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Exhibit 99.1

Syntel Reports Fourth Quarter and Full Year 2013 Financial Results

Highlights:

 

    Q4 revenue of $223.3M, up 19% from year-ago quarter, and 6% sequentially

 

    Q4 EPS of $1.58 per diluted share, up 32% from year-ago quarter, and 11% sequentially

 

    Full year revenue increase of 14% to $824.8M

 

    Full year EPS of $5.24 per diluted share

 

    2013 year-ending cash & short term investments of $668.9M

 

    Global Headcount of 23,652 on December 31, 2013, up 10% versus prior year

TROY, Mich. – February 13, 2014 – Syntel, Inc. (NASDAQ: SYNT), a global information technology services and Knowledge Process Outsourcing (KPO) company today announced financial results for the fourth quarter and full year, ended December 31, 2013.

Fourth Quarter Financial Highlights

Syntel’s revenue for the fourth quarter increased 19 percent to $223.3 million, compared to $187.8 million in the prior-year period, and increased six percent sequentially from $209.9 million in the third quarter of 2013. During the fourth quarter, Applications Outsourcing accounted for 78 percent of total revenue, with Knowledge Process Outsourcing (KPO) at 15 percent, e-Business contributing six percent and TeamSourcing at one percent.

The Company’s gross margin was 47.1 percent in the fourth quarter, compared to 45.2 percent in the prior-year period and 46.6 percent in the third quarter of 2013. Selling, General and Administrative (SG&A) expenses were 13.3 percent of revenue in the fourth quarter, compared to 15 percent in the prior-year period and 10.7 percent in the previous quarter.

The fourth quarter income from operations was 33.7 percent of revenue as compared to 30.2 percent in the prior-year period and 35.9 percent in the third quarter. The sequential decline in operating margin primarily reflects the impact of currency-related balance sheet translations, and higher employee headcount and compensation expense.

Net income for the fourth quarter was $66.3 million or $1.58 per diluted share, compared to $49.9 million or $1.19 per diluted share in the prior-year period and net income of $59.4 million or $1.42 per diluted share in the third quarter of 2013.

Full Year 2013 Financial Highlights

Revenue for 2013 increased 14 percent to $824.8 million, from $723.9 million in 2012. The Company’s 2013 operating margin was 32.4 percent, compared to 29.3 percent in 2012. Net income for the year was $219.7 million compared to $185.5 million in 2012. EPS for 2013 increased 18 percent to $5.24 per diluted share from $4.44 per diluted share in 2012.

During 2013, Syntel spent $20.5 million in CAPEX, largely in support of campus infrastructure, and finished the year with cash and short-term investments of $668.9 million. The Company added 23 new clients during the year and ended 2013 with 23,652 employees globally.

Operational Highlights

“I am pleased with the strong execution that drove our fourth quarter and full year results,” said Syntel CEO and President Prashant Ranade. “We will build on these efforts in the coming year as we deepen the relationships we have with our valued customers and forge new relationships that will support our growth over the longer term.”


“Syntel distinguishes itself on the strength and merit of our service capabilities, our domain expertise and our singular focus on serving customers,” said Ranade. “Our flexible and collaborative approach allows us to deliver unique solutions and this makes us a desirable long-term partner.”

“We will continue to invest in our company while fostering customer-centricity as we ready ourselves for future opportunities.”

2014 Guidance

Based on current visibility levels and an exchange rate assumption of 62 Indian Rupees to the dollar, the Company currently expects 2014 revenue of $910 to $940 million and EPS in the range of $5.10 to $5.35.

Syntel to Host Conference Call

Syntel will discuss its fourth quarter and full year 2013 results today on a conference call at 10:00 a.m. (EST). To listen to the call, please dial (877) 837-3915 in the US/Canada or (973) 638-3495 internationally. The call will also be broadcast live via the Internet at Syntel’s web site: investor.syntelinc.com. Please access the site at least 15 minutes prior to the call to register and download any necessary software. A replay will be available until February 27, 2014 by dialing (855) 859-2056 and entering “88510738”. International callers may dial (404) 537-3406 and enter the same passcode.

About Syntel

Syntel (Nasdaq:SYNT) is a leading global provider of integrated information technology and Knowledge Process Outsourcing (KPO) solutions spanning the entire lifecycle of business and information systems and processes. The Company is driven by its mission to create new opportunities for clients by harnessing the passion, talent and innovation of Syntel employees worldwide. Syntel leverages dedicated Centers of Excellence, a flexible Global Delivery Model, and a strong track record of building collaborative client partnerships to create sustainable business advantage for Global 2000 organizations. Syntel is assessed at SEI CMMi Level 5, and is ISO 27001 and ISO 9001:2008 certified. As of December 31, 2013, Syntel employed more than 23,000 people worldwide. To learn more, visit us at: www.syntelinc.com.

Safe Harbor Provision

This news release includes forward-looking statements, including those with respect to the future level of business for Syntel, Inc. These statements are necessarily subject to risk and uncertainty. Actual results could differ materially from those projected in these forward-looking statements as a result of certain risk factors set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 or from other factors not currently anticipated.

Contacts:

North America/Europe: Jon Luebke, Syntel, 248/619-3503, jon_luebke@syntelinc.com

Asia/Pacific: Sikta Samantaray, +91 9167512186, sikta_samantaray@syntelinc.com

# # #


SYNTEL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(IN THOUSANDS, EXCEPT SHARE DATA)

 

     THREE MONTHS ENDED     TWELVE MONTHS ENDED  
     DECEMBER 31,     DECEMBER 31,  
     2013     2012     2013     2012  

Net revenues

   $ 223,287      $ 187,773      $ 824,765      $ 723,903   

Cost of revenues

     118,169        102,918        460,576        408,919   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     105,118        84,855        364,189        314,984   

Selling, general and administrative expenses

     29,759        28,131        96,587        103,044   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     75,359        56,724        267,602        211,940   

Other income (expense), net

     9,802        7,280        18,220        27,988   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before provision for income taxes

     85,161        64,004        285,822        239,928   

Income tax expense

     18,856        14,077        66,164        54,385   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 66,305      $ 49,927      $ 219,658      $ 185,543   
  

 

 

   

 

 

   

 

 

   

 

 

 

Other Comprehensive Income (loss)

        

Foreign currency translation adjustments

   $ 10,690      $ (18,349   $ (64,641   $ (11,910

Gains (losses) on derivatives:

        

Gains (losses) arising during period on net investment hedges

     1,116        (324     (6,796     (1,558

Unrealized gains (losses) on securities:

        

Unrealized holding gains arising during period

     2,773        513        5,460        916   

Reclassification adjustment for gains included in net income

     (311     (623     (942     (269
  

 

 

   

 

 

   

 

 

   

 

 

 
     2,462        (110     4,518        647   

Defined benefit pension plans:

        

Net Profit/ (loss) arising during period

     281        (1,038     280        (1,051

Amortization of prior service cost included in net periodic pension cost

     75        8        146        32   
  

 

 

   

 

 

   

 

 

   

 

 

 
     356        (1,030     426        (1,019

Other comprehensive income (loss), before tax

     14,624        (19,813 )      (66,493     (13,840

Income tax benefit (expense) related to Other Comprehensive Income (loss)

     (951     382        (1,677     141   
  

 

 

   

 

 

   

 

 

   

 

 

 

Other comprehensive income (loss), net of tax

     13,673        (19,431     (68,170     (13,699
  

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive Income

   $ 79,978      $ 30,496      $ 151,488      $ 171,844   
  

 

 

   

 

 

   

 

 

   

 

 

 

Dividend per share

   $ —        $ 2.31      $ —        $ 2.49   

EARNINGS PER SHARE:

        

Basic

   $ 1.58      $ 1.20      $ 5.26      $ 4.45   

Diluted

   $ 1.58      $ 1.19      $ 5.24      $ 4.44   

Weighted average common shares outstanding:

        

Basic

     41,836        41,739        41,791        41,697   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     41,950        41,833        41,882        41,793   
  

 

 

   

 

 

   

 

 

   

 

 

 


SYNTEL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS)

 

     December 31,      December 31,  
     2013      2012  
ASSETS      

Current assets:

     

Cash and cash equivalents

   $ 178,757       $ 94,622   

Short term investments

     490,177         326,653   

Accounts receivable, net of allowance for doubtful accounts of $2,022 and $2,168 at December 31, 2013 and December 31, 2012, respectively

     101,974         86,004   

Revenue earned in excess of billings

     22,275         11,875   

Deferred income taxes and other current assets

     49,929         51,736   
  

 

 

    

 

 

 

Total current assets

     843,112         570,890   

Property and equipment

     198,687         204,151   

Less accumulated depreciation and amortization

     89,082         85,033   
  

 

 

    

 

 

 

Property and equipment, net

     109,605         119,118   

Goodwill

     906         906   

Non current Term Deposits with Banks

     163         14   

Deferred income taxes and other non current assets

     43,390         34,908   
  

 

 

    

 

 

 

TOTAL ASSETS

   $ 997,176       $ 725,836   
  

 

 

    

 

 

 
LIABILITIES AND SHAREHOLDERS’ EQUITY      
LIABILITIES      

Current liabilities:

     

Accrued payroll and related costs

   $ 56,308       $ 49,889   

Income taxes payable

     19,224         8,873   

Accounts payable and other current liabilities

     36,661         34,950   

Deferred revenue

     4,729         4,694   

Loans and borrowings

     7,363         50,029   
  

 

 

    

 

 

 

Total current liabilities

     124,285         148,435   

Other non current liabilities

     11,970         11,731   

Non Current loans and borrowings

     138,375         —     
  

 

 

    

 

 

 

TOTAL LIABILITIES

     274,630         160,166   
SHAREHOLDERS’ EQUITY      

Total shareholders’ equity

     722,546         565,670   
  

 

 

    

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

   $ 997,176       $ 725,836