[July 16, 2014] |
|
IGATE Reports 10.1% increase in Revenues; 3.2% sequential
BRIDGEWATER, N.J. --(Business Wire)--
IGATE Corporation ("IGATE" or the "Company") (NASDAQ: IGTE), the New
Jersey-headquartered integrated technology and operations solutions
provider, today announced its financial results for the second quarter
and six months ended June 30, 2014.
Ashok Vemuri, President and CEO, IGATE (Photo: Business Wire)
Second Quarter Highlights
-
Revenues were $311.7 million
-
Increased 10.1% compared to $283.3 million in the second quarter
of 2013
-
Increased 3.2% sequentially compared to $302.2 million in the
first quarter of 2014
-
Gross margin was 36.6%
-
Compared to 37.9% in the second quarter of 2013
-
Compared to 37.5 % in the first quarter of 2014
-
Adjusted EBITDA was $70.0 million
-
Compared to $66.2 million in the second quarter of 2013
-
Compared to $75.2 million in the first quarter of 2014
-
Net Income was $3.1 million (after a one-time charge of $51.8
million arising from the extinguishment of debt)
-
Compared to $30.0 million in the second quarter of 2013
-
Compared to $31.6 million in the first quarter of 2014
-
Non GAAP diluted Earnings per share were $0.48
-
Compared with $0.44 in the second quarter of 2013
-
Compared with $0.45 per share in the first quarter of 2014
-
Diluted earnings per share were $(0.07) GAAP (after a one-time
charge of $51.8 million arising from the extinguishment of debt)
-
Compared to $0.28 GAAP in the second quarter of 2013
-
Compared to $0.29 GAAP in the first quarter of 2014
-
The Company added nine new clients including five Global 2000
companies during the second quarter
-
As of June 30, 2014, the Company had 32,742 employees with a net
addition of 1,907
Ashok Vemuri, President and Chief Executive Officer, IGATE said, "I
am excited with the traction my team is making in the market. We had a
strong quarter in revenue growth and we continue to make steady progress
on large deal pursuits. The partnership that we entered with a North
American insurance major this quarter is testimony to our ability to be
a transformational player and validates our continuing investment in
building industry-leading solutions."
"Our new brand identity and redesigned value proposition has resonated
well with all our stakeholders. We continue to invest in technology and
process capabilities with specific focus on our Digital Practice. The
verticalization strategy we implemented at the beginning of the year has
started yielding dividends with overall growth across industry segments."
he added.
Sujit Sircar, Chief Financial Officer, IGATE said, "We
successfully refinanced the high yield bonds placed in 2011 at a much
lower interest cost subsequent to the rating upgrades from S&P and
Moody's. This has enabled us to reduce more than $50 million in interest
cost annually on a Q1 run rate basis."
"We are happy to have maintained our margin levels despite the salary
increase this quarter; however we are closely watching the forex
headwinds with the appreciation of the Rupee against the U.S. Dollar," he
added.
Second Quarter 2014 Operating Results
Results for the three and six months ended June 30, 2014 and 2013
respectively, on a GAAP and non-GAAP basis are provided in the table
below.
|
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Q2 FY'14
|
|
Q2 FY'13
|
|
Y/Y
|
|
Six months ended FY'14
|
|
Six months ended FY'13
|
|
Y/Y
|
Net revenue ($Millions)
|
|
|
|
311.7
|
|
|
283.3
|
|
10.1
|
%
|
|
614.0
|
|
558.2
|
|
10.0
|
%
|
Operating margin ($Millions)
|
|
|
|
57.8
|
|
|
49.6
|
|
16.6
|
%
|
|
119.0
|
|
102.2
|
|
16.5
|
%
|
GAAP net income ($Millions)
|
|
|
|
3.1
|
|
|
30.0
|
|
(89.6
|
)%
|
|
34.7
|
|
64.7
|
|
(46.3
|
)%
|
GAAP diluted EPS ($)
|
|
|
|
(0.07
|
)
|
|
0.28
|
|
(125.0
|
)%
|
|
0.22
|
|
0.62
|
|
(64.5
|
)%
|
Adjusted EBITDA ($Millions)
|
|
|
|
70.0
|
|
|
66.2
|
|
5.7
|
%
|
|
145.2
|
|
131.8
|
|
10.2
|
%
|
Non-GAAP net income ($Millions)
|
|
|
|
39.5
|
|
|
34.5
|
|
14.5
|
%
|
|
75.9
|
|
74.4
|
|
2.1
|
%
|
Non-GAAP diluted EPS ($)
|
|
|
|
0.48
|
|
|
0.44
|
|
9.1
|
%
|
|
0.93
|
|
0.95
|
|
(2.1
|
)%
|
Key contracts won during the Second Quarter
-
A leading North American medical device company in the area of cardiac
rhythm management has selected IGATE to develop a next-generation
product platform. In a multi-year engagement, IGATE will design,
develop and test FDA Class III software platform and applications.
This software is focused on significantly improving access to clinical
data resulting in improved physician productivity, expedited clinical
decision-making, and improved overall patient care at reduced costs.
-
IGATE formed a business relationship with one of the leading
commercial insurance companies in the U.S. As part of the multi-year
relationship, IGATE will implement transformational technology and
best practice processes to advance the evolution of the client's
current operations in the Long Term Care (LTC) business. Through a
collaborative process, the client will design and implement a new
operating model for claim and policyholder administrative services.
IGATE will administer the client's LTC business through its
proprietary and differentiated IGATE Business Administrative Solution
(IBAS).
-
A leading American healthcare technology company dealing with hospital
hygiene and infection prevention has selected IGATE to help design
Web-based applications and a suite of mobile applications on Android
and iOS to be used by healthcare providers. These applications are
expected to reduce incidents of hospital-acquired infections and any
resulting re-admissions.
-
An American sports clothing and accessories company in the business of
making the world's most innovative performance gear for athletes,
signed up with IGATE as its strategic partner to contribute to their
growth strategy. As part of the multi-million multi-year engagement,
IGATE will facilitate multiple levers at a process and technology
level to drive increased operational efficiency year over year. IGATE
will also implement enterprise systems across global locations
providing for a robust omni-channel environment for the client.
-
IGATE has signed up with a North America based leading medical device
company in radiology imaging to provide technical writing services. As
part of this engagement, IGATE will work with the client's services
organization to create a hub for all product documentation needs for a
wide range of medical device products sold across the globe in
compliance with the local documentation standards. This engagement is
expected to provide users with a high quality product documentation
management system resulting in positive user experience and enhanced
efficiency.
-
A large midstream energy company based in North America dealing with
the transmission, storage and distribution of oil and gas has selected
IGATE for a large scale enterprise systems integration program. As
part of the engagement, IGATE will consolidate multiple instances of
the client's enterprise systems into a single SAP system. IGATE will
also provide project planning and testing services as part of this
program.
-
A leading retail financing company based in North America has extended
its contract with IGATE for a strategic IT Services partnership. In a
multi-million dollar engagement, IGATE will provide application
development and maintenance services for the client's mission critical
systems ranging from credit application processing to collections and
recovery. This will enable the client to provide customized private
label credit programs to major retailers and financial services to
consumers through certificate of deposits.
Key Highlights and Recognitions during the Second Quarter
-
IGATE announced a brand change with the unveiling of a new logo
designed to showcase the Company's refreshed vision, mission and core
values.
-
Ranked among Global "High Performers" in the HfS Enterprise Mobility
Services Blueprint Report 2014.
-
Received the 2014 Global Customer Value Leadership Award in Product
Engineering Services, presented by Frost & Sullivan.
-
IGATE's new delivery center was opened in Budapest, Hungary. This will
add to the existing delivery capacity in Stockholm, Sweden to service
European customers.
-
Phase 6 of IGATE's Bangalore campus was inaugurated. The new building
has a seating capacity of 1,400.
-
IGATE and XTEL, the leading provider of sales automation solutions for
the consumer goods industry, announced a partnership to deliver
comprehensive sales solutions to the consumer goods industry in the
United States and Canada.
-
IGATE and OpenSpan, Inc. announced a new partnership to utilize
OpenSpan Desktop Automation and Activity Intelligence to enhance its
contact center operations and consulting services to customers in
North America and Europe.
-
IGATE announced the launch of the comprehensive IGATE After Sales
Service solution. This SAP-based solution empowers organizations to
deliver post-sales customer service, to enrich the customer experience
and drive customer loyalty, which can lead to higher customer
satisfaction and retention.
-
IGATE won the Madras Management Association's Award for Managerial
Excellence in the services category. The award recognizes companies in
India across industries for their business philosophies over their
years of existence.
-
IGATE Corporation Annual Report 2013 won the Gold Award in the
Technology and IT Services category in the prestigious LACP Annual
Report Competition. IGATE also won Best In-House Honors Award for the
Asia Pacific Region and was recognized for developing one of the top
80 Annual Reports in the Asia Pacific Region.
Conference Call and Webcast
IGATE has scheduled its Earnings Conference Call on Wednesday, July 16,
2014 to discuss the results of its second quarter ended June 30, 2014.
Senior management of the company will discuss the financial performance
for the quarter and answer participants' questions during the call.
Time
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: 08:00 - 9:00 am Eastern Time
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Toll Free (U.S.)
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: 877-407-8037
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Toll (U.S.)
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: 201-689-8037
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Toll Free (India)
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: 000-800-852-1477
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The call will be webcast live on IGATE's website (www.igate.com)
on the Investor Relations page under the 'Events' section. Participants
are requested to log in 10 minutes prior to the start of the webcast.
The on-demand version of the webcast will be available on the IGATE
website shortly after the call.
Investors, potential investors, shareholders and bond holders can access
the telephonic replay by dialing 877-660-6853 (toll free) or
201-612-7415 (toll) and entering conference number 13585487. The
telephonic replay will be available until July 30, 2014.
About IGATE
IGATE is a global leader in providing integrated technology and
operations-based solutions, headquartered in Bridgewater, New Jersey. As
a trusted partner to corporations in North America, Europe and Asia
Pacific, IGATE provides solutions to clients' business challenges by
leveraging its technology and process capabilities, underwritten by an
understanding of domain and industry imperatives. With revenues over
US$1.1 billion, and a global employee talent capital of over 32,000,
IGATE offers productized applications and platforms that provide the
necessary competitive and innovation edge to clients across industries,
through a combination of speed, agility and imagination. IGATE is listed
on NASDAQ under the symbol IGTE.
Follow IGATE on Twitter: @IGATE_Corp IGATE on Facebook: www.facebook.com\igateofficial
Use of non-GAAP Financial Measures
This press release contains non-GAAP financial measures as defined by
the Securities and Exchange Commission. These non-GAAP measures are not
in accordance with, or an alternative for, measures prepared in
accordance with, generally accepted accounting principles in the United
States ("GAAP") and may be different from non-GAAP measures used by
other companies. In addition, these non-GAAP measures are not based on
any comprehensive set of accounting rules or principles. Reconciliations
of these non-GAAP measures to their comparable GAAP measures are
included in the attached financial tables.
IGATE believes that non-GAAP measures have limitations in that they do
not reflect all of the amounts associated with IGATE's results of
operations as determined in accordance with GAAP and that these measures
should only be used to evaluate IGATE's results of operations in
conjunction with the corresponding GAAP measures. These non-GAAP
measures should be considered supplemental in nature and should not be
considered in isolation or be construed as being more important than
comparable GAAP measures.
IGATE believes that providing Adjusted EBITDA and non-GAAP net income
and non-GAAP diluted earnings per share in addition to the related GAAP
measures provides investors with greater transparency to the information
used by IGATE's management in its financial and operational
decision-making. These non-GAAP measures are also used by the Management
in connection with IGATE's performance compensation programs.
More specifically, the non-GAAP financial measures contained herein
exclude the following items:
-
Amortization of intangible assets: Intangible assets primarily
comprise of customer relationships. We incur charges relating to the
amortization of these intangibles. These charges are included in our
GAAP presentation of earnings from operations, operating margin, net
income and diluted earnings per share. We exclude these charges for
purposes of calculating these non-GAAP measures.
-
Stock-based compensation: Although stock-based compensation is an
important component of the compensation of IGATE's employees and
executives, determining the fair value of the stock-based instruments
involves a high degree of judgment and estimation and the expense
recorded may not reflect the actual value realized upon the future
exercise or termination of the related stock-based awards.
Furthermore, unlike cash compensation, the value of stock-based
compensation is determined using a complex formula that incorporates
factors, such as market volatility, that are beyond the Company's
control. Management believes it is useful to exclude stock-based
compensation in order to better understand the long-term performance
of IGATE's core business.
-
Foreign exchange (gain)/loss: From time to time, the Company
recognizes foreign currency losses on re-measurement of escrow account
balance and foreign exchange gains on re-measurement of redeemable
non-controlling interest liability. IGATE believes that eliminating
these non-capitalized items for purposes of calculating non-GAAP
measures facilitates a more meaningful evaluation of IGATE's current
performance and comparisons to its past performance.
-
Delisting expenses: We voluntarily delisted the equity shares of our
majority owned subsidiary, IGATE Computer Systems Limited from the
National Stock Exchange of India Limited and the Bombay Stock Exchange
Limited and the American Depository Shares from the New York Stock
Exchange. Delisting is an infrequent activity and expenses incurred in
connection therein are inconsistent in amount and are significantly
impacted by the timing and nature of the delisting. IGATE believes
that eliminating these expenses for purposes of calculating these
non-GAAP measures facilitates a more meaningful evaluation of its
current operating performance and comparisons to its past operating
performance.
-
Merger and reorganization expenses: IGATE is merging and reorganizing
its overseas subsidiaries and branches with a view to simplifying the
corporate structure and has incurred legal and professional expenses
in this connection. Merger and reorganization is an infrequent
activity and expenses incurred in connection therein are inconsistent
in amount and significantly impacted by the timing and nature of the
reorganization. IGATE believes that eliminating these expenses for
purposes of calculating non-GAAP measures facilitates a more
meaningful evaluation of IGATE's current operating performance and
comparisons to its past operating performance.
-
Preferred dividend and accretion to preferred stock: IGATE has issued
8.00% Series B Preferred Stock. IGATE also incurred issuance costs,
which have been netted against the proceeds received from the issuance
of Series B Preferred Stock. The Series B Preferred Stock is being
accreted over a period of six years. Although, the effect of inclusion
of equivalent units of common stock towards convertible participating
preferred stock is anti-dilutive for GAAP purposes, the non-GAAP
diluted earnings per share has been calculated assuming the conversion
of all outstanding shares of preferred stock into equivalent units of
common stock. IGATE believes that eliminating these expenses as
well as inclusion of equivalent units of common stock towards the
preference shares to compute diluted earnings per share for purposes
of calculating these non-GAAP measures facilitates a more meaningful
evaluation of IGATE's current operating performance and comparisons to
its past operating performance.
-
Loss on extinguishment of Debt: IGATE has extinguished Debt prior to
its scheduled maturity which has resulted in non-operating expenses
which otherwise would not have been incurred. Debt extinguishment
related charges that are excluded from GAAP earnings to determine
non-GAAP earnings consist of the extinguishment premium paid as well
as the write-off of unamortized debt issuance costs. These expenses
are inconsistent and of a non-recurring nature and IGATE believes that
eliminating them for purposes of calculating non-GAAP measures
facilitates a more meaningful evaluation of IGATE's current operating
performance and comparisons to its past operating performance.
From time to time in the future, there may be other items that IGATE may
exclude in presenting its financial results.
Forward-Looking Statements
This news release contains forward-looking statements that involve
risks, uncertainties and assumptions. If the risks or uncertainties ever
materialize or the assumptions prove incorrect, the results of the
Company may differ materially from those expressed or implied by such
forward-looking statements and assumptions. All statements regarding the
business outlook, the expected performance of the Company's products and
services for its clients, and all other statements in this release other
than statements of historical fact are statements that could be deemed
forward-looking statements. Words such as "expect", "potential",
"believes", "anticipates", "plans", "intends" and other similar
expressions are intended to identify such forward-looking statements.
Forward-looking statements in the press release include, without
limitation, statements regarding the business outlook, and the expected
performance of the Company's products and services for its clients, and
other matters that involve known and unknown risks, uncertainties and
other factors that may cause results, levels of activity, performance or
achievements to differ materially from results expressed or implied by
this press release. Such risk factors include, among others: uncertain
global economic conditions, concentrated revenues, new organizational
and operational strategies, continued pricing pressures and the
significant indebtedness which will use a significant portion of its
cash flows to service such indebtedness, as a result of which the
Company might not have sufficient funds to operate its businesses in the
manner it intends or has operated in the past. Additional risks relating
to the Company are set forth in the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 2013, the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended March 31, 2014 as well
as the Company's other reports filed with the Securities and Exchange
Commission. As in prior periods, the financial information set forth in
this release, including tax-related items, reflects estimates based on
information available at this time. While the Company believes these
estimates to be accurate, actual results may differ materially from
those contained in the forward-looking statements in this press release.
These amounts could also differ materially from actual reported amounts
in the Company's quarterly Report on Form 10-Q for the quarter ended
June 30, 2014. The Company assumes no obligation and does not intend to
update these forward-looking statements as circumstances change. This
document does not constitute an offer to purchase or to sell securities
in any jurisdiction.
|
IGATE CORPORATION
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(Amounts in thousands, except per share data)
|
|
|
|
|
|
June 30,
|
|
December 31,
|
|
|
|
|
2014
|
|
2013
|
|
|
|
|
(unaudited)
|
|
(audited)
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
128,507
|
|
|
$
|
204,836
|
|
Restricted cash
|
|
|
|
|
-
|
|
|
|
360,000
|
|
Short-term investments
|
|
|
|
|
150,864
|
|
|
|
181,401
|
|
Accounts receivable, net of allowances of $3,272 and $4,103,
respectively
|
|
|
|
|
169,756
|
|
|
|
157,905
|
|
Unbilled revenues
|
|
|
|
|
78,660
|
|
|
|
61,424
|
|
Prepaid expenses and other current assets
|
|
|
|
|
39,554
|
|
|
|
44,492
|
|
Prepaid income taxes
|
|
|
|
|
20,544
|
|
|
|
838
|
|
Deferred tax assets
|
|
|
|
|
1,996
|
|
|
|
10,235
|
|
Foreign exchange derivative contracts
|
|
|
|
|
5,756
|
|
|
|
836
|
|
Receivable from related parties
|
|
|
|
|
7,331
|
|
|
|
4,046
|
|
Total current assets
|
|
|
|
|
602,968
|
|
|
|
1,026,013
|
|
|
|
|
|
|
|
|
Deposits and other assets
|
|
|
|
|
22,480
|
|
|
|
24,930
|
|
Prepaid income taxes
|
|
|
|
|
32,552
|
|
|
|
32,160
|
|
Property and equipment, net of accumulated depreciation of $121,965
and $108,084, respectively
|
|
|
|
|
201,400
|
|
|
|
165,581
|
|
Leasehold land
|
|
|
|
|
77,798
|
|
|
|
76,732
|
|
Deferred tax assets
|
|
|
|
|
15,562
|
|
|
|
15,153
|
|
Goodwill
|
|
|
|
|
450,655
|
|
|
|
438,891
|
|
Intangible assets, net
|
|
|
|
|
117,153
|
|
|
|
119,262
|
|
Total assets
|
|
|
|
$
|
1,520,568
|
|
|
$
|
1,898,722
|
|
|
|
|
|
|
|
|
LIABILITIES, PREFERRED STOCK AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
$
|
10,276
|
|
|
$
|
9,268
|
|
Line of credit
|
|
|
|
|
52,000
|
|
|
|
52,000
|
|
Senior Notes
|
|
|
|
|
-
|
|
|
|
360,000
|
|
Term loans
|
|
|
|
|
90,000
|
|
|
|
90,000
|
|
Accrued payroll and related costs
|
|
|
|
|
48,301
|
|
|
|
57,093
|
|
Other accrued liabilities
|
|
|
|
|
76,499
|
|
|
|
79,785
|
|
Accrued income taxes
|
|
|
|
|
3,049
|
|
|
|
5,802
|
|
Foreign exchange derivative contracts
|
|
|
|
|
583
|
|
|
|
909
|
|
Deferred revenue
|
|
|
|
|
19,455
|
|
|
|
17,776
|
|
Total current liabilities
|
|
|
|
|
300,163
|
|
|
|
672,633
|
|
|
|
|
|
|
|
|
Other long-term liabilities
|
|
|
|
|
5,420
|
|
|
|
3,532
|
|
Senior notes
|
|
|
|
|
325,000
|
|
|
|
410,000
|
|
Term Loans
|
|
|
|
|
270,000
|
|
|
|
270,000
|
|
Accrued income taxes
|
|
|
|
|
20,084
|
|
|
|
13,936
|
|
Deferred tax liabilities
|
|
|
|
|
35,199
|
|
|
|
41,717
|
|
Total liabilities
|
|
|
|
|
955,866
|
|
|
|
1,411,818
|
|
|
|
|
|
|
|
|
Series B Preferred stock , without par value
|
|
|
|
|
427,184
|
|
|
|
410,371
|
|
|
|
|
|
|
|
|
Shareholders' equity:
|
|
|
|
|
|
|
Common Stock, par value $0.01 per share
|
|
|
|
|
599
|
|
|
|
594
|
|
Common stock in treasury, at cost
|
|
|
|
|
(14,714
|
)
|
|
|
(14,714
|
)
|
Additional paid-in capital
|
|
|
|
|
217,232
|
|
|
|
204,143
|
|
Retained earnings
|
|
|
|
|
286,669
|
|
|
|
268,750
|
|
Accumulated other comprehensive loss
|
|
|
|
|
(357,482
|
)
|
|
|
(387,115
|
)
|
Total IGATE Corporation shareholders' equity
|
|
|
|
|
132,304
|
|
|
|
71,658
|
|
Non controlling interest
|
|
|
|
|
5,214
|
|
|
|
4,875
|
|
Total equity
|
|
|
|
|
137,518
|
|
|
|
76,533
|
|
Total liabilities, preferred stock and shareholders' equity
|
|
|
|
$
|
1,520,568
|
|
|
$
|
1,898,722
|
|
|
|
|
|
|
|
|
|
|
|
|
IGATE CORPORATION
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|
(Amounts in thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months ended
|
|
Six Months ended
|
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Revenues
|
|
|
|
$
|
311,745
|
|
|
$
|
283,268
|
|
|
$
|
613,951
|
|
|
$
|
558,186
|
|
Cost of revenues (exclusive of depreciation and amortization)
|
|
|
|
|
197,733
|
|
|
|
175,771
|
|
|
|
386,513
|
|
|
|
346,010
|
|
Gross margin
|
|
|
|
|
114,012
|
|
|
|
107,497
|
|
|
|
227,438
|
|
|
|
212,176
|
|
Selling, general and administrative expense
|
|
|
|
|
47,508
|
|
|
|
49,350
|
|
|
|
90,169
|
|
|
|
92,142
|
|
Depreciation and amortization
|
|
|
|
|
8,718
|
|
|
|
8,595
|
|
|
|
18,276
|
|
|
|
17,866
|
|
Income from operations
|
|
|
|
|
57,786
|
|
|
|
49,552
|
|
|
|
118,993
|
|
|
|
102,168
|
|
Loss on extinguishment of debt
|
|
|
|
|
(51,760
|
)
|
|
|
-
|
|
|
|
(51,760
|
)
|
|
|
-
|
|
Other income (loss), net
|
|
|
|
|
(5,839
|
)
|
|
|
(4,712
|
)
|
|
|
(21,910
|
)
|
|
|
(7,608
|
)
|
Income before income taxes
|
|
|
|
|
187
|
|
|
|
44,840
|
|
|
|
45,323
|
|
|
|
94,560
|
|
Income tax expense (benefit)
|
|
|
|
|
(3,027
|
)
|
|
|
14,867
|
|
|
|
10,398
|
|
|
|
29,827
|
|
Net income before non- controlling interest
|
|
|
|
|
3,214
|
|
|
|
29,973
|
|
|
|
34,925
|
|
|
|
64,733
|
|
Non controlling interest
|
|
|
|
|
98
|
|
|
|
-
|
|
|
|
193
|
|
|
|
-
|
|
Net income attributable to IGATE Corporation
|
|
|
|
|
3,116
|
|
|
|
29,973
|
|
|
|
34,732
|
|
|
|
64,733
|
|
Accretion to Preferred Stock
|
|
|
|
|
145
|
|
|
|
120
|
|
|
|
284
|
|
|
|
235
|
|
Preferred dividend
|
|
|
|
|
8,390
|
|
|
|
7,752
|
|
|
|
16,529
|
|
|
|
15,252
|
|
Net (loss) income attributable to IGATE common shareholders
|
|
|
|
$
|
(5,419
|
)
|
|
$
|
22,101
|
|
|
$
|
17,919
|
|
|
$
|
49,246
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IGATE CORPORATION
|
Earnings Per Share
|
(Amounts in thousands, except per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
PARTICULARS
|
|
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Net income (loss) attributable to IGATE common shareholders
|
|
|
|
|
|
$
|
(5,419
|
)
|
|
$
|
22,101
|
|
$
|
17,919
|
|
$
|
49,246
|
Add: Dividends on Series B Preferred Stock
|
|
|
|
|
|
|
8,390
|
|
|
|
7,752
|
|
|
16,529
|
|
|
15,252
|
|
|
|
|
|
|
|
2,971
|
|
|
|
29,853
|
|
|
34,448
|
|
|
64,498
|
Less: Dividends on
|
|
|
|
|
|
|
|
|
|
|
|
|
Series B Preferred Stock
|
|
|
[A]
|
|
|
|
8,390
|
|
|
|
7,752
|
|
|
16,529
|
|
|
15,252
|
Undistributed Income (loss)
|
|
|
|
|
|
$
|
(5,419
|
)
|
|
$
|
22,101
|
|
$
|
17,919
|
|
$
|
49,246
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allocation of Undistributed Income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
[B]
|
|
|
|
(3,987
|
)
|
|
|
16,479
|
|
|
13,184
|
|
|
36,718
|
Unvested restricted stock
|
|
|
[C]
|
|
|
|
-
|
|
|
|
6
|
|
|
-
|
|
|
14
|
Series B Preferred Stock
|
|
|
[D]
|
|
|
|
(1,432
|
)
|
|
|
5,616
|
|
|
4,735
|
|
|
12,514
|
|
|
|
|
|
|
$
|
(5,419
|
)
|
|
$
|
22,101
|
|
$
|
17,919
|
|
$
|
49,246
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding for allocation of undistributed income:
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
|
|
|
|
58,864
|
|
|
|
57,301
|
|
|
58,864
|
|
|
57,301
|
Unvested restricted stock
|
|
|
|
|
|
|
-
|
|
|
|
23
|
|
|
-
|
|
|
23
|
Series B Preferred Stock
|
|
|
|
|
|
|
21,139
|
|
|
|
19,529
|
|
|
21,139
|
|
|
19,529
|
|
|
|
|
|
|
|
80,003
|
|
|
|
76,853
|
|
|
80,003
|
|
|
76,853
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
[E]
|
|
|
|
58,836
|
|
|
|
57,288
|
|
|
58,762
|
|
|
57,403
|
Unvested restricted stock
|
|
|
[F]
|
|
|
|
-
|
|
|
|
23
|
|
|
-
|
|
|
23
|
Series B Preferred Stock
|
|
|
[G]
|
|
|
|
21,139
|
|
|
|
19,529
|
|
|
21,139
|
|
|
19,529
|
|
|
|
|
|
|
|
79,975
|
|
|
|
76,840
|
|
|
79,901
|
|
|
76,955
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common stock outstanding
|
|
|
|
|
|
|
58,836
|
|
|
|
57,288
|
|
|
58,762
|
|
|
57,403
|
Dilutive effect of stock options and restricted shares outstanding
|
|
|
|
|
|
|
1,856
|
|
|
|
1,611
|
|
|
1,857
|
|
|
1,683
|
Dilutive weighted average shares outstanding
|
|
|
[H]
|
|
|
|
60,692
|
|
|
|
58,899
|
|
|
60,619
|
|
|
59,086
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributed earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Series B Preferred Stock
|
|
|
[I=A/G]
|
|
|
$
|
0.40
|
|
|
$
|
0.40
|
|
$
|
0.78
|
|
$
|
0.79
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Undistributed earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
[J=B/E]
|
|
|
|
($0.07
|
)
|
|
$
|
0.29
|
|
$
|
0.22
|
|
$
|
0.65
|
Unvested restricted stock
|
|
|
[K=C/F]
|
|
|
|
-
|
|
|
$
|
0.29
|
|
|
-
|
|
$
|
0.65
|
Series B Preferred Stock
|
|
|
[L=D/G]
|
|
|
|
($0.07
|
)
|
|
$
|
0.29
|
|
$
|
0.22
|
|
$
|
0.65
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - Basic
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
[J]
|
|
|
|
($0.07
|
)
|
|
$
|
0.29
|
|
$
|
0.22
|
|
$
|
0.65
|
Unvested restricted stock
|
|
|
[K]
|
|
|
|
-
|
|
|
$
|
0.29
|
|
|
-
|
|
$
|
0.65
|
Series B Preferred Stock
|
|
|
[I+L]
|
|
|
$
|
0.33
|
|
|
$
|
0.69
|
|
$
|
1.00
|
|
$
|
1.44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - Diluted
|
|
|
[[B+C]/H]
|
|
|
|
($0.07
|
)
|
|
$
|
0.28
|
|
$
|
0.22
|
|
$
|
0.62
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The number of outstanding participative convertible preferred
stock for which the earnings per share exceeded the earnings per
share of common stock aggregated to 21.1 million and 19.5 million
for the three and six months ended June 30, 2014 and 2013,
respectively. These shares were excluded from the computation of
diluted earnings per share because they were anti-dilutive.
|
|
IGATE CORPORATION
|
Reconciliation of Net Income, Net of Tax, to Adjusted EBITDA
|
(Amounts in thousands)
|
(unaudited)
|
|
|
|
|
|
Three Months ended
|
|
Six Months ended
|
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$
|
3,214
|
|
|
$
|
29,973
|
|
|
$
|
34,925
|
|
|
$
|
64,733
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
8,718
|
|
|
|
8,595
|
|
|
|
18,276
|
|
|
|
17,866
|
|
Interest expenses
|
|
|
|
|
12,196
|
|
|
|
24,112
|
|
|
|
35,825
|
|
|
|
46,769
|
|
Income tax expense
|
|
|
|
|
(3,027
|
)
|
|
|
14,867
|
|
|
|
10,398
|
|
|
|
29,827
|
|
Other income, net
|
|
|
|
|
(3,640
|
)
|
|
|
(17,417
|
)
|
|
|
(10,994
|
)
|
|
|
(34,697
|
)
|
Foreign exchange gain
|
|
|
|
|
(2,717
|
)
|
|
|
(1,983
|
)
|
|
|
(2,921
|
)
|
|
|
(4,464
|
)
|
Stock-based Compensation
|
|
|
|
|
3,519
|
|
|
|
3,240
|
|
|
|
7,816
|
|
|
|
6,365
|
|
Loss on Extinguishment of debt
|
|
|
|
|
51,760
|
|
|
|
-
|
|
|
|
51,760
|
|
|
|
-
|
|
Delisting expenses
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
93
|
|
Merger and reorganization expenses
|
|
|
|
|
-
|
|
|
|
4,845
|
|
|
|
130
|
|
|
|
5,264
|
|
Adjusted EBITDA (a non-GAAP measure)
|
|
|
|
$
|
70,023
|
|
|
$
|
66,232
|
|
|
$
|
145,215
|
|
|
$
|
131,756
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company presents the non-GAAP financial measures EBITDA and
adjusted EBITDA because management uses these measures to monitor
and evaluate the performance of the business and believes that the
presentation of these measures will enhance investors' ability to
analyze trends in the business and evaluate the Company's underlying
performance relative to other companies in the industry.
|
|
IGATE CORPORATION
|
Reconciliation of Selected GAAP Measures to Non-GAAP Measures
|
(Amounts in thousands, except per share data)
|
(unaudited)
|
|
|
|
|
|
Three Months ended
|
|
Six Months ended
|
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
GAAP Net income attributable to IGATE common shareholders
|
|
|
|
$
|
(5,419
|
)
|
|
$
|
22,101
|
|
|
$
|
17,919
|
|
|
$
|
49,246
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Preferred dividend and accretion to preferred stock
|
|
|
|
|
8,535
|
|
|
|
7,872
|
|
|
|
16,813
|
|
|
|
15,487
|
|
Amortization of Intangible assets
|
|
|
|
|
2,701
|
|
|
|
2,692
|
|
|
|
5,281
|
|
|
|
5,440
|
|
Stock-based Compensation
|
|
|
|
|
3,519
|
|
|
|
3,240
|
|
|
|
7,816
|
|
|
|
6,365
|
|
Delisting expenses
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
93
|
|
Merger and reorganization expenses
|
|
|
|
|
-
|
|
|
|
4,845
|
|
|
|
130
|
|
|
|
5,264
|
|
Foreign exchange loss on acquisition hedging and remeasurement
|
|
|
|
|
-
|
|
|
|
88
|
|
|
|
-
|
|
|
|
489
|
|
Forfeiture of vested stock options
|
|
|
|
|
-
|
|
|
|
(3,005
|
)
|
|
|
-
|
|
|
|
(3,005
|
)
|
Loss on Extinguishment of debt
|
|
|
|
|
51,760
|
|
|
|
-
|
|
|
|
51,760
|
|
|
|
-
|
|
Income tax adjustments
|
|
|
|
|
(21,574
|
)
|
|
|
(3,327
|
)
|
|
|
(23,817
|
)
|
|
|
(5,008
|
)
|
Non-GAAP Net income attributable to IGATE common shareholders
|
|
|
|
$
|
39,522
|
|
|
$
|
34,506
|
|
|
$
|
75,902
|
|
|
$
|
74,371
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding, Basic
|
|
|
|
|
58,836
|
|
|
|
57,311
|
|
|
|
58,762
|
|
|
|
57,426
|
|
Add: assumed preferred stock conversion
|
|
|
|
|
21,139
|
|
|
|
19,529
|
|
|
|
21,139
|
|
|
|
19,529
|
|
Non-GAAP weighted average shares outstanding , Basic
|
|
|
|
|
79,975
|
|
|
|
76,840
|
|
|
|
79,901
|
|
|
|
76,955
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average dilutive common shares outstanding
|
|
|
|
|
60,692
|
|
|
|
58,899
|
|
|
|
60,619
|
|
|
|
59,086
|
|
Add: assumed preferred stock conversion
|
|
|
|
|
21,139
|
|
|
|
19,529
|
|
|
|
21,139
|
|
|
|
19,529
|
|
Weighted average dilutive common equivalent shares outstanding
|
|
|
|
|
81,831
|
|
|
|
78,428
|
|
|
|
81,758
|
|
|
|
78,615
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS (GAAP) to Basic EPS (Non-GAAP):
|
|
|
|
|
|
|
|
|
|
|
Basic EPS (GAAP)
|
|
|
|
$
|
(0.07
|
)
|
|
$
|
0.29
|
|
|
$
|
0.22
|
|
|
$
|
0.65
|
|
Preferred dividend and accretion to preferred stock
|
|
|
|
|
0.11
|
|
|
|
0.10
|
|
|
|
0.21
|
|
|
|
0.20
|
|
Amortization of Intangible assets
|
|
|
|
|
0.03
|
|
|
|
0.04
|
|
|
|
0.07
|
|
|
|
0.08
|
|
Stock-based Compensation
|
|
|
|
|
0.04
|
|
|
|
0.04
|
|
|
|
0.10
|
|
|
|
0.08
|
|
Delisting expenses
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.00
|
|
Merger and reorganization expenses
|
|
|
|
|
-
|
|
|
|
0.06
|
|
|
|
0.00
|
|
|
|
0.06
|
|
Foreign exchange loss on acquisition hedging and remeasurement
|
|
|
|
|
-
|
|
|
|
(0.00
|
)
|
|
|
-
|
|
|
|
0.00
|
|
Forfeiture of vested stock options
|
|
|
|
|
-
|
|
|
|
(0.04
|
)
|
|
|
-
|
|
|
|
(0.04
|
)
|
Loss on Extinguishment of debt
|
|
|
|
|
0.65
|
|
|
|
-
|
|
|
|
0.65
|
|
|
|
-
|
|
Income tax adjustments
|
|
|
|
|
(0.27
|
)
|
|
|
(0.04
|
)
|
|
|
(0.30
|
)
|
|
|
(0.06
|
)
|
Basic EPS (Non-GAAP)
|
|
|
|
$
|
0.49
|
|
|
$
|
0.45
|
|
|
$
|
0.95
|
|
|
$
|
0.97
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS (GAAP) to Diluted EPS (Non-GAAP):
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS (GAAP)
|
|
|
|
$
|
(0.07
|
)
|
|
$
|
0.28
|
|
|
$
|
0.22
|
|
|
$
|
0.62
|
|
Preferred dividend and accretion to preferred stock
|
|
|
|
|
0.11
|
|
|
|
0.10
|
|
|
|
0.21
|
|
|
|
0.20
|
|
Amortization of Intangible assets
|
|
|
|
|
0.03
|
|
|
|
0.04
|
|
|
|
0.06
|
|
|
|
0.08
|
|
Stock-based Compensation
|
|
|
|
|
0.04
|
|
|
|
0.04
|
|
|
|
0.10
|
|
|
|
0.08
|
|
Delisting expenses
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Merger and reorganization expenses
|
|
|
|
|
-
|
|
|
|
0.06
|
|
|
|
0.00
|
|
|
|
0.07
|
|
Foreign exchange loss on acquisition hedging and remeasurement
|
|
|
|
|
-
|
|
|
|
(0.00
|
)
|
|
|
-
|
|
|
|
-
|
|
Forfeiture of vested stock options
|
|
|
|
|
-
|
|
|
|
(0.04
|
)
|
|
|
-
|
|
|
|
(0.04
|
)
|
Loss on Extinguishment of debt
|
|
|
|
|
0.63
|
|
|
|
-
|
|
|
|
0.63
|
|
|
|
-
|
|
Income tax adjustments
|
|
|
|
|
(0.26
|
)
|
|
|
(0.04
|
)
|
|
|
(0.29
|
)
|
|
|
(0.06
|
)
|
Diluted EPS (Non-GAAP)
|
|
|
|
$
|
0.48
|
|
|
$
|
0.44
|
|
|
$
|
0.93
|
|
|
$
|
0.95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Disclosure of Adjusted EBITDA
IGATE presents Adjusted EBITDA as a supplemental measure of its
performance. We define Adjusted EBITDA as net income plus
(i) depreciation and amortization, (ii) interest expense, (iii) income
tax expense, minus (iv) other income, net plus (v) foreign exchange
(gain)/loss, (vi) stock-based compensation (vii) delisting expenses,
(viii) merger and reorganization expenses and (ix) loss on
extinguishment of debt. We eliminated the impact of the above as we do
not consider them as indicative of our ongoing operating performance.
These adjustments are itemized below. You are encouraged to evaluate
these adjustments and the reasons we consider them appropriate for
supplemental analysis. In evaluating Adjusted EBITDA, you should be
aware that in the future we may incur expenses that are the same as or
similar to some of the adjustments in this presentation. Our
presentation of Adjusted EBITDA should not be construed as an inference
that our future results will be unaffected by unusual or non-recurring
items.
We present Adjusted EBITDA because we believe it assists investors and
analysts in comparing our performance across reporting periods on a
consistent basis by excluding items that we do not believe are
indicative of our core operating performance. In addition, we use
Adjusted EBITDA: (i) as a factor in evaluating management's performance
when determining incentive compensation, (ii) to evaluate the
effectiveness of our business strategies and (iii) because our credit
agreement and our indenture use measures similar to Adjusted EBITDA to
measure our compliance with certain covenants.
Adjusted EBITDA has limitations as an analytical tool. Some of these
limitations are:
-
Adjusted EBITDA does not reflect our cash expenditures or future
requirements, for capital expenditures or contractual commitments;
-
Adjusted EBITDA does not reflect changes in, or cash requirements for,
our working capital needs;
-
Adjusted EBITDA does not reflect the significant interest expense, or
the cash requirements necessary to service interest or principal
payments, on our debts; although depreciation and amortization are
non-cash charges, the assets being depreciated and amortized will
often have to be replaced in the future, and adjusted EBITDA does not
reflect any cash requirements for such replacements; non-cash
compensation is and will remain a key element of our overall long-term
incentive compensation package, although we exclude it as an expense
when evaluating our ongoing operating performance for a particular
period; and
-
Adjusted EBITDA does not reflect the impact of certain cash charges
resulting from matters we consider not to be indicative of our ongoing
operations; and other companies in our industry may calculate Adjusted
EBITDA differently than we do, limiting its usefulness as a
comparative measure.
-
Because of these limitations, Adjusted EBITDA should not be considered
in isolation or as a substitute for performance measures calculated in
accordance with GAAP. We compensate for these limitations by relying
primarily on our GAAP results and using Adjusted EBITDA only
supplementally.
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