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IGATE Reports Strong Third Quarter Earnings With Solid Margins; Profits Up By 97.9%

FREMONT, Calif., Oct. 12, 2012 (GLOBE NEWSWIRE) -- iGATE Corporation (Nasdaq:IGTE), the first integrated Technology and Operations Company providing Business Outcomes-business based solutions, today announced its financial results for the third quarter and nine months ended September 30, 2012.

Third Quarter Highlights

  • Net income for the third quarter of 2012 increased by 97.9 % to $28.3 million from $14.3 million in the third quarter of 2011
  • Revenues for the third quarter of 2012 increased by 2 % to $271.1 million from $265.7 million in the third quarter of 2011
  • Gross margin was 39.8% for the third quarter of 2012 compared to 36.9% in the corresponding quarter of 2011
  • Diluted earnings per share for the third quarter of 2012 were $0.27 GAAP; $0.46 non-GAAP
  • iGATE added nine new customers including five Fortune 1000 companies during the quarter
  • The company ended the third quarter of 2012 with 27,543 employees

Phaneesh Murthy, CEO, iGATE said, "On the revenue outlook, it has not been a happy quarter with extended lead-time in client decision making and contract renewals slowing our revenue growth. From a margin perspective, however, I am extremely pleased with our profitability as we continue to sustain strong gross margins and adjusted EBITDA."

"With the opening of our new facility in Virginia and recent hirings in our facilities in Pensacola and El Paso, we have been steadily increasing local hiring in the U.S." he added.

Sujit Sircar, CFO, iGATE said, "I am pleased that our corporate restructuring is proceeding according to schedule as we move towards our vision of 'one company'. I am also pleased to report that we have continued to maintain high earnings growth. However, volatility in the foreign exchange market remains to be a cause of concern."

Third Quarter Operating Results

Results for the three and nine month period ended September 30, 2012 and 2011, respectively on a GAAP and non-GAAP basis are provided in the table below.

 
        Nine months ended FY'12 Nine months ended FY'11  
  Q3 FY'12 Q3 FY'11 Y/Y     Y/Y
             
Net revenue ($Millions) 271.1 265.7 2.0% 802.3 511.9 56.7%
Operating margin($Millions) 53.7 37.7 42.4% 149.9 54.4 175.6%
GAAP net income ($Millions) 28.3 14.3 97.9% 65.0 36.2 79.6%
GAAP diluted EPS ($) 0.27 0.10 170.0% 0.56 0.28 100.0%

New customer wins in the quarter

  • A leading U.S. based Fortune 1000 company that provides health insurance services chose iGATE to streamline administration of its Long Term Care Insurance products. iGATE is working on a brand-transformational engagement of the company and will also provide integrated technology and operations-related services to facilitate lower costs of administration and increased profitability.
  • A large European financial institution has hired iGATE to adopt our post-trade settlement service to manage its standing settlement instructions more efficiently. This multi-year service agreement will allow the institution to manage large volumes of post-trade related data significantly more effectively; thereby minimizing errors and reducing re-work in its offices.
  • A U.S.-based Fortune 500 company that manufactures pharmaceutical and biotech products partnered with iGATE to reduce its cost of sales and, consequently, enhance its profits. As part of the engagement, iGATE will develop the company's first mobile applications for its sales force, enabling them to seamlessly access data during sales calls, prepare quotes, check inventory and retrieve product specifications in a mobile environment. iGATE will also continuously enhance the integration of the mobile application with the company's enterprise computer systems to positively impact the company's profitability.
  •  iGATE has been hired by a leading Malaysian mobile network operator to increase the quality standards of its mobile data and operations. iGATE will act as an independent testing partner and provide a wide range of quality assurance and testing services for policy, architectural, operational and other mobile data related systems.
  • A U.S.-based healthcare company that focuses on treating primary and recurrent prostate cancer selected iGATE to help improve its physician throughput. As part of this engagement, iGATE will deliver next-generation product design using "High Intensity Focused Ultrasound". The product will be developed under very aggressive go-to-market timelines and is intended to demonstrate measurable work-flow improvements to the physicians' efficiency and turnaround time.

Corporate Highlights and Recognitions

  • iGATE, in association with Forbes of North America, announced its first-ever CEO Golf Cup event to be held on 12 th and 13 th January, 2013. CEOs from leading international companies were invited to compete in this event being held at the Sawgrass Marriott Golf Resort & Spa in Florida. iGATE will donate $100,000 to the winner's favorite charities.
  • iGATE opened a new US facility in Sterling, Virginia on 15 th August, 2012. iGATE has expended over a million dollars on improvements to this facility, and over the next couple of years expects to create over 250 jobs in the region.
  • The Indo-Canadian Chamber of Commerce in Toronto invited Phaneesh Murthy to be its keynote speaker at a recent event. Mr. Murthy highlighted the importance of leveraging trade engagements between Canada and India to enhance the economic and productivity benefit of both countries.
  • iGATE was awarded the prestigious 'Golden Peacock Innovation Management Award' for the year 2012. This Award is regarded as one of the most esteemed awards for corporate organizational innovation.

Conference Call and Webcast

iGATE will host a telephone conference call on Friday, October 12, 2012 at 8:00 am Eastern time to discuss the results of the three and nine months ended September 30, 2012. The live discussion may be accessed by dialing 877-407-8037 (toll free) or 201-689-8037 (toll) and entering account number 293 and conference number 397094. The on-demand version of the webcast will be available on the iGATE website shortly after the call.

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