Cognizant Technology Solutions Reports Record First Quarter Results.Business Editors/High-Tech Writers 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)--April 20, 2004 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. Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : CTSH): -- Revenue exceeds expectations reaching $119.7 million, Increases 61% y-o-y and 11% sequentially -- Margins and pricing remain solid -- 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. 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. of $0.28 tops expectations Cognizant Technology Solutions Corporation (NASDAQ: CTSH), a leading provider of IT services, today announced its financial results for the first quarter ended March 31, 2004. Highlights for the first quarter include: -- Quarterly revenue increased to $119.7 million, up 11% sequentially and 61% from the year ago quarter -- Operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: of 19.8% compared to 19.8% sequentially and 19.5% in the year ago period -- Diluted quarterly EPS reached $0.28 Revenue for the first quarter increased to $119.7 million, up 11% from $108.2 million in the fourth quarter of 2003, and up 61% from $74.5 million in the first quarter of 2003. Net income for the first quarter increased to $19.8 million, or $0.28 per diluted share compared to $17.7 million, or $0.25 per diluted share in the fourth quarter of 2003. Operating margin for the quarter held steady at 19.8%, compared to 19.8% in the fourth quarter of 2003 and 19.5% in the first quarter of 2003. "Cognizant cog·ni·zant adj. Fully informed; conscious. See Synonyms at aware. [From cognizance.] Adj. 1. continues to deliver strong operating and financial performance as demand for high value offshore services continues to grow, with particularly strong interest in core application development and management services," stated Lakshmi Narayanan Lakshmi Narayanan is the vice chairman and ex-CEO of Cognizant Technology Solutions (CTS) . He was the CEO and president of Cognizant till 2006. [1] Lakshmi has played a leading role in the global information technology industry for more than 25 years, managing divisions , President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Cognizant. "We have maintained our position as the fastest-growing company among the major offshore IT Services firms through our strong focus and commitment to the superior execution of our onsite/offshore business strategy. Additionally, client satisfaction with our services remains strong as a result of the deep relationships we develop with our clients. Cognizant continues to solidify so·lid·i·fy v. so·lid·i·fied, so·lid·i·fy·ing, so·lid·i·fies v.tr. 1. To make solid, compact, or hard. 2. To make strong or united. v.intr. its position as a highly differentiated premium provider and demonstrates to clients the significant value it can deliver. We continue to see strong growth across our key verticals, especially in 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. and insurance. We expect the momentum to continue and reiterate re·it·er·ate tr.v. re·it·er·at·ed, re·it·er·at·ing, re·it·er·ates To say or do again or repeatedly. See Synonyms at repeat. re·it our expectation to grow the business faster than the industry's growth rate throughout 2004." "Our first quarter results are clearly the result of solid execution and strong momentum, as well as the strong demand environment for offshore services," said Gordon Gordon, river in W Tasmania, Australia, 125 mi (200 km) long. Flowing from mountains to the W coast, its main tributaries are the Franklin and Denison from the N, and Serpentine and Olga to the S. Coburn, Chief Financial Officer. "We expect to continue benefiting from these favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. trends and we have significant revenue visibility due to our high-level recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. revenue and the 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. nature of our customer relationships. We continue to experience a stable pricing environment as well as strong growth from strategic clients that we have won during the last 2 years, as these clients further leverage the advantages of offshore. During the quarter we increased our global staff by over 1,200 people to approximately 10,500 to meet current and anticipated demand. In addition, our sales pipeline is at a record level. We are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about the outlook for this year and believe we are well-positioned to deliver strong financial and operating results." Conference Call Cognizant will host a conference call on April 20th, at 9:00 a.m. (ET) to discuss the Company's quarterly results. To listen to the call please dial (800) 953-6584 domestic and (706) 645-0156 internationally. 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.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 (800) 642-1687 for domestic callers and (706) 645-9291 for international callers and entering "6694091" from two hours after the end of the call until 11:59 p.m. (ET) on April 27, 2004. About Cognizant Technology Solutions Cognizant Technology Solutions Corporation (Nasdaq: CTSH) is a leading provider of IT services. Focused on delivering strategic information technology solutions that address the complex business needs of its clients, Cognizant provides applications management, development, integration, and re-engineering, infrastructure management, business process outsourcing Business process outsourcing (BPO) is the contracting of a specific business task, such as payroll, to a third-party service provider. Usually, BPO is implemented as a cost-saving measure for tasks that a company requires but does not depend upon to maintain its position in , and a number of related services such as enterprise consulting, technology architecture, program management and change management through its onsite/offshore 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. model. Cognizant's more than 10,500 employees are committed to partnerships that sustain long-term, proven value for customers by delivering high-quality, cost-effective cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. solutions through its development centers in India and Ireland, and onsite client teams. Cognizant maintains P-CMM P-CMM People Capability Maturity Model (Software Engineering Institute) P-CMM Personnel Capability Maturity Model and SEI-CMM Level 5 assessments from an independent third-party assessor and was recently ranked #1 in Forbes' Hot Shots 200 Up & Comers and ranked as the top information technology company in BusinessWeek's Hot Growth Companies. Further information about Cognizant can be found at http://www.cognizant.com. This press release includes statements which may constitute 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. made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of 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, the accuracy of which are necessarily subject to risks, uncertainties and assumptions as to future events that may not prove to be accurate. Factors that could cause actual results to differ materially from those expressed or implied include general economic conditions and the factors discussed in our most recent Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and other filings with the Securities and Exchange Commission. Cognizant undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share data)
Three Months Ended
March 31,
-------------------------
2004 2003
---------- -----------
Revenues $119,744 $71,941
Revenues -related party - 2,575
---------- -----------
Total revenues 119,744 74,516
Cost of revenues 65,010 40,959
---------- -----------
Gross profit 54,734 33,557
Selling, general and administrative
expenses 27,182 16,411
Depreciation and amortization expense 3,865 2,622
---------- -----------
Income from operations 23,687 14,524
---------- -----------
Other income/(expense):
-----------------------
Interest income 840 421
Other income/(expense), net 301 (197)
Split-off costs (non tax deductible) - (2,010)
---------- -----------
Total other income/(expense) 1,141 (1,786)
---------- -----------
Income before provision for income
taxes 24,828 12,738
Provision for income taxes (5,040) (2,560)
---------- -----------
Net income $19,788 $10,178
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Basic earnings per share $0.31 $0.17
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---------- -----------
Diluted earnings per share $0.28 $0.15
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Weighted average number of common
---------- -----------
shares outstanding 64,440 61,319
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Weighted average number of common
---------- -----------
and dilutive shares outstanding 70,826 65,993
========== ===========
COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited)
(In thousands)
March 31, December 31,
----------- ------------
2004 2003
----------- ------------
Assets
Current Assets
Cash and cash equivalents $161,985 $194,221
Investments in short-term bank deposits 36,874 -
Trade accounts receivable, net of allowances
of $1,087 and $989, respectively 71,512 52,253
Unbilled accounts receivable 12,720 9,543
Current tax asset 12,374 14,066
Other current assets 11,576 8,414
----------- ------------
Total Current Assets 307,041 278,497
Property and equipment - net 57,813 58,438
Goodwill 5,647 4,477
Other Intangible assets - net 15,696 16,436
Other assets 3,153 2,741
----------- ------------
Total Assets $389,350 $360,589
=========== ============
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable $ 8,468 $ 9,423
Accrued and other current liabilities 54,371 53,213
----------- ------------
Total Current Liabilities 62,839 62,636
Deferred income taxes 22,298 23,883
----------- ------------
Total Liabilities 85,137 86,519
----------- ------------
----------- ------------
Stockholders' Equity 304,213 274,070
----------- ------------
----------- ------------
Total Liabilities and Stockholders' Equity $389,350 $360,589
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