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Ttec Holdings, Inc. (TTEC) SEC Filing 8-K Material Event for the period ending Monday, May 4, 2020

Ttec Holdings, Inc.

CIK: 1013880 Ticker: TTEC

 

Exhibit 99.1

 

 

 

TTEC Announces First Quarter 2020

Financial Results

 

 

Revenue was $432.2 Million

Operating Income was $40.7 Million or 9.4 Percent of Revenue

($42.0 Million or 9.7 Percent Non-GAAP)

Net Income was $21.5 Million ($30.0 Million Non-GAAP)

Adjusted EBITDA was $63.6 Million or 14.7 Percent of Revenue

Fully Diluted EPS was $0.46 ($0.64 Non-GAAP)

 

Signs Bookings of $87 Million

  

DENVER, May 4, 2020 – 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.

 

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

 

 

 

 

 

 

  · 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.

 

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

 

 

 

 

 

 

·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.

 

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

 

 

 

 

 

 

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 
           

 

    TTEC Engage   TTEC Digital 
    Q1 20    Q1 19    Q1 20    Q1 19 
Reconciliation of Adjusted EBITDA by Segment :                    
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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Ttec Holdings, Inc. provided additional information to their SEC Filing as exhibits

Ticker: TTEC
CIK: 1013880
Form Type: 8-K Corporate News
Accession Number: 0001104659-20-056644
Submitted to the SEC: Tue May 05 2020 10:30:14 AM EST
Accepted by the SEC: Tue May 05 2020
Period: Monday, May 4, 2020
Industry: Help Supply Services
Events:
  1. Earnings Release
  2. Financial Exhibit

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