SYNT EARNINGS:
[ Business | US Market | Industry | IPO | S&P | International | PRNews | BizWire | Finance Home ]
--------------------------------------------------------------------------------
Thursday February 19, 8:02 am Eastern Time
Company Press Release
Syntel Reports Record Fourth-Quarter Revenues Up 46% and Net Income Up 247%
TROY, Mich.--(BUSINESS WIRE)--Feb. 19, 1998--Syntel, Inc. (NASDAQ:SYNT - news), a leading information technology (IT) services firm that specializes in applications management, Year 2000 compliance services, and IT consulting, today reported record revenues and earnings for the fourth quarter ended December 31, 1997 as well as fiscal year 1997.
For the fourth quarter ended December 31, 1997, revenues were $35.4 million, a 46 percent increase over the same period in 1996. Net income increased 247 percent for the fourth quarter to $3.8 million, or $0.15 per share (diluted), compared to pro forma net income of $1.1 million, or $0.04 per share (diluted) for the same period in 1996.
Revenue for the fiscal year 1997 grew by 35 percent to $124.3 million from $92.3 million in revenue recorded for 1996. Pro forma net income for fiscal 1997 increased by 133 percent to $10.2 million, or $0.39 per share (diluted), compared to pro forma net income of $4.4 million, or $0.17 per share (diluted) for fiscal year 1996.
Performance Highlights
''Syntel's strong operating results for the fourth quarter and full year are due primarily to increased market acceptance of the Company's high value-added IntelliSourcing(SM) service offerings including full on-site applications management, as well as the Company's Global Service Delivery Model which provides Syntel's customers with 24 hour/seven day a week domestic and offshore service and support,'' said Syntel's President and CEO Bharat Desai.
Desai continued ''Our business mix continues to shift toward our higher value, higher margin IntelliSourcing services which include providing clients with a whole suite of applications management outsourcing services. In addition, Syntel will continue to pursue Year 2000 engagements where it is apparent there is a strong opportunity for an ongoing applications outsourcing relationship post-2000 and as a value-added service to our existing clients. Overall, the market has been very receptive to our IntelliSourcing and TeamSourcing(SM) service offerings, and the recently announced acquisition of Waypointe Technologies, Inc. further strengthens our growing Enterprise Solutions Practice.''
''Syntel will continue to invest in the expansion of our Global Delivery capabilities in 1998 and beyond,'' said Desai. ''By mid-1998, our offshore capability will have tripled from its levels at the end of 1996. Going forward, we are well positioned to capitalize on the new opportunities for further growth in revenues and profitability.''
Added Syntel Chief Financial Officer John Andary, ''Our focus throughout 1997 has been geared toward revenue growth that enhances our margin rate. This disciplined approach has enabled us to essentially improve both our gross margin and operating margin percentages each quarter in 1997. At the same time, our rate of revenue growth has accelerated in each quarter of 1997 when compared to the same quarter of the previous year.''
''The investments we made in our IntelliSourcing service offering, as well as our ongoing efforts to optimize our resources globally, are clearly generating the desired financial results,'' said Andary. ''With cash reserves of $33 million and an unused $25 million bank line of credit, we can continue to expand our infrastructure and pursue other growth opportunities.''
Additional information regarding Syntel's results will be discussed in an analyst conference call scheduled for 10:00 a.m. EST today. Financial results will be posted on the company's web site by noon EST, February 19 at: www.syntelinc.com on the ''Investor Relations'' page.
About Syntel, Inc.
Syntel, Inc. is a leading applications management, Year 2000 compliance, and professional IT consulting firm with 11 offices in North America, Europe, as well as four Global Development Centers in the US and India. Syntel is a leading provider of applications management outsourcing services -- including applications development, maintenance, and migration -- to Fortune 500 companies and government organizations in the manufacturing, transportation, retail, financial services, and telecommunications industries. Syntel also provides complete Year 2000 compliance services through its Method2000(R) offering and Enterprise Resource Planning (ERP) implementation services through its Enterprise Solutions Practice. To learn more about Syntel, visit the company's web site at: www.syntelinc.com.
Safe Harbor Provision
This news release includes forward-looking statements, including with respect to the future level of business for Syntel, Inc. These statements are necessarily subject to risk and uncertainty. Actual results could differ materially from those projected in these forward-looking statements as a result of certain risk factors set forth in the Company's prospectus dated August 12, 1997. Factors that could cause results to differ materially from those set forth above include trends and developments in the information technology industry generally, which is subject to rapid technological change and the Company's concentration of sales in a relatively small number of large customers, as well as intense competition in the information technology industry, which the Company believes will increase.
SYNTEL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(in thousands, except per share data)
3 MONTHS 12 MONTHS
ENDED DECEMBER 31 ENDED DECEMBER 31
_________________ _________________
1997 1996 1997 1996
Revenues $ 35,417 $ 24,289 $124,338 $ 92,330
Cost of revenues 24,162 17,439 87,584 67,083
________ ________ ________ ________
Gross profit 11,255 6,850 36,754 25,247
Selling, general and
administrative expenses 6,124 5,146 23,547 19,271
________ ________ ________ ________
Income from operations 5,131 1,704 13,207 5,976
Other income, principally
interest 208 (114) 730 149
________ ________ ________ ________
Income before
income taxes 5,339 1,590 13,937 6,125
Income taxes 1,541 97 3,517(a) 350
________ ________ ________ ________
Net income $ 3,798 $ 1,493 $ 10,420 $ 5,775
________ ________ ________ ________
________ ________ ________ ________
PRO FORMA INFORMATION:
Income before
income taxes $ 5,339 $ 1,590 $ 13,937 $ 6,125
Pro forma
income taxes(b) 1,541 495 3,741 1,746
________ ________ ________ ________
Pro forma net income $ 3,798 $ 1,095 $ 10,196 $ 4,379
________ ________ ________ ________
________ ________ ________ ________
Pro forma net income
per share - diluted $ 0.15 $ 0.04 $ 0.39 $ 0.17
________ ________ ________ ________
________ ________ ________ ________
Weighted average
common shares
outstanding - diluted 25,737 26,245 26,055 26,245
________ ________ ________ ________
________ ________ ________ ________
(a) - In connection with the termination of its S corporation status,
the Company changed its method of accounting for tax reporting
purposes from the cash method to the accrual method, resulting in
a one time charge of $1,090 to income taxes.
(b) - Represents the income taxes, as if the company had been a C
corporation during all periods presented.
SYNTEL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands)
December 31, December 31,
1997 1996
____ ____
ASSETS
Current assets:
Cash and cash equivalents $32,945 $ 7,332
Accounts receivable, net 20,644 20,642
Other current assets 7,404 715
_______ _______
Total current assets 60,993 28,689
Property and equipment 9,299 7,551
Less accumulated depreciation 5,060 3,248
_______ _______
Property and equipment, net 4,239 4,303
_______ _______
$65,232 $32,992
_______ _______
_______ _______
LIABILITIES
Current liabilities:
Accrued payroll and related costs $10,388 $ 8,019
Other current liabilities 7,929 3,541
Dividend/distribution payable 300 14,000
Deferred revenue 5,705 1,287
_______ _______
Total current liabilities 24,322 26,847
Income taxes payable 1,325 --
_______ _______
Total liabilities 25,647 26,847
SHAREHOLDERS' EQUITY
Total shareholders' equity 39,585 6,145
_______ _______
Total liabilities and shareholders'
equity $65,232 $32,992
_______ _______
_______ _______
--------------------------------------------------------------------------------
Contact:
Syntel
Jonathan K. James, 248/619-3584
E-mail: jonathan_james@syntelinc.com
or
Fi.Comm
Heidi Flannery/Sean Beers, 503/844-8888
E-mail: heidi.flannery@ficomm.com
E-mail: sean.beers@ficomm.com
--------------------------------------------------------------------------------
More Quotes and News: Syntel Inc (Nasdaq:SYNT - news)
Related News Categories: computers, internet
--------------------------------------------------------------------------------
Help
--------------------------------------------------------------------------------
Copyright c 1998 Business Wire. All rights reserved. All the news releases provided by Business Wire are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving ina public database, redistributing via a computer network or in a printed form.
See our Important Disclaimers and Legal Information.
Questions or Comments? |
