FREMONT, Calif., July 14, 2010 (GLOBE NEWSWIRE) -- iGATE (Nasdaq:IGTE) the first Business Outcomes driven integrated Technology and Operations (iTOPS) solutions provider today announced its financial results for the second quarter ended June 30, 2010.
Second quarter highlights
- Revenues were $66.8 million compared to $46.8 million made in the corresponding quarter previous year
- Achieved 38.1% gross margin and 16.7% net margin
- Diluted earnings per share was $0.20, an 82% increase over corresponding quarter previous year
- 8,158 employees as of June 30, 2010; net addition of 801 employees during the quarter
- 4 new customers added in the quarter
- Awarded LEED (Leadership in Energy and Environmental Design) GOLD certificate for the new delivery facility in Bangalore, India
- Expanded the global delivery facility in Guadalajara, Mexico
"We are pleased with the strong growth generated in the second quarter of 2010," said Phaneesh Murthy, Chief Executive Officer of iGATE Corporation. "We think there is a window of opportunity for a differentiated company like iGATE to build scale. We are encouraged by the new client wins and the quality of prospects we are talking to. We have increased investments in sales, marketing and consulting to try and close more deals."
"We had a good quarter and are encouraged by the strong earnings and cash flow. However, salary increase and substantial hiring has caused a short term pressure on margins," said Sujit Sircar, Chief Financial Officer of iGATE Corporation.
Second quarter operating results
Revenues for the quarter were $66.8 million a 42.7% increase from $46.8 million in the same period last year. Gross margin was 38.1% compared to 38.2% in the corresponding quarter last year.
Operating income for the quarter grew to $11.5 million from $7.2 million in the same period last year. Operating margin was 17.2% up from 15.3% in the corresponding quarter last year.
Net income was $11.2 million, or $0.20 per diluted share, compared to net income of $6.1 million or $0.11 per diluted share in the same period last year. Net income was 16.7% compared to 12.9% in the corresponding quarter last year.
As of June 30, 2010, the company's cash and cash equivalents and short-term investments increased to $104.4 million from $96.8 million.
Key customer wins and significant projects during the quarter
iGATE is helping a high-tech client in its recent acquisition by providing program management and application migration services.
A Fortune 500 insurance company contracted with iGATE to build a mobile web solution that will allow customers to easily model their retirement plan via a mobile device. The solution will make it easier for the insurance company to enroll clients into the retirement plan and thereby generate more revenue.
A leading global financial services firm has engaged iGATE to provide a host of strategic iTOPS consulting services in order to design a business outcome-based model.
Important events during the quarter
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Named by IAOP as a Leading IT Vendor for the Insurance Industry
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Selected among the Best Outsourcing Providers for the Discrete Manufacturing Industry
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Named to IAOP's Global Outsourcing 100 List
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Named among the Leading Providers of Outsourcing Services in Canada and the U.K.
- iGATE's Annual Report 2009, won the Bronze Award from the League of American Communications Professionals LLC (LACP) in the 2009 Vision Award Annual Report Competition
Conference Call and Webcast
iGATE will host a telephonic conference call on Wednesday, July 14, 2010 at 8:00 a.m. Eastern time to discuss the results of its second quarter ended June 30, 2010. A live webcast of this conference call will be available on our web site at www.igate.com. A replay of the call will be available until July 21, 2010.
About iGATE
iGATE (Nasdaq:IGTE) is the first Business Outcomes driven integrated Technology and Operations (iTOPS) solutions provider with a global delivery model. iGATE enables clients to optimize their business through a combination of process investment strategies, technology leverage and business process outsourcing and provisioning. Our unique business model aligns with the client's strategic objectives to achieve operational efficiencies, increase cost variability and rationalize their current operating environment. iGATE has over 8000 employees and 7 development centers in Australia, India, Japan, Malaysia and Mexico. iGATE has offices in 12 countries and 4 continents. With industry expertise spanning 16 years, iGATE has developed the right solutions with its Business Outcomes driven approach for industry verticals – Banking, Insurance, Manufacturing, Retail, Health Care, Media & Entertainment and Telecom & Hi-Tech. For more information, please visit www.igate.com
The iGATE Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5150
Forward-Looking Statements
Some of the statements contained in this news release that are not historical facts are forward-looking statements. These forward-looking statements include the company's financial, growth and liquidity projections as well as statements concerning the company's plans, strategies, intentions and beliefs concerning business cash flows, costs and the markets in which it operates. Without limiting the foregoing, the words "believes," "anticipates," "plans," "expects" and similar expressions are intended to identify certain forward-looking statements. These statements are based on information currently available to the company and it assumes no obligation to update the forward statements as circumstances change. There are risks and uncertainties that could cause actual events to differ materially from the forward-looking statements. These risks include, but are not limited to, the company's ability to predict its financial performance, the level of market demand for its services, the highly-competitive market for the types of services offered by the company, the impact of competitive factors on profit margins, market conditions that could cause the company's customers to reduce their spending for its services, the company's ability to create, acquire and build new businesses and to grow existing businesses, attract and retain qualified personnel, reduce costs and conserve cash, currency fluctuations and market conditions in India and elsewhere around the world, political and military tensions in India and South Asia, changes in generally accepted accounting principles and/or their interpretation and other risks that are described in more detail in the company's filings with the Securities and Exchange Commission including its Form 10-K for the year ended December 31, 2009.
iGATE CORPORATION | ||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
(Amounts in thousands, except per share data) | ||||
June 30, 2010 |
December 31, 2009 |
|||
(unaudited) | (audited) | |||
ASSETS | ||||
Current assets: | ||||
Cash and cash equivalents | $ 18,854 | $ 29,565 | ||
Short-term investments | 85,559 | 67,192 | ||
Accounts receivable, net | 32,941 | 24,533 | ||
Unbilled revenues | 13,613 | 9,636 | ||
Prepaid expenses and other current assets | 4,702 | 4,628 | ||
Foreign exchange derivative contract | 381 | -- | ||
Prepaid income taxes | 2,247 | 4,247 | ||
Deferred tax assets | 1,476 | 31 | ||
Receivable from Mastech Holding Inc. | 135 | 87 | ||
Total current assets | 159,908 | 139,919 | ||
Deposits and other assets | 6,465 | 4,482 | ||
Property and equipment, net | 43,250 | 42,682 | ||
Deferred tax assets | 9,947 | 8,474 | ||
Goodwill | 30,570 | 30,517 | ||
Intangible assets, net | 1,710 | 2,086 | ||
Total assets | $ 251,850 | $ 228,160 | ||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
Current liabilities: | ||||
Accounts payable | $ 2,135 | $ 1,515 | ||
Accrued payroll and related costs | 14,135 | 14,173 | ||
Accrued expenses | 16,764 | 14,160 | ||
Foreign exchange derivative contracts | -- | 1,097 | ||
Other current liabilities | 3,947 | 3,843 | ||
Restructuring reserve | 56 | 101 | ||
Deferred revenue | 865 | 918 | ||
Total current liabilities | 37,902 | 35,807 | ||
Other long-term liabilities | 1,086 | 1,035 | ||
Total liabilities | 38,988 | 36,842 | ||
Shareholders' equity: | ||||
Common Stock, par value $0.01 per share | 565 | 561 | ||
Additional paid-in capital | 183,023 | 180,278 | ||
Retained earnings | 54,920 | 38,228 | ||
Common stock in treasury, at cost | (14,714) | (14,714) | ||
Accumulated other comprehensive loss | (10,932) | (13,035) | ||
Total shareholders' equity | 212,862 | 191,318 | ||
Total liabilities and shareholders' equity | $ 251,850 | $ 228,160 |
iGATE CORPORATION | ||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||
(Amounts in thousands, except per share data) | ||||
(unaudited) | ||||
Three Months ended, | Six Months ended, | |||
June 30, | June 30, | |||
2010 | 2009 | 2010 | 2009 | |
Revenues | $ 66,849 | $ 46,831 | $ 124,739 | $ 91,640 |
Cost of revenues (exclusive of Depreciation and amortization) | 41,390 | 28,943 | 76,068 | 57,662 |
Gross margin | 25,459 | 17,888 | 48,671 | 33,978 |
Selling, general and administrative | 11,843 | 8,852 | 21,848 | 17,438 |
Depreciation and amortization | 2,126 | 1,867 | 4,348 | 3,770 |
Income from operations | 11,490 | 7,169 | 22,475 | 12,770 |
Other income (expense), net | 976 | (987) | 1,808 | (1,740) |
Income before income taxes | 12,466 | 6,182 | 24,283 | 11,030 |
Income tax expense (benefits) | 1,312 | 126 | 1,515 | (27) |
Net income | $ 11,154 | $ 6,056 | $ 22,768 | $ 11,057 |
Distributed earnings per share: | ||||
Common stock | $ -- | $ -- | $ 0.11 | $ 0.11 |
Unvested restricted stock | -- | -- | 0.11 | 0.11 |
Basic earnings per share from operations | ||||
Common Stock | $ 0.20 | $ 0.11 | $ 0.41 | $ 0.20 |
Unvested restricted stock | 0.20 | 0.11 | 0.41 | 0.20 |
Diluted earnings per share from operations | $ 0.20 | $ 0.11 | $ 0.40 | $ 0.20 |
Weighted average shares outstanding, Basic | 55,810 | 54,875 | 55,689 | 54,835 |
Weighted average dilutive common equivalent shares outstanding | 57,117 | 55,439 | 56,941 | 55,290 |