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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 | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 48.00 | 0 | 01:00:00 |
Second Quarter Highlights
Highlights of six months ending June 30, 2011
Commenting on the Q2 performance, Phaneesh Murthy, CEO, iGATE Patni said, "We have successfully completed the first phase of integration, integrating the go-to market functions of both the organizations and are well underway into the delivery and shared services integration. We believe that the integration program is progressing more smoothly than planned."
"We are seeing customers respond positively to our joint value proposition and are starting to sense some larger opportunities," he added.
Sujit Sircar, Chief Financial Officer, iGATE said, "The blending of iGATE and Patni results and increase in salaries have created a dip in the margins which we expect to improve over the next few quarters and to get to iGATE's benchmark margins over the next two years.
"iGATE continues to generate good operating cash-flow with a cash balance of over $430 million as on June 30, 2011."
Operating Results for the second quarter and six months ending June 30, 2011
Results for the second quarter and six months ending June 30, 2011 on a GAAP and non-GAAP basis are provided in the table below.
Six months | Six months | |||||
Q2 | Q2 | ended | ended | |||
FY'11 | FY'10 | Y/Y | FY'11 | FY'10 | Y/Y | |
Net revenue ($Millions) | 170.4 | 66.8 | 155.1% | 246.2 | 124.7 | 97.4% |
Operating margin ($Millions) | 9.7 | 11.5 | -15.7% | 16.7 | 22.5 | -25.8% |
GAAP net income ($Millions) | 4 | 11.2 | -64.3% | 21.9 | 22.8 | -3.9% |
GAAP diluted EPS ($) | -0.02 | 0.20 | -110.0% | 0.18 | 0.40 | -55.0% |
Non-GAAP net income ($Millions) | 11.9 | 13.2 | -9.8% | 27.7 | 26.2 | 5.7% |
Non-GAAP diluted EPS ($) | 0.16 | 0.23 | -30.4% | 0.37 | 0.46 | -19.6% |
New customers and projects won in the quarter
Awards and Recognitions in the quarter
Acquisition
On May 12, 2011, we completed our acquisition of a majority stake in Patni Computers and our results for the second quarter include Patni's results of operations since May 16, 2011.
Conference Call and Webcast
iGATE will host a telephone conference call on Friday, August 5, 2011 at 8:00 am Eastern Time to discuss the results of its second quarter ended June 30, 2011. The live discussion can be accessed by dialing 877-407-8037 (domestic) or 201-689-8037 (international). A live webcast of this conference call will be available on our web site at http://ir.igate.com/investors/. The teleconference replay will be available until September 1, 2011 and can be accessed by dialing 877-660-6853 (domestic) and 201-612-7415 (international), passcode 375662 and account number 293. A replay will also be available shortly after the live call via webcast on the iGATE Investor Relations website at http://ir.igate.com/investors/.
About iGATE Patni
'iGATE Patni' is the common brand identity of two organizations — iGATE Corporation and Patni Computer Systems Limited (Patni). With iGATE having acquired a majority stake in Patni, the two companies, under the common brand iGATE Patni, jointly 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 26,000+ people, consistently delivers effective solutions to over 360 Fortune 1000 clients spanning across verticals like: banking & financial services; insurance & healthcare; life sciences; manufacturing, retail, distribution & logistics; media, entertainment leisure & travel; communication, energy & utilities; public sector; and independent software vendors. Visit: www.igatepatni.com
iGATE Corporation is listed on NASDAQ (IGTE), and Patni Computer Systems Limited on the Bombay Stock Exchange (532517), the National Stock Exchange of India (PATNI) and NYSE (PTI).
The iGATE Patni brand logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5150
Use of non-GAAP Financial Measures
This press release contains non-GAAP financial measures as defined by 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 EBITDA, 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 as 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 by issuing 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. 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) | ||
June 30, | December 31, | |
2011 | 2010 | |
(unaudited) | (audited) | |
ASSETS | ||
Current assets: | ||
Cash and cash equivalents | $ 95,938 | $ 67,924 |
Short-term investments | 338,152 | 71,915 |
Accounts receivable, net | 154,995 | 37,946 |
Unbilled revenues | 68,568 | 13,893 |
Prepaid expenses and other current assets | 24,719 | 5,380 |
Foreign exchange derivative contracts | 7,256 | 794 |
Deferred tax assets | 24,557 | 5,422 |
Receivable from Mastech Holdings Inc. | 208 | 140 |
Prepaid income taxes | 7,332 | -- |
Total current assets | 721,725 | 203,414 |
Investment in affiliate | 427 | -- |
Deposits and other assets | 144,983 | 5,443 |
Property and equipment, net | 220,898 | 52,950 |
Deferred tax assets | 24,331 | 10,117 |
Goodwill | 628,080 | 31,741 |
Intangible assets, net | 188,135 | 1,378 |
Total assets | $ 1,928,579 | $ 305,043 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||
Current liabilities: | ||
Accounts payable | $ 8,394 | $ 3,291 |
Accrued payroll and related costs | 87,650 | 19,709 |
Accrued income taxes | 1,034 | 715 |
Line of credit | 45,000 | -- |
Other accrued liabilities | 81,067 | 31,354 |
Foreign exchange derivative contracts | 690 | -- |
Deferred revenue | 19,480 | 667 |
Total current liabilities | 243,315 | 55,736 |
Other long-term liabilities | 5,444 | 1,251 |
Accrued income taxes | 17,300 | -- |
Foreign exchange derivative contracts | 5,341 | -- |
Deferred income taxes | 66,275 | -- |
Senior Notes | 770,000 | -- |
Total liabilities | 1,107,675 | 56,987 |
Series B Preferred stock, without par value | 335,067 | -- |
Shareholders' equity: | ||
Common Stock, par value $0.01 per share | 575 | 572 |
Additional paid-in capital | 194,897 | 188,389 |
Retained earnings | 88,920 | 75,474 |
Common stock in treasury, at cost | (14,714) | (14,714) |
Accumulated other comprehensive loss | 3,796 | (1,665) |
Total iGATE Corporation shareholders' equity | 273,474 | 248,056 |
Non controlling interest | 212,363 | -- |
Total shareholders' equity | 485,837 | 248,056 |
Total liabilities and shareholders' equity | $ 1,928,579 | $ 305,043 |
iGATE CORPORATION | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||
(Amounts in thousands) | ||||||||
(unaudited) | ||||||||
Three Months ended | Six Months ended | |||||||
June 30, | June 30, | |||||||
2011* | 2010 | 2011* | 2010 | |||||
Revenues | $ 170,417 | $ 66,849 | $ 246,215 | $124,739 | ||||
Cost of revenues (exclusive of Depreciation and amortization) | 111,203 | 41,390 | 155,998 | 76,068 | ||||
Gross margin | 59,214 | 25,459 | 90,217 | 48,671 | ||||
Selling, general and administrative | 40,423 | 11,843 | 62,170 | 21,848 | ||||
Depreciation and amortization | 9,058 | 2,126 | 11,365 | 4,348 | ||||
Income from operations | 9,733 | 11,490 | 16,682 | 22,475 | ||||
Other (expenses) income, net | (4,003) | 976 | 15,850 | 1,808 | ||||
Income before income taxes | 5,730 | 12,466 | 32,532 | 24,283 | ||||
Income tax expense | 1,244 | 1,312 | 10,107 | 1,515 | ||||
Net income before noncontrolling interest | 4,486 | 11,154 | 22,425 | 22,768 | ||||
Noncontrolling interest | 487 | -- | 487 | -- | ||||
Net income attributable to iGATE Corporation | 3,999 | 11,154 | 21,938 | 22,768 | ||||
Accretion to Preferred Stock | 115 | -- | 130 | -- | ||||
Preferred dividend | 5,639 | -- | 8,362 | -- | ||||
Net (loss) income attributable to iGATE Corporation common shareholders | $ (1,755) | $ 11,154 | $ 13,446 | $ 22,768 | ||||
*Includes Patni results since May 16, 2011. |
iGATE CORPORATION | ||||||||||||||||
Earnings Per Share | ||||||||||||||||
(Amounts in thousands, except per share data) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
PARTICULARS | 2011** | 2010 | 2011** | 2010 | ||||||||||||
Net income attributable to iGATE common shareholders | $ (1,755) | $ 11,154 | $ 13,446 | $ 22,768 | ||||||||||||
Add: Dividends on Series B Preferred Stock | 5,639 | -- | 8,362 | -- | ||||||||||||
3,884 | 11,154 | 21,808 | 22,768 | |||||||||||||
Less: Dividends paid on | ||||||||||||||||
Common Stock | $ -- | $ -- | $ -- | $ 6,076 | ||||||||||||
Unvested restricted stock | -- | -- | -- | 60 | ||||||||||||
Series B Preferred Stock | 5,639 | 5,639 | -- | -- | 8,362 | 8,362 | -- | 6,136 | ||||||||
Undistributed Income | $ (1,755) | $ 11,154 | $ 13,446 | $ 16,632 | ||||||||||||
Basic and Diluted allocation of Undistributed Income | ||||||||||||||||
Common stock | (1,351) | 11,082 | 10,352 | 16,497 | ||||||||||||
Unvested restricted stock | (6) | 72 | 41 | 135 | ||||||||||||
Series B Preferred Stock | (398) | -- | 3,053 | -- | ||||||||||||
$ (1,755) | $ 11,154 | $ 13,446 | $ 16,632 | |||||||||||||
Shares outstanding: | ||||||||||||||||
Common stock | 56,524 | 55,557 | 56,524 | 55,557 | ||||||||||||
Unvested restricted stock | 222 | 363 | 222 | 455 | ||||||||||||
Series B Preferred Stock | 16,668 | -- | 16,668 | -- | ||||||||||||
73,414 | 55,920 | 73,414 | 56,012 | |||||||||||||
Weighted average shares outstanding: | ||||||||||||||||
Common stock | 56,514 | 55,447 | 56,399 | 55,234 | ||||||||||||
Unvested restricted stock | 238 | 363 | 257 | 455 | ||||||||||||
56,752 | 55,810 | 56,656 | 55,689 | |||||||||||||
Weighted average common stock outstanding | 56,752 | 55,447 | 56,399 | 55,234 | ||||||||||||
Dilutive effect of stock options and restricted shares outstanding | -- | 1,670 | 1,483 | 1,707 | ||||||||||||
Dilutive weighted average shares outstanding | 56,752 | 57,117 | 57,882 | 56,941 | ||||||||||||
Distributed earnings per share: | ||||||||||||||||
Common stock | $ -- | $ -- | $ -- | $ 0.11 | ||||||||||||
Unvested restricted stock | $ -- | $ -- | $ -- | $ 0.11 | ||||||||||||
Basic earnings per share from operations | ||||||||||||||||
Common Stock | $ (0.02) | $ 0.20 | $ 0.18 | $ 0.41 | ||||||||||||
Unvested restricted stock | $ (0.02) | $ 0.20 | $ 0.18 | $ 0.41 | ||||||||||||
Diluted earnings per share from operations | $ (0.02) | $ 0.20 | $ 0.18 | $ 0.40 | ||||||||||||
* The number of outstanding participative convertible preferred stock for which the earnings per share exceeded the earnings per share of common stock aggregated to 16.7 million shares for the six months ended June 30, 2011. These shares were excluded from the computation of diluted earnings per share as they were anti-dilutive. The dilutive effect of stock options outstanding of 1.5 million shares for the three months ended June 30, 2011 was not considered in computing diluted earnings per share as the Company was in a net loss position. Inclusion of such shares would have been anti-dilutive. | ||||||||||||||||
**Includes Patni results since May 16, 2011 |
iGATE CORPORATION | ||||
Reconciliation of Net income, net of tax, to Adjusted EBITDA | ||||
(Amounts in thousands) | ||||
(unaudited) | ||||
Three Months ended | Six Months ended | |||
June 30th | June 30th | |||
2011 | 2010 | 2011 | 2010 | |
Net income attributable to iGATE Corporation | $ 3,999 | $11,154 | $ 21,938 | $ 22,768 |
Adjustments | ||||
Depreciation and amortization | 9,058 | 2,126 | 11,365 | 4,348 |
Interest expenses | 13,199 | 14 | 13,288 | 33 |
Income tax expense | 1,244 | 1,312 | 10,107 | 1,515 |
EBITDA | 27,500 | 14,606 | 56,698 | 28,664 |
Other income, net | (3,321) | (747) | (4,418) | (2,886) |
Foreign exchange (gain)/loss | (5,875) | (243) | (24,720) | 1,078 |
Stock Based Compensation | 3,014 | 1,807 | 4,522 | 3,006 |
Acquisition expenses | 1,122 | -- | 10,914 | -- |
Severance expenses | 6,164 | -- | 6,164 | -- |
Adjusted EBITDA (a non-GAAP measure) | $ 28,604 | $15,423 | $ 49,160 | $ 29,862 |
The Company presents the non-GAAP financial measures EBITDA and adjusted EBITDA because management uses these measures to monitor and evaluate the performance of the business and believe the presentation of these measures will enhance the investors' ability to analyze trends in the business and evaluate the Company underlying performance relative to other companies in the industry. |
iGATE CORPORATION | ||||
Reconciliation of Selected GAAP measures to Non-GAAP measures | ||||
(Amounts in thousands, except per share data) | ||||
(unaudited) | ||||
Three Months ended | Six Months ended | |||
June 30th | June 30th | |||
2011 | 2010 | 2011 | 2010 | |
GAAP Net income attributable to iGATE Corporation | $ 3,999 | $ 11,154 | $ 21,938 | $ 22,768 |
Adjustments | ||||
Amortization of Intangible assets, net of taxes | 1,324 | 194 | 1,520 | 386 |
Stock Based Compensation, net of taxes | 2,358 | 1,807 | 3,219 | 3,006 |
Acquisition expenses, net of taxes | 1,875 | -- | 10,914 | -- |
Forex gain on acquisition hedging and remeasurement, net of taxes | (2,008) | -- | (14,314) | -- |
Severance cost, net of taxes | 4,388 | -- | 4,388 | -- |
Non-GAAP Net income | $ 11,936 | $ 13,155 | $ 27,665 | $ 26,160 |
Basic earnings per share from operations | ||||
GAAP | $ (0.02) | $ 0.20 | $ 0.18 | $ 0.41 |
Non-GAAP | $ 0.16 | $ 0.24 | $ 0.38 | $ 0.47 |
Diluted earnings per share from operations | ||||
GAAP | $ (0.02) | $ 0.20 | $ 0.18 | $ 0.40 |
Non-GAAP | $ 0.16 | $ 0.23 | $ 0.37 | $ 0.46 |
Weighted average shares outstanding, Basic | 73,420* | 55,810 | 73,325* | 55,689 |
Weighted average dilutive common equivalent shares outstanding | 73,420* | 57,117 | 74,550* | 56,941 |
*Includes assumed conversion of 16.7 million shares of Series B Preferred Stock as of January 1, 2011. |
CONTACT: Media Contact Prabhanjan Deshpande "PD" +91 80 4104 5006 PD@igatepatni.com Investor Contact Araceli Roiz +1 510 896 3007 araceli.roiz@igatepatni.com
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