WNS (NYSE:WNS)
Historical Stock Chart
From Jun 2019 to Jun 2024
WNS (Holdings) Limited (NYSE: WNS), a leading provider of global
business process outsourcing (BPO) services, today announced results for
the fiscal second quarter 2009 ended September 30, 2008 and reaffirmed
its profit guidance for fiscal 2009.
Revenue for fiscal second quarter 2009 at $149.8 million increased 29.6%
over the corresponding quarter in the prior fiscal year, while revenue
less repair payments at $109.0 million increased 52.0% over the same
quarter in the prior fiscal year. This growth in revenue less repair
payments for the fiscal quarter was primarily due to both the strong
organic growth in the global BPO business, and the revenue contributions
from Aviva Global Services Singapore Private Limited (AGS) and Call 24/7
Limited, which WNS acquired in July 2008 and April 2008, respectively.
“This was a strong quarter for us as we
successfully transitioned new client relationships and completed the
first phase of the AGS integration,” said
Neeraj Bhargava, Group Chief Executive Officer. “We
also achieved the milestone of exceeding $100 million in revenues less
repair payments for the first time, while improving our profitability.
Our strong performance in this difficult business environment clearly
positions us as a leader in the BPO industry.”
Net income for fiscal second quarter 2009 was $0.2 million as against a
net loss of $10.5 million during the corresponding quarter in the prior
fiscal year. The net loss during the fiscal second quarter 2008 was due
to the write off of goodwill and intangibles related to our mortgage
banking focused BPO business whereas the net income in the current
quarter was affected by amortization charges from the acquisition of AGS
during the quarter.
Adjusted net income, or net income excluding amortization and impairment
of goodwill and intangible assets, share-based compensation, and related
fringe benefit taxes, was $11.9 million, an increase of 47.6% over the
corresponding quarter in the prior year. The primary drivers of this
increase were our revenue growth, tight cost management, and increased
income from AGS. WNS also benefited from the revaluation of US
dollar-denominated assets, but this benefit was primarily offset by the
negative impact of foreign exchange losses from hedging, a one-time tax
associated with the AGS transaction, and lower interest income.
WNS recorded a basic income per ADS of $0.01 for fiscal second quarter
2009. Adjusted income per ADS, or basic income per ADS excluding
share-based compensation, related fringe benefit taxes and amortization
of intangible assets was $0.28 for the quarter.
“We have continued to tighten the management
of our operations and reduced non-operating costs, both of which have
been reflected in this quarter’s operating
margins.” said Alok Misra, Group Chief
Financial Officer. “The AGS integration is
on schedule and we see additional opportunities to reduce capital
expenditure and increase operating leverage.”
Financial Highlights: Fiscal Second
Quarter Ended September 30, 2008
Quarterly revenue of $149.8 million, up 29.6% from the corresponding
quarter last year.
Quarterly revenue less repair payments of $109.0 million, up 52.0%
from the corresponding quarter last year.
Quarterly net income of $0.2 million against a net loss of $10.5
million from the corresponding quarter last year.
Quarterly adjusted net income (or, net income excluding amortization
and impairment of goodwill and intangible assets, share-based
compensation, and related fringe benefit taxes) of $11.9 million, up
47.6% from the corresponding quarter last year.
Quarterly basic income per ADS of $0.01, up from a basic loss per
share of $0.25 for the corresponding quarter last year.
Quarterly adjusted basic income per ADS (or, basic income per share
excluding amortization and impairment of goodwill and intangible
assets, share-based compensation, and related fringe benefit taxes) of
$0.28, up from $0.19 for the corresponding quarter last year.
Reconciliations of non-GAAP financial measures to GAAP operating results
are included at the end of this release.
Key Organizational Developments
In the past quarter, WNS announced the following key developments to its
business:
The acquisition of AGS, the business process offshoring company
providing services to Aviva, and an eight year and four month Master
Services Agreement, naming WNS as the long-term strategic BPO services
provider to Aviva's UK and Canadian businesses.
The appointment of Karthik Sarma as Chief People Officer, who will
focus on attracting, retaining and developing high quality talent for
the WNS organization.
Fiscal 2009 Guidance
WNS provided the following guidance for the fiscal year ending March 31,
2009:
Revenue less repair payments is expected to be between $385 million
and $400 million (down from the previously announced $425 million to
$435 million). This assumes a USD to GBP range of 1.45 to 1.60.
Net income (excluding amortization and impairment of goodwill and
intangible assets, share-based compensation, and related fringe
benefit taxes) is still expected to remain between $46 million and $49
million.
“Our operating performance continues to be
strong but the recent strength of the dollar against the British Pound
in particular puts pressure on our non-US revenue and so we have revised
our revenue guidance accordingly. However, the dollar has also
strengthened considerably against the Indian Rupee and we have hedges in
place, which make us comfortable with our profit guidance,”
continued Misra.
Conference Call
WNS will host a conference call on November 13, 2008 at 8 am (ET) to
discuss the company's quarterly results. To participate, callers can
dial: 1-800-295-3991; international dial-in 617-614-3924; participant
passcode 1352836. A replay will also be made available online at www.wnsgs.com
for a period of three months beginning two hours after the end of the
call.
About WNS
WNS Holdings Ltd. [NYSE: WNS]
is a leading global business process outsourcing company. Deep industry
and business process knowledge, a partnership approach, comprehensive
service offering and a proven track record enables WNS to deliver
business value to some of the leading companies in the world. WNS is
passionate about building a market-leading company valued by our
clients, employees, business partners, investors and communities. For
more information, visit www.wnsgs.com.
About Non-GAAP Financial Measures
For financial statement reporting purposes, the company has two
reportable segments: WNS Global BPO and WNS Auto Claims BPO. In the auto
claims segment, which includes WNS Assistance and Chang Limited, WNS
provides claims-handling and accident-management services, in which it
arranges for automobile repairs through a network of third-party repair
centers. In its accident-management services, WNS acts as the principal
in dealings with the third-party repair centers and clients.
In order to provide accident-management services, the Company arranges
for the repair through a network of repair centers. Repair costs are
invoiced to customers. Amounts invoiced to customers for repair costs
paid to the automobile repair centers are recognized as revenue. The
Company uses revenue less repair payments for “fault”
repairs as a primary measure to allocate resources and measure segment
performance. Revenue less repair payments is a non-GAAP measure which is
calculated as revenue less payments to repair centers. For “Non
fault repairs,” revenue including repair
payments is used as a primary measure. As the Company provides a
consolidated suite of accident management services including credit hire
and credit repair for its “Non fault”
repairs business, the Company believes that measurement of that line of
business has to be on a basis that includes repair payments in revenue.
The Company believes that the presentation of this non-GAAP measure in
the segmental information provides useful information for investors
regarding the segment’s financial
performance. The presentation of this non-GAAP information is not meant
to be considered in isolation or as a substitute for the Company’s
financial results prepared in accordance with US GAAP.
Safe Harbor Statement under the
provisions of the United States Private Securities Litigation Reform Act
of 1995
This news release contains forward-looking statements, as defined in the
safe harbor provisions of the US Private Securities Litigation Reform
Act of 1995. These statements involve a number of risks, uncertainties
and other factors that could cause actual results to differ materially
from those that may be projected by these forward looking statements.
These risks and uncertainties include but are not limited to
technological innovation; telecommunications or technology disruptions;
future regulatory actions and conditions in our operating areas; our
dependence on a limited number of clients in a limited number of
industries; our ability to attract and retain clients; our ability to
expand our business or effectively manage growth; our ability to hire
and retain enough sufficiently trained employees to support our
operations; negative public reaction in the US or the UK to offshore
outsourcing; regulatory, legislative and judicial developments;
increasing competition in the business process outsourcing industry;
political or economic instability in India, Sri Lanka and Jersey;
worldwide economic and business conditions, including a slowdown in the
US and Indian economies and in the sectors in which our clients are
based and a slowdown in the BPO and IT sectors world-wide; our ability
to successfully grow our revenues, expand our service offerings and
market shareand achieve accretive benefits from our acquisition of Aviva
Global Services Singapore Private Limited and our master services
agreement with Aviva Global Services (Management Services) Private
Limited; our ability to successfully consummate strategic acquisitions,
as well as other risks detailed in our reports filed with the US
Securities and Exchange Commission. These filings are available at www.sec.gov.
We may, from time to time, make additional written and oral
forward-looking statements, including statements contained in our
filings with the Securities and Exchange Commission and our reports to
shareholders. You are cautioned not to place undue reliance on these
forward-looking statements, which reflect management’s
current analysis of future events. We undertake no obligation to
publicly update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
Reconciliation of revenue less repair payments (non-GAAP) to
revenue (GAAP)
Amount in thousands
Three months ended
Six months ended
September 30,2008
September 30,2007
September 30,2008
September 30,2007
Revenue less repair payments (Non-GAAP)
$
109,004
$
71,736
$
191,224
$
141,508
Add: Payments to repair centers
40,793
43,843
81,517
86,593
Revenue (GAAP)
$
149,797
$
115,579
$
272,741
$
228,101
Reconciliation of cost of revenue (non-GAAP to GAAP)
Amount in thousands
Three months ended
Six months ended
September 30,2008
September 30,2007
September 30,2008
September 30,2007
Cost of revenue (Non-GAAP)
$
74,119
$
48,625
$
131,882
$
96,081
Add: Payments to repair centers
40,793
43,843
81,517
86,593
Cost of revenue (GAAP)
$
114,912
$
92,469
$
213,399
$
182,674
Reconciliation of selling, general and administrative expense
(non-GAAP to GAAP)
Amount in thousands
Three months ended
Six months ended
September 30,2008
September 30,2007
September 30,2008
September 30,2007
Selling, general and administrative expenses (excluding
share-based compensation expense and FBT1
(Non-GAAP)
$18,671
$16,981
$34,233
$30,713
Add: Share-based compensation expense
2,471
1,175
4,736
2,164
Add: FBT1
162
627
531
627
Selling, general and administrative expenses (GAAP)
$21,304
$18,783
$39,500
$33,504
1 FBT means the fringe benefit taxes on
options and restricted share units granted to employees under the WNS
2002 Stock Incentive Plan and the WNS 2006 Incentive Award Plan (as
applicable) payable by WNS to the government of India.
Reconciliation of operating income (non-GAAP to GAAP)
Amount in thousands
Three months ended
Six months ended
September 30,2008
September 30,2007
September 30,2008
September 30,2007
Operating income (excluding amortization and impairment of
goodwill and intangible assets, share-based compensation and FBT2
(Non-GAAP)
$
17,204
$
6,873
$
26,898
$
15,972
Less: Amortization of intangible assets
8,012
479
9,481
1,308
Less: Impairment of goodwill and intangible assets
—
15,465
—
15,465
Less: Share-based compensation expense
3,461
1,918
6,525
3,423
Less: FBT1
162
627
531
627
Operating (loss) income (GAAP)
$
5,569
$
(11,616
)
$
10,361
$
(4,850
)
Reconciliation of net income (non-GAAP to GAAP)
Amount in thousands
Three months ended
Six months ended
September 30,2008
September 30,2007
September 30,2008
September 30,2007
Net income (excluding amortization and impairment of goodwill and
intangible assets, share-based compensation and FBT1)
(Non-GAAP)
$
11,862
$
8,035
$
20,104
$
18,807
Less: Amortization of intangible assets
8,012
479
9,481
1,308
Less: Impairment of goodwill and intangible assets
—
15,465
—
15,465
Less: Share-based compensation expense
3,461
1,918
6,525
3,423
Less: FBT1
162
627
531
627
Net income (GAAP)
$
227
$
(10,454
)
$
3,567
$
(2,015
)
2 FBT means the fringe benefit taxes on
options and restricted share units granted to employees under the WNS
2002 Stock Incentive Plan and the WNS 2006 Incentive Award Plan (as
applicable) payable by WNS to the government of India.
Reconciliation of Basic income per ADS (non-GAAP to GAAP)
Three months ended
Six months ended
September 30,2008
September 30,2007
September 30,2008
September 30,2007
Basic income per ADS (excluding amortization and impairment of
goodwill and intangible assets, share-based compensation and FBT3
(Non-GAAP)
$
0.28
$
0.19
$
0.47
$
0.45
Less: Adjustments for amortization and impairment of goodwill and
intangible assets, share-based compensation and FBT1
0.27
0.44
0.39
0.50
Basic income per ADS (GAAP)
$
0.01
$
(0.25
)
$
0.08
$
(0.05
)
Reconciliation of Diluted income per ADS (non-GAAP to GAAP)
Three months ended
Six months ended
September 30,2008
September 30,2007
September 30,2008
September 30,2007
Diluted income per ADS ( excluding amortization and impairment of
goodwill and intangible assets, share-based compensation and FBT1)
(Non-GAAP)
$
0.27
$
0.19
$
0.46
$
0.44
Less: Adjustments for amortization and impairment of goodwill and
intangible assets, share-based compensation and FBT1
0.26
0.44
0.38
0.49
Diluted income/(loss) per ADS (GAAP)
$
0.01
$
(0.25
)
$
0.08
$
(0.05
)
3 FBT means the fringe benefit taxes on
options and restricted share units granted to employees under the WNS
2002 Stock Incentive Plan and the WNS 2006 Incentive Award Plan (as
applicable) payable by WNS to the government of India.
WNS (HOLDINGS) LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(Amounts in thousands, except per share data)
Three months endedSeptember 30,
Six months endedSeptember 30,
2008
2007
2008
2007
Revenue
Third parties
$
148,925
$
114,679
$
270,961
$
226,487
Related parties
872
899
1,780
1,614
149,797
115,578
272,741
228,101
Cost of revenue
114,912
92,468
213,399
182,674
Gross profit
34,885
23,110
59,342
45,427
Operating expenses
Selling, general and administrative expenses
21,304
18,782
39,500
33,504
Amortization of intangible assets
8,012
479
9,481
1,308
Impairment of goodwill and intangible assets
—
15,465
—
15,465
Operating income (loss)
5,569
(11,616
)
10,361
(4,850
)
Other income (expense), net
(275
)
2,222
(1,788
)
4,908
Interest expense
(3,220
)
—
(3,367
)
—
Income (loss) before income taxes
2,074
(9,394
)
5,206
58
Provision for income taxes
(1,847
)
(1,060
)
(1,639
)
(2,073
)
Net income (loss)
$
227
$
(10,454
)
3,567
$
(2,015
)
Basic (loss) income per share
$
0.01
$
(0.25
)
$
0.08
$
(0.05
)
Diluted income (loss) per share
$
0.01
$
(0.25
)
$
0.08
$
(0.05
)
WNS (HOLDINGS) LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and per share data)
September
March 31
2008
2008
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
31, 328
$
102,698
Bank deposits and marketable securities
—
8,074
Accounts receivable, net of allowance of $2,107 and $1,741,
respectively
86,418
47,302
Accounts receivable — related parties
113
586
Funds held for clients
5,118
6,473
Employee receivables
1,963
1,179
Prepaid expenses
4,393
3,776
Prepaid income taxes
3,214
2,776
Deferred tax assets— current
538
618
Other current assets
17,550
8,596
Total current assets
150,635
182,078
Goodwill
96,596
87,470
Intangible assets, net
243,487
9,393
Property, plant and equipment, net
48,891
50,840
Deferred contract costs — non current
1,440
1,278
Foreign currency derivative contracts –
non current
779
—
Deposits
7,646
7,391
Deferred tax assets — non current
14,657
8,055
TOTAL ASSETS
$
564,131
$
346,505
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Account payable
$
31,599
$
15,562
Accounts payable — related parties
—
6
Long term debt – current
20,000
—
Short term line of credit
8,463
—
Short term line of credit – related
parties
6,336
—
Accrued employee costs
24,108
26,848
Deferred revenue — current
12,583
7,790
Income taxes payable
3,425
1,879
Deferred tax liabilities — current
1,800
211
Accrual for earn-out payment
—
33,699
Liability on outstanding derivative and interest swap contracts —current
14,366
—
Other current liabilities
40,243
25,806
Total current liabilities
162,923
111,801
Long term debt – non current
180,000
—
Deferred revenue — non current
2,143
1,549
Deferred rent
3,662
2,627
Accrued pension liability
1,965
1,544
Deferred tax liabilities — non current
11,139
1,834
Liability on outstanding derivative and interest swap contracts —
non current
3,214
—
TOTAL LIABILITIES
365,046
119,355
Shareholders’ equity:
Ordinary shares, $0.16 (10 pence) par value, authorized:
50,000,000 shares; Issued and outstanding: 42,569,239 and
42,363,100 shares, respectively
6,662
6,622
Additional paid-in capital
176,155
167,459
Ordinary shares subscribed: Nil and 1,666 shares, respectively
—
10
Retained earnings
42,472
38,839
Accumulated other comprehensive income (loss)
(26,204
)
14,220
Total shareholders’ equity
199,085
227,150
TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY
$
564,131
$
346,505