EPAM Reports Results for First Quarter 2015
(Thomson Reuters ONE) -
First quarter revenues of $200.0 million, up 25% year-over-year
Non-GAAP net income grew more than 34% for the first quarter year-over-year
Newtown, PA - May 6, 2015 - EPAM Systems, Inc. (NYSE: EPAM), a leading global
provider of complex software engineering solutions and a leader in delivery
capacity distributed across Central and Eastern Europe, today announced results
for its first quarter ended March 31, 2015.
First Quarter 2015 Highlights
Revenues increased to $200 million, up 24.7% over the same period last year and
up 33.7% in constant currency year over year and 1.4% sequentially. GAAP income
from operations was $22.8 million, an increase of 4.4% compared to $21.9 million
in the first quarter of 2014. Non-GAAP income from operations was $33.4 million,
an increase of $7.1 million, or 27.1%, from $26.3 million in the first quarter
of 2014. Non-GAAP quarterly diluted earnings per share (EPS) was $0.61, up
29.8% from $0.47 in the first quarter of 2014. Quarterly diluted EPS on a GAAP
basis was $0.29, down from $0.35 in the year-ago quarter mainly due to non-
operating foreign exchange losses.
EPAM reported cash from operations of $6.9 million in the first quarter of
2015, a decrease of $9.3 million compared to the first quarter of 2014.
"We are pleased with our strong financial results for the first quarter of
2015. Our revenue growth is on target with our projections and we continue to
see broad-based gains across multiple dimensions of our business. Despite the
currency headwinds, we are maintaining our market momentum and remain focused on
further differentiating our capabilities and enhancing our offerings." said
Arkadiy Dobkin, CEO and President of EPAM.
Full Year and Second Quarter 2015 Outlook
Based on current conditions, EPAM expects year-over-year revenue growth to be
between 21% and 23%. Non-GAAP net income growth for 2015 is expected to be in
the range of 20% to 22% year-over-year, with an effective tax rate of
approximately 20%. The full year weighted average share count is expected to be
approximately 51 million diluted shares outstanding.
For the second quarter of 2015, EPAM expects revenues between $213 million and
$215 million, representing a growth rate of 22% to 23% over second quarter 2014
revenues. Second quarter 2015 non-GAAP diluted EPS is expected to be in the
range of $0.62 to $0.64 based on an estimated second quarter 2015 weighted
average of 51.2 million diluted shares. GAAP diluted EPS is expected to be in
the range of $0.30 to $0.32.
Conference Call Information
EPAM will host a conference call to discuss results on Thursday, May 7, 2015 at
8:00 a.m. Eastern Time. The live conference call can be accessed by dialing
1-877-407-0784 (international) or 1-201-689-8560 (domestic). A telephonic replay
will also be available approximately one hour after the call and can be accessed
by dialing 1-877-870-5176 (international) or 1-858-384-5517 (domestic). The
passcode for the replay is 13607977. The telephonic replay will be available
until May 22, 2015. Interested investors and other parties may also listen to a
webcast of the conference call by logging onto the Investor Relations section of
the Company's website at http://investors.epam.com.
About EPAM Systems
Established in 1993, EPAM Systems, Inc. (NYSE: EPAM) is recognized as a leader
in software product development by independent research agencies. Headquartered
in the United States, EPAM serves clients worldwide utilizing its award-winning
global delivery platform and its locations in 19 countries across North America,
Europe, Asia and Australia. EPAM was ranked #6 in 2013 America's 25 Fastest-
Growing Tech Companies, and #3 in 2014 America's Best Small Companies lists by
Forbes Magazine.
For more information, please visit http://www.epam.com.
Non-GAAP Financial Measures
EPAM supplements results reported in accordance with United States generally
accepted accounting principles, 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. 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.
Because EPAM's reported non-GAAP financial measures are not calculated according
to GAAP, these measures are not comparable to GAAP and may not 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 the information in EPAM's 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.
Anthony J. Conte, Chief Financial Officer
Phone: +1-267-759-9000 x64588
Fax: +1-267-759-8989
investor_relations(at)epam.com
EPAM SYSTEMS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(US Dollars in thousands, except share and per share data)
Three Months Ended
March 31,
--------------------------
2015 2014
------------- ------------
Revenues $ 200,045 $ 160,384
Operating expenses:
Cost of revenues (exclusive of depreciation and
amortization) 125,887 102,454
Selling, general and administrative expenses 46,938 32,359
Depreciation and amortization expense 4,200 3,689
Other operating expenses/(income), net 200 25
------------- ------------
Income from operations 22,820 21,857
Interest and other income, net 1,158 976
Foreign exchange income/(loss) (5,754 ) (1,241 )
------------- ------------
Income before provision for income taxes 18,224 21,592
Provision for income taxes 3,510 4,228
------------- ------------
Net income $ 14,714 $ 17,364
------------- ------------
Foreign currency translation adjustments (2,730 ) (3,577 )
------------- ------------
Comprehensive income $ 11,984 $ 13,787
------------- ------------
Net income per share:
Basic $ 0.31 $ 0.37
Diluted $ 0.29 $ 0.35
Shares used in calculation of net income per share:
Basic 47,886 46,797
Diluted 51,000 49,207
EPAM SYSTEMS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(US Dollars in thousands, except share and per share data)
As of
March 31, As of December
2015 31, 2014
------------- --------------------
Assets
Current assets
Cash and cash equivalents $ 192,363 $ 220,534
Time deposits 30,000 -
Accounts receivable, net of allowance of
$2,618 and $2,181, respectively 104,714 124,483
Unbilled revenues 88,033 55,851
Prepaid and other current assets 14,390 9,289
Employee loans, net of allowance of $0 and $0,
respectively, current 2,498 2,434
Deferred tax assets, current 1,817 2,496
------------- --------------------
Total current assets 433,815 415,087
Property and equipment, net 55,115 55,134
Restricted cash, long-term 114 156
Employee loans, net of allowance of $0 and $0,
respectively, long-term 3,806 4,081
Intangible assets, net 45,091 47,689
Goodwill 56,346 57,417
Deferred tax assets, long-term 11,453 11,094
Other long-term assets 3,794 3,368
------------- --------------------
Total assets $ 609,534 $ 594,026
------------- --------------------
Liabilities
Current liabilities
Accounts payable $ 13,366 $ 4,641
Accrued expenses and other liabilities 20,579 32,203
Deferred revenue, current 3,061 3,220
Due to employees 29,870 24,518
Taxes payable 16,005 24,704
Contingent consideration, current 33,919 35,524
Contingent liability 92 -
Deferred tax liabilities, current 705 603
------------- --------------------
Total current liabilities 117,597 125,413
Deferred tax liabilities, long-term 4,106 4,563
------------- --------------------
Total liabilities 121,703 129,976
------------- --------------------
Commitments and contingencies
Stockholders' equity
Common stock, $0.001 par value; 160,000,000
authorized; 49,111,297 and 48,748,298 shares
issued, 48,692,313 and 48,303,811 shares
outstanding at March 31, 2015 and December
31, 2014, respectively 48 48
Additional paid-in capital 241,066 229,501
Retained earnings 275,312 260,598
Treasury stock (3,811 ) (4,043 )
Accumulated other comprehensive loss (24,784 ) (22,054 )
------------- --------------------
Total stockholders' equity 487,831 464,050
------------- --------------------
Total liabilities and stockholders' equity $ 609,534 $ 594,026
------------- --------------------
EPAM SYSTEMS, INC. AND SUBSIDIARIES
Reconciliations of Non-GAAP Financial Measures to Comparable GAAP Measures
(in thousands, except percent and per share amounts)
(Unaudited)
Three Months Ended March 31, 2015
----------------------------------------
GAAP Adjustments Non-GAAP
------------- ------------- ------------
Cost of revenues (exclusive of
depreciation and amortization)(1) $ 125,887 $ (2,484 ) $ 123,403
Selling, general and administrative
expenses(2) $ 46,938 $ (6,712 ) $ 40,226
Income from operations(3) $ 22,820 $ 10,614 $ 33,434
Operating margin 11.4 % 5.3 % 16.7 %
Net income(4) $ 14,714 $ 16,368 $ 31,082
Diluted earnings per share(5) $ 0.29 $ 0.61
Three Months Ended March 31, 2014
----------------------------------------
GAAP Adjustments Non-GAAP
------------- ------------- ------------
Cost of revenues (exclusive of
depreciation and amortization)(1) $ 102,454 $ (1,403 ) $ 101,051
Selling, general and administrative
expenses(2) $ 32,359 $ (2,386 ) $ 29,973
Income from operations(3) $ 21,857 $ 4,439 $ 26,296
Operating margin 13.6 % 2.8 % 16.4 %
Net income(4) $ 17,364 $ 5,680 $ 23,044
Diluted earnings per share (5) $ 0.35 $ 0.47
Notes:
(1) Adjustments to GAAP cost of revenues (exclusive of depreciation and
amortization) were comprised of stock-based compensation expense recorded in
the periods presented.
(2) Adjustments to GAAP selling general and administrative expenses:
Three Months Ended
March 31,
----------------------
2015 2014
----------- ----------
Selling, general and administrative expenses - Acquisition
related $ 4,492 $ 793
Selling, general and administrative expenses - All other 2,158 1,012
Acquisition-related costs 62 581
----------- ----------
Total adjustments to GAAP selling, general and
administrative expenses $ 6,712 $ 2,386
----------- ----------
(3) Adjustments to GAAP income from operations:
Three Months Ended
March 31,
-----------------------
2015 2014
------------ ----------
Stock-based compensation expense $ 9,134 $ 3,208
reported within cost of revenues 2,484 1,403
reported within selling, general and administrative
expenses- acquisition related 4,492 793
reported within selling, general and administrative
expenses- all other 2,158 1,012
Acquisition-related costs 62 581
Amortization of purchased intangible assets 1,418 650
Total adjustments to GAAP income from operations $ 10,614 $ 4,439
------------ ----------
(4) Adjustments to GAAP net income:
Three Months Ended
March 31,
-----------------------
2015 2014
------------ ----------
Stock-based compensation expense $ 9,134 $ 3,208
reported within cost of revenues 2,484 1,403
reported within selling, general and administrative
expenses- acquisition related 4,492 793
reported within selling, general and administrative
expenses- all other 2,158 1,012
Acquisition-related costs 62 581
Amortization of purchased intangible assets 1,418 650
Foreign exchange loss 5,754 1,241
------------ ----------
Total adjustments to GAAP net income $ 16,368 $ 5,680
------------ ----------
(5) There were no adjustments to GAAP average diluted common shares outstanding
during the three months ended March 31, 2015 and 2014.
This announcement is distributed by GlobeNewswire on behalf of
GlobeNewswire 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 GlobeNewswire
[HUG#1919603]
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Datum: 06.05.2015 - 23:26 Uhr
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News-ID 391599
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