Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Dec. 31, 2019 | Feb. 03, 2020 | |
Document and Entity Information | ||
Entity Registrant Name | VIRTUSA CORP | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Central Index Key | 0001207074 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2019 | |
Trading Symbol | VRTU | |
Amendment Flag | false | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 04-3512883 | |
Current Fiscal Year End Date | --03-31 | |
Entity Address, Address Line One | 132 Turnpike Rd | |
Entity Address, City or Town | Southborough | |
Entity Address, Postal Zip Code | 01772 | |
Entity Address, State or Province | MA | |
City Area Code | 508 | |
Local Phone Number | 389-7300 | |
Entity File Number | 001-33625 | |
Title of 12(b) Security | Common Stock | |
Entity Current Reporting Status | Yes | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 29,860,501 | |
Entity Shell Company | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Mar. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 217,387 | $ 189,676 |
Short-term investments | 20,058 | 33,138 |
Accounts receivable, net of allowance of $1,637 and $2,253 at December 31, 2019 and March 31, 2019, respectively | 149,800 | 162,396 |
Unbilled accounts receivable | 106,716 | 113,431 |
Prepaid expenses | 43,845 | 42,314 |
Restricted cash | 1,735 | 351 |
Asset held for sale | 8,749 | 8,978 |
Other current assets | 32,308 | 29,967 |
Total current assets | 580,598 | 580,251 |
Property and equipment, net | 108,198 | 119,865 |
Operating lease right-of-use assets | 50,894 | |
Investments accounted for using equity method | 1,429 | 1,446 |
Long-term investments | 10 | 322 |
Deferred income taxes | 31,136 | 28,770 |
Goodwill | 276,089 | 279,543 |
Intangible assets, net | 99,519 | 92,440 |
Other long-term assets | 38,085 | 29,836 |
Total assets | 1,185,958 | 1,132,473 |
Current liabilities: | ||
Accounts payable | 30,548 | 46,471 |
Accrued employee compensation and benefits | 78,524 | 74,801 |
Deferred revenue | 6,592 | 6,421 |
Accrued expenses and other | 65,675 | 70,050 |
Current portion of long-term debt | 14,597 | 11,407 |
Operating lease liabilities | 11,385 | |
Income taxes payable | 6,729 | 4,844 |
Total current liabilities | 214,050 | 213,994 |
Deferred income taxes | 14,873 | 15,824 |
Operating lease liabilities, noncurrent | 44,009 | |
Long-term debt, less current portion | 375,164 | 351,320 |
Long-term liabilities | 27,281 | 29,824 |
Total liabilities | 675,377 | 610,962 |
Commitments and contingencies | ||
Series A Convertible Preferred Stock: par value $0.01 per share, 108,000 shares authorized, 108,000 shares issued and outstanding at December 31, 2019 and March 31, 2019; redemption amount and liquidation preference of $108,000 at December 31, 2019 and March 31, 2019 | 107,285 | 107,161 |
Redeemable noncontrolling interest | 23,576 | |
Stockholders' equity: | ||
Undesignated preferred stock, $0.01 par value; Authorized 5,000,000 shares at December 31, 2019 and March 31, 2019 | ||
Common stock, $0.01 par value; Authorized 120,000,000 shares at December 31, 2019 and March 31, 2019; issued 33,246,073 and 33,012,775 shares at December 31, 2019 and March 31, 2019, respectively; outstanding 29,860,509 and 30,132,776 shares at December 31, 2019 and March 31, 2019, respectively | 332 | 330 |
Treasury stock, 3,385,564 and 2,879,999 common shares, at cost, at December 31, 2019 and March 31, 2019, respectively | (58,332) | (39,652) |
Additional paid-in capital | 256,152 | 239,204 |
Retained earnings | 272,673 | 250,279 |
Accumulated other comprehensive loss | (67,529) | (59,387) |
Total Virtusa stockholders' equity | 403,296 | 390,774 |
Noncontrolling interest in subsidiaries | ||
Total Stockholders' equity | 403,296 | 390,774 |
Total liabilities, Series A convertible preferred stock, redeemable noncontrolling interest and stockholders' equity | $ 1,185,958 | $ 1,132,473 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Mar. 31, 2019 |
Consolidated Balance Sheets | ||
Accounts receivable, allowance (in dollars) | $ 1,637 | $ 2,253 |
Series A convertible preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Series A convertible preferred stock, shares authorized | 108,000 | 108,000 |
Series A convertible preferred stock, shares issued | 108,000 | 108,000 |
Series A convertible preferred stock, shares outstanding | 108,000 | 108,000 |
Series A convertible preferred stock, redemption amount | $ 108,000 | $ 108,000 |
Series A convertible preferred stock, liquidation preference | $ 108,000 | $ 108,000 |
Undesignated preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Undesignated preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 120,000,000 | 120,000,000 |
Common stock, shares issued | 33,246,073 | 33,012,775 |
Common stock, shares outstanding | 29,860,509 | 30,132,776 |
Treasury stock, common shares | 3,385,564 | 2,879,999 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Consolidated Statements of Income | ||||
Revenue | $ 335,107 | $ 314,681 | $ 982,632 | $ 920,232 |
Costs of revenue | 236,427 | 221,461 | 709,746 | 654,288 |
Gross profit | 98,680 | 93,220 | 272,886 | 265,944 |
Operating expenses: | ||||
Selling, general and administrative expenses | 68,270 | 73,935 | 209,813 | 218,716 |
Income from operations | 30,410 | 19,285 | 63,073 | 47,228 |
Other income (expense): | ||||
Interest income | 520 | 634 | 1,744 | 1,988 |
Interest expense | (4,873) | (4,597) | (14,616) | (13,365) |
Foreign currency transaction gains (losses), net | (3,065) | 8,319 | (5,300) | (11,794) |
Other, net | 209 | (444) | 1,137 | 998 |
Total other income (expense) | (7,209) | 3,912 | (17,035) | (22,173) |
Income before income tax expense | 23,201 | 23,197 | 46,038 | 25,055 |
Income tax expense | 10,363 | 10,400 | 19,932 | 15,863 |
Net income | 12,838 | 12,797 | 26,106 | 9,192 |
Less: net income attributable to noncontrolling interests, net of tax | 118 | 221 | 450 | 1,407 |
Net income available to Virtusa stockholders | 12,720 | 12,576 | 25,656 | 7,785 |
Less: Series A Convertible Preferred Stock dividends and accretion | 1,087 | 1,087 | 3,262 | 3,262 |
Net income available to Virtusa common stockholders | $ 11,633 | $ 11,489 | $ 22,394 | $ 4,523 |
Basic earnings per share available to Virtusa common stockholders (in dollars per share) | $ 0.39 | $ 0.38 | $ 0.75 | $ 0.15 |
Diluted earnings per share available to Virtusa common stockholders (in dollars per share) | $ 0.38 | $ 0.37 | $ 0.73 | $ 0.15 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Consolidated Statements of Comprehensive Income (Loss) | ||||
Net income | $ 12,838 | $ 12,797 | $ 26,106 | $ 9,192 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment | 4,630 | (2,477) | (2,106) | (20,201) |
Pension plan adjustment | 79 | 73 | (606) | (23) |
Unrealized gain (loss) on available-for-sale debt securities, net of tax effect | 263 | (51) | ||
Unrealized gain (loss) on effective cash flow hedges, net of tax effect | (2,817) | 6,067 | (5,031) | (1,072) |
Other comprehensive income (loss) | 1,892 | 3,926 | (7,743) | (21,347) |
Comprehensive income (loss) | 14,730 | 16,723 | 18,363 | (12,155) |
Less: comprehensive income attributable to noncontrolling interest, net of tax | 484 | 669 | 849 | 134 |
Comprehensive income (loss) available to Virtusa stockholders | $ 14,246 | $ 16,054 | $ 17,514 | $ (12,289) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total Virtusa Stockholders' Equity | Common Stock | Treasury Stock | Additional Paid In Capital | Retained Earnings | Accumulated Other Comprehensive Income | Non-controlling interest | Redeemable Noncontrolling Interest | Total |
Balance at Mar. 31, 2018 | $ 418,623 | $ 325 | $ (39,652) | $ 260,612 | $ 238,019 | $ (40,681) | $ 17,460 | $ 436,083 | |
Balance (in shares) at Mar. 31, 2018 | 32,469,092 | (2,879,999) | |||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Proceeds from the exercise of stock options | 294 | 294 | 294 | ||||||
Proceeds from the exercise of stock options (in shares) | 33,173 | ||||||||
Proceeds from the exercise of subsidiary stock options | 196 | 196 | 196 | ||||||
Restricted stock awards vested | $ 1 | (1) | |||||||
Restricted stock awards vested (in shares) | 95,432 | ||||||||
Restricted stock awards withheld for tax | (2,450) | (2,450) | (2,450) | ||||||
Share-based compensation | 7,908 | 7,908 | 7,908 | ||||||
Subsidiary share-based compensation | 30 | 30 | 30 | ||||||
Cumulative effect of adopting ASC Topic 606, net of tax | 464 | 464 | 464 | ||||||
Series A Convertible Preferred Stock dividends and accretion | (1,087) | (1,087) | (1,087) | ||||||
Other comprehensive income (loss) | (13,060) | ||||||||
Other comprehensive income (loss) | (13,060) | (1,466) | (14,526) | ||||||
Net income (loss) | (6,296) | (6,296) | |||||||
Net income | 731 | ||||||||
Net income (loss) | (5,565) | ||||||||
Balance at Jun. 30, 2018 | 404,622 | $ 326 | $ (39,652) | 266,589 | 231,100 | (53,741) | 16,725 | 421,347 | |
Balance (in shares) at Jun. 30, 2018 | 32,597,697 | (2,879,999) | |||||||
Balance at Mar. 31, 2018 | 418,623 | $ 325 | $ (39,652) | 260,612 | 238,019 | (40,681) | 17,460 | 436,083 | |
Balance (in shares) at Mar. 31, 2018 | 32,469,092 | (2,879,999) | |||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Purchase of redeemable noncontrolling interest related to Polaris | 30,387 | ||||||||
Net income (loss) | 7,785 | ||||||||
Net income | (1,407) | ||||||||
Balance at Dec. 31, 2018 | 380,814 | $ 328 | $ (39,652) | 237,887 | 243,006 | (60,755) | $ 24,924 | 380,814 | |
Balance (in shares) at Dec. 31, 2018 | 32,781,374 | (2,879,999) | |||||||
Balance at Jun. 30, 2018 | 404,622 | $ 326 | $ (39,652) | 266,589 | 231,100 | (53,741) | 16,725 | 421,347 | |
Balance (in shares) at Jun. 30, 2018 | 32,597,697 | (2,879,999) | |||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Proceeds from the exercise of stock options | 134 | 134 | 134 | ||||||
Proceeds from the exercise of stock options (in shares) | 9,918 | ||||||||
Proceeds from the exercise of subsidiary stock options | 64 | 64 | 3 | 64 | |||||
Restricted stock awards vested | $ 2 | (2) | |||||||
Restricted stock awards vested (in shares) | 162,090 | ||||||||
Restricted stock awards withheld for tax | (5,152) | (5,152) | (5,152) | ||||||
Share-based compensation | 8,022 | 8,022 | 8,022 | ||||||
Reclassification of previously recognized stock compensation related to liabilities classified awards for Polaris to liabilities | (617) | (617) | (617) | ||||||
Adjustments of redeemable noncontrolling interest to redemption value | (37,842) | (37,842) | (16,450) | 54,850 | (54,292) | ||||
Purchase of redeemable noncontrolling interest related to Polaris | (28,395) | ||||||||
Foreign currency translation on redeemable noncontrolling interest | (2,045) | ||||||||
Series A Convertible Preferred Stock dividends and accretion | (1,088) | (1,088) | (1,088) | ||||||
Other comprehensive income (loss) | (10,492) | (10,492) | (10,492) | ||||||
Other comprehensive income (loss) | (255) | ||||||||
Net income (loss) | 1,505 | 1,505 | 1,505 | ||||||
Net income | 456 | ||||||||
Balance at Sep. 30, 2018 | 359,156 | $ 328 | $ (39,652) | 231,196 | 231,517 | (64,233) | 275 | 24,614 | 359,431 |
Balance (in shares) at Sep. 30, 2018 | 32,769,705 | (2,879,999) | |||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Proceeds from the exercise of subsidiary stock options | 50 | ||||||||
Restricted stock awards vested (in shares) | 11,669 | ||||||||
Restricted stock awards withheld for tax | (226) | (226) | (226) | ||||||
Share-based compensation | 6,993 | 6,993 | 6,993 | ||||||
Subsidiary share-based compensation | 6 | 6 | 6 | ||||||
Other | (115) | (115) | (290) | (405) | |||||
Adjustments of redeemable noncontrolling interest to redemption value | 33 | 33 | 603 | 33 | |||||
Purchase of redeemable noncontrolling interest related to Polaris | (1,992) | ||||||||
Foreign currency translation on noncontrolling interest | 995 | ||||||||
Series A Convertible Preferred Stock dividends and accretion | (1,087) | (1,087) | (1,087) | ||||||
Other comprehensive income (loss) | 3,478 | 3,478 | 448 | 3,478 | |||||
Net income (loss) | 12,576 | 12,576 | 12,576 | ||||||
Net income | 15 | 206 | (221) | ||||||
Net income (loss) | 12,591 | ||||||||
Balance at Dec. 31, 2018 | 380,814 | $ 328 | $ (39,652) | 237,887 | 243,006 | (60,755) | 24,924 | 380,814 | |
Balance (in shares) at Dec. 31, 2018 | 32,781,374 | (2,879,999) | |||||||
Balance at Mar. 31, 2019 | 390,774 | $ 330 | $ (39,652) | 239,204 | 250,279 | (59,387) | 23,576 | $ 390,774 | |
Balance (in shares) at Mar. 31, 2019 | 33,012,775 | (2,879,999) | 30,132,776 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Proceeds from the exercise of stock options | 194 | 194 | 8 | $ 194 | |||||
Proceeds from the exercise of stock options (in shares) | 13,416 | ||||||||
Restricted stock awards vested | $ 1 | (1) | |||||||
Restricted stock awards vested (in shares) | 96,763 | ||||||||
Restricted stock awards withheld for tax | (2,011) | (2,011) | (2,011) | ||||||
Share-based compensation | 6,674 | 6,674 | 6,674 | ||||||
Adjustments of redeemable noncontrolling interest to redemption value | 18 | 18 | 170 | 18 | |||||
Purchase of redeemable noncontrolling interest related to Polaris | (5,549) | ||||||||
Foreign currency translation on redeemable noncontrolling interest | 116 | ||||||||
Series A Convertible Preferred Stock dividends and accretion | (1,087) | (1,087) | (1,087) | ||||||
Other comprehensive income (loss) | (1,194) | (1,194) | 144 | (1,194) | |||||
Net income (loss) | 5,834 | 5,834 | 5,834 | ||||||
Net income | 186 | ||||||||
Balance at Jun. 30, 2019 | 399,202 | $ 331 | $ (39,652) | 244,078 | 255,026 | (60,581) | 18,651 | 399,202 | |
Balance (in shares) at Jun. 30, 2019 | 33,122,954 | (2,879,999) | |||||||
Balance at Mar. 31, 2019 | 390,774 | $ 330 | $ (39,652) | 239,204 | 250,279 | (59,387) | 23,576 | $ 390,774 | |
Balance (in shares) at Mar. 31, 2019 | 33,012,775 | (2,879,999) | 30,132,776 | ||||||
Balance at Sep. 30, 2019 | 382,269 | $ 332 | $ (58,332) | 248,284 | 261,040 | (69,055) | 15,128 | $ 397,397 | |
Balance (in shares) at Sep. 30, 2019 | 33,224,132 | (3,385,564) | |||||||
Balance at Mar. 31, 2019 | 390,774 | $ 330 | $ (39,652) | 239,204 | 250,279 | (59,387) | 23,576 | $ 390,774 | |
Balance (in shares) at Mar. 31, 2019 | 33,012,775 | (2,879,999) | 30,132,776 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Repurchase of common stock (in shares) | (505,565) | ||||||||
Purchase of redeemable noncontrolling interest related to Polaris | $ 8,675 | ||||||||
Net income (loss) | 25,656 | ||||||||
Net income | (450) | ||||||||
Balance at Dec. 31, 2019 | 403,296 | $ 332 | $ (58,332) | 256,152 | 272,673 | (67,529) | $ 403,296 | ||
Balance (in shares) at Dec. 31, 2019 | 33,246,073 | (3,385,564) | 29,860,509 | ||||||
Balance at Jun. 30, 2019 | 399,202 | $ 331 | $ (39,652) | 244,078 | 255,026 | (60,581) | 18,651 | $ 399,202 | |
Balance (in shares) at Jun. 30, 2019 | 33,122,954 | (2,879,999) | |||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Restricted stock awards vested | $ 1 | (1) | |||||||
Restricted stock awards vested (in shares) | 101,178 | ||||||||
Restricted stock awards withheld for tax | (1,647) | (1,647) | (1,647) | ||||||
Share-based compensation | 5,829 | 5,829 | 5,829 | ||||||
Repurchase of common stock | (18,680) | $ (18,680) | (18,680) | ||||||
Repurchase of common stock (in shares) | (505,565) | ||||||||
Adjustments of redeemable noncontrolling interest to redemption value | 25 | 25 | 101 | 25 | |||||
Purchase of redeemable noncontrolling interest related to Polaris | (3,126) | ||||||||
Foreign currency translation on redeemable noncontrolling interest | (533) | ||||||||
Reclassification of noncontrolling interest from temporary equity to permanent equity | 15,093 | $ (15,093) | 15,093 | ||||||
Series A Convertible Preferred Stock dividends and accretion | (1,088) | (1,088) | (1,088) | ||||||
Other comprehensive income (loss) | (8,474) | (8,474) | (111) | (8,585) | |||||
Net income (loss) | 7,102 | 7,102 | |||||||
Net income | 146 | ||||||||
Net income (loss) | 7,248 | ||||||||
Balance at Sep. 30, 2019 | 382,269 | $ 332 | $ (58,332) | 248,284 | 261,040 | (69,055) | 15,128 | 397,397 | |
Balance (in shares) at Sep. 30, 2019 | 33,224,132 | (3,385,564) | |||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Proceeds from the exercise of stock options | 233 | 233 | 233 | ||||||
Proceeds from the exercise of stock options (in shares) | 15,914 | ||||||||
Restricted stock awards vested (in shares) | 6,027 | ||||||||
Restricted stock awards withheld for tax | (126) | (126) | (126) | ||||||
Share-based compensation | 5,750 | 5,750 | 5,750 | ||||||
Reclassification of noncontrolling interest from permanet equity to liability. | (13,564) | (13,564) | |||||||
Adjustments for reclassification of noncontrolling interest | 2,011 | 2,011 | (2,048) | (37) | |||||
Series A Convertible Preferred Stock dividends and accretion | (1,087) | (1,087) | (1,087) | ||||||
Other comprehensive income (loss) | 1,526 | 1,526 | 366 | 1,892 | |||||
Net income (loss) | 12,720 | 12,720 | 12,720 | ||||||
Net income | $ 118 | (118) | |||||||
Net income (loss) | 12,838 | ||||||||
Balance at Dec. 31, 2019 | $ 403,296 | $ 332 | $ (58,332) | $ 256,152 | $ 272,673 | $ (67,529) | $ 403,296 | ||
Balance (in shares) at Dec. 31, 2019 | 33,246,073 | (3,385,564) | 29,860,509 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 26,106 | $ 9,192 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Depreciation and amortization | 23,672 | 21,696 |
Share-based compensation expense | 18,285 | 24,104 |
Provision (recovery) for doubtful accounts | 26 | (549) |
Gain on disposal of property and equipment | (403) | (115) |
Impairment of investment | 184 | 885 |
Foreign currency transaction losses, net | 5,300 | 11,794 |
Amortization of discounts and premiums on investments | (6) | 84 |
Amortization of debt issuance cost | 863 | 819 |
Deferred income taxes, net | (970) | (6,225) |
Net changes in operating assets and liabilities | ||
Accounts receivable and unbilled receivable | 19,129 | 4,780 |
Prepaid expenses and other current assets | (1,258) | (7,729) |
Other long-term assets | (11,239) | (11,702) |
Accounts payable | (12,730) | 12,014 |
Accrued employee compensation and benefits | 1,011 | (9,041) |
Accrued expenses and other current liabilities | 5,495 | 13,135 |
Operating lease liabilities | 172 | |
Income taxes payable | 2,537 | 2,975 |
Other long-term liabilities | (1,720) | 3,705 |
Net cash provided by operating activities | 74,454 | 69,822 |
Cash flows from investing activities: | ||
Proceeds from sale of property and equipment | 825 | 568 |
Purchase of short-term investments | (34,969) | (84,185) |
Proceeds from sale or maturity of short-term investments | 47,716 | 88,204 |
Payments for asset acquisitions | (9,192) | |
Payment of contigent consideration of asset acquisition | (942) | |
Business acquisition, net of cash acquired | (1,919) | |
Payment of deferred consideration related to business acquisition | (17,500) | |
Purchase of property and equipment | (10,865) | (24,715) |
Net cash used in investing activities | (24,927) | (22,047) |
Cash flows from financing activities: | ||
Payment of debt issuance costs | (808) | |
Proceeds from revolving credit facility | 36,000 | 32,000 |
Payment of debt | (9,141) | (9,375) |
Repurchase of common stock | (18,680) | |
Payment of other noncontrolling interest | (373) | |
Payments of withholding taxes related to net share settlements of restricted stock | (3,783) | (7,828) |
Purchase of redeemable noncontrolling interest related to Polaris | (8,675) | (30,387) |
Payment of noncontrolling interest | (12,534) | |
Principal payments on capital lease obligation | (36) | (65) |
Payment of contingent consideration related to acquisitions | (100) | |
Payment of dividend on Series A Convertible Preferred Stock | (3,138) | (3,138) |
Net cash used in financing activities | (20,275) | (18,307) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (131) | (13,530) |
Net increase in cash and cash equivalents and restricted cash | 29,121 | 15,938 |
Cash, cash equivalents and restricted cash, beginning of year | 190,113 | 195,236 |
Cash, cash equivalents and restricted cash, end of period | 219,234 | 211,174 |
Parent | ||
Cash flows from financing activities: | ||
Proceeds from exercise of common stock options | 427 | 428 |
Subsidiaries | ||
Cash flows from financing activities: | ||
Proceeds from exercise of common stock options | $ 93 | $ 531 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Mar. 31, 2019 |
Balance sheet classification | ||
Cash and cash equivalents | $ 217,387 | $ 189,676 |
Restricted cash in current assets | 1,735 | 351 |
Restricted cash in other long-term assets | 112 | 86 |
Total restricted cash | 1,847 | 437 |
Total cash, cash equivalents and restricted cash | $ 219,234 | $ 190,113 |
Nature of the Business
Nature of the Business | 9 Months Ended |
Dec. 31, 2019 | |
Nature of the Business | |
Nature of the Business | (1) Nature of the Business Virtusa Corporation (the “Company”, “Virtusa”, “we”, “us” or “our”) is a global provider of digital engineering and information technology (“IT”) outsourcing services that accelerate business outcomes for our clients. We support Forbes Global 2000 clients across large, consumer facing industries like banking, financial services, insurance, healthcare, communications, and media and entertainment, as these clients seek to improve their business performance through accelerating revenue growth, delivering compelling consumer experiences, improving operational efficiencies, and lowering overall IT costs. We provide services across the entire spectrum of the IT services lifecycle, from strategy and consulting to technology and user experience (“UX”) design, development of IT applications, systems integration, testing and business assurance, and maintenance and support services, including infrastructure and managed services. We help our clients solve critical business problems by leveraging a combination of our distinctive consulting approach, unique platforming methodology, and deep domain and technology expertise. Our services enable our clients to accelerate business outcomes by consolidating, rationalizing and modernizing their core customer-facing processes into one or more core systems. We deliver cost-effective solutions through a global delivery model, applying advanced delivery methods such as Agile, an industry standard technique designed to accelerate application development. We also use our consulting methodology, which we refer to as Accelerated Solution Design (“ASD”), which is a collaborative decision-making and design process performed with the client to ensure our solutions meet the client’s specifications and requirements. Our industry leading business transformational solutions combine deep domain expertise with our strengths in software engineering and business consulting to support our clients’ business-imperative initiatives across business growth and IT operations. Headquartered in Massachusetts, we have offices in the United States, Canada, the United Kingdom, the Netherlands, Germany, Switzerland, Sweden, Austria, the United Arab Emirates, Hong Kong, Japan, Qatar, Mexico, |
Unaudited Interim Financial Inf
Unaudited Interim Financial Information | 9 Months Ended |
Dec. 31, 2019 | |
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, 2019 included in the Company’s Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission, or SEC, on May 24, 2019. 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 accompanying financial statements have been prepared on a consolidated basis and reflect the financial statements of Virtusa Corporation and all of its subsidiaries that are directly or indirectly more than 50% owned or controlled. When the Company does not have a controlling interest in an entity, but exerts a significant influence on the entity, the Company applies the equity method of accounting. For those majority-owned subsidiaries that are not 100% owned by the Company, the interests of the minority owners are accounted for as noncontrolling interests. 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 re-evaluates 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, 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 December 31, 2019 and March 31, 2019, 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, other accrued expenses and long-term debt, 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 Recently Adopted Accounting Pronouncements Unless otherwise discussed below, the adoption of new accounting standards did not have an impact on the consolidated financial statements. In February 2016, the FASB issued an update (ASU 2016-02) to the standard on leases to increase transparency and comparability among organizations. The FASB subsequently issued ASU 2018-10 and ASU 2018-11 in July 2018, ASU 2018-20 in December 2018 and ASU 2019-01 in March 2019, which provide clarifications and improvements to this new standard. ASU 2018-11 also provides the optional transition method which allows companies to apply the new lease standard at the adoption date instead of at the earliest comparative period presented. The new standard replaces the existing guidance on leases and requires the lessee to recognize a right-of-use (“ROU”) asset and a lease liability for all leases with lease terms equal to or greater than twelve months. For finance leases, the lessee would recognize interest expense and amortization of the ROU asset, and for operating leases, the lessee would recognize total lease expense on a straight-line basis. For public business entities this standard is effective for the annual periods beginning after December 15, 2018, and interim periods within those annual periods. The standard permits the use of either retrospective to each prior reporting period presented with the cumulative effect of adoption recognized at the beginning of the earliest period presented or retrospective to the beginning of the period of adoption through a cumulative-effect adjustment (the “Modified Retrospective Effective Date Method”). The Company adopted this standard, (“ASC Topic 842”) effective April 1, 2019, using a Modified Retrospective Effective Date Method. The Company has elected the package of practical expedients which permits the Company to not reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs. The Company did not elect the use of hindsight practical expedient to reevaluate the lease term of existing contracts. Prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historic accounting policies. The impact of adoption primarily relates to the recognition of ROU operating lease assets and operating lease liabilities on the Company’s unaudited consolidated balance sheets for all operating leases with a term greater than twelve months. The adoption of this standard on April 1, 2019 resulted in the recognition of ROU assets for operating leases of $54,762 and operating lease liabilities of $59,157 . The Company’s accounting for finance leases (formerly capital leases) remains substantially unchanged. The adoption of this standard did not have an impact on the consolidated statements of income and comprehensive income (loss), consolidated statement of changes in stockholders’ equity or the consolidated statement of cash flows. See Note 7 “Leases” for additional information regarding leases. In August 2018, the FASB issued ASU No. 2018-15, Intangibles (Topic 350): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract , which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This standard requires customers to amortize the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement. The standard also requires the entity to present the expense related to the capitalized implementation costs in the same line item in the statement of income as the fees associated with the hosting element (service) of the arrangement and classify payments for capitalized implementation costs in the statement of cash flows in the same manner as payments made for fees associated with the hosting element. The entity is also required to present the capitalized implementation costs in the statement of financial position in the same line item that a prepayment for the fees of the associated hosting arrangement. For public companies, the amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. The Company early adopted this standard, as of July 1, 2019, on a prospective basis for applicable implementation costs. The adoption of this standard did not have a material impact on the consolidated balance sheet, consolidated statements of income, consolidated statement of changes in stockholders’ equity or the consolidated statement of cash flows. New Accounting Pronouncements Unless otherwise discussed below, the Company believes the impact of recently issued standards that are not yet effective will not have a material impact on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Measurement of Credit Losses on Financial Instruments, which modifies the measurement of expected credit losses of certain financial instruments. The FASB subsequently issued ASU 2019-04 in April 2019, ASU 2019-05 in May 2019 and ASU 2019-11 in November 2019 which provide clarifications and improvements to this new standard. The FASB also issued ASU 2019-10 in November 2019, which amends the mandatory effective date for all other than public entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. This standard update requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. This update is effective for public entities from fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. The effect on the consolidated financial statements will largely depend on the composition and credit quality of our investment portfolio and the economic conditions and forecasts at the time of adoption. Based on the current composition of our investment portfolio, current market conditions, and historical credit loss activity, the impact on our consolidated financial statements and related disclosures is not expected to be material. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740), which enhances and simplifies various aspects of the income tax accounting guidance, including requirements such as step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction, ownership changes in investments, and interim-period accounting for enacted changes in tax law. The standard will be effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the effect of this new standard will have on its consolidated financial statements. |
Earnings per Share
Earnings per Share | 9 Months Ended |
Dec. 31, 2019 | |
Earnings per Share | |
Earnings per Share | (3) Earnings per Share Basic earnings per share available to Virtusa common stockholders (“EPS”) is computed by dividing net income, less any dividends and accretion of issuance cost on the Series A Convertible Preferred Stock by the weighted average number of shares of common stock outstanding for the period. In computing diluted EPS, the Company adjusts the numerator used in the basic EPS computation, subject to anti-dilution requirements, to add back the dividends (declared or cumulative undeclared) applicable to the Series A Convertible Preferred Stock. Such add-back would also include any adjustments to equity in the period to accrete the Series A Convertible Preferred Stock to its redemption price. The Company adjusts the denominator used in the basic EPS computation, subject to anti-dilution requirements, to include the dilution from potential shares resulting from the issuance of restricted stock units, unvested restricted stock and stock options along with the conversion of the Series A Convertible Preferred Stock to common stock. The following table sets forth the computation of basic and diluted EPS for the periods set forth below: The components of basic earnings per share are as follows: Three Months Ended Nine Months Ended December 31, December 31, 2019 2018 2019 2018 Numerators: Net income available to Virtusa stockholders $ 12,720 $ 12,576 $ 25,656 $ 7,785 Less: Series A Convertible Preferred Stock dividends and accretion 1,087 1,087 3,262 3,262 Net income available to Virtusa common stockholders $ 11,633 $ 11,489 $ 22,394 $ 4,523 Denominators: Basic weighted average common shares outstanding 29,849,368 29,893,220 30,041,740 29,764,507 Basic earnings per share available to Virtusa common stockholders $ 0.39 $ 0.38 $ 0.75 $ 0.15 The components of diluted earnings per share are as follows: Three Months Ended Nine Months Ended December 31, December 31, 2019 2018 2019 2018 Numerators: Net income available to Virtusa common stockholders $ 11,633 $ 11,489 $ 22,394 $ 4,523 Add : Series A Convertible Preferred Stock dividends and accretion 1,087 1,087 — — Net income available to Virtusa common stockholders and assumed conversion $ 12,720 $ 12,576 $ 22,394 $ 4,523 Denominators: Basic weighted average common shares outstanding 29,849,368 29,893,220 30,041,740 29,764,507 Dilutive effect of Series A Convertible Preferred Stock if converted 3,000,000 3,000,000 — — Dilutive effect of employee stock options and unvested restricted stock awards and restricted stock units 608,863 768,508 658,529 833,607 Weighted average shares—diluted 33,458,231 33,661,728 30,700,269 30,598,114 Diluted earnings per share available to Virtusa common stockholders $ 0.38 $ 0.37 $ 0.73 $ 0.15 During the three months ended December 31, 2019 and 2018, unvested restricted stock awards and unvested restricted stock units issuable for, and options to purchase 24,037 and 20,617 shares of common stock, respectively, were excluded from the calculations of diluted earnings per share as their effect would have been anti-dilutive. For the three months ended December 31, 2019 and 2018, all of the 3,000,000 shares of Series A Convertible Preferred Stock were included in the calculations of diluted earnings per share as their effect was dilutive using the if-converted method. During the nine months ended December 31, 2019 and 2018, unvested restricted stock awards and unvested restricted stock units issuable for, and options to purchase 100,434 and 13,745 shares of common stock, respectively, were excluded from the calculations of diluted earnings per share as their effect would have been anti-dilutive. For the nine months ended December 31, 2019 and 2018, all of the 3,000,000 shares of Series A Convertible Preferred Stock were excluded from the calculations of diluted earnings per share as their effect would have been anti-dilutive using the if-converted method. |
Investment Securities
Investment Securities | 9 Months Ended |
Dec. 31, 2019 | |
Investment Securities. | |
Investment Securities | (4) Investment Securities At December 31, 2019 and March 31, 2019, all of the Company’s investment securities were classified as available-for-sale debt securities and equity securities. These 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 for a discussion of the fair value of the Company’s other financial instruments). The following is a summary of investment securities at December 31, 2019: Gross Gross Amortized Unrealized Unrealized Cost Gains Losses Fair Value Available-for-sale debt securities: Time Deposits: Current $ 6,849 $ — — $ 6,849 Equity securities: Mutual funds: Current 13,060 149 — 13,209 Equity Shares/ Options: Non-current 1 9 — 10 Total available-for-sale debt securities and equity securities $ 19,910 $ 158 $ — $ 20,068 The following is a summary of investment securities at March 31, 2019: Gross Gross Amortized Unrealized Unrealized Cost Gains Losses Fair Value Available-for-sale debt securities: Corporate bonds: Current $ 2,779 $ 1 $ (2) $ 2,778 Non-current — — — — Preference shares: 188 — — 188 Agency and short-term notes: Current 1,492 1 — 1,493 Time deposits: Current 15,861 — — 15,861 Equity securities: Mutual funds: Current 12,912 94 — 13,006 Equity Shares/ Options: Non-current 8 126 — 134 Total available-for-sale debt and equity securities $ 33,240 $ 222 $ (2) $ 33,460 The Company evaluates investments with unrealized losses to determine if the losses are other than 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 that the Company will not be required to sell such investments prior to the recovery of their carrying value. Proceeds from sales of available-for-sale debt and equity 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 Nine Months Ended December 31, December 31, 2019 2018 2019 2018 Proceeds from sales or maturities of available-for-sale debt securities and equity securities $ 9,476 $ 27,633 $ 47,716 $ 88,204 Gross gains $ 123 $ 253 $ 563 $ 639 Gross losses — — — (32) Net realized gains on sales of available-for-sale debt securities and equity securities $ 123 $ 253 $ 563 $ 607 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Dec. 31, 2019 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | (5) Fair Value of Financial Instruments The Company carries certain assets and liabilities at fair value on a recurring basis on its consolidated balance sheets. The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis at December 31, 2019: Level 1 Level 2 Level 3 Total Assets: Investments: Available-for-sale debt securities—current $ — $ 6,849 $ — $ 6,849 Equity securities—current — 13,209 — 13,209 Available-for-sale debt securities—non-current — — — — Equity securities—non-current — 10 — 10 Derivative financial instruments: Foreign currency derivative contracts — 2,152 — 2,152 Interest rate swap contracts — 288 — 288 Total assets $ — $ 22,508 $ — $ 22,508 Liabilities: Foreign currency derivative contracts — 2,264 — 2,264 Interest rate swap contracts — 5,836 — 5,836 Total liabilities $ — $ 8,100 $ — $ 8,100 The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis at March 31, 2019: Level 1 Level 2 Level 3 Total Assets: Investments: Available-for-sale debt securities—current $ — $ 20,132 — $ 20,132 Equity securities—current — 13,006 — 13,006 Available-for-sale debt securities—non-current — 188 — 188 Equity securities—non-current — 134 — 134 Derivative financial instruments: Foreign currency derivative contracts — 3,411 — 3,411 Interest rate swap contracts — 1,349 — 1,349 Total assets $ — $ 38,220 $ — $ 38,220 Liabilities: Foreign currency derivative contracts $ — 321 $ — 321 Interest rate swap contracts — 3,633 — 3,633 Total liabilities $ — $ 3,954 $ — $ 3,954 |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Dec. 31, 2019 | |
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, consolidated statements of income and consolidated statement of cash flows from all foreign currencies, including most significantly the U.K. pound sterling and Indian 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. There is no margin required, no cash collateral posted or received by us related to our foreign exchange forward contracts. The U.S. dollar notional value of all outstanding foreign currency derivative contracts was $133,032 and $118,557 at December 31, 2019 and March 31, 2019, respectively. Unrealized net gains related to these contracts which are expected to be reclassified from accumulated other comprehensive income (loss) (“AOCI”) to earnings during the next 12 months are $52 at December 31, 2019. At December 31, 2019, the maximum outstanding term of any derivative instrument was 15 months . The Company also uses interest rate swaps to mitigate the Company’s interest rate risk on the Company’s variable rate debt. The Company’s objective is to limit the variability of cash flows associated with changes in LIBOR interest rate payments due on the Credit Agreement (See Note 13), by using pay-fixed, receive-variable interest rate swaps to offset the future variable rate interest payments. The Company will recognize these transactions in accordance with ASC 815 "Derivatives and Hedging," and have designated the swaps as cash flow hedges. The Company purchased interest rate swaps in July 2016 with an effective date of July 2017 and in November 2018. The July 2016 interest rate swaps are at a blended weighted average of 1.025% and the Company will receive 1-month LIBOR on the same notional amounts. The November 2018 interest rate swaps were entered into to mitigate the interest rate risk associated with the Credit Agreement executed in February 2018 and subsequent additional borrowings. The November 2018 interest rate swaps are at a fixed rate of 2.85% and are designed to maintain a 50% coverage of our LIBOR debt, therefore the notional amount changes over the life of the swap to retain the 50% coverage target. At December 31, 2019, the total notional amounts of the interest rate swaps were $178,800 with remaining maturity of approximately 4 years . The unrealized losses associated with the swap agreements was $5,548 and $2,284 at December 31, 2019 and March 31, 2019, respectively, which represents the estimated amount that the Company would pay to the counterparties in the event of an early termination. The following table sets forth the fair value of derivative instruments included in the consolidated balance sheets at December 31, 2019 and March 31, 2019: Derivatives designated as hedging instruments December 31, 2019 March 31, 2019 Foreign currency exchange contracts: Other current assets $ 2,058 $ 3,264 Other long-term assets $ 94 $ 147 Accrued expenses and other $ 2,006 $ 318 Long-term liabilities $ 258 $ 3 December 31, 2019 March 31, 2019 Interest rate swap contracts Other long-term assets $ 288 $ 1,349 Long-term liabilities $ 5,836 $ 3,633 The following tables set forth the effect of the Company’s foreign currency exchange contracts and interest rate swap contracts on the consolidated financial statements of the Company for the three and nine months ended December 31, 2019 and 2018: Amount of Gain or (Loss) Recognized in AOCI on Derivatives Derivatives Designated as Three Months Ended December 31, Nine Months Ended December 31, Cash Flow Hedging Relationships 2019 2018 2019 2018 Foreign currency exchange contracts $ (3,158) $ 9,398 $ 148 $ (2,203) Interest rate swaps $ 782 $ (2,776) $ (3,054) $ (2,310) Location of Gain or (Loss) Reclassified Amount of Gain or (Loss) Reclassified from AOCI into Income from AOCI into Income (loss) (Effective Three Months Ended December 31, Nine Months Ended December 31, Portion) 2019 2018 2019 2018 Revenue $ — $ (510) $ (18) $ (1,673) Costs of revenue $ 827 $ (846) $ 2,351 $ (1,187) Operating expenses $ 337 $ (405) $ 1,020 $ (578) Interest Expenses $ (100) $ 288 $ 209 $ 731 Amount of Gain or (Loss) Recognized in Income (loss) on Derivatives Three Months Ended Nine Months Ended Derivatives not Designated Location of Gain Or (Loss) December 31, December 31, as Hedging Instruments Recognized in Income (loss) on Derivatives 2019 2018 2019 2018 Foreign currency exchange contracts Revenue $ (1,449) $ 1,131 $ (205) $ 2,237 Costs of revenue $ 1,105 $ (784) $ 380 $ (1,537) Selling, general and administrative expenses $ 114 $ (75) $ 29 $ (93) |
Leases
Leases | 9 Months Ended |
Dec. 31, 2019 | |
Leases | |
Leases | (7) Leases The Company’s leased assets primarily consist of operating leases for office space, equipment and vehicles. At the inception of a contract, the Company determines whether a contract contains a lease, and if a lease is identified, whether it is an operating or finance lease. In determining whether a contract contains a lease, the Company considers whether (1) it has the right to obtain substantially all of the economic benefits from the use of the asset throughout the term of the contract, (2) it has the right to direct how and for what purpose the asset is used throughout the term of the contract and (3) it has the right to operate the asset throughout the term of the contract without the lessor having the right to change the terms of the contract. The Company leases vehicles in certain locations primarily as an employee benefit and these leases are classified as either operating or finance leases. The Company does not have finance leases that are material to the Company’s consolidated financial statements. Some of the Company’s lease agreements contain both lease and non-lease components. The Company separates lease components from non-lease components for all the Company’s lease assets. The consideration in the lease contract is allocated to the lease and non-lease components based on the estimated standalone prices. A portion of the leases for office space contain certain charges for additional rent expenses that are variable. Due to this variability, the cash flows associated with these charges are not included in the minimum lease payments used in determining the ROU lease assets and associated lease liabilities. The Company’s ROU lease assets represent the Company’s right to use an underlying asset for the lease term and may include any advance lease payments made and any initial direct costs and exclude lease incentives. The Company’s lease liabilities represent the Company’s obligation to make lease payments arising from the contractual terms of the lease. ROU lease assets and lease liabilities are recognized at the commencement of the lease and are calculated using the present value of lease payments over the lease term. The Company’s operating lease agreements do not provide enough information to arrive at an implicit interest rate. Therefore, the Company uses its estimated incremental borrowing rate based on information available at the commencement date of the lease to calculate the present value of the lease payments. The Company determines the incremental borrowing rate on a lease-by-lease basis by developing an estimated borrowing rate of the Company for a fully collateralized obligation with a term similar to the lease term, and adjusts the rate to reflect the incremental risk associated with the currency in which the lease is denominated. The following table provides information on the components of the Company’s operating leases included in its unaudited consolidated balance sheets: Leases Location on Consolidated Balance Sheets December 31, 2019 Assets Operating lease assets Operating lease right-of-use of assets $ 50,894 Liabilities Current Operating lease liabilities Operating lease liabilities $ 11,385 Noncurrent Operating lease liabilities Operating lease liabilities, noncurrent $ 44,009 Total $ 55,394 The Company’s leases have remaining lease terms ranging from 1 year to 9 years . Certain lease agreements, mainly for office space, include options to extend or terminate the lease before the expiration date. The Company includes such options when determining the lease term when it is reasonably certain that the Company will exercise that option. The following table provides the components of lease expense related to our operating leases: Three Months Ended Nine Months Ended Location on Consolidated Statements of Income December 31, 2019 December 31, 2019 Operating lease cost: Operating lease cost Selling, general and administrative expenses $ 3,789 $ 11,403 Variable lease cost Selling, general and administrative expenses $ 30 $ 74 Short-term lease cost Selling, general and administrative expenses $ 90 $ 359 Less: Sublease income Selling, general and administrative expenses $ (353) $ (870) Total operating lease cost $ 3,556 $ 10,966 The following table provides supplemental cash flow information related to our operating leases: Nine Months Ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used for operating leases $ 11,217 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 5,714 The following table provides information on the weighted average remaining lease term and weighted average discount rate related to our operating leases: December 31, 2019 Weighted average remaining lease term, in years: Operating leases 5.56 Weighted average discount rate: Operating leases 7.49 % There were no lease agreements that contained restrictive covenants or material residual value guarantees as of December 31, 2019. The following table provides the schedule of maturities of the Company’s operating lease liabilities, under ASC Topic 842, as of December 31, 2019: Operating leases December 31, 2019 2020-remainder of year $ 3,784 2021 14,901 2022 13,663 2023 10,927 2024 6,975 2025 and thereafter 17,110 Total lease payments $ 67,360 Interest (11,966) Total lease liabilities $ 55,394 The following table provides the schedule of the Company’s future minimum payments on its operating leases at March 31, 2019, which were accounted for in accordance with its historic accounting policies under ASC Topic 840. Operating leases March 31, 2019 2020 $ 14,685 2021 13,895 2022 12,663 2023 9,879 2024 5,686 2025 and thereafter 16,761 Total lease payments $ 73,569 As of December 31, 2019, the Company had committed to payments of $320 related to operating leases that had yet to commence and therefore are not included in consolidated balance sheets. These leases will commence on various dates in the calendar year 2020 and have lease terms ranging from two years to three years . . |
Revenues
Revenues | 9 Months Ended |
Dec. 31, 2019 | |
Revenues | |
Revenues | (8) Revenues Disaggregation of Revenue The table below presents disaggregated revenues from the Company’s contracts with customers by geography, industry groups, service offerings and contract-type. The Company believes this disaggregation best depicts how the nature, amount, timing and uncertainty of its revenues and cash flows are affected by industry, market and other economic factors. Three Months Ended Nine Months Ended December 31, December 31, Revenue by geography: 2019 2018 2019 2018 North America $ 251,229 $ 224,143 $ 724,005 $ 652,076 Europe 55,154 65,046 175,258 192,175 Rest of World 28,724 25,492 83,369 75,981 Consolidated revenue $ 335,107 $ 314,681 $ 982,632 $ 920,232 Three Months Ended Nine Months Ended December 31, December 31, Revenue by customer’s industry groups 2019 2018 2019 2018 Banking financial services insurance $ 187,312 $ 197,329 $ 570,620 $ 578,138 Communications and Technology 119,558 89,159 332,465 257,527 Media & Information and Other 28,237 28,193 79,547 84,567 Consolidated revenue $ 335,107 $ 314,681 $ 982,632 $ 920,232 Three Months Ended Nine Months Ended December 31, December 31, Revenue by service offerings 2019 2018 2019 2018 Application outsourcing $ 183,777 $ 165,986 $ 547,303 $ 488,584 Consulting 151,330 148,695 435,329 431,648 Consolidated revenue $ 335,107 $ 314,681 $ 982,632 $ 920,232 Three Months Ended Nine Months Ended December 31, December 31, Revenue by contract type 2019 2018 2019 2018 Time-and-materials $ 190,423 $ 189,134 $ 579,657 $ 552,530 Fixed-price* 144,684 125,547 402,975 367,702 Consolidated revenue $ 335,107 $ 314,681 $ 982,632 $ 920,232 *Fixed-price includes both retainer-billing basis and fixed-price progress towards completion Receivables and Contract Balances The Company classifies its right to consideration in exchange for deliverables as either a receivable or a contract asset. A receivable is a right to consideration that is unconditional (i.e. only the passage of time is required before payment is due). The Company presents such receivables in accounts receivable or unbilled accounts receivable, in its consolidated statements of financial position at their net estimated realizable value. Contract assets included in unbilled accounts receivable are recorded when services have been provided but the Company does not have an unconditional right to receive consideration. Contract assets are primarily related to unbilled amounts on fixed-price contracts utilizing the input method of revenue recognition. The timing between services rendered and timing of payment is less than one year. The Company recognizes an impairment loss when the contract carrying amount is greater than the remaining consideration receivable, less directly related costs to be incurred. The table below shows movements during the nine months ended December 31, 2019 and 2018 in contract assets: December 31, 2019 December 31, 2018 Beginning balance $ 18,538 $ 15,998 Revenues recognized during the period but not yet billed 67,594 92,564 Amounts billed (68,314) (95,457) Other (20) (507) Ending balance $ 17,798 $ 12,598 Contract liabilities comprise of amounts billed to customers for revenues not yet earned. Such amounts are anticipated to be recorded as revenues when services are performed in subsequent periods. The table below shows movements in the deferred revenue balances during the nine months ended December 31, 2019 and 2018: December 31, 2019 December 31, 2018 Beginning balance $ 6,421 $ 7,908 Amounts billed but not yet recognized as revenues 5,342 5,310 Revenues recognized related to the opening balance of deferred revenue (5,017) (6,761) Other (154) (337) Ending balance $ 6,592 $ 6,120 Remaining performance obligation ASC Topic 606 - Revenue from Contracts with Customers requires that the Company discloses the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied as of December 31, 2019. This disclosure is not required for: (1) contracts with an original duration of one year or less, including contracts that can be terminated for convenience without a substantive penalty, (2) contracts for which the Company recognizes revenues based on the right to invoice for services performed, (3) variable consideration allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation in accordance with ASC 606-10-25-14(b), for which the criteria in ASC 606-10-32-40 have been met, or (4) variable consideration in the form of a sales-based or usage-based royalty promised in exchange for a license of intellectual property. Many of the Company’s performance obligations meet one or more of these exemptions. As of December 31, 2019, the aggregate amount of transaction price allocated to remaining performance obligations, other than those meeting the exclusion criteria above, was $41,582 and will be recognized as revenue within 5 years . From time to time, the Company enters into arrangements to deliver IT services that include upfront payments to its clients. As of December 31, 2019, the total unamortized upfront payments related to these services were $34,420 and are recorded in prepaid expenses and other long-term assets in the consolidated balance sheet. These upfront payments are expected to be amortized as a reduction to revenue over a benefit period of 5 years . |
Series A Convertible Preferred
Series A Convertible Preferred Stock | 9 Months Ended |
Dec. 31, 2019 | |
Series A Convertible Preferred Stock. | |
Series A Convertible Preferred Stock | (9) Series A Convertible Preferred Stock On May 3, 2017, the Company entered into an investment agreement with The Orogen Group (‘‘Orogen’’) pursuant to which Orogen purchased 108,000 shares of the Company’s newly issued Series A Convertible Preferred Stock, initially convertible into 3,000,000 shares of common stock, for an aggregate purchase price of $108,000 with an initial conversion price of $36.00 (the ‘‘Orogen Preferred Stock Financing’’). Under the terms of the investment, the Series A Convertible Preferred Stock has a 3.875% dividend per annum, payable quarterly in additional shares of common stock and/or cash at the Company’s option. If any shares of Series A Convertible Preferred Stock have not been converted into common stock prior to May 3, 2024, the Company will be required to repurchase such shares at a repurchase price equal to the liquidation preference of the repurchased shares plus the amount of accumulated and unpaid dividends thereon. If the Company fails to effect such repurchase, the dividend rate on the Series A Convertible Preferred Stock will increase by 1% per annum and an additional 1% per annum on each anniversary of May 3, 2024 during the period in which such failure to effect the repurchase is continuing, except that the dividend rate will not increase to more than 6.875% per annum. In connection with the issuance of the Series A Convertible Preferred Stock, the Company incurred direct and incremental expenses of $1,154, including financial advisory fees, closing costs, legal expenses and other offering-related expenses. These issuance costs are recorded as a reduction to the proceeds received from issuance of Series A Convertible Preferred Stock. These direct and incremental expenses reduced the Series A Convertible Preferred Stock, and will be accreted through retained earnings as a deemed dividend from the date of issuance through the first possible known redemption date, May 3, 2024. During the three and nine months ended December 31, 2019 and 2018, the Company recorded accretions to the Series A Convertible Preferred Stock related to its issuance cost. Holders of Series A Convertible Preferred Stock are entitled to a cumulative dividend at the rate of 3.875% per annum, payable quarterly in arrears. During the nine months ended December 31, 2019 and 2018, the Company has paid $3,138 as cash dividend on Series A Convertible Preferred Stock. As of December 31, 2019 and 2018, the Company had declared and accrued dividends of $686 associated with the Series A Convertible Preferred Stock. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | (10) Goodwill and Intangible Assets Goodwill: The Company has one operating segment. The following are details of the changes in goodwill balance at December 31, 2019: December 31, 2019 Balance at April 1, 2019 $ 279,543 Foreign currency translation adjustments (3,454) Balance at December 31, 2019 $ 276,089 The acquisition costs and goodwill balance deductible for our business acquisitions for tax purposes are $145,658. The acquisition costs and goodwill balance not deductible for tax purposes are $143,334. Intangible Assets: The following are details of the Company’s intangible asset carrying amounts acquired and amortization at December 31, 2019: December 31, 2019 Weighted Gross Net Average Carrying Accumulated Carrying Useful Life Amount Amortization Amount Amortizable intangible assets: Customer relationships 12.3 $ 141,267 $ 42,979 $ 98,288 Trademark 2.0 900 804 96 Technology 5.0 500 467 33 Other 5.0 1,233 131 1,102 12.1 $ 143,900 $ 44,381 $ 99,519 During the three months ended December 31, 2019, the Company acquired certain assets of a small consulting company located in the United States. The purchase price was approximately $1,400 in cash and an additional earn-out consideration of up to $1,400 payable within one year based on achievement of certain revenue targets. The probable and estimable value of the contingent consideration as of December 31, 2019 is $1,381. During the three months ended September 30, 2019, the Company’s U.S. subsidiary, eTouch Systems Corp., acquired certain assets of a small consulting company located in the United States. The purchase price was approximately $4,000 in cash and an additional earn-out consideration of up to $4,000 payable within one year based on achievement of certain revenue targets. During the three months ended December 31, 2019, the Company paid $942 towards earn-out consideration based on achievement of revenue targets for the first measurement period. The remaining probable and estimable value of the contingent consideration as of December 31, 2019 is $2,645. During the three months ended June 30, 2019, the Company acquired certain assets of a small consulting company located in the United States. The purchase price was approximately $4,251 in cash paid at closing and an additional earn-out consideration of up to $4,453, payable within one year based on achievement of certain revenue targets. The probable and estimable value of the contingent consideration as of December 31, 2019 is $3,078. The following are the details of the Company’s intangible asset carrying amounts acquired, and amortization at March 31, 2019: March 31, 2019 Weighted Gross Net Average Carrying Accumulated Carrying Useful Life Amount Amortization Amount Amortizable intangible assets: Customer relationships 13.0 $ 125,520 $ 33,679 $ 91,841 Trademark 2.0 900 431 469 Technology 5.0 500 370 130 12.9 $ 126,920 $ 34,480 $ 92,440 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 | 9 Months Ended |
Dec. 31, 2019 | |
Income Taxes | |
Income Taxes | (11) Income Taxes The Company applies an estimated annual effective tax rate to its year-to-date operating results to determine the interim provision (benefit) for income tax expense. The Company’s effective tax rate was 44.7% and 43.3% for the three and nine months ended December 31, 2019, as compared to an effective tax rate of 44.8% and 63.3% for the three and nine months ended December 31, 2018. The Company’s effective tax rate for the three and nine months ended December 31, 2019 was impacted by executive stock compensation limitations and Base Erosion Alternative Tax “BEAT” enacted in the Tax Cuts and Jobs Act (the “Tax Act”), enacted on December 22, 2017 by the U.S. government. The Company’s reported effective tax rate is also impacted by jurisdictional mix of profits and losses in which the Company operates, foreign statutory tax rates in effect, unusual or infrequent discrete items requiring a provision during the period and certain exemptions or tax holidays applicable to the Company. During the fiscal year ended March 31, 2019, the Company elected to treat several foreign entities as disregarded entities. The earnings of these subsidiaries will be subject to U.S. taxation as well as local taxation with a corresponding foreign tax credit, at the election of the Company. During the three and nine months ended December 31, 2019, the Company has elected to deduct the foreign taxes in computing the income tax expense. The Company’s income tax provision for the three and nine months ended December 31, 2019 includes the impact of Global Intangible Low-taxed Income (“GILTI”) and other provisions of the Tax Act and earnings of disregarded entities. The Company’s aggregate income tax rate in foreign jurisdictions is comparable to its income tax rate in the United States as a result of the Tax Act, other than in jurisdictions in which the Company has tax holiday benefits. A valuation allowance is required if, based on available evidence, it is more likely than not that all or some portion of the asset will not be realized due to the inability of the Company to generate sufficient taxable income in a specific jurisdiction. The Company has $25,685 and $2,183 of net deferred tax assets in the United States and the United Kingdom, respectively, at December 31, 2019. The Company has not recorded a valuation allowance as management has concluded it is more likely than not that the deferred tax assets will be utilized before expiration. The Company expects sufficient taxable income in future periods related to the impact of the GILTI and the election to treat several foreign entities as disregarded entities. The Company’s Indian subsidiaries operate several development centers in areas designated as a special economic zone, or SEZ, under the SEZ Act of 2005. In particular, the Company was approved as an 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 an 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 the fiscal year ended March 31, 2013. The Company has other units at various stages of tax holiday benefit. On September 20, 2019, the Indian government issued Ordinance 2019 making certain amendments in the Income-tax Act 1961, which substantially reduces tax rates. The effective rate of tax on India-based companies was reduced from 34.9% to 25.17%, effective for fiscal years beginning April 1, 2019. The new rates require the surrendering of any tax holidays and other attributes of which the Company may be currently taking advantage and is able to be elected once the tax holidays have concluded. The Company continues to apply the old tax rates and applicable holidays. The Company will continue to analyze and elect this Ordinance 2019 when it is most beneficial to the Company. In addition, the Company’s Sri Lankan subsidiary, Virtusa (Private) Limited, was operating under a 12 -year income tax holiday arrangement until March 31, 2019 and required Virtusa (Private) Limited to retain certain job creation and investment criteria through the expiration of the holiday period. During the fiscal year ended March 31, 2019, the Company believes it has fulfilled its hiring and investment commitments and is eligible for tax holiday through March 2019. The 12-year income tax holiday arrangement expired as of March 31, 2019 and therefore during the nine months ended December 31, 2019, the Company recorded tax expense on all the earnings in its Sri Lankan subsidiary at the statutory rate. The Company has been under income tax examination in India, the U.K, Singapore and the United States. The Indian taxing authorities issued an assessment order with respect to their examination of the various tax returns for the fiscal years ended March 31, 2005 to March 31, 2017 of the Company’s Indian subsidiary, Virtusa (India) Private Ltd, now merged with and into Virtusa Consulting Services Private Limited (collectively referred to as “Virtusa India”). At issue were several matters, the most significant of which was the redetermination of the arm’s-length profit which should be recorded by Virtusa India on the intercompany transactions with its affiliates. These matters are currently at different level of appeals. During the fiscal year ended March 31, 2011, the Company entered into a competent authority settlement and settled the uncertain tax position for the fiscal years ended March 31, 2004 and 2005. However, the redetermination of arm’s-length profit on transactions with respect to the Company’s subsidiaries and Virtusa UK Limited has not been resolved and remains under appeal for the fiscal year ended March 31, 2005. In the United Kingdom, the Company is currently under examination for transfer pricing and research benefits for the years ended March 31, 2014 to March 31, 2018. In Singapore, the Inland Revenue Authority is confirming the appropriateness of the Company’s deductions for the year ended March 31, 2017. In the United States, the Internal Revenue Service has concluded an examination of fiscal years ended March 31, 2015 and March 31, 2017 with a non-material impact on cash and earnings, while certain employment tax matters remain open. Unrecognized tax benefits represent uncertain tax positions for which the Company has established reserves. At December 31, 2019 and March 31, 2019, the total liability for unrecognized tax benefits was $6,905 and $6,744, respectively. Unrecognized tax benefits may be adjusted upon the closing of the statute of limitations for income tax returns filed in various jurisdictions. During the nine months ended December 31, 2019 and 2018, the unrecognized tax benefits increased by $161 and decreased by $531, respectively. The increase in unrecognized tax benefits in the nine months ended December 31, 2019 was predominantly due to increase in liability related to the UK audit, settlement of a state tax matter, foreign currency movements and 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 currently or has been historically 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 indefinitely reinvested. The Company does not provide for U.S. income taxes on foreign currency translation or applicable withholding tax until a distribution is declared. At December 31, 2019, the Company had approximately $198,020 of cash, cash equivalents, short-term and long-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. 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 | 9 Months Ended |
Dec. 31, 2019 | |
Concentration of Revenue and Assets | |
Concentration of Revenue and Assets | (12) 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 Nine Months Ended December 31, December 31, 2019 2018 2019 2018 Customer revenue: United States of America $ 237,754 $ 213,542 $ 685,023 $ 623,224 United Kingdom 42,902 52,248 137,795 154,813 Rest of World 54,451 48,891 159,814 142,195 Consolidated revenue $ 335,107 $ 314,681 $ 982,632 $ 920,232 December 31, March 31, 2019 2019 Long-lived assets, net of accumulated depreciation and amortization: United States of America $ 224,670 $ 216,279 India 240,000 251,722 Rest of World 19,136 23,847 Consolidated long-lived assets, net $ 483,806 $ 491,848 Revenue from significant clients as a percentage of the Company’s consolidated revenue was as follows: Three Months Ended Nine Months Ended December 31, December 31, 2019 2018 2019 2018 Customer A 16.4 % 18.0 % 15.9 % 17.7 % |
Debt
Debt | 9 Months Ended |
Dec. 31, 2019 | |
Debt | |
Debt | (13) Debt On February 6, 2018, the Company entered into a credit agreement (the “Credit Agreement”) dated as of February 6, 2018, by and among the Company, its guarantor subsidiaries party thereto, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as joint book runners and lead arrangers. The Credit Agreement replaced the prior $300,000 credit agreement with J.P. Morgan Securities and Merrill Lynch, Pierce, Fenner & Smith Incorporated and provides for a $200,000 revolving credit facility and a $180,000 term loan and a $70,000 On October 15, 2019, the Company entered into Amendment No. 2 to Amended and Restated Credit Agreement with JPMorgan Chase Bank, N.A. (the “Administrative Agent”) and the lenders party thereto (the “Credit Agreement Amendment”), which amends the Company’s Amended and Restated Credit Agreement, dated as of February 6, 2018, with such parties (the “Credit Agreement”) to, among other things, increase the revolving commitments available to the Company under the Credit Agreement from $200,000 to $275,000 , reduce the interest rate margins applicable to term loans and revolving loans outstanding under the Credit Agreement from time to time and reduce the commitment fee payable by the Company to the lenders in respect of unused revolving commitments under the Credit Agreement. The Company executed the Credit Agreement Amendment to provide additional lending capacity which the Company could use to fund the completion of the Polaris delisting transaction, as well as to provide excess lending capacity in the event of future opportunistic, strategic, investment opportunities. The Credit Agreement Amendment contains customary terms for amendments of this type, including representations, warranties and covenants. Interest under this new credit facility accrues at a rate per annum of LIBOR plus 2.75% , subject to step-downs based on the Company’s ratio of debt to EBITDA. For the fiscal year ending March 31, 2020 , the Company is required to make principal payments of $2,891 per quarter. The term of the Credit Agreement is five years ending February 6, 2023. During the nine months ended December 31, 2019, the Company drew down $36,000 from the credit facility to fund the eTouch 18-month anniversary payment of $17,500 and to fund opportunistic, strategic, investment opportunities . At December 31, 2019, the interest rate on the term loan and line of credit was 3.99% . At December 31, 2019, the Company was in compliance with its debt covenants and has provided a quarterly certification to its lenders to that effect. The Company believes that it currently meets all conditions set forth in the Credit Agreement to borrow thereunder and it is not aware of any conditions that would prevent it from borrowing part or all of the remaining available capacity under the existing revolving credit facility at December 31, 2019 and through the date of this filing. Current portion of long-term debt The following summarizes our short-term debt balances as of: December 31, 2019 March 31, 2019 Term loan- current maturities 15,898 12,500 Less: deferred financing costs, current (1,301) (1,093) Total $ 14,597 $ 11,407 Long-term debt, less current portion The following summarizes our long-term debt balance as of: December 31, 2019 March 31, 2019 Term loan $ 228,359 $ 237,500 Borrowings under revolving credit facility 165,500 129,500 Less: Current maturities (15,898) (12,500) Deferred financing costs, long-term (2,797) (3,180) Total $ 375,164 $ 351,320 In July 2016 and November 2018, the Company entered into interest rate swap transactions to mitigate Company’s interest rate risk on Company’s variable rate debt (See Note 6). Beginning in fiscal 2009, the Company’s U.K. subsidiary entered into an agreement with an unrelated financial institution to sell, without recourse or continuing involvement, certain of its European-based accounts receivable balances from one client to such third party financial institution. During the nine months ended December 31, 2019, $21,311 of receivables were sold under the terms of the financing agreement. Fees paid pursuant to this agreement were immaterial during the nine months ended December 31, 2019. No amounts were due as of December 31, 2019, but the Company may elect to use this program again in future periods. However, the Company cannot provide any assurances that this or any other financing facilities will be available or utilized in the future. |
Noncontrolling interest
Noncontrolling interest | 9 Months Ended |
Dec. 31, 2019 | |
Noncontrolling interest | |
Noncontrolling interest | (14) Noncontrolling interest On March 3, 2016, the Company’s Indian subsidiary, Virtusa Consulting Services Private Limited (“Virtusa India”), acquired approximately 51.7% of the fully diluted shares of Polaris Consulting & Services Limited (“Polaris”) for approximately $168,257 in cash (the “Polaris Transaction”) pursuant to a share purchase agreement dated as of November 5, 2015, by and among Virtusa India, Polaris and the promoter sellers named therein. Through a series of transactions and in compliance with the applicable Indian rules on takeovers and SEBI Delisting Regulations, Virtusa increased its ownership interest in Polaris from 51.7% to 93.0% by February 12, 2018, when Virtusa consummated its Polaris delisting offer with respect to the public shareholders of Polaris. The delisting offer resulted in an accepted exit price of INR 480 per share (“Exit Price”), for an aggregate consideration of approximately $145,000 , exclusive of transaction and closing costs. On July 11, 2018, the stock exchanges on which Polaris common shares are listed notified Polaris that trading in equity shares of Polaris would be discontinued and delisted effective on August 1, 2018. For a period of one year following the date of delisting, Virtusa India has, in compliance with SEBI Delisting Regulations, permitted the public shareholders of Polaris to tender their shares for sale to Virtusa India at the Exit Price. In connection with the Polaris delisting offer, during the six months ended September 30, 2019, Virtusa India purchased 1,263,117 shares, or approximately 1.2% of Polaris common stock from shareholders for an aggregate purchase price of approximately $8,675. As of September 30, 2019, the number of shares of Polaris common stock held by noncontrolling interest shareholders was 2,009,365 or approximately 1.95% of Polaris’ basic shares of common stock outstanding. Further to the Polaris delisting, in order to acquire the remaining noncontrolling interest, the Company filed an application for approval and authorization to purchase the remaining outstanding Polaris shares held by the Polaris shareholders (“the Polaris Repurchase”) as well as final approval of the merger of Polaris with and into Virtusa India (“Merger”). On December 9, 2019, the Company received a Common Order (“Court Order”) to move forward with the Polaris Repurchase and certain conditional approvals for the Merger. In connection with the Polaris Repurchase under the Court Order, on December 20, 2019, upon the Company filing the required documents, all the outstanding equity shares of Polaris held by public shareholders were deemed cancelled, but converted to the right to receive payment for these shares from the Company. Within 30 days from December 20, 2019, the Company is required to pay consideration of INR 480 per share for each cancelled share held by these former Polaris shareholders. At December 20, 2019, the total amount payable by the Company to the remaining Polaris public shareholders was $13,564. During the three months ended December 31, 2019, the Company paid $12,534 to the public shareholders. The remaining balance at December 31, 2019 of $1,030 is presented in accrued expense and other and in restricted cash in the consolidated balance sheet. In connection with the Merger, the conditional approvals required were approved by the respective authorities on January 2, 2020 and the Merger is effective, with an effective date as of April 1, 2018. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Dec. 31, 2019 | |
Accumulated Other Comprehensive Loss. | |
Accumulated Other Comprehensive Loss | (15) Accumulated Other Comprehensive Loss Changes in accumulated other comprehensive income (loss) by component were as follows for the three and nine months ended December 31, 2019 and 2018: Three Months Ended Nine Months Ended December 31, December 31, 2019 2018 2019 2018 Investment securities Beginning balance $ 12 $ (225) $ 12 $ 69 Other comprehensive income (loss) (OCI) before reclassifications, net of tax of $0, $0, $0 and $(52) — (8) — (176) Reclassifications from OCI to other income, net of tax of $0, $0, $0 and $12 — 271 125 Less: Noncontrolling interests, net of tax of $0, $(5), $0 and $7 — (8) — 12 Comprehensive income (loss) on investment securities, net of tax of $0, $(5), $0 and $(33) — 255 — (39) Closing balance $ 12 $ 30 $ 12 $ 30 Currency translation adjustments Beginning balance $ (64,116) $ (57,318) $ (57,354) $ (41,207) OCI before reclassifications 4,630 (2,477) (2,106) (20,201) Less: Noncontrolling interests (363) (396) (389) 1,217 Comprehensive income (loss) on currency translation adjustments 4,267 (2,873) (2,495) (18,984) Closing balance $ (59,849) $ (60,191) $ (59,849) $ (60,191) Cash flow hedges Beginning balance $ (2,175) $ (5,179) $ 39 $ 1,881 OCI before reclassifications net of tax of $(386), $1,608, $(666) and $(1,582) (1,993) 5,014 (2,240) (2,931) Reclassifications from OCI to —Revenue, net of tax of $0, $178, $7 and $586 — 332 11 1,087 —Costs of revenue, net of tax of $(188), $214, $(504) and $303 (639) 632 (1,847) 884 —Selling, general and administrative expenses, net of tax of $(77), $102, $(220) and $147 (260) 303 (800) 431 —Interest expenses, net of tax of $26, $(74), $(54) and $(188) 75 (214) (155) (543) Less: Noncontrolling interests, net of tax of $0, $(23), $0 and $17 — (44) — 35 Comprehensive income (loss) on cash flow hedges, net of tax of $(625), $2,005, $(1,437) and $(717) (2,817) 6,023 (5,031) (1,037) Closing balance $ (4,992) $ 844 $ (4,992) $ 844 Benefit plans Beginning balance $ (2,776) $ (1,511) $ (2,084) $ (1,424) OCI before reclassifications net of tax of $0, $0, $0 and $348 — 3 (911) (349) Reclassifications from OCI for prior service credit (cost) to: Other income (expense), net of tax of $0 for all periods 6 14 19 42 Reclassifications from net actuarial gain (loss) amortization to: Other income (expense), net of tax of $0 for all periods 70 36 210 113 Other adjustments 3 20 76 171 (Less): Noncontrolling interests, net of tax $0 for all periods (3) — (10) 9 Comprehensive income (loss) on benefit plans, net of tax of $0, $0, $0 and $348 76 73 (616) (14) Closing balance (2,700) $ (1,438) (2,700) $ (1,438) Accumulated other comprehensive loss $ (67,529) $ (60,755) $ (67,529) $ (60,755) |
Treasury Stock
Treasury Stock | 9 Months Ended |
Dec. 31, 2019 | |
Treasury Stock. | |
Treasury Stock | (16) Treasury Stock On August 5, 2019, the Company's board of directors authorized a share repurchase program of up to $30,000 of the Company's common stock over 12 months from the approval date, subject to certain price and other trading restrictions as established by the Company. During the nine months ended December 31, 2019, the Company repurchased 505,565 shares of the Company’s common stock at a weighted average price of $36.93 per share for an aggregate purchase price of $18,680 . |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies. | |
Commitments and Contingencies | (17) Commitments and Contingencies From time to time the Company is involved in legal proceedings, claims and litigation related to employee claims, contractual disputes and taxes in the ordinary course of business. The Company accrues a liability when a loss is considered probable and the amount can be reasonably estimated. When a material loss contingency is reasonably possible but not probable, the Company does not record a liability, but instead discloses the nature and the amount of the claim, and an estimate of the loss or range of loss, if such an estimate can be made. Legal fees are expensed as incurred. Although the Company cannot predict the outcome of such matters, the Company has no reason to believe the disposition of any current matter, other than the specific matters described below, could reasonably be expected to have a material adverse impact on the Company’s balance sheets, income of operations and cash flows or the ability to carry on any of its business activities. This assessment is based on our current understanding of relevant facts and circumstances. As such, our view of these matters is subject to inherent uncertainties and may change in the future. Recently, one of the Company’s larger clients made a demand for damages related to a project in which the Company was performing services. The client alleges breaches of certain representations and warranties regarding the Company’s performance and is seeking indemnification for damages from those alleged breaches. No litigation has been filed. The Company believes that it has defenses against the claims described in the demand, and intends to zealously defend against those claims. However, the Company cannot provide any assurance that the Company will prevail in the dispute or even partially prevail. Further, if the Company is unsuccessful in any settlement discussions, the Company also cannot provide any assurance that the client will not use set off rights in the contract, even if the Company disputes the claims or amount of damages alleged. In the event the Company does not fully prevail in this dispute, the Company may have to pay damages in amounts for which it may not have reserved or which may or may not be covered by the Company’s insurance policies; further, even if the damages are covered, depending on the outcome, the Company’s insurance may not cover or be adequate to pay the entire claim. In addition, the Company cannot guarantee that the Company will not lose future business with such client as a result of such dispute. On February 28, 2019, the Supreme Court of India issued a ruling interpreting certain statutory defined contribution obligations of employees and employers, which altered historical understandings of such obligations, extending them to cover additional portions of employee income. As a result, contributions by our employees and the Company will increase in future periods. There is uncertainty as to whether the Indian government will apply the Supreme Court's ruling on a retroactive basis and if so, how this liability should be calculated as it is impacted by multiple variables, including the period of assessment, the application with respect to certain current and former employees and whether interest and penalties may be assessed. As such, the ultimate amount of our obligation is difficult to quantify. If the Indian government were to apply the Supreme Court ruling retroactively, without assessing interest and penalties, the impact would be a charge of approximately $7,500 to the Company’s income from operations and cash flows. The Company is currently involved in an open examination by tax authorities in the United States related to the employment tax treatment of certain payments made to employees in the ordinary course of business. The Company cannot predict the outcome of the dispute, but it is in the process of evaluating the merits of a recent notice of proposed wage adjustment and is preparing a timely and appropriate response. At this time, it is premature to predict whether resolution of the dispute could reasonably be expected to have a material adverse impact on the Company’s income from operations and cash flows. |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Dec. 31, 2019 | |
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, 2019 included in the Company’s Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission, or SEC, on May 24, 2019. 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 accompanying financial statements have been prepared on a consolidated basis and reflect the financial statements of Virtusa Corporation and all of its subsidiaries that are directly or indirectly more than 50% owned or controlled. When the Company does not have a controlling interest in an entity, but exerts a significant influence on the entity, the Company applies the equity method of accounting. For those majority-owned subsidiaries that are not 100% owned by the Company, the interests of the minority owners are accounted for as noncontrolling interests. |
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 re-evaluates 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, 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 December 31, 2019 and March 31, 2019, 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, other accrued expenses and long-term debt, 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 Recently Adopted Accounting Pronouncements Unless otherwise discussed below, the adoption of new accounting standards did not have an impact on the consolidated financial statements. In February 2016, the FASB issued an update (ASU 2016-02) to the standard on leases to increase transparency and comparability among organizations. The FASB subsequently issued ASU 2018-10 and ASU 2018-11 in July 2018, ASU 2018-20 in December 2018 and ASU 2019-01 in March 2019, which provide clarifications and improvements to this new standard. ASU 2018-11 also provides the optional transition method which allows companies to apply the new lease standard at the adoption date instead of at the earliest comparative period presented. The new standard replaces the existing guidance on leases and requires the lessee to recognize a right-of-use (“ROU”) asset and a lease liability for all leases with lease terms equal to or greater than twelve months. For finance leases, the lessee would recognize interest expense and amortization of the ROU asset, and for operating leases, the lessee would recognize total lease expense on a straight-line basis. For public business entities this standard is effective for the annual periods beginning after December 15, 2018, and interim periods within those annual periods. The standard permits the use of either retrospective to each prior reporting period presented with the cumulative effect of adoption recognized at the beginning of the earliest period presented or retrospective to the beginning of the period of adoption through a cumulative-effect adjustment (the “Modified Retrospective Effective Date Method”). The Company adopted this standard, (“ASC Topic 842”) effective April 1, 2019, using a Modified Retrospective Effective Date Method. The Company has elected the package of practical expedients which permits the Company to not reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs. The Company did not elect the use of hindsight practical expedient to reevaluate the lease term of existing contracts. Prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historic accounting policies. The impact of adoption primarily relates to the recognition of ROU operating lease assets and operating lease liabilities on the Company’s unaudited consolidated balance sheets for all operating leases with a term greater than twelve months. The adoption of this standard on April 1, 2019 resulted in the recognition of ROU assets for operating leases of $54,762 and operating lease liabilities of $59,157 . The Company’s accounting for finance leases (formerly capital leases) remains substantially unchanged. The adoption of this standard did not have an impact on the consolidated statements of income and comprehensive income (loss), consolidated statement of changes in stockholders’ equity or the consolidated statement of cash flows. See Note 7 “Leases” for additional information regarding leases. In August 2018, the FASB issued ASU No. 2018-15, Intangibles (Topic 350): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract , which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This standard requires customers to amortize the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement. The standard also requires the entity to present the expense related to the capitalized implementation costs in the same line item in the statement of income as the fees associated with the hosting element (service) of the arrangement and classify payments for capitalized implementation costs in the statement of cash flows in the same manner as payments made for fees associated with the hosting element. The entity is also required to present the capitalized implementation costs in the statement of financial position in the same line item that a prepayment for the fees of the associated hosting arrangement. For public companies, the amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. The Company early adopted this standard, as of July 1, 2019, on a prospective basis for applicable implementation costs. The adoption of this standard did not have a material impact on the consolidated balance sheet, consolidated statements of income, consolidated statement of changes in stockholders’ equity or the consolidated statement of cash flows. New Accounting Pronouncements Unless otherwise discussed below, the Company believes the impact of recently issued standards that are not yet effective will not have a material impact on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Measurement of Credit Losses on Financial Instruments, which modifies the measurement of expected credit losses of certain financial instruments. The FASB subsequently issued ASU 2019-04 in April 2019, ASU 2019-05 in May 2019 and ASU 2019-11 in November 2019 which provide clarifications and improvements to this new standard. The FASB also issued ASU 2019-10 in November 2019, which amends the mandatory effective date for all other than public entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. This standard update requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. This update is effective for public entities from fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. The effect on the consolidated financial statements will largely depend on the composition and credit quality of our investment portfolio and the economic conditions and forecasts at the time of adoption. Based on the current composition of our investment portfolio, current market conditions, and historical credit loss activity, the impact on our consolidated financial statements and related disclosures is not expected to be material. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740), which enhances and simplifies various aspects of the income tax accounting guidance, including requirements such as step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction, ownership changes in investments, and interim-period accounting for enacted changes in tax law. The standard will be effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the effect of this new standard will have on its consolidated financial statements. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Earnings per Share | |
Schedule of components of basic earnings per share | Three Months Ended Nine Months Ended December 31, December 31, 2019 2018 2019 2018 Numerators: Net income available to Virtusa stockholders $ 12,720 $ 12,576 $ 25,656 $ 7,785 Less: Series A Convertible Preferred Stock dividends and accretion 1,087 1,087 3,262 3,262 Net income available to Virtusa common stockholders $ 11,633 $ 11,489 $ 22,394 $ 4,523 Denominators: Basic weighted average common shares outstanding 29,849,368 29,893,220 30,041,740 29,764,507 Basic earnings per share available to Virtusa common stockholders $ 0.39 $ 0.38 $ 0.75 $ 0.15 |
Schedule of components of diluted earnings per share | Three Months Ended Nine Months Ended December 31, December 31, 2019 2018 2019 2018 Numerators: Net income available to Virtusa common stockholders $ 11,633 $ 11,489 $ 22,394 $ 4,523 Add : Series A Convertible Preferred Stock dividends and accretion 1,087 1,087 — — Net income available to Virtusa common stockholders and assumed conversion $ 12,720 $ 12,576 $ 22,394 $ 4,523 Denominators: Basic weighted average common shares outstanding 29,849,368 29,893,220 30,041,740 29,764,507 Dilutive effect of Series A Convertible Preferred Stock if converted 3,000,000 3,000,000 — — Dilutive effect of employee stock options and unvested restricted stock awards and restricted stock units 608,863 768,508 658,529 833,607 Weighted average shares—diluted 33,458,231 33,661,728 30,700,269 30,598,114 Diluted earnings per share available to Virtusa common stockholders $ 0.38 $ 0.37 $ 0.73 $ 0.15 |
Investment Securities (Tables)
Investment Securities (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Investment Securities. | |
Summary of investment securities | The following is a summary of investment securities at December 31, 2019: Gross Gross Amortized Unrealized Unrealized Cost Gains Losses Fair Value Available-for-sale debt securities: Time Deposits: Current $ 6,849 $ — — $ 6,849 Equity securities: Mutual funds: Current 13,060 149 — 13,209 Equity Shares/ Options: Non-current 1 9 — 10 Total available-for-sale debt securities and equity securities $ 19,910 $ 158 $ — $ 20,068 The following is a summary of investment securities at March 31, 2019: Gross Gross Amortized Unrealized Unrealized Cost Gains Losses Fair Value Available-for-sale debt securities: Corporate bonds: Current $ 2,779 $ 1 $ (2) $ 2,778 Non-current — — — — Preference shares: 188 — — 188 Agency and short-term notes: Current 1,492 1 — 1,493 Time deposits: Current 15,861 — — 15,861 Equity securities: Mutual funds: Current 12,912 94 — 13,006 Equity Shares/ Options: Non-current 8 126 — 134 Total available-for-sale debt and equity securities $ 33,240 $ 222 $ (2) $ 33,460 |
Schedule of proceeds from sales of available-for-sale debt and equity securities and the gross gains and losses included in earnings as a result | Three Months Ended Nine Months Ended December 31, December 31, 2019 2018 2019 2018 Proceeds from sales or maturities of available-for-sale debt securities and equity securities $ 9,476 $ 27,633 $ 47,716 $ 88,204 Gross gains $ 123 $ 253 $ 563 $ 639 Gross losses — — — (32) Net realized gains on sales of available-for-sale debt securities and equity securities $ 123 $ 253 $ 563 $ 607 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Fair Value of Financial Instruments | |
Schedule of financial assets and liabilities measured at fair value on a recurring basis | Level 1 Level 2 Level 3 Total Assets: Investments: Available-for-sale debt securities—current $ — $ 6,849 $ — $ 6,849 Equity securities—current — 13,209 — 13,209 Available-for-sale debt securities—non-current — — — — Equity securities—non-current — 10 — 10 Derivative financial instruments: Foreign currency derivative contracts — 2,152 — 2,152 Interest rate swap contracts — 288 — 288 Total assets $ — $ 22,508 $ — $ 22,508 Liabilities: Foreign currency derivative contracts — 2,264 — 2,264 Interest rate swap contracts — 5,836 — 5,836 Total liabilities $ — $ 8,100 $ — $ 8,100 The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis at March 31, 2019: Level 1 Level 2 Level 3 Total Assets: Investments: Available-for-sale debt securities—current $ — $ 20,132 — $ 20,132 Equity securities—current — 13,006 — 13,006 Available-for-sale debt securities—non-current — 188 — 188 Equity securities—non-current — 134 — 134 Derivative financial instruments: Foreign currency derivative contracts — 3,411 — 3,411 Interest rate swap contracts — 1,349 — 1,349 Total assets $ — $ 38,220 $ — $ 38,220 Liabilities: Foreign currency derivative contracts $ — 321 $ — 321 Interest rate swap contracts — 3,633 — 3,633 Total liabilities $ — $ 3,954 $ — $ 3,954 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Derivative Financial Instruments | |
Schedule of fair value of derivative instruments included in the consolidated balance sheets | Derivatives designated as hedging instruments December 31, 2019 March 31, 2019 Foreign currency exchange contracts: Other current assets $ 2,058 $ 3,264 Other long-term assets $ 94 $ 147 Accrued expenses and other $ 2,006 $ 318 Long-term liabilities $ 258 $ 3 December 31, 2019 March 31, 2019 Interest rate swap contracts Other long-term assets $ 288 $ 1,349 Long-term liabilities $ 5,836 $ 3,633 |
Schedule of effect of the Company's foreign currency exchange and interest rate swap contracts on the consolidated financial statements | Amount of Gain or (Loss) Recognized in AOCI on Derivatives Derivatives Designated as Three Months Ended December 31, Nine Months Ended December 31, Cash Flow Hedging Relationships 2019 2018 2019 2018 Foreign currency exchange contracts $ (3,158) $ 9,398 $ 148 $ (2,203) Interest rate swaps $ 782 $ (2,776) $ (3,054) $ (2,310) Location of Gain or (Loss) Reclassified Amount of Gain or (Loss) Reclassified from AOCI into Income from AOCI into Income (loss) (Effective Three Months Ended December 31, Nine Months Ended December 31, Portion) 2019 2018 2019 2018 Revenue $ — $ (510) $ (18) $ (1,673) Costs of revenue $ 827 $ (846) $ 2,351 $ (1,187) Operating expenses $ 337 $ (405) $ 1,020 $ (578) Interest Expenses $ (100) $ 288 $ 209 $ 731 Amount of Gain or (Loss) Recognized in Income (loss) on Derivatives Three Months Ended Nine Months Ended Derivatives not Designated Location of Gain Or (Loss) December 31, December 31, as Hedging Instruments Recognized in Income (loss) on Derivatives 2019 2018 2019 2018 Foreign currency exchange contracts Revenue $ (1,449) $ 1,131 $ (205) $ 2,237 Costs of revenue $ 1,105 $ (784) $ 380 $ (1,537) Selling, general and administrative expenses $ 114 $ (75) $ 29 $ (93) |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Leases | |
Components of operating leases | Leases Location on Consolidated Balance Sheets December 31, 2019 Assets Operating lease assets Operating lease right-of-use of assets $ 50,894 Liabilities Current Operating lease liabilities Operating lease liabilities $ 11,385 Noncurrent Operating lease liabilities Operating lease liabilities, noncurrent $ 44,009 Total $ 55,394 |
Components of lease expense related to operating leases | Three Months Ended Nine Months Ended Location on Consolidated Statements of Income December 31, 2019 December 31, 2019 Operating lease cost: Operating lease cost Selling, general and administrative expenses $ 3,789 $ 11,403 Variable lease cost Selling, general and administrative expenses $ 30 $ 74 Short-term lease cost Selling, general and administrative expenses $ 90 $ 359 Less: Sublease income Selling, general and administrative expenses $ (353) $ (870) Total operating lease cost $ 3,556 $ 10,966 |
Summary of supplemental cash flow information | Nine Months Ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used for operating leases $ 11,217 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 5,714 |
Summary of weighted average remaining lease term and weighted average discount rate | December 31, 2019 Weighted average remaining lease term, in years: Operating leases 5.56 Weighted average discount rate: Operating leases 7.49 % |
Schedule of maturities of the Company's operating lease liabilities, under ASC Topic 842, as of December 31, 2019: | The following table provides the schedule of maturities of the Company’s operating lease liabilities, under ASC Topic 842, as of December 31, 2019: Operating leases December 31, 2019 2020-remainder of year $ 3,784 2021 14,901 2022 13,663 2023 10,927 2024 6,975 2025 and thereafter 17,110 Total lease payments $ 67,360 Interest (11,966) Total lease liabilities $ 55,394 |
Schedule of the Company's future minimum payments on its operating leases at March 31, 2019, which were accounted for in accordance with its historic accounting policies under ASC Topic 840 | Operating leases March 31, 2019 2020 $ 14,685 2021 13,895 2022 12,663 2023 9,879 2024 5,686 2025 and thereafter 16,761 Total lease payments $ 73,569 |
Revenues (Tables)
Revenues (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Revenues | |
Schedule of disaggregation of revenue | Three Months Ended Nine Months Ended December 31, December 31, Revenue by geography: 2019 2018 2019 2018 North America $ 251,229 $ 224,143 $ 724,005 $ 652,076 Europe 55,154 65,046 175,258 192,175 Rest of World 28,724 25,492 83,369 75,981 Consolidated revenue $ 335,107 $ 314,681 $ 982,632 $ 920,232 Three Months Ended Nine Months Ended December 31, December 31, Revenue by customer’s industry groups 2019 2018 2019 2018 Banking financial services insurance $ 187,312 $ 197,329 $ 570,620 $ 578,138 Communications and Technology 119,558 89,159 332,465 257,527 Media & Information and Other 28,237 28,193 79,547 84,567 Consolidated revenue $ 335,107 $ 314,681 $ 982,632 $ 920,232 Three Months Ended Nine Months Ended December 31, December 31, Revenue by service offerings 2019 2018 2019 2018 Application outsourcing $ 183,777 $ 165,986 $ 547,303 $ 488,584 Consulting 151,330 148,695 435,329 431,648 Consolidated revenue $ 335,107 $ 314,681 $ 982,632 $ 920,232 Three Months Ended Nine Months Ended December 31, December 31, Revenue by contract type 2019 2018 2019 2018 Time-and-materials $ 190,423 $ 189,134 $ 579,657 $ 552,530 Fixed-price* 144,684 125,547 402,975 367,702 Consolidated revenue $ 335,107 $ 314,681 $ 982,632 $ 920,232 *Fixed-price includes both retainer-billing basis and fixed-price progress towards completion |
Schedule of significant movements in contract assets and deferred revenue balances | The table below shows movements during the nine months ended December 31, 2019 and 2018 in contract assets: December 31, 2019 December 31, 2018 Beginning balance $ 18,538 $ 15,998 Revenues recognized during the period but not yet billed 67,594 92,564 Amounts billed (68,314) (95,457) Other (20) (507) Ending balance $ 17,798 $ 12,598 Contract liabilities comprise of amounts billed to customers for revenues not yet earned. Such amounts are anticipated to be recorded as revenues when services are performed in subsequent periods. The table below shows movements in the deferred revenue balances during the nine months ended December 31, 2019 and 2018: December 31, 2019 December 31, 2018 Beginning balance $ 6,421 $ 7,908 Amounts billed but not yet recognized as revenues 5,342 5,310 Revenues recognized related to the opening balance of deferred revenue (5,017) (6,761) Other (154) (337) Ending balance $ 6,592 $ 6,120 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets | |
Schedule of changes in goodwill | December 31, 2019 Balance at April 1, 2019 $ 279,543 Foreign currency translation adjustments (3,454) Balance at December 31, 2019 $ 276,089 |
Schedule of intangible asset carrying amounts acquired and amortization | The following are details of the Company’s intangible asset carrying amounts acquired and amortization at December 31, 2019: December 31, 2019 Weighted Gross Net Average Carrying Accumulated Carrying Useful Life Amount Amortization Amount Amortizable intangible assets: Customer relationships 12.3 $ 141,267 $ 42,979 $ 98,288 Trademark 2.0 900 804 96 Technology 5.0 500 467 33 Other 5.0 1,233 131 1,102 12.1 $ 143,900 $ 44,381 $ 99,519 |
Schedule of estimated amortization expense related to the purchased intangible assets | March 31, 2019 Weighted Gross Net Average Carrying Accumulated Carrying Useful Life Amount Amortization Amount Amortizable intangible assets: Customer relationships 13.0 $ 125,520 $ 33,679 $ 91,841 Trademark 2.0 900 431 469 Technology 5.0 500 370 130 12.9 $ 126,920 $ 34,480 $ 92,440 |
Concentration of Revenue and _2
Concentration of Revenue and Assets (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Concentration of Revenue and Assets | |
Schedule of revenue attributed to geographic areas based on location of the client | Three Months Ended Nine Months Ended December 31, December 31, 2019 2018 2019 2018 Customer revenue: United States of America $ 237,754 $ 213,542 $ 685,023 $ 623,224 United Kingdom 42,902 52,248 137,795 154,813 Rest of World 54,451 48,891 159,814 142,195 Consolidated revenue $ 335,107 $ 314,681 $ 982,632 $ 920,232 |
Schedule of long-lived assets, net of accumulated depreciation and amortization, attributed to geographic areas based on location of assets | December 31, March 31, 2019 2019 Long-lived assets, net of accumulated depreciation and amortization: United States of America $ 224,670 $ 216,279 India 240,000 251,722 Rest of World 19,136 23,847 Consolidated long-lived assets, net $ 483,806 $ 491,848 |
Schedule of revenue from significant clients as a percentage of Company's consolidated revenue | Three Months Ended Nine Months Ended December 31, December 31, 2019 2018 2019 2018 Customer A 16.4 % 18.0 % 15.9 % 17.7 % |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Debt | |
Summary of short-term debt balances | December 31, 2019 March 31, 2019 Term loan- current maturities 15,898 12,500 Less: deferred financing costs, current (1,301) (1,093) Total $ 14,597 $ 11,407 |
Summary of long-term debt balances | December 31, 2019 March 31, 2019 Term loan $ 228,359 $ 237,500 Borrowings under revolving credit facility 165,500 129,500 Less: Current maturities (15,898) (12,500) Deferred financing costs, long-term (2,797) (3,180) Total $ 375,164 $ 351,320 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Accumulated Other Comprehensive Loss. | |
Schedule of changes in accumulated other comprehensive income (loss) by component | Three Months Ended Nine Months Ended December 31, December 31, 2019 2018 2019 2018 Investment securities Beginning balance $ 12 $ (225) $ 12 $ 69 Other comprehensive income (loss) (OCI) before reclassifications, net of tax of $0, $0, $0 and $(52) — (8) — (176) Reclassifications from OCI to other income, net of tax of $0, $0, $0 and $12 — 271 125 Less: Noncontrolling interests, net of tax of $0, $(5), $0 and $7 — (8) — 12 Comprehensive income (loss) on investment securities, net of tax of $0, $(5), $0 and $(33) — 255 — (39) Closing balance $ 12 $ 30 $ 12 $ 30 Currency translation adjustments Beginning balance $ (64,116) $ (57,318) $ (57,354) $ (41,207) OCI before reclassifications 4,630 (2,477) (2,106) (20,201) Less: Noncontrolling interests (363) (396) (389) 1,217 Comprehensive income (loss) on currency translation adjustments 4,267 (2,873) (2,495) (18,984) Closing balance $ (59,849) $ (60,191) $ (59,849) $ (60,191) Cash flow hedges Beginning balance $ (2,175) $ (5,179) $ 39 $ 1,881 OCI before reclassifications net of tax of $(386), $1,608, $(666) and $(1,582) (1,993) 5,014 (2,240) (2,931) Reclassifications from OCI to —Revenue, net of tax of $0, $178, $7 and $586 — 332 11 1,087 —Costs of revenue, net of tax of $(188), $214, $(504) and $303 (639) 632 (1,847) 884 —Selling, general and administrative expenses, net of tax of $(77), $102, $(220) and $147 (260) 303 (800) 431 —Interest expenses, net of tax of $26, $(74), $(54) and $(188) 75 (214) (155) (543) Less: Noncontrolling interests, net of tax of $0, $(23), $0 and $17 — (44) — 35 Comprehensive income (loss) on cash flow hedges, net of tax of $(625), $2,005, $(1,437) and $(717) (2,817) 6,023 (5,031) (1,037) Closing balance $ (4,992) $ 844 $ (4,992) $ 844 Benefit plans Beginning balance $ (2,776) $ (1,511) $ (2,084) $ (1,424) OCI before reclassifications net of tax of $0, $0, $0 and $348 — 3 (911) (349) Reclassifications from OCI for prior service credit (cost) to: Other income (expense), net of tax of $0 for all periods 6 14 19 42 Reclassifications from net actuarial gain (loss) amortization to: Other income (expense), net of tax of $0 for all periods 70 36 210 113 Other adjustments 3 20 76 171 (Less): Noncontrolling interests, net of tax $0 for all periods (3) — (10) 9 Comprehensive income (loss) on benefit plans, net of tax of $0, $0, $0 and $348 76 73 (616) (14) Closing balance (2,700) $ (1,438) (2,700) $ (1,438) Accumulated other comprehensive loss $ (67,529) $ (60,755) $ (67,529) $ (60,755) |
Unaudited Interim Financial I_2
Unaudited Interim Financial Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Dec. 31, 2019 | Apr. 01, 2019 | |
Unaudited Interim Financial Information | ||
Lease, Practical Expedients, Package [true false] | true | |
Lease, Practical Expedient, Use of Hindsight [true false] | false | |
Right-of-use-assets | $ 50,894 | |
Lease liabilities | $ 55,394 | |
Effect | ASU 2016-02 | ||
Unaudited Interim Financial Information | ||
Right-of-use-assets | $ 54,762 | |
Lease liabilities | $ 59,157 |
Earnings per Share - Basic earn
Earnings per Share - Basic earnings per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Numerator: | ||||||
Net income available to Virtusa stockholders | $ 12,720 | $ 5,834 | $ 12,576 | $ 1,505 | $ 25,656 | $ 7,785 |
Less: Series A Convertible Preferred Stock dividends and accretion | (1,087) | (1,087) | (3,262) | (3,262) | ||
Net income available to Virtusa common stockholders | $ 11,633 | $ 11,489 | $ 22,394 | $ 4,523 | ||
Denominator: | ||||||
Basic weighted average common shares outstanding (in shares) | 29,849,368 | 29,893,220 | 30,041,740 | 29,764,507 | ||
Basic earnings per share available to Virtusa common stockholders (in dollars per share) | $ 0.39 | $ 0.38 | $ 0.75 | $ 0.15 |
Earnings per Share - Diluted ea
Earnings per Share - Diluted earnings per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Numerator: | ||||
Net income available to Virtusa common stockholders | $ 11,633 | $ 11,489 | $ 22,394 | $ 4,523 |
Add: Series A Convertible Preferred Stock dividends and accretion | 1,087 | 1,087 | ||
Net income available to Virtusa common stockholders and assumed conversion | $ 12,720 | $ 12,576 | $ 22,394 | $ 4,523 |
Denominator: | ||||
Basic weighted average common shares outstanding (in shares) | 29,849,368 | 29,893,220 | 30,041,740 | 29,764,507 |
Dilutive effect of Series A Convertible Preferred Stock if converted | 3,000,000 | 3,000,000 | ||
Dilutive effect of employee stock options and unvested restricted stock awards and restricted stock units (in shares) | 608,863 | 768,508 | 658,529 | 833,607 |
Weighted average shares-diluted (in shares) | 33,458,231 | 33,661,728 | 30,700,269 | 30,598,114 |
Diluted earnings per share available to Virtusa common stockholders (in dollars per share) | $ 0.38 | $ 0.37 | $ 0.73 | $ 0.15 |
Earnings per Share - Anti-dilut
Earnings per Share - Anti-dilutive securities (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Anti-dilutive securities | ||||
Dilutive effect of Series A Convertible Preferred Stock if converted | 3,000,000 | 3,000,000 | ||
Employee stock options and unvested restricted stock awards and restricted stock units | ||||
Anti-dilutive securities | ||||
Shares excluded from computation of earnings (loss) per share | 24,037 | 20,617 | 100,434 | 13,745 |
Series A Convertible Preferred Stock | ||||
Anti-dilutive securities | ||||
Shares excluded from computation of earnings (loss) per share | 3,000,000 | 3,000,000 |
Investment Securities (Details)
Investment Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2019 | |
Total available-for-sale debt securities and equity securities | |||||
Amortized Cost | $ 19,910 | $ 19,910 | $ 33,240 | ||
Gross Unrealized Gains | 158 | 158 | 222 | ||
Gross Unrealized Losses | (2) | ||||
Fair Value | 20,068 | 20,068 | 33,460 | ||
Proceeds from sales or maturities of available-for-sale investment and equity securities | |||||
Proceeds from sales or maturities of available-for-sale investment securities and equity securities | 9,476 | $ 27,633 | 47,716 | $ 88,204 | |
Gross gains | 123 | 253 | 563 | 639 | |
Gross losses | (32) | ||||
Net realized gains on sales of available-for-sale investment securities and equity securities | 123 | $ 253 | 563 | $ 607 | |
Corporate Debt Securities | Current | |||||
Available-for-sale debt securities | |||||
Amortized Cost | 2,779 | ||||
Gross Unrealized Gains | 1 | ||||
Gross Unrealized Losses | (2) | ||||
Fair Value | 2,778 | ||||
Preference shares | Noncurrent | |||||
Available-for-sale debt securities | |||||
Amortized Cost | 188 | ||||
Fair Value | 188 | ||||
Agency And Short Term Notes | Current | |||||
Available-for-sale debt securities | |||||
Amortized Cost | 1,492 | ||||
Gross Unrealized Gains | 1 | ||||
Fair Value | 1,493 | ||||
Time Deposits | Current | |||||
Available-for-sale debt securities | |||||
Amortized Cost | 6,849 | 6,849 | 15,861 | ||
Fair Value | 6,849 | 6,849 | 15,861 | ||
Mutual funds | Current | |||||
Equity securities | |||||
Amortized Cost | 13,060 | 13,060 | 12,912 | ||
Gross Unrealized Gains | 149 | 149 | 94 | ||
Fair Value | 13,209 | 13,209 | 13,006 | ||
Equity Shares/ Options | Noncurrent | |||||
Equity securities | |||||
Amortized Cost | 1 | 1 | 8 | ||
Gross Unrealized Gains | 9 | 9 | 126 | ||
Fair Value | $ 10 | $ 10 | $ 134 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Financial assets and liabilities measured at fair value on a recurring basis (Details) - Fair Value Measurements Recurring - USD ($) $ in Thousands | Dec. 31, 2019 | Mar. 31, 2019 |
Investments: | ||
Available-for-sales debt securities - current | $ 6,849 | $ 20,132 |
Equity securities - current | 13,209 | 13,006 |
Available-for-sales debt securities - non-current | 188 | |
Equity securities - non-current | 10 | 134 |
Derivative financial instruments: | ||
Foreign currency derivative contracts | 2,152 | 3,411 |
Interest rate swap contracts | 288 | 1,349 |
Total assets | 22,508 | 38,220 |
Liabilities: | ||
Foreign currency derivative contracts | 2,264 | 321 |
Interest rate swap contracts | 5,836 | 3,633 |
Total liabilities | 8,100 | 3,954 |
Fair Value Inputs Level2 | ||
Investments: | ||
Available-for-sales debt securities - current | 6,849 | 20,132 |
Equity securities - current | 13,209 | 13,006 |
Available-for-sales debt securities - non-current | 188 | |
Equity securities - non-current | 10 | 134 |
Derivative financial instruments: | ||
Foreign currency derivative contracts | 2,152 | 3,411 |
Interest rate swap contracts | 288 | 1,349 |
Total assets | 22,508 | 38,220 |
Liabilities: | ||
Foreign currency derivative contracts | 2,264 | 321 |
Interest rate swap contracts | 5,836 | 3,633 |
Total liabilities | $ 8,100 | $ 3,954 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Interest rate swaps (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Dec. 31, 2019 | Mar. 31, 2019 | |
Foreign Exchange Contract | ||
Derivative Financial Instruments | ||
Notional value of outstanding contracts | $ 133,032 | $ 118,557 |
Unrealized net gains related to derivative instruments expected to be reclassified from AOCI into earnings during the next 12 months | $ 52 | |
Foreign Exchange Contract | Maximum | ||
Derivative Financial Instruments | ||
Outstanding term of derivative instruments | 15 months | |
Interest rate swaps | ||
Derivative Financial Instruments | ||
Notional value of outstanding contracts | $ 178,800 | |
Outstanding term of derivative instruments | 4 years | |
Unrealized loss on derivative | $ 5,548 | $ 2,284 |
Interest rate swap 2018 | ||
Derivative Financial Instruments | ||
Fixed interest rate | 2.85% | |
Percentage of coverage target retain | 50.00% | |
Interest rate swap 2018 | London Interbank Offered Rate L I B O R | ||
Derivative Financial Instruments | ||
Percentage of coverage on debt | 50.00% | |
2016 interest rate swaps | 1-month LIBOR | ||
Derivative Financial Instruments | ||
Blended weighted average rate | 1.025% |
Derivative Financial Instrume_4
Derivative Financial Instruments - Derivatives designated as hedging instruments (Details) - Designated As Hedging Instrument - USD ($) $ in Thousands | Dec. 31, 2019 | Mar. 31, 2019 |
Foreign Exchange Contract | ||
Foreign currency exchange and interest rate swap contracts | ||
Other current assets | $ 2,058 | $ 3,264 |
Other long-term assets | 94 | 147 |
Accrued expenses and other | 2,006 | 318 |
Long-term liabilities | 258 | 3 |
Interest rate swaps | ||
Foreign currency exchange and interest rate swap contracts | ||
Other long-term assets | 288 | 1,349 |
Long-term liabilities | $ 5,836 | $ 3,633 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Effect of foreign currency exchange and interest rate swap contracts (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Designated As Hedging Instrument | Cash flow hedges. | Revenue | ||||
Derivative Financial Instruments | ||||
Amount of Gain or (Loss) Reclassified from AOCI into Income (loss) | $ (510) | $ (18) | $ (1,673) | |
Designated As Hedging Instrument | Cash flow hedges. | Costs of revenue | ||||
Derivative Financial Instruments | ||||
Amount of Gain or (Loss) Reclassified from AOCI into Income (loss) | $ 827 | (846) | 2,351 | (1,187) |
Designated As Hedging Instrument | Cash flow hedges. | Operating Expense | ||||
Derivative Financial Instruments | ||||
Amount of Gain or (Loss) Reclassified from AOCI into Income (loss) | 337 | (405) | 1,020 | (578) |
Designated As Hedging Instrument | Cash flow hedges. | Interest expenses | ||||
Derivative Financial Instruments | ||||
Amount of Gain or (Loss) Reclassified from AOCI into Income (loss) | (100) | 288 | 209 | 731 |
Designated As Hedging Instrument | Cash flow hedges. | Foreign Exchange Contract | ||||
Derivative Financial Instruments | ||||
Amount of Gain or (Loss) Recognized in AOCI on Derivatives | (3,158) | 9,398 | 148 | (2,203) |
Designated As Hedging Instrument | Cash flow hedges. | Interest rate swaps | ||||
Derivative Financial Instruments | ||||
Amount of Gain or (Loss) Recognized in AOCI on Derivatives | 782 | (2,776) | (3,054) | (2,310) |
Nondesignated | Foreign Exchange Contract | Revenue | ||||
Derivative Financial Instruments | ||||
Amount of Gain or (Loss) Recognized in Income (loss) on Derivatives | (1,449) | 1,131 | (205) | 2,237 |
Nondesignated | Foreign Exchange Contract | Costs of revenue | ||||
Derivative Financial Instruments | ||||
Amount of Gain or (Loss) Recognized in Income (loss) on Derivatives | 1,105 | (784) | 380 | (1,537) |
Nondesignated | Foreign Exchange Contract | Selling General And Administrative Expenses | ||||
Derivative Financial Instruments | ||||
Amount of Gain or (Loss) Recognized in Income (loss) on Derivatives | $ 114 | $ (75) | $ 29 | $ (93) |
Leases - Supplemental balance s
Leases - Supplemental balance sheet information (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases | |
Operating lease right-of-use assets | $ 50,894 |
Operating lease asset location on balance sheet | us-gaap:OperatingLeaseRightOfUseAsset |
Operating lease liabilities, current | $ 11,385 |
Operating lease liabilities current location on balance sheet | us-gaap:OperatingLeaseLiabilityCurrent |
Operating lease liabilities, noncurrent | $ 44,009 |
Operating lease liabilities non current location on balance sheet | us-gaap:OperatingLeaseLiabilityNoncurrent |
Total lease liabilities | $ 55,394 |
Minimum | |
Leases | |
Remaining lease terms, operating lease | 1 year |
Maximum | |
Leases | |
Remaining lease terms, operating lease | 9 years |
Leases - Components of lease ex
Leases - Components of lease expense (Details) - Selling General And Administrative Expenses - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Dec. 31, 2019 | Dec. 31, 2019 | |
Operating lease cost: | ||
Operating lease cost | $ 3,789 | $ 11,403 |
Variable lease cost | 30 | 74 |
Short-term lease cost | 90 | 359 |
Less: Sublease income | (353) | (870) |
Total operating lease cost | $ 3,556 | $ 10,966 |
Leases - Supplemental cash flow
Leases - Supplemental cash flow information (Details) $ in Thousands | 9 Months Ended |
Dec. 31, 2019USD ($) | |
Leases | |
Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used for operating leases | $ 11,217 |
Right-of-use assets obtained in exchange for lease obligations - Operating leases | $ 5,714 |
Leases - Lease terms and discou
Leases - Lease terms and discount rates (Details) | Dec. 31, 2019agreement |
Leases | |
Weighted average remaining lease term (Years) - Operating leases | 5 years 6 months 21 days |
Weighted average discount rate - Operating) - Operating leases | 7.49% |
Number of lease agreements that contained restrictive covenants or material residual guarantees | 0 |
Leases - Lease maturities (Deta
Leases - Lease maturities (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases | |
Amount of operating lease that has yet to commence | $ 320 |
Operating Leases maturities: | |
2020- remainder of year | 3,784 |
2021 | 14,901 |
2022 | 13,663 |
2023 | 10,927 |
2024 | 6,975 |
2025 and thereafter | 17,110 |
Total lease payments | 67,360 |
Interest | (11,966) |
Total lease liabilities | $ 55,394 |
Leases - Future minimum lease p
Leases - Future minimum lease payments (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Accounted for in accordance with its historic accounting policies under ASC Topic 840 | |
2020 | $ 14,685 |
2021 | 13,895 |
2022 | 12,663 |
2023 | 9,879 |
2024 | 5,686 |
2025 and thereafter | 16,761 |
Total lease payments | $ 73,569 |
Leases - Leases not yet commenc
Leases - Leases not yet commenced (Details) | Dec. 31, 2019 |
Minimum | |
Leases not yet commenced | |
Term of lease | 2 years |
Maximum | |
Leases not yet commenced | |
Term of lease | 3 years |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disaggregation of Revenue | ||||
Revenue | $ 335,107 | $ 314,681 | $ 982,632 | $ 920,232 |
Time-and-materials | ||||
Disaggregation of Revenue | ||||
Revenue | 190,423 | 189,134 | 579,657 | 552,530 |
Fixed-price | ||||
Disaggregation of Revenue | ||||
Revenue | 144,684 | 125,547 | 402,975 | 367,702 |
Application outsourcing | ||||
Disaggregation of Revenue | ||||
Revenue | 183,777 | 165,986 | 547,303 | 488,584 |
Consulting | ||||
Disaggregation of Revenue | ||||
Revenue | 151,330 | 148,695 | 435,329 | 431,648 |
Banking financial services insurance | ||||
Disaggregation of Revenue | ||||
Revenue | 187,312 | 197,329 | 570,620 | 578,138 |
Communications and Technology | ||||
Disaggregation of Revenue | ||||
Revenue | 119,558 | 89,159 | 332,465 | 257,527 |
Media & Information and Other | ||||
Disaggregation of Revenue | ||||
Revenue | 28,237 | 28,193 | 79,547 | 84,567 |
North America | ||||
Disaggregation of Revenue | ||||
Revenue | 251,229 | 224,143 | 724,005 | 652,076 |
Europe | ||||
Disaggregation of Revenue | ||||
Revenue | 55,154 | 65,046 | 175,258 | 192,175 |
Rest Of World | ||||
Disaggregation of Revenue | ||||
Revenue | $ 28,724 | $ 25,492 | $ 83,369 | $ 75,981 |
Revenues - Receivable and Contr
Revenues - Receivable and Contract Balances (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Significant movements in contract assets | ||
Beginning balance | $ 18,538 | $ 15,998 |
Revenues recognized during the period but not yet billed | 67,594 | 92,564 |
Amounts billed | (68,314) | (95,457) |
Other | (20) | (507) |
Ending balance | 17,798 | 12,598 |
Significant movements in deferred revenue balances | ||
Beginning balance | 6,421 | 7,908 |
Amounts billed but not yet recognized as revenues | 5,342 | 5,310 |
Revenues recognized related to the opening balance of deferred revenue | (5,017) | (6,761) |
Other | (154) | (337) |
Ending balance | $ 6,592 | $ 6,120 |
Revenues - Remaining performanc
Revenues - Remaining performance obligation (Details) $ in Thousands | 9 Months Ended |
Dec. 31, 2019USD ($) | |
Remaining performance obligation | |
Aggregate amount of transaction price allocated to remaining performance obligations | $ 41,582 |
Upfront payments | |
Unamortized upfront payments for services | $ 34,420 |
Amortization period for upfront payments for services | 5 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-12-31 | |
Remaining performance obligation | |
Remaining performance obligation, expected period of recognition | 5 years |
Series A Convertible Preferre_2
Series A Convertible Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | May 03, 2017 | Dec. 31, 2019 | Dec. 31, 2018 |
Series A Convertible Preferred Stock | |||
Cash dividends paid | $ 3,138 | $ 3,138 | |
Series A Convertible Preferred Stock | |||
Series A Convertible Preferred Stock | |||
Direct and incremental expenses incurred | $ 1,154 | ||
Declared and accrued dividends | 686 | 686 | |
Cash dividends paid | $ 3,138 | $ 3,138 | |
Series A Convertible Preferred Stock | After May 3, 2024 | |||
Series A Convertible Preferred Stock | |||
Increase in preference dividend rate, per annum upon failure to repurchase (as a percent) | 1.00% | ||
Additional increase in preference dividend rate, per annum on each anniversary of the date that the Company is required to effect such repurchase (as a percent) | 1.00% | ||
Series A Convertible Preferred Stock | After May 3, 2024 | Maximum | |||
Series A Convertible Preferred Stock | |||
Dividend rate (as a percent) | 6.875% | ||
Series A Convertible Preferred Stock | Orogen | |||
Series A Convertible Preferred Stock | |||
Sale of convertible preferred stock (in shares) | 108,000 | ||
Shares issuable upon conversion (in shares) | 3,000,000 | ||
Aggregate purchase price | $ 108,000 | ||
Conversion price (in dollars per share) | $ 36 | ||
Dividend rate (as a percent) | 3.875% |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2019USD ($) | Dec. 31, 2019USD ($)segment | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | |
Goodwill: | ||||
Number of operating segments | segment | 1 | |||
Changes in goodwill | ||||
Beginning balance | $ 279,543 | |||
Foreign currency translation adjustments | (3,454) | |||
Ending balance | $ 276,089 | 276,089 | ||
Acquisition costs and goodwill deductible for tax purposes | 145,658 | 145,658 | ||
Acquisition costs and goodwill not deductible for tax purposes | 143,334 | 143,334 | ||
Acquired certain assets of a small consulting company purchase price | ||||
Payment of contigent consideration of asset acquisition | 942 | |||
eTouch Systems Corp. | ||||
Acquired certain assets of a small consulting company purchase price | ||||
Cash paid at closing | $ 4,000 | |||
Additional earn-out consideration | $ 4,000 | |||
Payment of contigent consideration of asset acquisition | 942 | |||
Probable and estimable value of the contingent consideration | 2,645 | |||
Aquisition One | ||||
Acquired certain assets of a small consulting company purchase price | ||||
Cash paid at closing | 1,400 | 1,400 | ||
Additional earn-out consideration | 1,400 | 1,400 | ||
Probable and estimable value of the contingent consideration | $ 1,381 | |||
Acquistion Two | ||||
Acquired certain assets of a small consulting company purchase price | ||||
Cash paid at closing | $ 4,251 | |||
Additional earn-out consideration | $ 4,453 | |||
Probable and estimable value of the contingent consideration | $ 3,078 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Intangible assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Dec. 31, 2019 | Mar. 31, 2019 | |
Intangible Assets | ||
Weighted Average Useful Life | 12 years 1 month 6 days | 12 years 10 months 24 days |
Gross Carrying Amount | $ 143,900 | $ 126,920 |
Accumulated Amortization | 44,381 | 34,480 |
Net Carrying Amount | $ 99,519 | $ 92,440 |
Customer Relationships | ||
Intangible Assets | ||
Weighted Average Useful Life | 12 years 3 months 18 days | 13 years |
Gross Carrying Amount | $ 141,267 | $ 125,520 |
Accumulated Amortization | 42,979 | 33,679 |
Net Carrying Amount | $ 98,288 | $ 91,841 |
Trademarks | ||
Intangible Assets | ||
Weighted Average Useful Life | 2 years | 2 years |
Gross Carrying Amount | $ 900 | $ 900 |
Accumulated Amortization | 804 | 431 |
Net Carrying Amount | $ 96 | $ 469 |
Technology | ||
Intangible Assets | ||
Weighted Average Useful Life | 5 years | 5 years |
Gross Carrying Amount | $ 500 | $ 500 |
Accumulated Amortization | 467 | 370 |
Net Carrying Amount | $ 33 | $ 130 |
Other | ||
Intangible Assets | ||
Weighted Average Useful Life | 5 years | |
Gross Carrying Amount | $ 1,233 | |
Accumulated Amortization | 131 | |
Net Carrying Amount | $ 1,102 |
Income Taxes - Tax Act (Details
Income Taxes - Tax Act (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Taxes | ||||
Effective tax rate (as a percent) | 44.70% | 44.80% | 43.30% | 63.30% |
United States of America | ||||
Income Taxes | ||||
Deferred tax asset | $ 25,685 | $ 25,685 | ||
United Kingdom | ||||
Income Taxes | ||||
Deferred tax asset | $ 2,183 | $ 2,183 |
Income Taxes - Income tax holid
Income Taxes - Income tax holiday (Details) - a | Sep. 20, 2019 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 |
Income Taxes | ||||||
Effective tax rate (as a percent) | 44.70% | 44.80% | 43.30% | 63.30% | ||
India | ||||||
Income Taxes | ||||||
Effective tax rate (as a percent) | 25.17% | 34.90% | ||||
Hyderabad, India | Indian Operations In Special Economic Zone | ||||||
Income Taxes | ||||||
Parcel of land (in acres) | 6.3 | 6.3 | ||||
Consecutive period of income tax exemption | 10 years | |||||
Income tax benefits total eligibility period | 15 years | |||||
L [K] | Virtusa Private Limited | ||||||
Income Taxes | ||||||
Income tax exemption period | 12 years |
Income Taxes - Unrecognized tax
Income Taxes - Unrecognized tax benefits and other (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2019 | |
Income Taxes | |||
Total liability for unrecognized tax benefits | $ 6,905 | $ 6,744 | |
Increase (decrease) in unrecognized tax benefits | 161 | $ (531) | |
Cash, cash equivalents, short-term investments and long-term investments available for distribution if not indefinitely reinvested | $ 198,020 |
Concentration of Revenue and _3
Concentration of Revenue and Assets - Geographic concentration (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2019 | |
Concentration of Revenue and Assets | |||||
Revenue | $ 335,107 | $ 314,681 | $ 982,632 | $ 920,232 | |
Long-lived assets, net | 483,806 | 483,806 | $ 491,848 | ||
United States of America | |||||
Concentration of Revenue and Assets | |||||
Revenue | 237,754 | 213,542 | 685,023 | 623,224 | |
Long-lived assets, net | 224,670 | 224,670 | 216,279 | ||
United Kingdom | |||||
Concentration of Revenue and Assets | |||||
Revenue | 42,902 | 52,248 | 137,795 | 154,813 | |
India | |||||
Concentration of Revenue and Assets | |||||
Long-lived assets, net | 240,000 | 240,000 | 251,722 | ||
Rest Of World | |||||
Concentration of Revenue and Assets | |||||
Revenue | 54,451 | $ 48,891 | 159,814 | $ 142,195 | |
Long-lived assets, net | $ 19,136 | $ 19,136 | $ 23,847 |
Concentration of Revenue and _4
Concentration of Revenue and Assets - Revenue percentage (Details) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Customer Concentration Risk | Sales Revenue Net | Customer One | ||||
Concentration of Revenue and Assets | ||||
Revenue from significant clients as a percentage of consolidated revenue | 16.40% | 18.00% | 15.90% | 17.70% |
Debt - Credit Agreement (Detail
Debt - Credit Agreement (Details) - USD ($) $ in Thousands | Feb. 06, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Oct. 15, 2019 | Oct. 14, 2019 | Mar. 12, 2018 | Feb. 05, 2018 |
Debt | |||||||
Amount drawn down on credit facility | $ 36,000 | $ 32,000 | |||||
eTouch | |||||||
Debt | |||||||
Anniversary payment term | 18 months | ||||||
etouch anniversay payment | $ 17,500 | ||||||
JPM | Term loan facility | |||||||
Debt | |||||||
Amount under term loan | $ 180,000 | ||||||
Credit Agreement | JPM | London Interbank Offered Rate L I B O R | |||||||
Debt | |||||||
Interest rate (as a percent) | 2.75% | ||||||
Credit Agreement | JPM | Revolving credit facility | |||||||
Debt | |||||||
Maximum borrowing capacity under the credit agreement | 200,000 | ||||||
Amount drawn down on credit facility | 55,000 | 36,000 | |||||
Credit Agreement | JPM | Delayed-draw term loan | |||||||
Debt | |||||||
Amount under term loan | 70,000 | ||||||
Credit Agreement | JPM | Delayed-draw term loan | eTouch | |||||||
Debt | |||||||
Amount under term loan | $ 70,000 | ||||||
Credit Agreement | JPM | Term loan facility | |||||||
Debt | |||||||
Amount under term loan | $ 180,000 | ||||||
Required principal payments per quarter | $ 2,891 | ||||||
Frequency of required principal payments | quarterly | ||||||
Term of credit facility | 5 years | ||||||
Interest rate (as a percent) | 3.99% | ||||||
Prior Credit Agreement | JPM | |||||||
Debt | |||||||
Maximum borrowing capacity under the credit agreement | $ 300,000 | ||||||
Credit Agreement Amendment | JPM | Revolving credit facility | |||||||
Debt | |||||||
Maximum borrowing capacity under the credit agreement | $ 275,000 | $ 200,000 |
Debt - Current portion of long-
Debt - Current portion of long-term debt (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Mar. 31, 2019 |
Current portion of long-term debt | ||
Total | $ 14,597 | $ 11,407 |
JPM | ||
Current portion of long-term debt | ||
Term loan - current maturities | 15,898 | 12,500 |
Less: deferred financing costs, current | (1,301) | (1,093) |
Total | $ 14,597 | $ 11,407 |
Debt - Long-term debt, less cur
Debt - Long-term debt, less current portion (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Mar. 31, 2019 |
Less: | ||
Total | $ 375,164 | $ 351,320 |
JPM | ||
Less: | ||
Current maturities | (15,898) | (12,500) |
Deferred financing costs, long-term | (2,797) | (3,180) |
Total | 375,164 | 351,320 |
Delayed-draw term loan | JPM | ||
Long-term debt, less current portion | ||
Term loan and borrowings under revolving credit facility | 228,359 | 237,500 |
Revolving credit facility | JPM | ||
Long-term debt, less current portion | ||
Term loan and borrowings under revolving credit facility | $ 165,500 | $ 129,500 |
Debt - Sale of accounts receiva
Debt - Sale of accounts receivable (Details) - U.K. Subsidiary $ in Thousands | 9 Months Ended |
Dec. 31, 2019USD ($) | |
Debt | |
Receivables sold under the terms of the financing agreement | $ 21,311 |
Amounts due related to a financing agreement to sell certain accounts receivable balances | $ 0 |
Noncontrolling interest - (Deta
Noncontrolling interest - (Details) - Virtusa India Private Limited - Polaris $ in Thousands | Aug. 01, 2018 | Feb. 12, 2018USD ($) | Feb. 12, 2018₨ / shares | Mar. 03, 2016USD ($) |
Acquisitions | ||||
Shares acquired (as a percent) | 51.70% | |||
Cash paid at closing | $ 168,257 | |||
Ownership interest of diluted shares (as a percent) | 93.00% | 93.00% | ||
Exit price (in INR per share) | ₨ / shares | ₨ 480 | |||
Expected amount of payment to settle the delisting offer | $ 145,000 | |||
Maximum period for public shareholders to tender shares after delisting | 1 year |
Noncontrolling interest - Polar
Noncontrolling interest - Polaris and Virtusa India (Details) - USD ($) $ in Thousands | 6 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2019 | |
Noncontrolling interest | ||||
Aggregate purchase price of shares of delisted entity | $ 8,675 | $ 30,387 | ||
Noncontrolling interest | ||||
Polaris | ||||
Noncontrolling interest | ||||
Number of shares held by noncontrolling interest shareholders of delisted entity | 2,009,365 | |||
Polaris | ||||
Noncontrolling interest | ||||
Shares held by noncontrolling interest shareholders of delisted entity (as a percent) | 1.95% | |||
Virtusa India Private Limited | Polaris | ||||
Noncontrolling interest | ||||
Number of shares purchased from stockholders of delisted subsidiary | 1,263,117 | |||
Shares purchased from stockholders of delisted subsidiary (as a percent) | 1.20% | |||
Aggregate purchase price of shares of delisted entity | $ 8,675 |
Noncontrolling interest - Capit
Noncontrolling interest - Capital Reduction (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2019 | Dec. 20, 2019 | |
Noncontrolling interest | |||
Payment of noncontrolling interest | $ 12,534 | ||
Polaris | Accrued Expense (Other) And Restricted Cash | |||
Noncontrolling interest | |||
Amount payable to remaining Polaris public shareholders | $ 1,030 | $ 1,030 | |
Polaris Public Shareholders | Polaris | |||
Noncontrolling interest | |||
Amount payable to remaining Polaris public shareholders | $ 13,564 | ||
Payment of noncontrolling interest | $ 12,534 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Changes in the components of accumulated other comprehensive income (loss) | ||||||||
Balance | $ 397,397 | $ 399,202 | $ 390,774 | $ 359,431 | $ 421,347 | $ 436,083 | $ 390,774 | $ 436,083 |
Reclassifications from OCI to: | ||||||||
Other income | (209) | 444 | (1,137) | (998) | ||||
Revenue | (335,107) | (314,681) | (982,632) | (920,232) | ||||
Costs of revenue | 236,427 | 221,461 | 709,746 | 654,288 | ||||
Selling, general and administrative expenses | 68,270 | 73,935 | 209,813 | 218,716 | ||||
Interest expense | 4,873 | 4,597 | 14,616 | 13,365 | ||||
Less: comprehensive income attributable to noncontrolling interest, net of tax | 484 | 669 | 849 | 134 | ||||
Other comprehensive income (loss) | 1,892 | (8,585) | (1,194) | (14,526) | ||||
Other income (expense), net of tax | 7,209 | (3,912) | 17,035 | 22,173 | ||||
Comprehensive income (loss) | 3,478 | (10,492) | ||||||
Balance | 403,296 | 397,397 | 399,202 | 380,814 | 359,431 | 421,347 | 403,296 | 380,814 |
Investment securities, including noncontrolling interests | ||||||||
Changes in the components of accumulated other comprehensive income (loss) | ||||||||
OCI before reclassifications net of tax | (8) | (176) | ||||||
Other Comprehensive Income (Loss), Tax | ||||||||
OCI before reclassifications, Tax | 0 | 0 | 0 | (52) | ||||
Investment securities, including noncontrolling interests | Other income (expense) | ||||||||
Other Comprehensive Income (Loss), Tax | ||||||||
Reclassifications from OCI, Tax | 0 | 0 | 0 | 12 | ||||
Investment securities, including noncontrolling interests | Reclassification Out Of Accumulated Other Comprehensive Income | ||||||||
Reclassifications from OCI to: | ||||||||
Other income | 271 | 125 | ||||||
Investment securities, noncontrolling interests | ||||||||
Reclassifications from OCI to: | ||||||||
Less : Noncontrolling interests, net of tax | (8) | 12 | ||||||
Other Comprehensive Income (Loss), Tax | ||||||||
Noncontrolling interests, Tax | 0 | (5) | 0 | 7 | ||||
Accumulated Net Unrealized Investment Gain Loss | ||||||||
Changes in the components of accumulated other comprehensive income (loss) | ||||||||
Balance | 12 | 12 | (225) | 69 | 12 | 69 | ||
Reclassifications from OCI to: | ||||||||
Comprehensive income (loss) | 255 | (39) | ||||||
Balance | 12 | 12 | 30 | (225) | 12 | 30 | ||
Other Comprehensive Income (Loss), Tax | ||||||||
Comprehensive income (loss), Tax | 0 | (5) | 0 | (33) | ||||
Currency Translation Adjustments, including noncontrolling interests | ||||||||
Changes in the components of accumulated other comprehensive income (loss) | ||||||||
OCI before reclassifications net of tax | 4,630 | (2,477) | (2,106) | (20,201) | ||||
Reclassifications from OCI to: | ||||||||
Less : Noncontrolling interests, net of tax | (363) | (396) | (389) | 1,217 | ||||
Accumulated Translation Adjustment [Member] | ||||||||
Changes in the components of accumulated other comprehensive income (loss) | ||||||||
Balance | (64,116) | (57,354) | (57,318) | (41,207) | (57,354) | (41,207) | ||
Reclassifications from OCI to: | ||||||||
Comprehensive income (loss) | 4,267 | (2,873) | (2,495) | (18,984) | ||||
Balance | (59,849) | (64,116) | (60,191) | (57,318) | (59,849) | (60,191) | ||
Cash Flow Hedges, including noncontrolling interests | ||||||||
Changes in the components of accumulated other comprehensive income (loss) | ||||||||
OCI before reclassifications net of tax | (1,993) | 5,014 | (2,240) | (2,931) | ||||
Other Comprehensive Income (Loss), Tax | ||||||||
OCI before reclassifications, Tax | (386) | 1,608 | (666) | (1,582) | ||||
Cash Flow Hedges, including noncontrolling interests | Revenue | ||||||||
Other Comprehensive Income (Loss), Tax | ||||||||
Reclassifications from OCI, Tax | 0 | 178 | 7 | 586 | ||||
Cash Flow Hedges, including noncontrolling interests | Costs of revenue | ||||||||
Other Comprehensive Income (Loss), Tax | ||||||||
Reclassifications from OCI, Tax | (188) | 214 | (504) | 303 | ||||
Cash Flow Hedges, including noncontrolling interests | Selling General And Administrative Expenses | ||||||||
Other Comprehensive Income (Loss), Tax | ||||||||
Reclassifications from OCI, Tax | (77) | 102 | (220) | 147 | ||||
Cash Flow Hedges, including noncontrolling interests | Interest expenses | ||||||||
Other Comprehensive Income (Loss), Tax | ||||||||
Reclassifications from OCI, Tax | 26 | (74) | (54) | (188) | ||||
Cash Flow Hedges, including noncontrolling interests | Reclassification Out Of Accumulated Other Comprehensive Income | ||||||||
Reclassifications from OCI to: | ||||||||
Revenue | 332 | 11 | 1,087 | |||||
Costs of revenue | (639) | 632 | (1,847) | 884 | ||||
Selling, general and administrative expenses | (260) | 303 | (800) | 431 | ||||
Interest expense | 75 | (214) | (155) | (543) | ||||
Cash Flow Hedges, noncontrolling interests | ||||||||
Reclassifications from OCI to: | ||||||||
Less : Noncontrolling interests, net of tax | (44) | 35 | ||||||
Other Comprehensive Income (Loss), Tax | ||||||||
Noncontrolling interests, Tax | 0 | (23) | 0 | 17 | ||||
Accumulated Net Gain Loss From Designated Or Qualifying Cash Flow Hedges | ||||||||
Changes in the components of accumulated other comprehensive income (loss) | ||||||||
Balance | (2,175) | 39 | (5,179) | 1,881 | 39 | 1,881 | ||
Reclassifications from OCI to: | ||||||||
Comprehensive income (loss) | (2,817) | 6,023 | (5,031) | (1,037) | ||||
Balance | (4,992) | (2,175) | 844 | (5,179) | (4,992) | 844 | ||
Other Comprehensive Income (Loss), Tax | ||||||||
Comprehensive income (loss), Tax | 625 | (2,005) | 1,437 | 717 | ||||
Benefit plans, including noncontrolling interests | ||||||||
Changes in the components of accumulated other comprehensive income (loss) | ||||||||
OCI before reclassifications net of tax | 3 | (911) | (349) | |||||
Reclassifications from OCI to: | ||||||||
Other adjustments | 3 | 20 | 76 | 171 | ||||
Other Comprehensive Income (Loss), Tax | ||||||||
OCI before reclassifications, Tax | 0 | 0 | 0 | 348 | ||||
Benefit plans, prior service credit (cost), including noncontrolling interests | Other income (expense) | ||||||||
Other Comprehensive Income (Loss), Tax | ||||||||
Reclassifications from OCI, Tax | 0 | 0 | 0 | 0 | ||||
Benefit plans, prior service credit (cost), including noncontrolling interests | Reclassification Out Of Accumulated Other Comprehensive Income | ||||||||
Reclassifications from OCI to: | ||||||||
Other income (expense), net of tax | 6 | 14 | 19 | 42 | ||||
Benefit plans, net actuarial gain (loss), including noncontrolling interest | Reclassification Out Of Accumulated Other Comprehensive Income | ||||||||
Reclassifications from OCI to: | ||||||||
Other income (expense), net of tax | 70 | 36 | 210 | 113 | ||||
Benefit plans, noncontrolling interests | ||||||||
Reclassifications from OCI to: | ||||||||
Less : Noncontrolling interests, net of tax | (3) | (10) | 9 | |||||
Accumulated Defined Benefit Plans Adjustment | ||||||||
Changes in the components of accumulated other comprehensive income (loss) | ||||||||
Balance | (2,776) | (2,084) | (1,511) | (1,424) | (2,084) | (1,424) | ||
Reclassifications from OCI to: | ||||||||
Comprehensive income (loss) | 76 | 73 | (616) | (14) | ||||
Balance | (2,700) | (2,776) | (1,438) | (1,511) | (2,700) | (1,438) | ||
Other Comprehensive Income (Loss), Tax | ||||||||
Comprehensive income (loss), Tax | 0 | 0 | 0 | 348 | ||||
Benefit plans, prior service credit (cost) | ||||||||
Other Comprehensive Income (Loss), Tax | ||||||||
Noncontrolling interests, Tax | 0 | 0 | 0 | 0 | ||||
Benefit plans, net actuarial gain (loss) | Other income (expense) | ||||||||
Other Comprehensive Income (Loss), Tax | ||||||||
Reclassifications from OCI, Tax | 0 | 0 | 0 | 0 | ||||
Accumulated Other Comprehensive Income | ||||||||
Changes in the components of accumulated other comprehensive income (loss) | ||||||||
Balance | (69,055) | (60,581) | (59,387) | (64,233) | (53,741) | (40,681) | (59,387) | (40,681) |
Reclassifications from OCI to: | ||||||||
Other comprehensive income (loss) | 1,526 | (8,474) | (1,194) | (13,060) | ||||
Comprehensive income (loss) | 3,478 | (10,492) | ||||||
Balance | $ (67,529) | $ (69,055) | $ (60,581) | $ (60,755) | $ (64,233) | $ (53,741) | $ (67,529) | $ (60,755) |
Treasury Stock (Details)
Treasury Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 05, 2019 | Dec. 31, 2019 |
Treasury Stock | ||
Common stock repurchased (in shares) | 505,565 | |
Common stock at a weighted average price (in dollars per share) | $ 36.93 | |
Aggregate purchase price | $ 18,680 | |
Share repurchase program, August 5, 2019 | ||
Treasury Stock | ||
Amount authorized | $ 30,000 | |
Number of months from the approval date | 12 months |
Commitments and Contingencies a
Commitments and Contingencies and Guarantees (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Commitments and Contingencies. | |
Estimated amount of liability | $ 7,500 |