WNS Announces Fourth Quarter and Full Year Fiscal 2009 Earnings; Provides
Guidance for Fiscal 2010
NEW YORK and MUMBAI, May 7 /PRNewswire-AsiaNet/ --
Quarterly Revenue Increases 14.1%; Revenue Less Repair Payments
Increases 27.1% Over the Corresponding Quarter in the Prior Fiscal Year
Annual Revenue Increases 17.3%; Revenue Less Repair Payments
Increases 32.9% Over the Prior Fiscal Year
WNS (Holdings) Limited (NYSE: WNS), a leading provider of global business
process outsourcing (BPO) services, today announced results for the fiscal fourth
quarter and fiscal year 2009 ended March 31, 2009, and established guidance on
revenue less repair payments and adjusted net income (or net income
excluding amortization of intangible assets, share-based compensation, related
fringe benefit taxes and minority interest) for fiscal 2010.
Fiscal Q4 2009
Revenue for the fiscal fourth quarter 2009 of $132.5 million represented
an increase of 14.1% over the corresponding quarter in the prior fiscal year,
while revenue less repair payments at $95.5 million increased 27.1% over the
corresponding quarter in the prior fiscal year. The revenue less repair
payments growth largely resulted from growth from Aviva Global Services (AGS)
and Call 24/7 Limited, which WNS acquired in July and April 2008,
respectively.
Net income for the fiscal fourth quarter 2009 was $2.4 million compared
to $6.1 million during the corresponding quarter in the prior fiscal year.
The net income in the current quarter was impacted primarily by amortization
charges from the acquisition of AGS and higher foreign exchange losses.
Adjusted net income was $13.6 million, an increase of 34.5% over the
corresponding quarter in the prior year. The primary drivers of this increase
were revenue growth, tighter cost management, improved scale benefits and
increased income from WNS' acquisitions. This increase was partially offset
by higher foreign exchange losses.
"WNS finished fiscal year 2009 on a strong note," said Neeraj Bhargava,
Group Chief Executive Officer. "We continued to see new client activity and
our focus on operations has positively affected our profitability. While the
global economy is expected to present challenges in fiscal 2010, we are
well-positioned to execute on our plan and increase profitability during the
next year."
WNS recorded a basic income per ADS of $0.06 for fiscal fourth quarter
2009. Adjusted diluted net income per ADS (or diluted income per ADS
excluding amortization of intangible assets, share-based compensation,
related fringe benefit taxes and minority interest) was $0.32 for the
quarter.
Fiscal Year 2009
For the fiscal year 2009, WNS achieved revenues of $539.3 million,
representing an increase of 17.3% over the prior fiscal year. Revenue less
repair payments of $386.4 million increased 32.9% over the prior year. The
growth in revenue less repair payments was largely as a result of increased
revenues associated with AGS and Call 24/7 Limited, which WNS acquired in
July and April 2008, respectively.
Net income for the full year ended March 31, 2009 was $8.1 million
compared to $9.5 million in the prior fiscal year. The net income decrease
was a result of amortization charges from the acquisition of AGS and foreign
exchange losses, partially offset by improved synergies in operations.
Adjusted net income was $46.6 million, an increase of 26.0% over fiscal
2008. The primary drivers of this increase were revenue growth, tighter cost
management, improved scale benefits, and increased income from WNS'
acquisitions. These increases were partially offset by higher foreign
exchange losses.
WNS recorded a basic income per ADS of $0.19 for the fiscal year 2009.
Adjusted diluted net income per ADS (or diluted income per ADS excluding
amortization of intangible assets, share-based compensation, related fringe
benefit taxes and minority interest) was $1.08 for the year.
On April 2, 2009, WNS announced that it was making a voluntary prepayment
of $5 million on its existing $200 million term loan facility as permitted
under the terms of the loan agreement. This payment was made on April 14,
2009.
"We have made significant progress in improving our working capital and
tightening our capital expenditure, thanks largely to the synergies from our
recent acquisitions, which combined with our improved profitability resulted
in the strong free cash flow that we have realized this quarter. This will
continue to be our area of focus," said Alok Misra, Group Chief Financial
Officer.
Financial Highlights: Fiscal Fourth Quarter Ended March 31, 2009
-- Quarterly revenue of $132.5 million, up 14.1% from the
corresponding quarter last year.
-- Quarterly revenue less repair payments of $95.5 million, up 27.1%
from the corresponding quarter last year.
-- Quarterly net income of $2.4 million compared to $6.1 million
from the corresponding quarter last year.
-- Quarterly adjusted net income (or net income excluding
amortization of intangible assets, share-based compensation, related
fringe benefit taxes and minority interest) of $13.6 million, up 34.5%
from the corresponding quarter last year.
-- Quarterly basic income per ADS of $0.06, compared with $0.14 for the
corresponding quarter last year.
-- Quarterly adjusted diluted net income per ADS (or diluted
income per ADS excluding amortization of intangible assets, share-based
compensation, related fringe benefit taxes and minority interest) of
$0.32, up from $0.24 for the corresponding quarter last year.
Financial Highlights: Fiscal Full Year Ended March 31, 2009
-- Annual revenue of $539.3 million, up 17.3% from the prior
fiscal year.
-- Annual revenue less repair payments of $386.4 million, up 32.9%
from the prior fiscal year.
-- Annual net income of $8.1 million compared to $9.5 million from
the prior fiscal year.
-- Annual adjusted net income (or net income excluding amortization
of intangible assets, share-based compensation, related fringe benefit
taxes and minority interest) of $46.6 million, up 26.0% from the prior
fiscal year.
-- Annual basic income per ADS of $0.19, compared with $0.23 for the prior
fiscal year.
-- Annual adjusted diluted net income per ADS (or diluted income
per ADS excluding amortization of intangible assets, share-based
compensation, related fringe benefit taxes and minority interest) of
$1.08, up from $0.86 for the prior fiscal year.
Reconciliations of non-GAAP financial measures to GAAP operating results
are included at the end of this release.
Fiscal 2010 Guidance
WNS is providing the following guidance for the fiscal year ending March 31,
2010:
-- Revenue less repair payments is expected to be between $385
million and $390 million. This assumes an average USD to GBP exchange
rate of 1.40 to 1.45 for the 2010 fiscal year.
-- Adjusted net income (or net income excluding amortization of
intangible assets, share-based compensation, related fringe benefit
taxes and minority interest) is expected to range between $50 million
and $52 million. This assumes an average INR to USD exchange rate of 49
to 50 for the 2010 fiscal year.
"Although we are facing currency and economic headwinds which impact our
top line, we are confident that we will increase our profitability and free
cash flows as a result of the actions that we have taken to improve our
operating leverage and our continued balance sheet focus," continued Misra.
Conference Call
WNS will host a conference call on May 7, 2009 at 8 am (ET) to discuss
the company's quarterly and full year results. To participate, callers can
dial: +1-800-295-3991; international dial-in +1-617-614-3924; participant
passcode 1352836. A replay will also be made available for one week following
the call at +1-888-286-8010; international dial-in +1-617-801-6888; passcode
89145684, for a period of three months beginning two hours after the end of
the call. A webcast will be available online at www.wns.com.
About WNS
WNS Holdings Ltd. (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
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
provides useful information for investors regarding 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
This news release contains forward-looking statements, as defined in the
safe harbor provisions of the US Private Securities Litigation Reform Act of
1995. These forward-looking statements include statements regarding expected
future financial results. These statements involve a number of risks,
uncertainties and other factors that could cause actual results to differ
materially from those that may be projected by these forward looking
statements. These risks and uncertainties include but are not limited to
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 attract and retain clients; 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; regulatory, legislative
and judicial developments; increasing competition in the business process
outsourcing industry; political or economic instability in India, Sri Lanka
and Jersey; worldwide economic and business conditions, including a slowdown
in the US and Indian economies and in the sectors in which our clients are
based and a slowdown in the BPO and IT sectors world-wide; our ability to
successfully grow our revenues, expand our service offerings and market share
and achieve accretive benefits from our acquisition of Aviva Global Services
Singapore Private Limited and our master services agreement with Aviva Global
Services (Management Services) Private Limited; our ability to successfully
consummate strategic acquisitions, as well as other risks detailed in our
reports filed with the US Securities and Exchange Commission. These filings
are available at www.sec.gov. We may, from time to time, make additional
written and oral forward-looking statements, including statements contained
in our filings with the Securities and Exchange Commission and our reports to
shareholders. You are cautioned not to place undue reliance on these
forward-looking statements, which reflect management's current analysis of
future events. We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise. 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.
CONTACT:
Investors: Media:
Alan Katz Josh Passman
VP - Investor Relations CJP Communications
WNS (Holdings) Limited +1 212 279 3115 ext. 203
+1 212 599-6960 ext. 241 jpassman@cjpcom.com
ir@wnsgs.com
WNS (HOLDINGS) LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share data)
Three months ended Year ended March 31,
March 31,
2009 2008 2009 2008
Revenue
Third parties $131,772 $115,133 $536,022 $456,401
Related parties 741 988 3,242 3,466
132,513 116,121 539,264 459,867
Cost of revenue 99,887 88,786 410,316 363,322
Gross profit 32,626 27,335 128,948 96,545
Operating expenses
Selling, general and
administrative
expenses 17,119 21,418 75,522 72,699
Amortization of
intangible assets 8,012 663 24,912 2,869
Impairment of goodwill
and intangible assets - - - 15,464
Operating income 7,495 5,254 28,514 5,513
Other income
(expense), net 262 2,221 (5,639) 9,184
Interest (expense)
income, net (4,460) 20 (11,782) (3)
Income before income
taxes 3,297 7,495 11,093 14,694
Provision for income
taxes 958 1,435 3,302 5,194
Income before minority
interest 2,339 6,060 7,792 9,500
Minority interest 107 - 287 -
Net income $2,446 $6,060 $8,079 $9,500
Basic income per share $0.06 $0.14 $0.19 $0.23
Diluted income per
share $0.06 $0.14 $0.19 $0.22
Reconciliation of revenue less repair payments
(non-GAAP) to revenue (GAAP) Amount in
thousands
Three months ended Year ended March 31,
March 31,
2009 2008 2009 2008
Revenue less repair payments
(Non-GAAP) $95,543 $75,153 $386,373 $290,717
Add: Payments to repair centers 36,970 40,968 152,891 169,150
Revenue (GAAP) $132,513 $116,121 $539,264 $459,867
Reconciliation of cost of revenue (non-GAAP to GAAP)
Amount in
thousands
Three months ended Year ended March 31,
March 31,
2009 2008 2009 2008
Cost of revenue (Non-GAAP) $62,917 $47,818 $257,425 $194,172
Add: Payments to repair centers 36,970 40,968 152,891 169,150
Cost of revenue (GAAP) $99,887 $88,786 $410,316 $363,322
Reconciliation of selling, general and administrative expense
(non-GAAP to GAAP) Amount in
Thousands
Three months ended Year ended March 31,
March 31,
2009 2008 2009 2008
Selling, general and
administrative expenses
(excluding share-based
compensation expense
and FBT(1)) (Non-GAAP) $14,862 $18,632 $65,301 $65,997
Add: Share-based
compensation expense 2,426 1,323 9,775 4,380
Add: FBT(1) (169) 1,463 446 2,322
Selling, general and
administrative expenses
(GAAP) $17,119 $21,418 $75,522 $72,699
Reconciliation of operating income (non-GAAP to GAAP)
Amount in
thousands
Three months ended Year ended March 31,
March 31,
2009 2008 2009 2008
Operating income
(excluding amortization of
intangible assets,
share-based compensation
expense, impairment of
goodwill and intangible
assets, and FBT(1))
(Non-GAAP) $18,731 $9,287 $67,294 $32,985
Less: Amortization of
intangible assets 8,012 663 24,912 2,869
Less: Share-based compensation
expense 3,393 1,907 13,422 6,816
Less: Impairment of goodwill
and intangible assets - - - 15,464
Less: FBT(1) (169) 1,463 446 2,322
Operating income (GAAP) $7,495 $5,254 $28,514 $5,513
Reconciliation of net income (non-GAAP to GAAP)
Amount in
Thousands
Three months ended Year ended March 31,
March 31,
2009 2008 2009 2008
Net income (excluding
amortization of
intangible assets,
share-based compensation
expense, impairment of
goodwill and intangible
assets, FBT(1) and
minority interest)
(Non-GAAP) $13,575 $10,093 $46,572 $36,972
Less: Amortization of
intangible assets 8,012 663 24,912 2,869
Less: Share-based
compensation expense 3,393 1,907 13,422 6,816
Less: Impairment of
goodwill and intangible
assets - - - 15,464
Less: FBT(1) (169) 1,463 446 2,322
Add: Minority interest 107 - 287 -
Net income (GAAP) $2,446 $6,060 $8,079 $9,500
Reconciliation of basic income per ADS (non-GAAP to GAAP)
Three months ended Year ended March 31,
March 31,
2009 2008 2009 2008
Basic income per ADS
(excluding amortization and
impairment of goodwill and
intangible assets,
share-based compensation
expense, FBT(1) and minority
interest) (Non-GAAP) $0.32 $0.24 $1.10 $0.88
Less: Adjustments for
amortization and impairment
of goodwill and intangible
assets, share-based
compensation expense,
FBT(1) and minority interest 0.26 0.10 0.91 0.65
Basic income per ADS (GAAP) $0.06 $0.14 $0.19 $0.23
Reconciliation of diluted income per ADS (non-GAAP to GAAP)
Three months ended Year ended March 31,
March 31,
2009 2008 2009 2008
Diluted income per ADS
(excluding amortization and
impairment of goodwill and
intangible assets,
share-based compensation
expense, FBT(1) and minority
interest) (Non-GAAP) $0.32 $0.24 $1.08 $0.86
Less: Adjustments for
amortization and impairment
of goodwill and intangible
assets, share-based
compensation expense, FBT(1)
and minority interest 0.26 0.10 0.89 0.64
Diluted income per ADS (GAAP) $0.06 $0.14 $0.19 $0.22
(1) FBT means the fringe benefit taxes on options and restricted share
units granted to employees under the WNS 2002 Stock Incentive Plan
and the WNS 2006 Incentive Award Plan (as applicable) payable by WNS
to the government of India.
WNS (HOLDINGS) LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and per share data)
As of As of
March 31, March 31,
2009 2008
ASSETS
Current assets
Cash and cash equivalents $38,931 $102,698
Bank deposits and marketable
securities 8,925 8,074
Accounts receivable, net of
allowance of $1,935 and $1,784,
respectively 61,257 47,302
Accounts receivable - related
parties 64 586
Funds held for clients 5,379 6,473
Employee receivables 745 1,179
Prepaid expenses 2,082 3,776
Prepaid income taxes 5,768 2,776
Deferred tax assets 1,743 618
Other current assets 38,647 8,596
Total current assets $163,541 $182,078
Goodwill 81,679 87,470
Intangible assets, net 217,372 9,393
Property and equipment, net 55,992 50,840
Other assets - non current 11,449 1,278
Deposits 6,309 7,391
Deferred tax assets - non current 15,584 8,055
TOTAL ASSETS $551,926 $346,505
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $30,879 $15,562
Accounts payable - related parties 42 6
Long term debt - current 45,000 -
Short term line of credit 4,331 -
Accrued employee costs 23,754 26,848
Deferred revenue - current 5,583 7,790
Income taxes payable 3,995 1,879
Deferred tax liabilities - current - 211
Accrual for earn out payment - 33,699
Other current liabilities $54,126 25,806
Total current liabilities $167,710 $111,801
Long term debt - non current 155,000 -
Deferred revenue - non current 3,561 1,549
Deferred rent 1,967 2,627
Accrued pension liability 2,570 1,544
Deferred tax liabilities - non
current 9,946 1,834
Liability on outstanding derivative
contracts - non current 23,163 -
Commitments and contingencies
TOTAL LIABILITIES $363,917 $119,355
Minority interest 13 -
Shareholders' equity:
Ordinary shares, $0.16 (10 pence)
par value, Authorized: 50,000,000
shares;
Issued and outstanding: 42,607,403
and 42,363,100 shares, respectively 6,667 6,622
Additional paid-in-capital 184,122 167,459
Ordinary shares subscribed: Nil and
1,666 shares, respectively - 10
Retained earnings 46,917 38,839
Accumulated other comprehensive
(loss) income (49,710) 14,220
Total shareholders' equity 187,996 227,150
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $551,926 $346,505
WNS (HOLDINGS) LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
Year ended March 31,
2009 2008
Cash flows from operating activities
Net cash provided by operating
activities $62,897 $41,051
Cash flows from investing activities
Acquisitions, net of cash received (290,994) (36,121)
Purchase of facilities and property cost (22,693) (28,134)
Proceeds from sale of assets, net 342 178
Transfer of delivery centre to AVIVA - 1,570
Purchase of marketable securities and
deposits (41,983) (48,181)
Marketable securities and deposits sold 39,710 52,150
Net cash used in investing activities (315,618) (58,538)
Cash flows from financing activities
Proceeds from exercise of stock options 988 4,204
Excess tax benefits from share-based
compensation 2,226 1,613
Proceeds from issuance of long term
debt, net 198,803 -
Initial public offering expenses - (150)
Principal repayments under capital lease (183) -
Proceeds from short term line of credit 16,416 -
Repayment of short term line of credit (19,310) -
Net cash provided by financing activities 198,940 5,667
Effect of exchange rate changes on
cash and cash equivalent (9,986) 2,178
Net change in cash and cash equivalents (63,767) (9,642)
Cash and cash equivalents at
beginning of period 102,698 112,340
Cash and cash equivalents at end of period $38,931 $102,698
SOURCE WNS Holdings Ltd.
CONTACT: Investors, Alan Katz, VP - Investor Relations of WNS (Holdings)
Limited, +1-212-599-6960, Ext. 241, ir@wnsgs.com; or Media, Josh Passman of
CJP Communications, +1-212-279-3115, Ext. 203, jpassman@cjpcom.com
(WNS)
NEWS 
