Syntel Reports Second Quarter 2013 Financial Results

Syntel Reports Second Quarter 2013 Financial Results

Highlights:

  *Q2 revenue of $202.5M, up 13% from year-ago quarter, and 7% sequentially
  *Q2 EPS of $1.14 per diluted share, up 10% from year-ago quarter, and 3%
    sequentially
  *Q2 cash & short term investments of $552M
  *Global Headcount of 22,866 on June 30, 2013, up 14% versus prior year

TROY, Mich., July 18, 2013 (GLOBE NEWSWIRE) -- Syntel, Inc. (Nasdaq:SYNT), a
global information technology services and Knowledge Process Outsourcing (KPO)
firm, today announced financial results for the second quarter, ended June 30,
2013.

Second Quarter Financial Highlights

Syntel's revenue for the second quarter increased 13 percent to $202.5 million
from $179.0 million in the prior-year period, and increased seven percent
sequentially from $189.1 million in the first quarter of 2013. During the
second quarter, Applications Outsourcing accounted for 76 percent of total
revenue, with Knowledge Process Outsourcing (KPO) at 16 percent, e-Business
contributing six percent and TeamSourcing at two percent.

The Company's gross margin was 41.3 percent in the second quarter, compared to
41.3 percent in the prior-year period and 41.1 percent in the first quarter of
2013. Selling, General and Administrative (SG&A) expenses were 9.4 percent of
revenue in the second quarter, compared to 10.6 percent in the prior-year
period and 13.7 percent in the previous quarter.

The second quarter income from operations was 31.9 percent of revenue as
compared to 30.7 percent in the prior-year period and 27.4 percent in the
first quarter. The sequential rise in operating margin primarily reflects the
impact of currency-related balance sheet translations and the depreciation in
the Indian rupee during the second quarter, which more than offset costs
related to offshore wage increases, visas and higher billable headcount.

Net income for the second quarter was $47.5 million or $1.14 per diluted
share, compared to $43.4 million or $1.04 per diluted share in the prior-year
period and net income of $46.4 million or $1.11 per diluted share in the first
quarter of 2013.

During Q2, Syntel spent $4.37 million in CAPEX, largely in support of campus
infrastructure, and finished the quarter with cash and short-term investments
of $552 million. The Company also added 687 net employees, ending the quarter
with 22,866 employees globally.

Operational Highlights

"We executed well during the second quarter, crossing the $200 million revenue
milestone for the first time," said Syntel CEO and President Prashant Ranade.
"We are delivering these results by demonstrating value to our customers each
day through our innovation and domain knowledge.

"In a time of rising complexity and market uncertainty, we remain committed to
serving our customers," said Ranade. "Our model is flexible and we have the
ability to evolve as the landscape changes across the industries and
geographies we serve."

"The overall environment remains healthy and our prospects continue to
improve. We are positioning ourselves for long-term success through
client-driven investments in offerings that will help us deepen our customer
relationships. The breadth of our pipeline continues to improve due to these
investments and we look forward to helping our customers meet their future
business and operational goals."

2013 Guidance

Based on current visibility levels and an exchange rate assumption of 59
Indian Rupees to the dollar, the Company currently expects 2013 revenue of
$800 to $815 million and EPS in the range of $4.65 to $4.75.

Syntel to Host Conference Call

Syntel will discuss its second quarter 2013 results today on a conference call
at 10:00 a.m. (EDT). 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 July 25, 2013 by
dialing (855) 859-2056 and entering "18532373". 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 June 30, 2013, Syntel employed more than 22,000 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 March 31, 2013 or from other factors not
currently anticipated.

                                                               
SYNTEL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE DATA)
                                                               
                                                               
                              THREE MONTHS ENDED      SIX MONTHS ENDED
                              JUNE 30,                JUNE 30,
                              2013        2012        2013        2012
                                                               
Net revenues                   $202,501  $178,979  $391,607  $349,723
Cost of revenues               118,920     105,121     230,249     204,413
Gross profit                   83,581      73,858      161,358     145,310
Selling, general and           19,072      18,931      44,976      45,877
administrative expenses
                                                               
Income from operations         64,509      54,927      116,382     99,433
                                                               
Other income (loss),           (953)       2,455       8,062       10,744
principally interest, net
                                                               
Income before provision for    63,556     57,382     124,444    110,177
income taxes
                                                               
Income tax expense             16,044      13,993      30,508      26,043
                                                               
Net income                     $47,512   $43,389   $93,936   $84,134
                                                               
Other Comprehensive Income                                      
(Loss)
                                                               
Foreign currency translation   $(49,800) $(44,268) $(47,935) $(29,439)
adjustments
Gains (losses) on derivatives:                                  
Gains (losses) arising during
period on net investment       (4,808)    (3,477)    (4,718)    (2,294)
hedges
                                                               
Unrealized gains (losses) on                                    
securities:
Unrealized holding gains      553        322        674        358
arising during period
Reclassification adjustment
for gains included in net      (140)      (204)      (873)      (144)
income
                              413        118        (199)      214
                                                               
Defined benefit pension plans:                                  
Net Profit/ (loss) arising    22         (2)        28         (6)
during period
Amortization of prior service
cost included in net periodic  8          8          16         17
pension cost
                              30         6          44         11
                                                               
Other comprehensive income     (54,165)   (47,621)   (52,808)   (31,508)
(loss), before tax
Income tax benefit (expense)
related to Other Comprehensive (150)      (36)       47         (68)
Income (loss)
Other comprehensive income     (54,315)   (47,657)   (52,761)   (31,576)
(loss), net of tax
                                                               
Comprehensive Income (loss)    $(6,803)  $(4,268)  $41,175   $52,558
                                                               
Dividend per share             $--      $0.06     $--      $0.12
                                                               
EARNINGS PER SHARE:                                             
Basic                          $1.14     $1.04     $2.25     $2.02
Diluted                        $1.14     $1.04     $2.24     $2.01
                                                               
Weighted average common shares                                  
outstanding:
                                                               
Basic                          41,770      41,677      41,756      41,665
                                                               
Diluted                        41,850      41,774      41,845      41,769

                                                               

SYNTEL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS)
                                                               
                                                     June 30,  December 31,
                                                      2013      2012
                                                               
                                                               
ASSETS                                                          
                                                               
Current assets:                                                 
Cash and cash equivalents                             $136,316 $94,622
Short term investments                                415,499    326,653
Accounts receivable, net of allowance for doubtful
accounts of $1,996 and $2,168 at June 30, 2013 and    95,604     86,004
December 31, 2012, respectively
Revenue earned in excess of billings                  27,423     11,875
Deferred income taxes and other current assets        51,884     51,736
                                                               
Total current assets                                 726,726   570,890
                                                               
Property and equipment                                195,488    204,151
Lessaccumulated depreciation and amortization        84,111     85,033
                                                               
Property and equipment, net                          111,377   119,118
                                                               
Goodwill                                              906        906
                                                               
Non current Term Deposits with Banks                  2,663      14
                                                               
Deferred income taxes and other non current assets    36,925     34,908
                                                               
TOTAL ASSETS                                          $878,597 $725,836
                                                               
LIABILITIES AND SHAREHOLDERS' EQUITY                            
LIABILITIES                                                     
Current liabilities:                                            
Accrued payroll and related costs                     $43,085  $49,889
Income taxes payable                                  19,700     8,873
Accounts payable and other current liabilities        43,170     34,950
Deferred revenue                                      2,838      4,694
Loans and borrowings                                 --       50,029
                                                               
Total current liabilities                            108,793   148,435
                                                               
Other non current liabilities                         12,035     11,731
Non Current loans and borrowings                      148,757    --
                                                               
TOTAL LIABILITIES                                     269,585   160,166
                                                               
SHAREHOLDERS' EQUITY                                            
                                                               
Total shareholders' equity                            609,012   565,670
                                                               
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY            $878,597 $725,836

CONTACT: North America/Europe:
         Jon Luebke
         Syntel
         248/619-3503
         jon_luebke@syntelinc.com
        
         Asia/Pacific:
         Sikta Samantaray
         +91 9167512186
         sikta_samantaray@syntelinc.com

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