Release Details
EXL Reports 2009 First Quarter Results
EXL Reports 2009 First Quarter Results
First Quarter Income from Operations up 69.0% First Quarter Operating Margin of 10.4%; Adjusted Operating Margin of 14.2%
Rohit Kapoor, President and CEO, commented: "EXL continues to navigate
effectively in this difficult economic environment. This quarter, EXL renewed
and expanded two significant client contracts, each with an expected total
contract value in excess of
Financial Highlights
Financial highlights are based on continuing operations of the Company and exclude the Aviva BOT, which is treated as a discontinued operation as of the third quarter of 2008. Reconciliations of adjusted financial measures to GAAP are included at the end of this release.
-- Revenues for the quarter endedMarch 31, 2009 were$41.0 million compared to$44.4 million for the quarter endedMarch 31, 2008 and$43.7 million for the quarter endedDecember 31, 2008 . Revenues attributable to outsourcing services for the quarter endedMarch 31, 2009 were$33.4 million compared to$34.9 million in the quarter endedMarch 31, 2008 and$33.2 million in the quarter endedDecember 31 2008. Transformation services revenues for the quarter endedMarch 31, 2009 were$7.6 million compared to$9.5 million in the quarter endedMarch 31, 2008 and$10.5 million in the quarter endedDecember 31, 2008 . -- Gross margin for the quarter endedMarch 31, 2009 was 40.6% compared to 35.6% for the quarter endedMarch 31, 2008 and 41.6% for the quarter endedDecember 31, 2008 . Gross margin for outsourcing services was 45.3% for the quarter endedMarch 31, 2009 compared to 43.7% for the quarter endedDecember 31, 2008 . Transformation services gross margin was 19.7% for the quarter endedMarch 31, 2009 compared to 34.9% for the quarter endedDecember 31, 2008 . -- Operating margin for the quarter endedMarch 31, 2009 was 10.4%, compared to 5.7% for the quarter endedMarch 31, 2008 and 12.4% for the quarter endedDecember 31, 2008 ; adjusted operating margin, excluding the impact of stock-based compensation expense and amortization of intangibles, for the quarter endedMarch 31, 2009 was 14.2% compared to 8.4% for the quarter endedMarch 31, 2008 and 14.4% for the quarter endedDecember 31, 2008 . -- Diluted earnings per share to common stockholders for the quarter endedMarch 31, 2009 was$0.10 compared to$0.16 for the quarter endedMarch 31, 2008 and$0.12 for the quarter endedDecember 31, 2008 . Business Announcements -- Expanded multiple strategic outsourcing relationships with the migration of 15 new outsourcing processes during the quarter. Migrating processes for four recently acquired clients. -- Gained significant traction in expanding relationships in transformation services that are annuity in nature across clients in insurance, retail banking and credit cards. -- Reported record low quarterly attrition of 21.0% for billable employees compared to 34.3% for the first quarter of 2008 and 33.8% for the fourth quarter of 2008. -- Extended the scope of a contract with a top 10 U.S. insurance company including a contract value anticipated to exceed$100 million over 5 years to provide insurance domain-specific processing, analytics, and finance and accounting services. -- Renewed a strategic outsourcing contract with our largest client,Centrica, PLC (British Gas ), throughApril 2012 with the option to further extend the contract for two annual periods. Other Business Announcements -- Vishal Chhibbar will join EXL as Chief Financial Officer effectiveJune 1, 2009 . Vishal joins fromGE Capital where he was most recently Regional Head, Group Financial Planning, Strategy and Treasury forAustralia andNew Zealand . Previously, Vishal was the Chief Financial Officer for GE Capital South Korea and prior to that assignment the Chief Financial Officer for GE Capital Indonesia andMalaysia . Vishal is a Chartered Accountant and holds a Bachelor of Commerce degree fromDAV College , Dehradun. 2009 Outlook The Company is maintaining its guidance for calendar year 2009: -- Revenues between$170.0 million to $175.0 million -- Adjusted operating margin, excluding the impact of stock-based compensation expense and amortization of intangibles, between 10.0% and 12.0% Conference Call
EXL will host a conference call on
To listen to the conference call via phone, please dial 1-800-706-7745 or
1-617-614-3472 and enter "49246160." For those who cannot access the live
broadcast, a replay will be available by dialing 1-888-286-8010 or
1-617-801-6888 and entering "28815805" from two hours after the end of the
call until
About
This press release contains forward-looking statements. You should not
place undue reliance on those statements because they are subject to numerous
uncertainties and factors relating to the Company's operations and business
environment, all of which are difficult to predict and many of which are
beyond the Company's control. Forward-looking statements include information
concerning the Company's possible or assumed future results of operations,
including descriptions of its business strategy. These statements may include
words such as "may," "will," "should," "believe," "expect," "anticipate,"
"intend," "plan," "estimate" or similar expressions. These statements are
based on assumptions that we have made in light of management's experience in
the industry as well as its perceptions of historical trends, current
conditions, expected future developments and other factors it believes are
appropriate under the circumstances. You should understand that these
statements are not guarantees of performance or results. They involve known
and unknown risks, uncertainties and assumptions. Although the Company
believes that these forward-looking statements are based on reasonable
assumptions, you should be aware that many factors could affect the Company's
actual financial results or results of operations and could cause actual
results to differ materially from those in the forward-looking statements.
These factors are discussed in more details in the Company's filings with the
You should keep in mind that any forward-looking statement made herein, or elsewhere, speaks only as of the date on which it is made. New risks and uncertainties come up from time to time, and it is impossible to predict these events or how they may affect the Company. The Company has no obligation to update any forward-looking statements after the date hereof, except as required by federal securities laws.
EXLSERVICE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except share and per share amounts)
Three months ended
March 31,
2009 2008
Revenues $40,986 $44,431
Cost of revenues (exclusive of
depreciation and amortization) 24,356 28,634
Gross profit 16,630 15,797
Operating expenses:
General and administrative expenses 6,733 8,374
Selling and marketing expenses 3,184 2,374
Depreciation and amortization 2,430 2,515
Total operating expenses 12,347 13,263
Income from operations 4,283 2,534
Other income/(expense):
Foreign exchange gain/(loss) (1,309) 1,614
Interest and other income, net 311 536
Income from continuing operations before
income taxes 3,285 4,684
Income tax provision/(benefit) 263 (31)
Income from continuing operations 3,022 4,715
Income/(loss) from discontinued
operations, net of taxes (139) 2,085
Net income to common stockholders $2,883 $6,800
Earnings per share(a):
Basic:
Continuing operations $0.10 $0.16
Discontinued operations - 0.07
$0.10 $0.24
Diluted:
Continuing operations $0.10 $0.16
Discontinued operations - 0.07
$0.10 $0.23
Weighted-average number of shares used
in computing earnings per share:
Basic 28,843,190 28,757,077
Diluted 29,079,675 29,292,838
(a) Per share amounts may not foot due to rounding.
EXLSERVICE HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share and per share amounts)
March 31, December 31,
2009 2008
Assets
Current assets:
Cash and cash equivalents $106,595 $112,174
Short-term investments 153 153
Accounts receivable, net of allowance
for doubtful accounts of $125
at March 31, 2009 and $128 at December
31, 2008 31,888 33,714
Deferred tax assets 4,084 3,401
Income tax receivable 2,170 2,033
Prepaid expenses and other current
assets 3,948 6,402
Total current assets 148,838 157,877
Fixed assets, net of accumulated
depreciation of $29,040 at March 31,
2009 and $27,727 at December 31, 2008 24,023 24,518
Goodwill 17,557 17,557
Deferred tax assets 2,380 3,047
Other assets 9,745 8,970
Total assets $202,543 $211,969
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $1,894 $3,371
Deferred revenue 2,911 2,961
Accrued employee cost 7,383 14,725
Accrued expenses and other current
liabilities 17,069 18,011
Total current liabilities 29,257 39,068
Non-current liabilities 2,109 1,569
Total liabilities 31,366 40,637
Commitments and contingencies - -
Preferred stock, $0.001 par value;
15,000,000 shares authorized , none
issued - -
Stockholders' Equity:
Common stock, $0.001 par value;
100,000,000 shares authorized,
29,095,045 shares issued and
outstanding as of March 31, 2009 and
29,054,145 shares issued and
outstanding as of December 31, 2008 29 29
Additional paid-in capital 118,226 116,676
Retained earnings 72,904 70,021
Accumulated other comprehensive loss (19,034) (14,491)
172,125 172,235
Less: 244,016 shares as of March 31,
2009 and 237,080 shares as of December
31, 2008, held in treasury, at cost (948) (903)
Total stockholders' equity 171,177 171,332
Total liabilities and stockholders'
equity $202,543 $211,969
EXLSERVICE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Reconciliation of Adjusted Financial Measures to GAAP Measures
In addition to its reported operating results in accordance with U.S.
generally accepted accounting principles (GAAP), EXL has included in this
release adjusted financial measures that the
The following table shows the reconciliation of these adjusted financial
measures from GAAP measures for the three month periods ended
(Amounts in thousands)
ExlService Holdings, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended March 31, Three Months Ended March 31,
2009 2009 2008 2008
US GAAP Adjustments Non-GAAP US GAAP Adjustments Non-GAAP
Revenues $40,986 $- $40,986 $44,431 $- $44,431
Cost of
revenues
(exclusive
of
depreciation
and
amortization) 24,356 (301) (a) 24,055 28,634 (133) (a) 28,501
Gross profit 16,630 301 16,931 15,797 133 15,930
Gross
Margin % 40.6% 41.3% 35.6% 35.9%
Selling,
general and
administrative
expenses 9,917 (1,238) (a) 8,679 10,748 (856) (a) 9,893
Depreciation
and
amortization
expense 2,430 - (b) 2,430 2,515 (212) (b) 2,303
Income from
operations $4,283 $1,539 $5,822 $2,534 $1,200 $3,734
Income from
Operations
Margin % 10.4% 14.2% 5.7% 8.4%
(a) To exclude stock-based compensation expense under FAS 123R.
(b) To exclude amortization of acquisition-related intangibles.
SOURCE
Inc.
ir@exlservice.com
/Web Site: http://www.exlservice.com
(EXLS EXLS)