Achieves First Quarter 2011 Revenue of $281
Million;
Signs $100 Million of New Business in First Quarter;
Generates $21 Million in Free Cash Flow and Repurchases $34
Million in Stock;
Reaffirms 2011 and Longer-Term Revenue and Operating Margin
Outlook
ENGLEWOOD, Colo., May 03, 2011 (BUSINESS WIRE) --
TeleTech Holdings, Inc. (NASDAQ: TTEC), one of the largest
global providers of strategic consulting and technology-enabled
business process outsourcing solutions that drive commerce and
lifetime customer value, today announced financial results for the
first quarter ended March 31, 2011. The Company also filed its
Quarterly Report on Form 10-Q with the Securities and Exchange
Commission for the quarter ended March 31, 2011.
"We are pleased with our financial performance in the first
quarter," said Ken Tuchman, chairman and chief executive officer.
"Our year-over-year revenue growth, improved operating performance
and new business wins of $100 million in the first quarter reflect
the value of our strategic investments in revenue diversification,
innovation, and sales and marketing.
"Well run companies are increasingly recognizing the critical
importance of placing the customer at the center of their business
strategy," continued Tuchman. "Our ability to serve as both a
strategic advisor and implementation partner enables us to design
and execute transformative, technology-focused, customer-centric
strategies that deliver the highest value outcome for our clients
and their customers."
FIRST QUARTER 2011 FINANCIAL HIGHLIGHTS
TeleTech's first quarter 2011 revenue was $281.0 million
compared to $271.5 million in the year-ago period. Revenue from
TeleTech's offshore locations in the first quarter accounted for
$132.4 million or 47 percent of total revenue.
TeleTech's first quarter 2011 income from operations was $21.5
million, or 7.6 percent of revenue, compared to $19.3 million, or
7.1 percent of revenue in the year-ago quarter. Income from
operations for the first quarter 2011 and 2010 included $1.0
million and $1.5 million, respectively, of unusual charges related
to restructuring and asset impairments.
Excluding the unusual charges for both periods mentioned above,
TeleTech's first quarter 2011 non-GAAP income from operations was
$22.5 million, or 8.0 percent of revenue, as compared to 7.7
percent in the year-ago quarter.
First quarter 2011 fully diluted earnings per share attributable
to TeleTech shareholders was 18 cents compared to first quarter
2010 fully diluted earnings per share of 21 cents. First quarter
2011 net income included a net increase to tax expense of $5.9
million related to changes in judgment for uncertain tax
positions.
Excluding unusual charges for both periods, TeleTech's first
quarter 2011 non-GAAP fully diluted earnings per share attributable
to TeleTech shareholders was 29 cents compared to 22 cents in the
year-ago quarter.
OTHER BUSINESS HIGHLIGHTS
New Business
During the first quarter 2011 TeleTech signed an estimated $100
million in annualized revenue from both new and existing
clients.
Strong Balance Sheet Continues to Fund Operations and
Share Repurchases
- As of March 31, 2011, TeleTech had cash
and cash equivalents of $189.7 million, $79.5 million of borrowings
on its credit facility and total other debt of $3.9 million,
resulting in a net positive cash position of $106.3 million.
- Free cash flow for the first quarter
2011 was $20.7 million compared to $44.8 million in the year-ago
quarter.
- Capital expenditures for the first
quarter 2011 were $3.9 million, down from $6.6 million in the first
quarter 2010.
- TeleTech repurchased approximately 1.6
million shares of common stock during the first quarter 2011 for a
total cost of approximately $34 million. As of March 31, 2011,
there was approximately $62 million authorized for future share
repurchases.
2011 BUSINESS OUTLOOK
As outlined earlier this year, TeleTech estimates 2011 revenue
will grow approximately 5 to 6 percent over 2010 revenue, and full
year 2011 operating margin will range between 8.5 and 9.5 percent,
excluding unusual charges, if any.
LONGER-TERM FINANCIAL GOALS
As TeleTech continues to expand its delivery of higher value,
fully integrated solutions that span the entire customer experience
continuum, TeleTech reiterates its expectation that revenue will
increase from 2010 to 2014 at a compounded annual growth rate
between 9 and 10 percent. Furthermore, it expects revenue from
consultative and technology-based solutions to increase to
approximately 25 percent of total 2014 revenue and expects
operating margin to range between 11 and 12 percent by 2014.
CONFERENCE CALL
A conference call and webcast with management will be held on
Wednesday, May 4, 2011 at 8:30 a.m. Eastern Time. You are invited
to join a live webcast of the conference call by visiting the
"Investors" section of the TeleTech website at
http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.teletech.com&esheet=6705061&lan=en-US&anchor=www.teletech.com&index=2&md5=e2f14852e18fd62384ea9ba12b765ad1.
If you are unable to participate during the live webcast, a replay
will be available on the TeleTech website through Wednesday, May
18, 2011.
NON-GAAP FINANCIAL MEASURES
To supplement the Company's 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
TeleTech's management in its financial and operational decision
making and allows investors to see TeleTech's results "through the
eyes" of management. TeleTech also believes that providing this
information better enables TeleTech's 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
For nearly 30 years, TeleTech and its subsidiaries have helped
the world's largest companies achieve their most ambitious goals.
As the go-to partner for the Global 1000, the TeleTech group of
companies delivers technology-based solutions that maximize
revenue, transform customer experiences and optimize business
processes. From strategic consulting to operational execution,
TeleTech's approximately 44,000 employees drive success for clients
in the communications and media, financial services, government,
healthcare, technology, transportation and retail industries. Our
companies deliver award-winning integrated solutions in support of
professional services,
revenue generation,
customer innovation,
enterprise innovation,
hosted technology and
learning innovation. For additional information, please visit
http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.teletech.com&esheet=6705061&lan=en-US&anchor=www.teletech.com&index=9&md5=815f751fd4745a2a28dd529f6c102bbf.
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
TeleTech's 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 the successful integration of acquired
companies and the sales of new products; including sales of new
products; the possibility of lower revenue or price pressure from
our 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; the risk of
integrating strategic acquisitions; 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 terrorist-related events; risks associated with
attracting and retaining cost-effective 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 TeleTech's SEC filings, including
our Annual Report on Form 10-K for the year ended December 31,
2010. The Company's filings with the Securities and Exchange
Commission are available in the "Investors" section of TeleTech's
website, which is located at
http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.teletech.com%2F&esheet=6705061&lan=en-US&anchor=www.teletech.com&index=10&md5=1c232708aeec0bbe81527ffeb4d7f70f.
All information in this release is as of May 3, 2011. The Company
undertakes no duty to update any forward-looking statement to
conform the statement to actual results or changes in the Company's
expectations.
|
|
TELETECH HOLDINGS, INC. AND
SUBSIDIARIES
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS |
| (In
thousands, except per share data) |
|
|
| Three
months ended |
| March 31, |
| 2011 |
2010 |
|
|
Revenue |
$ |
280,979 |
$ |
271,526 |
|
|
Operating Expenses: |
| Cost of services |
199,121 |
194,618 |
| Selling,
general and administrative |
47,801 |
43,408 |
| Depreciation and
amortization |
11,598 |
12,724 |
| Restructuring charges,
net |
739 |
1,469 |
| Impairment
losses |
230 |
- |
| Total operating expenses |
259,489 |
252,219 |
|
|
Income From Operations |
21,490 |
19,307 |
|
| Other income
(expense) |
(270 |
) |
(211 |
) |
|
|
Income Before Income Taxes |
21,220 |
19,096 |
|
| Provision for
income taxes |
(9,849 |
) |
(5,054 |
) |
|
| Net
Income |
11,371 |
14,042 |
|
| Net income attributable to noncontrolling interest |
(898 |
) |
(755 |
) |
|
|
Net Income Attributable to TeleTech
Shareholders |
$ |
10,473 |
$ |
13,287 |
|
| Net Income Per Share Attributable to TeleTech
Shareholders |
|
|
Basic |
$ |
0.18 |
$ |
0.21 |
|
|
Diluted |
$ |
0.18 |
$ |
0.21 |
|
|
|
Income From Operations Margin |
7.6 |
% |
7.1 |
% |
| Net
Income Attributable to TeleTech Shareholders Margin |
3.7 |
% |
4.9 |
% |
|
Effective Tax Rate |
46.4 |
% |
26.5 |
% |
|
|
|
Weighted Average Shares Outstanding |
|
Basic |
57,190 |
61,877 |
|
Diluted |
58,797 |
63,483 |
|
|
|
TELETECH HOLDINGS, INC. AND SUBSIDIARIES |
|
SEGMENT INFORMATION |
| (In
thousands) |
|
|
| Three
months ended |
| March 31, |
| 2011 |
2010 |
|
|
Revenue: |
| North American BPO |
$ |
192,049 |
$ |
207,942 |
| International
BPO |
88,930 |
63,584 |
| Total |
$ |
280,979 |
$ |
271,526 |
|
| Income (Loss)
From Operations: |
| North American BPO |
$ |
17,568 |
$ |
19,788 |
| International
BPO |
3,922 |
(481 |
) |
| Total |
$ |
21,490 |
$ |
19,307 |
|
|
|
TELETECH HOLDINGS, INC. AND SUBSIDIARIES |
|
CONSOLIDATED BALANCE SHEETS |
| (In
thousands) |
|
|
| March
31, |
December 31, |
| 2011 |
2010 |
|
|
|
ASSETS |
| Current
assets: |
| Cash and cash
equivalents |
$ |
189,707 |
$ |
119,385 |
| Accounts receivable,
net |
224,665 |
233,706 |
| Other current
assets |
65,956 |
71,125 |
| Total current
assets |
480,328 |
424,216 |
|
| Property and
equipment, net |
98,569 |
105,528 |
| Other
assets |
131,593 |
130,879 |
|
| Total
assets |
$ |
710,490 |
$ |
660,623 |
|
| LIABILITIES AND
EQUITY |
| Total current
liabilities |
$ |
160,200 |
$ |
172,251 |
| Other long-term
liabilities |
113,008 |
33,554 |
| Total
equity |
437,282 |
454,818 |
|
| Total
liabilities and equity |
$ |
710,490 |
$ |
660,623 |
|
|
|
TELETECH HOLDINGS, INC. AND SUBSIDIARIES |
|
RECONCILIATION OF NON-GAAP FINANCIAL
INFORMATION |
| (In
thousands, except per share data) |
|
|
| Three
months ended |
| March 31, |
| 2011 |
2010 |
|
| Reconciliation of
Gross Margin: |
|
|
Revenue |
$ |
280,979 |
$ |
271,526 |
| Cost of
services |
199,121 |
194,618 |
| Gross
margin |
$ |
81,858 |
$ |
76,908 |
|
| Gross margin
percentage |
29.1 |
% |
28.3 |
% |
|
|
| Reconciliation of
EBIT & EBITDA: |
|
| Net Income
attributable to TeleTech shareholders |
$ |
10,473 |
$ |
13,287 |
| Interest income |
(666 |
) |
(574 |
) |
| Interest expense |
1,380 |
817 |
| Provision for
income taxes |
9,849 |
5,054 |
|
EBIT |
$ |
21,036 |
$ |
18,584 |
|
| Depreciation and
amortization |
11,598 |
12,724 |
|
|
EBITDA |
$ |
32,634 |
$ |
31,308 |
|
|
| Reconciliation of
Free Cash Flow: |
|
| Cash Flow From
Operating Activities: |
| Net income |
$ |
11,371 |
$ |
14,042 |
| Adjustments to reconcile
net income to net cash |
| provided by operating
activities: |
| Depreciation and
amortization |
11,598 |
12,724 |
| Other |
1,639 |
24,666 |
| Net cash provided by
operating activities |
24,608 |
51,432 |
|
| Less - Total
Capital Expenditures |
3,870 |
6,608 |
|
| Free Cash
Flow |
$ |
20,738 |
$ |
44,824 |
|
|
| Reconciliation of
Non-GAAP Income from Operations: |
|
| Income from
Operations |
$ |
21,490 |
$ |
19,307 |
| Restructuring charges,
net |
739 |
1,469 |
| Impairment
losses |
230 |
- |
|
| Non-GAAP Income
from Operations |
$ |
22,459 |
$ |
20,776 |
|
|
| Reconciliation of
Non-GAAP EPS: |
|
| Net Income
attributable to TeleTech shareholders |
$ |
10,473 |
$ |
13,287 |
| Add:
Asset impairment and restructuring charges, net of related
taxes |
683 |
987 |
|
Add: Changes in judgement for uncertain
tax positions recorded in prior periods
|
5,850 |
- |
|
| Non-GAAP Net
Income attributable to TeleTech shareholders |
$ |
17,006 |
$ |
14,274 |
|
| Diluted shares
outstanding |
58,797 |
63,483 |
|
| Non-GAAP EPS
attributable to TeleTech shareholders |
$ |
0.29 |
$ |
0.22 |
|
|
| Reconciliation of
Non-GAAP EBITDA: |
|
| Net Income
attributable to TeleTech shareholders |
$ |
10,473 |
$ |
13,287 |
| Interest income |
(666 |
) |
(574 |
) |
| Interest expense |
1,380 |
817 |
| Provision for income
taxes |
9,849 |
5,054 |
| Depreciation and
amortization |
11,598 |
12,724 |
| Asset impairment and
restructuring charges |
969 |
1,469 |
|
Equity-based compensation expense
|
3,760 |
3,188 |
|
| Non-GAAP
EBITDA |
$ |
37,363 |
$ |
35,965 |
SOURCE: TeleTech Holdings, Inc.
TeleTech Holdings, Inc.
Investor Contact
Karen Breen, 303-397-8592
or
Media Contact
Bob Livingston, 303-397-8958
