Syntel, Inc.
Apr 19, 2018
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Syntel Reports First Quarter 2018 Financial Results

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,
 20182017
   
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