IGATE Corporation (“IGATE” or the “Company”) (NASDAQ: IGTE), the New
Jersey-headquartered integrated technology and operations solutions
provider, today announced its financial results for the first quarter
ended March 31, 2015.
First Quarter Financial Highlights
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Revenues were $322.0 million
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Increased 6.6% compared to $302.2 million in the first quarter of
2014; 9.3% on a constant currency basis
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Decreased 2.9% sequentially compared to $331.5 million in the
fourth quarter of 2014 due to Forex impact and one-time revenue in
the last quarter; on a constant currency basis, sequential volume
growth after one time revenue adjustment is 1.5%
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Gross margin was 35.1%
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Compared to 37.5% in the first quarter of 2014
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Compared to 34.8% in the fourth quarter of 2014
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Adjusted EBITDA was $69.9 million
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Compared to $75.2 million in the first quarter of 2014
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Compared to $62.3 million in the fourth quarter of 2014
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Net income was $38.0 million
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Compared to $31.6 million in the first quarter of 2014
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Compared to $38.0 million in the fourth quarter of 2014
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Non-GAAP diluted earnings per share were $0.52
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Compared with $0.45 per share in the first quarter of 2014
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Compared with $0.52 per share in the fourth quarter of 2014
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GAAP Diluted earnings per share were $0.46
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Compared to $0.29 per share in the first quarter of 2014
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Compared to $(0.63) per share in the fourth quarter of 2014,
including $80 million paid to Series B preferred stock holders for
the induced conversion and $1.7 million towards write-off of
unamortized preferred stock issuance cost
-
The Company added 15 new clients during the first quarter
Ashok Vemuri, President and CEO, said, “I am pleased to witness a
steady start to the year. We increased revenues, delivered margin
improvement, and added a good number of new clients. We have made
significant investments around tools, methodology, automation and
program management which will take us to the next level in the coming
quarters. I am encouraged by the pace at which we are adding quality new
clients.”
Sujit Sircar, CFO, said, “I am pleased with our improvement in
our margins during the quarter. However, volatility in the foreign
exchange market remains a cause of concern, particularly the
appreciation of the US Dollar against other currencies which is
affecting our top line performance.”
IGATE-Capgemini Merger Agreement
The Company entered into a definitive merger agreement under which
Capgemini will acquire IGATE for cash consideration of $48 per share.
The merger agreement has been approved unanimously by both Capgemini’s
and IGATE’s boards of directors and is subject to the receipt of
regulatory approvals and other customary closing conditions. The
transaction is expected to close in the second half of 2015.
Commenting on the transaction, Ashok Vemuri, President and CEO, said:
“This is a seminal transaction for IGATE which will provide a wider
array of opportunities to our employees in the coming years. Our
management team has worked diligently to build and implement a business
model that would generate value for our customers, employees and
shareholders. We are pleased to have found a great partner for the
business and through this transaction we will effectively further enrich
the value proposition we offer to our clients.”
First Quarter Operating Results
Results for the first quarter ended March 31, 2015 and 2014,
respectively, on a GAAP and non-GAAP basis are provided in the table
below.
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Q1 FY'15
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Q1 FY'14
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Y/Y
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Net revenue ($Millions)
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322.0
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302.2
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6.6
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%
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Operating margin ($Millions)
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54.9
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61.2
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(10.3
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%)
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GAAP net income ($Millions)
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38.0
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31.6
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20.3
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%
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GAAP diluted EPS ($)
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0.46
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0.29
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58.6
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%
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Adjusted EBITDA ($Millions)
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69.9
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75.2
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(7.1
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%)
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Non-GAAP net income ($Millions)
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42.7
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36.4
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17.3
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%
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Non-GAAP diluted EPS ($)
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0.52
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0.45
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15.6
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%
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New customer wins in the quarter
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IGATE was selected as the strategic technology partner by a large
UK-based global insurance broker. The initial engagement has involved
transitioning the support of over 600 applications that are used by
its UK, USA and Reinsurance divisions. As part of this partnership,
IGATE will help them deploy their key applications across the globe to
create a consistent global client experience and drive new value added
services enabled by advanced analytics of complex risk and claims data.
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IGATE was selected by a leading American fast food restaurant chain
globally to assist the company maximize store reliability and increase
effectiveness of store systems technology with its proprietary “Store
in a Box” solution. As a strategic technology partner, IGATE will
assist this chain in over 40,000 stores worldwide. The partnership is
expected to leverage technology and data insights for improved store
reliability, predictability of operations and higher satisfaction for
store operators and customers.
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The largest industrial gases company in North and South America
selected IGATE to upgrade and re-engineer a Product Information
Management System (PIMS) that will allow the client to manage their
Product Information, Quality and Compliance Reports as well as content
and traceability. As part of this engagement, IGATE will assist the
client in evaluating and assessing current gaps in its Process and
Technology that support these processes.
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IGATE was selected by one of the largest privately held manufacturing,
trading, and investments corporations in the world to assist the
client in delivering effective Process and Technology Solutions. As
part of this partnership, IGATE will assist the client in developing
and deploying IT Solutions in areas of Legal, Finance and Supplier
Communications that will allow the client to reduce manual
intervention and oversight thereby allowing them to more efficiently
scale their business.
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An American investment management company selected IGATE as a
strategic technology partner to assist them with Data Management
services. The partnership will include multiple initiatives related to
data, including data governance & privacy consulting, data quality
assessment and data lineage for institutional and retail business
units using IGATE proprietary tools along with implementation of IBM
Infosphere.
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A Japanese multinational electronics and electrical equipment
manufacturing company selected IGATE for conceptualizing and designing
the next-generation In-Vehicle-Entertainment platform involving key
functionality in the areas of Audio, Video player, Bluetooth,
Smartphone pairing and call control along with Human Machine
Interface. The design is expected to improve driver safety and
efficiency significantly and leverage the next-generation Open-Source
Operating System.
Significant Events in the Quarter
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IGATE won the United States Excellence Award for 2015 for meeting and
exceeding industry benchmarks in various business and management
functions.
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IGATE further extended its partnership with Rio Tinto, a leading
global mining and metals company, by developing their Analytics
Excellence Centre in Pune, India to support the global growth and
development of Rio Tinto’s industry-leading Mine of the Future™
program.
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IGATE was ranked as a High Performer in HFS Blueprint Report for F&A
BPO Services and Enterprise Analytics Services.
-
IGATE was identified as a Major Contender in Everest PEAK Matrix for
Healthcare Payer BPO.
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Ashok Vemuri, President & CEO, IGATE was awarded with ‘The Outstanding
Entrepreneurship Awards’ at The Asia Pacific Entrepreneurship Awards –
2015. The award recognizes him for being a pioneer in the IT services
industry and for his outstanding achievements, efforts, contributions
and unflagging commitment towards organizational success,
entrepreneurship and expertise in global sourcing and technology-led
business transformation.
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Ashok Vemuri, President & CEO, IGATE received the coveted IAIR CEO of
the Year Award for the year 2014 in Hong Kong on March, 10, 2015. The
award recognizes outstanding business leaders who exhibit excellence
and success in areas such as innovation, organizational growth, and
personal commitment towards their businesses and people.
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The CFO India honored and awarded The League of Excellence Awards –
2015 to Sujit Sircar, EVP and Chief Finance Officer, in recognition of
his consistent and exemplary contributions to the world of finance at
the 5th Annual CFO100 program.
About IGATE
IGATE is a global leader in providing integrated technology and
operations-based solutions, headquartered in Bridgewater, New Jersey. As
a trusted partner to corporations in North America, Europe and Asia
Pacific, IGATE provides solutions to clients’ business challenges by
leveraging its technology and process capabilities, underwritten by an
understanding of domain and industry imperatives. With revenues over US$
1.3 billion, and a global employee talent capital of over 30,000, IGATE
offers productized applications and platforms that provide the necessary
competitive and innovation edge to clients across industries, through a
combination of speed, agility and imagination. IGATE is listed on NASDAQ
under the symbol IGTE.
Follow IGATE on Twitter: @IGATE_Corp
IGATE on Facebook: https://www.facebook.com/igatecorp
Use of non-GAAP Financial Measures
This press release contains non-GAAP financial measures as defined by
the Securities and Exchange Commission. These non-GAAP measures are not
in accordance with, or an alternative for, measures prepared in
accordance with generally accepted accounting principles in the United
States (“GAAP”) and may be different from non-GAAP measures used by
other companies. In addition, these non-GAAP measures are not based on
any comprehensive set of accounting rules or principles. Reconciliations
of these non-GAAP measures to their comparable GAAP measures are
included in the attached financial tables.
IGATE believes that non-GAAP measures have limitations in that they do
not reflect all of the amounts associated with IGATE's results of
operations as determined in accordance with GAAP and that these measures
should only be used to evaluate IGATE's results of operations in
conjunction with the corresponding GAAP measures. These non-GAAP
measures should be considered supplemental in nature and should not be
considered in isolation or be construed as being more important than
comparable GAAP measures.
IGATE believes that providing Adjusted EBITDA and non-GAAP net income
and non-GAAP diluted earnings per share in addition to the related GAAP
measures provides investors with greater transparency to the information
used by IGATE's management in its financial and operational
decision-making. These non-GAAP measures are also used by the Management
in connection with IGATE’s performance compensation programs.
More specifically, the non-GAAP financial measures contained herein
exclude the following items:
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Amortization of intangible assets: Intangible assets primarily
comprise customer relationships. We incur charges relating to the
amortization of these intangibles. These charges are included in our
GAAP presentation of earnings from operations, operating margin, net
income and diluted earnings per share. We exclude these charges for
purposes of calculating these non-GAAP measures.
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Stock-based compensation: Although stock-based compensation is an
important component of the compensation of IGATE’s employees and
executives, determining the fair value of the stock-based instruments
involves a high degree of judgment and estimation and the expense
recorded may not reflect the actual value realized upon the future
exercise or termination of the related stock-based awards.
Furthermore, unlike cash compensation, the value of stock-based
compensation is determined using a complex formula that incorporates
factors, such as market volatility, that are beyond the Company's
control. Management believes it is useful to exclude stock-based
compensation in order to better understand the long-term performance
of IGATE's core business.
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Merger and reorganization expenses: IGATE is merging and reorganizing
its overseas subsidiaries and branches with a view to simplifying the
corporate structure and has incurred legal and professional expenses
in this connection. Merger and reorganization is an infrequent
activity and expenses incurred in connection therein are inconsistent
in amount and significantly impacted by the timing and nature of the
reorganization. IGATE believes that eliminating these expenses for
purposes of calculating non-GAAP measures facilitates a more
meaningful evaluation of IGATE's current operating performance and
comparisons to its past operating performance.
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Preferred dividend and accretion to preferred stock: In 2011, we
issued 8.00% Series B Preferred Stock. We also incurred issuance costs
that have been netted against the proceeds received from the issuance
of the Series B Preferred Stock. Prior to its conversion to common
stock on November 4, 2014, the Series B Preferred Stock was being
accreted over a period of six years. Although, the effect of inclusion
of equivalent units of common stock towards convertible participating
preferred stock is anti-dilutive for GAAP purposes, the non-GAAP
diluted earnings per share has been calculated assuming the conversion
of all outstanding shares of preferred stock into equivalent units of
common stock. IGATE believes that eliminating these expenses as well
as inclusion of equivalent units of common stock towards the
preference shares till the date of conversion to compute basic and
diluted earnings per share for purposes of calculating these non-GAAP
measures facilitates a more meaningful evaluation of IGATE's current
operating performance and comparisons to its past operating
performance. Following the conversion on November 4, 2014, there were
no remaining issued and outstanding shares of Series B Preferred Stock.
From time to time in the future, there may be other items that IGATE may
exclude in presenting its financial results.
Forward-Looking Statements
This news release contains forward-looking statements that involve
risks, uncertainties and assumptions. If the risks or uncertainties ever
materialize or the assumptions prove incorrect, the results of the
Company may differ materially from those expressed or implied by such
forward-looking statements and assumptions. All statements regarding the
business outlook, the expected performance of the Company’s products and
services for its clients, and all other statements in this release other
than statements of historical fact are statements that could be deemed
forward-looking statements. Words such as “expect”, “potential”,
“believes”, “anticipates”, “plans”, “intends” and other similar
expressions are intended to identify such forward-looking statements.
Forward-looking statements in the press release include, without
limitation, statements regarding the business outlook, and the expected
performance of the Company’s products and services for its clients, and
other matters that involve known and unknown risks, uncertainties and
other factors that may cause results, levels of activity, performance or
achievements to differ materially from results expressed or implied by
this press release. Such risk factors include, among others: the
occurrence of any event, change or other circumstances that could give
rise to the termination of the merger agreement with Capgemini or a
failure to otherwise close the transaction, the effect the pending
merger has on our business, uncertain global economic conditions,
concentrated revenues, new organizational and operational strategies,
continued pricing pressures and the significant indebtedness which will
use a significant portion of its cash flows to service such
indebtedness, as a result of which the Company might not have sufficient
funds to operate its businesses in the manner it intends or has operated
in the past. Additional risks relating to the Company are set forth in
the Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2014, the Company’s Quarterly Report on Form 10-Q for the
fiscal quarter ended March 31, 2015 as well as the Company’s other
reports filed with the Securities and Exchange Commission. As in prior
periods, the financial information set forth in this release, including
tax-related items, reflects estimates based on information available at
this time. While the Company believes these estimates to be accurate,
actual results may differ materially from those contained in the
forward-looking statements in this press release. These amounts could
also differ materially from actual reported amounts in the Company’s
quarterly Report on Form 10-Q for the quarter ended March 31, 2015. The
Company assumes no obligation and does not intend to update these
forward-looking statements as circumstances change. This document does
not constitute an offer to purchase or to sell securities in any
jurisdiction.
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IGATE CORPORATION
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CONDENSED CONSOLIDATED BALANCE SHEETS
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(Amounts in thousands, except per share data)
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March 31,
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December 31,
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2015
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2014
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(unaudited)
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(audited)
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ASSETS
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Current assets:
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Cash and cash equivalents
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$
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88,714
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|
|
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$
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104,184
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Restricted cash
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|
9,783
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|
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5,305
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Short-term investments
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|
58,449
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|
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|
82,486
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|
Accounts receivable, net of allowances of $2,682 and $3,070,
respectively
|
|
|
|
|
191,094
|
|
|
|
|
|
|
|
|
|
|
174,159
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|
Unbilled revenues
|
|
|
|
|
80,189
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|
|
|
|
|
|
|
|
|
|
63,936
|
|
Prepaid expenses and other current assets
|
|
|
|
|
50,202
|
|
|
|
|
|
|
|
|
|
|
42,941
|
|
Prepaid income taxes
|
|
|
|
|
6,789
|
|
|
|
|
|
|
|
|
|
|
13,387
|
|
Deferred tax assets
|
|
|
|
|
557
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|
|
|
|
|
|
|
|
|
|
2,510
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|
Foreign exchange derivative contracts
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|
|
|
|
8,536
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|
|
|
|
|
|
|
|
|
|
3,200
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|
Receivable from related parties
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|
2,582
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|
|
|
|
|
|
|
|
|
|
5,898
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|
Total current assets
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|
|
|
|
496,895
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|
|
|
|
|
|
|
|
|
|
498,006
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|
|
|
|
|
|
|
|
|
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|
Deposits and other assets
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|
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|
|
18,502
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|
|
|
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|
|
|
|
|
|
19,469
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|
Restricted cash
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|
784
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|
|
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|
-
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Prepaid income taxes
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|
31,540
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|
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31,479
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|
Property and equipment, net of accumulated depreciation of $136,542
and $129,644, respectively
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243,894
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234,041
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Leasehold land
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74,291
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|
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|
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|
73,858
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|
Deferred tax assets
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|
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|
|
16,034
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|
|
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|
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|
16,104
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|
Goodwill
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|
433,981
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|
|
|
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|
|
|
|
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|
430,250
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|
Intangible assets, net
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|
|
|
|
101,623
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|
|
|
|
|
|
|
|
|
|
102,996
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|
Total assets
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|
$
|
1,417,544
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|
|
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|
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$
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1,406,203
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|
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|
|
|
|
|
|
|
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|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
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Current liabilities:
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|
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|
|
|
|
|
|
|
|
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|
|
Accounts payable
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|
|
|
$
|
9,830
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|
|
|
|
|
|
|
|
|
$
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11,168
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|
Line of credit
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|
|
|
107,000
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|
|
|
|
|
|
|
|
|
|
127,000
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|
Accrued payroll and related costs
|
|
|
|
|
39,918
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|
|
|
|
|
|
|
|
|
|
47,638
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|
Other accrued liabilities
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|
|
|
|
64,640
|
|
|
|
|
|
|
|
|
|
|
68,603
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|
Accrued income taxes
|
|
|
|
|
7,502
|
|
|
|
|
|
|
|
|
|
|
7,205
|
|
Foreign exchange derivative contracts
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
1,287
|
|
Deferred revenue
|
|
|
|
|
13,618
|
|
|
|
|
|
|
|
|
|
|
17,787
|
|
Total current liabilities
|
|
|
|
|
242,508
|
|
|
|
|
|
|
|
|
|
|
280,688
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other long-term liabilities
|
|
|
|
|
5,632
|
|
|
|
|
|
|
|
|
|
|
6,336
|
|
Senior Notes
|
|
|
|
|
325,000
|
|
|
|
|
|
|
|
|
|
|
325,000
|
|
Term loans
|
|
|
|
|
234,000
|
|
|
|
|
|
|
|
|
|
|
234,000
|
|
Accrued income taxes
|
|
|
|
|
8,618
|
|
|
|
|
|
|
|
|
|
|
8,000
|
|
Deferred tax liabilities
|
|
|
|
|
32,794
|
|
|
|
|
|
|
|
|
|
|
33,363
|
|
Total liabilities
|
|
|
|
|
848,552
|
|
|
|
|
|
|
|
|
|
|
887,387
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock, par value $0.01 per share
|
|
|
|
|
819
|
|
|
|
|
|
|
|
|
|
|
818
|
|
Common stock in treasury, at cost
|
|
|
|
|
(14,714
|
)
|
|
|
|
|
|
|
|
|
|
(14,714
|
)
|
Additional paid-in capital
|
|
|
|
|
677,086
|
|
|
|
|
|
|
|
|
|
|
671,395
|
|
Retained earnings
|
|
|
|
|
306,028
|
|
|
|
|
|
|
|
|
|
|
268,008
|
|
Accumulated other comprehensive loss
|
|
|
|
|
(404,099
|
)
|
|
|
|
|
|
|
|
|
|
(410,408
|
)
|
Total IGATE Corporation shareholders’ equity
|
|
|
|
|
565,120
|
|
|
|
|
|
|
|
|
|
|
515,099
|
|
Non-controlling interest
|
|
|
|
|
3,872
|
|
|
|
|
|
|
|
|
|
|
3,717
|
|
Total equity
|
|
|
|
|
568,992
|
|
|
|
|
|
|
|
|
|
|
518,816
|
|
Total liabilities and shareholders' equity
|
|
|
|
$
|
1,417,544
|
|
|
|
|
|
|
|
|
|
$
|
1,406,203
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IGATE CORPORATION
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|
(Amounts in thousands)
|
(unaudited)
|
|
|
|
|
|
Three Months ended
|
|
|
|
|
March 31,
|
|
|
|
|
2015
|
|
|
|
|
|
|
|
|
2014
|
Revenues
|
|
|
|
$
|
322,042
|
|
|
|
|
|
|
|
|
$
|
302,206
|
|
Cost of revenues (exclusive of depreciation and amortization)
|
|
|
|
|
208,938
|
|
|
|
|
|
|
|
|
|
188,780
|
|
Gross margin
|
|
|
|
|
113,104
|
|
|
|
|
|
|
|
|
|
113,426
|
|
Selling, general and administrative expense
|
|
|
|
|
47,631
|
|
|
|
|
|
|
|
|
|
42,661
|
|
Depreciation and amortization
|
|
|
|
|
10,561
|
|
|
|
|
|
|
|
|
|
9,558
|
|
Income from operations
|
|
|
|
|
54,912
|
|
|
|
|
|
|
|
|
|
61,207
|
|
Other income (loss), net
|
|
|
|
|
860
|
|
|
|
|
|
|
|
|
|
(16,071
|
)
|
Income before income taxes
|
|
|
|
|
55,772
|
|
|
|
|
|
|
|
|
|
45,136
|
|
Income tax expense
|
|
|
|
|
17,646
|
|
|
|
|
|
|
|
|
|
13,425
|
|
Net income before non- controlling interest
|
|
|
|
|
38,126
|
|
|
|
|
|
|
|
|
|
31,711
|
|
Non-controlling interest
|
|
|
|
|
106
|
|
|
|
|
|
|
|
|
|
95
|
|
Net income attributable to IGATE Corporation
|
|
|
|
|
38,020
|
|
|
|
|
|
|
|
|
|
31,616
|
|
Accretion to Preferred Stock
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
139
|
|
Preferred dividend
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
8,139
|
|
Net income attributable to IGATE common shareholders
|
|
|
|
$
|
38,020
|
|
|
|
|
|
|
|
|
$
|
23,338
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IGATE CORPORATION
|
Earnings Per Share
|
(Amounts in thousands, except per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
March 31,
|
PARTICULARS
|
|
|
|
|
|
|
|
2015
|
|
|
|
|
|
|
|
|
2014
|
Net income attributable to IGATE common shareholders
|
|
|
|
|
|
|
|
$
|
38,020
|
|
|
|
|
|
|
|
|
$
|
23,338
|
Add: Dividends on Series B Preferred Stock
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
8,139
|
|
|
|
|
|
|
|
|
|
38,020
|
|
|
|
|
|
|
|
|
|
31,477
|
Less: Dividends on
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series B Preferred Stock
|
|
|
|
[A]
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
8,139
|
Undistributed Income
|
|
|
|
|
|
|
|
$
|
38,020
|
|
|
|
|
|
|
|
|
$
|
23,338
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allocation of Undistributed Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
|
[B]
|
|
|
|
|
38,020
|
|
|
|
|
|
|
|
|
|
17,256
|
Series B Preferred Stock
|
|
|
|
[C]
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
6,082
|
|
|
|
|
|
|
|
|
$
|
38,020
|
|
|
|
|
|
|
|
|
$
|
23,338
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding for allocation of undistributed income :
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
|
|
|
|
|
|
80,930
|
|
|
|
|
|
|
|
|
|
58,808
|
Series B Preferred Stock
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
20,726
|
|
|
|
|
|
|
|
|
|
80,930
|
|
|
|
|
|
|
|
|
|
79,534
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
|
[D]
|
|
|
|
|
80,888
|
|
|
|
|
|
|
|
|
|
58,687
|
Series B Preferred Stock
|
|
|
|
[E]
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
20,726
|
|
|
|
|
|
|
|
|
|
80,888
|
|
|
|
|
|
|
|
|
|
79,413
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common stock outstanding
|
|
|
|
|
|
|
|
|
80,888
|
|
|
|
|
|
|
|
|
|
58,687
|
Dilutive effect of stock options and restricted shares outstanding
|
|
|
|
|
|
|
|
|
1,901
|
|
|
|
|
|
|
|
|
|
1,854
|
Dilutive weighted average shares outstanding
|
|
|
|
[F]
|
|
|
|
|
82,789
|
|
|
|
|
|
|
|
|
|
60,541
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributed earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series B Preferred Stock
|
|
|
|
[G=A/E]
|
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
$
|
0.39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Undistributed earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
|
[H=B/D]
|
|
|
|
$
|
0.47
|
|
|
|
|
|
|
|
|
$
|
0.29
|
Series B Preferred Stock
|
|
|
|
[I=C/E]
|
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
$
|
0.29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - Basic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
|
[H]
|
|
|
|
$
|
0.47
|
|
|
|
|
|
|
|
|
$
|
0.29
|
Series B Preferred Stock
|
|
|
|
[G+I]
|
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
$
|
0.68
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - Diluted
|
|
|
|
[B/F]
|
|
|
|
$
|
0.46
|
|
|
|
|
|
|
|
|
$
|
0.29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The no. of outstanding participative convertible preferred stock
for which the earnings per share exceeded the earnings per share
of common stock aggregated to NIL and 20.7 million for the three
months ended March 31, 2015 and 2014, respectively. These shares
were excluded from the computation of diluted earnings per share
as they were anti-dilutive.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IGATE CORPORATION
|
Reconciliation of Selected GAAP Measures to Non-GAAP Measures
|
(Amounts in thousands, except per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months ended
|
|
|
|
|
March 31,
|
|
|
|
|
2015
|
|
|
|
|
|
|
|
|
2014
|
GAAP Net income attributable to IGATE common shareholders
|
|
|
|
$ 38,020
|
|
|
|
|
|
|
|
|
$ 23,338
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred dividend and accretion to preferred stock
|
|
|
|
-
|
|
|
|
|
|
|
|
|
8,278
|
Amortization of Intangible assets
|
|
|
|
2,286
|
|
|
|
|
|
|
|
|
2,580
|
Stock-based compensation
|
|
|
|
4,391
|
|
|
|
|
|
|
|
|
4,297
|
Merger and reorganization expense
|
|
|
|
-
|
|
|
|
|
|
|
|
|
130
|
Income tax adjustments
|
|
|
|
(2,039)
|
|
|
|
|
|
|
|
|
(2,243)
|
Non-GAAP Net income attributable to IGATE common shareholders
|
|
|
|
$ 42,658
|
|
|
|
|
|
|
|
|
$ 36,380
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding, Basic
|
|
|
|
80,888
|
|
|
|
|
|
|
|
|
58,687
|
Add: assumed preferred stock conversion
|
|
|
|
-
|
|
|
|
|
|
|
|
|
20,726
|
Non-GAAP weighted average shares outstanding , Basic
|
|
|
|
80,888
|
|
|
|
|
|
|
|
|
79,413
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average dilutive common shares outstanding
|
|
|
|
82,789
|
|
|
|
|
|
|
|
|
60,541
|
Add: assumed preferred stock conversion
|
|
|
|
-
|
|
|
|
|
|
|
|
|
20,726
|
Weighted average dilutive common equivalent shares outstanding
|
|
|
|
82,789
|
|
|
|
|
|
|
|
|
81,267
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS (GAAP) to Basic EPS (Non-GAAP):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS (GAAP)
|
|
|
|
$ 0.47
|
|
|
|
|
|
|
|
|
$ 0.29
|
Preferred dividend and accretion to preferred stock
|
|
|
|
-
|
|
|
|
|
|
|
|
|
0.11
|
Amortization of Intangible assets
|
|
|
|
0.03
|
|
|
|
|
|
|
|
|
0.03
|
Stock-based compensation
|
|
|
|
0.05
|
|
|
|
|
|
|
|
|
0.06
|
Merger and reorganization expense
|
|
|
|
-
|
|
|
|
|
|
|
|
|
0.00
|
Income tax adjustments
|
|
|
|
(0.02)
|
|
|
|
|
|
|
|
|
(0.03)
|
Basic EPS (Non-GAAP)
|
|
|
|
$ 0.53
|
|
|
|
|
|
|
|
|
$ 0.46
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS (GAAP) to Diluted EPS (Non-GAAP):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS (GAAP)
|
|
|
|
$ 0.46
|
|
|
|
|
|
|
|
|
$ 0.29
|
Preferred dividend and accretion to preferred stock
|
|
|
|
-
|
|
|
|
|
|
|
|
|
0.10
|
Amortization of Intangible assets
|
|
|
|
0.03
|
|
|
|
|
|
|
|
|
0.03
|
Stock-based compensation
|
|
|
|
0.05
|
|
|
|
|
|
|
|
|
0.06
|
Merger and reorganization expense
|
|
|
|
-
|
|
|
|
|
|
|
|
|
0.00
|
Income tax adjustments
|
|
|
|
(0.02)
|
|
|
|
|
|
|
|
|
(0.03)
|
Diluted EPS (Non-GAAP)
|
|
|
|
$ 0.52
|
|
|
|
|
|
|
|
|
$ 0.45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IGATE CORPORATION
|
Reconciliation of Net Income, Net of Tax, to Adjusted EBITDA
|
(Amounts in thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months ended
|
|
|
|
|
March 31,
|
|
|
|
|
2015
|
|
|
|
|
|
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$
|
38,126
|
|
|
|
|
|
|
|
|
|
$
|
31,711
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
10,561
|
|
|
|
|
|
|
|
|
|
|
9,558
|
|
Interest expense
|
|
|
|
|
7,389
|
|
|
|
|
|
|
|
|
|
|
23,629
|
|
Income tax expense
|
|
|
|
|
17,646
|
|
|
|
|
|
|
|
|
|
|
13,425
|
|
Other income, net
|
|
|
|
|
(1,936
|
)
|
|
|
|
|
|
|
|
|
|
(7,354
|
)
|
Foreign exchange (gain)
|
|
|
|
|
(6,313
|
)
|
|
|
|
|
|
|
|
|
|
(204
|
)
|
Stock-based compensation
|
|
|
|
|
4,391
|
|
|
|
|
|
|
|
|
|
|
4,297
|
|
Merger and reorganization expense
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
130
|
|
Adjusted EBITDA (a non-GAAP measure)
|
|
|
|
$
|
69,864
|
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$
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75,192
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The Company presents the non-GAAP financial measures EBITDA and
adjusted EBITDA because management uses these measures to monitor
and evaluate the performance of the business and believes that the
presentation of these measures will enhance investors' ability to
analyze trends in the business and evaluate the Company's underlying
performance relative to other companies in the industry.
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Non-GAAP Disclosure of Adjusted EBITDA
We present Adjusted EBITDA as a supplemental measure of our performance.
We define Adjusted EBITDA as net income plus (i) depreciation and
amortization, (ii) interest expense, (iii) income tax expense, minus
(iv) other income, net plus (v) foreign exchange (gain)/loss, (vi)
stock-based compensation, (vii) Merger and reorganization expenses. We
eliminated the impact of the above as we do not consider them as
indicative of our ongoing operating performance. You are encouraged to
evaluate these adjustments and the reasons we consider them appropriate
for supplemental analysis. In evaluating Adjusted EBITDA, you should be
aware that in the future we may incur expenses that are the same as or
similar to some of the adjustments in this presentation. Our
presentation of Adjusted EBITDA should not be construed as an inference
that our future results will be unaffected by unusual or non-recurring
items.
We present Adjusted EBITDA because we believe it assists investors and
analysts in comparing our performance across reporting periods on a
consistent basis by excluding items that we do not believe are
indicative of our core operating performance. In addition, we use
Adjusted EBITDA: (i) as a factor in evaluating management’s performance
when determining incentive compensation, (ii) to evaluate the
effectiveness of our business strategies and (iii) because our credit
agreement and our indenture use measures similar to Adjusted EBITDA to
measure our compliance with certain covenants.
Adjusted EBITDA has limitations as an analytical tool. Some of these
limitations are:
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Adjusted EBITDA does not reflect our cash expenditures, or future
requirements, for capital expenditures or contractual commitments;
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Adjusted EBITDA does not reflect changes in, or cash requirements for,
our working capital needs;
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Adjusted EBITDA does not reflect the significant interest expense, or
the cash requirements necessary to service interest or principal
payments, on our debts; although depreciation and amortization are
non-cash charges, the assets being depreciated and amortized will
often have to be replaced in the future, and adjusted EBITDA does not
reflect any cash requirements for such replacements; non-cash
compensation is and will remain a key element of our overall long-term
incentive compensation package, although we exclude it as an expense
when evaluating our ongoing operating performance for a particular
period; Adjusted EBITDA does not reflect the impact of certain cash
charges resulting from matters we consider not to be indicative of our
ongoing operations; and other companies in our industry may calculate
adjusted EBITDA differently than we do, limiting its usefulness as a
comparative measure.
Because of these limitations, adjusted EBITDA should not be considered
in isolation or as a substitute for performance measures calculated in
accordance with GAAP. We compensate for these limitations by relying
primarily on our GAAP results and using Adjusted EBITDA only
supplementally.
Copyright Business Wire 2015