-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NwXJfxgwcQw6VDXstZBHfcLTrh1JIeZSwxuVDVOr8JAHSyFoa3Al1ZAALbxfyUhw OhYzhbQvLpvwQgQ5mJReHA== 0000950124-04-001786.txt : 20040423 0000950124-04-001786.hdr.sgml : 20040423 20040423085859 ACCESSION NUMBER: 0000950124-04-001786 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040423 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040423 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SYNTEL INC CENTRAL INDEX KEY: 0001040426 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING SERVICES [7371] IRS NUMBER: 382312018 STATE OF INCORPORATION: MI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-22903 FILM NUMBER: 04749409 BUSINESS ADDRESS: STREET 1: 2800 LIVERNOIS RD STREET 2: SUITE 400 CITY: TROY STATE: MI ZIP: 48043 BUSINESS PHONE: 2486192800 MAIL ADDRESS: STREET 1: 2800 LIVERNOID RD STREET 2: SUITE 400 CITY: TROY STATE: MI ZIP: 48043 8-K 1 k84797e8vk.txt CURRENT REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) April 23, 2004 ----------------------- Syntel, Inc. - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Its Charter) Michigan - -------------------------------------------------------------------------------- (State or Other Jurisdiction of Incorporation) 0-22903 38-2312018 - -------------------------------------------------------------------------------- (Commission File Number) (IRS Employer Identification No.) 525 E. Big Beaver Road, Suite 300, Troy, Michigan 48083 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) (248) 619-2800 - -------------------------------------------------------------------------------- (Registrant's Telephone Number, Including Area Code) - -------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) 1 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits. Exhibit Number 99.1 Press Release dated April 23, 2004. ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On April 23, 2004, Syntel, Inc. (the "Company") issued a press release announcing results of operations and related financial information for the first quarter ended March 31, 2004. A copy of the press release is attached to this Report as Exhibit 99.1. The information contained in this Current Report, including Exhibit 99.1, is being furnished and shall not be deemed to be "filed" for the purposes of Section 18 of the Securities and Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except if the Company expressly states that such information is to be considered "filed" under the Exchange Act or incorporates it by specific reference in such filing. 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Syntel, Inc. ---------------------------------- (Registrant) Date April 23, 2004 By /s/ Keshav Murugesh ---------------- ------------------------------ Keshav Murugesh, Chief Financial Officer 3 EXHIBIT INDEX Exhibit No. Description 99.1 Press Release dated April 23, 2004. 4 EX-99.1 3 k84797exv99w1.txt PRESS RELEASE DATED APRIL 23, 2004 EXHIBIT 99.1 TROY, Mich.--(BUSINESS WIRE)--xx--Syntel, Inc. (NASDAQ: SYNT): First Quarter Highlights: -- Revenue of $45.1M -- Gross margin of 42.1% -- EPS of $0.23 per diluted share -- Cash and Marketable Securities of $145.6M Syntel, Inc. (NASDAQ: SYNT), a global information technology services firm, today announced financial results for the first quarter ended March 31, 2004. Syntel's total revenue for the first quarter was $45.1 million, compared to $44.1 million in the prior-year period and $47.4 million in the fourth quarter of 2003. The Company's gross margin was 42.1 percent in the first quarter of 2004, compared to 43.1 percent in the prior-year period and 43.6 percent in the fourth quarter of 2003. This quarterly reduction in revenue and margin levels was anticipated due to the successful completion of two large-scale development projects at the end of 2003. During the first quarter, Syntel's core focus area of Applications Outsourcing accounted for 75 percent of total revenue, with e-Business contributing 19 percent, TeamSourcing just over five percent and Business Process Outsourcing (BPO) at one percent. Syntel began reporting the BPO contribution this quarter. Syntel's income from operations was 22.5 percent in the first quarter, compared to 25.2 percent in the prior-year period and 27.5 percent in the fourth quarter of 2003. During the quarter, the rupee appreciation had an adverse impact of just over one percent on Syntel's operating income. The combined effects of continued offshore transition, reduced onsite profitability and consequential transfer pricing related changes, resulted in reducing the tax rate to 16.5 percent. The tax reduction had a positive impact on EPS of $0.02. Net income for the first quarter was $9.3 million or $0.23 per diluted share, compared to $8.4 million or $0.21 per diluted share in the prior-year period, and $10.9 million or $0.27 per diluted share in the fourth quarter of 2003. During the first quarter of 2004, Syntel added one new corporate client to its roster and launched 75 new engagements. At the end of the first quarter, Syntel's "hunting licenses" or preferred partnership agreements with Global 2000 corporations totaled 57. Global headcount grew to 3,956 in the first quarter of 2004, compared to 3,861 in the fourth quarter of 2003. As anticipated, billable headcount progress during the quarter was muted due to project closures. Billable headcount in Q1 was 2,660, a net reduction of four compared to the fourth quarter. Utilization during the first quarter was 98 percent domestically and 61 percent offshore. Syntel's financial position and cash generation remain very strong. The Company ended the first quarter with $145.6 million in cash and marketable securities. In the third quarter of 2003, Syntel initiated a $0.06 per share quarterly dividend to shareholders of record. The Company remains debt-free. "We are encouraged by the all-time high interest levels in global sourcing solutions," said Bharat Desai, Chairman and CEO of Syntel. "We believe we have built the foundation for Syntel to continue to add value to our customers and deliver solid returns to our shareholders." Page 1 Outlook Syntel is reiterating 2004 guidance in the range of $198 million to $208 million and EPS between $0.92 and $1.00. Syntel to Host Conference Call Syntel will discuss its first quarter performance today on a conference call at 10:00 a.m. (Eastern). To listen to the call, please dial (888) 689-9220. The call will also be broadcast live via the Internet at Syntel's web site: www.syntelinc.com under the "Investor Relations" section. Please go to the web site at least 15 minutes prior to call start time to register and download any necessary audio software. A replay will be made available by calling (800) 642-1687 and entering "6508101" beginning at 1 p.m. (Eastern) on April 23, 2004 through midnight (Eastern) on April 27, 2004. About Syntel Syntel (SYNT) is a leading global provider of custom outsourcing solutions in a broad spectrum of information technology and information technology-enabled services. The Company's vertical practices support the entire Design-Build-Operate-Optimize lifecycle of systems and processes for corporations in the Financial Services, Insurance, Retail, Health Care and Automotive industries. The first US-based firm to launch a Global Delivery Service to drive speed-to-market and quality advantages for its customers, Syntel now leverages this efficient model for the majority of its Global 2000 customers. Recently named one of Forbes Magazine's "Best 200 Small Companies in America," Syntel has more than 3,900 employees worldwide, is assessed at Level 5 of the SEI's CMM and is ISO 9001:2000 certified. To learn more, visit us at: www.syntelinc.com. SYNTEL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME (in thousands, except per share data)
THREE MONTHS ENDED MAR 31 ---------------------- 2004 2003 ------- ------- Net Revenues $45,089 $44,078 Cost of revenues 26,085 25,080 ------- ------- Gross profit 19,004 18,998 Selling, general and administrative expenses 8,839 7,889 ------- ------- Income from operations 10,165 11,109 Other income, principally interest 996 615 ------- ------- Income before income taxes 11,161 11,724 Provision for Income tax 1,839 3,347 ------- ------- Net income before loss from equity investment 9,322 8,377 Loss from equity investment 0 25 ------- ------- Net income $ 9,322 $ 8,352 ======= ======= Dividend per share $ 0.06 $ - EARNINGS PER SHARE Basic $ 0.23 $ 0.21 Diluted $ 0.23 $ 0.21 Weighted average common shares outstanding : Basic 40,121 39,247 ======= ======= Diluted 40,614 40,493 ======= =======
Page 2 SYNTEL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET (in thousands)
March 31, Dec. 31, 2004 2003 -------- -------- ASSETS Current assets: Cash and cash equivalents $113,702 $110,699 Short Term Investments, principally marketable securities 31,875 26,137 Accounts receivable, net of allowances of $814 and $809 at March 31, 2004 and December 31, 2003, respectively 26,778 25,828 Revenue earned in excess of billings 8,229 6,601 Deferred income taxes and other current assets 3,257 5,617 -------- -------- Total current assets 183,841 174,882 Property and equipment 27,102 25,617 Less Accumulated depreciation 19,412 18,502 -------- -------- Property and equipment, net 7,690 7,115 Goodwill 906 906 Deferred income taxes and other noncurrent assets 3,311 3,178 -------- -------- $195,748 $186,081 ======== ======== LIABILITIES Current liabilities: Accrued payroll and related costs $ 11,548 $ 11,851 Income taxes payable 7,841 6,507 Accounts payable and other current liabilities 9,410 9,861 Deferred revenue 2,792 4,456 -------- -------- Total liabilities 31,591 32,675 SHAREHOLDERS' EQUITY Total Shareholders' equity 164,157 153,406 -------- -------- Total liabilities and shareholders' equity $195,748 $186,081 ======== ========
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