DENVER, Feb. 8 /PRNewswire/ -- TeleTech Holdings, Inc. (Nasdaq: TTEC), one of the fastest growing and largest global providers of customer relationship management services and solutions, today announced record fourth quarter and year-end 2000 financial results.
In the fourth quarter 2000, TeleTech reported continued strong growth in both revenues and net income. TeleTech's fourth quarter revenues climbed 35 percent to $243.8 million from $180.8 million in the year-ago quarter. The company's net income, excluding net, non-recurring items, increased 63 percent to a record $16.3 million, or $0.21 per diluted share, up from $10.0 million, or $0.13 per diluted share, on the same basis last year. Including net, non-recurring items, TeleTech's fourth quarter 2000 net income was $8.5 million, or $0.11 per diluted share.
Revenues for the year ended December 31, 2000, reached a record $885.3 million, increasing more than $281 million, or 47 percent, from 1999 revenues of $604.3 million. Approximately 98 percent of the $281 million revenue growth was organic.
The company's net income, excluding net, non-recurring items for the year ended December 31, 2000, increased 60 percent to a record $52.4 million, or $0.66 per diluted share, up from $32.7 million, or $0.44 per diluted share, in 1999. Including net, non-recurring items, TeleTech's 2000 net income was $73.8 million, or $0.93 per diluted share.
In the fourth quarter, TeleTech recorded a number of non-recurring items. Included in operating expense is $9.0 million related to the anticipated loss on the sale of its headquarters building and $4.7 million related to the consolidation of certain customer interaction centers. Included in other income/expense is a $7.8 million charge related to acquisition deal costs, offset by a $12.1 million gain on the sale of a portion of an equity investment.
"This year we delivered on our commitment to strong growth and a proven business strategy," said Scott Thompson, TeleTech CEO and president. "Our longstanding relationships with blue-chip companies worldwide and our continued success in winning large, multi-year contracts has enabled us to drive revenues up 47 percent during the year. We continue to outpace the worldwide CRM outsourcing industry, which IDC estimates is growing at 27 percent annually through 2004. Additionally, we consistently improved our operating margin throughout the year, representing a significant contribution to our bottom line."
Operating margin for the fourth quarter 2000, exclusive of non-recurring items, increased to 11.8 percent. This compares to 9.9 percent for the third quarter 2000 and 8.6 percent for the fourth quarter 1999. The improvement in the fourth quarter was attributable to strong revenue growth from both new and existing clients, as well as contract restructurings with two clients in the financial services industry. Operating margin for fiscal year 2000, exclusive of non-recurring items, was 10.2 percent, up 190 basis points from 8.3 percent in 1999.
TeleTech's 2000 international revenues grew more than 100 percent from 1999, reaching $317 million and representing 36 percent of 2000 consolidated revenues. Excluding programs that support U.S.-based customers from international facilities in Canada and Mexico, TeleTech's 2000 international revenues were $248 million, or 28 percent of consolidated revenues.
2000 YEAR IN REVIEW
"We moved aggressively in 2000 to solidify the three pillars of our growth strategy -- globalization, verticalization and insource," said Thompson. "We expanded into Spain and Hong Kong; we continued to refine our customized solutions for several market sectors including the communications, financial services, government and transportation industries; and we launched enhansiv, a business dedicated to serving companies that manage their customer relationship function in-house as well as supporting TeleTech's multi-channel client requirements."
Globalization
To meet the needs of its growing global client base, TeleTech successfully expanded its global reach during 2000 to 49 points of presence across 11 countries. TeleTech strengthened its presence in Europe with the successful acquisition of the largest privately held CRM company in Spain, and expanded into Greater China through the acquisition of one of Hong Kong's leading CRM outsourcing companies. As a result of this expansion, TeleTech experienced tremendous growth in its international revenues in 2000.
Verticalization
Through strategic alliances and targeted acquisitions, TeleTech well positioned itself within four industries during 2000 that are demonstrating high growth in CRM -- communications, financial services, government and transportation. According to industry analyst firm International Data Corporation, CRM will continue to be a major strategy and operational priority for many vertical industries, with communications and financial services representing more than 50 percent of the market.
In the communications sector, TeleTech completed the acquisition of the customer care division of Boston Communications Group during the fourth quarter 2000. Boston Communications is a leading provider of transaction processing and payment services to wireless carriers in North America, and TeleTech's purchase of the customer care division significantly strengthens the company's position within this fast-growing sector of the communications industry.
TeleTech established a strong presence in the high-growth financial services industry with the addition of several leading brands, including Allstate, American Express Brokerage, Commonwealth Bank and Lehman Brothers Bank. Additionally, TeleTech formed a strategic alliance with PricewaterhouseCoopers to jointly deliver a fully integrated CRM solution to the financial services sector, an area in which both TeleTech and PricewaterhouseCoopers have proven experience with some of the world's leading financial institutions.
TeleTech fueled its growth in the transportation sector with the successful launch of Percepta, a first-of-its-kind joint venture with Ford Motor Company created to consolidate and centralize Ford's customer relationship management functions around the globe. Today, Percepta is operational in the United States, Canada, Australia and the United Kingdom.
Lastly, TeleTech completed its acquisition of Newgen Results Corporation in the fourth quarter to further strengthen its position in the transportation sector. The acquisition broadens TeleTech's solution set with enhanced database management capabilities and the addition of an enterprise channel management offering. TeleTech plans to introduce Newgen's capabilities to additional markets and industries in 2001.
Insource Market
During the year, TeleTech launched enhansiv, a business dedicated to the development, deployment and management of remote-hosted eCRM technology solutions. enhansiv's multi-channel customer relationship management solutions are delivered across a virtual, centralized infrastructure, enabling companies to implement effective CRM strategies in-house.
2001 OUTLOOK
"Looking ahead, we will be very focused on delivering continued improvement in our operating margin and cash flow from operations as well as introduce new solution and service offerings such as automated operations, electronic channel management and virtual infrastructure services," said Thompson. "We are very confident that we have the right strategies and management team in place to fulfill our commitment to deliver strong top- and bottom-line growth and increased shareholder value."
The following statements are based on current expectations regarding TeleTech's outlook on its future financial results.
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For fiscal year 2001, the company expects revenue to be within the range of $1.16 billion to $1.2 billion. The company expects first quarter revenue to be within the range of $245 to $255 million; second quarter to be within the range of $275 to $285 million; third quarter to be within the range of $305 to $315 million; and fourth quarter to be within the range of $335 to $345 million.
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The company expects 2001 net income to be within the range of 90 to 96 cents per diluted share. The company expects first quarter net income to be within the range of 17 to 18 cents per diluted share; second quarter to be within the range of 21 to 22 cents; third quarter to be within the range of 24 to 26 cents; and fourth quarter to be within the range of 28 to 30 cents per diluted share.
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For the fiscal year 2001, the company anticipates capital expenditures to be within a range of $105 to $115 million.
TELETECH PROFILE
Founded in 1982, TeleTech is the leading provider of integrated customer relationship management solutions (CRM) for global organizations predominantly in the communications, financial services, technology, government and transportation industries. TeleTech has operations in 11 countries which include Argentina, Australia, Brazil, Canada, China, Mexico, New Zealand, Singapore, Spain, the U.K. and the U.S. TeleTech's CRM capabilities, including B2B electronic channel management and database management, help companies inform, acquire, service, grow and retain their customers throughout the entire relationship lifecycle. TeleTech integrates a full spectrum of voice and Internet communications, including custom e-mail response, "chat" and extensive Web co-browsing capabilities. Information regarding TeleTech Holdings can be found on the Worldwide Web at http://www.teletech.com.
FORWARD LOOKING STATEMENTS
All statements not based on historical fact are forward-looking statements that involve substantial risks and uncertainties. In accordance with the Private Securities Litigation Reform Act of 1995, following are important factors that could cause TeleTech's actual results to differ materially from those expressed or implied by such forward-looking statements: lower than anticipated customer interaction center capacity utilization; the loss or delay in implementation of a customer management program; TeleTech's ability to build-out facilities in a timely and economic manner; greater than anticipated competition from new entrants into the customer care market, causing increased price competition or loss of clients; the loss of one or more significant clients; higher than anticipated start-up costs associated with new business opportunities and ventures; TeleTech's ability to predict future revenues and associated costs, as well as the potential volume or profitability of any future technology or consulting sales; TeleTech's agreements with clients may be canceled on relatively short notice; and TeleTech's ability to generate a specific level of revenue is dependent upon customer interest in and use of the Company's clients' products and services. Readers are encouraged to review TeleTech's 1999 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, for first, second and third quarters 2000, and other publicly filed documents which describe other important factors that may impact TeleTech's business, results of operations and financial condition. TeleTech undertakes no obligation to update its forward looking statements after the date of this release.
TELETECH HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
Three months ended Twelve months ended
December 31, December 31,
2000 1999 2000 1999
Revenues $243,842 $180,829 $885,349 $604,264
Operating expenses:
Costs of services 146,279 121,849 560,826 406,149
Other operating expenses 68,875 43,424 234,524 147,918
Non-recurring items 13,663 -- 17,082 --
Total operating
expenses 228,817 165,273 812,432 554,067
Operating Income 15,025 15,556 72,917 50,197
Other income (expense):
Non-recurring items 4,335 -- 50,726 6,726
Other (854) 134 (1,340) 835
Total other income
(expense) 3,481 134 49,386 7,561
Income Before Income Taxes 18,506 15,690 122,303 57,758
Income tax expense 9,329 5,711 46,938 20,978
Net Income before
Minority Interest 9,177 9,979 75,365 36,780
Minority interest (634) -- (1,559) --
Net Income $8,543 $9,979 $73,806 $36,780
Basic Earnings Per Share $0.11 $0.14 $1.00 $0.51
Diluted Earnings Per Share $0.11 $0.13 $0.93 $0.49
Operating Margin 6.2% 8.6% 8.2% 8.3%
Net Income Margin 3.5% 5.5% 8.3% 6.1%
Effective Tax Rate 50.4% 36.4% 38.4% 36.3%
Shares Outstanding
Basic 74,605 72,468 74,171 70,557
Diluted 78,973 75,280 79,108 74,462
Excluding Non-recurring items:
Operating Income $28,688 $15,556 $89,999 $50,197
Operating Margin 11.8% 8.6% 10.2% 8.3%
Net Income $16,271 $9,979 $52,368 $32,694
Basic Earnings
Per Share $0.22 $0.14 $0.71 $0.46
Diluted Earnings
Per Share $0.21 $0.13 $0.66 $0.44
Effective Tax Rate 39.3% 36.4% 39.3% 36.3%
TELETECH HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, December 31,
2000 1999
ASSETS
Current assets:
Cash and cash equivalents $56,997 $22,077
Short-term investments 27,478 59,039
Accounts receivable, net 193,351 101,450
Other current assets 18,862 11,223
Total current assets 296,688 193,789
Property and Equipment, net 186,672 117,363
Other assets 105,876 51,427
Total assets $589,236 $362,579
LIABILITIES AND STOCKHOLDERS' EQUITY
Total current liabilities $137,586 $81,939
Total noncurrent liabilities 82,300 27,495
Total stockholders' equity 369,350 253,145
Total liabilities and
stockholders' equity $589,236 $362,579
TELETECH HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED CASH FLOW INFORMATION
(In thousands)
Twelve months ended
December 31,
2000 1999
Cash flow from operating activities:
Net income $73,806 $36,780
Adjustments to reconcile net income
to net cash provided
from operating activities:
Depreciation and amortization 44,439 32,661
Other (103,098) (5,128)
Net cash (used in) provided
by operating activities $15,147 $64,313
Total Capital Expenditures $112,540 $60,446
(inclusive of capital leases) SOURCE TeleTech Holdings, Inc.
CONTACT: Kirsten Hamling, Investor Relations of TeleTech Holdings, Inc., 303-894-7379, kirstenhamling@teletech.com/