Exult Taps Long-term Deals, Add-ons for 15-Fold Sales Gain
By ANDREW SIMONS
Managing human resources operations may not be the sexiest business in the world, but it can be lucrative.
Just ask Exult Inc.
The Irvine-based provider of outsourced human resources software and services came in at No. 2 on the Business Journal’s list of fastest-growing Orange County-based public companies.
Exult recorded a 3,242% gain in annual revenue to $461.2 million in the past three years.
Its bottom line has improved, too. Exult posted a profit of $9 million in the 12-month period through June 30, versus a loss of $24.7 million in 2000.
The company turned its first profit in the December quarter last year.
Exult, which uses its own software and call centers to handle human resources primarily for Fortune 1000 companies, has cashed in on the desire for large-sized companies to cut costs.
Exult has won long-term contracts from Bank of America Corp., International Paper Co., BP PLC and Unisys Corp.
In 2002, Exult signed additional deals with existing clients, such as a $90 million add-on to a prior $600 million deal with International Paper.
But last year the company took heat from analysts for not signing up new clients.
This year has been different, with Exult inking pacts with units of France-based Vivendi Universal SA.
The company projects similar deals from existing clients, plus new pacts to drive “significant” growth next year, executives say.
One hurdle for the company: Going after new customers entails significant costs.
The company devotes a lot of time to analyzing whether a prospective client would benefit from its services,and whether Exult can make money providing them.
Exult employs about 70 people in OC and 1,400 in all.
Exult officials have worked to shore up costs by laying off workers, closing facilities and moving work to India where labor is cheaper. Last December, Exult shed some 50 jobs in the U.S.
But the company is in the process of adding at least 2,000 people to its customer service facility in Mumbai, India in the next two to three years, according to a report in Asia Pulse magazine.
The facility, which opened earlier this year with 140 workers, now has more than 300 workers.
Its sales growth has won over investors. Shares of Exult are up 180% to 7.6 in the past year.
Exult sold $100 million of convertible bonds in September.
It plans to use proceeds from the offering for working capital and other general corporate purposes.
Exult also said in a release that it might use the funds for “strategic investments.”
