EXHIBIT 99.1
FOR: Cognizant Technology Solutions Corporation
500 Glenpointe Centre West
Teaneck, NJ 07666
CONTACT: Gordon Coburn
Chief Financial Officer
201-678-2712
Investors: Ian Bailey/Kirin Smith
Press: Brian Maddox/Scot Hoffman
Financial Dynamics
212-850-5600
shoffman@fd-us.com
COGNIZANT TECHNOLOGY SOLUTIONS REPORTS RECORD FIRST QUARTER RESULTS
*Revenue exceeds expectations reaching $119.7 million,
Increases 61% y-o-y and 11% sequentially
*Margins and pricing remain solid
*Diluted EPS of $0.28 tops expectations
Teaneck, NJ - April 20, 2004 - Cognizant Technology Solutions Corporation
(NASDAQ: CTSH), a leading provider of IT services, today announced its financial
results for the first quarter ended March 31, 2004.
Highlights for the first quarter include:
o Quarterly revenue increased to $119.7 million, up 11% sequentially and
61% from the year ago quarter
o Operating margin of 19.8% compared to 19.8% sequentially and 19.5% in
the year ago period
o Diluted quarterly EPS reached $0.28
Revenue for the first quarter increased to $119.7 million, up 11% from $108.2
million in the fourth quarter of 2003, and up 61% from $74.5 million in the
first quarter of 2003. Net income for the first quarter increased to $19.8
million, or $0.28 per diluted share compared to $17.7 million, or $0.25 per
diluted share in the fourth quarter of 2003. Operating margin for the quarter
held steady at 19.8%, compared to 19.8% in the fourth quarter of 2003 and 19.5%
in the first quarter of 2003.
"Cognizant continues to deliver strong operating and financial performance as
demand for high value offshore services continues to grow, with particularly
strong interest in core application development and management services," stated
Lakshmi Narayanan, President and CEO of Cognizant. "We have maintained our
position as the fastest-growing company among the major offshore IT Services
firms through our strong focus and commitment to the superior execution of our
onsite/offshore business strategy. Additionally, client satisfaction with our
services remains strong as a result of the deep relationships we develop with
our clients. Cognizant continues to solidify its position as a highly
differentiated premium provider and demonstrates to clients the
significant value it can deliver. We continue to see strong growth across our
key verticals, especially in financial services and insurance. We expect the
momentum to continue and reiterate our expectation to grow the business faster
than the industry's growth rate throughout 2004."
"Our first quarter results are clearly the result of solid execution and strong
momentum, as well as the strong demand environment for offshore services," said
Gordon Coburn, Chief Financial Officer. "We expect to continue benefiting from
these favorable trends and we have significant revenue visibility due to our
high-level recurring revenue and the long-term nature of our customer
relationships. We continue to experience a stable pricing environment as well as
strong growth from strategic clients that we have won during the last 2 years,
as these clients further leverage the advantages of offshore. During the quarter
we increased our global staff by over 1,200 people to approximately 10,500 to
meet current and anticipated demand. In addition, our sales pipeline is at a
record level. We are optimistic about the outlook for this year and believe we
are well-positioned to deliver strong financial and operating results."
Conference Call
Cognizant will host a conference call on April 20th, at 9:00 a.m. (ET) to
discuss the Company's quarterly results. To listen to the call please dial (800)
953-6584 domestic and (706) 645-0156 internationally. The call will also be
broadcast live via the Internet at Cognizant's web site, www.cognizant.com.
Please go to the web site at least fifteen minutes prior to the call to
register, download and install any necessary audio software. A replay will be
made available on the web site at www.cognizant.com or by calling (800) 642-1687
for domestic callers and (706) 645-9291 for international callers and entering
"6694091" from two hours after the end of the call until 11:59 p.m. (ET) on
April 27, 2004.
About Cognizant Technology Solutions
Cognizant Technology Solutions Corporation (Nasdaq: CTSH) is a leading provider
of IT services. Focused on delivering strategic information technology solutions
that address the complex business needs of its clients, Cognizant provides
applications management, development, integration, and re-engineering,
infrastructure management, business process outsourcing, and a number of related
services such as enterprise consulting, technology architecture, program
management and change management through its onsite/offshore outsourcing model.
Cognizant's more than 10,500 employees are committed to partnerships that
sustain long-term, proven value for customers by delivering high-quality,
cost-effective solutions through its development centers in India and Ireland,
and onsite client teams. Cognizant maintains P-CMM and SEI-CMM Level 5
assessments from an independent third-party assessor and was recently ranked #1
in Forbes' Hot Shots 200 Up & Comers and ranked as the top information
technology company in BusinessWeek's Hot Growth Companies. Further information
about Cognizant can be found at http://www.cognizant.com.
This press release includes statements which may constitute forward-looking
statements made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, the accuracy of which are necessarily subject to
risks, uncertainties and assumptions as to future
events that may not prove to be accurate. Factors that could cause actual
results to differ materially from those expressed or implied include general
economic conditions and the factors discussed in our most recent Form 10-K and
other filings with the Securities and Exchange Commission. Cognizant undertakes
no obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
-tables to follow-
COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share data)
Three Months Ended
March 31,
-----------------------
2004 2003
------- ------
Revenues $119,744 $71,941
Revenues - related party -- 2,575
-------- --------
Total revenues $119,744 74,516
Cost of revenues 65,010 40,959
-------- --------
Gross profit 54,734 33,557
Selling, general and administrative expenses 27,182 16,411
Depreciation and amortization expense 3,865 2,622
-------- --------
Income from operations 23,687 14,524
-------- --------
Other income/(expense):
- ----------------------
Interest income 840 421
Other income/(expense), net 301 (197)
Split-off costs (non tax deductible) -- (2,010)
-------- --------
Total other income/(expense) 1,141 (1,786)
-------- --------
Income before provision for income taxes 24,828 12,738
Provision for income taxes (5,040) (2,560)
-------- --------
Net income $ 19,788 $10,178
======== ========
-------- --------
Basic earnings per share $ 0.31 $ 0.17
======== ========
-------- --------
Diluted earnings per share $ 0.28 $ 0.15
======== ========
Weighted average number of common -------- --------
shares outstanding 64,440 61,319
======== ========
Weighted average number of common -------- --------
and dilutive shares outstanding 70,826 65,993
======== ========
COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited)
(In thousands)
March 31, December 31,
---------- ------------
2004 2003
------- ------
Assets
Current Assets
Cash and cash equivalents $161,985 $194,221
Investments in short-term bank deposits 36,874 --
Trade accounts receivable, net of allowances of $1,087
and $989, respectively 71,512 52,253
Unbilled accounts receivable 12,720 9,543
Current tax asset 12,374 14,066
Other current assets 11,576 8,414
-------- --------
Total Current Assets 307,041 278,497
Property and equipment - net 57,813 58,438
Goodwill 5,647 4,477
Other intangible assets - net 15,696 16,436
Other assets 3,153 2,741
-------- --------
Total Assets $389,350 $360,589
======== ========
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable $ 8,468 $ 9,423
Accrued and other current liabilities 54,371 53,213
-------- --------
Total Current Liabilities 62,839 62,636
Deferred income taxes 22,298 23,883
-------- --------
Total Liabilities 85,137 86,519
-------- --------
Stockholders' Equity 304,213 274,070
-------- --------
Total Liabilities and Stockholders' Equity $ 389,350 $360,589
======== ========