Ends 2004 With No Bank Debt and Announces Third Phase of Cost Improvement Plan
DENVER, Jan. 24 /PRNewswire-FirstCall/ -- TeleTech Holdings, Inc.
(Nasdaq: TTEC), a leading global provider of customer management and business
process outsourcing (BPO) solutions, today provided its three-year financial
goals in conjunction with its investor conference scheduled for January 24 and
25, 2005, in Beaver Creek, Colorado.
(Logo: http://www.newscom.com/cgi-bin/prnh/20010130/TELETECHLOGO )
Three-Year Financial Goals
Industry analysts estimate the customer management and BPO industries will
grow at a combined compounded annual growth rate of approximately 10 percent
over the next three years. During that period, TeleTech's goal is to grow
revenue at a rate greater than the industry average, to increase profitability
at a faster rate than revenue, and to generate strong free cash flow to
support future growth initiatives. The Company's goal is for revenue growth
to come from both organic growth, including new products and services, as well
as from select acquisitions, resulting in consolidated revenues growing to a
run-rate of approximately $1.5 billion by the end of 2007. The Company's
three-year revenue growth goal includes an expanding suite of new products and
services, such as recent announcements for TeleTech(R) On Demand(TM) and
TeleTech(R) In Culture(TM), growing to a revenue run-rate of approximately
$100 million by the end of 2007.
The Company's goal is to generate earnings before interest, taxes,
depreciation and amortization (EBITDA) of 15 percent and earnings before
interest and taxes (EBIT) of approximately 10 percent on a run-rate basis by
the end of 2007. The improvement from the Company's current level of
profitability is expected to result from selling higher margin products and
services, globally implementing the Company's North American operational and
technological 'best practices,' and further leveraging the Company's
technology centralization initiatives.
In addition, the Company is implementing further cost improvements enabled
by its ongoing focus on innovation, automation, and implementing global best
operating practices. In August 2003, the Company announced a $40 million cost
improvement plan. When combined with the second phase of $20 million
announced in early 2004, the Company has reduced its global operating costs by
$60 million on an annualized basis.
Today the Company is announcing the third phase of cost improvements,
which the Company believes will lower its operating costs by an additional
$20 million annually and is expected to be fully realized in 2006. These
savings are anticipated to result from increased automation, the
implementation of global best operating practices, and interest expense
savings, among other initiatives. When the third phase is completed in 2006,
the Company would have improved its cost structure by a total of $80 million
over a two and one-half year period.
Debt Update
The Company repaid all of its outstanding bank debt as of December 31,
2004. This reduction was achieved via a combination of free cash flow and
certain tax planning strategies. Going forward, the Company plans to operate
with a minimal debt level, except for potentially leveraging the Company to
pursue select strategic acquisitions.
Executive Commentary
"I am very pleased with our achievements over the past 18 months, which
include winning new client agreements, renewing and growing existing client
relationships, completing $60 million in cost improvement initiatives, ending
2004 with no bank debt, and centralizing our technology infrastructure in
several regions of the world," said Kenneth Tuchman, TeleTech's chairman and
chief executive officer. "We have achieved all this while continuing to drive
higher client satisfaction and while investing in and launching an expanded
array of complementary products and services."
"I believe the ongoing investment in our expanded product capabilities and
in standardizing and globalizing our delivery platform, combined with our
talented and dedicated employees around the world, will give us the ability to
outpace the forecasted industry growth rate over the next three years,"
continued Tuchman. "Furthermore, our financial strength and proven discipline
to control costs will allow us to pursue select acquisitions as part of our
three-year, strategic growth objectives."
ABOUT TELETECH
TeleTech is a premier global business services Company that provides a
full range of front- to back-office solutions including customer management,
BPO, database marketing, and outsourced services to measurably enhance
clients' core customer management processes. TeleTech's proven ability to
create innovative strategies, combined with its global technology platform and
delivery infrastructure, helps clients increase revenue, lower costs, and
delight and retain their customers around the world. TeleTech's products and
services, proprietary process, and recognized capabilities to implement
complex global projects make the Company a valued partner for clients that
include Global 1000 businesses and governments. TeleTech partners with
clients to offer 150 languages, through its more than 33,000 employees, in
16 countries. For additional information, visit http://www.TeleTech.com.
FORWARD-LOOKING STATEMENTS
This press release may contain certain forward-looking statements relating
to future results. The Private Securities Litigation Reform Act of 1995
provides a safe harbor for forward-looking statements. These forward-looking
statements are subject to risks and uncertainties that may cause TeleTech's
and its subsidiaries' actual results to differ materially from those expressed
or implied by such forward-looking statements, including but not limited to
the following: the ability to achieve the Company's three-year financial goals
and targeted cost reductions; the ability to successfully launch and generate
revenue from new product introductions; the estimated revenue associated with
new or renewed client agreements; the possibility of the Company's Database
Marketing and Consulting segment not returning to historic levels of
profitability; greater than anticipated competition in the customer care
market, causing adverse pricing and more stringent contractual terms; risks
associated with losing or not renewing significant client relationships, or
early termination of a client agreement; the Company's ability to close new
business and fill excess capacity; consumers' concerns or adverse publicity
regarding the products of the Company's clients; higher than anticipated
start-up costs or lead times associated with new ventures or business in new
markets; execution risks associated with performance-based pricing metrics in
certain client agreements; execution risks associated with achieving targeted
annualized cost reductions; the Company's ability to find cost effective
locations, obtain favorable lease terms, and build or retrofit facilities in a
timely and economic manner; risks associated with business interruption due to
weather-related events; risks associated with attracting and retaining
cost-effective labor at the Company's customer management centers; the
possibility of additional asset impairments and restructuring charges; risks
associated with changes in foreign currency exchange rates; economic or
political changes affecting the countries in which the Company operates;
changes in accounting policies and practices promulgated by standard setting
bodies; and, new legislation or government regulation that impacts the
customer care industry.
Please refer to the Company's filings with the Securities and Exchange
Commission, including the Company's Annual Report on Form 10-K for the year
ended 2003 and other more recent SEC filings, for a detailed discussion of
factors discussed above and other important factors that may impact the
Company's business, results of operations, financial condition, and cash
flows. The Company assumes no obligation to update its forward-looking
statements to reflect actual results or changes in factors affecting such
forward-looking statements.
SOURCE TeleTech Holdings, Inc.
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http://www.teletech.com
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CONTACT:
Investors, Karen Breen, +1-303-397-8592, or
Dan Campbell, +1-303-397-8634, Investor Relations, or Media,
Julie Lucas, Public Relations, +1-303-397-8555, all of TeleTech
Holdings, Inc.
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