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 21, 2016

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 21, 2016, Syntel, Inc. (the “Company”) issued a press release announcing results of operations and related financial information for its first quarter ended March 31, 2016. 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 21, 2016.

2

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 21, 2016	By	/s/ Daniel M. Moore
			Daniel M. Moore, Chief Administrative Officer

3

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release dated April 21, 2016.

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EX-99.1

Exhibit 99.1

Syntel Reports First Quarter 2016 Financial Results

Highlights:

• Q1 revenue of $241.4M, up 9% from year-ago quarter, down 5% sequentially

• Q1 EPS of $0.63 per diluted share, up 32% from year-ago quarter, down 29% sequentially

• Q1 cash & short term investments of $1.08B

• Global Headcount of 24,496 on March 31, 2016, versus 24,534 in the year ago quarter

TROY, Mich. – April 21, 2016 – 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, 2016.

First Quarter Financial Highlights

Syntel’s revenue for the first quarter increased nine percent to $241.4 million from $220.6 million in the prior-year period, and declined five percent from $254.6 million in the fourth quarter of 2015. During the first quarter, Banking and Financial Services accounted for 50.3 percent of total revenue, with Retail, Logistics and Telecom at 16.4 percent, Healthcare and Life Sciences at 15.9 percent, Insurance at 12.7 percent, and Manufacturing at 4.7 percent.

The Company’s gross margin was 37.2 percent in the first quarter, compared to 35.7 percent in the prior-year period and 41.8 percent in the fourth quarter of 2015. Selling, General and Administrative (SG&A) expenses were 12.3 percent of revenue in the first quarter, compared to 16 percent in the prior-year period and 11 percent in the previous quarter.

The first quarter income from operations was 24.9 percent of revenue as compared to 19.7 percent in the prior-year period and 30.8 percent in the fourth quarter. The sequential decline in operating margin during the first quarter primarily reflects the impact of lower revenue, higher compensation-related expense and currency-related balance sheet translations.

Net income for the first quarter was $53.1 million or $0.63 per diluted share, compared to $40 million or $0.48 per diluted share in the prior-year period and net income of $74.2 million or $0.88 per diluted share in the fourth quarter of 2015.

During Q1, Syntel spent $3.4 million in CAPEX, largely in support of campus infrastructure, and finished the quarter with cash and short-term investments of $1.08 billion. The Company ended the quarter with 24,496 employees globally.

Operational Highlights

“Our customers remain focused on transforming their businesses, however, the market volatility seen during the first quarter led to elongated decision cycles on full-year budgets,” said Syntel CEO and President Nitin Rakesh. “There is a clear need for partners who can help companies execute strategic initiatives while also managing the cost of ownership of IT investments across their organizations. Syntel’s capabilities in digital enablement and modernization and our SyntBots recursive automation platform are helping customers strike the right balance between these competing priorities.”

“On the strength of our offerings, we expanded our footprint with strategic customers last quarter and identified additional ways to build on these critical relationships. Syntel’s ongoing investments in domain-centric capabilities underscore our commitment to the long-term success of our customers,” said Rakesh. “While growth in our insurance industry group remained weak this quarter, the health of the underlying pipeline continues to give us confidence that this segment will begin to recover in a few quarters.”

2016 Guidance

Based on current visibility levels and an exchange rate assumption of 66.50 Indian rupees to the dollar, the Company currently expects 2016 revenue of $1,010 million to $1,040 million and EPS in the range of $2.55 to $2.80.

Syntel to Host Conference Call

Syntel will discuss its first quarter 2016 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 28, 2016 by dialing (855) 859-2056 and entering “89695872”. International callers may dial (404) 537-3406 and enter the same passcode.

About Syntel

Syntel (Nasdaq:SYNT) is the global leader in digital modernization services, with a core suite of automation-driven IT and knowledge process services. Syntel helps global enterprises thrive in the Two-Speed World™ by building agile, efficient technology infrastructures that blend legacy business models with disruptive digital innovations. Syntel’s recursive automation platform, SyntBots®, enables clients to manage, migrate, and modernize their business and technology ecosystems. Syntel believes in a “Customer for Life” philosophy to build collaborative partnerships and creates long-term business value for its clients by investing in IP, solutions and industry-focused delivery teams with deep domain knowledge.

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, 2015 or from other factors not currently anticipated.

Contacts:

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

Europe and International: Rani Gill, Flame PR, +44 0203 357 9746, Syntel@flamepr.com

# # #

SYNTEL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

(IN THOUSANDS, EXCEPT PER SHARE DATA)

	THREE MONTHS ENDED MARCH 31,
	2016			2015
Net revenues	$	241,390		$	220,599
Cost of revenues		151,666			141,785
Gross profit		89,724			78,814
Selling, general and administrative expenses		29,677			35,382
Income from operations		60,047			43,432
Other income, net		4,096			9,338
Income before provision for income taxes		64,143			52,770
Income tax expense		11,086			12,749
Net income	$	53,057		$	40,021
Other Comprehensive Income
Foreign currency translation adjustments	$	(1,240	)	$	10,626
Unrealized gains on securities:
Unrealized holding gains arising during period		1,915			3,440
Reclassification adjustment for gains included in net income		(21	)		(1,868	)
		1,894			1,572
Defined benefit pension plans:
Net Profit arising during period		—			—
Amortization of prior service cost included in net periodic pension cost		16			25
		16			25
Other comprehensive income, before tax		670			12,223
Income tax expenses related to Other Comprehensive Income		(735	)		(486	)
Other comprehensive income (loss), net of tax		(65	)		11,737
Comprehensive Income	$	52,992		$	51,758
EARNINGS PER SHARE:
Basic	$	0.63		$	0.48
Diluted	$	0.63		$	0.48
Weighted average common shares outstanding:
Basic		84,112			83,907
Diluted		84,266			84,127

SYNTEL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS)

	(Unaudited) March 31, 2016		(Audited) December 31, 2015
ASSETS
Current assets:
Cash and cash equivalents	$	658,454	$	500,499
Short term investments		425,683		540,045
Accounts receivable, net of allowance for doubtful accounts of $622 at March 31, 2016 and December 31, 2015, respectively		108,641		136,926
Revenue earned in excess of billings		48,527		30,448
Deferred income taxes and other current assets		50,182		44,575
Total current assets		1,291,487		1,252,493
Property and equipment		221,096		217,922
Less accumulated depreciation and amortization		115,068		112,146
Property and equipment, net		106,028		105,776
Goodwill		906		906
Non current Term Deposits with Banks		229		77
Deferred income taxes and other non current assets		68,489		64,018
TOTAL ASSETS	$	1,467,139	$	1,423,270
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES
Current liabilities:
Accrued payroll and related costs	$	49,934	$	60,339
Income taxes payable		11,906		11,305
Accounts payable and other current liabilities		40,326		37,892
Deferred revenue		3,817		7,716
Loans and borrowings		129,977		129,981
Total current liabilities		235,960		247,233
Other non current liabilities		17,899		17,592
TOTAL LIABILITIES		253,859		264,825
SHAREHOLDERS’ EQUITY
Total shareholders’ equity		1,213,280		1,158,445
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,467,139	$	1,423,270