Continues Relationship With Wireless Division of Major Client;
Plans Fourth Quarter Charge to Strengthen Its Competitive Position
DENVER, Dec. 19 /PRNewswire-FirstCall/ --
TeleTech Holdings, Inc. (Nasdaq: TTEC), a leading global provider of customer
management solutions, today provided an update on the status of a large client
relationship and its overall business environment.
TeleTech will continue its relationship with the wireless division of its
largest telecommunications client. This program represented approximately
four percent of TeleTech's revenues through the first nine months of 2002, or
approximately $32 million. Under the new agreement, TeleTech will continue
assisting consumers, as well as small and medium businesses, in obtaining new
wireless services across certain U.S. regions.
Additionally, as part of a continual review of its operations, TeleTech
expects to exit or reduce the carrying value of certain customer management
centers in its U.S., European, and Latin American operations to better
position the company for future profitable growth. Furthermore, TeleTech will
undertake a workforce reduction of approximately 200 professional employees.
In addition, during the fourth quarter 2002, TeleTech acquired the shares of
enhansiv holdings, inc. ("EHI") common stock from the four remaining outside
shareholders of EHI. Consequently, TeleTech owns 100 percent of the common
stock of EHI.
As a result of the items described above, TeleTech expects to record a
pre-tax charge in the fourth quarter 2002 ranging between $40 million and
$50 million. Between $6 million and $10 million is estimated to be
cash-related charges primarily for severance and the EHI transaction, with the
remainder being non-cash charges for asset impairments or facility closures.
TeleTech believes the closure of customer management centers and the workforce
reduction will take place throughout 2003.
"I am pleased we will continue our relationship with the wireless division
of our largest client and look forward to continuing to provide exceptional
service to their wireless subscribers," said Kenneth Tuchman, TeleTech's
Chairman and Chief Executive Officer.
"Furthermore, the global economic environment continues to be challenging
resulting in a sales cycle that has continued to lengthen. As a result, we
must continually evaluate and streamline our operations to position the
company for future growth opportunities," continued Tuchman. "We will
continue to selectively pursue expansion into international locations that
allow TeleTech to provide more competitive and flexible customer management
solutions."
"In light of the ongoing challenges in the global business environment,
and upon careful assessment of our operations, it became necessary for
TeleTech to evaluate certain assets and undertake a workforce reduction," said
Margot O'Dell, TeleTech's Chief Financial Officer. "The resulting fourth
quarter charge is primarily related to asset impairments of under-performing
customer management centers, and will better position the company in the
global customer management marketplace."
"TeleTech continues to maintain a conservative balance sheet and generate
significant free cash flows during a difficult economic period, while actively
focusing on closing new business opportunities," continued O'Dell. "At the
end of the third quarter 2002, TeleTech had a debt to capitalization ratio of
19 percent and $107.0 million of cash and short-term investments."
BUSINESS OUTLOOK
TeleTech expects revenue and fully diluted earnings per share for the
fourth quarter 2002 to be in line with its original guidance, before the
effect of the charges discussed above. TeleTech expects fourth quarter 2002
revenue will range between $250 million and $255 million, while fully diluted
earnings per share is expected to be at the low end of the company's original
guidance of 7 cents to 9 cents, before the effect of the charges described
above.
The company expects to provide an update on the initiatives discussed
above and its approach to providing 2003 earnings guidance when it announces
fourth quarter 2002 results in February.
TELETECH PROFILE
For twenty years, TeleTech has managed the customer experience for some of
the world's largest enterprises. TeleTech's innovative customer care services
help companies acquire, serve, grow, and retain customers throughout the
entire relationship lifecycle. TeleTech offers solutions to a variety of
industries including financial services, transportation, communications,
government, healthcare, and travel. With a presence that spans North America,
Asia-Pacific, Europe, and Latin America, TeleTech provides comprehensive
customer care services to global organizations. Additional information on
TeleTech can be found at 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, including:
TeleTech's ability to predict future revenue and associated costs; 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; 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 products and services of TeleTech's
clients. Readers are encouraged to review TeleTech's 2001 Form 10-K, first,
second and third quarter 2002 Forms 10-Q, 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.
SOURCE TeleTech Holdings, Inc.
/CONTACT: Karen Breen, +1-303-397-8592, karen.breen@teletech.com, or Dan
Campbell, +1-303-397-8634, dan.campbell@teletech.com, both Investor Relations
of TeleTech Holdings, Inc./
