Exhibit 99.1
Press Release
Ness Technologies Announces
First Quarter 2007 Financial Results
Revenues Increase 18% and Backlog Rises 20% Year-over-Year
with Earnings In Line with Management Guidance
Hackensack, NJ — May 2, 2007 — Ness Technologies, Inc. (NASDAQ: NSTC), a global provider of IT services and solutions, today announced financial results for the quarter ended March 31, 2007.
First Quarter 2007 Highlights:
· Revenues reached $125.8 million, an increase of $18.7 million or 18%, compared to $107.0 million in the first quarter of 2006.
· First quarter results were affected, as guided, by exceptional expenses of about $3.0 million, including those associated with Ness’ management transition;
· Operating income was $6.7 million, a decrease of $1.2 million or 15%, compared to $7.9 million in the first quarter of 2006.
· Net income was $5.7 million, a decrease of $0.6 million or 10%, compared to $6.3 million in the first quarter of 2006.
· Diluted net earnings per share were $0.15, compared to $0.18 in first quarter of 2006.
· Backlog at March 31, 2007 increased to a record $631 million, up 20% compared to $527 million as of March 31, 2006.
“We had a successful first quarter, bringing in strong quarterly revenues and meeting management expectations,” said Sachi Gerlitz, President and Chief Executive Officer of Ness Technologies. “As nicely demonstrated by the strong growth in our backlog, we have continued to sign large-scale strategic deals which we expect will have a positive impact on future results. Our company fundamentals are strong, our underlying structure is good, and I believe we are on the right track.”
“Operating cash flows in the first quarter were much stronger than any prior first quarter,” stated Ofer Segev, Executive Vice President and Chief Financial Officer. “This improvement is attributable in part to the relatively timely approval by the Israeli government of its 2007 budget, compared to prior years when it was very late. We intend to keep our focus on strong cash flows, low financial expenses and managing our debt-to-equity ratio.”
Guidance
For the full year 2007, Ness reiterates its previously given guidance. Ness expects to generate revenues in the range of $560 million to $570 million, representing year-over-year growth of 18% to 20%, and diluted net earnings per share in the range of $1.00 to $1.05. However, the current weakness of the U.S. dollar represents potential downside to full year earnings of approximately $0.06 per diluted share.
For the second quarter 2007, Ness expects to generate diluted net earnings per share of $0.17 to $0.19 on revenues of $125 million to $130 million. This guidance includes approximately $0.06 per diluted share of capital gains associated with a potential private placement in our NessPRO business unit.
Conference Call Details
Ness Technologies President and Chief Executive Officer, Sachi Gerlitz, and Chief Financial Officer, Ofer Segev, will conduct a conference call to discuss the first quarter 2007 results. The call, which will be simultaneously webcast, will be at 9:00 AM Eastern Time / 6:00 AM Pacific Time on Wednesday, May 2, 2007.
To access the Ness Technologies first quarter 2007 earnings conference call, participants in North America should dial 1-800-399-0427 and international participants should dial +1-706-634-5453. A live audio webcast of the conference call will be available on the investor relations page of the Ness Technologies corporate web site at www.ness.com. Please visit the web site at least 15 minutes early to register for the teleconference webcast and download any necessary audio software. A replay of the call will be available on the web site approximately two hours after the conference call is completed.
About Ness Technologies
Ness Technologies (NASDAQ: NSTC) is a global provider of end-to-end IT services and solutions designed to help clients improve competitiveness and efficiency. Ness specializes in outsourcing and offshore, systems integration and application development, software and consulting, and quality assurance and training. With 7,500 employees, Ness maintains operations in 16 countries, and partners with numerous software and hardware vendors worldwide. For more information about Ness Technologies, visit www.ness.com.
Forward Looking Statement
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements often are preceded by words such as “believes,” “expects,” “may,” “anticipates,” “plans,” “intends,” “assumes,” “will” or similar expressions. Forward-looking statements reflect management’s current expectations, as of the date of this press release, and involve certain risks and uncertainties. Ness’ actual results could differ materially from those anticipated in these forward looking statements as a result of various factors. Some of the factors that could cause future results to
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materially differ from the recent results or those projected in forward-looking statements include the “Risk Factors” described in Ness’ Annual Report of Form 10-K filed with the Securities and Exchange Commission on March 14, 2007. Ness is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of such changes, new information, subsequent events or otherwise.
Ness Technologies media contact:
David Kanaan
USA: 1-888-244-4919
Intl: + 972-3-540-8188
Email: media.int@ness.com
Ness Technologies investor contact:
Drew Wright
USA: 1-201-488-3262
Email: investor@ness.com
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