Release Details
EXL Reports 2009 Third Quarter Results
EXL Reports 2009 Third Quarter Results
We are also pleased to announce a new eight-year agreement to service the back-office operations of American Express Business Travel and the associated acquisition of
Financial Highlights
Financial highlights are based on continuing operations of the Company and exclude the sale of the
-- Revenues for the quarter endedSeptember 30, 2009 were$48.2 million compared to$46.6 million for the quarter endedSeptember 30, 2008 and$42.4 million for the quarter endedJune 30, 2009 . Revenues attributable to outsourcing services for the quarter endedSeptember 30, 2009 were$37.7 million compared to$34.5 million in the quarter endedSeptember 30, 2008 and$34.5 million in the quarter endedJune 30, 2009 . Transformation services revenues for the quarter endedSeptember 30, 2009 were$10.5 million compared to$12.0 million in the quarter endedSeptember 30, 2008 and$7.9 million in the quarter endedJune 30, 2009 .
-- Gross margin for the quarter endedSeptember 30, 2009 was 40.2% compared to 39.8% for the quarter endedSeptember 30, 2008 and 39.1% for the quarter endedJune 30, 2009 . Gross margin for outsourcing services was 41.0% for the quarter endedSeptember 30, 2009 compared to 41.9% for the quarter endedJune 30, 2009 . Transformation services gross margin was 37.5% for the quarter endedSeptember 30, 2009 compared to 26.8% for the quarter endedJune 30, 2009 .
-- Operating margin for the quarter endedSeptember 30, 2009 was 10.7% compared to 11.3% for the quarter endedSeptember 30, 2008 and 6.6% for the quarter endedJune 30, 2009 ; adjusted operating margin for the quarter endedSeptember 30, 2009 , excluding the impact of stock-based compensation expense and amortization of intangibles, was 14.8% compared to 14.7% for the quarter endedSeptember 30, 2008 and 11.3% for the quarter endedJune 30, 2009 .
-- Diluted earnings per share to common stockholders for the quarter ended
September 30, 2009 were $0.14 compared to $0.01 for the quarter ended
September 30, 2008 and $0.04 for the quarter ended June 30, 2009 .
Business Announcements
-- Signed eight-year agreement withAmerican Express to provide business process services in conjunction with the acquisition ofAmerican Express' Global Travel Service Center operations in Gurgaon,India . The purchase price for this transaction will be approximately$30.0 million net of working capital adjustments at closing.
-- Awarded a five-year outsourcing contract with a global P&C and
reinsurance company to provide business process services from both our
India facilities and our new Romanian facility currently in development.
-- Increased annuity-based transformation revenues to comprise of
approximately one-third of total transformation.
-- Reduced days sales outstanding in the third quarter of 2009 to 59 days
from 68 days in the second quarter of 2009 and 76 days in the third
quarter of 2008.
-- Experienced quarterly attrition in the third quarter of 22.0% for
billable employees compared to 22.0% in the second quarter 2009 and
37.3% for the third quarter of 2008.
2009 Outlook
The Company is increasing its guidance for calendar year 2009:
-- Revenues of$178.0 million to $180.0 million from$170.0 million to$175.0 million .
-- Adjusted operating margin, excluding the impact of stock-based
compensation expense and amortization of intangibles, of 13.0% and 13.5%
from 10.0% and 12.0%.
Conference Call
EXL will host a conference call on
To listen to the conference call via phone, please dial 1-800-884-5695 or 1-617-786-2960 and enter "73278987." 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 "85132426" from two hours after the end of the call until
EXL will host its First Annual Investor Day on
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 Nine months ended
September 30, September 30,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
Revenues $48,186 $46,573 $131,557 $138,019
Cost of revenues
(exclusive of
depreciation and
amortization) 28,803 28,046 78,986 86,902
------ ------ ------ ------
Gross profit 19,383 18,527 52,571 51,117
------ ------ ------ ------
Operating expenses:
General and
administrative
expenses 7,770 7,349 22,137 24,193
Selling and marketing
expenses 3,516 3,081 10,040 8,366
Depreciation and
amortization 2,918 2,832 8,137 8,302
----- ----- ----- -----
Total operating expenses 14,204 13,262 40,314 40,861
------ ------ ------ ------
Income from continuing
operations 5,179 5,265 12,257 10,256
Other income/(expense):
Foreign exchange
gain/(loss) (1,995) (6,637) (5,014) (5,847)
Interest and other
income, net 269 1,157 856 2,294
--- ----- --- -----
Income/(loss) from
continuing operations
before income taxes 3,453 (215) 8,099 6,703
Income tax provision/
(benefit) (541) (589) (169) (984)
---- ---- ---- ----
Income from continuing
operations 3,994 374 8,268 7,687
Income/(loss) from
discontinued operations,
net of taxes - (1,449) (139) 3,302
- ------ ---- -----
Net income/(loss) to
common stockholders $3,994 $(1,075) $8,129 $10,989
====== ======= ====== =======
Earnings/(loss) per share(a):
Basic:
Continuing operations $0.14 $0.01 $0.29 $0.27
Discontinued operations - (0.05) - 0.11
- ----- - ----
$0.14 $(0.04) $0.28 $0.38
===== ====== ===== =====
Diluted:
Continuing operations $0.14 $0.01 $0.28 $0.26
Discontinued operations - (0.05) - 0.11
- ----- - ----
$0.14 $(0.04) $0.28 $0.38
===== ====== ===== =====
Weighted-average number
of shares used in
computing earnings
per share:
Basic 28,930,344 28,846,137 28,893,515 28,801,102
Diluted 29,368,390 29,127,304 29,202,856 29,257,254
(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)
September 30, December 31,
2009 2008
---- ----
Assets
Current assets:
Cash and cash equivalents $117,510 $112,174
Short-term investments 816 153
Restricted cash 1,311 203
Accounts receivable, net of allowance
for doubtful accounts of $259 at
September 30, 2009 and $128 at
December 31, 2008 31,578 33,714
Deferred tax assets 4,490 3,401
Advance income-tax, net 101 2,033
Prepaid expenses and other current assets 3,546 6,199
----- -----
Total current assets 159,352 157,877
------- -------
Fixed assets, net of accumulated
depreciation of $35,787 at
September 30, 2009 and $27,727 at
December 31, 2008 22,702 24,518
Goodwill 19,595 17,557
Intangible assets 710 -
Restricted cash 3,744 281
Deferred tax assets, net 7,735 3,047
Other assets 10,500 8,689
------ -----
Total assets $224,338 $211,969
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $2,254 $3,371
Deferred revenue 3,379 2,961
Accrued employee cost 12,176 14,725
Accrued expenses and other current
liabilities 12,157 18,011
------ ------
Total current liabilities 29,966 39,068
------ ------
Non-current liabilities 3,433 1,569
----- -----
Total liabilities 33,399 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,
29,179,013 shares issued and outstanding
as of September 30, 2009 and 29,054,145
shares issued and outstanding as of
December 31, 2008 29 29
Additional paid-in capital 122,308 116,676
Retained earnings 78,150 70,021
Accumulated other comprehensive loss (8,572) (14,491)
------ -------
191,915 172,235
------- -------
Less: 247,030 shares as of September 30,
2009 and 237,080 shares as of
December 31, 2008, held in
treasury, at cost (976) (903)
---- ----
Total stockholders' equity 190,939 171,332
------- -------
Total liabilities and stockholders' equity $224,338 $211,969
======== ========
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 Three Months Ended
September 30, September 30,
---------------------------- ----------------------------
2009 2009 2008 2008
US GAAP Adjustments Non-GAAP US GAAP Adjustments Non-GAAP
------- ----------- -------- ------- ----------- --------
Revenues $48,186 $- $48,186 $46,573 $- $46,573
Cost of revenues
(exclusive of
depreciation and
amortization) 28,803 (341)(a) 28,462 28,046 (396)(a) 27,650
------ --- ------ ------ --- ------
Gross profit 19,383 341 19,724 18,527 396 18,923
====== === ====== ====== === ======
Gross Margin % 40.2% 40.9% 39.8% 40.6%
Selling, general
and
administrative
expenses 11,286 (1,535)(a) 9,751 10,430 (1,155)(a) 9,275
Depreciation and
amortization
expense 2,918 (84)(b) 2,834 2,832 (51)(b) 2,781
------ ------ ------ ------ ------ ------
Income from
operations $5,179 $1,960 $7,139 $5,265 $1,602 $6,866
====== ====== ====== ====== ====== ======
Income from
Operations
Margin % 10.7% 14.8% 11.3% 14.7%
Three Months Ended June 30,
----------------------------
2009 2009
US GAAP Adjustments Non-GAAP
------- ----------- --------
Revenues $42,385 $- $42,385
Cost of revenues (exclusive of depreciation
and amortization) 25,827 (454)(a) 25,373
------ --- ------
Gross profit 16,558 454 17,012
====== === ======
Gross Margin % 39.1% 40.1%
Selling, general and administrative expenses 10,974 (1,520)(a) 9,454
Depreciation and amortization expense 2,789 - (b) 2,789
------ ------ ------
Income from operations $2,795 $1,974 $4,769
====== ====== ======
Income from Operations Margin % 6.6% 11.3%
(a) To exclude stock-based compensation expense under SFAS 123R.
(b) To exclude amortization of acquisition-related intangibles.
SOURCE
Jean Liang, Head of Investor Relations of ExlService Holdings, Inc., +1-212-277-7115, ir@exlservice.com