TROY, Mich., April 14, 2014 (GLOBE NEWSWIRE) -- Syntel, Inc. (Nasdaq:SYNT), a global information technology services and Knowledge Process Outsourcing (KPO) company today announced a realigned financial reporting structure, which will become effective as of the quarter ending March 31, 2014.
While this financial data reflects the change in the Company's reportable segments described below, the Company has not in any way revised or restated its historical financial statements for any period.
Under the realigned structure, the Company's reportable segments are as follows: (1) Banking and Financial Services – which includes banking, transaction processing and capital markets customers; (2) Insurance – which includes insurance customers; (3) Healthcare and Life Sciences – which includes healthcare and life sciences customers; (4) Manufacturing – which includes automotive and manufacturing customers; and (5) Retail, Logistics and Telecom – which includes retail, travel and other hospitality services, logistics services, telecommunication, and all other customers.
Historical results reflecting the new business segments for previously reported fiscal periods for the 2013 and 2012 quarterly and 2013, 2012, and 2011 year-end periods are attached. The Company will begin to report results under the new reporting segments with the filing of its Quarterly Report on Form 10-Q for the quarter ending March 31, 2014.
This information is being furnished in order to provide the financial community with summary financial information and historical data for the 2013 and 2012 quarterly and 2013, 2012, and 2011 year-end periods that is on a basis consistent with the Company's new reporting segments. In accordance with ASC 280, "Segment Reporting," those prior period's segment disclosures have been restated to reflect industry segments as follows.
Syntel's leadership evaluates the Company's performance and allocates resources based on segment revenues and segment cost of revenues. Segment Gross Profit is defined as gross profit before Corporate Direct Costs.
The Company's cost of revenues consists of costs directly associated with billable professionals in the U.S. and offshore, including salaries, payroll taxes, benefits, relocation costs, immigration costs, finder's fees, trainee compensation and travel.
Generally, the cost of revenues for each operating segment has similar characteristics and is subject to the same factors, pressures and challenges. However, the economic environment and its effects on industries served by our operating groups may affect revenue and cost of revenues to differing degrees.
Certain expenses, for cost centers such as Centers of Excellence, Architecture Solutions Group (ASG), Research and Development (R&D), Cloud Computing, Application Management, etc., are not specifically allocated to specific segments because management believes it is not practical to allocate such costs to individual segments as they are not directly attributable to any specific segment.
Accordingly, these expenses are separately disclosed as Corporate Direct Costs and adjusted only against the Total Gross Profit.
The following table describes the historical results reflecting the new business segments for previously reported fiscal periods for the 2013 and 2012 quarterly and 2013, 2012, and 2011 year end periods.
Quarterly and YTD Revenue and Income from Operations for 2013.
| Q1-2013 | Q2-2013 | Q3-2013 | Q4-2013 | YTD 2013 | ||||||||||||||||
| Net Revenues | $ in thousands | % | $ in thousands | % | $ in thousands | % | $ in thousands | % | $ in thousands | % | ||||||||||
| Banking and Financial Services | 102,892 | 54.4% | 106,038 | 52.4% | 104,397 | 49.7% | 109,911 | 49.2% | 423,238 | 51.3% | ||||||||||
| Insurance | 29,101 | 15.4% | 30,042 | 14.8% | 30,400 | 14.5% | 32,546 | 14.6% | 122,089 | 14.8% | ||||||||||
| Healthcare and Life Sciences | 29,490 | 15.6% | 33,654 | 16.6% | 37,336 | 17.8% | 38,098 | 17.1% | 138,578 | 16.8% | ||||||||||
| Manufacturing | 8,269 | 4.4% | 7,731 | 3.8% | 7,178 | 3.4% | 7,144 | 3.2% | 30,322 | 3.7% | ||||||||||
| Retail, Logistics & Telecom | 19,354 | 10.2% | 25,036 | 12.4% | 30,560 | 14.6% | 35,588 | 15.9% | 110,538 | 13.4% | ||||||||||
| Total Net Revenues | 189,106 | 202,501 | 209,871 | 223,287 | 824,765 | |||||||||||||||
| Gross Profit | ||||||||||||||||||||
| Banking and Financial Services | 44,989 | 43.7% | 45,684 | 43.1% | 49,154 | 47.1% | 53,075 | 48.3% | 192,902 | 45.6% | ||||||||||
| Insurance | 11,143 | 38.3% | 11,614 | 38.7% | 13,206 | 43.4% | 13,646 | 41.9% | 49,609 | 40.6% | ||||||||||
| Healthcare and Life Sciences | 12,625 | 42.8% | 14,972 | 44.5% | 19,459 | 52.1% | 18,772 | 49.3% | 65,828 | 47.5% | ||||||||||
| Manufacturing | 2,982 | 36.1% | 2,645 | 34.2% | 2,533 | 35.3% | 2,684 | 37.6% | 10,844 | 35.8% | ||||||||||
| Retail, Logistics & Telecom | 6,860 | 35.4% | 9,650 | 38.5% | 14,326 | 46.9% | 17,969 | 50.5% | 48,805 | 44.2% | ||||||||||
| Segment Gross Profit | 78,599 | 41.6% | 84,565 | 41.8% | 98,678 | 47.0% | 106,146 | 47.5% | 367,988 | 44.6% | ||||||||||
| Corporate Direct Costs | (822) | -0.4% | (984) | -0.5% | (965) | -0.5% | (1,028) | -0.5% | (3,799) | -0.5% | ||||||||||
| Total Gross Profit | 77,777 | 41.1% | 83,581 | 41.3% | 97,713 | 46.6% | 105,118 | 47.1% | 364,189 | 44.2% | ||||||||||
| Selling, General and | ||||||||||||||||||||
| administrative expenses | 25,693 | 13.6% | 18,690 | 9.2% | 22,445 | 10.7% | 29,759 | 13.3% | 96,587 | 11.7% | ||||||||||
| Income from Operations | 52,084 | 27.5% | 64,891 | 32.0% | 75,268 | 35.9% | 75,359 | 33.7% | 267,602 | 32.4% | ||||||||||
Quarterly and YTD Revenue and Income from Operations for 2012 and YTD for 2011.
| Q1-2012 | Q2-2012 | Q3-2012 | Q4-2012 | YTD 2012 | YTD 2011 | |||||||||||||||||||
| Net Revenues | $ in thousands | % | $ in thousands | % | $ in thousands | % | $ in thousands | % | $ in thousands | % | $ in thousands | % | ||||||||||||
| Banking and Financial Services | 93,954 | 55.0% | 98,561 | 55.1% | 102,630 | 55.1% | 102,656 | 54.7% | 397,801 | 55.0% | 367,220 | 57.2% | ||||||||||||
| Insurance | 22,752 | 13.3% | 25,488 | 14.2% | 25,843 | 13.9% | 26,993 | 14.4% | 101,076 | 14.0% | 82,423 | 12.8% | ||||||||||||
| Healthcare and Life Sciences | 31,209 | 18.3% | 31,727 | 17.7% | 32,428 | 17.4% | 31,499 | 16.8% | 126,863 | 17.5% | 113,008 | 17.6% | ||||||||||||
| Manufacturing | 7,973 | 4.7% | 7,844 | 4.4% | 8,082 | 4.3% | 8,324 | 4.4% | 32,223 | 4.5% | 24,886 | 3.9% | ||||||||||||
| Retail, Logistics & Telecom | 14,856 | 8.7% | 15,359 | 8.6% | 17,424 | 9.3% | 18,301 | 9.7% | 65,940 | 9.1% | 54,867 | 8.5% | ||||||||||||
| Total Net Revenues | 170,744 | 178,979 | 186,407 | 187,773 | 723,903 | 642,404 | ||||||||||||||||||
| Gross Profit | ||||||||||||||||||||||||
| Banking and Financial Services | 41,121 | 43.8% | 42,132 | 42.7% | 47,645 | 46.4% | 47,431 | 46.2% | 178,329 | 44.8% | 144,014 | 39.2% | ||||||||||||
| Insurance | 8,742 | 38.4% | 10,137 | 39.8% | 10,680 | 41.3% | 11,404 | 42.2% | 40,963 | 40.5% | 28,808 | 35.0% | ||||||||||||
| Healthcare and Life Sciences | 13,299 | 42.6% | 13,396 | 42.2% | 16,370 | 50.5% | 15,606 | 49.5% | 58,671 | 46.2% | 45,398 | 40.2% | ||||||||||||
| Manufacturing | 3,106 | 39.0% | 3,050 | 38.9% | 3,418 | 42.3% | 3,341 | 40.1% | 12,915 | 40.1% | 9,698 | 39.0% | ||||||||||||
| Retail, Logistics & Telecom | 5,997 | 40.4% | 5,959 | 38.8% | 7,511 | 43.1% | 7,813 | 42.7% | 27,280 | 41.4% | 22,790 | 41.5% | ||||||||||||
| Segment Gross Profit | 72,265 | 42.3% | 74,674 | 41.7% | 85,624 | 45.9% | 85,595 | 45.6% | 318,158 | 44.0% | 250,708 | 39.0% | ||||||||||||
| Corporate Direct Costs | (813) | -0.5% | (816) | -0.5% | (805) | -0.4% | (740) | -0.4% | (3,174) | -0.4% | (3,759) | -0.6% | ||||||||||||
| Total Gross Profit | 71,452 | 41.8% | 73,858 | 41.3% | 84,819 | 45.5% | 84,855 | 45.2% | 314,984 | 43.5% | 246,949 | 38.4% | ||||||||||||
| Selling, General and | ||||||||||||||||||||||||
| administrative expenses | 26,946 | 15.8% | 18,931 | 10.6% | 29,036 | 15.6% | 28,131 | 15.0% | 103,044 | 14.2% | 108,721 | 16.9% | ||||||||||||
| Income from Operations | 44,506 | 26.1% | 54,927 | 30.7% | 55,783 | 29.9% | 56,724 | 30.2% | 211,940 | 29.3% | 138,228 | 21.5% | ||||||||||||
About Syntel
Syntel (Nasdaq:SYNT) is a leading global provider of integrated information technology and Knowledge Process Outsourcing (KPO) solutions spanning the entire lifecycle of business and information systems and processes. The Company is driven by its mission to create new opportunities for clients by harnessing the passion, talent and innovation of Syntel employees worldwide. Syntel leverages dedicated Centers of Excellence, a flexible Global Delivery Model, and a strong track record of building collaborative client partnerships to create sustainable business advantage for Global 2000 organizations. Syntel is assessed at SEI CMMi Level 5, and is ISO 27001 and ISO 9001:2008 certified. As of December 31, 2013, Syntel employed more than 23,000 people worldwide. To learn more, visit us at: www.syntelinc.com.
Safe Harbor Provision
This news release may include forward-looking statements. Forward-looking statements are necessarily subject to risk and uncertainty. Actual results could differ materially from those projected in forward-looking statements as a result of certain risk factors set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2013 or from other factors not currently anticipated.