Syntel Reports First Quarter 2012 Financial Results
- Q1 revenue of $170.7M, up 17% from year-ago quarter, down 1% sequentially
- Q1 EPS of $0.98 per diluted share, up 62% from year-ago quarter, down 7% sequentially
- Q1 cash & short term investments of $334.4M
- Global Headcount of 19,659 on March 31, 2012, up 12% versus prior year
TROY, Mich., April 19, 2012 (GLOBE NEWSWIRE) -- Syntel, Inc. (SYNT), a global information technology services and Knowledge Process Outsourcing (KPO) firm, today announced financial results for the first quarter, ended March 31, 2012.
First Quarter Financial Highlights
Syntel's revenue for the first quarter increased 17 percent to $170.7 million, compared to $145.4 million in the prior-year period, and decreased one percent sequentially from $172.4 million in the fourth quarter of 2011. During the first quarter, Applications Outsourcing accounted for 75 percent of total revenue, with Knowledge Process Outsourcing (KPO) at 15 percent, e-Business contributing eight percent and TeamSourcing at two percent.
The Company's gross margin was 41.8 percent in the first quarter, compared to 35 percent in the prior-year period and 42.1 percent in the fourth quarter of 2011. Selling, General and Administrative (SG&A) expenses were 15.8 percent of revenue in the first quarter, compared to 16.9 percent in the prior-year period and 11.4 percent in the previous quarter.
The first quarter income from operations was 26.1 percent of revenue as compared to 18 percent in the prior-year period and 30.7 percent in the fourth quarter. The sequential reduction in operating margin primarily reflects the impact of balance sheet translations and the appreciation in the Indian rupee during the first quarter.
Net income for the first quarter was $40.7 million or $0.98 per diluted share, compared to $25 million or $0.60 per diluted share in the prior-year period and net income of $44 million or $1.05 per diluted share in the fourth quarter of 2011.
During Q1, Syntel spent $4.5 million in CAPEX, largely in support of campus infrastructure, and finished the quarter with cash and short-term investments of $334.4 million. The Company also added 175 net employees, ending the quarter with 19,659 employees globally.
"Our company's commitment to its customers yielded benefits during the quarter," said Syntel CEO and President Prashant Ranade. "Year-over-year revenue growth of 17% in the first quarter positions us well to meet our goals for 2012. While we are mindful of the global backdrop, we saw stable trends for client spending during the quarter and building pipelines."
"Syntel's commitment to providing value to our customers guides our plans for investment in our business," said Ranade. "We remain on track with hiring and infrastructure build-outs and expect to make additional investment as 2012 progresses."
"During the first quarter, we were pleased to see growth from clients six through 20 continue to outpace that of the company overall. We think our investments in value-added horizontal solutions coupled with our deep domain expertise will help us develop these relationships over the long-term. In addition to the innovation we deliver, our customer-centric culture will be a key success factor as we look to help all our clients meet their internal objectives and derive value from their IT investment."
Based on current visibility levels and an exchange rate assumption of 51.80 Indian Rupees to the dollar, the Company currently expects 2012 revenue of $730 to $755 million and EPS in the range of $3.40 to $3.65.
Syntel to Host Conference Call
Syntel will discuss its first quarter 2012 results today on a conference call at 10:00 a.m. (EDT). To listen to the call, please dial (877) 837-3915 in the US/Canada or (973) 638-3495 internationally. The call will also be broadcast live via the Internet at Syntel's web site: investor.syntelinc.com. Please access the site at least 15 minutes prior to the call to register and download any necessary software. A replay will be available until April 26, 2012 by dialing (855) 859-2056 and entering "72301028". International callers may dial (404) 537-3406 and enter the same passcode.
Syntel is a leading global provider of integrated information technology and Knowledge Process Outsourcing (KPO) solutions spanning the entire lifecycle of business and information systems and processes. The Company is driven by its mission to create new opportunities for clients by harnessing the passion, talent and innovation of Syntel employees worldwide. Syntel leverages dedicated Centers of Excellence, a flexible Global Delivery Model, and a strong track record of building collaborative client partnerships to create sustainable business advantage for Global 2000 organizations. Syntel is assessed at SEI CMMi Level 5, and is ISO 27001 and ISO 9001:2008 certified. As of March 31, 2012, Syntel employed more than 19,000 people worldwide. To learn more, visit us at: www.syntelinc.com .
Safe Harbor Provision
This news release includes forward-looking statements, including those with respect to the future level of business for Syntel, Inc. These statements are necessarily subject to risk and uncertainty. Actual results could differ materially from those projected in these forward-looking statements as a result of certain risk factors set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2011 or from other factors not currently anticipated.
|SYNTEL, INC. AND SUBSIDIARIES|
|CONDENSED CONSOLIDATED STATEMENTS OF INCOME|
|(IN THOUSANDS, EXCEPT SHARE DATA)|
|THREE MONTHS ENDED|
|Net revenues||$ 170,744||$ 145,372|
|Cost of revenues||99,292||94,560|
|Selling, general and administrative expenses||26,946||24,623|
|Income from operations||44,506||26,189|
|Other income, principally interest||8,289||6,119|
|Income before income taxes||52,795||32,308|
|Income tax expense||12,050||7,259|
|Net income||$ 40,745||$ 25,049|
|Other Comprehensive Income, Net of tax|
|Foreign currency translation adjustments||16,012||3,036|
|Unrealized gains on securities:|
|Unrealized holding gains arising during period||272||229|
|Less: reclassification adjustment for gains included in net income||(177)||(192)|
|Defined benefit pension plans:|
|Prior service cost arising during period|
|Net loss arising during period||(4)||10|
|Less: amortization of prior service cost included in net periodic pension cost||9||--|
|Other comprehensive income, before tax||16,112||3,083|
|Income tax expenses related to Other Comprehensive Income||(31)||(2)|
|Other comprehensive income, net of tax||16,081||3,081|
|Dividend per share||$ 0.06||$ 0.06|
|EARNINGS PER SHARE:|
|Basic||$ 0.98||$ 0.60|
|Diluted||$ 0.98||$ 0.60|
|Weighted average common shares outstanding:|
|SYNTEL, INC. AND SUBSIDIARIES|
|CONDENSED CONSOLIDATED BALANCE SHEETS|
|March 31,||December 31,|
|Cash and cash equivalents||$ 83,849||$ 104,628|
|Short term investments||250,549||215,798|
|Accounts receivable, net of allowance for doubtful accounts of $1,727 and $2,409 at March 31, 2012 and December 31, 2011, respectively||96,544||88,573|
|Revenue earned in excess of billings||15,480||5,131|
|Deferred income taxes and other current assets||54,662||46,353|
|Total current assets||501,084||460,483|
|Property and equipment||189,824||179,576|
|Less accumulated depreciation and amortization||80,154||73,574|
|Property and equipment, net||109,670||106,002|
|Non current Term Deposits with Banks||136||130|
|Deferred income taxes and other non current assets||31,780||29,727|
|$ 643,576||$ 597,248|
|Accrued payroll and related costs||$ 36,658||$ 45,949|
|Income taxes payable||5,711||3,080|
|Accounts payable and other current liabilities||36,068||35,341|
|Total current liabilities||84,260||94,062|
|Other non current liabilities||10,946||9,997|
|Total shareholders' equity||548,370||493,189|
|Total liabilities and shareholders' equity||$ 643,576||$ 597,248|
CONTACT: North America/Europe: Jon Luebke, Syntel, 248/619-3503, firstname.lastname@example.org AsiaPac: Suruchi Sharma, Syntel, +91 9833691415, email@example.com
Source: Syntel, Inc. 2012 GlobeNewswire, Inc.