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Press Releases |
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New York/ New Delhi - May 7, 2008:
ExlService Holdings, Inc. (Nasdaq: EXLS), a leading
provider of transformation and outsourcing solutions,
today announced its financial results for the quarter
ended March 31, 2008.
The Company's highlights for the first quarter of
2008 include:
| • |
Revenues for the quarter were $50.9
million compared to $39.9 million in the quarter
ended March 31, 2007, an increase of 27.8%. |
| • |
Gross margin for the quarter was
36.5% compared to 38.6% in the quarter ended
March 31, 2007. |
| • |
Operating margin for the quarter
was 9.9% compared to 12.4% in the quarter
ended March 31, 2007; adjusted operating margin
for the quarter, excluding the impact of stock-based
compensation expense and amortization of intangibles,
was 12.2% compared to 15.9% in the quarter
ended March 31, 2007. |
| • |
Net income to common stockholders
for the quarter was $6.8 million compared
to $5.4 million in the quarter ended March
31, 2007. |
| • |
Diluted earnings per share to common
stockholders was $0.23 for the quarter compared
to $0.19 in the quarter ended March 31, 2007. |
Reconciliations of adjusted financial measures to
GAAP are included at the end of this release.
Vikram Talwar, Executive Chairman of EXL, commented:
"By focusing on providing transformational
outsourcing solutions to our clients, maintaining
our leading client satisfaction scores and high-quality
global delivery, and continually expanding our service
capabilities, EXL has delivered on its expectations
for the first quarter of 2008. The recently announced
senior management changes at EXL should position
the leadership team to deliver continued growth
of our business."
Rohit Kapoor, President and CEO of EXL, commented:
"The first quarter of 2008 saw many exciting
developments for EXL. We completed preparations
for the launch of our new Philippine operations
center with a major U.S. insurance provider and
added key management talent to the organization.
I am particularly enthusiastic about the strong
demand in our transformation services business despite
the difficult economic environment and the positive
reception we are receiving from clients for our
integrated transformation and outsourcing solutions."
Matt Appel, CFO of EXL, commented: "EXL's first
quarter results reflected 1% revenue growth as compared
to the fourth quarter of 2007 and stable operating
margins as reflected in our guidance for 2008. Our
first quarter revenues and operating margin were
driven by accelerating growth in our transformation
services business and flat revenues in our outsourcing
business attributable to the 3% depreciation of
the British Pound as compared to the fourth quarter
of 2007. As a result of our first quarter results
and visibility to the rest of 2008, we are maintaining
our calendar year 2008 revenue guidance at $205
to $210 million, adjusted operating margin guidance
at 12% and earnings per share guidance at $0.80
to $0.85 per diluted share."
Financial Highlights -- First Quarter 2008
| • |
Revenues for the quarter ended March 31,
2008 increased 27.8% to $50.9 million from
$39.9 million in the quarter ended March 31,
2007. First quarter revenues grew by 1.1%
as compared to the quarter ended December
31, 2007 due partially to strong sequential
growth of 9.5% in transformation services
revenues offset by the adverse impact of depreciation
of the British Pound on outsourcing revenues.
Outsourcing revenues for the first quarter
of 2008 of $41.7 million reflects growth of
27.3% as compared to the first quarter of
2007. Research and analytics revenues for
the first quarter of 2008 of $5.0 million
grew 17.3% as compared to the first quarter
of 2007. Advisory services revenues of $4.3
million for the first quarter of 2008 reflects
growth of 48.9% as compared to the first quarter
of 2007. |
| • |
Gross margin for the quarter ended March
31, 2008 was 36.5% compared to 38.6% for the
quarter ended March 31, 2007 and 39.3% for
the quarter ended December 31, 2007. First
quarter 2008 gross margin decreased as compared
to the previous quarter due to the impact
of exchange rate fluctuations. |
| • |
Operating margin for the quarter ended
March 31, 2008 was 9.9%, compared to 12.4%
for the quarter ended March 31, 2007 and 9.9%
for the quarter ended December 31, 2007. Adjusted
operating margin, excluding the impact of
stock-based compensation expense and amortization
of intangibles, for the quarter ended March
31, 2008 was 12.2% compared to 15.9% for the
quarter ended March 31, 2007 and 12.8% for
the quarter ended December 31, 2007. First
quarter 2008 operating margin was negatively
impacted as compared to the quarter ended
December 31, 2007 by unfavorable exchange
rate fluctuations as well as start-up costs
attributable to our new Philippine operations
center. |
| • |
Net income to common stockholders for the
quarter ended March 31, 2008 was $6.8 million
compared to $5.4 million for the quarter ended
March 31, 2007 and $9.8 million for the quarter
ended December 31, 2007. Net income for the
first quarter of 2008 was negatively impacted
as compared to the quarter ended December
31, 2007 by a reduction in interest income
due to lower market interest rates, lower
gains from foreign exchange hedge contracts
and a higher effective tax rate (8.0% as compared
to -11.3%). |
| • |
Revenues generated from our largest client
represented 23.5% of total revenues for the
quarter ended March 31, 2008 as compared to
27.7% for the quarter ended March 31, 2007.
Revenues generated from our three largest
clients represented 52.2% of total revenues
for the quarter ended March 31, 2008 as compared
to 58.9% for the quarter ended March 31, 2007. |
Business Highlights -- First Quarter 2008
| • |
Announced key management appointments and
organization changes including the appointment
of Vikram Talwar as Executive Chairman, Rohit
Kapoor as President and CEO, and Pavan Bagai
as Chief Operating Officer. |
| • |
Appointed Rembert de Villa as Head of Transformation
Services. Rembert joins EXL with over 23 years
of global management consulting leadership
experience, primarily in the financial services
industry. Transformation Services is comprised
of Research and Analytics, Risk Advisory services
and Six-Sigma based Process Reengineering
services. |
| • |
Substantially completed build-out of our
Philippines operations center and commenced
operations in April 2008 with a major U.S.
insurance provider. |
| • |
Transformation Services revenues grew 9.5%
as compared to the previous quarter based
on the commencement of new work with existing
Outsourcing Services customers and the initiation
of five new customer relationships. |
| • |
Outsourcing Services migrated 20 new processes
for nine clients during the quarter; this
revenue growth was offset by a decrease in
revenues due to the impact of foreign currency
fluctuations and a decrease in revenues from
our second largest customer. |
As of March 31, 2008, EXL had a headcount of approximately
10,500 individuals (including personnel managed
under structured client service agreements) representing
an increase of approximately 500 from the fourth
quarter of 2007. The attrition rate for billable
employees during the first quarter was 32% as compared
to 44% for the first quarter of 2007 and 30% for
the fourth quarter of 2007.
2008 Outlook
Based on current visibility, the Company is providing
the following guidance based on current exchange
rates:
Calendar year 2008 guidance remains unchanged
at:
| • |
Revenues of $205 to $210 million. |
| • |
Adjusted operating margin, excluding the
impact of stock-based compensation expense
and amortization of intangibles, of 12%. |
| • |
GAAP EPS of $0.80 to $0.85 per diluted share. |
Second quarter of 2008 expectation that operating
margin will be negatively impacted by the cost of
annual salary increments and costs associated with
the opening of our Philippines operations center.
Conference Call
EXL will host a conference call on Wednesday, May
7, at 10:00 a.m. (ET) to discuss the Company's quarterly
results and discuss the Company's operating performance
and financial outlook. The conference call will
be available live via the Internet by accessing
the EXL web site at www.exlservice.com, where the
accompanying presentation can also be accessed.
Please go to the web site at least fifteen minutes
prior to the call to register, download and install
any necessary audio software.
To listen to the conference call via phone, please
dial +1-866-713-8564 or 1-617-597-5312 and enter
"13850005". For those who cannot access
the live broadcast, a replay will be available by
dialing +1-888-286-8010 or +1-617-801-6888 and enter
"27925721" from two hours after the end
of the call until 11:59 p.m. (EST) on May 14, 2008.
The replay will also be available at the EXL web
site.
ExlService Holdings, Inc. (Nasdaq: EXLS-News) is
a recognized business solutions provider. EXL's
service offerings provide a competitive edge to
its clients by transforming and outsourcing business
processes. Transformation services enable continuous
improvement of client processes by bringing together
EXL's capabilities in reengineering including Six
Sigma process improvement, research & analytics,
and risk advisory services. EXL's outsourcing services
include a full spectrum of business process services
from offshore delivery centers requiring ongoing
process management skills. Headquartered in New
York, EXL primarily serves the needs of Global 1000
companies in the banking, financial services, insurance,
utilities, healthcare, telecommunications and transportation
sectors. Find additional information about EXL at
http://www.exlservice.com.
This press release contains forward-looking
statements. You should not place undue reliance
on those statements because they are subject to
numerous uncertainties and factors relating to the
Company's operations and business environment, all
of which are difficult to predict and many of which
are beyond the Company's control. Forward-looking
statements include information concerning the Company's
possible or assumed future results of operations,
including descriptions of its business strategy.
These statements often include words such as "may,"
"will," "should," "believe,"
"expect," "anticipate," "intend,"
"plan," "estimate" or similar
expressions. These statements are based on assumptions
that we have made in light of management's experience
in the industry as well as its perceptions of historical
trends, current conditions, expected future developments
and other factors it believes are appropriate under
the circumstances. You should understand that these
statements are not guarantees of performance or
results. They involve known and unknown risks, uncertainties
and assumptions. Although the Company believes that
these forward-looking statements are based on reasonable
assumptions, you should be aware that many factors
could affect the Company's actual financial results
or results of operations and could cause actual
results to differ materially from those in the forward-looking
statements. These factors are discussed in more
details in the Company's filings with the Securities
and Exchange Commission, including the Company's
Annual Report on Form 10-K for the year ended December
31, 2007. These risks could cause actual results
to differ materially from those implied by forward-looking
statements in this release.
You should keep in mind that any forward-looking
statement made herein, or elsewhere, speaks only
as of the date on which it is made. New risks and
uncertainties come up from time to time, and it
is impossible to predict these events or how they
may affect the Company. The Company has no obligation
to update any forward-looking statements after the
date hereof, except as required by federal securities
laws.
Web: http://www.exlservice.com |
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