Release Details
EXL Reports 2012 Fourth Quarter and Full Year Results and Provides Guidance for Calendar Year 2013
2012 Fourth Quarter Revenues of
2012 Revenues of
2013 Revenue Guidance of
2013 Adjusted EPS Guidance of
"Along with strong growth, in 2012 we made substantial investments in our company. We added several key executives to our senior leadership team. We made significant investments to develop in-house domain expertise by launching the
"For 2013, based on current visibility and an Indian rupee to U.S. dollar exchange rate of 54, we are providing revenues guidance of
Financial Highlights — Fourth Quarter 2012 and Year Ended
Reconciliations of adjusted financial measures to GAAP are included at the end of this release.
- Revenues for the year ended
December 31, 2012 increased 22.9% to$442.9 million compared to$360.5 million for the year endedDecember 31, 2011 . Revenues for the quarter endedDecember 31, 2012 were$117.7 million compared to$102.6 million for the quarter endedDecember 31, 2011 and$112.6 million for the quarter endedSeptember 30, 2012 . Outsourcing services revenues for the year endedDecember 31, 2012 were$366.8 million , up 24.6% compared to$294.4 million for the year endedDecember 31, 2011 . Transformation services revenues for the year endedDecember 31, 2012 were$76.2 million , up 15.1% compared to$66.2 million in the year endedDecember 31, 2011 .
- Gross margin for the year ended
December 31, 2012 was 38.6% compared to 39.0% for the year endedDecember 31, 2011 . Gross margin for the quarter endedDecember 31, 2012 was 40.1% compared to 39.5% for the quarter endedDecember 31, 2011 . Outsourcing services gross margin for the year endedDecember 31, 2012 was 39.2% compared to 39.4% for the year endedDecember 31, 2011 . Outsourcing services gross margin for the quarter endedDecember 31, 2012 was 41.5% compared to 39.5% for the quarter endedDecember 31 , 2011. Transformation services gross margin for the year endedDecember 31, 2012 was 35.6% compared to 37.0% for the year endedDecember 31, 2011 . Transformation services gross margin for the quarter endedDecember 31, 2012 was 33.6% compared to 39.6% for the quarter endedDecember 31, 2011 .
- Operating margin for the year ended
December 31, 2012 was 12.9% compared to 11.5% for the year endedDecember 31, 2011 . Operating margin for the quarter endedDecember 31, 2012 was 13.2% compared to 12.4% for the quarter endedDecember 31, 2011 . Adjusted operating margin for the year endedDecember 31, 2012 was 16.3% compared to 15.3% for the year endedDecember 31, 2011 . Adjusted operating margin for the quarter endedDecember 31, 2012 was 16.3% compared to 15.9% for the quarter endedDecember 31, 2011 .
- Net income for the year ended
December 31, 2012 was$41.8 million compared to$34.8 million for the year endedDecember 31, 2011 . Net income for the quarter endedDecember 31, 2012 was$12.2 million compared to$9.6 million for the quarter endedDecember 31, 2011 . Adjusted EBITDA for the year endedDecember 31, 2012 was$92.3 million compared to$73.8 million for the year endedDecember 31 , 2011. Adjusted EBITDA for the quarter endedDecember 31, 2012 was$24.5 million compared to$21.5 million for the quarter endedDecember 31, 2011 .
- Diluted earnings per share for the year ended
December 31, 2012 were$1.26 compared to$1.10 for the year endedDecember 31 , 2011. Diluted earnings per share for the quarter endedDecember 31, 2012 were$0.36 compared to$0.29 for the quarter endedDecember 31, 2011 . Adjusted diluted earnings per share for the year endedDecember 31, 2012 were$1.58 compared to$1.39 for the year endedDecember 31 , 2011. Adjusted diluted earnings per share for the quarter endedDecember 31, 2012 were$0.44 compared to$0.37 for the quarter endedDecember 31, 2011 .
Business Highlights
- Won ten new clients during the quarter, including five outsourcing clients and five transformation clients. EXL won forty one new clients in 2012, versus seventeen in 2011.
- Expanded multiple outsourcing services relationships, including migrating 49 new processes in the fourth quarter of 2012.
- Recognized as a "Leader" by
Everest Group in its market report, "A PEAK into the Leaders, Major Contenders, and Emerging Players of Insurance BPO," as well as the largest provider of business process outsourcing services to the U.S. insurance industry.
- Launched a strategic alliance with the
Indian Institute of Management ,Lucknow to offer a co-branded business management certification program in operational excellence and consulting.
- Appointed
Leo Curran as Senior Vice President, Head ofUK andEurope , andAnup Kumar as Senior Vice President, Head ofProduct Development and Operations Consulting .
- Grew headcount as of
December 31, 2012 to 21,049, compared to 18,884 as ofDecember 31, 2011 and 20,095 as ofSeptember 30, 2012 .
- Employee attrition for the quarter ended
December 31, 2012 was 30.4%, compared with 28.5% for the quarter endedSeptember 30, 2012 . Employee attrition for the year endedDecember 31, 2012 was 29.3%.
- Partnered with BlackLine Systems to provide cloud-based financial close solutions.
2013 Outlook
Based on current visibility and an Indian rupee to U.S. dollar exchange rate of 54, the Company is providing the following guidance for calendar year 2013:
- Revenues of
$495 million to $505 million .
- Adjusted diluted earnings per share, excluding the impact of stock-based compensation expense, amortization of intangibles and associated tax impacts, of
$1.77 to $1.85 .
Conference Call and Investor Day
EXL will host a conference call on
To listen to the conference call or investor day presentations via phone, please dial 1-877-303-6384 or 1-224-357-2191 and an operator will assist you. For those who cannot access the live broadcasts, a replay will be available on the EXL website (ir.exlservice.com).
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 detail in the Company's filings with the
| CONSOLIDATED STATEMENTS OF INCOME | ||||
| (In thousands, except share and per share amounts) | ||||
| (Audited) | (Unaudited) | |||
| Year ended |
Three months ended |
|||
| 2012 | 2011 | 2012 | 2011 | |
| Revenues | $ 442,930 | $ 360,541 | $ 117,653 | $ 102,580 |
| Cost of revenues (exclusive of depreciation and amortization) | 271,876 | 219,987 | 70,509 | 62,015 |
| Gross profit | 171,054 | 140,554 | 47,144 | 40,565 |
| Operating expenses: | ||||
| General and administrative expenses | 57,192 | 50,660 | 16,210 | 14,545 |
| Selling and marketing expenses | 31,007 | 25,582 | 8,505 | 6,689 |
| Depreciation and amortization | 25,623 | 22,994 | 6,891 | 6,589 |
| Total operating expenses | 113,822 | 99,236 | 31,606 | 27,823 |
| Income from operations | 57,232 | 41,318 | 15,538 | 12,742 |
| Other income/(expense) : | ||||
| Foreign exchange (loss)/gain | (2,509) | 3,373 | (142) | (573) |
| Interest and other income, net | 1,997 | 1,957 | 676 | 613 |
| Income before income taxes | 56,720 | 46,648 | 16,072 | 12,782 |
| Income tax provision | 14,884 | 11,868 | 3,909 | 3,229 |
| Net income | $ 41,836 | $ 34,780 | $ 12,163 | $ 9,553 |
| Earnings per share: | ||||
| Basic | $ 1.31 | $ 1.15 | $ 0.38 | $ 0.31 |
| Diluted | $ 1.26 | $ 1.10 | $ 0.36 | $ 0.29 |
| Weighted-average number of shares used in computing earnings per share: | ||||
| Basic | 31,968,386 | 30,264,805 | 32,297,414 | 31,266,183 |
| Diluted | 33,171,105 | 31,546,144 | 33,514,446 | 32,623,251 |
| CONSOLIDATED BALANCE SHEETS | ||
| (Audited) | ||
| (In thousands, except share and per share amounts) | ||
| 2012 | 2011 | |
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $ 103,037 | $ 82,393 |
| Short-term investments | 6,137 | 7,869 |
| Restricted cash | 573 | 934 |
| Accounts receivable, net | 73,729 | 55,672 |
| Prepaid expenses | 5,353 | 4,503 |
| Deferred tax assets, net | 7,460 | 6,228 |
| Advance income tax, net | 4,581 | 3,379 |
| Other current assets | 7,065 | 5,863 |
| Total current assets | 207,935 | 166,841 |
| Fixed assets, net | 40,239 | 42,320 |
| Restricted cash | 3,752 | 3,387 |
| Deferred tax assets, net | 13,139 | 16,495 |
| Intangible assets, net | 43,522 | 36,313 |
| Goodwill | 106,671 | 92,287 |
| Other assets | 20,596 | 19,768 |
| Total assets | $ 435,854 | $ 377,411 |
| Liabilities and Stockholders' Equity | ||
| Current liabilities: | ||
| Accounts payable | $ 3,604 | $ 4,333 |
| Deferred revenue | 7,922 | 7,772 |
| Accrued employee cost | 29,393 | 27,444 |
| Accrued expenses and other current liabilities | 31,737 | 30,956 |
| Current portion of capital lease obligations | 1,685 | 1,729 |
| Total current liabilities | 74,341 | 72,234 |
| Capital lease obligations, less current portion | 2,679 | 4,244 |
| Non-current liabilities | 14,317 | 22,458 |
| Total liabilities | 91,337 | 98,936 |
| Commitments and contingencies | ||
| Preferred stock, |
-- | -- |
| Stockholders' equity: | ||
| Common stock, |
33 | 31 |
| Additional paid-in-capital | 195,248 | 173,926 |
| Retained earnings | 188,882 | 147,046 |
| Accumulated other comprehensive loss | (36,647) | (39,858) |
| Total stockholders' equity including shares held in treasury | 347,516 | 281,145 |
| Less: 336,262 shares as of |
(3,024) | (2,693) |
| 344,492 | 278,452 | |
| Non-controlling interest | 25 | 23 |
| Total stockholders' equity | 344,517 | 278,475 |
| Total liabilities and stockholders' equity | $ 435,854 | $ 377,411 |
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 (adjusted EBITDA, adjusted net income and adjusted diluted earnings per share) that the
Additionally, the Company provides certain information on a constant currency basis, which reflects a comparison of current period results translated at the prior period currency rates. This information is provided because the Company believes that it provides useful incremental information to investors regarding the Company's operating performance.
The following table shows the reconciliation of these adjusted financial measures from GAAP measures for the year ended
| Reconciliation of Adjusted Operating Income and Adjusted EBITDA | ||||||||||
| (Amounts in thousands) | ||||||||||
| Year Ended |
Three Months Ended |
Three Months Ended |
||||||||
| 2012 | 2011 | 2012 | 2011 | 2012 | ||||||
| Net income (GAAP) | $ 41,836 | $ 34,780 | $ 12,163 | $ 9,553 | $ 11,703 | |||||
| add: Income tax provision and other income/(expense) | 15,396 | 6,538 | 3,375 | 3,189 | 5,167 | |||||
| Income from operations (GAAP) | $ 57,232 | $ 41,318 | $ 15,538 | $ 12,742 | $ 16,870 | |||||
| add: Stock-based compensation expense (a) | 9,416 | 9,462 | 2,087 | 2,175 | 1,871 | |||||
| add: Amortization of acquisition-related intangibles (b) | 5,638 | 4,329 | 1,555 | 1,385 | 1,324 | |||||
| Adjusted operating income (Non-GAAP) | $ 72,286 | $ 55,109 | $ 19,180 | $ 16,302 | $ 20,065 | |||||
| Adjusted operating income margin % | 16.3% | 15.3% | 16.3% | 15.9% | 17.8% | |||||
| add: Depreciation | 19,985 | 18,665 | 5,336 | 5,204 | 5,009 | |||||
| Adjusted EBITDA (Non-GAAP) | $ 92,271 | $ 73,774 | $ 24,516 | $ 21,506 | $ 25,074 | |||||
| Adjusted EBITDA margin % | 20.8% | 20.5% | 20.8% | 21.0% | 22.3% | |||||
| (a) To exclude stock-based compensation expense under ASC Topic 718. | ||||||||||
| (b) To exclude amortization of acquisition-related intangibles. | ||||||||||
| Reconciliation of Adjusted Net Income and Adjusted Diluted Earnings Per Share | ||||||||||
| (Amounts in thousands, except per share data) | ||||||||||
| Year Ended |
Three Months Ended |
Three Months Ended |
||||||||
| 2012 | 2011 | 2012 | 2011 | 2012 | ||||||
| Net income (GAAP) | $ 41,836 | $ 34,780 | $ 12,163 | $ 9,553 | $ 11,703 | |||||
| add: Stock-based compensation expense (a) | 9,416 | 9,462 | 2,087 | 2,175 | 1,871 | |||||
| add: Amortization of acquisition-related intangibles (b) | 5,638 | 4,329 | 1,555 | 1,385 | 1,324 | |||||
| subtract: Tax impact on stock-based compensation expense | (3,601) | (3,897) | (687) | (974) | (753) | |||||
| subtract: Tax impact on amortization of acquisition-related intangibles | (774) | (785) | (218) | (187) | (179) | |||||
| Adjusted net income | $ 52,515 | $ 43,889 | $ 14,900 | $ 11,952 | $ 13,966 | |||||
| Adjusted diluted earnings per share | $ 0.44 | $ 0.37 | $ 0.42 | |||||||
| (a) To exclude stock-based compensation expense under ASC Topic 718. | ||||||||||
| (b) To exclude amortization of acquisition-related intangibles. | ||||||||||
CONTACT:Source:Charles Murphy , CFA Head of Investor RelationsExlService Holdings, Inc. 280 Park Avenue New York, NY 10017 (212) 624-5913 charles.murphy@exlservice.com
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