PeopleSupport, Inc. (PSPT) announced the achievement of record annual revenues for its fourth quarter and fiscal year end for December 31, 2007. PeopleSupport is an offshore business process outsourcing (BPO) provider that offers customer management, transcription and captioning and additional BPO services from its centers in the Philippines, Costa Rica and the United States. A majority of PeopleSupport’s services are performed in the Philippines, where PeopleSupport is one of the largest outsourcing companies, employing approximately 8,000 college-educated, fluent English speaking personnel. The company serves clients in a variety of industries, such as travel, consumer, financial services, healthcare, insurance, technology, telecommunications, entertainment and education.
For the fourth quarter 2007, the company reported revenues of $35.8M, an increase of 15% compared to $31.0M of the same quarter previous year. Income operations for the fourth quarter were $0.2M compared to $0.8M of the previous year. Non-cash stock-based compensation expense was $2.0M and net income was $18.1M. Net cash provided by operating activities for the quarter was $5.3M and capital expenditures were $1.6M for the fourth quarter.
For the fiscal year 2007, the company reported record revenues of $140.6M, an increase of 28% compared to $110.1M reported for fiscal year 2006. Net income was $32.2M, or $1.37 per diluted share based on 23.6M weighted average shares outstanding. Operating margins for the full year of 2007 were 3.0% due primarily to the appreciation of the Philippine Peso relative to the U.S. dollar and non-cash stock-based compensation expenses. The Philippine Peso appreciated 10% against the U.S. dollar during the year and decreased full year operating margins by 5.4%. The impact of the appreciating Philippine Peso was partially offset by the company’s foreign currency forward contracts, which represented a realized and unrealized gain of $23.6M in Other income for the full year 2007. The realized portion of this benefit, or actual cash generated by this program, was $4.6M or approximately 3.2% of revenues for the full year.
Lance Rosenzweig, chief executive officer and chairman, stated the company made significant progress in 2007. Operations ran well, IT is highly scalable and fault tolerant, the sales pipeline is the strongest in the company’s history, the sales team has nearly doubled in size, and sales and marketing presences were established in Europe. He further stated that the company delivered revenue growth of 28% for the year despite the departure of Vonage as a significant client earlier in the year. Between the anticipated proceeds from the sales of land purchased in Manila and existing Philippine Peso foreign currency forward contracts, the company expects to generate over $25M in pre-tax cash.
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