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Share Name | Share Symbol | Market | Type |
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(MM) | NASDAQ:IGTE | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 48.00 | 0 | 01:00:00 |
Fourth Quarter Highlights
Full Year Highlights
Expansion
On the performance of the Company in 2011, Phaneesh Murthy, Chief Executive Officer, iGATE Patni, said, "Fiscal year 2011 was a milestone year for iGATE Patni, with the combined entity ending the year with revenue run rate in excess of $1 billion. I am particularly happy with the way our integration with Patni has been going smoothly and at an accelerated pace ensuring value protection to all stakeholders."
On the outlook for 2012, Phaneesh Murthy said, "We are seeing that our differentiated outcomes-based business model is getting increased traction. I am also happy to report that it looks like almost all our top customers will be expanding work and programs with us."
Sujit Sircar, Chief Financial Officer, iGATE Patni, said, "With the integration in place and benefits of a single combined entity beginning to take shape, we have made significant savings in terms of costs during the year, to the extent of approximately $32 million. The depreciation of the rupee also had a positive impact of approximately a 3% on the Company's profitability in the fourth quarter. The rupee volatility is a concern in the longer run; however, in 2012 we will continue to sustain the benefits of our successful integration."
Fourth Quarter and Fiscal Year 2011 Operating Results
Results for the fourth quarter and full fiscal year of both 2011 and 2010, on both GAAP and non-GAAP basis, are provided in the table below.
Q4 FY11 | Q4 FY10 | Y/Y | FY11 | FY10 | Y/Y | |
Net revenue ($Millions) | 267.7 | 81.0 | 230% | 779.6 | 280.6 | 178% |
Operating margin ($Millions) | 51.5 | 15.4 | 234% | 105.9 | 53.0 | 100% |
GAAP net income ($Millions) | 15.3 | 14.7 | 4% | 51.5 | 51.8 | (1%) |
GAAP diluted EPS ($) | 0.11 | 0.25 | (56%) | 0.38 | 0.90 | (57%) |
Non-GAAP net income ($Millions) | 20.1 | 19.9 | (1%) | 67.0 | 62.2 | 8% |
Non-GAAP diluted EPS ($) | 0.27 | 0.34 | (21%) | 0.89 | 1.08 | (18%) |
Key New Customers and Projects during the Fourth Quarter
Awards and Recognitions
Conference Call and Webcast
The Company has scheduled its Earnings Conference Call on Wednesday, January 25, 2012 to discuss the results of its fourth quarter ended December 31, 2011. Senior management of the Company will discuss the Company's financial performance for the quarter and answer participants' questions during the call.
Time: | 08:00-9:00 a.m. Eastern Standard Time / 05:00-06:00 a.m. Pacific Standard Time |
Dial-in: | 877-407-8037 (U.S.) |
201-689-8037 (International) |
The call will be webcast live on iGATE Patni's website (www.igatepatni.com) and can be accessed by going to the Investor Relations page and selecting "Events." Participants are requested to log in 10 minutes prior to the start of the webcast. The on-demand version of the webcast will be available on the Company's website shortly after the call.
Investors, potential investors, shareholders and bond holders can access the telephonic replay by dialing 877-660-6853 (U.S.) or 201-612-7415 (international) and entering account number 293 and conference number 386227. The telephonic replay will be available until February 01, 2012.
About iGATE Patni
'iGATE Patni' is the common brand identity of two organizations — iGATE and Patni. With iGATE Corporation having acquired a majority stake in Patni Computer Systems Limited, the two companies, under the common brand iGATE Patni, provide full-spectrum consulting, technology and business process outsourcing, and product engineering services on a Business Outcomes-based model. Armed with over three decades of IT Services experience and powered by the iTOPS (Integrated Technology and Operations) platform, iGATE Patni's multi-location global organization with a talent pool of over 26,000 people, consistently delivers effective solutions to over 360 Fortune 1000 clients spanning across verticals like: banking and financial services; insurance and healthcare; life sciences; manufacturing, retail, distribution and logistics; media, entertainment leisure and travel; communication, energy and utilities; public sector; and independent software vendors. Visit www.igatepatni.com.
iGATE Corporation is listed on NASDAQ (IGTE), and Patni Computer Systems Limited is listed on the Bombay Stock Exchange (532517), the National Stock Exchange of India (PATNI) and the New York Stock Exchange (PTI).
Use of non-GAAP Financial Measures
This press release contains non-GAAP financial measures as defined by the Securities and Exchange Commission. These non-GAAP measures are not in accordance with, or an alternative for measures prepared in accordance with, generally accepted accounting principles in the United States and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Reconciliations of these non-GAAP measures to their comparable GAAP measures are included in the attached financial tables.
iGATE believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with iGATE's results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate iGATE's results of operations in conjunction with the corresponding GAAP measures. These non-GAAP measures should be considered supplemental in nature and should not be considered in isolation or be construed as being more important than comparable GAAP measures.
iGATE believes that providing Adjusted EBITDA and non-GAAP net income and non-GAAP diluted earnings per share in addition to the related GAAP measures provides investors with greater transparency to the information used by iGATE's management in its financial and operational decision-making. These non-GAAP measures are also used by management in connection with iGATE's performance compensation programs.
More specifically, the non-GAAP financial measures contained herein exclude the following items:
From time to time in the future, there may be other items that iGATE may exclude in presenting its financial results.
Forward-Looking Statements
Statements contained in this press release regarding the benefits of the Patni acquisition, the business outlook, the demand for the products and services, and all other statements in this release other than recitation of historical facts are forward-looking statements. Words such as "expect", "potential", "believes", "anticipates", "plans", "intends" and similar expressions are intended to identify such forward-looking statements. Forward-looking statements in the press release include, without limitation, forecasts of market growth, future revenues, future expectations concerning growth of business, cost competitiveness and expansion of global reach following the acquisition, and other matters that involve known and unknown risks, uncertainties and other factors that may cause results, levels of activity, performance or achievements to differ materially from results expressed or implied by this press release. Such risk factors include, among others: difficulties encountered in integrating business; whether certain market segments grow as anticipated; the competitive environment in the information technology services industry and competitive responses to our acquisition of Patni; and whether the companies can successfully provide services/products and the degree to which these gain market acceptance. Furthermore, in connection with the Patni acquisition, the Company has borrowed significant amounts, including through the issuance of high yield notes, and will have to use a significant portion of its cash flows to service such indebtedness, as a result of which the Company might not have sufficient funds to operate its businesses in the manner it intends or has operated in the past. Additional risks relating to the Company are set forth in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2010, as well as the Company's other reports filed with the Securities and Exchange Commission and risks related to the business of Patni as set forth in Patni's Annual Report in Form 20-F for the fiscal year ended December 31, 2010. Actual results may differ materially from those contained in the forward-looking statements in this press release. Any forward-looking statements are based on information currently available to the Company and it assumes no obligation to update these statements as circumstances change. This document does not constitute an offer to purchase or to sell securities in any jurisdiction.
iGATE CORPORATION | ||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
(Amounts in thousands, except per share data) | ||
December 31, | December 31, | |
2011 | 2010 | |
(unaudited) | (audited) | |
ASSETS | ||
Current assets: | ||
Cash and cash equivalents | $ 75,440 | $ 67,924 |
Short-term investments | 354,528 | 71,915 |
Accounts receivable, net | 172,711 | 37,946 |
Unbilled revenues | 45,223 | 13,893 |
Prepaid expenses and other current assets | 18,752 | 5,380 |
Foreign exchange derivative contracts | -- | 794 |
Deferred tax assets | 20,574 | 5,422 |
Prepaid income taxes | 8,341 | -- |
Receivable from Mastech Holdings Inc. | 187 | 140 |
Total current assets | 695,756 | 203,414 |
Investment in affiliate | 584 | -- |
Deposits and other assets | 67,940 | 5,443 |
Property and equipment, net | 175,672 | 52,950 |
Lease hold Land | 53,917 | -- |
Prepaid income taxes | 18,481 | -- |
Deferred tax assets | 30,456 | 10,117 |
Goodwill | 511,060 | 31,741 |
Intangible assets, net | 160,706 | 1,378 |
Total assets | $ 1,714,572 | $ 305,043 |
LIABILITIES, PREFERRED STOCK AND SHAREHOLDERS' EQUITY | ||
Current liabilities: | ||
Accounts payable | $ 7,857 | $ 3,291 |
Accrued payroll and related costs | 71,913 | 19,709 |
Accrued income taxes | 3,993 | 715 |
Line of credit | 57,000 | -- |
Other accrued liabilities | 89,294 | 31,354 |
Foreign exchange derivative contracts | 1,669 | -- |
Deferred revenue | 21,631 | 667 |
Total current liabilities | 253,357 | 55,736 |
Other long-term liabilities | 4,610 | 1,251 |
Accrued income taxes | 17,672 | -- |
Foreign exchange derivative contracts | 6,739 | -- |
Deferred tax liabilities | 58,992 | -- |
Senior Notes | 770,000 | -- |
Total liabilities | 1,111,370 | 56,987 |
Series B Preferred stock, without par value | 349,023 | -- |
Shareholders' equity: | ||
Common Stock, par value $0.01 per share | 577 | 572 |
Additional paid-in capital | 201,281 | 188,389 |
Retained earnings | 104,493 | 75,474 |
Common stock in treasury, at cost | (14,714) | (14,714) |
Accumulated other comprehensive loss | (257,920) | (1,665) |
Total iGATE Corporation shareholders' equity | 33,717 | 248,056 |
Non controlling interest | 220,462 | -- |
Total shareholders' equity | 254,179 | 248,056 |
Total liabilities and shareholders' equity | $ 1,714,572 | $ 305,043 |
iGATE CORPORATION | ||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||
(Amounts in thousands) | ||||
Three Months ended | Year ended, | |||
December 31, | December 31, | |||
2011 | 2010 | 2011* | 2010 | |
(unaudited) | (unaudited) | (unaudited) | (audited) | |
Revenues | $ 267,707 | $ 81,013 | $ 779,646 | $ 280,597 |
Cost of revenues (exclusive of depreciation and amortization) | 159,941 | 46,460 | 483,504 | 167,906 |
Gross margin | 107,766 | 34,553 | 296,142 | 112,691 |
Selling, general and administrative expense | 42,582 | 16,765 | 151,497 | 50,669 |
Depreciation and amortization | 13,703 | 2,415 | 38,735 | 9,014 |
Income from operations | 51,481 | 15,373 | 105,910 | 53,008 |
Other (expenses) income, net | (14,151) | 1,917 | (21,638) | 4,686 |
Income before income taxes | 37,330 | 17,290 | 84,272 | 57,694 |
Income tax expense | 16,904 | 2,568 | 24,218 | 5,939 |
Net income before noncontrolling interest | 20,426 | 14,722 | 60,054 | 51,755 |
Noncontrolling interest | 5,149 | -- | 8,586 | -- |
Net income attributable to iGATE Corporation | 15,277 | 14,722 | 51,468 | 51,755 |
Accretion to Preferred Stock | 88 | -- | 302 | -- |
Preferred dividend | 7,016 | -- | 22,147 | -- |
Net income attributable to iGATE Corporation common shareholders | $ 8,173 | $ 14,722 | $ 29,019 | $ 51,755 |
*Includes Patni revenues since May 16, 2011. |
iGATE CORPORATION | |||||||||||
Earnings Per Share | |||||||||||
(Amounts in thousands, except per share data) | |||||||||||
Three Months Ended December 31 | Year ended December 31 | ||||||||||
PARTICULARS | 2011 | 2010 | 2011** | 2010 | |||||||
(unaudited) | (unaudited) | (unaudited) | (audited) | ||||||||
Net income attributable to iGATE common shareholders | $ 8,173 | $ 14,722 | $ 29,019 | $ 51,755 | |||||||
Add: Dividends on Series B Preferred Stock | 7,016 | -- | 22,147 | -- | |||||||
15,189 | 14,722 | 51,166 | 51,755 | ||||||||
Less: Dividends paid on | |||||||||||
Common Stock | [A] | $ -- | $ 8,433 | $ -- | $ 14,509 | ||||||
Unvested restricted stock | [B] | -- | 43 | -- | 103 | ||||||
Participating preferred stock | [C] | 7,016 | 7,016 | -- | 8,476 | 22,147 | 22,147 | -- | 14,612 | ||
Undistributed Income | $ 8,173 | $ 6,246 | $ 29,019 | $ 37,143 | |||||||
Allocation of Undistributed Income | |||||||||||
Common stock | [D] | 6,240 | 6,215 | 22,157 | 36,878 | ||||||
Unvested restricted stock | [E] | 24 | 31 | 84 | 265 | ||||||
Participating preferred stock | [F] | 1,909 | -- | 6,778 | -- | ||||||
$ 8,173 | $ 6,246 | $ 29,019 | $ 37,143 | ||||||||
Shares outstanding for allocation of undistributed income: | |||||||||||
Common stock | 56,706 | 56,227 | 56,706 | 56,227 | |||||||
Unvested restricted stock | 214 | 280 | 214 | 280 | |||||||
Participating preferred stock | 17,347 | -- | 17,347 | -- | |||||||
74,267 | 56,507 | 74,267 | 56,507 | ||||||||
Weighted average shares outstanding: | |||||||||||
Common stock | [G] | 56,671 | 56,141 | 56,523 | 55,656 | ||||||
Unvested restricted stock | [H] | 213 | 294 | 217 | 399 | ||||||
Participating preferred stock | [I] | 17,347 | -- | 17,347 | -- | ||||||
74,231 | 56,435 | 74,087 | 56,055 | ||||||||
Weighted average common stock outstanding | 56,671 | 56,141 | 56,523 | 55,656 | |||||||
Dilutive effect of stock options and restricted shares outstanding | 1,390 | 1,716 | 1,420 | 1,738 | |||||||
Dilutive weighted average shares outstanding | [J] | 58,061 | 57,857 | 57,943 | 57,394 | ||||||
Distributed earnings per share: | |||||||||||
Common stock | [K=A/G] | $ -- | $ 0.15 | $ -- | $ 0.26 | ||||||
Unvested restricted stock | [L=B/H] | $ -- | $ 0.15 | $ -- | $ 0.26 | ||||||
Participating preferred stock | [M=C/I] | $ 0.40 | $ -- | $ 1.28 | $ -- | ||||||
Undistributed earnings per share: | |||||||||||
Common stock | [N=D/G] | $ 0.11 | $ 0.11 | $ 0.39 | $ 0.66 | ||||||
Unvested restricted stock | [O=E/H] | $ 0.11 | $ 0.11 | $ 0.39 | $ 0.66 | ||||||
Participating preferred stock | [P=F/I] | $ 0.11 | $ -- | $ 0.39 | $ -- | ||||||
Basic earnings per share from operations | |||||||||||
Common Stock | [K+N] | $ 0.11 | $ 0.26 | $ 0.39 | $ 0.92 | ||||||
Unvested restricted stock | [L+O] | $ 0.11 | $ 0.26 | $ 0.39 | $ 0.92 | ||||||
Participating preferred stock | [M+P] | $ 0.51 | $ -- | $ 1.67 | $ -- | ||||||
Diluted earnings per share from operations | [[A+B+D+E]/J] | $ 0.11 | $ 0.25 | $ 0.38 | $ 0.90 | ||||||
**Includes Patni balances since May 16, 2011 | |||||||||||
The number of outstanding participative convertible preferred stock for which the earnings per share exceeded the earnings per share of common stock aggregated to 17.3 million shares for the three and twelve months ended Dec 31, 2011. These shares were excluded from the computation of diluted earnings per share as they were anti-dilutive. |
iGATE CORPORATION | ||||
Reconciliation of Net income, net of tax, to Adjusted EBITDA | ||||
(Amounts in thousands) | ||||
(Unaudited) | ||||
Three Months ended | Year ended | |||
December 31 | December 31 | |||
2011 | 2010 | 2011* | 2010 | |
Net income attributable to iGATE Corporation | $ 15,277 | $ 14,722 | $ 51,468 | $ 51,755 |
Adjustments | ||||
Depreciation and amortization | 13,703 | 2,415 | 38,735 | 9,014 |
Interest expenses | 17,774 | 28 | 50,608 | 108 |
Income tax expense | 16,904 | 2,568 | 24,218 | 5,939 |
Noncontrolling interest | 5,149 | -- | 8,586 | -- |
Other income, net | (7,393) | (1,169) | (15,894) | (5,171) |
Foreign exchange (gain)/loss | 3,770 | (776) | (13,076) | 377 |
Stock Based Compensation | 1,869 | 1,829 | 10,737 | 6,651 |
Acquisition expenses | -- | 3,749 | 10,914 | 3,749 |
Delisting expenses | 997 | -- | 997 | -- |
Severance expenses | -- | -- | 6,164 | -- |
Adjusted EBITDA (a non-GAAP measure) | $ 68,050 | $ 23,366 | $ 173,457 | $ 72,422 |
*Includes Patni Balances since May 16, 2011 | ||||
The company presents the non-GAAP financial measure adjusted EBITDA because, management uses this measure to monitor | ||||
and evaluate the performance of the business and believes the presentation of this measure will enhance the investors' ability | ||||
to analyze trends in the business and evaluate the Company's underlying performance relative to other companies in the industry. |
Non-GAAP Disclosure of Adjusted EBITDA
We present Adjusted EBITDA as a supplemental measure of our performance. We define Adjusted EBITDA as net income attributable to iGATE Corporation plus (i) depreciation and amortization, (ii) interest expense, (iii) income tax expense, minus (iv) other income, net plus (v) foreign exchange loss, (v) stock based compensation (vi) acquisition expenses (vii) severance expenses and (viii) delisting expenses. We eliminated the impact of the above as we do not consider them as indicative of our ongoing operating performance. These adjustments are itemized below. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.
We present Adjusted EBITDA because we believe it assists investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. In addition, we use Adjusted EBITDA: [(i) as a factor in evaluating management's performance when determining incentive compensation, (ii) to evaluate the effectiveness of our business strategies and (iii) because our credit agreement and our indenture use measures similar to Adjusted EBITDA to measure our compliance with certain covenants.
Adjusted EBITDA has limitations as an analytical tool. Some of these limitations are:
Because of these limitations, adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA only supplementally.
iGATE CORPORATION | ||||
Reconciliation of Selected GAAP measures to Non-GAAP measures | ||||
(Amounts in thousands, except per share data) | ||||
(Unaudited) | ||||
Three Months ended | Year ended, | |||
December 31 | December 31 | |||
2011 | 2010 | 2011** | 2010 | |
Net income attributable to iGATE Corporation | $ 15,277 | $ 14,722 | $ 51,468 | $ 51,755 |
Adjustments | ||||
Amortization of Intangible assets, net of taxes | 2,551 | 197 | 6,191 | 774 |
Share Based Compensation, net of taxes | 1,804 | 1,720 | 8,530 | 6,437 |
Acquisition expenses | -- | 3,213 | 10,914 | 3,213 |
Delisting expenses | 997 | -- | 997 | -- |
Forex gain on acquisition hedging and other remeasurement, net of taxes | (724) | -- | (15,975) | -- |
Severance cost, net of taxes | 222 | -- | 4,897 | -- |
Non-GAAP Net income | $ 20,127 | $ 19,852 | $ 67,022 | $ 62,179 |
Basic earnings per share from operations | ||||
GAAP | $ 0.11 | $ 0.26 | $ 0.39 | $ 0.92 |
Non-GAAP | $ 0.27 | $ 0.35 | $ 0.90 | $ 1.11 |
Diluted earnings per share from operations | ||||
GAAP | $ 0.11 | $ 0.25 | $ 0.38 | $ 0.90 |
Non-GAAP | $ 0.27 | $ 0.34 | $ 0.89 | $ 1.08 |
Weighted average shares outstanding, Basic | 74,231* | 56,439 | 74,087* | 56,055 |
Weighted average dilutive common equivalent shares outstanding | 75,408* | 57,857 | 75,290* | 57,394 |
*Includes assumed conversion of 17.3 million shares of Series B Preferred Stock as of January 1, 2011. | ||||
**Includes Patni balances since May 16, 2011 |
CONTACT: Media Contact Prabhanjan Deshpande "PD" +91 80 4104 5006 PD@igatepatni.com Investor Contact Araceli Roiz +1 510 896 3007
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