Attached files
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| 8-K - CURRENT REPORT - INTELLIGROUP INC | intelligroup_8k.htm |
Exhibit
99.1
For Immediate Release
Intelligroup® Q4
EPS Rose to $0.08 from $0.02 in Q4 2008, and
2009 EPS Rose 65% to $0.26 on Revenue of $126.5 Million
2009 EPS Rose 65% to $0.26 on Revenue of $126.5 Million
- Cash, Cash Equivalents including Short Term
Investments Rose to $23.2 million at Year-End -
Investments Rose to $23.2 million at Year-End -
- Conference Call & Webcast Today at 10:00 a.m. EST
-
Princeton, NJ, February 16, 2010 –
Intelligroup, Inc. (OTC
BB: ITIG), an information technology and outsourcing services provider
principally focused on enterprise resource planning (ERP) and extended ERP
solutions, today announced operating results for its fourth quarter and year
ended December 31, 2009. Intelligroup will host a conference call today at 10:00
a.m. EST to review the results.
Conference Call/Replay: Dial 800-734-8507 or 212-231-2927. Replay
available until Feb. 23rd via 800-633-8284 or 402-977-9140, passcode: 21458624.
Live Webcast/archive: www.intelligroup.com/ig_events_webcasts.html or www.earnings.com; archived for 30
days.
Q4 Highlights:
- Q4 ’09 revenue increased by 3.9%
to $33.0 million compared to revenue of $31.7 million in Q3’ 09, and decreased
11.6% compared to revenue of $37.3 million in Q4 '08.
- Q4 ’09 gross margin decreased to
33.7% from 34.6% in Q3 ’09 and increased compared to 32.5% in Q4
’08.
- Q4 ’09 operating margin was 11.0%
compared to 11.4% in Q3 ’09 and 7.9% in Q4 ’08.
- Foreign exchange (fx) loss of $0.2
million in Q4 ’09 compares to an fx gain of $0.03 million in Q3 ’09 and an fx
loss of $1.4 million in Q4 ’08.
- Q4 ’09 net income was $3.3
million, or $0.08 per diluted share, compared to $3.6 million, $0.09 per
diluted share, in Q3 ’09 and $1.0 million, or $0.02 per diluted share, in Q4
’08.
- Cash from operating activities was
$0.8 million in Q4 ’09 versus $3.3 million in Q3 ’09 and $7.9 million in Q4
2008.
- Cash and cash equivalents
including short-term investments rose to $23.2 million at December 31, 2009
compared to $22.9 million at September 30, 2009 and $11.2 million at December
31, 2008.
- Intelligroup added 24 new customers globally during the quarter.
2009 Highlights:
- 2009 revenue declined 19.5% to
$126.5 million.
- 2009 gross margin improved to
33.5% compared to 31.5% in 2008; Reflecting the revenue decline, gross profit
decreased to $42.4 million.
- 2009 operating margin rose to 9.4%
from 7.1% in 2008; Operating income rose 7.2% to $11.9 million from
2008.
- 2009 net income rose 61.5% to $10.8 million, or $0.26 per diluted share, compared to $6.7 million, or $0.16 per diluted share, in 2008.
| Intelligroup Q4 2009 Results, 2/16/10 | page 2 |
- Net cash generated by operating
activities was $14.8 million in 2009 as compared to $13.2 million in
2008.
- Intelligroup added 116 new customers globally during 2009.
Intelligroup President
and Chief Executive Officer, Vikram Gulati, commented, “In the face of a
challenging year which impacted revenue levels, Intelligroup achieved growth
across a range of financial metrics including, gross and operating margins, net
income and diluted EPS, as well as cash flow generated from operations. These
improvements reflect our company-wide focus on improving operational
efficiencies; disciplines which we are working very hard to maintain, even in an
environment of firming demand and return to sequential growth.
“Our ERP expertise and
vertical focus continue to serve as two key differentiators that have enabled
Intelligroup to develop a steady stream of new customer relationships, while at
the same time allowing us to broaden certain existing customer engagements. Our
go-to-market strategy and value-added service offerings are being recognized by
existing and new customers.”
| Overview of Key Operating Metrics: | ||||||||
| Q4' 09 | Q3' 09 | Q2' 09 | Q1' 09 | Q4' 08 | 2009 | 2008 | ||
| Utilization Rate | 81% | 80% | 78% | 72% | 70% | 78% | 71% | |
| Billing Rates – Offshore | $22 | $23 | $21 | $21 | $24 | $22 | $24 | |
| Billing Rates – Onsite | $102 | $101 | $105 | $102 | $110 | $103 | $107 | |
| Revenue Mix – Offshore | 33% | 33% | 32% | 34% | 32% | 33% | 30% | |
| Revenue Mix – Onsite | 67% | 67% | 68% | 66% | 68% | 67% | 70% | |
| Top 10 Customer Revenue % | 35% | 37% | 39% | 36% | 38% | 37% | 35% | |
Q4 Operating Results:
Q4 '09 revenues decreased 11.6% to $33.0 million, compared to $37.3 million in Q4 '08 however revenue increased by 3.9% compared to Q3 ’09. Gross margins improved to 33.7% from 32.5% in the prior year period, yet fell 0.9% sequentially, principally due to the impact of the Rupee’s appreciation against the U.S. dollar.
Q4 '09 revenues decreased 11.6% to $33.0 million, compared to $37.3 million in Q4 '08 however revenue increased by 3.9% compared to Q3 ’09. Gross margins improved to 33.7% from 32.5% in the prior year period, yet fell 0.9% sequentially, principally due to the impact of the Rupee’s appreciation against the U.S. dollar.
SG&A, including
Depreciation and Amortization, decreased by 18.7% to $7.5 million in Q4 ‘09
compared to $9.2 million in Q4 ’08 and was $7.4 million in Q3 ’09.
Intelligroup recorded a
foreign exchange (fx) loss of $0.2 million in Q4 ’09. This compares to an fx
loss of $1.4 million in Q4 ’08 and an fx gain of $0.03 million in Q3
’09.
Q4 ’09 net income was
$3.3 million, or $0.08 per diluted share, compared to Q4 ’08 net income of $1.0
million, or $0.02 per diluted share, and Q3 ’09 net income of $3.6 million, or
$0.09 per share.
Intelligroup generated
cash from operating activities of $0.8 million in Q4 ’09 and $14.8 million for
the full year 2009. The Company’s ability to generate higher free cash during
2009 was a result of the improved margins, an active cash management discipline
as well as an expected freeing of working capital related to the decline in
revenue. Intelligroup ended the year with $23.2 million of cash, cash
equivalents and short-term investments, an increase of $12.0 million from
year-end 2008.
Alok Bajpai, CFO, added,
“During 2009 we were able to achieve a return to sequential growth quarter on
quarter while delivering stronger operating margins, higher net income and EPS
and forging a robust balance sheet. We have entered 2010 well positioned to
participate favorably as the IT market rebounds and we continue to deliver on
our operating and financial metrics.”
| Intelligroup Q4 2009 Results, 2/16/10 | page 3 |
About Intelligroup,
Inc.
Intelligroup is an ERP-focused enterprise applications systems integrator providing consulting, implementation, testing, application management, infrastructure management, and other IT services for global corporations. Intelligroup possesses deep expertise and proprietary tools in industry-specific enterprise solutions and has been recognized by clients, partners including SAP and Oracle and IT industry analysts for consistently exceeding expectations. Intelligroup won the 2009 global annual Pinnacle Award from SAP, was a finalist in the Oracle 2009 Titan Awards, was recognized by NASSCOM as a Top 100 Innovator, and was named one of the World’s top outsourcing service providers on the IAOP® 2010 Global Outsourcing 100® list. Intelligroup’s global service delivery model combines onsite teams and offshore development capabilities to deliver solutions that accelerate results, reduce costs and generate meaningful ROI for clients. For more information please visit www.intelligroup.com.
Intelligroup is an ERP-focused enterprise applications systems integrator providing consulting, implementation, testing, application management, infrastructure management, and other IT services for global corporations. Intelligroup possesses deep expertise and proprietary tools in industry-specific enterprise solutions and has been recognized by clients, partners including SAP and Oracle and IT industry analysts for consistently exceeding expectations. Intelligroup won the 2009 global annual Pinnacle Award from SAP, was a finalist in the Oracle 2009 Titan Awards, was recognized by NASSCOM as a Top 100 Innovator, and was named one of the World’s top outsourcing service providers on the IAOP® 2010 Global Outsourcing 100® list. Intelligroup’s global service delivery model combines onsite teams and offshore development capabilities to deliver solutions that accelerate results, reduce costs and generate meaningful ROI for clients. For more information please visit www.intelligroup.com.
Safe Harbor for Forwarding-looking
Statements:
Certain statements contained herein, including statements regarding the development of services and markets, future demand for services and the effect of the share repurchases by the Company and other statements regarding matters that are not historical facts, are forward-looking statements (as defined in the Private Securities Litigation Reform Act of 1995), including future financial performance and the effect of share repurchase by the Company. Such forward-looking statements include risks and uncertainties; consequently, actual results may differ materially from those expressed or implied thereby. Factors that could cause actual results to differ materially include, but are not limited to the impact of the general economic conditions and the strength of the global economic recovery, variability of quarterly operating results, continued uncertainty of the IT market and revenues derived from application management business, uncertainty in revenues for traditional professional services offerings, loss of one or more significant customers, reliance on large projects, concentration of revenue, volatility caused by fluctuations in the currency markets, ability to attract and retain professional staff, dependence on key personnel, ability to manage growth effectively, risks associated with strategic partnerships, various project-associated risks, including termination with short notice, substantial competition, risks associated with intellectual property rights, risks associated with international operations and other risk factors detailed under the caption "Risk Factors" in Intelligroup's annual report on Form 10-K for the period ended December 31, 2008. Intelligroup disclaims any intention or obligation to update forward looking statements as a result of developments occurring after the date of this press release.
Certain statements contained herein, including statements regarding the development of services and markets, future demand for services and the effect of the share repurchases by the Company and other statements regarding matters that are not historical facts, are forward-looking statements (as defined in the Private Securities Litigation Reform Act of 1995), including future financial performance and the effect of share repurchase by the Company. Such forward-looking statements include risks and uncertainties; consequently, actual results may differ materially from those expressed or implied thereby. Factors that could cause actual results to differ materially include, but are not limited to the impact of the general economic conditions and the strength of the global economic recovery, variability of quarterly operating results, continued uncertainty of the IT market and revenues derived from application management business, uncertainty in revenues for traditional professional services offerings, loss of one or more significant customers, reliance on large projects, concentration of revenue, volatility caused by fluctuations in the currency markets, ability to attract and retain professional staff, dependence on key personnel, ability to manage growth effectively, risks associated with strategic partnerships, various project-associated risks, including termination with short notice, substantial competition, risks associated with intellectual property rights, risks associated with international operations and other risk factors detailed under the caption "Risk Factors" in Intelligroup's annual report on Form 10-K for the period ended December 31, 2008. Intelligroup disclaims any intention or obligation to update forward looking statements as a result of developments occurring after the date of this press release.
Intelligroup, the
Intelligroup logo and ‘Creating the Intelligent Enterprise’, are trademarks of
the Company. 4Sight, 4Sight Plus, PowerUp Services, HotPac Analyzer and
Uptimizer are service marks of Intelligroup.
All other trademarks and company names mentioned are the property of their respective owners.
All other trademarks and company names mentioned are the property of their respective owners.
INVESTOR CONTACTS:
Norberto Aja, David Collins
Jaffoni & Collins Incorporated
(212) 835-8500
itig@jcir.com
Norberto Aja, David Collins
Jaffoni & Collins Incorporated
(212) 835-8500
itig@jcir.com
(tables
to follow)
| Intelligroup Q4 2009 Results, 2/16/10 | page 4 |
INTELLIGROUP, INC.
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2009 AND 2008
(In thousands except par value)
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2009 AND 2008
(In thousands except par value)
| December 31 | December 31 | |||||||
| 2009 | 2008 | |||||||
| ASSETS | (Unaudited) | |||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | 20,783 | $ | 10,161 | ||||
| Short-term investments | 2,441 | 1,031 | ||||||
| Accounts receivable, less allowance for doubtful accounts of $2,176 | ||||||||
| and $1,996 at December 31, 2009 and 2008, respectively | 23,677 | 23,805 | ||||||
| Unbilled services, less allowance for doubtful accounts of $136 and | ||||||||
| $20 at December 31, 2009 and 2008, respectively | 6,433 | 10,456 | ||||||
| Deferred tax asset, current portion | 644 | 545 | ||||||
| Prepaid expenses and prepaid taxes | 1,092 | 1,115 | ||||||
| Other current assets | 741 | 617 | ||||||
| Total current assets | 55,811 | 47,730 | ||||||
| Property and equipment, net | 3,085 | 5,041 | ||||||
| Goodwill and intangibles | 1,888 | 1,941 | ||||||
| Restricted cash and investments | 1,202 | 882 | ||||||
| Prepaid taxes - Non-adjustable, less allowance for doubtful accounts of | ||||||||
| $104 and $95 at December 31, 2009 and 2008, respectively | 1,130 | 393 | ||||||
| Deferred taxes and other assets | 4,287 | 4,243 | ||||||
| Total Assets | $ | 67,403 | $ | 60,230 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Line of credit borrowings | $ | — | $ | 125 | ||||
| Accounts payable | 1,418 | 1,820 | ||||||
| Liability on derivative instruments | 389 | 2,621 | ||||||
| Accrued payroll and related taxes | 10,899 | 11,609 | ||||||
| Accrued expenses and other current liabilities | 4,416 | 4,930 | ||||||
| Deferred revenue, current portion | 1,353 | 735 | ||||||
| Tax payable | 763 | - | ||||||
| Capital lease and deferred rent, current portion | 481 | 805 | ||||||
| Total current liabilities | 19,719 | 22,645 | ||||||
| Obligations under capital lease, net of current portion | 214 | 533 | ||||||
| Deferred revenue, net of current portion | 322 | 454 | ||||||
| Other long-term liabilities | 844 | 1,556 | ||||||
| Total Liabilities | 21,099 | 25,188 | ||||||
| SHARE HOLDERS' EQUITY | ||||||||
| Preferred stock, $.01 par value, 5,000 shares authorized, none issued or | ||||||||
| outstanding | — | — | ||||||
| Common stock, $.01 par value, 65,000 shares authorized | ||||||||
| at December 31, 2009 and 2008 & 41,137 and 42,114 shares issued | ||||||||
| and outstanding at December 31, 2009 and 2008, respectively | 411 | 421 | ||||||
| Additional paid-in capital | 71,090 | 72,089 | ||||||
| Accumulated deficit | (23,300 | ) | (34,100 | ) | ||||
| Accumulated other comprehensive loss | (1,897 | ) | (3,368 | ) | ||||
| Total shareholders’ equity | 46,304 | 35,042 | ||||||
| Total liabilities and shareholders’ equity | $ | 67,403 | $ | 60,230 | ||||
| Intelligroup Q4 2009 Results, 2/16/10 | page 5 |
INTELLIGROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Thousands except per share data)
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Thousands except per share data)
| THREE MONTHS ENDED DEC 31 | TWELVE MONTHS ENDED DEC 31, | ||||||||||||||||
| 2009 | 2008 | 2009 | 2008 | ||||||||||||||
| (Unaudited) | (Unaudited) | ||||||||||||||||
| Revenue | $ | 32,959 | $ | 37,305 | $ | 126,518 | $ | 157,101 | |||||||||
| Cost of revenue | $ | 21,857 | 25,181 | 84,117 | 107,635 | ||||||||||||
| Gross profit | 11,102 | 12,124 | 42,401 | 49,466 | |||||||||||||
| Selling, general and administrative expenses | 6,884 | 8,471 | 27,984 | 35,938 | |||||||||||||
| Depreciation and amortization | 586 | 714 | 2,492 | 2,399 | |||||||||||||
| Total operating expenses | 7,470 | 9,185 | 30,476 | 38,337 | |||||||||||||
| Operating income | 3,632 | 2,939 | 11,925 | 11,129 | |||||||||||||
| Interest income | 42 | 37 | 141 | 297 | |||||||||||||
| Interest expense | (23 | ) | (107 | ) | (80 | ) | (535 | ) | |||||||||
| Foreign currency transaction gain (loss), net | (159 | ) | (1,411 | ) | (18 | ) | (3,126 | ) | |||||||||
| Other income (expense), net | 199 | (43 | ) | 892 | 436 | ||||||||||||
| Income before income taxes | 3,691 | 1,415 | 12,860 | 8,201 | |||||||||||||
| Provision for income taxes | 431 | 418 | 2,060 | 1,512 | |||||||||||||
| Net income | $ | 3,260 | $ | 996 | $ | 10,800 | $ | 6,689 | |||||||||
| Basic net income per share | $ | 0.08 | $ | 0.02 | $ | 0.26 | $ | 0.16 | |||||||||
| Diluted net income per share | $ | 0.08 | $ | 0.02 | $ | 0.26 | $ | 0.16 | |||||||||
| Weighted average no. of common shares | |||||||||||||||||
| outstanding | - Basic | 41,090 | 42,160 | 41,360 | 42,155 | ||||||||||||
| - Diluted | 42,099 | 42,580 | 41,733 | 42,387 | |||||||||||||
| Intelligroup Q4 2009 Results, 2/16/10 | page 6 |
INTELLIGROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR TWELVE MONTHS ENDED DECEMBER 31, 2009 AND 2008
(USD in thousands)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR TWELVE MONTHS ENDED DECEMBER 31, 2009 AND 2008
(USD in thousands)
| TWELVE MONTHS | |||||||
| ENDED DEC 31, | |||||||
| 2009 | 2008 | ||||||
| (Unaudited) | |||||||
| Cash flows from operating activities: | |||||||
| Net income | $ | 10,800 | $ | 6,689 | |||
| Adjustments to reconcile net income to net | |||||||
| Cash provided by operating activities: | |||||||
| Depreciation and amortization | 3,075 | 2,759 | |||||
| Provision for doubtful accounts and advances | 999 | 1,146 | |||||
| Stock compensation expense | 588 | 1,055 | |||||
| Profit on sale of investment | (147 | ) | — | ||||
| Unrealized interest | (84 | ) | — | ||||
| Unrealized gain on investments | (553 | ) | — | ||||
| Loss on sale of fixed assets | 127 | — | |||||
| Unrealized exchange (gain)/loss | 283 | 2,424 | |||||
| Deferred taxes | (556 | ) | (77 | ) | |||
| Changes in operating assets and liabilities: | |||||||
| Accounts receivable | (26 | ) | (1,434 | ) | |||
| Unbilled services | 3,877 | 742 | |||||
| Prepaid taxes | (683 | ) | — | ||||
| Prepaid expenses and other current assets | (188 | ) | (1,235 | ) | |||
| Other assets | 271 | (107 | ) | ||||
| Restricted cash and investments | 733 | 3,350 | |||||
| Derivative liability | (2,642 | ) | (541 | ) | |||
| Accounts payable | (573 | ) | (2,224 | ) | |||
| Accrued payroll and related taxes | (829 | ) | 502 | ||||
| Accrued expenses and other current liabilities | (659 | ) | 297 | ||||
| Deferred revenue, Current portion | 598 | (1,659 | ) | ||||
| Deferred revenue, net of current portion | (146 | ) | — | ||||
| Income taxes payable | 492 | 1,027 | |||||
| Other long-term liabilities | 12 | 515 | |||||
| Net cash provided by operating activities | $ | 14,769 | $ | 13,229 | |||
| Cash flows from investing activities: | |||||||
| Purchase of property and equipment | (1,300 | ) | (1,523 | ) | |||
| Proceeds from sale of equipment | — | 84 | |||||
| Purchases of investments | (23,882 | ) | (3,131 | ) | |||
| Proceeds from sale of investments | 22,571 | — | |||||
| Net cash used in investing activities | $ | (2,611 | ) | $ | (4,570 | ) | |
| Cash flows from financing activities: | |||||||
| Principal payments under capital leases | (242 | ) | (569 | ) | |||
| Stock repurchase | (1,848 | ) | (129 | ) | |||
| Proceeds from exercise of stock options | 252 | 44 | |||||
| Net change in line of credit borrowings | — | (6,034 | ) | ||||
| Net cash used in financing activities | $ | (1,838 | ) | $ | (6,688 | ) | |
| Effect of foreign currency exchange rate changes on cash | 302 | (229 | ) | ||||
| Net increase (decrease) in cash and cash equivalents | 10,622 | 1,742 | |||||
| Cash and cash equivalents - beginning of year | $ | 10,161 | $ | 8,419 | |||
| Cash and cash equivalents - end of the period | $ | 20,783 | $ | 10,161 | |||