PITTSBURGH: Compared with 2002's fourth quarter revenues of $69.6 million, the first quarter revenues are flat and in line with previously announced guidance. Income from operations increased 18.0% this quarter to $1.5 million from last year's first quarter of $1.3 million. This increase was primarily driven by continued reduction in SG&A expenses both in dollar terms and as a percentage of revenues. This quarter, SG&A expenses were $16.6 million, a 20.1% decrease over last year's first quarter of $20.8 million. As a percentage of revenues, SG&A expenses were 24.2% of revenues compared with 27.7% of revenues in the first quarter of last year. Net loss for the first quarter of 2003 was ($0.5) million or ($0.01) per share. This compares with last year's first quarter net income of $4.6 million or $0.09 a share, which included a one-time gain equivalent of $0.08 per share. This quarter's net loss included a $1.8 million special, one-time provision for income taxes related to the sale of eJiva, iGate's US-based enterprise solutions subsidiary, to Mascot, iGate's Indian subsidiary. Excluding the impact of this special, one-time provision for taxes, iGate's earnings were $0.03 per share for this quarter and in line with previously announced guidance. "The continued decline in SG&A expenses and increase in income from operations reflect the execution of our strategy to increase profitability despite challenging economic conditions. We expect this trend to continue as we remain focused on three key strategic areas: the expansion of our offshore outsourcing services business, the stabilization of our professional services business and the ongoing management of our overhead expenses," said Sunil Wadhwani, iGate's Chief Executive Officer and Co-Founder. iGate's balance sheet remains strong. The company ended the quarter with $108.1 million in cash and investments, and despite recording a net loss of ($0.5) million its shareholder equity to total assets ratio remained at 62%. "Despite a challenging geopolitical environment and long sales cycles, we have noticed in this quarter a clear increase in the level of activity and interest for offshore services. Customer visits to India, both from the US and from Europe, increased despite the war with Iraq and concerns over SARS. We are encouraged by these signs," said Ashok Trivedi, iGate's President and Co-Founder. Looking ahead at Q2 2003, Sunil Wadhwani added, "The ongoing economic uncertainty continues to affect our clients' IT budgets and lengthen their decision making process. As a result, we anticipate revenue to be flat as compared to the first quarter 2003. However, we believe that as we continue to focus on offshore delivery services and manage our SG&A expenses our margins will expand and allow us to achieve EPS of $0.03 in the second quarter of 2003."