SIGNATURE | ||||||||
EXHIBIT INDEX | ||||||||
Ex-99.1 Earnings release of WNS (Holdings) Limited dated August 20, 2006. |
99.1 | Earnings release of WNS (Holdings) Limited dated August 20, 2006. |
WNS (HOLDINGS) LIMITED |
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By: | /s/ Zubin Dubash | |||
Name: | Zubin Dubash | |||
Title: | Chief Financial Officer |
CONTACT:
|
Investors: | |
Jay Venkateswaran | ||
Senior VP Investor Relations | ||
WNS (Holdings) Limited | ||
+1 212 599 6960 | ||
ir@wnsgs.com | ||
Media: | ||
Mike Geczi | ||
The Torrenzano Group | ||
+1 (212) 681-1700, ext. 156 | ||
mgeczi@torrenzano.com |
| Revenue for the quarter ended June 30, 2006, was $53.0 million, up 3.6% from $51.2 million in the quarter ended June 30, 2005. Revenue for the quarter grew sequentially by 0.2% from $52.9 million in the previous quarter. | ||
| Revenue less repair payments for the quarter ended June 30, 2006, was $45.5 million, up 37.1% from $33.2 million in the quarter ended June 30, 2005. Revenue less repair payments for the quarter grew sequentially by 9.8% from $41.4 million in the previous quarter.** | ||
| Net income for the quarter ended June 30, 2006, was $4.6 million, up 5.0% from $4.4 million in the quarter ended June 30, 2005. Net income for the quarter grew sequentially by 24.6% from $3.7 million in the previous quarter. | ||
| Net income (excluding amortization of intangible assets and share-based compensation expense) for the quarter ended June 30, 2006, was $5.3 million, up 11.4% from $4.7 million in the quarter ended June 30, 2005. Net income (excluding amortization of intangible assets and share-based compensation expense) for the quarter grew sequentially by 19.3% from $4.4 million in the previous quarter. |
| Basic income per share for the quarter ended June 30, 2006, was 13 cents, compared with 14 cents for the quarter ended June 30, 2005. Basic income per share for the previous quarter was 10 cents. (EPS calculation excludes 4,473,684 shares issued by the company in its initial public offering, which closed on July 31, 2006.) | ||
| Basic income per share (excluding amortization of intangible assets and share-based compensation expense) for the quarter ended June 30, 2006, was 15 cents, compared with 15 cents in the quarter ended June 30, 2005. Basic income per share (excluding amortization of intangible assets and share-based compensation expense) for the previous quarter was 13 cents. (EPS calculation excludes 4,473,684 shares issued by the company in its IPO which closed on July 31, 2006.) |
| As of June 30, 2006, WNS had total employees of 11,970, up 49.5% from 8,009 a year earlier, and 14.7% from 10,433 as of March 31, 2006. | ||
| WNS entered into a definitive contract with a large client, British Airways, which extended the expiration of the term of our original contract from March 2007 to May 2012. Under the new contract, the parties have agreed to change the basis of pricing for a portion of the contracted services over a transition period from a per-full-time-equivalent basis to a per-unit-transaction basis. In WNS IPO, British Airways, one of the companys selling shareholders, sold 5,160,000 ordinary shares, reducing its ownership in WNS (Holdings) Limited to zero from 14.6%. For fiscal 2006, British Airways accounted for 7.2% of WNS revenue and 9.9% of its revenue less repair payments. | ||
| WNS also entered into a definitive amendment to the contract with another large client, AVIVA, that continues the relationship between the two companies. Under the contract, the date on which AVIVA could require WNS to transfer relevant projects and operations back to AVIVA has been extended to on or after June 30, 2007, for its facility in Sri Lanka and to on or after December 30, 2007, for a larger facility in Pune. For fiscal 2006, AVIVA accounted for 9.8% of WNS revenue and 13.4% of its revenue less repair payments. |
Revenue | ||||||||||||
Quarters ended | ||||||||||||
June 30, | March 31, | June 30, | ||||||||||
2006 | 2006 | 2005 | ||||||||||
Cost of revenue |
70.6 | % | 70.5 | % | 75.7 | % | ||||||
Gross profit |
29.4 | % | 29.5 | % | 24.3 | % | ||||||
Operating expenses: |
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Selling, general and administrative expense |
19.1 | % | 21.5 | % | 13.8 | % | ||||||
Amortization of intangible assets |
0.9 | % | 1.0 | % | 0.1 | % | ||||||
Operating income |
9.4 | % | 7.0 | % | 10.4 | % | ||||||
Non-operating income (expense), net |
(0.1 | )% | 0.4 | % | (0.1 | )% | ||||||
Provision for income taxes |
(0.6 | )% | (0.5 | )% | (1.7 | )% | ||||||
Net income |
8.7 | % | 7.0 | % | 8.5 | % |
| Revenue for the quarter ended June 30, 2006, was $53.0 million, compared with $51.2 million for the quarter ended June 30, 2005, an increase of 3.6%. Revenue for the quarter increased sequentially by 0.2% from $52.9 million in the quarter ended March 31, 2006. | ||
| Gross profit for the quarter ended June 30, 2006, was $15.6 million or 29.4% of revenue, compared with $12.4 million or 24.3% of revenue, in the quarter ended June 30, 2005. The increase in gross profit percentage in the quarter ended June 30, 2006, compared with the year-earlier quarter, is due to the loss of a significant client in WNS Auto Claims BPO which when compared with the rest of the business, contributed to a comparatively lower gross profit percentage. Gross profit for the quarter ended March 31, 2006 was $15.6 million, or 29.5% of revenue. | ||
| SG&A expenses for the quarter ended June 30, 2006, were $10.1 million, or 19.1% of revenue, compared with $7.1 million, or 13.8% of revenue, in the quarter ended June 30, 2005. The increase in expenses is on account of higher travel, legal and professional charges and employee-related costs such as staff welfare and recruitment expenses. SG&A expenses for the quarter ended March 31, 2006, were $11.4 million, or 21.5% of revenue. This decline in expenses is attributable to non-recurring expenses of $0.7 million incurred for quarter ended March 31, 2006 for consulting and audit fees, representing a portion of the professional fees relating to preparation for becoming a public company, and $0.3 million, of decreased travel costs during the quarter ended June 30, 2006. | ||
| Operating income for the quarter ended June 30, 2006, was $5.0 million or 9.4% of revenue, compared with $5.3 million, or 10.4% of revenue, in the quarter ended June 30, 2005. Operating income for the quarter ended March 31, 2006, was $3.7 million or 7.0% of revenue. |
Revenue less repair payments Quarters ended |
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June 30, | March 31, | June 30, | ||||||||||
2006 | 2006 | 2005 | ||||||||||
Cost of revenue |
65.7 | % | 62.4 | % | 62.5 | % | ||||||
Gross profit |
34.3 | % | 37.6 | % | 37.5 | % | ||||||
Operating expenses: |
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Selling, general and administrative expense |
22.3 | % | 27.4 | % | 21.3 | % | ||||||
Amortization of intangible assets |
1.0 | % | 1.2 | % | 0.2 | % | ||||||
Operating income |
11.0 | % | 9.0 | % | 16.0 | % | ||||||
Non-operating (expense) income, net |
(0.1 | )% | 0.5 | % | (0.2 | )% | ||||||
Provision for income taxes |
(0.7 | )% | (0.6 | )% | (2.6 | )% | ||||||
Net income |
10.1 | % | 8.9 | % | 13.2 | % | ||||||
SG&A (excluding share-based compensation expense) |
21.8 | % | 26.9 | % | 20.4 | % | ||||||
Operating income (excluding amortization of
intangible assets and share-based compensation
expense) |
12.5 | % | 10.8 | % | 17.1 | % |
| Revenue less repair payments for the quarter ended June 30, 2006, was $45.5 million, compared with $33.2 million for the quarter ended June 30, 2005, an increase of 37.1%. Revenue less repair payments grew sequentially by 9.8% from $41.4 million for the quarter ended March 31, 2006. | ||
| Gross profit for the quarter ended June 30, 2006, was $15.6 million, or 34.3% of revenue less repair payments, compared with $12.4 million, or 37.5% of revenue less repair payments, in the quarter ended June 30, 2005. Gross profit for the quarter ended March 31, 2006, was $15.6 million, or 37.6% of revenue less repair payments. This decline in gross profit percentage in the quarter ended June 30, 2006 is due to: |
| Significant increase in the number of new hires who underwent training and could not be billed at full rates in the WNS Global BPO and Auto Claims businesses. These employees are expected to be billed at full rates in subsequent quarters. | ||
| Addition of three new facilities, which resulted in increased infrastructure costs | ||
| Incremental salary increase effective from April 1, 2006. |
| SG&A expenses (excluding share-based compensation expense) for the quarter ended June 30, 2006, were $9.9 million, or 21.8% of revenue less repair payment, compared with $6.8 million, or 20.4% of revenue less repair payment, in the quarter ended June 30, 2005. The increase in expenses is attributable primarily to higher travel, legal and professional charges and employee-related costs such as staff welfare and recruitment expenses. SG&A cost (excluding share-based compensation expense) for the quarter ended March 31, 2006, was $11.1 million, or 26.9% of revenue less repair payments. This decline in SG&A expenses in the quarter ended June 30, 2006 is attributable to non-recurring expenses of $0.7 million incurred for quarter ended March 31, 2006, for consulting and audit fees representing a portion of the professional fees relating to WNS preparation to become a |
public company, and $0.3 million, reflecting decreased travel during the quarter ended June 30, 2006. |
| Operating income (excluding amortization of intangible assets and share-based compensation expense) for the quarter ended June 30, 2006, was $5.7 million, or 12.5% of revenue less repair payments, compared with $5.7 million, or 17.1% of revenue less repair payments, in the quarter ended June 30, 2005. Operating income (excluding amortization of intangible assets and share-based compensation expense) for the quarter ended March 31, 2006, was $4.5 million, or 10.8% of revenue less repair payments. |
| Revenue less repair payments expected to be US$205 million to US$208 million | ||
| Net income (excluding amortization of intangible assets and share-based compensation expense) expected to be US$30.5 million to US$32.5 million | ||
| Capital expenditure for the year is expected to be approximately US$25 million |
Three months ended | ||||||||||||
June 30, | March 31, | June 30, | ||||||||||
2006 | 2006 | 2005 | ||||||||||
Revenue |
$ | 53,026 | $ | 52,920 | $ | 51,182 | ||||||
Cost of revenue |
37,430 | 37,323 | 38,736 | |||||||||
Gross profit |
15,596 | 15,597 | 12,446 | |||||||||
Operating expenses |
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Selling, general and administrative expenses [refer
note a below] |
10,130 | 11,367 | 7,069 | |||||||||
Amortization of intangible assets |
471 | 508 | 68 | |||||||||
Operating income |
4,995 | 3,722 | 5,309 | |||||||||
Other (expense) income, net |
(35 | ) | 277 | 68 | ||||||||
Interest expense |
(32 | ) | (53 | ) | (137 | ) | ||||||
Income before income taxes |
4,928 | 3,946 | 5,240 | |||||||||
Provision for income taxes |
(335 | ) | (261 | ) | (864 | ) | ||||||
Net income |
4,593 | 3,685 | 4,376 | |||||||||
Basic income per share |
$ | 0.13 | $ | 0.10 | $ | 0.14 | ||||||
Diluted income per share |
$ | 0.12 | $ | 0.10 | $ | 0.13 | ||||||
Basic weighted average ordinary shares outstanding |
35,220,868 | 35,174,350 | 31,209,074 | |||||||||
Diluted weighted average ordinary shares outstanding |
38,021,949 | 37,724,432 | 33,655,565 | |||||||||
Note: |
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a) Includes the following expense |
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Share-based compensation |
212 | 231 | 291 |
Amounts in thousands | ||||||||||||
Quarters ended | ||||||||||||
June 30, | March 31, | June 30, | ||||||||||
2006 | 2006 | 2005 | ||||||||||
Revenue less repair payments (Non-GAAP) |
$ | 45,509 | $ | 41,444 | $ | 33,188 | ||||||
Add: Payments to repair centers |
7,517 | 11,476 | 17,994 | |||||||||
Revenue (GAAP) |
$ | 53,026 | $ | 52,920 | $ | 51,182 |
Amounts in thousands | ||||||||||||
Quarters ended | ||||||||||||
June 30, | March 31, | June 30, | ||||||||||
2006 | 2006 | 2005 | ||||||||||
Cost of revenue (Non-GAAP) |
$ | 29,913 | $ | 25,847 | $ | 20,742 | ||||||
Add: Payments to repair centers |
7,517 | 11,476 | 17,994 | |||||||||
Cost of revenue (GAAP) |
$ | 37,430 | $ | 37,323 | $ | 38,736 |
Amounts in thousands | ||||||||||||
Quarters ended | ||||||||||||
June 30, | March 31, | June 30, | ||||||||||
2006 | 2006 | 2005 | ||||||||||
Selling, general and administrative expenses
(excluding share-based compensation expense)
(Non-GAAP) |
$ | 9,918 | $ | 11,136 | $ | 6,778 | ||||||
Add: Share-based compensation expense |
212 | 231 | 291 | |||||||||
Selling, general and administrative expenses (GAAP) |
$ | 10,130 | $ | 11,367 | $ | 7,069 |
Amounts in thousands | ||||||||||||
Quarters ended | ||||||||||||
June 30, | March 31, | June 30, | ||||||||||
2006 | 2006 | 2005 | ||||||||||
Operating income (excluding
share-based compensation and
amortization of intangible assets)
(Non-GAAP) |
$ | 5,678 | $ | 4,461 | $ | 5,668 | ||||||
Less: Share-based compensation expense |
212 | 231 | 291 | |||||||||
Less: Amortization of intangible assets |
471 | 508 | 68 | |||||||||
Operating income (GAAP) |
$ | 4,995 | $ | 3,722 | $ | 5,309 |
Amounts in thousands | ||||||||||||
Quarters ended | ||||||||||||
June 30, | March 31, | June 30, | ||||||||||
2006 | 2006 | 2005 | ||||||||||
Net income (excluding share-based
compensation and amortization of
intangible assets) (Non-GAAP) |
$ | 5,276 | $ | 4,424 | $ | 4,735 | ||||||
Less: Share-based compensation expense |
212 | 231 | 291 | |||||||||
Less: Amortization of intangible assets |
471 | 508 | 68 | |||||||||
Net income (GAAP) |
4,593 | 3,685 | 4,376 |
June 30, 2006 (unaudited) |
March 31, 2006 |
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ASSETS |
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Current assets |
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Cash and cash equivalents |
$ | 11,645 | $ | 18,549 | ||||
Accounts receivable, net of allowance of $404 and $373, respectively |
30,101 | 28,081 | ||||||
Funds held for clients |
3,001 | 3,047 | ||||||
Deferred tax assets |
339 | 353 | ||||||
Prepaid expenses |
2,578 | 1,225 | ||||||
Other current assets |
7,216 | 6,140 | ||||||
Total current assets |
54,880 | 57,395 | ||||||
Goodwill |
34,542 | 33,774 | ||||||
Intangible assets, net |
8,243 | 8,713 | ||||||
Property and equipment, net |
34,369 | 30,623 | ||||||
Deposits |
2,394 | 2,990 | ||||||
Deferred tax assets |
2,604 | 1,308 | ||||||
TOTAL ASSETS |
$ | 137,032 | $ | 134,803 | ||||
LIABILITIES AND SHAREHOLDERS EQUITY |
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Current liabilities |
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Accounts payable |
$ | 17,286 | $ | 23,074 | ||||
Line of credit |
4,347 | | ||||||
Accrued employee costs |
8,237 | 11,336 | ||||||
Deferred revenue |
6,810 | 8,994 | ||||||
Income taxes payable |
566 | 726 | ||||||
Obligations under capital leases current |
121 | 184 | ||||||
Deferred tax liabilities |
895 | 368 | ||||||
Other current liabilities |
12,184 | 8,781 | ||||||
Total current liabilities |
50,446 | 53,463 | ||||||
Obligation under capital leases non current |
21 | 2 | ||||||
Deferred rent |
859 | 824 | ||||||
Deferred tax liabilities non current |
2,146 | 2,350 | ||||||
Shareholders equity: |
||||||||
Preference shares, $0.15 (£0.10) par value Authorized: 1,000,000
shares and none respectively. Issued and outstanding none |
||||||||
Ordinary shares, $0.15 (£0.10) par value Authorized: 50,000,000
shares and 40,000,000 shares, respectively |
||||||||
Issued and outstanding: 35,328,173 and 35,321,511 shares, respectively |
5,291 | 5,290 | ||||||
Additional paid-in-capital |
63,026 | 62,228 | ||||||
Ordinary shares subscribed, 57,337 and 4,346 shares, respectively |
142 | 10 | ||||||
Retained earnings |
8,697 | 4,104 | ||||||
Deferred share-based compensation |
(387 | ) | (582 | ) | ||||
Accumulated other comprehensive income |
6,791 | 7,114 | ||||||
Total shareholders equity |
83,560 | 78,164 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY |
$ | 137,032 | $ | 134,803 | ||||