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• Quarterly revenues were a record $170.0 million, up 29% year-over-year, while full year revenues were a record $562.3 million, up 19% year-over-year.
• On a GAAP basis, the company had a fourth quarter operating loss of $5.5 million, a net loss of $7.1 million and an $0.18 diluted net loss per share. On a full year basis, operating income was $15.6 million, net income was $10.1 million and diluted net earnings per share was $0.26.
• As recently announced, last week the company signed a settlement agreement in a long-running dispute with a client. Under the terms of the agreement, Ness paid $9 million to the client to settle the arbitration. In addition to the payment, Ness has taken a charge to write off accounts receivable and other assets related to the contract with the client and for legal expenses associated with the arbitration, together totaling approximately $7 million, and an additional approximately $5 million of unrelated allowances for doubtful accounts and other charges. The company took all these charges in the fourth quarter of 2007, for a total of approximately $21 million. Excluding the charges, on a non-GAAP basis ( ):
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• Quarterly operating income was a record $15.0 million, or 8.8% of revenues, up 86% year-over-year, while full year operating income was $36.1 million.
• Quarterly net income was a record $12.3 million, while full year net income was $29.5 million.
• Quarterly diluted net earnings per share was a record $0.31, while full year diluted net earnings per share was $0.75. |
• Operationg cash flows for the full year were a record $16.4 million.
• Backlog as of December 31, 2007 was a record $734 million, up 21% compared to $606 million as of December 31, 2006.
• Headcount reached a new record of 8,280 as of December 31, 2007.
“We had a terrific fourth quarter, winning numerous significant deals, and as we end the year we are in the most fertile sales period in the history of the company,” said Sachi Gerlitz, president and chief executive officer of Ness Technologies. “We settled the arbitration and cleaned up our balance sheet, taking a significant provision, and we are positioned for what we believe will be a strong 2008. Our core business is thriving, as shown by our fourth quarter results, where we delivered record quarterly and annual revenues and, excluding the provision, record quarterly operating income. Our global growth strategy is paying off, as manifested by the fact that almost 60% of our business in the fourth quarter was generated in North America and Europe, and our growth in Central Europe was especially impressive.”
“We also delivered record quarterly operating cash flows, as the result of our continued focus on collections and cash flow generation,” stated Ofer Segev, executive vice president and chief financial officer of Ness. “We took important steps to improve operating margins in each of our operating segments, and we are beginning to see the fruit of those decisions. Our balance sheet and liquidity remain strong, and we feel very confident about the future.”
Guidance
For the full year 2008, Ness expects to generate revenues in the range of $635 million to $655 million and diluted net earnings per share in the range of $1.00 to $1.05.
Guidance includes the effect of an anticipated increase in the number of outstanding diluted shares to an average of approximately 40 million in 2008, as the result of stock option exercises.
Guidance does not include any contribution to revenues or earnings per share from future acquisitions.
Conference Call Details
Ness Technologies President and Chief Executive Officer, Sachi Gerlitz, and Chief Financial Officer, Ofer Segev, will also conduct a conference call to discuss the fourth quarter and full year 2007 results. The call, which will be simultaneously webcast, will be at 8:30 AM Eastern Time / 5:30 AM Pacific Time on Tuesday, February 5, 2008.
To access the Ness Technologies fourth quarter and full year 2007 earnings conference call, participants in North America should dial 1-800-399-0427 and international participants should dial +1-706-634-5453. A live audio webcast of the conference call will be available on the investor relations page of the Ness Technologies corporate web site at www.ness.com. Please visit the web site at least 15 minutes early to register for the teleconference webcast and download any necessary audio software. A replay of the call will be available on the web site approximately two hours after the conference call is completed.
About Ness Technologies
Ness Technologies (NASDAQ: NSTC) is a global provider of end-to-end IT services and solutions designed to help clients improve competitiveness and efficiency. Ness specializes in outsourcing and offshore, systems integration and application development, software and consulting, and quality assurance and training. With over 8,000 employees, Ness maintains operations in 18 countries, and partners with numerous software and hardware vendors worldwide. For more information about Ness Technologies, visit www.ness.com
Use of Non-GAAP Financial Information
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Ness uses various non-GAAP measures of net income and earnings per share, including (a) exclusion of the one-time provision for extraordinary expenses taken in the fourth quarter of 2007 and (b) adjustments from results based on GAAP to exclude non-cash stock-based compensation expenses in accordance with SFAS 123R and amortization of intangible assets, net of taxes. Ness’ management believes the non-GAAP financial information provided in this release is useful to investors’ understanding and assessment of Ness’ on-going core operations and prospects for the future. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. Management uses both GAAP and non-GAAP information in evaluating and operating business internally and as such has determined that it is important to provide this information to investors.
Forward Looking Statement
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements often are preceded by words such as “believes,” “expects,” “may,” “anticipates,” “plans,” “intends,” “assumes,” “will” or similar expressions. Forward-looking statements reflect management’s current expectations, as of the date of this press release, and involve certain risks and uncertainties. Ness’ actual results could differ materially from those anticipated in these forward looking statements as a result of various factors. Some of the factors that could cause future results to materially differ from the recent results or those projected in forward-looking statements include the “Risk Factors” described in Ness’ Annual Report of Form 10-K filed with the Securities and Exchange Commission on March 14, 2007. Ness is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of
such changes, new information, subsequent events or otherwise.
Ness Technologies media contact:
David Kanaan
USA: 1-888-244-4919
Intl: + 972-3-540-8188
Email: media.int@ness.com
Ness Technologies investor contact:
Drew Wright
USA: 1-201-488-3262
Email: investor@ness.com |
