Record Revenue Expected for Fourth Quarter 2005, Ten Percent of Outstanding
Common Stock Repurchased During 2005
DENVER, Jan. 12 /PRNewswire-FirstCall/ -- TeleTech Holdings, Inc.
(Nasdaq: TTEC), a global provider of customer management and transaction-based
business process outsourcing (BPO) solutions, today provided a business
update.
(Logo: http://www.newscom.com/cgi-bin/prnh/20050404/LAM124LOGO )
TeleTech continues to execute on its principal goals of enhancing future
profitability by continuing to, among other tactics:
- deliver clients the highest Total Value,
- win new large global client agreements,
- renew and expand existing client relationships,
- improve Newgen's financial performance, and
- expand capacity to meet client demand and rationalize unprofitable
capacity.
This business update reports upon recent progress on certain aspects of
these plans, among other information.
Deliver Clients the Highest Total Value
TeleTech's strategy is to win new clients and expand existing client
relationships by delivering the highest Total Value. This strategy has been
executed by continual investment in technology, patented processes, and human
capital.
Win New Large Global Client Agreements
Since early November, TeleTech won "New Client Logo" agreements estimated
at $10 million annually, primarily in the financial services and utility
industries.
2005 Fourth Quarter Revenue
TeleTech currently estimates fourth quarter 2005 revenue will be an
all-time historic high of approximately $300 million. As previously
announced, TeleTech Government Solutions began work in mid-September 2005 on
behalf of a large branch of the U.S. government to assist in the Gulf Coast
hurricane relief efforts. This work continued through late November 2005,
representing approximately 10 percent of TeleTech's fourth quarter 2005
revenue.
Renew and Expand Existing Client Relationships
TeleTech's performance with existing clients has enabled it to renew and
expand contracts with its global "Embedded Client Base", resulting in an
estimated $90 million in annual revenue signed since early November, net of
attrition. Approximately 70 percent of this is from expanded client
relationships. TeleTech believes that its performance levels for clients will
enable it to further grow its Embedded Client Base.
Improve Newgen's Financial Performance
As disclosed in TeleTech's third quarter 2005 Form 10-Q, the Company
indicated that Newgen was working with its largest client to jointly develop a
new agreement for 2006. In December of 2005, a new agreement was executed and
Newgen will begin its second decade of being a preferred, but not an
exclusive, provider to this client and its automotive dealerships. Under this
agreement, Newgen now has the flexibility to customize service offerings and
to contract directly with the client's dealerships.
TeleTech has retained a new President for Newgen and will publicly
announce his appointment shortly. The new President is a seasoned executive
with extensive experience as a general manager with full profit and loss
responsibility for significant divisions of multibillion dollar corporations.
Expand Capacity to Meet Client Demand and Rationalize Unprofitable
Capacity
As a result of new and expanded client relationships, TeleTech has plans
to expand its capacity in select International markets with the addition of an
estimated 4,500 workstations in Argentina, Canada, and the Philippines. This
figure includes 1,500 workstations in the Philippines that were previously
announced in TeleTech's third quarter 2005 earnings release.
On TeleTech's third quarter 2005 conference call, the Company stated its
intent to reach a decision on its South Korean operation by year-end. Based
on TeleTech's assessment that there is a limited future market opportunity,
TeleTech has decided to exit its South Korean facility during the first
quarter 2006. This facility generated an operating loss, before corporate
allocations, of approximately $3.4 million during the past 12 months.
As a result of exiting this center, TeleTech will record a pre-tax asset
impairment charge currently estimated at approximately $2 million in the
fourth quarter of 2005. This action is expected to result in an annualized
pre-tax profit improvement estimated between $2.5 million and $3.0 million
beginning the first quarter of 2006.
Other Information
2005 Common Stock Repurchase Program
During the fourth quarter of 2005, TeleTech repurchased 2.1 million shares
of its common stock for a total of $22.3 million. For the full year of 2005,
TeleTech repurchased 7.1 million shares, or approximately 10 percent of its
common stock outstanding, for a total of $67.8 million. TeleTech intends to
continue its common stock repurchase program during 2006.
First Quarter 2006 Financial Results
As the fourth quarter 2005 benefited from the short-term hurricane relief
work for the U.S. government discussed above, TeleTech believes revenue for
the first quarter of 2006 will be lower when compared to the fourth quarter
2005. Earnings for the first quarter 2006 will be impacted by the lower
revenue and, as previously disclosed in the Company's SEC filings, higher
first quarter labor related costs due to increased payroll taxes, and the
adoption of SFAS 123R as discussed below.
2006 Stock Option Expense
TeleTech will adopt Statement of Financial Accounting Standards No. 123
(revised 2004), "Share-Based Payment" ("SFAS 123R") beginning in the first
quarter of 2006. TeleTech preliminarily estimates adoption of SFAS 123R will
result in an after-tax impact to diluted earnings per share of approximately
$0.04 to $0.05 in 2006.
ABOUT TELETECH
TeleTech is a global business services company that provides a full range
of front-to-back office outsourced solutions including customer management,
BPO, and database marketing services to measurably enhance clients' core
customer management processes. TeleTech's comprehensive solutions include
fully managed, technology-based services including infrastructure, software
applications, and business intelligence. TeleTech's ability to create
innovative strategies, combined with its global technology platform and
delivery infrastructure, helps clients increase revenue, lower costs, and
retain their customers around the world. TeleTech's products and services,
standardized processes, and recognized capabilities to implement complex
global projects make the Company a valued partner for clients that include
Global 1000 businesses and governments. TeleTech partners with clients to
offer 150 languages, through its 36,000 employees, in 17 countries. For
additional information, visit www.TeleTech.com.
FORWARD-LOOKING STATEMENTS
This press release may contain certain forward-looking statements relating
to future results. The Private Securities Litigation Reform Act of 1995
provides a safe harbor for forward-looking statements. These forward-looking
statements are subject to risks and uncertainties that may cause TeleTech's
and its subsidiaries' actual results to differ materially from those expressed
or implied by such forward-looking statements, including but not limited to
the following: the Company's estimates and or beliefs regarding certain fourth
quarter 2005 and 2006 financial results; estimated revenue from new, renewed
or expanded client business; achieving the Company's expected profit
improvement in its International operations; the ability to close, ramp and/or
grow new business opportunities within its Embedded Client Base, with New
Client Logo agreements or with potential clients; the ability for the Company
to execute its growth plans, including sales of new products (such as TeleTech
On Demand(TM) and TeleTech In Culture(TM)); to increase profitability via the
globalization of its North American best operating practices; to achieve its
year-end 2007 financial goals and targeted cost reductions; the possibility of
the Company's Database Marketing and Consulting not returning to historic
levels of profitability; the possibility of lower revenue or price pressure
from clients experiencing a downturn or merger in their business; greater than
anticipated competition in the customer care 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 the Company serves; consumers' concerns or
adverse publicity regarding the products of the Company's clients; higher than
anticipated start-up costs or lead times associated with new ventures or
business in new markets; execution risks associated with performance-based
pricing metrics in certain client agreements; the Company's 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 or terrorist-related events; risks associated with
attracting and retaining cost-effective labor at the Company's customer
management centers; the possibility of additional asset impairments and
restructuring charges; risks associated with changes in foreign currency
exchange rates; economic or political changes affecting the countries in which
the Company operates; changes in accounting policies and practices promulgated
by standard setting bodies; and, new legislation or government regulation that
impacts the customer care industry.
Please refer to the Company's filings with the Securities and Exchange
Commission, including the Company's Annual Report on Form 10-K for the year
ended December 31, 2004 and Quarterly Report on Form 10-Q for the three months
ended September 30, 2005, for a detailed discussion of factors discussed above
and other important factors that may impact the Company's business, results of
operations, financial condition, and cash flows. The Company assumes no
obligation to update its forward-looking statements to reflect actual results
or changes in factors affecting such forward-looking statements.
CONTACT:
Investors
Karen Breen
Investor Relations
+1-303-397-8592
Media
KC Higgins
Public Relations
+1-303-397-8325
Both of TeleTech
Holdings, Inc.
