MUMBAI, India, July 25, 2011 (GLOBE NEWSWIRE) -- Patni Computer Systems Limited (NSE:PATNI) (NYSE:PTI) (Patni) today announced its financial results for the second quarter ended June 30, 2011.
Second Quarter Highlights
- Revenues for the quarter at US $183.8 million (` 8,221 million)
- Up 9.7% from US$ 167.6 million (` 7,776 million) in the corresponding quarter 2010.
- Revenue concentration of Top 10 Customers decreased to 48.4% from 48.6% in corresponding quarter 2010.
- Three Fortune 1000 clients added in the quarter.
- Non GAAP EBITDA for the quarter at US$22.7million
- Down by 37.7 % from US$36.4 million EBITDA in the corresponding quarter 2010
- Net Income for the quarter at US$2.4 million (` 108 million)
- Down 92.4% from US$ 31.7 million (` 1,473million) in the corresponding quarter 2010
- Down by 45.6% to US$18.9 million after adjusting for non-GAAP adjustments.
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EPS for the quarter at US$ 0.02 per share (US$ 0.04 per ADS); adjusted for non GAAP items, is at US$ 0.14 (US$ 0.29 per ADS).
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During the quarter, the Company generated cash flow of $16.5 million from operating activities and ended the quarter with $394 million in cash and short-term investments.
- Headcount at 18,372 as on June 30, 2011.
Commenting on the performance, Phaneesh Murthy, CEO and MD, Patni said, "Our integration process is well on track as we build the two companies together under our new vision. We expect our results to stabilize in 2012 after all the integration expenses and the accounting charges related to the acquisition have evened out.
With the front end sales already integrated, I am happy that our joint go-to market strategy has been responding well among our customers and markets. Our focus is on building a platform for long term growth and taking both the companies to the best in class earnings growth that iGATE has been able to achieve over the last three to five years."
Key Client Wins
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A leading US Financial Services firm has chosen Patni for Eagle platform upgrade and implementation of new modules.
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A leading Forest Products Company has engaged with Patni to provide infrastructure management services on an outcomes based model.
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A German Manufacturing major has engaged with Patni to provide product engineering services leveraging its offshore delivery model.
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Patni has been chosen by a US Manufacturing major for its ERP implementation.
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A US healthcare leader has signed up with Patni for a large scale consulting engagement.
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Patni has been selected by a leading US Manufacturing company to provide support for sales force automation.
- A leading Communications firm in the Middle East has engaged with Patni to provide offshore support for its ERP applications.
Other highlights of the quarter
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Patni released the Beta version of 'Design for Safety (DFS)' an ISO 26262 functional safety compliance tool; the tool will help automotive organizations design safer electrical and electronic systems.
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Patni has been re-appraised at CMMI Level 5 version 1.2 by QAI.
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CHCS Services, Inc., a unit of Patni that offers health and life administration services, was honored with the "Case In Point Platinum Award" for overall case management excellence across the healthcare spectrum.
- Patni was awarded the Advanced Solutions Partner status with TIA Technology, the Copenhagen based world leader in integrated, leading edge standard software solutions for the global insurance industry.
Acquisition
Further to the share purchase agreements signed with iGATE Corporation and its subsidiaries by the founders of Patni and General Atlantic on Jan 10th, 2011, iGATE Corporation announced completion of the acquisition of a majority stake in Patni Computers on May 12th, subsequent to the Mandatory Tender Offer to the minority share holders of Patni. It was also announced that Patni Computers will continue to be listed in the Indian stock exchanges as a subsidiary of iGATE Corporation while iGATE Corporation will be listed in the NASDAQ. Both the organizations will jointly go to market under the brand name iGATE Patni.
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Unaudited Consolidated Statement of Income - US GAAP (US$ '000) for the quarter ended June 30, 2011. |
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| Particulars |
Period May 16, 2011 to June 30, 2011 Successor Company |
Period Apr 1, 2011 to May 15, 2011 Predecessor Company |
Quarter ended June 30 2011 Total NON GAAP |
Quarter ended June 30 2010 Predecessor Company |
YoY change % |
Quarter ended Mar 31, 2011 Predecessor Company |
QoQ change % |
| Revenue | 94,268 | 89,568 | 183,836 | 167,557 | 9.7% | 190,314 | -3.4% |
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Cost of revenues (exclusive of depreciation and amortization) |
63,612 | 59,509 | 123,121 | 101,033 | 21.9% | 120,130 | 2.5% |
| Gross Profit | 30,656 | 30,059 | 60,715 | 66,524 | -8.7% | 70,184 | -13.5% |
| Selling, general and administrative expenses | 25,432 | 31,701 | 57,133 | 32,254 | 77.1% | 36,318 | 57.3% |
| Depreciation and amortization | 6,549 | 3,708 | 10,257 | 7,040 | 45.7% | 7,263 | 41.2% |
| Foreign exchange gain, net | (3,265) | (3,705) | (6,970) | (4,259) | 63.7% | (5,460) | 27.7% |
| Operating income / (loss) | 1,940 | (1,645) | 295 | 31,489 | -99.1% | 32,063 | -99.1% |
| Other income, net | 2,772 | 1,348 | 4,120 | 6,940 | -40.6% | 4,772 | -13.7% |
| Income/(loss) before income taxes | 4,712 | (297) | 4,415 | 38,429 | -88.5% | 36,835 | -88.0% |
| Income taxes | 1,982 | 9 | 1,991 | 6,689 | -70.2% | 10,347 | -80.8% |
| Net income/(loss) | 2,730 | (306) | 2,424 | 31,740 | -92.4% | 26,488 | -90.8% |
| Earnings per share – GAAP | |||||||
| - Basic | $0.02 | ($0.00) | $0.02 | $0.24 | -92.6% | $0.20 | -91.0% |
| - Diluted | $0.02 | ($0.00) | $0.02 | $0.24 | -92.5% | $0.20 | -90.9% |
| Weighted average number of common shares used in computing earnings per share | |||||||
| - Basic | 133,915,882 | 133,544,231 | 133,570,818 | 129,562,441 | 131,991,860 | ||
| - Diluted | 135,773,325 | 135,420,766 | 135,642,004 | 133,835,341 | 134,910,508 | ||
| NON GAAP Adjustments | |||||||
| Amortization of Intangible Assets | 1,740 | 798 | 2,538 | 1,231 | 1,580 | ||
| Stock Based Compensation | 1,225 | 404 | 1,629 | 2,110 | 2,316 | ||
| Severance Expenses | 6,164 | 11,289 | 17,453 | -- | -- | ||
| Total NON GAAP Adjustments |
9,129 |
12,491 | 21,620 | 3,341 | 3,896 | ||
| Tax on above |
2,264 |
2,906 |
5,170 | 387 | 115 | ||
| NON-GAAP Net Income | 9,595 |
9,279 |
18,874 | 34,694 | -45.6% | 30,269 | -37.6% |
| Earnings per share – NON GAAP | |||||||
| - Basic |
$0.07 |
$0.07 |
$0.14 | $0.27 | -47.2% | $0.23 | 38.4% |
| - Diluted |
$0.07 |
$0.07 |
$0.14 | $0.26 | -46.3% | $0.22 | -38.0% |
| NON GAAP Adjustments | |||||||
| Stock Based Compensation | 1,225 | 404 | 1,629 | 2,110 | 2,316 | ||
| Severance expenses |
6,164 |
11,289 |
17,453 | -- | -- | ||
| Total NON GAAP Adjustments | 7,389 | 11,693 | 19,082 | 2,110 | 2,316 | ||
| Non-GAAP EBITDA | 12,613 | 10,051 | 22,664 | 36,380 | -37.7% | 36,182 | -37.4% |
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Unaudited Consolidated Statement of Income (` '000) for the quarter ended June 30, 2011, based on Convenience Translation. |
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| Particulars |
Period May 16, 2011 to June 30, 2011 Successor Company |
Period Apr 1, 2011 to May 15, 2011 Predecessor Company |
Quarter ended June 30, 2011 Total |
Quarter ended June 30, 2010 Predecessor Company |
Quarter ended March 31, 2011 Predecessor Company |
| Exchange rate$1 = INR | 44.59 | 44.86 | 44.72 | 46.41 | 44.54 |
| Revenues | 4,203,407 | 4,018,019 | 8,221,426 | 7,776,338 | 8,476,575 |
| Cost of revenues (exclusive of depreciation and amortization) | 2,836,475 | 2,669,552 | 5,506,027 | 4,688,962 | 5,350,573 |
| Gross Profit | 1,366,932 | 1,348,467 | 2,715,399 | 3,087,376 | 3,126,002 |
| Selling, general and administrative expenses | 1,134,023 | 1,422,078 | 2,556,101 | 1,496,915 | 1,617,595 |
| Depreciation and amortization | 291,994 | 166,347 | 458,341 | 326,703 | 323,513 |
| Foreign exchange gain , net | (145,593) | (166,201) | (311,794) | (197,649) | (243,171) |
| Operating income/(loss) | 86,508 | (73,757) | 12,751 | 1,461,407 | 1,428,065 |
| Other income, net | 123,606 | 60,457 | 184,063 | 322,095 | 212,558 |
| Income/(loss) before income taxes | 210,114 | (13,300) | 196,814 | 1,783,502 | 1,640,623 |
| Income taxes | 88,365 | 424 | 88,789 | 310,453 | 460,862 |
| Net income/(loss) | 121,749 | (13,724) | 108,025 | 1,473,049 | 1,179,761 |
| Earnings per share | |||||
| - Basic | 0.91 | (0.10) | 0.81 | 11.37 | 8.94 |
| - Diluted | 0.90 | (0.10) | 0.80 | 11.01 | 8.74 |
| Weighted average number of common shares used in computing earnings per share | |||||
| - Basic | 133,915,882 | 133,544,231 | 133,570,818 | 129,562,441 | 131,991,860 |
| - Diluted | 135,773,325 | 135,420,766 | 135,642,004 | 133,835,341 | 134,910,508 |
Important Notes to the release
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Fiscal Year: Patni follows a January – December fiscal year. The current review covers the financial and operating performance of the Company for the quarter ended June 30, 2011. On May 12, 2011, approximately 82.4% of our shares were acquired by iGATE Corporation. For convenience, we have used a cut-off date of May 15, 2011 as the transactions from May 13, 2011 and May 14, 2011 were insignificant. The post May 15, 2011 consolidated financial statements reflect the new basis of accounting as required by the authoritative guidance under ASC 805-50-S99-1, and have applied the SEC rules and guidance regarding "push down" accounting treatment. Accordingly, our consolidated financial statements prior to the acquisition by iGATE Corporation reflect the historical accounting basis in our assets and liabilities and are labeled Predecessor Company, while such consolidated financial statements subsequent to the acquisition by iGATE Corporation are labeled Successor Company and reflect the push down basis of accounting for the fair values of assets and liabilities acquired by iGATE Corporation. The total for the quarter ended June 30, 2011 is not intended to represent or be indicative of the combined results of operations of the Successor Company and the Predecessor Company that would have been reported had the push down accounting treatment not been effected and should not be taken as representative of our future combined results of operations. Additionally, certain totals for the quarter ended June 30, 2011 may not be comparable to the quarter ended June 30, 2010 and quarter ended March 31, 2011 as a result of the push down accounting treatment.
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U.S. GAAP: A Consolidated Statement of Income in US GAAP is available on Page 3 of the Fact Sheet attached to this release.
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Percentage analysis: Any percentage amounts, as set forth in this release, unless otherwise indicated, have been calculated on the basis of the U.S. Dollar amounts derived from our consolidated financial statements prepared in accordance with U.S. GAAP, and not on the basis of any translated Rupee amount. Calculation of percentage amounts on the basis of Rupee amounts may lead to results that are different, in a material way, from those calculated as per U.S. Dollar amounts.
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Convenience translation: A Consolidated Statement of Income as per Convenience Translation prepared in accordance with US GAAP is available on page 6 of the Fact Sheet attached to this release. We have translated the financial data derived from our consolidated financial statements prepared in accordance with U.S. GAAP for each period at the noon buying rate in the City of New York on the last business day of such period for cable transfers in Rupees as certified for customs purposes by the Federal Reserve Bank of New York. The translations should not be considered as a representation that such US Dollar amounts have been, could have been or could be converted into Rupees at any particular rate, the rate stated elsewhere in this document, or at all. Investors are cautioned to not rely on such translated amounts.
- Attached Fact Sheet (results & analysis tables)
About iGATE Patni
'iGATE Patni' is the common brand identity of two organizations — iGATE Corporation and Patni Computer Systems Limited ( Patni). With iGATE having acquired a majority stake in Patni, the two companies, under the common brand iGATE Patni, provide full-spectrum consulting, technology and business process outsourcing, and product engineering services on a Business Outcomes-based model. Armed with over three decades of IT Services experience and powered by the iTOPS (Integrated Technology and Operations) platform, iGATE Patni's multi-location global organization with a talent pool of 26000+ people, consistently delivers effective solutions to over 360 Fortune 1000 clients spanning across verticals like: banking & financial services; insurance & healthcare; life sciences; manufacturing, retail, distribution & logistics; media, entertainment leisure & travel; communication, energy & utilities; public sector; and independent software vendors. Visit: www.igatepatni.com
iGATE Corporation is listed on NASDAQ (IGTE), and Patni Computer Systems Limited on BSE (532517), NSE (PATNI) and NYSE (PTI)
The iGATE Patni brand logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5150
Safe Harbor
Certain statements in this release concerning the benefits of the acquisition by iGATE, the business outlook, the demand for products and services, our future growth prospects and all other statements in this release other than recitation of historical facts are forward-looking statements, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. Words such as "expect", "potential", "believes", "anticipates", "plans", "intends" and similar expressions are intended to identify such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth and the integration of iGATE and Patni, whether the companies can successfully provide services/products and the degree to which these gain market acceptance, our relationship with iGATE, including the risks related to its business, some of which are discussed under the caption "Risk Factors" in iGATE's Annual Report on Form 10-K for the fiscal year ended December 31, 2010, intense competition in IT services including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks, liability for damages on our service contracts, the success of the companies in which Patni has made strategic investments, withdrawal of governmental fiscal incentives, political instability, legal restrictions on raising capital or acquiring companies outside India, unauthorized use of our intellectual property and general economic conditions affecting our industry. Actual results may differ materially from those contained in the forward-looking statements in this press release. Any forward-looking statements are based on information currently available to the company. The company does not undertake to update any forward-looking statement that may be made from time to time by or on behalf of the Company.