ExlService Holdings, Inc 8-K, filed Jan 7, 2020

ExlService Holdings, Inc. (EXLS)

8-K 2020-01-07 For: 2019-12-31

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Added on April 04, 2026

About this 8-K

ExlService Holdings, Inc filed this 8-K on January 7, 2020, reporting on events of December 31, 2019.

Items reported

Item 2.01: Completed an acquisition or sale of assets
Item 9.01: Financial statements and exhibits

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Delaware	001-33089	82-0572194
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)



320 Park Avenue,	29th Floor,	10022
New York,	New York	(Zip code)
(Address of principal executive offices)



☐	Emerging growth company

☐	If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act



Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value per share	EXLS	NASDAQ



	EXLSERVICE HOLDINGS, INC. (Registrant)


Date: January 7, 2020	By:	/s/ Ajay Ayyappan
	Name:	Ajay Ayyappan
	Title:	General Counsel and Corporate Secretary



☐	Written communication 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))


•	Unaudited Pro Forma Condensed Consolidated Statements of Income for the nine months ended September 30, 2019 and for the year ended December 31, 2018.


99.1	ExlService Holdings, Inc. Unaudited Pro Forma Condensed Consolidated Financial Statements.



EXLSERVICE HOLDINGS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 2019
(In thousands, except share and per share amounts)

	Reported			Adjustments			Pro Forma
Assets
Current assets:
Cash and cash equivalents	$	101,432		$	(1,004	)	$	100,428
Short-term investments	179,340			—			179,340
Restricted cash	5,412			—			5,412
Accounts receivable, net	179,702			—			179,702
Prepaid expenses	9,364			(444		)	8,920
Advance income tax, net	3,002			—			3,002
Other current assets	27,974			—			27,974
Total current assets	506,226			(1,448		)	504,778
Property and equipment, net	78,471			—			78,471
Operating lease right-of-use assets	88,753			(641		)	88,112
Restricted cash	2,441			—			2,441
Deferred tax assets, net	6,190			—			6,190
Intangible assets, net	78,845			—			78,845
Goodwill	349,530			—			349,530
Other assets	32,967			—			32,967
Investment in equity affiliate	2,555			—			2,555
Total assets	$	1,145,978		$	(2,089	)	$	1,143,889
Liabilities and equity
Current liabilities:
Accounts payable	$	3,658		$	—		$	3,658
Current portion of long-term borrowings	20,876			—			20,876
Deferred revenue	9,585			—			9,585
Accrued employee costs	59,568			—			59,568
Accrued expenses and other current liabilities	69,876			(1,078		)	68,798
Current portion of operating lease liabilities	23,516			—			23,516
Income taxes Payable	575			—			575
Current portion of finance lease liabilities	248			—			248
Total current liabilities	187,902			(1,078		)	186,824
Long term borrowings	223,916			—			223,916
Finance lease liabilities, less current portion	436			—			436
Deferred tax liabilities, net	720			—			720
Operating lease liabilities, less current portion	76,080			—			76,080
Other non-current liabilities	9,241			—			9,241
Total liabilities	498,295			(1,078		)	497,217
Commitments and contingencies
Preferred stock, $0.001 par value; 15,000,000 shares authorized, none issued	—			—			—
ExlService Holdings, Inc. Stockholders’ equity:
Common stock, $0.001 par value; 100,000,000 shares authorized, 38,322,354 shares issued and 34,107,851 shares outstanding as of September 30, 2019	38			—			38
Additional paid-in capital	386,060			—			386,060
Retained earnings	530,547			(1,011		)	529,536
Accumulated other comprehensive loss	(86,153		)	—			(86,153		)
Total including shares held in treasury	830,492			(1,011		)	829,481
Less: 4,214,503 shares as of September 30, 2019, held in treasury, at cost	(182,809		)	—			(182,809		)
Stockholders' equity	$	647,683		$	(1,011	)	$	646,672
Non-controlling interest	—			—			—
Total equity	$	647,683		$	(1,011	)	$	646,672
Total liabilities and equity	$	1,145,978		$	(2,089	)	$	1,143,889



	Reported			Health Integrated Adjustments				Pro Forma
Revenues, net	$	734,474		$	(9,699	)	(a)	$	724,775
Cost of revenues ⁽¹⁾	487,228			(13,322		)	(a)	473,906
Gross profit ⁽¹⁾	247,246			3,623				250,869
Operating expenses:
General and administrative expenses	93,349			(4,203		)	(a)	89,146
Selling and marketing expenses	53,996			(314		)	(a)	53,682
Depreciation and amortization	39,466			(584		)	(a)	38,882
Impairment and restructuring charges	7,296			(7,296		)	(b)	—
Total operating expenses	194,107			(12,397		)		181,710
Income from operations	53,139			16,020				69,159
Foreign exchange gain, net	3,471			—				3,471
Interest expense	(10,626		)	—				(10,626		)
Other income, net	13,088			(822		)	(a)	12,266
Income before income tax expense and earnings from equity affiliate	59,072			15,199				74,271
Income tax expense	12,571			3,612			(c)	16,183
Income before earnings from equity affiliates	46,501			11,587				58,088
Loss from equity-method investment	198			—				198
Net income attributable to ExlService Holdings, Inc. stockholders	$	46,303		$	11,587			$	57,890
Earnings per share attributable to ExlService Holdings, Inc. stockholders:
Basic	$	1.35						$	1.68
Diluted	$	1.33						$	1.67
Weighted-average number of shares used in computing earnings per share attributable to ExlService Holdings Inc. stockholders:
Basic	34,382,787							34,382,787
Diluted	34,744,968							34,744,968



	Reported			SCIO Acquisition Adjustments⁽¹⁾				Health Integrated Adjustments				Pro Forma
Revenues, net	$	883,112		$	41,060		(a)	$	(17,718	)	(b)	$	906,454
Cost of revenues ⁽²⁾	584,855			24,771			(a)	(20,031		)	(b)	589,595
Gross profit ⁽²⁾	298,257			16,289				2,313				316,859
Operating expenses:
General and administrative expenses	116,202			6,301			(a)	(5,798		)	(b)	116,705
Selling and marketing expenses	63,612			3,847			(a)	(2,464		)	(b)	64,995
Depreciation and amortization	48,566			1,817			(a)	(3,505		)	(b)	46,878
Impairment charges	20,056			—				(20,056		)	(c)	—
Total operating expenses	248,436			11,965				(31,823		)		228,578
Income from operations	49,821			4,324				34,136				88,281
Foreign exchange gain, net	4,787			140			(a)	—				4,927
Interest expense	(7,227		)	(380		)	(a)	—				(7,607		)
Other income, net	12,989			11			(a)	(1,245		)	(b)	11,755
Income before income tax expense and earnings from equity affiliate	60,370			4,095				32,891				97,356
Income tax expense	3,397			1,438			(a)	6,392			(d)	11,227
Income before earnings from equity affiliates	56,973			2,657				26,499				86,129
Loss from equity-method investment	247			—				—				247
Net income attributable to ExlService Holdings, Inc. stockholders	$	56,726		$	2,657			$	26,499			$	85,882
Earnings per share attributable to ExlService Holdings, Inc. stockholders:
Basic	$	1.65										$	2.49
Diluted	$	1.62										$	2.45
Weighted-average number of shares used in computing earnings per share attributable to ExlService Holdings Inc. stockholders:
Basic	34,451,008											34,451,008
Diluted	35,030,984											35,030,984


(a)	Health Integrated adjustments reflects the elimination of income and expenses attributable to the Health Integrated business.


(b)	Impairment and restructuring charges represents pre-tax costs recognized in connection with the wind down of the Health Integrated business of $4,129 and impairment of Right-of-Use assets and long-lived assets of $3,167.


(c)	To adjust income tax expense for the effects of the pro forma adjustments of wind down of the Health Integrated business, the Company used tax rate of 23.8% for the Health Integrated business.