EX-99.1 2 k04613exv99w1.txt PRESS RELEASE DATED APRIL 25, 2006 EXHIBIT 99.1 SYNTEL REPORTS FIRST QUARTER 2006 FINANCIAL RESULTS HIGHLIGHTS - Period-over-period revenue increase of 25% to $63.5 million - EPS for Q1 was $0.29 per diluted share - Global headcount crosses 6,300 mark - Ending cash balance & short term investments of $113M TROY, Mich. - April 25, 2006 - Syntel, Inc. (SYNT), a global information technology services firm, today announced financial results for the first quarter, ended March 31, 2006. FIRST QUARTER 2006 FINANCIAL HIGHLIGHTS Syntel's total revenue for the first quarter increased more than 25 percent to $63.5 million, compared to $50.7 million in the prior-year period and two percent sequentially from $62.3 million in the fourth quarter of 2005. The Company's gross margin was 38.3 percent in the first quarter, compared to 41.4 percent in the prior-year period and 40.1 percent in the fourth quarter of 2005. During the first quarter, Syntel's focus area of Applications Outsourcing accounted for 73 percent of total revenue, with e-Business contributing 14 percent, TeamSourcing at 8 percent, and Business Process Outsourcing (BPO) at 5 percent. The Company's Selling, General and Administrative (SG&A) expenses were 16.7 percent in the first quarter of 2006, compared to 22.0 percent in the prior-year period and 20.1 percent in the fourth quarter of 2005. Syntel's income from operations was 21.6 percent in the first quarter, compared to 19.4 percent in the prior-year quarter and 20.0 percent in the fourth quarter of 2005. Syntel's global headcount grew four percent during the first quarter of 2006 to 6,357, as compared to 6,093 at the end of 2005. The Company finished the quarter with cash and short term investments of $113.2 million. Syntel added six new clients in the quarter and launched 151 new engagements. The Company added two new "Hunting Licenses" or preferred partnership agreements during the quarter, taking the total to 73 strategic relationships. OPERATIONAL HIGHLIGHTS "The market for the global delivery of IT services remains very dynamic," said Syntel Chairman and CEO Bharat Desai. "Our mature approach continues to be validated by our Global 1,000 customers and that, combined with our strategic investments in our People, Processes and Infrastructure, are positioning the company for continued success." UPDATED 2006 GUIDANCE Based on current visibility levels, the Company now expects 2006 revenue in the range of $255-$265 million and EPS between $1.03 to $1.07. 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 the call start time to register and download any necessary audio software. A replay will be available by dialing (800) 642-1687 and entering "7334437" from 1:00 p.m. on April 25, 2006 until midnight on May 2, 2006. International callers may dial (706) 645-9291 and enter the same pass code. # # # SYNTEL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF INCOME (IN THOUSANDS, EXCEPT PER SHARE DATA)
3 MONTHS ENDED MARCH 31 ----------------------- 2006 2005 ------- ------- Net Revenues $63,496 $50,732 Cost of revenues 39,162 29,704 ------- ------- Gross Profit 24,334 21,028 Selling, general and administrative expenses 10,598 11,165 ------- ------- Income from operations 13,736 9,863 Other income, principally interest 889 1,136 ------- ------- Income before income taxes 14,625 10,999 Provision for income taxes 2,570 2,005 ------- ------- Net (loss) / income $12,055 $ 8,994 ======= ======= Dividend Per Share : $ 0.06 $ 1.56 EARNINGS PER SHARE : Basic $ 0.30 $ 0.22 Diluted $ 0.29 $ 0.22 Weighted average common shares outstanding : Basic 40,696 40,366 ======= ======= Diluted 40,948 40,526 ======= =======
SYNTEL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS)
MARCH, 31 DECEMBER, 31 2006 2005 --------- ------------ ASSETS Current assets: Cash and cash equivalents $ 85,880 $ 99,390 Short term investments 27,303 21,083 Accounts receivable, net of allowance for doubtful accounts of $2,575 and $2,575 at March 31, 2006 and December 31, 2005, respectively 30,680 27,907 Revenue earned in excess of billings 12,818 8,366 Deferred income taxes and other current assets 11,252 10,003 -------- -------- Total current assets 167,933 166,749 Property and equipment 57,119 54,690 Less accumulated depreciation and amortization 26,530 25,504 -------- -------- Property and equipment, net 30,589 29,186 Goodwill 906 906 Deferred income taxes and other noncurrent assets 3,415 1,320 -------- -------- $202,843 $198,161 ======== ======== LIABILITIES Current liabilities: Accrued payroll and related costs $ 14,544 $ 15,906 Income taxes payable 6,910 9,809 Accounts payable and other current liabilities 15,791 16,812 Deferred revenue 2,531 3,356 -------- -------- Total liabilities 39,776 45,883 SHAREHOLDERS' EQUITY Total shareholders' equity 163,067 152,278 -------- -------- Total liabilities and shareholders' equity $202,843 $198,161 ======== ========