Release Details
EXL Reports 2009 Second Quarter Results
EXL Reports 2009 Second Quarter Results
Second Quarter Revenues of $42.4 million; Operating Cash Flow of $7.8 million Expands Global Delivery Capability with Entry in Czech Republic and Decision to Operate from Romania
Rohit Kapoor, President and CEO, commented: "After announcing our win in
July with a strategic client in the transportation and logistics vertical,
which will enable us to deliver services from the
"This quarter we made the requisite investments in our outsourcing business to support the growth we anticipate in the second half of the year. Implementation and employee training for our new outsourcing clients are on schedule and we expect those efforts to be completed over the second half of 2009, driving continued sequential revenue growth. EXL's transformation business stabilized in the second quarter and we now see increased momentum and faster decision making by our clients and expect to see growth in the second half of the year."
Vishal Chhibbar, CFO, commented: "EXL's second quarter results were in
line with our revenue and margin expectations. We are making prudent
investments in our delivery infrastructure expansion and are pleased to
announce that our
Financial Highlights
Financial highlights are based on continuing operations of the Company and exclude the sale of the Pune assets providing services to Aviva under the BOT arrangement, 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 endedJune 30, 2009 were$42.4 million compared to$47.0 million for the quarter endedJune 30, 2008 and$41.0 million for the quarter endedMarch 31, 2009 . Revenues attributable to outsourcing services for the quarter endedJune 30, 2009 were$34.5 million compared to$36.1 million in the quarter endedJune 30, 2008 and$33.4 million in the quarter endedMarch 31, 2009 . Transformation services revenues for the quarter endedJune 30, 2009 were$7.9 million compared to$10.9 million in the quarter endedJune 30, 2008 and$7.6 million in the quarter endedMarch 31, 2009 . -- Gross margin for the quarter endedJune 30, 2009 was 39.1% compared to 35.7% for the quarter endedJune 30, 2008 and 40.6% for the quarter endedMarch 31, 2009 . Gross margin for outsourcing services was 41.9% for the quarter endedJune 30, 2009 compared to 45.3% for the quarter endedMarch 31, 2009 . Transformation services gross margin was 26.8% for the quarter endedJune 30, 2009 compared to 19.7% for the quarter endedMarch 31, 2009 . -- Operating margin for the quarter endedJune 30, 2009 was 6.6%, compared to 5.2% for the quarter endedJune 30, 2008 and 10.4% for the quarter endedMarch 31, 2009 ; adjusted operating margin for the quarter endedJune 30, 2009 , excluding the impact of stock-based compensation expense and amortization of intangibles, was 11.3% compared to 9.7% for the quarter endedJune 30, 2008 and 14.2% for the quarter endedMarch 31, 2009 . -- Diluted earnings per share to common stockholders for the quarter endedJune 30, 2009 were$0.04 compared to$0.09 for the quarter endedJune 30, 2008 and$0.10 for the quarter endedMarch 31, 2009 . Business Announcements -- Setting up a new delivery center inRomania in the third quarter to deliver near-shore multi-lingual outsourcing services. -- Awarded a multi-year outsourcing contract in July with a leading transportation and logistics company to provide business process services from our new delivery center in theCzech Republic . -- New wins in annuity-based transformation work from three existing insurance and banking clients. -- Achieved operating profitability in thePhilippines center fifteen months after commencement of operational delivery. -- Expanded multiple strategic outsourcing relationships with the migration of 20 new processes during the quarter. Migrating processes for four recently acquired clients. -- Quarterly attrition of 22.0% for billable employees compared to 30.7% for the second quarter of 2008 and 21.0% for the first quarter of 2009. 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 1-800-638-4817 or
1-617-614-3943 and enter "96023834." 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 "10709074" 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 Six months ended
June 30, June 30,
-------- --------
2009 2008 2009 2008
---- ---- ---- ----
Revenues $42,385 $47,015 $83,371 $91,446
Cost of revenues
(exclusive of
depreciation and
amortization) 25,827 30,222 50,183 58,856
------ ------ ------ ------
Gross profit 16,558 16,793 33,188 32,590
------ ------ ------ ------
Operating
expenses:
General and
administrative
expenses 7,634 8,470 14,367 16,844
Selling and
marketing
expenses 3,340 2,911 6,524 5,285
Depreciation and
amortization 2,789 2,954 5,219 5,469
----- ----- ----- -----
Total operating
expenses 13,763 14,335 26,110 27,598
------ ------ ------ ------
Income from
continuing
operations 2,795 2,458 7,078 4,992
Other
income/(expense):
Foreign exchange
gain/(loss) (1,710) (825) (3,019) 790
Interest and
other income,
net 276 601 587 1,136
--- --- --- -----
Income from
continuing
operations
before income
taxes 1,361 2,234 4,646 6,918
Income tax
provision/(benefit) 109 (363) 372 (394)
--- ---- --- ----
Income from
continuing
operations 1,252 2,597 4,274 7,312
Income/(loss)
from
discontinued
operations, net
of taxes - 2,667 (139) 4,752
- ----- ---- -----
Net income to
common
stockholders $1,252 $5,264 $4,135 $12,064
====== ====== ====== =======
Earnings per
share (a):
Basic:
Continuing
operations $0.04 $0.09 $0.15 $0.25
Discontinued
operations - 0.09 - 0.17
- ---- - ----
$0.04 $0.18 $0.14 $0.42
===== ===== ===== =====
Diluted:
Continuing
operations $0.04 $0.09 $0.15 $0.25
Discontinued
operations - 0.09 - 0.16
- ---- - ----
$0.04 $0.18 $0.14 $0.41
===== ===== ===== =====
Weighted-average
number of shares
used in computing
earnings per
share:
Basic 28,906,052 28,799,510 28,874,795 28,778,337
Diluted 29,159,547 29,351,038 29,119,785 29,321,982
(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)
June December
30, 31,
2009 2008
---- ----
Assets
Current assets:
Cash and cash equivalents $114,291 $112,174
Short-term investments - 153
Accounts receivable, net of
allowance for doubtful accounts
of $287 at June 30, 2009
and $128 at December 31, 2008 31,892 33,714
Deferred tax assets 4,155 3,401
Advance tax 2,226 2,033
Prepaid expenses and other
current assets 3,614 6,402
----- -----
Total current assets 156,178 157,877
------- -------
Fixed assets, net of accumulated
depreciation of $33,188 at June
30, 2009 and $27,727 at
December 31, 2008 22,598 24,518
Goodwill 17,557 17,557
Restricted cash 3,054 281
Deferred tax assets 2,757 3,047
Other assets 10,440 8,689
------ -----
Total assets $212,584 $211,969
======== ========
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable $1,948 $3,371
Deferred revenue 3,252 2,961
Accrued employee cost 9,623 14,725
Accrued expenses and other
current liabilities 14,530 18,011
------ ------
Total current liabilities 29,353 39,068
------ ------
Non-current liabilities 745 1,569
--- -----
Total liabilities 30,098 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,
29,172,063 shares issued and
outstanding as of
June 30, 2009 and 29,054,145
shares issued and outstanding
as of December 31, 2008 29 29
Additional paid-in capital 120,394 116,676
Retained earnings 74,156 70,021
Accumulated other comprehensive
loss (11,117) (14,491)
------- -------
183,462 172,235
------- -------
Less: 247,030 shares as of June
30, 2009 and 237,080 shares as
of December 31, 2008 ,
held in treasury, at cost (976) (903)
------- -------
Total stockholders' equity 182,486 171,332
------- -------
Total liabilities and
stockholders' equity $212,584 $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 June 30, Three Months Ended June 30,
--------------------------- ---------------------------
2009 2009 2008 2008
US GAAP Adjustments Non-GAAP US GAAP Adjustments Non-GAAP
------- -- ------- ------- -- -------
Revenues $42,385 $- $42,385 $47,015 $- $47,015
Cost of
revenues
(exclusive of
depreciation
and
amortization) 25,827 (454) (a) 25,373 30,222 (455) (a) 29,768
------ --- ------ ------ --- ------
Gross profit 16,558 454 17,012 16,793 455 17,247
====== === ====== ====== === ======
Gross Margin % 39.1% 40.1% 35.7% 36.7%
Selling,
general and
administrative
expenses 10,974 (1,520) (a) 9,454 11,381 (1,432) (a) 9,949
Depreciation
and
amortization
expense 2,789 - (b) 2,789 2,954 (221) (b) 2,733
------ ------ ------ ------ ------ ------
Income from
operations $2,795 $1,974 $4,769 $2,458 $2,107 $4,565
====== ====== ====== ====== ====== ======
Income from
Operations
Margin % 6.6% 11.3% 5.2% 9.7%
(a) To exclude stock-based compensation expense under SFAS 123R.
(b) To exclude amortization of acquisition-related intangibles.
SOURCE
Inc.
ir@exlservice.com/
/Web Site: http://www.exlservice.com /
(EXLS)