Investor Relations:

Press Release

<< Back
Print Version
TeleTech Announces Second Quarter 2015 Financial Results
Aug 5, 2015
Second Quarter 2015 Results
Revenue Increased 5.0 Percent to $310.2 Million
(10.8 Percent or $327.5 Million on a Constant Currency Basis);
Operating Income was $23.4 Million, 7.5 Percent of Revenue (7.6 Percent Non-GAAP);
Fully Diluted EPS was 30 Cents (34 Cents Non-GAAP)
Signed $100 Million in New Business
Reaffirms Outlook for Full Year 2015 Revenue and Operating Income

DENVER, Aug. 5, 2015 /PRNewswire/ -- TeleTech Holdings, Inc. (NASDAQ: TTEC), a leading global provider of customer experience, engagement and growth solutions, today announced financial results for the second quarter ended June 30, 2015. The Company also filed its Quarterly Report on Form 10-Q with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2015.

"We had a strong first half of 2015 and are pleased with our continued revenue diversity and growth," commented Ken Tuchman, chairman and chief executive officer of TeleTech. "Year-to-date, revenue, EBITDA, operating income, and bookings increased over the prior six-month period. We are also seeing increased adoption of our integrated capabilities, as evidenced by accelerated growth in our strategic Consulting, customer Technology and customer Growth segments, which contributed approximately 29 percent of total revenue in the second quarter of 2015."

Tuchman continued, "The ability to build an emotional connection with customers is paramount to win in today's disruptive and unforgiving experience economy.  Our managed services platform of consulting, analytics, technology and operations helps our clients succeed. Working as partners, we help our clients differentiate their brand with a simple and seamless customer experience, drive deeper engagement with insight-driven relevant interactions and ignite growth with sophisticated digital revenue generation capabilities."

SECOND QUARTER 2015 FINANCIAL HIGHLIGHTS

Revenue        

  • Second quarter 2015 GAAP revenue increased 5.0 percent to $310.2 million compared to $295.5 million in the year ago quarter.
  • On a constant currency basis, revenue was $327.5 million, representing a 10.8 percent growth rate over the year ago period.

Income from Operations

  • Second quarter 2015 GAAP income from operations was $23.4 million or 7.5 percent of revenue compared to $20.7 million or 7.0 percent of revenue in the second quarter 2014.
  • Income from operations, adjusted for $0.2 million in restructuring charges, was $23.6 million or 7.6 percent of revenue. This compares to $21.3 million or 7.2 percent of revenue in the year ago quarter.

Earnings Per Share

  • Second quarter 2015 GAAP fully diluted earnings per share attributable to TeleTech shareholders was 30 cents compared to 34 cents in the second quarter 2014.
  • Adjusted fully diluted earnings per share was 34 cents compared to 30 cents in the prior year.

Bookings

  • During the second quarter 2015, TeleTech signed an estimated $100 million in annualized contract value revenue from new and expanded client relationships. The bookings mix was diversified across all verticals with 92 percent from existing clients, 72 percent from emerging businesses, and 20 percent from clients based outside of the United States.

STRONG BALANCE SHEET CONTINUES TO FUND OPERATIONS, SHARE REPURCHASES, STRATEGIC ACQUISITIONS, AND INVESTMENTS

  • As of June 30, 2015, TeleTech had cash and cash equivalents of $93.8 million and $124.5 million of total debt, resulting in a net debt position of $30.7 million. Cash flow from operations, including stronger accounts receivable collections, aided liquidity.
  • As of June 30, 2015, TeleTech had approximately $385 million of additional borrowing capacity available under its revolving credit facility.
  • Cash flow from operations in the second quarter 2015 was $81.7 million compared to $18.1 million in the second quarter 2014.
  • Capital expenditures in the second quarter 2015 were $16.5 million compared to $19.4 million in the second quarter 2014.
  • TeleTech repurchased approximately 240 thousand shares of common stock during the second quarter 2015 for a total cost of $6.3 million. As of June 30, 2015, $24.6 million was authorized for future share repurchases.

SEGMENT REPORTING & COMMENTARY

TeleTech reports financial results for the following four business segments: Customer Management Services (CMS), Customer Growth Services (CGS), Customer Technology Services (CTS) and Customer Strategy Services (CSS).  Financial highlights for the segments are provided below.

Customer Management Services (CMS) – Customer Experience Delivery Solutions

  • In the second quarter 2015, the CMS segment revenue was $219.3 million, up 0.3 percent from $218.7 million in the year ago quarter. On a constant currency basis, revenue increased 7.0 percent relative to the same period last year.
  • Income from operations was $13.3 million or 6.1 percent compared to $16.5 million or 7.5 percent in the year ago quarter.

Customer Growth Services (CGS) – Digitally-Enabled Revenue Growth Solutions

  • CGS second quarter 2015 revenue grew 5.9 percent to $30.6 million compared to $28.9 million in the year ago quarter. On a constant currency basis, revenue increased 10.5 percent versus the same period last year.
  • Income from operations was $2.1 million or 6.9 percent compared to $1.8 million or 6.3 percent in the prior year period.

Customer Technology Services (CTS) – Hosted and Managed Technology Solutions

  • CTS second quarter 2015 revenue grew 6.6 percent to $38.1 million compared to $35.7 million in the year ago quarter.
  • Income from operations was $3.3 million or 8.5 percent compared to $1.6 million or 4.5 percent in the year ago quarter.

Customer Strategy Services (CSS) – Customer Experience Strategy and Data Analytics Solutions

  • CSS second quarter 2015 revenue increased 82.4 percent to $22.3 million from $12.2 million in the year ago quarter.
  • Income from operations was $4.7 million or 20.9 percent, up from 6.0 percent in the prior year period.

BUSINESS OUTLOOK

"Our financial performance in the first and second quarters of 2015 is in line with expectations," commented Regina Paolillo, chief financial and administrative officer of TeleTech. "With three quarters of steady revenue growth, we are confident our investments are yielding positive returns."

TeleTech reaffirms its 2015 guidance as follows:

Revenue – Year-over-year revenue growth estimated between $1.315 and $1.325 billion, reflecting an estimated four percent adverse impact from foreign exchange translation.  

Operating Margin – Operating margin estimated at 8.25 percent  (before asset impairment, restructuring and acquisition-related charges), but including an incremental $10 million investment in sales and research and development.

Capital Expenditures – Estimated to be approximately six percent of revenue. 

SEC FILINGS

The company's filings with the Securities and Exchange Commission are available in the "Investors" section of TeleTech's website, which can be found at www.teletech.com.

CONFERENCE CALL

A conference call and webcast with management will be held on August 6th, 2015 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 www.teletech.com. If you are unable to participate during the live webcast, a replay will be available on the TeleTech website.

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 Revenue, Non-GAAP Income from Operations, Non-GAAP EBITDA and Non-GAAP EPS. Additionally our discussion of revenue and income from operations contain references to constant currency amounts. Constant currency measures are calculated by translating the current year reported amounts using the prior year foreign exchange rates for each underlying currency. 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 TeleTech's most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q.

ABOUT TELETECH

TeleTech is a leading global customer engagement company.  Founded in 1982, the Company helps its clients acquire, retain and grow profitable customer relationships. Using customer-centric  strategy, technology, processes and operations, TeleTech partners with business leadership across marketing, sales and customer care to design and deliver a simple, more human customer experience across every interaction channel. Servicing over 80 countries, TeleTech's 40,000 employees live by a set of customer focused values that guide relationships with clients, their customers, and each other. To learn more about how TeleTech is bringing humanity to the customer experience visit TeleTech.com.

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, 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 TeleTech's filings with the US Securities and Exchange Commission (the "SEC"), including our most recent Annual Report on Form 10-K and subsequent quarterly financial reports on Form 10-Q. TeleTech's filings with the SEC are available in the "Investors" section of TeleTech's website, www.teletech.com and at the SEC's public website at www.sec.gov.  Our forward looking statements speak only as of the date of the press release and we undertake no obligation to update them, except as may be required by applicable laws.

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


Six months ended





 June 30,


 June 30,





2015


2014


2015


2014













Revenue


$310,223


$295,490


$635,744


$597,711













Operating Expenses:











Cost of services


223,617


212,315


456,601


426,102



Selling, general and administrative


47,376


47,802


97,613


98,169



Depreciation and amortization


15,680


14,089


31,043


27,259



Restructuring charges, net


198


617


1,007


1,157



Impairment losses


-


-


-


-


         Total operating expenses


286,871


274,823


586,264


552,687













Income From Operations


23,352


20,667


49,480


45,024














Other income (expense)


(18)


2,880


(1,706)


2,702













Income Before Income Taxes


23,334


23,547


47,774


47,726














Provision for income taxes


(7,841)


(5,417)


(12,246)


(8,293)













Net Income


15,493


18,130


35,528


39,433














Net income attributable to noncontrolling interest

(797)


(1,268)


(2,060)


(2,353)













Net Income Attributable to TeleTech Stockholders

$  14,696


$  16,862


$  33,468


$  37,080













Net Income Per Share Attributable to TeleTech Stockholders





















Basic


$     0.30


$     0.34


$     0.69


$     0.75














Diluted


$     0.30


$     0.34


$     0.68


$     0.73
























Income From Operations Margin


7.5%


7.0%


7.8%


7.5%


Net Income Attributable to TeleTech Stockholders Margin

4.7%


5.7%


5.3%


6.2%


Effective Tax Rate


33.6%


23.0%


25.6%


17.4%
























Weighted Average Shares Outstanding









  Basic


48,325


49,351


48,347


49,696


  Diluted


49,064


50,111


49,113


50,536













 










TELETECH HOLDINGS, INC. AND SUBSIDIARIES

SEGMENT INFORMATION

(In thousands)

(Unaudited)





















Three months ended


Six months ended



 June 30,


 June 30,



2015


2014


2015


2014










Revenue:









Customer Management Services


$219,316


$218,683


$462,325


$446,607

Customer Growth Services


30,570


28,875


56,526


57,780

Customer Technology Services


38,087


35,737


73,801


68,513

Customer Strategy Services


22,250


12,195


43,092


24,811

Total


$310,223


$295,490


$635,744


$597,711










Income From Operations:









Customer Management Services


$  13,324


$  16,493


$  35,026


$  37,316

Customer Growth Services


2,122


1,831


2,148


3,601

Customer Technology Services


3,250


1,616


5,259


1,927

Customer Strategy Services


4,656


727


7,047


2,180

Total


$  23,352


$  20,667


$  49,480


$  45,024

 

TELETECH HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)








 June 30,


 December 31, 



2015


2014











ASSETS





Current assets:





   Cash and cash equivalents


$  93,842


$  77,316

   Accounts receivable, net


259,833


276,432

   Other current assets


90,979


91,735

      Total current assets


444,654


445,483






Property and equipment, net


159,669


150,212

Other assets


258,882


256,780






Total assets


$863,205


$852,475






LIABILITIES AND EQUITY





Total current liabilities


$202,212


$198,631

Other long-term liabilities


202,012


187,780

Mandatorily redeemable noncontrolling interest


3,410


2,814

Total equity


455,571


463,250






Total liabilities and equity


$863,205


$852,475

 


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,



2015


2014


2015


2014

Reconciliation of Revenue:


















Revenue


$310,223


$295,490


$635,744


$597,711

   Changes due to foreign currency fluctuations  1


17,266




26,796



Non-GAAP Revenue


$327,489


$295,490


$662,540


$597,711



















Reconciliation of EBIT & EBITDA:


















Net Income Attributable to TeleTech stockholders


$  14,696


$  16,862


$  33,468


$  37,080

Interest income


(364)


(492)


(681)


(1,003)

Interest expense


1,676


1,861


3,374


3,551

Provision for income taxes


7,841


5,417


12,246


8,293

EBIT


$  23,849


$  23,648


$  48,407


$  47,921










Depreciation and amortization


15,680


14,089


31,043


27,259










EBITDA


$  39,529


$  37,737


$  79,450


$  75,180



















Reconciliation of Free Cash Flow:


















Cash Flow From Operating Activities:









   Net income


$  15,493


$  18,130


$  35,528


$  39,433

   Adjustments to reconcile net income to net cash provided by operating activities:









          Depreciation and amortization


15,680


14,089


31,043


27,259

          Other


50,520


(14,126)


18,942


(35,062)

   Net cash provided by operating activities


81,693


18,093


85,513


31,630










Less - Total Capital Expenditures


16,467


19,388


29,505


34,483










Free Cash Flow


$  65,226


$   (1,295)


$  56,008


$   (2,853)



















Reconciliation of Non-GAAP Income from Operations:


















Income from Operations


$  23,352


$  20,667


$  49,480


$  45,024

Restructuring charges, net


198


617


1,007


1,157

Impairment losses


-


-


-


-










Non-GAAP Income from Operations


$  23,550


$  21,284


$  50,487


$  46,181










Non-GAAP Income from Operations Margin


7.6%


7.2%


7.6%


7.7%



















Reconciliation of Non-GAAP EPS:


















Net Income Attributable to TeleTech stockholders


$  14,696


$  16,862


$  33,468


$  37,080

 Add:  Asset impairment and restructuring charges, net of related taxes


143


399


640


746

 Add:  Changes in acquisition contingent consideration, net of related taxes


(500)


(2,416)


(455)


(2,416)

 Add:  Changes in valuation allowance and returns to provision adjustments


2,175


196


1,586


(1,777)










 Non-GAAP Net Income Attributable to TeleTech stockholders


$  16,514


$  15,041


$  35,239


$  33,633










    Diluted shares outstanding


49,064


50,111


49,113


50,536










 Non-GAAP EPS Attributable to TeleTech stockholders


$0.34


$0.30


$0.72


$0.67



















Reconciliation of Non-GAAP EBITDA:


















Net Income Attributable to TeleTech stockholders


$  14,696


$  16,862


$  33,468


$  37,080

   Interest income


(364)


(492)


(681)


(1,003)

   Interest expense


1,676


1,861


3,374


3,551

   Provision for income taxes


7,841


5,417


12,246


8,293

   Depreciation and amortization


15,680


14,089


31,043


27,259

   Asset impairment and restructuring charges


198


617


1,007


1,157

   Changes in acquisition contingent consideration


(545)


(3,961)


(503)


(3,961)

   Equity-based compensation expenses


2,588


2,720


5,278


5,881










 Non-GAAP EBITDA


$  41,770


$  37,113


$  85,232


$  78,257



















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. 

 

Logo - http://photos.prnewswire.com/prnh/20140717/127860

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/teletech-announces-second-quarter-2015-financial-results-300124456.html

SOURCE TeleTech Holdings, Inc.