Form 8-K TELETECH HOLDINGS INC For: Nov 05

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM�8-K

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CURRENT REPORT

PURSUANT TO SECTION�13 OR 15(d)�OF

THE SECURITIES EXCHANGE ACT OF 1934

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Date of Report (Date of earliest event reported) November�5, 2014

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TeleTech Holdings,�Inc.

(Exact name of registrant as specified in its charter)

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Registrant�s telephone number, including area code: 303-397-8100

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Not Applicable

(Former name or former address, if changed since last report.)

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Check the appropriate box below if the Form�8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

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o����������� Written Communications pursuant to Rule�425 under the Securities Act (17 CFR 230.425)

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o����������� Soliciting material pursuant to Rule�14a-12 under the Exchange Act (17 CFR 240.14a-12)

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o����������� Pre-commencement communications pursuant to Rule�14d-2(b)�under the Exchange Act (17 CFR 240.14d-2(b))

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o����������� Pre-commencement communications pursuant to Rule�13e-4(c)�under the Exchange Act (17 CFR 240.13e-4(c))

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Item 2.02.� Results of Operations and Financial Condition.

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On November�5, 2014, TeleTech Holdings,�Inc. issued a press release announcing financial results for the quarter ended September�30, 2014.

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A copy of the November�5, 2014 press release is attached hereto as Exhibit�99.1 and is hereby incorporated by reference.

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In accordance with General Instruction B.2 of Form�8-K, the information contained in this Item 2.02 and attached Exhibit�99.1 shall not be deemed to be �filed� for purposes of Section�18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as expressly set forth by specific reference in such a filing.

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Item 9.01.� Financial Statements and Exhibits.

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(d)� Exhibits.

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99.1 Press release dated November�5, 2014

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SIGNATURE

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Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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�	�	TeleTech Holdings,�Inc.
�	�	(Registrant)
�	�	�
�	�	�
Date: November�5, 2014	By:	/s/ Margaret B. McLean
�	�	Margaret B. McLean, Senior Vice President, General Counsel�& Corporate Secretary

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2

Exhibit�99.1

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TeleTech Announces Third Quarter 2014 Financial Results

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Third Quarter 2014 Results

Revenue was $305.9 Million ($305.8 Million Non-GAAP);

Operating Income was $21.3 Million, 7.0 Percent of Revenue (7.0 Percent Non-GAAP);

Fully Diluted EPS were 27 Cents (31 Cents Non-GAAP);

Signs Record $125 Million in New Business ($340 Million Year-to-date)

Updated Full-year 2014 Revenue and Operating Margin Guidance

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Denver, Colo., November�5, 2014 � TeleTech Holdings,�Inc. (or �Company�), NASDAQ: TTEC, a leading global provider of analytics-driven, technology-enabled customer engagement solutions, today announced financial results for the third quarter ended September�30, 2014. The Company also filed its Quarterly Report on Form�10-Q with the U.S. Securities and Exchange Commission for the quarter ended September�30, 2014.

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�Our record new business signings demonstrate the growing market demand for our integrated, vertically focused customer engagement solutions,� commented Ken Tuchman, chief executive officer of TeleTech.� �The balance of new business across segments, verticals and regions underlines the strategic relevance and breadth of our new sales and marketing platform. We have only just begun to tap into the full value of our vertically focused account management teams. As we grow relationships with existing clients and build strategic new ones, we are increasing wallet share with cross sell and up sell opportunities across our full solutions portfolio. Furthermore, our expanding pipeline is being supplemented from the many new clients added as part of our M&A focus.�

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Tuchman continued, �Year-to-date our constant currency growth rate was 5.7 percent versus 1.3 percent in the same period last year with organic growth of 3.1 percent versus a negative 3.5 percent in the prior period.�While we are pleased with the progress we are making in delivering top line growth, we are disappointed in our third quarter operating margin.�The decline is specific to our Customer Technology Services (CTS) business, wherein the operating profit declined $5.5 million, having a negative 180 basis point impact on our operating margin.�The third quarter CTS operating profit was largely impacted by a combination of incremental cloud investment, reduced revenue and one-time expense adjustments.� We view this decline as unique to the quarter.�

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Tuchman concluded, �With our best-in-class client net promoter scores, record new signings,�backlog and pipeline, alongside our�improving revenue growth rate, we are confident our investment strategy will deliver continued value to our clients and shareholders.�

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Investor Contact	Media Contact
Paul Miller	Elizabeth Grice
303.397.8641	303.397.8507

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THIRD QUARTER 2014 FINANCIAL HIGHLIGHTS

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Revenue

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������������������ Third quarter 2014 GAAP revenue was $305.9 million compared to $297.0 million in the third quarter of 2013.

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EBITDA

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������������������ Non-GAAP EBITDA was $37.3 million, or 12.2 percent of revenue. This compares to $41.2 million or 13.8 percent of revenue in the year ago quarter.

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Income from Operations

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������������������ Third quarter 2014 GAAP income from operations was $21.3 million or 7.0 percent of revenue compared to $26.0 million or 8.7 percent of revenue in the third quarter of 2013.

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Earnings Per Share

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������������������ Third quarter 2014 GAAP fully diluted earnings per share attributable to TeleTech shareholders were $0.27 compared to $0.34 for the same period last year.

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Bookings

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������������������ During the third quarter 2014, TeleTech signed an estimated $125 million in annualized revenue from new and expanded client relationships. The bookings mix was well diversified across all verticals with approximately 90 percent from existing clients, 72�percent in recurring revenue, 48�percent from emerging businesses and 8 percent from international clients.

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

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������������������ As of September�30, 2014, TeleTech had cash and cash equivalents of $87.6 million and $121.1�million of total debt, resulting in a net debt position of $33.5 million. These balances were impacted by the acquisition of rogenSi, share repurchases and capital expenditures.

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������������������ As of September�30, 2014, TeleTech had $581.5 million of additional borrowing capacity available under its revolving credit facility.

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������������������ Cash flow from operations in the third quarter 2014 was $30.3 million compared to $36.4 million in the third quarter 2013.

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������������������ Capital expenditures in the third quarter 2014 were $17.8 million compared to $18.2 million in the third quarter 2013.

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������������������ TeleTech repurchased approximately 387,500 shares of common stock during the third quarter 2014 for a cost of $10.2 million. As of September�30, 2014, $21.6 million was authorized for future share repurchases.

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SEGMENT REPORTING

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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).� Financial highlights for the segments are provided below.

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Customer Management Services (CMS) � Customer Experience Delivery Solutions

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������������������ In the third quarter 2014, CMS revenue was $226.8 million compared to $217.0 million in the year ago quarter. On a constant currency basis, revenue increased 4.6 percent to $227.0 million. Income from operations was $18.6 million or 8.2 percent of revenue versus 8.3 percent in the year ago quarter. Operating income margin reflects a $0.4 million benefit from foreign currency translation offset by $0.4 million of restructuring charges.

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Customer Growth Services (CGS) � Technology-Enabled Revenue Generation Solutions

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������������������ CGS third quarter 2014 revenue increased 11 percent to $28.8 million compared to $25.9 million in the year ago quarter. Income from operations was $1.8 million or 6.3 percent of revenue versus $0.6�million or 2.3 percent last year.

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Customer Technology Services (CTS) � Cloud and Premise Managed Technology Solutions

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������������������ CTS third quarter 2014 revenue was $35.2 million compared to $40.6 million in the year ago quarter. Income from operations was a negative $0.3 million of revenue compared to income of $5.2 million or 12.7�percent in the year ago quarter.

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������������������ The third quarter CTS income from operations was largely impacted by a combination of $2 million in incremental cloud investment, $1 million in lower revenues and $2�million in one-time expense adjustments.

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Customer Strategy Services (CSS) � Customer Experience Strategy and Analytics Solutions

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������������������ CSS third quarter 2014 revenue increased 12.7 percent to $15.1 million from $13.4 million in the year ago quarter. Income from operations was $1.2 million or 7.8 percent of revenue versus 16.9�percent in the same period last year.

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BUSINESS OUTLOOK

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�While we are realizing tangible results from our investments, as demonstrated by our record bookings and improved revenue growth, the short-term challenges in our CTS business are impacting our overall results,� explained Regina Paolillo, chief financial and administrative officer at TeleTech.��Adjusting for changes in foreign currency, we estimate CTS�s performance to impact our full-year revenue growth by approximately 200�basis points and our operating margin by approximately 60 basis points. As a result, we are lowering our 2014 guidance.�Excluding CTS�s revenue and operating margin decline, on a constant currency basis, we estimate that the�non-CTS segments (CMS, CGS, CSS) will grow revenue

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approximately 7.6 percent and deliver an operating margin of approximately 9.0 percent for full-year 2014, representing an estimated 24�percent improvement in operating profit for those segments,� concluded Paolillo.

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TeleTech updates its 2014 business outlook, as follows:

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Revenue � Revenue estimated from $1.230 to $1.235�billion, reflecting an expected two percent adverse impact from foreign exchange translation.

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Operating Margin � Operating margin range estimated between 7.75 and 8.0 percent (before asset impairment, restructuring or acquisition-related charges), but including approximately $9�million investment in sales, and research and development.

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Capital Expenditures - Range between $55 and $65 million with 70 percent expected for growth initiatives.

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SEC FILINGS

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The Company�s filings with the U.S. Securities and Exchange Commission are available in the �Investors� section of TeleTech�s website, which can be found at www.teletech.com.

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CONFERENCE CALL

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A conference call and webcast with management will be held on November�6, 2014 at 8:30�a.m. Eastern�Time. You are invited to join a live webcast of the conference call by visiting the �Investors� section of the TeleTech website at www.teletech.com.� If you are unable to participate during the live webcast, a replay will be available on the TeleTech website.

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NON-GAAP FINANCIAL MEASURES

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To supplement the Company�s consolidated financial statements presented in accordance with generally accepted accounting principles (GAAP) in the United States, the Company uses the following Non-GAAP financial measures: Free Cash Flow, Non-GAAP Revenue, Non-GAAP Income from Operations, Non-GAAP EBITDA and Non-GAAP EPS. Additionally our discussion of revenue and income from operations contain references to constant currency amounts. Constant currency measures are calculated by translating the current year reported amounts using the prior year foreign exchange rates for each underlying currency. TeleTech believes that providing these Non-GAAP financial measures provides investors with greater transparency to the information used by TeleTech�s management in its financial and operational decision making and allows investors to see TeleTech�s results �through the eyes� of management. TeleTech also believes that providing this information better enables TeleTech�s investors to understand its operating performance and information used by management to evaluate and measure such performance. These financial measures are not intended to be used in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.�A reconciliation of these Non-GAAP financial measures is available in the financial tables attached to this press release. We also

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encourage all investors to read TeleTech�s most recent Annual Report on Form�10-K and Quarterly Report on Form�10-Q.

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ABOUT TELETECH

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TeleTech, founded in 1982, is a leading global provider of analytics-driven, technology-enabled customer engagement solutions. The Company offers an integrated platform that combines consulting, technology, care and growth services to simplify and personalize interactions that build deep engagement between people and brands. �This holistic, multichannel approach improves customer satisfaction, increases customer loyalty and drives long-term profitability and growth. From strategic consulting to operational execution, TeleTech�s 42,000 employees speaking over 50 languages deliver results for Global 1000 clients in the automotive, communications and media, financial services, government, healthcare, technology, transportation and retail industries. Through the TeleTech Community Foundation, the Company leverages its innovative leadership to ensure that students in underserved communities around the globe have access to the tools and support they need to maximize their educational outcomes. For additional information, please visit teletech.com.

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FORWARD-LOOKING STATEMENTS

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Statements in this press release contain��forward-looking statements� within the meaning of Section�27A of the Securities Act of 1933, Section�21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995, relating to our operations, expected financial position, results of operation, and other business matters that are based on our current expectations, assumptions, and projections with respect to the future, and are not a guarantee of performance. We use words such as �may,� �believe,� �plan,� �will,� �anticipate,� �estimate,� �expect,� �intend,� �project,� �would,� �could,� �target,� or similar expressions, or when we discuss our strategy, plans, goals, initiatives, or objectives, we are making forward-looking statements.

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We caution you not to rely unduly on any forward-looking statements. Actual results may differ materially from what is expressed in the forward-looking statements, and you should review and consider carefully the risks, uncertainties and other factors that affect our business and may cause such differences as outlined but are not limited to factors discussed in the sections entitled �Risk Factors� included in TeleTech�s filings with the U.S. Securities and Exchange Commission (the �SEC�), including our most recent Annual Report on Form�10-K and subsequent quarterly financial reports on Form�10-Q. TeleTech�s filings with the SEC are available in the �Investors� section of TeleTech�s website, www.teletech.com and at the SEC�s public website at www.sec.gov.� Our forward looking statements speak only as of the date of the press release and we undertake no obligation to update them, except as may be required by applicable laws.

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TELETECH HOLDINGS,�INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

�

�

�

Three�months�ended

�

Nine�months�ended

�

�

�

September�30,

�

September�30,

�

�

�

2014

�

2013

�

2014

�

2013

�

�

�

�

�

�

�

�

�

�

�

Revenue

�

$

305,900

�

$

296,995

�

$

903,611

�

$

875,070

�

�

�

�

�

�

�

�

�

�

�

Operating Expenses:

�

�

�

�

�

�

�

�

�

Cost of services

�

220,244

�

208,648

�

646,346

�

625,689

�

Selling, general and administrative

�

49,847

�

50,165

�

148,016

�

142,080

�

Depreciation and amortization

�

13,893

�

11,463

�

41,152

�

33,281

�

Restructuring charges, net

�

593

�

758

�

1,750

�

4,181

�

Impairment losses

�

�

�

�

�

�

�

1,205

�

Total operating expenses

�

284,577

�

271,034

�

837,264

�

806,436

�

�

�

�

�

�

�

�

�

�

�

Income From Operations

�

21,323

�

25,961

�

66,347

�

68,634

�

�

�

�

�

�

�

�

�

�

�

Other income (expense)

�

(856

)

(434

)

1,846

�

(5,537

)

�

�

�

�

�

�

�

�

�

�

Income Before Income Taxes

�

20,467

�

25,527

�

68,193

�

63,097

�

�

�

�

�

�

�

�

�

�

�

Provision for income taxes

�

(5,778

)

(6,358

)

(14,071

)

(12,603

)

�

�

�

�

�

�

�

�

�

�

Net Income

�

14,689

�

19,169

�

54,122

�

50,494

�

�

�

�

�

�

�

�

�

�

�

Net income attributable to noncontrolling interest

�

(1,442

)

(1,526

)

(3,795

)

(2,575

)

�

�

�

�

�

�

�

�

�

�

Net Income Attributable to TeleTech Stockholders

�

$

13,247

�

$

17,643

�

$

50,327

�

$

47,919

�

�

�

�

�

�

�

�

�

�

�

Net Income Per Share Attributable to TeleTech Stockholders

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Basic

�

$

0.27

�

$

0.35

�

$

1.02

�

$

0.93

�

�

�

�

�

�

�

�

�

�

�

Diluted

�

$

0.27

�

$

0.34

�

$

1.00

�

$

0.91

�

�

�

�

�

�

�

�

�

�

�

Income From Operations Margin

�

7.0

%

8.7

%

7.3

%

7.8

%

Net Income Attributable to TeleTech Stockholders Margin

�

4.3

%

5.9

%

5.6

%

5.5

%

Effective Tax Rate

�

28.2

%

24.9

%

20.6

%

20.0

%

�

�

�

�

�

�

�

�

�

�

Weighted Average Shares Outstanding

�

�

�

�

�

�

�

�

�

Basic

�

49,093

�

50,732

�

49,493

�

51,643

�

Diluted

�

49,940

�

51,678

�

50,338

�

52,499

�

�

�

TELETECH HOLDINGS,�INC. AND SUBSIDIARIES

SEGMENT INFORMATION

(In thousands)

(Unaudited)

�

�

�

Three�months�ended

�

Nine�months�ended

�

�

�

September�30,

�

September�30,

�

�

�

2014

�

2013

�

2014

�

2013

�

�

�

�

�

�

�

�

�

�

�

Revenue:

�

�

�

�

�

�

�

�

�

Customer Management Services

�

$

226,814

�

$

217,035

�

$

673,421

�

$

660,258

�

Customer Growth Services

�

28,765

�

25,893

�

86,545

�

71,148

�

Customer Technology Services

�

35,194

�

40,649

�

103,707

�

110,855

�

Customer Strategy Services

�

15,127

�

13,418

�

39,938

�

32,809

�

Total

�

$

305,900

�

$

296,995

�

$

903,611

�

$

875,070

�

�

�

�

�

�

�

�

�

�

�

Income From Operations:

�

�

�

�

�

�

�

�

�

Customer Management Services

�

$

18,625

�

$

17,944

�

$

55,941

�

$

55,140

�

Customer Growth Services

�

1,800

�

588

�

5,401

�

1,244

�

Customer Technology Services

�

(286

)

5,165

�

1,641

�

13,882

�

Customer Strategy Services

�

1,184

�

2,264

�

3,364

�

(1,632

)

Total

�

$

21,323

�

$

25,961

�

$

66,347

�

$

68,634

�

�

�

TELETECH HOLDINGS,�INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

�

�	�	September�30,		�	December�31,		�
�	�	2014		�	2013		�
�	�	(Unaudited)		�	�		�
�	�	�		�	�		�
ASSETS	�	�		�	�		�
Current assets:	�	�		�	�		�
Cash and cash equivalents	�	$	87,612	�	$	158,017	�
Accounts receivable, net	�	266,846		�	236,099		�
Other current assets	�	85,038		�	75,435		�
Total current assets	�	439,496		�	469,551		�
�	�	�		�	�		�
Property and equipment, net	�	147,905		�	126,719		�
Other assets	�	273,908		�	246,072		�
�	�	�		�	�		�
Total assets	�	$	861,309	�	$	842,342	�
�	�	�		�	�		�
LIABILITIES AND EQUITY	�	�		�	�		�
Total current liabilities	�	$	188,898	�	$	190,787	�
Other long-term liabilities	�	201,928		�	175,564		�
Mandatorily redeemable noncontrolling interest	�	2,790		�	2,509		�
Total equity	�	467,693		�	473,482		�
�	�	�		�	�		�
Total liabilities and equity	�	$	861,309	�	$	842,342	�

�

�

TELETECH HOLDINGS,�INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION

(In thousands, except per share data)

(Unaudited)

�

�

�

Three�months�ended

�

Nine�months�ended

�

�

�

September�30,

�

September�30,

�

�

�

2014

�

2013

�

2014

�

2013

�

�

�

�

�

�

�

�

�

�

�

Reconciliation of Revenue:

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Revenue

�

$

305,900

�

$

296,995

�

$

903,611

�

$

875,070

�

Changes due to foreign currency fluctuations 1

�

(97

)

�

�

21,287

�

�

�

Lost revenue from typhoon

�

�

�

1,216

�

�

�

1,216

�

Non-GAAP Revenue

�

$

305,803

�

$

298,211

�

$

924,898

�

$

876,286

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Reconciliation of Gross Margin:

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Non-GAAP Revenue

�

$

305,803

�

$

298,211

�

$

924,898

�

$

876,286

�

Cost of services

�

220,244

�

208,648

�

646,346

�

625,689

�

Adjustments related to Non-GAAP revenue adjustments 1

335

�

396

�

15,754

�

396

�

Non-GAAP Gross margin

�

$

85,224

�

$

89,167

�

$

262,798

�

$

250,201

�

�

�

�

�

�

�

�

�

�

�

NON-GAAP Gross margin percentage

�

27.9

%

29.9

%

28.4

%

28.6

%

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Reconciliation of EBIT�& EBITDA:

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Net Income Attributable to TeleTech stockholders

�

$

13,247

�

$

17,643

�

$

50,327

�

$

47,919

�

Interest income

�

(542

)

(938

)

(1,545

)

(2,182

)

Interest expense

�

1,646

�

1,799

�

5,197

�

5,567

�

Provision for income taxes

�

5,778

�

6,358

�

14,071

�

12,603

�

EBIT

�

$

20,129

�

$

24,862

�

$

68,050

�

$

63,907

�

�

�

�

�

�

�

�

�

�

�

Depreciation and amortization

�

13,893

�

11,463

�

41,152

�

33,281

�

�

�

�

�

�

�

�

�

�

�

EBITDA

�

$

34,022

�

$

36,325

�

$

109,202

�

$

97,188

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Reconciliation of Free Cash Flow:

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Cash Flow From Operating Activities:

�

�

�

�

�

�

�

�

�

Net income

�

$

14,689

�

$

19,169

�

$

54,122

�

$

50,494

�

Adjustments to reconcile net income to net cash provided by operating activities:

�

�

�

�

�

�

�

�

�

Depreciation and amortization

�

13,893

�

11,463

�

41,152

�

33,281

�

Other

�

1,695

�

5,770

�

(33,367

)

(7,162

)

Net cash provided by operating activities

�

30,277

�

36,402

�

61,907

�

76,613

�

�

�

�

�

�

�

�

�

�

�

Less - Total Capital Expenditures

�

17,751

�

18,172

�

52,234

�

31,832

�

�

�

�

�

�

�

�

�

�

�

Free Cash Flow

�

$

12,526

�

$

18,230

�

$

9,673

�

$

44,781

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Reconciliation of Non-GAAP Income from Operations:

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Income from Operations

�

$

21,323

�

$

25,961

�

$

66,347

�

$

68,634

�

Restructuring charges, net

�

593

�

758

�

1,750

�

4,181

�

Impairment losses

�

�

�

�

�

�

�

1,205

�

Net effect of foreign currency fluctuations 1

�

(432

)

�

�

5,533

�

�

�

Net effect of revenue lost from typhoon

�

�

�

820

�

�

�

820

�

�

�

�

�

�

�

�

�

�

�

Non-GAAP Income from Operations

�

$

21,484

�

$

27,539

�

$

73,630

�

$

74,840

�

�

�

�

�

�

�

�

�

�

�

Non-GAAP Income from Operations Margin

�

7.0

%

9.2

%

8.0

%

8.5

%

�

1����������������������� Foreign currency fluctuations are calculated on a constant currency basis by translating the current year reported amounts using the prior year foreign exchange rates for each underlying currency.

�

TELETECH HOLDINGS,�INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION

(In thousands, except per share data)

(Unaudited)

�

�

�

Three�months�ended

�

Nine�months�ended

�

�

�

September�30,

�

September�30,

�

�

�

2014

�

2013

�

2014

�

2013

�

�

�

�

�

�

�

�

�

�

�

Reconciliation of Non-GAAP EPS:

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Net Income Attributable to TeleTech stockholders

�

$

13,247

�

$

17,643

�

$

50,327

�

$

47,919

�

Add: Asset impairment and restructuring charges, net of related taxes

�

367

�

501

�

1,111

�

3,616

�

Add: Deconsolidation of subsidiary

�

�

�

�

�

�

�

3,556

�

Add: Changes in acquisition contingent consideration, net of related taxes

�

561

�

�

�

(1,855

)

�

�

Add: Net effect of foreign currency fluctuations, net of related taxes 1

�

(305

)

�

�

3,845

�

�

�

Add: Net effect of revenue lost from typhoon, net of related taxes

�

�

�

574

�

�

�

574

�

Add: Changes in valuation allowance and returns to provision adjustments

�

1,379

�

1,000

�

(398

)

(509

)

�

�

�

�

�

�

�

�

�

�

Non-GAAP Net Income Attributable to TeleTech stockholders

�

$

15,249

�

$

19,718

�

$

53,031

�

$

55,156

�

�

�

�

�

�

�

�

�

�

�

Diluted shares outstanding

�

49,940

�

51,678

�

50,338

�

52,499

�

�

�

�

�

�

�

�

�

�

�

Non-GAAP EPS Attributable to TeleTech stockholders

�

$

0.31

�

$

0.38

�

$

1.05

�

$

1.05

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Reconciliation of Non-GAAP EBITDA:

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Net Income Attributable to TeleTech stockholders

�

$

13,247

�

$

17,643

�

$

50,327

�

$

47,919

�

Interest income

�

(542

)

(938

)

(1,545

)

(2,182

)

Interest expense

�

1,646

�

1,799

�

5,197

�

5,567

�

Provision for income taxes

�

5,778

�

6,358

�

14,071

�

12,603

�

Depreciation and amortization

�

13,893

�

11,463

�

41,152

�

33,281

�

Asset impairment and restructuring charges

�

593

�

758

�

1,750

�

5,386

�

Net effect of foreign currency fluctuations 1

�

(432

)

�

�

5,533

�

�

�

Net effect of revenue lost from typhoon

�

�

�

820

�

�

�

820

�

Changes in acquisition contingent consideration

�

51

�

�

�

(3,910

)

�

�

Equity-based compensation expenses

�

3,050

�

3,265

�

9,031

�

9,842

�

�

�

�

�

�

�

�

�

�

�

Non-GAAP EBITDA

�

$

37,284

�

$

41,168

�

$

121,606

�

$

113,236

�

�

1����������������������� Foreign currency fluctuations are calculated on a constant currency basis by translating the current year reported amounts using the prior year foreign exchange rates for each underlying currency.

�