Sykes Enterprises, Incorporated Reports Second-Quarter 2010 Financial Results

About Sykes Enterprises, Incorporated

SYKES is a global leader in providing customer contact management solutions and services in the business process outsourcing (BPO) arena. SYKES provides an array of sophisticated customer contact management solutions to Fortune 1000 companies around the world, primarily in the communications, financial services, healthcare, technology and transportation and leisure industries. SYKES specializes in providing flexible, high quality customer support outsourcing solutions with an emphasis on inbound technical support and customer service. Headquartered in Tampa, Florida, with customer contact management centers throughout the world, SYKES provides its services through multiple communication channels encompassing phone, e-mail, web and chat. Utilizing its integrated onshore/offshore global delivery model, SYKES serves its clients through two geographic operating segments: the Americas (United States, Canada, Latin America, India and the Asia Pacific region) and EMEA (Europe, Middle East and Africa). SYKES also provides various enterprise support services in the Americas and fulfillment services in EMEA, which include multi-lingual sales order processing, payment processing, inventory control, product delivery and product returns handling. For additional information please visit www.sykes.com .

Forward-Looking Statements

This press release may contain "forward-looking statements," including SYKES' estimates of future business outlook, prospects or financial results, statements regarding SYKES' objectives, expectations, intentions, beliefs or strategies, or statements containing words such as "believe," "estimate," "project," "expect," "intend," "may," "anticipate," "plans," "seeks," or similar expressions. It is important to note that SYKES' actual results could differ materially from those in such forward-looking statements, and undue reliance should not be placed on such statements. Among the important factors that could cause such actual results to differ materially are (i) the impact of economic recessions in the U.S. and other parts of the world, (ii) fluctuations in global business conditions and the global economy, (iii) SYKES' ability to continue the growth of its support service revenues through additional technical and customer contact centers, (iv) currency fluctuations, (v) the timing of significant orders for SYKES' products and services, (vi) loss or addition of significant clients, (vii) the early termination of contracts by clients, (viii) SYKES' ability to recognize deferred revenue through delivery of products or satisfactory performance of services, (ix) construction delays of new or expansion of existing customer support centers, (x) difficulties or delays in implementing SYKES' bundled service offerings, (xi) failure to achieve sales, marketing and other objectives, (xii) variations in the terms and the elements of services offered under SYKES' standardized contract including those for future bundled service offerings, (xiii) changes in applicable accounting principles or interpretations of such principles, (xiv) delays in the Company's ability to develop new products and services and market acceptance of new products and services, (xv) rapid technological change, (xvi) political and country-specific risks inherent in conducting business abroad, (xvii) SYKES' ability to attract and retain key management personnel, (xviii) SYKES' ability to further penetrate into vertically integrated markets, (xix) SYKES' ability to expand its global presence through strategic alliances and selective acquisitions, (xx) SYKES' ability to continue to establish a competitive advantage through sophisticated technological capabilities, (xxi) the ultimate outcome of any lawsuits or penalties (regulatory or otherwise), (xxii) SYKES' dependence on trends toward outsourcing, (xxiii) risk of interruption of technical and customer contact management center operations due to such factors as fire, earthquakes, inclement weather and other disasters, power failures, telecommunications failures, unauthorized intrusions, computer viruses and other emergencies, (xxiv) the existence of substantial competition, (xxv) the ability to obtain and maintain grants and other incentives, including tax holidays or otherwise, (xxvi) the potential of cost savings/synergies associated with the ICTG acquisition not being realized, or not being realized within the anticipated time period, (xxvii) the potential loss of key clients related to the ICTG acquisition, (xxviii) risks related to the integration of the businesses of SYKES and ICTG and (xxix) other risk factors listed from time to time in SYKES' registration statements and reports as filed with the Securities and Exchange Commission. All forward-looking statements included in this press release are made as of the date hereof, and SYKES undertakes no obligation to update any such forward-looking statements, whether as a result of new information, future events, or otherwise.

Sykes Enterprises, Incorporated
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
Exhibit 1
	Three Months Ended
	SYKES + ICT June 30, 2010	SYKES June 30, 2009
Revenues	$ 299,177	$ 208,839
Direct salaries and related costs	(197,244)	(133,727)
General and administrative	(93,287)	(56,477)
Canada's KLA Impairment	--	(1,584)
Income from operations	8,646	17,051
Other income (expense), net	(5,135)	643
SHPS Impairment	--	(2,089)
Income before benefit (provision) for income taxes	3,511	15,605
(Provision) for income taxes	(966)	(1,257)
Net income	$ 2,545	$ 14,348
Net income per basic share	$ 0.05	$ 0.35
Shares outstanding, basic	46,601	40,654
Net income per diluted share	$ 0.05	$ 0.35
Shares outstanding, diluted	46,648	40,953

Sykes Enterprises, Incorporated
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
Exhibit 2
	Six Months Ended
	SYKES + ICT June 30, 2010	SYKES June 30, 2009
Revenues	$ 574,394	$ 412,080
Direct salaries and related costs	(375,765)	(263,980)
General and administrative	(196,140)	(111,965)
Canada's KLA Impairment	--	(1,584)
Income from operations	2,489	34,551
Other income (expense), net	(8,958)	2,200
SHPS Impairment	--	(2,089)
Income (loss) before (provision) for income taxes	(6,469)	34,662
(Provision) for income taxes	(499)	(5,544)
Net income (loss)	$ (6,968)	$ 29,118
Net income (loss) per basic share	$ (0.15)	$ 0.72
Shares outstanding, basic	45,604	40,632
Net income (loss) per diluted share	$ (0.15)	$ 0.71
Shares outstanding, diluted	45,712	40,999

Sykes Enterprises, Incorporated
Segment Results
(in thousands)
(Unaudited)
Exhibit 3
	Three Months Ended
	SYKES + ICT June 30, 2010	SYKES June 30, 2009
Revenues:
Americas	$ 245,957	$ 148,935
EMEA	53,220	59,904
Total	$ 299,177	$ 208,839
Operating Income:
Americas	$ 24,603	$ 24,998
EMEA	(3,908)	1,752
Corporate G&A expenses	(12,049)	(9,699)
Income from operations	8,646	17,051
SHPS Impairment	--	(2,089)
Other income (expense), net	(5,135)	643
(Provision) for income taxes	(966)	(1,257)
Net Income	$ 2,545	$ 14,348
	Six Months Ended
	SYKES + ICT June 30, 2010	SYKES June 30, 2009
Revenues:
Americas	$ 461,495	$ 291,742
EMEA	112,899	120,338
Total	$ 574,394	$ 412,080
Operating Income:
Americas	$ 50,849	$ 48,376
EMEA	(4,614)	6,411
Corporate G&A expenses	(43,746)	(20,236)
Income from operations	2,489	34,551
SHPS Impairment	--	(2,089)
Other income (expense), net	(8,958)	2,200
(Provision) for income taxes	(499)	(5,544)
Net income (loss)	$ (6,968)	$ 29,118

Sykes Enterprises, Incorporated
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
Exhibit 4
	Three Months Ended June 30, 2010
		Acquisition related Costs
	SYKES + ICT Reported	ICT Severance & Consulting Engagement	ICT Depreciation and Amortization of Property & Equipment and Intangibles Write-Ups	ICT Merger & Integration Costs	SYKES + ICT Adjusted
Revenues	$ 299,177				$ 299,177
Direct salaries and related costs	(197,244)	19			(197,225)
General and administrative	(93,287)	1,718	3,243	1,022	(87,304)
Income from operations	8,646	1,737	3,243	1,022	14,648
Other (expense), net	(5,135)				(5,135)
Income before (provision) for income taxes	3,511	1,737	3,243	1,022	9,513
(Provision) for income taxes	(966)	(557)	(1,038)	(327)	(2,888)
Net income	$ 2,545	$ 1,180	$ 2,205	$ 695	$ 6,625
Net income (loss) per basic share	$ 0.05	$ 0.03	$ 0.05	$ 0.01	$ 0.14
Shares outstanding, basic	46,601	46,601	46,601	46,601	46,601
Net income (loss) per diluted share	$ 0.05	$ 0.03	$ 0.05	$ 0.01	$ 0.14
Shares outstanding, diluted	46,648	46,648	46,648	46,648	46,648
		Acquisition related Costs
	SYKES + ICT Reported	ICT Severance & Consulting Engagement	ICT Depreciation and Amortization of Property & Equipment and Intangibles Write-Ups	ICT Merger & Integration Costs	SYKES + ICT Adjusted
Revenues:
Americas	$ 245,957				$ 245,957
EMEA	53,220				53,220
Total	$ 299,177	$ --	$ --	$ --	$ 299,177
Operating Income:
Americas	$ 24,603	407	3,235		$ 28,245
EMEA	(3,908)		8		(3,900)
Corporate G&A expenses	(12,049)	1,330		1,022	(9,697)
Income from operations	8,646	1,737	3,243	1,022	14,648
Other (expense), net	(5,135)				(5,135)
(Provision) for income taxes	(966)	(557)	(1,038)	(327)	(2,888)
Net Income	$ 2,545	$ 1,180	$ 2,205	$ 695	$ 6,625

Sykes Enterprises, Incorporated
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
Exhibit 5
	Six Months Ended June 30, 2010
		Acquisition related Costs
	SYKES + ICT Reported	ICT Severance & Consulting Engagement	ICT Depreciation and Amortization of Property & Equipment and Intangibles Write-Ups	ICT Merger & Integration Costs	SYKES + ICT Adjusted
Revenues	$ 574,394				$ 574,394
Direct salaries and related costs	(375,765)	34			(375,731)
General and administrative	(196,140)	15,171	5,381	8,676	(166,912)
Income from operations	2,489	15,205	5,381	8,676	31,751
Other (expense), net	(8,958)				(8,958)
Income (loss) before (Provision) for income taxes	(6,469)	15,205	5,381	8,676	22,793
(Provision) for income taxes	(499)	(4,056)	(1,436)	(2,314)	(8,305)
Net income (loss)	$ (6,968)	$ 11,149	$ 3,945	$ 6,362	14,488
Net income (loss) per basic share	$ (0.15)	$ 0.24	$ 0.09	$ 0.14	$ 0.32
Shares outstanding, basic	45,604	45,604	45,604	45,604	45,604
Net income (loss) per diluted share	$ (0.15)	$ 0.24	$ 0.09	$ 0.14	$ 0.32
Shares outstanding, diluted	45,712	45,712	45,712	45,712	45,712
		Acquisition related Costs
	SYKES + ICT June 30, 2010	ICT Severance & Consulting Engagement	ICT Depreciation and Amortization of Property & Equipment and Intangibles Write-Ups	ICT Merger & Integration Costs	SYKES + ICT Adjusted
Revenues:
Americas	$ 461,495				$ 461,495
EMEA	112,899				112,899
Total	$ 574,394	$ --	$ --	$ --	$ 574,394
Operating Income:
Americas	$ 50,849	1,260	$ 5,366		$ 57,475
EMEA	(4,614)		15		(4,599)
Corporate G&A expenses	(43,746)	13,945		8,676	(21,125)
Income from operations	2,489	15,205	5,381	8,676	31,751
Other (expense), net	(8,958)				(8,958)
(Provision) for income taxes	(499)	(4,056)	(1,436)	(2,314)	(8,305)
Net income (loss)	$ (6,968)	$ 11,149	$ 3,945	$ 6,362	$ 14,488

Sykes Enterprises, Incorporated
Segment Results
(in thousands)
(Unaudited)
Exhibit 6
	Three Months Ended
	SYKES + ICT Adjusted June 30, 2010	SYKES + ICT Adjusted March 31, 2010
Revenues	$ 299,177	$ 275,217
Direct salaries and related costs	(197,225)	(178,506)
General and administrative	(87,304)	(79,608)
Income from operations	14,648	17,103
Other (expense), net	(5,135)	(3,823)
Income before provision for income taxes	9,513	13,280
(Provision) for income taxes	(2,888)	(5,417)
Net income	$ 6,625	$ 7,863
Net income per basic share	$ 0.14	$ 0.18
Shares outstanding, basic	46,601	44,590
Net income per diluted share	$ 0.14	$ 0.18
Shares outstanding, diluted	46,648	44,766
	Three Months Ended
	SYKES + ICT Adjusted June 30, 2010	SYKES + ICT Adjusted March 31, 2010
Revenues:
Americas	$ 245,957	$ 215,537
EMEA	53,220	59,680
Total	$ 299,177	$ 275,217
Operating Income:
Americas	$ 28,245	$ 29,230
EMEA	(3,900)	(699)
Corporate G&A expenses	(9,697)	(11,428)
Income from operations	14,648	17,103
Other (expense), net	(5,135)	(3,823)
Provision for income taxes	(2,888)	(5,417)
Net income	$ 6,625	$ 7,863

Sykes Enterprises, Incorporated
Condensed Consolidated Balance Sheets
(in thousands)
Exhibit 7
	June 30, 2010	December 31, 2009
Assets:
Current assets	$ 493,610	$ 547,854
Property and equipment, net	126,019	80,264
Goodwill & Intangibles, net	169,444	23,300
Other noncurrent assets	44,173	21,053
Total assets	$ 833,246	$ 672,471
Liabilities & Shareholders' Equity:
Current liabilities	$ 181,582	$ 200,418
Noncurrent liabilities	90,215	21,379
Shareholders' equity	561,449	450,674
Total liabilities and shareholders' equity	$ 833,246	$ 672,471
Sykes Enterprises, Incorporated
Supplementary Data
	Q2 2010	Q2 2009
Geographic Mix (% of Total Revenues):
Americas (1)	82.2%	71.3%
Europe, Middle East & Africa (EMEA)	17.8%	28.7%
Total:	100.0%	100.0%
(1) Includes the United States, Canada, Latin America, South Asia and the Asia Pacific (APAC) Region. Latin America, South Asia and APAC are included in the Americas due to the nature of the business and client profile, which is primarily made up of U.S. based clients.
	Q2 2010	Q2 2009
Vertical Industry Mix (% of Total Revenues):
Communications	34%	36%
Financial Services	25%	15%
Technology / Consumer	20%	30%
Healthcare	7%	6%
Transportation & Leisure	6%	9%
Other	8%	4%
Total:	100%	100%

Sykes Enterprises, Incorporated
Cash Flow from Operations
(in thousands)
(Unaudited)
Exhibit 8
	Three Months Ended
	June 30, 2010	June 30, 2009
Cash Flow From Operating Activities:
Net income	$ 2,545	$ 14,348
Depreciation and amortization	15,252	7,162
Changes in assets and liabilities and other	9,323	3,933
Net cash provided by operating activities	$ 27,120	$ 25,443
Capital expenditures	$ 7,342	$ 7,251
Cash interest paid	$ 876	$ 560
Cash taxes paid	$ 6,362	$ 2,722
	Six Months Ended
	June 30, 2010	June 30, 2009
Cash Flow From Operating Activities:
Net income (loss)	$ (6,968)	$ 29,118
Depreciation and amortization	28,015	13,938
Changes in assets and liabilities and other	(10,727)	(9,567)
Net cash provided by operating activities	$ 10,320	$ 33,489
Capital expenditures	$ 13,470	$ 18,308
Cash interest paid	$ 1,968	$ 630
Cash taxes paid	$ 13,107	$ 6,274

Sykes Enterprises, Incorporated
Business Outlook Reconciliation*
Exhibit 9
	Business Outlook
	Third Quarter 2010
Adjusted Diluted Earnings Per Share	$0.24 - $0.26
Severance & Consulting Engagement Costs	$0.00
Merger and Integration Costs	($0.01) - $0.00
Depreciation & Amortization of Property & Equipment and Intangibles Write-Ups	($0.05) - $(0.04)
Earnings (loss) Per Share	$0.18 - $0.22
	Business Outlook
	Full Year 2010
Adjusted Diluted Earnings Per Share	$0.81 - $0.83
Severance & Consulting Engagement Costs	($0.24)
Merger and Integration Costs	($0.15) - ($0.14)
Depreciation & Amortization of Property & Equipment and Intangibles Write-Ups	($0.19) - ($0.17)
Diluted Earnings Per Share	$0.23 - $0.28

CONTACT:  Sykes Enterprises, Incorporated
          Subhaash Kumar
          [phone]

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