SYNT Syntel, Inc. (delisted)

In a release issued under the same headline yesterday by Syntel, Inc. (Nasdaq:SYNT), please note that the section header referencing guidance should read "2017 Guidance," not "2016 Guidance" as previously stated. The corrected release follows:

Syntel, Inc. (Nasdaq:SYNT), a leading global provider of integrated information technology and knowledge process services, today announced financial results for the fourth quarter and full year, ended December 31, 2016.

Fourth Quarter Financial Highlights

Syntel's revenue for the fourth quarter decreased 6.6 percent to $237.9 million from $254.6 million in the prior-year period, and 1.4 percent from $241.3 million in the third quarter of 2016.  During the fourth quarter, Banking and Financial Services accounted for 48.4 percent of total revenue, with Retail, Logistics and Telecom at 17.6 percent, Healthcare and Life Sciences at 16 percent, Insurance at 13.7 percent, and Manufacturing at 4.3 percent.

The Company's gross margin was 40.2 percent in the fourth quarter, compared to 41.8 percent in the prior-year period and 39.2 percent in the third quarter of 2016.  Selling, General and Administrative (SG&A) expenses were 13.1 percent of revenue in the fourth quarter, compared to 11 percent in the prior-year period and 12.2 percent in the previous quarter.

The fourth quarter income from operations was 27.1 percent of revenue as compared to 30.8 percent in the prior-year period and 27 percent in the third quarter.

Net income for the fourth quarter was $48 million or $0.57 per diluted share, compared to $74.2 million or $0.88 per diluted share in the prior-year period and net loss of $217.2 million or $2.58 per diluted share in the third quarter of 2016. In connection with a special cash dividend and the one-time repatriation of cash announced on September 12, 2016, the Company recognized a one-time tax expense of $271 million (net of foreign tax credits) in the third quarter of 2016.

Full Year 2016 Financial Highlights

Revenue for 2016 decreased 0.2 percent to $966.6 million, from $968.6 million in 2015. The Company's 2016 operating margin was 27.1 percent, compared to 29.3 percent in 2015. Net loss for the year was $57.4 million compared to income of $252.5 million in 2015. The Company reported a net loss of $0.68 in 2016 as compared to earnings of $3.00 per diluted share in 2015.  

During 2016, Syntel spent $17.5 million in CAPEX, largely in support of campus infrastructure, and finished the year with cash and short-term investments of $100 million. The Company added 15 new clients during the year and ended 2016 with 23,011 employees globally.

Operational Highlights

"While we were impacted by challenges seen across several industries in the past year, Syntel has started 2017 with a focus on helping our clients build competitive differentiation and gain operational flexibility in an uncertain business climate," said Syntel Interim CEO and President Rakesh Khanna. "Digital enablement and modernizing existing IT assets are increasingly becoming strategic priorities for our customers as they undergo enterprise-wide technology transformations.”

“Syntel has developed cutting-edge capabilities to help customers ‘go digital’ as well as high-impact solutions to modernize and evolve their core applications and infrastructure,” said Khanna. “Ongoing support for core IT assets remains the largest demand on customer resources. Syntel’s holistic approach to digital transformation aligns us with the most pressing business and operational needs of our customers.”

2017 Guidance

Based on current visibility levels and an exchange rate assumption of 67 Indian rupees to the dollar, the Company currently expects 2017 revenue of $900 million to $945 million and EPS in the range of $1.75 to $2.00.

Syntel to Host Conference Call

Syntel will discuss its fourth quarter 2016 results today on a conference call at 10:00 a.m. (EDT). To listen to the call, please dial (877) 837-3915 in the US/Canada or (973) 638-3495 internationally.  The call will also be broadcast live via the Internet at Syntel's web site: investor.syntelinc.com. Please access the site at least 15 minutes prior to the call to register and download any necessary software. A replay will be available until February 23, 2017 by dialing (855) 859-2056 and entering “60632903".  International callers may dial (404) 537-3406 and enter the same passcode.

About SyntelSyntel (Nasdaq:SYNT) is a leading global provider of integrated information technology (IT) and knowledge process services. Syntel helps global enterprises evolve their core business processes, IT applications and infrastructure to succeed in the digital age. Our intelligent automation, scaled agile and cloud platforms ensure efficient delivery of application development and management, testing, and infrastructure solutions. Syntel’s digital services enable companies to engage customers, discover insights through analytics and build a connected enterprise through the internet of things. Syntel’s "Customer for Life" philosophy builds collaborative partnerships and delivers long-term client value through investments in intellectual property, domain knowledge and industry solutions.

To learn more, visit us at: www.syntelinc.com

Safe Harbor ProvisionThis news release may include forward-looking statements, including those with respect to the future level of business for Syntel, Inc. These statements are necessarily subject to risk and uncertainty. Actual results could differ materially from those projected in these forward-looking statements as a result of certain risk factors set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2015, the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 or from other factors not currently anticipated.

	SYNTEL, INC. AND SUBSIDIARIES
	CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
	(IN THOUSANDS, EXCEPT PER SHARE DATA)
			THREE MONTHS ENDED							TWELVE MONTHS ENDED
			DECEMBER 31,							DECEMBER 31,
				2016			2015				2016			2015
	Net revenues		$	237,887		$	254,580			$	966,550		$	968,612
	Cost of revenues			142,354			148,061				595,725			584,611
	Gross profit			95,533			106,519				370,825			384,001
	Selling, general and administrative expenses			31,060			28,025				108,528			100,256
	Income from operations			64,473			78,494				262,297			283,745
	Other income (expense), net			(2,110	)		14,004				11,088			43,456
	Income before provision for income taxes			62,363			92,498				273,385			327,201
	Income tax expense			14,372			18,263				330,775			74,675
	Net income (Loss)		$	47,991		$	74,235			$	(57,390	)	$	252,526
	Other Comprehensive Income/(Loss)
		Foreign currency translation adjustments	$	(1,293	)	$	(5,496	)		$	(19,018	)	$	(45,428	)
		Gains on derivatives:
		Gains arising during period on cash flow hedges		533			-				533			-
		Unrealized gains (Loss) on securities:
		Unrealized holding gains arising during period		179			6				242			116
		Reclassification adjustment for gains included in net income		(158	)		(6,879	)			(248	)		(6,580	)
				21			(6,873	)			(6	)		(6,464	)
		Defined benefit pension plans:
		Net Profit (Loss) arising during period		(802	)		802				(802	)		802
		Amortization of prior service cost included in net periodic pension cost		(82	)		53				(35	)		149
				(884	)		855				(837	)		951
		Other comprehensive Loss, before tax		(1,623	)		(11,514	)			(19,328	)		(50,941	)
		Income tax benefits related to Other Comprehensive Loss		86			2,148				32			1,576
		Other comprehensive Loss, net of tax		(1,537	)		(9,366	)			(19,296	)		(49,365	)
	Comprehensive Income (Loss)		$	46,454		$	64,869			$	(76,686	)	$	203,161
	Dividend Per Share		$	-		$	-			$	15.00		$	-
	EARNINGS/(LOSS) PER SHARE:
		Basic	$	0.57		$	0.88			$	(0.68	)	$	3.01
		Diluted	$	0.57		$	0.88			$	(0.68	)	$	3.00
	Weighted average common shares outstanding:
		Basic		84,117			84,079				84,146			83,982
		Diluted		84,163			84,204				84,146			84,149

 

	SYNTEL, INC. AND SUBSIDIARIES
	CONDENSED CONSOLIDATED BALANCE SHEETS
	(IN THOUSANDS)
			December 31,				December 31,
				2016				2015
		ASSETS
	Current assets:
		Cash and cash equivalents	$	78,332			$	500,499
		Short term investments		21,614				540,045
		Accounts receivable, net of allowance for doubtful accounts of $801 at December 31, 2016 and $622 at December 31, 2015, respectively		118,299				136,926
		Revenue earned in excess of billings		25,039				30,448
		Other current assets		36,306				36,423
		Total current assets		279,590				1,244,341
	Property and equipment			227,056				217,922
		Less  accumulated depreciation and amortization		120,580				112,146
		Property and equipment, net		106,476				105,776
	Goodwill			906				906
	Non current Term Deposits with Banks			225				77
	Deferred income taxes and other non current assets			67,346				72,170
		TOTAL ASSETS	$	454,543			$	1,423,270
		LIABILITIES AND SHAREHOLDERS' (DEFICIT)/EQUITY
		LIABILITIES
	Current liabilities:
		Accrued payroll and related costs	$	56,650			$	60,339
		Income taxes payable		15,195				11,305
		Accounts payable and other current liabilities		31,559				37,828
		Deferred revenue		7,973				7,716
		Loans and borrowings		21,264				129,981
		Total current liabilities		132,641				247,169
	Deferred income taxes and other non current liabilities			26,373				17,656
	Non Current loans and borrowings			478,616				-
		TOTAL LIABILITIES		637,630				264,825
		SHAREHOLDERS' EQUITY
	Total shareholders' (deficit)/equity			(183,087	)			1,158,445
	TOTAL LIABILITIES AND SHAREHOLDERS' (DEFICIT)/EQUITY		$	454,543			$	1,423,270

Contacts:  
North America/Europe: Jon Luebke, Syntel, 248/619-3503, jon_luebke@syntelinc.com
Europe and International: Rani Gill, Flame PR, +44 0203 357 9746, Syntel@flamepr.com