Ness Technologies Announces Second Quarter 2011 Financial Results
TEANECK, New Jersey, July 27, 2011 /PRNewswire/ --
Ness Technologies, Inc. (NASDAQ: NSTC and TASE: NSTC), a global provider of IT services and solutions, announced today its financial results for the quarter ended June 30, 2011.
Second Quarter 2011 Highlights:
- On June 10, 2011, the company announced that it entered into a definitive merger agreement under which an affiliate of Citi Venture Capital International, a global private equity investment fund, will acquire Ness in an all-cash transaction valued at approximately $307 million, or $7.75 in cash per share of common stock. The company has scheduled a special meeting of stockholders on August 30, 2011 for the purpose of obtaining stockholder approval for the merger.
- In connection with its entry into the merger agreement, the company recognized a non-cash goodwill impairment charge of $55.2 million as of June 30, 2011, which brings its book value in line with the transaction value. In addition, the company incurred expenses of $1.4 million related to the transaction during the second quarter.
- Revenues were $141.3 million, up 1% year-over-year and up 3% sequentially.
- The company reported an operating loss of $49.4 million, due to the previously mentioned goodwill impairment charge and transaction-related expenses, compared to operating income of $3.0 million in the second quarter of 2010. On a non-GAAP basis (1 ) operating income was $8.7 million, up 44% year-over-year, representing 6.2% of revenues.
- GAAP net loss from continuing operations was $52.3 million, due to the previously mentioned goodwill impairment charge and transaction-related expenses, compared to net income of $0.9 million in the second quarter of 2010. GAAP net income from continuing operations, adjusted for the goodwill impairment charge and transaction-related expenses, was $4.2 million. On a non-GAAP basis, net income from continuing operations was $4.9 million, up 32% year-over-year.
- GAAP diluted net loss per share from continuing operations was ($1.37), compared to $0.02 in the second quarter of 2010. GAAP diluted net earnings per share from continuing operations, adjusted for the goodwill impairment charge and transaction-related expenses, was $0.11. On a non-GAAP basis, diluted net earnings per share from continuing operations were $0.13, up from $0.10 in the second quarter of 2010.
- Operating cash flows from continuing operations were $15.6 million.
- Cash, cash equivalents and short-term bank deposits were $45.6 million as of June 30, 2011.
- Backlog from continuing operations as of June 30, 2011 was $680 million, up 3% year-over-year.
- Headcount for continuing operations was approximately 6,970 as of June 30, 2011.
"We are proud to have delivered solid second quarter results, despite the distraction inherent in our transaction process, as we continued to execute successfully on our 2011 strategic business plan," said Sachi Gerlitz, president and chief executive officer of Ness Technologies. "Most of our businesses performed well in the quarter, while a few of our Central and Eastern Europe businesses, and others, remain on the path to recovery. We look forward to growth and additional operating margin expansion moving forward."
- Results by operating segment:
- The company's Software Product Engineering segment, which provides outsourced software product research and development services to companies that build or rely on software to generate revenues, performed well, with 12% year-over-year revenue growth and solid operating margins in line with second quarter expectations.
- The company's System Integration and Application Development segment generated healthy non-GAAP operating margins on a 1% decline in revenues year-over-year, in its seasonally weak second quarter, with strong performance in Israel and lingering softness in Central and Eastern Europe.
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