Sykes Enterprises, Incorporated Reports Second-Quarter 2010 Financial Results
-- Anticipate early retirement of acquisition-related term loan
-- Solid progress on operational integration of ICT acquisition
-- Increasing 2010 and long-term anticipated cost synergy target-- Updating 2010 business outlook TAMPA, Fla., Aug. 2, 2010 (GLOBE NEWSWIRE) -- Sykes Enterprises, Incorporated ("SYKES" or the "Company") (Nasdaq:SYKE), a global leader in providing outsourced customer contact management solutions and services in the business process outsourcing (BPO) arena, announced today second-quarter 2010 financial results. Second quarter 2010 Highlights
- Second quarter 2010 revenues of $299.2 million increased $90.3 million, or 43.3%, over the comparable quarter last year; second quarter 2010 revenues included $98.5 million in contribution from the ICT acquisition
- Second quarter 2010 operating margin was 2.9% versus 8.2% on a comparable basis; on an adjusted basis, a non-GAAP measure, which includes the ICT acquisition but excludes ICT acquisition-related costs (see Exhibit 4 for reconciliation), second quarter 2010 operating margin was 4.9% versus 8.9%, which excludes the KLA impairment loss in the year-ago quarter, comparably due to previously-discussed program expirations beginning in the second-half of 2009, lower-than-forecasted client demand without a commensurate reduction in labor costs and costs related to migration of demand to near-shore locations in Egypt, Romania and Germany
- Excluding the ICT acquisition and on a constant currency basis, second quarter 2010 revenues decreased 5.9% comparably due to tougher year-ago comparisons driven principally by previously-discussed program expirations, migration of demand to near-shore locations as well as softness in the technology and communications verticals, which more than offset increased demand from the financial services and transportation verticals and new client wins
- Excluding the ICT acquisition, second quarter 2010 operating margins declined 400 basis points (4.9% vs. 8.9%) comparably due principally to previously-discussed client program expirations, lower-than-forecasted client demand without a commensurate reduction in labor costs, wage increases in certain geographies and migration costs
- Second quarter 2010 diluted earnings per share was $0.05 versus $0.35 in the comparable quarter last year and below the Company's second quarter 2010 business outlook earnings per share range of $0.20 to $0.22. The decrease in the Company's second quarter 2010 diluted earnings per share on a comparable basis and relative to the business outlook was due to a combination of foreign currency transaction and other expense net losses, lower-than- forecasted-demand and a higher tax rate
- On an adjusted basis, second quarter 2010 diluted earnings per share was $0.14 versus $0.41 per share in the comparable quarter last year, which excludes the impact of the impairment loss on KLA and SHPS in the year-ago quarter, and versus an adjusted diluted earnings per share range of $0.28 to $0.32 provided in the Company's second quarter 2010 business outlook. Assuming a forecasted tax rate of 13% as projected in the Company's second quarter 2010 business outlook and assuming the projected net interest expense of approximately $1.0 million for the second quarter of 2010, the adjusted diluted earnings per share would have been $0.25. The decrease in second quarter 2010 adjusted earnings per share was due to principally to lower-than-forecasted client demand
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