- Second Quarter Revenue Reaches Record $357 Million;
- Signs Estimated $65 Million of New Annualized Revenue During the Second Quarter;
- Generates $12 Million of Free Cash Flow;
- Reaffirms $100M Share Repurchase Authorization
ENGLEWOOD, CO, Aug 04, 2008 (MARKET WIRE via COMTEX News Network) -- TeleTech Holdings, Inc. (NASDAQ: TTEC), one of the largest and most
geographically diverse global providers of business process
outsourcing ("BPO") solutions, today announced business highlights
for the second quarter ended June 30, 2008.
TeleTech reported record second quarter 2008 revenue of $357 million,
an 8.4 percent increase over second quarter 2007 revenue of $330
million. Revenue in TeleTech's BPO segment grew 10.4 percent from the
year-ago period.
TeleTech believes it has one of the largest and most geographically
diverse offshore footprints of any global BPO provider with
approximately 24,000 offshore workstations representing more than 60
percent of its total delivery capacity. Second quarter 2008 revenue
from TeleTech's offshore delivery centers grew approximately 18
percent to $156 million and represented 44 percent of total revenue.
TeleTech's offshore workstations currently span seven countries
including Argentina, Canada, Costa Rica, Malaysia, Mexico, the
Philippines and South Africa.
TeleTech's income from operations was $29.7 million or 8.3 percent of
revenue. Income from operations for the second quarter 2008 included
$0.4 million of restructuring charges and, as previously disclosed,
$3.4 million of audit, legal and other professional fees associated
with the Audit Committee's review of the Company's equity-based
comensation practices and the subsequent financial restatement.
Excluding these charges, which totaled $3.8 million, TeleTech's
income from operations in the second quarter 2008 was $33.5 million
or 9.4 percent of revenue, an increase from a 9.1 percent operating
margin, excluding unusual charges, in the year-ago quarter.
Furthermore, excluding $2.0 million of non-cash expense in the 2008
second quarter for equity-based compensation, operating margin would
have been 9.9 percent.
Fully diluted GAAP earnings per share for the second quarter 2008
were 28 cents on net income of $20.4 million. Excluding the unusual
charges discussed above, which totaled $3.8 million pre-tax or
approximately 4 cents per share after-tax, second quarter 2008
non-GAAP earnings per share were 32 cents, up 28 percent from 25
cents non-GAAP earnings per share in the year-ago quarrter.
EXECUTIVE COMMENTARY ON TELETECH'S SECOND QUARTER FINANCIAL RESULTS
"I am pleased that we delivered record second quarter revenue of $357
million," said Kenneth Tuchman, chairman and chief executive officer.
"Our year-to-date BPO revenue grew 11.4 percent and our year-to-date
operating margin, excluding unusual items, increased to 9.6 percent.
We continue to perform well in a dynamic global economy and our
leading industry position enabled us to win an estimated $65 million
in annualized new business during the second quarter of 2008. We
believe the third quarter of 2008 will again represent a strong level
of new business wins, based on the size and number of deals we are
currently working to complete."
SECOND QUARTER 2008 FINANCIAL HIGHLIGHTS
Solid Balance Sheet Continues to Fund Organic Growth
- As of June 30, 2008, TeleTech had cash and cash equivalents of $127
million and total debt of $90 million.
- Capital expenditures were $21 million in the 2008 second quarter of
which approximately 80 percent were for growth related needs with the
balance for improving TeleTech's embedded infrastructure.
New Business
-
During the second quarter of 2008, TeleTech signed an estimated $65
million in annualized long-term revenue from new and expanded client
relationships.
Business Outlook
-
Consistent with our previous guidance, TeleTech expects 2008 revenue
will grow a minimum of between 6 and 8 percent and 2008 operating margin
will range between 9 and 10 percent, before unusual charges.
CONFERENCE CALL
A conference call and webcast with management will be held on Monday,
August 4, 2008, at 8:30 a.m. Eastern Time. You are invited to join
the live webcast of the conference call by visiting the "Investors"
section of the TeleTech website at www.TeleTech.com. If you are
unable to participate during the live webcast, a replay will be
available on the TeleTech website through Monday, August 18, 2008.
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
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
TeleTech is one of the largest and most geographically diverse global
providers of business process outsourcing solutions. We have a
26-year history of designing, implementing, and managing critical
business processes for Global 1000 companies to help them improve
their customers' experience, expand their strategic capabilities, and
increase their operating efficiencies. By delivering a high-quality
customer experience through the effective integration of
customer-facing front-office processes with internal back-office
processes, we enable our clients to better serve, grow, and retain
their customer base. We use Six Sigma-based quality methods
continually to design, implement, and enhance the business processes
we deliver to our clients and we also apply this methodology to our
own internal operations. We have developed deep domain expertise and
support approximately 250 business process outsourcing programs
serving 100 global clients in the automotive, communications and
media, financial services, government, healthcare, retail, technology
and travel and leisure industries. Our integrated global solutions
are provided by more than 50,000 employees utilizing 39,000
workstations across 89 Delivery Centers in 17 countries.
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:
general economic, business and industry conditions; the loss of
business or lower volumes from significant clients; delivery center
utilization and labor rates; the pace at which we are able to ramp
new business; the effect of TeleTech's failure to timely file all of
its required reports under the Securities and Exchange Act of 1934
and its restatement of previously issued financial statements,
including shareholder litigation and action by the SEC and/or other
governmental agencies; negative tax or other implications for TeleTech
resulting from any accounting adjustments or other factors;
unexpected regulatory changes, tax laws, and data privacy measures;
data privacy issues; our ability to accurately predict geographic
revenue mix and seasonal sales trends; information technology and/or
delivery center interruptions; issues or matters that may arise from
governmental and/or administrative agency investigations; our ability
to successfully remediate identified internal control deficiencies;
litigation and governmental investigations or proceedings arising out
of or related to accounting and financial reporting matters;
fluctuations in foreign currency exchange rates along with our
ability to effectively hedge exposure to changes in foreign currency
exchange and/or interest rates; the ability to attract, retain and
motivate key personnel; and political instability, the effect of armed
hostilities, terrorism and natural disasters. A detailed discussion of
these and other 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, 2007.
TELETECH HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
-------------------- --------------------
2008 2007 2008 2007
--------- --------- --------- ---------
As Restated As Restated
Revenue $ 357,416 $ 329,608 $ 725,052 $ 662,348
Operating Expenses:
Cost of services 265,833 237,228 535,933 474,470
Selling, general and
administrative 45,858 48,611 97,230 100,707
Depreciation and amortization 15,624 13,794 30,784 27,348
Restructuring charges, net 440 262 2,642 262
Impairment losses - 13,515 - 13,515
--------- --------- --------- ---------
Total operating
expenses 327,755 313,410 666,589 616,302
--------- --------- --------- ---------
Income From Operations 29,661 16,198 58,463 46,046
Other income (expense) (543) (2,235) (1,591) (3,512)
--------- --------- --------- ---------
Income Before Income Taxes and
Minority Interest 29,118 13,963 56,872 42,534
(Provision) benefit for
income taxes (7,536) (4,737) (15,329) (15,111)
--------- --------- --------- ---------
Income Before Minority Interest 21,582 9,226 41,543 27,423
Minority interest (1,220) (508) (2,056) (942)
--------- --------- --------- ---------
Net Income $ 20,362 $ 8,718 $ 39,487 $ 26,481
========= ========= ========= =========
Net Income Per Share:
Basic $ 0.29 $ 0.12 $ 0.56 $ 0.38
========= ========= ========= =========
Diluted $ 0.28 $ 0.12 $ 0.55 $ 0.36
========= ========= ========= =========
Income From Operations Margin 8.3% 4.9% 8.1% 7.0%
Net Income Margin 5.7% 2.6% 5.4% 4.0%
Effective Tax Rate after
Minority Interest 25.9% 33.9% 27.0% 35.5%
Weighted Average Shares
Outstanding
Basic 69,977 70,580 69,957 70,474
Diluted 71,729 73,104 71,649 73,430
TELETECH HOLDINGS, INC. AND SUBSIDIARIES
SEGMENT INFORMATION
(In thousands)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
--------------------- --------------------
2008 2007 2008 2007
---------- --------- --------- ---------
As Restated As Restated
Revenue:
North American BPO $ 243,238 $ 225,792 $ 505,700 $ 460,237
International BPO 114,178 98,111 219,352 190,516
Database Marketing and
Consulting - 5,705 - 11,595
---------- --------- --------- ---------
Total $ 357,416 $ 329,608 $ 725,052 $ 662,348
========== ========= ========= =========
Income (Loss) From Operations:
North American BPO $ 26,457 $ 28,742 $ 59,001 $ 62,347
International BPO 3,113 4,689 (143) 4,974
Database Marketing and
Consulting 91 (17,233) (395) (21,275)
---------- --------- --------- ---------
Total $ 29,661 $ 16,198 $ 58,463 $ 46,046
========== ========= ========= =========
TELETECH HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, December 31,
2008 2007
------------ ------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 126,914 $ 91,239
Accounts receivable, net 275,691 270,988
Other current assets 101,350 97,598
------------ ------------
Total current assets 503,955 459,825
Property and equipment, net 180,979 174,809
Other assets 121,311 125,661
------------ ------------
Total assets $ 806,245 $ 760,295
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Total current liabilities $ 186,723 $ 186,810
Other long-term liabilities 137,791 118,729
Minority interest 4,514 3,555
Total stockholders' equity 477,217 451,201
------------ ------------
Total liabilities and stockholders' equity $ 806,245 $ 760,295
============ ============
TELETECH HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION
(In thousands, except per share data)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
-------------------- --------------------
2008 2007 2008 2007
--------- --------- --------- ---------
Reconciliation of EBIT:
Net Income $ 20,362 $ 8,718 $ 39,487 $ 26,481
Interest income (1,388) (492) (2,474) (885)
Interest expense 1,489 1,594 3,054 3,062
Provision (benefit) for
income taxes 7,536 4,737 15,329 15,111
--------- --------- --------- ---------
EBIT $ 27,999 $ 14,557 $ 55,396 $ 43,769
Reconciliation of Free Cash Flow:
Cash Flow From Operating
Activities:
Net income $ 20,362 $ 8,718 $ 39,487 $ 26,481
Adjustments to reconcile net
income to net cash
provided by operating
activities:
Depreciation and
amortization 15,624 13,794 30,784 27,348
Other (2,856) (3,274) (10,966) (3,758)
--------- --------- --------- ---------
Net cash provided by
operating activities $ 33,130 $ 19,238 $ 59,305 $ 50,071
--------- --------- --------- ---------
Total Capital Expenditures 21,223 15,514 36,408 29,020
--------- --------- --------- ---------
Free Cash Flow $ 11,907 $ 3,724 $ 22,897 $ 21,051
========= ========= ========= =========
Reconciliation of Non-GAAP
Income from Operations:
Income from Operations $ 29,661 $ 16,198 $ 58,463 $ 46,046
Restructuring charges, net 440 262 2,642 262
Impairment losses - 13,515 - 13,515
Equity comp review and
restatement expenses 3,386 - 8,354 -
--------- --------- --------- ---------
Non-GAAP Income from Operations $ 33,487 $ 29,975 $ 69,459 $ 59,823
Reconciliation of Non-GAAP EPS:
GAAP Net Income $ 20,362 $ 8,718 $ 39,487 $ 26,481
Add: Asset impairment and
restructuring charges, net
of related taxes 295 9,341 1,770 9,341
Add: Equity comp review and
restatement expenses, net of
related taxes 2,269 - 5,597 -
--------- --------- --------- ---------
Non-GAAP Net Income $ 22,925 $ 18,059 $ 46,854 $ 35,822
Diluted shares outstanding 71,729 73,104 71,649 73,430
Non-GAAP Net Income per Diluted
Share $ 0.32 $ 0.25 $ 0.65 $ 0.49
Investor Contact:
Karen Breen
303-397-8592
Media Contact:
KC Higgins
303-397-8325
