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Teaneck, NJ - July 16, 2001 - Cognizant Technology Solutions Corp. (Nasdaq: CTSH), a leading e-business and application management solutions provider, today announced financial results for the second quarter ended June 30, 2001.
Revenue for the second quarter increased to $45.4 million, up 43 percent from $31.8 million in the second quarter of 2000. Net income for the quarter ended June 30, 2001 increased 46 percent to $5.8 million, as compared to $4.0 million in the second quarter of 2000. Diluted earnings per share increased 45 percent to $0.29 from $0.20 in the year ago period.
"In recent months we have seen an increasing number of blue chip companies start the process of selecting a long-term strategic partner for large scale offshore outsourcing," said Kumar Mahadeva, Chairman and Chief Executive Officer. "Cognizant has emerged as one of only a few premier vendors qualified to handle these large deployments, with high quality, large scale offshore capabilities and a track record of managing large end-to-end contracts; as a result we have had a high rate of success in closing these deals. In the second quarter we added 12 new customers including large blue chip clients such as MetLife, Providian Financial, eGM, The Regence Group, and several others."
"Revenue from application management increased 66 percent to account for 51 percent of our revenue mix as enterprises continue to focus on long-term, cost effective outsourcing. Although billing rates for application management are historically lower than the rates for e-Business development, application management offers higher utilization and a higher offshore mix, which allows us to maintain our margins at historical levels," stated Gordon Coburn, Chief Financial Officer.
"We are one of only a handful of firms who have been able to successfully position ourselves through rapidly changing technology cycles as evidenced by our 19th consecutive quarter of sequential revenue growth," stated Coburn. "This record of performance is a direct result of a strong and loyal customer base. Approximately 80 percent of our second quarter revenue came from customers who have utilized our services for more than a year. We remain confident in our ability to navigate through the IT slowdown and continue our strong financial performance."
Coburn added, "Our recent externally administered customer satisfaction survey showed a very high level of customer satisfaction, up from last year. Customer satisfaction is also reflected in our DSO levels which continued to be industry leading at 55 days. This is quite impressive given the cash conscious environment."
Conference Call
Cognizant Technology Solutions will host a conference call tomorrow, Tuesday July 17, at 10:00 a.m. (eastern) to discuss the Company's quarterly results. To listen to the call please dial 212-896-6154. The call will also 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. A replay will be made available on the web site at www.cognizant.com or by calling 858-812-6440 and entering "19283784" from two hours after the end of the call until 11:59 p.m. (EST) on July 20, 2001.
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About Cognizant Technology Solutions
Cognizant is a leading provider of custom
software development, integration and maintenance
services that links e-business with core
information systems for companies worldwide.
Cognizant operates under a high quality,
high value onsite/offshore model that enables
better, faster and more cost effective development
and deployment of large-scale systems across
a wide range of transaction intensive business
needs.
Its more than 3,500 employees are committed
to partnerships that sustain long-term,
proven value in order win in today's global
marketplace. Cognizant was listed as one
of the ``Best Small Companies in America,''
by Forbes and as the top solutions provider
and one of the top 200 Hot Companies by
Business Week. Cognizant has been assessed
at SEI/CMM Level 5, the highest possible
rating. For more information, visit Cognizant
on the web at 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.
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| COGNIZANT
TECHNOLOGY SOLUTIONS CORPORATION |
| CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (Unaudited) |
| (In thousands, except
per share data) |
| |
Three Months Ended June 30 |
Six
Months Ended June 30, |
| 2001 |
2000 |
2001 |
2000 |
| Revenues |
$40,414 |
$28,052 |
$80,400 |
51,616 |
| Revenues-related party |
4,997 |
3,749 |
8,415 |
7,255 |
| Total revenues |
45,411 |
31,801 |
88,815 |
58,871 |
| Cost of revenues |
23,381 |
16,376 |
16,376 |
30,315 |
| Gross profit |
22,030 |
15,425 |
43,065 |
28,556 |
| Selling, general and administrative
expenses |
11,657 |
8,358 |
22,865 |
15,395 |
| Depreciation and amortization expense |
1,499 |
1,026 |
2,937 |
1,997 |
| Income from operations |
8,874 |
6,041 |
17,263 |
11,164 |
| Other income: |
| Interest income |
617 |
542 |
1,363 |
1,047 |
| Other, net |
(150) |
(166) |
(395) |
(264) |
| Total other income |
467 |
376 |
968 |
783 |
| Income before provision for income
taxes |
9,341 |
6,417 |
18,231 |
11,947 |
| Provision for income taxes |
(3,494) |
(2400) |
(6,819) |
(4,468) |
| Net income |
$5,847 |
$4,017 |
$11,412 |
$7,479 |
| Basic earnings per share * |
$0.31 |
$0.22 |
$0.61 |
$0.40 |
| Diluted earnings per share * |
$0.29 |
$0.20 |
$0.56 |
$0.37 |
| Weighted average number of common
shares outstanding * |
18,913 |
18,535 |
18,801 |
18,518 |
| Weighted average number of common
and dilutive shares outstanding * |
20,464 |
20,175 |
20,329 |
20,194 |
* Reflects a 2-for-1 stock split paid
on March 16, 2000. |
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| COGNIZANT TECHNOLOGY
SOLUTIONS CORPORATION |
| CONDENSED CONSOLIDATED
STATEMENT OF FINANCIAL POSITION
(Unaudited) |
| (In thousands) |
| |
June
30, 2001 |
December
31 2000 |
| Assets |
| Current Assets |
|
|
| Cash and cash equivalents |
$ 67,659 |
$ 61,976 |
| Trade accounts receivable, net
of allowances of $ 1,069 and $ 516,
respectively |
20,142 |
19,187 |
| Trade accounts receivable - related
party |
3,081 |
1,361 |
| Unbilled Accounts Receivable |
4,322 |
1,941 |
| Unbilled Accounts Receivable -
related party |
34 |
-- |
| Other current assets |
4,483 |
3,758 |
| Total Current Assets |
99,721 |
88,223 |
| Property and equipment - net |
18,370 |
15,937 |
| Goodwill - net |
1,036 |
1,195 |
| Investments |
1,955 |
1,955 |
| Other assets |
2,201 |
2,230 |
| Total Assets |
$ 123,283 |
$ 109,540 |
| Liabilities
and Stockholders' Equity |
| Current Liabilities |
|
|
| Accounts payable |
$ 1,990 |
$ 2,849 |
| Accounts payable - related party |
30 |
8 |
| Accrued expenses and other current
liabilities |
18,171 |
23,865 |
| Total Current
Liabilities |
20,191 |
26,722 |
| Deferred income taxes |
20,139 |
16,702 |
| Total Liabilities |
40,330 |
43,424 |
| Stockholders' Equity |
82,953 |
66,116 |
| Total Liabilities
and Stockholders' Equity |
$ 123,283 |
$ 109,540 |
| *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. |
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| Contact |
Investors Contact |
Media Contact |
Gordon Coburn
Chief Financial Officer
201-678-2712 |
Corey Cutler/Ian
Hirsch |
Brian Maddox/Scot
Hoffman
Morgen-Walke Associates
212-850-5600 |
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