United States
Securities and Exchange Commission
Washington, DC 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange
Act of 1934
Date of Report (Date of earliest event reported): March 31, 2001
SILVERLINE TECHNOLOGIES LIMITED
(Exact name of registrant as specified in its charter)
Not Applicable
(Translation of registrant's name into English)
Republic of India
(Jurisdiction of incorporation or organization)
Unit 121, SDF IV
SEEPZ, Andheri (East)
Mumbai (Bombay) 400096
India
(91) 22-829-1950
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F. Form 20F X Form 40 F _______
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ______ No X
If "Yes" is marked, indicate below the file number assigned to registrant in
connection with Rule 12g3-2(b). Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunder duly organized.
Date: June 12, 2001 SILVERLINE TECHNOLOGIES LIMITED
By: /s/ Ravi Subramanian
Sd/- Ravi Subramanian
----------------------------------------
Name: Ravi Subramanian
Title: Chairman
[LOGO OF SILVERLINE TECHNOLOGIES]
For Immediate Release
Silverline Technologies Posts Record Revenues of $155 million (Rs. 707 crores),
Net Profit of $27 million (Rs.122 crores), and EPS of $0.36 (Rs. 16.88) for
Twelve Months Ended March 31, 2001
Company provides guidance for FY 2002: Revenues of $190-$210 million (Rs.900 -
Rs.1000 crores) and EBITDA of $32-$37 million (Rs.150 - Rs.175 crores)
Mumbai, India and Piscataway, NJ (May 30, 2001): Silverline Technologies (BSE -
SLVR; NYSE - SLT and SLT Pr), an international software development and
integration services firm, today announced record financial results for the
three- and twelve-month periods ended March 31, 2001.
Note: Currency exchange rate at Rs. 43.30 for the 12 months ended March 31,
- ----
2000; Rs.45.74/$ for 12 months ended March 31, 2001, and Rs.47/$ in fiscal 2002.
Consolidated results are unaudited.
Highlights
Corresponding analysis for twelve months ended March 2001 vs. March 2000
- ------------------------------------------------------------------------
o Revenues grew by 52% to $154.6 million (Rs.707crores) compared to $101.6
million (Rs.440 crores)
o EBITDA increased to $34.8 million (Rs.159 crores) compared to $28.8 million
(Rs.125 crores) in the prior twelve months
o Net Income grew by 41% to $26.6 million (Rs.122 crores) up from $18.8 million
(Rs. 80 crores)
o EPS for the twelve months ended March 31, 2001, rose to $0.36 (Rs.16.88) from
$0.29 (Rs.12.56); Earnings per ADS (1 ADS = 2 shares) were $0.72 (Rs.38.42),
up from $0.58 (Rs.25.11)
Corresponding analysis for quarter ended March 2001 vs. March 2000
- ------------------------------------------------------------------
o Revenues grew by 41% to $43.7 million (Rs.200 crores), compared to $31.0
million (Rs.134 crores) in the corresponding period last year
o EBITDA was $10.0 million (Rs.46 crores) compared to $9.2 million (Rs.40
crores) for the same period a year back
o Net Income was $5.0 million (Rs.23 crores) compared to $5.9 million (Rs.26
crores), primarily due to higher depreciation and amortization
o EPS for this quarter were $0.07 (Rs.3.20) compared to $0.09 (Rs. 3.90) in the
last quarter a year back; Earnings per ADS (1 ADS = 2 shares) were $0.14
(Rs.6.40) compared to $0.18 (Rs. 7.79)
Performance guidance for fiscal year 2002
- -----------------------------------------
o Revenues for the fiscal year targeted to be in the range of $190 million to
$210 million (Approx. Rs. 900 crores - Rs.1000 crores).
o EBITDA for the fiscal year targeted to be $32 million (Rs.150 crores) to $37
million (Rs.175 crores)
o The emphasis will be on consolidating and leveraging the acquisitions,
diminishing lower margin consulting engagements, more effective leveraging of
our global infrastructure, pursuing larger outsourcing deals, and shifting
work offshore.
o Continue business integration and building on core strengths to achieve
strong and sustainable long term growth.
Operating highlights
- --------------------
o Total headcount at the end of March 31, 2001 for Silverline was 1,621
(excluding SeraNova)
o Offshore revenue for the quarter was 36% of total revenues
o Revenue Mix
o eBusiness 48%
o Mainframe 20%
o Client/server 28%
o CRM 4%
o Revenue by Key Verticals
o Financial Services 57%
o Telecom 13%
o Manufacturing 3%
o Others 27%
o Active clients at the end of the year were 168
"We are glad to report another exciting year for Silverline," said Shankar Iyer,
CEO of Silverline. "We greatly expanded Silverline's global presence, increased
our client roster, shifted more business to offshore, augmented our delivery
assets, and successfully consummated strategic acquisitions in the US,
2
Canada and Hong Kong. Today, Silverline has offices in 11 countries, offers a
complete suite of end-to-end solutions, and worldwide employs approximately 2600
people who have contributed significantly to our success. We have embarked on a
program designed to help us realize organizational synergies and rationalize
costs by optimally utilizing internal resources as well as eliminating non-
strategic expenditures. Overall, we remain confident in our business model and
our strategic direction," continued Mr. Iyer.
The Company's acquisition of SeraNova, announced on October 27, 2000, was
completed on March 6, 2001. Silverline's consolidated performance includes only
partial contribution from SeraNova for the quarter ended March 31, 2001.
Mr. Iyer noted, "During fiscal year 2001, we made significant strategic
acquisitions, the largest one of those being SeraNova. These acquisitions
allowed us to improve our access at higher levels within enterprises,
strengthened our vertical industry capabilities, and provided greater
opportunities to shift work offshore. We have progressed our operation and
business development integration with SeraNova, and today present a unified and
compelling proposal to clients looking for depth in legacy and eBusiness
technologies. We have already achieved success at cross-selling our expanded
capabilities to each other's client base, particularly within our largest
clients. To reflect the new infusion of talent and energy, our new expanded
capabilities, and our global branding, we launched our new Silverline logo
during the quarter."
Mr. Iyer commented on the business outlook, "The current business environment in
the US can best be described as challenging. However, we are discovering that
the offshore outsourcing message is being well received within the large
enterprises, even though customers are taking longer to decide on strategic
offshore outsourcing deals. eBusiness in the form that we knew last year has
been transformed. Our business opportunities have shifted from purely eBusiness
projects to opportunities that require a wider spectrum of skills across
multiple technologies. In this context, we continue to focus on driving
profitability by continuing to shift our delivery offshore, downsizing lower-
margin at-site businesses while retaining areas where the possibility to expand
into higher-value added projects exists. In this scenario, we have a target to
post revenues of approximately $200 million or Rs.1000 crores for fiscal 2001."
This is a forward-looking statement.
Conference Call Details: Silverline management will discuss the results on a
conference call tomorrow, May 31, 2001 at 9:00am ET (6:30pm IST). US toll free
dial-in: 1 800-818-5264; International toll dial-in +1 913 981 4910; India
callers toll free, listen-only: 1 600 338 093/4. A replay of the call will be
available from 4pm May 31 through midnight Wednesday, June 6. Replay
US/International dial-in: +1 719-457-0820 - passcode: 760585.
3
Investor Contacts:
US - Peggy Coleman, Silverline Technologies: +1-732-584-5300
US - Wendel Carson, Brunswick: +1-212-333-3810
India - Shiv Muttoo, Citigate Dewe Rogerson: +91-22-284-2728
Media Contact:
US - Richard Bevis, Silverline Technologies: +1-732-584-5828
India - Lawrence Alfonso, Silverline Technologies +91-40-324-0189
About Silverline
Silverline Technologies Limited (NYSE: SLT and SLT Pr) is an international
software development and integration services firm, with over 2,600 software
professionals world-wide. Silverline provides a comprehensive set of eBusiness
consulting and IT services, including strategic consulting, creative design,
technology integration and implementation, as well as management and maintenance
of Internet and legacy applications.
Silverline focuses primarily on Global 2000 clients in key industry sectors,
such as automotive/discrete manufacturing, financial services,
healthcare/insurance, technology and telecommunications. The Company also has
extensive experience in technologies such as mobile and wireless applications,
ePayments and enterprise information portals, as well as in business processes
such as customer relationship management (CRM), eProcurement and online
marketplaces, channel management and employee enablement.
Silverline delivers its services through a global network of software
development centers. At the heart of the network are core offshore centers in
Bangalore, Chennai, Hyderabad and Mumbai, in India, and Cairo, Egypt. These
centers support regional development facilities located close to clients
throughout North America, Europe and Asia Pacific. With SEI CMM Level 4 and ISO
9001 certified processes, Silverline uses this Global Delivery Model to provide
superior service, accelerated delivery and significant cost savings to clients
around the world. Visit Silverline on the World Wide Web at www.silverline.com.
###
NOTE: Silverline, the Silverline `S' logo and 'The Power of Approach' are
registered trademarks and SeraNova, the SeraNova logo, `i-team and N/able are
service marks of Silverline Technologies Ltd. in the United States and other
countries. All other trademarks are the property of their owners.
Safe Harbor Statement
Except for the historical information and discussions contained herein,
statements included in this release may constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements involve a number of risks, uncertainties and
other factors that could cause actual results to differ materially from those
than may be projected by these forward-looking statements. These risks and
uncertainties include, but are not limited to competition, acquisitions,
attracting, recruiting and retaining highly skilled employees, technology, law
and regulatory policy and managing risks associated with customer projects as
well as other risks detailed in the reports filed by Silverline Technologies
Limited with the Securities and Exchange Commission. Silverline undertakes no
obligation to update forward-looking statements to reflect events or
circumstances after the date thereof.
4
SILVERLINE TECHNOLOGIES LTD.
STATEMENT OF OPERATIONS
(unaudited and in US $)
QUARTER ENDED QUARTER ENDED QUARTER ENDED 31, TWELVE MONTHS TWELVE MONTHS
31, MARCH 31, MARCH DECEMBER ENDED 31, ENDED 31,
MARCH MARCH
2001 2000 2000 2001 2000
---------- ---------- ---------- ----------- -----------
Revenues 43,703,320 30,998,158 41,192,000 154,661,566 101,578,271
Cost of Revenues 22,275,392 16,112,368 22,876,055 82,807,488 56,464,741
Gross Profit 21,427,928 14,885,790 18,315,945 71,854,078 45,113,530
Selling, General and 11,429,773 5,688,153 11,573,000 37,057,679 16,264,209
Administrative Expenses
EBITDA 9,998,155 9,197,637 6,742,945 34,796,399 28,849,321
Deferred Stock Compensation
Amortization (225,000) 861,640 57,380 809,347 1,393,640
Depreciation 2,388,190 697,544 1,203,800 9,130,984 4,011,056
Amortization 1,304,637 241,918 1,875,481 - -
Other Income (Expenses), Net (539,412) (283,755) 1,405,236 4,178,756 (1,119,431)
Pre-tax Income 5,990,915 7,112,780 5,011,520 29,034,824 22,325,194
Provision for Income Taxes 948,000 1,229,993 (1,257,804) 2,393,872 3,440,381
Net Income 5,042,915 5,882,787 6,269,324 26,640,952 18,884,813
Cash EPS *
- ----------
Fully Diluted Cash EPS 0.11 0.10 0.13 - -
Fully Diluted Cash Earnings 0.22 0.20 0.26 - -
per ADS
EPS
- ---
Basic EPS 0.07 0.09 0.09 0.36 0.29
Diluted EPS 0.07 0.09 0.09 0.36 0.29
Basic Earnings Per ADS 0.14 0.18 0.18 0.72 0.58
Diluted Earnings Per ADS 0.14 0.18 0.18 0.72 0.58
Shares Outstanding 76,659,690 66,296,776 69,655,444 72,122,389 65,610,505
(2 shares = 1 ADS)
*cash earnings computed as Net Income plus Amortization, and Tax-effected
Depreciation
The Basic and Diluted EPS as of Twelve Months Ended
March 31, 2001 is computed as follows:
$26,640,952
- ----------- = $0.36
72,122,389
This EPS was incorrectly computed at $0.42 in the earlier press release of May
30, 2001.
5
Notes:
1. The above results have been approved and taken on record by the Board of
Directors at their meeting held on May 30, 2001.
2. The board has recommended a dividend of 12.5% for the year ended March 31,
2001. The underlying equity shares issued in respect of our ADR issue on
June 20, 2000 would be entitled to pro-rata dividend.
3. Other income includes the following:
(i) Exchange loss from operations of U.S. $117,544 for the quarter (exchange
gain during the corresponding quarter of the previous year of $13,833) due to
fluctuations in exchange rates.
(ii) Exchange loss of $26,992 arising during the quarter($ Nil during the
corresponding quarter of the previous year) from exchange difference on
translations of foreign currency current assets maintained abroad resulting
from the ADS issue. Excluding this loss, the net profit after tax is $5,069,907
during the quarter ended March 31, 2001.
4. Financial statements, Equity Share capital & Share Premium:
(i) In terms of approval granted by the shareholders at the Extra-ordinary
General Meeting held on January 12, 2000, the company issued 4,350,000 American
Depositary Shares (ADS) at a price of US $25 per share. Each ADS represents 2
underlying equity shares of the company. The ADSs were listed for trading on
the New York Stock Exchange on June 20, 2000. Consequently the company's
stockholder's equity and additional paid in capital increased by $1,944,134 and
$106,805,866 respectively.
(ii) In terms of the approval granted by the shareholders at the Extra-ordinary
General Meeting held on February 20, 2001, the company acquired the entire share
capital of SeraNova, Inc., USA, through an ADR swap by issue of 6,227,442 ADSs
to the share holders of SeraNova Inc USA. Each ADS represents 2 underlying
equity shares of the company. The ADS(s) were listed for trading on the New York
Stock exchange on March 07, 2001. Consequently the company's paid up share
capital and share premium increased by $2,677,318 & $36,555,567 respectively.
5. Acquisitions/Additional investments:
In addition to the acquisitions/additional investments reported earlier, during
the current quarter under report:
(i) The company made additional investments of US $19,166,833 in the common
stock of it's wholly owned subsidiary Silverline Technologies Inc., USA for
expansion of company's sales & marketing operations and the consequent working
capital requirements. The company thus acquired 20,719 additional common stock
of Silverline Technologies Inc., USA.
(ii) The company acquired the entire share capital of SeraNova Inc., USA, a
Nasdaq listed, global provider of Internet and E-Commerce solutions, through an
ADR swap. The company issued 6,277,442 ADSs (1 ADS equals 2 equity shares) to
the shareholders of SeraNova Inc., in the ratio of 0.35 ADS of the company for
each common stock of SeraNova Inc.
The acquisition was carried out through a forward merger mechanism under the
laws of USA. This transaction was approved at the Extra-ordinary General Meeting
held on February 20, 2001.
6. Employee Stock Options
(i) In terms of the approval granted by the members at the Annual General
Meeting held on September 28, 2000, the company granted 700,000 stock options to
the resident Indian employees on April 16, 2001, under an Indian stock option
plan II. All options under the plan will be exercisable for equity shares, on
one to one basis, at an exercise the options from the date of vesting.
(ii) Pursuant to the acquisition of SeraNova Inc., USA and in terms of the
approval granted by the members at the Extra Ordinary General Meeting held on
February 20, 2001, the company granted 2,000,000 stock options on April 16,
2001, to the employees of SeraNova Inc., USA and it's subsidiary, in exchange
for options held by them in SeraNova Inc., USA, under an ADR linked stock option
plan II. All options under the plan will be exercisable for ADSs, on one to one
basis (each ADS equal to 2 underlying equity shares), at a price of US $2.95 per
ADS, being the market price of the company's ADS on the date of grant of the
options. The employee have five years to exercise the options from the date of
vesting.
(iii) In terms of the approval granted by the members at the Extra Ordinary
General Meeting held on February 20, 2001, the company granted 1,000,000 stock
options on April 16, 2001, to the employees of its subsidiaries, under an ADR
linked stock option plan III. All options under the plan will be exercisable for
ADSs, on one to one basis (each ADS equal to 2 equity shares), at an exercise
price of US $2.95 per ADS, being the market price of the company's ADS on the
date of grant of the options. The employee have five years to exercise the
options from the date of vesting.
7. Basic & Diluted Earnings per share (EPS) have been calculated on income after
taxes but before extraordinary items.
Place: Mumbai On behalf of the Board of Directors
For Silverline Technologies Ltd.
Date: May 30, 2001 Krishnakumar Subramanian
Vice Chairman
6
SILVERLINE TECHNOLOGIES LTD
- ----------------------------
Auditied financial results for the year ended March 31, 2001
- -------------------------------------------------------------
(Rs in Lacs)
- --------------------------------------------------------------------------------------------------
Quarter ended Audited for the year ended
-------------- --------------------------
31.03.2001 31.03.2000 31.03.2001 31.03.2000
- ----------------------------------------------------------------------------------------------------
1 Net sales 6,104.75 5,695.68 27,271.81 19,528.23
2 Other income 604.27 75.55 3,663.98 418.72
3 Total Income 6,709.02 5,771.23 30.935.79 19,946.95
4 Staff cost 716.03 611.78 2,829.14 2,023.94
5 Software development
expenses (overseas) 2,711.51 2,287.31 11,267.47 8,022.33
6 Other expenditure 449.86 667.39 2,271.49 1,898.64
7 Total expenditure 3,877.40 3,566.48 16,368.10 11,944.91
8 Operating profits (PBDIT) 2,831.62 2,204.75 14,567.69 8,002.04
9 Finance charges 10.67 (0.97) 95.77 148.22
10 Depreciation 281.23 215.63 1,025.40 798.79
11 Profit before tax 2,539.72 1,990.09 13,446.52 7.055.03
12 Provision for taxation 235.00 1.00 300.00 1.00
13 Profit after tax before
extraordinary items 2,304.72 1,989.09 3,146.52 7,054.03
14 Extraordinary items - 45.59 - (38.41)
15 Net profit after tax and
extraordinary items 2,304.72 2,034.68 13,146.52 7,015,62
16 Paid-up equity
share capital 8,565.49 6,450.00 8,565.49 6,450.00
17 Reserves excluding
revaluation reserves 11,138.00 39,012.59
18 Earnings per share (EPS) in
Rs-Basic 3.19 3.37 18.22 11.96
-Diluted 2.69 3.15 15.35 10.88
7
Notes:
1. The above results have been approved and taken on record by the Board of
Directors at their meeting held on May 30, 2001.
2. The Board has recommended a dividend of 12.5% for the year ended March 31,
2001. The underlying equity shares issued in respect of our ADR issue on 20th
June, 2000 would be entitled to pro-rata dividend.
3. Other income includes the following:
(i) Exchange gain from operations of Rs. 689.39 lacs for the year (Rs. 81.98
lacs during the previous year)
(ii) Rs. 1,055.08 lacs exchange gain arising during the year (Rs. Nil during the
previous year) from differences on translation of foreign currency current
assets maintained abroad resulting from the ADS issue. Excluding these profits,
the net profit after tax is Rs. 12,091.45 lacs during the year ended March 31,
2001.
4. Financial statements, Equity Share Capital & Share Premium
(i) The company's financial statements have been restated to comply with
Generally Accepted Accounting Practices of United States Of America which relate
to depreciation/amortization, which are not considered in above information.
(ii) In terms of approval granted by the shareholders at the Extraordinary
General Meeting held on January 12, 2000, the company issued 4,350,000 American
Depositary Shares (ADS) at a price of US$ 25 per share. Each ADS represents 2
underlying equity shares of the company. The ADSs were listed for trading on the
New York Stock Exchange on June 20, 2000. Consequently the company's paid-up
share capital & share premium increased by Rs. 87,000,000 and Rs. 4,770,862,500
respectively.
(iii) In terms of the approval granted by the shareholders at the
Extraordinary General Meeting held on February 20, 2001, the company acquired
the entire share capital of SeraNova Inc., USA, through an ADR swap by issue of
6,227,442 ADSs to the shareholders of SeraNova Inc. USA. Each ADS represents 2
underlying equity shares of the company. The ADSs were listed for trading on the
New York stock exchange on March 07, 2001. Consequently the company's paid up
share capital and share premium increased by Rs. 124,548,840 & Rs. 1,700,564,970
respectively.
5. Acquisitions/Additional investments
In addition to the acquisitions/additional investments reported earlier, during
the current quarter under report:
(i) The company made additional investments of US$ 19,166,833 in the common
stock of its wholly owned subsidiary Silverline Technologies Inc., USA for
expansion of company's sales & marketing operations and the consequent working
capital requirements. The Company was issued 20,719 additional common stock of
Silverline Technologies Inc., USA
(ii) The company acquired the entire share capital of SeraNova Inc, USA, a
Nasdaq listed, global provided of Internet and E-Commerce solutions, through an
ADR swap. The company Issued 6,227,442 ADSs (1 ADS equals 2 equity shares) to
the shareholders of SeraNova Inc., in the ratio of 0.35 ADS of the company for
each common stock of SeraNova Inc. The acquisition was carried out through a
forward merger mechanism under the laws of USA. This transaction was approved at
the Extraordinary General Meeting held on February 20, 2001.
6. Employee Stock Options
(i) In terms of the approval granted by the members at the Annual General
Meeting held on September 28, 2000, the company granted 700,000 stock options to
the resident Indian employees on April 16, 2001, under an Indian stock option
plan II. All options under the plan will be exercisable for equity shares, on
one to one basis, at an exercise price of Rs. 61/- being the market price of the
company's equity shares on the date of grant of the options. The employees have
one year to exercise the options from the date of vesting.
(ii) Pursuant to the acquisition of SeraNova Inc., USA and in terms of the
approval granted by the members at the Extraordinary General Meeting held on
February 20, 2001, the company granted 2,000,000 stock options on April 16,
2001, to the employees of SeraNova Inc., USA and it's subsidiary, in exchange
for options held by them in SeraNova Inc., USA, under an ADR linked stock option
plan II. All options under the plan will be exercisable for ADSs, on one to one
basis (each ADS equal to 2 equity shares), at an exercise price of US$ 2.95 per
ADS, being the market price of the company's ADS on the date of grant of the
options. The employees have five years to exercise the options from the date of
vesting.
(iii) In terms of the approval granted by the members at the Extra Ordinary
General Meeting held on February 20, 2001, the company granted 1,000,000 stock
options on April 16, 2001, to the employees of its subsidiaries, under an ADR
linked stock option plan III. All options under the plan will be exercisable for
ADSs, on one to one basis (each ADS equal to 2 equity shares), at an exercise
price of US$ 2.95 per ADS, being the market price of the company's ADS on the
date of grant of the options. The employee have five years to exercise the
options from the date of vesting.
7. Basic & Diluted Earnings per share (EPS) have been calculated on income after
taxes but before extraordinary items.
Place: Mumbai On behalf of the Board of Directors
Date: May 30, 2001. For Silverline Technologies Ltd.
Krishnakumar Subramanian
Vice Chairman
8