TeleTech Announces First Quarter 2015 Financial Results
"The solid results we delivered in the first quarter demonstrate the progress we are making in advancing our client's customer engagement agenda," commented
FIRST QUARTER 2015 FINANCIAL HIGHLIGHTS
Revenue
-
First quarter 2015 GAAP revenue increased 7.7 percent to
$325.5 million compared to$302 .2 million in the year ago quarter. -
On a constant currency basis, revenue was
$335.1 million , representing a 10.9 percent growth rate over the year ago period.
Income from Operations
-
First quarter 2015 GAAP income from operations was
$26.1 million or 8.0 percent of revenue compared to$24.4 million or 8.1 percent of revenue in the first quarter 2014. -
Income from operations, adjusted for
$0.8 million in restructuring charges, was$26.9 million or 8.3 percent of revenue. This compares to$24.9 million or 8.2 percent of revenue in the year ago quarter.
Earnings Per Share
-
First quarter 2015 GAAP fully diluted earnings per share attributable to
TeleTech shareholders was38 cents compared to40 cents in the first quarter 2014. -
Adjusted fully diluted earnings per share was
38 cents compared to36 cents in the prior year.
Bookings
-
During the first quarter 2015,
TeleTech signed an estimated $120 million in annualized contract value revenue from new and expanded client relationships, up 14 percent over the prior year period. The bookings mix was diversified across all verticals with 85 percent from existing clients, 64 percent from emerging businesses, and 13 percent from clients based outside of the United States.
STRONG BALANCE SHEET CONTINUES TO FUND OPERATIONS, SHARE REPURCHASES,
-
As of
March 31, 2015 ,TeleTech had cash and cash equivalents of$65.7 million and$131 .2 million of total debt, resulting in a net debt position of$65.5 million . In the first quarter of 2015,$24.7 million was deployed towards share repurchases, dividends, and acquisition and technology-related investments. -
As of
March 31, 2015 ,TeleTech had$570.8 million of additional borrowing capacity available under its revolving credit facility. -
Cash flow from operations in the first quarter 2015 was
$3.8 million compared to$13.5 million in the first quarter 2014. -
Capital expenditures in the first quarter 2015 were
$13.0 million compared to$15.1 million in the first quarter 2014. -
TeleTech repurchased nearly 261 thousand shares of common stock during the first quarter 2015 for a total cost of$5.9 million . As ofMarch 31, 2015 ,$30.9 million was authorized for future share repurchases.
SEGMENT REPORTING & COMMENTARY
Customer Management Services (CMS) – Customer Experience Delivery Solutions
-
In the first quarter 2015, the CMS segment revenue was
$243.0 million , up 6.6 percent from$227 .9 million in the year ago quarter. On a constant currency basis, revenue increased 10.1 percent relative to the same period last year. -
Income from operations was
$21.7 million or 8.9 percent compared to$20.8 million or 9.1 percent in the year ago quarter. Adjusted operating income margin was 9.3 percent reflecting$0.8 million of restructuring charges. This compares to 9.4 percent in the same period last year.
Customer Growth Services (CGS) – Technology-Enabled Revenue Generation Solutions
-
CGS first quarter 2015 revenue declined 10.2 percent to
$26.0 million compared to$28.9 million in the year ago quarter. On a constant currency basis, revenue decreased 7.3 percent. This expected temporary decline in revenue is due to the timing of new business implementations. -
Income from operations was
$0.03 million compared to$1 .8 million in the prior year period.
Customer Technology Services (CTS) – Hosted and Managed Technology Solutions
-
CTS first quarter 2015 revenue grew 9.0 percent to
$35.7 million compared to$32.8 million in the year ago quarter. -
Income from operations was
$2.0 million or 5.6 percent compared to$0.3 million or 0.9 percent in the year ago quarter.
Customer Strategy Services (CSS) – Customer Experience Strategy and Data Analytics Solutions
-
CSS first quarter 2015 revenue increased 65.2 percent to
$20.8 million from$12.6 million in the year ago quarter. -
Income from operations was
$2.4 million or 11.5 percent, unchanged over the prior year period.
BUSINESS OUTLOOK
"We are pleased with our first quarter financial results inclusive of our continued growth in bookings, a strong indication of future revenue growth," explained
Revenue – Year-over-year revenue growth estimated between
Operating Margin – Operating margin estimated at 8.25 percent (before asset impairment, restructuring and acquisition-related charges), but including an incremental
Capital Expenditures – Estimated to be approximately six 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, 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) |
|||||
(Unaudited) |
|||||
Three months ended |
|||||
March 31, |
|||||
2015 |
2014 |
||||
Revenue |
$ 325,521 |
$ 302,221 |
|||
Operating Expenses: |
|||||
Cost of services |
232,984 |
213,787 |
|||
Selling, general and administrative |
50,237 |
50,367 |
|||
Depreciation and amortization |
15,363 |
13,170 |
|||
Restructuring charges, net |
809 |
540 |
|||
Impairment losses |
- |
- |
|||
Total operating expenses |
299,393 |
277,864 |
|||
Income From Operations |
26,128 |
24,357 |
|||
Other income (expense) |
(1,688) |
(178) |
|||
Income Before Income Taxes |
24,440 |
24,179 |
|||
Provision for income taxes |
(4,405) |
(2,876) |
|||
Net Income |
20,035 |
21,303 |
|||
Net income attributable to noncontrolling interest |
(1,263) |
(1,085) |
|||
Net Income Attributable to TeleTech Stockholders |
$ 18,772 |
$ 20,218 |
|||
Net Income Per Share Attributable to TeleTech Stockholders |
|||||
Basic |
$ 0.39 |
$ 0.40 |
|||
Diluted |
$ 0.38 |
$ 0.40 |
|||
Income From Operations Margin |
8.0% |
8.1% |
|||
Net Income Attributable to TeleTech Stockholders Margin |
5.8% |
6.7% |
|||
Effective Tax Rate |
18.0% |
11.9% |
|||
Weighted Average Shares Outstanding |
|||||
Basic |
48,370 |
50,045 |
|||
Diluted |
49,158 |
50,973 |
|||
TeleTech HOLDINGS, INC. AND SUBSIDIARIES |
||||
SEGMENT INFORMATION |
||||
(In thousands) |
||||
(Unaudited) |
||||
Three months ended |
||||
March 31, |
||||
2015 |
2014 |
|||
Revenue: |
||||
Customer Management Services |
$ 243,009 |
$ 227,924 |
||
Customer Growth Services |
25,956 |
28,905 |
||
Customer Technology Services |
35,714 |
32,776 |
||
Customer Strategy Services |
20,842 |
12,616 |
||
Total |
$ 325,521 |
$ 302,221 |
||
Income From Operations: |
||||
Customer Management Services |
$ 21,702 |
$ 20,823 |
||
Customer Growth Services |
26 |
1,770 |
||
Customer Technology Services |
2,009 |
311 |
||
Customer Strategy Services |
2,391 |
1,453 |
||
Total |
$ 26,128 |
$ 24,357 |
||
TeleTech HOLDINGS, INC. AND SUBSIDIARIES |
|||||
CONSOLIDATED BALANCE SHEETS |
|||||
(In thousands) |
|||||
(Unaudited) |
|||||
March 31, |
December 31, |
||||
2015 |
2014 |
||||
ASSETS |
|||||
Current assets: |
|||||
Cash and cash equivalents |
$ 65,714 |
$ 77,316 |
|||
Accounts receivable, net |
295,719 |
276,432 |
|||
Other current assets |
94,030 |
91,735 |
|||
Total current assets |
455,463 |
445,483 |
|||
Property and equipment, net |
150,017 |
150,212 |
|||
Other assets |
259,003 |
256,780 |
|||
Total assets |
$ 864,483 |
$ 852,475 |
|||
LIABILITIES AND EQUITY |
|||||
Total current liabilities |
$ 190,628 |
$ 198,631 |
|||
Other long-term liabilities |
215,703 |
187,780 |
|||
Mandatorily redeemable noncontrolling interest |
3,411 |
2,814 |
|||
Total equity |
454,741 |
463,250 |
|||
Total liabilities and equity |
$ 864,483 |
$ 852,475 |
|||
TeleTech HOLDINGS, INC. AND SUBSIDIARIES |
||||
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION |
||||
(In thousands, except per share data) |
||||
(Unaudited) |
||||
Three months ended |
||||
March 31, |
||||
2015 |
2014 |
|||
Reconciliation of Revenue: |
||||
Revenue |
$ 325,521 |
$ 302,221 |
||
Changes due to foreign currency fluctuations 1 |
9,530 |
|||
Non-GAAP Revenue |
$ 335,051 |
$ 302,221 |
||
Reconciliation of EBIT & EBITDA: |
||||
Net Income Attributable to TeleTech stockholders |
$ 18,772 |
$ 20,218 |
||
Interest income |
(317) |
(511) |
||
Interest expense |
1,698 |
1,690 |
||
Provision for income taxes |
4,405 |
2,876 |
||
EBIT |
$ 24,558 |
$ 24,273 |
||
Depreciation and amortization |
15,363 |
13,170 |
||
EBITDA |
$ 39,921 |
$ 37,443 |
||
Reconciliation of Free Cash Flow: |
||||
Cash Flow From Operating Activities: |
||||
Net income |
$ 20,035 |
$ 21,303 |
||
Adjustments to reconcile net income to net cash |
||||
provided by operating activities: |
||||
Depreciation and amortization |
15,363 |
13,170 |
||
Other |
(31,578) |
(20,916) |
||
Net cash provided by operating activities |
3,820 |
13,557 |
||
Less - Total Capital Expenditures |
13,038 |
15,095 |
||
Free Cash Flow |
$ (9,218) |
$ (1,538) |
||
Reconciliation of Non-GAAP Income from Operations: |
||||
Income from Operations |
$ 26,128 |
$ 24,357 |
||
Restructuring charges, net |
809 |
540 |
||
Impairment losses |
- |
- |
||
Non-GAAP Income from Operations |
$ 26,937 |
$ 24,897 |
||
Non-GAAP Income from Operations Margin |
8.3% |
8.2% |
||
Reconciliation of Non-GAAP EPS: |
||||
Net Income Attributable to TeleTech stockholders |
$ 18,772 |
$ 20,218 |
||
Add: Asset impairment and restructuring charges, net of related taxes |
498 |
347 |
||
Add: Changes in valuation allowance and returns to provision adjustments |
(593) |
(1,973) |
||
Non-GAAP Net Income Attributable to TeleTech stockholders |
$ 18,677 |
$ 18,592 |
||
Diluted shares outstanding |
49,158 |
50,973 |
||
Non-GAAP EPS Attributable to TeleTech stockholders |
$0.38 |
$0.36 |
||
Reconciliation of Non-GAAP EBITDA: |
||||
Net Income Attributable to TeleTech stockholders |
$ 18,772 |
$ 20,218 |
||
Interest income |
(317) |
(511) |
||
Interest expense |
1,698 |
1,690 |
||
Provision for income taxes |
4,405 |
2,876 |
||
Depreciation and amortization |
15,363 |
13,170 |
||
Asset impairment and restructuring charges |
809 |
540 |
||
Equity-based compensation expenses |
2,690 |
3,160 |
||
Non-GAAP EBITDA |
$ 43,420 |
$ 41,143 |
||
1Foreign 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. |