DENVER, May 4, 2020 /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 first quarter ended
March 31, 2020.
"We outperformed in the first quarter on both the top and bottom
line. We continue to execute on our strategic priorities which
include converting market demand for the adoption of cloud,
omni-channel, intelligent automation and digitization
technologies," commented Ken Tuchman, chairman and chief
executive officer of TTEC. "As we navigate the uncertainty of
COVID-19, we are intensely focused on the health and safety of our
employees, ensuring business continuity for our clients, and
steadfastly supporting the communities in which we
operate."
Tuchman continued, "The sudden onset of the global COVID-19
pandemic has brought with it a new set of challenges and client
opportunities in several verticals, and we're leveraging our CX
technology platform and overall organizational agility to support
this current reality. We spent over a decade building this
end-to-end platform to meet the unique demands of a virtual
economy. Our team has been working tirelessly to respond
swiftly to support surging engagement volumes with expertise in
implementing a range of market leading Digital customer experience
technology and automation. We are well positioned to win a
disproportionate share of new pipeline opportunities for essential
service providers. Successfully pivoting to these engagements
keeps us on a compelling growth trajectory for the time being and
will help us to bridge back to a more normalized recovery
environment."
FIRST QUARTER 2020 FINANCIAL
HIGHLIGHTS
Revenue
- First quarter 2020 GAAP revenue increased 9.6 percent to
$432.2 million compared to
$394.4 million in the prior year
period.
- Foreign exchange had a $1.4
million negative impact on revenue in the first quarter
2020.
Income from Operations
- First quarter 2020 GAAP income from operations was $40.7 million, or 9.4 percent of
revenue, compared to $32.1 million,
or 8.1 percent of revenue in the prior year period.
- First quarter 2020 Non-GAAP income from operations, excluding
$1.2 million in restructuring
charges, was $41.9 million or
9.7 percent of revenue versus 8.8 percent for the prior year
period.
- Foreign exchange had a $0.2 million negative impact on income from
operations in the first quarter 2020.
Adjusted
EBITDA
- First quarter 2020 Non-GAAP Adjusted EBITDA was $63.6 million, or 14.7 percent of
revenue, compared to $55.0 million, or 13.9 percent of revenue in
the prior year period.
Earnings Per Share
- First quarter 2020 GAAP fully diluted earnings per share was
$0.46 compared to $0.41 for the same period last year.
- First quarter 2020 Non-GAAP fully diluted earnings per share
was $0.64 compared to $0.51 in the prior year period.
Bookings
- During the first quarter 2020, TTEC signed an estimated
$87 million in annualized contract
value. 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 first quarter 2020 was
$62.2 million compared to
$80.0 million for the first quarter
2019.
- Capital expenditures in the first quarter 2020 were
$16.8 million compared to
$13.2 million for the first
quarter 2019.
- As of March 31, 2020, TTEC had
cash and cash equivalents of $520.4 million and debt of $715.6 million, resulting in a net debt
position of $195.2 million. This
compares to a net debt position of $173.6 million for the same period 2019. In
response to COVID-19 related uncertainties, the increased cash
and debt at March 31, 2020 was
primarily related to precautionary measures taken to proactively
increase liquidity by drawing down a portion of the revolving
credit facility.
- As of March 31, 2020, TTEC had
approximately $195.0 million of
additional borrowing capacity available under its revolving credit
facility compared to $465 million for
the same period 2019.
- Paid a 34 cent per share, or
$15.8 million, semi-annual dividend
on April 16, 2020, an
approximate 6.3 percent increase over the dividend paid in
October 2019 and a 13.3 percent
increase over the April 2019
dividend.
SEGMENT REPORTING & COMMENTARY
TTEC reports financial results for the following two segments:
TTEC Digital (Digital) and TTEC Engage (Engage). Financial
highlights for the segments are provided below.
TTEC Digital – Design, build and operate tech-enabled,
insight-driven CX solutions
- First quarter 2020 GAAP revenue for TTEC Digital increased
17.8 percent to $77.6 million from $65.9 million for the year ago period.
Income from operations was $10.3 million or 13.2 percent of
revenue compared to operating income of $7.8 million or 11.8 percent of
revenue for the prior year period.
- First quarter 2020 Non-GAAP income from operations was
$11.2 million, or
14.4 percent of revenue compared to operating income of
$8.1 million
or 12.3 percent of revenue in the prior year period.
- First quarter 2020 Non-GAAP Adjusted EBITDA was $15.3 million, or 19.7 percent of
revenue, compared to $11.3 million, or 17.1 percent of revenue in
the prior year period.
TTEC Engage – Digitally-enabled customer care, acquisition,
and fraud prevention services
- First quarter 2020 GAAP revenue for TTEC Engage
increased 8.0 percent to $354.7 million from $328.5 million for the year ago period.
Income from operations was $30.5 million or 8.6 percent of revenue
compared to operating income of $24.3 million or 7.4 percent of
revenue for the prior year period.
- First quarter 2020 Non-GAAP income from operations was
$30.8 million, or
8.7 percent of revenue compared to operating income of
$26.5 million
or 8.1 percent of revenue in the prior year period.
- First quarter 2020 Non-GAAP Adjusted EBITDA was $48.3 million, or 13.6 percent of
revenue, compared to $43.7 million, or 13.3 percent of revenue in
the prior year period.
- Foreign exchange had a $1.2 million negative impact on revenue and
$0.1 million negative impact on
income from operations in the first quarter 2020.
Although the COVID-19 pandemic disruptions did not have a
material adverse impact on the financial results for the first
quarter of 2020, there can be no assurances that TTEC will not
experience such impacts through the end of 2020 and beyond.
BUSINESS OUTLOOK
"The inherent value of our diverse portfolio of marquee clients,
the resiliency and agility of our business model, and strength of
our balance sheet, liquidity and cash flow carry even greater
importance during uncertain times," commented Regina Paolillo, chief financial and
administrative officer. "We are confident that we have the
necessary resources to support our existing business as well as new
business opportunities associated with the pandemic."
Paolillo continued, "While it is too early to fully understand
the net impact of COVID-19 on our financial performance, we
continue to see net top and bottom line growth in 2020. We estimate
the combination of a healthy revenue backlog, COVID-19 related
surge work, and the increased volumes from recent acquisitions to
more than offset the economic headwinds of this crisis."
NON-GAAP FINANCIAL MEASURES
This press release contains a discussion of certain Non-GAAP
financial measures that TTEC 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.
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 48,700 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
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 COVID-19 global
pandemic and the various government mandates designed to contain
the pandemic, and how these risks may impact our business in the
short and longer term; the 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; consolidation activities undertaken by our
clients; geographic concentration of our brick and mortar delivery
platform and our global footprint; changes in laws that impact our
business and our ability to comply with those and other laws
governing our operations; the reliability of our information
technology infrastructure and our ability to consistently deliver
uninterrupted service to our clients; the need to forecast demand
for services accurately and the impact of such forecasts on our
capacity utilization; 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; and our equity
structure including our controlling shareholder risk, the limited
market float of our stock, and the potential volatility of our
stock price resulting therefrom. Risk Factors that could cause
TTEC's results to differ materially from those described in the
forward-looking statements can be found in TTEC's Quarterly Report
on Form 10-Q for the quarter ended on March
31, 2020 and Annual Report on Form 10-K for the year ended
December 31, 2019, 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
|
|
|
March
31,
|
|
|
2020
|
|
2019
|
|
|
|
|
|
Revenue
|
$432,213
|
|
$394,356
|
|
|
|
|
|
Operating
Expenses:
|
|
|
|
|
Cost of
services
|
321,557
|
|
293,334
|
|
Selling, general and
administrative
|
49,834
|
|
49,720
|
|
Depreciation and
amortization
|
18,872
|
|
16,743
|
|
Restructuring and
integration charges, net
|
538
|
|
961
|
|
Impairment
losses
|
696
|
|
1,506
|
Total operating expenses
|
391,497
|
|
362,264
|
|
|
|
|
|
Income From
Operations
|
40,716
|
|
32,092
|
|
|
|
|
|
|
Other income
(expense), net
|
(5,832)
|
|
(4,150)
|
|
|
|
|
|
Income Before
Income Taxes
|
34,884
|
|
27,942
|
|
|
|
|
|
|
Provision for income
taxes
|
(10,199)
|
|
(7,466)
|
|
|
|
|
|
Net
Income
|
24,685
|
|
20,476
|
|
|
|
|
|
|
Net income
attributable to noncontrolling interest
|
(3,151)
|
|
(1,474)
|
|
|
|
|
|
Net Income
Attributable to TTEC Stockholders
|
$
21,534
|
|
$
19,002
|
|
|
|
|
|
|
|
|
|
|
Net Income Per
Share
|
|
|
|
|
|
|
|
|
|
Basic
|
$
0.53
|
|
$
0.44
|
|
|
|
|
|
|
Diluted
|
$
0.53
|
|
$
0.44
|
|
|
|
|
|
Net Income Per
Share Attributable to TTEC Stockholders
|
|
|
|
|
|
|
|
|
|
Basic
|
$
0.46
|
|
$
0.41
|
|
|
|
|
|
|
Diluted
|
$
0.46
|
|
$
0.41
|
|
|
|
|
|
|
|
|
|
|
Income From
Operations Margin
|
9.4%
|
|
8.1%
|
Net Income
Margin
|
5.7%
|
|
5.2%
|
Net Income
Attributable to TTEC Stockholders Margin
|
5.0%
|
|
4.8%
|
Effective Tax
Rate
|
29.2%
|
|
26.7%
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Shares Outstanding
|
|
|
|
Basic
|
46,498
|
|
46,203
|
Diluted
|
46,813
|
|
46,590
|
TTEC HOLDINGS,
INC. AND SUBSIDIARIES
|
SEGMENT
INFORMATION
|
(In
thousands)
|
(unaudited)
|
|
|
|
|
Three months
ended
|
|
|
March
31,
|
|
|
2020
|
|
2019
|
|
|
|
|
|
Revenue:
|
|
|
|
|
TTEC
Digital
|
|
$
77,556
|
|
$
65,853
|
TTEC
Engage
|
|
354,657
|
|
328,503
|
Total
|
|
$432,213
|
|
$394,356
|
|
|
|
|
|
Income From
Operations:
|
|
|
|
|
TTEC
Digital
|
|
$
10,258
|
|
$
7,759
|
TTEC
Engage
|
|
30,458
|
|
24,333
|
Total
|
|
$
40,716
|
|
$
32,092
|
TTEC HOLDINGS,
INC. AND SUBSIDIARIES
|
CONSOLIDATED
BALANCE SHEETS
|
(In
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and
cash equivalents
|
|
$
520,369
|
|
$
82,407
|
Accounts
receivable, net
|
|
313,639
|
|
331,096
|
Other
current assets
|
|
124,100
|
|
136,322
|
Total current
assets
|
|
958,108
|
|
549,825
|
|
|
|
|
|
Property and
equipment, net
|
|
173,717
|
|
176,633
|
Other
assets
|
|
632,943
|
|
650,330
|
|
|
|
|
|
Total
assets
|
|
$1,764,768
|
|
$
1,376,788
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Total current
liabilities
|
|
$
380,398
|
|
$
363,289
|
Other long-term
liabilities
|
|
929,597
|
|
532,846
|
Redeemable
noncontrolling interest
|
|
53,367
|
|
48,923
|
Total
equity
|
|
401,406
|
|
431,730
|
|
|
|
|
|
Total liabilities
and equity
|
|
$1,764,768
|
|
$
1,376,788
|
TTEC HOLDINGS,
INC. AND SUBSIDIARIES
|
RECONCILIATION OF
NON-GAAP FINANCIAL INFORMATION
|
(In thousands,
except per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
|
|
March
31,
|
|
|
|
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$432,213
|
|
$394,356
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income
|
|
$
24,685
|
|
$
20,476
|
|
|
|
Interest
income
|
|
(364)
|
|
(340)
|
|
|
|
Interest
expense
|
|
9,592
|
|
5,288
|
|
|
|
Provision for income taxes
|
|
10,199
|
|
7,466
|
|
|
|
Depreciation and amortization
|
|
18,872
|
|
16,743
|
|
|
|
Asset
impairment, restructuring and integration charges
|
|
1,234
|
|
2,467
|
|
|
|
Gain on
sale of business units
|
|
(246)
|
|
(308)
|
|
|
|
Changes
in acquisition contingent consideration
|
|
(3,265)
|
|
-
|
|
|
|
Equity-based compensation expenses
|
|
2,919
|
|
3,168
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
63,626
|
|
$
54,960
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Free Cash Flow:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flow From
Operating Activities:
|
|
|
|
|
|
|
|
Net
income
|
|
$
24,685
|
|
$
20,476
|
|
|
|
Adjustments to reconcile net income to net cash
|
|
|
|
|
|
|
|
provided by
operating activities:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
18,872
|
|
16,743
|
|
|
|
Other
|
|
18,608
|
|
42,744
|
|
|
|
Net cash
provided by operating activities
|
|
62,165
|
|
79,963
|
|
|
|
|
|
|
|
|
|
|
|
Less - Total Cash
Capital Expenditures
|
|
16,813
|
|
13,200
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash
Flow
|
|
$
45,352
|
|
$
66,763
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Non-GAAP Income from Operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
Operations
|
|
$
40,716
|
|
$
32,092
|
|
|
|
Restructuring
charges, net
|
|
538
|
|
961
|
|
|
|
Impairment
losses
|
|
696
|
|
1,506
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Income
from Operations
|
|
$
41,950
|
|
$
34,559
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Income
from Operations Margin
|
|
9.7%
|
|
8.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Non-GAAP EPS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income
|
|
$
24,685
|
|
$
20,476
|
|
|
|
Add: Asset
restructuring and impairment charges
|
|
1,234
|
|
2,467
|
|
|
|
Add: Interest
charge related to future purchase of remaining 30% for Motif
acquisition
|
|
6,477
|
|
1,307
|
|
|
|
Less: Changes
in acquisition contingent consideration
|
|
(3,265)
|
|
-
|
|
|
|
Less: Gain on
sale of business units
|
|
(246)
|
|
(308)
|
|
|
|
Add: Changes in
valuation allowance, return to provision adjustments and other, and
tax effects of items separately disclosed above
|
|
1,133
|
|
(300)
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Net
Income
|
|
$
30,018
|
|
$
23,642
|
|
|
|
|
|
|
|
|
|
|
|
Diluted shares outstanding
|
|
46,813
|
|
46,590
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
EPS
|
|
$0.64
|
|
$0.51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted EBITDA by Segment :
|
|
TTEC
Engage
|
|
TTEC
Digital
|
|
|
|
|
|
|
|
|
|
|
Q1
20
|
|
Q1
19
|
|
Q1
20
|
Q1
19
|
|
|
|
|
|
|
|
|
Earnings before
Income Taxes
|
|
$
24,582
|
|
$
20,133
|
|
$10,302
|
$
7,812
|
Interest
income / expense, net
|
|
9,274
|
|
4,950
|
|
(45)
|
(2)
|
Depreciation and amortization
|
|
15,584
|
|
14,435
|
|
3,288
|
2,308
|
Asset
impairment, restructuring and integration charges
|
|
331
|
|
2,120
|
|
902
|
347
|
Gain on
sale of business units
|
|
(246)
|
|
(308)
|
|
-
|
-
|
Changes
in acquisition contingent consideration
|
|
(3,265)
|
|
-
|
|
-
|
-
|
Equity-based compensation expenses
|
|
2,070
|
|
2,357
|
|
849
|
811
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
48,330
|
|
$
43,687
|
|
$15,296
|
$11,276
|
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SOURCE TTEC Holdings, Inc.