EPAM Systems Reports Results for Second Quarter 2013
(Thomson Reuters ONE) -
Second quarter revenues up 28% year-over-year and 7% sequentially
Newtown, PA - August 8, 2013 - EPAM Systems, Inc. (NYSE: EPAM), a leading
provider of complex software engineering solutions and a leader in Central and
Eastern European IT services delivery, today announced results for the quarter
ended June 30, 2013.
"Our differentiated business model and focus on emerging technology trends has
given us a clear competitive advantage in the marketplace and helped us to
produce another quarter of industry-leading revenue growth. We continue to see
strong demand for our complex software engineering services across our vertical
markets from both new and existing clients," commented Arkadiy Dobkin, CEO and
President of EPAM Systems, Inc.
Second Quarter 2013 Highlights
· Revenues increased to $133.2 million, up 28.3% year-over-year and 7.2%
sequentially;
· GAAP income from operations was $17.5 million, an increase of $0.7 million
or 4.2% from $16.8 million in the second quarter of 2012;
· Non-GAAP income from operations was $21.8 million, an increase of $2.7
million or 14.3% from $19.1 million in the second quarter of 2012;
· Non-GAAP quarterly diluted EPS was $0.40, up 8.1% from $0.37 in the year-ago
quarter;
· Quarterly diluted earnings per share (EPS) on a GAAP basis was $0.29, flat
compared to the year-ago quarter.
EPAM generated cash from operations of $8.0 million in the second quarter of
2013. At June 30, 2013, cash and cash equivalents were $107.5 million.
Reconciliations of non-GAAP financial measures to operating results and diluted
EPS are included at the end of this release.
Corporate Highlights
· Forbes named EPAM number 6 in the Forbes' list of America's 25 Fastest-
Growing Tech Companies, which includes some of the most well-respected companies
in technology such as LinkedIn, Facebook, Apple, Google, and Cognizant. This
list was developed to identify firms that have proven and sustainable businesses
with a pipeline of innovative ideas. In order to qualify for membership in the
list, Forbes requires sales growth of at least 10% for each of the past three
fiscal years and over the last 12 months, as well as estimated earnings growth
above 10% over the next three to five years.
· EPAM's Innovation Lab project created with its long-standing client, Wolters
Kluwer, won the IT Outsourcing Project of the Year category at the 2013 European
Outsourcing Association ("EOA") Awards and Best Practice Showcase. The winners
were announced in Amsterdam, Netherlands, on April 25, during the annual EOA
Awards ceremony that celebrates best pan-European IT practices.
· EPAM was recognized with a Duke's Choice Award. At the event, Oracle
recognized companies for their innovative projects and significant contribution
to the Java community. The Award winners were announced on April 23 at JavaOne
Russia 2013 in Moscow as part of the regional JavaOne conference series.
Full Year and Third Quarter 2013 Outlook
"We remain confident that the demand for our service offerings will be strong
for the balance of the year. Our technical expertise combined with the
investments that we have made to expand our scope of services, both organically
and through acquisitions, have positioned us for continued future growth across
the geographies and verticals that we serve." concluded Mr. Dobkin.
Based on current conditions, EPAM reiterates full year guidance of expected
year-over-year revenue growth in the range of 23% to 25%. Non-GAAP net income
growth for 2013 is expected to be in the range of 12% to 15% year-over-year,
with an effective tax rate of approximately 20%.
For the third quarter of 2013, EPAM expects revenues between $135 million and
$137 million, representing a growth rate of 23% to 25% over third quarter 2012
revenues. Third quarter 2013 non-GAAP diluted EPS is expected to be in the range
of $0.41 to $0.42 based on an estimated third quarter 2013 weighted average of
48.7 million diluted shares.
Conference Call Information
EPAM will hold a conference call to discuss its second quarter 2013 results at
8:00 a.m. Eastern time, on Friday, August 9, 2013. A live webcast of the call
may be accessed over the Internet from EPAM's Investor Relations website at
http://investors.epam.com. Participants should follow the instructions provided
on the website to download and install the necessary audio applications. The
conference call is also available by dialing 1-800-237-9752 (international) or
1-617-847-8706 (domestic) and entering the passcode 90572291.
A replay of the live conference call will be available approximately one hour
after the call. The replay will be available on EPAM's website or by dialing
1-888-286-8010 (international) or 1-617-801-6888 (domestic) and entering the
replay passcode 37864189. The telephonic replay will be available until August
26, 2013.
About EPAM Systems
Established in 1993, EPAM Systems, Inc. (NYSE:EPAM) provides software
engineering solutions through its leading Central and Eastern European service
delivery platform. Headquartered in the United States, EPAM employs
approximately 8,900 IT professionals and serves clients worldwide from its
locations in the United States, Canada, UK, Switzerland, Germany, Sweden,
Netherlands, Belarus, Hungary, Russia, Ukraine, Kazakhstan and Poland.
Non-GAAP Financial Measures
EPAM supplements results reported in accordance with principles generally
accepted in the United States, referred to as GAAP, with non-GAAP financial
measures. Management believes these measures help illustrate underlying trends
in EPAM's business and uses the measures to establish budgets and operational
goals, communicated internally and externally, for managing EPAM's business and
evaluating its performance. Management also believes these measures help
investors compare EPAM's operating performance with its results in prior periods
and compare EPAM and similar companies. EPAM anticipates that it will continue
to report both GAAP and certain non-GAAP financial measures in its financial
results, including non-GAAP results that exclude stock-based compensation
expense, write-off and recovery, amortization of purchased intangible assets,
goodwill impairment, legal settlement, foreign exchange gains and losses, and
acquisition-related costs. However, because EPAM's reported non-GAAP financial
measures are not calculated according to GAAP, these measures are not comparable
to GAAP and may not necessarily be comparable to similarly described non-GAAP
measures reported by other companies within EPAM's industry. Consequently,
EPAM's non-GAAP financial measures should not be evaluated in isolation or
supplant comparable GAAP measures, but, rather, should be considered together
with its consolidated financial statements, which are prepared according to
GAAP.
Forward-Looking Statements
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 Annual Report on Form 10-K and other filings with
the Securities and Exchange Commission. EPAM undertakes no obligation to update
or revise any forward-looking statements, whether as a result of new
information, future events, or otherwise, except as may be required under
applicable securities law.
Contact:
EPAM Systems, Inc.
Ilya Cantor, Chief Financial Officer
Phone: +1-267-759-9000 x64588
Fax: +1-267-759-8989
investor_relations(at)epam.com
EPAM SYSTEMS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended June Six Months Ended June
30, 30,
------------------------- -------------------------
2013 2012 2013 2012
----------- ----------- ----------- -----------
(in thousands, except share and per share data)
Revenues $ 133,184 $ 103,800 $ 257,382 $ 198,183
Operating expenses:
Cost of revenues
(exclusive of
depreciation and
amortization) 83,547 63,803 161,484 123,978
Selling, general and
administrative
expenses 28,541 20,711 55,624 38,338
Depreciation and
amortization expense 3,854 2,423 7,471 4,634
Other operating
(income)/ expenses,
net (293) 33 (268 ) 619
----------- ----------- ----------- -----------
Income from operations 17,535 16,830 33,071 30,614
Interest and other
income, net 769 460 1,399 936
Foreign exchange loss (869 ) (1,394 ) (1,368 ) (1,314 )
----------- ----------- ----------- -----------
Income before
provision for income
taxes 17,435 15,896 33,102 30,236
Provision for income
taxes 3,317 2,575 6,304 4,816
----------- ----------- ----------- -----------
Net Income $ 14,118 $ 13,321 $ 26,798 $ 25,420
----------- ----------- ----------- -----------
Net income per share
of common stock:
Basic (common) $ 0.31 $ 0.31 $ 0.59 $ 0.60
Diluted (common) $ 0.29 $ 0.29 $ 0.56 $ 0.55
Shares used in
calculation of net
income per share of
common stock:
Basic (common) 45,486 42,475 45,151 36,987
Diluted (common) 47,977 46,382 47,813 40,820
EPAM SYSTEMS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
As of As of
June December
30, 2013 31, 2012
------------- -----------------
(in thousands, except share
and per share data)
Assets
Current assets
Cash and cash equivalents $ 107,475 $ 118,112
Accounts receivable, net of allowance of
$2,434 and $2,203, respectively 82,817 78,906
Unbilled revenues 57,680 33,414
Prepaid and other current assets 17,167 11,835
Employee loans, net of allowance of $0 and
$0, respectively, current 1,417 429
Time deposits 977 1,006
Restricted cash, current 60 660
Deferred tax assets, current 5,876 6,593
------------- -----------------
Total current assets 273,469 250,955
Property and equipment, net 55,400 53,135
Restricted cash, long-term 353 467
Employee loans, net of allowance of $0 and
$0, respectively, long-term 3,408 -
Intangible assets, net 15,115 16,834
Goodwill 22,304 22,698
Deferred tax assets, long-term 3,530 6,093
Other long-term assets 938 632
------------- -----------------
Total assets $ 374,517 $ 350,814
------------- -----------------
Liabilities
Current liabilities
Accounts payable $ 8,376 $ 6,095
Accrued expenses and other liabilities 7,017 19,814
Deferred revenue, current 4,041 6,369
Due to employees 13,744 12,026
Taxes payable 13,619 14,557
Deferred tax liabilities, current 543 491
------------- -----------------
Total current liabilities 47,340 59,352
Deferred revenue, long-term 312 1,263
Taxes payable, long-term 1,228 1,228
Deferred tax liabilities, long-term 404 2,691
------------- -----------------
Total liabilities 49,284 64,534
------------- -----------------
Commitments and contingencies
Stockholders' equity
Common stock, $0.001 par value;
160,000,000 authorized; 46,914,858 and
45,398,523 shares issued, 45,958,829 and
44,442,494 shares outstanding at June
30, 2013 and December 31, 2012,
respectively 46 44
Additional paid-in capital 182,503 166,962
Retained earnings 155,790 128,992
Treasury stock (8,697 ) (8,697 )
Accumulated other comprehensive loss (4,409 ) (1,021 )
------------- -----------------
Total stockholders' equity 325,233 286,280
------------- -----------------
Total liabilities and stockholders' equity $ 374,517 $ 350,814
------------- -----------------
EPAM SYSTEMS, INC. AND SUBSIDIARIES
Reconciliations of Non-GAAP Financial Measures to Comparable GAAP Measures
(Unaudited)
(In thousands, except per share amounts and percentages)
Three Months Ended Six Months Ended
June 30, June 30,
----------------------------------------- -------------------------------------------
2013 2013
2013 2013 Non- 2013 2013 Non-
GAAP Adjustments GAAP GAAP Adjustments GAAP
---------- --------------- ---------- ----------- --------------- -----------
Cost of revenues
(exclusive of
depreciation and
amortization)(1) $ 83,547 $ (1,079 ) $ 82,468 $ 161,484 $ (1,858 ) $ 159,626
---------- --------------- ---------- ----------- --------------- -----------
Selling, general
and
administrative
expenses(2) $ 28,541 $ (2,781 ) $ 25,760 $ 55,624 $ (4,616 ) $ 51,008
---------- --------------- ---------- ----------- --------------- -----------
Income from
operations(3) $ 17,535 $ 4,233 $ 21,768 $ 33,071 $ 7,546 $ 40,617
---------- --------------- ---------- ----------- --------------- -----------
Operating margin 13.2 % 3.1 % 16.3 % 12.8 % 3.0 % 15.8 %
---------- --------------- ---------- ----------- --------------- -----------
Net income(4) $ 14,118 $ 5,102 $ 19,220 $ 26,798 $ 8,914 $ 35,712
---------- --------------- ---------- ----------- --------------- -----------
Diluted earnings
per share(5) $ 0.29 $ 0.40 $ 0.56 $ 0.75
---------- ---------- ----------- -----------
Three Months Ended Six Months Ended
June 30, June 30,
----------------------------------------- -------------------------------------------
2012 2012
2012 2012 Non- 2012 2012 Non-
GAAP Adjustments GAAP GAAP Adjustments GAAP
---------- --------------- ---------- ----------- --------------- -----------
Cost of revenues
(exclusive of
depreciation and
amortization)(1) $ 63,803 $ (884 ) $ 62,919 $ 123,978 $ (1,450 ) $ 122,528
---------- --------------- ---------- ----------- --------------- -----------
Selling, general
and
administrative
expenses(2) $ 20,711 $ (1,196 ) $ 19,515 $ 38,338 $ (2,260 ) $ 36,078
---------- --------------- ---------- ----------- --------------- -----------
Income from
operations(3) $ 16,830 $ 2,220 $ 19,050 $ 30,614 $ 4,574 $ 35,188
---------- --------------- ---------- ----------- --------------- -----------
Operating margin 16.2 % 2.2 % 18.4 % 15.4 % 2.4 % 17.8 %
---------- --------------- ---------- ----------- --------------- -----------
Net income(4) $ 13,321 $ 3,614 $ 16,935 $ 25,420 $ 5,888 $ 31,308
---------- --------------- ---------- ----------- --------------- -----------
Diluted earnings
per share(5) $ 0.29 $ 0.37 $ 0.55 $ 0.69
---------- ---------- ----------- -----------
Notes:
(1) Does not include $1,079 and $884 of stock-based compensation expense
reported within cost of revenues during the three months ended June 30, 2013 and
2012, respectively, and $1,858 and $1,450 of stock-based expense during the six
months ended June 30, 2013 and 2012, respectively.
(2) Adjustments to GAAP selling, general and administrative expenses:
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ ------------------------
2013 2012 2013 2012
GAAP Non-GAAP GAAP Non-GAAP
--------- ------------ --------- ------------
Stock-based compensation
expense $ 2,771 $ 889 $ 4,568 $ 1,873
Acquisition-related
costs 10 307 48 387
--------- ------------ --------- ------------
Total adjustments to
GAAP selling, general
and administrative
expenses $ 2,781 $ 1,196 $ 4,616 $ 2,260
--------- ------------ --------- ------------
(3) Adjustments to GAAP income from operations:
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ ------------------------
2013 2012 2013 2012
GAAP Non-GAAP GAAP Non-GAAP
--------- ------------ --------- ------------
Stock-based compensation
expense $ 3,850 $ 1,773 $ 6,426 $ 3,323
reported within cost of
revenues 1,079 884 1,858 1,450
reported within selling,
general and
administrative expenses 2,771 889 4,568 1,873
Amortization of
purchased intangible
assets 704 140 1,403 280
Acquisition-related
costs 10 307 48 387
One-time charges (331 ) - (331 ) 584
--------- ------------ --------- ------------
Total adjustments to
GAAP income from
operations $ 4,233 $ 2,220 $ 7,546 $ 4,574
--------- ------------ --------- ------------
(4) Adjustments to GAAP net income:
Three Months Ended Six Months Ended
June 30, June 30,
--------------------- ---------------------
2013 2012 2013 2012
Non- Non-
GAAP GAAP GAAP GAAP
--------- --------- --------- ---------
Stock-based compensation
expense $ 3,850 $ 1,773 $ 6,426 $ 3,323
reported within cost of
revenues 1,079 884 1,858 1,450
reported within selling,
general and administrative
expenses 2,771 889 4,568 1,873
Amortization of purchased
intangible assets 704 140 1,403 280
Acquisition-related costs 10 307 48 387
One-time charges (331 ) - (331 ) 584
Foreign exchange loss/ (gain) 869 1,394 1,368 1,314
--------- --------- --------- ---------
Total adjustments to GAAP net
income $ 5,102 $ 3,614 $ 8,914 $ 5,888
--------- --------- --------- ---------
(5) Non-GAAP weighted average diluted common shares outstanding were 47,977
and 46,382 during the three months ended June 30, 2013 and 2012, and
47,813 and 45,449 during the six months ended June 30, 2013 and 2012,
respectively.
Non-GAAP diluted earnings per share presents non-GAAP net income divided
by Non-GAAP weighted average diluted common shares outstanding. Non-GAAP
weighted average diluted common shares outstanding assumes (i) the 2.9
million shares EPAM sold in its February 2012 initial public offering were
outstanding as of January 1, 2012, and (ii) the conversion of the
outstanding preferred stock into common stock on an as-converted basis.
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: EPAM Systems, Inc. via Thomson Reuters ONE
[HUG#1722154]
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Datum: 08.08.2013 - 23:05 Uhr
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News-ID 286303
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