Achieves Third Quarter 2011 Revenue of $304 Million and
Fully Diluted Earnings per Share of 44 Cents;
Non-GAAP Fully Diluted Earnings per Share Increases 21 Percent
to 35 Cents;
Signs $95 Million of New Business in the Third
Quarter
ENGLEWOOD, Colo., Nov 02, 2011 (BUSINESS WIRE) -- TeleTech Holdings, Inc. (NASDAQ: TTEC), one of the
largest global providers of strategic and technology-enabled
business process outsourcing solutions that accelerate commerce and
lifetime customer value, today announced financial results for the
third quarter ended September 30, 2011. The Company also filed its
Quarterly Report on Form 10-Q with the Securities and Exchange
Commission for the quarter ended September 30, 2011.
"TeleTech's performance is fueled by its clients' intensified
focus on growing revenue and redefining the customer experience.
Global 1000 companies are increasingly seeking a partner who offers
a broad array of fully integrated technology-enabled services
designed to help them achieve their business objectives," said Ken
Tuchman, chairman and chief executive officer. "We remain confident
that our growing investment in an end-to-end suite of highly
scalable, customer-focused solutions strongly positions us to
respond to rapidly increasing customer demands and further
strengthens our market and financial leadership."
THIRD QUARTER 2011 FINANCIAL HIGHLIGHTS
TeleTech's third quarter 2011 revenue increased 12.3 percent to
$304.2 million compared to $271.0 million in the year-ago period.
The year-ago period included $23.6 million of technology-enabled
services revenue for the U.S. Census program which was
substantially completed in the third quarter 2010. Excluding the
Census program revenue, TeleTech's third quarter 2011 constant
currency revenue growth was 19.7 percent reflecting organic growth
and the contribution from both the Peppers and Rogers Group and
eLoyalty acquisitions. Approximately 20 percent of TeleTech's third
quarter 2011 revenue came from its continuing revenue
diversification efforts into greater professional and
technology-enabled services.
TeleTech's third quarter 2011 income from operations increased
32.3 percent to $26.6 million, or 8.7 percent of revenue, compared
to $20.1 million, or 7.4 percent of revenue, in the year-ago
quarter. Income from operations included unusual charges of $1.6
million related to restructuring in the third quarter 2011 and $3.9
million related to restructuring and asset impairments in the third
quarter 2010. Excluding the unusual charges mentioned above,
TeleTech's third quarter 2011 non-GAAP income from operations
increased 17.5 percent to $28.2 million, or 9.3 percent of revenue,
compared to $24.0 million, or 8.9 percent of revenue, in the
year-ago quarter.
Third quarter 2011 fully diluted earnings per share attributable
to TeleTech shareholders increased 41.9 percent to 44 cents
compared to third quarter 2010 fully diluted earnings per share of
31 cents. Third quarter 2011 fully diluted earnings per share
attributable to TeleTech shareholders includes a one-time net tax
benefit of $6.6 million related to favorable tax items.
Excluding the one-time net tax benefit in the third quarter 2011
in addition to the unusual charges for both periods, TeleTech's
third quarter 2011 non-GAAP fully diluted earnings per share
attributable to TeleTech shareholders increased 20.7 percent to 35
cents compared to 29 cents in the year-ago quarter.
TeleTech's normalized effective tax rate was 23.4 percent for
the third quarter 2011 and 20.8 percent for the first nine months
of 2011. TeleTech expects its full year 2011 normalized effective
tax rate will range between 21 and 22 percent.
OTHER BUSINESS HIGHLIGHTS
New Business
During the third quarter 2011 TeleTech signed an estimated $95
million in annualized revenue from both new and expanding client
relationships.
Strong Balance Sheet Continues to Fund Operations,
Strategic Acquisitions and Share Repurchases
- As of September 30, 2011, TeleTech had
cash and cash equivalents of $169.8 million, $130.3 million of
borrowings on its credit facility and total other debt of $2.3
million, resulting in a net positive cash position of $37.2
million.
- Capital expenditures for the third
quarter 2011 were $8.8 million, compared to $5.1 million in the
third quarter 2010.
- TeleTech repurchased approximately
893,000 shares of common stock during the third quarter 2011 for a
total cost of approximately $14.6 million. As of September 30,
2011, there was approximately $37.0 million authorized for future
share repurchases.
2011 BUSINESS OUTLOOK
TeleTech expects its full year 2011 revenue will grow
approximately 9 to 10 percent over 2010, and full year 2011
operating margin will range between 8.7 and 9.5 percent, excluding
unusual charges, if any.
CONFERENCE CALL
A conference call and webcast with management will be held on
Thursday, November 3, 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 . If you
are unable to participate during the live webcast, a replay will be
available on the TeleTech website through Thursday, November 17,
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. 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.
We also encourage all investors to read our Quarterly Report on
Form 10-Q for the third quarter ended September 30, 2011.
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 .
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; 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 . All
information in this release is as of November 2, 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 |
Nine
months ended |
| September 30, |
September 30, |
| 2011 |
2010 |
2011 |
2010 |
|
|
Revenue |
$ |
304,235 |
$ |
271,005 |
$ |
878,850 |
$ |
814,458 |
|
|
Operating Expenses: |
| Cost of services |
220,795 |
193,996 |
630,274 |
586,808 |
| Selling, general and
administrative |
43,445 |
40,572 |
138,529 |
123,721 |
| Depreciation and
amortization |
11,807 |
12,452 |
34,828 |
38,122 |
| Restructuring charges,
net |
1,616 |
3,579 |
2,298 |
6,352 |
| Impairment
losses |
- |
327 |
230 |
1,006 |
| Total operating expenses |
277,663 |
250,926 |
806,159 |
756,009 |
|
|
Income From Operations |
26,572 |
20,079 |
72,691 |
58,449 |
|
| Other income
(expense) |
(633 |
) |
7,295 |
(2,179 |
) |
7,416 |
|
|
Income Before Income Taxes |
25,939 |
27,374 |
70,512 |
65,865 |
|
| Benefit from
(provision for) income taxes |
496 |
(7,586 |
) |
(9,482 |
) |
(17,711 |
) |
|
| Net
Income |
26,435 |
19,788 |
61,030 |
48,154 |
|
| Net income
attributable to noncontrolling interest |
(1,064 |
) |
(1,118 |
) |
(2,969 |
) |
(2,795 |
) |
|
|
Net Income Attributable to TeleTech
Shareholders |
$ |
25,371 |
$ |
18,670 |
$ |
58,061 |
$ |
45,359 |
|
| Net Income Per Share Attributable to TeleTech
Shareholders |
|
|
Basic |
$ |
0.45 |
$ |
0.31 |
$ |
1.02 |
$ |
0.74 |
|
|
Diluted |
$ |
0.44 |
$ |
0.31 |
$ |
1.00 |
$ |
0.73 |
|
|
|
Income From Operations Margin |
8.7 |
% |
7.4 |
% |
8.3 |
% |
7.2 |
% |
| Net
Income Attributable to TeleTech Shareholders Margin |
8.3 |
% |
6.9 |
% |
6.6 |
% |
5.6 |
% |
|
Effective Tax Rate |
(1.9 |
)% |
27.7 |
% |
13.4 |
% |
26.9 |
% |
|
|
|
Weighted Average Shares Outstanding |
|
Basic |
56,476 |
59,808 |
56,790 |
60,926 |
|
Diluted |
57,748 |
61,028 |
58,173 |
62,258 |
|
|
|
TELETECH HOLDINGS, INC. AND SUBSIDIARIES |
|
SEGMENT INFORMATION |
| (In
thousands) |
|
|
| Three
months ended |
Nine
months ended |
| September 30, |
September 30, |
| 2011 |
2010 |
2011 |
2010 |
|
|
Revenue: |
| North American BPO |
$ |
219,891 |
$ |
204,978 |
$ |
612,825 |
$ |
625,426 |
| International
BPO |
84,344 |
66,027 |
266,025 |
189,032 |
| Total |
$ |
304,235 |
$ |
271,005 |
$ |
878,850 |
$ |
814,458 |
|
| Income (Loss)
From Operations: |
| North American BPO |
$ |
22,936 |
$ |
22,099 |
$ |
59,823 |
$ |
66,984 |
| International
BPO |
3,636 |
(2,020 |
) |
12,868 |
(8,535 |
) |
| Total |
$ |
26,572 |
$ |
20,079 |
$ |
72,691 |
$ |
58,449 |
|
|
|
TELETECH HOLDINGS, INC. AND SUBSIDIARIES |
|
CONSOLIDATED BALANCE SHEETS |
| (In
thousands) |
|
|
|
September 30, |
December 31, |
| 2011 |
2010 |
|
|
|
ASSETS |
| Current
assets: |
| Cash and cash
equivalents |
$ |
169,809 |
$ |
119,385 |
| Accounts receivable,
net |
265,598 |
233,706 |
| Other current
assets |
89,087 |
71,125 |
| Total current
assets |
524,494 |
424,216 |
|
| Property and
equipment, net |
92,379 |
105,528 |
| Other
assets |
166,256 |
130,879 |
|
| Total
assets |
$ |
783,129 |
$ |
660,623 |
|
| LIABILITIES AND
EQUITY |
| Total current
liabilities |
$ |
157,536 |
$ |
172,251 |
| Other long-term
liabilities |
170,862 |
33,554 |
| Total
equity |
454,731 |
454,818 |
|
| Total
liabilities and equity |
$ |
783,129 |
$ |
660,623 |
|
|
|
TELETECH HOLDINGS, INC. AND SUBSIDIARIES |
|
RECONCILIATION OF NON-GAAP FINANCIAL
INFORMATION |
| (In
thousands, except per share data) |
|
|
| Three
months ended |
Nine
months ended |
| September 30, |
September 30, |
| 2011 |
2010 |
2011 |
2010 |
|
| Reconciliation of
Gross Margin: |
|
|
Revenue |
$ |
304,235 |
$ |
271,005 |
$ |
878,850 |
$ |
814,458 |
| Cost of
services |
220,795 |
193,996 |
630,274 |
586,808 |
| Gross
margin |
$ |
83,440 |
$ |
77,009 |
$ |
248,576 |
$ |
227,650 |
|
| Gross margin
percentage |
27.4% |
28.4% |
28.3% |
28.0% |
|
|
| Reconciliation of
EBIT & EBITDA: |
|
| Net Income
attributable to TeleTech shareholders |
$ |
25,371 |
$ |
18,670 |
$ |
58,061 |
$ |
45,359 |
| Interest income |
(896) |
(571) |
(2,282) |
(1,631) |
| Interest expense |
1,143 |
696 |
3,814 |
2,212 |
| (Benefit from)
provision for income taxes |
(496) |
7,586 |
9,482 |
17,711 |
|
EBIT |
$ |
25,122 |
$ |
26,381 |
$ |
69,075 |
$ |
63,651 |
|
| Depreciation and
amortization |
11,807 |
12,452 |
34,828 |
38,122 |
|
|
EBITDA |
$ |
36,929 |
$ |
38,833 |
$ |
103,903 |
$ |
101,773 |
|
|
| Reconciliation of
Free Cash Flow: |
|
| Cash Flow From
Operating Activities: |
| Net income |
$ |
26,435 |
$ |
19,788 |
$ |
61,030 |
$ |
48,154 |
| Adjustments to reconcile
net income to net cash |
| provided by operating
activities: |
| Depreciation and
amortization |
11,807 |
12,452 |
34,828 |
38,122 |
| Other |
(46,721) |
13,081 |
(56,356) |
33,680 |
|
Net cash (used in) provided by operating
activities
|
(8,479) |
45,321 |
39,502 |
119,956 |
|
| Less - Total
Capital Expenditures |
8,804 |
5,074 |
21,166 |
17,391 |
|
|
| Free Cash
Flow |
$ |
(17,283) |
$ |
40,247 |
$ |
18,336 |
$ |
102,565 |
|
|
| Reconciliation of
Non-GAAP Income from Operations: |
|
| Income from
Operations |
$ |
26,572 |
$ |
20,079 |
$ |
72,691 |
$ |
58,449 |
| Restructuring charges,
net |
1,616 |
3,579 |
2,298 |
6,352 |
| Impairment losses |
- |
327 |
230 |
1,006 |
| Acquisition
related expenses |
- |
- |
1,066 |
- |
|
| Non-GAAP Income
from Operations |
$ |
28,188 |
$ |
23,985 |
$ |
76,285 |
$ |
65,807 |
|
|
| Reconciliation of
Non-GAAP EPS: |
|
| Net Income
attributable to TeleTech shareholders |
$ |
25,371 |
$ |
18,670 |
$ |
58,061 |
$ |
45,359 |
| Add:
Asset impairment and restructuring charges, net of related
taxes |
1,136 |
2,762 |
1,777 |
5,305 |
| Add: Acquisition related
expenses, net of related taxes |
- |
- |
640 |
- |
| Add: Changes in judgement
for uncertain tax positions |
|
| recorded in prior
periods |
(6,568) |
- |
(6,405) |
- |
|
Less: Gain on settlement of legal claim, net of related taxes |
- |
(3,542) |
- |
(3,542) |
|
| Non-GAAP Net
Income attributable to TeleTech shareholders |
$ |
19,939 |
$ |
17,890 |
$ |
54,073 |
$ |
47,122 |
|
| Diluted shares
outstanding |
57,748 |
61,028 |
58,173 |
62,258 |
|
| Non-GAAP EPS
attributable to TeleTech shareholders |
$ |
0.35 |
$ |
0.29 |
$ |
0.93 |
$ |
0.76 |
|
|
| Reconciliation of
Non-GAAP EBITDA: |
|
| Net Income
attributable to TeleTech shareholders |
$ |
25,371 |
$ |
18,670 |
$ |
58,061 |
$ |
45,359 |
| Interest income |
(896) |
(571) |
(2,282) |
(1,631) |
| Interest expense |
1,143 |
696 |
3,814 |
2,212 |
| Provision for income
taxes |
(496) |
7,586 |
9,482 |
17,711 |
| Depreciation and
amortization |
11,807 |
12,452 |
34,828 |
38,122 |
| Asset impairment and
restructuring charges |
1,616 |
3,906 |
2,528 |
7,358 |
| Acquisition related
expenses |
- |
- |
1,066 |
- |
| Equity-based
compensation expenses |
3,848 |
3,382 |
11,563 |
9,976 |
|
| Non-GAAP
EBITDA |
$ |
42,393 |
$ |
46,121 |
$ |
119,060 |
$ |
119,107 |
SOURCE: TeleTech Holdings
TeleTech
Investor Contact:
Karen Breen, 303-397-8592
or
Media Contact:
Jeanne Blatt, 303-397-8507
