ExlService Holdings, Inc. - FORM 8-K/A - EX-99.1 - RECONCILIATION OF PRO FORMA ADJUSTED FINANCIAL TO PRO FORMA GAAP MEASURES - August 1, 2011

Attached files

file filename
8-K/A - AMENDMENT NO. 1 TO FORM 8-K - ExlService Holdings, Inc.d8ka.htm
EX-99.3 - UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION OF EXL - ExlService Holdings, Inc.dex993.htm
EX-99.2 - HISTORICAL FINANCIAL STATEMENTS OF OPI - ExlService Holdings, Inc.dex992.htm
EX-23.1 - CONSENT OF ERNST & YOUNG LLP - ExlService Holdings, Inc.dex231.htm

Exhibit 99.1

Reconciliation of Pro Forma Adjusted Financial Measures to Pro Forma GAAP Measures

In addition to its combined reported operating results in accordance with U.S. generally accepted accounting principles (“GAAP”), EXL has included in this Exhibit 99.1 to Form 8-K/A pro forma adjusted financial measures that the Securities and Exchange Commission defines as “non-GAAP financial measures.” Management believes that these pro forma adjusted financial measures, when read in conjunction with the Company’s reported results, can provide useful supplemental information for investors analyzing period to period comparisons of the Company’s results because the adjustments eliminate the impact of the following three items which do not directly link to the Company’s ongoing performance: (i) stock-based compensation and (ii) expenses associated with the amortization of acquisition-related intangibles. The Company also incurs significant non-cash charges for depreciation that may not be indicative of our ability to generate cash flow. The Company believes that providing the measure of adjusted EBITDA will help investors better understand the Company’s underlying financial performance and ability to generate cash flows from operations. Adjusted EBITDA does not represent cash flows from operations as defined by GAAP. The pro forma adjusted financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations from those financial statements should be carefully evaluated.

The following table shows the reconciliation of these pro forma adjusted financial measures from pro forma GAAP measures for the year ended December 31, 2010 and the quarter ended March 31, 2011:

Reconciliation of Adjusted Operating Income and Adjusted EBITDA

(Amounts in thousands)

 

     Year Ended
December 31,		     Quarter Ended
March  31,		  
     2010     2011  

Net income (GAAP)

    $ 28,746      $ 10,113   

add: Income tax provision and other income

      1,092        (531 ) 
  

 

 

    

 

 

  

Income from operations (GAAP)

      29,838        9,582   

add: Stock-based compensation expense

      8,815        2,328   

add: Amortization of acquisition-related intangibles

      5,337        1,464   
  

 

 

    

 

 

  

Adjusted operating income (Non-GAAP)

    $ 43,990      $ 13,374   
  

 

 

    

 

 

  

Adjusted operating income margin %

      13.4 %      14.1 % 

add: Depreciation

      17,400        5,060   

Adjusted EBITDA (Non-GAAP)

    $ 61,390      $ 18,434   

Adjusted EBITDA margin %

      18.7 %      19.5 % 

Reconciliation of Adjusted Net Income and Adjusted Diluted Earnings Per Share

(Amounts in thousands, except per share data)

 

     Year Ended
December 31,		     Quarter Ended
March  31,		  
     2010     2011  

Net income (GAAP)

    $ 28,746      $ 10,113   

add: Stock-based compensation expense

      8,815        2,328   

add: Amortization of acquisition-related intangibles

      5,337        1,464   

sub: Tax impact on stock-based compensation expense

      (3,716 )      (985 ) 

sub: Tax impact on amortization of acquisition-related intangibles

      (625 )      (206 ) 
  

 

 

    

 

 

  

Adjusted net income

    $ 38,557      $ 12,714   
  

 

 

    

 

 

  

Adjusted diluted earnings per share

    $ 1.27      $ 0.41   

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