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Virtusa Announces First Quarter Fiscal 2010 Financial Results

  • First quarter fiscal 2010 revenue of $37.4 million decreased 12% year-over-year and 7% in constant currency.
  • First quarter fiscal 2010 EPS was $0.11 compared to $0.03 in the year ago period.
  • Cash, cash equivalents, short-term investments and long-term investments of $116.7 million, an increase of 9% over the fourth quarter of fiscal 2009.

Hyderabad, July 31, 2009: Virtusa Corporation (NASDAQ: VRTU), a global information technology (IT) services company that provides IT consulting, technology implementation and application outsourcing services through an enhanced global delivery model, today reported financial results for the first quarter fiscal year 2010, ended June 30, 2009.

First Quarter Fiscal 2010 Financial Results

Revenue for the first quarter of fiscal 2010 was $37.4 million, a decrease of 12% year-over-year and 10% sequentially. On a constant currency basis (1) first quarter revenue decreased 7% year-over-year and 12% sequentially.

Virtusa reported income from operations of $3.1 million for the first quarter of fiscal 2010, compared to $11 thousand for the first quarter of fiscal 2009 and $3.9 million for the fourth quarter of fiscal 2009.

Net income for the first quarter of fiscal 2010 was $2.6 million, or $0.11 per diluted share, compared to $0.8 million, or $0.03 per diluted share for the first quarter of fiscal 2009 and $3.6 million, or $0.15 per diluted share, for the fourth quarter of fiscal 2009.

The Company ended the first quarter of fiscal 2010 with $116.7 million of cash, cash equivalents, short-term investments and long-term investments (2). The Company generated cash from operations of $4.1 million during the first quarter of fiscal 2010.

Kris Canekeratne, Virtusa’s Chairman and CEO, stated, “Even in a challenging business environment, we started work with six new clients during the June quarter, continued to execute well against newer client expansion programs, and efficiently managed operations.” Mr. Canekeratne continued, “We believe our ability to drive successful business outcomes for our clients through our value proposition and outstanding track-record of service excellence, combined with our focus on operational efficiencies, positions Virtusa well for sustainable long-term profitable growth.”

Ranjan Kalia, Chief Financial Officer, said, “Consistent with our fiscal year 2010 goals, our first quarter performance demonstrates our ability to manage profitability and continue to generate positive cash flow from operations. We also further strengthened our balance sheet, ending the quarter with cash and investments of $116.7 million.” Mr. Kalia added, “We continue to believe sequential growth will resume in the second half of fiscal year 2010 and remain focused on optimizing our cost structure while making select investments in support of growth opportunities.”

Financial Outlook

Virtusa management provided the following current financial guidance:

  • Second quarter 2010 revenue is expected to be in the range of $36.4 to $37.8 million, with diluted EPS of $0.08 to $0.11.
  • Fiscal year 2010 revenue is expected to be in the range of $154 to $162 million, with diluted EPS of $0.46 to $0.56.

The Company’s second quarter and fiscal year 2010 diluted EPS estimates assume an average share count of approximately 23.9 million and 24.0 million, respectively (assuming no further exercises of stock-based awards) and assumes a stock price of $9.12, which was derived from the average closing price of the Company’s stock over the five trading days ended on July 24, 2009. Deviations from this stock price may cause actual EPS to vary based on share dilution from Virtusa’s stock options and stock appreciation rights.

Conference Call and Webcast

Virtusa will host a conference call today, July 30, 2009 at 5:00 pm Eastern time to discuss the Company’s first quarter 2010 financial results, current financial guidance and other corporate developments. To access this call, dial 888-211-9994 (domestic) or 913-312-0830 (international). A replay of this conference call will be available through August 6, 2009 at 888-203-1112 (domestic) or 719-457-0820 (international). The replay passcode is 3799694. A live webcast of this conference call will be available on the “Investors” page of the Company’s website (www.virtusa.com), and a replay will be archived on the website as well.

About Virtusa Corporation
Virtusa is a global information technology (IT) services company providing IT consulting, technology implementation and application outsourcing services. Using its enhanced global delivery model, innovative platforming approach and industry expertise, Virtusa provides high-value services that enhance clients’ business performance, accelerate time-to-market, increase productivity and improve customer service. Founded in 1996 and headquartered in Massachusetts, Virtusa has offices in the United States and the United Kingdom, and global delivery centers in India and Sri Lanka. "Virtusa" is a registered trademark of Virtusa Corporation. "Virtusa" is a trademark of the company and a registered trademark in the US, European Union (EU) and in India.

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