TeleTech Announces First Quarter 2016 Financial Results
"Today,
FIRST QUARTER 2016 FINANCIAL HIGHLIGHTS
Revenue
-
First quarter 2016 GAAP revenue decreased 4.0 percent to
$312.4 million compared to$325 .5 million in the prior year period. -
Non-GAAP constant currency revenue decreased 1.0 percent to
$322.4 million over the prior year.
Income from Operations
-
First quarter 2016 GAAP income from operations was
$17.8 million , or 5.7 percent of revenue, compared to$26.1 million , or 8.0 percent of revenue in the first quarter 2015. -
Non-GAAP constant currency income from operations was
$16.7 million or 5.2 percent of adjusted revenue.
Earnings Per Share
-
First quarter 2016 GAAP fully diluted earnings per share attributable to
TeleTech shareholders was23 cents compared to38 cents in the same period last year. -
Non-GAAP fully diluted earnings per share was
25 cents compared to38 cents in the prior year.
Bookings
-
During the first quarter 2016,
TeleTech signed an estimated $100 million in annualized contract value revenue from new and expanded client relationships. The first quarter bookings mix was diversified across all verticals with 70 percent from existing clients, 68 percent from emerging businesses, and 14 percent from outside of the United States.
STRONG BALANCE SHEET CONTINUES TO FUND OPERATIONS, SHARE REPURCHASES, DIVIDENDS, AND INVESTMENTS
-
As of
March 31, 2016 ,TeleTech had cash and cash equivalents of$75.4 million and$141 .7 million of total debt, resulting in a net debt position of$66.3 million . -
As of
March 31, 2016 ,TeleTech had approximately$460 million of additional borrowing capacity available under its revolving credit facility. -
Cash flow from operations in the first quarter 2016 was
$11.5 million compared to$3.8 million in the first quarter 2015. -
Capital expenditures in the first quarter 2016 were
$14.9 million compared to$13.0 million in the first quarter 2015. -
TeleTech repurchased 332 thousand shares of common stock during the first quarter 2016 for a total cost of$8.7 million . As ofMarch 31, 2016 ,$35.9 million was authorized for future share repurchases. -
TeleTech's Board of Directors declared a semi-annual dividend of$0.185 per share in the first quarter of 2016, which was paid onApril 15, 2016 to shareholders of record onMarch 31, 2016 .
SEGMENT REPORTING & COMMENTARY
Customer Management Services (CMS) – Customer Experience Delivery Solutions
-
CMS first quarter 2016 revenue declined 6.2 percent to
$227.9 million compared to$243.0 million in the year ago quarter. Income from operations was$15.6 million or 6.8 percent of revenue compared to$21.7 million or 8.9 percent in the prior year. -
Non-GAAP constant currency revenue declined 2.6 percent over the year ago period and income from operations was
$14.5 million or 6.1 percent of adjusted revenue. This compares to$22 .5 million or 9.3 percent of revenue in the prior year.
Customer Growth Services (CGS) – Digitally-Enabled Revenue Growth Solutions
-
CGS first quarter 2016 revenue grew 29.1 percent to
$33.5 million compared to$26.0 million in the year ago quarter. Income from operations was$0.5 million or 1.5 percent of revenue, compared to 0.1 percent in the same period last year. - Non-GAAP constant currency revenue increased 32.3 percent over the year ago period and income from operations was $0.7 million or 2.0 percent of adjusted revenue. This compares to 0.1 percent of revenue in the prior year.
Customer Technology Services (CTS) – Hosted and Managed Technology Solutions
-
CTS first quarter 2016 revenue declined 1.2 percent to
$35.3 million compared to$35.7 million in the year ago quarter. Income from operations was$2.8 million or 7.9 percent of revenue compared to$2.0 million or 5.6 percent in the prior year. -
Non-GAAP constant currency revenue declined 1.2 percent over the year ago period and income from operations was
$2.7 million or 7.6 percent of adjusted revenue. This compares to$2.0 million or 5.6 percent of revenue in the prior year.
Customer Strategy Services (CSS) – Customer Experience Strategy and Data Analytics Solutions
-
CSS first quarter 2016 revenue declined 24.7 percent to
$15.7 million from$20.8 million in the year ago quarter. Loss from operations was$1.1 million or negative 7.1 percent of revenue compared to a positive 11.5 percent in the prior year. -
Non-GAAP constant currency revenue declined 23.3 percent over the year ago period and loss from operations was
$1.2 million or negative 7.6 percent of adjusted revenue. This compares to$2.4 million or 11.6 percent of revenue in the prior year.
BUSINESS OUTLOOK
"We see the first quarter year-over-year decline in performance as temporary and in line with the estimates we made in providing our 2016 guidance. Reflecting on our current and projected revenue backlog, we continue to estimate full year revenue in the
SEC FILINGS
The company's filings with the
CONFERENCE CALL
A conference call and webcast with management will be held on
NON-GAAP FINANCIAL MEASURES
To supplement the Company's consolidated financial statements presented in accordance with generally accepted accounting principles (GAAP) in
ABOUT
FORWARD-LOOKING STATEMENTS
Statements in this press release contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995, relating to our operations, expected financial position, results of operation, continuation of client relationships, and other business matters that are based on our current expectations, assumptions, and projections with respect to the future, and are not a guarantee of performance. We use words such as "may," "believe," "plan," "will," "anticipate," "estimate," "expect," "intend," "project," "would," "could," "target," or similar expressions, or when we discuss our strategy, plans, goals, initiatives, or objectives, we are making forward-looking statements.
We caution you not to rely unduly on any forward-looking statements. Actual results may differ materially from what is expressed in the forward-looking statements, and you should review and consider carefully the risks, uncertainties and other factors that affect our business and may cause such differences as outlined but are not limited to factors discussed in the sections entitled "Risk Factors" included in
Investor Contact |
Media Contact |
Paul Miller |
Elizabeth Grice |
303.397.8641 |
303.397.8507 |
TeleTech HOLDINGS, INC. AND SUBSIDIARIES |
|||||
CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||
(In thousands, except per share data) |
|||||
(Unaudited) |
|||||
Three months ended |
|||||
March 31, |
|||||
2016 |
2015 |
||||
Revenue |
$ 312,410 |
$ 325,521 |
|||
Operating Expenses: |
|||||
Cost of services |
231,340 |
232,984 |
|||
Selling, general and administrative |
45,500 |
50,237 |
|||
Depreciation and amortization |
17,729 |
15,363 |
|||
Restructuring charges, net |
88 |
809 |
|||
Impairment losses |
- |
- |
|||
Total operating expenses |
294,657 |
299,393 |
|||
Income From Operations |
17,753 |
26,128 |
|||
Other income (expense) |
(1,320) |
(1,688) |
|||
Income Before Income Taxes |
16,433 |
24,440 |
|||
Provision for income taxes |
(4,528) |
(4,405) |
|||
Net Income |
11,905 |
20,035 |
|||
Net income attributable to noncontrolling interest |
(680) |
(1,263) |
|||
Net Income Attributable to TeleTech Stockholders |
$ 11,225 |
$ 18,772 |
|||
Net Income Per Share Attributable to TeleTech Stockholders |
|||||
Basic |
$ 0.23 |
$ 0.39 |
|||
Diluted |
$ 0.23 |
$ 0.38 |
|||
Income From Operations Margin |
5.7% |
8.0% |
|||
Net Income Attributable to TeleTech Stockholders Margin |
3.6% |
5.8% |
|||
Effective Tax Rate |
27.6% |
18.0% |
|||
Weighted Average Shares Outstanding |
|||||
Basic |
48,368 |
48,370 |
|||
Diluted |
48,746 |
49,158 |
TeleTech HOLDINGS, INC. AND SUBSIDIARIES |
||||
SEGMENT INFORMATION |
||||
(In thousands) |
||||
(Unaudited) |
||||
Three months ended |
||||
March 31, |
||||
2016 |
2015 |
|||
Revenue: |
||||
Customer Management Services |
$ 227,921 |
$ 243,009 |
||
Customer Growth Services |
33,519 |
25,956 |
||
Customer Technology Services |
35,268 |
35,714 |
||
Customer Strategy Services |
15,702 |
20,842 |
||
Total |
$ 312,410 |
$ 325,521 |
||
Income From Operations: |
||||
Customer Management Services |
$ 15,595 |
$ 21,702 |
||
Customer Growth Services |
495 |
26 |
||
Customer Technology Services |
2,780 |
2,009 |
||
Customer Strategy Services |
(1,117) |
2,391 |
||
Total |
$ 17,753 |
$ 26,128 |
TeleTech HOLDINGS, INC. AND SUBSIDIARIES |
||||
CONSOLIDATED BALANCE SHEETS |
||||
(In thousands) |
||||
(Unaudited) |
||||
March 31, |
December 31, |
|||
2016 |
2015 |
|||
ASSETS |
||||
Current assets: |
||||
Cash and cash equivalents |
$ 75,422 |
$ 60,304 |
||
Accounts receivable, net |
286,165 |
283,474 |
||
Other current assets |
79,738 |
71,294 |
||
Total current assets |
441,325 |
415,072 |
||
Property and equipment, net |
169,551 |
168,289 |
||
Other assets |
255,017 |
259,966 |
||
Total assets |
$ 865,893 |
$ 843,327 |
||
LIABILITIES AND EQUITY |
||||
Total current liabilities |
$ 195,997 |
$ 206,906 |
||
Other long-term liabilities |
214,274 |
191,473 |
||
Mandatorily redeemable noncontrolling interest |
4,105 |
4,131 |
||
Total equity |
451,517 |
440,817 |
||
Total liabilities and equity |
$ 865,893 |
$ 843,327 |
TeleTech HOLDINGS, INC. AND SUBSIDIARIES |
||||
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION |
||||
(In thousands, except per share data) |
||||
(Unaudited) |
||||
Three months ended |
||||
March 31, |
||||
2016 |
2015 |
|||
Reconciliation of Revenue: |
||||
Revenue |
$ 312,410 |
$ 325,521 |
||
Changes due to foreign currency fluctuations 1 |
9,994 |
|||
Non-GAAP Revenue |
$ 322,404 |
$ 325,521 |
||
Reconciliation of EBIT & EBITDA: |
||||
Net Income Attributable to TeleTech stockholders |
$ 11,225 |
$ 18,772 |
||
Interest income |
(166) |
(317) |
||
Interest expense |
1,964 |
1,698 |
||
Provision for income taxes |
4,528 |
4,405 |
||
EBIT |
$ 17,551 |
$ 24,558 |
||
Depreciation and amortization |
17,729 |
15,363 |
||
EBITDA |
$ 35,280 |
$ 39,921 |
||
Reconciliation of Free Cash Flow: |
||||
Cash Flow From Operating Activities: |
||||
Net income |
$ 11,905 |
$ 20,035 |
||
Adjustments to reconcile net income to net cash |
||||
provided by operating activities: |
||||
Depreciation and amortization |
17,729 |
15,363 |
||
Other |
(18,096) |
(31,578) |
||
Net cash provided by operating activities |
11,538 |
3,820 |
||
Less - Total Capital Expenditures |
14,949 |
13,038 |
||
Free Cash Flow |
$ (3,411) |
$ (9,218) |
||
Reconciliation of Non-GAAP Income from Operations: |
||||
Income from Operations |
$ 17,753 |
$ 26,128 |
||
Restructuring charges, net |
88 |
809 |
||
Impairment losses |
- |
- |
||
Non-GAAP Income from Operations |
$ 17,841 |
$ 26,937 |
||
Non-GAAP Income from Operations Margin |
5.7% |
8.3% |
||
Reconciliation of Non-GAAP EPS: |
||||
Net Income Attributable to TeleTech stockholders |
$ 11,225 |
$ 18,772 |
||
Add: Asset impairment and restructuring charges, net of related taxes |
54 |
498 |
||
Add: Changes in valuation allowance and returns to provision adjustments |
878 |
(593) |
||
Non-GAAP Net Income Attributable to TeleTech stockholders |
$ 12,157 |
$ 18,677 |
||
Diluted shares outstanding |
48,746 |
49,158 |
||
Non-GAAP EPS Attributable to TeleTech stockholders |
$0.25 |
$0.38 |
||
Reconciliation of Non-GAAP EBITDA: |
||||
Net Income Attributable to TeleTech stockholders |
$ 11,225 |
$ 18,772 |
||
Interest income |
(166) |
(317) |
||
Interest expense |
1,964 |
1,698 |
||
Provision for income taxes |
4,528 |
4,405 |
||
Depreciation and amortization |
17,729 |
15,363 |
||
Asset impairment and restructuring charges |
88 |
809 |
||
Equity-based compensation expenses |
2,759 |
2,690 |
||
Non-GAAP EBITDA |
$ 38,127 |
$ 43,420 |
1 |
Foreign currency fluctuations are calculated on a constant currency basis by translating the current year reported amounts using the prior year foreign exchange rates for each rates for each underlying currency. |
TeleTech HOLDINGS, INC. AND SUBSIDIARIES |
||||
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION |
||||
(In thousands) |
||||
(Unaudited) |
||||
FIRST QUARTER |
||||
(three months end, March 31, 2016) |
||||
Revenue |
||||
GAAP Revenue |
Foreign Exchange |
Constant |
||
CMS |
$ 227,921 |
$ 8,876 |
$ 236,797 |
|
YoY Growth Rate: |
-6.2% |
-2.6% |
||
CGS |
$ 33,519 |
$ 811 |
$ 34,330 |
|
YoY Growth Rate: |
29.1% |
32.3% |
||
CTS |
$ 35,268 |
$ 27 |
$ 35,295 |
|
YoY Growth Rate: |
-1.2% |
-1.2% |
||
CSS |
$ 15,702 |
$ 280 |
$ 15,982 |
|
YoY Growth Rate: |
-24.7% |
-23.3% |
||
Emerging Businesses |
$ 84,489 |
$ 1,118 |
$ 85,607 |
|
YoY Growth Rate: |
2.4% |
3.8% |
||
Company (Consolidated) |
$ 312,410 |
$ 9,994 |
$ 322,404 |
|
YoY Growth Rate: |
-4.0% |
-1.0% |
||
Operating Income |
||||
Non-GAAP |
Foreign Exchange |
Constant |
||
CMS |
$ 15,683 |
$ (1,139) |
$ 14,544 |
|
Operating Margin: |
6.9% |
6.1% |
||
CGS |
$ 495 |
$ 191 |
$ 686 |
|
Operating Margin: |
1.5% |
2.0% |
||
CTS |
$ 2,780 |
$ (87) |
$ 2,693 |
|
Operating Margin: |
7.9% |
7.6% |
||
CSS |
$ (1,117) |
$ (93) |
$ (1,210) |
|
Operating Margin: |
-7.1% |
-7.6% |
||
Emerging Businesses |
$ 2,158 |
$ 11 |
$ 2,169 |
|
Operating Margin: |
2.6% |
2.5% |
||
Company (Consolidated) |
$ 17,841 |
$ (1,128) |
$ 16,713 |
|
Operating Margin: |
5.7% |
5.2% |
||
Segments Defined: |
CMS (Customer Management Services), CGS (Customer Growth Services), CTS (Customer Technology Services), CSS (Customer Strategy Services) Emerging Businesses: CGS, CTS, and CSS |
|||
Methodology: |
Foreign exchange fluctuations are calculated on a constant currency basis by translating the current year reported amounts using the prior year foreign exchange rate for each underlying currency |
|||
Non-GAAP Operating Income: |
Adjusted for restructuring and impairment costs |
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