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Teaneck, NJ, April 18, 2000 - Cognizant Technology Solutions Corp. (Nasdaq: CTSH), an e-business and application management solutions provider, today announced financial results for the first quarter ended March 31, 2000.
Revenue for the first quarter of 2000 increased 33 percent to $27.1 million, from $20.4 million in the first quarter of 1999. Non-Y2K revenue increased 77 percent from the prior year period. Net income for the quarter ended March 31, 2000 increased 25 percent to $3.5 million, as compared to $2.8 million in the 1999 first quarter. Diluted earnings per share increased 21 percent to $0.17 from $0.14 in the year ago period.
"This quarter marks the resumption of double-digit sequential revenue growth as we end our Y2K transition" said Kumar Mahadeva, Chairman and Chief Executive Officer "Y2K declined to 2 percent of revenue from 7 percent in the fourth quarter of 1999 and 26 percent in the prior year quarter. We won a number of new e-business deals, and the percentage of revenue from e-business increased to 20 percent from roughly 10 percent in the fourth quarter of 1999. Application management also contributed strongly to our revenue growth."
"To meet the growing demand for our e-business and application management work, Cognizant increased billable headcount to 2,140, up 570 professionals from year ago levels," stated Gordon Coburn, Chief Financial Officer. "Also, employee retention remained high as our annualized turnover rate was 11 percent for the quarter."
"The significant sales and marketing investments that we undertook beginning in the second quarter of 1999 resulted in operating margins of 18.9 percent compared to 19.9 percent in the year ago quarter. These investments are now paying off as we have experienced sequential margin expansion over the last three quarters, and expect continued leverage from these investments as we progress through the year," added Coburn.
Cognizant Technology Solutions will host a conference call at 10:00 a.m. (eastern) to discuss the Company's quarterly results. The call will be broadcast live via the Internet at Cognizant's web site, www.Cognizant.com.
Please go to the web site at least fifteen minutes prior to the call to register, download and install any necessary audio software. |
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About Cognizant
Cognizant delivers high-quality, cost-effective, full life-cycle solutions to complex software development and management problems. Cognizant employs more than 2,000 computer science and engineering professionals globally at its client sites and eight development centers in India. The company specializes in e-business and application management. Cognizant has been assessed at SEI/CMM Level 4 and is ISO 9001 certified. Based on sustained revenue and earnings growth, Forbes magazine named Cognizant the best small company in America in its Nov. 1, 1999 listing of the "200 Best Small Companies." For more information, visit Cognizant on the Web at http://www.cognizant.com. |
| Certain statements contained herein, including statements regarding the development of the Company's services, markets and future demand for the Company's services, projections on future growth potential, 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). 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, variability of quarterly operating results, reliance on large projects, concentration of revenue, ability to attract and retain professional staff, dependence on key personnel, ability to manage growth effectively, risks associated with rapid technological advances, risks associated with possible acquisitions, risks associated with the Company's strategic partnerships, various project-associated risks, substantial competition, general economic conditions, risks associated with intellectual property rights, risks associated with international operations and other risk factors listed from time to time in the Company's filings and reports with the Securities and Exchange Commission. |
| COGNIZANT
TECHNOLOGY SOLUTIONS CORPORATION |
| CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (Unaudited) |
| (In thousands, except
per share data) |
| |
Three Months Ended |
|
March 31 |
|
2000 |
1999 |
| Revenues |
$23,564 |
$17,135 |
| Revenues-related party |
3,506 |
3,291 |
| Total revenues |
27,070 |
20,426 |
| Cost of revenues |
13,939 |
10,711 |
| Gross Profit |
13,131 |
9,715 |
| Selling, general and administrative
expenses |
7,037 |
5,014 |
| Depreciation and amortization expense |
971 |
631 |
| Income from operations |
5,123 |
4,070 |
| Other income: |
| Interest income |
505 |
276 |
| Other, net |
(99) |
62 |
| Total other income
|
406 |
338 |
| Income before provision for income
taxes |
5,529 |
4,408 |
| Provision for income taxes |
(2,068) |
(1,649) |
| Net income |
$3,461 |
$2,759 |
| Basic earnings per share * |
$0.19 |
$0.15 |
| Diluted earnings per share * |
$0.17 |
$0.14 |
| Weighted average number of common
shares outstanding * |
18,500 |
18,302 |
| Weighted average number of common
and dilutive shares outstanding *
|
20,187 |
19,218 |
* Reflects a 2-for-1 stock split on
March 16, 2000. |
|
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| COGNIZANT TECHNOLOGY
SOLUTIONS CORPORATION |
| CONDENSED CONSOLIDATED
STATEMENT OF FINANCIAL POSITION
(Unaudited) |
| (In thousands) |
| |
March
31, 2000 |
December
31, 1999 |
| Assets |
| Current Assets |
|
|
| Cash and cash equivalents* |
$40,360 |
$42,641 |
| Trade accounts receivable, net
of allowances of $238 and $225,
respectively |
12,871 |
8,166 |
| Trade accounts receivable - related
party |
1,719 |
1,848 |
| Unbilled Accounts Receivable |
1,236 |
1,071 |
| Unbilled Accounts Receivable -
related party |
618 |
73 |
| Other current assets |
3,740 |
2,912 |
| Total Current Assets |
60,544 |
56,711 |
| Property and equipment - net |
9,376 |
9,474 |
| Goodwill - net |
1,433 |
1,513 |
| Other assets |
1,456 |
1,328 |
| Total Assets |
$72,809 |
$69,026 |
| Liabilities
and Stockholders' Equity |
| Current Liabilities |
|
|
| Accounts payable |
$1,771 |
$1,435 |
| Accrued and other current liabilities |
9,731 |
11,769 |
| Total Current Liabilities |
11,502 |
13,204 |
| Deferred income taxes |
12,000 |
10,361 |
| Total Liabilities |
23,502 |
23,565 |
| Stockholders' Equity |
49,307 |
45,461 |
| Total Liabilities
and Shareholders' Equity |
$72,809 |
$69,026 |
| *In
the first quarter, the Company began
to classify its investment in auction-rate
securities as short-term investments.
These investments were included
in cash and equivalents in previous
periods ($94.15) million as of December
31, 2004), and such amounts have
been reclassified in the accompanying
financial statements to conform
to the current period classification.
This change in classification had
no effect on the amounts of total
current assets, total assets, net
income or cash flow from operations
of the Company. |
|
| Contact |
Investors Contact |
Media Contact |
Gordon Coburn
Chief Financial Officer
201-678-2712 |
Gordon McCoun/Peter Schmidt |
Brian Maddox/Scot Hoffman
Financial Dynamics
212-850-5600
shoffman@fd-us.com |
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