From correspondents in Maharashtra, India, 10:58 PM IST

For the first quarter of fiscal 2009, Virtusa’s revenue increased 14% year-over-year, to $42.5 million. Virtusa reported income from operations of approximately break-even for the first quarter of fiscal 2009. Income from operations was $3.2 million for the first quarter of fiscal 2008.

Net income for the first quarter of fiscal 2009 was $0.8 million, or $0.03 per diluted share, compared to $2.7 million, or $0.13 per diluted share for the first quarter of fiscal 2008. Earnings per share for the first quarter of fiscal 2009 reflects a 23% year-over-year increase in diluted shares outstanding primarily due to the successful completion of the Company’s initial public offering.

The Company ended the first quarter 2009 with $94.8 million of cash and cash equivalents, short-term investments and long-term investments.

Kris Canekeratne, Virtusa’s Chairman and CEO, stated “In the first quarter, our business excluding British Telecom was inline with our expectations, growing 20% year-over-year. This was driven by strength in our financial services industry group, as well as by increased contribution from our non-Top 10 clients, validating our belief that recent client additions will build the foundation for sustainable, long term growth.” Canekeratne continued, “British Telecom continues to be a strategic partner, and we remain confident in the long term success of the relationship.”

“We remain committed to managing our business for long-term, profitable growth,” said Tom Holler, Chief Financial Officer. “Our current guidance for 2009 reflects revised revenue expectations for British Telecom and near-term general economic weakness. Our guidance also considers plans to increase utilization and expand profit margins in the second half of this fiscal year,” Holler concluded.

In addition, Virtusa’s board of directors authorized a share repurchase program of up to $15 million of the Company’s common stock over the next twelve months. Share repurchases under the program may be made through open market purchases or privately negotiated transactions in accordance with applicable federal securities laws, including Rule 10b-18 of the Exchange Act of 1934. While the board of directors has approved the share purchasing guidelines, the timing of repurchases and the exact number of shares of common stock to be purchased will be determined by the Company’s management, at its discretion, and will depend upon market conditions and other factors. The program will be funded using the Company’s cash on hand and cash generated from operations. The program may be extended, suspended or discontinued at any time. The Company’s fiscal year 2009 current financial guidance does not consider any potential impact from the share repurchase program.

Financial Outlook

Virtusa management provided the following current financial guidance:

• Second quarter 2009 revenue is expected to be in the range of $41.5 to $43.0 million, with diluted EPS of $(0.06) to $0.01.

• Fiscal year 2009 revenue is expected to be in the range of $172 to $180 million, with diluted EPS of $0.20 to $0.42.

The Company’s second quarter and fiscal year 2009 diluted EPS estimates assume an average share count of approximately 24.4 million (assuming no further exercises of stock-based awards and assuming the realization of net profit in the fiscal second quarter) and assumes a stock price of $6.42, which was derived from the average closing price of our stock over the five trading days ended on July 25, 2008. Deviations from this stock price will cause actual EPS to vary based on share dilution from Virtusa’s stock options and stock appreciation rights. The second quarter and fiscal year 2009 average share counts do not consider the impact of the new share repurchase program. The second quarter and fiscal year 2009 average share counts are higher year-over-year by approximately 5%, primarily due to the Company’s IPO in August 2007.

Conference Call and Webcast

Virtusa will host a conference call today, July 30, 2008 at 5:00 pm Eastern time to discuss the Company’s first quarter 2009 financial results, current financial guidance and other corporate developments. To access this call, dial 888-277-7115 (domestic) or 913-312-0660 (international). A replay of this conference call will be available through August 6, 2008 at 888-203-1112 (domestic) or 719-457-0820 (international). The replay passcode is 9514892. A live webcast of this conference call will be available on the “Investors” page of the Company’s website (www.virtusa.com), and a replay will be archived on the website as well.

Source: Press Release Distribution via India PRwire