We are an information technology consulting firm serving Forbes Global 2000 (“Global 2000”) and other large enterprise companies with a primary focus on the United States. We help our clients gain competitive advantage by using Internet-based technologies to make their businesses more responsive to market opportunities and threats, strengthen relationships with their customers, suppliers and partners, improve productivity, and reduce information technology costs. We design, build and deliver business-driven technology solutions using third party software products. Our solutions include custom applications, portals and collaboration, eCommerce, online customer management, enterprise content management, business intelligence, business integration, mobile technology, technology platform implementations, and service oriented architectures. Our solutions enable our clients to operate a real-time enterprise that dynamically adapts business processes and the systems that support them to meet the changing demands of an increasingly global, Internet-driven and competitive marketplace.
Through our experience in developing and delivering business-driven technology solutions for a large number of Global 2000 clients, we have acquired domain expertise that we believe differentiates our firm. We use expert project teams that we believe deliver high-value, measurable results by working collaboratively with clients and their partners through a user-centered, technology-based and business-driven solutions methodology. We believe this approach enhances return-on-investment for our clients by significantly reducing the time and risk associated with designing and implementing technology solutions.
Our goal is to continue to build one of the leading independent information technology consulting firms in North America by expanding our relationships with existing and new clients and through the resumption of our disciplined acquisition strategy. We believe that information technology consulting is a fragmented industry and that there are a substantial number of privately held information technology consulting firms in our target markets that, if acquired, can be strategically beneficial and accretive to earnings over time. We have a track record of identifying, executing and integrating acquisitions that add strategic value to our business. From April 2004 through November 2007, we acquired and integrated 12 information technology consulting firms. Given the economic conditions during 2008 and 2009, we suspended acquisition activity, pending improved visibility into the health of the economy.
We serve our customers from locations in 17 markets throughout North America. In addition, as of December 31, 2009, we had 423 colleagues (defined as billable employees and subcontractors) who are part of “national” business units and travel extensively to serve clients throughout North America and Europe. Our future growth plan includes expanding our business both organically and through acquisitions, with a primary focus on the United States. We also intend to further leverage our existing offshore capabilities to support our future growth and provide our clients flexible options for project delivery. In 2009, 96% of our revenues were derived from clients in the United States while 4% of our revenues were derived from clients in Canada and Europe. In 2008 and 2007, 97% and 99%, respectively, of our revenues were derived from clients in the United States while 3% and 1%, respectively, of our revenues were derived from clients in Canada and Europe. Over 97% and 98% of our total assets were located in the United States in 2009 and 2008, respectively, with the remainder located in Canada, China, and India.
We place strong emphasis on building lasting relationships with clients. Over the past three years ending December 31, 2009, an average of 86% of revenues were derived from clients who continued to utilize our services from the prior year, excluding any revenues from acquisitions completed in that year. We have also built meaningful relationships with software providers whose products we use to design and implement solutions for our clients. These relationships enable us to reduce our cost of sales and sales cycle times and increase success rates through leveraging our partners' marketing efforts and endorsements.
We help clients gain competitive advantage by using Internet-based technologies to make their businesses more responsive to market opportunities and threats, strengthen relationships with customers, suppliers and partners, improve productivity, and reduce information technology costs. Our business-driven technology solutions enable these benefits by developing, integrating, automating, and extending business processes, technology infrastructure and software applications end-to-end within an organization and with key partners, suppliers and customers. This provides real-time access to critical business applications and information and a scalable, reliable, secure, and cost-effective technology infrastructure that enables clients to:
·give managers and executives the information they need to make quality business decisions and dynamically adapt their business processes and systems to respond to client demands, market opportunities or business problems;
·improve the quality and lower the cost of customer acquisition and care through web-based customer self-service and provisioning;
·reduce supply chain costs and improve logistics by flexibly and quickly integrating processes and systems and making relevant real-time information and applications available online to suppliers, partners and distributors;
·increase the effectiveness and value of legacy enterprise technology infrastructure investments by enabling faster application development and deployment, increased flexibility and lower management costs; and
·increase employee productivity through better information flow and collaboration capabilities and by automating routine processes to enable focus on unique problems and opportunities.
Our goal is to be the premier technology management consulting firm in North America. To achieve our goal, our strategy is to:
·Grow Relationships with Existing and New Clients. We intend to continue to solidify and expand enduring relationships with our existing clients and to develop long-term relationships with new clients by providing them with solutions that generate a demonstrable, positive return-on-investment. Our incentive plan rewards our project managers to work in conjunction with our sales people to expand the nature and scope of our engagements with existing clients.
·Resume Making Disciplined Acquisitions. Given the economic conditions during 2008 and 2009, we suspended acquisition activity, pending improved visibility into the health of the economy. With the expected return to growth in 2010, we plan to resume our disciplined acquisition strategy. The information technology consulting market is a fragmented industry and we believe there are a substantial number of smaller privately held information technology consulting firms that can be acquired and be accretive to our financial results. We have a track record of successfully identifying, executing and integrating acquisitions that add strategic value to our business. Our established culture and infrastructure positions us to successfully integrate each acquired company, while continuing to offer effective solutions to our clients.
·Expand Geographic Base. We believe we have built one of the leading independent information technology consulting firms in the United States. We serve our customers from locations in 17 markets throughout North America. In addition, as of December 31, 2009, we had 423 colleagues who are part of “national” business units and travel extensively to serve clients primarily in North America and Europe. Our future growth plan includes expanding our business both organically and through acquisitions, with a primary focus on the United States.
·Continue Repurchasing Our Equity Securities. In an ongoing effort to provide the most value to our stockholders, the Board of Directors authorized the repurchase of up to $40.0 million of our common stock as part of a program that expires at the end of June 2011. As of December 31, 2009, we had repurchased approximately $27.5 million, or 4.5 million shares, of our outstanding common stock. We believe, at certain price levels, our stock is undervalued and the repurchase program provides the best way to return the value to our stockholders. We will continually re-evaluate the position of our stock price and will seek additional authorization to repurchase our common stock as necessary.
·Enhance Brand Visibility. Our focus on a core set of technology solutions, applications and software platforms, and a targeted customer and geographic market has given us brand visibility. In addition, we believe we have achieved the size necessary to enhance our visibility among prospective clients, employees and software vendors. As we continue to grow our business, we intend to highlight to current and prospective customers our leadership in technology solutions and infrastructure software technology platforms.
·Leverage Offshore Capabilities. Our solutions and services are primarily delivered at the customer site and require a significant degree of customer participation, interaction and specialized technology expertise. We can compliment this with lower cost offshore technology professionals to perform less specialized roles on our solution engagements, enabling us to fully leverage our United States colleagues while offering our clients a highly competitive blended average rate. We own and operate a CMMI Level 5 certified global development center in Hangzhou, China that is staffed with colleagues who provide offshore custom application development, quality assurance and testing services and we have a relationship with an offshore development facility in Bitola, Macedonia. In addition to our offshore capabilities, we employ a substantial number of H1-B foreign nationals in the United States. We also maintain a recruiting facility in Chennai, India, to continue to grow our base of H1-B foreign national colleagues. As of December 31, 2009 we had 136 colleagues at the Hangzhou, China facility and 198 colleagues with H1-B visas. We intend to continue to leverage our existing offshore capabilities to support our growth and provide our clients flexible options for project delivery.
·Invest in Our People and Culture. We have developed a culture built on teamwork, a passion for technology and client service, and a focus on cost control and the bottom line. As a people-based business, we continue to invest in the development of our professionals and to provide them with entrepreneurial opportunities, and career development and advancement. Our technology, business consulting and project management ensure that client team best practices are being developed across the company and our recognition program rewards teams for implementing those practices. We believe this results in a team of motivated professionals with the ability to deliver high-quality and high-value services for our clients.
·Leverage Existing and Pursue New Strategic Alliances. We intend to continue to develop alliances that complement our core competencies. Our alliance strategy is targeted at leading business advisory companies and technology providers and allows us to take advantage of compelling technologies in a mutually beneficial and cost-competitive manner. Many of these relationships, and in particular IBM, result in our partners, their clients or clients using IBM platforms, utilizing us as the services firm of choice.
·Expand and Enhance Our Industry Vertical Focus. We have industry focused practices such as healthcare, communications and consumer products. The goal of these industry verticals is to recruit and retain consultants with specific industry expertise and to ‘mine’ and leverage the intellectual property we have as we serve clients within these industries. Expanding these verticals will help us in terms of revenue generation as well as market expansion beyond our geographic and solution focused business units.
As of December 31, 2009, we had 1,015 employees, 857 of which were billable professionals (excludes 168 billable subcontractors) and 158 were involved in sales, administration and marketing. None of our employees are represented by a collective bargaining agreement and we have never experienced a strike or similar work stoppage. We consider our relations with our employees to be good.