x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware
|
223536104
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
|
|
41 University Drive, Suite 202
Newtown, Pennsylvania
|
18940
|
(Address of principal executive offices)
|
(Zip code)
|
Large accelerated filer
|
¨
|
Accelerated filer
|
¨
|
|
|
|
|
Non-accelerated filer
|
x (Do not check if a smaller reporting company)
|
Smaller reporting company
|
¨
|
Title of Each Class
|
Outstanding as of August 5, 2013
|
Common Stock, par value $0.001 per share
|
46,091,444 shares
|
|
Page
|
3
|
|
3
|
|
3
|
|
4
|
|
5
|
|
6
|
|
16
|
|
26
|
|
27
|
|
28
|
|
28
|
|
28
|
|
28
|
|
28
|
|
28
|
|
28
|
|
29
|
|
30
|
|
As of
June 30, 2013
|
As of
December 31, 2012
|
||||||
|
(in thousands, except share
and per share data)
|
|||||||
Assets
|
||||||||
Current assets
|
||||||||
Cash and cash equivalents
|
$
|
107,475
|
$
|
118,112
|
||||
Accounts receivable, net of allowance of $2,434 and $2,203, respectively
|
82,817
|
78,906
|
||||||
Unbilled revenues
|
57,680
|
33,414
|
||||||
Prepaid and other current assets
|
17,167
|
11,835
|
||||||
Employee loans, net of allowance of $0 and $0, respectively, current
|
1,417
|
429
|
||||||
Time deposits
|
977
|
1,006
|
||||||
Restricted cash, current
|
60
|
660
|
||||||
Deferred tax assets, current
|
5,876
|
6,593
|
||||||
Total current assets
|
273,469
|
250,955
|
||||||
Property and equipment, net
|
55,400
|
53,135
|
||||||
Restricted cash, long-term
|
353
|
467
|
||||||
Employee loans, net of allowance of $0 and $0, respectively, long-term
|
3,408
|
-
|
||||||
Intangible assets, net
|
15,115
|
16,834
|
||||||
Goodwill
|
22,304
|
22,698
|
||||||
Deferred tax assets, long-term
|
3,530
|
6,093
|
||||||
Other long-term assets
|
938
|
632
|
||||||
Total assets
|
$
|
374,517
|
$
|
350,814
|
||||
|
||||||||
Liabilities
|
||||||||
Current liabilities
|
||||||||
Accounts payable
|
$
|
8,376
|
$
|
6,095
|
||||
Accrued expenses and other liabilities
|
7,017
|
19,814
|
||||||
Deferred revenue, current
|
4,041
|
6,369
|
||||||
Due to employees
|
13,744
|
12,026
|
||||||
Taxes payable
|
13,619
|
14,557
|
||||||
Deferred tax liabilities, current
|
543
|
491
|
||||||
Total current liabilities
|
47,340
|
59,352
|
||||||
Deferred revenue, long-term
|
312
|
1,263
|
||||||
Taxes payable, long-term
|
1,228
|
1,228
|
||||||
Deferred tax liabilities, long-term
|
404
|
2,691
|
||||||
Total liabilities
|
49,284
|
64,534
|
||||||
Commitments and contingencies (Note 10)
|
||||||||
Stockholders' equity
|
||||||||
Common stock, $.001 par value; 160,000,000 authorized; 46,914,858 and 45,398,523 shares issued, 45,958,829 and 44,442,494 shares outstanding at June 30, 2013 and December 31, 2012, respectively
|
46
|
44
|
||||||
Additional paid-in capital
|
182,503
|
166,962
|
||||||
Retained earnings
|
155,790
|
128,992
|
||||||
Treasury stock
|
(8,697
|
)
|
(8,697
|
)
|
||||
Accumulated other comprehensive loss
|
(4,409
|
)
|
(1,021
|
)
|
||||
Total stockholders' equity
|
325,233
|
286,280
|
||||||
Total liabilities and stockholders' equity
|
$
|
374,517
|
$
|
350,814
|
|
Three months ended
June 30,
|
Six months ended
June 30,
|
||||||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
|
(in thousands, except share and per share data)
|
|||||||||||||||
Revenues
|
$
|
133,184
|
$
|
103,800
|
$
|
257,382
|
$
|
198,183
|
||||||||
Operating expenses:
|
||||||||||||||||
Cost of revenues (exclusive of depreciation and amortization)
|
83,547
|
63,803
|
161,484
|
123,978
|
||||||||||||
Selling, general and administrative expenses
|
28,541
|
20,711
|
55,624
|
38,338
|
||||||||||||
Depreciation and amortization expense
|
3,854
|
2,423
|
7,471
|
4,634
|
||||||||||||
Other operating (income)/ expenses, net
|
(293
|
) |
33
|
(268
|
)
|
619
|
||||||||||
Income from operations
|
17,535
|
16,830
|
33,071
|
30,614
|
||||||||||||
Interest and other income, net
|
769
|
460
|
1,399
|
936
|
||||||||||||
Foreign exchange loss
|
(869
|
) |
(1,394
|
)
|
(1,368
|
)
|
(1,314
|
)
|
||||||||
Income before provision for income taxes
|
17,435
|
15,896
|
33,102
|
30,236
|
||||||||||||
Provision for income taxes
|
3,317
|
2,575
|
6,304
|
4,816
|
||||||||||||
Net Income
|
$
|
14,118
|
$
|
13,321
|
$
|
26,798
|
$
|
25,420
|
||||||||
Cumulative translation adjustment
|
(1,045
|
) |
(2,464
|
)
|
(3,388
|
)
|
(852
|
)
|
||||||||
Comprehensive income
|
$
|
13,073
|
$
|
10,857
|
$
|
23,410
|
$
|
24,568
|
||||||||
|
||||||||||||||||
Net income/ (loss) allocated to participating securities
|
-
|
-
|
-
|
$
|
(3,176
|
)
|
||||||||||
Net income available for common stockholders
|
$
|
14,118
|
$
|
13,321
|
$
|
26,798
|
$
|
22,244
|
||||||||
|
||||||||||||||||
Net income per share of common stock:
|
||||||||||||||||
Basic (common)
|
$
|
0.31
|
$
|
0.31
|
$
|
0.59
|
$
|
0.60
|
||||||||
Diluted (common)
|
$
|
0.29
|
$
|
0.29
|
$
|
0.56
|
$
|
0.55
|
||||||||
Shares used in calculation of net income per share of common stock:
|
||||||||||||||||
Basic (common)
|
45,486
|
42,475
|
45,151
|
36,987
|
||||||||||||
Diluted (common)
|
47,977
|
46,382
|
47,813
|
40,820
|
|
Six Months Ended June
|
|||||||
|
2013
|
2012
|
||||||
|
(in thousands)
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
26,798
|
$
|
25,420
|
||||
Adjustments to reconcile net income to net cash (used in)/ provided by operating activities:
|
||||||||
Depreciation and amortization
|
7,471
|
4,634
|
||||||
Bad debt provision/ (recovery)
|
803
|
(7
|
)
|
|||||
Deferred taxes
|
530
|
39
|
||||||
Excess tax benefit on stock-based compensation plans
|
(3,250
|
)
|
(301
|
)
|
||||
Stock-based compensation
|
6,426
|
3,323
|
||||||
Non-cash stock charge
|
-
|
640
|
||||||
Other
|
1,139
|
(140
|
)
|
|||||
Increase/ (decrease) in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(6,563
|
)
|
(6,803
|
)
|
||||
Unbilled revenues
|
(24,695
|
)
|
(12,241
|
)
|
||||
Prepaid expenses and other assets
|
981
|
955
|
||||||
Accounts payable
|
2,630
|
349
|
||||||
Accrued expenses
|
(12,695
|
)
|
(14,516
|
)
|
||||
Deferred revenue
|
(3,059
|
)
|
(2,482
|
)
|
||||
Due to employees
|
1,881
|
4,982
|
||||||
Taxes payable
|
(2,177
|
)
|
(2,223
|
)
|
||||
Net cash (used in)/ provided by operating activities
|
(3,780
|
)
|
1,629
|
|||||
Cash flows from investing activities:
|
||||||||
Purchases of property and equipment
|
(8,998
|
)
|
(6,410
|
)
|
||||
Payment for construction of corporate facilities
|
(1,006
|
)
|
(3,232
|
)
|
||||
Employee housing loans
|
(5,172
|
)
|
-
|
|||||
Proceeds from repayments of employee housing loans
|
821
|
-
|
||||||
Decrease in restricted cash, net
|
709
|
144
|
||||||
Increase in other long-term assets, net
|
(320
|
)
|
(50
|
)
|
||||
Acquisitions of businesses, net of cash acquired
|
(20
|
)
|
(6,990
|
)
|
||||
Net cash used in investing activities
|
(13,986
|
)
|
(16,538
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Net proceeds from issuance of common stock in initial public offering
|
-
|
32,364
|
||||||
Costs related to stock issue
|
-
|
(1,766
|
)
|
|||||
Repurchase of common stock
|
-
|
(50
|
)
|
|||||
Excess tax benefit on stock-based compensation plans
|
3,250
|
301
|
||||||
Proceeds related to stock options exercises
|
5,353
|
248
|
||||||
Net cash provided by financing activities
|
8,603
|
31,097
|
||||||
Effect of exchange rate changes on cash and cash equivalents
|
(1,474
|
)
|
(54
|
)
|
||||
Net (decrease)/ increase in cash and cash equivalents
|
(10,637
|
)
|
16,134
|
|||||
Cash and cash equivalents, beginning of period
|
118,112
|
88,796
|
||||||
Cash and cash equivalents, end of period
|
$
|
107,475
|
$
|
104,930
|
• | Total incurred but not paid costs related to acquisition of Thoughtcorp, Inc. were $0 and $234 for the six months ended June 30, 2013 and 2012, respectively. |
1. | BASIS OF PRESENTATION |
2. | ACQUISITIONS |
3. | GOODWILL |
|
North
America
|
EU
|
Russia
|
Other
|
Total
|
|||||||||||||||
Balance as of January 1, 2013
|
||||||||||||||||||||
Goodwill
|
$
|
16,643
|
$
|
2,864
|
$
|
3,191
|
$
|
1,697
|
$
|
24,395
|
||||||||||
Accumulated impairment losses
|
-
|
-
|
-
|
(1,697
|
)
|
(1,697
|
)
|
|||||||||||||
|
16,643
|
2,864
|
3,191
|
-
|
22,698
|
|||||||||||||||
Effect of net foreign currency exchange rate changes
|
(159
|
)
|
-
|
(235
|
)
|
-
|
(394
|
)
|
||||||||||||
Balance as of June 30, 2013
|
||||||||||||||||||||
Goodwill
|
16,484
|
2,864
|
2,956
|
1,697
|
24,001
|
|||||||||||||||
Accumulated impairment losses
|
-
|
-
|
-
|
(1,697
|
)
|
(1,697
|
)
|
|||||||||||||
|
$
|
16,484
|
$
|
2,864
|
$
|
2,956
|
$
|
-
|
$
|
22,304
|
4. | RESTRICTED CASH AND TIME DEPOSITS |
|
As of June 30, 2013
|
As of December 31, 2012
|
||||||
Time deposits
|
$
|
977
|
$
|
1,006
|
||||
Short-term security deposits under client contracts
|
60
|
660
|
||||||
Long-term deposits under employee loan programs
|
353
|
360
|
||||||
Long-term deposits under operating leases
|
-
|
107
|
||||||
Total
|
$
|
1,390
|
$
|
2,133
|
5. | EMPLOYEE LOANS AND ALLOWANCE FOR LOANS LOSSES |
|
As of June 30, 2013
|
As of December 31, 2012
|
||||||
Housing loans
|
$
|
4,440
|
$
|
-
|
||||
Relocation and other loans
|
385
|
429
|
||||||
Total employee loans
|
4,825
|
429
|
||||||
Less:
|
||||||||
Allowance for loan losses
|
-
|
-
|
||||||
Total loans, net of allowance for loan losses
|
$
|
4,825
|
$
|
429
|
6. | LONG-TERM DEBT |
7. | EMPLOYEE BENEFITS |
8. | INCOME TAXES |
9. | EARNINGS PER SHARE |
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
|
(in thousands, except share and per share data)
|
|||||||||||||||
|
||||||||||||||||
Numerator for common earnings per share:
|
||||||||||||||||
Operating expenses:
|
||||||||||||||||
Net income
|
$
|
14,118
|
$
|
13,321
|
$
|
26,798
|
$
|
25,420
|
||||||||
Net income allocated to participating securities
|
-
|
-
|
-
|
(3,176
|
)
|
|||||||||||
Numerator for basic earnings per share
|
14,118
|
13,321
|
26,798
|
22,244
|
||||||||||||
Effect on income available from reallocation of options
|
-
|
-
|
-
|
264
|
||||||||||||
Numerator for diluted earnings per share
|
$
|
14,118
|
$
|
13,321
|
$
|
26,798
|
$
|
22,508
|
||||||||
|
||||||||||||||||
Denominator for basic earnings per share:
|
||||||||||||||||
Weighted average common shares outstanding
|
45,486
|
42,475
|
45,151
|
36,987
|
||||||||||||
Effect of dilutive securities:
|
||||||||||||||||
Stock options
|
2,491
|
3,907
|
2,662
|
3,833
|
||||||||||||
Denominator for diluted earnings per share
|
47,977
|
46,382
|
47,813
|
40,820
|
||||||||||||
|
||||||||||||||||
Net income per share:
|
||||||||||||||||
Basic (common)
|
$
|
0.31
|
$
|
0.31
|
$
|
0.59
|
$
|
0.60
|
||||||||
Diluted (common)
|
$
|
0.29
|
$
|
0.29
|
$
|
0.56
|
$
|
0.55
|
||||||||
Anti-dilutive options not included in the calculation
|
950
|
1,393
|
1,162
|
1,396
|
10. | COMMITMENTS AND CONTINGENCIES |
11. | OPERATING SEGMENTS |
|
Three Months Ended,
June 30,
|
Six Months Ended,
June 30,
|
||||||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
Total segment revenues:
|
||||||||||||||||
North America
|
$
|
69,076
|
$
|
46,703
|
$
|
132,133
|
$
|
89,566
|
||||||||
Europe
|
48,424
|
40,794
|
94,577
|
80,655
|
||||||||||||
Russia
|
13,498
|
9,778
|
25,851
|
19,255
|
||||||||||||
Other
|
2,176
|
6,501
|
4,789
|
8,671
|
||||||||||||
Total segment revenues
|
$
|
133,174
|
$
|
103,776
|
$
|
257,350
|
$
|
198,147
|
||||||||
Segment operating profit:
|
||||||||||||||||
North America
|
$
|
16,213
|
$
|
10,440
|
$
|
30,394
|
$
|
20,166
|
||||||||
Europe
|
8,118
|
7,003
|
16,489
|
15,663
|
||||||||||||
Russia
|
1,687
|
1,499
|
2,319
|
1,818
|
||||||||||||
Other
|
(148
|
)
|
3,119
|
(64
|
)
|
3,320
|
||||||||||
Total segment operating profit
|
$
|
25,870
|
$
|
22,061
|
$
|
49,138
|
$
|
40,967
|
Three Months Ended,
June 30,
|
Six Months Ended,
June 30,
|
|||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
Total segment revenues
|
$
|
133,174
|
$
|
103,776
|
$
|
257,350
|
$
|
198,147
|
||||||||
Unallocated revenue
|
10
|
24
|
32
|
36
|
||||||||||||
Revenues
|
$
|
133,184
|
$
|
103,800
|
$
|
257,382
|
$
|
198,183
|
||||||||
|
||||||||||||||||
Total Segment operating profit:
|
$
|
25,870
|
$
|
22,061
|
$
|
49,138
|
$
|
40,967
|
||||||||
Unallocated amounts:
|
||||||||||||||||
Other revenues
|
10
|
24
|
32
|
36
|
||||||||||||
Stock-based compensation expense
|
(3,850
|
)
|
(1,773
|
)
|
(6,426
|
)
|
(3,323
|
)
|
||||||||
Stock charge
|
-
|
-
|
-
|
(640
|
)
|
|||||||||||
Non-corporate taxes
|
(680
|
)
|
(514
|
)
|
(1,500
|
)
|
(1,239
|
)
|
||||||||
Professional fees
|
(724
|
)
|
(889
|
)
|
(2,074
|
)
|
(1,318
|
)
|
||||||||
Depreciation and amortization
|
(715
|
)
|
(151
|
)
|
(1,430
|
)
|
(308
|
)
|
||||||||
Bank charges
|
(321
|
)
|
(296
|
)
|
(653
|
)
|
(545
|
)
|
||||||||
Other corporate expenses
|
(2,055
|
)
|
(1,632
|
)
|
(4,016
|
)
|
(3,016
|
)
|
||||||||
Income from operations
|
17,535
|
16,830
|
33,071
|
30,614
|
||||||||||||
Interest and other income, net
|
769
|
460
|
1,399
|
936
|
||||||||||||
Foreign exchange loss
|
(869
|
)
|
(1,394
|
)
|
(1,368
|
)
|
(1,314
|
)
|
||||||||
Income before provision for income taxes
|
$
|
17,435
|
$
|
15,896
|
$
|
33,102
|
$
|
30,236
|
As of June 30,
2013
|
As of December 31,
2012
|
|||||||
Belarus
|
$
|
40,210
|
$
|
40,095
|
||||
Ukraine
|
5,711
|
5,357
|
||||||
Russia
|
3,688
|
3,234
|
||||||
United States
|
2,788
|
2,048
|
||||||
Hungary
|
2,342
|
1,744
|
||||||
Other
|
661
|
657
|
||||||
Total
|
$
|
55,400
|
$
|
53,135
|
Three Months ended June 30,
|
Six Months ended June 30,
|
|||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
United States
|
$
|
59,746
|
$
|
48,565
|
$
|
117,196
|
$
|
94,604
|
||||||||
United Kingdom
|
27,711
|
22,858
|
54,779
|
45,786
|
||||||||||||
Russia
|
13,192
|
9,393
|
24,930
|
18,491
|
||||||||||||
Switzerland
|
10,734
|
6,797
|
20,014
|
12,942
|
||||||||||||
Canada
|
8,393
|
1,763
|
13,818
|
2,546
|
||||||||||||
Germany
|
4,537
|
3,959
|
9,070
|
7,441
|
||||||||||||
Netherlands
|
2,384
|
868
|
4,770
|
1,658
|
||||||||||||
Kazakhstan
|
2,028
|
1,662
|
4,493
|
3,333
|
||||||||||||
Sweden
|
1,349
|
1,017
|
2,604
|
2,472
|
||||||||||||
Spain
|
609
|
377
|
1,241
|
722
|
||||||||||||
Ukraine
|
143
|
4,321
|
331
|
4,375
|
||||||||||||
Other locations
|
848
|
514
|
1,188
|
1,020
|
||||||||||||
Reimbursable expenses and other revenues
|
1,510
|
1,706
|
2,948
|
2,793
|
||||||||||||
Revenues
|
$
|
133,184
|
$
|
103,800
|
$
|
257,382
|
$
|
198,183
|
Three Months ended June 30,
|
Six Months ended June 30,
|
|||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
|
||||||||||||||||
|
||||||||||||||||
Software development
|
$
|
90,298
|
$
|
69,268
|
$
|
174,078
|
$
|
132,151
|
||||||||
Application testing services
|
26,547
|
20,428
|
50,700
|
39,296
|
||||||||||||
Application maintenance and support
|
10,648
|
8,728
|
21,487
|
16,969
|
||||||||||||
Infrastructure services
|
3,461
|
3,148
|
6,871
|
5,752
|
||||||||||||
Licensing
|
720
|
522
|
1,298
|
1,222
|
||||||||||||
Reimbursable expenses and other revenues
|
1,510
|
1,706
|
2,948
|
2,793
|
||||||||||||
Revenues
|
$
|
133,184
|
$
|
103,800
|
$
|
257,382
|
$
|
198,183
|
12. | STOCK-BASED COMPENSATION |
Three Months ended June, 30,
|
Six Months ended June, 30,
|
|||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
Cost of revenues
|
$
|
1,079
|
$
|
884
|
$
|
1,858
|
$
|
1,450
|
||||||||
Selling, general and administrative expenses
|
2,771
|
889
|
4,568
|
1,873
|
||||||||||||
Total
|
$
|
3,850
|
$
|
1,773
|
$
|
6,426
|
$
|
3,323
|
|
Number of
Options
|
Weighted
Average
|
Aggregate
Intrinsic Value
|
|||||||||
Options outstanding at December 31, 2012
|
6,296,709
|
$
|
7.51
|
$
|
66,682
|
|||||||
Options granted
|
1,865,000
|
23.03
|
7,740
|
|||||||||
Options exercised
|
(1,502,294
|
)
|
3.90
|
(34,973
|
)
|
|||||||
Options forfeited/cancelled
|
(49,043
|
)
|
14.67
|
(614
|
)
|
|||||||
Options outstanding at June 30, 2013
|
6,610,372
|
$
|
12.66
|
$
|
95,983
|
|||||||
Options vested and exercisable at June 30, 2013
|
2,681,891
|
$
|
5.79
|
$
|
57,366
|
|||||||
Options expected to vest
|
3,613,916
|
$
|
17.17
|
$
|
36,175
|
|
Number of
Shares
|
Weighted
Average
Grant
Date Fair
Value
Per Share
|
||||||
Unvested restricted stock outstanding at January 1, 2013
|
659,872
|
$
|
17.92
|
|||||
Restricted stock granted
|
14,041
|
23.20
|
||||||
Restricted stock vested
|
(172,987
|
)
|
(16.71
|
)
|
||||
Unvested restricted stock outstanding at June 30, 2013
|
500,926
|
$
|
18.48
|
13. | RECENT ACCOUNTING PRONOUNCEMENTS |
Three Months Ended June 30, 2012
|
Six Months Ended June 30, 2012
|
|||||||||||||||||||||||||||||||
As Previously
Reported |
After Reclassification
|
As Previously
Reported |
After Reclassification
|
|||||||||||||||||||||||||||||
(in thousands, except percentages)
|
||||||||||||||||||||||||||||||||
ISVs and Technology
|
$
|
25,218
|
24.3
|
%
|
$
|
24,762
|
23.9
|
%
|
$
|
49,318
|
24.9
|
%
|
$
|
48,207
|
24.3
|
%
|
||||||||||||||||
Banking and Financial Services
|
24,258
|
23.4
|
24,168
|
23.3
|
46,825
|
23.6
|
46,473
|
23.4
|
||||||||||||||||||||||||
Travel and Consumer
|
22,465
|
21.6
|
22,446
|
21.6
|
46,344
|
23.4
|
46,276
|
23.4
|
||||||||||||||||||||||||
Business Information and Media
|
16,002
|
15.4
|
16,338
|
15.7
|
31,455
|
15.9
|
32,571
|
16.4
|
||||||||||||||||||||||||
Other verticals
|
14,151
|
13.7
|
14,380
|
13.9
|
21,448
|
10.8
|
21,863
|
11.1
|
||||||||||||||||||||||||
Reimbursable expenses and other revenues
|
1,706
|
1.6
|
1,706
|
1.6
|
2,793
|
1.4
|
2,793
|
1.4
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Revenues
|
$
|
103,800
|
100.0
|
%
|
$
|
103,800
|
100.0
|
%
|
$
|
198,183
|
100.0
|
%
|
$
|
198,183
|
100.0
|
%
|
|
Three Months Ended March 31, 2013
|
|||||||||||||||
|
As Previously Reported
|
After Reclassification
|
||||||||||||||
|
(in thousands, except percentages)
|
|||||||||||||||
Client Location
|
||||||||||||||||
North America
|
$
|
64,474
|
51.9
|
%
|
$
|
62,875
|
50.6
|
%
|
||||||||
Europe
|
43,632
|
35.1
|
45,231
|
36.4
|
||||||||||||
CIS
|
14,654
|
11.8
|
14,654
|
11.8
|
||||||||||||
Reimbursable expenses and other revenues
|
1,438
|
1.2
|
1,438
|
1.2
|
||||||||||||
Revenues
|
$
|
124,198
|
100.0
|
%
|
$
|
124,198
|
100.0
|
%
|
Three Months Ended June 30,
|
Increase
|
Six Months Ended June 30,
|
Increase
|
|||||||||||||||||||||||||||||
2013
|
2012
|
Dollars
|
Percentage
|
2013
|
2012
|
Dollars
|
Percentage
|
|||||||||||||||||||||||||
(in thousands, except percentages)
|
||||||||||||||||||||||||||||||||
Revenues
|
$
|
133,184
|
$
|
103,800
|
$
|
29,384
|
28.3
|
%
|
$
|
257,382
|
$
|
198,183
|
$
|
59,199
|
29.9
|
%
|
||||||||||||||||
Income from operations
|
17,535
|
16,830
|
705
|
4.2
|
33,071
|
30,614
|
2,457
|
8.0
|
||||||||||||||||||||||||
Net income
|
14,118
|
13,321
|
797
|
6.0
|
26,798
|
25,420
|
1,378
|
5.4
|
•
|
Broad-based revenue growth from clients in most of our key verticals, and in particular within Banking and Financial Services, which grew $13.1 million and $23.4 million during the three and six months ended June 30, 2013, respectively, and ISVs and Technology, which increased revenues by $8.8 million and $17.6 million in the three and six months ended June 30, 2013, over the corresponding periods in 2012;
|
•
|
Continued penetration to the European market, where we experienced revenue growth of $11.9 million and $21.8 million, or 33.1% and 30.6%, in the three and six months ended June 30, 2013, respectively, over the corresponding periods in 2012;
|
•
|
Completion of strategic acquisitions of Thoughtcorp, Inc. (“Thoughtcorp”) in May 2012 and Empathy Lab, LLC (“Empathy Lab”) in December 2012. Both acquisitions proved to be a natural fit into all of our core verticals and strengthened our value proposition on the North American market. Over a short period of time that lapsed since acquisition, we’ve managed to realize a number of the expected synergies, including acquisition of a major customer within Travel and Consumer vertical, which entered EPAM’s top 10 list in the second quarter of 2013;
|
•
|
Additional stock-based compensation expense of $1.6 million and $2.6 million during the three and six months ended June 30, 2013, respectively, related to our 2012 acquisitions, as well as $0.2 million and $0.9 million of incremental public company costs incurred in the three and six months ended June 30, 2013, respectively; and
|
•
|
Increase in our effective tax rate, which grew from 16.2% and 15.9% in the three and six months ended June 30, 2012 to 19.0% in the corresponding periods of 2013, which resulted in a $0.5 million and a $1.0 million decrease in net income for the three and six months ended June 30, 2013, respectively.
|
•
|
Income from operations, as reported on our consolidated and condensed statements of income and comprehensive income, excluding certain expenses and benefits, which we refer to as “non-GAAP income from operations”.
|
•
|
The second measure calculates non-GAAP income from operations as a percentage of reported revenues, which we refer to as “non-GAAP operating margin”.
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
|
(in thousands, except percentages)
|
|||||||||||||||
GAAP income from operations
|
$
|
17,535
|
$
|
16,830
|
$
|
33,071
|
$
|
30,614
|
||||||||
Stock-based compensation expense
|
3,850
|
1,773
|
6,426
|
3,323
|
||||||||||||
One-time charges
|
(331
|
)
|
-
|
(331
|
)
|
584
|
||||||||||
Amortization of purchased intangible assets
|
704
|
140
|
1,403
|
280
|
||||||||||||
Acquisition-related costs
|
10
|
307
|
48
|
387
|
||||||||||||
Non-GAAP income from operations
|
$
|
21,768
|
$
|
19,050
|
$
|
40,617
|
$
|
35,188
|
||||||||
|
||||||||||||||||
GAAP Operating margin
|
13.2
|
%
|
16.2
|
%
|
12.8
|
%
|
15.4
|
%
|
||||||||
Effect of the adjustments detailed above
|
3.1
|
2.2
|
3.0
|
2.4
|
||||||||||||
Non-GAAP Operating margin
|
16.3
|
%
|
18.4
|
%
|
15.8
|
%
|
17.8
|
%
|
|
Three Months Ended June 30,
|
Increase/Decrease
|
Six Months Ended June 30,
|
Increase/Decrease
|
||||||||||||||||||||||||||||
|
2013
|
2012
|
Dollars
|
Percentage
|
2013
|
2012
|
Dollars
|
Percentage
|
||||||||||||||||||||||||
|
(in thousands, except percentages)
|
|||||||||||||||||||||||||||||||
Revenues
|
$
|
133,184
|
$
|
103,800
|
$
|
29,384
|
28.3
|
%
|
$
|
257,382
|
$
|
198,183
|
$
|
59,199
|
29.9
|
%
|
||||||||||||||||
Operating expenses:
|
||||||||||||||||||||||||||||||||
Cost of revenues (exclusive of depreciation and amortization)(1)
|
83,547
|
63,803
|
19,744
|
30.9
|
161,484
|
123,978
|
37,506
|
30.3
|
||||||||||||||||||||||||
Selling, general and administrative expenses(2)
|
28,541
|
20,711
|
7,830
|
37.8
|
55,624
|
38,338
|
17,286
|
45.1
|
||||||||||||||||||||||||
Depreciation and amortization expense
|
3,854
|
2,423
|
1,431
|
59.1
|
7,471
|
4,634
|
2,837
|
61.2
|
||||||||||||||||||||||||
Other operating (income)/ expenses, net
|
(293
|
)
|
33
|
(326
|
)
|
(987.9
|
)
|
(268
|
)
|
619
|
(887
|
)
|
(143.3
|
)
|
||||||||||||||||||
Income from operations
|
17,535
|
16,830
|
705
|
4.2
|
33,071
|
30,614
|
2,457
|
8.0
|
||||||||||||||||||||||||
Interest and other income, net
|
769
|
460
|
309
|
67.2
|
1,399
|
936
|
463
|
49.5
|
||||||||||||||||||||||||
Foreign exchange (loss)/ gain
|
(869
|
)
|
(1,394
|
)
|
525
|
(37.7
|
)
|
(1,368
|
)
|
(1,314
|
)
|
(54
|
)
|
4.1
|
||||||||||||||||||
Income before provision for income taxes
|
17,435
|
15,896
|
1,539
|
9.7
|
33,102
|
30,236
|
2,866
|
9.5
|
||||||||||||||||||||||||
Provision for income taxes
|
3,317
|
2,575
|
742
|
28.8
|
6,304
|
4,816
|
1,488
|
30.9
|
||||||||||||||||||||||||
Net Income
|
$
|
14,118
|
$
|
13,321
|
$
|
797
|
6.0
|
%
|
$
|
26,798
|
$
|
25,420
|
$
|
1,378
|
5.4
|
%
|
(1)
|
Included $1,079 and $884 of stock-based compensation expense for the three months ended June 30, 2013 and 2012, respectively, and $1,858 and $1,450 of stock-based compensation expense for the six months ended June 30, 2013 and 2012, respectively;
|
(2)
|
Included $2,771 and $889 of stock-based compensation expense for the three months ended June 30, 2013 and 2012, respectively, and $4,568 and $1,873 of stock-based compensation expense for the six months ended June 30, 2013 and 2012, respectively.
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
Total segment revenues:
|
||||||||||||||||
North America
|
$
|
69,076
|
$
|
46,703
|
$
|
132,133
|
$
|
89,566
|
||||||||
Europe
|
48,424
|
40,794
|
94,577
|
80,655
|
||||||||||||
Russia
|
13,498
|
9,778
|
25,851
|
19,255
|
||||||||||||
Other
|
2,176
|
6,501
|
4,789
|
8,671
|
||||||||||||
Total segment revenues
|
$
|
133,174
|
$
|
103,776
|
$
|
257,350
|
$
|
198,147
|
||||||||
Segment operating profit:
|
||||||||||||||||
North America
|
$
|
16,213
|
$
|
10,440
|
$
|
30,394
|
$
|
20,166
|
||||||||
Europe
|
8,118
|
7,003
|
16,489
|
15,663
|
||||||||||||
Russia
|
1,687
|
1,499
|
2,319
|
1,818
|
||||||||||||
Other
|
(148
|
)
|
3,119
|
(64
|
)
|
3,320
|
||||||||||
Total segment operating profit
|
$
|
25,870
|
$
|
22,061
|
$
|
49,138
|
$
|
40,967
|
Six Months Ended June 30,
|
||||||||
2013
|
2012
|
|||||||
|
(in thousands)
|
|||||||
Consolidated Statements of Cash Flow Data:
|
||||||||
Net cash (used in)/ provided by operating activities
|
$
|
(3,780
|
)
|
$
|
1,629
|
|||
Net cash used in investing activities
|
(13,986
|
)
|
(16,538
|
)
|
||||
Net cash provided by financing activities
|
8,603
|
31,097
|
||||||
Effect of exchange-rate changes on cash and cash equivalents
|
(1,474
|
)
|
(54
|
)
|
||||
Net (decrease)/ increase in cash and cash equivalents
|
$
|
(10,637
|
)
|
$
|
16,134
|
|||
Cash and cash equivalents, beginning of period
|
118,112
|
88,796
|
||||||
Cash and cash equivalents, end of period
|
$
|
107,475
|
$
|
104,930
|
Total
|
Less than 1
Year
|
1-3 Years
|
3-5 Years
|
More than 5
years
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Operating lease obligations
|
$
|
31,307
|
$
|
12,815
|
$
|
12,808
|
$
|
4,313
|
$
|
1,371
|
||||||||||
5,129
|
5,129
|
—
|
—
|
—
|
||||||||||||||||
Employee Housing Program (2)
|
2,153
|
2,153
|
—
|
—
|
—
|
|||||||||||||||
|
$
|
38,589
|
$
|
20,097
|
$
|
12,808
|
$
|
4,313
|
$
|
1,371
|
(1) | On December 7, 2011, we entered into an agreement with IDEAB Project Eesti AS for the construction of a 14,071 square meter office building within the High Technologies Park in Minsk, Belarus. The building is expected to be operational in the second half of 2013. As of June 30, 2013, our total outstanding commitment was $5.1 million. |
(2) | In the third quarter of 2012, our Board of Directors approved the Employee Housing Program, which assists employees in purchasing housing in Belarus. As part of the program, we will extend financing to employees up to an aggregate amount of $10 million. |
Exhibit
Number
|
|
Description
|
|
|
|
|
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934
|
|
|
|
|
|
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934
|
|
|
|
|
|
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
EPAM SYSTEMS, INC.
|
|
|
|
|
|
By:
|
/s/ Arkadiy Dobkin
|
|
|
Name: Arkadiy Dobkin
|
|
|
Title: Chairman, Chief Executive Officer and President (principal executive officer)
|
|
|
|
|
By:
|
/s/ Ilya Cantor
|
|
|
Name: Ilya Cantor
|
|
|
Title: Senior Vice President, Chief Financial Officer and Treasurer (principal financial officer and principal accounting officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of EPAM Systems, Inc.;
|
|
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
|
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Arkadiy Dobkin
|
|
Arkadiy Dobkin
|
|
|
|
Chairman, Chief Executive Officer and President
|
|
(principal executive officer)
|
1. | I have reviewed this quarterly report on Form 10-Q of EPAM Systems, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Ilya Cantor
|
|
Ilya Cantor
|
|
|
|
Senior Vice President, Chief Financial Officer and Treasurer
|
|
(principal financial officer and principal accounting officer)
|
/s/ Arkadiy Dobkin
|
|
Arkadiy Dobkin
|
|
|
|
Chairman, Chief Executive Officer and President
|
|
(principal executive officer)
|
/s/ Ilya Cantor
|
|
Ilya Cantor
|
|
|
|
Senior Vice President, Chief Financial Officer and Treasurer
|
|
(principal financial officer and principal accounting officer)
|
OPERATING SEGMENTS
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OPERATING SEGMENTS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OPERATING SEGMENTS |
The Company's reportable segments are: North America, Europe, Russia and Other. This determination is based on the unique business practices and market specifics of each region and that each region engages in business activities from which it earns revenues and incurs expenses. The Company's reportable segments are based on the allocation of managerial responsibility for its client base. Because managerial responsibility for a particular client relationship generally correlates with the client's geographic location, there is a high degree of similarity between client locations and the geographic boundaries of the Company's reportable segments. In some specific cases, however, managerial responsibility for a particular client is assigned to a management team in another region, usually based on the strength of the relationship between client executives and particular members of EPAM's senior management team. In a case like this, the client's activity would be reported through the management team's reportable segment. The Company's Chief Operating Decision Maker (CODM) evaluates its performance and allocates resources based on segment revenues and operating profit. Segment operating profit is defined as income from operations before unallocated costs. Generally, operating expenses for each operating segment have similar characteristics and are subject to similar factors, pressures and challenges. Expenses included in segment operating profit consist principally of direct selling and delivery costs as well as an allocation of certain shared services expenses. Certain expenses are not specifically allocated to specific segments as management does not believe it is practical to allocate such costs to individual segments because they are not directly attributable to any specific segment. Further, stock based compensation expense is not allocated to individual segments in internal management reports used by the CODM. Accordingly, these expenses are separately disclosed as "unallocated" and adjusted only against the Company's total income from operations. Revenues from external customers and segment operating profit, before unallocated expenses, for the North America, Europe, Russia and Other reportable segments for the three and six months ended June 30, 2013 and 2012, were as follows:
Intersegment transactions were excluded from the above on the basis that they are neither included into the measure of a segment's profit and loss by the CODM, nor provided to the CODM on a regular basis. Reconciliation of segment revenues and operating profit to consolidated income before provision for income taxes is presented below:
Geographic Area Information Management has determined that it is not practical to allocate identifiable assets by segment since such assets are used interchangeably amongst the segments. Geographical information about the Company's long-lived assets based on physical location of the assets was as follows:
Long-lived assets include property and equipment, net of accumulated depreciation and amortization. Information about the Company's revenues by client location is as follows:
Service Offering Information Information about the Company's revenues by service offering is as follows:
|
RESTRICTED CASH AND TIME DEPOSITS
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
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RESTRICTED CASH AND TIME DEPOSITS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RESTRICTED CASH AND TIME DEPOSITS |
Restricted cash and time deposits consist of the following:
Included in time deposits as of June 30, 2013 and December 31, 2012, was a deposit of $977 and $1,006, respectively, which earned an interest rate of 2.95%. The deposit matures on September 27, 2013. The Company doesn't intend to withdraw the deposit prior to its maturity. At June 30, 2013 and December 31, 2012, short-term security deposits under client contracts included fixed amounts placed in respect of bank guarantees intended to secure appropriate performance under respective contracts. The Company estimates the probability of non-performance under the contracts as remote, therefore, no provision for losses has been created in respect of these amounts as of these dates. Also included in restricted cash as of June 30, 2013 and December 31, 2012, were deposits of $353 and $360, respectively, placed in connection with certain employee loan programs (See Note 10). |
EARNINGS PER SHARE (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
|
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EARNINGS PER SHARE [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Basic and Diluted Earning Per Share | The following table sets forth the computation of basic and diluted earnings per share as follows:
|
STOCK-BASED COMPENSATION
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
|
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STOCK-BASED COMPENSATION [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION |
The following costs related to the Company's stock compensation plans are included in the unaudited consolidated statements of income:
2012 Non-Employee Directors Compensation Plan—On January 11, 2012 the Company approved the 2012 Non-Employee Directors Compensation Plan ("2012 Directors Plan"), which will be used to issue equity grants to its non-employee directors. The Company authorized 600,000 shares of common stock to be reserved for issuance under the plan. The 2012 Directors Plan will expire after ten years and will be administered by the Company's Board of Directors. On January 8, 2013, the Company issued 5,257 shares of non-vested ("restricted") stock to its new non-employee director under the 2012 Non-Employee Directors Compensation Plan. The shares will vest and become unforfeitable 25% on each of the first, second, third and fourth anniversaries of the grant date. Upon termination of service from the Board at any time, a portion of these shares shall vest as of the date of such termination on a pro rata basis determined by the number of days that the participant served on the Board from the grant date through the date of such termination. The fair value of the restricted shares at the time of grant was $101. On June 13, 2013, the Company issued 8,784 shares of non-vested ("restricted") stock to its non-employee directors under the 2012 Non-Employee Directors Compensation Plan. The shares will vest and become unforfeitable on the first anniversary of the grant date. Upon termination of service from the Board at any time, a portion of these shares shall vest as of the date of such termination on a pro rata basis determined by the number of days that the participant served on the Board from the grant date through the date of such termination. The fair value of the restricted shares at the time of grant was $225. 2012 Long-Term Incentive Plan — On January 11, 2012 the Company approved the 2012 Long-Term Incentive Plan ("2012 Plan"), which will be used to issue equity grants to employees. As of June 30, 2013, 6,037,728 shares of common stock were reserved for issuance under the plan. This is in addition to 872,608 shares that remained available for issuance under the 2006 Plan as of June 30, 2013 and which are available for issuance under the 2012 Plan. In addition, up to 3,437,072 shares that are subject to outstanding awards as of June 30, 2013, under the 2006 Plan and that expire or terminate for any reason prior to exercise or that would otherwise return to the 2006 Plan's share reserve will be available for awards to be granted under the 2012 Plan. During the three months ended June 30, 2013, the Company issued a total of 1,865,000 stock options under its 2012 Long-Term Incentive Plan with the grant-date fair value of $17,710. As of June 30, 2013, a total of 6,910,336 shares remained available for issuance under the 2012 Plan. 2006 Stock Option Plan — Effective May 31, 2006, the Board of Directors of the Company adopted the 2006 Stock Option Plan (the "2006 Plan"). The Company's stock option plan permitted the granting of options to directors, employees, and certain independent contractors. The Compensation Committee of the Board of Directors generally had the authority to select individuals who were to receive options and to specify the terms and conditions of each option so granted, including the number of shares covered by the option, the exercise price, vesting provisions, and the overall option term. In January 2012, the 2006 Plan was discontinued; however, a total of 872,608 shares remained available for issuance under the 2012 Plan as of June 30, 2013. All of the options issued pursuant to the 2006 Plan expire ten years from the date of grant. Stock option activity under the Company’s plans is set forth below:
The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model. The Company recognizes the fair value of each option as compensation expense ratably using the straight-line method over the service period (generally the vesting period). Additionally, the Company estimates forfeitures at the time of grant and revises those estimates in subsequent periods if actual forfeitures differ from those estimates. The Company uses a combination of historical data and other factors to estimate pre-vesting option forfeitures and record share-based compensation expense only for those awards that are expected to vest. As of June 30, 2013, total unrecognized compensation cost related to non-vested share-based compensation awards was $35,058. That cost is expected to be recognized over the next 2 years using the weighted average method. Summary of restricted stock activity as of June 30, 2013, and changes during the six months then ended is presented below:
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RECONCILIATION OF SEGMENT REVENUES AND OPERATING PROFIT TO CONSOLIDATED INCOME FROM OPERATIONS (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | $ 133,184 | $ 103,800 | $ 257,382 | $ 198,183 |
Segment Reporting Information [Line Items] | ||||
Income from operations | 17,535 | 16,830 | 33,071 | 30,614 |
Stock-based compensation expense | (3,850) | (1,773) | (6,426) | (3,323) |
Depreciation and amortization | (3,854) | (2,423) | (7,471) | (4,634) |
Interest and other income, net | 769 | 460 | 1,399 | 936 |
Foreign exchange loss | (869) | (1,394) | (1,368) | (1,314) |
Income before provision for income taxes | 17,435 | 15,896 | 33,102 | 30,236 |
Operating Segments [Member]
|
||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 133,174 | 103,776 | 257,350 | 198,147 |
Segment Reporting Information [Line Items] | ||||
Income from operations | 25,870 | 22,061 | 49,138 | 40,967 |
Unallocated Amounts [Member]
|
||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 10 | 24 | 32 | 36 |
Segment Reporting Information [Line Items] | ||||
Other revenues | 10 | 24 | 32 | 36 |
Stock-based compensation expense | (3,850) | (1,773) | (6,426) | (3,323) |
Stock charge | 0 | 0 | 0 | (640) |
Non-corporate taxes | (680) | (514) | (1,500) | (1,239) |
Professional fees | (724) | (889) | (2,074) | (1,318) |
Depreciation and amortization | (715) | (151) | (1,430) | (308) |
Bank charges | (321) | (296) | (653) | (545) |
Other corporate expenses | $ (2,055) | $ (1,632) | $ (4,016) | $ (3,016) |
BASIS OF PRESENTATION (Details) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Organization Consolidation And Summary Of Significant Accounting Policies [Line Items] | |
Loan term | 5 years |
Interest rate on loan | 7.50% |
Capped price per housing loan | $ 50 |
Maximum loan-to-value-ratio | 70.00% |
Loans on nonaccrual status | 90 days |
STOCK-BASED COMPENSATION (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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STOCK-BASED COMPENSATION [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Costs Related to Stock Compensation Plans |
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Stock Option Activity | Stock option activity under the Company’s plans is set forth below:
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Restricted Stock Activity |
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INCOME TAXES (Details)
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3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Income Taxes [Line Items] | ||||
Effective tax rate | 19.00% | 16.20% | 19.00% | 15.90% |
Belarus [Member]
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Income Taxes [Line Items] | ||||
Tax exempt income | 100.00% |
STOCK-BASED COMPENSATION - ADDITIONAL INFORMATION (Details) (USD $)
In Thousands, except Share data, unless otherwise specified |
6 Months Ended | 0 Months Ended | 3 Months Ended | 6 Months Ended | 0 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Jan. 11, 2012
2012 Non Employee Directors Compensation Plan
|
Jun. 30, 2013
2012 Long Term Incentive Plan
|
Jun. 30, 2013
2006 Stock Option Plan
|
Jun. 30, 2013
2006 Stock Option Plan
Maximum
|
Jun. 30, 2013
Stock Options Fiscal 2006 Plan
|
Jun. 13, 2013
Non Employee Directors
Restricted Stock Units (RSUs)
|
Jan. 08, 2013
Non Employee Directors
Restricted Stock Units (RSUs)
|
Jan. 08, 2017
Scenario, Forecast
Non Employee Directors
Restricted Stock Units (RSUs)
|
Jan. 08, 2016
Scenario, Forecast
Non Employee Directors
Restricted Stock Units (RSUs)
|
Jan. 08, 2015
Scenario, Forecast
Non Employee Directors
Restricted Stock Units (RSUs)
|
Jan. 08, 2014
Scenario, Forecast
Non Employee Directors
Restricted Stock Units (RSUs)
|
|
Compensation Related Costs Share Based Payments Disclosure [Line Items] | ||||||||||||
Shares authorized to be reserved for issuance (in shares) | 600,000 | |||||||||||
2012 Directors Plan expiration period | 10 years | |||||||||||
Non vested common stock shares issued (in shares) | 8,784 | 5,257 | ||||||||||
Percentage of Restricted stock shares vested (in hundredths) | 25.00% | 25.00% | 25.00% | 25.00% | ||||||||
Fair value of restricted stock | $ 225 | $ 101 | ||||||||||
Common stock shares subject to outstanding awards that expire or terminate that are available for awards to be granted (in shares) | 3,437,072 | |||||||||||
Common stock shares available for issuance (in shares) | 6,037,728 | 872,608 | ||||||||||
Stock options issued (in shares) | 1,865,000 | |||||||||||
Stock options issued, grant date fair value | 17,710 | |||||||||||
Number of remaining shares (in shares) | 6,910,336 | |||||||||||
Options issued expiration period | 10 years | |||||||||||
Total unrecognized compensation cost related to non-vested share-based compensation awards granted | $ 35,058 | |||||||||||
Total unrecognized compensation cost related to non-vested share-based compensation awards granted, period for recognition | 2 years |
OPERATING SEGMENTS (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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OPERATING SEGMENTS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues from External Customers and Segment Operating Profit before Unallocated Expenses | Revenues from external customers and segment operating profit, before unallocated expenses, for the North America, Europe, Russia and Other reportable segments for the three and six months ended June 30, 2013 and 2012, were as follows:
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Reconciliation of Segment Revenues and Operating Profit to Consolidated Income Before Provision for Income Taxes | Reconciliation of segment revenues and operating profit to consolidated income before provision for income taxes is presented below:
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Geographical Information of Long-Lived Assets Based on Physical Location | Management has determined that it is not practical to allocate identifiable assets by segment since such assets are used interchangeably amongst the segments. Geographical information about the Company's long-lived assets based on physical location of the assets was as follows:
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Revenues by Client Location | Information about the Company's revenues by client location is as follows:
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Revenues by Service Offering | Information about the Company's revenues by service offering is as follows:
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Parenthetical) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended | |
---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) [Abstract] | ||
Total incurred but not paid costs related to acquisition of Thoughtcorp | $ 0 | $ 234 |
ACQUISITIONS
|
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2013
|
|||
ACQUISITIONS [Abstract] | |||
ACQUISITIONS |
On December 18, 2012, the Company acquired substantially all of the assets and assumed certain liabilities of Empathy Lab, LLC ("Empathy Lab"), a U.S.-based digital strategy and multi-channel experience design firm. The acquisition was accounted for as a business combination under the acquisition method of accounting in accordance with generally accepted accounting principles. As of June 30, 2013, the Company finalized the fair values of the assets acquired and liabilities assumed as of the date of acquisition. As a result, total consideration transferred was set at $27,172. There were no material adjustments to the purchase price allocation previously reported. |
EMPLOYEE LOANS AND ALLOWANCE FOR LOANS LOSSES
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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EMPLOYEE LOANS AND ALLOWANCE FOR LOANS LOSSES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EMPLOYEE LOANS AND ALLOWANCE FOR LOANS LOSSES |
In the third quarter of 2012, the Board of Directors of the Company approved the Employee Housing Program ("the Housing Program"), which assists employees in purchasing housing in Belarus. The Housing Program was designed to be a retention mechanism for the Company's employees in Belarus and is available to full-time employees who have been with the Company for at least three years. As part of the Housing Program, the Company will extend financing to employees up to an aggregate amount of $10,000. Loans issued by the Company under the Housing Program during the six months ended June 30, 2013, were denominated in U.S. Dollars with a 5 year term and carried an interest rate of 7.5%. Additionally, the Company issues relocation loans in connection with the intra-company transfers, as well as certain other individual loans. At June 30, 2013, and December 31, 2012, categories of employee loans included in the loans portfolio were as follows:
There were no loans issued to principal officers, directors, and their affiliates during the six months ended June 30, 2013 and 2012. On a quarterly basis, the Company reviews the aging of its loan portfolio to evaluate information about the ability of employees to service their debt, including historical payment experience, reasons for payment delays and shortfalls, if any, probability of collecting scheduled principal and interest payments based on the knowledge of individual borrowers, among other factors. As of June 30, 2013 and December 31, 2012, there were no past due or non-accrual employee loans. As of June 30, 2013 and December 31, 2012, the Company determined no allowance for loan losses was required regarding its employee loans and there were no movements in provision for loan losses during the three and six months ended June 30, 2013 and 2012. |
GOODWILL
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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GOODWILL [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL |
Changes in goodwill for the six months ended June 30, 2013 are as follows:
|
REVENUES BY SERVICE OFFERING (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Revenue from External Customer [Line Items] | ||||
Revenues | $ 133,184 | $ 103,800 | $ 257,382 | $ 198,183 |
Software development [Member]
|
||||
Revenue from External Customer [Line Items] | ||||
Revenues | 90,298 | 69,268 | 174,078 | 132,151 |
Application testing services [Member]
|
||||
Revenue from External Customer [Line Items] | ||||
Revenues | 26,547 | 20,428 | 50,700 | 39,296 |
Application maintenance and support [Member]
|
||||
Revenue from External Customer [Line Items] | ||||
Revenues | 10,648 | 8,728 | 21,487 | 16,969 |
Infrastructure services [Member]
|
||||
Revenue from External Customer [Line Items] | ||||
Revenues | 3,461 | 3,148 | 6,871 | 5,752 |
Licensing [Member]
|
||||
Revenue from External Customer [Line Items] | ||||
Revenues | 720 | 522 | 1,298 | 1,222 |
Reimbursable expenses and other revenues [Member]
|
||||
Revenue from External Customer [Line Items] | ||||
Revenues | $ 1,510 | $ 1,706 | $ 2,948 | $ 2,793 |
ACQUISITIONS (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
|
---|---|
ACQUISITIONS [Abstract] | |
Total consideration transferred | $ 27,172 |
LONG-TERM DEBT (Details) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended | |
---|---|---|
Jun. 30, 2013
|
Jan. 15, 2013
|
|
Debt Instrument [Line Items] | ||
Percentage of foreign subsidiaries outstanding shares of capital stock serves as collateral | 65.00% | |
2013 Credit Facility
|
||
Debt Instrument [Line Items] | ||
Line of credit, maximum borrowing capacity | $ 40,000 | |
Line of credit, expiration date | Jan. 15, 2015 | |
Line of credit, current borrowing capacity | $ 40,000 | |
Variable rate in addition to LIBOR | 1.25% |
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