WNS Announces Fourth Quarter and Full Year Fiscal 2013 Earnings
WNS (Holdings) Limited (WNS) (NYSE: WNS), a leading provider of global business process outsourcing (BPO) services, today announced results for the 2013 fiscal fourth quarter and full year ended March 31, 2013.
- New York, NY (1888PressRelease) April 20, 2013 - Reconciliations of the non-GAAP financial measures discussed below to our GAAP operating results are included at the end of this release. See also "About Non-GAAP Financial Measures."
Revenue less repair payments* of $112.8 million in the fiscal fourth quarter increased 13.0% year-over-year, and was down 0.7% compared to the previous quarter. Year-over-year, revenue improvement was broad-based, with particular strength in emerging verticals such as Utilities and Retail & CPG, as well traditional verticals including Banking & Financial Services and Insurance. The sequential revenue reduction was the result of depreciation in the British Pound against the US dollar, and approximately $2 million of incremental transition revenue booked in the third quarter. In Q4, the average GBP/$ exchange rate depreciated 0.9% versus the same quarter of last year, and 3.3% sequentially, adversely impacting 49.7% of the company's revenue. Excluding exchange rate impacts, constant currency revenue* grew 13.4% versus the same quarter of last year and 1.0% sequentially.
Adjusted operating margin* for the quarter was 15.8%, as compared to 17.5% in Q4 of last year, and 13.9% reported in the third quarter. On a year-over-year basis, operating margin declined as a result of investments in infrastructure and the Capability Creation Group, and our acquisition of Fusion Outsourcing. Also, as clients have increasingly adopted our new onshore and nearshore capabilities, the company's delivery mix has shifted putting pressure on operating margins. Depreciation in the Indian rupee and higher revenue levels helped to significantly offset these impacts. The 195 basis point sequential improvement in adjusted operating margin* was the result of higher constant currency revenue volumes, gains on our Q4 hedging positions and the reduction in pass-through transition revenue. These items more than offset the negative impacts on revenue and operating margin associated with depreciation in the British Pound.
Adjusted net income (ANI)* in the fiscal fourth quarter was $15.8 million, up $2.6 million as compared to Q4 of last year and up$1.8 million from the previous quarter. The fiscal fourth quarter ANI* margin was 14.0%, as compared to 13.2% in Q4 of last year, and 12.3% reported last quarter. On a year-over-year basis, increased income on higher cash balances and a lower effective tax rate more than offset the reduction in adjusted operating margin* percentage discussed above. Sequentially, the increase in ANI* margin was a result of a higher adjusted operating margin*, which was partially offset by a higher effective tax rate in Q4.
From a balance sheet perspective, WNS ended the fiscal fourth quarter with $117.6 million in cash and investments and $96.4 million of gross debt. In the fiscal fourth quarter, the company generated $17.8 million in cash from operations, and capital expenditures for the quarter came in at $3.4 million. Days sales outstanding were 33 days, representing a reduction from 35 days in Q4 of last year, and an increase from 32 days last quarter.
"While currency headwinds muted our reported Q4 revenues, we continued to make progress adding new clients and strengthening our existing relationships during the quarter. Both financially and operationally, fiscal 2013 represented a solid step forward for WNS. Our revenue less repair payments* grew 10.4%, which represented 11.2% improvement on a constant currency* basis. This is compared to 6.9% growth, or 5.3% constant currency* growth posted in fiscal 2012. Revenue growth in 2013 also included approximately $10.0 million, or 2.6% from the acquisition of Fusion, South Africa. In addition to driving revenue improvement during the year, the company was able to invest in geographic expansion, technology-enablement, domain expertise and the creation of new services while growing our adjusted net income* faster than revenue less repair payments*," said Keshav Murugesh, WNS's Chief Executive Officer.
"As we enter fiscal 2014, the demand environment for BPO is stable and healthy and we are excited about our differentiated positioning and the opportunity to accelerate business momentum. While ongoing investments will be required to capitalize on the long-term BPO growth trends, WNS believes that by successfully executing on our key strategies we will be able to grow revenue at or above industry rates and expand our margins."
Fiscal 2014 Guidance
WNS has provided guidance for the fiscal year ending March 31, 2014 as follows:
• Revenue less repair payments* is expected to be between $460 million and $480 million, up from $436.1 million in fiscal 2013. This assumes an average GBP to USD exchange rate of 1.52 versus 1.58 in fiscal 2013.
• ANI* is expected to range between $59 million and $63 million, up from $53.1 million in fiscal 2013. This assumes an average USD to INR exchange rate of 54.4, the same average exchange rate as fiscal 2013.
"Consistent with previous years, our initial guidance for fiscal 2014 is based on current visibility levels and exchange rates. Guidance for the year reflects top line growth of 6% to 10%, with 90% visibility to the midpoint of the range. This guidance represents 8% to 12% revenue growth on a constant currency* basis. Our ANI* guidance reflects 11% to 19% year-over-year improvement. WNS will continue to focus on making strategic investments and driving operational excellence which will enable us to grow revenue and improve profit margin in fiscal 2014 and beyond," said Deepak Sogani, WNS's Chief Financial Officer.
Conference Call
WNS will host a conference call on April 17, 2013 at 8:00 am (Eastern) to discuss the company's quarterly results. To participate in the call, please use the following details: +1-866-277-1184; international dial-in +1-617-597-5360; participant passcode 37185223. A replay will be available for one week following the call at +1-888-286-8010; international dial-in +1-617-801-6888; passcode 99626595, as well as on the WNS website, www.wns.com, beginning two hours after the end of the call.
About WNS
WNS (Holdings) Limited (NYSE: WNS), is a leading global business process outsourcing company. WNS offers business value to 200+ global clients by combining operational excellence with deep domain expertise in key industry verticals including Travel, Insurance, Banking and Financial Services, Manufacturing, Retail and Consumer Packaged Goods, Shipping and Logistics and Healthcare and Utilities. WNS delivers an entire spectrum of business process outsourcing services such as finance and accounting, customer care, technology solutions, research and analytics and industry specific back office and front office processes. As of March 31, 2013, WNS had 25,520 professionals across 31 delivery centers worldwide including Costa Rica,India, Philippines, Poland, Romania, South Africa, Sri Lanka, United Kingdom and the United States. For more information, visitwww.wns.com.
For more about Fiscal earnings - http://bit.ly/wnspressrelease
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