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Teaneck, NJ – April 27, 2005
– Cognizant Technology Solutions
Corporation (NASDAQ: CTSH), a leading
provider of IT services, today announced
its financial results for the first quarter
ended March 31, 2005. Highlights
– First Quarter 2005
- Quarterly revenue increased to $181.7 million, up 52% from the year-ago quarter
- Net income increased to $32.0 million, up 62% from the year-ago quarter
- Diluted quarterly EPS of $0.22 compared to $0.14 in the year-ago quarter (on a split-adjusted basis)
Revenue for the first quarter increased
to $181.7 million, up 52% from $119.7
million in the first quarter of 2004.
Net income for the first quarter increased
to $32.0 million, or $0.22 per diluted
share compared to $19.8 million or $0.14
per diluted share (on a split-adjusted
basis) in the first quarter of 2004. Operating
margin for the quarter increased to 20.5%,
compared to 19.8% in the first quarter
of 2004. "We are pleased to
report that Cognizant has delivered another
quarter of strong financial results, driven
by continued demand for premium IT solutions
from our onsite/offshore model,"
said Lakshmi Narayanan, President and
CEO of Cognizant. "Our ability to
offer comprehensive business-aligned IT
solutions, coupled with our vertical industry
expertise, resulted in Cognizant not only
expanding upon existing client relationships,
but also winning new strategic clients
across a range of industries including
financial services, healthcare and retail/manufacturing/logistics.
Cognizant will continue to invest in the
development of additional best-of-breed
service offerings, enhancing our ability
to meet existing and potential clients’
growing demand for a strategic partner
that can manage a broad range of increasingly
complex projects. We believe this will
provide a solid platform for the Company’s
future growth." Cognizant
added over 1,700 associates in the first
quarter, ending the quarter with approximately
17,000 employees. The Company also completed
its acquisition of the IT consultancy
Fathom in mid-April, strengthening its
telecommunications vertical practice. 2005
Outlook – Second Quarter & Full
Year
Based on current
visibility, the Company is now providing
the following guidance:
- Second quarter 2005 revenue anticipated to be at least $206 million, including an expected contribution from Fathom of approximately $6 million
- Second quarter 2005 expected diluted EPS of $0.23
- Fiscal 2005 revenue anticipated to be at least $870 million, including an expected contribution from Fathom of approximately $20 million
- Fiscal 2005 diluted EPS of approximately $0.99
- Total headcount by end of Fiscal 2005 expected to reach 23,000
"Demand for Cognizant’s services
remains strong as we experience healthy
interest for a broad range of offerings
across all of our key verticals,"
said Gordon Coburn, Chief Financial Officer
of Cognizant. "Our ongoing investment
in physical and intellectual infrastructure
continues to result in industry-leading
performance. Based on our continued success
in winning new strategic clients and penetrating
our existing relationships, combined with
the positive demand environment, we have
increased our revenue, earnings, and headcount
expectations for Fiscal 2005." Conference
Call
Cognizant will
host a conference call on April 27th,
at 10:00 a.m. (ET) to discuss the Company’s
quarterly results. To listen to the call
please dial (888) 652-6834 domestically
or (706) 679-3288 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 for domestic callers and (706)
645-9291 for international callers and
entering "5629978" from two
hours after the end of the call until
11:59 p.m. (ET) on May 5, 2005. |
| |
About Cognizant
Cognizant (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 more than 17,000 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 onsite client teams. Cognizant
maintains P-CMM and SEI-CMM Level 5 assessments
from an independent third-party assessor.
Cognizant was recently named to the NASDAQ-100
Index, recognized as Forbes' Best Small
Company in America for the second consecutive
year, and ranked as the top information
technology company 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,
the accuracy of which are necessarily subject
to risks, uncertainties and assumptions
as to future events that may not prove to
be accurate. Factors that could cause actual
results to differ materially from those
expressed or implied include general economic
conditions and the factors discussed in
our most recent Form 10-K and other filings
with the Securities and Exchange Commission.
Cognizant undertakes no obligation to update
or revise any forward-looking statements,
whether as a result of new information,
future events or otherwise. |
| COGNIZANT TECHNOLOGY
SOLUTIONS CORPORATION |
| CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (Unaudited) |
| (In thousands, except
per share data) |
| |
Three
Months Ended |
| March
31, |
| 2005 |
2004 |
| Revenues |
$181,681 |
$119,744 |
| Cost of revenues |
97,994 |
65,010 |
| Gross profit |
83,687 |
54,734 |
| Selling, general and administrative
expenses |
41,410 |
27,182 |
| Depreciation and amortization expense |
5,090 |
3,865 |
| Income from operations |
37,187 |
23,687 |
| Other income/(expense): |
|
|
| Interest income |
1840 |
840 |
| Other income/(expense), net |
(124) |
301 |
| Total other income/(expense) |
1,716 |
1,141 |
| Income before provision for income
taxes |
38,903 |
24,828 |
| Provision for income taxes |
6,925 |
5,040 |
| Net income |
$31,978 |
$19,788 |
| Basic earnings per share* |
$0.24 |
$ 0.15 |
| Diluted earnings per share* |
$0.22 |
$ 0.14 |
| Weighted average number of common
shares outstanding |
134,485 |
128,881 |
| Weighted average number of common
and dilutive shares outstanding |
145,821 |
141,651 |
*Reflects a 2-for-1 stock split effected
by a 100% stock dividend paid on June
17, 2004. |
|
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| COGNIZANT TECHNOLOGY SOLUTIONS
CORPORATION |
| CONDENSED CONSOLIDATED
STATEMENT OF FINANCIAL POSITION (Unaudited) |
| (In thousands) |
| |
March
31, 2005 |
December
31, 2004 |
| Assets |
| Current Assets |
|
|
| Cash and cash equivalents* |
$174,988 |
$199,296 |
| Short-term investments* |
139,406 |
115,465 |
| Trade accounts receivable, net of
allowances of $1,971 and $1,560 respectively |
112,452 |
96,363 |
| Unbilled Accounts Receivable |
18,742 |
14,154 |
| Deferred income tax assets |
21,528 |
16,815 |
| Other current assets |
15,263 |
11,904 |
| Total Current Assets |
482,379 |
453,997
|
| Property and equipment - net |
94,638 |
90,705 |
| Goodwill |
9,684 |
9,701 |
| Other Intangible assets - net |
11,520 |
12,126 |
| Other assets |
6,626 |
6,216 |
| Total Assets |
$604,847 |
$572,745 |
| Liabilities and Stockholders'
Equity |
| Current Liabilities |
|
|
| Accounts payable |
$13,107 |
$11,190 |
| Accrued expenses and other liabilities |
83,427 |
103,870 |
| Total Current Liabilities |
96,534 |
115,060
|
| Deferred income tax liabilities |
1,227 |
4,156 |
| Total Liabilities |
97,761 |
119,216 |
| Stockholders' Equity |
507,086 |
453,529 |
| Total Liabilities
and Stockholders' Equity |
$604,847 |
$572,745 |
| *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 |
|
|
Gordon Coburn
Chief Financial Officer
201-678-2712 |
Investors:
Ian Bailey/Peter Schmidt |
Press:
Brian Maddox/Scot Hoffman
Financial Dynamics
212-850-5600
shoffman@fd-us.com |
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