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Teaneck, NJ - October 16, 2001 - Cognizant Technology Solutions Corp. (Nasdaq: CTSH), a leading e-business and application management solutions provider, today announced financial results for the third quarter ended September 30, 2001.
Revenue for the third quarter increased to $45.5 million, up 23 percent from $37.1 million in the third quarter of 2000. Net income for the quarter ended September 30, 2001 increased 28 percent to $6.1 million, as compared to $4.8 million in the third quarter of 2000. Diluted earnings per share increased 25 percent to $0.30 from $0.24 in the year ago period.
"Application management services continued to drive revenue as large organizations seek out long-term strategic partners to provide cost-effective and value-added offshore outsourcing," said Kumar Mahadeva, Chairman and Chief Executive Officer. "Although some smaller clients significantly reduced spending on new development, the larger application management clients continued to ramp up spending in the quarter. At the same time we were able to increase our operating margins through tight expense controls to deliver on our prior EPS goals. It is important to note that despite the current geopolitical tension we are seeing no change in the perception of the strategic importance of the offshore model to large blue chip clients. Key clients have indicated to us that offshore outsourcing is expected to continue to win an increasing share of total IT spending, and therefore we remain cautiously optimistic about our outlook."
"We added 12 new clients in the third quarter including UnitedHealthCare, Intermountain Health Care, Fletcher Allen Health Care, Sears, Roebuck and Co., Levi Strauss & Co., and Vauxhall Motors among others," said Gordon Coburn, Chief Financial Officer. "Revenue from application management increased 39 percent to contribute 53 percent of revenue. Of particular strength was our healthcare vertical, which increased to 26 percent of our revenue mix. To meet this and future demand we continued our recruiting efforts increasing our global headcount during the third quarter to 3,950 from 3,580."
"This quarter we continued to generate significant cash flow from operations. Our cash balance increased approximately $12 million to over $79 million. Additionally, despite the cash conscious environment, our DSOs continued to lead the industry at 55 days as customers continue to be highly satisfied with our services," concluded Mr. Coburn.
Conference Call
Cognizant Technology Solutions will host
a conference call today, Tuesday October
16, at 10:00 a.m. (eastern) to discuss
the Company's quarterly results. To listen
to the call please dial 415-247-8519.
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 "19802037" from
two hours after the end of the call until
11:59 p.m. (EST) on October 19, 2001. |
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About Cognizant
Cognizant is a leading provider of custom
software development, integration and
maintenance services that link 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 3,900 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.
|
| COGNIZANT
TECHNOLOGY SOLUTIONS CORPORATION |
| CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) |
| (In
thousands, except per share data) |
| |
Three Months Ended |
Nine
Months Ended |
|
September 30, |
September
30, |
|
2001 |
2000 |
2001 |
2000 |
| Revenues |
$40,403 |
$33,376 |
$120,803 |
$84,992 |
| Revenues-related party |
5,099 |
3,731 |
13,514 |
10,986 |
| Total revenues |
45,502 |
37,107 |
134,317 |
95,978 |
| Cost of revenues |
23,109 |
19,110 |
68,859 |
49,425 |
| Gross profit |
22,393 |
17,997 |
65,458 |
46,553 |
| Selling, general and administrative
expenses |
11,441 |
9,673 |
34,306 |
25,068 |
| Depreciation and amortization expense |
1,629 |
1,245 |
4,566 |
3,242 |
| Income from operations |
9,323 |
7,079 |
26,586 |
18,243 |
| Other income: |
|
|
|
|
| Interest income |
643 |
732 |
2,006 |
1,779 |
| Other, net |
(209) |
(167) |
(604) |
(431) |
| Total other income |
434 |
565 |
1,402 |
1,348 |
| Income before provision for income
taxes |
9,757 |
7,644 |
27,988 |
19,591 |
| Provision for income taxes |
3,649 |
2,859 |
10,468 |
7,327 |
| Net income |
$6,108 |
$4,785 |
$17,520 |
$12,264 |
| Basic earnings per share * |
$0.32 |
$0.26 |
$0.93 |
$0.66 |
| Diluted earnings per share * |
$0.30 |
$0.24 |
$0.86 |
$0.61 |
| Weighted average number of common
shares outstanding * |
19,184 |
18,584 |
18,896 |
18,538 |
| Weighted average number of common
and dilutive shares outstanding * |
20,515 |
20,109 |
20,382 |
20,226 |
* Reflects a 2-for-1 stock split paid
on March 16, 2000 |
|
| |
| COGNIZANT TECHNOLOGY
SOLUTIONS CORPORATION |
| CONDENSED CONSOLIDATED
STATEMENT OF FINANCIAL POSITION
(Unaudited) |
| (In thousands) |
| |
September
30, 2001 |
December
31, 2000 |
| Assets |
| Current Assets |
|
|
| Cash and cash equivalents* |
$79,767 |
$61,976 |
| Trade accounts receivable, net
of allowances of $ 1,074 and $ 516,
respectively |
19,006 |
19,187 |
| Trade accounts receivable - related
party |
1,474 |
1,361 |
| Unbilled Accounts Receivable |
6,449 |
1,941 |
| Unbilled Accounts Receivable -
related party |
277 |
-- |
| Other current assets |
4,291 |
3,758 |
| Total Current Assets |
111,264 |
88,223 |
| Property and equipment - net |
22,197 |
15,937 |
| Goodwill - net |
957 |
1,195 |
| Investments |
1,955 |
1,955 |
| Other assets |
2,200 |
2,230 |
| Total Assets |
$138,573 |
$109,540 |
| Liabilities
and Stockholders' Equity |
| Current Liabilities |
|
|
| Accounts payable |
$2,995 |
$2,849 |
| Accounts payable - related party |
16 |
8 |
| Accrued and other current liabilities |
20,689 |
23,865 |
| Total Current Liabilities |
23,700 |
26,722 |
| Deferred income taxes |
22,377 |
16,702 |
| Total Liabilities |
46,077 |
43,424 |
| Stockholders' Equity |
92,496 |
66,116 |
| Total Liabilities
and Stockholders' Equity |
$138,573 |
$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. |
|
| 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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