iGATE Reports Third Quarter 2009 Earnings

Growth in Volume and Revenue Drives Surge in Profit

• Press Release
• Source: iGATE Corporation
• On 4:00 pm EDT, Tuesday October 20, 2009

FREMONT, Calif., Oct. 20, 2009 (GLOBE NEWSWIRE) -- iGATE Corporation (Nasdaq:IGTE - News), an integrated technology and operations (iTOPS) company, announced today its financial results for the third quarter of fiscal year 2009, ended September 30, 2009.

Related Quotes

Symbol	Price	Change
IGTE	9.63	-0.21

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Third quarter highlights

  --  Diluted earnings from continuing operations of $0.16 per
      share compared to $0.15 per share made in the corresponding
      quarter of FY 2008
  --  Revenue from continuing operations of $49.1 million compared
      to $55.4 million made in the corresponding quarter of FY 2008
  --  6 new customers added during the quarter
  --  6,380 employees as of September 30, 2009 compared to 6,407 in
      the same period last year
  --  Ranked second in Dataquest-IDC's annual survey of the top 20
      Best IT Employers in India

"First time offshorers and growth from existing customers helped to drive up sequential volume and revenue," said Phaneesh Murthy, CEO. "Better overall efficiencies helped move us toward our objective of attaining best in class earnings growth."

"We benefited from pricing discipline and cost management," said Sujit Sircar, Chief Financial Officer. "Our focus on operating margin expansion, earnings growth and operating cash flow helped our performance. However, the global currencies market continues to be volatile and is still a cause of concern."

Third quarter operating results

Revenue for the quarter was $49.1 million, a 4.7% sequential increase from $46.8 million in the second quarter and 11.5% decrease from the $55.4 million reported in the same period a year ago. Gross profit margin increased to 41.1% from 38.4% in the corresponding quarter of last year.

Operating income for the quarter was $9.1 million, a 27.3% sequential jump from $7.2 million in the second quarter and 22.5% jump over $7.4 million reported in the same period last year. Operating margin increased to 18.6% of revenue from 13.4% in the corresponding quarter last year.

Net income from continuing operations was $8.9 million, or $0.16 per diluted share, compared to $6.1 million or $0.11 per diluted share in the second quarter and $8.5 million or $0.15 per diluted share in the third quarter of 2008. Net margin was 18.1% for the quarter as against 15.3% in the third quarter of 2008.

For the nine months ended September 30, 2009, the company generated operating cash flow of $31.8 million and ended the quarter with $84.5 million in cash and short-term investments.

Key customer wins and significant projects executed during the quarter

A Fortune 500 North American building materials company selected iGATE as its preferred partner by signing a multi-year, multi-million-dollar deal to support its ERP applications. The client has applications running in diverse ERP platforms across the globe. iGATE will leverage its global delivery model to execute this project.

iGATE is providing a 24*7*365 Remote Infrastructure support services for the messaging environment of a global pharmaceutical company. iGATE has crafted an offshore support model that assures single point of ownership, round-the-clock service availability and alignment to industry standard best practices for the client's messaging infrastructure.

A leading mortgage insurance provider in North America chose iGATE to assist it in the design of its support function with the long term view of setting up a shared services center for its technical support.

iGATE's end-to-end capabilities in mortgage servicing resulted in a Fortune 20 Bank selecting it as a preferred partner in providing back-office support in loan fulfillment.

An online marketing and lead generation agency has engaged iGATE to redesign its financial systems.

Important events during the quarter

  --  Joseph J. Murin, former president of Ginnie Mae and a veteran
      mortgage and banking executive, was appointed to the Board of
      Directors

  --  Ranked #6 among the Top Tier Information Technology Outsourcers
      for the Insurance Industry by The Black Book of Outsourcing
      2009

  --  Inaugurated Phase 1 of the eco-friendly Global Delivery
      facility in Chennai, India

  --  Received Global HR Excellence Award for Innovative HR
      Practices for 2009 from the Asia Pacific HRM congress for 2009

Conference Call and Webcast

iGATE will host a telephonic conference call to discuss the company's third quarter financial results at 05.00 pm Eastern Time (USA) on Tuesday, October 20, 2009. A live webcast of this conference call will be available on our web site, www.igate.com. The webcast will remain available for replay until October 27, 2009.

About iGATE

iGATE (Nasdaq:IGTE - News) is the first outsourcing solutions provider to offer a business outcome based pricing model through a fully integrated technology and operations (iTOPS) structure with global service delivery. iGATE works with clients to optimize their businesses, secure substantial and sustainable year on year cost benefits and tie costs to business needs and results. iGATE provides IT consulting; application development and maintenance; data warehousing; business intelligence solutions; ERP/enterprise solutions; BPO/business service provisioning; infrastructure management; independent verification and validation; KPO and contact center services. The company has been assessed at CMMI Level 5, follows Six Sigma methodologies, is COBIT, ISO 9001 and ISO 27001 certified, ensuring the highest levels of quality and data security. iGATE has 34 offices in 16 countries and manages global delivery centers in Mexico, Australia, Malaysia and India. iGATE is rated as a leading employer in India. For more information, please visit www.igate.com

The iGATE Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5150

Forward-Looking Statements

Some of the statements contained in this news release that are not historical facts are forward-looking statements. These forward-looking statements include the company's financial, growth and liquidity projections as well as statements concerning the company's plans, strategies, intentions and beliefs concerning business cash flows, costs and the markets in which it operates. Without limiting the foregoing, the words "believes," "anticipates," "plans," "expects" and similar expressions are intended to identify certain forward-looking statements. These statements are based on information currently available to the company and it assumes no obligation to update the forward-looking statements as circumstances change. There are risks and uncertainties that could cause actual events to differ materially from the forward-looking statements. These risks include, but are not limited to, the company's ability to predict its financial performance, the level of market demand for its services, the highly-competitive market for the types of services offered by the company, the impact of competitive factors on profit margins, market conditions that could cause the company's customers to reduce their spending for its services, the company's ability to create, acquire and build new businesses and to grow existing businesses, attract and retain qualified personnel, reduce costs and conserve cash, currency fluctuations and market conditions in India and elsewhere around the world, political and military tensions in India and South Asia, changes in generally accepted accounting principles and/or their interpretation and other risks that are described in more detail in the company's filings with the Securities and Exchange Commission including its Form 10-K for the year ended December 31, 2008.

                            iGATE CORPORATION

                 CONDENSED CONSOLIDATED BALANCE SHEETS
             (dollars in thousands, except per share data)

                                       September 30,      December 31,
                                           2009              2008

                                        (unaudited)        (audited)
                                       -------------     -------------
            ASSETS
 Current assets:
  Cash and cash equivalents                $  29,649         $  30,878
  Short-term investments                      54,871            34,601
  Accounts receivable, net                    26,642            33,778
  Unbilled revenues                            8,362             6,787
  Prepaid expenses and other
   current assets                              4,292             4,184
  Prepaid income taxes                         4,120             3,300
  Deferred tax assets                             57                32
  Receivable from Mastech                         82               742
                                       -------------     -------------
    Total current assets                     128,075           114,302

 Deposits and other assets                     4,180             3,986
 Property and equipment, net                  39,425            34,490
 Deferred tax assets                           6,948             5,016
 Goodwill                                     29,537            29,179
 Intangible assets, net                        2,200             2,920
                                       -------------     -------------

    Total  assets                          $ 210,365         $ 189,893
                                       =============     =============

    LIABILITIES AND SHAREHOLDERS' EQUITY
 Current liabilities:
  Accounts payable                         $   1,352         $   1,785
  Accrued payroll and related
   costs                                      14,196            13,146
  Accrued expenses                            12,744            12,024
  Deferred income taxes                          307               471
  Foreign exchange derivative
   contracts                                   3,898             7,468
  Other current liabilities                    3,402             3,874
  Restructuring reserve                          100               271
  Deferred revenue                             1,375               766
                                       -------------     -------------
    Total current liabilities                 37,374            39,805

  Other long-term liabilities                    992               882
  Foreign exchange derivative
   contracts, long term                           59             3,134
                                       -------------     -------------
    Total liabilities                         38,425            43,821

 Shareholders' equity:
  Common Stock, par value
   $0.01 per share                               558               551
  Additional paid-in capital                 178,683           173,198
  Retained earnings                           29,594            15,613
  Common stock in treasury,
   at cost                                   (14,714)          (14,714)
  Accumulated other
   comprehensive loss                        (22,181)          (28,576)
                                       -------------     -------------
    Total shareholders'
     equity                                  171,940           146,072
                                       -------------     -------------
    Total liabilities and
     shareholders' equity                  $ 210,365         $ 189,893
                                       =============     =============


                           iGATE CORPORATION
              CONDENSED CONSOLIDATED STATEMENTS OF INCOME
       (dollars and shares in thousands, except per share data)
                              (unaudited)

                              Three Months ended,   Nine Months ended,
                                 September 30,         September 30,
                              -------------------  -------------------
                                2009       2008      2009       2008
                              --------   --------  --------   --------

 Revenues                     $ 49,055   $ 55,418  $140,695   $167,298

 Cost of revenues               28,897     34,143    86,559    105,820
                              --------   --------  --------   --------

 Gross margin                   20,158     21,275    54,136     61,478

 Selling, general and
  administrative                 9,197     11,659    26,635     33,929

 Depreciation and
  amortization                   1,837      2,168     5,607      7,508
                              --------   --------  --------   --------

   Income from operations        9,124      7,448    21,894     20,041

 Other income (expense),
  net                               38        968    (1,702)     3,198

 Noncontrolling interest            --         --        --       (371)

 Equity in income of
  affiliated companies              --         --        --          2
                              --------   --------  --------   --------

   Income before income
    taxes                        9,162      8,416    20,192     22,870

 Income tax expense
  (benefit)                        278        (40)      251        541
                              --------   --------  --------   --------
 Income from continuing
  operations                     8,884      8,456    19,941     22,329
 (Loss) income from
  discontinued operations,
  net of taxes                      --       (162)       --      1,781
                              --------   --------  --------   --------
 Net income                   $  8,884   $  8,294  $ 19,941   $ 24,110
                              ========   ========  ========   ========


 Basic earnings per share
  from continuing
  operations                  $   0.16   $   0.15  $   0.36   $   0.42
 Basic earnings per share
  from discontinuing
  operations                  $     --   $     --  $     --   $   0.03

 Diluted earnings per
  share from continuing
  operations                  $   0.16   $   0.15  $   0.36   $   0.40
 Diluted earnings per
  share from discontinuing
  operations                  $     --   $     --  $     --   $   0.03

 Weighted average shares
  outstanding, Basic            55,227     53,985    54,965     53,818
                              ========   ========  ========   ========
 Weighted average dilutive
  common equivalent shares
  outstanding                   56,153     55,743    55,612     55,457
                              ========   ========  ========   ========

iGATE Corporation
Investor Contact:
Salil Ravindran
  +1 510-896-3015
  salil.ravindran@igate.com
Media Contact:
Rathnam Subramanyam 
  +1 510-896-3021
  pr@igate.com