Press Release

DENVER, Nov. 8, 2017 /PRNewswire/ -- TeleTech Holdings, Inc. (NASDAQ: TTEC), a leading global provider of customer experience, engagement, and growth solutions delivered through its proprietary end-to-end Humanify™ Customer Engagement as a Service offering, today announced financial results for the third quarter ended September 30, 2017.

"We are pleased to report another productive quarter with strong bookings, revenue, and operating income in line with our expectations," commented Ken Tuchman, chairman and chief executive officer of TeleTech. "Highlights include this month's completion of the strategic acquisition of trust and safety, community moderation company, Motif, Inc., and record third quarter bookings in our Customer Technology Services segment, including significant demand for cloud-based solutions. In addition, we completed the majority of the Connextions integration and made the necessary investments to prepare for a strong seasonal fourth quarter. Excluding the financial impact of the seasonal ramp initiatives, our third quarter operating income continued to expand and set the stage for a record high fourth quarter and our improved full year outlook."

Tuchman continued, "Through our digitally-enabled Humanify™ Customer Engagement as a Service offering, we are helping clients design and deliver captivating customer experiences at scale within or across any channel at the highest total value delivered. As services become an increasingly important differentiator for customers, our ability to weave strategy, insights, technology and operations together to deliver seamless, frictionless and personalized experiences continues to drive our growth and unique position in the market." 

THIRD QUARTER 2017 FINANCIAL HIGHLIGHTS

GAAP - In accordance with Generally Accepted Accounting Principles.

Non-GAAP AHFS/WD (Excluding Assets Held for Sale and Wind-down) - As discussed below and shown in the attached reconciliation table, the definition of Non-GAAP AHFS/WD excludes from revenue and operating income i) assets held for sale and wind-down, and ii) impairment, restructuring and integration charges.

Revenue

• Third quarter 2017 GAAP revenue increased 14.8 percent to $359 million compared to $312.8 million in the prior year period. Inorganic revenue growth was 13.9 percent.
• Non-GAAP AHFS/WD revenue increased 16.9 percent to $356 million over the prior year period. Inorganic revenue growth was 14.3 percent.

Income from Operations

• Third quarter 2017 GAAP income from operations was $15.8 million, or 4.4 percent of revenue, compared to $12.5 million, or 4.0 percent of revenue in the third quarter 2016.
• Non-GAAP AHFS/WD income from operations was $22.8 million or 6.4 percent of adjusted revenue versus $22.7 million or 7.5 percent in the prior year.

Earnings Per Share

• Third quarter 2017 GAAP fully diluted earnings per share attributable to TeleTech shareholders was 32 cents compared to 24 cents in the same period last year.
• Non-GAAP fully diluted earnings per share attributable to TeleTech shareholders was 34 cents versus 39 cents in the prior year.

Bookings

• During the third quarter 2017, TeleTech signed an estimated $114 million in annualized contract value revenue from new and existing client relationships. The third quarter bookings mix was diversified across all verticals with 91 percent from existing clients and 17 percent from outside of the United States.

STRONG BALANCE SHEET CONTINUES TO FUND OPERATIONS, DIVIDENDS, AND INVESTMENTS

• As of September 30, 2017, TeleTech had cash and cash equivalents of $79 million and $271 million of total debt, resulting in a net debt position of $192 million.
• As of September 30, 2017, TeleTech had approximately $390 million of additional borrowing capacity available under its revolving credit facility.
• Cash flow from operations in the third quarter 2017 was $24.2 million compared to $55.8 million in the third quarter 2016.
• Capital expenditures in the third quarter 2017 were $14.3 million compared to $11.1 million in the third quarter 2016.
• Declared a 25-cent dividend per share, or $11.5 million, on September 21, 2017, which was paid on October 17, 2017 to shareholders of record on October 5, 2017. The dividend represented a 25 percent increase over the distribution paid in October 2016.

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

• CMS third quarter 2017 revenue increased 24.0 percent to $277.4 million compared to $223.7 million in the year ago quarter. Inorganic revenue growth was 19.5 percent. Income from operations was $9.1 million or 3.3 percent of revenue compared to $12.3 million or 5.5 percent of revenue in the prior year.
• Non-GAAP income from operations was $15.1 million or 5.4 percent of revenue. This compares to $15.8 million or 7.1 percent of revenue in the prior year.

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

• CGS third quarter 2017 revenue declined 12.7 percent to $30.8 million compared to $35.3 million in the year ago quarter. Income from operations was $1.6 million or 5.1 percent of revenue compared to $0.2 million or 0.5 percent of revenue in the prior year.
• Non-GAAP AHFS/WD revenue declined 12.4 percent over the year ago period and income from operations was $1.7 million or 5.9 percent of adjusted revenue. This compares to $0.8 million or 2.5 percent of adjusted revenue in the prior year.

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

• CTS third quarter 2017 revenue declined 5.5 percent to $34.6 million compared to $36.6 million in the year ago quarter. Income from operations was $4.2 million or 12.0 percent of revenue compared to $3.8 million or 10.3 percent of revenue in the prior year.
• Non-GAAP AHFS/WD revenue increased 10.7 percent over the year ago period and income from operations was $4.2 million or 12.1 percent of adjusted revenue. This compares to $4.4 million or 14.1 percent of adjusted revenue in the prior year.

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

• CSS third quarter 2017 revenue declined 5.7 percent to $16.3 million from $17.3 million in the year ago quarter. Income from operations was $0.9 million or 5.8 percent of revenue compared to an operating loss of $3.7 million or negative 21.3 percent of revenue in the prior year.
• Non-GAAP AHFS/WD revenue declined 8.1 percent over the year ago period and income from operations was $1.8 million or 12.4 percent of adjusted revenue. This compares to operating income of $1.7 million or 10.6 percent of revenue in the prior year.

BUSINESS OUTLOOK

"We delivered on many fronts in the third quarter," commented Regina Paolillo, chief financial and administrative officer of TeleTech. "Our commitment to narrow our focus and improve our profitability is transforming our financial performance. In the third quarter, our bookings and revenue volumes increased as did our operating margin after excluding the ramp costs associated with increased fourth quarter seasonal volumes. Based on the additional seasonal volume, we now expect our full year 2017 revenue to grow approximately 15.1 percent and our operating income to grow 26.5 percent.  Additionally, we expect the acquisitions we have completed and the organic investments we have made to provide us the client base, solution portfolio, channels and geographic footprint to continue this top line growth and profitability into 2018."

Increased full year 2017 estimated revenue and operating income guidance for TeleTech which excludes i) assets held for sale and wind-down, and ii) impairment, restructuring and integration charges as follows:

Revenue - Revenue between $1.425 and $1.435 billion, up from $1.400 and $1.410 billion.

Operating Income Margin - Operating income margin remains unchanged in the range of 8.3 and 8.5 percent.

Capital Expenditures - Capital expenditures of 4.4 percent of revenue, down from 4.6 percent.

ABOUT TELETECH

TeleTech (NASDAQ: TTEC) is a leading global provider of customer experience, engagement and growth solutions delivered through its proprietary end-to-end Humanify™ Customer Engagement as a Service offering. 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. TeleTech's 49,500 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.

 

 

 

 

 

 

 

SOURCE TeleTech Holdings, Inc.