EDISON, N.J., Oct. 26 /PRNewswire-FirstCall/ -- Intelligroup Inc., a consulting, business optimization, and outsourcing firm serving global corporations, today reported results for its third quarter and six-month period ended September 30, 2007.
Third Quarter Highlights: -- Revenue growth: Revenue grew 5.5% from second quarter to third quarter of 2007 and grew 16.8% from the third quarter of 2006. -- Gross Margin: Gross margin remained relatively flat at 29% as compared to second quarter of 2007 and third quarter of 2006. -- Operating Margin: Operating margin improved three percentage points quarter over quarter from 2.7% of revenue in second quarter of 2007 to 5.5% in the third quarter. Year on year it improved by approximately four percentage points from 1.7% in third quarter of 2006 to 5.5% in the third quarter of 2007. -- Utilization Rate: Utilization rate remained flat at 70% in the third quarter of 2007 as compared to second quarter of 2007 and decreased by two percentage points as compared to third quarter of 2006. -- New Customers: Added 39 new customers globally in the third quarter of 2007.
The Company reported third quarter 2007 revenues of $38.0 million, which marks a 5.5% increase from $36.0 million in the second quarter of 2007 and a 16.8% increase from $32.5 million in the third quarter of 2006. The Company's average bill rates were relatively flat in the third quarter of 2007 as compared with the second quarter of 2007 and the third quarter of 2006. Due to its continued focus on utilization rates and effective cost management strategies, the Company reported gross margin of 29.0% for the third quarter of 2007, which remains relatively flat as compared with the second quarter of 2007. The Company reported operating income from continuing operations of $2.1 million, which marks a 114% increase from $984,000 in the second quarter of 2007 and 287% increase from $545,000 in the third quarter of 2006.
ABOUT INTELLIGROUP
Intelligroup is a vertically-led ERP focused life cycle management partner serving global corporations as well as public sector clients. Its proven Global delivery model has enabled customers to accelerate results and reduce costs significantly. With deep expertise in industry-specific enterprise solutions, Intelligroup has earned a reputation for consistently exceeding client expectations. Intelligroup develops implements and supports IT solutions for some of the largest U.S. school systems and global corporations including GE, Hershey, Abbott Labs, Eastman Chemical, Hitachi, and Kimball International.
SAFE HARBOR STATEMENT
Certain statements contained herein, including statements regarding the development of services and markets and future demand for services and other statements regarding matters that are not historical facts, are forward- looking statements (as defined in the Private Securities Litigation Reform Act of 1995).
Such forward-looking statements include risks and uncertainties; consequently, actual results may differ materially from those expressed or implied thereby. Factors that could cause actual results to differ materially include, but are not limited to, variability of quarterly operating results, continued uncertainty of the IT market and revenues derived from application management business, uncertainty in revenues for traditional professional services offerings, loss of one or more significant customers, reliance on large projects, concentration of revenue, unanticipated costs associated with continued litigation, ability to attract and retain professional staff, dependence on key personnel, ability to manage growth effectively, risks associated with strategic partnerships, various project-associated risks, including termination with short notice, substantial competition, general economic conditions, risks associated with intellectual property rights, risks associated with international operations and other risk factors detailed under the caption "Risk Factors" in Intelligroup's annual report on Form 10-K for the period ended December 31, 2006. Intelligroup disclaims any intention or obligation to update forward looking statements as a result of developments occurring after the date of this press release.
Intelligroup and the Intelligroup logo are registered trademarks and 'Creating the Intelligent Enterprise', 4Sight, 4Sight Plus, ASPPlus, myADVISOR, ASPPlus Power Upgrade Services and Uptimizer are service marks of Intelligroup in the U.S. and other countries. All other trademarks and company names mentioned are the property of their respective owners.
INTELLIGROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands except par value) September 30, December 31, 2007 2006 (unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents $7,912 $12,277 Short-term Investments - 2,227 Accounts receivable, less allowance for doubtful accounts of $983 and $991 at September 30, 2007 and December 31, 2006, respectively 21,824 20,477 Unbilled services, less allowance for doubtful accounts of $891 at September 30, 2007 and December 31, 2006 11,238 9,464 Prepaid expenses 659 957 Prepaid Taxes 412 170 Other current assets 5,882 1,296 Total current assets 47,927 46,868 Property and equipment, net 6,582 5,472 Restricted Cash 4,700 - Deferred taxes and other assets 2,369 2,203 Total Assets $61,578 $54,543 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Line of credit borrowings $7,356 $4,959 Accounts payable 3,557 3,078 Accrued payroll and related taxes 11,851 11,301 Accrued expenses and other current liabilities 4,850 4,695 Deferred revenue 2,152 2,294 Current portion of obligations under capital lease 518 483 Total current liabilities 30,285 26,810 Obligations under capital lease, net of current portion 395 552 Deferred revenue, net of current portion 672 686 Other long-term liabilities 695 101 Total Liabilities 32,047 28,149 Commitments and contingencies Shareholders' Equity Preferred stock, $.01 par value, 5,000 shares authorized, none issued or outstanding - - Common stock, $.01 par value, 50,000 shares authorized, 42,129 and 41,933 shares issued and outstanding at September 30, 2007 and December 31, 2006 respectively 421 419 Additional paid-in capital 70,798 69,702 Accumulated deficit (44,102) (43,753) Accumulated other comprehensive income 2,415 26 Total shareholders' equity 29,532 26,394 Total liabilities and shareholders' equity $61,578 $54,543 INTELLIGROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED) (in thousands except per share data) NINE MONTHS ENDED THREE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, 2007 2006 2007 2006 Revenue $106,745 93,277 38,010 32,530 Cost of revenue 78,817 66,527 26,945 23,214 Gross profit 27,928 26,750 11,064 9,316 Selling, general and administrative expenses 26,087 25,587 8,397 8,092 Depreciation and amortization 1,799 1,829 560 679 Total operating expenses 27,886 27,416 8,957 8,771 Operating Income/(loss) 42 (666) 2,107 545 Interest expense, net (516) (399) (142) (220) Other income (expense) 756 1,647 817 340 Loss before income tax provision 282 582 2,782 665 Provision for income taxes 631 1,947 182 878 Net income/(loss) $(349) $(1,365) $2,600 $(213) Income/(Loss) per share: Basic net income/(loss) per share $(0.01) $(0.03) $0.06 $(0.01) Weighted average number of common shares outstanding - basic 41,988 39,591 42,078 41,802 Diluted net income/(loss) per share $(0.01) $(0.03) $0.06 $(0.01) Weighted average number of common shares outstanding - diluted 41,988 39,591 42,181 41,802 Comprehensive income/(loss) Net income/(loss) $(349) $(1,365) $2,600 $(213) Other comprehensive income - currency translation adjustments 2,389 (682) 388 114 Comprehensive income/(loss) $2,040 $(2,047) $2,988 $(99)
