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EXL Reports 2013 First Quarter Results

Quarterly Revenues of $116.0 Million, Up 11% Year over Year

Adjusted Diluted Earnings Per Share (EPS) of $0.40, Up 11% Year over Year

NEW YORK, May 1, 2013 (GLOBE NEWSWIRE) -- ExlService Holdings, Inc. (Nasdaq:EXLS), a leading provider of outsourcing and transformation services, today announced its financial results for the first quarter of 2013.

Rohit Kapoor, Vice Chairman and CEO, commented: "In the first quarter, EXL posted sequential growth in our outsourcing business, due to contributions from our insurance and healthcare and utilities verticals. Our transformation business started the year slowly, similar to last year. While we have experienced some delays in discretionary project-based spending on the part of clients and prospects, the pipeline remains strong across our businesses. We are encouraged by our progress with both new and existing clients.

We expect our transformation business to pick up through the year, due to strong demand for proprietary, industry-tailored analytical insights. We are investing in strategic growth initiatives such as decision analytics and healthcare business process management. And, as always, we remain focused on delivering significant business impact across our client base."

Vishal Chhibbar, CFO, commented: "In the first quarter, EXL generated revenues of $116.0 million, up 11% year-over-year, driven by 9% growth in outsourcing and 24% growth in transformation services.  Excluding previously announced client transitions, constant currency revenues grew 18% year-over-year.  This quarter we delivered adjusted diluted earnings per share of $0.40, up 11% year-over-year, driven by revenue growth.

"For 2013, we are maintaining our revenues guidance of $495 million to $505 million and our adjusted diluted EPS guidance of $1.77 to $1.85. While we are maintaining our guidance for 2013, we anticipate most of our growth will occur in the second half of the year."

Financial Highlights – First Quarter 2013

Reconciliations of adjusted financial measures to GAAP are included at the end of this release.
  • Revenues for the quarter ended March 31, 2013 were $116.0 million compared to $104.6 million for the quarter ended March 31, 2012 and $117.7 million for the quarter ended December 31, 2012.  Outsourcing services revenues for the quarter ended March 31, 2013 were $97.6 million compared to $89.7 million for the quarter ended March 31, 2012 and $96.1 million for the quarter ended December 31, 2012.  Transformation services revenues for the quarter ended March 31, 2013 were $18.4 million compared to $14.9 million for the quarter ended March 31, 2012 and $21.5 million for the quarter ended December 31, 2012.  
  • Gross margin for the quarter ended March 31, 2013 was 37.1% compared to 36.3% for the quarter ended March 31, 2012 and 40.1% for the quarter ended December 31, 2012. Outsourcing services gross margin for the quarter ended March 31, 2013 was 39.0% compared to 37.1% for the quarter ended March 31, 2012 and 41.5% for the quarter ended December 31, 2012. Transformation services gross margin for the quarter ended March 31, 2013 was 27.1% compared to 31.5% for the quarter ended March 31, 2012 and 33.6% for the quarter ended December 31, 2012.    
  • Operating margin for the quarter ended March 31, 2013 was 10.2% compared to 10.0% for the quarter ended March 31, 2012 and 13.2% for the quarter ended December 31, 2012.  Adjusted operating margin for the quarter ended March 31, 2013 was 14.7% compared to 13.9% for the quarter ended March 31, 2012 and 16.3% for the quarter ended December 31, 2012.   
  • Net income for the quarter ended March 31, 2013 was $9.8 million compared to $8.9 million for the quarter ended March 31, 2012 and $12.2 million for the quarter ended December 31, 2012. Adjusted EBITDA for the quarter ended March 31, 2013 was $21.9 million compared to $19.5 million for the quarter ended March 31, 2012 and $24.5 million for the quarter ended December 31, 2012.  
  • Diluted earnings per share for the quarter ended March 31, 2013 were $0.29 compared to $0.27 for the quarter ended March 31, 2012 and $0.36 for the quarter ended December 31, 2012.  Adjusted diluted earnings per share for the quarter ended March 31, 2013 were $0.40 compared to $0.36 for the quarter ended March 31, 2012 and $0.44 for the quarter ended December 31, 2012.

Business Highlights
  • Won seven new clients during the quarter, including three transformation clients and four outsourcing clients.  
  • Expanded multiple outsourcing services relationships, including migrating 33 new processes in the first quarter of 2013.   
  • Named a "High Performer" by research firm Horses for Sources (HfS) in "HfS Blueprint Axis: Finance and Accounting BPO, 2013."  
  • Completed successful university recruiting season in India, including hiring approximately 160 graduates to EXL's decision analytics business from top universities such as the Indian Institutes of Management, Indian Institutes of Technology and National Institutes of Technology.  
  • Commenced decision analytics operations in Bangalore, India, across several client relationships.  
  • Commenced services from an operations center in Cebu, Philippines, specializing in insurance, healthcare and banking business process management.  
  • Announced Rev-Lift, an integrated analytics and business process services solution using proprietary algorithms to identify and recover unbilled revenues for trucking and ocean carriers. EXL successfully implemented Rev-Lift with a leading North American Less-than-Truckload (LTL) carrier.  
  • Grew headcount as of March 31, 2013 to 21,356, compared to 19,164 as of March 31, 2012 and 21,049 as of December 31, 2012.  
  • Employee attrition for the quarter ended March 31, 2013 declined to 23.6%, compared with 29.7% for the quarter ended March 31, 2012 and 30.4% for the quarter ended December 31, 2012.

2013 Outlook

The Company is maintaining its guidance for calendar year 2013, based on current visibility and an Indian rupee rate to the U.S. dollar of 54:
  • Revenues of $495 million to $505 million.  
  • Adjusted diluted earnings per share, excluding the impact of stock-based compensation expense, amortization of intangibles and associated tax impacts, of $1.77 to $1.85.

Conference Call

EXL will host a conference call on Thursday, May 2, 2013 at 10:00 a.m. (ET) to discuss the Company's quarterly operating and financial results.  The conference call will be available live via the internet by accessing the investor relations section of EXL's website at ir.exlservice.com, where an accompanying investor-friendly spreadsheet of historical operating and financial data can also be accessed.  Please go to the website at least fifteen minutes prior to the call to register, download and install any necessary audio software.

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