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8-K - FORM 8-K - TTEC Holdings, Inc. | d71165e8vk.htm |
EX-10.3 - EX-10.3 - TTEC Holdings, Inc. | d71165exv10w3.htm |
EX-99.2 - EX-99.2 - TTEC Holdings, Inc. | d71165exv99w2.htm |
EX-10.1 - EX-10.1 - TTEC Holdings, Inc. | d71165exv10w1.htm |
EX-10.2 - EX-10.2 - TTEC Holdings, Inc. | d71165exv10w2.htm |
Exhibit 99.1
Investor Contact:
Karen Breen
303-397-8592
Karen Breen
303-397-8592
TeleTech Announces Fourth Quarter and Full Year 2009 Financial Results
Achieves $1.2 Billion of Full Year 2009 Revenue and $1.12 in Fully Diluted Earnings Per Share;
Delivers 41 Percent Increase in Fourth Quarter 2009 Earnings Per Share;
Solid Operational Performance Drives Full Year 2009 Cash Flow From Operations of $161 Million;
Ends the Fourth Quarter with $109 Million in Cash and No Borrowings on its Credit Facility
Delivers 41 Percent Increase in Fourth Quarter 2009 Earnings Per Share;
Solid Operational Performance Drives Full Year 2009 Cash Flow From Operations of $161 Million;
Ends the Fourth Quarter with $109 Million in Cash and No Borrowings on its Credit Facility
Englewood, Colo., February 22, 2010 TeleTech Holdings, Inc. (NASDAQ: TTEC), one of the
largest global providers of technology-enabled revenue generation, on-demand and business process
outsourcing (BPO) solutions, today announced financial results for the fourth quarter and fiscal
year ended December 31, 2009. The Company also filed its Annual Report on Form 10-K with the
Securities and Exchange Commission for the year ended December 31, 2009.
TeleTechs fourth quarter and full year 2009 results demonstrate our ability to deliver solid
performance during both good and bad economic times. Our results are a testament to the strength
and sustainability of our companys business model and management team, said Ken Tuchman, chairman
and chief executive officer. Our goals and priorities continue to be strategically aligned with
the business objectives of our clients. As we deliver on our clients goals to increase
revenue, optimize processes, reduce risk and maximize the customer experience we improve the
financial and operational performance for both our clients and for TeleTech. This strategic
alignment gives us confidence in our ability to continue to deliver solid financial performance in
2010.
FINANCIAL RESULTS
For the fourth quarter 2009, TeleTech reported revenue of $280.8 million, income from operations of
10.4 percent of revenue, and fully diluted earnings per share attributable to TeleTech shareholders
of 31 cents.
For the full year 2009, TeleTech reported revenue of $1.2 billion, income from operations of 8.6
percent of revenue, and fully diluted earnings per share attributable to TeleTech shareholders of
$1.12.
FOURTH QUARTER 2009 FINANCIAL HIGHLIGHTS
TeleTechs fourth quarter revenue was $280.8 million compared to $326.0 million in the year-ago
period. This decline was primarily attributable to lower client volumes due to reduced demand for
clients products or services given the weak economic environment and the increased migration of
certain client programs to offshore locations.
Revenue from TeleTechs offshore locations in the fourth quarter accounted for $131 million or 47
percent of total revenue.
TeleTechs fourth quarter 2009 gross margin improved 330 basis points to 30.9 percent from 27.6
percent in the year-ago quarter. This improvement was primarily due to the increased delivery of
professional services and technology-based on-demand offerings, the proactive management of the
Companys
operating and workforce-related expenses and continued expansion of services provided from our
geographically diverse delivery centers.
TeleTechs fourth quarter 2009 income from operations was $29.3 million or 10.4 percent of revenue,
representing a 330 basis point improvement from $23.3 million or 7.1 percent of revenue in the
year-ago quarter. The increase in operating margin is primarily due to the gross margin
improvement outlined above in addition to a $2.3 million favorable change in the estimate of the
Companys self-insurance reserves.
Fourth quarter 2009 fully diluted earnings per share attributable to TeleTech shareholders
increased 41 percent to 31 cents compared to fourth quarter 2008 fully diluted earnings per share
of 22 cents.
2009 FINANCIAL HIGHLIGHTS
TeleTechs full year 2009 revenue was $1.2 billion compared to $1.4 billion for the full year 2008.
On a constant currency basis, full year revenue declined 12.5 percent from 2008. These declines
were attributable to the impact on quarterly revenue described above.
TeleTechs 2009 income from operations increased 80 basis points from 7.8 percent of revenue in
2008 to 8.6 percent of revenue in 2009. Income from operations for the year included $9.6 million
of restructuring and impairment charges primarily related to the rationalization of certain
underperforming delivery centers and associated severance costs.
Excluding the $9.6 million of unusual charges mentioned above, TeleTechs 2009 non-GAAP income from
operations was $110.3 million, or 9.4 percent of revenue, which was unchanged from 2008.
2009 non-GAAP EBITDA was $178.0 million, or 15.2 percent of revenue. This represents a 130 basis
point increase over 2008 non-GAAP EBITDA margin of 13.9 percent.
2009 fully diluted earnings per share attributable to TeleTech shareholders increased 5.7 percent
to $1.12 on net income of $71.8 million, compared to $1.06 on net income of $73.7 million in
2008. Excluding the $9.6 million of unusual pre-tax charges discussed above, 2009 non-GAAP
earnings per share was $1.22.
OTHER BUSINESS HIGHLIGHTS
New Business
During the fourth quarter 2009, TeleTech signed an estimated $100 million in revenue from both new
and existing clients. Several of the new business wins in the fourth quarter included TeleTechs
revenue generation and on-demand suite of offerings.
Strong Balance Sheet Continues to Fund Operations
| As of December 31, 2009, TeleTech had cash and cash equivalents of $109.4 million, no borrowings on its credit facility and total other debt of $9.8 million, resulting in a net positive cash position of $99.6 million. | ||
| Free cash flow for the full year 2009 was $136.5 million, representing a 38 percent increase from $98.9 million in 2008. | ||
| Capital expenditures in the fourth quarter 2009 were $5.1 million, down from $10.0 million in the year-ago quarter. | ||
| Return on invested capital was 27.5 percent as of December 31, 2009. |
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BUSINESS OUTLOOK
TeleTech believes volumes across much of its base business are continuing to stabilize, however
there are still certain clients which continue to experience softness in their business. At this
time, TeleTech remains comfortable with the current analyst consensus numbers for 2010 full year
revenue and operating margin and expects to see sequential revenue growth beginning in the second
quarter of 2010.
CONFERENCE CALL
A conference call and webcast with management will be held on Tuesday, February 23, 2010 at 8:30
a.m. Eastern Time. You are invited to join the live webcast of the conference call by visiting the
Investors section of the TeleTech website at www.teletech.com. If you are unable to
participate during the live webcast, a replay will be available on the TeleTech website through
Tuesday, March 9, 2010.
NON-GAAP FINANCIAL MEASURES
To supplement the Companys consolidated financial statements presented in accordance with
generally accepted accounting principles (GAAP) in the United States, the Company uses the
following non-GAAP financial measures: Free Cash Flow, Non-GAAP Income from Operations, Non-GAAP
EBITDA and Non-GAAP EPS. TeleTech believes that providing these non-GAAP financial measures
provides investors with greater transparency to the information used by TeleTechs management in
its financial and operational decision making and allows investors to see TeleTechs results
through the eyes of management. TeleTech also believes that providing this information better
enables TeleTechs investors to understand its operating performance and information used by
management to evaluate and measure such performance. The presentation of these financial measures
are not intended to be used in isolation or as a substitute for the financial information prepared
and presented in accordance with GAAP. A reconciliation of these non-GAAP financial measures is
available in the financial tables attached to this press release.
ABOUT TELETECH
TeleTech is one of the largest and most geographically diverse global providers of
technology-enabled business process outsourcing solutions. TeleTech and its subsidiaries have a
28-year history of designing, implementing, and managing critical business processes for Global
1000 companies to help them improve their customers experience, expand their strategic
capabilities, and increase their operating efficiencies. By delivering a high-quality customer
experience through the effective integration of customer-facing front-office processes with
internal back-office processes, we enable our clients to better serve, grow, and retain their
customer base. We use Six Sigma-based quality methods continually to design, implement, and enhance
the business processes we deliver to our clients and we also apply this methodology to our own
internal operations. TeleTech and its subsidiaries have developed deep domain expertise and support
more than 270 business process outsourcing programs serving approximately 90 global clients in the
automotive, communications and media, financial services, government, healthcare, retail,
technology and travel and leisure industries. Our integrated global solutions are provided by
approximately 45,000 employees utilizing 35,600 workstations across 68 delivery centers in 16
countries. For additional information, visit www.teletech.com.
FORWARD-LOOKING STATEMENTS
Statements in this press release that relate to future results and events (including statements
about future financial and operating performance) are forward-looking statements based on
TeleTechs current expectations. Actual results and events in future periods could differ
materially from those projected in these forward-looking statements because of a number of risks
and uncertainties including: achieving estimated revenue from new, renewed and expanded client
business as volumes may not materialize as forecasted, especially due to the global economic
slowdown; achieving profit improvement in our International BPO operations; the ability to close
and ramp new business opportunities that are currently being pursued or that are in the final
stages with existing and/or potential clients; our ability to execute our growth plans, including
sales of new products; the possibility of lower revenue or price pressure from our
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clients experiencing a business downturn or merger in their business; greater than anticipated
competition in the BPO services market, causing adverse pricing and more stringent contractual
terms; risks associated with losing or not renewing client relationships, particularly large client
agreements, or early termination of a client agreement; the risk of losing clients due to
consolidation in the industries we serve; consumers concerns or adverse publicity regarding our
clients products; our ability to find cost effective locations, obtain favorable lease terms and
build or retrofit facilities in a timely and economic manner; risks associated with business
interruption due to weather, fires, pandemic, or terroristrelated events; risks associated with
attracting and retaining costeffective labor at our delivery centers; the possibility of asset
impairments and restructuring charges; risks associated with changes in foreign currency exchange
rates; economic or political changes affecting the countries in which we operate; changes in
accounting policies and practices promulgated by standard setting bodies; and new legislation or
government regulation that adversely impacts our tax obligations, health care costs or the BPO and
customer management industry. A detailed discussion of these and other risk factors that could
affect our results is included in TeleTechs SEC filings, including our Annual Report on Form 10-K
for the year ended December 31, 2009. The Companys filings with the Securities and Exchange
Commission are available in the Investors section of TeleTechs website, which is located at
www.teletech.com. All information in this release is as of February 22, 2010. The Company
undertakes no duty to update any forward-looking statement to conform the statement to actual
results or changes in the Companys expectations.
###
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TELETECH HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three months ended | Twelve months ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Revenue |
$ | 280,849 | $ | 325,985 | $ | 1,167,915 | $ | 1,400,147 | ||||||||
Operating Expenses: |
||||||||||||||||
Cost of services |
194,017 | 235,852 | 820,517 | 1,024,451 | ||||||||||||
Selling, general and administrative |
43,978 | 51,108 | 180,039 | 199,495 | ||||||||||||
Depreciation and amortization |
13,457 | 13,384 | 56,991 | 59,166 | ||||||||||||
Restructuring charges, net |
58 | 1,402 | 5,072 | 6,059 | ||||||||||||
Impairment losses |
| 985 | 4,587 | 2,018 | ||||||||||||
Total operating expenses |
251,510 | 302,731 | 1,067,206 | 1,291,189 | ||||||||||||
Income From Operations |
29,339 | 23,254 | 100,709 | 108,958 | ||||||||||||
Other income (expense) |
764 | (1,986 | ) | 2,334 | (4,354 | ) | ||||||||||
Income Before Income Taxes |
30,103 | 21,268 | 103,043 | 104,604 | ||||||||||||
Provision for income taxes |
(8,998 | ) | (6,572 | ) | (27,477 | ) | (27,269 | ) | ||||||||
Net Income |
21,105 | 14,696 | 75,566 | 77,335 | ||||||||||||
Net income attributable to noncontrolling interest |
(1,066 | ) | (596 | ) | (3,812 | ) | (3,588 | ) | ||||||||
Net Income Attributable to TeleTech Shareholders |
$ | 20,039 | $ | 14,100 | $ | 71,754 | $ | 73,747 | ||||||||
Net Income Per Share Attributable to TeleTech Shareholders |
||||||||||||||||
Basic |
$ | 0.32 | $ | 0.22 | $ | 1.14 | $ | 1.08 | ||||||||
Diluted |
$ | 0.31 | $ | 0.22 | $ | 1.12 | $ | 1.06 | ||||||||
Income From Operations Margin |
10.4 | % | 7.1 | % | 8.6 | % | 7.8 | % | ||||||||
Net Income Attributable to TeleTech Shareholders Margin |
7.1 | % | 4.3 | % | 6.1 | % | 5.3 | % | ||||||||
Effective Tax Rate |
29.9 | % | 30.9 | % | 26.7 | % | 26.1 | % | ||||||||
Weighted Average Shares Outstanding |
||||||||||||||||
Basic |
62,415 | 64,741 | 62,891 | 68,208 | ||||||||||||
Diluted |
64,243 | 65,217 | 64,238 | 69,578 |
TELETECH HOLDINGS, INC. AND SUBSIDIARIES
SEGMENT INFORMATION
(In thousands)
SEGMENT INFORMATION
(In thousands)
Three months ended | Twelve months ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Revenue: |
||||||||||||||||
North American BPO |
$ | 211,911 | $ | 243,866 | $ | 886,738 | $ | 1,020,722 | ||||||||
International BPO |
68,938 | 82,119 | 281,177 | 379,425 | ||||||||||||
Database Marketing and
Consulting |
| | | | ||||||||||||
Total |
$ | 280,849 | $ | 325,985 | $ | 1,167,915 | $ | 1,400,147 | ||||||||
Income (Loss) From Operations: |
||||||||||||||||
North American BPO |
$ | 26,874 | $ | 21,878 | $ | 111,497 | $ | 103,084 | ||||||||
International BPO |
2,465 | 1,429 | (10,788 | ) | 6,351 | |||||||||||
Database Marketing and
Consulting |
| (53 | ) | | (477 | ) | ||||||||||
Total |
$ | 29,339 | $ | 23,254 | $ | 100,709 | $ | 108,958 | ||||||||
TELETECH HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, | December 31, | |||||||
2009 | 2008 | |||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 109,424 | $ | 87,942 | ||||
Accounts receivable, net |
216,614 | 236,997 | ||||||
Other current assets |
76,337 | 79,949 | ||||||
Total current assets |
402,375 | 404,888 | ||||||
Property and equipment, net |
126,995 | 157,747 | ||||||
Other assets |
110,797 | 106,307 | ||||||
Total assets |
$ | 640,167 | $ | 668,942 | ||||
LIABILITIES AND EQUITY |
||||||||
Total current liabilities |
$ | 145,966 | $ | 180,099 | ||||
Other long-term liabilities |
38,300 | 127,949 | ||||||
Total equity |
455,901 | 360,894 | ||||||
Total liabilities and equity |
$ | 640,167 | $ | 668,942 | ||||
TELETECH HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION
(In thousands, except per share data)
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION
(In thousands, except per share data)
Three months ended | Twelve months ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Reconciliation of Gross Margin: |
||||||||||||||||
Revenue |
$ | 280,849 | $ | 325,985 | $ | 1,167,915 | $ | 1,400,147 | ||||||||
Cost of services |
194,017 | 235,852 | 820,517 | 1,024,451 | ||||||||||||
Gross margin |
$ | 86,832 | $ | 90,133 | $ | 347,398 | $ | 375,696 | ||||||||
Gross margin percentage |
30.9 | % | 27.6 | % | 29.7 | % | 26.8 | % | ||||||||
Reconciliation of EBIT & EBITDA: |
||||||||||||||||
Net Income attributable to TeleTech shareholders |
$ | 20,039 | $ | 14,100 | $ | 71,754 | $ | 73,747 | ||||||||
Interest income |
(543 | ) | (1,015 | ) | (2,634 | ) | (4,816 | ) | ||||||||
Interest expense |
529 | 2,089 | 3,158 | 6,738 | ||||||||||||
Provision for income taxes |
8,998 | 6,572 | 27,477 | 27,269 | ||||||||||||
EBIT |
$ | 29,023 | $ | 21,746 | $ | 99,755 | $ | 102,938 | ||||||||
Depreciation and amortization |
13,457 | 13,384 | 56,991 | 59,166 | ||||||||||||
EBITDA |
$ | 42,480 | $ | 35,130 | $ | 156,746 | $ | 162,104 | ||||||||
Reconciliation of Free Cash Flow: |
||||||||||||||||
Cash Flow From Operating Activities: |
||||||||||||||||
Net income |
$ | 21,105 | $ | 14,696 | $ | 75,566 | $ | 77,335 | ||||||||
Adjustments to reconcile net income to net cash
provided by operating activities: |
||||||||||||||||
Depreciation and amortization |
13,457 | 13,384 | 56,991 | 59,166 | ||||||||||||
Other |
(26,568 | ) | 7,187 | 28,115 | 24,065 | |||||||||||
Net cash provided by operating activities |
7,994 | 35,267 | 160,672 | 160,566 | ||||||||||||
Less Total Capital Expenditures |
5,096 | 9,984 | 24,188 | 61,712 | ||||||||||||
Free Cash Flow |
$ | 2,898 | $ | 25,283 | $ | 136,484 | $ | 98,854 | ||||||||
Reconciliation of Non-GAAP Income from Operations: |
||||||||||||||||
Income from Operations |
$ | 29,339 | $ | 23,254 | $ | 100,709 | $ | 108,958 | ||||||||
Restructuring charges, net |
58 | 1,402 | 5,072 | 6,059 | ||||||||||||
Impairment losses |
| 985 | 4,587 | 2,018 | ||||||||||||
Equity-based comp review and restatement expenses |
195 | 3,906 | (65 | ) | 14,645 | |||||||||||
Non-GAAP Income from Operations |
$ | 29,592 | $ | 29,547 | $ | 110,303 | $ | 131,680 | ||||||||
Reconciliation of Non-GAAP EPS: |
||||||||||||||||
Net Income attributable to TeleTech shareholders |
$ | 20,039 | $ | 14,100 | $ | 71,754 | $ | 73,747 | ||||||||
Add: Asset impairment and restructuring charges,
net of related taxes |
40 | 1,528 | 6,481 | 5,169 | ||||||||||||
Add: Equity-based comp review and restatement exp,
net of related taxes |
135 | 2,500 | (44 | ) | 9,373 | |||||||||||
Less: Release of Income Tax Valuation Allowance |
| | | (2,915 | ) | |||||||||||
Non-GAAP Net Income attributable to TeleTech
shareholders |
$ | 20,214 | $ | 18,128 | $ | 78,191 | $ | 85,374 | ||||||||
Diluted shares outstanding |
64,243 | 65,217 | 64,238 | 69,578 | ||||||||||||
Non-GAAP EPS attributable to TeleTech shareholders |
$ | 0.31 | $ | 0.28 | $ | 1.22 | $ | 1.23 | ||||||||
Reconciliation of Non-GAAP EBITDA: |
||||||||||||||||
Net Income attributable to TeleTech shareholders |
$ | 20,039 | $ | 14,100 | $ | 71,754 | $ | 73,747 | ||||||||
Interest income |
(543 | ) | (1,015 | ) | (2,634 | ) | (4,816 | ) | ||||||||
Interest expense |
529 | 2,089 | 3,158 | 6,738 | ||||||||||||
Provision for income taxes |
8,998 | 6,572 | 27,477 | 27,269 | ||||||||||||
Depreciation and amortization |
13,457 | 13,384 | 56,991 | 59,166 | ||||||||||||
Asset impairment and restructuring charges |
58 | 2,387 | 9,659 | 8,077 | ||||||||||||
Equity-based comp review and restatement expenses |
195 | 3,906 | (65 | ) | 14,645 | |||||||||||
Equity-based compensation expenses |
2,680 | 2,411 | 11,640 | 10,101 | ||||||||||||
Non-GAAP EBITDA |
$ | 45,413 | $ | 43,834 | $ | 177,980 | $ | 194,927 |