PR Newswire | Mar 1, 2021 06:00PM EST

03/01 17:00 CST

TTEC Announces Record Fourth Quarter and Full Year 2020 Financial ResultsFull Year 2020Revenue was $1.949 BillionOperating Income was $204.7 Million or 10.5 Percent of Revenue(Non-GAAP $242.4 Million or 12.4 Percent of Revenue)Net Income was $118.6 Million ($179.7 Million Non-GAAP)Adjusted EBITDA was $304.0 Million or 15.6 Percent of RevenueFully Diluted EPS was $2.52 ($3.82 Non-GAAP)Fourth Quarter 2020Revenue was $571.0 MillionOperating Income was $61.6 Million or 10.8 Percent of Revenue(Non-GAAP $73.9 Million or 12.9 Percent of Revenue)Net Income was $44.4 Million ($57.6 Million Non-GAAP)Adjusted EBITDA was $92.3 Million or 16.2 Percent of RevenueFully Diluted EPS was $0.94 ($1.22 Non-GAAP)Signs Bookings of $188 Million in the Fourth Quarter and $659 Million in 2020Provides Outlook for Full Year 2021 DENVER, March 1, 2021

DENVER, March 1, 2021 /PRNewswire/ -- TTEC Holdings, Inc.(NASDAQ: TTEC), one of the largest, global CX (customer experience) technology and services innovators for end-to-end digital CX solutions, announced today financial results for the fourth quarter and full year ended December 31, 2020.

"TTEC achieved record performance across our 2020 booking, revenue, and profitability metrics. The full year 19 percent revenue growth, including the fourth quarter's 24 percent revenue growth and our full year 58 percent Non-GAAP operating income growth are the result of a growing market demand for partners who can with quality and reliability deliver virtual, digital and outcome-based customer experience solutions," commented Ken Tuchman, chairman and chief executive officer of TTEC.

Tuchman continued, "Our ability to swiftly and safely bring the technology and human talent to unprecedented levels of customer and citizen interaction has resulted in a significant increase in our overall client momentum. This increased market share, our strong revenue backlog, and growing sales pipeline, alongside our continued execution of strategic and accretive acquisitions, including Avtex, confidently sets us up to continue to deliver industry leading solutions and financial results into 2021 and beyond."

FULL YEAR 2020 FINANCIAL HIGHLIGHTS

Revenue

* Full year 2020 GAAP revenue increased 18.6 percent to $1.949 billion compared to $1.644 billion in the prior year. * Foreign exchange had a $0.3 million positive impact on revenue for the full year 2020.

Income from Operations

* Full year 2020 GAAP income from operations was $204.7 million, or 10.5 percent of revenue, compared to $123.7 million, or 7.5 percent of revenue in the prior year. * Non-GAAP income from operations, excluding restructuring and impairment charges, equity-based compensation expenses, and amortization of purchased intangibles, was $242.4 million or 12.4 percent of revenue versus 9.3 percent for the prior year. * Foreign exchange had a $1.2 million positive impact on income from operations for the full year 2020.

Adjusted EBITDA

* Full year 2020 Non-GAAP Adjusted EBITDA was $304.0 million, or 15.6 percent of revenue, compared to $209.1 million, or 12.7 percent of revenue in the prior year.

Earnings Per Share

* Full year 2020 GAAP fully diluted earnings per share was $2.52 compared to $1.65 for the same period last year. * Non-GAAP fully diluted earnings per share was $3.82 compared to $2.25 in the prior year.

Bookings

* During full year 2020, TTEC signed an estimated $659 million in annualized contract value compared to $487 million in the prior year. Full year bookings mix was diversified across segments, verticals, and geographies.

FOURTH QUARTER 2020 FINANCIAL HIGHLIGHTS

Revenue

* Fourth quarter 2020 GAAP revenue increased 23.8 percent to $571.0 million compared to $461.3 million in the prior year period. * Foreign exchange had a $3.1 million positive impact on revenue in the fourth quarter 2020.

Income from Operations

* Fourth quarter 2020 GAAP income from operations was $61.6 million, or 10.8 percent of revenue, compared to $42.8 million, or 9.3 percent of revenue in the prior year period. * Non-GAAP income from operations, excluding restructuring and impairment charges, equity-based compensation expenses, and amortization of purchased intangibles, was $73.9 million or 12.9 percent of revenue versus 10.8 percent for the prior year period. * Foreign exchange had a negligible positive impact on income from operations in the fourth quarter 2020.

Adjusted EBITDA

* Fourth quarter 2020 Non-GAAP Adjusted EBITDA was $92.3 million, or 16.2 percent of revenue, compared to $63.2 million, or 13.7 percent of revenue in the prior year period.

Earnings Per Share

* Fourth quarter 2020 GAAP fully diluted earnings per share was $0.94 compared to $0.60 for the same period last year. * Non-GAAP fully diluted earnings per share was $1.22 compared to $0.76 in the prior year period.

Bookings

* During the fourth quarter 2020, TTEC signed an estimated $188 million in annualized contract value compared to $120 million in the prior year period. Fourth quarter bookings mix was diversified across segments, verticals, and geographies.

STRONG CASH FLOW AND BALANCE SHEET FUND INVESTMENTS AND DIVIDENDS

* Cash flow from operations in the fourth quarter 2020 was $85.1 million compared to $53.6 million for the fourth quarter 2019. For the full year 2020, cash flow from operations was $271.9 million compared to $238.0 million for the same period 2019. * Capital expenditures in the fourth quarter 2020 were $11.9 million compared to $16.3 million for the fourth quarter 2019. For the full year 2020, capital expenditures were $59.8 million compared to $60.8 million for the same period 2019. * As of December 31, 2020, TTEC had cash and cash equivalents of $132.9 million and debt of $396.3 million, resulting in a net debt position of $263.4 million. This compares to a net debt position of $225.1 million for the same period 2019. * As of December 31, 2020, TTEC had approximately $510 million of additional borrowing capacity available under its revolving credit facility compared to $530 million for the same period 2019. * In the fourth quarter 2020, TTEC paid a $0.40 per share, or $18.7 million, semi-annual dividend on October 29, 2020, and paid a $2.14 per share, or $100.0 million, one-time special dividend on December 30, 2020. On February 25, 2021, the Board declared the next semi-annual dividend of $0.43 per share, payable on April 21, 2021 to shareholders of record as of April 5, 2021. This dividend represents a 7.5 percent increase over the October 2020 dividend and 26.5 percent over the April 2020 dividend.

SEGMENT REPORTING & COMMENTARY

TTEC reports financial results for the following two business segments: TTEC Digital (Digital) and TTEC (Engage). Financial highlights for the two segments are provided below.

TTEC Digital - Design, build and operate tech-enabled, insight-driven CX solutions

* Fourth quarter 2020 GAAP revenue for TTEC Digital decreased 8.1 percent to $75.7 million from $82.4 million for the year ago period. Income from operations was $7.6 million or 10.1 percent of revenue compared to operating income of $11.8 million or 14.3 percent of revenue for the prior year period. * Non-GAAP income from operations was $9.9 million, or 13.1 percent of revenue compared to operating income of $13.3 million or 16.2 percent of revenue in the prior year period.

TTEC Engage - Digitally-enabled customer care, acquisition, and fraud prevention services

* Fourth quarter 2020 GAAP revenue for TTEC Engage increased 30.7 percent to $495.3 million from $379.0 million for the year ago period. Income from operations was $54.0 million or 10.9 percent of revenue compared to operating income of $31.0 million or 8.2 percent of revenue for the prior year period. * Non-GAAP income from operations was $64.0 million, or 12.9 percent of revenue compared to operating income of $36.6 million or 9.7 percent of revenue in the prior year period. * Foreign exchange had a $2.9 million positive impact on revenue and negligible impact on income from operations.

BUSINESS OUTLOOK

"Our performance over the past year demonstrates the resiliency of our global team, the strength of our client relationships, and the market relevancy of our Digital and Engage assets," commented Regina Paolillo, chief financial and administrative officer. "From the very onset of the pandemic, we responded with agility and ingenuity. We protected the safety of our employees and clients and rapidly deployed our secure Humanify Cloud @home platform to enable over 100 thousand users to work virtually. By successfully responding to our client's initial challenges including continuity, quality of service and surge volumes, we have been rewarded with more permanent volumes including virtualizing and digitizing their customer experience platforms with our OneTTEC technology-rich, suite of solutions."

Paolillo continued, "Our demonstrated capabilities and deep domain expertise in delivering differentiated outcome-based CX solutions has propelled TTEC to a new level of performance with record fourth quarter and full year 2020 financial results. We are well positioned to deliver continued profitable revenue growth in 2021, substantiated by the size and diversity of our bookings, revenue backlog, sales pipeline and history of strategic and accretive acquisitions, including Avtex."

Our full-year 2021 outlook, including Avtex, is as follows:

Revenue between $2.147 and $2.183 billion, an increase of 10.2 and 12.0 percent over the prior year.

Non-GAAP Operating Income margins between 11.9 and 12.2 percent.

* Margins of approximately 13.8 percent for TTEC Digital and 11.7 percent for TTEC Engage

Non-GAAP Adjusted EBITDA margins between 14.8 and 15.2 percent.

* Margins of approximately 17.4 percent for TTEC Digital and 14.5 percent for TTEC Engage

Non-GAAP Earnings Per Share between $4.06 and $4.25.

Capital expenditures are estimated to between 3.1 and 3.3 percent of revenue, of which approximately 60 percent is growth oriented.

Effective tax rate for the full year is estimated between 21 and 24 percent.

Diluted share count for the full year is estimated between 47.2 and 47.6 million.

We estimate the first half - second half 2021 mix as follows:

* Revenue: 49 percent first half, 51 percent second half * Non-GAAP Operating Income: 51 percent first half, 49 percent second half * Non-GAAP Adjusted EBITDA: 51 percent first half, 49 percent second half * Non-GAAP Earnings Per Share: 52 percent first half, 48 percent second half

We estimate the Digital - Engage 2021 mix as follows:

* Revenue: 17.5 percent Digital, 82.5 percent Engage, of which 39 percent of Digital and 51 percent of Engage in the first half, respectively. * Non-GAAP Operating Income: 20 percent Digital, 80 percent Engage, of which 30 percent of Digital and 57 percent of Engage in the first half, respectively. * Adjusted EBITDA: 20 percent Digital 80 percent Engage, of which 33 percent of Digital and 55 percent of Engage in the first half, respectively.

NON-GAAP FINANCIAL MEASURES

This press release contains a discussion of certain Non-GAAP financial measures that the Company includes to allow investors and analysts to measure, analyze and compare its financial condition and results of operations in a meaningful and consistent manner. A reconciliation of these Non-GAAP financial measures can be found in the tables accompanying this press release.

* GAAP metrics are presented in accordance with Generally Accepted Accounting Principles. * Non-GAAP - As reflected in the attached reconciliation table, the definition of Non-GAAP may exclude from operating income, EBITDA, net income and earnings per share restructuring and impairment charges, equity-based compensation expenses, amortization of purchased intangibles, among other items.

ABOUTTTEC

TTEC Holdings, Inc. (NASDAQ: TTEC) is one of the largest, global CX (customer experience) technology and services innovators for end-to-end, digital CX solutions. The Company delivers leading CX technology and operational CX orchestration at scale through its proprietary cloud-based CXaaS (Customer Experience as a Service) platform. Serving iconic and disruptive brands, TTEC's outcome-based solutions span the entire enterprise, touch every virtual interaction channel, and improve each step of the customer journey. Leveraging next gen digital and cognitive technology, the Company's Digital business designs, builds, and operates omnichannel contact center technology, conversational messaging, CRM, automation (AI / ML and RPA), and analytics solutions. The Company's Engage business delivers digital customer engagement, customer acquisition & growth, content moderation, fraud prevention, and data annotation solutions. Founded in 1982, the Company's singular obsession with CX excellence has earned it leading client NPS scores across the globe. The company's nearly 61,000 employees operate on six continents and bring technology and humanity together to deliver happy customers and differentiated business results. To learn more visit us at https://www.ttec.com

FORWARD-LOOKING STATEMENTS

This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of TTEC Holding, Inc.'s management and are subject to significant risks and uncertainties. Specifically, we would like for you to focus on risks related to COVID-19 global pandemic and the various government mandates designed to contain the pandemic, and how these risks may impact our business in the short and longer term; the risks related to our strategy execution; our ability to innovate and introduce technologies that are sufficiently disruptive to allow us to maintain and grow our market share; cybersecurity; consolidation activities undertaken by our clients; changes in laws that impact our business and our ability to comply with those and other laws governing our operations; the reliability of our information technology infrastructure and our ability to consistently deliver uninterrupted service to our clients; the need to forecast demand for services accurately and the impact of such forecasts on our capacity utilization; our ability to attract and retain qualified and skilled personnel at a price point that we can afford and our clients are willing to pay; our M&A activity, including our ability to identify, acquire and properly integrate acquired businesses in accordance with our strategy; and our equity structure including our controlling shareholder risk, and the potential volatility of our stock price resulting therefrom. Risk Factors that could cause TTEC's results to differ materially from those described in the forward-looking statements can be found in TTEC's Annual Report on Form 10-K for the year ended December 31, 2020, which has been filed with the U.S. Securities and Exchange Commission (the "SEC") and is available on TTEC's website www.ttec.com, and on the SEC's public website at www.sec.gov. TTEC Holdings, Inc. does not undertake to update any forward-looking statements.

Investor Relations Contact Public Relations Contact Address Contact

Paul Miller Nick Cerise 9197 South Peoria Street ttec.com

+1.303.397.8641 +1.303.397.8331 Englewood, CO 80112 +1.800.835.3832

TTEC HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

Three months ended Twelve months ended

December 31, December 31,

2020 2019 2020 2019

Revenue $570,974 $461,326 $1,949,248 $1,643,704

Operating Expenses:

Cost of services 425,451 345,694 1,452,719 1,242,887

Selling, general and administrative 57,235 53,894 203,902 202,540

Depreciation and amortization 21,808 18,634 78,862 69,086

Restructuring and integration charges, net 700 175 3,264 1,747

Impairment losses 4,165 166 5,809 3,735

Total operating expenses 509,359 418,563 1,744,556 1,519,995

Income From Operations 61,615 42,763 204,692 123,709

Other income (expense), net (3,366) (6,428) (34,424) (13,298)

Income Before Income Taxes 58,249 36,335 170,268 110,411

Provision for income taxes (11,284) (5,670) (40,937) (25,677)

Net Income 46,965 30,665 129,331 84,734

Net income attributable to noncontrolling interest (2,542) (2,402) (10,683) (7,570)

Net Income Attributable to TTEC Stockholders $ 44,423 $ 28,263 $ 118,648 $ 77,164

Net Income Per Share

Basic $ 1.00 $ 0.66 $ 2.77 $ 1.83

Diluted $ 0.99 $ 0.65 $ 2.75 $ 1.81

Net Income Per Share Attributable to TTEC Stockholders

Basic $ 0.95 $ 0.61 $ 2.54 $ 1.66

Diluted $ 0.94 $ 0.60 $ 2.52 $ 1.65

Income From Operations Margin 10.8% 9.3% 10.5% 7.5%

Net Income Margin 8.2% 6.6% 6.6% 5.2%

Net Income Attributable to TTEC Stockholders Margin 7.8% 6.1% 6.1% 4.7%

Effective Tax Rate 19.4% 15.6% 24.0% 23.3%

Weighted Average Shares Outstanding

Basic 46,736 46,487 46,647 46,373

Diluted 47,232 46,830 46,993 46,758

TTEC HOLDINGS, INC. AND SUBSIDIARIES

SEGMENT INFORMATION

(In thousands)

Three months ended Twelve months ended

December 31, December 31,

2020 2019 2020 2019

Revenue:

TTEC Digital $ 75,715 $ 82,354 $ 306,985 $ 305,346

TTEC Engage 495,259 378,972 1,642,263 1,338,358

Total $570,974 $461,326 $1,949,248 $1,643,704

Income From Operations:

TTEC Digital $ 7,639 $ 11,754 $ 45,315 $ 38,927

TTEC Engage 53,976 31,009 159,377 84,782

Total $ 61,615 $ 42,763 $ 204,692 $ 123,709

TTEC HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

December 31, December 31,

2020 2019

ASSETS

Current assets:

Cash and cash equivalents $ 132,914 $ 82,407

Accounts receivable, net 378,397 331,096

Other current assets 145,491 136,322

Total current assets 656,802 549,825

Property and equipment, net 178,706 176,633

Other assets 680,900 650,330

Total assets $ 1,516,408 $ 1,376,788

LIABILITIES AND EQUITY

Total current liabilities $ 396,170 $ 363,289

Other long-term liabilities 609,500 532,846

Redeemable noncontrolling interest 52,976 48,923

Total equity 457,762 431,730

Total liabilities and equity $ 1,516,408 $ 1,376,788

TTEC HOLDINGS, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION

(In thousands, except per share data)

Three months ended Twelve months ended

December 31, December 31,

2020 2019 2020 2019

Revenue $570,974 $461,326 $1,949,248 $1,643,704

Reconciliation of Adjusted EBITDA:

Net Income $ 46,965 $ 30,665 $ 129,331 $ 84,734

Interest income (235) (622) (1,656) (1,913)

Interest expense 2,038 5,576 17,489 19,113

Provision for income taxes 11,284 5,670 40,937 25,677

Depreciation and amortization 21,808 18,634 78,862 69,086

Asset impairment, restructuring and integration charges 4,865 341 9,073 5,482

Gain on sale of business units - (225) (596) (1,366)

Gain on sale of trademarks - - - (700)

Gain on recovery of receivables held by division in winddown - - - (1,416)

Changes in acquisition contingent consideration 2,526 - (1,823) (2,424)

Loss on dissolution of subsidiary - - 19,905 -

Equity-based compensation expenses 3,036 3,151 12,507 12,814

Adjusted EBITDA $ 92,287 $ 63,190 $ 304,029 $ 209,087

Reconciliation of Free Cash Flow:

Cash Flow From Operating Activities:

Net income $ 46,965 $ 30,665 $ 129,331 $ 84,734

Adjustments to reconcile net income to net cash provided by operatingactivities:

Depreciation and amortization 21,808 18,634 78,862 69,086

Other 16,363 4,293 63,727 84,169

Net cash provided by operating activities 85,136 53,592 271,920 237,989

Less - Total Cash Capital Expenditures 11,945 16,338 59,772 60,776

Free Cash Flow $ 73,191 $ 37,254 $ 212,148 $ 177,213

Reconciliation of Non-GAAP Income from Operations:

Income from Operations $ 61,615 $ 42,763 $ 204,692 $ 123,709

Restructuring charges, net 700 175 3,264 1,747

Impairment losses 4,165 166 5,809 3,735

Equity-based compensation expenses 3,036 3,151 12,507 12,814

Amortization of purchased intangibles 4,387 3,679 16,175 11,585

Non-GAAP Income from Operations $ 73,903 $ 49,934 $ 242,447 $ 153,590

Non-GAAP Income from Operations Margin 12.9% 10.8% 12.4% 9.3%

Reconciliation of Non-GAAP EPS:

Net Income $ 46,965 $ 30,665 $ 129,331 $ 84,734

Add: Asset restructuring and impairment charges 4,865 341 9,073 5,482

Add: Equity-based compensation expenses 3,036 3,151 12,507 12,814

Add: Amortization of purchased intangibles 4,387 3,679 16,175 11,585

Add: Interest charge related to future purchase of remaining 30% for Motif - 2,124 6,273 4,657acquisition

Less: Changes in acquisition contingent consideration 2,526 - (1,823) (2,424)

Less: Gain on sale of business units - (225) (596) (1,366)

Less: Gain on sale of trademarks - - - (700)

Less: Gain on recovery of receivable held by division in winddown - - - (1,416)

Add: Loss on dissolution of subsidiary - - 19,905 -

Add: Changes in valuation allowance, return to provision adjustments and (4,205) (4,154) (11,130) (8,171)other, and tax effects of items separately disclosed above

Non-GAAP Net Income $ 57,574 $ 35,581 $ 179,715 $ 105,195

Diluted shares outstanding 47,232 46,830 46,993 46,758

Non-GAAP EPS $1.22 $0.76 $3.82 $2.25

Reconciliation of Adjusted EBITDA by Segment : TTEC Engage TTEC Digital TTEC Engage TTEC Digital

Q4 20 Q4 19 Q4 20 Q4 19 YTD 20 YTD 19 YTD 20 YTD 19

Earnings before Income Taxes $ 50,580 $ 24,408 $ 7,669 $11,928 $ 124,822 $ 71,176 $45,446 $39,238

Interest income / expense, net 1,835 4,990 (32) (37) 15,966 17,237 (133) (39)

Depreciation and amortization 17,881 15,472 3,926 3,161 64,832 57,868 14,030 11,217

Asset impairment, restructuring and integration charges 4,865 242 - 99 7,620 2,936 1,453 2,546

Gain on sale of business units - (225) - - (596) (1,366) - -

Gain on sale of trademarks - - - - - (700) - -

Gain on recovery of receivables held by division in winddown - - - - - (1,416) - -

Changes in acquisition contingent consideration 2,526 - - - (1,823) (2,424) - -

Loss on dissolution of subsidiary - - - - 19,905 - - -

Equity-based compensation expenses 1,883 2,295 1,154 856 8,433 9,472 4,074 3,342

Adjusted EBITDA $ 79,570 $ 47,182 $12,717 $16,007 $ 239,159 $ 152,783 $64,870 $56,304

View original content to download multimedia: http://www.prnewswire.com/news-releases/ttec-announces-record-fourth-quarter-and-full-year-2020-financial-results-301237822.html

SOURCE TTEC Holdings, Inc.