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,
		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