Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Sep. 30, 2015 | Oct. 30, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | VIRTUSA CORP | |
Entity Central Index Key | 1,207,074 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --03-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 29,796,685 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2015 | Mar. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 82,258 | $ 124,802 |
Short-term investments | 96,286 | 90,414 |
Accounts receivable, net of allowance of $1,111 and $881 at September 30, 2015 and March 31, 2015, respectively | 97,290 | 75,431 |
Unbilled accounts receivable | 23,690 | 27,914 |
Prepaid expenses | 10,321 | 7,428 |
Deferred income taxes | 7,978 | 7,639 |
Restricted cash | 3,463 | 45 |
Other current assets | 13,957 | 13,565 |
Total current assets | 335,243 | 347,238 |
Property and equipment, net of accumulated depreciation of $39,140 and $36,203 at September 30, 2015 and March 31, 2015, respectively | 40,694 | 37,988 |
Long-term investments | 24,887 | 20,732 |
Deferred income taxes | 5,479 | 4,764 |
Goodwill | 76,430 | 50,360 |
Intangible assets, net | 34,321 | 21,909 |
Other long-term assets | 5,607 | 6,746 |
Total assets | 522,661 | 489,737 |
Current liabilities: | ||
Accounts payable | 11,013 | 8,693 |
Accrued employee compensation and benefits | 30,524 | 26,915 |
Accrued expenses and other current liabilities | 34,462 | 23,762 |
Income taxes payable | 1,516 | 1,834 |
Total current liabilities | 77,515 | 61,204 |
Deferred income taxes | 1,861 | 1,996 |
Long-term liabilities | 3,627 | 2,762 |
Total liabilities | $ 83,003 | $ 65,962 |
Commitments and guarantees | ||
Stockholders' equity: | ||
Undesignated preferred stock, $0.01 par value: Authorized 5,000,000 shares at September 30, 2015 and March 31, 2015; zero shares issued and outstanding at September 30, 2015 and March 31, 2015 | ||
Common stock, $0.01 par value: Authorized 120,000,000 shares at September 30, 2015 and March 31, 2015; issued 31,125,442 and 30,854,979 shares at September 30, 2015 and March 31, 2015, respectively; outstanding 29,268,739 and 28,998,276 shares at September 30, 2015 and March 31, 2015, respectively | $ 311 | $ 309 |
Treasury stock, 1,856,703 common shares, at cost, at September 30, 2015 and March 31, 2015, respectively | (9,652) | (9,652) |
Additional paid-in capital | 287,922 | 283,178 |
Retained earnings | 205,267 | 184,068 |
Accumulated other comprehensive loss | (44,190) | (34,128) |
Total stockholders' equity | 439,658 | 423,775 |
Total liabilities, undesignated preferred stock and stockholders' equity | $ 522,661 | $ 489,737 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2015 | Mar. 31, 2015 |
Consolidated Balance Sheets | ||
Accounts receivable, allowance (in dollars) | $ 1,111 | $ 881 |
Property and equipment, accumulated depreciation (in dollars) | $ 39,140 | $ 36,203 |
Undesignated preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Undesignated preferred stock, Authorized shares | 5,000,000 | 5,000,000 |
Undesignated preferred stock, shares issued | 0 | 0 |
Undesignated preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, Authorized shares | 120,000,000 | 120,000,000 |
Common stock, Issued shares | 31,125,442 | 30,854,979 |
Common stock, Outstanding shares | 29,268,739 | 28,998,276 |
Treasury stock, common shares | 1,856,703 | 1,856,703 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Consolidated Statements of Income | ||||
Revenue | $ 143,002 | $ 117,700 | $ 277,846 | $ 229,974 |
Costs of revenue | 93,500 | 74,968 | 180,862 | 147,557 |
Gross profit | 49,502 | 42,732 | 96,984 | 82,417 |
Operating expenses: | ||||
Selling, general and administrative expenses | 36,246 | 30,491 | 71,318 | 58,946 |
Income from operations | 13,256 | 12,241 | 25,666 | 23,471 |
Other income (expense): | ||||
Interest income | 1,502 | 1,230 | 2,927 | 2,389 |
Foreign currency transaction gains (losses) | 219 | 85 | 194 | (69) |
Other, net | 109 | (58) | 99 | (68) |
Total other income | 1,830 | 1,257 | 3,220 | 2,252 |
Income before income tax expense | 15,086 | 13,498 | 28,886 | 25,723 |
Income tax expense | 4,000 | 3,384 | 7,687 | 6,606 |
Net income | $ 11,086 | $ 10,114 | $ 21,199 | $ 19,117 |
Net income per share of common stock: | ||||
Basic earnings per share | $ 0.38 | $ 0.35 | $ 0.73 | $ 0.67 |
Diluted earnings per share | $ 0.37 | $ 0.34 | $ 0.71 | $ 0.65 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Consolidated Statements of Comprehensive Income | ||||
Net income | $ 11,086 | $ 10,114 | $ 21,199 | $ 19,117 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | (5,195) | (5,249) | (6,809) | (5,450) |
Pension plan adjustment | 74 | 26 | 130 | 13 |
Unrealized (loss) gain on available-for-sale securities, net of tax | 29 | (91) | 14 | (41) |
Unrealized (loss) gain on effective cash flow hedges, net of tax | 1,810 | (3,397) | 2,471 | |
Other comprehensive (loss) income | (5,092) | (3,504) | (10,062) | (3,007) |
Comprehensive income | $ 5,994 | $ 6,610 | $ 11,137 | $ 16,110 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities: | ||
Net income | $ 21,199 | $ 19,117 |
Adjustments to reconcile net income to net cash used in provided by operating activities: | ||
Depreciation and amortization | 7,639 | 7,151 |
Share-based compensation expense | 6,634 | 4,931 |
Reversal of contingent consideration | (1,833) | |
Provision for doubtful accounts | 203 | (175) |
Loss on sale of property and equipment | 5 | 42 |
Deferred income taxes | 122 | |
Foreign currency (gains) losses, net | (194) | 69 |
Amortization of discounts and premiums on investments | 372 | 636 |
Excess tax benefits from stock option exercises | (2,127) | (2,837) |
Net changes in operating assets and liabilities: | ||
Accounts receivable and unbilled receivable | (14,168) | (3,422) |
Prepaid expenses and other current assets | (4,923) | (927) |
Other long-term assets | (209) | (386) |
Accounts payable | 670 | (887) |
Accrued employee compensation and benefits | (759) | (6,577) |
Accrued expenses and other current liabilities | 3,378 | 2,834 |
Income taxes payable | 558 | 824 |
Other long-term liabilities | 216 | 539 |
Net cash provided by operating activities | 18,494 | 19,221 |
Cash flows from investing activities: | ||
Proceeds from sale of property and equipment | 3 | 26 |
Purchase of short-term investments | (29,261) | (2,515) |
Proceeds from sale or maturity of short-term investments | 26,405 | 10,797 |
Purchase of long-term investments | (18,173) | (15,005) |
Proceeds from sale or maturity of long-term investments | 8,200 | 2,000 |
Increase in restricted cash | (3,420) | (15) |
Business acquisition, net of cash acquired | (37,167) | |
Purchase of property and equipment | (7,313) | (6,393) |
Net cash used in investing activities | (60,726) | (11,105) |
Cash flows from financing activities: | ||
Proceeds from exercise of common stock options | 748 | 1,650 |
Payment of contingent consideration related to acquisitions | (441) | |
Principal payments on capital lease obligation | (51) | (22) |
Excess tax benefits from stock option exercises | 2,127 | 2,837 |
Net cash provided by financing activities | 2,824 | 4,024 |
Effect of exchange rate changes on cash and cash equivalents | (3,136) | (934) |
Net (decrease) increase in cash and cash equivalents | (42,544) | 11,206 |
Cash and cash equivalents, beginning of period | 124,802 | 82,761 |
Cash and cash equivalents, end of period | $ 82,258 | $ 93,967 |
Nature of the Business
Nature of the Business | 6 Months Ended |
Sep. 30, 2015 | |
Nature of the Business | |
Nature of the Business | (1) Nature of Business Virtusa Corporation (the “Company” or “Virtusa”) is a global information technology services company. The Company uses an enhanced global delivery model to provide end to end information technology (“IT”) services to Global 2000 companies. These services include IT and business consulting, user experience (“UX”) design, development of IT applications, maintenance and support services, systems integration, infrastructure and managed services. Using its enhanced global delivery model, innovative platforming approach and industry expertise, the Company provides cost effective services that enable its clients to accelerate time to market, improve service and enhance productivity. Headquartered in Massachusetts, Virtusa has offices in the United States, the United Kingdom, Sweden, Germany, Netherlands and Austria and global delivery centers in India, Sri Lanka, Hungary, Singapore and Malaysia, as well as a near shore center in the United States. |
Unaudited Interim Financial Inf
Unaudited Interim Financial Information | 6 Months Ended |
Sep. 30, 2015 | |
Unaudited Interim Financial Information | |
Unaudited Interim Financial Information | (2) Unaudited Interim Financial Information Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared by the Company in accordance with U.S. generally accepted accounting principles and Article 10 of Regulation S-X under the Securities and Exchange Act of 1934, as amended, and should be read in conjunction with the Company’s audited consolidated financial statements (and notes thereto) for the fiscal year ended March 31, 2015 included in the Company’s Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission, or SEC, on May 20, 2015. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States have been condensed or omitted pursuant to such SEC rules and regulations. In the opinion of the Company’s management, all adjustments considered necessary for a fair presentation of the accompanying unaudited consolidated financial statements have been included, and all material adjustments are of a normal and recurring nature. Operating results for the interim periods are not necessarily indicative of results that may be expected to occur for the entire fiscal year. Principles of Consolidation The consolidated financial statements reflect the accounts of the Company and its direct and indirect subsidiaries, Virtusa Consulting Services Private Limited, Virtusa Software Services Private Limited and Virtusa Technologies (India) Private Limited, each organized and located in India, Virtusa (Private) Limited, organized and located in Sri Lanka, Virtusa UK Limited, organized and located in the United Kingdom, Virtusa Securities Corporation, a Massachusetts securities corporation, Apparatus Inc. incorporated and located in Indiana, Virtusa International, B.V., organized and located in the Netherlands, Virtusa Hungary Kft., incorporated and located in Hungary, Virtusa Germany GmbH, organized and located in Germany, Virtusa Switzerland GmbH, organized and located in Switzerland, Virtusa Singapore Private Limited, organized and located in Singapore, Virtusa Malaysia Private Limited Company located in Malayisa, Virtusa Austria GmbH, organized and located in Austria, Virtusa Philippines Inc. located in the Philippines, TradeTech Consulting Scandinavia AB organized and located in Sweden and Virtusa Canada, Inc., a corporation organized under the laws of British Columbia, Canada. All intercompany transactions and balances have been eliminated in consolidation. Use of Estimates The preparation of financial statements in accordance with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, including the recoverability of tangible assets, disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenue and expenses during the reported period. Management reevaluates these estimates on an ongoing basis. The most significant estimates relate to the recognition of revenue and profits based on the percentage of completion method of accounting for fixed price contracts, share based compensation, income taxes, including reserves for uncertain tax positions, deferred taxes and liabilities, intangible assets, contingent consideration and valuation of financial instruments including derivative contracts and investments. Management bases its estimates on historical experience and on various other factors and assumptions that are believed to be reasonable under the circumstances. The actual amounts may vary from the estimates used in the preparation of the accompanying consolidated financial statements. Fair Value of Financial Instruments At September 30, 2015 and March 31, 2015, the carrying amounts of certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, unbilled accounts receivable, restricted cash, accounts payable, accrued employee compensation and benefits and other accrued expenses, approximate their fair values due to the nature of the items. See Note 5 for a discussion of the fair value of the Company’s other financial instruments. Recent accounting pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for the Company on April 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. In June 2014, the FASB issued ASU No. 2014 12—“Stock Compensation—Accounting for Share Based Payments. In some cases, the terms of an award may provide that a performance target that affects vesting could be achieved after an employee completes the requisite service period. That is, the employee would be eligible to vest in the award regardless of whether the employee is rendering service on the date the performance target is achieved. A performance target that affects vesting and that could be achieved after an employee’s requisite service period shall be accounted for as a performance condition. As such, the performance target shall not be reflected in estimating the fair value of the award at the grant date. Compensation cost shall be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service already has been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost for which requisite service has not yet been rendered shall be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period shall reflect the number of awards that are expected to vest and shall be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. As indicated in the definition of vest, the stated vesting period (which includes the period in which the performance target could be achieved) may differ from the requisite service period. The ASU is effective for annual and interim periods for fiscal years beginning on or after December 15, 2015. Entities can apply the amendment either a) prospectively to all awards granted or modified after the effective date or b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The ASU does not have an impact on the consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, “Interest — Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs”. This update requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying value of that debt liability, consistent with debt discounts. The adoption of this guidance did not have an impact on the consolidated financial statements. In September 2015 the FASB issued ASU 2015-16, which eliminates the requirement for an acquirer to retrospectively adjust the financial statements for measurement-period adjustments that occur in periods after a business combination is consummated. The ASU is effective for public business entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. The Company elected to adopt this guidance in the current fiscal quarter. The adoption of this guidance did not have a material impact on the consolidated financial statements. |
Earnings per Share
Earnings per Share | 6 Months Ended |
Sep. 30, 2015 | |
Earnings per Share | |
Earnings per Share | (3) Earnings per Share Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding for the period, and diluted earnings per share is computed by including the dilutive impact of common stock equivalents outstanding for the period in the denominator. Common stock equivalents include shares issuable upon the exercise of outstanding stock options, stock appreciation rights, unvested restricted stock awards and unvested restricted stock units, net of shares assumed to have been purchased with the proceeds, using the treasury stock method. The following table sets forth the computation of basic and diluted earnings per share for the periods set forth below: Three Months Ended September 30, Six Months Ended September 30, 2015 2014 2015 2014 Numerators: Net income $ $ $ $ Denominators: Weighted average common shares outstanding Dilutive effect of employee stock options and unvested restricted stock Dilutive effect of stock appreciation rights Weighted average shares-diluted Basic earnings per share $ $ $ $ Diluted earnings per share $ $ $ $ During the three months ended September 30, 2015, there were no shares excluded from the calculation of diluted earnings per share. During the six months ended September 30, 2015, options to purchase 2,769 shares of common stock were excluded from the calculations of diluted earnings per share as their effect would have been anti-dilutive. During the three and six months ended September 30, 2014, options to purchase 22,471 and 47,849 shares of common stock, respectively, were excluded from the calculations of diluted earnings per share as their effect would have been anti-dilutive. |
Investment Securities
Investment Securities | 6 Months Ended |
Sep. 30, 2015 | |
Investment Securities | |
Investment Securities | (4) Investment Securities At September 30, 2015 and March 31, 2015, all of the Company’s investment securities were classified as available-for-sale and were carried on its balance sheet at their fair market value. A fair market value hierarchy based on three levels of inputs was used to measure each security (see Note 5). The following is a summary of investment securities at September 30, 2015: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available-for-sale securities: Corporate bonds: Current $ $ $ ) $ Non-current ) Agency and short-term notes: Current — Non-current — Municipal bonds: Current — — Time deposits: Current — — Total available-for-sale securities $ $ $ ) $ The following is a summary of investment securities at March 31, 2015: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available-for-sale securities: Corporate bonds: Current $ $ $ ) $ Non-current — ) Agency and short-term notes: Current — Non-current ) Municipal bonds: Current — — Time deposits: Current — — Total available-for-sale securities $ $ $ ) $ The Company evaluates investments with unrealized losses to determine if the losses are other than temporary. The Company has determined that the gross unrealized losses at September 30, 2015 and March 31, 2015 are temporary. In making this determination, the Company considered the financial condition, credit ratings and near-term prospects of the issuers, the underlying collateral of the investments, and the magnitude of the losses as compared to the cost and the length of time the investments have been in an unrealized loss position. Additionally, while the Company classifies the securities as available for sale, the Company does not currently intend to sell such investments and it is more likely than not the Company will not be required to sell such investments prior to the recovery of their carrying value, except as disclosed in Note 5. Proceeds from sales of available-for-sale investment securities and the gross gains and losses that have been included in earnings as a result of those sales were as follows: Three Months Ended September 30, Six Months Ended September 30, 2015 2014 2015 2014 Proceeds from sales of available-for-sale investment securities $ $ $ $ Gross gains $ — $ — $ $ — Gross losses — — — — Net realized gains on sales of available-for-sale investment securities $ — $ — $ $ — |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Sep. 30, 2015 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | (5) Fair Value of Financial Instruments The Company uses a framework for measuring fair value under U.S. generally accepted accounting principles and enhanced disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The Company’s financial assets and liabilities reflected in the consolidated financial statements at carrying value include marketable securities and other financial instruments which approximate fair value. Fair value for marketable securities is determined using a market approach based on quoted market prices at period end in active markets. The fair value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following: · Level 1—Quoted prices in active markets for identical assets or liabilities. · Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. · Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis at September 30, 2015: Level 1 Level 2 Level 3 Total Assets: Investments: Available-for-sales securities—current $ — $ $ — $ Available-for-sales securities—non-current — — Foreign currency derivative contracts — — Total assets $ — $ $ — $ Liabilities: Foreign currency derivative contracts $ — $ $ — $ Contingent consideration — — Total liabilities $ — $ $ $ The Company determines the fair value of the contingent consideration related to acquisitions based on the probability of attaining certain revenue and profit margin targets using an appropriate discount rate to present value the liability. See Note 7 of the notes to our financial statements included herein for a description of the Company’s acquisitions and related contingent consideration targets. The following table provides a summary of changes in fair value of the Company’s Level 3 financial liabilities at September 30, 2015. Level 3 Liabilities Balance at April 1, 2015 $ Contingent consideration related to acquisition purchase price allocation Contingent consideration recognized in earnings Foreign currency translation adjustments ) Balance at September 30, 2015 $ |
Derivative Financial Instrument
Derivative Financial Instruments | 6 Months Ended |
Sep. 30, 2015 | |
Derivative Financial Instruments | |
Derivative Financial Instruments | (6) Derivative Financial Instruments The Company evaluates its foreign exchange policy on an ongoing basis to assess its ability to address foreign exchange exposures on its consolidated balance sheets, statements of income and consolidated statement of cash flows from all foreign currencies, including most significantly the U.K. pound sterling, the euro, the Swedish krona, Indian rupee and Sri Lankan rupee. The Company enters into hedging programs with highly rated financial institutions in accordance with its foreign exchange policy (as approved by the Company’s audit committee and board of directors) which permits hedging of material, known foreign currency exposures. Currently, the Company maintains three hedging programs, each with varying contract types, duration and purposes. The Company’s “Cash Flow Program” is designed to mitigate the impact of volatility in the U.S. dollar and U.K. pound sterling equivalents of the Company’s Indian rupee denominated expenses over a rolling 36 month period. The Cash Flow Program transactions currently meet the criteria for hedge accounting as cash flow hedges. The Company’s “Balance Sheet Program” involves the use of 30 day derivative instruments designed to mitigate the monthly impact of foreign exchange gains/losses on certain intercompany balances and payments. The Company’s “Economic Hedge Program” involves the purchase of derivative instruments with maturities of up to 92 days, and is designed to mitigate the impact of foreign exchange on U.K. pound sterling, the euro and Swedish krona denominated revenue and costs with respect to the quarter for which such instruments are purchased. The Balance Sheet Program and the Economic Hedge Program are treated as economic hedges as these programs do not meet the criteria for hedge accounting and all gains and losses are recognized in consolidated statement of income under the same line item as the underlying exposure being hedged. The Company evaluates all of its derivatives based on market observable inputs, including both forward and spot prices for currencies. Any significant change in the forward or spot prices for hedged currencies would have a significant impact on the value of the Company’s derivatives. Changes in fair value of the designated cash flow hedges for the Company’s Cash Flow Program are recorded as a component of accumulated other comprehensive income (loss) (“AOCI”), net of tax, until the forecasted hedged transactions occur and are then recognized in the consolidated statement of income in the same line item as the item being hedged . The Company evaluates hedge effectiveness at the time a contract is entered into, as well as on an ongoing basis. If, and when, all or part of a hedge relationship is discontinued because the forecasted transaction is deemed probable of not occurring by the end of the originally specified period or within an additional two-month period of time thereafter, the contract, or the relative amount of the contract, is deemed “ineffective” and any related derivative amounts recorded in equity are reclassified to earnings. There were no gains (losses) that were reclassified from AOCI into earnings as a result of forecasted transactions that were considered probable of not occurring for the six months ended September 30, 2015 and 2014. Changes in the fair value of the derivatives purchased under the Balance Sheet Program are reflected in the Company’s consolidated statement of income and are included in foreign currency transaction gains (losses) for each period. Changes in the fair value of the derivatives purchased under the Economic Hedge Program are also reflected in the Company’s consolidated statement of income and are included in the same line item as the underlying exposure being hedged for each period. The U.S. dollar notional equivalent market value, which consists of the notional value and net unrealized gain or loss, of all outstanding foreign currency derivative contracts, was $128,062 and $121,380, at September 30, 2015 and March 31, 2015, respectively. Unrealized net losses related to these contracts which are expected to be reclassified from AOCI to earnings during the next 12 months were $848 at September 30, 2015. At September 30, 2015, the maximum outstanding term of any derivative instrument was 33 months. The following table sets forth the fair value of derivative instruments included in the consolidated balance sheets at September 30, 2015 and March 31, 2015: Derivatives designated as hedging instruments September 30, 2015 March 31, 2015 Foreign currency exchange contracts: Other current assets $ $ Other long-term assets $ $ Accrued expenses and other current liabilities $ $ Long-term liabilities $ $ The following tables set forth the effect of the Company’s foreign currency exchange contracts on the consolidated financial statements of the Company for the three and six months ended September 30, 2015 and 2014: Amount of Gain or (Loss) Recognized in AOCI on Derivative (Effective Portion) Derivatives Designated as Cash Flow Three months ended September 30, Six months ended September 30, Hedging Relationships 2015 2014 2015 2014 Foreign currency exchange contracts $ ) $ $ ) $ Location of Gain or (Loss) Reclassified Amount of Gain or (Loss) Reclassified from AOCI into Income (Effective Portion) from AOCI into Income (Effective Three months ended September 30, Six months ended September 30, Portion) 2015 2014 2015 2014 Costs of revenue $ $ ) $ $ ) Operating expenses $ $ ) $ $ ) Amount of Gain or (Loss) Recognized in Income on Derivatives Derivatives not Designated Location of Gain or (Loss) Three months ended September 30, Six months ended September 30, as Hedging Instrument Recognized in Income on Derivatives 2015 2014 2015 2014 Foreign currency exchange contracts Foreign currency transaction gains (losses) $ ) $ $ ) $ ) Revenue $ $ $ ) $ Costs of revenue $ $ ) $ $ ) Selling, general and administrative expenses $ $ ) $ $ ) |
Acquisitions
Acquisitions | 6 Months Ended |
Sep. 30, 2015 | |
Acquisitions | |
Acquisitions | (7) Acquisitions On April 1, 2015, the Company entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) by and among the Company, Apparatus, Inc. an Indiana corporation (“Apparatus”), the majority stockholder of Apparatus (“Major Stockholder”) and the other stockholders (collectively with the Major Stockholder, the “Sellers”), to acquire all of the issued and outstanding stock of Apparatus (the “Acquisition”). The Company completed the Acquisition on April 1, 2015, at which time Apparatus became a wholly owned subsidiary of the Company. The acquisition strengthens the Company’s growing Infrastructure Management Services (IMS) practice and offers the combined Company’s clients a stronger set of offerings that are focused on simplifying their IT infrastructure and driving high levels of efficiency in IT operations. Under the terms of the Stock Purchase Agreement, the purchase price for the Acquisition was approximately $34,200 in cash, subject to post closing working capital adjustments. The purchase price is also subject to adjustment after the closing by up to an additional $1,700 in earn out consideration to the Sellers in the event of Apparatus’ achievement at 100% of certain revenue and profit milestones for the fiscal year ending March 31, 2016. The Sellers can earn up to 110% of the earn-out if the performance targets are exceeded by 110%. The fair value of contingent at September 30, 2015 is $894. The Company deposited 8.5% of the purchase price into escrow for a period of 12 months as security for the Sellers’ indemnification obligations under the Stock Purchase Agreement. The Company, Sellers and Apparatus made customary representations, warranties and covenants in the Stock Purchase Agreement. During the three months ended September 30, 2015, the Company and Apparatus agreed to a working capital adjustment of $297, resulting in a reduction to the purchase price paid. In connection with the Acquisition, the Company offered employment to all of Apparatus’ employees. The Company has agreed to offer up to $1,500 in the form of variable cash compensation to certain Apparatus employees in the event of Apparatus’ achievement at 100% of certain revenue and profit milestones for the fiscal year ending March 31, 2016. These Apparatus employees can earn up to 110% if the performance targets are exceeded by 110%. The Company has also agreed to issue an aggregate of up to $3,500 in shares of restricted stock from the Company’s stock option and incentive plan, not to exceed 93,333 shares, to certain Apparatus employees. The shares will vest annually and will be expensed over a four year period and will be recorded as post-acquisition compensation expense. A summary of the preliminary purchase price allocation for Apparatus is as follows: Amount Useful Life Consideration Transferred: Cash paid at closing $ Holdback of 8.5% Fair value of contingent consideration Working capital adjustment ) Fair value of consideration transferred Less: Cash acquired ) Total purchase price, net of cash acquired $ Acquisition-related costs $ Purchase Price Allocation: Cash and cash equivalents $ Accounts receivable and unbilled receivable Prepaid expense Property and equipment Goodwill Customer relationships 10 years Technology 5 years Trademark 3 years Other current liabilities ) Total purchase price Less: Cash acquired ) Total purchase price, net of cash acquired $ The purchase price allocation is based upon preliminary estimates and assumptions that may be subject to change during the measurement period. On June 1, 2015, Virtusa AB, a wholly owned subsidiary of the Company organized and formed in Sweden, acquired the assets of a consulting company located in Sweden. The purchase price was approximately $360 in cash subject to adjustment after the closing for up to an additional $540 in earn-out consideration. The purchase price allocation was as follows: goodwill of $505, customer relationships of $446 and other current liabilities of $51. The fair value of contingent consideration at September 30, 2015 is $534, which includes a $6 foreign currency translation loss. On July 28, 2015, the Company acquired the business of Agora Group, Inc., an IT consulting organization headquartered in Atlanta, Georgia, USA and its Indian affiliate (collectively, “Agora”), focused on implementing and integrating business process management (BPM) solutions on leading BPM suites. Agora employs approximately 60 experienced practitioners with deep knowledge in BPM-related solutions. Under the terms of the asset purchase agreement by and among the Company, Agora Group, Inc. and the sole stockholder of the Agora Group, Inc., the Company acquired Agora’s business for $7,441 in cash (net of working capital adjustments). The Company has also agreed to issue an aggregate of up to $2,890 in restricted stock awards from the Company’s stock option and incentive plan, not to exceed 77,067 shares, to certain Agora employees. The restricted stock awards will vest annually and will be expensed over a four year period. From the purchase price, the Company deposited approximately $854 into escrow for a period of 12 months as security for the Agora Group’s and the sole stockholder’s indemnification obligations under the asset purchase agreement. The Company, the Agora Group and sole stockholder made customary representations, warranties and covenants in the asset purchase agreement. The asset purchase agreement also contains non-solicitation and non-competition provisions pursuant to which the Agora Group and the sole stockholder agreed not to solicit any employee or affiliate or client of the Company and to not engage in any competitive business or activities, in each case, for a period of three years after the date of closing of the transaction. A summary of the preliminary purchase price allocation for Agora is as follows: Amount Useful Life Consideration Transferred: Cash paid at closing $ Holdback Total purchase price, net of cash acquired $ Acquisition-related costs $ Purchase Price Allocation: Goodwill $ Customer relationships 5 yrs $ The following unaudited, pro forma information assumes the Apparatus and Agora acquisition occurred on April 1, 2014. The unaudited pro forma consolidated results of operations are provided for informational purposes only and do not purport to represent the Company’s actual consolidated results of operations had each acquisition occurred on the dates assumed, nor are these necessarily indicative of the Company’s future consolidated results of operations. Three months ended September 30, Six months ended September 30, 2015 2014 2015 2014 Revenue $ $ $ $ Net income $ $ $ $ Revenue and net loss, relating to Apparatus and Agora since the acquisition dates, amounting to $8,525 and (613), respectively, have been included in the consolidated statement of income for the three months ended September 30, 2015. Revenue and net loss relating to Apparatus and Agora since the acquisition date, amounting to $15,609 and (1,225), respectively, have been included in the consolidated statement of income for the six months ended September 30, 2015. The unaudited pro forma consolidated results of operations for the three and six months ended September 30, 2015 and 2014 included amortization of intangible assets, share-based compensation expense, acquisition related costs, earn-out bonuses and changes in the fair value of contingent consideration. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | (8) Goodwill and Intangible Assets Goodwill: The Company has one reportable segment. The following are details of the changes in goodwill balance at September 30, 2015: Amount Balance at April 1, 2015 $ Goodwill arising from acquisitions Foreign currency translation adjustments Balance at September 30, 2015 $ The acquisition costs and goodwill balance deductible for the Company’s business acquisitions for tax purposes are $68,388. The acquisition costs and goodwill balance not deductible for tax purposes are $10,117 and relate to the Company’s TradeTech Consulting AB acquisition, which closed on January 2, 2014. The Company performed the annual assessment of its goodwill during the fourth quarter of the fiscal year ended March 31, 2015 and determined that the estimated fair value of the Company’s reporting unit exceeded its carrying value and therefore goodwill was not impaired. The Company will continue to complete goodwill impairment assessments at least annually during the fourth quarter of each ensuing fiscal year. The Company will continue to evaluate whether events or circumstances have occurred that indicate that the estimated remaining useful life of its long-lived assets, including intangible assets, may warrant revision or that the carrying value of these assets may be impaired. Any write -downs are treated as permanent reductions in the carrying amount of the assets. Intangible Assets: The following are details of the Company’s intangible asset carrying amounts acquired and amortization at September 30, 2015. Weighted Average Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortizable intangible assets: Customer relationships $ $ $ Partner relationships Trademark Technology $ $ $ The intangible assets are being amortized based upon the pattern in which the economic benefits of the intangible assets are being utilized. |
Income Taxes
Income Taxes | 6 Months Ended |
Sep. 30, 2015 | |
Income Taxes | |
Income Taxes | (9) Income Taxes The Company applies an estimated annual effective tax rate to its year-to-date operating results to determine the interim provision for income tax expense. The Company’s effective tax rate was 26.5% and 26.6% for the three and six months ended September 30, 2015, respectively, as compared to an effective tax rate of 25.1% and 25.7% for the three and six months ended September 30, 2014, respectively. The Company’s reported effective tax rate is impacted by jurisdictional mix of profits in which the Company operates, statutory tax rates in effect, unusual or infrequent discrete items requiring a provision during the period and certain exemptions or tax holidays the Company has in place. The Company created two export oriented units in India, one in Bangalore during the fiscal year ended March 31, 2011 and a second unit in Hyderabad during the fiscal year ended March 31, 2010 for which no income tax exemptions were availed. The Indian subsidiaries also operate two development centers in areas designated as a SEZ, under the SEZ Act of 2005. In particular, the Company was approved as a SEZ Co-developer and has built a campus on a 6.3 acre parcel of land in Hyderabad, India that has been designated as an SEZ. As a SEZ Co-developer, the Company is entitled to certain tax benefits for any consecutive period of 10 years during the 15 year period starting in fiscal year 2008. The Company has elected to claim SEZ Co-developer income tax benefits starting in fiscal year ended March 31, 2013. In addition, the Company has leased facilities in SEZ designated locations in Hyderabad and Chennai, India. The Company’s profits from the Hyderabad and Chennai SEZ operations are eligible for certain income tax exemptions for a period of up to 15 years beginning in fiscal March 31, 2009. The Company’s India profits ineligible for SEZ benefits are subject to corporate income tax at the current rate of 34.6%. In the fiscal year ended March 31, 2014, the Company leased a facility in a SEZ designated location in Bangalore and Pune, India each of which is eligible for tax holidays for up to 15 years beginning in the fiscal year ended March 31, 2014. Based on the latest changes in tax laws, book profits of SEZ units are subject to Indian Minimum Alternative Tax (“MAT”), commencing April 1, 2011, which will continue to negatively impact the Company’s cash flows. In addition, the Company’s Sri Lankan subsidiary, Virtusa (Private) Limited, is operating under a 12 year income tax holiday arrangement that is set to expire on March 31, 2019 and required Virtusa (Private) Limited to meet certain job creation and investment criteria by March 31, 2015. During the fiscal year ended March 31, 2015, the Company believed it had fulfilled its hiring and investment commitments and is eligible for tax holiday through March 2019. The current agreement provides income tax exemption for all export business income. On September 30, 2015, the Company received confirmation for the Board of Investments that it has satisfied investment criteria through March 31, 2015 and is eligible for holiday benefits. At September 30, 2015, the Company believes it is eligible for continued benefits for the entire 12 year tax holiday. The Company’s effective income tax rate is based on the composition of estimated income in different jurisdictions, including those where the Company is enjoying tax holidays, for the applicable fiscal year and adjustments, if any, in the applicable quarterly periods, for unrecognized tax benefits for uncertain income tax positions or other discrete items required to be reported during interim periods. The Company’s aggregate income tax rate in foreign jurisdictions is lower than its income tax rate in the United States due primarily to lower rates generally in jurisdictions in which the Company operates and applicable tax holiday benefits of the Company, obtained primarily in India and Sri Lanka. Unrecognized tax benefits represent uncertain tax positions for which the Company has established reserves. At September 30, 2015 and March 31, 2015, the total liability for unrecognized tax benefits was $559 and $546, respectively, if realized. Each fiscal year, unrecognized tax benefits may be adjusted upon the closing of the statute of limitations for income tax returns filed in various jurisdictions. During the six months ended September 30, 2015 and September 30, 2014, the unrecognized tax benefits increased by $13 and decreased by $22, respectively. The increase in unrecognized tax benefits in the six months period ending September 30, 2015 was predominantly due to increases for incremental interest accrued on existing uncertain tax positions. Undistributed Earnings of Foreign Subsidiaries A substantial amount of the Company’s income before provision for income tax is from operations earned in its Indian and Sri Lankan subsidiaries and is subject to tax holiday. The Company intends to use accumulated and future earnings of foreign subsidiaries to expand operations outside the United States and, accordingly, undistributed income is considered to be indefinitely reinvested. The Company does not provide for U.S. income taxes on foreign earnings. At September 30, 2015, the Company had $211,450 of unremitted earnings from foreign subsidiaries and approximately $105,887 of cash and short-term investments that would otherwise be available for potential distribution, if not indefinitely reinvested. If required, such cash and investments could be repatriated to the United States. However, under current law, any repatriation would be subject to United States federal income tax less applicable foreign tax credits. Due to the various methods by which such earnings could be repatriated in the future, the amount of taxes attributable to the undistributed earnings is not practicably determinable. |
Concentration of Revenue and As
Concentration of Revenue and Assets | 6 Months Ended |
Sep. 30, 2015 | |
Concentration of Revenue and Assets | |
Concentration of Revenue and Assets | (10) Concentration of Revenue and Assets Total revenue is attributed to geographic areas based on the location of the client. Long-lived assets represent property, plant and equipment, intangible assets and goodwill, net of accumulated depreciation and amortization, and are attributed to geographic area based on their location. Geographic information is summarized as follows: Three Months Ended September 30, Six Months Ended September 30, 2015 2014 2015 2014 Client revenue: North America $ $ $ $ Europe Rest of world Consolidated revenue $ $ $ $ September 30, 2015 March 31, 2015 Long-lived assets, net of accumulated depreciation and amortization: North America $ $ Asia Europe Consolidated long-lived assets, net $ $ Revenue from significant clients as a percentage of the Company’s consolidated revenue was as follows: Three Months Ended September 30, Six Months Ended September 30, 2015 2014 2015 2014 Customer 1 % % % % |
Debt
Debt | 6 Months Ended |
Sep. 30, 2015 | |
Debt | |
Debt | (11) Debt On December 31, 2013, the Company entered into an amended and restated credit agreement with JPMorgan Chase Bank, N.A. (“JPM”). The credit agreement amended and restated the Company’s $3,000 secured revolving credit agreement with JPM and provides for a $25,000 secured revolving credit facility, which shall be available to fund working capital and other corporate purposes, as well as to serve as security in support of the Company’s foreign currency hedging programs. The credit agreement contains financial covenants that require the Company to maintain a Funded Debt to Adjusted EBITDA Ratio of not more than 2.00 to 1.00 and a Fixed Charge Coverage Ratio of less than 2.50 to 1.00, each as determined for the trailing twelve month period ending on each fiscal quarter. The Company is currently in compliance with all covenants contained in the credit agreement and believes that the credit agreement provides sufficient flexibility to enable continued compliance with its terms. Interest under this credit facility accrues at a rate between LIBOR plus 1.5% and LIBOR plus 1.75% based on the Company’s ratio of indebtedness to Adjusted EBITDA. The term of the credit facility is five years, ending December 31, 2018. This facility replaced the Company’s prior $3,000 line of credit with JPM. At September 30, 2015, there were no borrowings outstanding under the credit facility. Beginning in fiscal 2009, the Company’s U.K. subsidiary entered into an agreement with a financial institution to sell, without recourse, certain of its Europe-based accounts receivable balances to the financial institution. During the six months ended September 30, 2015, $7,901 of receivables was sold under the terms of the financing agreement. Fees paid pursuant to this agreement were immaterial during the three and six months ended September 30, 2015. The Company had no letters of credit outstanding at September 30, 2015. |
Pension and Post-retirement Ben
Pension and Post-retirement Benefits | 6 Months Ended |
Sep. 30, 2015 | |
Pension and Post-retirement Benefits | |
Pension and Post-retirement Benefits | (12) Pensions and post-retirement benefits The Company has noncontributory defined benefit plans covering its employees in India and Sri Lanka as mandated by the Indian and Sri Lankan governments. The following tables provide information regarding pension expense recognized: Three Months Ended September 30, Six Months Ended September 30, 2015 2014 2015 2014 Components of net periodic pension cost Service cost $ $ $ $ Interest cost Expected return on plan assets ) ) ) ) Amortization past service cost Amortization of actuarial loss Net periodic pension cost $ $ $ The Company expects to contribute approximately $1,000 in cash to the gratuity plans during the fiscal year ending March 31, 2016. The Company made cash contributions of $703 to the plans during the six months ended September 30, 2015. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 6 Months Ended |
Sep. 30, 2015 | |
Accumulated Other Comprehensive Loss: | |
Accumulated Other Comprehensive Loss | (13) Accumulated Other Comprehensive Loss Changes in accumulated other comprehensive income (loss) by component were as follows for the three and six months ended September 30, 2015 and 2014: Three Months Ended September 30, Six Months Ended September 30, Accumulated Other Comprehensive Income (Loss) 2015 2014 2015 2014 Investment securities Beginning balance $ ) $ ) $ ) $ ) Other comprehensive income (loss) (OCI) before reclassifications net of tax of $0 for all periods ) ) Reclassifications from OCI to other income — net of tax of $0 for all periods — — ) — Comprehensive income (loss) on investment securities, net of tax of $0 for all periods ) ) Closing Balance $ ) $ ) $ ) $ ) Currency Translation Adjustments Beginning balance $ ) $ ) $ ) $ ) OCI before reclassifications ) ) ) ) Closing Balance $ ) $ ) $ ) $ ) Cash Flow Hedges Beginning balance $ ) $ ) $ $ ) OCI before reclassifications net of tax of $(317), $105, $(1,144) and $361 ) Reclassifications from OCI to - Costs of revenue, net of tax of $18, $228, $(37) and $329 ) ) - Selling, general and administrative expenses, net of tax of $11, $127, $(17) and $188 ) ) Comprehensive income (loss) on cash flow hedges, net of tax of $(288), $460, $(1,198) and $878 — ) Closing Balance $ ) $ ) $ ) $ ) Benefit plans Beginning balance $ ) $ ) $ ) $ ) OCI before reclassifications net of tax of $0 for all periods $ — $ — $ — $ — Reclassifications from OCI for prior service credit (cost) to: - Costs of revenue, net of tax of $0 for all periods - Selling, general and administrative expenses, net of tax of $0 for all periods — — Reclassifications from OCI for net actuarial gain (loss) amortization to: - Costs of revenue, net of tax of $0 for all periods - Selling, general and administrative expenses, net of tax of $0 for all periods Other adjustments — ) Comprehensive income (loss) on benefit plans, net of tax of $0 for all periods Closing Balance $ ) $ ) $ ) $ ) Accumulated other comprehensive income (loss) at September 30, 2015 $ ) $ ) $ ) $ ) |
Subsequent Events
Subsequent Events | 6 Months Ended |
Sep. 30, 2015 | |
Subsequent Events | |
Subsequent Events | (14) Subsequent Events On October 20, 2015, the Company purchased multiple foreign currency forward contracts designed to hedge fluctuation in the U.K. pound sterling (“GBP”) against the U.S. dollar, the Swedish Krona (“SEK”) against the U.S. dollar and the Euro (“EUR”) against the U.S. dollar (the “Euro contracts”), each of which will expire on various dates during the period ending December 31, 2015. The GBP contracts have an aggregate notional amount of approximately £ 4,978 (approximately $ 7,657), the SEK contracts have an aggregate notional amount of approximately SEK 4,402 (approximately $534) and the EUR contracts have an aggregate notional amount of approximately EUR 1,265 (approximately $1,431). The weighted average U.S. dollar settlement rate associated with the GBP contracts is $ 1.538, the weighted average U.S dollar settlement rate associated with the SEK contracts is approximately $0.121, and the weighted average U.S. dollar settlement rate associated with the EUR contracts is approximately $1.131. On November 5, 2015, Virtusa Consulting Services Private Limited (“Virtusa India”), a subsidiary of Virtusa Corporation (“Virtusa” or the “Company”), entered into a definitive share purchase agreement (“SPA”) to purchase 53,133,127 shares, or approximately 51.7% of the fully-diluted capitalization of Polaris Consulting & Services Limited (“Polaris”) from certain Polaris shareholders for approximately $180,000 in cash (the “Polaris SPA Transaction”). In addition, under applicable India Takeover rules, Virtusa India will make an unconditional mandatory offer to the Polaris public shareholders to purchase up to an additional 26.0% of the outstanding shares of Polaris for approximately $90,000 in cash, assuming full tender and the offer price remaining unchanged, for total consideration of approximately $270,000. The transaction is subject to certain conditions to close, including regulatory approvals in the United States and India, and is expected to close during Virtusa’s fourth fiscal quarter ending March 31, 2016. The Company has secured commitments for senior secured debt financing of $300,000 from JP Morgan Chase Bank, N.A. and Bank of America, N.A., in support of the transaction, comprised of $100,000 revolving credit facility and a $200,000 multi-draw term loan. Interest under these facilities accrues at a rate per annum of LIBOR plus 2.75%, subject to step-downs based on Virtusa’s ratio of debt to adjusted earnings before interest, taxes, depreciation, amortization, and stock compensation expense (“EBITDA”). Virtusa intends to enter into an interest rate swap agreement to minimize interest rate exposure. The term of the facilities is five years from date of close. The definitive credit agreement governing the facilities will include a maximum debt to EBITDA ratio and a minimum fixed charge ratio. These facilities will replace Virtusa’s existing $25,000 credit facility with JP Morgan Chase Bank, N.A. On November 5, 2015, the Company entered into an amendment with Citigroup Technology, Inc. (“Citi”) and Polaris, effective only upon the closing of the Polaris SPA Transaction, pursuant to which, (i) Citi agreed to appoint the Company and Polaris as a preferred vendor for Global Technology Resource Strategy (“GTRS”) for the provision of IT services to Citi on an enterprise wide basis (“GTRS Preferred Vendor”), (ii) the Company agreed to certain productivity savings and associated reduced spend commitments for a period of two years, which, if not achieved, would require the Company to provide certain minimum discounts to Citi, (iii) the parties agreed to amend Polaris’ master services agreement with Citi such that the Company would also be deemed a contracting party and the Company would assume, and agree to perform, or cause Polaris to perform, all applicable obligations under the master services agreement, as amended by the amendment (the “Citi/Virtusa MSA”), and (iv) Virtusa agreed to terminate Virtusa’s existing master services agreement with Citi, and have the Citi/Virtusa MSA be the sole surviving agreement. Under the terms of the Citi/Virtusa MSA, the Citi/Virtusa MSA has a perpetual term, but may be terminated sooner by either party in the event of, among other things, an uncured, material breach of the other party on 30 days prior written notice or by Citi for convenience generally upon 30 days prior written notice except for certain time and material engagements, which may be terminated for convenience by Citi on 10 business days or shorter notice. The Citi/Virtusa MSA contains provisions regarding insurance, indemnities, limitations of liability, warranty, service levels, liquidated damages and other customary terms and conditions. |
Unaudited Interim Financial I21
Unaudited Interim Financial Information (Policies) | 6 Months Ended |
Sep. 30, 2015 | |
Unaudited Interim Financial Information | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared by the Company in accordance with U.S. generally accepted accounting principles and Article 10 of Regulation S-X under the Securities and Exchange Act of 1934, as amended, and should be read in conjunction with the Company’s audited consolidated financial statements (and notes thereto) for the fiscal year ended March 31, 2015 included in the Company’s Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission, or SEC, on May 20, 2015. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States have been condensed or omitted pursuant to such SEC rules and regulations. In the opinion of the Company’s management, all adjustments considered necessary for a fair presentation of the accompanying unaudited consolidated financial statements have been included, and all material adjustments are of a normal and recurring nature. Operating results for the interim periods are not necessarily indicative of results that may be expected to occur for the entire fiscal year. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements reflect the accounts of the Company and its direct and indirect subsidiaries, Virtusa Consulting Services Private Limited, Virtusa Software Services Private Limited and Virtusa Technologies (India) Private Limited, each organized and located in India, Virtusa (Private) Limited, organized and located in Sri Lanka, Virtusa UK Limited, organized and located in the United Kingdom, Virtusa Securities Corporation, a Massachusetts securities corporation, Apparatus Inc. incorporated and located in Indiana, Virtusa International, B.V., organized and located in the Netherlands, Virtusa Hungary Kft., incorporated and located in Hungary, Virtusa Germany GmbH, organized and located in Germany, Virtusa Switzerland GmbH, organized and located in Switzerland, Virtusa Singapore Private Limited, organized and located in Singapore, Virtusa Malaysia Private Limited Company located in Malayisa, Virtusa Austria GmbH, organized and located in Austria, Virtusa Philippines Inc. located in the Philippines, TradeTech Consulting Scandinavia AB organized and located in Sweden and Virtusa Canada, Inc., a corporation organized under the laws of British Columbia, Canada. All intercompany transactions and balances have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, including the recoverability of tangible assets, disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenue and expenses during the reported period. Management reevaluates these estimates on an ongoing basis. The most significant estimates relate to the recognition of revenue and profits based on the percentage of completion method of accounting for fixed price contracts, share based compensation, income taxes, including reserves for uncertain tax positions, deferred taxes and liabilities, intangible assets, contingent consideration and valuation of financial instruments including derivative contracts and investments. Management bases its estimates on historical experience and on various other factors and assumptions that are believed to be reasonable under the circumstances. The actual amounts may vary from the estimates used in the preparation of the accompanying consolidated financial statements. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments At September 30, 2015 and March 31, 2015, the carrying amounts of certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, unbilled accounts receivable, restricted cash, accounts payable, accrued employee compensation and benefits and other accrued expenses, approximate their fair values due to the nature of the items. See Note 5 for a discussion of the fair value of the Company’s other financial instruments. |
Recent Accounting Pronouncements | Recent accounting pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for the Company on April 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. In June 2014, the FASB issued ASU No. 2014 12—“Stock Compensation—Accounting for Share Based Payments. In some cases, the terms of an award may provide that a performance target that affects vesting could be achieved after an employee completes the requisite service period. That is, the employee would be eligible to vest in the award regardless of whether the employee is rendering service on the date the performance target is achieved. A performance target that affects vesting and that could be achieved after an employee’s requisite service period shall be accounted for as a performance condition. As such, the performance target shall not be reflected in estimating the fair value of the award at the grant date. Compensation cost shall be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service already has been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost for which requisite service has not yet been rendered shall be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period shall reflect the number of awards that are expected to vest and shall be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. As indicated in the definition of vest, the stated vesting period (which includes the period in which the performance target could be achieved) may differ from the requisite service period. The ASU is effective for annual and interim periods for fiscal years beginning on or after December 15, 2015. Entities can apply the amendment either a) prospectively to all awards granted or modified after the effective date or b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The ASU does not have an impact on the consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, “Interest — Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs”. This update requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying value of that debt liability, consistent with debt discounts. The adoption of this guidance did not have an impact on the consolidated financial statements. In September 2015 the FASB issued ASU 2015-16, which eliminates the requirement for an acquirer to retrospectively adjust the financial statements for measurement-period adjustments that occur in periods after a business combination is consummated. The ASU is effective for public business entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. The Company elected to adopt this guidance in the current fiscal quarter. The adoption of this guidance did not have a material impact on the consolidated financial statements. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 6 Months Ended |
Sep. 30, 2015 | |
Earnings per Share | |
Schedule of computation of basic and diluted earnings per share | Three Months Ended September 30, Six Months Ended September 30, 2015 2014 2015 2014 Numerators: Net income $ $ $ $ Denominators: Weighted average common shares outstanding Dilutive effect of employee stock options and unvested restricted stock Dilutive effect of stock appreciation rights Weighted average shares-diluted Basic earnings per share $ $ $ $ Diluted earnings per share $ $ $ $ |
Investment Securities (Tables)
Investment Securities (Tables) | 6 Months Ended |
Sep. 30, 2015 | |
Investment Securities | |
Schedule of investment securities | The following is a summary of investment securities at September 30, 2015: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available-for-sale securities: Corporate bonds: Current $ $ $ ) $ Non-current ) Agency and short-term notes: Current — Non-current — Municipal bonds: Current — — Time deposits: Current — — Total available-for-sale securities $ $ $ ) $ The following is a summary of investment securities at March 31, 2015: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available-for-sale securities: Corporate bonds: Current $ $ $ ) $ Non-current — ) Agency and short-term notes: Current — Non-current ) Municipal bonds: Current — — Time deposits: Current — — Total available-for-sale securities $ $ $ ) $ |
Schedule of proceeds from sales of available for sale investment securities and the gross gains and losses that have been included in earnings | Three Months Ended September 30, Six Months Ended September 30, 2015 2014 2015 2014 Proceeds from sales of available-for-sale investment securities $ $ $ $ Gross gains $ — $ — $ $ — Gross losses — — — — Net realized gains on sales of available-for-sale investment securities $ — $ — $ $ — |
Fair Value of Financial Instr24
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Sep. 30, 2015 | |
Fair Value of Financial Instruments | |
Schedule of financial assets and liabilities measured at fair value on a recurring basis | The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis at September 30, 2015: Level 1 Level 2 Level 3 Total Assets: Investments: Available-for-sales securities—current $ — $ $ — $ Available-for-sales securities—non-current — — Foreign currency derivative contracts — — Total assets $ — $ $ — $ Liabilities: Foreign currency derivative contracts $ — $ $ — $ Contingent consideration — — Total liabilities $ — $ $ $ |
Schedule of changes in fair value of the Company's Level 3 financial liabilities | Level 3 Liabilities Balance at April 1, 2015 $ Contingent consideration related to acquisition purchase price allocation Contingent consideration recognized in earnings Foreign currency translation adjustments ) Balance at September 30, 2015 $ |
Derivative Financial Instrume25
Derivative Financial Instruments (Tables) | 6 Months Ended |
Sep. 30, 2015 | |
Derivative Financial Instruments | |
Schedule of fair value of derivative instruments included in the consolidated balance sheets | September 30, 2015 March 31, 2015 Foreign currency exchange contracts: Other current assets $ $ Other long-term assets $ $ Accrued expenses and other current liabilities $ $ Long-term liabilities $ $ |
Schedule of effect of the foreign currency exchange contracts on the consolidated financial statements | Amount of Gain or (Loss) Recognized in AOCI on Derivative (Effective Portion) Derivatives Designated as Cash Flow Three months ended September 30, Six months ended September 30, Hedging Relationships 2015 2014 2015 2014 Foreign currency exchange contracts $ ) $ $ ) $ Location of Gain or (Loss) Reclassified Amount of Gain or (Loss) Reclassified from AOCI into Income (Effective Portion) from AOCI into Income (Effective Three months ended September 30, Six months ended September 30, Portion) 2015 2014 2015 2014 Costs of revenue $ $ ) $ $ ) Operating expenses $ $ ) $ $ ) Amount of Gain or (Loss) Recognized in Income on Derivatives Derivatives not Designated Location of Gain or (Loss) Three months ended September 30, Six months ended September 30, as Hedging Instrument Recognized in Income on Derivatives 2015 2014 2015 2014 Foreign currency exchange contracts Foreign currency transaction gains (losses) $ ) $ $ ) $ ) Revenue $ $ $ ) $ Costs of revenue $ $ ) $ $ ) Selling, general and administrative expenses $ $ ) $ $ ) |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Sep. 30, 2015 | |
Acquisitions | |
Schedule of unaudited, pro forma information | Three months ended September 30, Six months ended September 30, 2015 2014 2015 2014 Revenue $ $ $ $ Net income $ $ $ $ |
Apparatus | |
Acquisitions | |
Summary of the purchase price allocation | Amount Useful Life Consideration Transferred: Cash paid at closing $ Holdback of 8.5% Fair value of contingent consideration Working capital adjustment ) Fair value of consideration transferred Less: Cash acquired ) Total purchase price, net of cash acquired $ Acquisition-related costs $ Purchase Price Allocation: Cash and cash equivalents $ Accounts receivable and unbilled receivable Prepaid expense Property and equipment Goodwill Customer relationships 10 years Technology 5 years Trademark 3 years Other current liabilities ) Total purchase price Less: Cash acquired ) Total purchase price, net of cash acquired $ |
Agora Group Inc | |
Acquisitions | |
Summary of the purchase price allocation | A summary of the preliminary purchase price allocation for Agora is as follows: Amount Useful Life Consideration Transferred: Cash paid at closing $ Holdback Total purchase price, net of cash acquired $ Acquisition-related costs $ Purchase Price Allocation: Goodwill $ Customer relationships 5 yrs $ |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets | |
Schedule of changes in goodwill | Amount Balance at April 1, 2015 $ Goodwill arising from acquisitions Foreign currency translation adjustments Balance at September 30, 2015 $ |
Schedule of carrying amount and amortization of acquired intangible asset | The following are details of the Company’s intangible asset carrying amounts acquired and amortization at September 30, 2015. Weighted Average Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortizable intangible assets: Customer relationships $ $ $ Partner relationships Trademark Technology $ $ $ |
Concentration of Revenue and 28
Concentration of Revenue and Assets (Tables) | 6 Months Ended |
Sep. 30, 2015 | |
Concentration of Revenue and Assets | |
Schedule of revenue attributed to geographic areas based on location of the client | Three Months Ended September 30, Six Months Ended September 30, 2015 2014 2015 2014 Client revenue: North America $ $ $ $ Europe Rest of world Consolidated revenue $ $ $ $ |
Schedule of long-lived assets, net of accumulated depreciation and amortization attributed to geographic areas based on location of assets | September 30, 2015 March 31, 2015 Long-lived assets, net of accumulated depreciation and amortization: North America $ $ Asia Europe Consolidated long-lived assets, net $ $ |
Schedule of revenue from significant clients as a percentage of consolidated revenue | Three Months Ended September 30, Six Months Ended September 30, 2015 2014 2015 2014 Customer 1 % % % % |
Pensions and Post-retirement be
Pensions and Post-retirement benefits (Tables) | 6 Months Ended |
Sep. 30, 2015 | |
Post-retirement benefits. | |
Schedule of pension expense recognized | Three Months Ended September 30, Six Months Ended September 30, 2015 2014 2015 2014 Components of net periodic pension cost Service cost $ $ $ $ Interest cost Expected return on plan assets ) ) ) ) Amortization past service cost Amortization of actuarial loss Net periodic pension cost $ $ $ |
Accumulated Other Comprehensi30
Accumulated Other Comprehensive Loss (Tables) | 6 Months Ended |
Sep. 30, 2015 | |
Accumulated Other Comprehensive Loss: | |
Schedule of changes in accumulated other comprehensive income (loss) by component | Three Months Ended September 30, Six Months Ended September 30, Accumulated Other Comprehensive Income (Loss) 2015 2014 2015 2014 Investment securities Beginning balance $ ) $ ) $ ) $ ) Other comprehensive income (loss) (OCI) before reclassifications net of tax of $0 for all periods ) ) Reclassifications from OCI to other income — net of tax of $0 for all periods — — ) — Comprehensive income (loss) on investment securities, net of tax of $0 for all periods ) ) Closing Balance $ ) $ ) $ ) $ ) Currency Translation Adjustments Beginning balance $ ) $ ) $ ) $ ) OCI before reclassifications ) ) ) ) Closing Balance $ ) $ ) $ ) $ ) Cash Flow Hedges Beginning balance $ ) $ ) $ $ ) OCI before reclassifications net of tax of $(317), $105, $(1,144) and $361 ) Reclassifications from OCI to - Costs of revenue, net of tax of $18, $228, $(37) and $329 ) ) - Selling, general and administrative expenses, net of tax of $11, $127, $(17) and $188 ) ) Comprehensive income (loss) on cash flow hedges, net of tax of $(288), $460, $(1,198) and $878 — ) Closing Balance $ ) $ ) $ ) $ ) Benefit plans Beginning balance $ ) $ ) $ ) $ ) OCI before reclassifications net of tax of $0 for all periods $ — $ — $ — $ — Reclassifications from OCI for prior service credit (cost) to: - Costs of revenue, net of tax of $0 for all periods - Selling, general and administrative expenses, net of tax of $0 for all periods — — Reclassifications from OCI for net actuarial gain (loss) amortization to: - Costs of revenue, net of tax of $0 for all periods - Selling, general and administrative expenses, net of tax of $0 for all periods Other adjustments — ) Comprehensive income (loss) on benefit plans, net of tax of $0 for all periods Closing Balance $ ) $ ) $ ) $ ) Accumulated other comprehensive income (loss) at September 30, 2015 $ ) $ ) $ ) $ ) |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Numerators: | ||||
Net income | $ 11,086 | $ 10,114 | $ 21,199 | $ 19,117 |
Denominators: | ||||
Weighted average common shares outstanding | 29,217,820 | 28,695,642 | 29,143,383 | 28,586,223 |
Dilutive effect of employee stock options and unvested restricted stock awards (in shares) | 788,766 | 720,156 | 825,059 | 797,595 |
Dilutive effect of stock appreciation rights (in shares) | 1,884 | 8,569 | 3,107 | 9,006 |
Weighted average shares-diluted | 30,008,470 | 29,424,367 | 29,971,549 | 29,392,824 |
Basic earnings per share | $ 0.38 | $ 0.35 | $ 0.73 | $ 0.67 |
Diluted earnings per share | $ 0.37 | $ 0.34 | $ 0.71 | $ 0.65 |
Unvested restricted stock and options excluded from the calculations of diluted earnings per share (in shares) | 0 | 22,471 | 2,769 | 47,849 |
Investment Securities (Details)
Investment Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Mar. 31, 2015 | |
Investment Securities | |||||
Available-for-sale Securities, Amortized Cost Basis | $ 121,189 | $ 121,189 | $ 111,177 | ||
Gross Unrealized Gains | 21 | 21 | 14 | ||
Gross Unrealized Losses | (37) | (37) | (45) | ||
Fair Value | 121,173 | 121,173 | 111,146 | ||
Proceeds from sales of available for sale investment securities and the gross gains and losses | |||||
Proceeds from sales of available for sale investment securities | 15,551 | $ 7,499 | 34,605 | $ 12,797 | |
Gross gains | 1 | ||||
Net realized gains on sales of available-for-sale investment securities | 1 | ||||
Corporate bonds | Current | |||||
Investment Securities | |||||
Available-for-sale Securities, Amortized Cost Basis | 35,398 | 35,398 | 41,873 | ||
Gross Unrealized Gains | 4 | 4 | 10 | ||
Gross Unrealized Losses | (16) | (16) | (22) | ||
Fair Value | 35,386 | 35,386 | 41,861 | ||
Corporate bonds | Non-current | |||||
Investment Securities | |||||
Available-for-sale Securities, Amortized Cost Basis | 21,993 | 21,993 | 10,551 | ||
Gross Unrealized Gains | 14 | 14 | |||
Gross Unrealized Losses | (21) | (21) | (21) | ||
Fair Value | 21,986 | 21,986 | 10,530 | ||
Agency and short-term notes | Current | |||||
Investment Securities | |||||
Available-for-sale Securities, Amortized Cost Basis | 3,013 | 3,013 | 6,737 | ||
Gross Unrealized Gains | 2 | 2 | 3 | ||
Fair Value | 3,015 | 3,015 | 6,740 | ||
Agency and short-term notes | Non-current | |||||
Investment Securities | |||||
Available-for-sale Securities, Amortized Cost Basis | 2,900 | 2,900 | 10,203 | ||
Gross Unrealized Gains | 1 | 1 | 1 | ||
Gross Unrealized Losses | (2) | ||||
Fair Value | 2,901 | 2,901 | 10,202 | ||
Municipal bonds | Current | |||||
Investment Securities | |||||
Available-for-sale Securities, Amortized Cost Basis | 200 | 200 | 200 | ||
Fair Value | 200 | 200 | 200 | ||
Time deposits | Current | |||||
Investment Securities | |||||
Available-for-sale Securities, Amortized Cost Basis | 57,685 | 57,685 | 41,613 | ||
Fair Value | $ 57,685 | $ 57,685 | $ 41,613 |
Fair Value of Financial Instr33
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Mar. 31, 2015 |
Level 3 | ||
Liabilities: | ||
Total liabilities | $ 4,209 | $ 2,432 |
Recurring | ||
Investments: | ||
Available-for-sale securities - current | 96,286 | |
Available-for-sale securities - non-current | 24,887 | |
Foreign currency derivative contracts | 1,539 | |
Total assets | 122,712 | |
Liabilities: | ||
Foreign currency derivative contracts | 3,292 | |
Contingent consideration | 4,209 | |
Total liabilities | 7,501 | |
Recurring | Level 2 | ||
Investments: | ||
Available-for-sale securities - current | 96,286 | |
Available-for-sale securities - non-current | 24,887 | |
Foreign currency derivative contracts | 1,539 | |
Total assets | 122,712 | |
Liabilities: | ||
Foreign currency derivative contracts | 3,292 | |
Total liabilities | 3,292 | |
Recurring | Level 3 | ||
Liabilities: | ||
Contingent consideration | 4,209 | |
Total liabilities | $ 4,209 |
Fair Value of Financial Instr34
Fair Value of Financial Instruments (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Changes in fair value of the Company's Level 3 financial liabilities | ||||
Contingent consideration recognized in earnings | $ (1,833) | |||
Foreign currency translation adjustments | $ (5,195) | $ (5,249) | $ (6,809) | $ (5,450) |
Level 3 | ||||
Changes in fair value of the Company's Level 3 financial liabilities | ||||
Balance at start of period | 2,432 | |||
Contingent consideration related to acquisition purchase price allocation | 1,370 | |||
Contingent consideration recognized in earnings | 413 | |||
Foreign currency translation adjustments | (6) | |||
Balance at end of period | $ 4,209 | $ 4,209 |
Derivative Financial Instrume35
Derivative Financial Instruments (Details) - Foreign currency exchange contracts $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)item | Sep. 30, 2014USD ($) | Mar. 31, 2015USD ($) | |
Derivative Financial Instruments and Trading Activities | |||||
Number of hedging programs maintained | item | 3 | ||||
Maximum outstanding term of derivative instruments | 33 months | ||||
U.S. dollar notional equivalent market value | $ 128,062 | $ 128,062 | $ 121,380 | ||
Derivatives designated as hedging instruments | |||||
Derivative Financial Instruments and Trading Activities | |||||
Period hedged by Cash Flow Program | 36 months | ||||
Additional period after which the contract is deemed ineffective | 2 months | ||||
Unrealized net gains related to derivative instruments expected to be reclassified from AOCI into earnings during the next 12 months | $ 848 | ||||
Other current assets | 1,114 | 1,114 | 3,285 | ||
Other long-term assets | 425 | 425 | 1,359 | ||
Accrued expenses and other current liabilities | 1,962 | 1,962 | 1,183 | ||
Long-term liabilities | 1,330 | 1,330 | $ 619 | ||
Derivatives designated as hedging instruments | Cash Flow Hedges | Reclassification out of accumulated other comprehensive income | |||||
Derivative Financial Instruments and Trading Activities | |||||
Amount reclassified to earnings as a result of hedge ineffectiveness | $ 0 | $ 0 | $ 0 | $ 0 | |
Derivatives not Designated as Hedging Instrument | |||||
Derivative Financial Instruments and Trading Activities | |||||
Maturity period of Balance Sheet Program derivatives | 30 months | ||||
Maximum outstanding term of derivative instruments | 92 days |
Derivative Financial Instrume36
Derivative Financial Instruments (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Costs of revenue | ||||
Derivative Financial Instruments | ||||
Amount of Gain or (Loss) Reclassified from AOCI into Income (Effective Portion) | $ 51 | $ (771) | $ 331 | $ (1,165) |
Operating expenses | ||||
Derivative Financial Instruments | ||||
Amount of Gain or (Loss) Reclassified from AOCI into Income (Effective Portion) | 19 | (427) | 170 | (670) |
Derivatives designated as hedging instruments | Foreign currency exchange contracts | ||||
Derivative Financial Instruments | ||||
Amount of Gain or (Loss) Recognized in AOCI on Derivative (Effective Portion) | (218) | 1,072 | (4,094) | 1,514 |
Derivatives not Designated as Hedging Instrument | Foreign currency exchange contracts | Foreign currency transaction gains (losses) | ||||
Derivative Financial Instruments | ||||
Amount of Gain or (Loss) Recognized in Income on Derivatives | (150) | 166 | (1,048) | (83) |
Derivatives not Designated as Hedging Instrument | Foreign currency exchange contracts | Revenue | ||||
Derivative Financial Instruments | ||||
Amount of Gain or (Loss) Recognized in Income on Derivatives | 16 | 284 | (270) | 136 |
Derivatives not Designated as Hedging Instrument | Foreign currency exchange contracts | Costs of revenue | ||||
Derivative Financial Instruments | ||||
Amount of Gain or (Loss) Recognized in Income on Derivatives | 19 | (129) | 125 | (80) |
Derivatives not Designated as Hedging Instrument | Foreign currency exchange contracts | Selling, general and administrative expenses | ||||
Derivative Financial Instruments | ||||
Amount of Gain or (Loss) Recognized in Income on Derivatives | $ 6 | $ (23) | $ 12 | $ (14) |
Acquisitions (Details)
Acquisitions (Details) $ in Thousands | Jul. 28, 2015USD ($)itemshares | Apr. 01, 2015USD ($)shares | Apr. 01, 2014USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($) |
Acquisitions | |||||
Total purchase price, net of cash acquired | $ 37,167 | ||||
Apparatus | |||||
Acquisitions | |||||
Purchase price for the acquisition was in cash, subject to post closing working capital adjustments | $ 34,200 | ||||
Total purchase price, net of cash acquired | $ 33,953 | ||||
Fair value of contingent consideration | $ 830 | $ 894 | |||
Hold back percentage | 8.50% | ||||
Hold back period | 12 months | ||||
Vesting period | 4 years | ||||
Working capital adjustment | $ 297 | $ 297 | |||
Apparatus | Deferred restricted stock awards | Maximum | |||||
Acquisitions | |||||
Authorized value of awards | $ 3,500 | ||||
Number of authorized shares | shares | 93,333 | ||||
Agora Group Inc | |||||
Acquisitions | |||||
Total purchase price, net of cash acquired | $ 7,441 | ||||
Number of experienced practitioners | item | 60 | ||||
Purchase price in cash | $ 7,441 | ||||
Escrow deposit | $ 854 | ||||
Hold back period | 12 months | ||||
Term of non solicitation agreement | 3 years | ||||
Agora Group Inc | Deferred restricted stock awards | |||||
Acquisitions | |||||
Vesting period | 4 years | ||||
Agora Group Inc | Deferred restricted stock awards | Maximum | |||||
Acquisitions | |||||
Authorized value of awards | $ 2,890 | ||||
Number of authorized shares | shares | 77,067 | ||||
Milestone achievement | Apparatus | |||||
Acquisitions | |||||
Additional consideration | $ 1,700 | ||||
Percentage of revenue recognition milestone | 100.00% | ||||
Maximum earnings, if performance target exceeds 110 percent | 110.00% | ||||
Threshold limit of performance target to earn maximum earning | 110.00% | ||||
Bonus Pool | Milestone achievement | Apparatus | |||||
Acquisitions | |||||
Additional consideration | $ 1,500 |
Acquisitions (Details 2)
Acquisitions (Details 2) - USD ($) $ in Thousands | Jul. 28, 2015 | Jun. 01, 2015 | Apr. 01, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Mar. 31, 2015 |
Consideration Transferred: | |||||||||
Total purchase price, net of cash acquired | $ 37,167 | ||||||||
Purchase Price Allocation | |||||||||
Goodwill | $ 76,430 | $ 76,430 | $ 50,360 | ||||||
Weighted Average Useful Life | 9 years | ||||||||
Unaudited, pro forma information | |||||||||
Revenue | 143,780 | $ 127,150 | $ 281,187 | $ 248,127 | |||||
Net income | 11,161 | 9,885 | 21,720 | 18,220 | |||||
Revenue | 8,525 | 15,609 | |||||||
Net loss | $ (613) | $ (1,225) | |||||||
Customer relationships | |||||||||
Purchase Price Allocation | |||||||||
Weighted Average Useful Life | 10 years | 9 years 4 months 24 days | |||||||
Technology | |||||||||
Purchase Price Allocation | |||||||||
Weighted Average Useful Life | 5 years | 5 years | |||||||
Trademark | |||||||||
Purchase Price Allocation | |||||||||
Weighted Average Useful Life | 3 years | 2 years 9 months 18 days | |||||||
Apparatus | |||||||||
Consideration Transferred: | |||||||||
Cash paid at closing | $ 31,248 | ||||||||
Holdback | 2,903 | ||||||||
Fair value of contingent consideration | 830 | $ 894 | 894 | 894 | |||||
Working capital adjustment | (297) | (297) | |||||||
Fair value of consideration transferred | 34,684 | ||||||||
Less : Cash acquired | (731) | ||||||||
Total purchase price, net of cash acquired | 33,953 | ||||||||
Acquisition-related costs | 631 | ||||||||
Purchase Price Allocation | |||||||||
Cash and cash equivalents | 731 | ||||||||
Accounts receivable | 2,916 | ||||||||
Prepaid expense | 79 | ||||||||
Property and equipment | 1,115 | ||||||||
Goodwill | 19,229 | ||||||||
Other current liabilities | (2,486) | ||||||||
Total purchase price | 34,684 | ||||||||
Less : Cash acquired | (731) | ||||||||
Total purchase price, net of cash acquired | 33,953 | ||||||||
Apparatus | Customer relationships | |||||||||
Purchase Price Allocation | |||||||||
Intangibles assets | 12,200 | ||||||||
Apparatus | Technology | |||||||||
Purchase Price Allocation | |||||||||
Intangibles assets | 500 | ||||||||
Apparatus | Trademark | |||||||||
Purchase Price Allocation | |||||||||
Intangibles assets | $ 400 | ||||||||
Consulting company | Virtusa AB | |||||||||
Consideration Transferred: | |||||||||
Fair value of contingent consideration | 534 | $ 534 | $ 534 | ||||||
Fair value of consideration transferred | $ 360 | ||||||||
Purchase Price Allocation | |||||||||
Additional consideration | 540 | ||||||||
Goodwill | 505 | ||||||||
Intangibles assets | 446 | ||||||||
Other current liabilities | $ (51) | ||||||||
Foreign currency translation loss | $ 6 | ||||||||
Agora Group Inc | |||||||||
Consideration Transferred: | |||||||||
Cash paid at closing | $ 6,587 | ||||||||
Holdback | 854 | ||||||||
Total purchase price, net of cash acquired | 7,441 | ||||||||
Acquisition-related costs | 35 | ||||||||
Purchase Price Allocation | |||||||||
Goodwill | 6,141 | ||||||||
Total purchase price, net of cash acquired | 7,441 | ||||||||
Agora Group Inc | Customer relationships | |||||||||
Purchase Price Allocation | |||||||||
Intangibles assets | $ 1,300 | ||||||||
Weighted Average Useful Life | 5 years |
Goodwill and Intangible Asset39
Goodwill and Intangible Assets (Details) $ in Thousands | 6 Months Ended |
Sep. 30, 2015USD ($)item | |
Goodwill: | |
Number of reportable segments | item | 1 |
Changes in goodwill | |
Balance at the beginning of the period | $ 50,360 |
Goodwill arising from acquisitions | 25,875 |
Foreign currency translation adjustments | 195 |
Balance at the end of the period | 76,430 |
Acquisition costs and goodwill deductible for tax purposes | 68,388 |
Trade Tech | |
Changes in goodwill | |
Acquisition costs and goodwill not deductible for tax purposes | $ 10,117 |
Goodwill and Intangible Asset40
Goodwill and Intangible Assets (Details 2) - USD ($) $ in Thousands | Apr. 01, 2015 | Sep. 30, 2015 | Mar. 31, 2015 |
Intangible Assets | |||
Weighted Average Useful Life | 9 years | ||
Gross Carrying Amount | $ 49,825 | ||
Accumulated Amortization | 15,504 | ||
Net Carrying Amount | $ 34,321 | $ 21,909 | |
Customer relationships | |||
Intangible Assets | |||
Weighted Average Useful Life | 10 years | 9 years 4 months 24 days | |
Gross Carrying Amount | $ 48,168 | ||
Accumulated Amortization | 14,706 | ||
Net Carrying Amount | $ 33,462 | ||
Partner relationships | |||
Intangible Assets | |||
Weighted Average Useful Life | 6 years | ||
Gross Carrying Amount | $ 700 | ||
Accumulated Amortization | 660 | ||
Net Carrying Amount | $ 40 | ||
Trademark | |||
Intangible Assets | |||
Weighted Average Useful Life | 3 years | 2 years 9 months 18 days | |
Gross Carrying Amount | $ 457 | ||
Accumulated Amortization | 107 | ||
Net Carrying Amount | $ 350 | ||
Technology | |||
Intangible Assets | |||
Weighted Average Useful Life | 5 years | 5 years | |
Gross Carrying Amount | $ 500 | ||
Accumulated Amortization | 31 | ||
Net Carrying Amount | $ 469 |
Income Taxes (Details)
Income Taxes (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | 24 Months Ended | |||
Sep. 30, 2015USD ($)a | Sep. 30, 2014 | Sep. 30, 2015USD ($)aitem | Sep. 30, 2014USD ($) | Mar. 31, 2011subsidiary | Mar. 31, 2011subsidiary | Mar. 31, 2015USD ($) | |
Income Taxes | |||||||
Effective tax rate (as a percent) | 26.50% | 25.10% | 26.60% | 25.70% | |||
Total liability for unrecognized tax benefits which would impact the annual effective rate, if realized | $ 559 | $ 559 | $ 546 | ||||
Change in unrecognized tax benefits | 13 | $ (22) | |||||
Unremitted earnings from foreign subsidiaries | 211,450 | 211,450 | |||||
Cash and short-term investments available for distribution if not indefinitely reinvested | $ 105,887 | $ 105,887 | |||||
Bangalore | |||||||
Income Taxes | |||||||
Number of export oriented units created | subsidiary | 1 | ||||||
India | |||||||
Income Taxes | |||||||
Number of export oriented units created | subsidiary | 2 | ||||||
India | Indian operations in areas designated as a SEZ | |||||||
Income Taxes | |||||||
Number of development centers operated | item | 2 | ||||||
India | Indian operations in areas designated as a SEZ | Hyderabad | |||||||
Income Taxes | |||||||
Parcel of land (in acres) | a | 6.3 | 6.3 | |||||
Consecutive period of income tax exemption | 10 years | ||||||
Income tax benefits total eligibility period | 15 years | ||||||
India | Virtusa India | |||||||
Income Taxes | |||||||
Current corporate income tax rate | 34.60% | ||||||
Sri Lanka | Virtusa (Private) Limited | |||||||
Income Taxes | |||||||
Income tax exemption period | 12 years | ||||||
Maximum | India | Indian operations in areas designated as a SEZ | Pune | |||||||
Income Taxes | |||||||
Income tax exemption period | 15 years | ||||||
Maximum | India | Indian operations in areas designated as a SEZ | Hyderabad and Chennai | |||||||
Income Taxes | |||||||
Income tax exemption period | 15 years | ||||||
Maximum | Indian Operations Software Technology Parks | India | Bangalore | |||||||
Income Taxes | |||||||
Income tax exemption period | 15 years |
Concentration of Revenue and 42
Concentration of Revenue and Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Mar. 31, 2015 | |
Concentration of Revenue and Assets | |||||
Consolidated revenue | $ 143,002 | $ 117,700 | $ 277,846 | $ 229,974 | |
Consolidated long-lived assets, net | 151,445 | 151,445 | $ 110,257 | ||
North America | |||||
Concentration of Revenue and Assets | |||||
Consolidated revenue | 101,621 | 75,985 | 198,322 | 149,448 | |
Consolidated long-lived assets, net | 97,614 | 97,614 | 59,316 | ||
Asia | |||||
Concentration of Revenue and Assets | |||||
Consolidated long-lived assets, net | 35,092 | 35,092 | 32,896 | ||
Europe | |||||
Concentration of Revenue and Assets | |||||
Consolidated revenue | 32,061 | 34,586 | 62,407 | 66,484 | |
Consolidated long-lived assets, net | 18,739 | 18,739 | $ 18,045 | ||
Rest of world | |||||
Concentration of Revenue and Assets | |||||
Consolidated revenue | $ 9,320 | $ 7,129 | $ 17,117 | $ 14,042 |
Concentration of Revenue and 43
Concentration of Revenue and Assets (Details 2) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Sales revenue | Customer 1 | ||||
Concentration of Revenue and Assets | ||||
Revenue from significant clients as a percentage of consolidated revenue | 13.30% | 9.90% | 13.30% | 9.40% |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended |
Dec. 31, 2013 | Sep. 30, 2015 | |
Debt | ||
Receivables sold under the terms of the financing agreement | $ 7,901 | |
Amount outstanding under letters of credit | 0 | |
Prior secured revolving credit agreement | ||
Debt | ||
Maximum borrowing capacity under the credit agreement | $ 3,000 | |
Prior secured revolving credit agreement | Maximum | ||
Debt | ||
Debt to Adjusted EBITDA Ratio | 2 | |
Fixed Charge Coverage Ratio | 2.50 | |
Secured revolving credit facility | ||
Debt | ||
Maximum borrowing capacity under the credit agreement | $ 25,000 | 25,000 |
Term of credit facility | 5 years | |
Amount outstanding under the credit facility | $ 0 | |
Secured revolving credit facility | LIBOR | ||
Debt | ||
Variable rate basis | LIBOR | |
Secured revolving credit facility | LIBOR | Minimum | ||
Debt | ||
Interest rate added to the base rate (as a percent) | 1.50% | |
Secured revolving credit facility | LIBOR | Maximum | ||
Debt | ||
Interest rate added to the base rate (as a percent) | 1.75% | |
Prior amended and restated line of credit agreement | ||
Debt | ||
Maximum borrowing capacity under the credit agreement | $ 3,000 |
Pensions and Post-retirement 45
Pensions and Post-retirement Benefits (Details) - Pension benefits - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Pensions and post-retirement benefits | ||||
Service cost | $ 182 | $ 135 | $ 368 | $ 271 |
Interest cost | 67 | 59 | 136 | 118 |
Expected return on plan assets | (81) | (54) | (164) | (108) |
Amortization past service cost | 3 | 2 | 5 | 5 |
Amortization of actuarial loss | 39 | 24 | 78 | 48 |
Net periodic pension cost | $ 210 | $ 166 | 423 | $ 334 |
Expected cash contributions to the plans in current fiscal period | 1,000 | |||
Cash contributions to the plan for the current fiscal year | $ 703 |
Accumulated Other Comprehensi46
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Sep. 30, 2015 | Jun. 30, 2015 | Sep. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Changes in accumulated other comprehensive income (loss) | ||||||
Balance | $ 423,775 | $ 423,775 | ||||
Reclassifications from OCI to: | ||||||
Cost of Revenue | $ 93,500 | $ 74,968 | 180,862 | $ 147,557 | ||
Balance | 439,658 | 439,658 | ||||
Accumulated Other Comprehensive Loss | ||||||
Reclassifications from OCI to: | ||||||
Balance | (44,190) | (30,721) | (44,190) | (30,721) | ||
Investment securities. | ||||||
Changes in accumulated other comprehensive income (loss) | ||||||
Balance | (33) | (18) | (4) | $ (54) | (18) | (54) |
OCI before reclassifications net of tax | 29 | (91) | 15 | (41) | ||
Reclassifications from OCI to: | ||||||
Comprehensive income (loss), net of tax | 29 | (91) | 14 | (41) | ||
Balance | (4) | (33) | (95) | (4) | (4) | (95) |
Other Comprehensive Income (Loss), Tax | ||||||
Other Comprehensive Income (Loss) before Reclassifications, Tax | 0 | 0 | 0 | 0 | ||
Other Comprehensive Income (Loss), Available-for-sale Securities, Tax | 0 | 0 | 0 | 0 | ||
Investment securities. | Reclassification out of accumulated other comprehensive income | ||||||
Reclassifications from OCI to: | ||||||
Other Income | (1) | |||||
Other Comprehensive Income (Loss), Tax | ||||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Tax | 0 | 0 | 0 | 0 | ||
Currency Translation Adjustments | ||||||
Changes in accumulated other comprehensive income (loss) | ||||||
Balance | (37,179) | (35,565) | (23,454) | (23,253) | (35,565) | (23,253) |
OCI before reclassifications net of tax | (5,195) | (5,249) | (6,809) | (5,450) | ||
Reclassifications from OCI to: | ||||||
Balance | (42,374) | (37,179) | (28,703) | (23,454) | (42,374) | (28,703) |
Cash Flow Hedges | ||||||
Changes in accumulated other comprehensive income (loss) | ||||||
Balance | (1,010) | 2,387 | (3,168) | (3,829) | 2,387 | (3,829) |
OCI before reclassifications net of tax | 99 | 967 | (2,950) | 1,153 | ||
Reclassifications from OCI to: | ||||||
Comprehensive income (loss), net of tax | 1,810 | (3,397) | 2,471 | |||
Balance | (1,010) | (1,010) | (1,358) | (3,168) | (1,010) | (1,358) |
Other Comprehensive Income (Loss), Tax | ||||||
Other Comprehensive Income (Loss) before Reclassifications, Tax | (317) | 105 | (1,144) | 361 | ||
Comprehensive income (loss), Tax | (288) | 460 | (1,198) | 878 | ||
Cash Flow Hedges | Reclassification out of accumulated other comprehensive income | ||||||
Reclassifications from OCI to: | ||||||
Cost of Revenue | (69) | 543 | (294) | 836 | ||
Selling, General and Administrative Expense | (30) | 300 | (153) | 482 | ||
Cash Flow Hedges | Reclassification out of accumulated other comprehensive income | Costs of revenue | ||||||
Other Comprehensive Income (Loss), Tax | ||||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Tax | 18 | 228 | (37) | 329 | ||
Cash Flow Hedges | Reclassification out of accumulated other comprehensive income | Selling, general and administrative expenses | ||||||
Other Comprehensive Income (Loss), Tax | ||||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Tax | 11 | 127 | (17) | 188 | ||
Benefit plans | ||||||
Changes in accumulated other comprehensive income (loss) | ||||||
Balance | (876) | (932) | (591) | (578) | (932) | (578) |
Reclassifications from OCI to: | ||||||
Other adjustments | 34 | 44 | (40) | |||
Comprehensive income (loss), net of tax | 74 | 26 | 130 | 13 | ||
Balance | (802) | (876) | (565) | (591) | (802) | (565) |
Other Comprehensive Income (Loss), Tax | ||||||
Other Comprehensive Income (Loss) before Reclassifications, Tax | 0 | 0 | ||||
Comprehensive income (loss), Tax | 0 | 0 | ||||
Benefit plans, prior service credit (cost) | Reclassification out of accumulated other comprehensive income | ||||||
Reclassifications from OCI to: | ||||||
Cost of Revenue | 3 | 2 | 4 | 4 | ||
Selling, General and Administrative Expense | 1 | 1 | ||||
Benefit plans, prior service credit (cost) | Reclassification out of accumulated other comprehensive income | Costs of revenue | ||||||
Other Comprehensive Income (Loss), Tax | ||||||
Other Comprehensive (Income) Loss, Amortization Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, for Net Prior Service Cost (Credit), Tax | 0 | 0 | ||||
Benefit plans, prior service credit (cost) | Reclassification out of accumulated other comprehensive income | Selling, general and administrative expenses | ||||||
Other Comprehensive Income (Loss), Tax | ||||||
Other Comprehensive (Income) Loss, Amortization Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, for Net Prior Service Cost (Credit), Tax | 0 | 0 | ||||
Benefit plans, net actuarial gain (loss) | Reclassification out of accumulated other comprehensive income | ||||||
Reclassifications from OCI to: | ||||||
Cost of Revenue | 28 | 14 | 56 | 29 | ||
Selling, General and Administrative Expense | $ 9 | $ 10 | $ 25 | $ 19 | ||
Benefit plans, net actuarial gain (loss) | Reclassification out of accumulated other comprehensive income | Costs of revenue | ||||||
Other Comprehensive Income (Loss), Tax | ||||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, for Net Gain (Loss), Tax | 0 | 0 | ||||
Benefit plans, net actuarial gain (loss) | Reclassification out of accumulated other comprehensive income | Selling, general and administrative expenses | ||||||
Other Comprehensive Income (Loss), Tax | ||||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, for Net Gain (Loss), Tax | $ 0 | $ 0 |
Subsequent Events (Details)
Subsequent Events (Details) - Oct. 20, 2015 - Subsequent event - Derivatives designated as hedging instruments - Foreign currency forward contracts € in Thousands, SEK in Thousands, $ in Thousands | GBP (£)$ / £$ / SEK$ / € | SEK$ / £$ / SEK$ / € | EUR (€)$ / £$ / SEK$ / € | USD ($)$ / £$ / SEK$ / € |
U.S. Dollar and U.K. Pound Sterling Forward Contract | ||||
Subsequent Events | ||||
Aggregate notional amount of foreign currency forward contracts | £ 4,978,000 | $ 7,657 | ||
Weighted average settlement rate | $ / £ | 1.538 | 1.538 | 1.538 | 1.538 |
U.S. dollar and Swedish Krona ("SEK") Forward Contract | ||||
Subsequent Events | ||||
Aggregate notional amount of foreign currency forward contracts | SEK 4,402 | $ 534 | ||
Weighted average settlement rate | 0.121 | 0.121 | 0.121 | 0.121 |
U.S. Dollar and Euro Forward Contract | ||||
Subsequent Events | ||||
Aggregate notional amount of foreign currency forward contracts | € 1,265 | $ 1,431 | ||
Weighted average settlement rate | $ / € | 1.131 | 1.131 | 1.131 | 1.131 |
Subsequent Events (Details 2)
Subsequent Events (Details 2) - USD ($) $ in Thousands | Nov. 05, 2015 | Dec. 31, 2013 | Sep. 30, 2015 |
Secured revolving credit facility | |||
Subsequent Events | |||
Maximum borrowing capacity under the credit agreement | $ 25,000 | $ 25,000 | |
Term of senior secured debt financing | 5 years | ||
Secured revolving credit facility | LIBOR | Maximum | |||
Subsequent Events | |||
Interest rate added to the base rate (as a percent) | 1.75% | ||
Subsequent event | JP Morgan Chase Bank and Bank of America | Senior secured debt financing | Forecast | |||
Subsequent Events | |||
Maximum borrowing capacity under the credit agreement | $ 300,000 | ||
Term of senior secured debt financing | 5 years | ||
Subsequent event | JP Morgan Chase Bank and Bank of America | Senior secured debt financing | LIBOR | Forecast | |||
Subsequent Events | |||
Interest rate added to the base rate (as a percent) | 2.75% | ||
Subsequent event | JP Morgan Chase Bank and Bank of America | Revolving credit facility | Forecast | |||
Subsequent Events | |||
Maximum borrowing capacity under the credit agreement | $ 100,000 | ||
Subsequent event | JP Morgan Chase Bank and Bank of America | Multi-draw term loan | Forecast | |||
Subsequent Events | |||
Term loan face value | $ 200,000 | ||
Subsequent event | Virtusa India | Citi | Forecast | |||
Subsequent Events | |||
Commitment period | 2 years | ||
Subsequent event | Virtusa India | Citi | Forecast | MSA termination by either party | |||
Subsequent Events | |||
Number of days written notice required prior to termination of agreement | 30 days | ||
Subsequent event | Virtusa India | Citi | Forecast | MSA termination by client | |||
Subsequent Events | |||
Number of days written notice required prior to termination of agreement | 30 days | ||
Subsequent event | Virtusa India | Citi | Forecast | Time and material engagement termination by client | |||
Subsequent Events | |||
Number of days written notice required prior to termination of agreement | 10 days | ||
Subsequent event | Virtusa India | Polaris | Forecast | |||
Subsequent Events | |||
Total consideration | $ 270,000 | ||
Subsequent event | Virtusa India | Polaris | Certain Polaris Shareholders | Forecast | |||
Subsequent Events | |||
Number of shares purchased | 53,133,127 | ||
Acquisition ownership percentage | 51.70% | ||
Purchase price in cash | $ 180,000 | ||
Subsequent event | Virtusa India | Polaris | Polaris Public Shareholders | Forecast | |||
Subsequent Events | |||
Acquisition ownership percentage | 26.00% | ||
Purchase price in cash | $ 90,000 |