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TTEC Announces Fourth Quarter and Full Year 2022 Financial Results

Full Year 2022
Revenue was $2.444 Billion, up 7.5 Percent and 9.4 Percent on a Constant Currency Basis
Operating Income was $168.5 Million or 6.9 Percent of Revenue
($248.5 Million or 10.2 Percent of Revenue Non-GAAP)
Net Income was $117.3 Million or 4.8 Percent of Revenue
($174.4 Million or 7.1 Percent of Revenue Non-GAAP)
Adjusted EBITDA was $326.6 Million or 13.4 Percent of Revenue
Fully Diluted EPS was $2.48 ($3.68 Non-GAAP)

Full Year Bookings of $762 Million

Fourth Quarter 2022
Revenue was $658.3 Million, up 7.5 Percent and 9.6 Percent on a Constant Currency Basis
Operating Income was $48.7 Million or 7.4 Percent of Revenue
($69.9 Million or 10.6 Percent of Revenue Non-GAAP)
Net Income was $25.6 Million or 3.9 Percent of Revenue
($42.0 Million or 6.4 Percent of Revenue Non-GAAP)
Adjusted EBITDA was $84.8 Million or 12.9 Percent of Revenue
Fully Diluted EPS was $0.54 ($0.89 Non-GAAP)

Fourth Quarter Bookings of $197 Million

Provides Outlook for Full Year 2023

DENVER, Feb. 27, 2023 /PRNewswire/ -- TTEC Holdings, Inc. (NASDAQ: TTEC), one of the largest, global CX (customer experience) technology and services innovators for end-to-end digital CX solutions, announced today financial results for the fourth quarter and full year ended December 31, 2022.

"We ended 2022 with solid execution and financial results despite the increased uncertainties surrounding the macroeconomic environment. Our performance reflects our broad and diverse base of global clients, our expertise across key strategic verticals, and our full range of CX technology, AI, and service capabilities," commented Ken Tuchman, chairman and chief executive officer of TTEC. "In this dynamic environment, we will continue to execute on our strategy to accelerate the diversification of our geographic and language footprint, and capitalize on the growing adoption of the modern capabilities enabled by the CX cloud."

Tuchman continued, "Over the last forty years, we have thoughtfully managed through uncertain business cycles and always come out stronger. We have proven time and again that we are resilient, innovative and have what it takes to turn challenges into opportunities. Our strategy for 2023 is prudent and designed to set us up for accelerated growth in 2024. The plan will enable us to operate efficiently in the short term while investing in capabilities our clients need today and into the future."

FULL YEAR 2022 FINANCIAL HIGHLIGHTS

Revenue

  • Full year 2022 GAAP revenue increased 7.5 percent to $2.444 billion compared to $2.273 billion in the prior year.
  • Foreign exchange had a $42.4 million negative impact on revenue for the full year 2022.

Income from Operations

  • Full year 2022 GAAP income from operations was $168.5 million, or 6.9 percent of revenue, compared to $217.2 million, or 9.6 percent of revenue in the prior year.
  • Non-GAAP income from operations, excluding restructuring and impairment charges, equity-based compensation expenses, amortization of purchased intangibles, and other items, was $248.5 million, or 10.2 percent of revenue, compared to $286.2 million, or 12.6 percent for the prior year.
  • Foreign exchange had a $13.9 million positive impact on Non-GAAP income from operations for the full year 2022.

Adjusted EBITDA

  • Full year 2022 Non-GAAP Adjusted EBITDA was $326.6 million, or 13.4 percent of revenue, compared to $354.4 million, or 15.6 percent of revenue in the prior year.

Earnings Per Share

  • Full year 2022 GAAP fully diluted earnings per share was $2.48 compared to $3.34 for the prior year.
  • Non-GAAP fully diluted earnings per share was $3.68 compared to $4.62 in the prior year.

Bookings

  • During the full year 2022, TTEC signed an estimated $762 million in annualized contract value compared to $751 million in the prior year. Full year bookings mix was diversified across segments, verticals, and geographies.

FOURTH QUARTER 2022 FINANCIAL HIGHLIGHTS

Revenue

  • Fourth quarter 2022 GAAP revenue increased 7.5 percent to $658.3 million compared to $612.3 million in the prior year period.
  • Foreign exchange had a $12.6 million negative impact on revenue in the fourth quarter 2022.

Income from Operations

  • Fourth quarter 2022 GAAP income from operations was $48.7 million, or 7.4 percent of revenue, compared to $51.9 million, or 8.5 percent of revenue in the prior year period.
  • Non-GAAP income from operations, excluding restructuring and impairment charges, equity-based compensation expenses, amortization of purchased intangibles, and other items, was $69.9 million, or 10.6 percent of revenue, compared to $68.3 million, or 11.2 percent for the prior year period.
  • Foreign exchange had a $4.5 million positive impact on Non-GAAP income from operations in the fourth quarter 2022.

Adjusted EBITDA

  • Fourth quarter 2022 Non-GAAP Adjusted EBITDA was $84.8 million, or 12.9 percent of revenue, compared to $84.1 million, or 13.7 percent of revenue in the prior year period.

Earnings Per Share

  • Fourth quarter 2022 GAAP fully diluted earnings per share was $0.54 compared to $0.69 for the same period last year.
  • Non-GAAP fully diluted earnings per share was $0.89 compared to $1.08 in the prior year period.

Bookings

  • During the fourth quarter 2022, TTEC signed an estimated $197 million in annualized contract value compared to $206 million in the prior year period. Fourth quarter bookings mix was diversified across segments, verticals, and geographies.

STRONG CASH FLOW AND BALANCE SHEET FUND INVESTMENTS AND DIVIDENDS

  • Cash flow from operations in the fourth quarter 2022 was $18.2 million compared to $76.2 million for the fourth quarter 2021. For the full year 2022, cash flow from operations was $137.0 million compared to $251.3 million for the same period 2021.
  • Capital expenditures in the fourth quarter 2022 were $19.4 million compared to $19.6 million for the fourth quarter 2021. For the full year 2022, capital expenditures were $84.0 million compared to $60.4 million for the same period 2021.
  • As of December 31, 2022, TTEC had cash and cash equivalents of $153.4 million and debt of $963.6 million, resulting in a net debt position of $810.2 million. This compares to a net debt position of $638.9 million for the same period 2021. The increase in net debt is primarily attributable to the acquisition of Faneuil in April 2022.
  • As of December 31, 2022, TTEC's remaining borrowing capacity under its revolving credit facility was approximately $335 million compared to $565 million for the same period 2021.
  • TTEC paid a $0.52 per share, or $24.6 million, semi-annual dividend on October 26, 2022. On February 23, 2023, the Board declared the next semi-annual dividend of $0.52 per share, payable on April 20, 2023 to shareholders of record as of March 31, 2023. This dividend is unchanged over the October 2022 dividend and 4.0 percent over the April 2022 dividend.

SEGMENT REPORTING & COMMENTARY

TTEC reports financial results for the following two business segments: TTEC Digital (Digital) and TTEC (Engage). Financial highlights for the two segments are provided below.

TTEC Digital – Design, build and operate tech-enabled, insight-driven CX solutions

  • Fourth quarter 2022 GAAP revenue for TTEC Digital increased 4.2 percent to $123.4 million from $118.4 million for the year ago period. Income from operations was $8.4 million or 6.8 percent of revenue compared to operating income of $13.0 million or 11.0 percent of revenue for the prior year period.
  • Non-GAAP income from operations was $16.5 million, or 13.3 percent of revenue compared to operating income of $20.2 million or 17.1 percent of revenue in the prior year period.

TTEC Engage – Digitally-enabled customer care, acquisition, and fraud mitigation services

  • Fourth quarter 2022 GAAP revenue for TTEC Engage increased 8.3 percent to $534.9 million from $493.9 million for the year ago period. Income from operations was $40.3 million or 7.5 percent of revenue compared to operating income of $38.9 million, or 7.9 percent of revenue for the prior year period.
  • Non-GAAP income from operations was $53.4 million, or 10.0 percent of revenue, compared to operating income of $48.1 million, or 9.7 percent of revenue in the prior year period.
  • Foreign exchange had a $11.6 million negative impact on revenue and $4.2 million positive impact on income from operations.

BUSINESS OUTLOOK

"Our solid fourth-quarter performance capped a year in which we grew revenue 9.4 percent on a constant currency basis, reflecting the contribution from strategic acquisitions partially offset by emerging macroeconomic headwinds in the second half of the year," commented Dustin Semach, chief financial officer of TTEC.

Semach continued, "We are confident we will successfully navigate the dynamic environment ahead of us and position the company for accelerated growth as we exit the year. We are excited about our future, supported by our 40-year track record of delivering innovation and value-driven CX outcomes for our clients, a strong executive leadership team, and an unmatched CX technology and services platform."

TTEC Full Year 2023 Outlook

               
   

First Quarter 2023
Guidance

 

First Quarter 2023
Mid-Point

 

Full Year 2023
Guidance

 

Full Year 2023
Mid-Point

Revenue

 

$591M$607M

 

$599M

 

$2,460M$2,540M

 

$2,500M

Non-GAAP adjusted EBITDA

 

$58M$66M

 

$62M

 

$290M$310M

 

$300M

Non-GAAP adjusted EBITDA margins

 

9.9% — 11.0%

 

10.4 %

 

11.8% — 12.2%

 

12.0 %

Non-GAAP operating income

 

$42M$50M

 

$46M

 

$221M$241M

 

$231M

Non-GAAP operating income margins

7.2% — 8.3%

 

7.7 %

 

9.0% — 9.5%

 

9.3 %

Interest expense, net

 

($17M) — ($18M)

 

($17M)

 

($74M) — ($76M)

 

($75M)

Effective tax rate

 

22% — 24%

 

23 %

 

22% — 24%

 

23 %

Diluted share count

 

47.2M — 47.4M

 

47.3M

 

47.3M — 47.5M

 

47.4M

Non-GAAP earnings per a share

 

$0.41$0.54

 

$0.48

 

$2.38$2.71

 

$2.54

                 

Engage Full Year 2023 outlook

               
   

First Quarter 2023
Guidance

 

First Quarter 2023
Mid-Point

 

Full Year 2023
Guidance

 

Full Year 2023
Mid-Point

Revenue

 

$486M$496M

 

$491M

 

$1,970M$2,030M

 

$2,000M

Non-GAAP adjusted EBITDA

 

$49M$55M

 

$52M

 

$221M$235M

 

$228M

Non-GAAP adjusted EBITDA margins

 

10.0% — 11.0%

 

10.5 %

 

11.2% — 11.6%

 

11.4 %

Non-GAAP operating income

 

$34M$40M

 

$37M

 

$164M$178M

 

$171M

Non-GAAP operating income margins

7.1% — 8.2%

 

7.6 %

 

8.3% — 8.8%

 

8.5 %

                 

Digital Full Year 2023 outlook

               
   

First Quarter 2023
Guidance

 

First Quarter 2023
Mid-Point

 

Full Year 2023
Guidance

 

Full Year 2023
Mid-Point

Revenue

 

$105M$111M

 

$108M

 

$490M$510M

 

$500M

Non-GAAP adjusted EBITDA

 

$10M$12M

 

$11M

 

$69M$75M

 

$72M

Non-GAAP adjusted EBITDA margins

 

9.4% — 10.7%

 

10.0 %

 

14.1% — 14.7%

 

14.4 %

Non-GAAP operating income

 

$8M$10M

 

$9M

 

$57M$63M

 

$60M

Non-GAAP operating income margins

7.5% — 8.9%

 

8.2 %

 

11.7% — 12.4%

 

12.1 %

The Company has not quantitatively reconciled its guidance for Non-GAAP operating income margins, Non-GAAP adjusted EBITDA margins, or Non-GAAP earnings per share to their respective most comparable GAAP measures because certain of the reconciling items that impact these metrics, including asset impairment, restructuring and integration charges, cybersecurity incident-related costs, gains or losses on the sale of business units or other assets, equity-based compensation expense, changes in acquisition contingent consideration, depreciation and amortization expense, and provision for income taxes are dependent on the timing of future events outside of the Company's control or cannot be reliably predicted. Accordingly, the Company is unable to provide reconciliations to GAAP operating income margins, net income margins, and diluted earnings per share without unreasonable effort. Please note that the unavailable reconciling items could significantly impact the Company's 2023 financial results as reported under GAAP.

NON-GAAP FINANCIAL MEASURES

This press release contains a discussion of certain Non-GAAP financial measures that the Company includes to allow investors and analysts to measure, analyze and compare its financial condition and results of operations in a meaningful and consistent manner. A reconciliation of these Non-GAAP financial measures can be found in the tables accompanying this press release.

  • GAAP metrics are presented in accordance with Generally Accepted Accounting Principles.
  • Non-GAAP - As reflected in the attached reconciliation table, the definition of Non-GAAP may exclude from operating income, EBITDA, net income and earnings per share restructuring and impairment charges, equity-based compensation expenses, amortization of purchased intangibles, among other items.

ABOUT TTEC

TTEC Holdings, Inc. (NASDAQ: TTEC) is one of the largest, global CX (customer experience) technology and services innovators for end-to-end, digital CX solutions. The Company delivers leading CX technology and operational CX orchestration at scale through its proprietary cloud-based CXaaS (Customer Experience as a Service) platform. Serving iconic and disruptive brands, TTEC's outcome-based solutions span the entire enterprise, touch every virtual interaction channel, and improve each step of the customer journey. Leveraging next gen digital and cognitive technology, the Company's Digital business designs, builds, and operates omnichannel contact center technology, conversational messaging, CRM, automation (AI / ML and RPA), and analytics solutions. The Company's Engage business delivers digital customer engagement, customer acquisition and growth, content moderation, fraud prevention, and data annotation solutions. Founded in 1982, the Company's singular obsession with CX excellence has earned it leading client NPS scores across the globe. The Company's 69,400 employees operate on six continents and bring technology and humanity together to deliver happy customers and differentiated business results. To learn more visit us at https://www.ttec.com

FORWARD-LOOKING STATEMENTS

This earnings release contains "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. In this release when 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 those 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 in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2022 and any subsequent filings with the U.S. Securities and Exchange Commission (the "SEC") which are available on TTEC's website www.ttec.com, and on the SEC's public website at www.sec.gov. Important factors that could cause our actual results to differ materially from those indicated in the forward looking statements include, among others: the risks related to our business operations and strategy, including the risks related to our strategy execution in a competitive market; our ability to innovate and introduce technologies that are sufficiently disruptive to allow us to maintain and grow our market share, including the effective adoption of artificial intelligence into our solutions; risks that may arise in connection with events outside of our control, such as macroeconomic conditions, geopolitical tensions, and outbreaks of infectious diseases; risks inherent in a disruption of our information technology systems, our technology infrastructure's cybersecurity in general, and cyber-related criminal activity such as ransomware, other malware and data breach in particular, which can impact our ability to consistently deliver uninterrupted service to our clients and may result in government enforcement actions, regulatory investigations, fines, penalties, and private legal actions; risks inherent in the delivery of client services by employees working from home; our ability to attract and retain qualified and skilled personnel at a price point that we can afford and our clients are willing to pay; our M&A activity, including our ability to identify, acquire and properly integrate acquired businesses in accordance with our strategy; our reliance on a relatively small number of clients to generate the majority of our revenue and our reliance on technology partners to generate a large portion of TTEC Digital's revenue; the risks related to legal and regulatory impact on our operations, including rapidly changing and at times inconsistent laws that regulate our and our clients' business, such as data privacy and data protection laws, regulatory changes impacting our healthcare businesses, financial and public sector specific regulations, our ability to comply with these laws timely and cost effectively; the cost of wage and hour litigation and other class action litigation in the United States; the risk related to our international operations including the stress that geographic expansion may have on our business and the impacts if we are unable to expand geographically to meet our clients' demand; and risks inherent in our equity structure including our controlling shareholder risk, and Delaware choice of dispute resolution risks.

Our forward-looking statements speak only as of the date that this release is issued. We undertake no obligation to update them, except as may be required by applicable law. Although we believe that our forward-looking statements are reasonable, they depend on many factors outside of our control and we can provide no assurance that they will prove to be correct.

 

Investor Relations Contact
Paul Miller
paul.miller@ttec.com
303-397-8641

Communications Contact
Tim Blair
tim.blair@ttec.com
303-397-9267

Address
9197 South Peoria Street
Englewood, CO 80112


 

 

 

TTEC HOLDINGS, INC. AND SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF OPERATIONS

 

(In thousands, except per share data)

                   
                   
     

Three months ended

 

Twelve months ended

     

December 31,

 

December 31,

     

2022

 

2021

 

2022

 

2021

                   

Revenue

 

$658,278

 

$612,315

 

$2,443,707

 

$2,273,062

                   

Operating Expenses:

               
 

Cost of services

 

495,339

 

467,340

 

1,856,518

 

1,704,109

 

Selling, general and administrative

 

80,602

 

58,511

 

287,433

 

239,994

 

Depreciation and amortization

 

31,730

 

26,051

 

111,791

 

96,706

 

Restructuring charges, net

 

1,412

 

1,195

 

5,673

 

3,807

 

Impairment losses

 

450

 

7,305

 

13,749

 

11,254

Total operating expenses

 

609,533

 

560,402

 

2,275,164

 

2,055,870

                   

Income From Operations

 

48,745

 

51,913

 

168,543

 

217,192

                   
 

Other income (expense), net

 

(15,877)

 

(4,738)

 

(24,095)

 

(9,308)

                   

Income Before Income Taxes

 

32,868

 

47,175

 

144,448

 

207,884

                   
 

Provision for income taxes

 

(7,318)

 

(14,424)

 

(27,115)

 

(49,695)

                   

Net Income

 

25,550

 

32,751

 

117,333

 

158,189

                   
 

Net income attributable to noncontrolling interest

(3,197)

 

(4,003)

 

(14,093)

 

(17,219)

                   

Net Income Attributable to TTEC Stockholders

$ 22,353

 

$ 28,748

 

$ 103,240

 

$ 140,970

                   
                   

Net Income Per Share

               
                   
 

Basic

 

$ 0.54

 

$ 0.70

 

$ 2.49

 

$ 3.37

                   
 

Diluted

 

$ 0.54

 

$ 0.69

 

$ 2.48

 

$ 3.34

                   

Net Income Per Share Attributable to TTEC Stockholders

             
                   
 

Basic

 

$ 0.47

 

$ 0.61

 

$ 2.19

 

$ 3.01

                   
 

Diluted

 

$ 0.47

 

$ 0.61

 

$ 2.18

 

$ 2.97

                   
                   

Income From Operations Margin

 

7.4 %

 

8.5 %

 

6.9 %

 

9.6 %

Net Income Margin

 

3.9 %

 

5.3 %

 

4.8 %

 

7.0 %

Net Income Attributable to TTEC Stockholders Margin

3.4 %

 

4.7 %

 

4.2 %

 

6.2 %

Effective Tax Rate

 

22.3 %

 

30.6 %

 

18.8 %

 

23.9 %

                   
                   

Weighted Average Shares Outstanding

             

Basic

 

47,220

 

46,989

 

47,121

 

46,890

Diluted

 

47,299

 

47,372

 

47,335

 

47,386

 

TTEC HOLDINGS, INC. AND SUBSIDIARIES

SEGMENT INFORMATION

(In thousands)

                 
                 
   

Three months ended

 

Twelve months ended

   

December 31,

 

December 31,

   

2022

 

2021

 

2022

 

2021

                 

Revenue:

               

TTEC Digital

 

$123,411

 

$118,436

 

$ 471,523

 

$ 414,104

TTEC Engage

 

534,867

 

493,879

 

1,972,184

 

1,858,958

Total

 

$658,278

 

$612,315

 

$2,443,707

 

$2,273,062

                 

Income From Operations:

               

TTEC Digital

 

$ 8,433

 

$ 13,000

 

$ 33,729

 

$ 35,437

TTEC Engage

 

40,312

 

38,913

 

134,814

 

181,755

Total

 

$ 48,745

 

$ 51,913

 

$ 168,543

 

$ 217,192

 

TTEC HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

         
   

December 31,

 

December 31,

   

2022

 

2021

         

ASSETS

       

Current assets:

       

Cash and cash equivalents

 

$ 153,435

 

$ 158,205

Accounts receivable, net

 

417,637

 

357,310

Other current assets

 

178,898

 

182,472

Total current assets

 

749,970

 

697,987

         

Property and equipment, net

 

183,360

 

168,404

Operating lease assets

 

92,431

 

90,180

Goodwill

 

807,845

 

739,481

Other intangibles assets, net

 

233,909

 

212,349

Other assets

 

86,447

 

88,403

         

Total assets

 

$ 2,153,962

 

$ 1,996,804

         

LIABILITIES AND EQUITY

       

Current liabilities:

       

Accounts payable

 

$ 93,937

 

$ 70,415

Accrued employee compensation and benefits

 

145,096

 

156,324

Deferred revenue

 

87,846

 

95,608

Current operating lease liabilities

 

35,271

 

44,460

Other current liabilities

 

49,214

 

77,589

Total current liabilities

 

411,364

 

444,396

         

Long-term liabilities:

       

Line of credit

 

960,000

 

791,000

Non-current operating lease liabilities

 

69,575

 

64,419

Other long-term liabilities

 

79,273

 

102,648

Total long-term liabilities

 

1,108,848

 

958,067

         

Redeemable noncontrolling interest

 

55,645

 

56,316

         

Equity:

       

Common stock

 

472

 

470

Additional Paid in Capital

 

367,673

 

361,135

Treasury stock

 

(593,164)

 

(597,031)

Accumulated other comprehensive income (loss)

 

(126,301)

 

(98,426)

Retained earnings

 

911,233

 

856,065

Noncontrolling interest

 

18,192

 

15,812

Total equity

 

578,105

 

538,025

         

Total liabilities and equity

 

$ 2,153,962

 

$ 1,996,804

 

TTEC HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

       
 

Twelve Months Ended

 

Twelve Months Ended

 

December 31,

 

December 31,

 

2022

 

2021

       

Cash flows from operating activities:

     

Net income

$ 117,333

 

$ 158,189

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

     

Depreciation and amortization

111,791

 

96,706

Amortization of contract acquisition costs

2,065

 

983

Amortization of debt issuance costs

1,018

 

1,016

Imputed interest expense and fair value adjustments to contingent consideration

1,746

 

1,168

Provision for credit losses

9,391

 

(350)

Loss on disposal of assets

1,916

 

1,127

Impairment losses

13,749

 

11,254

Deferred income taxes

(11,001)

 

831

Excess tax benefit from equity-based awards

(1,122)

 

(5,301)

Equity-based compensation expense

17,571

 

16,425

Loss / (gain) on foreign currency derivatives

(7)

 

(213)

Changes in assets and liabilities, net of acquisitions:

     

Accounts receivable

(74,564)

 

40,156

Prepaids and other assets

43,699

 

18,407

Accounts payable and accrued expenses

(12,695)

 

(17,209)

Deferred revenue and other liabilities

(83,842)

 

(71,893)

Net cash provided by operating activities

137,048

 

251,296

       

Cash flows from investing activities:

     

Proceeds from sale of property, plant and equipment

229

 

93

Purchases of property, plant and equipment

(84,012)

 

(60,358)

Acquisitions

(142,420)

 

(481,718)

Net cash used in investing activities

(226,203)

 

(541,983)

       

Cash flows from financing activities:

     

Net proceeds / (borrowings) from line of credit

169,000

 

406,000

Payments on other debt

(3,245)

 

(6,626)

Payments of contingent consideration and hold back payments to acquisitions

(9,600)

 

(11,517)

Dividends paid to shareholders

(48,072)

 

(42,217)

Payments to noncontrolling interest

(11,883)

 

(10,984)

Tax payments related to the issuance of restricted stock units

(7,164)

 

(11,397)

Payments of debt issuance costs

-

 

(3,614)

Net cash provided by financing activities

89,036

 

319,645

       

Effect of exchange rate changes on cash and cash equivalents and restricted cash

(13,499)

 

(7,291)

       

Increase in cash, cash equivalents and restricted cash

(13,618)

 

21,667

Cash, cash equivalents and restricted cash, beginning of period

180,682

 

159,015

Cash, cash equivalents and restricted cash, end of period

$ 167,064

 

$ 180,682

 

TTEC HOLDINGS, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION

(In thousands, except per share data)

                             
   

Three months ended

       

Twelve months ended

     
   

December 31,

       

December 31,

     
   

2022

 

2021

       

2022

 

2021

     
                             

Revenue

 

$658,278

 

$612,315

       

$2,443,707

 

$2,273,062

     
                             

Reconciliation of Non-GAAP Income from Operations and EBITDA:

                         
                             

Income from Operations

 

$ 48,745

 

$ 51,913

       

$ 168,543

 

$ 217,192

     

Restructuring charges, net

 

1,412

 

1,195

       

5,673

 

3,807

     

Impairment losses

 

450

 

7,305

       

13,749

 

11,254

     

Grant income for pandemic relief

 

-

 

33

       

-

 

(8,142)

     

Cybersecurity incident related impact, net of insurance recovery

 

(446)

 

(5,796)

       

(3,610)

 

13,659

     

Software accelerated amortization

 

6,382

 

-

       

8,509

 

-

     

Write-off of acquisition related receivable

 

-

 

-

       

900

 

-

     

Equity-based compensation expenses

 

4,331

 

4,456

       

17,571

 

16,425

     

Amortization of purchased intangibles

 

9,038

 

9,238

       

37,169

 

31,990

     
                             

Non-GAAP Income from Operations

 

$ 69,912

 

$ 68,344

       

$ 248,504

 

$ 286,185

     
                             

Non-GAAP Income from Operations Margin

 

10.6 %

 

11.2 %

       

10.2 %

 

12.6 %

     
                             

Depreciation and amortization

 

16,310

 

16,813

       

66,113

 

64,716

     

Changes in acquisition contingent consideration

 

(272)

 

122

       

1,798

 

1,168

     

Other Income (expense), net

 

(1,156)

 

(1,222)

       

10,161

 

2,315

     
                             

Adjusted EBITDA

 

$ 84,794

 

$ 84,057

       

$ 326,576

 

$ 354,384

     
                             

Adjusted EBITDA Margin

 

12.9 %

 

13.7 %

       

13.4 %

 

15.6 %

     
                             

Reconciliation of Non-GAAP EPS:

                           
                             

Net Income

 

$ 25,550

 

$ 32,751

       

$ 117,333

 

$ 158,189

     

Add: Asset impairment and restructuring charges

 

1,862

 

8,500

       

19,422

 

15,061

     

Add: Equity-based compensation expenses

 

4,331

 

4,456

       

17,571

 

16,425

     

Add: Amortization of purchased intangibles

 

9,038

 

9,238

       

37,169

 

31,990

     

Add: Cybersecurity incident related impact, net of insurance recovery

 

(446)

 

(5,796)

       

(3,610)

 

13,659

     

Add: Software accelerated amortization

 

6,382

 

-

       

8,509

 

-

     

Add: Changes in acquisition contingent consideration

 

(272)

 

122

       

1,798

 

1,168

     

Add: Write-off of acquisition related receivable

 

-

 

-

       

900

 

-

     

Less: Grant income for pandemic relief

 

-

 

33

       

-

 

(8,142)

     

Less: Changes in valuation allowance, return to provision adjustments and other, and tax effects of items separately disclosed above

 

(4,444)

 

1,922

       

(24,664)

 

(9,446)

     
                             

Non-GAAP Net Income

 

$ 42,001

 

$ 51,226

       

$ 174,428

 

$ 218,904

     
                             

Diluted shares outstanding

 

47,299

 

47,372

       

47,335

 

47,386

     
                             

Non-GAAP EPS

 

$0.89

 

$1.08

       

$3.68

 

$4.62

     
                             

Reconciliation of Free Cash Flow:

                           
                             

Cash Flow From Operating Activities:

                           

Net income

 

$ 25,550

 

$ 32,751

       

$ 117,333

 

$ 158,189

     

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

                       

Depreciation and amortization

 

31,730

 

26,051

       

111,791

 

96,706

     

Other

 

(39,045)

 

17,432

       

(92,076)

 

(3,599)

     

Net cash provided by operating activities

 

18,235

 

76,234

       

137,048

 

251,296

     
                             

Less - Total Cash Capital Expenditures

 

19,448

 

19,580

       

84,012

 

60,358

     
                             

Free Cash Flow

 

$ (1,213)

 

$ 56,654

       

$ 53,036

 

$ 190,938

     
                             
                             

Reconciliation of Non-GAAP Income from Operations and Adjusted EBITDA by Segment :

                   
   

TTEC Engage

 

TTEC Digital

 

TTEC Engage

 

TTEC Digital

   

Q4 22

 

Q4 21

 

Q4 22

Q4 21

 

YTD 22

 

YTD 21

 

YTD 22

YTD 21

                             

Income from Operations

 

$ 40,313

 

$ 38,913

 

$ 8,432

$13,000

 

$ 134,815

 

$ 181,755

 

$33,728

$35,438

Restructuring charges, net

 

1,130

 

1,195

 

282

-

 

5,251

 

2,937

 

422

869

Impairment losses

 

24

 

7,352

 

426

(47)

 

13,112

 

11,702

 

637

(448)

Grant income for pandemic relief

 

-

 

33

 

-

-

 

-

 

(8,036)

 

-

(106)

Cybersecurity incident related impact, net of insurance recovery

 

(446)

 

(5,792)

 

-

(4)

 

(3,610)

 

13,429

 

-

230

Software accelerated amortization

 

5,106

 

-

 

1,276

-

 

6,807

 

-

 

1,702

-

Write-off of acquisition related receivable

 

-

 

-

 

-

-

 

-

 

-

 

900

-

Equity-based compensation expenses

 

2,659

 

3,099

 

1,672

1,357

 

11,406

 

11,604

 

6,165

4,821

Amortization of purchased intangibles

 

4,658

 

3,303

 

4,380

5,935

 

17,272

 

13,224

 

19,897

18,766

                             

Non-GAAP Income from Operations

 

$ 53,444

 

$ 48,103

 

$16,468

$20,241

 

$ 185,053

 

$ 226,615

 

$63,451

$59,570

                             

Depreciation and amortization

 

13,340

 

13,593

 

2,970

3,220

 

54,233

 

53,016

 

11,880

11,700

Changes in acquisition contingent consideration

 

(272)

 

122

 

-

-

 

1,798

 

1,168

 

-

-

Other Income (expense), net

 

(1,063)

 

(1,318)

 

(93)

96

 

9,352

 

2,164

 

809

151

                             

Adjusted EBITDA

 

$ 65,449

 

$ 60,500

 

$19,345

$23,557

 

$ 250,436

 

$ 282,963

 

$76,140

$71,421