Filed by Scient Corporation
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-6 under the
Securities Exchange Act of 1934
Subject Company: iXL Enterprises, Inc.
Commission File No. 000-26167
Date: October 22, 2001
The following press release was issued by Scient Corporation.
INVESTOR RELATIONS: MEDIA RELATIONS:
Theresa A. Matacia, CFA Katie McManus
415/602-6833 917/534-8200
tmatacia@scient.com kmcmanus@scient.com
SCIENT REPORTS SEPTEMBER QUARTER RESULTS
NEW YORK, NY, October 22, 2001 - Scient Corp. (NASDAQ: SCNT), The eBusiness
Innovator(TM), today reported financial results for its second fiscal quarter
ended September 30, 2001.
As a result of continued weakness in the market environment, revenues
for the second fiscal quarter totaled $11.6 million compared to $102.0 million
in the same period a year ago, and up 3% versus the June 2001 quarter.
On a pro-forma basis, Scient reported a pro forma net loss of $19.1
million (before restructuring charges, merger-related costs, and excluding
amortization of intangible assets and stock compensation charges), and a net
loss per diluted share of $0.26 for the September 2001 quarter. This compares
to a pro forma net loss of $14.8 million, or a net loss per diluted share of
$0.20, in the June quarter, and pro forma net income of $5.7 million, or a net
gain of $0.07 per diluted share in the same period a year ago. Scient recorded
pretax restructuring and merger-related charges of $5.2 million in the
September quarter.
Scient ended the September quarter with 331 total colleagues compared
to 510 at June 30, 2001. Of the decline, approximately 155 positions were
related to the restructuring initiatives that were announced in April 2001 as
well as the continued restructuring of our business.
Scient ended the quarter with $88 million in cash and cash
equivalents. This represents a decline of $27 million from the June 30th total
of $115 million and is slightly better than anticipated levels at the beginning
of the quarter.
Commenting on the Scient's performance in the September quarter, Bob
Howe, Chairman and CEO of Scient stated, "The overall market environment
remains challenging,
particularly given the events of September 11th. While many technology software
and services companies have reported a marked slowdown in business following
the terrorist attacks, we did not experience the same trends in our business.
Following September 11th, our pipeline remained stable, we did lose several
billing days and our employee productivity was affected. However, with the
exception of the capital markets sector in New York, we have been able to
recover from the impact felt in the quarter."
On a more positive note, Mr. Howe noted, "Although the demand is still
soft, we do believe the environment may be stabilizing for us. We are
successfully cultivating new relationships and have garnered additional follow
on work from existing clients. In addition, we are excited about our pending
merger with IXL Enterprises and believe the business, financial, and management
synergies we discussed at the outset of our merger agreement can be realized."
Fiscal Q2 Operational Highlights
o Served 22 clients, including 6 new clients:
> All clients served were enterprise- or enterprise-backed clients
across global business units
> 3 international clients
o Scient's top five clients accounted for 55% of revenue in the quarter
compared to 49% in the June quarter. Scient had four clients that each
accounted for greater than 10% of revenue in the quarter.
o Ongoing relationships with global enterprise clients including AXA, Boots,
BP Amoco, Credit Agricole, Fairchild Semiconductor, Genzyme, J.P. Morgan
Chase, McNeil Consumer Healthcare, Morgan Stanley, Royal & Sun Alliance,
Societe Generale, Sun Microsystems, and UBS Warburg.
Scient will be holding a conference call to discuss September quarter
results today, October 22nd, at 4:30 p.m. (EDT)/1:30 p.m. (PDT). Access to the
call is as follows:
United States: (800) 289-0436; Passcode: 631639
Outside United States: (913) 981-5507; Passcode: 631639
A replay of the October 22nd call will be available through October
29, 2001. Access to the replay is as follows:
United States: (888) 203-1112; Passcode: 631639
Outside United States: (719) 457-0820; Passcode: 631639
About Scient(R): Scient delivers real results for clients, using extensive
eBusiness experience to reduce cost and create new revenue opportunities, based
on:
eBusiness Focus: From the start, Scient's only business has been
eBusiness, allowing Scient to gain unequaled know-how, from strategy
development through implementation;
Industry Expertise: Scient's extensive industry-specific experience in
identifying and delivering eBusiness initiatives with high impact; and
Proven Approach: Scient's dynamic integration of strategy, customer
experience and technology that drives powerful and differentiated
results, faster.
Since 1998, Scient has completed projects for 165 clients, from Global 2000
businesses to start-ups. Headquartered in New York, Scient has offices in
London and in key regions throughout the United States. For more information,
please go to www.scient.com or call 917-534-8200.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements in this press release constitute forward-looking
statements. These statements involve known and unknown risks, uncertainties and
other factors that may cause our or our 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. Forward-looking statements relate
to future events or our future financial performance. In some cases, you can
identify forward-looking statements by terminology such as "may," "will,"
"should," "expects," "plans," "anticipates," "believes," "estimates,"
"predicts," "potential" or "continue" or the negative of such terms or other
comparable terminology. These statements include but are not limited to
statements regarding our expectations regarding the future success of the
business, future profitability, break-even point, margins, cash position,
restructuring charges, and other operating and financial results, the scope,
nature and timing of Scient's expected restructuring activities and the
anticipated impact of those activities, statements regarding the proposed
merger between Scient and iXL Enterprises and the expected outcome thereof, and
the success of our strategy and corresponding client demand for our services.
These statements are only projections. Actual events or results may differ
materially. Factors that could cause or contribute to such differences include
but are not limited to, the timing and size of client demand for Scient's
services; the potential loss of or delay by major clients; Scient's ability to
hire, train and retain the appropriately skilled and qualified personnel;
Scient's ability to attract and retain new clients; Scient's ability to develop
successful relationships with partners and other third parties; our ability to
accurately price our projects and to meet client expectations; our ability to
manage and expand international operations; our ability to predict and offer
responsive services to meet market demand; the highly competitive market in
which we operate; the efficiency and success of our accounts receivable
efforts; the accuracy of our internal reporting and management systems; our
reliance on a limited number of clients and our lack of long-term contracts;
assuming the completion of the merger, that the business, financial and
management synergies will not be realized; and the development and
sustainability of a market for Scient's services. This list should not be
considered inclusive of all risk factors. In evaluating these statements, you
should specifically consider various factors, including the risks factors
listed in our Form 10-K for the period ended March 31, 2001, 10-Q for the
period ended June 30, 2001 and the Registration Statement, Form S-4, for
India-Sierra Holdings, Inc (to be renamed Scient, Inc. upon completion of the
merger) filed with the Securities and Exchange Commission. These factors may
cause our actual results to differ materially from any forward-looking
statement.
ADDITIONAL INFORMATION
In connection with these transactions, India-Sierra Holdings, Inc., together
with iXL Enterprises and Scient Corporation, filed a registration statement on
Form S-4 which was declared effective on October 11, 2001, a definitive joint
proxy statement/prospectus and other relevant documents with the Securities and
Exchange Commission (the "SEC"). Investors are urged to read the definitive
joint proxy statement/prospectus carefully and in its entirety and any other
relevant documents filed with the SEC because they contain important
information. You can obtain the documents free of charge at the website
maintained by the SEC at www.sec.gov. In addition, you can 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: Jill A. Gilmer, or by telephone at 404-279-1000. You can obtain
documents filed with the SEC by Scient Corporation 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 definitive joint proxy
statement/prospectus carefully and in its entirety before making any voting or
investment decisions.
#
SCIENT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months Ended
September 30,
------------------
2001 2000
------ ------
(unaudited)
Revenues $ 11,610 $ 102,005
Operating expenses
Professional services 15,315 45,832
Selling, general and administrative 16,409 49,000
Restructuring Costs 3,190 -
Merger 2,000 -
Amortization of intangible assets - 1,167
Stock compensation 1,093 2,741
-------- ---------
Total operating expenses 38,006 98,740
-------- ---------
Income (loss) from operations (26,397) 3,265
Interest and other income, net 1,015 2,379
-------- ---------
Income/(loss) before income taxes (25,382) 5,644
-------- ---------
Provision for income taxes - 2,258
Net income/(loss) $(25,382) $ 3,386
======== =========
Net income/(loss) per share:
Basic $ (0.35) $ 0.05
Diluted $ (0.35) $ 0.04
Weighted average common shares:
Basic 72,590 65,664
Diluted 72,590 80,766
Pro forma information: (unaudited)
Pro forma net income/(loss) (a) $(19,099) $ 5,731
Pro forma net income/(loss) per diluted share (a) $ (0.26) $ 0.07
Shares used in computing pro forma net
income/(loss) per diluted share 73,846 80,766
(a) Excludes stock compensation, amortization of intangible assets,
restructuring costs, and includes pro forma tax expense of 40% for the
quarter ended September 30, 2000
SCIENT CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands)
ASSETS
September 30, March 31,
2001 2001
------------- -------------
(unaudited)
Current assets
Cash and cash equivalents $ 32,360 $ 93,601
Restricted Cash 37,341 -
Short-term investments 18,171 67,472
Accounts receivable, net 12,317 27,139
Prepaid expenses and other 5,888 18,203
----------- ----------
Total current assets 106,077 206,415
Property and equipment, net 9,032 8,278
Intangibles, net - 9,351
----------- ----------
$ 115,108 $ 224,044
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable 1,213 6,357
Accrued compensation and benefits 12,308 15,047
Accrued other expenses 48,464 57,324
Deferred revenue - 105
Capital lease obligations, current 3,328 3,892
----------- ----------
Total current liabilities 65,313 82,725
Capital lease obligations, long-term 1,285 2,614
----------- ----------
$ 66,598 $ 85,339
----------- ----------
Stockholders' equity
Common stock 7 7
Additional paid-in capital 311,878 313,866
Unearned compensation (2,840) (6,321)
Accumulated deficit (260,535) (168,847)
----------- ----------
Total stockholders' equity 48,510 138,705
----------- ----------
$ 115,108 $ 224,044
=========== ==========
See notes to interim condensed consolidated financial statements.