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:
- TTEC Digital (Digital) - Previously TTEC's Customer
Strategy Services and Customer Technology Services segments.
- 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
|
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SOURCE TTEC Holdings, Inc.