Sykes Enterprises, Incorporated Reports Second-Quarter 2010 Financial Results
During the quarter, approximately 49% of the Americas second quarter 2010 revenues was generated from services provided offshore. Excluding the ICT acquisition, approximately 57% of the Americas second quarter 2010 revenues was generated from services provided offshore compared to approximately 60% in the prior year quarter, with the percentage decrease due primarily to an increased revenue contribution from the U.S.
Sequentially, revenues generated from the Americas segment increased 14.1% to $246.0 million, or 82.2% of total revenues, for the second quarter of 2010. First quarter 2010 revenues of $215.5 million, or 78.3% of total revenues, included only two-months of revenue contribution from the ICT acquisition, which closed on February 2 nd, 2010. Excluding the ICT acquisition and on a constant currency basis, second quarter 2010 Americas revenues decreased 1.9% sequentially due principally to lower-than-forecasted client demand, program expirations and some seasonality, which more than offset increased demand from primarily the financial services vertical.
The Americas income from operations for the second quarter of 2010 decreased 1.6% to $24.6 million, with an operating margin of 10.0% versus 16.8% in the comparable quarter last year. On an adjusted basis, which includes the ICT acquisition but excludes ICT acquisition-related costs (see Exhibit 4 for reconciliation), the Americas operating margin was 11.5% versus 17.8% in the comparable quarter last year, which excludes the impact of the KLA impairment loss. Excluding the ICT acquisition, the Americas operating margin decreased 230 basis points (15.5% vs. 17.8%) comparably due to expiration of certain previously-discussed client programs and somewhat lower-than-forecasted client demand without a commensurate reduction in labor costs and wage increases in certain geographies.
Sequentially, the Americas income from operations for the second quarter of 2010 decreased 6.3% to $24.6 million, with an operating margin of 10.0% versus 12.2% in the first quarter of 2010. On an adjusted basis, which includes the ICT acquisition but excludes ICT acquisition-related costs (see Exhibit 6 for reconciliation), the Americas operating margins were 11.5% versus 13.6% sequentially. Excluding the ICT acquisition, the Americas operating margin decreased 200 basis points (15.5% vs. 17.5%) sequentially due largely to the above-mentioned factors.
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