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Syntel Reports First Quarter 2018 Financial Results

/EIN News/ -- Highlights:

• Q1 revenue of $245.3M, up 9% from year-ago quarter, and 2% sequentially
• Q1 EPS of $0.55 per diluted share as compared to $0.46 in the year-ago quarter and $0.51 in the fourth quarter 2017
• Q1 2018 cash & short term investments of $72.5M
• Global Headcount of 22,571 on March 31, 2018, versus 22,795 in the year-ago quarter

TROY, Mich., April 19, 2018 (GLOBE NEWSWIRE) -- Syntel, Inc. (Nasdaq:SYNT), a leading global provider of integrated information technology and knowledge process services, today announced financial results for the first quarter, ended March 31, 2018.

First Quarter Financial Highlights
Syntel's revenue for the first quarter increased 8.6 percent to $245.3 million from $225.9 million in the prior-year period, and 2.3 percent from $239.8 million in the fourth quarter of 2017.  During the first quarter, Banking and Financial Services accounted for 43.4 percent of total revenue, with Retail, Logistics and Telecom at 18.4 percent, Healthcare and Life Sciences at 18.2 percent, Insurance at 15.3 percent, and Manufacturing at 4.7 percent.

The Company's gross margin was 37.2 percent in the first quarter, compared to 36.6 percent in the prior-year period and 41.4 percent in the fourth quarter of 2017. Selling, General and Administrative (SG&A) expenses were 11 percent of revenue in the first quarter, compared to 13.4 percent in the prior-year period and 12.1 percent in the previous quarter.

The first quarter income from operations was 26.2 percent of revenue as compared to 23.2 percent in the prior-year period and 29.3 percent in the fourth quarter of 2017. Net income for the first quarter was $45.6 million or $0.55 per diluted share, compared to $38.4 million or $0.46 per diluted share in the prior-year period and $42.4 million or $0.51 per diluted share in the fourth quarter of 2017.

During Q1, Syntel spent $2.2 million in CAPEX and finished the quarter with cash and short-term investments of $72.5 million. Syntel ended the quarter with 22,571 employees globally.

Operational Highlights
"During Q1, we continued to make progress in expanding across our top 50 client relationships," said Syntel CEO and President Rakesh Khanna. "As a result of our client-facing efforts and strong service offerings, the pace of deal closures has been healthy."

"We saw broader contribution across our industry segments during the quarter, and are tackling each opportunity with high-impact digital solutions as well as cutting-edge automation and modernization services to support our customers' technology and business initiatives," said Khanna.  "The pace of change is intensifying across each industry we serve. Our ability to help our customers evolve and stay ahead of the competition will lead to our mutual success.”

2018 Guidance
Based on current visibility levels and an exchange rate assumption of 65 Indian rupees to the dollar, the Company currently expects 2018 revenue of $920 million to $960 million and EPS in the range of $1.76 to $1.96.

Syntel to Host Conference Call
Syntel will discuss its first quarter 2018 results today on a conference call at 10:00 a.m. (EDT). To listen to the call, please dial (877) 837-3915 in the US/Canada or (973) 638-3495 internationally. The call will also be broadcast live via the Internet at Syntel's web site: investor.syntelinc.com. Please access the site at least 15 minutes prior to the call to register and download any necessary software. A replay will be available until April 26, 2018 by dialing (855) 859-2056 and entering “4089007." International callers may dial (404) 537-3406 and enter the same passcode.

About Syntel
Syntel (Nasdaq:SYNT) is a leading global provider of integrated information technology and knowledge process services. Syntel helps global enterprises evolve the core by leveraging automation, scaled agile and cloud platforms to build efficient application development and management, testing and infrastructure solutions. Syntel’s digital services enable companies to engage customers, discover new insights through analytics, and create a more connected enterprise through the internet of things. Syntel’s "Customer for Life" philosophy builds collaborative partnerships and creates long-term client value by investing in IP, solutions and industry-focused delivery teams with deep domain knowledge.

To learn more, visit us at www.syntelinc.com.

Safe Harbor Provision
This news release may include forward-looking statements, including those 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 Annual Report on Form 10-K for the year ended December 31, 2017 or from other factors not currently anticipated.

Contacts: 
North America/Europe: Jon Luebke, Syntel, 248/619-3503, jon_luebke@syntelinc.com


 

 
SYNTEL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
     
  THREE MONTHS ENDED
  MARCH 31,
  2018 2017
     
Net revenues $ 245,345   $ 225,869  
Cost of revenues   154,091     143,160  
Gross profit   91,254     82,709  
Selling, general and administrative expenses   26,986     30,254  
     
Income from operations   64,268     52,455  
     
Other income (expense):    
Interest Expense   (2,433 )   (3,376 )
Non-Service component of post retirement benefit cost   (302 )   (324 )
Other income   561     496  
Other income (expense), net   (2,174 )   (3,204 )
     
Income before provision for income taxes   62,094     49,251  
     
Income tax expense   16,455     10,871  
     
Net income $ 45,639   $ 38,380  
     
Other Comprehensive Income    
     
Foreign currency translation adjustments $ (2,457 ) $ 6,175  
     
Gains on derivatives:    
Gains arising during period on cash flow hedges   2,910     963  
     
Unrealized gains on available-for-sale debt securities:    
Unrealized holding gains arising during period   384     131  
Reclassification adjustment for gains included in net income   (60 )   (80 )
    324     51  
     
Defined benefit pension plans:    
Net Profit (Loss) arising during period   (439 )   6  
Amortization of prior service cost included in net periodic pension cost      8     8  
    (431 )   14  
     
Other comprehensive income, before tax   346     7,203  
Income tax expenses related to Other Comprehensive Income   (699 )   (403 )
Other comprehensive income (loss), net of tax   (353 )   6,800  
     
Comprehensive Income  $ 45,286   $ 45,180  
     
EARNINGS PER SHARE:    
Basic $ 0.55   $ 0.46  
Diluted $ 0.55   $ 0.46  
     
Weighted average common shares outstanding:    
     
Basic   83,129     83,797  
     
Diluted   83,377     83,834  
     

 

 
SYNTEL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS)
  (Unaudited)   (Audited)
  March 31,   December 31,
   2018     2017 
       
       
ASSETS      
       
Current assets:      
Cash and cash equivalents $ 41,373   $ 95,994  
Short term investments   31,140     26,501  
Accounts receivable, net of allowance for doubtful accounts of $49 at March 31, 2018 and $ Nil at December 31, 2017.   126,619     115,052  
Revenue earned in excess of billings   26,651     24,995  
Other current assets   36,006     29,484  
       
Total current assets   261,789     292,026  
       
Property and equipment   238,248     240,948  
Less accumulated depreciation and amortization   134,993     134,650  
       
Property and equipment, net   103,255     106,298  
       
Goodwill   906     906  
       
Non current Term Deposits with Banks   472     396  
       
       
Deferred income taxes and other non current assets   86,022     84,090  
       
TOTAL ASSETS $    452,444   $    483,716  
       
LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT)      
LIABILITIES      
Current liabilities:      
Accrued payroll and related costs $ 45,084   $ 51,497  
Income taxes payable   32,810     21,100  
Accounts payable and other current liabilities   35,716     34,762  
Deferred revenue   2,965     3,240  
Loans and borrowings   26,117     24,268  
       
Total current liabilities   142,692     134,867  
       
Deferred income taxes and other non current liabilities   28,688     27,325  
Non Current loans and borrowings   246,997     334,446  
       
TOTAL LIABILITIES   418,377     496,638  
       
SHAREHOLDERS' EQUITY      
       
       
Total shareholders' equity/(deficit)   34,067     (12,922 )
       
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT) $    452,444   $    483,716  
       


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