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TeleTech Announces Fourth Quarter And Full Year 2012 Financial Results

TeleTech Holdings, Inc. (NASDAQ: TTEC), a leading global provider of technology-enabled customer experience solutions, today announced financial results for the fourth quarter and full year ended December 31, 2012. The Company also filed its Annual Report on Form 10-K with the Securities and Exchange Commission for the year ended December 31, 2012.

“We celebrated our 30 year anniversary in 2012 and attribute our continued success to designing and delivering technology-enabled customer experiences that drive measurable outcomes for our clients,” said Ken Tuchman, TeleTech chairman and chief executive officer. “As customers become more connected and broadcast their experiences across a variety of social networking channels, the quality of the customer experience is having a profound impact on brand loyalty and business performance. We believe customers are increasingly shaping their attitudes, behaviors and willingness to recommend on the totality of their experience,” continued Tuchman.

“In 2012, we significantly expanded our suite of fully-integrated customer-centric offerings by adding greater data-driven consulting and technology expertise to enable our clients to maximize the lifetime value of their customers,” said Tuchman. “Our diversified business segments grew to 21 percent of revenue from 17 percent in 2011. Our strong balance sheet has facilitated our continued investment in scalable, technology-rich offerings that keep us strategically relevant with the increasingly complex customer experience needs of our clients.”

FULL YEAR 2012 FINANCIAL HIGHLIGHTS

  • 2012 revenue was $1.163 billion compared to $1.179 billion in 2011. The lower revenue was attributable to a $64.2 million reduction from the Company’s previously announced decision to exit certain underperforming business and a negative foreign currency impact of $14.8 million. Excluding the impact of the above reductions, 2012 revenue grew $62.6 million or 5.3 percent.
  • Income from operations for 2012 included $26.0 million of net restructuring, asset impairment and acquisition-related charges compared to $5.0 million in 2011.
  • 2012 income from operations was $78.5 million or 6.8 percent of revenue compared to $93.5 million or 7.9 percent of revenue in 2011. Excluding the restructuring and impairment charges discussed above, 2012 non-GAAP income from operations was $104.5 million or 9.0 percent of revenue compared to $98.5 million or 8.3 percent of revenue in 2011.
  • 2012 fully diluted earnings per share attributable to TeleTech stockholders was $1.26 compared to $1.28 in 2011. Excluding restructuring and other items, 2012 non-GAAP fully diluted earnings per share attributable to TeleTech stockholders increased 8.7 percent to $1.37 from $1.26 in 2011.
  • During 2012 TeleTech signed an estimated $305 million in annualized revenue from both new and expanding client relationships. Approximately 75 percent represented recurring revenue.

FOURTH QUARTER 2012 FINANCIAL HIGHLIGHTS

  • Fourth quarter 2012 revenue was $295.3 million compared to $300.5 million in the fourth quarter 2011. The lower revenue was attributable to a $21.7 million reduction from the Company’s previously announced decision to exit certain underperforming business partially offset by a foreign currency benefit of $2.9 million. Excluding these items, fourth quarter 2012 revenue grew $13.6 million or 4.5 percent.
  • Income from operations for the fourth quarter 2012 included $2.2 million of net restructuring charges.
  • Fourth quarter 2012 income from operations was $26.0 million or 8.8 percent of revenue compared to $20.8 million or 6.9 percent of revenue in the fourth quarter 2011. Excluding the net restructuring charges discussed above, fourth quarter 2012 non-GAAP income from operations grew $6.0 million or 27.0 percent to $28.2 million or 9.5 percent of revenue.
  • Fourth quarter 2012 fully diluted earnings per share attributable to TeleTech stockholders grew 35.7 percent to 38 cents compared to 28 cents in the fourth quarter 2011. Excluding restructuring and other items, fourth quarter 2012 non-GAAP fully diluted earnings per share attributable to TeleTech stockholders increased 31.0 percent to 38 cents from 29 cents in the year-ago quarter.
  • During the fourth quarter 2012 TeleTech signed an estimated $75 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 December 31, 2012, TeleTech had cash and cash equivalents of $164.5 million, $119.5 million of debt, resulting in net cash of $45.0 million.
  • TeleTech had approximately $388 million of additional borrowing capacity available under its revolving credit facility as of December 31, 2012. This provides TeleTech with the continued financial flexibility to fund organic growth, share repurchases and accretive acquisitions.
  • Cash flow from operations in the fourth quarter 2012 was $43.5 million compared to $74.3 million in the fourth quarter 2011. The decrease was primarily due to the timing of certain working capital items.
  • Capital expenditures in the fourth quarter 2012 were $7.4 million compared to $17.1 million in the fourth quarter 2011.
  • TeleTech repurchased 1.5 million shares of common stock during the fourth quarter 2012 for a total cost of $26.0 million. As of December 31, 2012, there was $25.4 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).

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