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& Events > Press Releases > 2003 |
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Teaneck, NJ
- April 21, 2003 - Cognizant Technology
Solutions Corporation (Nasdaq: CTSH),
a leading provider of IT services, today
announced financial results for the first
quarter ended March 31, 2003.
Revenue for the first quarter increased
to $74.5 million, up 60 percent from $46.5
million in the first quarter of 2002,
and up 11% sequentially from the fourth
quarter of 2002. On a GAAP basis, net
income for the first quarter increased
to $10.2 million, or $0.15 per diluted
share. Pro forma earnings per share, which
excludes $2.0 million in one-time, non-recurring
transaction costs related to the recently
completed IMS Health exchange offer, was
$0.18, up 50% from $0.12 in the year ago
quarter. Operating margin for the quarter
was 19.5%, compared to 19.8% in the fourth
quarter of 2002 and 19.7% in the first
quarter of 2002.
"Cognizant is growing faster than its
peer group because of our continuing success
in winning and ramping up large strategic
clients," said Kumar Mahadeva, Chairman
and Chief Executive Officer. "Our 4th
Generation business model is focused on
partnering with customers to achieve substantial
reductions in cost structure while rationalizing
and streamlining their applications portfolio
to better align with business needs, a
process we call "transforming while performing".
New clients rapidly ramp up their relationships
because Cognizant's business model can
quickly deliver substantial business results,
and because Cognizant is able to lead
clients through the change process."
"Financial Services customers continue
to account for a growing portion of our
revenue mix, rising to 47% compared to
43% last quarter due to the recent ramp-up
of several large new customers," said
Gordon Coburn, Chief Financial Officer.
"Our existing clients who we have worked
with for over a year remain highly satisfied
as well, accounting for 80% of our business
this quarter. DSO, including unbilled
receivables, remained strong at 57 days.
Total headcount increased to almost 6,500,
reflecting the strength of our business
outlook for 2003."
Conference Call
Cognizant will host a conference call
on April 21, at 5:00 PM. (EST) to discuss
the Company's quarterly results. To listen
to the call please dial 800-953-6584 domestic
and 706-645-0156 internationally. 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 800-642-1687 and entering "9672732"
from two hours after the end of the call
until 11:59 p.m. (EST) on April 25, 2003. |
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About Cognizant
Cognizant Technology Solutions Corporation
(Nasdaq:CTSH) is a leading provider of
IT services. Focused on delivering strategic
information technology solutions that
address the complex business needs of
its clients, Cognizant provides applications
management, development, integration,
and re-engineering, infrastructure management,
business process outsourcing, and a number
of related services such as enterprise
consulting, technology architecture, program
management and change management through
its onsite/offshore outsourcing model.
Cognizant's nearly 6,500 employees are
committed to partnerships that sustain
long-term, proven value for customers
by delivering high-quality, cost-effective
solutions through its development centers
in India and Ireland, and onsite client
teams. Cognizant maintains P-CMM and SEI-CMM
Level 5 assessments from an independent
third-party assessor and was recently
ranked as the top information technology
company in Forbes' 200 Best Small Companies
in America and in BusinessWeek's Hot Growth
Companies. Further information about Cognizant
can be found at http://www.cognizant.com.
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| This press release
includes statements which may constitute
forward-looking statements made pursuant
to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995.
Although Cognizant believes the expectations
contained in such forward-looking statements
are reasonable, it can give no assurance
that such expectations will prove correct.
This information may involve risks and uncertainties
that could cause actual results to differ
materially from the forward-looking statements.
Potential risks and uncertainties that could
cause or contribute to differences include,
but are not limited to: (i) the significant
fluctuations of Cognizant's quarterly operating
results caused by a variety of factors,
many of which are not within Cognizant's
control, including (a) the number, timing,
scope and contractual terms of application
design, development and maintenance projects,
(b) delays in the performance of projects,
(c) the accuracy of estimates of costs,
resources and time to complete projects,
(d) seasonal patterns of Cognizant's services
required by customers, (e) levels of market
acceptance for Cognizant's services, (f)
potential adverse impacts of new tax legislation,
and (g) the hiring of additional staff;
(ii) changes in Cognizant's billing and
employee utilization rates; (iii) Cognizant's
ability to manage its growth effectively,
which will require Cognizant (a) to increase
the number of its personnel, particularly
skilled technical, marketing and management
personnel, (b) to find suitable acquisition
candidates to support geographic expansion,
and (c) to continue to develop and improve
its operational, financial, communications
and other internal systems, in the United
States, India and Europe; (iv) Cognizant's
reliance on key customers and large projects;
(v) the highly competitive nature of the
markets for Cognizant's services; (vi) Cognizant's
ability to successfully address the continuing
changes in information technology, evolving
industry standards and changing customer
objectives and preferences; (vii) Cognizant's
reliance on the continued services of its
key executive officers and leading technical
personnel; (viii) Cognizant's ability to
attract and retain a sufficient number of
highly skilled employees in the future;
(ix) Cognizant's ability to protect its
intellectual property rights; (x) the concentration
of Cognizant's operations in India and the
related geo-political risks of local and
cross-border conflicts; (xi) terrorist activity,
the threat of terrorist activity, and responses
to and results of terrorist activity and
threats, including, but not limited to,
effects, domestically and/or internationally,
on Cognizant, its personnel and facilities,
its customers and suppliers, financial markets
and general economic conditions; (xii) the
effects, domestically and/or internationally,
on Cognizant, its personnel and facilities,
its customers and suppliers, financial markets
and general economic conditions arising
from hostilities involving the United States
in Iraq or elsewhere; (xiii) a breach of
the Distribution Agreement entered into
between the Company and IMS Health; (xiv)
a change in the Company's intent to repatriate
undistributed earnings; and (xv) general
economic conditions. Such forward-looking
statements include risks and uncertainties;
consequently, actual transactions and results
may differ materially from those expressed
or implied thereby.
Additional information on factors that
may affect the business and financial
results of the companies can be found
in filings of the companies made from
time to time 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, |
| 2003 |
2002 |
| Revenues |
$71,941 |
$41,650 |
| Revenues - related party |
2,575 |
4,834 |
| Total revenues |
74,516 |
46,484 |
| Cost of revenues |
40,959 |
24,189 |
| Gross profit |
33,557 |
22,295 |
| Selling, general and administrative
expenses |
16,411 |
11,222 |
| Depreciation and amortization expense |
2,622 |
1,927 |
| Income from operations |
14,524 |
9,146 |
| Other income: |
| Interest income |
421 |
429 |
| Other expense, net |
(197) |
(159) |
| Total other income |
224 |
270 |
| Income before provision for income
taxes |
14,748 |
9,416 |
| Provision for income taxes |
(2,560) |
(2,307) |
| Pro forma Net income (Excluding
split-off costs) |
12,188 |
7,109 |
| Split-off costs, net of tax benefit |
(2,010) |
- |
| Net income |
$ 10,178 |
$ 7,109 |
| Pro forma Basic EPS* (Excluding
split-off costs) |
$ 0.20 |
$ 0.12 |
| Pro forma Diluted EPS* (Excluding
split-off costs) |
$ 0.18 |
$ 0.12 |
| Basic earnings per share* |
$ 0.17 |
$ 0.12 |
| Diluted earnings per share* |
$ 0.15 |
$ 0.12 |
| Weighted average number of common
shares outstanding* |
61,319 |
58,095 |
| Weighted average number of common
and dilutive shares outstanding* |
65,993 |
61,701 |
* Reflects a 3-for-1 stock split distributed
on April 1, 2003. |
|
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| COGNIZANT TECHNOLOGY
SOLUTIONS CORPORATION |
| CONDENSED CONSOLIDATED
STATEMENTS OF FINANCIAL POSITION (Unaudited) |
| (In thousands) |
| |
March
31, 2003 |
December
31, 2002 |
| Assets |
| Current Assets |
|
|
| Cash and cash equivalents |
$ 126,647 |
$ 126,211 |
| Trade accounts receivable, net of
allowances of $847 and $861, respectively |
40,610 |
35,092 |
| Trade accounts receivable - related
party |
- |
1,605 |
| Unbilled accounts receivable |
6,223 |
4,308 |
| Current tax asset |
2,639 |
3,711 |
| Other current assets |
6,423 |
4,907 |
| Total Current Assets |
182,542 |
175,834 |
| Property and equipment - net |
42,766 |
39,090 |
| Goodwill - net |
878 |
878 |
| Other Intangible assets - net |
12,530 |
12,870 |
| Other assets |
2,976 |
2,801 |
| Total Assets |
$ 241,692 |
$ 231,473 |
| Liabilities and Stockholder's
Equity |
| Current Liabilities |
|
|
| Accounts Payable |
$ 5,643 |
6,948 |
| Accrued and other current liabilities |
31,882 |
34,539 |
| Total Current Liabilities |
37,525 |
41,487 |
| Deferred income taxes |
24,537 |
24,505 |
| Total Liabilities |
62,062 |
65,992 |
| Stockholders' Equity |
179,630 |
165,481 |
| Total Liabilities
and Stockholders' Equity |
$ 241,692 |
$ 231,473 |
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Contact |
Investors
Contact |
Media
Contact |
Gordon Coburn
Chief Financial Officer
201-678-2712 |
Stephanie
Prince/Kirin Smith |
Brian Maddox/Scot
Hoffman
FD Morgen-Walke
212-850-5600 |
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