Filed by iXL Enterprises, Inc.
Pursuant to Rule 165 and Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12 under the Securities
Exchange Act of 1934
Subject Company: Scient Corporation
Commission File No. 000-25893
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This filing contains forward-looking statements within the meaning of the Safe
Harbor Provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements relate to future events or iXL Enterprises' or Scient
Corporation's future financial performance. In some cases, you can identify
forward-looking statements by terminology such as "may," "will," "could",
"should," "expects," "plans," "anticipates," "believes," "estimates,"
"projects", "predicts," "potential" or "continue" or the negative of such terms
or other comparable terminology. These statements include, but are not limited
to, statements regarding: the expected benefits of the merger such as
efficiencies, cost savings, market profile and financial strength, and the
competitive ability and position of the combined company. These statements
involve known and unknown risks, uncertainties and other factors that may cause
iXL Enterprises' or Scient Corporation's or their industry's actual results,
levels of activity, performance or achievements to be materially different from
any future results, levels of activity, performance or achievements expressed or
implied by such forward-looking statements. These statements are only
predictions. Actual events or results may differ materially. In evaluating these
statements, you should specifically consider various factors, including the
inability to obtain, or meet conditions imposed for approvals for the business
combination, failure of the iXL Enterprises or Scient Corporation stockholders
to approve the mergers, the risk that the iXL Enterprises and Scient
Corporation's businesses will not be coordinated and integrated successfully,
and disruption from the merger making it more difficult to maintain
relationships with clients, lenders, employees, suppliers or other constituents.
For a detailed discussion of additional factors that could cause iXL
Enterprises' or Scient Corporation's results to differ materially from those
described in the forward-looking statements, please refer to iXL Enterprises'
and Scient Corporation's filings with the Securities and Exchange Commission,
especially the sections titled "Special Note Regarding Forward-Looking
Information" and "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Risk Factors" in iXL Enterprises' 2000 Annual
Report on Form 10-K and "Special Note Regarding Forward-Looking Statements" and
"Business -- Risk Factors" in Scient Corporation's 2000 Annual Report on Form
10-K. These factors may cause iXL Enterprises' or Scient Corporation's actual
results to differ materially from any forward-looking statement.
ADDITIONAL INFORMATION
In connection with these transactions, iXL Enterprises and Scient Corporation
will file a joint proxy statement/prospectus and other relevant documents with
the Securities and Exchange Commission (the "SEC"). Investors are urged to read
the joint proxy statement/prospectus carefully and in its entirety when it
becomes available and any other relevant documents filed with the SEC because
they will contain important information. You will be able to obtain the
documents free of charge at the website maintained by the SEC at www.sec.gov. In
addition, you may obtain documents filed with the SEC by iXL Enterprises free of
charge by requesting them in writing from iXL Enterprises, 1600 Peachtree St.,
NW, Atlanta, GA 30309, Attention: Michael J. Casey, or by telephone at
404-279-1000. You may obtain documents filed with the SEC by Scient Corp. free
of charge by requesting them in writing from Scient Corporation, 860 Broadway,
New York, NY 10003, Attention: Michael Hand, or by telephone at 917-534-8200.
iXL Enterprises and Scient Corporation, and their respective directors and
executive officers, may be deemed to be participants in the solicitation of
proxies from the stockholders of iXL Enterprises and Scient Corporation in
connection with the mergers. Information about the directors and executive
officers of iXL Enterprises and their ownership of iXL Enterprises stock is set
forth in the proxy statement for iXL Enterprises' 2000 annual meeting of
stockholders. Information about the directors and executive officers of Scient
Corporation and their ownership of Scient Corporation stock is set forth in the
proxy statement for Scient Corporation's 2001 annual meeting of stockholders.
Investors may obtain additional information regarding the interests of such
participants by reading the joint proxy statement/prospectus when it becomes
available.
Investors are urged to read the joint proxy statement/prospectus carefully and
in its entirety when it becomes available before making any voting or investment
decisions.
The following press release was issued by iXL Enterprises, Inc.:
iXL ANNOUNCES SECOND QUARTER 2001 RESULTS
ATLANTA, July 31, 2001 -- iXL Enterprises, Inc. (Nasdaq: IIXL - news) today
reported second quarter 2001 financial results. For the three months ended June
30, 2001, iXL's revenue was $32.7 million. Revenue was $118.4 million for the
same period for 2000. Excluding amortization, stock-based compensation and other
non-cash expenses, equity in net losses of affiliates, impairment of intangible
assets and a restructuring charge, iXL reported a pro forma net loss of $9.8
million or $0.10 per share for the three months ended June 30, 2001, compared to
pro forma net income of $3.6 million or $0.05 per share for the same period in
2000.
In May, iXL announced that it would effect a workforce reduction from
approximately 1,300 employees to approximately 1,000 employees. Those reductions
have been largely completed.
"We continue to take costs out of our operations and run our business more
efficiently. Revenue from our top 10 accounts remained constant from the
previous quarter and, in this very difficult market, we improved our
professional services margins, utilization rates and revenue per billable
employee from the previous quarter," said iXL President and Chief Executive
Officer Christopher M. Formant. "While we fell short of being cash flow positive
by the end of the quarter, our fundamental operations continue to improve, and
we believe our revenue picture is stabilizing.
"iXL added a number of new clients recently, including the American Insurance
Association, Independence Blue Cross, and the Darden Graduate School of Business
Administration at the University of Virginia," Formant added. "We also continue
to deliver significant follow-on work from larger clients such as Eastman
Chemical, DuPont, GE, Marconi and the American Booksellers Association."
About iXL:
IXL is an industry-focused global consulting and services company. iXL solves
fundamental business issues by digitizing and integrating our clients' sales,
customer service, training, production and distribution processes to facilitate
interactions with all customers, employees and suppliers across all channels.
iXL has done this successfully for some of the world's leading companies,
including AIG, BellSouth, British Airways, Budget Rent a Car, Chase, Citicorp,
The Coca-Cola Company, Delta Air Lines, DuPont, Eastman Chemical FedEx, First
Union, Fleet, GE and LloydsTSB via its Enterprise, Travel/Transportation,
Financial Services, Retail/Consumer Packaged Goods and Manufacturing groups. For
more information, visit www.ixl.com.
Forward Looking Statements
This release contains certain forward-looking statements regarding iXL,
including statements about its operations, prospects and expectations about
future financial results. These forward-looking statements involve risks and
uncertainties, which could cause actual results to differ materially. These
risks and uncertainties include the demand for iXL's services, iXL's ability to
obtain additional projects with existing or new clients, iXL's ability to
provide services to existing and new clients, the sufficiency of iXL's sales and
marketing teams, future growth, absence of long-term contracts with clients, key
management and employee retention, competition, technological advances, and
other factors identified in iXL's filings with the Securities and Exchange
Commission, including but not limited to the 10-K and subsequent 10-Qs. Copies
of those filings are available from the Company and the SEC.
Call in information: iXL Enterprises, Inc. (Nasdaq: IIXL - news) will release
its second quarter 2001 financial results on Tuesday, July 31, 2001, before the
market opens. This release will be followed by a conference call hosted by iXL
senior management at 9:00 a.m. EST. iXL had previously announced that it would
report its results on August 8, 2001.
To access the release and the conference call over the Internet, please go to
http://www.ixl.com at least 15 minutes prior to the call. To access the call
directly, dial 1-800-289-0528. Listeners will then be prompted to enter a pass
code. The pass code is 536665. A rebroadcast of the call can be accessed via
http://www.ixl.com shortly after the call has been completed. The rebroadcast
will be continually available for 48 hours.
iXL ENTERPRISES, INC.
CONDENSED STATEMENT OF OPERATIONS
(in thousands)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2001 2000 2001 2000
Professional services
revenue $ 32,737 $ 118,423 $ 73,431 $ 219,718
Professional services
expense 25,553 55,122 60,750 103,018
Sales and marketing
expenses 5,569 11,370 11,022 21,104
General and administrative
expenses 13,748 42,449 33,534 79,467
Operating loss before
non-cash expenses (12,133) 9,482 (31,875) 16,129
Stock-based compensation
and other 405 756 606 3,866
Depreciation 4,706 4,928 9,719 9,113
Amortization 4,117 11,205 8,370 22,036
Impairment charge on
intangible assets 12,746 -- 12,746 --
Restructuring charge 24,880 -- 24,880 --
Total operating
expenses 91,724 125,830 161,627 238,604
Loss from
operations (58,987) (7,407) (88,196) (18,886)
Other income (expense),
net 7,933 (84) 7,757 (266)
Interest income 350 1,667 937 3,344
Interest expense (1,256) (219) (2,259) (690)
Equity in net losses
of affiliates -- (21,908) -- (32,079)
Loss before income
taxes (51,960) (27,951) (81,761) (48,577)
Income tax expense -- (600) -- (600)
Net loss $ (51,960) $ (28,551) $ (81,761) $ (49,177)
Weighted average common
shares outstanding 95,541 74,801 87,162 73,339
Net loss per common
shareholder $ (0.54) $ (0.38) $ (0.94) $ (0.67)
(1)Pro forma net (loss)
income $ (9,812) $ 3,610 $ (35,159) $ 5,736
Pro forma net (loss)
income per share $ (0.10) $ 0.05 $ (0.40) $ 0.08
(1) Pro forma net (loss) income is defined as loss before income taxes
excluding amortization, stock-based compensation and other non-cash
expenses, equity in net losses of affiliates, impairment charge on
intangible assets and restructuring charge. Pro forma net income for
the three months ended June 30, 2000 is presented net of a 39 percent
income tax rate.
iXL ENTERPRISES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands)
(Unaudited)
June 30, December 31,
2001 2000
ASSETS
Cash and cash equivalents $ 25,578 $ 48,595
Marketable securities 202 3,967
Accounts receivable, net of allowance for
doubtful accounts of $5,768 and $21,339 at
June 30, 2001 and December 31, 2000,
respectively 19,607 47,330
Unbilled revenue 9,328 13,858
Prepaid expenses and other current assets 2,388 3,035
Total current assets 57,103 116,785
Property and equipment, net 42,046 69,896
Intangible assets, net 20,396 41,589
Other non-current assets 4,996 6,165
Total assets $124,541 $234,435
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 9,017 $ 22,919
Deferred revenue 5,462 7,537
Accrued liabilities 6,688 15,180
Restructuring reserve 8,730 30,328
Current portion of long-term debt 314 323
Borrowings under credit facility 3,700 --
Total current liabilities 33,911 76,287
Long-term restructuring reserve 11,381 11,297
Long-term debt and warrants 14,618 20,395
Other long-term liabilities 2,152 48
Total liabilities 62,062 108,027
Stockholders' equity 62,479 126,408
Total liabilities and stockholders' equity $124,541 $234,435