Revenue Increases 105.0%; Revenue Less Repair Payments
Increases 48.8%, Over Corresponding Quarter in the Prior Fiscal Year
MUMBAI, India & NEW YORK--(BUSINESS WIRE)--Feb. 13, 2007--WNS
(Holdings) Limited (NYSE: WNS), a leading provider of offshore
business process outsourcing (BPO) services, today announced strong
results for the quarter ended December 31, 2006, and revised upward
its guidance for the 2007 fiscal year.
"We continue to see many positive dynamics within the BPO industry
which has resulted in the third consecutive quarter of exceptional
revenue growth," said Neeraj Bhargava, Group Chief Executive Officer.
"We are ramping up client contracts more quickly than previously
estimated, and accordingly have exceeded our internal expectations for
third-quarter revenue growth and maintained our margins."
During its previous earnings call held on November 15, 2006, WNS
said it expected the third fiscal quarter to be a period of
consolidation following two quarters of strong growth in fiscal 2007.
"The rate of growth of net income was lower than the rate of
growth of revenue for the three months ended December 31, 2006,
primarily because of $2.4 million in deferred revenue recognized
during the three months ended December 31, 2005," said Zubin Dubash,
Group Chief Financial Officer. "Quarterly net income growth would have
been substantially higher, excluding the impact of such deferred
revenue recognized during the three months ended December 31, 2005."
Financial Highlights: Third Quarter Ended December 31, 2006
-- Quarterly revenue of $102.0 million, up 105.0% from the
corresponding quarter last year.
-- Quarterly revenue less repair payments of $57.2 million, up
48.8% from the corresponding quarter last year.
-- Quarterly net income of $7.1 million, up 21.0% from the
corresponding quarter last year.
-- Quarterly net income (excluding amortization of intangible
assets and share-based compensation expense) of $8.9 million,
up 18.9% from the corresponding quarter last year.
-- Quarterly basic income per ADS of 18 cents, up from 17 cents
for the corresponding quarter last year.
-- Quarterly basic income per ADS (excluding amortization of
intangible assets and share-based compensation expense) of 22
cents, unchanged from the corresponding quarter last year.
Financial Highlights: Nine Months Ended December 31, 2006
-- Revenue of $241.6 million, up 61.2% from the corresponding
nine months last year.
-- Revenue less repair payments of $155.6 million, up 46.2% from
the corresponding nine months last year.
-- Net income of $17.7 million, up 20.9% from the corresponding
nine months last year.
-- Net income (excluding amortization of intangible assets and
share-based compensation expense) of $21.6 million, up 29.1%
from the corresponding nine months last year.
-- Basic income per ADS of 47 cents, up from 46 cents for the
corresponding nine months last year.
-- Basic income per ADS (excluding amortization of intangible
assets and share-based compensation expense) of 57 cents, up
from 52 cents for the corresponding nine months last year.
Reconciliations of non-GAAP financial measures to GAAP operating
results are included at the end of this release.
Key Announcements
-- As part of a previously announced succession plan, former
chairman and co-founder David Tibble will retire from the
company, effective March 31, 2007.
-- Steve Dunning assumed Mr. Tibble's responsibilities as
chairman of WNS U.K. as of January 3, 2007. Mr. Dunning is a
fellow co-founder of WNS and formerly worked with Mr. Tibble
as managing director of WNS U.K.
-- Due diligence activities related to setting up an operations
center in Eastern Europe is ongoing.
Fiscal 2007 Guidance
WNS also updated its guidance for the fiscal year ending March 31,
2007:
-- Revenue less repair payments revised upwards from the
previously estimated level of slightly higher than $208
million. It is now estimated to be slightly higher than $213
million.
-- Net income guidance (excluding amortization of intangible
assets and share-based compensation expense) remains unchanged
at $30.5 million to $32.5 million.
-- Capital expenditure for the year also remains unchanged at
approximately $26 million.
"We continue to execute well on our business strategy and are very
pleased with this quarter's results," Mr. Bhargava said. "We believe
we are well positioned to achieve our adjusted targets for fiscal
2007."
Conference call
WNS will host a conference call on February 13, at 8 a.m. (EST) to
discuss the company's quarterly results. To participate, callers can
dial 800-295-3991 from within the U.S. or +1-617-614-3924 from any
other country. The participant passcode is 1352836. A replay will be
made available online at www.wnsgs.com for a period of three months
beginning two hours after the end of the call.
About WNS
WNS is a leading provider of offshore business process
outsourcing, or BPO, services. We provide comprehensive data, voice
and analytical services that are underpinned by our expertise in our
target industry sectors. We transfer the execution of the business
processes of our clients, which are typically companies located in
Europe and North America, to our delivery centers located primarily in
India. We provide high quality execution of client processes, monitor
these processes against multiple performance metrics, and seek to
improve them on an ongoing basis.
Our ADSs are listed on the New York Stock Exchange. For more
information, please visit our website at www.wnsgs.com.
About Non-GAAP Financial Measures
For financial statement reporting purposes, the company has two
reportable segments: WNS Global BPO and WNS Auto Claims BPO. In the
auto claims segment, WNS provides claims-handling and
accident-management services, in which it arranges for automobile
repairs through a network of third-party repair centers. In its
accident-management services, WNS acts as the principal in dealings
with the third-party repair centers and clients.
The amounts invoiced to WNS clients for payments made by WNS to
third-party repair centers are reported as revenue. As the company
wholly subcontracts the repairs to the repair centers, it evaluates
its financial performance based on revenue less repair payments to
third party repair centers, which is a non-GAAP measure.
WNS believes revenue less repair payments reflects more accurately
the value addition of the business process services it directly
provides to its clients. The presentation of this non-GAAP information
is not meant to be considered in isolation or as a substitute for the
company's financial results prepared in accordance with U.S. GAAP. WNS
revenue less repair payments may not be comparable to similarly titled
measures reported by other companies due to potential differences in
the method of calculation.
Safe Harbor Statement under the provisions of the United States
Private Securities Litigation Reform Act of 1995
This news release contains forward-looking statements, as defined
in the safe harbor provisions of the U.S. Private Securities
Litigation Reform Act of 1995. These statements involve a number of
risks, uncertainties and other factors that could cause actual results
to differ materially from those that may be projected by these forward
looking statements. These risks and uncertainties include but are not
limited to a slowdown in the U.S. and Indian economies and in the
sectors in which our clients are based, a slowdown in the BPO and IT
sectors world-wide, competition, the success or failure of our past
and future acquisitions, attracting, recruiting and retaining highly
skilled employees, technology, legal and regulatory policy as well as
other risks detailed in our reports filed with the U.S. Securities and
Exchange Commission. These filings are available at www.sec.gov. We
may, from time to time, make additional written and oral
forward-looking statements, including statements contained in our
filings with the Securities and Exchange Commission and our reports to
shareholders. You are cautioned not to place undue reliance on these
forward-looking statements, which reflect management's current
analysis of future events. We undertake no obligation to publicly
update or revise any forward-looking statements, whether as a result
of new information, future events or otherwise.
WNS (HOLDINGS) LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Amounts in thousands, except share and per share data)
Three months ended Nine months ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2006 2005 2006 2005
Revenue 101,999 49,759 241,615 149,889
Cost of Revenue (refer to
note (a) below) 81,250 34,088 186,017 108,408
Gross Profit 20,749 15,671 55,598 41,481
Operating expenses:
Selling, general and
administrative expenses
(refer to note (b) as
below) 13,973 9,668 36,180 24,978
Amortization of
intangible assets 490 230 1,441 349
Operating income 6,286 5,773 17,977 16,154
Other income, net 1,331 113 1,250 178
Interest expense - (114) (101) (375)
Income before income
taxes 7,617 5,772 19,126 15,957
(Provision)/Benefit for
income taxes (525) 90 (1,418) (1,313)
Net income 7,092 5,862 17,708 14,644
Basic income per share $0.18 $0.17 $0.47 $0.46
Diluted income per share $0.17 $0.17 $0.44 $0.43
Basic weighted average
ordinary shares
outstanding 40,067,072 33,705,909 37,869,784 32,121,555
Diluted weighted average
ordinary shares
outstanding 42,664,150 35,140,551 40,546,010 34,300,207
Note:
Includes the following
share-based compensation
amounts:
(a) Cost of Revenue 376 - 530 -
(b) Selling, general and
administrative expenses 900 1,357 1,869 1,694
Non-GAAP measure note:
In addition to its reported operating results in accordance with
U.S. generally accepted accounting principles (US GAAP). WNS has
included in the table below non-GAAP operating measures that the
Securities and Exchange Commission defines as "non-GAAP financial
measures". Management believes that such non-GAAP 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. The non-GAAP 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 to those financial statements
should be carefully evaluated.
Reconciliation of revenue less repair payments (non-GAAP) Amount in
to revenue (GAAP) thousands
Three months ended Nine months ended
--------------------------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2006 2005 2006 2005
--------------------------- ----------
--------------------------- ----------
Revenue less repair payments
(Non-GAAP) 57,192 38,435 155,665 106,461
Add: Payments to repair centers 44,807 11,324 85,950 43,428
Revenue (GAAP) 101,999 49,759 241,615 149,889
Reconciliation of selling, general and administrative
expense excluding share-based compensation expense (non-
GAAP) to selling, general and administrative expenses Amount in
(GAAP) thousands
Three months ended Nine months ended
---------------------------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2006 2005 2006 2005
---------------------------------------
---------------------------------------
Selling, general and
administrative expenses
(excluding share-based
compensation expense) (Non-
GAAP) 13,073 8,311 34,311 23,284
Add: Share-based compensation
expense 900 1,357 1,869 1,694
Selling, general and
administrative expenses (GAAP) 13,973 9,668 36,180 24,978
Reconciliation of operating income excluding share-based
compensation and amortization of intangible assets (non- Amount in
GAAP) to operating income (GAAP) thousands
Three months ended Nine months ended
--------------------------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2006 2005 2006 2005
--------------------------------------
--------------------------------------
Operating income (excluding
share-based compensation and
amortization of intangible
assets) (Non-GAAP) 8,052 7,360 21,817 18,197
Less: Share-based compensation
expense 1,276 1,357 2,399 1,694
Less: Amortization of intangible
assets 490 230 1,441 349
Operating income (GAAP) 6,286 5,773 17,977 16,154
Reconciliation of net income excluding share-based
compensation expense and amortization of intangible Amount in
assets (non-GAAP) to net income (GAAP) thousands
Three months ended Nine months ended
---------------------------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2006 2005 2006 2005
---------------------------------------
---------------------------------------
Net income (excluding share-
based compensation and
amortization of intangible
assets) (Non-GAAP) 8,858 7,449 21,548 16,687
Less: Share-based compensation
expense 1,276 1,357 2,399 1,694
Less: Amortization of
intangible assets 490 230 1,441 349
Net income (GAAP) 7,092 5,862 17,708 14,644
Reconciliation of basic income per ADS (excluding amortization of
intangibles assets and share-based compensation expense) to basic
income per ADS (non-GAAP to GAAP)
Three months
ended Nine months ended
------------------------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2006 2005 2006 2005
------------------------------------
------------------------------------
Basic income per ADS (excluding
amortization of intangible assets
and share based compensation
expense) (Non-GAAP) $0.22 $0.22 $0.57 $0.52
Less: Adjustments for amortization
of intangible assets and share-
based compensation expense $0.04 $0.05 $0.10 $0.06
Basic income per ADS (GAAP) $0.18 $0.17 $0.47 $0.46
WNS (HOLDINGS) LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and per share data)
Dec. 31, March 31,
2006 2006
(Unaudited)
----------------------
ASSETS
Current assets
Cash and cash equivalents $103,319 $18,549
Accounts receivable, net of allowance of $442
and $373, respectively 39,136 28,081
Funds held for clients 4,553 3,047
Deferred tax assets - 353
Prepaid expenses 3,029 1,225
Other current assets 6,472 6,140
----------------------
Total current assets 156,509 57,395
Goodwill 37,218 33,774
Intangible assets, net 7,439 8,713
Property and equipment, net 42,914 30,623
Deposits 2,746 2,990
Deferred tax assets 1,666 1,308
----------------------
TOTAL ASSETS $248,492 $134,803
======================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $19,051 $23,074
Accrued employee costs 15,357 11,336
Deferred revenue 11,016 8,994
Income taxes payable 589 726
Obligations under capital leases - current 26 184
Deferred tax liabilities 1,376 368
Other current liabilities 16,116 8,781
----------------------
Total current liabilities 63,531 53,463
Obligation under capital leases - non current - 2
Deferred rent 976 824
Deferred tax liabilities - non current 531 2,350
Shareholders' equity:
Preference shares, $0.20 (10 pence) par value
Authorized: 1,000,000 shares and none,
respectively, Issued and outstanding - none
Ordinary shares, $0.20 (10 pence) par value
Authorized: 50,000,000 shares and 40,000,000
shares, respectively
Issued and outstanding: 40,238,516 and
35,321,511 shares, respectively 6,204 5,290
Additional paid-in-capital 143,574 62,228
Ordinary shares subscribed, 16,998 and 4,346
shares, respectively 52 10
Retained earnings 21,812 4,104
Deferred share-based compensation (57) (582)
Accumulated other comprehensive income 11,869 7,114
----------------------
Total shareholders' equity 183,454 78,164
----------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $248,492 $134,803
======================
CONTACT:
Investors:
WNS (Holdings) Limited
Jay Venkateswaran
Senior VP -- Investor Relations
+1 212 599 6960
ir@wnsgs.com
or
Media:
The Torrenzano Group
Al Bellenchia, +1 212 681 1700 ext. 156
abellenchia@torrenzano.com
SOURCE:
WNS (Holdings) Limited
