F I N A N C I A L H I G H L I G H T S > 1 > 3 > 5 > 7 > 9 > 11 (in thousands, except per share data) R E S U LT S O F O P E R AT I O N S : Net revenues Cost and expenses: Project personnel and expenses Selling, general and administrative expenses Stock compensation expense Merger related expenses Impairment of capitalized software Purchased research and development expense Restructuring costs Total costs and operating expenses Income (loss) from operations Other income (expense): Litigation settlement Interest income (expense), net Income (loss) before income taxes and extraordinary loss Income taxes Income (loss) before extraordinary loss Extraordinary loss on early extinguishment of debt (net of taxes) Net income (loss) Basic net income (loss) per common share Weighted average common shares outstanding Diluted net income (loss) per common share Weighted average common and common equivalent shares outstanding F I N A N C I A L P O S I T I O N : Cash and cash equivalents Working capital Total assets Shareholders’ equity YEAR ENDED DECEMBER 31, 1999 YEAR ENDED JANUARY 1, 1999 $ 260,460 $167,517 154,531 82,672 — 11,700 989 — — 249,892 10,568 — 281 10,849 7,602 3,247 2,113 1,134 0.03 34,953 0.03 43,098 $ $ $ 99,054 62,609 63,886 — — 5,200 921 231,670 (64,153) 2,500 (631) (62,284) (870) (61,414) — $ (61,414) $ $ (2.47) 24,844 (2.47) 24,844 DECEMBER 31, 1999 JANUARY 1, 1999 $ 27,124 $ 55,166 $ 200,713 $ 140,270 $ 36,931 $ 49,711 $153,394 $100,789 1 9 9 8 – 1 9 9 9 Q U A R T E R L Y N E T R E V E N U E S (in thousands) $69,038 $71,052 $62,738 $57,632 $48,884 $42,116 $42,711 $33,806 Q1/98 Q2/98 Q3/98 Q4/98 Q1/99 Q2/99 Q3/99 Q4/99 > 2 > 4 > 6 > 8 > 10 H E L P I N G > 12 busine Dear Shareholder, As you opened up this annual report, I hope the first thing you So as we looked ahead to the opportunities of the ebusiness age, noticed was the brand new answerthink corporate identity. Have we knew we needed to augment our skills with world-class another look if you like. You might notice a few changes. For interactive marketing and branding expertise, and we did it by starters, there’s the head with those “electronic” rings around it. merging with THINK New Ideas. We knew we needed to add new “AnswerThink Consulting Group” and the ACG acronym have given services, and we did it by launching services such as eProcurement way to “answerthink.” And finally there’s the new tagline: and eCRM. We knew we needed to partner with other technology “Helping business evolve.” leaders to fully deliver on the Internet promise, and we did it by What’s it all mean? Plenty. IBM and I2 Technologies. But even as we evolved, our original announcing new strategic initiatives with organizations such as It’s been quite an exciting year in the life of this company, and anticipating, adapting and leading change. Now, that mission is mission proved to be solid. From the outset, it was all about the new identity reflects, among other things, that answerthink is clearer than ever. itself evolving in order to best help our clients capitalize on the opportunities provided by the emerging Internet economy. All of these changes have now enabled us to again help redefine our sector with the recent introduction of our electronic To put it another way, there’s a reason answerthink is qualified to marketplace offering, ePlex. The ePlex brings focused Application help businesses evolve: we had to do it ourselves. Three years Service Provider (ASP) solutions tailored to buyers and sellers ago, a group of associates founded a new company because they conducting business in a real-time marketplace setting. Our saw the limitations of conventional consulting models. It was an offering will include a series of ePlex modules specifically opportunity to help redefine a sector during a period in which the designed to execute online transactions including Trading Internet and related technologies would have a very profound Exchanges, Pay and Settle, Transportation and Logistics, Demand effect on every aspect of our lives. In a sense, AnswerThink Planning and Forecasting, Supply Chain Execution, Customer Consulting Group was created with the premise that, in order to Relationship Management, Content Management and Decision remain a leader in its sector, it must continue to evolve…right Support. The ePlex service modules are being used to bring from the start. This is a requirement of any great organization, complete industries, suppliers, customers and even competitors but especially important given the role we play in helping our together to transact business on the Internet through a clients successfully execute their strategies. comprehensive electronic marketplace approach. According to > 1 > 3 > 5 > 7 > 9 > 11 ss E V O L V E International Data Corporation and Forrester Research, over 5000 Here at the outset of a new century, companies stand at a new ePlexes will be developed during 2000, while Gartner Group crossroads. In the rearview mirror, the threat of “business as estimates that $2.71 trillion in commerce will be conducted usual.” Ahead, the wide-open landscape of ebusiness. There’s through ePlexes by 2004. This provides an exceptional never been a greater opportunity for companies that are wise opportunity to truly differentiate the depth and breadth of our enough to maximize the way they do business and make the most esolutions services. of shifting paradigms. Today, businesses large and small face the same challenge we I want to personally thank each one of our associates and at answerthink had to confront: to accurately assess the investors who join us for the journey as answerthink rises to a opportunities and realities of the ebusiness era, and make the position of leadership in the rapidly changing world of “e” and in necessary changes to ensure and maximize their success. In short, the process helps business evolve. to evolve or die. Fortunately, answerthink is equipped and positioned to provide, in an unmatched offering, the technology expertise, strategic thinking and creative firepower companies Ted Fernandez will need to transition into the dynamic ebusiness world. Ted A. Fernandez Chief Executive Officer & Chairman, answerthink “ Our clients can now creatively solve all their ebusiness, technology and strategic issues with the help of a single, multi-dimensional, world-class partner.” > Ted A. Fernandez > 2 > 4 > 6 > 8 > 10 > 12 I S T H I S T H E BEGINN E N D O F Saying the Internet is impacting business is a bit like saying that discovering the earth was round had an impact on mapmaking. It’s a given. O R T H E But while progressive senior executives acknowledge their companies need to embrace change, many are unsure how to best grow their business as paradigms shift. To complicate matters, individual solution providers could solve parts, but never all, of the puzzle. Even AnswerThink Consulting Group, with our world- renowned consulting, benchmarking and best-practices, technology integration and ecommerce services, simply couldn’t offer Fortune 1000 companies end-to-end ebusiness solutions. No one could. The opportunity was enormous. If one company could supply the entire range of services and solutions—from front-end brand engineering to back-end legacy systems integration—it could gain an enviable leadership position helping businesses exploit the opportunities of the new ecommerce paradigm. We wanted answerthink to be that company. But before we could help anyone else evolve, we had to evolve ourselves. Which is why in November, answerthink merged with THINK New Ideas, a company that provided a high level of integrated, strategic marketing, technology and communications solutions to Fortune 1000 companies. With the merger, answerthink now helps design, build, market and support the ebusiness efforts of a growing list of Fortune 1000 and dot-com clients. answerthink offers an unparalleled range of services that fall primarily within six key areas: Benchmarking, Branding & Marketing, eBusiness Strategy and Services, eCommerce, Technology Architecture & Integration, and Web Development. From ebusiness consulting to interactive marketing; from branding and creative content development to Web design; from benchmarking and best-practices to ebusiness transformation, organization change and more; answerthink now offers clients a comprehensive spectrum of excellence never before available from one company. So, is this the dawn of the end-to-end esolutions era? Well, not the way we see it. “The concept of ‘end-to-end’ resonates with clients because conventional business thinking has created an end-to-end mentality,” says Allan R. Frank, President & Chief Technology Officer. “Technology is changing that. It enables business to operate open architectures that incorporate flux and leverage all the benefits of the enterprise. It’s not one point that connects with one point and so on down the line. It’s all points connected to all other points.” When it comes to information, we at answerthink embrace virtually everything, and everything virtually. We believe the lines are quickly disappearing from end-to-end thinking. We believe the true leaders will be the companies that think, operate and communicate in organic, flexible and multidimensional ways. “In answerthink,” David N. Dungan, Chief Operating Officer, notes, “companies now have a single partner that can solve problems at any—or every—phase of ebusiness. But philosophically, ‘end-to- end’ suggests a linear model. And we believe dynamic beats linear. Offering eservices is one thing. Recognizing how they’re connected in new and powerful ways is where our point of difference really begins.” > 1 > 3 > 5 > 7 > 9 > 11 inG E N D - T O - E N D ? > 2 > 4 > 6 > 8 > 10 > 12 E B U S I N E S S S T R A T E G A N D S E R V I C E S Developing effective ebusiness solutions requires more than sticking a lower case “e” in front of words. It takes knowledge and experience. Fortunately, answerthink has plenty of both. We help drive superior growth and results by evaluating the inner workings of organizations, streamlining processes, motivating human resources and ultimately mapping the quickest path to a company‘s ebusiness destination. We have a comprehensive understanding of the new business models being employed by both traditional businesses as they leverage the Internet, as well as virtual companies and trading communities operating S E R V I C E S : > > > > > > E B U S I N E S S T R A N S F O R M A T I O N S U P P L Y C H A I N D E M A N D F U L F I L L M E N T E P L E X E L E C T R O N I C M A R K E T S P R O C U R E M E N T C R M / D E M A N D G E N E R A T I O N E R E S O U R C E S exclusively on the Internet. For example, for our client Floraplex,™ We offer our clients a comprehensive range of services required to we designed and built an ePlex that links growers, wholesalers identify, design, develop and deploy Internet-based solutions. Our and retailers and allows them to transact business in real-time solution offerings include ePlex, eCommerce, eCRM, eProcurement over the Internet. Much of our expertise is derived from our senior and eResources. We bring together our strategists, designers, consultants, who combine many years of business experience with engineers and project managers in multidisciplinary teams. focus on the Internet. This enables our clients to avoid the bottlenecks in project management and deliverables associated with multiple consulting “As global Internet usage expands,” states Susan D. Goodman, firms designing and implementing a desired solution. By doing Chief Corporate Development Officer, Managing Director eMarketing this, we allow our clients to achieve improved time-to-market Solutions, “global companies are increasingly allocating significant and value in today’s competitive environment. resources to seize the broader opportunities presented by the Internet—not just how to market online in the United States, but how to build new channels, reach new audiences, communicate with global partners, more efficiently process transactions—across borders and time zones. These opportunities require senior consultants who are not only fluent in the Internet, but also are multilingual, multicultural and, more importantly, multidisciplinary.” G YE > 1 > 3 > 5 > 7 > 9 > 11 E C O M M E R C E S E R V I C E S : S T R A T E G Y / C O N S U L T I N G B 2 B B 2 C C O M M E R C E A P P L I C A T I O N S > > > > The business transaction. The primary connection between understand emerging business models, including ePlexes, and the company and customer. The culmination of everything a company technical skills required to integrate software packages, custom and its employees work toward. A glitch here can undo a year of software components and legacy systems in order to handle the man-hours in just seconds. enormous growth in volume that businesses are expected to experience on the Internet. Our ecommerce mission is simple: to ensure that at this most critical juncture, companies have the necessary information In today’s virtual world, companies must integrate and deploy technology products in place to help them thrive. While there are technology and services across the boundaries of their enterprises. many Internet services firms active in the market today, we Whether it’s running customer self-service facilities, online believe that most focus on Web design, user experience and transaction and Internet-based procurement systems, or managing Web-enablement of simple transaction systems. In addition, we shipments of products and supplies, the same four criteria prevail: believe that few firms have all of the technical skills or resources speed, accuracy, accountability and consistency. At answerthink, necessary to design solutions that are reliable, scalable and we have the experience and the proven ability to help companies flexible or which can be deployed in an environment that may succeed in the world of today’s transactional environments. involve multiple computing platforms and technologies. The stakes have never been higher. But the rewards have never answerthink provides both the business knowledge required to been greater. > 2 > 4 > 6 > 8 > 10 > 12 AB R S E R V I C E S : S I T E B U I L D I N G W E B A P P L I C A T I O N D E V E L O P M E N T D A T A B A S E I N T E G R A T I O N I N T R A N E T S E X T R A N E T S I N T E R A C T I V E M A R K E T I N G > > > > > > W E B D E V E L O P M E N T The world of Web sites has undergone a dramatic metamorphosis. No longer technological afterthoughts, Web sites are the essential business tool, if not the very business itself. answerthink has led this transformation. And we’ve done it not by asking “What technology can companies use?” but rather, “What do they need to achieve?” The best technology in the world can’t help a Web site that lacks a crystal-clear strategy and purpose. “Once a company’s Web presence is fully conceived, our experts in technology and marketing work with the client to make sure that the interactive strategic promise is fully realized—whatever that takes,” says Ulysses S. Knotts, Chief Sales & Marketing Officer. “Our Web developers consider themselves ‘technology agnostics,’ devoted only to what works best for each company’s needs. It’s a philosophy that has distinct advantages for our clients. Because over the years it has allowed answerthink to develop a far-reaching network of resources with a proven ability to meet any technological challenge.” R A N D I N G A N D M A R K E T I N G > 1 > 3 > 5 > 7 > 9 > 11 S E R V I C E S : I N T E R A C T I V E M A R K E T I N G & A D V E R T I S I N G E M A R K E T I N G S T R A T E G Y R E S E A R C H M E D I A C A P A B I L I T I E S S T R A T E G I C A N D A C C O U N T P L A N N I N G T R A D I T I O N A L A D V E R T I S I N G > > > > > > We’ve all grown up in the age of the brand. Back in the olden days (before 1994), brands were described using words like “new,” “fast,” “bigger” or “better.” Now, in the new world of connected expectation, the way in which we interact with brands has transformed the very meaning of what a brand is. Information technology first connected companies to their customers, partners, suppliers, investors, critics, and even competitors. The nature of brand was transformed; no longer objects or places, brands became experiences. Maxwell House was a first-generation coffee brand defined as a product. Starbucks is a new coffee brand defined by experience. The Internet age elevates the brand experience to a one-to-one relationship. Each of us now has a personal belief about what we expect in our interactions with companies and brands. The brand experience now becomes the very essence of a company’s mission. Brand informs every element of a company’s behavior. Unlike many techno-centric companies, answerthink excels at branding and marketing, through both online and offline channels. We don’t just build effective conduits between companies and their stakeholders, we develop brands and messaging that have an impact on people. Which, in this era of information overload, is no longer a luxury. > 2 > 4 > 6 > 8 > 10 > 12 T E C Global business conditions. Changing technology. Put them together and what have you got? In the minds of more and more senior executives, you’ve got a realization. Management is finding that the knowledge-worker functions in today’s enterprises need to be fundamentally reoriented in their mission, operation and, most essentially, in how value is added. But before a company can get from here to there, it better have a pretty clear idea where “here” is. answerthink’s Hackett Benchmarking & Research believes strongly that no company can B E N C H M A R K I N G successfully sustain an improvement effort without first understanding its current situation, relative to its industry and marketspace. Consequently, our Benchmarking Solutions group S E R V I C E S : > > > > > > > > F U L F I L L M E N T P R O C U R E M E N T I N F O R M A T I O N T E C H N O L O G Y F I N A N C E H U M A N R E S O U R C E S P L A N N I N G & P E R F O R M A N C E M E A S U R E M E N T C U S T O M R E S E A R C H C O N T A C T C E N T E R S maintains one of the world’s largest, most comprehensive knowledge-worker benchmarking and best-practices database. Companies can use this resource to compare their process performance with that of other companies. Beyond comparison capabilities, our benchmarking services enable executives to learn from the practices of the best performers in an ongoing study. Instead of struggling with new, untested techniques, companies can devise solutions based on the proven methods of leaders. Use of best-practices can not only mean immediate cost savings, but also increased organizational effectiveness, better information flow and higher satisfaction— exactly the things a company trying to keep pace with evolving ebusiness challenges needs. H N O L O G Y A R C H I T E C T U R E A N D I N T E G R A T I O N > 1 > 3 > 5 > 7 > 9 > 11 Information. It’s the very lifeblood of a business—any business. And the way it flows within a company has never been more S E R V I C E S : important than in this, the ebusiness age. Managing information is critical for success. Putting the right information at the end-user’s fingertips creates an undeniably lasting competitive advantage. With capabilities including IT Management and Strategy, IT Transformation, Information Architecture and Applications Integration, answerthink enables > > > > > > > I T M A N A G E M E N T / S T R A T E G Y B U S I N E S S I N T E L L I G E N C E B U S I N E S S A P P L I C A T I O N S K N O W L E D G E M A N A G E M E N T A D V A N C E D T E C H N O L O G Y C U S T O M D E V E L O P M E N T S Y S T E M S I N T E G R A T I O N organizations to build fluid information architectures, develop impact the architecture, devices and infrastructure requirements dynamic knowledge workers and combine structures and of our clients. We provide consulting, design and implementation techniques to help employees work more efficiently. of commerce applications, enterprise information portals and We evaluate, design, build, and integrate applications and related architecture, application architecture and integration, implemen- technology infrastructures that help clients take full advantage of tation of third-party software and custom application development. emerging ebusiness models. We also focus on how new We believe that a key differentiation from our competitors is our technologies in the wireless and broadband area will continue to deep understanding of third-party software functionality, and data warehouse solutions. Our services include data and network our ability to modify and integrate applications into existing computing environments. This understanding is most critical in the deployment of complex business-to-business networks or ePlexes. answerthink empowers IT executives to understand and manage mission-critical assignments. We quantify and articulate the challenges that must be addressed to transform the enterprise and its IT function into an efficient, proactive and successful ebusiness. > 2 > 2 > 4 > 4 > 6 > 6 > 8 > 8 > 10 > 10 > 12 > 12 T H E R I G H T C O M P A N Y. I N T H E R I G H T P L A C E . A T T H E R I G H T T I M E . > > > > > > > > > > > B O A R D O F D I R E C T O R S Ted A. Fernandez Chief Executive Officer & Chairman Robert J. Bahash Executive Vice President & Chief Financial Officer, The McGraw-Hill Companies Allan R. Frank President & Chief Technology Officer Jeffrey E. Keisling Senior Vice President & Chief Information Officer, Advanta Corporation William C. Kessinger Principal, GTCR Golder Rauner, LLC Ulysses S. Knotts, III Chief Sales & Marketing Officer Edmund R. Miller President, Miller Capital Management, Inc. Fernando Montero President, Mentor Capital Corporation Bruce V. Rauner Managing Principal, GTCR Golder Rauner, LLC Alan T.G. Wix Retired Managing Director, Lloyds TSB C O R P O R A T E H E A D Q U A R T E R S answerthink 1001 Brickell Bay Drive, Suite 3000 Miami, FL 33131 > Telephone: 305.375.8005 Facsimile: 305.379.8810 www.answerthink.com With our comprehensive, integrated and dynamic ebusiness capabilities, answerthink is perfectly and uniquely positioned to help companies large and small evolve in the information age. We offer clients a higher collective of technological and strategic knowledge that powers the eworld ’s most vibrant business transformations. We looked into the future and strategically equipped ourselves for a period of unprecedented change. And the opportunity of a lifetime. > > > > A N N U A L M E E T I N G Wednesday, May 10, 2000, 11:00 am The Hotel Inter-Continental Miami 100 Chopin Plaza Miami, FL 33131 T R A N S F E R A G E N T BankBoston, N.A. c/o EquiServe, LP Canton, MA I N D E P E N D E N T A U D I T O R S PricewaterhouseCoopers LLP Miami, FL L E G A L C O U N S E L Hogan & Hartson LLP Washington, DC