Ness Technologies Inc (NSTC)

[ByloCellhi]

Ness Technologies Announces Record Third Quarter 2005 Financial Results
Tuesday November 8, 5:31 am ET
Net Income Rises 63% and Operating Income Rises 42% Year-Over-Year on a 27% Increase in Revenues

HACKENSACK, New Jersey, November 8 /PRNewswire-FirstCall/ -- Ness Technologies, Inc. (NASDAQ: NSTC - News), a global provider of IT services and solutions, today announced financial results for the third quarter ended September 30, 2005.

Third Quarter 2005 Highlights:

- Revenues reached a record $97.7 million, up 27% year-over-year.

- Operating income increased to a record $7.7 million, up 42%
year-over-year.

- Net income increased to a record $6.0 million, up 63% year-over-year.

- Backlog increased to $439 million, up 24% year-over year.

- Global workforce increased by 295 sequentially to 5,725.


"The strength of our third quarter financial performance reflects our success in implementing our strategy of building a leadership position in targeted business verticals and penetrating key geographic markets, as we continue to grow our global diversified customer base," stated Raviv Zoller, President and Chief Executive Officer of Ness Technologies. "Our record quarterly revenue, as well as operating and net income provide clear evidence of our ability to capitalize on the growing demand for our services while increasing billable headcount and keeping a tight control on expenses."

Ness' third quarter 2005 revenues totaled $97.7 million, an increase of $20.5 million or 27%, compared to $77.2 million in the third quarter of 2004.

Third quarter 2005 operating income increased to $7.7 million, an increase of $2.3 million or 42%, compared to $5.4 million in the third quarter of 2004.

Third quarter 2005 net income increased to $6.0 million, an increase of $2.3 million or 63%, compared to $3.7 million in the third quarter of 2004. Diluted net earnings per share for the third quarter of 2005 were $0.17 compared to $0.14 in the third quarter of 2004. The year-over-year diluted net earnings per share comparison was impacted by the change in share count since the third quarter of 2004, when Ness completed its initial public offering.

Backlog as of September 30, 2005 increased to $439 million, up 24% compared to $354 million as of September 30, 2004.

"We continue to grow our bottom line profitability at a faster pace than our solid top line growth rate. This trend reflects the significant operating leverage we are yielding from our strategic business model on a global basis," stated Ytzhak Edelman, Executive Vice President and Chief Financial Officer, Ness Technologies, Inc. "The initiatives we announced last quarter to reduce our financial expenses are yielding positive and measurable results. We remain dedicated to further reducing our financial expenses and to maintaining a lower level of foreign exchange exposure related to our global operating structure. Overall, we remain focused on further increasing our operating and bottom line profitability."

Guidance

For the fourth quarter 2005 Ness expects to generate revenues in the range of $101 million to $104 million and diluted net earnings per share in the range of $0.17 to $0.20.

The Company is increasing its 2005 annual revenue guidance to a range of $381 million to $384 million, from its previously stated range of $376 million to $381 million, based on the increased revenue contribution expected from Ness Slovakia as result of the Delta acquisition which closed on October 3, 2005.

Full year 2005 diluted net earnings per share guidance remains in the range of $0.63 to $0.66.