WNS (Holdings) Limited (NYSE: WNS), a leading provider of offshore
business process outsourcing (BPO) services, today announced strong
results for the quarter ended June 30, 2007 and reiterated its
guidance for fiscal 2008. �As evidenced by our results, our
momentum coming into fiscal 2008 continues to be very strong,� said
Neeraj Bhargava, Group Chief Executive Officer. �Our strong
operating performance enabled us to exceed our revenue and net
income expectations for the first quarter. Further, we are
encouraged by our continued success with new clients highlighted by
11 new wins and 6 expansions by existing clients.� WNS recorded
basic income per ADS of 20 cents and basic income per ADS
(excluding share-based compensation expense and amortization of
intangible assets) of 26 cents for the quarter. �We were able to
minimize the impact of the rupee appreciation through tight cost
controls, scale benefits and currency hedging,� said Zubin Dubash,
Group Chief Financial Officer. �These factors have collectively
enabled us to achieve results beyond our expectations and give us
confidence about our position in relation to full year guidance.�
Financial Highlights: Fiscal First Quarter Ended June 30, 2007
Quarterly revenue of $112.5 million, up 112.2% from the
corresponding quarter last year. Quarterly revenue less repair
payments of $69.8 million, up 53.3% from the corresponding quarter
last year. Quarterly net income of $8.4 million, up 83.8% from the
corresponding quarter last year. Quarterly net income (excluding
share-based compensation expense and amortization of intangible
assets) of $10.8 million, up 104.2% from the corresponding quarter
last year. Quarterly basic income per ADS of 20 cents, up from 13
cents for the corresponding quarter last year. Quarterly basic
income per ADS (excluding share-based compensation expense and
amortization of intangible assets) of 26 cents, up from 15 cents
for the corresponding quarter last year. Reconciliations of
non-GAAP financial measures to GAAP operating results are included
at the end of this release. Key Announcements WNS was the top
ranked Indian outsourcing provider according to the 4th annual
Black Book of Outsourcing Survey conducted by the Brown Wilson
Group, a leading industry analyst. WNS also made dramatic gains in
this year�s global ranking, overtaking numerous other outsourcing
providers to its new position as #3. As expected, WNS transferred
to AVIVA the Sri Lankan facility dedicated to this client on July
2, 2007, subsequent to AVIVA exercising its call option on January
1, 2007. This transfer was a part of the Build-Operate-Transfer
contract with the client. WNS completed transition to majority
independent Board of Directors with the appointment of Sir Anthony
Greener. Sir Anthony joins WNS after retiring from British Telecom
plc (BT) in September 2006, where he served as Deputy Chairman of
the Board. He was Chairman of Diageo plc through 2000 and Chief
Executive of Dunhill Holdings prior to that. Guy Sochovsky, who has
served on the Board of Directors since January 26, 2006 as a
representative of majority shareholder Warburg Pincus, stepped down
on July 24, 2007. Deborah S. Kops was appointed Chief Marketing
Officer on May 24, 2007. Ms. Kops joins WNS after holding managing
director positions at Deutsche Bank London, where she led global
sourcing transformation efforts, and FleetBoston (now Bank of
America), where she managed corporate administrative services. She
was one of the founding partners of PricewaterhouseCoopers�
business process outsourcing division. Fiscal 2008 Guidance WNS
reiterates its May 15, 2007 guidance for fiscal 2008: Revenue less
repair payments expected to be between $302 million and $307
million Net income (excluding share-based compensation expense and
amortization of intangible assets) expected to be between $41.0
million to $ 43.0 million. Revised exchange rate assumptions for
the above guidance are 40.70 Indian Rupees to 1 US Dollar and 2.03
US Dollars to 1 Pound Sterling for the full fiscal year. �We have
maintained our initial guidance despite the appreciation of the
rupee as we are confident of being able to control costs and
increase SG&A leverage through the year,� said Zubin Dubash,
Group Chief Financial Officer. �Further, we have reduced our
estimate of share-based compensation expense for fiscal 2008 from
$8.8 million to $7.8 million.� Conference Call WNS will host a
conference call on August 16, at 8 a.m. (EDT) to discuss the
company's quarterly results. To participate, callers can dial
800-295-3991 from within the U.S. or +1-617-614-3924 from any other
country. The participant passcode is 1352836. A replay will be made
available online at www.wnsgs.com for a period of three months
beginning two hours after the end of the call. About WNS WNS is a
leading provider of offshore business process outsourcing, or BPO,
services. We provide comprehensive data, voice and analytical
services that are underpinned by our expertise in our target
industry sectors. We transfer the execution of the business
processes of our clients, which are typically companies located in
Europe and North America, to our delivery centers located primarily
in India. We provide high quality execution of client processes,
monitor these processes against multiple performance metrics, and
seek to improve them on an ongoing basis. Our ADSs are listed on
the New York Stock Exchange. For more information, please visit our
website at www.wnsgs.com. About Non-GAAP Financial Measures For
financial statement reporting purposes, the company has two
reportable segments: WNS Global BPO and WNS Auto Claims BPO. In the
auto claims segment, WNS provides claims-handling and
accident-management services, in which it arranges for automobile
repairs through a network of third-party repair centers. In its
accident-management services, WNS acts as the principal in dealings
with the third-party repair centers and clients. The amounts
invoiced to WNS clients for payments made by WNS to third-party
repair centers are reported as revenue. As the company wholly
subcontracts the repairs to the repair centers, it evaluates its
financial performance based on revenue less repair payments to
third party repair centers, which is a non-GAAP measure. WNS
believes revenue less repair payments reflects more accurately the
value addition of the business process services it directly
provides to its clients. The presentation of this non-GAAP
information is not meant to be considered in isolation or as a
substitute for the company's financial results prepared in
accordance with U.S. GAAP. WNS revenue less repair payments may not
be comparable to similarly titled measures reported by other
companies due to potential differences in the method of
calculation. Safe Harbor Statement under the provisions of the
United States Private Securities Litigation Reform Act of 1995 This
news release contains forward-looking statements, as defined in the
safe harbor provisions of the U.S. Private Securities Litigation
Reform Act of 1995. These statements involve a number of risks,
uncertainties and other factors that could cause actual results to
differ materially from�those that may be projected by these forward
looking statements. These risks and uncertainties include but are
not limited to a slowdown in the U.S. and Indian economies and in
the sectors in which our clients are based, a slowdown in the BPO
and IT sectors world-wide, competition, the success or failure of
our past and future acquisitions, attracting, recruiting and
retaining highly skilled employees, technology, legal and
regulatory policy as well as other risks detailed in our reports
filed with the U.S. Securities and Exchange Commission. These
filings are available at www.sec.gov. We may, from time to time,
make additional written and oral forward-looking statements,
including statements contained in our filings with the Securities
and Exchange Commission and our reports to shareholders. You are
cautioned not to place undue reliance on these forward-looking
statements, which reflect management�s current analysis of future
events. We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. WNS (HOLDINGS) LIMITED CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (Amounts in
thousands, except share and per share data) � June 30, 2007 June
30, 2006 � Revenue 112,523 53,026 Cost of revenue (refer to note
below) 90,206 37,430 Gross Profit 22,317 15,596 Operating expenses:
Selling, general and administrative expenses (refer note as below)
14,722 10,130 Amortization of intangible assets 829 471 Operating
income 6,766 4,995 Other (expense) income, net 2,686 (35 ) Interest
expense - (32 ) Income before income taxes 9,452 4,928 Provision
for income taxes (1,013 ) � (335 ) Net income $8,439 � � $4,593 �
Basic income per share $0.20 $0.13 Diluted income per share $0.20
$0.12 Basic weighted average ordinary shares outstanding 41,892,868
35,220,868 Diluted weighted average ordinary shares outstanding
43,085,843 38,021,949 � Note: a) Includes the following share-based
compensation amounts: Cost of Revenue 516 - Selling, general and
administrative expenses 989 212 Non-GAAP measure note: In addition
to its reported operating results in accordance with U.S. generally
accepted accounting principles (US GAAP). WNS has included in the
table below non-GAAP operating measures that the Securities and
Exchange Commission defines as �non-GAAP financial measures�.
Management believes that such non-GAAP financial measures, when
read in conjunction with the company�s reported results, can
provide useful supplemental information for investors analyzing
period to period comparisons of the company�s results. The non-GAAP
financial measures disclosed by the company should not be
considered a substitute for, or superior to, financial measures
calculated in accordance with GAAP, and the financial results
calculated in accordance with GAAP and reconciliations to those
financial statements should be carefully evaluated. Reconciliation
of revenue less repair payments (non-GAAP) to revenue (GAAP) Three
months ended June 30, 2007 � June 30, 2006 � Revenue less repair
payments (Non-GAAP) 69,773 45,509 Add: Payments to repair centers
42,750 7,517 Revenue (GAAP) 112,523 53,026 � Reconciliation of cost
of revenue (non-GAAP to GAAP) Three months ended June 30, 2007 �
June 30, 2006 � Cost of revenue (Non-GAAP) 47,456 29,913 Add:
Payments to repair centers 42,750 7,517 Cost of revenue (GAAP)
90,206 37,430 Reconciliation of selling, general and administrative
expense (non-GAAP to GAAP) Three months�ended June�30, 2007 �
June�30, 2006 � Selling, general and administrative expenses
(excluding share-based compensation expense) (Non-GAAP) 13,733
9,918 Add: Share-based compensation expense 989 212 Selling,
general and administrative expenses (GAAP) 14,722 10,130 �
Reconciliation of operating income (non-GAAP to GAAP) Three months
ended June 30, 2007 � June 30, 2006 � Operating income (excluding
share-based compensation expense and amortization of intangible
assets) (Non-GAAP) 9,100 5,678 Less: Share-based compensation
expense 1,505 212 Less: Amortization of intangible assets 829 471
Operating income (GAAP) 6,766 4,995 Reconciliation of net income
(non-GAAP to GAAP) Three months ended June�30, 2007 � June�30, 2006
� Net income (excluding share-based compensation expense and
amortization of intangible assets) (Non-GAAP) 10,773 5,276 Less:
Share-based compensation expense 1,505 212 Less: Amortization of
intangible assets 829 471 Net income (GAAP) 8,439 4,593
Reconciliation of basic income per ADS (non-GAAP to GAAP) Three
months ended June�30, 2007 � June�30, 2006 � Basic income per ADS
(excluding amortization of intangible assets and share based
compensation expense) (Non-GAAP) 0.26 0.15 Less: Adjustments for
amortization of intangible assets and share-based compensation
expense 0.06 0.02 Basic income per ADS (GAAP) 0.20 0.13
Reconciliation of diluted income per ADS (non-GAAP to GAAP) Three
months ended June�30, 2007 June�30, 2006 � Diluted income per ADS
(excluding amortization of intangible assets and share based
compensation expense) (Non-GAAP) 0.25 0.14 Less: Adjustments for
amortization of intangible assets and share-based compensation
expense 0.05 0.02 Diluted income per ADS (GAAP) 0.20 0.12 WNS
(HOLDINGS) LIMITED CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts
in thousands, except share and per share data) � June 30,2007 March
31,2007 (Unaudited) � � ASSETS Current assets Cash and cash
equivalents $75,375 $112,340 Bank deposits 12,000 12,000 Accounts
receivable, net of allowance of $330 and $364, respectively 48,130
40,592 Funds held for clients 7,409 6,589 Employee receivable 1,526
1,289 Prepaid expenses 3,813 2,162 Prepaid income taxes 2,996 3,225
Deferred tax assets 588 701 Other current assets 7,117 � 4,524
Total current assets 158,954 183,422 � Goodwill 62,116 37,356
Intangible assets, net 15,780 7,091 Property and equipment, net
47,343 41,830 Deposits 5,522 3,081 Deferred tax assets 4,587 �
3,101 TOTAL ASSETS $294,302 � $275,881 � LIABILITIES AND
SHAREHOLDERS� EQUITY Current liabilities Accounts payable $16,778
$18,751 Accrued employee costs 15,810 18,492 Deferred revenue �
current 7,459 9,827 Income taxes payable 864 88 Obligations under
capital leases � current 10 13 Deferred tax liabilities 206 ? Other
current liabilities 22,749 � 16,239 Total current liabilities
63,876 63,410 � Deferred revenue � non current 6,462 5,051 Deferred
rent 1,506 1,098 Accrued pension liability 1,104 771 Deferred tax
liabilities � non current 2,372 23 � Shareholders� equity: Ordinary
shares, $0.16 (? 0.10) par value; Authorized 50,000,000 shares
Issued and outstanding: 41,906,477 and 41,842,879 shares,
respectively 6,531 6,519 Additional paid-in-capital 157,150 154,952
Ordinary shares subscribed, 21,006 and 30,022 shares, respectively
117 137 Retained earnings 37,778 30,685 Accumulated other
comprehensive income 17,406 � 13,235 Total shareholders� equity
218,982 � 205,528 TOTAL LIABILITIES AND SHAREHOLDERS� EQUITY
$294,302 � $275,881
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