Sykes Enterprises, Incorporated Reports Third-Quarter 2010 Financial Results
--Stronger-than-expected revenue and earnings per share growth relative to business outlook
--Operating performance in EMEA improves sequentially
--The Company exits third-quarter 2010 with no debt--Raising 2010 business outlook and acquisition synergy target TAMPA, Fla., Nov. 1, 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 third-quarter 2010 financial results. Third quarter 2010 Highlights
- Third quarter 2010 revenues of $307.0 million increased $93.5 million, or 43.8%, over the comparable quarter last year; third quarter 2010 revenues included $101.2 million in contribution from the ICT acquisition.
- Third quarter 2010 operating margin was 4.3% versus 9.7% 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) such as those associated with capacity rationalization and facilities consolidation, third quarter 2010 operating margin was 7.6% versus 10.3%, due to previously-discussed program expirations in both the Americas and EMEA regions beginning in the second-half of 2009, duplicative costs related to migration of demand to near-shore locations in Egypt, Romania and Germany, coupled with unfavorable translation of certain non-dollar denominated expenses and wage increases in certain geographies.
- Excluding the ICT acquisition and on a constant currency basis, third quarter 2010 revenues decreased 3.9% 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.
- Excluding the ICT acquisition, third quarter 2010 operating margins declined 330 basis points (7.0% vs. 10.3%) comparably due principally to previously-discussed client program expirations, unfavorable translation of certain non-dollar denominated expenses, migration costs and wage increases in certain geographies.
- Third quarter 2010 diluted earnings per share was $0.29 versus $0.46 in the comparable quarter last year and above the Company's third quarter 2010 business outlook earnings per share range of $0.18 to $0.22. The decrease in the Company's third quarter 2010 diluted earnings per share on a comparable basis was due to unfavorable translation of certain non-dollar denominated expenses, an operating loss in the EMEA region due to factors noted above and higher interest expense. Relative to the business outlook, the increase in earnings per share was due to a combination of stronger-than-expected demand, reduced operating losses in EMEA, reduction in compensation expenses and tax benefits.
- On an adjusted basis, third quarter 2010 diluted earnings per share was $0.43 versus $0.48 per share in the comparable quarter last year and versus an adjusted diluted earnings per share range of $0.24 to $0.26 provided in the Company's third quarter 2010 business outlook. The decrease on a comparable basis was due to an operating loss in the EMEA region and higher interest expense. Relative to the business outlook, the increase in earnings per share was largely due to aforementioned factors. Assuming a forecasted tax rate of 20% as projected in the Company's third quarter 2010 business outlook and assuming projected net interest expense of approximately $1.3 million for the third quarter of 2010, adjusted diluted earnings per share would have been $0.38.
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