Cognizant Technology Solutions Reports Fourth Quarter Pro Forma EPS of $0.29.Business Editors TEANECK Teaneck (tē`nĕk), residential township (1990 pop. 37,825), Bergen co., NE N.J., near the Hackensack River; settled in the early 1600s, inc. 1895. Jewelry, electrical equipment, and food seasonings are among its manufactures. , N.J.--(BUSINESS WIRE)--Feb. 5, 2002 2001 Revenue Increases 30% Continues To See Strong Demand For Offshore Application Outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. Cognizant Technology Solutions Cognizant redirects here. For a definition of the word see the entry for at Wiktionary Cognizant Technology Solutions (NASDAQ: CTSH) is an information technology services company with headquarters in New Jersey U.S.A. Corp. (Nasdaq: CTSH), a leading application management and e-business (Electronic-BUSINESS) Doing business online. The term is often used synonymously with e-commerce, but e-business is more of an umbrella term for having a presence on the Web. solutions provider, today announced financial results for the fourth quarter and year ended December December: see month. 31, 2001. Revenue for the fourth quarter increased to $43.5 million, up 6 percent from $41.1 million in the fourth quarter of 2000. Gross margin and operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: for the fourth quarter improved to 49.4 percent and 20.8 percent, respectively from 48.8 percent and 19.2 percent, respectively in the prior year. Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net income for the fourth quarter increased to $5.9 million or $0.29 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share from $5.4 million or $0.27 per diluted share in the fourth quarter of 2000. Pro forma amounts exclude the effect of a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. , non-cash, after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. charge of $1.2 million, related to an impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. loss write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of Questra QUESTRA Qualitative Undertaking and Educational Society for Total Respectable Achievements (Xavier University, Ohio) , the Company's only venture capital investment. Net income for the fourth quarter of 2001, inclusive of inclusive of prep. Taking into consideration or account; including. the one-time charge, was $4.6 million, or $0.23 per diluted share. Revenue for the year ended December 31, 2001 increased 30 percent to $177.8 million from $137.0 million in 2000. Pro forma net income for 2001 increased 32 percent to $23.4 million, from $17.7 million in the prior year. 2001 Pro forma EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. increased 32 percent to $1.15 per diluted share from $0.87 per diluted share in 2000. Net income for the year ended December 31, 2001, inclusive of the one-time charge, increased to $22.2 million or $1.09 per diluted share. "Offshore application management continued to move to the forefront of corporate IT spending as a result of its cost effectiveness and value added Value Added The enhancement a company gives its product or service before offering the product to customers. Notes: This can either increase the products price or value. capabilities," said Kumar Mahadeva, Chairman and Chief Executive Officer. "Cognizant's results benefited from this mainstream acceptance and resulted in 22 percent growth in application management revenue during the fourth quarter and a 43% increase for the full year. Additionally, investments in our vertical market strategy continue to bear fruit as we experienced sequential growth in the fourth quarter in our health care and financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. practices. This partially offset the substantial decline in revenue from our travel industry clients. We do not expect any further decline in revenues from the travel segment." "Our cash balance increased over $5 million during the fourth quarter to approximately $85 million as we continued to generate significant cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses . Also, DSOs remained strong at 59 days," said Gordon Coburn, Chief Financial Officer. "Additionally, our customer base remains strong and loyal. Over 80% of our fourth quarter revenue came from customers who have utilized our services for more than one year." Coburn added, "Although spending on development and integration projects remains weak, we continue to see strong demand for offshore outsourcing Offshore outsourcing is the practice of hiring an external organization to perform some business functions in a country other than the one where the product or service will be sold or consumed. services and as a result expect to resume sequential revenue growth in the first quarter of 2002." Conference Call Cognizant Technology Solutions will host a conference call today, Tuesday February 5, at 10:00 a.m. (eastern) to discuss the Company's quarterly results. To listen to the call please dial 706-679-3318. The call will also be broadcast live via the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at Cognizant's web site, www.cognizant cog·ni·zant adj. Fully informed; conscious. See Synonyms at aware. [From cognizance.] Adj. 1. .com. Please go to the web site at least fifteen minutes prior to the call to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary audio software. A replay will be made available on the web site at www.cognizant.com or by calling 706-645-9291 and entering "2804625" from two hours after the end of the call until 11:59 p.m. (EST EST electroshock therapy. EST abbr. electroshock therapy ) on February 12, 2002. About Cognizant Technology Solutions Cognizant is a leading provider of custom software development, integration and maintenance services that link e-business with core information systems for companies worldwide. Cognizant operates under a high quality, high value onsite/offshore model that enables better, faster and more cost effective development and deployment of large-scale systems across a wide range of transaction intensive business needs. Its more than 3,900 employees are committed to partnerships that sustain long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. , proven value in order to win in today's global marketplace. Cognizant was listed as one of the "Best Small Companies in America," by Forbes and as the top solutions provider and one of the top 200 Hot Companies by Business Week. Cognizant has been assessed at SEI/CMM Level 5, the highest possible rating. For more information, visit Cognizant on the web at www.cognizant.com. Certain statements contained herein, including statements regarding the development of the Company's services, markets and future demand for the Company's services, projections on future growth potential, and other statements regarding matters that are not historical facts, are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. (as defined in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995). Such forward-looking statements include risks and uncertainties; consequently, actual results may differ materially from those expressed or implied thereby. Factors that could cause actual results to differ materially include, but are not limited to, variability of quarterly operating results, reliance on large projects, concentration of revenue, ability to attract and retain professional staff, dependence on key personnel, ability to manage growth effectively, risks associated with rapid technological advances, risks associated with possible acquisitions, risks associated with the Company's strategic partnerships, various project-associated risks, substantial competition, general economic conditions, risks associated with intellectual property rights, risks associated with international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. and other risk factors listed from time to time in the Company's filings and reports with the Securities and Exchange Commission.
COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
2001 2000 2001 2000
-------- -------- --------- ---------
Revenues $38,166 $37,766 $ 158,969 $ 122,758
Revenues -related party 5,295 3,287 18,809 14,273
------- ------- -------- --------
Total revenues 43,461 41,053 177,778 137,031
Cost of revenues 21,989 21,012 90,848 70,437
------- ------- -------- --------
Gross profit 21,472 20,041 86,930 66,594
Selling, general and
administrative expenses 10,636 10,891 44,942 35,959
Depreciation and
amortization expense 1,802 1,265 6,368 4,507
------- ------- -------- --------
Income from operations $ 9,034 $ 7,885 $ 35,620 $ 26,128
------- ------- -------- --------
Other income:
Interest income 495 870 2,501 2,649
Other expense, net (163) (98) (767) (530)
------- ------- -------- --------
Total other income 332 772 1,734 2,119
------- ------- -------- --------
Income before provision
for income taxes 9,366 8,657 37,354 28,247
Provision for income taxes (3,502) (3,237) (13,970) (10,564)
------- ------- -------- --------
Pro forma Net income 5,864 5,420 23,384 17,683
Impairment loss
on Investment,
net of tax benefit (1,224) - (1,224) -
Net income $ 4,640 $ 5,420 $ 22,160 $ 17,683
======= ======= ======== ========
Pro forma Basic EPS $ 0.30 $ 0.29 $ 1.23 $ 0.95
======= ======= ======== ========
Pro forma Diluted EPS $ 0.29 $ 0.27 $ 1.15 $ 0.87
======= ======= ======== ========
Basic earnings per share $ 0.24 $ 0.29 $ 1.17 $ 0.95
======= ======= ======== ========
Diluted earnings per share $ 0.23 $ 0.27 $ 1.09 $ 0.87
======= ======= ======== ========
Weighted average number of
common shares outstanding 19,283 18,634 19,017 18,565
======= ======= ======== ========
Weighted average number of
common and dilutive
shares outstanding 20,284 20,118 20,371 20,256
======= ======= ======== ========
COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited)
(In thousands)
Dec. 31, Dec. 31,
2001 2000
--------- ---------
Assets
Current Assets
Cash and cash equivalents $ 84,977 $ 61,976
Trade accounts receivable, net of
allowances of $882 and $516, respectively 21,063 19,187
Trade accounts receivable - related party 1,481 1,361
Unbilled accounts receivable 5,005 1,941
Unbilled accounts receivable - related party 417 -
Other current assets 4,392 3,758
--------- ---------
Total Current Assets 117,335 88,223
--------- ---------
Property and equipment - net 24,339 15,937
Goodwill - net 878 1,195
Investment - 1,955
Other assets 2,431 2,230
--------- ---------
Total Assets $ 144,983 $ 109,540
========= =========
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable $ 3,652 $ 2,849
Accounts payable - related party - 8
Accrued and other current liabilities 18,046 23,865
--------- ---------
Total Current Liabilities 21,698 26,722
Deferred income taxes 24,493 16,702
--------- ---------
Total Liabilities 46,191 43,424
--------- ---------
Stockholders' Equity 98,792 66,116
--------- ---------
Total Liabilities and Stockholders' Equity $ 144,983 $ 109,540
========= =========
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