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iGate Corp. Reports Operating Results (10-Q)

April 28, 2010 | About:
10qk

10qk

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iGate Corp. (IGTE) filed Quarterly Report for the period ended 2010-03-31.

Igate Corp. has a market cap of $673.9 million; its shares were traded at around $12.2 with a P/E ratio of 19.6 and P/S ratio of 3.5. The dividend yield of Igate Corp. stocks is 0.9%.IGTE is in the portfolios of 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 March 31, 2010 were $10.0 million or 17.3% of revenues, as compared to $8.6 million or 19.2% of revenues for the three months ended March 31, 2009. Our net employee costs increased approximately by $1.0 million in the first quarter of 2010 as compared to the first quarter of 2009, comprised mainly of increased salaries and performance bonus by $0.5 million, travel related expenses by $0.2 million and recruitment expenses $0.1 million. Our net corporate and facilities costs increased by $0.4 million mainly due to an increase in rental expense by $0.3 million.

Other expense is primarily comprised of realized loss on our hedges amounting to $0.8 million for the three months ended March 31, 2010 as compared to $2.2 million for the three months ended March 31, 2009. The decrease in hedge loss is due to favorable currency movements. For the three months ended March 31, 2010, we recognized $0.6 million of unfavorable foreign currency loss related to our intercompany debt in India as compared to a favorable foreign currency gain of $0.4 million for the three months ended March 31, 2009. As of March 31, 2010, all of our outstanding forward contracts met the qualifying criteria to receive hedge accounting. We recognized gain on sale of fixed assets of $1.1 million and gain on sale of investment in affiliate of $0.6 million during the three months ended March 31, 2010

Federal income taxes, calculated at the U.S. statutory rate, totaled $4.1 million and $1.6 million for the three months ended March 31, 2010 and 2009, respectively. State income taxes, which totaled $0.01 million and $0.01 million for the three months ended March 31, 2010 and 2009, respectively, were calculated using a blended statutory rate, and are net of federal income tax benefit. Our income tax provision was $0.2 million and a benefit of $0.15 million at an effective rate of 1.7% and 3.2% for the three months ended March 31, 2010 and 2009, respectively.

Cash provided by operating activities was $3.8 million for the three months period ended March 31, 2010. Factors contributing to our cash provided by operating activities were net income of $11.6 million for the period, significant non cash items of approximately $2.0 million, offset by changes in working capital amounting to $(7.7) million. These non cash items principally comprised of depreciation and amortization of $2.2 million, stock based compensation expense of $1.2 million, which was offset by an increase in deferred tax of $1.5 million.

Cash provided by operating activities was $8.6 million for the three months period ended March 31, 2009. Primary factors were income from operations of $5.0 million for the period, plus significant non cash items of approximately $2.6 million. These non cash items included depreciation and amortization of $1.9 million, stock based compensation expense of $1.3 million, bad debts of $0.2 million which were offset by deferred taxes of $0.8 million.

Cash used by financing activities was $5.8 million and $6.0 million for the three month period ended March 31, 2010 and 2009, respectively. Sources of cash related to stock option exercises were $0.3 million and $0.06 million in 2010 and 2009, respectively. During the first quarter of 2010 and 2009, our Board of Directors approved annual cash dividends of $0.11 per share. The total amount of dividends paid was $6.1 million and $6.0 million in 2010 and 2009, respectively.

Read the The complete Report

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