- Revenue of $74.5 million, up 39% year-over-year and 22%
sequentially ROSEMONT, Ill., April 27 /PRNewswire-FirstCall/ --
Kanbay International, Inc. (NASDAQ:KBAY), a global IT services firm
focused on the Financial Services and Consumer & Industrial
Products industry, today reported its financial results for its
first quarter ended March 31, 2006. (Logo:
http://www.newscom.com/cgi-bin/prnh/20050830/CGTU033LOGO ) First
Quarter 2006 Highlights: - Closed the acquisition of Adjoined
Consulting on March 9th, earlier than expected (effective March 1st
for accounting purposes) - Revenue, before the acquisition and
excluding the impact from the sale of the products business in May
2005, increased 26 percent year-over- year and 4 percent
sequentially - Consolidated revenue was $74.5 million - Revenue,
before a $10.8 million contribution from the Adjoined acquisition,
rose to $63.6 million, up 19 percent year-over-year and 4 percent
sequentially - Diluted EPS of $0.20 for the quarter is net of $0.03
for stock option expense and a $0.01 reduction due to Adjoined
activity for the month of March inclusive of amortization of
intangibles, interest expense and integration costs - A total of 22
new clients were added in the quarter Commenting on the results,
Raymond Spencer, Chairman and CEO of Kanbay, said, "The first
quarter of 2006 was a historic one for Kanbay and all its
stakeholders. We announced and closed, ahead of schedule, the
transforming acquisition of Adjoined Consulting. We are witnessing,
in these early days, enhanced competitive positioning and
significant opportunities for accelerated future growth. Our
combined Company now has almost 200 active clients with whom we
have a proven ability to blend advisory and consulting services
with deep technology expertise. Looking ahead, we see abundant
opportunities to cross-sell our full-service offering to both
existing and future customers." He added, "The quarter was
especially positive given the performance in our core financial
services business. Kanbay, on a stand-alone basis, signed 11 new
clients in the quarter, the largest number of new clients wins in
the last four quarters, and Adjoined signed an additional 11 new
clients." Spencer concluded, "We view Kanbay as being uniquely
positioned in the marketplace. The transformational nature of the
Adjoined acquisition is playing out to our high expectations and we
are confident in the path we've chosen. Our focus and commitment
has been sharpened through the integration process to date. We did
not take our eye off the ball and we will not going forward. I
believe our operating results in the first quarter and the tone of
business in the second quarter demonstrates our early stage
progress and the momentum the organization is building for the
future." Financial Review Bill Weissman, Kanbay's Chief Financial
Officer, added, "In the quarter, we continued to grow Kanbay's
business in line with our expectations for 25% top line growth.
Excluding Adjoined and our product business divestiture in May
2005, total revenue grew 26% in the first quarter on a
year-over-year basis. We added 964 technical associates and
finished the quarter with over 5,600 technical associates globally.
This positions us well to capitalize on robust demand in our
vertical market segments. We expect strong growth in the second
quarter, particularly from our third party clients." Weissman
added, "Our relationship with HSBC remains exceptionally strong.
Revenue from HSBC grew 25 percent from the year ago period and over
5 percent sequentially, reflecting a strong mix of current business
initiatives." During the quarter, the Company reassessed the
accounting classification of its business relationship with Morgan
Stanley. "Based on Morgan Stanley's current equity ownership, its
lack of board of directors representation and its current client
concentration, the relationship with Morgan Stanley no longer
qualifies as a related party based on GAAP and SEC guidelines,"
Weissman added. "Consequently, the Company began classifying
revenue from Morgan Stanley as third party revenue effective
January 1, 2006. This change in classification is for accounting
purposes only. Our business relationship with Morgan Stanley
remains strong and fundamentally unchanged." As reported under the
new classification, third party revenue increased 64 percent
year-over-year and 47 percent sequentially. On a comparable basis,
including Morgan Stanley as third party revenue in prior periods,
revenue from third parties increased 26 percent year-over-year and
3 percent sequentially." Weissman commented, "We generated $15
million in cash from operating activities in the quarter. As
expected, capital expenditures were high in the first quarter at
$19 million as we near the completion of the first phase of our
Hyderabad campus construction and our learning center in Pune,
India. As previously announced, we secured a $125 million debt
facility in the quarter in order to help fund the Adjoined
acquisition and provide additional liquidity. We had $98 million
outstanding on the debt facility and $80 million in cash and
investments at the end of the quarter. We will continue to assess
the appropriate balance of cash and debt that optimizes our
liquidity and financial flexibility." Outlook and Guidance
Regarding the second quarter, for Kanbay on a stand-alone basis,
the Company is targeting revenue of $68 million, an increase of 7
percent sequentially and 26 percent year-over-year. The second
quarter will be the first reporting period with a full quarter
impact from Adjoined. Thus, the Company anticipates total
consolidated revenues of $99 million in the second quarter. Based
on Company performance to date and the impact of ten months of
Adjoined revenue for the year, as opposed to our original
assumption of nine months, Kanbay is increasing its full-year
revenue guidance from at least $370 million to at least $385
million. "The second quarter has typically been a high cost quarter
for us," Weissman added, "First, we have annual salary increases
becoming effective for a large portion of our organization on April
1st. Secondly, as was the case last year, we will incur the annual
H1-B visa costs in the second quarter needed to support the
business next year. The total impact of these items will be
approximately $2.5 million in Q2." Thus for Kanbay, on a
stand-alone basis, EPS guidance is $0.19, including a $0.04 impact
from stock compensation expense. Weissman added, "In addition, we
will incur the largest portion of our integration costs in the
second quarter. Integration costs will be more significant during
these early months post-acquisition while we expect the synergy
benefits of the transaction to ramp more meaningfully in the second
half of 2006. Thus we anticipate consolidated EPS of $0.15 in the
second quarter." The Company announced that for Kanbay, on a
stand-alone basis, its full-year earnings guidance remains $0.88
per share on a fully diluted basis. Targeted full-year earnings
guidance for Kanbay on a consolidated basis is unchanged at a range
of $0.79 to $0.83 cents per share, fully diluted. The earnings
range guidance reflects that a final determination of the valuation
of intangibles associated with the acquisition and integration
costs is pending in the second quarter. Weissman concluded, "We are
maintaining our full-year guidance range despite funding the
integration costs and additional dilution associated with closing
the transaction earlier than anticipated." "The overall demand
environment for IT services in our vertical markets remains very
strong," said Raymond Spencer. "Our core business remains strong
and is growing, our integration plan is solid and being executed as
we speak and our global associate team is highly motivated and
excited about the opportunities at hand." Conference Call Details
Kanbay management will host a conference call on April 27, 2006, at
8:30 a.m. (ET) to discuss the Company's results of operations for
the second quarter. To participate in the call, domestic callers
can dial (800) 659-1942 and international callers can dial (617)
614-2710. The passcode for the conference call is 30854209. The
conference call will also be webcast and accessible through
Kanbay's website at http://www.kanbay.com/. Please access the
website at least fifteen minutes prior to the call to register and
download any required software. A replay of the conference call
will be available for one week, until 11:00 p.m. (ET) on May 4,
2006, by dialing (888) 286-8010 for domestic callers and (617)
801-6888 for international callers. The passcode for the replay is
74168189. A webcast replay of the conference call will also be
available through Kanbay's website at http://www.kanbay.com/. About
Kanbay Founded in 1989, Kanbay International, Inc. (NASDAQ:KBAY) is
a global IT services firm with more than 6,200 associates
worldwide. Kanbay provides a highly-integrated suite of management
consulting, technology integration and development, and outsourcing
solutions through a proven global delivery platform to clients
focused on Financial Services and Consumer & Industrial
Products, as well as an emerging presence in the Communications
& Media and Life Sciences industries. Kanbay is a CMM Level 5
assessed Company headquartered in greater Chicago with offices in
North America and India, as well as London, Singapore, Hong Kong,
Tokyo and Melbourne. Forward-Looking Statements This release
contains statements relating to projections or future results.
These statements are forward-looking statements under the federal
securities laws. We can give no assurance that any projections or
future results discussed in these statements will be achieved. Any
forward-looking statements represent our views only as of today and
should not be relied upon as representing our views as of any
subsequent date. These statements are subject to a variety of risks
and uncertainties that could cause our actual results to differ
materially from the statements contained in this release. For a
discussion of important factors that could affect our actual
results, please refer to our SEC filings, including the "Risk
Factors" disclosure in our Annual Report on Form 10-K for the year
ended December 31, 2005. Presentation of Non-GAAP Financial
Measures In the text of this press release and the accompanying
supplementary financial information, Kanbay presents revenue
excluding the impact of the sale of the products business, the
acquisition of Adjoined Consulting, and the inclusion of revenue
from Morgan Stanley as Third Party Revenue, all of which are
non-GAAP financial measures. The Company's management uses revenue
excluding the impact of these matters to evaluate the quarterly and
annual growth in the services business. In addition, these non-GAAP
financial measures facilitate management's internal comparisons to
competitors' growth in their services business. This non-GAAP
financial information is provided as additional information for
investors and is not in accordance with, or an alternative to,
GAAP. In addition, the non-GAAP financial information provided may
be different than similar measures used by other companies.
However, the Company's management believes these non-GAAP measures
provide useful information to investors, potential investors,
securities analysts and others so each group can evaluate the
Company's current and future growth in the services business in the
same manner as management if they so chose. Reconciliation from
revenue-to-revenue excluding the impact of the sale of the products
business and Adjoined Consulting has been provided in the
accompanying supplementary financial information. Kanbay
International, Inc. Condensed Consolidated Statement of Income
(Unaudited) (dollars in thousands except per share amounts) Three
months ended March 31 2006 2005 Net revenues -- related parties
$35,177 $33,240 Net revenues -- third parties 39,278 20,220 Total
revenues 74,455 53,460 Cost of revenues 41,995 28,097 Gross profit
32,460 25,363 Sales and marketing expenses 5,710 4,640 General and
administrative expenses 13,979 8,609 Total selling, general and
administrative expenses 19,689 13,249 Depreciation and amortization
3,518 1,908 Loss on sale of fixed assets 14 40 Income from
operations 9,239 10,166 Other income Interest income and other, net
131 332 Equity in earnings of affiliate 594 239 Total other income/
725 571 Income before income taxes 9,964 10,737 Income tax expense
2,392 2,530 Net income 7,572 8,207 Income available to common
stockholders $ 7,572 $ 8,207 Income per share of common stock Basic
$ 0.21 $ 0.25 Diluted $ 0.20 $ 0.22 Weighted average number of
common shares outstanding 36,074,156 33,237,959 Weighted average
number of common and dilutive shares outstanding 38,425,042
37,599,207 Kanbay International, Inc. Condensed Consolidated
Statement of Financial Position (Unaudited) (In thousands) March
31, December 31, 2006 2005 Assets Current Assets Cash and cash
equivalents $ 24,638 $ 19,520 Short term investments 55,290 54,918
Trade accounts receivable 61,311 51,771 Other current assets 16,621
13,660 Total Current Assets 157,860 139,869 Property and equipment
- net 64,747 45,745 Investment in affiliate 23,437 22,567 Goodwill
and other intangible assets, net 164,512 9,295 Other assets 211 -
Total Assets $410,767 $217,476 Liabilities and Stockholders' Equity
Current Liabilities Accounts payable $ 9,015 $ 3,878 Current
portion of long term debt 5,000 - Accrued and other current
liabilities 33,591 24,360 Total Current Liabilities 47,606 28,238
Long term debt 93,000 - Other non current liabilities 1,141 1,122
Total Non Current Liabilities 94,141 1,122 Total Liabilities
$141,747 $ 29,360 Stockholders' Equity 269,020 188,116 Total
Liabilities and Stockholders' Equity $410,767 $217,476 Kanbay
International, Inc. Condensed Consolidated Statement of Cash Flows
(Unaudited) (In thousands) Three Months ended March 31, 2006 2005
Operating activities Net income $ 7,572 $ 8,207 Adjustments to
reconcile net income to net cash provided by (used in) operating
activities 4,755 1,841 Changes in operating assets and liabilities
Trade accounts receivable 7,598 (12,172) Other assets (171) 3,069
Trade accounts payable 709 (96) Other liabilities (5,858) (10,237)
Net cash provided by (used in) operating activities 14,605 (9,388)
Investing activities Additions to property and equipment (19,112)
(3,770) Purchase of businesses, net of cash acquired (159,225)
(4,938) Purchase of short term investments (372) (218) Other
investing activities 27 - Net cash used in investing activities
(178,682) (8,926) Financing activities Proceeds from issuance of
long tem debt 98,000 - Issuance of common stock 70,327 - Proceeds
from exercise of options and stock purchase plan and other 848
1,423 Net cash provided by financing activities 169,175 1,423
Effect of exchange rates on cash and cash equivalents 20 33
Increase (decrease) in cash and cash equivalents 5,118 (16,858)
Cash and cash equivalents at beginning of period 19,520 29,126 Cash
and cash equivalents at end of period $24,638 $12,268 Kanbay
International, Inc. Reconciliation from Revenue to Revenue
Excluding Adjoined Consulting and the Impact of the Sale of the
Products Business (Unaudited) (in thousands) Three months ended
March 31 2006 2005 Total revenues $ 74,455 $ 53,460 Less: Adjoined
Consulting (10,806) - Less: Total revenues from products business -
(2,880) Total revenues excluding Adjoined and impact of sale of the
products business $ 63,649 $ 50,580 Kanbay International, Inc.
Reconciliation from Third Party Revenue to Third Party Revenue
Excluding Adjoined Consulting (Unaudited) (in thousands) Three
months ended March 31 2006 Total Third Party revenues $ 39,278
Less: Adjoined Consulting (10,806) Total Third Party revenues
excluding Adjoined $ 28,472 Kanbay International, Inc.
Reconciliation from Revenue to Revenue Including Morgan Stanley as
Third Party Revenue (Unaudited) (in thousands) Three months ended
December 31 March 31 2005 2005 Total Third Party revenues $ 19,347
$ 20,220 Less: Total revenues from products business - (2,880) Add:
Morgan Stanley Revenue 8,350 5,199 Total third party revenues
including Morgan Stanley $ 27,697 $ 22,539
http://www.newscom.com/cgi-bin/prnh/20050830/CGTU033LOGO
http://photoarchive.ap.org/ DATASOURCE: Kanbay International, Inc.
CONTACT: Investor Relations - Seth R. Frank of Kanbay
International, Director of Investor Relations, +1-847-384-4732 Web
Site: http://www.kanbay.com/
Copyright
Grafico Azioni Kanbay (NASDAQ:KBAY)
Storico
Da Ago 2024 a Set 2024
Grafico Azioni Kanbay (NASDAQ:KBAY)
Storico
Da Set 2023 a Set 2024