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WNS Announces Fourth Quarter and Full Year Fiscal 2009 Earnings; Provides Guidance for Fiscal 2010

Quarterly Revenue Increases 14.1%; Revenue Less Repair Payments Increases 27.1% Over the Corresponding Quarter in the Prior Fiscal Year

Annual Revenue Increases 17.3%; Revenue Less Repair Payments Increases 32.9% Over the Prior Fiscal Year

NEW YORK and MUMBAI, India, May 7 /PRNewswire-FirstCall/ -- WNS (Holdings) Limited (NYSE: WNS), a leading provider of global business process outsourcing (BPO) services, today announced results for the fiscal fourth quarter and fiscal year 2009 ended March 31, 2009, and established guidance on revenue less repair payments and adjusted net income (or net income excluding amortization of intangible assets, share-based compensation, related fringe benefit taxes and minority interest) for fiscal 2010.

Fiscal Q4 2009

Revenue for the fiscal fourth quarter 2009 of $132.5 million represented an increase of 14.1% over the corresponding quarter in the prior fiscal year, while revenue less repair payments at $95.5 million increased 27.1% over the corresponding quarter in the prior fiscal year. The revenue less repair payments growth largely resulted from growth from Aviva Global Services (AGS) and Call 24/7 Limited, which WNS acquired in July and April 2008, respectively.

Net income for the fiscal fourth quarter 2009 was $2.4 million compared to $6.1 million during the corresponding quarter in the prior fiscal year. The net income in the current quarter was impacted primarily by amortization charges from the acquisition of AGS and higher foreign exchange losses.

Adjusted net income was $13.6 million, an increase of 34.5% over the corresponding quarter in the prior year. The primary drivers of this increase were revenue growth, tighter cost management, improved scale benefits and increased income from WNS' acquisitions. This increase was partially offset by higher foreign exchange losses.

"WNS finished fiscal year 2009 on a strong note," said Neeraj Bhargava, Group Chief Executive Officer. "We continued to see new client activity and our focus on operations has positively affected our profitability. While the global economy is expected to present challenges in fiscal 2010, we are well-positioned to execute on our plan and increase profitability during the next year."

WNS recorded a basic income per ADS of $0.06 for fiscal fourth quarter 2009. Adjusted diluted net income per ADS (or diluted income per ADS excluding amortization of intangible assets, share-based compensation, related fringe benefit taxes and minority interest) was $0.32 for the quarter.

Fiscal Year 2009
For the fiscal year 2009, WNS achieved revenues of $539.3 million, representing an increase of 17.3% over the prior fiscal year. Revenue less repair payments of $386.4 million increased 32.9% over the prior year. The growth in revenue less repair payments was largely as a result of increased revenues associated with AGS and Call 24/7 Limited, which WNS acquired in July and April 2008, respectively.

Net income for the full year ended March 31, 2009 was $8.1 million compared to $9.5 million in the prior fiscal year. The net income decrease was a result of amortization charges from the acquisition of AGS and foreign exchange losses, partially offset by improved synergies in operations.

Adjusted net income was $46.6 million, an increase of 26.0% over fiscal 2008. The primary drivers of this increase were revenue growth, tighter cost management, improved scale benefits, and increased income from WNS' acquisitions. These increases were partially offset by higher foreign exchange losses.

WNS recorded a basic income per ADS of $0.19 for the fiscal year 2009. Adjusted diluted net income per ADS (or diluted income per ADS excluding amortization of intangible assets, share-based compensation, related fringe benefit taxes and minority interest) was $1.08 for the year.

On April 2, 2009, WNS announced that it was making a voluntary prepayment of $5 million on its existing $200 million term loan facility as permitted under the terms of the loan agreement. This payment was made on April 14, 2009.

"We have made significant progress in improving our working capital and tightening our capital expenditure, thanks largely to the synergies from our recent acquisitions, which combined with our improved profitability resulted in the strong free cash flow that we have realized this quarter. This will continue to be our area of focus," said Alok Misra, Group Chief Financial Officer.

Financial Highlights: Fiscal Fourth Quarter Ended March 31, 2009

  • Quarterly revenue of $132.5 million, up 14.1% from the corresponding quarter last year.
  • Quarterly revenue less repair payments of $95.5 million, up 27.1% from the corresponding quarter last year.
  • Quarterly net income of $2.4 million compared to $6.1 million from the corresponding quarter last year.
  • Quarterly adjusted net income (or net income excluding amortization of intangible assets, share-based compensation, related fringe benefit taxes and minority interest) of $13.6 million, up 34.5% from the corresponding quarter last year.
  • Quarterly basic income per ADS of $0.06, compared with $0.14 for the corresponding quarter last year.
  • Quarterly adjusted diluted net income per ADS (or diluted income per ADS excluding amortization of intangible assets, share-based compensation, related fringe benefit taxes and minority interest) of $0.32, up from $0.24 for the corresponding quarter last year.

Financial Highlights: Fiscal Full Year Ended March 31, 2009

  • Annual revenue of $539.3 million, up 17.3% from the prior fiscal year.
  • Annual revenue less repair payments of $386.4 million, up 32.9% from the prior fiscal year.
  • Annual net income of $8.1 million compared to $9.5 million from the prior fiscal year.
  • Annual adjusted net income (or net income excluding amortization of intangible assets, share-based compensation, related fringe benefit taxes and minority interest) of $46.6 million, up 26.0% from the prior fiscal year.
  • Annual basic income per ADS of $0.19, compared with $0.23 for the prior fiscal year.
  • Annual adjusted diluted net income per ADS (or diluted income per ADS excluding amortization of intangible assets, share-based compensation, related fringe benefit taxes and minority interest) of $1.08, up from $0.86 for the prior fiscal year.

Reconciliations of non-GAAP financial measures to GAAP operating results are included at the end of this release.

Fiscal 2010 Guidance

WNS is providing the following guidance for the fiscal year ending March 31, 2010:

  • Revenue less repair payments is expected to be between $385 million and $390 million. This assumes an average USD to GBP exchange rate of 1.40 to 1.45 for the 2010 fiscal year.
  • Adjusted net income (or net income excluding amortization of intangible assets, share-based compensation, related fringe benefit taxes and minority interest) is expected to range between $50 million and $52 million. This assumes an average INR to USD exchange rate of 49 to 50 for the 2010 fiscal year.

"Although we are facing currency and economic headwinds which impact our top line, we are confident that we will increase our profitability and free cash flows as a result of the actions that we have taken to improve our operating leverage and our continued balance sheet focus," continued Misra.

Conference Call
WNS will host a conference call on May 7, 2009 at 8 am (ET) to discuss the company's quarterly and full year results. To participate, callers can dial: +1-800-295-3991; international dial-in +1-617-614-3924; participant passcode 1352836. A replay will also be made available for one week following the call at +1-888-286-8010; international dial-in +1-617-801-6888; passcode 89145684, for a period of three months beginning two hours after the end of the call. A webcast will be available online at www.wns.com.

About WNS
WNS Holdings Ltd. (NYSE: WNS) is a leading global business process outsourcing company. Deep industry and business process knowledge, a partnership approach, comprehensive service offering and a proven track record enables WNS to deliver business value to some of the leading companies in the world. WNS is passionate about building a market-leading company valued by our clients, employees, business partners, investors and communities. For more information, visit www.wns.com.

About Non-GAAP Financial Measures
For financial statement reporting purposes, the company has two reportable segments: WNS Global BPO and WNS Auto Claims BPO. In the auto claims segment, which includes WNS Assistance and Chang Limited, WNS provides claims-handling and accident-management services, in which it arranges for automobile repairs through a network of third-party repair centers. In its accident-management services, WNS acts as the principal in dealings with the third-party repair centers and clients.

In order to provide accident-management services, the Company arranges for the repair through a network of repair centers. Repair costs are invoiced to customers. Amounts invoiced to customers for repair costs paid to the automobile repair centers are recognized as revenue. The Company uses revenue less repair payments for "fault" repairs as a primary measure to allocate resources and measure segment performance. Revenue less repair payments is a non-GAAP measure which is calculated as revenue less payments to repair centers. For "Non fault repairs," revenue including repair payments is used as a primary measure. As the Company provides a consolidated suite of accident management services including credit hire and credit repair for its "Non fault" repairs business, the Company believes that measurement of that line of business has to be on a basis that includes repair payments in revenue.

The Company believes that the presentation of this non-GAAP measure provides useful information for investors regarding financial performance. The presentation of this non-GAAP information is not meant to be considered in isolation or as a substitute for the Company's financial results prepared in accordance with US GAAP.

Safe Harbor Statement under the provisions of the United States Private Securities Litigation Reform Act of 1995
This news 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 include statements regarding expected future financial results. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those that may be projected by these forward looking statements. These risks and uncertainties include but are not limited to technological innovation; telecommunications or technology disruptions; future regulatory actions and conditions in our operating areas; our dependence on a limited number of clients in a limited number of industries; our ability to attract and retain clients; our ability to expand our business or effectively manage growth; our ability to hire and retain enough sufficiently trained employees to support our operations; negative public reaction in the US or the UK to offshore outsourcing; regulatory, legislative and judicial developments; increasing competition in the business process outsourcing industry; political or economic instability in India, Sri Lanka and Jersey; worldwide economic and business conditions, including a slowdown in the US and Indian economies and in the sectors in which our clients are based and a slowdown in the BPO and IT sectors world-wide; our ability to successfully grow our revenues, expand our service offerings and market share and achieve accretive benefits from our acquisition of Aviva Global Services Singapore Private Limited and our master services agreement with Aviva Global Services (Management Services) Private Limited; our ability to successfully consummate strategic acquisitions, as well as other risks detailed in our reports filed with the US Securities and Exchange Commission. These filings are available at www.sec.gov. We may, from time to time, make additional written and oral forward-looking statements, including statements contained in our filings with the Securities and Exchange Commission and our reports to shareholders. You are cautioned not to place undue reliance on these forward-looking statements, which reflect management's current analysis of future events. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. 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.



    CONTACT:
    Investors:                            Media:
    Alan Katz                             Josh Passman
    VP -- Investor Relations               CJP Communications
    WNS (Holdings) Limited                +1 212 279 3115 ext. 203
    +1 212 599-6960 ext. 241              jpassman@cjpcom.com
    ir@wnsgs.com




                               WNS (HOLDINGS) LIMITED
                    CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                   (Amounts in thousands, except per share data)

                               Three months ended     Year ended March 31,
                                   March 31,
                               2009         2008       2009         2008

    Revenue
     Third parties           $131,772     $115,133   $536,022     $456,401
     Related parties              741          988      3,242        3,466
                              132,513      116,121    539,264      459,867
    Cost of revenue            99,887       88,786    410,316      363,322
    Gross profit               32,626       27,335    128,948       96,545
    Operating expenses
     Selling, general and
      administrative
      expenses                 17,119       21,418     75,522       72,699
     Amortization of
      intangible assets         8,012          663     24,912        2,869
     Impairment of goodwill
      and intangible assets         -            -          -       15,464
    Operating income            7,495        5,254     28,514        5,513
    Other income
     (expense), net               262        2,221     (5,639)       9,184
    Interest (expense)
     income, net               (4,460)          20    (11,782)          (3)
    Income before income
     taxes                      3,297        7,495     11,093       14,694
    Provision for income
     taxes                        958        1,435      3,302        5,194
    Income before minority
     interest                   2,339        6,060      7,792        9,500
    Minority interest             107            -        287            -
    Net income                 $2,446       $6,060     $8,079       $9,500

    Basic income per share      $0.06        $0.14      $0.19        $0.23
    Diluted income per
     share                      $0.06        $0.14      $0.19        $0.22




    Reconciliation of revenue less repair payments
     (non-GAAP) to revenue (GAAP)                                 Amount in
                                                                  thousands

                                      Three months ended  Year ended March 31,
                                           March 31,
                                       2009       2008      2009        2008

    Revenue less repair payments
     (Non-GAAP)                      $95,543    $75,153   $386,373   $290,717
    Add: Payments to repair centers   36,970     40,968    152,891    169,150
    Revenue (GAAP)                  $132,513   $116,121   $539,264   $459,867



    Reconciliation of cost of revenue (non-GAAP to GAAP)
                                                                  Amount in
                                                                  thousands

                                      Three months ended  Year ended March 31,
                                           March 31,
                                       2009       2008      2009        2008

    Cost of revenue (Non-GAAP)       $62,917    $47,818   $257,425   $194,172
    Add: Payments to repair centers   36,970     40,968    152,891    169,150
    Cost of revenue (GAAP)           $99,887    $88,786   $410,316   $363,322



    Reconciliation of selling, general and administrative expense
     (non-GAAP to GAAP)                                           Amount in
                                                                  Thousands

                                      Three months ended  Year ended March 31,
                                           March 31,
                                       2009       2008      2009        2008
    Selling, general and
     administrative expenses
     (excluding share-based
     compensation expense
     and FBT(1)) (Non-GAAP)           $14,862    $18,632   $65,301    $65,997

    Add: Share-based
     compensation expense               2,426      1,323     9,775      4,380
    Add: FBT(1)                          (169)     1,463       446      2,322
    Selling, general and
     administrative expenses
     (GAAP)                           $17,119    $21,418   $75,522    $72,699



    Reconciliation of operating income (non-GAAP to GAAP)
                                                                  Amount in
                                                                  thousands

                                      Three months ended  Year ended March 31,
                                           March 31,
                                       2009       2008      2009        2008
    Operating income
     (excluding amortization of
     intangible assets,
     share-based compensation
     expense, impairment of
     goodwill and intangible
     assets, and FBT(1))
     (Non-GAAP)                       $18,731     $9,287   $67,294    $32,985
    Less: Amortization of
     intangible assets                  8,012        663    24,912      2,869
    Less: Share-based compensation
     expense                            3,393      1,907    13,422      6,816
    Less: Impairment of goodwill
     and intangible assets                  -          -         -     15,464
    Less: FBT(1)                         (169)     1,463       446      2,322
    Operating income (GAAP)            $7,495     $5,254   $28,514     $5,513


    Reconciliation of net income (non-GAAP to GAAP)
                                                                  Amount in
                                                                  Thousands

                                      Three months ended  Year ended March 31,
                                           March 31,
                                       2009       2008      2009        2008
    Net income (excluding
     amortization of
     intangible assets,
     share-based compensation
     expense, impairment of
     goodwill and intangible
     assets, FBT(1) and
     minority interest)
     (Non-GAAP)                       $13,575    $10,093   $46,572    $36,972
    Less: Amortization of
     intangible assets                  8,012        663    24,912      2,869
    Less: Share-based
     compensation expense               3,393      1,907    13,422      6,816
    Less: Impairment of
     goodwill and intangible
     assets                                 -          -         -     15,464
    Less: FBT(1)                         (169)     1,463       446      2,322
    Add: Minority interest                107          -       287          -
    Net income (GAAP)                  $2,446     $6,060    $8,079     $9,500


    Reconciliation of basic income per ADS (non-GAAP to GAAP)

                                      Three months ended  Year ended March 31,
                                           March 31,
                                       2009       2008      2009        2008
    Basic income per ADS
     (excluding  amortization and
     impairment of goodwill and
     intangible assets,
     share-based compensation
     expense, FBT(1) and minority
     interest) (Non-GAAP)               $0.32     $0.24      $1.10      $0.88
    Less: Adjustments for
     amortization and impairment
     of goodwill and intangible
     assets, share-based
     compensation expense,
    FBT(1) and minority interest         0.26      0.10       0.91       0.65
    Basic income per ADS (GAAP)         $0.06     $0.14      $0.19      $0.23


    Reconciliation of diluted income per ADS (non-GAAP to GAAP)

                                      Three months ended  Year ended March 31,
                                           March 31,
                                       2009       2008      2009        2008

    Diluted income per ADS
     (excluding  amortization and
     impairment of goodwill and
     intangible assets,
     share-based compensation
     expense, FBT(1) and minority
     interest) (Non-GAAP)               $0.32     $0.24      $1.08      $0.86
    Less: Adjustments for
     amortization and impairment
     of goodwill and intangible
     assets, share-based
     compensation expense, FBT(1)
     and minority interest               0.26      0.10       0.89       0.64
    Diluted income per ADS (GAAP)       $0.06     $0.14      $0.19      $0.22


    (1) FBT means the fringe benefit taxes on options and restricted share
        units granted to employees under the WNS 2002 Stock Incentive Plan
        and the WNS 2006 Incentive Award Plan (as applicable) payable by WNS
        to the government of India.



                               WNS (HOLDINGS) LIMITED
                        CONDENSED CONSOLIDATED BALANCE SHEETS
               (Amounts in thousands, except share and per share data)

                                                    As of           As of
                                                   March 31,       March 31,
                                                     2009            2008
    ASSETS
    Current assets
        Cash and cash equivalents                  $38,931        $102,698
        Bank deposits and marketable
         securities                                  8,925           8,074
        Accounts receivable, net of
         allowance of $1,935 and $1,784,
         respectively                               61,257          47,302
        Accounts receivable - related
         parties                                        64             586
        Funds held for clients                       5,379           6,473
        Employee receivables                           745           1,179
        Prepaid expenses                             2,082           3,776
        Prepaid income taxes                         5,768           2,776
        Deferred tax assets                          1,743             618
        Other current assets                        38,647           8,596
           Total current assets                   $163,541        $182,078
     Goodwill                                       81,679          87,470
     Intangible assets, net                        217,372           9,393
     Property and equipment, net                    55,992          50,840
     Other assets - non current                     11,449           1,278
     Deposits                                        6,309           7,391
     Deferred tax assets - non current              15,584           8,055
    TOTAL ASSETS                                  $551,926        $346,505

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities
        Accounts payable                           $30,879         $15,562
        Accounts payable - related parties              42               6
        Long term debt - current                    45,000               -
        Short term line of credit                    4,331               -
        Accrued employee costs                      23,754          26,848
        Deferred revenue - current                   5,583           7,790
        Income taxes payable                         3,995           1,879
        Deferred tax liabilities - current               -             211
        Accrual for earn out payment                     -          33,699
        Other current liabilities                  $54,126          25,806
           Total current liabilities              $167,710        $111,801
    Long term debt - non current                   155,000               -
    Deferred revenue - non current                   3,561           1,549
    Deferred rent                                    1,967           2,627
    Accrued pension liability                        2,570           1,544
    Deferred tax liabilities - non
     current                                         9,946           1,834
    Liability on outstanding derivative
     contracts - non current                        23,163               -
    Commitments and contingencies
           TOTAL LIABILITIES                      $363,917        $119,355
    Minority interest                                   13               -
    Shareholders' equity:
        Ordinary shares, $0.16 (10 pence)
         par value, Authorized: 50,000,000
         shares;
        Issued and outstanding: 42,607,403
         and 42,363,100 shares, respectively         6,667           6,622
        Additional paid-in-capital                 184,122         167,459
        Ordinary shares subscribed: Nil and
         1,666 shares, respectively                      -              10
        Retained earnings                           46,917          38,839
        Accumulated other comprehensive
         (loss) income                             (49,710)         14,220
            Total shareholders' equity             187,996         227,150
    TOTAL LIABILITIES AND SHAREHOLDERS'
     EQUITY                                       $551,926        $346,505



                                WNS (HOLDINGS) LIMITED
                    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (Amounts in thousands)

                                                        Year ended March 31,
                                                           2009       2008
    Cash flows from operating activities
       Net cash provided by operating
        activities                                      $62,897    $41,051

    Cash flows from investing activities
       Acquisitions, net of cash received              (290,994)   (36,121)
       Purchase of facilities and property cost         (22,693)   (28,134)
       Proceeds from sale of assets, net                    342        178
       Transfer of delivery centre to AVIVA                   -      1,570
       Purchase of marketable securities and
        deposits                                        (41,983)   (48,181)
       Marketable securities and deposits sold           39,710     52,150
       Net cash used in investing activities           (315,618)   (58,538)

    Cash flows from financing activities
       Proceeds from exercise of stock options              988      4,204
       Excess tax benefits from share-based
        compensation                                      2,226      1,613
       Proceeds from issuance of long term
        debt, net                                       198,803          -
       Initial public offering expenses                       -       (150)
       Principal repayments under capital lease            (183)         -
       Proceeds from short term line of credit           16,416          -
       Repayment of short term line of credit           (19,310)         -
       Net cash provided by financing activities        198,940      5,667

    Effect of exchange rate changes on
     cash and cash equivalent                            (9,986)     2,178

    Net change in cash and cash equivalents             (63,767)    (9,642)
    Cash and cash equivalents at
     beginning of period                                102,698    112,340
    Cash and cash equivalents at end of period          $38,931   $102,698


SOURCE WNS Holdings Ltd.

CONTACT:

Investors:


Alan Katz, VP -- Investor Relations of WNS
(Holdings) Limited
, +1-212-599-6960, Ext. 241,
ir@wnsgs.com

Media:

Josh
Passman
of CJP Communications, +1-212-279-3115, Ext. 203,
jpassman@cjpcom.com
Web Site: http://www.wns.com
(WNS)