Intelligroup, Inc., an information technology and outsourcing services provider primarily focused on enterprise resource planning (ERP) and extended ERP solutions, today reported its operating results for the first quarter ended March 31, 2009.
Q1 Highlights include:
• Q1 ’09 revenue decreased 19.7% to $30.9 million compared to $38.5 million in Q1 ‘08
• Q1 ’09 gross margin rose to 31.2% compared to 29.7% in Q1 ’08
• Q1 ’09 operating margin was 5.9% compared to 4.4% in Q1 ’08 and 7.9% in Q4 ’08
• Q1 ’09 net income was $0.8 million, or $0.02 per diluted share, compared to $1.9 million, or $0.04 per diluted share, in Q1 ’08
• Q1 ’09 cash from operating activities of $6.2 million
• Cash and cash equivalents of $14 million as of March 31, 2009
Intelligroup President and Chief Executive Officer, Vikram Gulati, commented, “We continue to be impacted by the challenging global economic environment, which led many of our existing and prospective customers to defer decision-making on a range of IT services initiatives, particularly shorter-term projects. In response, we moved quickly to adjust our staffing levels and overhead structure to address this new environment, and we were able to preserve much of our gross and operating margins on a sequential basis and improve margins versus a year ago. While we are certainly not pleased with our top line results, we are encouraged by our ability to manage the business well and cushion the impact on the earnings.”
“Though we face difficult industry prospects, and visibility as to the depth and length of the current environment remains uncertain, we are convinced that the long-term prospects for the ERP market and Intelligroup remain sound,” he added. “While continuing to deliver the superior execution our customers have come to expect, we will continue to actively manage our resources focusing on improving key operating metrics and aligning our costs to the changes in market dynamics. Though it is clear that the full year 2009 will be a challenging period with revenue levels below those in 2008, we are on track to improve our operational efficiency and reduce cost to best manage our margins. In addition to the efforts we undertook in Q1 ’09 to preserve operating margins, we have also solidified our balance sheet and cash position with a significant increase in our cash and cash equivalent position.”
In conclusion he stated, “We continue to view accretive share repurchases as an excellent means to enhance shareholder value over the long term and believe the current valuation of Intelligroup common shares makes such share repurchases a very compelling use of capital. Pursuant to our October 2008 repurchase authorization of up to $5 million, we expect to continue to repurchase additional shares, subject to business conditions, cash flows, and the market price of our shares.”
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