Virtusa Announces Second Quarter Fiscal 2008 Financial Results.* Revenue grows 34% year-over-year to $40.3 million
* Income from operations grows 28% year-over-year to $4.7 million
* Cash and marketable securities Marketable Securities
Very liquid securities that can be converted into cash quickly at a reasonable price.
Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has grow to $100.2 million
WESTBOROUGH, Mass. -- Virtusa 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 : VRTU VRTU VME Based Remote Terminal Unit ), a global information technology (IT) services company that provides IT consulting, technology implementation and application outsourcing services through an enhanced global delivery model, today reported its financial results for the second quarter of fiscal 2008, ended September 30, 2007.
Second Quarter Fiscal 2008 Financial Results
For the second quarter of fiscal 2008, Virtusa's revenue increased 33.8% year-over-year and 7.5% sequentially, to $40.3 million.
Virtusa reported second quarter income from operations of $4.7 million, or 11.7% of revenue. This represents an increase of 27.8% compared to $3.7 million for the second quarter of fiscal 2007.
Net income for the second quarter of fiscal 2008 was $4.6 million, or $0.20 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, compared to $3.8 million, or $0.21 per diluted share, for the second quarter of fiscal 2007. The change in diluted net income per share year-over-year was influenced by a higher effective tax rate and an increase in diluted shares outstanding. The Company's effective tax rate increased to 17.1% in the second quarter of fiscal 2008 from 3.3% in the second quarter of fiscal 2007 as the Company is no longer recognizing an income statement benefit from the use of its deferred tax assets due to the release of its valuation allowance in fiscal 2007. In addition, the diluted shares outstanding in the second quarter of fiscal 2008 increased 29% year-over-year primarily due to the successful completion of the Company's initial public offering.
Kris Canekeratne, Virtusa's Chairman 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. stated, "We are pleased with the progress we made in our second quarter towards our long-term objective of predictable growth with increasing profitability." Canekeratne continued, "We added 5 new clients and expanded our existing client relationships in the quarter. We believe that this is indicative of the increased value that we provide through our broad range of IT services, transformational platforming approach and optimal global delivery model, where we provide 20% or less of our services onsite and 80% or more offshore."
The Company ended the second quarter of fiscal 2008 with $100.2 million of cash and cash equivalents, short-term investments and long-term investments, which is an increase of $60.7 million from the prior quarter, due primarily to the net proceeds Net Proceeds
The amount received after all costs are deducted from the sale of a piece of property or security.
In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). that were raised through the Company's initial public offering, completed on August 8, 2007. The Company ended the second quarter of fiscal 2008 with no long-term debt Long-Term Debt
Loans and financial obligations lasting over one year.
For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. .
"Our second quarter performance demonstrated our ability to leverage operating expenses Operating expenses
The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. while growing revenue in-line with our guidance," said Tom Holler, Chief Financial Officer. "Although our second quarter cost management initiatives enabled us to exceed profit guidance, we remain committed to our strategy of investing in business development and people practices to support long-term revenue growth."
Virtusa management provided the following current financial guidance:
* Third quarter 2008 revenue is expected to be in the range of $42.0 to $43.0 million, with diluted 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 $0.16 to $0.18.
* Fiscal year 2008 revenue is expected to be in the range of $164.0 to $167.0 million, with diluted EPS of $0.67 to $0.71.
Conference Call and Webcast
Virtusa will host a conference call on October 31, 2007 at 8:00 am Eastern time to discuss the Company's second quarter financial results, current financial guidance and other corporate developments. To access this call, dial 888-271-8602 (domestic) or 913-312-1393 (international). A replay of this conference call will be available through November 7, 2007 at 888-203-1112 (domestic) or 719-457-0820 (international). The replay passcode is 9072946. A live webcast of this conference call will be available on the "Investors" page of the Company's website (www.virtusa.com), and a replay will be archived on the website as well.
About Virtusa Corporation
Virtusa is a global information technology (IT) services company providing IT consulting, technology implementation and application outsourcing services. Using its enhanced global delivery model, innovative platforming approach and industry expertise, Virtusa provides cost-effective services that enable its clients to use IT to enhance business performance, accelerate time-to-market, increase productivity and improve customer service.
Founded in 1996 and headquartered in Massachusetts, Virtusa has offices in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and the United Kingdom, and global delivery centers in India and Sri Lanka Sri Lanka (srē läng`kə) [Sinhalese,=resplendent land], formerly Ceylon, ancient Taprobane, officially Democratic Socialist Republic of Sri Lanka, island republic (2005 est. pop. .
"Virtusa" is a registered trademark of Virtusa Corporation.
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.
Certain statements made in this press release that are not based on historical information are forward-looking statements which are 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. This press release contains express or implied forward-looking statements relating to relating to relate prep → concernant
relating to relate prep → bezüglich +gen, mit Bezug auf +acc , among other things, Virtusa's expectations concerning management's forecast of financial performance, the acquisition of new clients and growth of business, and management's plans, objectives, and strategies. These statements are neither promises nor guarantees, but are subject to a variety of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those contemplated in these forward-looking statements. In particular, the risks and uncertainties include, among other things: our dependence on a limited number of clients as well as clients located principally in the United States and United Kingdom and in concentrated industries; our ability to expand our business or effectively manage growth; restrictions on immigration immigration, entrance of a person (an alien) into a new country for the purpose of establishing permanent residence. Motives for immigration, like those for migration generally, are often economic, although religious or political factors may be very important. ; the loss of any key member of our senior management team, increasing competition in the IT services outsourcing industry; our ability to hire and retain enough sufficiently trained IT professionals to support our operations; quarterly fluctuations in our earnings; client terminations or contracting delays, or delays in revenue recognition in any reporting period, our ability to attract and retain clients and meet their expectations; our ability to sustain profitability or maintain profitable engagements; our ability to successfully manage our billing and utilization rates and our targeted on-site to offshore delivery mix; technological innovation; our ability to effectively manage our facility, infrastructure and capacity needs; regulatory, legislative and judicial developments in our operations areas; political or economic instability in India or Sri Lanka; any reduction or withdrawal of tax benefits provided to us by the governments of India and Sri Lanka, or new legislation by such governments which could be harmful to us; wage inflation and increases in government mandated benefits mandated benefit Managed care A benefit that a health plan is required by law to provide Examples In vitro fertilization, defined days of inpatient mental health or substance abuse treatment, special-condition treatments. See Benefit, ERISA. in India and Sri Lanka; telecommunications or technology disruptions; worldwide economic and business conditions; currency exchange rate fluctuations of the Indian and Sri Lankan rupee The rupee (Sinhala: රුපියල , Tamil: ரூபாய்) is the currency of Sri Lanka, divided into 100 cents. The currency code is LKR. , and the US dollar and the U.K. pound sterling; and the volatility of the market price of our common stock. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Virtusa undertakes no obligation to update or revise the information contained in this press release, whether as a result of new information, future events or circumstances or otherwise. For additional disclosure regarding these and other risks faced by Virtusa, see the disclosure contained in our public filings with the Securities and Exchange Commission including our Quarterly Report on Form 10-Q Form 10-Q
See 10-Q. for the first fiscal quarter ended June 30, 2007 filed with the Securities and Exchange Commission on September 7, 2007.
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