WNS (Holdings) Limited (WNS) (NYSE: WNS), a leading provider of
global Business Process Management (BPM)** services, today
announced results for the 2014 fiscal third quarter ended December
31, 2013.
Highlights – Fiscal Third Quarter 2014:
GAAP Financials
- Revenue of $127.1 million, up 5.8% from $120.2 million in Q3
of last year and up 3.3% from $123.1 million last quarter
- Profit of $12.2 million, compared to $6.1 million in Q3 of
last year and $9.3 million last quarter
- Diluted earnings per ADS of $0.23, compared to $0.12 in Q3
of last year and $0.18 last quarter
Non-GAAP Financial
Measures*
- Revenue less repair payments of $119.6 million, up 5.4% from
$113.5 million in Q3 of last year and up 3.7% from $115.4 million
last quarter
- Adjusted Net Income (ANI) of $19.8 million, compared to
$14.0 million in Q3 of last year and $17.2 million last
quarter
- Adjusted diluted earnings per ADS of $0.38, compared to
$0.27 in Q3 of last year and $0.33 last quarter
Other Metrics
- Added 4 new clients in the quarter, expanded 8 existing
relationships
- Days sales outstanding (DSO) at 31 days
- Global headcount of 26,578 as of December 31, 2013
Reconciliations of the non-GAAP financial measures discussed
below to our GAAP operating results are included at the end of this
release. See also “About Non-GAAP Financial Measures.”
Revenue less repair payments* in the fiscal third quarter was
$119.6 million, representing a 5.4% increase versus the third
quarter of last year and a 3.7% increase from the previous quarter.
Year-over-year, revenue improvement was broad-based with the growth
rate paced by strength in the Banking & Financial Services,
Utilities, Shipping & Logistics, and Insurance verticals. On a
year-over-year basis, revenue was pressured by currency headwinds
resulting from depreciation in the South African rand and
Australian dollar against the US dollar. Sequentially, revenue was
favorably impacted by appreciation in the British Pound against the
US dollar. Excluding exchange rate impacts, constant currency
revenue less repair payments* in the third quarter grew 6.0%
year-over-year and 1.1% sequentially.
Adjusted operating margin* for the quarter was 18.4%, as
compared to 13.9% in Q3 of last year, and 16.2% reported in the
second quarter. On a year-over-year basis, operating margin
improved as a result of depreciation in the Indian rupee against
the US dollar, improved productivity and operating leverage
associated with higher revenue. Partially offsetting this
favorability were investments in global infrastructure which
reduced seat utilization and the impact of our annual wage
increases. The sequential improvement in adjusted operating margin*
from Q2 to Q3 was largely driven by favorable currency exchange
rates.
Adjusted net income (ANI)* in the fiscal third quarter was $19.8
million, up $5.8 million as compared to Q3 of last year and up $2.6
million from the previous quarter. Third quarter ANI* margin was
16.6%, as compared to 12.3% in Q3 of last year, and 14.9% reported
last quarter.
From a balance sheet perspective, WNS ended the fiscal third
quarter with $122.5 million in cash and investments and $87.6
million of gross debt. In the third quarter, the company generated
$22.6 million in cash from operations, and had $5.7 million in
capital expenditures. Days sales outstanding were 31 days, as
compared to 32 days in Q3 of last year and 30 days reported in the
previous quarter.
“During the third quarter, the company was able to grow our top
line, expand margins and profits, and generate healthy cash flow.
Our new business pipeline remains robust, and we continue to move
deals along at a slow and steady pace. WNS added 4 new logos this
quarter, including our fourth large deal of fiscal 2014. This new
relationship with a major US Insurer will begin with Finance and
Accounting and actuarial services, and has long-term growth
potential,” said Keshav Murugesh, WNS’s Chief Executive
Officer.
“We believe recognition of our competitive positioning is
improving as the BPM industry shifts towards domain-led solutions
and higher value service offerings. WNS plans to continue investing
in enhancing our capabilities to meet the evolving needs of our
clients, with the objective of growing our organic revenues at or
above industry levels.”
Fiscal 2014 Guidance
WNS has updated guidance for the fiscal year ending March 31,
2014 as follows:
- Revenue less repair payments* is
expected to be between $470 million and $472 million, up from
$436.1 million in fiscal 2013. This assumes an average GBP to USD
exchange rate of 1.63 for the remainder of fiscal 2014.
- ANI* is expected to range between $70
million and $72 million, up from $53.1 million in fiscal 2013. This
assumes an average USD to INR exchange rate of 62.0 for the
remainder of fiscal 2014.
“The company has updated our forecast for fiscal 2014 based on
current visibility levels and exchange rates. Our revised guidance
for the year reflects top line growth of 8%, with over 99%
visibility to the midpoint of the range. This guidance represents
8% to 9% revenue growth on a constant currency* basis.
Profitability is expected to expand at a much greater pace than
revenue this fiscal year, with our revised ANI* guidance now
reflecting 32% to 36% year-over-year improvement,” said Sanjay
Puria, WNS’s Chief Financial Officer.
Conference Call
WNS will host a conference call on January 15, 2014 at 8:00 am
(Eastern) to discuss the company's quarterly results. To
participate in the call, please use the following details:
+1-877-415-3185; international dial-in +1-857-244-7328; participant
passcode 97628452. A replay will be available for one week
following the call at +1-888-286-8010; international dial-in
+1-617-801-6888; passcode 30218126, as well as on the WNS website,
www.wns.com, beginning two hours after the end of the call.
About WNS
WNS (Holdings) Limited (NYSE: WNS), is a leading global business
process management company. WNS offers business value to 200+
global clients by combining operational excellence with deep domain
expertise in key industry verticals including Travel, Insurance,
Banking and Financial Services, Manufacturing, Retail and Consumer
Packaged Goods, Shipping and Logistics, Healthcare and Utilities.
WNS delivers an entire spectrum of business process management
services such as finance and accounting, customer care, technology
solutions, research and analytics and industry specific back office
and front office processes. As of December 31, 2013, WNS had 26,578
professionals across 33 delivery centers worldwide including China,
Costa Rica, India, Philippines, Poland, Romania, South Africa, Sri
Lanka, United Kingdom and the United States. For more information,
visit www.wns.com.
Safe Harbor Statement
This release contains forward-looking statements, as defined in
the safe harbor provisions of the US Private Securities Litigation
Reform Act of 1995. These forward-looking statements are based on
our current expectations and assumptions about our Company and our
industry. Generally, these forward-looking statements may be
identified by the use of terminology such as “anticipate,”
“believe,” “estimate,” “expect,” “intend,” “will,” “seek,” “should”
and similar expressions. These statements include, among other
things, the discussions of our strategic initiatives and the
expected resulting benefits, our growth opportunities, industry
environment, expectations concerning our future financial
performance and growth potential, including our fiscal 2014
guidance and future profitability, and expected foreign currency
exchange rates. Forward-looking statements inherently involve risks
and uncertainties that could cause actual results to differ
materially from those expressed or implied by such statements. Such
risks and uncertainties include but are not limited to worldwide
economic and business conditions; political or economic instability
in the jurisdictions where we have operations; regulatory,
legislative and judicial developments; our ability to attract and
retain clients; technological innovation; telecommunications or
technology disruptions; future regulatory actions and conditions in
our operating areas; our dependence on a limited number of clients
in a limited number of industries; our ability to expand our
business or effectively manage growth; our ability to hire and
retain enough sufficiently trained employees to support our
operations; negative public reaction in the US or the UK to
offshore outsourcing; the effects of our different pricing
strategies or those of our competitors; and increasing competition
in the BPM industry. These and other factors are more fully
discussed in our most recent annual report on Form 20-F and
subsequent reports on Form 6-K filed with or furnished to the US
Securities and Exchange Commission (SEC) which are available at
www.sec.gov. We caution you not to place undue reliance on any
forward-looking statements. Except as required by law, we do not
undertake to update any forward-looking statements to reflect
future events or circumstances.
References to “$” and “USD” refer to the United States dollars,
the legal currency of the United States; references to “GBP” refer
to the British pound, the legal currency of Britain; and references
to “INR” refer to Indian Rupees, the legal currency of India.
References to GAAP refers to International Financial Reporting
Standards, as issued by the International Accounting Standards
Board (IFRS).
About Non-GAAP Financial
Measures
The financial information in this release is focused on non-GAAP
financial measures as we believe that they reflect more accurately
our operating performance. Reconciliations of these non-GAAP
financial measures to our GAAP operating results are included
below. A discussion of our GAAP measures is contained in “Part I
–Item 5. Operating and Financial Review and Prospects” in our
annual report on Form 20-F filed with the SEC on May 2, 2013.
For financial statement reporting purposes, WNS has two
reportable segments: WNS Global BPM and WNS Auto Claims BPM.
Revenue less repair payments is a non-GAAP financial measure that
is calculated as (a) revenue less (b) in the auto claims business,
payments to repair centers for “fault” repair cases where WNS acts
as the principal in its dealings with the third party repair
centers and its clients. WNS believes that revenue less repair
payments for “fault” repairs reflects more accurately the value
addition of the business process management services that it
directly provides to its clients. For more details, please see the
discussion in “Part I – Item 5. Operating and Financial Review and
Prospects – Overview” in our annual report on Form 20-F filed with
the SEC on May 2, 2013.
Constant currency revenue less repair payments is a non-GAAP
financial measure. We present constant currency revenue less repair
payments so that revenue less repair payments may be viewed without
the impact of foreign currency exchange rate fluctuations, thereby
facilitating period-to-period comparisons of business performance.
Constant currency revenue less repair payments is presented by
recalculating prior period’s revenue less repair payments
denominated in currencies other than in US dollars using the
foreign exchange rate used for the latest period, without taking
into account the impact of hedging gains/losses. Our non-US dollar
denominated revenues include, but are not limited to, revenues
denominated in pound sterling, South African rand, Australian
dollar and euro.
WNS also presents (1) adjusted operating margin, which refers to
adjusted operating profit (calculated as operating profit excluding
amortization of intangible assets and share-based compensation
expense) as a percentage of revenue less repair payments, and (2)
ANI, which is calculated as profit excluding amortization of
intangible assets and share-based compensation expense, and other
non-GAAP measures included in this release as supplemental measures
of its performance. WNS presents these non-GAAP measures because it
believes they assist investors in comparing its performance across
reporting periods on a consistent basis by excluding items that it
does not believe are indicative of its core operating performance.
In addition, it uses these non-GAAP measures (i) as a factor in
evaluating management’s performance when determining incentive
compensation and (ii) to evaluate the effectiveness of its business
strategies. These non-GAAP measures are not meant to be considered
in isolation or as a substitute for WNS’s financial results
prepared in accordance with IFRS.
* See “About Non-GAAP Financial Measures” and the
reconciliations of the historical non-GAAP financial measures to
our GAAP operating results at the end of this release.** Previously
described as Business Process Outsourcing (BPO) in our prior annual
reports on Form 20-F and current reports on Form 6-K containing our
quarterly results for periods up to (and including) fiscal Q1 2014
ended June 30, 2013.
WNS (HOLDINGS) LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited,
amounts in millions, except share and per share data)
Three months ended
Dec 31,2013
Dec 31,2012
Sep 30,2013
Revenue $ 127.1 $ 120.2 $ 123.1 Cost of revenue 81.7
80.8 79.7 Gross profit 45.5 39.3 43.4 Operating expenses: Selling
and marketing expenses 8.9 7.8 9.0 General and administrative
expenses 13.1 15.1 13.0 Foreign exchange loss, net 3.3 2.1 4.6
Amortization of intangible assets 5.8 6.6 5.8
Operating profit 14.4 7.8 10.9 Other income, net (2.5 ) (1.3 ) (1.8
) Finance expense 0.7 0.9 0.8 Profit before income
taxes 16.1 8.2 12.0 Provision for income taxes 3.9
2.2 2.6 Profit $ 12.2 $ 6.1 $ 9.3 Earnings per share of
ordinary share Basic $ 0.24 $ 0.12 $ 0.18 Diluted $ 0.23 $ 0.12 $
0.18
Growth of revenue (GAAP) and revenue
less repair payments (non-GAAP)
Three months ended
Three months endedDec 31, 2013
compared to
Dec 31,2013
Dec 31,2012
Sep 30,2013
Dec 31,2012
Sep 30,2013
(Amounts in millions) (% growth) Revenue
(GAAP) $ 127.1 $ 120.2 $ 123.1
5.8 % 3.3 % Less: Payments to repair centers 7.5 6.7 7.7 12.7 %
(2.6 )% Revenue less repair payments (Non-GAAP) $ 119.6 $ 113.5 $
115.4 5.4 % 3.7 % Constant currency revenue less
repair payments (Non-GAAP)
$ 121.5 $ 114.7 $ 120.2 6.0 % 1.1 %
Reconciliation of cost of revenue (GAAP
to non-GAAP)
Three months ended
Dec 31,2013
Dec 31,2012
Sep 30,2013
(Amounts in millions) Cost of revenue (GAAP) $ 81.7 $ 80.8 $
79.7 Less: Payments to repair centers 7.5 6.7 7.7 Less: Share-based
compensation expense 0.4 0.0 0.4 Adjusted cost of revenue
(excluding payment to repair centers and share-based compensation
expense) (Non-GAAP) $ 73.8 $ 74.2 $ 71.6
Reconciliation of gross profit (GAAP to
non-GAAP)
Three months ended
Dec 31,2013
Dec 31,2012
Sep 30,2013
(Amounts in millions) Gross profit (GAAP) $ 45.5 $ 39.3 $
43.4 Add: Share-based compensation expense 0.4 0.0 0.4 Adjusted
gross profit (excluding share-based compensation expense)
(Non-GAAP) $ 45.9 $ 39.4 $ 43.8
Three months ended
Dec 31,2013
Dec 31,2012
Sep 30,2013
Gross profit as a percentage of revenue (GAAP) 35.8 % 32.7 % 35.3 %
Adjusted gross profit (excluding share-based compensation expense)
as a percentage of revenue less repair payments (Non-GAAP) 38.3 %
34.7 % 38.0 %
Reconciliation of selling and marketing
expenses (GAAP to non-GAAP)
Three months ended
Dec 31,2013
Dec 31,2012
Sep 30,2013
(Amounts in millions) Selling and marketing expenses (GAAP)
$ 8.9 $ 7.8 $ 9.0 Less: Share-based compensation expense 0.2 0.1
0.1 Adjusted selling and marketing expenses (excluding share-based
compensation expense) (Non-GAAP) $ 8.7 $ 7.7 $ 8.9
Three
months ended
Dec 31,2013
Dec 31,2012
Sep 30,2013
Selling and marketing expenses as a percentage of revenue (GAAP)
7.0 % 6.5 % 7.3 % Adjusted selling and marketing expenses
(excluding share-based compensation expense) as a percentage of
revenue less repair payments (Non-GAAP) 7.3 % 6.8 % 7.7 %
Reconciliation of general and
administrative expenses (GAAP to non-GAAP)
Three months ended
Dec 31,2013
Dec 31,2012
Sep 30,2013
(Amounts in millions) General and administrative expenses
(GAAP) $ 13.1 $ 15.1 $ 13.0 Less: Share-based compensation expense
1.2 1.2 1.5 Adjusted general and administrative expenses (excluding
share-based compensation expense) (Non-GAAP) $ 11.9 $ 13.9 $ 11.5
Three months ended
Dec 31,2013
Dec 31,2012
Sep 30,2013
General and administrative expenses as a percentage of revenue
(GAAP) 10.3 % 12.5 % 10.6 % Adjusted general and administrative
expenses (excluding share-based compensation expense) as a
percentage of revenue less repair payments (Non-GAAP) 10.0 % 12.2 %
10.0 %
Reconciliation of operating profit
(GAAP to non-GAAP)
Three months ended
Dec 31,2013
Dec 31,2012
Sep 30,2013
(Amounts in millions) Operating profit (GAAP) $ 14.4 $ 7.8 $
10.9 Add: Amortization of intangible assets 5.8 6.6 $ 5.8 Add:
Share-based compensation expense 1.8 1.3 2.0 Adjusted operating
profit (excluding amortization of intangible assets and share-based
compensation expense) (Non-GAAP) $ 22.0 $ 15.8 $ 18.7
Three months ended
Dec 31,2013
Dec 31,2012
Sep 30,2013
Operating profit as a percentage of revenue (GAAP) 11.3 % 6.5 % 8.9
% Adjusted operating profit (excluding amortization of intangible
assets and share-based compensation expense) as a percentage of
revenue less repair payments (Non-GAAP) 18.4 % 13.9 % 16.2 %
Reconciliation of profit (GAAP to
non-GAAP)
Three months ended
Dec 31,2013
Dec 31,2012
Sep 30,2013
(Amounts in millions) Profit (GAAP) $ 12.2 $ 6.1 $ 9.3 Add:
Amortization of intangible assets 5.8 6.6 5.8 Add: Share-based
compensation expense 1.8 1.3 2.0 Adjusted net income (excluding
amortization of intangible assets and share-based compensation
expense) (Non-GAAP) $ 19.8 $ 14.0 $ 17.2
Three months
ended
Dec 31,2013
Dec 31,2012
Sep 30,2013
Profit as a percentage of revenue (GAAP) 9.6 % 5.0 % 7.6 % Adjusted
net income (excluding amortization of intangible assets and
share-based compensation expense) as a percentage of revenue less
repair payments (Non-GAAP) 16.6 % 12.3 % 14.9 %
Reconciliation of basic income per ADS
(GAAP to non-GAAP)
Three months ended
Dec 31,2013
Dec 31,2012
Sep 30,2013
Basic earnings per ADS (GAAP) $ 0.24 $ 0.12 $ 0.18 Add: Adjustments
for amortization of intangible assets and share-based compensation
expense 0.15 0.16 0.16 Adjusted basic net income per ADS (excluding
amortization of intangible assets and share-based compensation
expense) (Non-GAAP) $ 0.39 $ 0.28 $ 0.34
Reconciliation of diluted income per
ADS (GAAP to non-GAAP)
Three months ended
Dec 31,2013
Dec 31,2012
Sep 30,2013
Diluted earnings per ADS (GAAP) $ 0.23 $ 0.12 $ 0.18 Add:
Adjustments for amortization of intangible assets and share-based
compensation expense. 0.15 0.15 0.15 Adjusted diluted net income
per ADS (excluding amortization of intangible assets and
share-based compensation expense) (Non-GAAP) $ 0.38 $ 0.27 $ 0.33
WNS (HOLDINGS) LIMITED CONDENSED
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Amounts in
millions, except share and per share data)
As atDecember
31,2013
As atMarch
31,2013
ASSETS Current assets: Cash and cash equivalents $
28.3 $ 27.9 Investments 94.2 46.5 Trade receivables, net 62.0 64.4
Unbilled revenue 31.9 25.5 Funds held for clients 13.8 19.9
Derivative assets 5.5 7.6 Prepayments and other current assets 16.9
12.0 Total current assets 252.7 203.8 Non-current assets: Goodwill
84.1 87.1 Intangible assets 70.6 92.1 Property and equipment 45.8
48.4 Derivative assets 2.7 3.8 Investments 0.0 43.2 Deferred tax
assets 42.2 41.6 Other non-current assets 14.9 14.8 Total
non-current assets 260.3 331.1
TOTAL ASSETS $ 513.0
$ 534.9
LIABILITIES AND EQUITY Current
liabilities: Trade payables $ 22.5 $ 29.3 Provisions and accrued
expenses 24.3 26.7 Derivative liabilities 15.4 3.9 Pension and
other employee obligations 32.0 32.7 Short term line of credit 48.1
54.9 Current portion of long term debt 10.5 7.7 Deferred revenue
5.0 6.5 Current taxes payable 3.7 5.2 Other liabilities 7.6
15.4 Total current liabilities 169.3
182.4 Non-current liabilities: Derivative
liabilities 6.5 1.3 Pension and other employee obligations 4.9 5.6
Long term debt 29.0 33.7 Deferred revenue 2.8 3.3 Other non-current
liabilities 3.7 4.4 Deferred tax liabilities 3.1 3.6 Total
non-current liabilities 50.0 51.9
TOTAL LIABILITIES $ 219.3
$ 234.3 Shareholders' equity: Share capital (ordinary shares
$ 0.16 (10 pence) par value, authorized 60,000,000 shares; issued:
51,181,695 and 50,588,044 shares each as at December 31, 2013 and
March 31, 2013, respectively) 8.0 7.9 Share premium 275.4 269.3
Retained earnings 108.4 80.1 Other components of equity (98.1 )
(56.7 ) Total shareholders' equity 293.7 300.6
TOTAL LIABILITIES
AND EQUITY $ 513.0
$ 534.9
WNS (Holdings) LimitedInvestors:David
MackeyCorporate SVP–Finance & Head of Investor Relations+1
(201) 942-6261david.mackey@wns.comorMedia:Archana RaghuramHead –
Corporate Communications+91 (22) 4095
2397archana.raghuram@wns.compr@wns.com
WNS (NYSE:WNS)
Historical Stock Chart
From Jun 2024 to Jul 2024
WNS (NYSE:WNS)
Historical Stock Chart
From Jul 2023 to Jul 2024