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Sykes Enterprises, Incorporated Reports Fourth-Quarter And Full-Year 2012 Financial Results

Stocks in this article: SYKE

During the quarter, revenues from continuing operations generated from services provided offshore decreased to 43% from 49% in the same period last year principally due to a mix-shift in revenues to North America driven by Alpine Access, whose clients reside in and are serviced from the U.S. and Canada.

Sequentially, revenues from continuing operations generated from the Americas region increased 8.7% to $258.3 million in the fourth quarter of 2012 compared to $237.5 million, or 84.7% of total revenues, in the third quarter of 2012. On a constant currency basis, the 8.5% increase was principally due to full quarter's revenue contribution from the Alpine Access acquisition in the fourth quarter versus a partial quarter's revenue contribution in the third quarter due to the timing of the closing of the acquisition.

The Americas income from continuing operations for the fourth quarter of 2012 decreased 8.3% to $24.2 million, with an operating margin of 9.4% versus 11.6% in the comparable quarter last year. On a non-GAAP basis, the Americas operating margin from continuing operations was 11.6% versus 12.9% in the comparable quarter last year, with the decrease due to a combination of previously discussed end-of-life client programs, client program ramp expenses and investments in facility upgrades and transfers (see Exhibit 7 for reconciliation).

Sequentially, the Americas income from continuing operations for the fourth quarter of 2012 increased 11.7% to $24.2 million, with an operating margin of 9.4% versus 9.1% in the third quarter of 2012. On a non-GAAP basis, the Americas operating margin from continuing operations increased to 11.6% from 11.0% in the third quarter of 2012, driven by a full quarter's revenue contribution from Alpine Access and expense leverage, coupled with cost savings associated with facility closures and lower professional services fees (see Exhibit 7 for reconciliation).

EMEA Region

Revenues from continuing operations from the Company's Europe, Middle East and Africa (EMEA) region decreased 5.5% to $46.0 million, representing 15.1% of total revenues for the fourth quarter of 2012, compared to $48.7 million, or 17.6% of total revenues, in the prior year's fourth quarter (EMEA's revenues were down 3.8% on a constant currency basis). The constant currency decrease in EMEA revenues from continuing operations was largely a result of previously discussed end-of-life client programs and the effect of strategic actions (the Company's planned exit from Ireland, South Africa and capacity rationalization in Amsterdam).

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