

As announced in the Company’s press release dated September 22, 2004, a teleconference will be held today at 8:00 a.m. ET to discuss the results of the third quarter. To participate in the call, please dial (888) 791-4793, passcode: 1104; International callers should dial (484) 630-1730, passcode: 1104. A rebroadcast will be available approximately two hours after the end of the call until Friday, November 19, 2004. To access the rebroadcast, dial (888) 300-0165; International callers should dial (402) 998-1239.

This teleconference can be accessed in a listen only mode from the Company’s website at www.bearingpoint.com. Online replay, available approximately two hours after the end of the call, and all written materials associated with this call will be available until Friday, November 19, 2004.

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About BearingPoint, Inc.

BearingPoint, Inc. (NYSE:BE), is one of the world’s largest business consulting, systems integration and managed services firms serving Global 2000 companies, medium-sized businesses, government agencies and other organizations. We provide business and technology strategy, systems design, architecture, applications implementation, network infrastructure, systems integration and managed services. Our service offerings are designed to help our clients generate revenue, reduce costs and access the information necessary to operate their business on a timely basis. Based in McLean, Va., BearingPoint has been named by Fortune as one of America’s Most Admired Companies in the computer and data services sector. For more information, visit the Company’s website atwww.BearingPoint.com.

This press release may contain forward-looking statements relating to our operations that are based on our current expectations, estimates and projections. Words such as “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” and similar expressions are used to identify these forward-looking statements. These statements include, but are not limited to, statements regarding the following: whether our cost saving initiatives and restructuring actions will allow us to improve our financial performance going forward and our ability to position the Company to conform to the current global economic environment. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. Actual outcomes and results may differ materially from what is expressed or forecasted in these forward-looking statements. As a result, these statements speak only as of the date they were made, and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Our actual results may differ from the forward-looking statements for many reasons, including: any continuation of the global economic downturn and challenging economic conditions; the business decisions of our clients regarding the use of our services; the timing of projects and their termination; the availability of surety bonds, letters of credit or bank guarantees supporting client engagements; the impact of rating agency actions; the availability of talented professionals to provide our services; the pace of technological change; the strength of our joint marketing relationships; the actions of our competitors; unexpected difficulties associated with the Company’s asset acquisitions, group hires and the acquisition of BearingPoint GmbH, including rationalization of assets and personnel and managing or integrating these acquisitions of assets, personnel or businesses; changes in spending policies or budget priorities of the U.S. Government, particularly the Department of Defense, in light of the large U.S. budget deficit; and our inability to use losses in some of our foreign subsidiaries to offset earnings in the U.S. In addition, these statements could be affected by domestic and international economic and political conditions. For a more detailed discussion of these factors, see Exhibit 99.1 in our Report on Form 10-Q for the quarter ended June 30, 2004.

For Media:	For Investors:
John Schneidawind	Deborah Mandeville
BearingPoint, Inc.	BearingPoint, Inc.
john.schneidawind@bearingpoint.com	debbie.mandeville@bearingpoint.com
(703) 747-5853	(508) 549-5207

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STATEMENTS OF OPERATIONS - QUARTERLY

US dollars in thousands, except share and per share data	Three Months Ended September 30, 2004					Three Months Ended September 30, 2003
Revenue	$	840,864		100.0	%	$	742,958		100.0	%
Costs of Service:
Professional Compensation		382,936		45.5			347,373		46.8
Other Direct Contract Expenses		217,610		25.9			182,734		24.6
Lease and Facilities Charge		—		—			59,203		8.0
Other Costs of Service		66,863		8.0			66,405		8.9
Total Costs of Service		667,409		79.4			655,715		88.3
Gross Profit		173,455		20.6			87,243		11.7
Amortization of Purchased Intangible Assets		792		0.1			8,106		1.1
Selling, General & Administrative		146,862		17.5			129,428		17.4
Operating Income (Loss)		25,801		3.1			(50,291	)	(6.8	)
Interest Income / (Expense), Net		(4,717	)	(0.6	)		(2,149	)	(0.3	)
Other Income / (Expense), Net		(537	)	(0.1	)		374		0.1
Income (Loss) Before Taxes		20,547		2.4			(52,066	)	(7.0	)
Income Tax Expense (Benefit)		8,605		1.0			(12,882	)	(1.7	)
Net Income (Loss)	$	11,942		1.4		$	(39,184	)	(5.3	)
Earnings (Loss) Per Share - Basic and Diluted:
Net Income (Loss)	$	0.06				$	(0.20	)
Common Shares Outstanding:
Weighted Average - Diluted		198,243,384					193,093,913
Period End		199,166,964					194,446,144
GLOBAL PERFORMANCE METRICS
Utilization Rate		67	%				62	%
Gross Billing Rate	$	167				$	179
Net Billing Rate	$	123				$	135
Days Sales Outstanding		80					63
Average Billable Headcount		14,163					12,872
Total Headcount (Period End)		16,557					14,931

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STATEMENTS OF OPERATIONS - YEAR TO DATE

US dollars in thousands, except share and per share data	Nine Months Ended September 30, 2004					Nine Months Ended September 30, 2003
Revenue	$	2,587,405		100.0	%	$	2,341,963		100.0	%
Costs of Service:
Professional Compensation		1,126,123		43.5			1,081,055		46.2
Other Direct Contract Expenses		731,650		28.3			562,288		24.0
Lease and Facilities Charge		11,951		0.5			74,530		3.2
Other Costs of Service		197,554		7.6			189,910		8.1
Total Costs of Service		2,067,278		79.9			1,907,783		81.5
Gross Profit		520,127		20.1			434,180		18.5
Amortization of Purchased Intangible Assets		2,890		0.1			33,474		1.4
Selling, General & Administrative		436,648		16.9			401,944		17.2
Operating Income (Loss)		80,589		3.1			(1,238	)	(0.1	)
Interest Income / (Expense), Net		(12,870	)	(0.5	)		(10,284	)	(0.4	)
Other Income / (Expense), Net		(2,112	)	(0.1	)		(2,282	)	(0.1	)
Income (Loss) Before Taxes		65,607		2.5			(13,804	)	(0.6	)
Income Tax Expense		36,331		1.4			10,933		0.5
Income (Loss) Before Cumulative Effect of Change in Accounting Principle		29,276		1.1			(24,737	)	(1.1	)
Cumulative Effect of Change in Accounting Principle		(529	)	(0.0	)		—		—
Net Income (Loss)	$	28,747		1.1		$	(24,737	)	(1.1	)
Earnings (Loss) Per Share:
Income (Loss) Before Cumulative Effect of Change in Accounting Principle - Basic and Diluted	$	0.15				$	(0.13	)
Cumulative Effect of Change in Accounting Principle - Basic and Diluted		—					—
Net Income (Loss) - Basic	$	0.15				$	(0.13	)
Net Income (Loss) - Diluted	$	0.14				$	(0.13	)
Common Shares Outstanding:
Weighted Average - Diluted		198,733,697					191,513,588
Period End		199,166,964					194,446,144
GLOBAL PERFORMANCE METRICS
Utilization Rate		68	%				64	%
Gross Billing Rate	$	181				$	181
Net Billing Rate	$	130				$	138
Days Sales Outstanding		80					63
Average Billable Headcount		13,838					13,372
Total Headcount (Period End)		16,557					14,931

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BALANCE SHEETS

US dollars in thousands	September 30, 2004		December 31, 2003
ASSETS
Current Assets:
Cash and Cash Equivalents	$	149,040	$	122,723
Accounts Receivable, Net		459,751		357,620
Unbilled Revenue		353,485		293,559
Deferred Income Taxes		42,678		35,291
Prepaid Expenses and Other Current Assets		66,545		53,088
Total Current Assets		1,071,499		862,281
Property and Equipment, Net		211,987		203,341
Goodwill		967,678		981,222
Other Intangible Assets, Net		4,376		8,156
Deferred Income Taxes, Less Current Portion		42,799		50,539
Other Assets		24,645		23,908
Total Assets	$	2,322,984	$	2,129,447
LIABILITIES AND EQUITY
Current Liabilities:
Current Portion of Notes Payable	$	118,180	$	9,345
Accounts Payable		263,905		200,521
Accrued Payroll and Employee Benefits		173,960		175,830
Deferred Revenue		67,723		72,473
Income Tax Payable		20,950		21,082
Current Portion of Accrued Lease and Facilities Charge		18,921		22,048
Deferred Income Taxes		4,865		4,268
Other Current Liabilities		104,707		123,829
Total Current Liabilities		773,211		629,396
Notes Payable, Less Current Portion		226,921		238,883
Accrued Employee Benefits		68,253		62,821
Accrued Lease and Facilities Charge, Less Current Portion		31,842		33,465
Deferred Income Taxes, Less Current Portion		7,885		4,549
Other Liabilities		33,877		28,675
Total Liabilities		1,141,989		997,789
Total Equity		1,180,995		1,131,658
Total Liabilities and Equity	$	2,322,984	$	2,129,447

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STATEMENTS OF OPERATIONS - CONSECUTIVE QUARTERLY RESULTS

US dollars in thousands, except share and per share data	Qtr Ended Sept. 30, 2004			Qtr Ended June 30, 2004			Qtr Ended Mar. 31, 2004			Qtr Ended Dec. 31, 2003			Qtr Ended Sept. 30, 2003
Revenue	$	840,864		$	885,500		$	861,041		$	811,473		$	742,958
Costs of Service:
Professional Compensation		382,936			367,445			375,742			342,397			347,373
Other Direct Contract Expenses		217,610			253,301			260,739			237,710			182,734
Lease and Facilities Charge		—			8,379			3,572			2,483			59,203
Other Costs of Service		66,863			63,733			66,958			63,102			66,405
Total Costs of Service		667,409			692,858			707,011			645,692			655,715
Gross Profit		173,455			192,642			154,030			165,781			87,243
Amortization of Purchased Intangible Assets		792			1,003			1,095			2,545			8,106
Goodwill Impairment Charge		—			—			—			127,326			—
Selling, General & Administrative		146,862			151,856			137,930			144,347			129,428
Operating Income (Loss)		25,801			39,783			15,005			(108,437	)		(50,291	)
Interest Income / (Expense), Net		(4,717	)		(3,949	)		(4,204	)		(4,438	)		(2,149	)
Other Income / (Expense), Net		(537	)		(825	)		(750	)		2,005			374
Income (Loss) Before Taxes		20,547			35,009			10,051			(110,870	)		(52,066	)
Income Tax Expense (Benefit)		8,605			19,828			7,898			15,713			(12,882	)
Income (Loss) Before Cumulative Effect of Change in Accounting Principle		11,942			15,181			2,153			(126,583	)		(39,184	)
Cumulative Effect of Change in Accounting Principle		—			—			(529	)		—			—
Net Income (Loss)	$	11,942		$	15,181		$	1,624		$	(126,583	)	$	(39,184	)
Earnings (Loss) Per Share - Basic and Diluted:
Income (Loss) Before Cumulative Effect of Change in Accounting Principle	$	0.06		$	0.08		$	0.01		$	(0.65	)	$	(0.20	)
Cumulative Effect of Change in Accounting Principle		—			—			—			—			—
Net Income (Loss)	$	0.06		$	0.08		$	0.01		$	(0.65	)	$	(0.20	)
Common Shares Outstanding:
Weighted Average - Diluted		198,243,384			198,710,662			198,203,736			194,071,874			193,093,913
Period End		199,166,964			196,434,731			196,395,150			194,483,114			194,446,144
GLOBAL PERFORMANCE METRICS
Utilization Rate		67	%		68	%		66	%		64	%		62	%
Gross Billing Rate	$	167		$	185		$	192		$	193		$	179
Net Billing Rate	$	123		$	132		$	134		$	136		$	135
Days Sales Outstanding		80			80			74			67			63
Average Billable Headcount		14,163			13,704			13,271			12,924			12,872
Total Headcount (Period End)		16,557			15,995			15,572			15,013			14,931

Note: Prior quarters have been reclassified to conform with current presentation.

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BearingPoint

INDUSTRY RESULTS

US dollars in thousands	Public Services		Communications & Content		Financial Services		CIT		EMEA		Asia Pacific		Latin America		Corporate / Other			Total
Quarter Ended Sept. 30, 2004
Revenue	$	330,405	$	56,654	$	87,924	$	119,434	$	148,502	$	76,290	$	21,665	$	(10	)	$	840,864
Other Direct Contract Expenses		100,051		12,683		13,413		32,117		28,270		25,632		4,586		858			217,610
Costs of Service		135,189		34,860		48,293		56,246		95,561		48,645		12,027		18,978			449,799
Gross Profit	$	95,165	$	9,111	$	26,218	$	31,071	$	24,671	$	2,013	$	5,052	$	(19,846	)	$	173,455
Quarter Ended June 30, 2004
Revenue	$	360,563	$	57,616	$	76,979	$	105,696	$	163,898	$	98,130	$	19,658	$	2,960		$	885,500
Other Direct Contract Expenses		135,258		13,518		10,718		24,685		31,320		29,176		4,500		4,126			253,301
Costs of Service		126,451		32,376		40,736		55,707		98,983		42,417		10,714		32,173			439,557
Gross Profit	$	98,854	$	11,722	$	25,525	$	25,304	$	33,595	$	26,537	$	4,444	$	(33,339	)	$	192,642
Quarter Ended Mar. 31, 2004
Revenue	$	353,403	$	60,394	$	67,232	$	111,754	$	153,934	$	91,637	$	20,950	$	1,737		$	861,041
Other Direct Contract Expenses		137,237		15,368		15,133		30,896		29,068		27,493		4,840		704			260,739
Costs of Service		118,675		34,326		36,849		56,662		107,796		44,030		12,050		35,884			446,272
Gross Profit	$	97,491	$	10,700	$	15,250	$	24,196	$	17,070	$	20,114	$	4,060	$	(34,851	)	$	154,030
Quarter Ended Dec. 31, 2003
Revenue	$	303,553	$	77,206	$	60,103	$	108,166	$	152,481	$	82,781	$	25,138	$	2,045		$	811,473
Other Direct Contract Expenses		108,921		18,653		12,092		34,413		35,581		21,807		7,090		(847	)		237,710
Costs of Service		102,496		39,055		31,222		45,413		96,177		43,446		12,431		37,742			407,982
Gross Profit	$	92,136	$	19,498	$	16,789	$	28,340	$	20,723	$	17,528	$	5,617	$	(34,850	)	$	165,781
Quarter Ended Sept. 30, 2003
Revenue	$	271,473	$	63,254	$	60,561	$	107,427	$	136,815	$	80,505	$	21,929	$	994		$	742,958
Other Direct Contract Expenses		81,086		12,007		10,581		27,058		25,987		19,398		6,995		(378	)		182,734
Costs of Service		104,872		35,035		31,751		58,960		96,590		41,239		11,305		93,229			472,981
Gross Profit	$	85,515	$	16,212	$	18,229	$	21,409	$	14,238	$	19,868	$	3,629	$	(91,857	)	$	87,243

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Selected Definitions

Revenue includes all amounts that are billed or billable to clients, including other direct contract expenses. Revenue is generally recognized on a time and materials or percentage-of-completion basis, depending upon the type of contract with the customer. Revenue related to time and material contracts are recognized in the period in which services are performed. Revenue related to fixed price contracts are recognized based upon costs to the client incurred as a percentage of total estimated costs to the client. The cumulative impact of any revisions in estimated total revenue and direct contract costs are recognized in the period they become known.

Other Direct Contract Expenses include costs directly attributable to client engagements. These costs include items such as computer hardware and software, travel expenses for professional personnel and costs associated with subcontractors.

Other Costs of Service primarily consist of the costs attributable to the support and maintenance of the professional staff, bad debt expense relating to accounts receivable and other costs attributable to the servicing of our client base. These costs include occupancy costs related to office space utilized by professional staff, the costs of training and recruiting professional staff and costs associated with professional support personnel.

Selling, General and Administrativeexpenses include organic expenses such as marketing, costs for information systems, finance and accounting, human resources, sales commissions and business development expenses. In addition, BearingPoint has entered into a transition services agreement and an outsourcing agreement with KPMG LLP, whereby the Company receives and is charged for certain shared services.

Utilization Rate represents total hours charged directly to engagements divided by total hours in a specific time period. Personnel included in this calculation are services, sales force and solutions employees. Infrastructure personnel are excluded from this calculation.

Days Sales Outstanding(DSO) represents the trailing twelve months revenue divided by 365 days. The resulting figure represents the average day’s sales, which is divided into the consolidated accounts receivables and unbilled revenue balances to arrive at DSO at a point in time.

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