DENVER, July 20 /PRNewswire/ -- TeleTech Holdings, Inc. (Nasdaq: TTEC),
the leading global provider of e-commerce-enabling customer management
solutions (eCRM), today announced record second quarter financial results.
Net income for the second quarter 2000 was $9.9 million, or 15 cents per
share on a diluted basis, excluding a net, non-operational, one-time gain of
$12 million, principally due to the sale of a portion of an equity investment.
This represents an 81 percent increase over second quarter 1999 net income of
$5.5 million or 9 cents per share on a diluted basis. Including the net,
non-operational, one-time gain, TeleTech's second quarter 2000 net income was
$17.6 million, or 26 cents per share on a diluted basis.
Revenues for the second quarter 2000 increased to a record $181.8 million,
up 51 percent from $120.6 million in the second quarter 1999. Approximately
94 percent of this revenue growth was organic, with the balance derived from
acquisitions completed in the second half of 1999.
Operating margin for the second quarter 2000 increased for the fifth
consecutive quarter to 9.5 percent, up 190 basis points from second quarter
1999 operating margin of 7.6 percent and up 40 basis points from first quarter
2000 operating margin of 9.1 percent. This improvement is primarily
attributable to increased capacity utilization, operational efficiencies and
strong margin performance by our Percepta joint venture with Ford.
"This was a record quarter for TeleTech," commented Scott Thompson,
TeleTech chief executive officer and president. "We continued to aggressively
grow the top line, delivering strong growth across all geographies and
verticals. We signed a significant amount of new business, improved our
operating margins, and successfully launched the operations of our Percepta
joint venture with Ford in several regions around the world. These
accomplishments contributed to an acceleration of our growth rate and
continued improvement in our operating performance, two key indicators of the
overall strength of our company."
Revenues for the first six months of 2000 increased $109.1 million, or
47 percent, to $340.3 million from $231.2 million for the first six months of
1999. TeleTech's net income for the first six months of 2000 was
$18.5 million, or 28 cents per share on a diluted basis excluding the net,
non-operational, one-time gain. This represents an 80 percent increase over
net income of $10.3 million, or 16 cents per share on a diluted basis, for the
same period in 1999.
Revenues from TeleTech's e-commerce and e-commerce infrastructure clients
for the second quarter 2000 grew 94 percent from the second quarter 1999,
reaching $44 million and representing 24 percent of second quarter
consolidated revenues.
Revenues from TeleTech's international operations totaled $60 million, a
135 percent increase over the same period in 1999, and representing 33 percent
of TeleTech's second quarter revenues. The increase was primarily
attributable to growth in TeleTech's Latin American, Canadian and European
operations, all which grew more than 200 percent year-over-year.
"We demonstrated solid performance across the board," said Thompson. "Our
Percepta joint venture with Ford got off to a strong start, now servicing Ford
customers across the United States, Canada, Australia and most recently,
Europe. Given the significant amount of revenues the JV contributed to the
second quarter, we are confident that it is on track for a strong 2000."
"We ended the second quarter with a very strong balance sheet," commented
Michael Foss, TeleTech chief financial officer. "Our cash and short-term
investments amounted to $124 million. This represents very significant
improvement over year-end 1999 and is more than double our current debt
position.
"Our current financial position combined with our strong operational
performance clearly gives us the internal capability to fund the continued
rapid growth of our existing business as well as key growth initiatives,"
continued Foss.
New Contract Awards
During the second quarter TeleTech signed 13 new contracts with global
leaders in the financial services, telecommunications, technology and
e-commerce industries. Many clients request their names not be disclosed for
competitive reasons, however new wins included a leading global investment
bank; a large cable television service provider; a leading global media
company; two high profile online banks; and a leading provider of e-business
solutions.
TeleTech will implement, operate and support e-commerce-enabled
multi-channel customer management solutions on behalf of these clients,
enabling their customers to contact them from anywhere, at anytime, over any
medium. In aggregate, these new business wins should account for in excess of
$160 million in revenues over the next three years.
Global Expansion
To meet the demands of its growing client base, TeleTech expanded its
global operations during the second quarter. The company opened a new
550-workstation multi-client customer interaction center in Morgantown, West
Virginia, a 550-workstation multi-client center in Leon, Mexico, which has the
capability to expand to 1,100 workstations, as well as a new 530-workstation
dedicated center in London, Ontario, Canada on behalf of a large client in the
telecommunications industry. TeleTech now operates 15,300 Internet-enabled
workstations across 35 customer interaction centers in nine countries, serving
customers in 25 countries.
"Global expansion is a strategic imperative for TeleTech," commented
Thompson. "Our ability to offer a uniform platform across multiple
geographies enables our Global 1000 clients to leverage this platform
regardless of the country or countries in which they choose to do business
with us. This quarter we opened three new world-class facilities, and we
expect to continue to expand into new markets over the next several quarters."
Insource Solutions(TM)
TeleTech also announced today the formation of a new business unit,
Insource Solutions(TM), that is focused exclusively on providing world-class
eCRM solutions to businesses that internally manage their customer
relationship management function. Insource Solutions offers various
professional services designed to assist companies enhance or build their own
customer interaction environments, as well as customized, remote-hosted
technology solutions to in-house operators, a marketplace TeleTech has
classified as the "insource" market.
"This is arguably the most strategic move in TeleTech's history," said
Thompson. "Looking ahead, we will be attacking a marketplace that has
historically been our largest competitor, and providing a solution that could
be the single biggest growth driver for the company. Our 18 years of
experience in building, staffing, managing and Internet-enabling customer
management operations coupled with our ability to offer a uniform technology
platform across a global enterprise presents our existing and potential
clients with a solution that is unmatched in the industry. We are extremely
well positioned to capitalize on the market opportunity, which is believed to
be ten times the size of our traditional market."
TELETECH PROFILE
Founded in 1982, TeleTech is the leading provider of integrated,
e-commerce-enabling customer management solutions (eCRM) for global
organizations predominantly in the telecommunications, financial services,
technology, government and transportation industries. Its innovative customer
interaction platform, CyberCare(TM), integrates the full spectrum of voice and
Internet communications, including custom e-mail response, "chat" and
extensive Web co-browsing capabilities. TeleTech operates
15,300 state-of-the-art customer interaction center workstations and employs
19,300 people in nine countries. Through 35 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/partners 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; TeleTech's ability to predict 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 and quarterly report on Form 10-Q for the first quarter 2000, which
describe other important factors that may impact TeleTech's business, results
of operations and financial condition. However, these factors should not be
construed as an exhaustive list. TeleTech cannot always predict which factors
could cause actual results to differ materially from those in its
forward-looking statements. In light of these risks and uncertainties the
forward-looking statements might not occur. TeleTech assumes no obligation to
update its forward-looking statements to reflect actual results or changes in
factors affecting such forward-looking statements.
TELETECH HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
Three months ended Six months ended
June 30, June 30,
2000 1999 2000 1999
Revenues $181,846 $120,565 $340,340 $231,203
Operating expenses:
Costs of services 117,913 79,835 222,915 154,203
Other operating
expenses 46,660 31,565 85,723 59,969
Total operating
expenses 164,573 111,400 308,638 214,172
Operating Income 17,273 9,165 31,702 17,031
Other income (expense) 11,688 1 11,534 204
Income Before
Income Taxes 28,961 9,166 43,236 17,235
Income tax expense 10,952 3,712 16,555 6,970
Net Income before
Minority Interest 18,009 5,454 26,681 10,265
Minority interest (399) -- (399) --
Net Income $17,610 $5,454 $26,282 $10,265
Basic Earnings Per Share $0.28 $0.09 $0.42 $0.17
Diluted Earnings Per Share $0.26 $0.09 $0.39 $0.16
Operating Margin 9.5% 7.6% 9.3% 7.4%
Net Income Margin 9.7% 4.5% 7.7% 4.4%
Effective Tax Rate 37.8% 40.5% 38.3% 40.4%
Shares Outstanding
Basic 62,607 61,095 62,299 60,933
Diluted 66,700 62,692 66,716 62,371
Excluding Net,
Non-Operational
One-time Gain
Net Income $9,852 $5,454 $18,524 $10,265
Basic Earnings
Per Share $0.16 $0.09 $0.30 $0.17
Diluted Earnings
Per Share $0.15 $0.09 $0.28 $0.16
TELETECH HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, December 31,
2000 1999
ASSETS
Current assets:
Cash and cash equivalents $6,119 $14,663
Short-term investments 118,198 41,599
Accounts receivable, net 123,601 78,753
Other current assets 7,852 10,250
Total current assets 255,770 145,265
Property and Equipment, net 136,912 108,945
Other assets 45,631 39,520
Total assets $438,313 $293,730
LIABILITIES AND STOCKHOLDERS' EQUITY
Total current liabilities $96,043 $63,528
Total noncurrent liabilities 51,881 25,166
Total stockholders' equity 290,389 205,036
Total liabilities and stockholders' equity $438,313 $293,730
TELETECH HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED CASH FLOW INFORMATION
(In thousands)
Six months ended
June 30,
2000 1999
Cash flow from operating activities:
Net income $26,282 $10,265
Adjustments to reconcile net income to
net cash provided from
operating activities:
Depreciation and amortization 18,197 13,983
Other (46,835) (8,486)
Net cash (used in) provided
by operating activities $(2,356) $15,762
Total Capital Expenditures $45,818 $30,835
(inclusive of capital leases)
SOURCE TeleTech Holdings, Inc.
Web site:
http://www.teletech.com
Company News On-Call:
http://www.prnewswire.com/comp/107907.htmlor fax, 800-758-5804, ext. 107907
CONTACT: Emily Eikelberner, Investor Relations of TeleTech
Holdings, 303-894-7360,
emilyeikelberner@teletech.com
