|
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
|
||
|
FORM
8-K
|
||
|
CURRENT
REPORT
|
||
|
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date
of Report (Date of earliest event reported): August 21,
2007
|
||
|
GENPACT
LIMITED
(Exact
name of registrant as specified in its
charter)
|
||
|
Bermuda
|
333-142875
|
98-0533350
|
|
(State
or other jurisdiction
of
incorporation)
|
(Commission
File
Number)
|
(I.R.S.
Employer
Identification
No.)
|
|
Canon’s
Court, 22 Victoria Street
Hamilton
HM, Bermuda
|
||
|
(Address
of Principal Executive Offices) (Zip Code)
Registrant’s
telephone number, including area code: (441)
295-2244
|
||
|
Not
Applicable
|
||
|
(Former
name or former address, if changed since last report)
|
||
|
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any
of the following provisions:
|
|
o
|
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
|
|
¨
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
¨
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR
240.14d-2(b))
|
|
¨
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR
240.13e-4(c))
|
Item
2.02. Results of Operations and Financial Condition.
On
August
21, 2007, Genpact Limited issued a press release with respect to earnings
for
the quarter ended June 30, 2007. Genpact is furnishing this 8-K
pursuant to item 2.02, “Results of Operations and Financial
Condition.” A copy of this press release, attached hereto as
Exhibit 99.1, is incorporated herein by reference.
Item
9.01. Financial Statements and Exhibits.
(d)
Exhibits:
|
Exhibit
99.1
|
Press
release dated August 21, 2007
|
Signature
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
| GENPACT LIMITED | |||
|
Date:
August 21, 2007
|
By:
|
/s/ Victor Guaglianone | |
| Name: Victor Guaglianone | |||
| Title: Senior Vice President and General Counsel | |||
EXHIBIT INDEX
|
Exhibit
|
Description
|
|
99.1
|
Press
release dated August 21, 2007
|
Exhibit
99.1
Genpact
Reports Second Quarter
2007
Results
Second
Quarter
Revenues Grow 42%
Gurgaon,
India and New York, NY, August 21, 2007 – Genpact
Limited (NYSE: G), which manages business processes for companies
around the world, today announced results for the second quarter ended June
30,
2007.
Highlights
Results
for the
Second Quarter ended June 30, 2007
|
●
|
Second
quarter revenues were $200.5 million, up 42% from second quarter
2006 and
14% from first quarter 2007
|
|
●
|
Second
quarter net income was $7.1 million, up 1% from second quarter
2006 and
284% from first quarter 2007; Net income margin was 4%, down from
5% in
second quarter 2006 due to global taxes which are now being eliminated
as
a result of changes in the holding structure post-IPO
|
|
●
|
Cash
EBIT for
the second quarter was $30.3 million, up 35% from second quarter
2006 and
41% from first quarter 2007. Cash EBIT margin was at 15.1%,
vs.16.0% in second quarter 2006 and 12.2% in first quarter
2007.
|
This
summary
includes Cash EBIT a non-GAAP financial measure which is reconciled to GAAP
at
the end of this release.
Results
for the
First Half ended June 30, 2007
|
●
|
Revenues
were
$376.5 million for the first half of 2007, up 38% from the
first half of 2006
|
|
●
|
Net
income
was $8.9 million for the first half of 2007, down 26% from the
corresponding half last year due to global taxes which are now
being
eliminated as a result of changes in the holding structure
post-IPO
|
|
●
|
Cash
EBIT was
$51.8 million for the first half of 2007, up 26% from the corresponding
half last year. Cash EBIT margin was 13.8% for the first half
of 2007 as compared to 15.1% for the first half of
2006
|
Global
Clients
revenues grew at 144% in the second quarter as compared to the second quarter
of
2006; Global Clients revenues for the first half of 2007 grew at 146% as
compared to the first half of 2006. For the first half of 2007,
Global Clients represent 35% of total revenues. The second quarter
saw strong, accelerated revenue growth from GE at 13% as compared to the
second
quarter of 2006. For the first half of 2007 GE revenues grew at 12% as compared
to the first half of 2006.
As
of June 30th
headcount grew 9% from the first quarter of 2007 to 29,400 and 13% from December
31, 2006.
Genpact
saw
increasing demand for its business solutions during the first half of 2007
with
significant new clients added:
|
●
|
Major
automotive components manufacturer in North
America
|
|
●
|
Leading
financial management & advisory company
|
|
●
|
Global
industrial automation, transportation and controls group
in the UK
|
|
●
|
US-based
leading IT hardware and network computing
company
|
|
●
|
Leading
global internet brand
|
|
●
|
Leading
information services company in the human resources,
retail and transportation markets
|
Pramod
Bhasin,
Genpact’s President and CEO said, “Our journey as a public company commences
with reporting strong financial performance this quarter. The
increasing globalization of the world economy as well as a growing shortage
of
labor in developed markets helped the global BPO and IT Services industry
continue to show strong growth. Sophisticated clients are seeking the
benefits of Genpact’s unrelenting focus on operational excellence and continuous
process improvement to drive business impact.”
Bhasin
continued,
“We saw particularly strong growth in our operations in Europe as well as
Asia
Pacific, especially China, showing the strength of our global delivery
network. In Europe we have announced a second operations site in
Romania. We are also expanding our Asia Pacific presence with our
operations in the Philippines and a second operations site in
China.”
The
following
financial statements are for Genpact Global Holdings SICAR S.à.r.l. which was
our parent entity as of June 30, 2007. On July 13, 2007, prior to our
initial public offering, we entered into a transaction in which Genpact
Limited
became our parent company.
Conference
Call
Genpact
will host a
conference call beginning at 8 am EDT on Tuesday, August 21, 2007, to discuss
the company’s quarterly results and operating performance. To
participate, callers can dial 1-866-831-6162 (toll free) from within the
US or
1-617-213-8852 from any other country. The participant passcode is
77981151. A replay will be made available online at www.genpact.com
from two hours after the end of the call for a period of 12
months.
About
Genpact
Genpact
manages
business processes for companies around the world. The company combines process
expertise, information technology and analytical capabilities with operational
insight and experience in diverse industries to provide a wide range of services
using its global delivery platform. Genpact helps companies improve the ways
in
which they do business by applying Six Sigma and Lean principles plus technology
to continuously improve their business processes. Genpact operates service
delivery centers in India, China, Hungary, Mexico, the Philippines, the
Netherlands, Romania, Spain and the United States. For more info:
www.genpact.com.
Safe
Harbor
This
press release
contains certain statements concerning our future growth prospects and
forward-looking statements, as defined in the safe harbor provisions of the
U.S.
Private Securities Litigation Reform Act of 1995. These statements
involve a number of risks, uncertainties and other factors that could cause
actual results to differ materially from those in such forward-looking
statements. These risks and uncertainties include but are not limited
to the risks and uncertainties arising from our past and future acquisitions,
slowdown in the economies and sectors in which our clients operate, a slowdown
in the BPO and IT Services sectors, our ability to manage growth, factors
which
may impact our cost advantage, wage increases, our ability to attract and
retain
skilled professionals, risks and uncertainties regarding fluctuations in
our
earnings, general economic conditions affecting our industry as well as other
risks detailed in our reports filed with the U.S. Securities and Exchange
Commission, including the Company’s Registration Statement in Form
S-1. These filings are available at www.sec.gov. Genpact
may, from time to time make additional written and oral forward-looking
statements, including statements contained in our filings with the Securities
and Exchange Commission and our reports to shareholders. Although,
the company believes that these forward-looking statements are based on
reasonable assumptions, you are cautioned not to pay undue reliance on these
forward-looking statements, which reflect management’s current analysis of
future events. The company does not undertake to update any
forward-looking statements that may be made from time to time by or on behalf
of
the company.
Contact
|
Investors
|
Roanak
Desai
+91
(124)
402-2716
roanak.desai@genpact.com
|
|
|
Media
|
David
Jensen
+1
(203) 252
8562
david.jensen@genpact.com
|
Anita
Trehan
+91
(124) 402
2726
anita.trehan@genpact.com
|
GENPACT
GLOBAL HOLDINGS SICAR S.à.r.l.
Consolidated
Balance Sheets (Unaudited)
(In
thousands of U.S. Dollars, except share and per share data)
|
As
of June 30,
2007
|
As
of December 31, 2006
|
|||||||
|
Assets
|
||||||||
|
Current
assets
|
||||||||
|
Cash
and cash equivalents
|
$ |
49,024
|
$ |
35,430
|
||||
|
Accounts
receivable, net
|
78,701
|
43,854
|
||||||
|
Accounts
receivable from a significant shareholder, net
|
84,254
|
97,397
|
||||||
|
Inter-corporate
deposits with a significant shareholder
|
12,786
|
1,010
|
||||||
|
Deferred
income taxes
|
1,156
|
1,144
|
||||||
|
Due
from a significant shareholder
|
5,460
|
10,236
|
||||||
|
Prepaid
expenses and other current assets
|
129,873
|
53,829
|
||||||
|
Total
current assets
|
361,254
|
242,900
|
||||||
|
Property,
plant and equipment, net
|
167,231
|
157,976
|
||||||
|
Deferred
income taxes
|
1,044
|
1,549
|
||||||
|
Investment
in equity affiliate
|
375
|
–
|
||||||
|
Customer-related
intangible assets, net
|
114,170
|
119,680
|
||||||
|
Other
intangible assets, net
|
11,291
|
11,908
|
||||||
|
Goodwill
|
570,777
|
493,452
|
||||||
|
Other
assets
|
123,089
|
53,827
|
||||||
|
Total
assets
|
$ |
1,349,231
|
$ |
1,081,292
|
||||
4
GENPACT
GLOBAL HOLDINGS SICAR S.à.r.l.
Consolidated
Balance Sheets(Unaudited)
(In
thousands of U.S. Dollars, except share and per share data)
|
As
of June 30,
2007
|
As
of December 31,
2006 |
|||||||
|
Liabilities
and stockholders’ equity
|
||||||||
|
Current
liabilities
|
||||||||
|
Short-term
borrowings
|
$ |
97,675
|
$ |
83,000
|
||||
|
Current
portion of long-term debt
|
19,418
|
19,383
|
||||||
|
Current
portion of long-term debt from a significant shareholder
|
1,937
|
1,131
|
||||||
|
Current
portion of capital lease obligations
|
21
|
64
|
||||||
|
Current
portion of capital lease obligations payable to a significant
shareholder
|
1,742
|
1,686
|
||||||
|
Accounts
payable
|
19,064
|
9,230
|
||||||
|
Income
taxes payable
|
9,983
|
1,617
|
||||||
|
Deferred
income taxes
|
2,222
|
1,858
|
||||||
|
Due
to a significant shareholder
|
10,212
|
8,928
|
||||||
|
Accrued
expenses and other current liabilities
|
146,343
|
136,949
|
||||||
|
Total
current liabilities
|
$ |
308,617
|
$ |
263,846
|
||||
|
Long-term
debt, less current portion
|
108,940
|
118,657
|
||||||
|
Long-term
debt from a significant shareholder, less current portion
|
3,873
|
3,865
|
||||||
|
Capital
lease obligations, less current portion
|
231
|
–
|
||||||
|
Capital
lease obligations payable to a significant
shareholder, less current portion
|
2,873
|
3,067
|
||||||
|
Deferred
income taxes
|
37,653
|
20,481
|
||||||
|
Due
to a significant shareholder
|
8,067
|
7,019
|
||||||
|
Other
liabilities
|
45,366
|
39,662
|
||||||
|
Total
liabilities
|
$ |
515,620
|
$ |
456,597
|
||||
|
Minority
interest
|
4,048
|
– | ||||||
|
Pro
Form Stockholders’
equity
as of June 30,2007
|
||||||||||||
|
(unaudited)
|
||||||||||||
|
Stockholders’
equity
|
||||||||||||
|
2%
Cumulative Series A convertible preferred stock,
3,077,346
and
3,077,868 authorized, issued and outstanding,
and
$211,521 and $208,577 aggregate liquidation value as of
June
30, 2007 and December 31, 2006, respectively; none pro
forma
|
95,398
|
95,414
|
||||||||||
|
5%
Cumulative Series B convertible preferred stock,
3,017,346
and
3,017,868 authorized, issued and outstanding,
and
$222,566 and $216,502 aggregate liquidation value as of
June
30, 2007 and December 31, 2006, respectively; none shares pro
forma
|
93,538
|
93,554
|
||||||||||
|
Common
stock, $31 par value, 384,790 and 394,642 shares
authorized,
issued and outstanding as of June 30, 2007
and
December 31, 2006, respectively; 191,994,384 shares pro
forma
|
1,920
|
11,928
|
12,234
|
|||||||||
|
Additional
paid-in capital
|
706,613
|
507,669
|
482,805
|
|||||||||
|
Retained
earnings (accumulated deficit)
|
(18,546 | ) | (18,546 | ) |
5,978
|
|||||||
|
Accumulated
other comprehensive income (loss)
|
152,907
|
152,907
|
(15,295 | ) | ||||||||
|
Treasury
stock, 850 and 20,056 common stock and 59,000
2%
Cumulative Series A convertible preferred stock as of June
30,
2007
and December 31, 2006, respectively; 1,276,068 shares pro
forma
|
(13,331 | ) | (13,331 | ) | (49,995 | ) | ||||||
|
Total
stockholders’ equity
|
829,563
|
829,563
|
624,695
|
|||||||||
|
Commitments
and contingencies
|
||||||||||||
|
Total
liabilities, minority interest and stockholders’
equity
|
$ |
1,349,231
|
$ |
1,081,292
|
||||||||
5
GENPACT
GLOBAL HOLDINGS SICAR S.à.r.l.
Consolidated
Statements of Income
(Unaudited)
(In
thousands of U.S. Dollars, except share and per share data)
|
Three
months ended
|
Six
months ended
|
|||||||||||||||
|
June
30, 2007
|
June
30,
2006
|
June
30, 2007
|
June
30,
2006
|
|||||||||||||
|
Net
revenues
|
||||||||||||||||
|
Net
revenues from services - significant shareholder
|
$ |
124,218
|
$ |
109,662
|
$ |
244,990
|
$ |
219,311
|
||||||||
|
Net
revenues from services - other
|
75,847
|
31,294
|
130,101
|
53,542
|
||||||||||||
|
Other
revenues
|
427
|
–
|
1,382
|
–
|
||||||||||||
|
Total
net revenues
|
200,492
|
140,956
|
376,473
|
272,853
|
||||||||||||
|
Cost
of revenue
|
||||||||||||||||
|
Services
|
128,248
|
85,753
|
237,398
|
163,739
|
||||||||||||
|
Others
|
299
|
–
|
1,034
|
–
|
||||||||||||
|
Total
cost of revenue
|
128,547
|
85,753
|
238,432
|
163,739
|
||||||||||||
|
Gross
profit
|
71,945
|
55,203
|
138,041
|
109,114
|
||||||||||||
|
Operating
expenses:
|
||||||||||||||||
|
Selling,
general and administrative expenses
|
55,565
|
37,025
|
104,120
|
73,129
|
||||||||||||
|
Amortization
of acquired intangible assets
|
9,437
|
10,569
|
18,629
|
21,614
|
||||||||||||
|
Foreign
exchange (gains) losses, net
|
(11,478 | ) |
826
|
(13,137 | ) |
4,521
|
||||||||||
|
Other
operating income
|
(1,160 | ) | (625 | ) | (1,723 | ) | (1,753 | ) | ||||||||
|
Income
from operations
|
19,580
|
7,408
|
30,152
|
11,603
|
||||||||||||
|
Other
income (expense) net
|
(3,498 | ) | (2,630 | ) | (7,078 | ) | (3,185 | ) | ||||||||
|
Income
before share of equity in (earnings)/loss of affiliate, minority
interest
and income taxes
|
16,082
|
4,778
|
23,074
|
8,418
|
||||||||||||
|
Equity
in (earnings)/loss of affiliate
|
7
|
–
|
80
|
–
|
||||||||||||
|
Minority
interest
|
2,788
|
–
|
3,692
|
–
|
||||||||||||
|
Income
taxes expense (benefit)
|
6,195
|
(2,244 | ) |
10,363
|
(3,672 | ) | ||||||||||
|
Net
income
|
$ |
7,093
|
$ |
7,022
|
$ |
8,939
|
$ |
12,090
|
||||||||
|
Net
loss per common share - basic and diluted
|
$ | (31.02 | ) | $ | (9.11 | ) | $ | (69.93 | ) | $ | (15.27 | ) | ||||
|
Weighted
average number of common shares
used in computing net loss per common share
basic and diluted
|
383,980
|
394,000
|
380,548
|
394,000
|
||||||||||||
|
Proforma
earnings per common share -
|
||||||||||||||||
|
Basic
|
$ |
0.04
|
$ |
0.05
|
||||||||||||
|
Diluted
|
$ |
0.04
|
$ |
0.05
|
||||||||||||
|
Weighted
average number of proforma common shares
used
in computing earnings per common share ---
|
||||||||||||||||
|
Basic
|
188,693,573
|
188,072,728
|
||||||||||||||
|
Diluted
|
197,698,302
|
197,216,435
|
||||||||||||||
6
Reconciliation
of Adjusted Financial Measures to GAAP Measures
To
supplement the consolidated financial statements presented in accordance
with
GAAP, this press release includes the following measures defined
by the
Securities and Exchange Commission as non-GAAP financial measures:
non-GAAP Cash
EBIT. This non-GAAP measure is not based on any comprehensive set
of accounting
rules or principles and should not be considered a substitute for,
or superior
to, financial measures calculated in accordance with GAAP, and may
be different
from non-GAAP measures used by other companies. In addition, this
non-GAAP
measure, the financial statements prepared in accordance with GAAP
and
reconciliations of Genpact’s GAAP financial statements to such non-GAAP measure
should be carefully evaluated.
For
its internal management reporting and budgeting purposes,
Genpact’s management uses financial statements that do not include
stock-based compensation expense related to employee stock options,
amortization
of acquired intangibles at formation and additional depreciation due
to mark-to-market adjustment at formation for financial and operational
decision-making, to evaluate period-to-period comparisons or for
making
comparisons of Genpact’s operating results to that of its competitors. Moreover,
because of varying available valuation methodologies, subjective
assumptions and
the variety of award types that companies can use when adopting FAS
123(R),
Genpact’s management believes that providing a non-GAAP financial measure
that
excludes stock-based compensation, amortization of acquired intangibles
and
additional depreciation due to mark-to-market adjustment at
formation allows investors to make additional comparisons between Genpact’s
operating results to those of other companies. The Company also believes
that it
is unreasonably difficult to provide its financial outlook in accordance
with
GAAP for a number of reasons including, without limitation, the Company’s
inability to predict its future stock-based compensation expense
under FAS
123(R) and the amortization of intangibles associated with further
acquisitions,
if any. Accordingly,Genpact believes that the presentation of
non-GAAP Cash EBIT, when read in conjunction with the Company’s reported
results, can provide useful supplemental information to investors
and management
regarding financial and business trends relating to its financial
condition and
results of operations.
A
limitation of using non-GAAP Cash EBIT versus net income calculated
in
accordance with GAAP is that non-GAAP Cash EBIT exclude costs, namely,
stock-based compensation, that are recurring. Stock-based compensation
has been
and will continue to be a significant recurring expense in Genpact’s business
for the foreseeable future. Management compensates for this limitation
by
providing specific information regarding the GAAP amounts excluded
from non-GAAP
Cash EBIT and evaluating such non-GAAP financial measure with financial
measures
calculated in accordance with GAAP.
The
following table shows the reconciliation of this adjusted financial
measure from
GAAP for the three months and six months ended June 30, 2007 and
June 30, 2006:
Reconciliation
of Cash EBIT
(Unaudited)
(In
thousands of U.S. Dollars, except share and per share data)
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
|
Jun-07
|
Jun-06
|
Jun-07
|
Jun-06
|
|||||||||||||
|
Income
from Operations
|
$ |
19,580
|
$ |
7,408
|
$ |
30,152
|
$ |
11,603
|
||||||||
|
Add
: Amortization of acquired intangibles at formation
|
9,281
|
10,909
|
18,515
|
22,309
|
||||||||||||
|
Add
: Additional Depreciation due to Mark to Market adjustment
at
information
|
514
|
514
|
1,028
|
1,028
|
||||||||||||
|
Add
: Stock based Compensation
|
3,296
|
1,307
|
5,231
|
2,479
|
||||||||||||
|
Add
: Gain/(loss) on interest rate swaps
|
15
|
1,456
|
(20 | ) |
2,567
|
|||||||||||
|
Add
: Other Income
|
434
|
899
|
709
|
1,271
|
||||||||||||
|
Less
: Equity in (earnings)/loss of affiliate
|
7
|
-
|
80
|
-
|
||||||||||||
|
Less
: Minority Interest
|
2,788
|
-
|
3,692
|
-
|
||||||||||||
|
Cash
EBIT
|
$ |
30,325
|
$ |
22,493
|
$ |
51,843
|
$ |
41,257
|
||||||||
7