iGATE Corporation
25.01.2012 08:30
---------------------------------------------------------------------------
Smooth Integration Drives Margin to 2013 Goal Levels; Largest Single Phase
Delivery Center Inaugurated in Bangalore
FREMONT, Calif., 2012-01-25 08:30 CET (GLOBE NEWSWIRE) --
iGATE Corporation (iGATE or the Company) (Nasdaq:IGTE), the first integrated
Technology and Operations (iTOPS) company providing Business Outcomes based
solutions under the brand iGATE Patni, today announced its financial results
for the fourth quarter and year ended December 31, 2011.
Fourth Quarter Highlights
-- Revenues for fourth quarter 2011 were $267.7 million.
-- Compared with $81.0 million in the fourth quarter 2010
-- Compared with $265.7 million in the third quarter 2011
-- Net Income for fourth quarter 2011 was $15.3 million.
-- Compared with $14.7 million in the fourth quarter 2010
-- Compared with $14.3 million in the third quarter 2011
-- Interest expense impacted net income by $17.8 million in the fourth quarter
2011
-- Gross margin was 40.3 % for the fourth quarter 2011.
-- Compared with 42.7% in the fourth quarter 2010
-- Compared with 36.9 % in the third quarter 2011
-- Diluted earnings per share for the fourth quarter 2011 were $0.11 GAAP;
$0.27 non-GAAP.
-- Compared with $0.25 GAAP in fourth quarter 2010; $0.34 non-GAAP in fourth
quarter 2010
-- Compared with $0.10 GAAP in third quarter 2011; $0.26 non-GAAP in third
quarter 2011
-- Adjusted EBITDA was $68.1 million for the fourth quarter 2011.
-- Compared with $23.4 million in the fourth quarter 2010
-- Compared with $55.8 million in the third quarter 2011
-- 16 new customers were added during the fourth quarter, including three
Fortune 1000 companies.
-- Headcount was at 26,523 employees as of December 31, 2011.
Full Year Highlights
-- Revenues for the year ended December 31, 2011 were $779.6 million.
-- Compared with $280.6 million for the year ended December 31, 2010.
-- Net Income for the year ended December 31, 2011 was $51.5 million.
-- Compared with $51.8 million for the year ended December 31, 2010.
-- Interest expense impacted net income by $50.6 million.
-- Gross margin was 38.0% for the year ended December 31, 2011.
-- Compared with 40.2 % for the year ended December 31, 2010.
-- Diluted earnings per share were $0.38 GAAP; $0.90 non-GAAP.
-- Compared with $0.89 GAAP; $1.08 non-GAAP in the corresponding period in
2010.
-- Adjusted EBITDA was $173.5 million for the year ended December 31, 2011.
-- Compared with $72.4 million for the year ended December 31, 2010.
Expansion
-- iGATE Patni has invested $15 million into a new 260,000 sq. ft facility in
Bangalore. With a capacity of seating more than 2,500 people, this building
is the largest single phase delivery center equipped with state of the art
energy and green sustenance features.
-- A large Capital outlay of $120 million has been approved to build a
residential training facility in Pune along with a 5000 member capacity
delivery center, campus expansion in Mumbai, and another extra phase in
Bangalore.
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%
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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%)
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GAAP diluted EPS ($) 0.11 0.25 (56%) 0.38 0.90 (57%)
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Non-GAAP net income ($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%)
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Key New Customers and Projects during the Fourth Quarter
-- A North America-based Fortune 1000 communications company chose iGATE Patni
improving and providing a unified customer experience across its business
units while at the same time standardizing and optimizing workforce
management practices to achieve best in industry cost and efficiency. iGATE
Patni will leverage its experience in executive dashboards and data
analytics to provide an enterprise-wide view of its customer service
performance.
-- A North America based financial services firm selected iGATE Patni to
redesign its dealer portal thus impacting customer satisfaction and
increase the ability to cross sell products. The firm's current portal has
an Advisor Center that helps creation of new accounts, allows Financial
Advisors to manage their Client's Portfolios and generate different
Reports. iGATE Patni will develop a new intuitive and self service portal
that will provide better user experience to Financial Advisors, Broker
dealers and Investment advisors along with faster turnover on key
functions.
-- An Indian state-owned Fortune 1000 company that is in the oil and gas
sector chose iGATE Patni for its software development needs as the first
'Unique Identification Authority of India (UIDAI)' opportunity in India.
-- A leading American Wealth Management firm chose iGATE Patni for a Process
Consulting engagement. As part of the engagement, iGATE Patni, through a
combination of Six Sigma and other proprietary methodologies, will identify
opportunities to reduce the operating expenses of the client.
-- One of the largest and most diversified groups in the Middle East region
operating in various sectors that includes Automobiles, Industrial Trading,
Media, Retail, engaged iGATE Patni in an enterprise cost optimization
initiative and provide Business Intelligence solutions across the Gulf
Conglomerate's breadth of businesses. As part of the deal, iGATE Patni will
replace different bespoke systems that were developed originally to meet
the needs of individual organizations and implement an Oracle ERP on a
single platform.
-- A North America-based Fortune 1000 company that conducts business in the
areas of diversified industrial manufacturing has signed a product
engineering deal with iGATE Patni pursuant to which the Company will be
responsible for developing a new generation of residential locks for the
client that will enable newer ways of ensuring security and safety to
households.
-- A major operator of marine ports in the Middle East has chosen iGATE Patni
for its port function decentralization effort. The project involves
providing documentation on current architecture of the system as well the
proposed system design, to be followed for the de-centralization.
Awards and Recognitions
-- iGATE Corporation Wins 'Golden Peacock' Global Award (Americas) for
Excellence in Corporate Governance
-- iGATE Patni's IT and Business Enabling functions in Bangalore were
successfully appraised and rated at People CMM(r) maturity level 5.
-- Phaneesh Murthy received Enterprise Asia's 'Outstanding Entrepreneurship'
Award for 2011.
-- iGATE Patni's Employee Engagement initiative, 'Thank God It's Monday,'
entered the Limca Book of Records for running a corporate music show every
Monday for five consecutive years.
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:
-- Amortization of intangible assets: Intangible assets comprise value of
customer relationships from the recent Patni acquisition and the previous
delisting of iGATE's Indian subsidiary. iGATE incurs charges relating to
the amortization of these intangibles. These charges are included in
iGATE's GAAP presentation of earnings from operations, operating margin,
net income and diluted earnings per share. iGATE excludes these charges for
purposes of calculating these non-GAAP measures.
-- Stock-based compensation: Although stock-based compensation is an important
aspect of the compensation of iGATE's employees and executives, determining
the fair value of the stock-based instruments involves a high degree of
judgment and estimation and the expense recorded may not reflect the actual
value realized upon the future exercise or termination of the related
stock-based awards. Furthermore, unlike cash compensation, the value of
stock-based compensation is determined using a complex formula that
incorporates factors, such as market volatility, that are beyond our
control. Management believes it is useful to exclude stock-based
compensation in order to better understand the long-term performance of our
core business.
-- Acquisition expenses: iGATE incurs costs related to its acquisitions, which
are inconsistent in amount and frequency and are significantly impacted by
the timing and nature of iGATE's acquisitions. iGATE believes that
eliminating these expenses for purposes of calculating these non-GAAP
measures facilitates a more meaningful evaluation of iGATE's current
operating performance and comparisons to its past operating performance.
-- Forex gain: The Company entered into forward foreign exchange contracts to
mitigate the risk of changes in foreign exchange rates on payments related
to the acquisition of Patni. We also recognized favorable foreign currency
gain on re-measurement of escrow account balance maintained for
facilitating payments related to Patni acquisition. iGATE believes that
eliminating the non-capitalized items for purposes of calculating these
non-GAAP measures facilitates a more meaningful evaluation of iGATE's
current performance and comparisons to its past performance.
-- Severance Cost: As a result of the acquisition of Patni, iGATE incurred
severance costs in connection with the termination of the services of some
of Patni's employees.
-- Delisting expenses: iGATE is voluntarily delisting the equity shares of its
majority owned subsidiary, Patni from the National Stock Exchange of India
Limited and the Bombay Stock Exchange Limited and the American Depository
Shares from the New York Stock Exchange. Delisting is an infrequent
activity and expenses incurred in connection therein are inconsistent in
amount and are significantly impacted by the timing and nature of the
delisting. iGATE believes that eliminating these expenses for purposes of
calculating these non-GAAP measures facilitates a more meaningful
evaluation of iGATE's current operating performance and comparisons to its
past operating performance.
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
(unaudite (unaudit (unaudite (audited)
d) ed) d)
------------------------------------------
Revenues $ 267,707 $ 81,013 $ 779,646 $ 280,597
Cost of revenues (exclusive of 159,941 46,460 483,504 167,906
depreciation and amortization)
------------------------------------------
Gross margin 107,766 34,553 296,142 112,691
Selling, general and administrative 42,582 16,765 151,497 50,669
expense
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 20,426 14,722 60,054 51,755
interest
Noncontrolling interest 5,149 -- 8,586 --
------------------------------------------
Net income attributable to iGATE 15,277 14,722 51,468 51,755
Corporation
Accretion to Preferred Stock 88 -- 302 --
Preferred dividend 7,016 -- 22,147 --
------------------------------------------
Net income attributable to iGATE $ 8,173 $ 14,722 $ 29,019 $ 51,755
Corporation common shareholders
==========================================
*Includes Patni revenues since May
16, 2011.
iGATE CORPORATION
Earnings Per Share
(Amounts in thousands, except per share data)
Three Months Ended Year ended
December 31
December 31
--------------------------------------------------------------------------------
-------
PARTIC 2011 2010 2011**
2010
ULARS
(unaudi (unaudit (unaudit
(audited
ted) ed) ed)
)
--------------------------------------------------------------------------------
-------
Net $ 8,173 $ 14,722 $ 29,019
$ 51,755
incom
e
attri
butabl
e to
iGATE
commo
n
share
holder
s
Add: 7,016 -- 22,147
--
Divid
ends
on
Serie
s B
Prefe
rred
Stock
--------- ---------- ----------
---------
15,189 14,722 51,166
51,755
Less:
Divid
ends
paid
on
C [A] $ -- $ 8,433 $ -- $ 14,509
o
m
m
o
n
S
t
o
c
k
U [B] -- 43 -- 103
n
v
e
s
t
e
d
r
e
s
t
r
i
c
t
e
d
s
t
o
c
k
P [C] 7,016 7,016 -- 8,476 22,147 22,147 --
14,612
a
r
t
i
c
i
p
a
t
i
n
g
p
r
e
f
e
r
r
e
d
s
t
o
c
k
------------------------------------------------------------------------
Undist $ 8,173 $ 6,246 $ 29,019
$ 37,143
ribute
d
Incom
e
========= ========== ==========
=========
Alloca
tion
of
Undis
tribut
ed
Incom
e
C [D] 6,240 6,215 22,157
36,878
o
m
m
o
n
s
t
o
c
k
U [E] 24 31 84
265
n
v
e
s
t
e
d
r
e
s
t
r
i
c
t
e
d
s
t
o
c
k
P [F] 1,909 -- 6,778
--
a
r
t
i
c
i
p
a
t
i
n
g
p
r
e
f
e
r
r
e
d
s
t
o
c
k
--------- ---------- ----------
---------
$ 8,173 $ 6,246 $ 29,019
$ 37,143
========= ========== ==========
=========
Shares
outst
anding
for
alloc
ation
of
undis
tribut
ed
incom
e:
C 56,706 56,227 56,706
56,227
o
m
m
o
n
s
t
o
c
k
U 214 280 214
280
n
v
e
s
t
e
d
r
e
s
t
r
i
c
t
e
d
s
t
o
c
k
P 17,347 -- 17,347
--
a
r
t
i
c
i
p
a
t
i
n
g
p
r
e
f
e
r
r
e
d
s
t
o
c
k
--------- ---------- ----------
---------
74,267 56,507 74,267
56,507
========= ========== ==========
=========
Weight
ed
avera
ge
share
s
outst
anding
:
C [G] 56,671 56,141 56,523
55,656
o
m
m
o
n
s
t
o
c
k
U [H] 213 294 217
399
n
v
e
s
t
e
d
r
e
s
t
r
i
c
t
e
d
s
t
o
c
k
P [I] 17,347 -- 17,347
--
a
r
t
i
c
i
p
a
t
i
n
g
p
r
e
f
e
r
r
e
d
s
t
o
c
k
--------- ---------- ----------
---------
74,231 56,435 74,087
56,055
========= ========== ==========
=========
Weight 56,671 56,141 56,523
55,656
ed
avera
ge
commo
n
stock
outst
anding
Diluti 1,390 1,716 1,420
1,738
ve
effec
t of
stock
optio
ns and
restr
icted
share
s
outst
anding
--------- ---------- ----------
---------
Diluti [J] 58,061 57,857 57,943
57,394
ve
weigh
ted
avera
ge
share
s
outst
anding
========= ========== ==========
=========
Distri
buted
earni
ngs
per
share
:
C [K=A/G $ -- $ 0.15 $ --
$ 0.26
o ]
m
m
o
n
s
t
o
c
k
U [L=B/H $ -- $ 0.15 $ --
$ 0.26
n ]
v
e
s
t
e
d
r
e
s
t
r
i
c
t
e
d
s
t
o
c
k
P [M=C/I $ 0.40 $ -- $ 1.28
$ --
a ]
r
t
i
c
i
p
a
t
i
n
g
p
r
e
f
e
r
r
e
d
s
t
o
c
k
Undist
ribute
d
earni
ngs
per
share
:
C [N=D/G $ 0.11 $ 0.11 $ 0.39
$ 0.66
o ]
m
m
o
n
s
t
o
c
k
U [O=E/H $ 0.11 $ 0.11 $ 0.39
$ 0.66
n ]
v
e
s
t
e
d
r
e
s
t
r
i
c
t
e
d
s
t
o
c
k
P [P=F/I $ 0.11 $ -- $ 0.39
$ --
a ]
r
t
i
c
i
p
a
t
i
n
g
p
r
e
f
e
r
r
e
d
s
t
o
c
k
Basic
earni
ngs
per
share
from
opera
tions
C [K+N] $ 0.11 $ 0.26 $ 0.39
$ 0.92
o
m
m
o
n
S
t
o
c
k
U [L+O] $ 0.11 $ 0.26 $ 0.39
$ 0.92
n
v
e
s
t
e
d
r
e
s
t
r
i
c
t
e
d
s
t
o
c
k
P [M+P] $ 0.51 $ -- $ 1.67
$ --
a
r
t
i
c
i
p
a
t
i
n
g
p
r
e
f
e
r
r
e
d
s
t
o
c
k
Dilute [[A+B+ $ 0.11 $ 0.25 $ 0.38
$ 0.90
d D+E]/J
earni ]
ngs
per
share
from
opera
tions
**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 $ 15,277 $ 14,722 $ 51,468 $ 51,755
Corporation
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:
-- Adjusted EBITDA does not reflect our cash expenditures, or future
requirements, for capital expenditures or contractual commitments;
-- Adjusted EBITDA does not reflect changes in, or cash requirements for, our
working capital needs;
-- Adjusted EBITDA does not reflect the significant interest expense, or the
cash requirements necessary to service interest or principal payments, on
our debts; although depreciation and amortization are non-cash charges, the
assets being depreciated and amortized will often have to be replaced in
the future, and adjusted EBITDA does not reflect any cash requirements for
such replacements; non-cash compensation is and will remain a key element
of our overall long-term incentive compensation package, although we
exclude it as an expense when evaluating our ongoing operating performance
for a particular period; Adjusted EBITDA does not reflect the impact of
certain cash charges resulting from matters we consider not to be
indicative of our ongoing operations; and other companies in our industry
may calculate adjusted EBITDA differently than we do, limiting its
usefulness as a comparative measure.
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 $ 15,277 $ 14,722 $ 51,468 $ 51,755
Corporation
Adjustments
Amortization of Intangible assets, net 2,551 197 6,191 774
of taxes
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 (724) -- (15,975) --
other remeasurement, net of taxes
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, 74,231* 56,439 74,087* 56,055
Basic
=======================================
Weighted average dilutive common 75,408* 57,857 75,290* 57,394
equivalent shares outstanding
=======================================
*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
News Source: NASDAQ OMX
25.01.2012 Dissemination of a Corporate News, transmitted by DGAP -
a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
DGAP's Distribution Services include Regulatory Announcements,
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Language: English
Company: iGATE Corporation
United States
Phone:
Fax:
E-mail:
Internet:
ISIN: US9901036403
WKN:
End of Announcement DGAP News-Service
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DGAP-News: iGATE Corporation Closes Strong 2011
| Source: EQS Group AG