8-K

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) April 23, 2015

Syntel, Inc.

(Exact name of registrant as specified in its charter)

Michigan	000-22903	38-2312018
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

525 E. Big Beaver Road, Suite 300, Troy, Michigan	48083
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (248) 619-2800

(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 (see General Instruction A.2. below):

¨ 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 April 23, 2015, Syntel, Inc. (the “Company”) issued a press release announcing results of operations and related financial information for its first quarter ended March 31, 2015. A copy of the press release is attached to this Report as Exhibit 99.1. The information contained in this Current Report, including Exhibit 99.1, is being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities and Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except if the Company expressly states that such information is to be considered “filed” under the Exchange Act or incorporates it by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number
99.1	Press Release dated April 23, 2015.

1

SIGNATURES

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.

		Syntel, Inc.
		(Registrant)
Date	April 23, 2015	By	/s/ Daniel M. Moore
			Daniel M. Moore, Chief Administrative Officer

2

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release dated April 23, 2015.

3

EX-99.1

Exhibit 99.1

Syntel Reports First Quarter 2015 Financial Results

Highlights:

• Q1 revenue of $220.6M, up 1% from year-ago quarter, down 6% sequentially

• Q1 EPS of $0.48 per diluted share, down 31% from year-ago quarter, and 43% sequentially

• Q1 cash & short term investments of $867M

• Global Headcount of 24,534 on March 31, 2015, up 1% versus prior year

TROY, Mich. – April 23, 2015 – Syntel, Inc. (Nasdaq:SYNT), a global provider of digital transformation, information technology and knowledge process services to Global 2000 companies, today announced financial results for the first quarter, ended March 31, 2015.

First Quarter Financial Highlights

Syntel’s revenue for the first quarter increased one percent to $220.6 million from $219.5 million in the prior-year period, and declined six percent from $235.3 million in the fourth quarter of 2014. During the first quarter, Banking and Financial Services accounted for 47.8 percent of total revenue, with Retail, Logistics and Telecom at 17.1 percent, Healthcare and Life Sciences at 15.6 percent, Insurance at 15.6 percent, and Manufacturing at 3.9 percent.

The Company’s gross margin was 35.7 percent in the first quarter, compared to 43.7 percent in the prior-year period and 41.4 percent in the fourth quarter of 2014. Selling, General and Administrative (SG&A) expenses were 16 percent of revenue in the first quarter, compared to 14.7 percent in the prior-year period and 10.2 percent in the previous quarter.

The first quarter income from operations was 19.7 percent of revenue as compared to 29.1 percent in the prior-year period and 31.2 percent in the fourth quarter. The sequential decline in operating margin during the first quarter primarily reflects lower revenue and the impact of currency-related balance sheet translations.

Net income for the first quarter was $40 million or $0.48 per diluted share, compared to $58.1 million or $0.69 per diluted share in the prior-year period and net income of $70.7 million or $0.84 per diluted share in the fourth quarter of 2014.

During Q1, Syntel spent $4.4 million in CAPEX, largely in support of campus infrastructure, and finished the quarter with cash and short-term investments of $867 million. The Company ended the quarter with 24,534 employees globally.

Operational Highlights

“While the first quarter is typically a seasonally weaker period for us, this Q1 got off to a slower start than usual as some of the projects we are engaged on were slow to ramp,” said Syntel CEO and President Nitin Rakesh. “We are maintaining our 2015 outlook for EPS and the lower end of our revenue range as the broader environment remains favorable and our pipelines continue to build. We are optimistic that current market conditions support a continuation of the discretionary spending trends seen last year.”

“This quarter’s performance is not characteristic of Syntel and we have taken actions to ensure that we stay on the growth path we have embarked on,” said Rakesh. “One of the quarter’s highlights is that business activity in our Healthcare and Life Sciences industry group continued to improve from second-half 2014 as we expanded our services offerings in this industry to further strengthen our market position.”

“We remain committed to distinguishing our service delivery with innovative IP and a customer focus that has fortified existing relationships while presenting multiple opportunities to build new ones in our chosen domains. This commitment has helped us assemble a long-term track record of strong execution, and we look forward to building on this in the future.”

2015 Guidance

Based on current visibility levels and an exchange rate assumption of 62 Indian rupees to the dollar, the Company currently expects 2015 revenue of $985 million to $1015 million and EPS in the range of $2.70 to $2.95.

Syntel to Host Conference Call

Syntel will discuss its first quarter 2015 results today on a conference call at 10:00 a.m. (EDT). To listen to the call, please dial (877) 837-3915 in the US/Canada or (973) 638-3495 internationally. The call will also be broadcast live via the Internet at Syntel’s web site: investor.syntelinc.com. Please access the site at least 15 minutes prior to the call to register and download any necessary software. A replay will be available until April 30, 2015 by dialing (855) 859-2056 and entering “27576350”. International callers may dial (404) 537-3406 and enter the same passcode.

About Syntel

Syntel (Nasdaq: SYNT) is a global provider of digital transformation, information technology and knowledge process services to Global 2000 companies. Syntel’s mission is to create new opportunities for clients by harnessing our passion, talent and innovation. We combine technology expertise, industry knowledge and a global delivery model to drive business value creation. Syntel’s “Customer for Life” philosophy drives our relentless focus to build long-term, collaborative client partnerships. To learn more, visit us at: www.syntelinc.com

Safe Harbor Provision

This news release may include forward-looking statements, including those with respect to the future level of business for Syntel, Inc. These statements are necessarily subject to risk and uncertainty. Actual results could differ materially from those projected in these forward-looking statements as a result of certain risk factors set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, or from other factors not currently anticipated.

Contacts:

North America/Europe: Jon Luebke, Syntel, 248/619-3503, jon_luebke@syntelinc.com

Asia/Pacific: Sikta Samantaray, +91 9167512186, sikta_samantaray@syntelinc.com

# # #

SYNTEL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

(IN THOUSANDS, EXCEPT PER SHARE DATA)

	THREE MONTHS ENDED MARCH 31,
	2015			2014
Net revenues	$	220,599		$	219,523
Cost of revenues		141,785			123,500
Gross profit		78,814			96,023
Selling, general and administrative expenses		35,382			32,221
Income from operations		43,432			63,802
Other income, net		9,338			11,785
Income before provision for income taxes		52,770			75,587
Income tax expense		12,749			17,439
Net income	$	40,021		$	58,148
Other Comprehensive Income
Foreign currency translation adjustments	$	10,626		$	24,847
Gains on derivatives:
Gains arising during period on net investment hedges		—			724
Unrealized gains on securities:
Unrealized holding gains arising during period		3,440			2,724
Reclassification adjustment for gains included in net income		(1,868	)		(1,855	)
		1,572			869
Defined benefit pension plans:
Net Profit arising during period		—			—
Amortization of prior service cost included in net periodic pension cost		25			2
		25			2
Other comprehensive income, before tax		12,223			26,442
Income tax expenses related to Other Comprehensive Income		(486	)		(252	)
Other comprehensive income, net of tax		11,737			26,190
Comprehensive Income	$	51,758		$	84,338
Dividend per share	$	—		$	—
EARNINGS PER SHARE:
Basic	$	0.48		$	0.69
Diluted	$	0.48		$	0.69
Weighted average common shares outstanding:
Basic		83,907			83,680
Diluted		84,127			83,944

SYNTEL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS)

	(Unaudited)
	March 31, 2015		December 31, 2014
ASSETS
Current assets:
Cash and cash equivalents	$	281,784	$	197,708
Short term investments		585,168		669,353
Accounts receivable, net of allowance for doubtful accounts of $703 at March 31, 2015 and December 31, 2014, respectively		114,995		111,993
Revenue earned in excess of billings		40,654		27,493
Deferred income taxes and other current assets		65,190		56,930
Total current assets		1,087,791		1,063,477
Property and equipment		217,320		210,206
Less accumulated depreciation and amortization		106,157		101,155
Property and equipment, net		111,163		109,051
Goodwill		906		906
Non current Term Deposits with Banks		82		105
Deferred income taxes and other non current assets		61,872		50,476
TOTAL ASSETS	$	1,261,814	$	1,224,015
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES
Current liabilities:
Accrued payroll and related costs	$	48,336	$	60,765
Income taxes payable		21,562		23,781
Accounts payable and other current liabilities		35,097		33,573
Deferred revenue		2,294		3,266
Loans and borrowings		6,968		8,852
Total current liabilities		114,257		130,237
Other non current liabilities		16,430		16,198
Non Current loans and borrowings		129,750		129,750
TOTAL LIABILITIES		260,437		276,185
SHAREHOLDERS’ EQUITY
Total shareholders’ equity		1,001,377		947,830
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,261,814	$	1,224,015