Virtusa Corporation (VRTU)F
F4Q10 (Qtr End 03/31/2010) Earnings Call
May 12, 2010 05:00 pm ET
Staci Strauss Mortenson - IR, ICR
Kris Canekeratne - Chairman & CEO
Tom Holler - EVP & COO
Ranjan Kalia - SVP & CFO
Jon Maietta - Needham & Company
Brian Kinstlinger - Sidoti & Company
Vincent Colicchio - Noble Financial
Avishai Kantor - Cowen & Company
Previous Statements by VRTU
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Good afternoon ladies and gentlemen. Thank you for standing by and welcome to the Virtusa Corporation Fourth Quarter 2010 Earnings Conference Call. At this time all participants are in a listen-only mode. Following the presentation we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for your questions. I would like to remind everyone that this conference is being recorded.
And now I’ll turn the conference over to Ms. Staci Strauss Mortenson of ICR. Please go ahead.
Staci Strauss Mortenson
Thank you, good evening and welcome to Virtusa’s fourth quarter and fiscal year 2010 earnings conference call where we will be discussing our financial results for the quarter and year ended March 31, 2010. On the call with me are Kris Canekeratne, Chairman and Chief Executive Officer, Tom Holler, Executive Vice President and Chief Operating Officer, and Ranjan Kalia, Senior Vice President and Chief Financial Officer of Virtusa.
Certain statements made in this call that are not based on historical information are forward-looking statements which are made pursuant to the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. During this call we may make, express or imply forward looking statements relating to among other things, Virtusa’s expectations and assumptions concerning management forecast to financial performance.
Virtusa’s ability to assimilate and integrate the operations of in source and compares to consulting acquisition of new clients and growth of the business, the ability of Virtusa’s clients to realize benefits from the use of Virtusa’s IT services. The potential impact of currency exchange on our business and operations and management’s plans, objectives and strategies. These statements are neither promises nor guarantees, but are subject to a variety of risks and uncertainties, many of which are beyond Virtusa’s control, which could cause actual results to differ materially from those contemplated in these forward looking statements.
Existing and prospective investors are cautioned, not to place undue reliance on these forward looking statements, which speak only as of the date here of. Virtusa undertakes no obligation to update or revise the information disclosed during this call, whether as a result of new information, future events, or circumstances, or otherwise. Other statements in this call also include certain non-GAAP financial information as defined by the SEC. We present constant currency revenue to provide a framework for assessing how our revenue performed excluding the effect of foreign currencies rate and fluctuation. We also present a reconciliation of cash, cash equivalents, short-term and long-term investment that we believe provides insight into our total cash position and overall liquidity. For additional disclosure regarding needs and risks stated by Virtusa see that disclosures contained and Virtusa’s public filing with the Securities and Exchange Commission, and on our earlier press release.
With that I would like to turn the call over to Kris. Kris please go ahead.
Thank you Staci, and thank you for joining us on our fourth quarter and fiscal 2010 year-end conference call. We are pleased to report a strong fourth quarter and good progress during a challenging economic period. During this call, I will summarize our fourth quarter and fiscal year results provide you with our thoughts on the market place, our key differentiators and focus areas and then discuss our outlook.
Ranjan will provide more details on our financials and provide you with our current fiscal year ‘11 guidance before we open up the call for Q&A.
While the economic environment was challenging during 2010, our business performed growth and we were pleased with our ability to show meaningful sequential growth in the second half of the fiscal year. This was a direct result of the investments we made in broadening and deepening our industry expertise, growing our business consulting practice, a better spend environment and the acquisition of InSource and ConVista Consulting.
We are particularly pleased with the strong foundation we have built for our business through the increased quality and significant expansion of our plant base. All this combined with our expertise in IT rationalization through our platforming approach positions us well for sustainable, long-term growth in fiscal year ‘11 and beyond.
Here are some of the highlights from the fourth quarter and fiscal year 2010. For the March quarter total revenue was $47.8 million, an increase of 15% year-over-year and 15% sequentially. Our operating income was $3.2 million or 6.7% and earnings per diluted share was $0.15. Fiscal year revenue was $164.4 million a decrease of 5% from the prior year. Operating profit was $12.9 million and EBITDA for the fiscal year was $0.50.
During the fourth quarter, we added 11 new clients, including six from ConVista. For the full year, the number of active clients increased from 56 to 68. We are pleased with the quality of the clients we added during the year and many have the potential to be strategic. Our overall client base is stronger than at any point in our history and provides us with a solid foundation for sustainable long-term growth. Unlike a year ago, the demand environment is improving, budgets are set and clients have increasing confidence in their ability to spend.