"In 2015, we achieved another year of strong bookings, signed new marquee clients, expanded our integrated suite of offerings, and launched several innovative products," commented
Tuchman continued, "The market is ripe for our integrated customer experience managed services platform and we have the elements to accelerate market leadership. As we move into 2016, we are keenly focused on deepening and growing our client relationships, strengthening our heritage core offerings, investing in cloud delivery and digital innovation, executing on strategic acquisitions, and returning value to our shareholders through share repurchases and dividends."
FULL YEAR 2015 FINANCIAL HIGHLIGHTS
Revenue
- Full year 2015 GAAP revenue was
$1.287 billion compared to$1.242 billion in 2014. - On a non-GAAP constant currency basis, 2015 revenue grew 8.8 percent to
$1.351 billion over the prior year. Organic growth was 6.5 percent.
Income from Operations
- Full year 2015 GAAP income from operations was
$90.2 million or 7.0 percent of revenue compared to$96.5 million or 7.8 percent of revenue in 2014. - 2015 income from operations on a non-GAAP constant currency basis, adjusted for
$9.9 million in restructuring charges and asset impairments, was$115.0 million , representing 8.5 percent of adjusted revenue versus 8.1 percent the prior year.
Earnings Per Share
- Full year 2015 GAAP fully diluted earnings per share attributable to
TeleTech shareholders was$1 .26 compared to $1.44 in 2014. - Non-GAAP fully diluted earnings per share was
$1.48 compared to$1.43 in the prior year.
Bookings
- During the full year 2015,
TeleTech signed an estimated$470 million in annualized contract value revenue from new and expanded client relationships, a seven percent increase over the prior year. The bookings mix was diversified across all verticals with approximately 80 percent from existing clients, 56 percent from emerging businesses, and 15 percent outside ofthe United States .
FOURTH QUARTER 2015 FINANCIAL HIGHLIGHTS
Revenue
- Fourth quarter 2015 GAAP revenue increased 1.1 percent to
$341.8 million compared to$338.2 million in the prior year period. - Non-GAAP constant currency revenue increased 5.6 percent to
$357.0 million over the prior year.
Income from Operations
- Fourth quarter 2015 GAAP income from operations was
$25.1 million , or 7.3 percent of revenue, compared to$30.1 million , or 8.9 percent of revenue in the fourth quarter 2014. - Non-GAAP constant currency income from operations, adjusted for
$5.2 million in restructuring charges and asset impairments, was$31.3 million or 8.8 percent of revenue.
Earnings Per Share
- Fourth quarter 2015 GAAP fully diluted earnings per share attributable to
TeleTech shareholders was35 cents compared to44 cents in the same period last year. - Non-GAAP fully diluted earnings per share was
47 cents compared to46 cents in the prior year.
Bookings
- During the fourth quarter 2015,
TeleTech signed an estimated$117 million in annualized contract value revenue from new and expanded client relationships, a 17 percent increase over the prior year quarter. The bookings mix was diversified across all verticals with 84 percent from existing clients, 45 percent from emerging businesses, and 20 percent from outside ofthe United States .
STRONG BALANCE SHEET CONTINUES TO FUND OPERATIONS, SHARE REPURCHASES, DIVIDENDS, AND INVESTMENTS
- As of
December 31, 2015 ,TeleTech had cash and cash equivalents of$60.3 million and$107.3 million of total debt, resulting in a net debt position of$47.0 million . - As of
December 31, 2015 ,TeleTech had approximately$415 million of additional borrowing capacity available under its revolving credit facility. - Cash flow from operations in the fourth quarter 2015 was
$17.6 million compared to$32.2 million in the fourth quarter 2014. - Capital expenditures in the fourth quarter 2015 were
$17.4 million compared to$15.4 million in the fourth quarter 2014. TeleTech repurchased twenty three thousand shares of common stock during the fourth quarter 2015 for a total cost of$0.6 million . For full-year 2015,TeleTech repurchased 686 thousand shares for a total cost of$17.2 million . As ofDecember 31, 2015 ,$19.6 million was authorized for future share repurchases.
OnFebruary 18, 2016 ,TeleTech's Board of Directors increased the authorized share repurchase allowance by an incremental$25 million .TeleTech paid a semi-annual dividend of$0.18 per share onOctober 14, 2015 to shareholders of record onSeptember 30, 2015 .
OnFebruary 18, 2016 ,TeleTech's Board of Directors declared an increase in the semi-annual dividend to$0.185 per share, payable onApril 15, 2016 to shareholders of record on March 31, 2016.
SEGMENT REPORTING & COMMENTARY
Customer Management Services (CMS) – Customer Experience Delivery Solutions
- In the fourth quarter 2015, the CMS segment revenue was
$238.3 million , down 4.7 percent compared to$250.1 million in the year ago quarter. Income from operations was$14.1 million or 5.9 percent of revenue compared to$20.8 million or 8.3 percent in the prior year. - Non-GAAP constant currency revenue increased 0.4 percent over the year ago period and income from operations, adjusted for
$2.3 million in restructuring charges and asset impairments, was$17.1 million or 6.8 percent of adjusted revenue. This compares to$22.0 million or 8.8 percent of revenue in the prior year.
Customer Growth Services (CGS) – Digitally-Enabled Revenue Growth Solutions
- CGS fourth quarter 2015 revenue grew 33.8 percent to
$38.6 million compared to$28.9 million in the year ago quarter. Income from operations was$1.2 million , or 3.1 percent of revenue compared to$1.9 million or 6.4 percent in the prior year. - Non-GAAP constant currency revenue increased 38.6 percent over the year ago period and income from operations, adjusted for
$2.9 million in restructuring charges and asset impairments, was$4.5 million or 11.2 percent. This compares to$1.9 million or 6.5 percent of revenue in the prior year.
Customer Technology Services (CTS) – Hosted and Managed Technology Solutions
- CTS fourth quarter 2015 revenue grew 17.5 percent to
$41.7 million compared to$35.5 million in the year ago quarter. Income from operations was$4.3 million or 10.3 percent of revenue compared to$2.9 million or 8.1% in the prior year. - Non-GAAP constant currency revenue increased 17.6 percent over the year ago period and income from operations was
$4.1 million or 9.9 percent of revenue. This compares to$3.3 million or 9.2 percent of revenue in the prior year.
Customer Strategy Services (CSS) – Customer Experience Strategy and Data Analytics Solutions
- CSS fourth quarter 2015 revenue decreased 2.0 percent to
$23.2 million from$23.7 million in the year ago quarter. Income from operations was$5.5 million or 23.8 percent of revenue, an increase from 19.2 percent in the prior year. - Non-GAAP constant currency revenue increased 1.4 percent over the year ago period and income from operations was
$5.6 million or 23.4 percent of revenue. This compares to$4.9 million or 20.8 percent of revenue in the prior year.
BUSINESS OUTLOOK
"The race is on for companies across the globe to deliver experiences that set them apart from their competition. Forward thinking, value-oriented brands are increasingly selecting
Paolillo continued, "We estimate a 2016 constant currency revenue growth rate between 6.75 and 7.50 percent, which assumes an estimated three percentage points of adverse impact from foreign exchange rate movements. Our emerging Customer Strategy, Technology and Growth businesses are estimated to collectively grow revenue in the low to mid double digits, while our Customer Management business will be in the low to mid single digits, before adjusting for an approximate three percent adverse impact from foreign exchange. We expect 46 percent of our revenue and operating income in the first half of 2016 with the balance in the second half."
- Revenue – GAAP revenue estimated between
$1.335 and $1.345 billion , reflecting an approximate three percent adverse impact from foreign exchange rate movements. - Operating Income Margin – GAAP operating income margin estimated to range between 8.1 and 8.3 percent, reflecting an approximate 20 basis points adverse impact from foreign exchange movements.
- Capital Expenditures – Capital expenditure are estimated to approximate 4.5 percent of revenue.
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) |
|||||||||
Three months ended |
Twelve months ended |
||||||||
December 31, |
December 31, |
||||||||
2015 |
2014 |
2015 |
2014 |
||||||
Revenue |
$341,816 |
$338,170 |
$1,286,755 |
$1,241,781 |
|||||
Operating Expenses: |
|||||||||
Cost of services |
245,668 |
240,146 |
928,247 |
886,492 |
|||||
Selling, general and administrative |
48,575 |
50,537 |
194,606 |
198,553 |
|||||
Depreciation and amortization |
17,279 |
15,386 |
63,808 |
56,538 |
|||||
Restructuring charges, net |
185 |
1,600 |
1,814 |
3,350 |
|||||
Impairment losses |
5,034 |
373 |
8,100 |
373 |
|||||
Total operating expenses |
316,741 |
308,042 |
1,196,575 |
1,145,306 |
|||||
Income From Operations |
25,075 |
30,128 |
90,180 |
96,475 |
|||||
Other income (expense) |
(590) |
2,138 |
(4,291) |
3,984 |
|||||
Income Before Income Taxes |
24,485 |
32,266 |
85,889 |
100,459 |
|||||
Provision for income taxes |
(6,566) |
(8,971) |
(20,004) |
(23,042) |
|||||
Net Income |
17,919 |
23,295 |
65,885 |
77,417 |
|||||
Net income attributable to noncontrolling interest |
(916) |
(1,329) |
(4,219) |
(5,124) |
|||||
Net Income Attributable to TeleTech Stockholders |
$ 17,003 |
$ 21,966 |
$ 61,666 |
$ 72,293 |
|||||
Net Income Per Share Attributable to TeleTech Stockholders |
|||||||||
Basic |
$ 0.35 |
$ 0.45 |
$ 1.27 |
$ 1.47 |
|||||
Diluted |
$ 0.35 |
$ 0.44 |
$ 1.26 |
$ 1.44 |
|||||
Income From Operations Margin |
7.3% |
8.9% |
7.0% |
7.8% |
|||||
Net Income Attributable to TeleTech Stockholders Margin |
5.0% |
6.5% |
4.8% |
5.8% |
|||||
Effective Tax Rate |
26.8% |
27.8% |
23.3% |
22.9% |
|||||
Weighted Average Shares Outstanding |
|||||||||
Basic |
48,439 |
48,714 |
48,370 |
49,297 |
|||||
Diluted |
48,853 |
49,514 |
49,011 |
50,102 |
TELETECH HOLDINGS, INC. AND SUBSIDIARIES |
||||||||
SEGMENT INFORMATION |
||||||||
(In thousands) |
||||||||
Three months ended |
Twelve months ended |
|||||||
December 31, |
December 31, |
|||||||
2015 |
2014 |
2015 |
2014 |
|||||
Revenue: |
||||||||
Customer Management Services |
$238,257 |
$250,076 |
$ 913,272 |
$ 923,497 |
||||
Customer Growth Services |
38,642 |
28,889 |
129,021 |
115,434 |
||||
Customer Technology Services |
41,671 |
35,475 |
157,606 |
139,182 |
||||
Customer Strategy Services |
23,246 |
23,730 |
86,856 |
63,668 |
||||
Total |
$341,816 |
$338,170 |
$1,286,755 |
$1,241,781 |
||||
Income From Operations: |
||||||||
Customer Management Services |
$ 14,062 |
$ 20,851 |
$ 58,018 |
$ 76,792 |
||||
Customer Growth Services |
1,186 |
1,854 |
3,077 |
7,255 |
||||
Customer Technology Services |
4,306 |
2,878 |
13,339 |
4,519 |
||||
Customer Strategy Services |
5,521 |
4,545 |
15,746 |
7,909 |
||||
Total |
$ 25,075 |
$ 30,128 |
$ 90,180 |
$ 96,475 |
TELETECH HOLDINGS, INC. AND SUBSIDIARIES |
||||
CONSOLIDATED BALANCE SHEETS |
||||
(In thousands) |
||||
December 31, |
December 31, |
|||
2015 |
2014 |
|||
ASSETS |
||||
Current assets: |
||||
Cash and cash equivalents |
$ 60,304 |
$ 77,316 |
||
Accounts receivable, net |
283,474 |
276,432 |
||
Other current assets |
71,294 |
91,735 |
||
Total current assets |
415,072 |
445,483 |
||
Property and equipment, net |
168,289 |
150,212 |
||
Other assets |
259,966 |
256,780 |
||
Total assets |
$ 843,327 |
$ 852,475 |
||
LIABILITIES AND EQUITY |
||||
Total current liabilities |
$ 206,906 |
$ 198,631 |
||
Other long-term liabilities |
191,473 |
187,780 |
||
Mandatorily redeemable noncontrolling interest |
4,131 |
2,814 |
||
Total equity |
440,817 |
463,250 |
||
Total liabilities and equity |
$ 843,327 |
$ 852,475 |
TELETECH HOLDINGS, INC. AND SUBSIDIARIES |
||||||||
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION |
||||||||
(In thousands, except per share data) |
||||||||
Three months ended |
Twelve months ended |
|||||||
December 31, |
December 31, |
|||||||
2015 |
2014 |
2015 |
2014 |
|||||
Reconciliation of Revenue: |
||||||||
Revenue |
$341,816 |
$338,170 |
$1,286,755 |
$1,241,781 |
||||
Changes due to foreign currency fluctuations 1 |
15,169 |
63,746 |
||||||
Non-GAAP Revenue |
$356,985 |
$338,170 |
$1,350,501 |
$1,241,781 |
||||
Reconciliation of EBIT & EBITDA: |
||||||||
Net Income Attributable to TeleTech stockholders |
$ 17,003 |
$ 21,966 |
$ 61,666 |
$ 72,293 |
||||
Interest income |
(213) |
(224) |
(1,090) |
(1,769) |
||||
Interest expense |
1,827 |
1,749 |
7,538 |
6,946 |
||||
Provision for income taxes |
6,566 |
8,971 |
20,004 |
23,042 |
||||
EBIT |
$ 25,183 |
$ 32,462 |
$ 88,118 |
$ 100,512 |
||||
Depreciation and amortization |
17,279 |
15,386 |
63,808 |
56,538 |
||||
EBITDA |
$ 42,462 |
$ 47,848 |
$ 151,926 |
$ 157,050 |
||||
Reconciliation of Free Cash Flow: |
||||||||
Cash Flow From Operating Activities: |
||||||||
Net income |
$ 17,919 |
$ 23,295 |
$ 65,885 |
$ 77,417 |
||||
Adjustments to reconcile net income to net cash |
||||||||
provided by operating activities: |
||||||||
Depreciation and amortization |
17,279 |
15,386 |
63,808 |
56,538 |
||||
Other |
(17,612) |
(6,498) |
4,057 |
(39,865) |
||||
Net cash provided by operating activities |
17,586 |
32,183 |
133,750 |
94,090 |
||||
Less - Total Capital Expenditures |
17,411 |
15,407 |
66,595 |
67,641 |
||||
Free Cash Flow |
$ 175 |
$ 16,776 |
$ 67,155 |
$ 26,449 |
||||
Reconciliation of Non-GAAP Income from Operations: |
||||||||
Income from Operations |
$ 25,075 |
$ 30,128 |
$ 90,180 |
$ 96,475 |
||||
Restructuring charges, net |
185 |
1,600 |
1,814 |
3,350 |
||||
Impairment losses |
5,034 |
373 |
8,100 |
373 |
||||
Non-GAAP Income from Operations |
$ 30,294 |
$ 32,101 |
$ 100,094 |
$ 100,198 |
||||
Non-GAAP Income from Operations Margin |
8.9% |
9.5% |
7.8% |
8.1% |
||||
Reconciliation of Non-GAAP EPS: |
||||||||
Net Income Attributable to TeleTech stockholders |
$ 17,003 |
$ 21,966 |
$ 61,666 |
$ 72,293 |
||||
Add: Asset impairment and restructuring charges, net of related taxes |
3,828 |
1,342 |
6,629 |
2,456 |
||||
Add: Changes in acquisition contingent consideration, net of related taxes |
208 |
(949) |
313 |
(2,804) |
||||
Add: Changes in valuation allowance and returns to provision adjustments |
2,110 |
272 |
3,868 |
(126) |
||||
Non-GAAP Net Income Attributable to TeleTech stockholders |
$ 23,149 |
$ 22,631 |
$ 72,476 |
$ 71,819 |
||||
Diluted shares outstanding |
48,853 |
49,514 |
49,011 |
50,102 |
||||
Non-GAAP EPS Attributable to TeleTech stockholders |
$0.47 |
$0.46 |
$1.48 |
$1.43 |
||||
Reconciliation of Non-GAAP EBITDA: |
||||||||
Net Income Attributable to TeleTech stockholders |
$ 17,003 |
$ 21,966 |
$ 61,666 |
$ 72,293 |
||||
Interest income |
(213) |
(224) |
(1,090) |
(1,769) |
||||
Interest expense |
1,827 |
1,749 |
7,538 |
6,946 |
||||
Provision for income taxes |
6,566 |
8,971 |
20,004 |
23,042 |
||||
Depreciation and amortization |
17,279 |
15,386 |
63,808 |
56,538 |
||||
Asset impairment and restructuring charges |
5,219 |
1,973 |
9,914 |
3,723 |
||||
Changes in acquisition contingent consideration |
(278) |
(2,719) |
26 |
(6,629) |
||||
Equity-based compensation expenses |
2,735 |
2,276 |
11,304 |
11,307 |
||||
Non-GAAP EBITDA |
$ 50,138 |
$ 49,378 |
$ 173,170 |
$ 165,451 |
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 underlying currency. |
TELETECH HOLDINGS, INC. AND SUBSIDIARIES |
||||
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION |
||||
(In thousands) |
||||
(Unaudited) |
||||
FOURTH QUARTER |
||||
(three months end, December 31, 2015) |
||||
Revenue |
||||
GAAP Revenue |
Foreign Exchange Impact |
Constant Currency Revenue |
||
CMS |
$ 238,257 |
$ 12,882 |
$ 251,139 |
|
YoY Growth Rate: |
-4.7% |
0.4% |
||
CGS |
$ 38,642 |
$ 1,399 |
$ 40,041 |
|
YoY Growth Rate: |
33.8% |
38.6% |
||
CTS |
$ 41,671 |
$ 64 |
$ 41,735 |
|
YoY Growth Rate: |
17.5% |
17.6% |
||
CSS |
$ 23,246 |
$ 824 |
$ 24,070 |
|
YoY Growth Rate: |
-2.0% |
1.4% |
||
Emerging Businesses |
$ 103,559 |
$ 2,287 |
$ 105,846 |
|
YoY Growth Rate: |
17.6% |
20.2% |
||
Company (Consolidated) |
$ 341,816 |
$ 15,169 |
$ 356,985 |
|
YoY Growth Rate: |
1.1% |
5.6% |
||
Operating Income |
||||
Non-GAAP Operating Income |
Foreign Exchange Impact |
Constant Currency Operating Income |
||
CMS |
$ 16,356 |
$ 712 |
$ 17,068 |
|
Operating Margin: |
6.9% |
6.8% |
||
CGS |
$ 4,098 |
$ 402 |
$ 4,500 |
|
Operating Margin: |
10.6% |
11.2% |
||
CTS |
$ 4,306 |
$ (182) |
$ 4,124 |
|
Operating Margin: |
10.3% |
9.9% |
||
CSS |
$ 5,534 |
$ 101 |
$ 5,635 |
|
Operating Margin: |
23.8% |
23.4% |
||
Emerging Businesses |
$ 13,938 |
$ 321 |
$ 14,259 |
|
Operating Margin: |
13.5% |
13.5% |
||
Company (Consolidated) |
$ 30,294 |
$ 1,033 |
$ 31,327 |
|
Operating Margin: |
8.9% |
8.8% |
||
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 |
TELETECH HOLDINGS, INC. AND SUBSIDIARIES |
||||
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION |
||||
(In thousands) |
||||
(Unaudited) |
||||
YEAR-TO-DATE |
||||
(twelve- months end, December 31, 2015) |
||||
Revenue |
||||
GAAP Revenue |
Foreign Exchange Impact |
Constant Currency Revenue |
||
CMS |
$ 913,272 |
$ 53,912 |
$ 967,184 |
|
YoY Growth Rate: |
-1.1% |
4.7% |
||
CGS |
$ 129,021 |
$ 5,429 |
$ 134,450 |
|
YoY Growth Rate: |
11.8% |
16.5% |
||
CTS |
$ 157,606 |
$ 518 |
$ 158,124 |
|
YoY Growth Rate: |
13.2% |
13.6% |
||
CSS |
$ 86,856 |
$ 3,887 |
$ 90,743 |
|
YoY Growth Rate: |
36.4% |
42.5% |
||
Emerging Businesses |
$ 373,483 |
$ 9,834 |
$ 383,317 |
|
YoY Growth Rate: |
17.3% |
20.4% |
||
Company (Consolidated) |
$ 1,286,755 |
$ 63,746 |
$ 1,350,501 |
|
YoY Growth Rate: |
3.6% |
8.8% |
||
Operating Income |
||||
Non-GAAP Operating Income |
Foreign Exchange Impact |
Constant Currency Operating Income |
||
CMS |
$ 61,645 |
$ 12,989 |
$ 74,634 |
|
Operating Margin: |
6.7% |
7.7% |
||
CGS |
$ 9,055 |
$ 1,778 |
$ 10,833 |
|
Operating Margin: |
7.0% |
8.1% |
||
CTS |
$ 13,352 |
$ (404) |
$ 12,948 |
|
Operating Margin: |
8.5% |
8.2% |
||
CSS |
$ 16,042 |
$ 495 |
$ 16,537 |
|
Operating Margin: |
18.5% |
18.2% |
||
Emerging Businesses |
$ 38,449 |
$ 1,869 |
$ 40,318 |
|
Operating Margin: |
10.3% |
10.5% |
||
Company (Consolidated) |
$ 100,094 |
$ 14,858 |
$ 114,952 |
|
Operating Margin: |
7.8% |
8.5% |
||
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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