DENVER, Oct. 23 /PRNewswire/ -- TeleTech Holdings, Inc. (Nasdaq:
TTEC),
the fastest-growing global provider of customer relationship management and
B2B infrastructure services, today announced record third quarter financial
results.
Net income for the third quarter 2000 was $11.7 million, or 17 cents per
share on a diluted basis, excluding a net one-time gain of $19 million,
principally due to the sale of a portion of an equity investment. This
represents a 68 percent increase over third quarter 1999 net income of
$7.0 million, or 10 cents per share on a diluted basis, excluding a one-time
gain. Including the net, one-time gain, TeleTech's third quarter 2000 net
income was $30.7 million, or 44 cents per share on a diluted basis.
Revenues for the third quarter 2000 increased to a record $212.7 million,
up 58 percent from $134.7 million in the third quarter 1999. Approximately
95 percent of the $78.0 million revenue growth was organic, with the balance
derived from an acquisition completed in the fourth quarter of 1999.
Operating margin for the third quarter 2000, exclusive of the impacts of
the disposition of the company's Pamet River subsidiary, increased to
9.6 percent, up 110 basis points from third quarter 1999 operating margin of
8.5 percent and was up from reported second quarter 2000 operating margin of
9.5 percent. This improvement was primarily attributable to strong growth in
revenues both from existing and new clients and increased operating
efficiencies. This increase was partially offset by significant incremental
investments in the company's international expansion efforts and insource
solutions business.
"TeleTech's third quarter results reflect our intense focus on execution,"
commented Scott Thompson, TeleTech CEO and president. "Our revenue growth is
the strongest quarterly growth in more than three years, and an acceleration
over the growth we achieved in both the first and second quarters of 2000. It
is important to note that during this period of fast-paced growth, we
continued to drive improved operating performance. We attribute this to our
continued success in winning large, long-term contracts, the expansion of our
existing client relationships, solid performance across our international
operations as well as continued focus on operating efficiencies."
FINANCIAL HIGHLIGHTS
Revenues for the first nine months of 2000 increased $199.0 million, or
52 percent, to $582.6 million from $383.6 million for the first nine months of
1999. TeleTech's net income for the first nine months of 2000 was
$32.1 million, or 46 cents per share on a diluted basis excluding net,
one-time gains. This represents a 68 percent increase over net income of
$19.1 million, or 29 cents per share on a diluted basis, for the same period
in 1999, excluding a one-time gain.
Revenues from TeleTech's e-commerce and e-commerce infrastructure clients
for the third quarter 2000 grew 90 percent from the third quarter 1999,
reaching $44.4 million and representing 21 percent of third quarter
consolidated revenues.
Revenues from TeleTech's international operations totaled $90.3 million,
representing 43 percent of TeleTech's third quarter revenues, and a
143 percent increase over international revenues of $37.1 in the third quarter
1999. Approximately 44 percent of the $53.2 million increase was driven by
TeleTech's support of U.S. customers from overseas facilities.
STRATEGIC INITIATIVES
"TeleTech made significant inroads in three key strategic growth areas
during the third quarter," said Thompson. "Through accretive acquisitions,
joint ventures and other strategic alliances, TeleTech will further its
globalization, verticalization and insource strategies. By focusing on these
three areas, we continue to execute our breakout strategy and are creating a
new industry paradigm. Our longstanding relationships with leaders in
fast-growth vertical markets coupled with our ability to scale a robust
end-to-end solution across our expansive global footprint whether in an
insource or outsource environment, presents an unparalleled value proposition
to our clients and further distances TeleTech from the traditional
competition."
Globalization
To meet the demands of its growing global client base, in the third
quarter TeleTech announced its plans to open two new Internet-enabled customer
interaction centers outside of the U.S., in North Bay, Ontario, Canada and
Belfast, Northern Ireland. Additionally, TeleTech successfully completed the
acquisition of the largest privately held CRM company in Spain, expanding its
global reach to ten countries and significantly enhancing the company's
presence in Europe.
Verticalization
Consistent with its vertical market expansion plans, TeleTech announced
two strategic transactions that will significantly strengthen its positioning
in two high-growth vertical markets, financial services and wireless.
TeleTech formed a strategic alliance with PricewaterhouseCoopers, the world's
largest professional services organization. The two companies are working
together to deliver a fully integrated, end-to-end eCRM solution to the
financial services sector, an area in which both TeleTech and
PricewaterhouseCoopers have proven experience with some of the world's leading
financial institutions.
TeleTech's second strategic transaction was in the wireless area, with the
recently announced agreement to acquire the customer care division of Boston
Communications Group (Nasdaq: BCGI). Boston Communications Group is the
leading provider of services to wireless carriers in North America. TeleTech
also announced the formation of a strategic alliance with BCGI to jointly
market and sell products on a worldwide basis.
During the third quarter, TeleTech also announced an agreement to acquire
Newgen Results Corporation (Nasdaq: NWGN), to further strengthen its position
in the transportation sector. The transaction is a stock-for-stock deal
valued at approximately $200 million. The acquisition will also allow
TeleTech to broaden its product offering by increasing its existing database
management capabilities and enhancing its end-to-end eCRM solution with the
addition of an enterprise channel management offering. The transaction is
expected to close in the fourth quarter of 2000.
Insource Market
TeleTech today announced the launch of enhansiv inc., a subsidiary
dedicated to the development, deployment and management of remote-hosted eCRM
technology solutions. enhansiv's multi-channel customer relationship
management solutions are delivered across a virtual, centralized
infrastructure, enabling companies seeking to implement effective CRM
strategies to reap the benefits of faster time to market, economies of scale
and a uniform platform across the entire enterprise.
"We are very optimistic about the future of enhansiv and its implications
on TeleTech's business and have continued to invest heavily in this
initiative," said Thompson. "enhansiv presents TeleTech with a new operating
paradigm that can be leveraged both internally and externally. enhansiv's
remote-hosted technology can potentially drive significant cost efficiencies
for TeleTech, as well as open the doors to new markets and opportunities,
including the expansive insource market and smaller customers we traditionally
had to turn away."
BUSINESS OUTLOOK
Following are a number of statements based on current expectations
regarding TeleTech's outlook on its future financial results. Note: the
following expectations do not include the anticipated acquisition of Newgen
Results Corporation.
-- For the fourth quarter of 2000, the company anticipates revenue to be
within the current analyst estimate range of $201 million to
$228 million, and net income to be within the current analyst estimate
range of 20 to 22 cents per diluted share.
-- For the fiscal year 2000, the company anticipates capital expenditures
to be within a range of $105 to $115 million.
-- For the fiscal year 2001, the company anticipates revenue to be within
the current analyst estimate range of $1.0 billion to $1.1 billion, and
net income to be within the current analyst estimate range of 97 cents
to $1.06 per diluted share.
-- For the fiscal year 2001, the company anticipates capital expenditures
to be consistent with capital expenditures in 2000.
In connection with the recent adoption of new SEC rules on corporate
disclosure, TeleTech is adopting the following procedures for communicating
its outlook for financial results. All guidance will be published within
TeleTech's quarterly earnings releases or by other publicly available means.
TeleTech will keep its earnings releases publicly available on its web site at
http://www.teletech.com.
TELETECH PROFILE
Founded in 1982, TeleTech is the leading provider of integrated,
eCommerce-enabling customer relationship management solutions (eCRM) for
global organizations predominantly in the telecommunications, financial
services, technology, government and transportation industries. TeleTech has
operations in ten countries which include Argentina, Australia, Brazil,
Canada, Mexico, New Zealand, Singapore, Spain, the U.K. and the U.S.
TeleTech's eCRM capabilities, including B2B electronic channel management and
database management, help companies inform, acquire, service, grow and retain
their customers throughout the entire relationship lifecycle. Its innovative
customer interaction platform, CyberCare, integrates the full spectrum of
voice and Internet communications, including custom e-mail response, "chat"
and extensive Web co-browsing capabilities. Through 43 customer interaction
centers in the Americas, Europe and Asia, TeleTech couples high-velocity
e-infrastructure service deployment with premier quality e-customer
relationship management to assure our clients unparalleled success in
acquiring, retaining and growing customer relationships. Information
regarding TeleTech Holdings can be found on the Worldwide Web at
http://www.teletech.com.
FORWARD LOOKING STATEMENTS
All statements not based on historical fact are forward-looking statements
that involve substantial risks and uncertainties. In accordance with the
Private Securities Litigation Reform Act of 1995, following are important
factors that could cause TeleTech's actual results to differ materially from
those expressed or implied by such forward-looking statements: lower than
anticipated customer interaction center capacity utilization; the loss or
delay in implementation of a customer management program; TeleTech's ability
to build-out facilities in a timely and economic manner; greater than
anticipated competition from new entrants into the customer care market,
causing increased price competition or loss of clients; the loss of one or
more significant clients; higher than anticipated start-up costs associated
with new business opportunities and ventures such as enhansiv; TeleTech's
ability to predict future revenues and associated costs, as well as the
potential volume or profitability of any future technology or consulting
sales; TeleTech's agreements with clients may be canceled on relatively short
notice; and TeleTech's ability to generate a specific level of revenue is
dependent upon customer interest in and use of the Company's clients' products
and services. Readers are encouraged to review TeleTech's 1999 Annual Report
on Form 10-K , Quarterly Reports on Form 10-Q, for first and second quarters
2000, and other publicly filed documents which describe other important
factors that may impact TeleTech's business, results of operations and
financial condition. TeleTech undertakes no obligation to update its forward
looking statements after the date of this release.
TELETECH HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
Three months ended Nine months ended
September 30, September 30,
2000 1999 2000 1999
Revenues $212,716 $134,691 $582,570 $383,567
Operating expenses:
Costs of services 135,532 90,336 381,523 256,576
Other operating
expenses 56,750 32,958 145,786 95,576
Loss on disposal
of subsidiary 3,419 -- 3,419 --
Total operating
expenses 195,701 123,294 530,728 352,152
Operating Income 17,015 11,397 51,842 31,415
Other income (expense) 32,945 6,887 44,255 7,074
Income Before
Income Taxes 49,960 18,284 96,097 38,489
Income tax expense 18,739 7,248 36,306 15,257
Net Income before
Minority Interest 31,221 11,036 59,791 23,232
Minority interest (526) -- (925) --
Net Income $30,695 $11,036 $58,866 $23,232
Basic Earnings Per Share $0.46 $0.17 $0.90 $0.36
Diluted Earnings Per Share $0.44 $0.17 $0.84 $0.35
Operating Margin 8.0% 8.5% 8.9% 8.2%
Net Income Margin 14.4% 8.2% 10.1% 6.1%
Effective Tax Rate 37.5% 39.6% 37.8% 39.6%
Shares Outstanding
Basic 66,105 64,511 65,743 64,301
Diluted 70,472 66,544 70,144 65,871
Excluding One Time Effects
Operating Income 20,434 11,397 55,261 31,415
Operating Margin 9.6% 8.5% 9.5% 8.2%
Net Income $11,651 $6,951 $32,064 $19,147
Basic Earnings Per Share $0.18 $0.11 $0.49 $0.30
Diluted Earnings
Per Share $0.17 $0.10 $0.46 $0.29
Effective Tax Rate 39.3% 39.6% 39.3% 39.6%
TELETECH HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30, December 31,
2000 1999
ASSETS
Current assets:
Cash and cash equivalents $19,275 $16,227
Short-term investments 76,554 41,621
Accounts receivable, net 166,333 91,979
Other current assets 5,283 10,250
Total current assets 267,445 160,077
Property and Equipment, net 155,458 111,644
Other assets 44,861 39,763
Total assets $467,764 $311,484
LIABILITIES AND STOCKHOLDERS' EQUITY
Total current liabilities $99,444 $74,507
Total noncurrent liabilities 63,223 26,179
Total stockholders' equity 305,097 210,798
Total liabilities and
stockholders' equity $467,764 $311,484
TELETECH HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED CASH FLOW INFORMATION
(In thousands)
Nine months ended
September 30,
2000 1999
Cash flow from operating activities:
Net income $58,866 $23,232
Adjustments to reconcile net income
to net cash provided from
operating activities:
Depreciation and amortization 30,378 21,465
Other (98,865) (5,830)
Net cash (used in) provided
by operating activities $(9,621) $38,867
Total Capital Expenditures $76,216 $40,169
(inclusive of capital leases)
SOURCE TeleTech Holdings, Inc.
Web site: http://www.teletech.com
Company News On-Call: http://www.prnewswire.com/comp/107907.html
or fax, 800-758-5804, ext. 107907
CONTACT: Kirsten Hamling, Investor Relations of TeleTech
Holdings, Inc., 303-894-7379, kirstenhamling@teletech.com
