Quarterly Revenue Increases 2.2%; Revenue Less Repair Payments Declines 8.1% Over the Corresponding Quarter in the Prior Fiscal Year
WNS), a leading provider of global business process outsourcing (BPO) services, today announced results for the fiscal second quarter 2010 ended September 30, 2009, and noted that it is well positioned to beat the top end of its guidance on revenue less repair payments and adjusted net income (or net income attributable to WNS shareholders excluding amortization of intangible assets, share-based compensation, related fringe benefit tax and loss attributable to non-controlling interest) for fiscal 2010.
— WNS (Holdings) Limited (WNS) (NYSE:
Revenue for the fiscal second quarter 2010 of $153.0 million represented an increase of 2.2% over the corresponding quarter in the prior fiscal year, while revenue less repair payments at $100.2 million declined by 8.1% over the corresponding period in the prior fiscal year. The revenue less repair payments decline was largely the result of the weakening of the British Pound compared with the US Dollar and the second year pricing terms of the Aviva Global Services (AGS) contract.
“We had a healthy quarter from a revenue and profitability standpoint and we are on track to beat the top end of our original fiscal 2010 guidance on both metrics,” said Neeraj Bhargava, Group Chief Executive Officer. “We see the market improving and growing acknowledgment of our global BPO capabilities.”
Net income attributable to WNS shareholders for the fiscal second quarter 2010 was $1.4 million compared to $0.2 million during the corresponding quarter in the prior fiscal year. The net income attributable to WNS shareholders in the current quarter increased due to the cost synergies generated out of the acquisitions made in the previous fiscal year and lower taxes compared to the corresponding quarter in the last fiscal year.
Adjusted net income was $13.7 million, an increase of 15.6% over the corresponding quarter in the prior year. The primary drivers of this increase were tighter cost management, improved scale benefits and increased profits from WNS’ acquisitions. This increase was partially offset by higher foreign exchange losses.
WNS recorded a basic income per ADS of $0.03 for fiscal second quarter 2010. Adjusted basic income per ADS (or net income per ADS attributable to WNS shareholders excluding amortization of intangible assets, share-based compensation, related fringe benefit tax and loss attributable to non-controlling interest) was $0.32 for the quarter, an increase of 14.4% from the corresponding quarter last year.
“This was one of our strongest quarters in the recent past in terms of new bookings and improvement in our sales pipeline,” said Anup Gupta, Group Chief Operating Officer. “We are winning multi-country deals and our global footprint is now an integral part of our value proposition. Our operations remain very strong with four straight quarters of operating margins above 19 percent.”
Financial Highlights: Fiscal Second Quarter Ended September 30, 2009
- Quarterly revenue of $153.0 million, up 2.2% from the corresponding quarter last year.
- Quarterly revenue less repair payments of $100.2 million, down 8.1% from the corresponding quarter last year.
- Quarterly net income attributable to WNS shareholders of $1.4 million compared to $0.2 million from the corresponding quarter last year.
- Quarterly adjusted net income (or net income attributable to WNS shareholders excluding amortization of intangible assets, share-based compensation, related fringe benefit tax and loss attributable to non- controlling interest) of $13.7 million, up 15.6% from the corresponding quarter last year.
- Quarterly basic income per ADS of $0.03, compared with $0.01 for the corresponding quarter last year.
- Quarterly adjusted basic income per ADS (or net income attributable to WNS shareholders per share excluding amortization of intangible assets, share-based compensation, related fringe benefit tax and loss attributable to non-controlling interest) of $0.32, up from $0.28 for the corresponding quarter last year, up 14.4% from the corresponding quarter last year.
Reconciliations of non-GAAP financial measures to GAAP operating results are included at the end of this release.
Fiscal 2010 Guidance
WNS noted that it is well positioned to beat the top end of the guidance ranges for the fiscal year ending March 31, 2010:
- Revenues less repair payments of $390 million.
- Adjusted net income (or net income attributable to WNS shareholders excluding amortization of intangible assets, share-based compensation, related fringe benefit tax and loss attributable to non-controlling interest) of $52 million.
“While we are well positioned to beat the top end of our guidance range, we continue to see volatility in the exchange rates and volume pressure in our travel and insurance-related businesses,” said Alok Misra, Group Chief Financial Officer. “As we anticipated, our adjusted net income and cash flow have both continued to improve compared with the first quarter of this fiscal. Our cash generation was particularly strong this quarter at over $24 million in operating cash and almost $22 million of free cash, providing additional strength to our balance sheet.”
“Our DSOs have also improved further and are now running at 39 days. This is a testament to our ability to manage costs, improve operations and maintain strong relationships with our clients,” concluded Misra.
WNS will host a conference call on November 4, 2009 at 8 am (ET) to discuss the company’s quarterly results. To participate in the call, please use the following details: +1-866-713-8307; international dial-in +1-617-597-5307; participant passcode 87323509. A replay will be available for one week following the call at +1-888-286-8010; international dial-in +1-617-801-6888; passcode 91110852, as well as on the WNS website, www.wns.com, beginning two hours after the end of the call.
Source: Press release distribution via India PRwire
Notes to Editor
WNS (Holdings) Limited. (NYSE: WNS) is a leading global business process outsourcing company. Deep industry and business process knowledge, a partnership approach, comprehensive service offering and a proven track record enables WNS to deliver business value to some of the leading companies in the world. WNS is passionate about building a market-leading company valued by our clients, employees, business partners, investors and communities. For more information, visit www.wns.com.
About Non-GAAP Financial Measures
For financial statement reporting purposes, the company has two reportable segments: WNS Global BPO and WNS Auto Claims BPO. In the auto claims segment, which includes WNS Assistance and Chang Limited, WNS provides claims-handling and accident-management services, in which it arranges for automobile repairs through a network of third-party repair centers. In its accident-management services, WNS acts as the principal in dealings with the third-party repair centers and clients.
In order to provide accident-management services, the Company arranges for the repair through a network of repair centers. Repair costs are invoiced to customers. Amounts invoiced to customers for repair costs paid to the automobile repair centers are recognized as revenue. The Company uses revenue less repair payments for “fault” repairs as a primary measure to allocate resources and measure segment performance. Revenue less repair payments is a non-GAAP measure which is calculated as revenue less payments to repair centers. For “non fault repairs,” revenue including repair payments is used as a primary measure. As the Company provides a consolidated suite of accident management services including credit hire and credit repair for its “Non fault” repairs business, the Company believes that measurement of that line of business has to be on a basis that includes repair payments in revenue.
The Company believes that the presentation of this non-GAAP measure in the segmental information provides useful information for investors regarding the segment’s financial performance. The presentation of this non-GAAP information is not meant to be considered in isolation or as a substitute for the Company’s financial results prepared in accordance with US GAAP.
Safe Harbor Statement under the provisions of the United States Private Securities Litigation Reform Act of 1995
These forward-looking statements are based on our current expectations, assumptions, estimates and projections about our Company and our industry. The forward-looking statements are subject to various risks and uncertainties. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “will,” “project,” “seek,” “should” and similar expressions. Those statements include, among other things, the discussions of our business strategy and expectations concerning our market position, future operations, margins, profitability, liquidity and capital resources. We caution you that reliance on any forward-looking statement involves risks and uncertainties, and that although we believe that the assumptions on which our forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and, as a result, the forward-looking statements based on those assumptions could be materially incorrect. These factors include but are not limited to worldwide economic and business conditions; political or economic instability in the jurisdictions where we have operations; regulatory, legislative and judicial developments; our ability to attract and retain clients technological innovation; telecommunications or technology disruptions; future regulatory actions and conditions in our operating areas; our dependence on a limited number of clients in a limited number of industries; our ability to expand our business or effectively manage growth; our ability to hire and retain enough sufficiently trained employees to support our operations; negative public reaction in the US or the UK to offshore outsourcing; increasing competition in the BPO industry; our ability to successfully grow our revenue, expand our service offerings and market share and achieve accretive benefits from our acquisition of Aviva Global Services Singapore Pte. Ltd. (which we have renamed as WNS Customer Solutions (Singapore) Private Limited following our acquisition), or Aviva Global, and our master services agreement with Aviva Global Services (Management Services) Private Limited; and our ability to successfully consummate strategic acquisitions. These and other factors are more fully discussed in our annual report on Form 20-F for the fiscal year ended March 31, 2009 filed with the U.S. Securities and Exchange Commission which is available at www.sec.gov. In light of these and other uncertainties, you should not conclude that we will necessarily achieve any plans, objectives or projected financial results referred to in any of the forward-looking statements. Except as required by law, we do not undertake to release revisions of any of these forward-looking statements to reflect future events or circumstances.
References to “$” and “USD” refer to the United States dollars, the legal currency of the United States; references to “GBP” refer to the British Pound, the legal currency of Britain; and references to “INR” refer to Indian Rupees, the legal currency of India.
For more information, please contact:
- Alan Katz
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- Emily Cleary
- CJP Communications
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