TTEC
$57.88
Teletech Hlds
($1.57)
(2.64%)
Earnings Details
2nd Quarter June 2020
Wednesday, August 5, 2020 4:05:00 PM
Tweet Share Watch
Summary

TTEC Guides Above Estimates

Teletech Hlds (TTEC) reported 2nd Quarter June 2020 earnings of $0.75 per share on revenue of $453.1 million. The consensus earnings estimate was $0.36 per share on revenue of $405.9 million. Revenue grew 15.4% on a year-over-year basis.

The company said it expects 2020 earnings of $2.37 to $2.43 per share on revenue of $1.766 billion to $1.784 billion. The current consensus earnings estimate is $2.03 per share on revenue of $1.72 billion for the year ending December 31, 2020.

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
$0.75
Earnings Whisper
-
Consensus Estimate
$0.36
Reported Revenue
$453.1 Mil
Revenue Estimate
$405.9 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

TTEC Announces Record Second Quarter 2020 Financial Results

DENVER, Aug. 5, 2020 /PRNewswire/ -- TTEC Holdings, Inc. (NASDAQ: TTEC), a leading global Customer Experience as a Service (CXaaS) partner for many of the world's most iconic and disruptive brands, today announced financial results for the second quarter and six months ended June 30, 2020.

"Our record financial results for the second quarter reflect heightened demand for digitized and virtualized CX solutions," commented Ken Tuchman, chairman and chief executive officer of TTEC. "Our ability to rapidly enable clients to substitute person-to-person engagement with an authentic digitized and virtualized customer experience has never been more essential. Our business performance underscores the agility and market differentiation in our technology rich customer experience-as-a-service (CXaaS) offerings."

Tuchman continued, "TTEC provides everything it takes for large commercial enterprise and government organizations to operate virtually, automate processes, and successfully enable digital customer experience. We expect our topline momentum to continue to benefit from current market trends including a growing demand for digitization and virtualization, an increasingly compressed time to digital adoption and a shift toward ubiquitous engagement for businesses and consumers."

"I'm also thrilled about TTEC Digital's strategic acquisition of VoiceFoundry, a leading global Amazon Connect partner.  VoiceFoundry provides additional speed, agility, and optionality to our Humanify™ Cloud platform, expanding our CX Ecosystem with Amazon's cloud-first, best-of-breed solutions that will accelerate digital CX transformation for our clients," concluded Tuchman.

SECOND QUARTER 2020 FINANCIAL HIGHLIGHTS                 

Revenue        

  • Second quarter 2020 GAAP revenue increased 15.4 percent to $453.1 million compared to $392.5 million in the prior year period, or 16.3 percent growth in constant currencies.
  • Foreign exchange had a $3.5 million negative impact on revenue in the second quarter 2020.

Income from Operations

  • Second quarter 2020 GAAP income from operations was $49.0 million, or 10.8 percent of revenue, compared to $22.9 million, or 5.8 percent of revenue in the prior year period.
  • Second quarter 2020 Non-GAAP income from operations, excluding $0.8 million in restructuring charges, was $49.8 million or 11.0 percent of revenue versus 6.5 percent for the prior year period.
  • Foreign exchange had a $0.5 million positive impact on income from operations in the second quarter 2020.

Adjusted EBITDA        

  • Second quarter 2020 Non-GAAP Adjusted EBITDA was $71.0 million, or 15.7 percent of revenue, compared to $44.8 million, or 11.4 percent of revenue in the prior year period.

Earnings Per Share

  • Second quarter 2020 GAAP fully diluted earnings per share was $0.67 compared to $0.25 for the same period last year.
  • Second quarter 2020 Non-GAAP fully diluted earnings per share was $0.75 compared to $0.34 in the prior year period.

Bookings

  • During the second quarter 2020, TTEC signed an estimated $214 million in annualized contract value. Bookings were diversified across segments, verticals, and geographies and included programs related to pandemic relief and support efforts.

STRONG CASH FLOW AND BALANCE SHEET FUND INVESTMENTS AND DIVIDENDS

  • Cash flow from operations in the second quarter 2020 was $43.1 million compared to $41.3 million for the second quarter 2019.
  • Capital expenditures in the second quarter 2020 were $15.1 million compared to $15.2 million for the second quarter 2019.
  • As of June 30, 2020, TTEC had cash and cash equivalents of $482.3 million and debt of $714.0 million, resulting in a net debt position of $231.7 million. This compares to a net debt position of $172.8 million for the same period 2019. The increased cash and debt at June 30, 2020 was primarily related to precautionary measures, taken late in the first quarter in response to potential COVID-19 risks, to proactively increase liquidity by drawing down a portion of the revolving credit facility.
  • As of June 30, 2020, TTEC had approximately $195.0 million of additional borrowing capacity available under its revolving credit facility compared to $510.0 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

  • Second quarter 2020 GAAP revenue for TTEC Digital was $77.1 million, compared to $78.5 million for the year ago period. Revenue in the cloud and related systems integration collectively grew 31.8 percent over the year ago period. The slight decline in total revenue is attributable to the exit of certain non-core consulting practices and reduction in product and managed service volumes as clients increasingly pivot to Digital's cloud-based offerings.
  • Income from operations was $14.4 million or 18.6 percent of revenue compared to operating income of $7.7 million or 9.8 percent of revenue for the prior year period.
  • Second quarter 2020 Non-GAAP income from operations was $14.5 million, or 18.8 percent of revenue compared to operating income of $9.7 million or 12.4 percent of revenue in the prior year period.
  • Second quarter 2020 Non-GAAP Adjusted EBITDA was $18.7 million, or 24.2 percent of revenue, compared to $13.9 million, or 17.7 percent of revenue in the prior year period.

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

  • Second quarter 2020 GAAP revenue for TTEC Engage increased 19.7 percent to $375.9 million from $314.0 million for the year ago period. Revenue growth was 20.8 percent in constant currencies. Income from operations was $34.6 million or 9.2 percent of revenue compared to operating income of $15.2 million or 4.8 percent of revenue for the prior year period.
  • Second quarter 2020 Non-GAAP income from operations was $35.3 million, or 9.4 percent of revenue compared to operating income of $15.7 million or 5.0 percent of revenue in the prior year period.
  • Second quarter 2020 Non-GAAP Adjusted EBITDA was $52.3 million, or 13.9 percent of revenue, compared to $30.9 million, or 9.8 percent of revenue in the prior year period.
  • Foreign exchange had a $3.3 million negative impact on revenue and $0.5 million positive impact on income from operations in the second quarter 2020.

BUSINESS OUTLOOK

"We remain intensely focused on the health and safety of our people and partners, our clients' success as they navigate the macro challenges inherent in COVID-19, and managing our near and long-term priorities to deliver sustainable long-term profitable growth," commented Regina Paolillo, chief financial and administrative officer of TTEC. "We could not be more satisfied with our first half results, with the strength of our client relationships, and the relevancy of CX cloud, omnichannel, intelligent automation and virtual and digital technologies. With a strong revenue backlog, new business pipeline, and solid balance sheet in hand for 2020, we are restoring and increasing our original outlook and can now turn our attention to 2021 and beyond, including both organic and inorganic investments that will enable continued high single-digit topline and double-digit profit growth."

Our reinstated full-year 2020 outlook, which includes a modest contribution from the VoiceFoundry acquisition and excludes restructuring and impairment charges, is as follows:

Revenue between $1.766 and $1.784 billion, an increase of 7.4 and 8.5 percent over the prior year.

Operating Income margins between 9.1 and 9.2 percent.

  • Margins of approximately 13.8 percent for TTEC Digital and 8.2 percent for TTEC Engage

Adjusted EBITDA margins between 14.2 and 14.3 percent.

  • Margins of approximately 19.7 percent for TTEC Digital and 13.2 percent for TTEC Engage

Earnings Per Share between $2.37 and $2.43.

Capital expenditures are estimated to be between 3.1 and 3.3 percent of revenue, of which approximately 70 percent is growth oriented. 

Effective tax rate for the full year is estimated between 23 and 27 percent.

Diluted share count for the full year is estimated between 46.9 and 47.1 million.

We estimate the second half total company 2020 mix as follows:

  • Revenue: 51 percent third quarter, 49 percent fourth quarter
  • Operating Income: 52 percent third quarter, 48 percent fourth quarter
  • Adjusted EBITDA: 51 percent third quarter, 49 percent fourth quarter
  • Earnings Per Share: 53 percent third quarter, 47 percent fourth quarter

We estimate the Digital - Engage segment 2020 mix as follows:

  • Revenue: 17 percent Digital, 83 percent Engage, of which 24 percent of Digital and 25 percent of Engage in the fourth quarter, respectively.
  • Operating Income: 26 percent Digital, 74 percent Engage, of which 19 percent of Digital and 21 percent of Engage in the fourth quarter, respectively.
  • Adjusted EBITDA: 23 percent Digital, 77 percent Engage, of which 21 percent of Digital and 24 percent of Engage in the fourth quarter, respectively.

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 digital customer experience (CX) 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 and government agencies. 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 51,700 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 June 30, 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


Six months ended



 June 30,


 June 30,



2020


2019


2020


2019










Revenue

$ 453,081


$ 392,515


$   885,294


$   786,871










Operating Expenses:









Cost of services

337,306


299,237


658,863


592,571


Selling, general and administrative

47,360


50,864


97,194


100,584


Depreciation and amortization

18,660


17,050


37,532


33,793


Restructuring and integration charges, net

793


428


1,331


1,389


Impairment losses

-


2,063


696


3,569

              Total operating expenses

404,119


369,642


795,616


731,906










Income From Operations

48,962


22,873


89,678


54,965











Other income (expense), net

(4,374)


(1,914)


(10,206)


(6,064)










Income Before Income Taxes

44,588


20,959


79,472


48,901











Provision for income taxes

(11,039)


(7,345)


(21,238)


(14,811)










Net Income

33,549


13,614


58,234


34,090











Net income attributable to noncontrolling interest

(2,224)


(1,816)


(5,375)


(3,290)










Net Income Attributable to TTEC Stockholders

$   31,325


$   11,798


$     52,859


$     30,800



















Net Income Per Share


















Basic

$       0.72


$       0.29


$         1.25


$         0.74











Diluted

$       0.72


$       0.29


$         1.24


$         0.73










Net Income Per Share Attributable to TTEC Stockholders


















Basic

$       0.67


$       0.25


$         1.14


$         0.67











Diluted

$       0.67


$       0.25


$         1.13


$         0.66



















Income From Operations Margin

10.8%


5.8%


10.1%


7.0%

Net Income Margin

7.4%


3.5%


6.6%


4.3%

Net Income Attributable to TTEC Stockholders Margin

6.9%


3.0%


6.0%


3.9%

Effective Tax Rate

24.8%


35.0%


26.7%


30.3%



















Weighted Average Shares Outstanding








  Basic

46,619


46,318


46,559


46,261

  Diluted

46,861


46,684


46,838


46,636

 

TTEC HOLDINGS, INC. AND SUBSIDIARIES

SEGMENT INFORMATION

(In thousands)

(unaudited)





















Three months ended


Six months ended



 June 30,


 June 30,



2020


2019


2020


2019










Revenue:









TTEC Digital


$       77,143


$       78,519


$    154,699


$     144,372

TTEC Engage


375,938


313,996


730,595


642,499

Total


$     453,081


$     392,515


$    885,294


$     786,871










Income From Operations:









TTEC Digital


$       14,376


$         7,709


$      24,634


$       15,468

TTEC Engage


34,586


15,164


65,044


39,497

Total


$       48,962


$       22,873


$      89,678


$       54,965

 

 

TTEC HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

(unaudited)








 June 30,


 December 31, 



2020


2019











ASSETS





Current assets:





   Cash and cash equivalents


$        482,255


$         82,407

   Accounts receivable, net


353,289


331,096

   Other current assets


123,308


136,322

      Total current assets


958,852


549,825






Property and equipment, net


177,099


176,633

Other assets


631,038


650,330






Total assets


$      1,766,989


$    1,376,788






LIABILITIES AND EQUITY





Total current liabilities


$        344,790


$       363,289

Other long-term liabilities


920,246


532,846

Redeemable noncontrolling interest


54,026


48,923

Total equity


447,927


431,730






Total liabilities and equity


$      1,766,989


$    1,376,788

 

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,






2020


2019





2020


2019


















Revenue

$  453,081


$  392,515





$  885,294


$  786,871


















Reconciliation of Adjusted EBITDA:




























Net Income

$   33,549


$   13,614





$   58,234


$   34,090




   Interest income

(491)


(429)





(855)


(769)




   Interest expense

3,104


4,208





12,696


9,496




   Provision for income taxes

11,039


7,345





21,238


14,811




   Depreciation and amortization

18,660


17,050





37,532


33,793




   Asset impairment, restructuring and integration charges

793


2,491





2,027


4,958




   Gain on sale of business units

(142)


(442)





(388)


(750)




   Changes in acquisition contingent consideration

(1,084)


(2,424)





(4,349)


(2,424)




   Loss on dissolution of subsidiary

2,467


-





2,467


-




   Equity-based compensation expenses

3,057


3,366





5,976


6,534


















 Adjusted EBITDA

$   70,952


$   44,779





$  134,578


$   99,739
































Reconciliation of Free Cash Flow:




























Cash Flow From Operating Activities:














   Net income

$   33,549


$   13,614





$   58,234


$   34,090




   Adjustments to reconcile net income to net cash














       provided by operating activities:














          Depreciation and amortization

18,660


17,050





37,532


33,793




          Other

(9,096)


10,639





9,512


53,383




   Net cash provided by operating activities

43,113


41,303





105,278


121,266


















Less - Total Cash Capital Expenditures

15,102


15,228





31,915


28,428


















Free Cash Flow

$   28,011


$   26,075





$   73,363


$   92,838
































Reconciliation of Non-GAAP Income from Operations:



























Income from Operations

$   48,962


$   22,873





$   89,678


$   54,965




Restructuring charges, net

793


428





1,331


1,389




Impairment losses

-


2,063





696


3,569


















Non-GAAP Income from Operations

$   49,755


$   25,364





$   91,705


$   59,923


















Non-GAAP Income from Operations Margin

11.0%


6.5%





10.4%


7.6%
































Reconciliation of Non-GAAP EPS:




























Net Income

$   33,549


$   13,614





$   58,234


$   34,090




Add:  Asset restructuring and impairment charges

793


2,491





2,027


4,958




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

(204)


469





6,273


1,776




Less:  Changes in acquisition contingent consideration

(1,084)


(2,424)





(4,349)


(2,424)




Less:  Gain on sale of business units

(142)


(442)





(388)


(750)




Add:  Loss on dissolution of subsidiary

2,467


-





2,467


-




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

(192)


2,134





941


1,834


















 Non-GAAP Net Income

$   35,187


$   15,842





$   65,205


$   39,484


















    Diluted shares outstanding

46,861


46,684





46,838


46,636


















 Non-GAAP EPS

$0.75


$0.34





$1.39


$0.85
































Reconciliation of Adjusted EBITDA by Segment :

TTEC Engage


TTEC Digital


TTEC Engage


TTEC Digital
















Q2 20


Q2 19


Q2 20

Q2 19


YTD 20


YTD 19


YTD 20

YTD 19















Earnings before Income Taxes

$   30,190


$   13,166


$   14,398

$     7,793


$   54,772


$   33,299


$    24,700

$    15,605

   Interest income / expense, net

2,635


3,769


(22)

9


11,909


8,719


(67)

6

   Depreciation and amortization

15,382


13,814


3,278

3,235


30,966


28,249


6,566

5,543

   Asset impairment, restructuring and integration charges

679


489


114

2,003


1,010


2,608


1,016

2,350

   Gain on sale of business units

(142)


(442)


-

-


(388)


(750)


-

-

   Changes in acquisition contingent consideration

(1,084)


(2,424)


-

-


(4,349)


(2,424)


-

-

   Loss on dissolution of subsidiary

2,467


-


-

-


2,467


-


-

-

   Equity-based compensation expenses

2,128


2,515


929

852


4,198


4,872


1,778

1,663















 Adjusted EBITDA

$   52,255


$   30,887


$   18,697

$   13,892


$  100,585


$   74,573


$    33,993

$    25,167

 

TTEC Logo (PRNewsfoto/TTEC Holdings, Inc.)

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SOURCE TTEC Holdings, Inc.