DENVER, Aug. 7, 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 second quarter ended June 30, 2017.

«We are pleased to report another strong quarter and solid close to the first half of 2017. For the first six months of 2017, over the same period last year, we increased revenue, operating income, net income, earnings-per-share, and cash flow from operations,» commented Ken Tuchman, chairman and chief executive officer of TeleTech. «Our improved performance is the result of three primary factors. First, the profit optimization improvements we began executing in the second half of 2016 are yielding favorable results. Second, our end-to-end, outcome-based customer engagement platform continues to increase in relevance in a growing market. Third, the refinement of our sales, account management, and marketing organizations are starting to generate early wins.»

Tuchman continued, «The service experience has become the most important point of differentiation for many companies and the bar continues to rise. When customers experience great service from one company across one channel, they expect and feel entitled to it from every company, across every channel. Through our Humanify™ Customer Engagement as a Service offering, we are helping our clients stay ahead of the complex challenge. With our integrated platform, we are providing the strategy, insights, technology and operational excellence our clients need to orchestrate and deliver captivating experiences across every channel and interaction in the customer journey. Our integrated approach of people, process, analytics and technologies is enabling personalized experiences at scale that delight customers, drive profitable growth for our clients, and increase equity value for our shareholders.»

SECOND QUARTER 2017 FINANCIAL HIGHLIGHTS

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

  • Second quarter 2017 GAAP revenue increased 15.8 percent to $353.4 million compared to $305.1 million in the prior year period. Inorganic revenue growth was 13.3 percent.
  • Non-GAAP AHFS/WD revenue increased 17.3 percent to $347.4 million over the prior year period. Inorganic revenue growth was 13.7 percent.

Income from Operations

  • Second quarter 2017 GAAP income from operations was $21.6 million, or 6.1 percent of revenue, compared to $16.2 million, or 5.3 percent of revenue in the second quarter 2016.
  • Non-GAAP AHFS/WD income from operations was $25.4 million or 7.3 percent of adjusted revenue versus 6.0 percent in the prior year.

Earnings Per Share

  • Second 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 38 cents compared to 28 cents in the same period last year.

Bookings

  • During the second quarter 2017, TeleTech signed an estimated $107 million in annualized contract value revenue from new and existing client relationships. The second quarter bookings mix was diversified across all verticals with 80 percent from existing clients and 11 percent from outside of the United States.

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

  • As of June 30, 2017, TeleTech had cash and cash equivalents of $77.9 million and $273.3 million of total debt, resulting in a net debt position of $195.4 million.
  • As of June 30, 2017, TeleTech had approximately $385 million of additional borrowing capacity available under its revolving credit facility.
  • Cash flow from operations in the second quarter 2017 was $50.5 million compared to $43.5 million in the second quarter 2016.
  • Capital expenditures in the second quarter 2017 were $17.6 million compared to $12.8 million in the second quarter 2016.
  • On April 14, 2017, TeleTech paid a $0.22 per share semi-annual dividend, totaling $10.1 million, to TeleTech shareholders of record on March 31, 2017. This dividend represents an 18.9 percent increase over the distribution in April 2016.
  • During the second quarter 2017, TeleTech repurchased approximately 223 thousand shares of common stock for a total cost of $6.7 million. As of June 30, 2017, $26.6 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

  • CMS second quarter 2017 revenue increased 26.4 percent to $269.1 million compared to $212.8 million in the year ago quarter. Inorganic revenue grew 19.1 percent year-over-year. Income from operations was $14.1 million or 5.2 percent of revenue compared to $8.3 million or 3.9 percent of revenue in the prior year.
  • Non-GAAP income from operations was $17.7 million or 6.6 percent of revenue. This compares to $8.4 million or 3.9 percent of revenue in the prior year.

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

  • CGS second quarter 2017 revenue declined 12.2 percent to $32.4 million compared to $36.9 million in the year ago quarter. Income from operations was $2.3 million or 7.2 percent of revenue compared to $3.5 million or 9.4 percent of revenue in the prior year.
  • Non-GAAP AHFS/WD revenue declined 11.9 percent over the year ago period and income from operations was $2.4 million or 7.6 percent of adjusted revenue. This compares to $4.1 million or 11.4 percent of adjusted revenue in the prior year.

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

  • CTS second quarter 2017 revenue declined 6.8 percent to $34.8 million compared to $37.4 million in the year ago quarter. Income from operations was $3.8 million or 11.0 percent of revenue compared to $3.4 million or 9.0 percent of revenue in the prior year.
  • Non-GAAP AHFS/WD revenue declined 0.7 percent over the year ago period and income from operations was $3.7 million or 11.6 percent of adjusted revenue. This compares to $3.8 million or 11.8 percent of adjusted revenue in the prior year.

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

  • CSS second quarter 2017 revenue declined 4.9 percent to $17.2 million from $18.1 million in the year ago quarter. Income from operations was $1.4 million or 8.0 percent of revenue compared to $1.0 million or 5.7 percent of revenue in the prior year.
  • Non-GAAP AHFS/WD revenue declined 3.6 percent over the year ago period and income from operations was $1.7 million or 11.3 percent of adjusted revenue. This compares to operating income of $1.4 million or 9.3 percent of revenue in the prior year.

BUSINESS OUTLOOK

«I want to highlight the strong performance of the business. In the first half of 2017, we executed on many fronts. We grew the top-line organically and inorganically, improved our profitability and cash flow generation, increased our vertical and geographic market share, and expanded our capabilities into more integrated, outcome-based solutions,» commented Regina Paolillo, chief financial and administrative officer. «The overperformance at the half year provides improved visibility and confidence in our ability to execute our full-year 2017 revenue and operating income guidance. In comparison to our first half, we anticipate a significant increase in our revenue and operating income in the second half. We estimate our seasonal peak fourth quarter revenue and operating income, which includes acquired volumes from Connextions, to significantly exceed historical levels.»

Reaffirmed 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 $1.400 and $1.410 billion.

Operating Income Margin – Operating income margin in the range of 8.3 and 8.5 percent before impairment, restructuring and integration charges.

Capital Expenditures – Capital expenditures of 4.6 percent of revenue.

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 48,000 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

Olivia Griner

303.397.8641

303.397.8999

 

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,

2017

2016

2017

2016

Revenue

$  353,429

$  305,105

$  691,706

$ 617,515

Operating Expenses:

Cost of services

268,004

226,768

521,902

458,108

Selling, general and administrative

43,985

44,774

87,205

90,274

Depreciation and amortization

16,258

17,221

30,758

34,950

Restructuring charges, net

3,593

114

3,762

202

     Total operating expenses

331,840

288,877

643,627

583,534

Income From Operations

21,589

16,228

48,079

33,981

Other income (expense)

(4,198)

(734)

(5,130)

(2,054)

Income Before Income Taxes

17,391

15,494

42,949

31,927

Benefit (Provision) for income taxes

(1,597)

(2,952)

(6,988)

(7,480)

Net Income

15,794

12,542

35,961

24,447

Net income attributable to noncontrolling interest

(1,100)

(926)

(2,022)

(1,606)

Net Income Attributable to TeleTech Stockholders

$    14,694

$    11,616

$    33,939

$   22,841

Net Income Per Share Attributable to TeleTech Stockholders

Basic

$        0.32

$        0.24

$        0.74

$       0.47

Diluted

$        0.32

$        0.24

$        0.73

$       0.47

Income From Operations Margin

6.1%

5.3%

7.0%

5.5%

Net Income Attributable to TeleTech Stockholders Margin

4.2%

3.8%

4.9%

3.7%

Effective Tax Rate

9.2%

19.1%

16.3%

23.4%

Weighted Average Shares Outstanding

  Basic

45,662

47,873

45,805

48,120

  Diluted

46,150

48,221

46,224

48,483

 

TELETECH HOLDINGS, INC. AND SUBSIDIARIES

SEGMENT INFORMATION

(In thousands)

(Unaudited)

Three months ended

Six months ended

 June 30,

 June 30,

2017

2016

2017

2016

Revenue:

Customer Management Services

$  269,056

$  212,807

$  521,135

$  440,728

Customer Growth Services

32,403

36,893

66,061

70,412

Customer Technology Services

34,798

37,350

70,491

72,618

Customer Strategy Services

17,172

18,055

34,019

33,757

Total

$  353,429

$  305,105

$  691,706

$  617,515

Income From Operations:

Customer Management Services

$    14,075

$      8,339

$    34,671

$    23,934

Customer Growth Services

2,321

3,482

4,731

3,977

Customer Technology Services

3,819

3,376

6,876

6,156

Customer Strategy Services

1,374

1,031

1,801

(86)

Total

$    21,589

$    16,228

$    48,079

$    33,981

 

TELETECH HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 June 30,

 December 31, 

2017

2016

ASSETS

Current assets:

   Cash and cash equivalents

$   77,910

$          55,264

   Accounts receivable, net

288,041

300,808

   Other current assets

74,783

66,940

   Assets held for sale

8,969

10,715

      Total current assets

449,703

433,727

Property and equipment, net

160,321

151,037

Other assets

320,099

261,540

Total assets

$ 930,123

$        846,304

LIABILITIES AND EQUITY

Total current liabilities

$ 197,352

$        178,672

Liabilities held for sale

1,908

1,357

Other long-term liabilities

335,605

304,380

Total equity

395,258

361,895

Total liabilities and equity

$ 930,123

$        846,304

 

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,

2017

2016

2017

2016

Revenue

$  353,429

$  305,105

$  691,706

$  617,515

Reconciliation of EBIT & EBITDA:

Net Income Attributable to TeleTech stockholders

$    14,694

$    11,616

$    33,939

$    22,841

Interest income

(695)

(263)

(1,121)

(429)

Interest expense

2,912

1,753

5,230

3,717

Provision for income taxes

1,597

2,952

6,988

7,480

EBIT

$    18,508

$    16,058

$    45,036

$    33,609

Depreciation and amortization

16,258

17,221

30,758

34,950

EBITDA

$    34,766

$    33,279

$    75,794

$    68,559

Reconciliation of Free Cash Flow:

Cash Flow From Operating Activities:

   Net income

$    15,794

$    12,542

$    35,961

$    24,447

   Adjustments to reconcile net income to net cash

       provided by operating activities:

          Depreciation and amortization

16,258

17,221

30,758

34,950

          Other

18,471

13,744

58,736

(4,352)

   Net cash provided by operating activities

50,523

43,507

125,455

55,045

Less – Total Capital Expenditures

17,554

12,794

29,589

27,743

Free Cash Flow

$    32,969

$    30,713

$    95,866

$    27,302

Reconciliation of Non-GAAP Income from Operations:

Income from Operations

$    21,589

$    16,228

$    48,079

$    33,981

Restructuring charges, net

3,593

114

3,762

202

Impairment losses

Non-GAAP Income from Operations

$    25,182

$    16,342

$    51,841

$    34,183

Non-GAAP Income from Operations Margin

7.1%

5.4%

7.5%

5.5%

Reconciliation of Non-GAAP EPS:

Net Income Attributable to TeleTech stockholders

$    14,694

$    11,616

$    33,939

$    22,841

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

2,165

93

2,282

148

Add:  Estimated loss on assets held for sale, net of related taxes

1,907

1,907

Less:  Estimated gain on sale of business unit

(18)

(18)

Add:  Changes in valuation allowance and returns to provision adjustments

(1,363)

1,558

(1,399)

2,436

 Non-GAAP Net Income Attributable to TeleTech stockholders

$    17,385

$    13,267

$    36,711

$    25,425

    Diluted shares outstanding

46,150

48,221

46,224

48,483

 Non-GAAP EPS Attributable to TeleTech stockholders

$0.38

$0.28

$0.79

$0.52

Reconciliation of Non-GAAP EBITDA:

Net Income Attributable to TeleTech stockholders

$    14,694

$    11,616

$    33,939

$    22,841

   Interest income

(695)

(263)

(1,121)

(429)

   Interest expense

2,912

1,753

5,230

3,717

   Provision for income taxes

1,597

2,952

6,988

7,480

   Depreciation and amortization

16,258

17,221

30,758

34,950

   Asset impairment and restructuring charges

3,593

114

3,762

202

   Gain on sale of business unit

(30)

(30)

   Estimated loss of assets held for sale

3,178

3,178

   Equity-based compensation expenses

2,795

1,825

4,836

4,584

 Non-GAAP EBITDA

$    44,302

$    35,218

$    87,540

$    73,345

 

TELETECH HOLDINGS, INC.

Non-GAAP AHFS/WD Reconciliation (Excluding Assets Held For Sale and Wind-down) & Year-over-Year (YoY) Growth Rate Comparison

U.S. Dollars in Thousands

SECOND QUARTER

(three months end, June 30, 2017)

Revenue

Operating Income

GAAP Revenue

Non-GAAP Revenue Contribution from AHFS/WD

Non-GAAP Revenue (excluding AHFS/WD)

GAAP Operating Income

Non-GAAP Operating Income Adjustments

Non-GAAP Operating Income

Non-GAAP Operating Income Contribution from AHFS/WD

Non-GAAP Operating Income (excluding AHFS/WD)

CMS

$  269,056

$             –

$         269,056

CMS

$  14,075

$        3,579

$  17,654

$                    –

$              17,654

YoY Growth Rate:

26.4%

26.4%

Operating Margin:

5.2%

6.6%

6.6%

CGS

$    32,403

$       1,110

$           31,293

CGS

$    2,321

$             –

$    2,321

$                  (43)

$                2,364

YoY Growth Rate:

-12.2%

-11.9%

Operating Margin:

7.2%

7.2%

7.6%

CTS

$    34,798

$       2,799

$           31,999

CTS

$    3,819

$             14

$    3,833

$                 117

$                3,716

YoY Growth Rate:

-6.8%

-0.7%

Operating Margin:

11.0%

11.0%

11.6%

CSS

$    17,172

$       2,110

$           15,062

CSS

$    1,374

$             –

$    1,374

$                (321)

$                1,695

YoY Growth Rate:

-4.9%

-3.6%

Operating Margin:

8.0%

8.0%

11.3%

Company (Consolidated)

$  353,429

$       6,019

$         347,410

Company

$  21,589

$        3,593

$  25,182

$                (247)

$              25,429

YoY Growth Rate:

15.8%

17.3%

Operating Margin:

6.1%

7.1%

7.3%

Segments Defined:

CMS (Customer Management Services), CGS (Customer Growth Services)

CTS (Customer Technology Services), CSS (Customer Strategy Services)

Non-GAAP AHFS/WD Defined:

Excludes from revenue and operating income i) assets held for sale and wind-down, and ii) restructuring and integration charges.

 

TELETECH HOLDINGS, INC.

Non-GAAP AHFS/WD Reconciliation (Excluding Assets Held For Sale and Wind-down) & Year-over-Year (YoY) Growth Rate Comparison

U.S. Dollars in Thousands

SECOND QUARTER (YEAR-TO-DATE)

(six months end, June 30, 2017)

Revenue

Operating Income

GAAP Revenue

Non-GAAP Revenue Contribution from AHFS/WD

Non-GAAP Revenue (excluding AHFS/WD)

GAAP Operating Income

Non-GAAP Operating Income Adjustments

Non-GAAP Operating Income

Non-GAAP Operating Income Contribution from AHFS/WD

Non-GAAP Operating Income (excluding AHFS/WD)

CMS

$  521,135

$             –

$         521,135

CMS

$  34,671

$        3,585

$  38,256

$                    –

$              38,256

YoY Growth Rate:

18.2%

18.2%

Operating Margin:

6.7%

7.3%

7.3%

CGS

$    66,061

$       2,279

$           63,782

CGS

$    4,731

$             –

$    4,731

$                (261)

$                4,992

YoY Growth Rate:

-6.2%

-5.5%

Operating Margin:

7.2%

7.2%

7.8%

CTS

$    70,491

$       6,780

$           63,711

CTS

$    6,876

$           177

$    7,053

$                 489

$                6,564

YoY Growth Rate:

-2.9%

1.5%

Operating Margin:

9.8%

10.0%

10.3%

CSS

$    34,019

$       4,487

$           29,532

CSS

$    1,801

$             –

$    1,801

$                (653)

$                2,454

YoY Growth Rate:

0.8%

0.4%

Operating Margin:

5.3%

5.3%

8.3%

Company (Consolidated)

$  691,706

$     13,546

$         678,160

Company

$  48,079

$        3,762

$  51,841

$                (425)

$              52,266

YoY Growth Rate:

12.0%

13.0%

Operating Margin:

7.0%

7.5%

7.7%

Segments Defined:

CMS (Customer Management Services), CGS (Customer Growth Services)

CTS (Customer Technology Services), CSS (Customer Strategy Services)

Non-GAAP AHFS/WD Defined:

Excludes from revenue and operating income i) assets held for sale and wind-down, and ii) restructuring and integration charges.

 

TeleTech Logo.

 

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SOURCE TeleTech Holdings, Inc.