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iGate Corp. Reports Operating Results (10-Q)

October 22, 2010 | About:
insider

10qk

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iGate Corp. (IGTE) filed Quarterly Report for the period ended 2010-09-30.

Igate Corp. has a market cap of $1 billion; its shares were traded at around $18.04 with a P/E ratio of 22.6 and P/S ratio of 5.3. The dividend yield of Igate Corp. stocks is 0.6%.IGTE is in the portfolios of Columbia Wanger of Columbia Wanger Asset Management, Ronald Muhlenkamp of Muhlenkamp Fund, Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

S,G&A costs for the three months ended September 30, 2010 were 16.1% of revenues, as compared to 18.7% of revenues for the three months ended September 30, 2009. Our net employee cost increased by $1.9 million for the three months ended September 30, 2010, as compared to three months ended September 30, 2009, mainly due to an increase in salaries, bonus and benefits of $1.4 million, recruitment expense of $0.1 million, and travel expense and related costs of $0.4 million. Our net corporate cost increased by $0.4 million for the three months ended September 30, 2010 due to increase in outside professional services, legal costs, accounting, and administrative charges which was partly offset by decrease in the provision for doubtful debts. Our net facilities costs increased by $0.6 million for the three months ended September 30, 2010, mainly due to increase in rental, maintenance and communication related expenses.

Other income, net is primarily comprised of the favorable foreign currency movements resulting in the realized gain on our hedges amounting to $0.4 million for the three months ended September 30, 2010 as compared to realized loss of $1.8 million for the three months ended September 30, 2009. The unfavorable foreign currency loss related to our intercompany debt in India and the remeasurement of the current assets denominated in the foreign currency, amounting to $0.5 million for the three months ended September 30, 2010 as compared to the favorable foreign currency gain of $0.5 million for the three months ended September 30, 2009.Our investment income for the three months ended September 30, 2010 totaled $0.9 million as compared to $0.8 million for the three months ended September 30, 2009. The increased investments during the current period as compared to corresponding period of the previous year yielded higher income. We recognized gain on sale of fixed assets of $0.2 million during the three months ended September 30, 2010. In September 2009, we received $0.4 million of cash from an escrow account related to the prior sale of a business. The cash received was recognized as a gain on venture investments and affiliated companies.

S,G&A costs for the nine months ended September 30, 2010 were 17.0% of revenues, as compared to 18.9% of revenues for the nine months ended September 30, 2009. Our net employee cost increased by $5.2 million for the nine months ended September 30, 2010, as compared to nine months ended September 30, 2009, mainly due to an increase in salaries, bonus and benefits of $3.4 million, recruitment expense of $0.7 million, and travel expense and related costs of $1.0 million. Our net corporate cost increased by $1.1 million for the nine months ended September 30, 2010 due to increase in outside professional services, legal costs, accounting, insurance, marketing and administrative charges which was partly offset by decrease in the provision for doubtful debts. Our net facilities costs increased by $1.0 million for the nine months ended September 30, 2010, mainly due to increase in rental, maintenance and communication related expenses.

Other income, net is primarily comprised of the favorable foreign currency movements resulting in the reduction of the realized loss on our hedges amounting to $0.6 million for the nine months ended September 30, 2010 as compared to $6.5 million for the nine months ended September 30, 2009. The unfavorable foreign currency loss related to our intercompany debt in India and the remeasurement of the current assets denominated in the foreign currency, amounting to $0.5 million for the nine months ended September 30, 2010 as compared to the favourable foreign currency gain of $1.5 million for the nine months ended September 30, 2009. Our investment income for the nine months ended September 30, 2010 totaled $2.1 million as compared to $2.6 million for the nine months ended September 30, 2009. In 2010, our investments have been primarily in a dividend yielding money market mutual fund. The Net Asset Value of the units tends to decrease on payment of the dividends leading to a loss on redemption of the units which has been compensated by the dividend income. In 2009, the investments were primarily in a high yield interest bearing fixed income securities. We recognized gain on sale of fixed assets of $1.3 million and gain on sale of investment in affiliate of $0.6 million during the nine months ended September 30, 2010. In September 2009, we received $0.4 million of cash from an escrow account related to the prior sale of a business. The cash received was recognized as a gain on venture investments and affiliated companies.

Cash collected from the customers is $177.0 million as compared to $146.8 million for the nine months ended September 30, 2010 and 2009, respectively. Payments made to the vendors for operating activities are $146.0 million as compared to $115.0 million for the nine months ended September 30, 2010 and 2009, respectively. The collections and payments have increased in 2010 as compared to 2009 due to the increased operations.

Cash used by financing activities for the nine months ended September 30, 2010 was $5.0 million, as compared to $4.6 million for the nine months ended September 30, 2009. Dividends paid amounted to $6.1 million and $6.0 million for the nine months ended September 30, 2010 and 2009, respectively.

Read the The complete Report

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