TTEC
$47.63
Teletech Hldgs
$.47
1.00%
Earnings Details
2nd Quarter June 2019
Wednesday, August 07, 2019 4:45:00 PM
Tweet Share Watch
Summary

TTEC Narrows Guidance

Teletech Hldgs (TTEC) reported 2nd Quarter June 2019 earnings of $0.34 per share on revenue of $392.5 million. The consensus earnings estimate was $0.11 per share on revenue of $376.8 million. Revenue grew 12.2% on a year-over-year basis.

The company said it expects 2019 revenue of $1.622 billion to $1.630 billion. The company's previous guidance was revenue of $1.614 billion to $1.63 billion and the current consensus estimate is revenue of $1.63 billion for the year ending December 31, 2019.

TeleTech Holdings Inc is a customer engagement management service provider. It caters to the automotive, communications, financial services, government, healthcare, logistics, media and entertainment, retail, and other industries.

Results
Reported Earnings
$0.34
Earnings Whisper
-
Consensus Estimate
$0.11
Reported Revenue
$392.5 Mil
Revenue Estimate
$376.8 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

TTEC Announces Second Quarter 2019 Financial Results

DENVER, Aug. 7, 2019 /PRNewswire/ -- TTEC Holdings, Inc. (NASDAQ: TTEC), a leading digital global customer experience technology and services company focused on the design, implementation and delivery of transformative solutions for many of the world's most iconic and disruptive brands, today announced financial results for the second quarter ended June 30, 2019.

"We had a standout first half of the year on a number of fronts," commented Ken Tuchman, chairman and chief executive officer of TTEC. "We delivered record year-to-date top line growth and profit with revenue increasing 8.5 percent to $787 million and non-GAAP operating income increasing 44.6 percent to $60 million. Our bookings and pipeline are healthy. We are winning market share across the board, highlighted by both our expansion in Europe and hypergrowth born-digital client focus. We progressed our strategic initiatives, including growing our customer experience (CX) cloud-based technology platform 188 percent. We are proud of our client and employee Net Promoter Scores. They are a testament to our focus on building the culture necessary to bring humanity to business at scale. Our first half performance, in combination with our new business pipeline and revenue backlog, have led us to raise our full year 2019 guidance."

Tuchman continued, "CX is the last frontier for competitive advantage and the market is demanding cutting-edge digital experiences. Having anticipated this trend, we were deliberate in shaping TTEC with the CX technology and services that enable clients to create digital-first experiences with our Humanify® Cloud. We are changing the game by leveraging the speed and power of AI and RPA across the customer lifecycle, with solutions including Associate Assist and our managed services RPA offering."

SECOND QUARTER 2019 FINANCIAL HIGHLIGHTS               

Revenue        

  • Second quarter 2019 GAAP revenue increased 12.2 percent to $392.5 million compared to $349.9 million in the prior year period.
  • Foreign exchange had a $1.1 million negative impact on revenue in the second quarter 2019.

Income from Operations

  • Second quarter 2019 GAAP income from operations was $22.9 million, or 5.8 percent of revenue, compared to $13.5 million, or 3.9 percent of revenue in the prior year period.
  • Non-GAAP income from operations, excluding $2.5 million in restructuring and impairment charges, was $25.4 million or 6.5 percent of revenue versus 4.2 percent for the prior year period.
  • Foreign exchange had a $1.2 million positive impact on income from operations in the second quarter 2019.

Adjusted EBITDA        

  • Second quarter 2019 Non-GAAP Adjusted EBITDA was $44.8 million, or 11.4 percent of revenue, compared to $35.4 million, or 10.1 percent of revenue in the prior year period

Earnings Per Share

  • Second quarter 2019 GAAP fully diluted earnings per share was $0.29 compared to $0.14 for the same period last year.
  • Non-GAAP fully diluted earnings per share was $0.34 compared to $0.22 in the prior year period.

Bookings

  • During the second quarter 2019, TTEC signed an estimated $122 million in annualized contract value. Second quarter bookings mix was diversified across segments, verticals, and geographies.

STRONG BALANCE SHEET AND CASH FLOWS CONTINUE TO FUND INVESTMENTS AND DIVIDENDS

  • As of June 30, 2019, TTEC had cash and cash equivalents of $75.5 million and debt of $248.3 million, resulting in a net debt position of $172.8 million. This compares to a net debt position of $238.1 million for the same period 2018.
  • As of June 30, 2019, TTEC had approximately $510 million of additional borrowing capacity available under its revolving credit facility compared to $395 million for the same period 2018.
  • Cash flow from operations in the second quarter 2019 was $41.3 million compared to $37.3 million for the second quarter 2018.
  • Capital expenditures in the second quarter 2019 were $15.2 million compared to $9.4 million for the second quarter 2018.
  • Paid a 30 cent per share, or $13.9 million, semi-annual dividend on April 18, 2019, an approximate 7 percent increase over the distribution paid in October 2018 and an 11 percent increase over the distribution paid in April 2018.

SEGMENT REPORTING & COMMENTARY

Effective June 30, 2019, TTEC reports financial results for the following two business segments:

  1. TTEC Digital (Digital) - Previously TTEC's Customer Strategy Services and Customer Technology Services segments.
  2. TTEC Engage (Engage) – Previously TTEC's Customer Growth Services and Customer Management Services segments.

Financial highlights for the two segments are provided below.

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

  • Digital second quarter 2019 GAAP revenue increased 49.6 percent to $78.5 million from $52.5 million for the year ago quarter. Income from operations was $7.7 million or 9.8 percent of revenue compared to operating income of $6.8 million or 12.9 percent of revenue for the prior year period.
  • Non-GAAP income from operations was $9.7 million, or 12.4 percent of revenue compared to operating income of $6.8 million or 12.9 percent of revenue in the prior year period.

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

  • Engage second quarter 2019 GAAP revenue increased 5.6 percent to $314.0 million from $297.4 million for the year ago quarter. Income from operations was $15.2 million or 4.8 percent of revenue compared to operating income of $6.7 million or 2.3 percent of revenue for the prior year period.
  • Non-GAAP income from operations was $15.7 million, or 5.0 percent of revenue compared to operating income of $7.8 million or 2.6 percent of revenue in the prior year period.
  • Foreign exchange had a negative $0.8 million impact on revenue and positive $1.1 million impact on income from operations.

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, among other items.

BUSINESS OUTLOOK

"We are delighted with the financial performance and business execution underlying another strong quarter and first half of the year," commented Regina Paolillo, chief financial and administrative officer. "Our years of dedication and investment in transforming the company have differentiated our solutions portfolio, increased the value that we deliver to our clients across the CX continuum, and allowed us to build loyal and tenured relationships with many of the world's most noteworthy brands."

Paolillo continued, "We are pleased to launch our updated segments, TTEC Digital and TTEC Engage. We believe this consolidation aligns our management, go-to-market platform, operational and financial reporting structures, and provides our investors a more meaningful view of the now integrated Customer Technology and Strategy Services business (TTEC Digital) and the Customer Growth and Management Services business (TTEC Engage). Looking ahead, we anticipate our first half momentum to continue and expect to deliver significant organic revenue growth alongside improved profitability and cash flow generation this year. As a result, we are raising our full year 2019 revenue and profitability outlook."

Our updated 2019 estimated full-year guidance, which excludes restructuring charges, impairment charges and PRG Middle East, is as follows:

Revenue between $1.622 and $1.630 billion, versus $1.614 and $1.630 billion

  • Using the mid-point of our full-year guidance, we estimate TTEC Digital to comprise 18 percent of revenue and TTEC Engage 82 percent of revenue.

Operating income margins between 7.8 and 8.0 percent, versus 7.4 and 7.6 percent. 

  • Using the mid-point of our full-year guidance, we estimate TTEC Digital's margin of 13.4 percent of revenue and TTEC Engage 6.6 percent of revenue.

Adjusted EBITDA margins between 12.8 and 13.0 percent, versus 12.6 and 12.8 percent.

  • Using the mid-point of our full-year guidance, we estimate TTEC Digital's margin of 18.5 percent of revenue and TTEC Engage 11.7 percent of revenue.

Using the midpoint of our full-year guidance, we expect approximately 28 percent of our revenue, 37 percent of our operating income and 32 percent of our adjusted EBITDA to be recognized in the fourth quarter, our peak seasonal period. 

Capital expenditures are estimated to remain unchanged between 3.8 and 4.0 percent of revenue, of which 65 percent is growth oriented.

Effective tax rate for the full year is estimated to remain unchanged between 25 and 27 percent.

About TTEC 

TTEC Holdings, Inc. (NASDAQ: TTEC) is a leading global customer experience technology and services company focused on the design, implementation and delivery of transformative customer experience for many of the world's most iconic and disruptive brands. The Company delivers outcome-based customer engagement solutions through TTEC Digital, its digital consultancy that designs and builds human centric, tech-enabled, insight-driven customer experience solutions for clients and TTEC Engage, its delivery center of excellence, that operates customer acquisition, care, fraud prevention and detection, and content moderation services. Founded in 1982, the Company's 48,000 employees operate on six continents across the globe and live by a set of customer-focused values that guide relationships with clients, their customers, and each other. To learn more about how TTEC is bringing humanity to the customer experience, visit www.ttec.com

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.

FORWARD-LOOKING STATEMENTS

This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of TTEC Holding, Inc.'s management and are subject to significant risks and uncertainties. Specifically, we would like for you to focus on risks related to our strategy execution, our ability to innovate and introduce technologies that are sufficiently disruptive to allow us to maintain and grow our market share, cybersecurity risk and risks inherent to our equity structure. Actual results may differ from what is expressed in the forward-looking statements. Factors that could cause TTEC's results to differ materially from those described in the forward-looking statements can be found in TTEC's Annual Report on Form 10-K for the year ended December 31, 2018, which has been filed with the U.S. Securities and Exchange Commission (the "SEC") and is available on TTEC's website www.ttec.com, and on the SEC's public website at www.sec.gov. TTEC Holdings, Inc. does not undertake to update any forward-looking statements.

Investor Relations Contact

Paul Miller

+1.303.397.8641

Public Relations Contact

Nick Cerise

+1.303.397.8331

Address

9197 South Peoria Street

Englewood, CO 80112

Contact

ttec.com

+1.800.835.3832

 

TTEC 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,




2019


2018


2019


2018











Revenue


$392,515


$349,853


$786,871


$725,102











Operating Expenses:










Cost of services


299,237


274,260


592,571


557,630


Selling, general and administrative


50,864


44,245


100,584


91,290


Depreciation and amortization


17,050


16,811


33,793


34,735


Restructuring and integration charges, net


428


1,034


1,389


1,883


Impairment losses


2,063


-


3,569


1,120

         Total operating expenses


369,642


336,350


731,906


686,658











Income From Operations


22,873


13,503


54,965


38,444












Other income (expense), net


(1,914)


(6,553)


(6,064)


(23,460)











Income Before Income Taxes


20,959


6,950


48,901


14,984












Provision for income taxes


(7,345)


(653)


(14,811)


(2,755)











Net Income


13,614


6,297


34,090


12,229












Net income attributable to noncontrolling interest


(1,816)


(779)


(3,290)


(2,120)











Net Income Attributable to TTEC Stockholders


$  11,798


$    5,518


$  30,800


$  10,109





















Net Income Per Share




















Basic


$     0.29


$     0.14


$     0.74


$     0.27












Diluted


$     0.29


$     0.14


$     0.73


$     0.26











Net Income Per Share Attributable to TTEC Stockholders




















Basic


$     0.25


$     0.12


$     0.67


$     0.22












Diluted


$     0.25


$     0.12


$     0.66


$     0.22





















Income From Operations Margin


5.8%


3.9%


7.0%


5.3%

Net Income Margin


3.5%


1.8%


4.3%


1.7%

Net Income Attributable to TTEC Stockholders Margin


3.0%


1.6%


3.9%


1.4%

Effective Tax Rate


35.0%


9.4%


30.3%


18.4%





















Weighted Average Shares Outstanding









  Basic


46,318


46,016


46,261


45,944

  Diluted


46,684


46,401


46,636


46,424

 

TTEC HOLDINGS, INC. AND SUBSIDIARIES

SEGMENT INFORMATION

(In thousands)

(unaudited)





















Three months ended


Six months ended



 June 30,


 June 30,



2019


2018


2019


2018










Revenue:









TTEC Digital


$  78,519


$  52,500


$144,372


$102,568

TTEC Engage


313,996


297,353


642,499


622,534

Total


$392,515


$349,853


$786,871


$725,102










Income From Operations:









TTEC Digital


$    7,709


$    6,764


$  15,468


$  12,110

TTEC Engage


15,164


6,739


39,497


26,334

Total


$  22,873


$  13,503


$  54,965


$  38,444

 

TTEC HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

(unaudited)








 June 30,


 December 31, 



2019


2018











ASSETS





Current assets:





   Cash and cash equivalents


$     75,517


$           78,237

   Accounts receivable, net


323,823


350,962

   Other current assets


113,142


97,278

      Total current assets


512,482


526,477






Property and equipment, net


162,643


161,523

Other assets


504,216


366,508






Total assets


$1,179,341


$      1,054,508






LIABILITIES AND EQUITY





Total current liabilities


$   322,869


$         235,418

Other long-term liabilities


465,823


466,241

Total equity


390,649


352,849






Total liabilities and equity


$1,179,341


$      1,054,508

 

TTEC 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,



2019


2018


2019


2018










Revenue


$392,515


$349,853


$786,871


$725,102



















Reconciliation of Adjusted EBITDA:


















Net Income


$  13,614


$    6,297


$  34,090


$  12,229

   Interest income


(429)


(1,471)


(769)


(2,539)

   Interest expense


4,208


7,765


9,496


14,224

   Provision for income taxes


7,345


653


14,811


2,755

   Depreciation and amortization


17,050


16,811


33,793


34,735

   Asset impairment, restructuring and integration charges


2,491


1,034


4,958


3,003

   Impairment of equity investment


-


-


-


15,632

   Gain on sale of business units


(442)


(271)


(750)


(1,065)

   Changes in acquisition contingent consideration


(2,424)


-


(2,424)


-

   Loss on asset held for sale reclassified to asset held and used


-


2,000


-


2,000

   Gain on bargain purchase of acquisition


-


-


-


(685)

   Equity-based compensation expenses


3,366


2,574


6,534


6,183










 Adjusted EBITDA


$  44,779


$  35,392


$  99,739


$  86,472



















Reconciliation of Free Cash Flow:


















Cash Flow From Operating Activities:









   Net income


$  13,614


$    6,297


$  34,090


$  12,229

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









          Depreciation and amortization


17,050


16,811


33,793


34,735

          Other


10,639


14,211


53,383


57,742

   Net cash provided by operating activities


41,303


37,319


121,266


104,706










Less - Total Cash Capital Expenditures


15,228


9,375


28,428


16,883










Free Cash Flow


$  26,075


$  27,944


$  92,838


$  87,823



















Reconciliation of Non-GAAP Income from Operations:


















Income from Operations


$  22,873


$  13,503


$  54,965


$  38,444

Restructuring charges, net


428


1,034


1,389


1,883

Impairment losses


2,063


-


3,569


1,120










Non-GAAP Income from Operations


$  25,364


$  14,537


$  59,923


$  41,447










Non-GAAP Income from Operations Margin


6.5%


4.2%


7.6%


5.7%



















Reconciliation of Non-GAAP EPS:


















Net Income


$  13,614


$    6,297


$  34,090


$  12,229

Add:  Asset restructuring and impairment charges


2,491


1,034


4,958


3,003

Add:  Loss on asset held for sale reclassified to asset held and used


-


2,000


-


2,000

Add:  Interest charge related to future purchase of remaining 30% for Motif acquisition


469


3,062


1,776


4,987

Add:  Impairment of equity investment


-


-


-


15,632

Add:  Changes in acquisition contingent consideration


(2,424)


-


(2,424)


-

Less:  Gain on sales of business units


(442)


(271)


(750)


(1,065)

Less:  Gain on bargain purchase of acquisition


-


-


-


(685)

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


2,134


(1,842)


1,834


(6,346)










 Non-GAAP Net Income


$  15,842


$  10,280


$  39,484


$  29,755










    Diluted shares outstanding


46,684


46,401


46,636


46,424










 Non-GAAP EPS


$0.34


$0.22


$0.85


$0.64

 

TTEC Logo (PRNewsfoto/TTEC Holdings, Inc.)

 

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SOURCE TTEC Holdings, Inc.