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TeleTech Announces Third Quarter 2012 Financial Results

TeleTech Holdings, Inc. (NASDAQ: TTEC), a leading global provider of technology-enabled customer experience solutions, today announced financial results for the third quarter ended September 30, 2012. The Company also filed its Quarterly Report on Form 10-Q with the Securities and Exchange Commission for the quarter ended September 30, 2012.

“We continue to execute on our strategy of investing in both revenue diversification and innovation to position the company for top line growth,” said Ken Tuchman, TeleTech chairman and chief executive officer. “Our diversified business segments grew to 22 percent of revenue from 18 percent in the year-ago period. Our strong balance sheet has funded our continued investment in scalable, technology-rich offerings that keep us strategically relevant with the increasingly complex customer experience needs of our clients,” continued Tuchman. “Industry leading companies realize that creating strong emotional connections with their customers is the key differentiator in today’s dynamic global marketplace. As we celebrate our 30 th year in business, I am very excited about our future. We have been investing in innovation for the past three decades and as a result, we are uniquely positioned to help our clients deliver on the promise of their brand by providing engaging customer experiences at every touch point.”

THIRD QUARTER 2012 FINANCIAL HIGHLIGHTS

  • Third quarter 2012 revenue was $286.3 million compared to $304.2 million in the third quarter 2011. The lower revenue was attributable to a $27.7 million reduction from the Company’s previously announced decision to exit certain underperforming business in addition to a $4.5 million negative foreign currency impact. Excluding the impact of the above reductions, third quarter 2012 revenue grew $14.3 million or 4.7 percent.
  • Income from operations for the third quarter 2012 included $2.6 million of net restructuring and impairment charges.
  • Third quarter 2012 income from operations was $27.4 million or 9.6 percent of revenue compared to $26.6 million or 8.7 percent of revenue in the third quarter 2011. Excluding the restructuring and impairment charges discussed above, third quarter 2012 non-GAAP income from operations was $30.0 million or 10.5 percent of revenue.
  • Third quarter 2012 fully diluted earnings per share attributable to TeleTech stockholders was 52 cents compared to 44 cents in the third quarter 2011. Excluding restructuring, impairment and other items, third quarter 2012 non-GAAP fully diluted earnings per share attributable to TeleTech stockholders increased 11.4 percent to 39 cents compared to 35 cents in the year-ago quarter.
  • During the third quarter 2012 TeleTech signed an estimated $90 million in annualized revenue from both new and expanding client relationships. Approximately 75 percent represented recurring revenue.

STRONG BALANCE SHEET CONTINUES TO FUND OPERATIONS, SHARE REPURCHASES AND STRATEGIC ACQUISITIONS

  • As of September 30, 2012, TeleTech had cash and cash equivalents of $170.4 million, $88.0 million of borrowings on its credit facility and total other debt of $12.8 million, resulting in net cash of $69.6 million.
  • TeleTech had approximately $408 million of additional borrowing capacity available under its revolving credit facility as of September 30, 2012. This provides TeleTech with the continued financial flexibility to fund organic growth, share repurchases and accretive acquisitions.
  • Cash flow from operations in the third quarter 2012 increased to $14.8 million from a negative ($8.5) million in the third quarter 2011. The increase was primarily due to the timing of certain working capital items.
  • Capital expenditures in the third quarter 2012 were $15.8 million compared to $8.8 million in the third quarter 2011. The higher capital expenditures were principally related to increased investments in the Company’s technology-based offerings.
  • TeleTech repurchased 0.9 million shares of common stock during the third quarter 2012 for a total cost of $14.5 million. As of September 30, 2012, there was $26.5 million authorized for future share repurchases.

SEGMENT REPORTING

To provide clarity as to the financial profile and performance of TeleTech’s primary businesses, TeleTech reports financial results for the following four business segments: Customer Management Services (CMS), Customer Growth Services (CGS), Customer Technology Services (CTS) and Customer Strategy Services (CSS). Corporate expenses are reported separately from the above. Highlights of the financial performance of the primary segments are provided below.

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