(Logo: http://photos.prnewswire.com/prnh/20131017/LA99244LOGO)
"We had a strong fourth quarter and finish to 2013. These solid results were across all four segments, demonstrating that our outcome-based, holistic customer engagement strategy is taking hold and our execution is accelerating. Our focus on partnering with clients to use analytics and technology to build meaningful, profitable and lasting connections with their customers is delivering value and increasingly differentiating us in the marketplace," commented
FULL YEAR 2013 FINANCIAL HIGHLIGHTS
Revenue
- Full year 2013 GAAP revenue was
$1.193 billion compared to$1.163 billion in 2012. - On a constant currency basis, 2013 revenue was approximately
$1.21 billion . This represents a 5.8 percent growth rate over the prior year after adjusting for$37.6 million in exited business fromSpain .
Income from Operations
- Full year 2013 GAAP income from operations was
$101.4 million or 8.5 percent of revenue compared to$78.5 million or 6.8 percent of revenue in 2012. - 2013 income from operations on a constant currency basis and primarily adjusted for
$5.6 million in restructuring charges and asset impairments increased to$112.9 million , representing 9.4 percent of adjusted revenue versus 9.0 percent the prior year.
Earnings Per Share
- Full year 2013 GAAP fully diluted earnings per share attributable to
TeleTech shareholders was$1.29 from$1.26 for the full year 2012. - Non-GAAP fully diluted earnings per share increased 12.3 percent to
$1 .55 from$1.38 in the prior year period.
Bookings
- During the full year 2013,
TeleTech signed an estimated$365 million in annualized revenue from new and expanded client relationships, representing an increase of 20 percent over the prior year. The bookings mix was well diversified across all verticals with approximately 90 percent from existing clients, 64 percent in recurring revenue, 50 percent percent from emerging businesses and 27 percent from international clients.
FOURTH QUARTER 2013 FINANCIAL HIGHLIGHTS
Revenue
- Fourth quarter 2013 GAAP revenue was
$318.1 million compared to$295.3 million in the year-ago quarter. - On a constant currency basis, revenue was
$326.3 million , representing a 12.3% growth rate over the year-ago period when adjusted for$1.7 million in exited business fromSpain .
Income from Operations
- Fourth quarter 2013 GAAP income from operations was
$32.8 million or 10.3 percent of revenue compared to$26.0 million or 8.8 percent of revenue in the fourth quarter 2012. - Income from operations on a constant currency basis and adjusted for $0.3 million in restructuring charges increased 28.5% to
$35.5 million or 10.9 percent of adjusted revenue. This compares to$27.7 million or 9.5 percent of adjusted revenue in the year-ago quarter. - The improvement in operations was across all segments and primarily attributable to revenue mix, expanded offerings, acquisition contribution, retention, and capacity utilization, but offset by foreign currency fluctuations, incremental investment, and additional amortization expense from acquisitions.
Earnings Per Share
- Fourth quarter 2013 GAAP fully diluted earnings per share attributable to
TeleTech shareholders was38 cents , unchanged over the fourth quarter 2012. - Adjusted fully diluted earnings per share increased 23.7 percent to 47 cents from
38 cents in the prior year period.
Bookings
- During the fourth quarter 2013,
TeleTech signed an estimated$80 million in annualized revenue from new and expanded client relationships.
STRONG BALANCE SHEET CONTINUES TO FUND OPERATIONS, SHARE REPURCHASES,
- As of
December 31, 2013 ,TeleTech had cash and cash equivalents of$158.0 million and$109 .8 million of total debt, resulting in a net cash position of$48.2 million . - As of
December 31, 2013 ,TeleTech had$596.5 million of additional borrowing capacity available under its revolving credit facility. - Cash flow from operations in the fourth quarter 2013 was
$61.4 million compared to$43 .5 million in the fourth quarter 2012. - Capital expenditures in the fourth quarter 2013 were
$18.5 million compared to$7.4 million in the fourth quarter 2012. TeleTech repurchased 199,500 shares of common stock during the fourth quarter 2013 for a total cost of$4.9 million . As ofDecember 31, 2013 ,$18.9 million was authorized for future share repurchases. For the full year 2013,TeleTech repurchased nearly 2.48 million shares of common stock for a total cost of approximately$56.5 million .
SEGMENT REPORTING
On a constant currency basis, revenue growth and operational improvements were realized across the business, with each segment demonstrating higher year-over-year and sequential fourth quarter revenue and operating income.
Customer Management Services (CMS) – Customer Experience Delivery Solutions
- In the fourth quarter 2013, the CMS segment revenue was
$230.6 million from$235.5 million in the year-ago quarter. On a constant currency basis and adjusted for$1.7 million related to the exit fromSpain , revenue grew 3.2 percent. - Operating income was
$20.5 million or 8.9 percent compared to$21.8 million or 9.3 percent in the year-ago quarter. Adjusted operating income margin was 9.9 percent reflecting$2.8 million of foreign currency translation and$0.2 million of restructuring charges. This compares to 10.3 percent in the year-ago period.
Customer Growth Services (CGS) – Technology-Enabled Revenue Generation Solutions
- CGS fourth quarter 2013 revenue increased 17.5 percent to
$29.8 million compared to$25 .4 million in the year-ago quarter. Income from operations was$1.8 million or 6.0 percent versus $0.8 million or 3.3 percent.
Customer Technology Services (CTS) – Hosted and Managed Technology Solutions
- CTS fourth quarter 2013 revenue increased 73.5 percent to
$41.6 million compared to$24 .0 million in the year-ago quarter, of which 26.4 percent was organic growth. Income from operations was$6.1 million or 14.6 percent compared to$4.6 million or 19.3 percent in the year-ago quarter.
Customer Strategy Services (CSS) – Customer Experience Strategy and Data Analytics Solutions
- CSS fourth quarter 2013 revenue increased 53.6 percent to
$16.0 million from$10.4 million in the year-ago quarter. Income from operations increased to$4.4 million or 27.2 percent of revenue from a loss of$1 .3 million in the same period last year.
BUSINESS OUTLOOK
"We are optimistic about our 2014 business outlook and remain committed to continuing our investment in our strategy," commented
Revenue – Year-over-year revenue growth estimated between four and six percent from
Operating Margin – Operating margin range estimated between 8.75 and 9.0 percent (before asset impairment, restructuring or acquisition-related charges), but including an incremental
Capital Expenditures - Range between
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
TELETECH HOLDINGS, INC. AND SUBSIDIARIES |
|||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||||
(In thousands, except per share data) |
|||||||||
Three months ended |
Twelve months ended |
||||||||
December 31, |
December 31, |
||||||||
2013 |
2012 |
2013 |
2012 |
||||||
Revenue |
$ 318,087 |
$ 295,261 |
$1,193,157 |
$ 1,162,981 |
|||||
Operating Expenses: |
|||||||||
Cost of services |
220,942 |
212,021 |
846,631 |
834,803 |
|||||
Selling, general and administrative |
51,343 |
44,945 |
193,423 |
182,634 |
|||||
Depreciation and amortization |
12,783 |
10,126 |
46,064 |
41,166 |
|||||
Restructuring charges, net |
254 |
2,181 |
4,435 |
22,875 |
|||||
Impairment losses |
- |
- |
1,205 |
2,958 |
|||||
Total operating expenses |
285,322 |
269,273 |
1,091,758 |
1,084,436 |
|||||
Income From Operations |
32,765 |
25,988 |
101,399 |
78,545 |
|||||
Other income (expense) |
(3,793) |
(1,881) |
(9,330) |
(4,683) |
|||||
Income Before Income Taxes |
28,972 |
24,107 |
92,069 |
73,862 |
|||||
(Provision for) benefit from income taxes |
(7,995) |
(2,969) |
(20,598) |
61 |
|||||
Net Income |
20,977 |
21,138 |
71,471 |
73,923 |
|||||
Net income attributable to noncontrolling interest |
(1,508) |
(756) |
(4,083) |
(3,908) |
|||||
Net Income Attributable to TeleTech Stockholders |
$ 19,469 |
$ 20,382 |
$ 67,388 |
$ 70,015 |
|||||
Net Income Per Share Attributable to TeleTech Stockholders |
|||||||||
Basic |
$ 0.39 |
$ 0.38 |
$ 1.31 |
$ 1.28 |
|||||
Diluted |
$ 0.38 |
$ 0.38 |
$ 1.29 |
$ 1.26 |
|||||
Income From Operations Margin |
10.3% |
8.8% |
8.5% |
6.8% |
|||||
Net Income Attributable to TeleTech Stockholders Margin |
6.1% |
6.9% |
5.6% |
6.0% |
|||||
Effective Tax Rate |
27.6% |
12.3% |
22.4% |
(0.1)% |
|||||
Weighted Average Shares Outstanding |
|||||||||
Basic |
50,439 |
53,262 |
51,338 |
54,738 |
|||||
Diluted |
51,465 |
54,196 |
52,244 |
55,540 |
|||||
TELETECH HOLDINGS, INC. AND SUBSIDIARIES |
||||||||
SEGMENT INFORMATION |
||||||||
(In thousands) |
||||||||
Three months ended |
Twelve months ended |
|||||||
December 31, |
December 31, |
|||||||
2013 |
2012 |
2013 |
2012 |
|||||
Revenue: |
||||||||
Customer Management Services |
$ 230,625 |
$ 235,456 |
$ 890,883 |
$ 923,774 |
||||
Customer Growth Services |
29,848 |
25,399 |
100,996 |
100,772 |
||||
Customer Technology Services |
41,630 |
23,997 |
152,485 |
96,848 |
||||
Customer Strategy Services |
15,984 |
10,409 |
48,793 |
41,587 |
||||
Total |
$ 318,087 |
$ 295,261 |
$ 1,193,157 |
$ 1,162,981 |
||||
Income From Operations: |
||||||||
Customer Management Services |
$ 20,549 |
$ 21,833 |
$ 75,689 |
$ 60,271 |
||||
Customer Growth Services |
1,780 |
849 |
3,024 |
2,258 |
||||
Customer Technology Services |
6,083 |
4,625 |
19,965 |
15,714 |
||||
Customer Strategy Services |
4,353 |
(1,319) |
2,721 |
302 |
||||
Total |
$ 32,765 |
$ 25,988 |
$ 101,399 |
$ 78,545 |
||||
TELETECH HOLDINGS, INC. AND SUBSIDIARIES |
||||
CONSOLIDATED BALANCE SHEETS |
||||
(In thousands) |
||||
December 31, |
December 31, |
|||
2013 |
2012 |
|||
ASSETS |
||||
Current assets: |
||||
Cash and cash equivalents |
$ 158,017 |
$ 164,485 |
||
Accounts receivable, net |
236,099 |
251,206 |
||
Other current assets |
75,435 |
87,853 |
||
Total current assets |
469,551 |
503,544 |
||
Property and equipment, net |
126,719 |
112,276 |
||
Other assets |
246,072 |
231,353 |
||
Total assets |
$ 842,342 |
$ 847,173 |
||
LIABILITIES AND EQUITY |
||||
Total current liabilities |
$ 190,787 |
$ 171,405 |
||
Other long-term liabilities |
175,564 |
175,431 |
||
Mandatorily redeemable noncontrolling interest |
2,509 |
1,067 |
||
Total equity |
473,482 |
499,270 |
||
Total liabilities and equity |
$ 842,342 |
$ 847,173 |
TELETECH 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, |
|||||||
2013 |
2012 |
2013 |
2012 |
|||||
Reconciliation of Revenue: |
||||||||
Revenue |
$ 318,087 |
$ 295,261 |
$1,193,157 |
$ 1,162,981 |
||||
Changes due to foreign currency fluctuations |
8,178 |
(2,918) |
12,127 |
14,784 |
||||
Lost revenue from typhoon |
- |
- |
1,216 |
- |
||||
Non-GAAP Revenue |
$ 326,265 |
$ 292,343 |
$1,206,500 |
$ 1,177,765 |
||||
Reconciliation of Gross Margin: |
||||||||
Non-GAAP Revenue |
$ 326,265 |
$ 292,343 |
$1,206,500 |
$ 1,177,765 |
||||
Cost of services |
220,942 |
212,021 |
846,631 |
834,803 |
||||
Adjustments related to Non-GAAP revenue adjustments |
5,670 |
(2,400) |
7,439 |
13,612 |
||||
Non-GAAP Gross margin |
$ 99,653 |
$ 82,722 |
$ 352,430 |
$ 329,350 |
||||
NON-GAAP Gross margin percentage |
30.5% |
28.3% |
29.2% |
28.0% |
||||
Reconciliation of EBIT & EBITDA: |
||||||||
Net Income Attributable to TeleTech stockholders |
$ 19,469 |
$ 20,382 |
$ 67,388 |
$ 70,015 |
||||
Interest income |
(378) |
(743) |
(2,560) |
(2,978) |
||||
Interest expense |
1,946 |
1,886 |
7,513 |
6,696 |
||||
Provision for (benefit from) income taxes |
7,995 |
2,969 |
20,598 |
(61) |
||||
EBIT |
$ 29,032 |
$ 24,494 |
$ 92,939 |
$ 73,672 |
||||
Depreciation and amortization |
12,783 |
10,126 |
46,064 |
41,166 |
||||
EBITDA |
$ 41,815 |
$ 34,620 |
$ 139,003 |
$ 114,838 |
||||
Reconciliation of Free Cash Flow: |
||||||||
Cash Flow From Operating Activities: |
||||||||
Net income |
$ 20,977 |
$ 21,138 |
$ 71,471 |
$ 73,923 |
||||
Adjustments to reconcile net income to net cash |
||||||||
provided by operating activities: |
||||||||
Depreciation and amortization |
12,783 |
10,126 |
46,064 |
41,166 |
||||
Other |
27,606 |
12,245 |
20,444 |
(8,169) |
||||
Net cash provided by operating activities |
61,366 |
43,509 |
137,979 |
106,920 |
||||
Less - Total Capital Expenditures |
18,532 |
7,394 |
50,364 |
40,543 |
||||
Free Cash Flow |
$ 42,834 |
$ 36,115 |
$ 87,615 |
$ 66,377 |
||||
Reconciliation of Non-GAAP Income from Operations: |
||||||||
Income from Operations |
$ 32,765 |
$ 25,988 |
$ 101,399 |
$ 78,545 |
||||
Restructuring charges, net |
254 |
2,181 |
4,435 |
22,875 |
||||
Impairment losses |
- |
- |
1,205 |
2,958 |
||||
Net effect of foreign currency fluctuations |
2,508 |
(518) |
5,084 |
1,172 |
||||
Net effect of revenue lost from typhoon |
- |
- |
820 |
- |
||||
Acquisition-related expenses |
- |
- |
- |
159 |
||||
Non-GAAP Income from Operations |
$ 35,527 |
$ 27,651 |
$ 112,943 |
$ 105,709 |
||||
Non-GAAP Income from Operations Margin |
10.9% |
9.5% |
9.4% |
9.0% |
||||
Reconciliation of Non-GAAP EPS: |
||||||||
Net Income Attributable to TeleTech stockholders |
$ 19,469 |
$ 20,382 |
$ 67,388 |
$ 70,015 |
||||
Add: Asset impairment and restructuring charges, net of related taxes |
223 |
1,584 |
3,840 |
16,681 |
||||
Add: Acquisition-related expenses, net of related taxes |
- |
- |
- |
95 |
||||
Add: Deconsolidation of subsidiary |
- |
- |
3,556 |
- |
||||
Add: Changes in acquisition contingent consideration, net of related taxes |
1,146 |
- |
1,146 |
- |
||||
Add: Net effect of foreign currency fluctuations, net of related taxes |
1,782 |
(337) |
3,583 |
762 |
||||
Add: Net effect of revenue lost from typhoon, net of related taxes |
- |
- |
574 |
- |
||||
Add: Changes in valuation allowance and returns to provision adjustments |
1,488 |
(1,305) |
880 |
(10,746) |
||||
Non-GAAP Net Income Attributable to TeleTech stockholders |
$ 24,108 |
$ 20,325 |
$ 80,967 |
$ 76,808 |
||||
Diluted shares outstanding |
51,465 |
54,196 |
52,244 |
55,540 |
||||
Non-GAAP EPS Attributable to TeleTech stockholders |
$0.47 |
$0.38 |
$1.55 |
$1.38 |
||||
Reconciliation of Non-GAAP EBITDA: |
||||||||
Net Income Attributable to TeleTech stockholders |
$ 19,469 |
$ 20,382 |
$ 67,388 |
$ 70,015 |
||||
Interest income |
(378) |
(743) |
(2,560) |
(2,978) |
||||
Interest expense |
1,946 |
1,886 |
7,513 |
6,696 |
||||
Provision for (benefit from) income taxes |
7,995 |
2,969 |
20,598 |
(61) |
||||
Depreciation and amortization |
12,783 |
10,126 |
46,064 |
41,166 |
||||
Asset impairment and restructuring charges |
254 |
2,181 |
5,640 |
25,833 |
||||
Acquisition-related expenses |
- |
- |
- |
159 |
||||
Net effect of foreign currency fluctuations |
2,508 |
(518) |
5,084 |
1,172 |
||||
Net effect of revenue lost from typhoon |
- |
- |
820 |
- |
||||
Changes in acquisition contingent consideration |
1,878 |
- |
1,878 |
- |
||||
Equity-based compensation expenses |
3,392 |
3,066 |
13,234 |
13,376 |
||||
Non-GAAP EBITDA |
$ 49,847 |
$ 39,349 |
$ 165,659 |
$ 155,378 |
SOURCE
Investor Contact: Paul Miller, 303.397.8641 or Media Contact: Jeanna Blatt, 303.397.8507