Provides Guidance for Fiscal 2018
WNS (Holdings) Limited (WNS) (NYSE: WNS), a leading provider of
global Business Process Management (BPM) services, today announced
results for the fiscal 2017 fourth quarter and full year ended
March 31, 2017.
Highlights – Fiscal 2017 Fourth Quarter:
GAAP Financials
- Revenue of $159.4 million, up 11.7% from $142.6 million in
Q4 of last year and up 9.6% from $145.4 million last
quarter
- Profit/(Loss) of ($5.0) million, compared to $15.9 million
in Q4 of last year and $18.0 million last quarter
- Diluted earnings/(loss) per ADS of ($0.10), compared to
$0.30 in Q4 of last year and $0.35 last quarter
Non-GAAP Financial
Measures*
- Revenue less repair payments of $154.1 million, up 13.9%
from $135.3 million in Q4 of last year and up 10.2% from $139.8
million last quarter
- Adjusted Net Income (ANI) of $24.0 million, compared to
$23.4 million in Q4 of last year and $25.2 million last
quarter
- Adjusted diluted earnings per ADS of $0.46, compared to
$0.44 in Q4 of last year and $0.49 last quarter
Other Metrics
- Added 36 new clients in the quarter (including clients of
acquired businesses), expanded 10 existing relationships
- Days sales outstanding (DSO) at 29 days
- Global headcount of 33,968 as of March 31, 2017
Highlights – Fiscal 2017 Full Year:
GAAP Financials
- Revenue of $602.5 million, up 7.2% from $562.2 million in
fiscal 2016
- Profit of $37.8 million, compared to $59.9 million in fiscal
2016
- Diluted earnings per ADS of $0.71, compared to $1.12 in
fiscal 2016
Non-GAAP Financial
Measures*
- Revenue less repair payments of $578.4 million, up 8.9% from
$531.0 million in fiscal 2016
- Adjusted Net Income (ANI) of $92.2 million, compared to
$90.9 million in fiscal 2016
- Adjusted diluted earnings per ADS of $1.74, compared to
$1.69 in fiscal 2016
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.”
* 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.
Revenue in the fourth quarter was $159.4 million, representing
an 11.7% increase versus Q4 of last year and a 9.6% increase from
the previous quarter. Revenue less repair payments* in the fourth
quarter was $154.1 million, an increase of 13.9% year-over-year and
10.2% sequentially. Excluding exchange rate impacts, constant
currency revenue less repair payments* in the fiscal fourth quarter
grew 19.1% versus Q4 of last year and 9.9% sequentially.
Year-over-year, fiscal Q4 revenue was impacted by currency
movements net of hedging, primarily related to depreciation in the
British pound against the US dollar. This headwind was more than
offset by broad-based revenue growth across key verticals from both
new and existing clients. Year-over-year revenue also increased as
a result of the company’s acquisitions of Value Edge, Denali and
HealthHelp. Sequentially, revenue growth was driven by
acquisitions, improved farming activities, new client wins, and
one-time revenue benefits from project extensions, gain sharing and
client transition work.
WNS recorded an operating loss margin in the fourth quarter of
(2.0%), as compared to operating profit margin of 13.2% in Q4 of
last year and 14.2% in the previous quarter. In Q4, WNS recorded a
non-recurring $21.7 million charge for goodwill impairment relating
to the AutoClaims business. The company believes this impairment
charge was necessary given developments in Q4 including the
proposed regulatory changes in the legal services market which will
result in WNS exiting this part of the business, and the loss of
business due to contract reductions and cancellations in the
traditional repair business. On a year-over-year basis, margin
reductions were driven by goodwill impairment, acquisition-related
expenses, the impact of our annual wage increases, and currency
movements net of hedging. These headwinds were partially offset by
a step-down in amortization of intangible asset expense and
increased operating leverage from higher volumes. Sequentially,
margins were pressured by goodwill impairment, acquisition-related
expenses, hiring in advance of large deal ramps, and currency net
of hedging which more than offset benefits from the step-down in
amortization of intangible asset expense and increased operating
leverage on higher volumes.
Fourth quarter adjusted operating margin* was 18.1%, versus
22.0% in Q4 of last year and 21.3% last quarter. On both a
year-over-year and sequential basis, adjusted operating margin*
reduced for the same reasons discussed for GAAP operating margin,
with the exception of impacts relating to goodwill impairment and
amortization of intangible asset expense. The goodwill impairment
charge has been excluded from adjusted operating margin* and
adjusted net income (ANI)* as it is non-recurring in nature.
In the fiscal fourth quarter, WNS recorded a loss of ($5.0)
million, as compared to profits of $15.9 million in Q4 of last year
and $18.0 million in the previous quarter. Adjusted net income
(ANI)* in Q4 was $24.0 million, up $0.6 million as compared to Q4
of last year and down $1.2 million from the previous quarter.
From a balance sheet perspective, WNS ended Q4 with $182.2
million in cash and investments and $116.7 million of debt. In the
fourth quarter, the company generated $30.7 million in cash from
operations, had $7.4 million in capital expenditures and spent
$117.8 million on acquisitions. Days sales outstanding were 29
days, as compared to 28 days in Q4 of last year and 30 days
reported in the previous quarter.
“Our business continues to perform well, as evidenced by Q4
constant currency revenue growth of 19.1%, healthy adjusted
operating margins and strong adjusted diluted earnings per share.
We also acquired two new strategic businesses in the fourth
quarter, with Denali enhancing our high-end procurement
capabilities, and HealthHelp providing us with a technology-led,
analytics-driven offering in care management,” said Keshav
Murugesh, WNS’ Chief Executive Officer. “Overall, we are pleased
with our fiscal 2017 performance, including constant currency
revenue growth of 15.8%, adjusted operating margins of 19.4% and
adjusted earnings per diluted share of $1.74. WNS also completed
three tuck-in acquisitions and repurchased 2.2 million shares of
stock during the year.
“Entering fiscal 2018, we are excited about WNS’ strategic
positioning and business momentum. Our clients’ businesses are
becoming increasingly complex and competitive, necessitating
changes to how they approach their respective markets. WNS is
helping clients deal with business disruption by delivering the
right combination of domain expertise, analytics, automation,
digital capabilities and global process expertise. We will continue
to target industry leading financial performance and generating
increased value for all of our key stakeholders.”
Fiscal 2018 Guidance
WNS is providing guidance for the fiscal year ending March 31,
2018 as follows:
- Revenue less repair payments* is
expected to be between $680 million and $713 million, up from
$578.4 million in fiscal 2017. This assumes an average GBP to USD
exchange rate of 1.25 in fiscal 2018 versus 1.31 in fiscal
2017.
- ANI* is expected to range between $97
million and $105 million versus $92.2 million in fiscal 2017. This
assumes an average USD to INR exchange rate of 64.5 in fiscal 2018
versus 67.1 in fiscal 2017.
- Based on a diluted share count of 51.5
million shares, the company expects adjusted diluted earnings* per
ADS to be in the range of $1.88 to $2.04 versus $1.74 in fiscal
2017.
“The company has provided our initial forecast for fiscal 2018
based on current visibility levels and exchange rates,” said Sanjay
Puria, WNS’s Chief Financial Officer. “Our guidance for the year
reflects growth in revenue less repair payments* of 18% to 23%, or
19% to 25% on a constant currency* basis. Consistent with our
guidance methodology in previous years, we enter fiscal 2018 with
90% visibility to the midpoint of the range. For the year, we
expect capital expenditures to be in the range of $28 million to
$30 million.”
Conference Call
WNS will host a conference call on April 27, 2017 at 8:00 am
(Eastern) to discuss the company's quarterly results. To
participate in the call, please use the following details:
+1-888-656-9018; international dial-in +1-503-343-6030; participant
passcode 3697333. A replay will be available for one week following
the call at +1-855-859-2056; international dial-in +1-404-537-3406;
passcode 3697333, 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 300+
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 interaction
services, technology solutions, research and analytics and industry
specific back office and front office processes. As of March 31,
2017, WNS had 33,968 professionals across 48 delivery centers
worldwide including China, Costa Rica, India, Philippines, Poland,
Romania, South Africa, Sri Lanka, Turkey, 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 2018
guidance, future profitability, estimated capital expenditures, the
expected benefits of our acquisitions of Denali and HealthHelp, 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; our dependence on a limited number of clients in a
limited number of industries; regulatory, legislative and judicial
developments; increasing competition in the BPM industry;
technological innovation; telecommunications or technology
disruptions; our liability arising from fraud or unauthorized
disclosure of sensitive or confidential client and customer data;
our ability to attract and retain clients; negative public reaction
in the US or the UK to offshore outsourcing; our ability to expand
our business or effectively manage growth; our ability to hire and
retain enough sufficiently trained employees to support our
operations; the effects of our different pricing strategies or
those of our competitors; our ability to successfully consummate,
integrate and achieve accretive benefits from our strategic
acquisitions, and to successfully grow our revenue and expand our
service offerings and market share; and future regulatory actions
and conditions in our operating areas. 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).
WNS (HOLDINGS) LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited,
amounts in millions, except share and per share data)
Three months ended Year ended
Mar 31,2017
Mar 31,2016
Dec 31,2016
Mar 31,2017
Mar 31,2016
Revenue $ 159.4 $ 142.6 $ 145.4 $ 602.5 $
562.2 Cost of revenue 107.4 92.2
97.5 403.3 365.4
Gross profit 52.0 50.4 47.9 199.2 196.8 Operating expenses:
Selling and marketing expenses 9.0 7.4 7.9 32.6 30.8 General and
administrative expenses 27.3 20.8 21.5 91.7 78.9 Foreign exchange
loss/ (gain), net (5.7 ) (2.8 ) (6.2 ) (14.5 ) (11.0 ) Impairment
of goodwill 21.7 - - 21.7 - Amortization of intangible assets
2.9 6.2 4.1
20.5 25.2 Operating
profit / (loss) (3.3 ) 18.8
20.6 47.2 72.8
Other income, net (2.0 ) (2.6 ) (2.2 ) (8.7 ) (8.5 ) Finance
expense 0.4 0.0
0.0 0.5 0.3 Profit /
(loss) before income taxes (1.6 ) 21.4 22.8 55.3 81.1 Provision for
income taxes 3.3 5.5
4.8 17.5 21.2
Profit / (loss) $ (5.0
) $ 15.9 $ 18.0
$ 37.8 $ 59.9 Earnings per share
of ordinary share Basic $ (0.10 ) $ 0.31 $
0.36 $ 0.75 $ 1.17 Diluted $ (0.10 )
$ 0.30 $ 0.35 $ 0.71 $
1.12
WNS (HOLDINGS)
LIMITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION (Unaudited, amounts in millions, except share and
per share data)
As atMarch
31,2017
As atMarch
31,2016
ASSETS Current assets: Cash and cash equivalents $ 69.8 $
41.9 Investments 112.0 133.0 Trade receivables, net 60.4 54.9
Unbilled revenue 48.9 44.3 Funds held for clients 9.1 11.9
Derivative assets 35.4 13.9 Prepayments and other current assets
27.4 22.6 Total current assets
363.1 322.5 Non-current assets:
Goodwill 134.0 76.2 Intangible assets 96.6 27.1 Property and
equipment 54.8 50.4 Derivative assets 6.6 4.8 Investments 0.4 -
Deferred tax assets 16.7 22.5 Other non-current assets 31.9
21.8 Total non-current assets 341.1
203.0
TOTAL ASSETS $
704.1 $ 525.5
LIABILITIES AND EQUITY Current liabilities: Trade payables $
14.2 $ 19.9 Provisions and accrued expenses 27.2 24.7 Derivative
liabilities 3.9 3.3 Pension and other employee obligations 52.9
44.8 Current portion of long term debt 27.6 - Deferred revenue 5.5
2.9 Current taxes payable 1.3 1.7 Other liabilities 16.0
6.0 Total current liabilities 148.8
103.3 Non-current liabilities: Derivative
liabilities 0.8 0.5 Pension and other employee obligations 10.7 6.9
Long term debt 89.1 - Deferred revenue 0.4 0.3 Other non-current
liabilities 18.5 4.5 Deferred tax liabilities 20.8
1.8 Total non-current liabilities 140.3
13.9
TOTAL LIABILITIES 289.1
117.3 Shareholders' equity:
Share capital (ordinary shares $ 0.16 (10
pence) par value, authorized 60,000,000 shares; issued: 53,312,559
and 52,406,304 shares; outstanding: 50,012,559 shares and
51,306,304 shares; each as at March 31, 2017 and March 31, 2016,
respectively)
8.3 8.2 Share premium 338.3 306.9 Retained earnings 278.0 240.2
Other components of equity (114.9 ) (116.7 ) Total shareholders’
equity including shares held in treasury 509.8 438.6 Less:
3,300,000 shares as of March 31, 2017 and 1,100,000 shares as of
March 31, 2016, held in treasury, at cost (94.7 )
(30.5 ) Total shareholders’ equity $ 415.1 $ 408.2
TOTAL LIABILITIES AND EQUITY $ 704.1
$ 525.5
About Non-GAAP Financial
Measures
The financial information in this release includes certain
non-GAAP financial measures that we believe more accurately reflect
our core operating performance. Reconciliations of these non-GAAP
financial measures to our GAAP operating results are included
below. A more detailed discussion of our GAAP results is contained
in “Part I –Item 5. Operating and Financial Review and Prospects”
in our annual report on Form 20-F to be filed with the SEC in due
course.
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 to be filed
with the SEC in due course.
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 / (loss)
excluding goodwill impairment, share-based expense and amortization
of intangible assets) as a percentage of revenue less repair
payments, and (2) ANI, which is calculated as profit excluding
goodwill impairment, share-based expense and amortization of
intangible assets and including the tax effect thereon, and
other non-GAAP financial measures included in this release as
supplemental measures of its performance. WNS presents these
non-GAAP financial measures because it believes they assist
investors in comparing its performance across reporting periods on
a consistent basis by excluding items that are non-recurring in
nature and those it believes are not indicative of its core
operating performance. In addition, it uses these non-GAAP
financial 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 financial measures are not meant to be considered in
isolation or as a substitute for WNS’s financial results prepared
in accordance with IFRS.
The company is not able to provide our forward-looking GAAP
revenue, profit and earnings per ADS without unreasonable efforts
for a number of reasons, including our inability to predict with a
reasonable degree of certainty the payments to repair centers, our
future share-based compensation expense under IFRS 2 (Share Based
payments), amortization of intangibles associated with future
acquisitions, goodwill impairment and currency fluctuations. As a
result, any attempt to provide a reconciliation of the
forward-looking GAAP financial measures (revenue, profit, earnings
per ADS) to our forward-looking non-GAAP financial measures
(revenue less repair payments*, ANI* and Adjusted diluted earnings*
per ADS respectively) would imply a degree of likelihood that we do
not believe is reasonable.
Reconciliation of revenue (GAAP) to revenue less repair
payments (non-GAAP) and constant currency revenue less repair
payments (non-GAAP)
Three months ended Year
ended
Mar 31,2017
Mar 31,2016
Dec 31,2016
Mar 31,2017
Mar 31,2016
(Amounts in millions) (Amounts in millions) Revenue
(GAAP) $ 159.4 $ 142.6 $
145.4
$ 602.5 $ 562.2 Less: Payments to repair centers 5.3 7.3 5.6
24.1 31.2 Revenue less repair payments (non-GAAP) $ 154.1 $ 135.3 $
139.8 $ 578.4 $ 531.0 Exchange rate impact (1.9 ) (7.5 ) (1.5 )
(6.8
)
(37.5
)
Constant currency revenue less
repair payments (non-GAAP)
$ 152.1 $ 127.8 $ 138.4 $ 571.6 $ 493.5
Reconciliation of cost of revenue (GAAP to non-GAAP)
Three months ended Year ended
Mar 31,2017
Mar 31,2016
Dec 31,2016
Mar 31,2017
Mar 31,2016
(Amounts in millions) (Amounts in millions)
Cost of revenue (GAAP) $ 107.4 $ 92.2 $ 97.5 $ 403.3
$ 365.4 Less: Payments to repair centers 5.3 7.3 5.6 24.1
31.2 Less: Share-based compensation expense 0.8 0.5 0.6 2.8 1.9
Adjusted cost of revenue (excluding payment to repair centers and
share-based
compensation expense) (non-GAAP)
$ 101.3 $ 84.4 $ 91.4 $ 376.5 $ 332.3
Reconciliation of gross profit (GAAP to non-GAAP)
Three months ended
Year ended
Mar 31,2017
Mar 31,2016
Dec 31,2016
Mar 31,2017
Mar 31,2016
(Amounts in millions) (Amounts in millions) Gross
profit (GAAP) $ 52.0 $ 50.4 $ 47.9
$ 199.2 $ 196.8 Add: Share-based compensation expense 0.8
0.5 0.6 2.8 1.9 Adjusted gross profit (excluding share-based
compensation expense) (non-GAAP) $ 52.8 $ 50.9 $ 48.5 $ 202.0 $
198.7
Three months ended
Year ended
Mar 31,2017
Mar 31,2016
Dec 31,2016
Mar 31,2017
Mar 31,2016
Gross profit as a percentage of revenue (GAAP) 32.6 % 35.3 %
32.9 % 33.1 % 35.0 % Adjusted gross profit (excluding
share-based compensation expense) as a percentage of revenue less
repair payments (non-GAAP) 34.3 % 37.6 % 34.7 % 34.9 % 37.4 %
Reconciliation of selling and marketing expenses (GAAP to
non-GAAP)
Three months ended
Year ended
Mar 31,2017
Mar 31,2016
Dec 31,2016
Mar 31,2017
Mar 31,2016
(Amounts in millions) (Amounts in millions) Selling
and marketing expenses (GAAP) $ 9.0 $ 7.4 $ 7.9 $
32.6 $ 30.8 Less: Share-based compensation expense 0.5 0.3
0.4 1.7 1.4 Adjusted selling and marketing expenses (excluding
share-based compensation
expense) (non-GAAP)
$ 8.5 $ 7.1 $ 7.5 $ 30.9 $ 29.5
Three months ended
Year ended
Mar 31,2017
Mar 31,2016
Dec 31,2016
Mar 31,2017
Mar 31,2016
Selling and marketing expenses as a percentage of revenue (GAAP)
5.7 % 5.2 % 5.4 % 5.4 % 5.5 % Adjusted selling
and marketing expenses (excluding share-based compensation expense)
as a percentage of revenue less repair payments (non-GAAP) 5.5 %
5.2 % 5.4 % 5.3 % 5.6 %
Reconciliation of general and administrative expenses (GAAP
to non-GAAP)
Three months ended
Year ended
Mar 31,2017
Mar 31,2016
Dec 31,2016
Mar 31,2017
Mar 31,2016
(Amounts in millions) (Amounts in millions) General
and administrative expenses (GAAP) $ 27.3 $ 20.8 $
21.5 $ 91.7 $ 78.9 Less: Share-based compensation expense
5.2 3.9 4.2 18.5 14.6 Adjusted general and administrative
expenses (excluding share-based
compensation expense) (non-GAAP)
$ 22.1 $ 16.9 $ 17.3 $ 73.2 $ 64.3
Three months ended
Year ended
Mar 31,2017
Mar 31,2016
Dec 31,2016
Mar 31,2017
Mar 31,2016
General and administrative expenses as a percentage of revenue
(GAAP) 17.1 % 14.6 % 14.8 % 15.2 % 14.0 %
Adjusted general and administrative expenses (excluding share-based
compensation expense) as a percentage of revenue less repair
payments (non-GAAP) 14.3 % 12.5 % 12.4 % 12.7 % 12.1 %
Reconciliation of operating profit / (loss) (GAAP to
non-GAAP)
Three months ended Year
ended
Mar 31,2017
Mar 31,2016
Dec 31,2016
Mar 31,2017
Mar 31,2016
(Amounts in millions) (Amounts in millions) Operating
profit / (loss) (GAAP) $ (3.3 ) $ 18.8 $ 20.6 $ 47.2
$ 72.8 Add: Impairment of goodwill 21.7 - - 21.7 - Add:
Share-based compensation expense 6.6 4.8 5.1 23.0 17.9 Add:
Amortization of intangible assets 2.9 6.2 4.1 20.5 25.2 Adjusted
operating profit (excluding
impairment of goodwill, share-based
compensation expense and amortization of intangible assets)
(non-GAAP)
$ 27.9 $ 29.8 $ 29.8 $ 112.4 $ 116.0
Three months ended
Year ended
Mar 31,2017
Mar 31,2016
Dec 31,2016
Mar 31,2017
Mar 31,2016
Operating profit / (loss) as a percentage of revenue (GAAP) (2.0 )%
13.2 % 14.2 % 7.8 % 13.0 % Adjusted operating
profit (excluding
impairment of goodwill, share-based
compensation expense and amortization of intangible assets) as a
percentage of revenue less repair payments (non-GAAP)
18.1 % 22.0 % 21.3 % 19.4 % 21.8 %
Reconciliation of profit / (loss) (GAAP) to ANI
(non-GAAP)
Three months ended Year
ended
Mar 31,2017
Mar 31,2016
Dec 31,2016
Mar 31,2017
Mar 31,2016
(Amounts in millions) (Amounts in millions) Profit /
(loss) (GAAP) $ (5.0 ) $ 15.9 $
18.0
$ 37.8 $ 59.9 Add: Impairment of goodwill 21.7 - - 21.7 -
Add: Share-based compensation expense 6.6 4.8 5.1 23.0 17.9 Add:
Amortization of intangible assets 2.9 6.2 4.1 20.5 25.2 Adjusted
net income (excluding
impairment of goodwill, share-based
compensation expense and amortization of intangible assets)
(non-GAAP)
$ 26.2 $ 26.9 $ 27.2 $ 103.0 $ 103.0 Less: Tax impact on
share-based compensation expense(1) (1.3 ) (1.9 ) (0.9 ) (5.1 )
(5.6 ) Less: Tax impact on amortization of intangible assets(1)
(0.9 ) (1.7 ) (1.1 ) (5.6 ) (6.5 ) Adjusted net income (excluding
impairment of goodwill, share-based
compensation expense and amortization of intangible assets,
including tax effect* thereon) (non-GAAP)
$ 24.0 $ 23.4 $ 25.2 $ 92.2 $ 90.9
(1) The company applies GAAP methodologies in computing the tax
impact on its non-GAAP ANI adjustments (including amortization of
intangible assets and share-based compensation expense). The
company’s non-GAAP tax expense is generally higher than its GAAP
tax expense if the income subject to taxes is higher considering
the effect of the items excluded from GAAP profit to arrive at
non-GAAP profit.
* Goodwill being non-tax deductible, there is no impact on tax
thereon
Three months ended Year
ended
Mar 31,2017
Mar 31,2016
Dec 31,2016
Mar 31,2017
Mar 31,2016
Profit as a percentage of revenue (GAAP) (3.1 )% 11.1 %
12.4 % 6.3 % 10.7 % Adjusted net income as a
percentage of revenue less repair payments (non-GAAP) as per our
previous method of calculation 17.0 % 19.9 % 19.5 % 17.8 % 19.4 %
Adjusted net income (excluding
impairment of goodwill, share-based
compensation expense and amortization of intangible assets,
including tax effect* thereon) as a percentage of revenue less
repair payments (non-GAAP)
15.6 % 17.3 % 18.0 % 15.9 % 17.1 %
* Goodwill being non-tax deductible, there is no impact on tax
thereon
Reconciliation of basic income per ADS (GAAP to
non-GAAP)
Three month ended Year
ended
Mar 31,2017
Mar 31,2016
Dec 31,2016
Mar 31,2017
Mar 31,2016
Basic earnings per ADS (GAAP) $ (0.10 ) $ 0.31 $ 0.36
$ 0.75 $ 1.17 Add: Adjustments for impairment of goodwill,
share-based compensation expense and amortization of intangible
assets 0.62 0.21 0.18 1.29 0.83 Adjusted basic net income per ADS
(non-GAAP) as per previous method of calculation $ 0.52 $ 0.52 $
0.54 $ 2.04 $ 2.00 Less: Tax impact on amortization of intangible
assets and share-based compensation expense* 0.04 0.06 0.04 0.22
0.23 Adjusted basic net income per ADS (excluding impairment of
goodwill, share-based compensation expenses and amortization of
intangible assets, including tax effect thereon) (non-GAAP) $ 0.48
$ 0.46 $ 0.50 $ 1.82 $ 1.77
* Goodwill being non-tax deductible, there is no impact on tax
thereon
Reconciliation of diluted income per ADS (GAAP to
non-GAAP)
Three months ended
Year ended
Mar 31,2017
Mar 31,2016
Dec 31,2016
Mar 31,2017
Mar 31,2016
Diluted earnings per ADS (GAAP) $ (0.10 ) $ 0.30 $
0.35
$
0.71
$
1.12
Add: Adjustments for impairment of goodwill, share-based
compensation expense and amortization of intangible assets 0.60
0.20 0.18
1.24
0.80
Adjusted diluted net income per ADS
(non-GAAP) as per previous method of calculation
$ 0.50 $ 0.50 $ 0.53
$
1.95
$
1.92
Less: Tax impact on amortization of intangible assets and
share-based compensation expense* 0.04 0.06 0.04 0.21 0.23 Adjusted
diluted net income per ADS (excluding impairment of goodwill,
amortization of intangible assets and share-based compensation
expense, including tax effect thereon) (non-GAAP) $ 0.46 $ 0.44 $
0.49
$
1.74
$
1.69
* Goodwill being non-tax deductible, there is no impact on tax
thereon
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170427005704/en/
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