FREMONT, Calif., Oct. 13, 2010 (GLOBE NEWSWIRE) -- iGATE (Nasdaq:IGTE), the first Business Outcomes driven integrated Technology and Operations (iTOPS) solutions provider today announced its financial results for the third quarter ended September 30, 2010.
Third quarter highlights
- Revenues were $74.8 million compared to $49.1 million made in the corresponding quarter previous year
- Achieved 39.4% gross margin and 19.1% net margin
- Diluted earnings per share was $0.25, a 56.3% increase over the corresponding quarter previous year
- 8,278 employees as of September 30, 2010; net addition of 120 employees during the quarter
- 5 new customers added
- A dividend of 15 cents per common share, as a partial dividend for iGATE's performance for the year. The dividend is payable December 28, 2010, to shareowners of record as of December 1, 2010. iGATE's Board of Directors currently intends to declare a further cash dividend in the first quarter of 2011, subject to iGATE's year-end results.
- Ranked third in Dataquest-IDC's annual survey of top 20 Best IT Employers in India.
"Our strong revenue, margin growth and recent client wins are a positive affirmation that our business model and messaging is resonating well with our customers," said Phaneesh Murthy, Chief Executive Officer of iGATE.
"Our margin growth continues to be strong. We are able to translate our growing top line into a significant improvement on the bottom line," said Sujit Sircar, Chief Financial Officer of iGATE. "We continue to generate strong operating cash flow and our balance sheet is further strengthened with cash and cash equivalents and short-term investments of over $ 120 million."
Third quarter operating results
Revenues for the quarter were $74.8 million, a 52.6% increase from $49.1 million in the same period last year. Gross margin was 39.4% compared to 41.1% in the corresponding quarter last year.
Operating income for the quarter grew to $15.2 million from $9.1 million in the same period last year. Operating margin was 20.3%, up from 18.6% in the corresponding quarter last year.
Net income was $14.3 million, or $0.25 per diluted share, compared to net income of $8.9 million or $0.16 per diluted share, in the same period last year. Net income was 19.1% compared to 18.1% in the corresponding quarter last year.
At September 30, 2010, iGATE's cash and cash equivalents and short-term investments increased to $120.8 million from $96.8 million at December 31, 2009.
Key customer wins and significant projects during the quarter
iGATE is helping a leading Canadian publisher optimize and publish its content over the web enabling its customers to easily search and retrieve specific topics. By leveraging its global delivery model, iGATE will also help the client identify opportunities to increase productivity and quality while reducing cost and risk in its operational processes.
A large provider of mobility platform and IP Network based solutions and services has engaged iGATE to fine tune and enhance its global contract management system to a robust, high performance and scalable solution that will meet the demands of its global operations.
iGATE is providing comprehensive website and web-application support to a reputed print and digital media company. Besides 24-7 technology support, the client will also benefit by enhanced customer experience for all its web initiatives.
A U.S. based loan servicing client has engaged iGATE to gain better efficiencies across multiple processes. With the solutions that iGATE will provide, the client expects to reduce cycle time and improve the quality of delivery.
A Fortune 500 safety and security provider contracted with iGATE to roll out a global Enterprise Resource Planning (ERP) application which will replace existing legacy systems running in a couple of the client's European business units. iGATE is also providing a solution which is expected to help the client offer enhanced customer support.
Important events during the quarter
- Second phase of facility expansion in Special Economic Zone, Chennai and Hyderabad, India, completed, adding a total additional capacity of 900 seats
- iGATE's printing governance solution wins the Best IT implementation of the year 2010 – Green IT category from PC Quest Magazine, India
- New equity analyst coverage initiated by Signal Hill Capital Group
Conference Call and Webcast
iGATE will host a telephonic conference call on Wednesday, October 13, 2010 at 8:00 a.m. Eastern Time to discuss the results of its third quarter ended September 30, 2010. A live webcast of this conference call will be available on our web site at www.igate.com. A replay of the call will be available until October 20, 2010.
About iGATE
iGATE (Nasdaq:IGTE) is the first Business Outcomes driven integrated Technology and Operations (iTOPS) solutions provider with a global delivery model. iGATE enables clients to optimize their business through a combination of process investment strategies, technology leverage and business process outsourcing and provisioning. Our unique business model aligns with the client's strategic objectives to achieve operational efficiencies, increase cost variability and rationalize their current operating environment. iGATE has over 8,000 employees and 7 development centers in Australia, India, Japan, and Mexico. iGATE has offices in 17 countries and 4 continents. With industry expertise spanning 16 years, iGATE has developed the right solutions with its Business Outcomes driven approach for industry verticals – Banking, Insurance, Manufacturing, Retail, Health Care, Media & Entertainment and Telecom & Hi-Tech. For more information, please visit www.igate.com
The iGATE Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5150
Forward-Looking Statements
Some of the statements contained in this news release that are not historical facts are forward-looking statements. These forward-looking statements include the company's financial, growth and liquidity projections as well as statements concerning the company's plans, strategies, intentions and beliefs concerning business cash flows, costs and the markets in which it operates. Without limiting the foregoing, the words "believes," "anticipates," "plans," "expects," "intends" and similar expressions are intended to identify certain forward-looking statements. These statements are based on information currently available to the company and it assumes no obligation to update the forward statements as circumstances change. There are risks and uncertainties that could cause actual events to differ materially from the forward-looking statements. These risks include, but are not limited to, the company's ability to predict its financial performance, the level of market demand for its services, the highly-competitive market for the types of services offered by the company, the impact of competitive factors on profit margins, market conditions that could cause the company's customers to reduce their spending for its services, the company's ability to create, acquire and build new businesses and to grow existing businesses, attract and retain qualified personnel, reduce costs and conserve cash, currency fluctuations and market conditions in India and elsewhere around the world, political and military tensions in India and South Asia, changes in generally accepted accounting principles and/or their interpretation and other risks that are described in more detail in the company's filings with the Securities and Exchange Commission including its Form 10-K for the year ended December 31, 2009.
| iGATE CORPORATION | ||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| (Amounts in thousands, except per share data) | ||
| September 30, | December 31, | |
| 2010 | 2009 | |
| (unaudited) | (audited) | |
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 27,579 | $ 29,565 |
| Short-term investments | 93,264 | 67,192 |
| Accounts receivable, net | 37,458 | 24,533 |
| Unbilled revenues | 18,808 | 9,636 |
| Prepaid expenses and other current assets | 5,067 | 4,628 |
| Foreign exchange derivative contract | 1,632 | -- |
| Prepaid income taxes | 1,017 | 4,247 |
| Deferred tax assets | 2,798 | 31 |
| Receivable from Mastech Holding Inc. | 242 | 87 |
| Total current assets | 187,865 | 139,919 |
| Deposits and other assets | 5,722 | 4,482 |
| Property and equipment, net | 49,851 | 42,682 |
| Deferred tax assets | 10,710 | 8,474 |
| Goodwill | 31,577 | 30,517 |
| Intangible assets, net | 1,573 | 2,086 |
| Total assets | $ 287,298 | $ 228,160 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable | $ 2,977 | $ 1,515 |
| Accrued payroll and related costs | 17,815 | 14,173 |
| Other current liabilities | 25,506 | 18,003 |
| Foreign exchange derivative contracts | -- | 1,097 |
| Restructuring reserve | 58 | 101 |
| Deferred revenue | 424 | 918 |
| Total current liabilities | 46,780 | 35,807 |
| Other long-term liabilities | 1,133 | 1,035 |
| Total liabilities | 47,913 | 36,842 |
| Shareholders' equity: | ||
| Common Stock, par value $0.01 per share | 569 | 561 |
| Additional paid-in capital | 186,406 | 180,278 |
| Retained earnings | 69,185 | 38,228 |
| Common stock in treasury, at cost | (14,714) | (14,714) |
| Accumulated other comprehensive loss | (2,061) | (13,035) |
| Total shareholders' equity | 239,385 | 191,318 |
| Total liabilities and shareholders' equity | $ 287,298 | $ 228,160 |
| iGATE CORPORATION | ||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||
| (Amounts in thousands, except per share data) | ||||
| (unaudited) | ||||
| Three Months ended, | Nine Months ended, | |||
| September 30, | September 30, | |||
| 2010 | 2009 | 2010 | 2009 | |
| Revenues | $ 74,845 | $ 49,055 | $ 199,584 | $ 140,695 |
| Cost of revenues (exclusive of depreciation and amortization) | 45,378 | 28,897 | 121,446 | 86,559 |
| Gross margin | 29,467 | 20,158 | 78,138 | 54,136 |
| Selling, general and administrative | 12,056 | 9,197 | 33,904 | 26,635 |
| Depreciation and amortization | 2,251 | 1,837 | 6,599 | 5,607 |
| Income from operations | 15,160 | 9,124 | 37,635 | 21,894 |
| Other income (expense), net | 961 | 38 | 2,769 | (1,702) |
| Income before income taxes | 16,121 | 9,162 | 40,404 | 20,192 |
| Income tax expense | 1,856 | 278 | 3,371 | 251 |
| Net income | $ 14,265 | $ 8,884 | $ 37,033 | $ 19,941 |
| Distributed earnings per share: | ||||
| Common stock | $ -- | $ -- | $ 0.11 | $ 0.11 |
| Unvested restricted stock | -- | -- | 0.11 | 0.11 |
| Basic earnings per share from operations | ||||
| Common Stock | $ 0.25 | $ 0.16 | $ 0.66 | $ 0.36 |
| Unvested restricted stock | 0.25 | 0.16 | 0.66 | 0.36 |
| Diluted earnings per share from operations | $ 0.25 | $ 0.16 | $ 0.65 | $ 0.36 |
| Weighted average shares outstanding, Basic | 56,092 | 55,227 | 55,910 | 54,965 |
| Weighted average dilutive common equivalent shares outstanding | 57,498 | 56,153 | 57,183 | 55,612 |