Cognizant reports 6% increase in Q4 revenue

BANGALORE: Cognizant Technology Solutions Corp. has posted revenue of $ 43.5

million for the fourth quarter ended December 31, 2001. This is up by 6 per

cent, from $ 41.1 million in the fourth quarter of 2000. This was announced by

the company today, by a media release.

Gross margin and operating margin for the fourth quarter improved to 49.4 per

cent and 20.8 per cent, respectively from 48.8 per cent and 19.2 per cent,

respectively in the prior year.

Pro forma net income for the fourth quarter increased to $5.9 million or

$0.29 per diluted share from $5.4 million or $0.27 per diluted share in the

fourth quarter of 2000. Pro forma amounts exclude the effect of a one-time,

non-cash, after-tax charge of $1.2 million, related to an impairment loss

write-off of Questra, the Company’s only venture capital investment. Net

income for the fourth quarter of 2001, inclusive of the one-time charge, was

$4.6 million, or $0.23 per diluted share.

Revenue for the year ended December 31, 2001 increased 30 per cent to $177.8

million from $137.0 million in 2000. Pro forma net income for 2001 increased 32

per cent to $23.4 million, from $17.7 million in the prior year. 2001 Pro forma

EPS increased 32 per cent to $1.15 per diluted share from $0.87 per diluted

share in 2000. Net income for the year ended December 31, 2001, inclusive of the

one-time charge, increased to $22.2 million or $1.09 per diluted share.

"Offshore application management continued to move to the forefront of

corporate IT spending as a result of its cost effectiveness and value added

capabilities," said, Cognizant’s chairman and chief executive officer,

Kumar Mahadeva. "Cognizant’s results benefited from this mainstream

acceptance and resulted in 22 per cent growth in application management revenue

during the fourth quarter and a 43 per cent increase for the full year.

Additionally, investments in our vertical market strategy continue to bear fruit

as we experienced sequential growth in the fourth quarter in our health care and

financial services practices. This partially offset the substantial decline in

revenue from our travel industry clients. We do not expect any further decline

in revenues from the travel segment."

"Our cash balance increased over $5 million during the fourth quarter to

approximately $85 million as we continued to generate significant cash flow from

operations. Also, DSOs remained strong at 59 days," said, the company’s

chief financial officer, Gordon Coburn. "Additionally, our customer base

remains strong and loyal. Over 80 per cent of our fourth quarter revenue came

from customers who have utilized our services for more than one year."

Coburn added, "Although spending on development and integration projects

remains weak, we continue to see strong demand for offshore outsourcing services

and as a result expect to resume sequential revenue growth in the first quarter

of 2002."