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8-K - FORM 8-K - SYKES ENTERPRISES INC | b86261e8vk.htm |
Exhibit 99.1
News Release
news release
FOR IMMEDIATE RELEASE | MAY 2, 2011 |
SYKES ENTERPRISES, INCORPORATED REPORTS
FIRST-QUARTER 2011 FINANCIAL RESULTS
FIRST-QUARTER 2011 FINANCIAL RESULTS
--First quarter 2011 revenues and diluted earnings per share exceed outlook
--EMEA region posts revenue growth & operating profit
--Raising full-year 2011 revenue and earnings per share business outlook
--EMEA region posts revenue growth & operating profit
--Raising full-year 2011 revenue and earnings per share business outlook
TAMPA, FL May 2, 2011 - Sykes Enterprises, Incorporated (SYKES or the Company) (NASDAQ:
SYKE), a global leader in providing outsourced customer contact management solutions and services
in the business process outsourcing (BPO) arena, announced today its first-quarter 2011 financial
results. Given that the ICT acquisition closed on February 2nd, 2010, first quarter 2010
financial data for the combined company reflect only two-months of financial impact from the ICT
acquisition versus a full-quarter ( three months) for first quarter 2011.
First Quarter 2011 Financial Highlights
|
First quarter 2011 revenues of $310.2 million increased $43.6 million, or
16.3%, from $266.6 million in the comparable quarter last year; the ICT
acquisition contributed $100.3 million to first quarter 2011 revenues compared
to $63.7 million in the same period last year
|
||
| Excluding the ICT acquisition and on a constant currency basis, first
quarter 2011 revenues increased 2.6% comparably driven principally by growth
within the financial services and technology verticals |
||
| First quarter 2011 operating margin was 5.0% versus a negative 1.9% in the
same period last year; on an adjusted basis, a non-GAAP measure (see
explanation on Page 6 and see Exhibit 3 for reconciliation), first quarter 2011
operating margin was 6.3% versus 6.8% in the same period last year
|
||
| Excluding the ICT acquisition, first quarter 2011 operating margins declined
330 basis points (4.4% vs. 7.7%) comparably due to a weaker U.S. dollar
relative to certain offshore currencies driving direct and indirect costs,
anticipated end-of-life of certain customer contact management programs and an
increase in personnel costs
|
||
| First quarter 2011 diluted earnings per share from continuing operations
were $0.28 versus a loss from continuing operations of $0.18 in the comparable
quarter last year and versus the Companys February 2011 business outlook
diluted earnings per share range of $0.20 to $0.23; relative to the business
outlook per share range, the increase in first quarter 2011 diluted earnings
per share was due principally to higher-than-anticipated revenues and a lower
tax rate driven largely by a $2.6 million discrete adjustment related to a
favorable resolution of a tax audit
|
1
|
On an adjusted basis, first quarter 2011 diluted earnings per share were
$0.35 compared to an adjusted first quarter 2010 diluted earnings per share of
$0.21; relative to the Companys February 2011 business outlook range of $0.25
to $0.28, the increase in first quarter 2011 adjusted diluted earnings per
share was due principally to the above mentioned factors; assuming a tax rate
of 25%, which was the midpoint of the forecasted tax rate range of 24% to 26%
projected in the Companys February 2011 business outlook, adjusted diluted
earnings per share in the first quarter of 2011 would have been $0.29 |
||
| First quarter 2010 loss per share from discontinued operations, net of
taxes, was $0.03 due principally to a loss in the Companys Argentina
operations, the disposal of which was completed in December 2010 |
Americas Region
Revenues generated from the Companys Americas region, including operations in North America and
offshore (Latin America, South Asia and the Asia Pacific region), increased 19.2% to $246.5
million, or 79.5% of total revenues, for the first quarter of 2011. Revenues for the prior year
period totaled $206.9 million, or 77.6% of total revenues. The ICT acquisition contributed $100.3
million to Americas first quarter 2011 revenues compared to a $63.4 million contribution in the
same period last year. Excluding the ICT acquisition and on a constant currency basis, first
quarter 2011 Americas revenues increased 1.3% comparably due largely to growth from existing
clients within the financial services and technology verticals.
During the quarter, approximately 46% of the Americas first quarter 2011 revenues was generated
from services provided offshore compared to approximately 49% in the same period last year.
Excluding the ICT acquisition, approximately 52% of the Americas first quarter 2011 revenues was
generated from services provided offshore compared to approximately 55% in the prior year quarter,
with the percentage decrease due primarily to increased revenue contribution from the U.S.
Sequentially, revenues generated from the Americas region decreased 1.7% to $246.5 million in the
first quarter of 2011. Fourth quarter 2010 revenues were $250.8 million, or 81.1% of total
revenues. On a constant currency basis, first quarter 2011 Americas revenues decreased 1.7%
sequentially driven mainly by seasonality and the anticipated end-of-life of certain customer
contact
management programs.
The Americas income from operations for the first quarter of 2011 decreased 1.0% to $27.0 million,
with an operating margin of 11.0% versus 13.2% in the comparable quarter last year. On an adjusted
basis (see Exhibit 3 for reconciliation), the Americas operating margin was 12.6% versus 14.6% in
the comparable quarter last year. Excluding the ICT acquisition, the Americas operating margin
decreased 460 basis points (14.4% vs. 19.0%) comparably due to a weaker U.S. dollar relative to
certain offshore currencies driving direct and indirect costs, anticipated end-of-life of certain
customer contact management programs and an increase in personnel costs.
Sequentially, the Americas income from operations for the first quarter of 2011 decreased 9.3% to
$27.0 million, with an operating margin of 11.0% versus 11.9% in the fourth quarter of 2010. On an
adjusted basis, (see Exhibit 4), the Americas operating margin decreased 160 basis points to 12.6%
from 14.2%. The decrease was due to seasonality coupled with the above-mentioned factors.
EMEA Region
Revenues from the Companys Europe, Middle East and Africa (EMEA) region increased 6.6% to $63.6
million, representing 20.5% of SYKES total revenues for the first quarter of 2011 compared to
$59.7 million, or 22.4%, in the prior years first quarter. Excluding the ICT acquisition and on a
constant currency basis, EMEA revenues increased 5.7% due to growth from existing and new clients
within the financial services and transportation verticals.
2
Sequentially, revenues from the Companys EMEA region increased 9.0% to $63.6 million for the first
quarter of 2011 compared to $58.4 million, or 18.9% of SYKES total revenues in the fourth quarter
of 2010. On a constant currency basis, EMEA revenues increased 7.1% sequentially, driven by growth
from existing and new clients within the communications, financial services and transportation
verticals.
The EMEA regions income from operations was $0.5 million, or 0.8% of EMEA revenues, versus an
operating loss of $0.7 million, or 1.2% of revenues, in the comparable quarter last year. On an
adjusted basis (see Exhibit 3 for reconciliation), the comparable operating margin was 0.8% versus
a negative 1.2% in the comparable quarter last year. Excluding the ICT acquisition, the EMEA
operating margin was 0.4% versus a negative 0.6% driven largely by higher-than-anticipated revenues
and the resulting expense leverage.
Sequentially, the EMEA region generated income from operations of $0.5 million, or 0.8% of EMEA
revenues, versus a loss of $4.1 million, or 7.1% of revenues, in the fourth quarter of 2010. On an
adjusted basis (see Exhibit 4), the EMEA operating margin was 0.8% versus a negative 4.4% due to
higher-than-anticipated revenues coupled with lower labor costs.
Corporate G&A Expenses
Corporate costs decreased to $12.2 million, or 3.9% of revenues, in the first quarter of 2011,
compared to $31.7 million, or 11.9% of revenues, in the comparable quarter last year. On an
adjusted basis (see Exhibit 3 for reconciliation), corporate costs increased 5.4% to $12.0 million,
or 3.9% of revenues, from $11.4 million, or 4.3% of revenues, in comparable period last year.
Excluding the ICT acquisition, corporate costs increased to $12.0 million, or 5.7% of first quarter
2011 revenues, from $11.4 million, or 5.6% of revenues, in the same period last year due to higher
compensation expenses, technology maintenance costs and professional services fees.
Sequentially, corporate costs increased to $12.2 million, or 3.9% of revenues, in the first quarter
of 2011, from $11.5 million, or 3.7% of revenues, in the fourth quarter of 2010. On an adjusted
basis (see Exhibit 4), corporate costs increased to $12.0 million, or 3.9% of revenues, from $10.2
million, or 3.3% of revenues, in the fourth quarter of 2010 due largely to the above-mentioned
factors.
Interest & Other Expense and Taxes
Interest and other expense for the first quarter of 2011 totaled approximately $1.6 million
compared to interest and other expense of $3.5 million for the same period in the prior year. The
decrease in interest and other expense was due principally to lower interest expense related to the
now paid-off Bermuda and term loan associated with the ICT acquisition in the prior years first
quarter.
The Companys effective tax rate from continuing operations was 4.2% in first quarter 2011 versus a
tax benefit of 5.4% in the same period last year and lower than the estimated 24% to 26% tax rate
range provided in the Companys February 2011 business outlook. The decline in the tax rate
relative to the business outlook was driven principally by the $2.6 million discrete adjustment
related to a favorable resolution of a tax audit.
On an adjusted basis, first quarter 2011 tax rate was 8.9% compared to 36.6% in the same period
last year and versus the estimated 24% to 26% range provided in the Companys February 2011
business outlook. The decrease in the tax rate on a comparable basis was due to a discrete
adjustment and a shift in the geographic mix of earnings to higher tax rate jurisdictions last
year, while relative to the business outlook, the decline was due mainly to a discrete adjustment.
3
Liquidity and Capital Resources
The Companys balance sheet at March 31, 2011 remained strong with cash and cash equivalents of
$199.9 million, excluding restricted cash of $0.5 million. Approximately 76.0% or $152.0 million
was held in international operations, of which $127.0 million may be subject to additional taxes if
repatriated to the United States, including withholding tax applied by the country of origin and
repatriation tax on the foreign-source income. The Company expects to repatriate $25.0 million in
cash and cash equivalents held in international operations in the future. At March 31, 2011, the
Company had $75 million of undrawn borrowing capacity available under its revolving credit
facility. During the three months ended March 31, 2011, the Company repurchased 0.3 million common
shares for a total cost of $5.5 million.
Business Outlook
The assumptions driving the business outlook are as follows:
| The Company is increasing its full-year revenue and diluted earnings per
share outlook to reflect the better-than-expected performance in the first quarter of 2011
and sustained improvement in demand trends, more-than-offsetting the anticipated impact of
end-of-life of certain customer contact management programs within both the Americas and
EMEA regions and the associated severance expenses which are expected to disproportionately
impact the second quarter. The Company expects little change in the overall drivers of
demand among them the financial services, technology and healthcare verticals as
discussed in its February 2011 business outlook;
|
||
| The Companys revenues and adjusted earnings per share assumptions are based on foreign
exchange rates as of April 2011. Therefore, the continued volatility in foreign exchange
rates between the U.S. dollar and the functional currencies of the markets the Company
serves could have a significant impact, positive or negative, on revenues and adjusted
earnings per share relative to the business outlook for the second quarter and full-year;
|
||
| The Company remains on track to add the previously announced 1,800 seats on a gross
basis for the full-year, split roughly evenly over the first and second half of the year.
Similarly, the ramp costs associated with the seats additions are expected to be split
roughly evenly between the first and second half of the year. The Company expects to add
approximately
550 seats on a gross basis in the second quarter, in addition to the 350 seats that were
added in the first quarter; |
||
| The Company received a GST (Goods and Services Tax) refund from the Canadian government
for $1.2 million in April, which is expected to favorably impact diluted earnings per share
by approximately $0.02 on a tax-adjusted basis for the second quarter and full year 2011; |
||
| The Company anticipates interest and other expense of approximately $0.2 million for the
second quarter and $2.4 million for the full year 2011, which reflects the $1.6 million in
interest and other expense incurred in the first quarter and the $0.2 million per quarter
of net interest expense related to commitment fees and deferred financing costs associated
with its credit facility, which are partially offset by lower interest income resulting
from lower interest rates on cash balances. The aforementioned amounts exclude the
potential impact of any future foreign exchange gains or losses in other expense; and |
||
| Relative to its February 2011 business outlook, the Company anticipates a lower
effective tax rate for the second-quarter and full-year 2011 due to a combination of the
first quarter discrete adjustment and a shift in the geographic mix of earnings to lower
tax rate jurisdictions. |
4
Considering the above factors, the Company anticipates the following financial results for the
three months ended June 30, 2011:
| Revenues in the range of $305.0 million to $310.0 million | |
| Tax rate of approximately 18%; on an adjusted basis, a tax rate of approximately 19% | |
| Fully diluted share count of approximately 46.4 million | |
| *Diluted earnings per share of approximately $0.26 to $0.29 | |
| Adjusted diluted earnings per share in the range of $0.31 to $0.34 | |
| Capital expenditures in the range of $12.0 million to $14.0 million |
For the twelve months ended December 31, 2011, the Company anticipates the following financial
results:
| Revenues in the range of $1,225.0 million to $1,240.0 million | |
| Tax rate of approximately 19%; on an adjusted basis, a tax rate of approximately 20% | |
| Fully diluted share count of approximately 46.5 million | |
| *Diluted earnings per share of approximately $1.21 to $1.31 | |
| Adjusted diluted earnings per share in the range of $1.43 to $1.53 | |
| Capital expenditures in the range of $38.0 million to $42.0 million |
* See Business Outlook Reconciliation for Second Quarter and Full-Year 2011 earnings per share.
Conference Call
The Company will conduct a conference call regarding the content of this release tomorrow, May
3rd, 2011 at 10:00 a.m. Eastern Time. The conference call will be carried live on the
Internet. Instructions for listening to the call over the Internet are available on the Investors
page of SYKES website at www.sykes.com. A replay will be available at this location for two
weeks. This press release is also posted on the SYKES website at
http://investor.sykes.com/phoenix.zhtml?c=119541&p=irol-news&nyo=0.
Non-GAAP Financial Measure
Adjusted earnings per diluted share and adjusted operating margins are important indicators of
performance as these non-GAAP financial measures assist readers in further understanding the
Companys results of operations and trends from period-to-period exclusive of certain
acquisition-related items. The term adjusted basis, as referenced throughout the press release,
includes the ICT acquisition but excludes ICT acquisition-related costs (see Exhibit 3 for
reconciliation) such as those associated with capacity rationalization and facilities
consolidation, coupled with items one-time in nature. Adjusted earnings per diluted share and
adjusted operating margins, however, are supplemental measures of performance that are not
required by, or presented in accordance with, U.S. Generally Accepted Accounting Principles
(GAAP). Refer to the tables in the release for a detailed reconciliation.
About Sykes Enterprises, Incorporated
SYKES is a global leader in providing customer contact management solutions and services in the
business process outsourcing (BPO) arena. SYKES provides an array of sophisticated customer
contact management solutions to Fortune 1000 companies around the world, primarily in the
communications, financial services, healthcare, technology and transportation and leisure
industries. SYKES specializes in providing flexible, high quality customer support outsourcing
solutions with an emphasis on inbound technical support and customer service. Headquartered in
Tampa, Florida, with customer contact management centers throughout the world, SYKES provides its
services through multiple communication channels encompassing phone, e-mail, web and chat.
5
Utilizing its integrated onshore/offshore global delivery model, SYKES serves its clients through
two geographic operating segments: the Americas (United States, Canada, Latin America, India and
the Asia Pacific region) and EMEA (Europe, Middle East and Africa). SYKES also provides various
enterprise support services in the Americas and fulfillment services in EMEA, which include
multi-lingual sales order processing, payment processing, inventory control, product delivery and
product returns handling. For additional information please visit www.sykes.com.
Forward-Looking Statements
This press release may contain forward-looking statements, including SYKES estimates of future
business outlook, prospects or financial results, statements regarding SYKES objectives,
expectations, intentions, beliefs or strategies, or statements containing words such as believe,
estimate, project, expect, intend, may, anticipate, plans, seeks, implies, or
similar expressions. It is important to note that SYKES actual results could differ materially
from those in such forward-looking statements, and undue reliance should not be placed on such
statements. Among the important factors that could cause such actual results to differ materially
are (i) the impact of economic recessions in the U.S. and other parts of the world, (ii)
fluctuations in global business conditions and the global economy, (iii) SYKES ability to continue
the growth of its support service revenues through additional technical and customer contact
centers, (iv) currency fluctuations, (v) the timing of significant orders for SYKES products and
services, (vi) loss or addition of significant clients, (vii) the early termination of contracts by
clients, (viii) SYKES ability to recognize deferred revenue through delivery of products or
satisfactory performance of services, (ix) construction delays of new or expansion of existing
customer support centers, (x) difficulties or delays in implementing SYKES bundled service
offerings, (xi) failure to achieve sales, marketing and other objectives, (xii) variations in the
terms and the elements of services offered under SYKES standardized contract including those for
future bundled service offerings, (xiii) changes in applicable accounting principles or
interpretations of such principles, (xiv) delays in the Companys ability to develop new products
and services and market acceptance of new products and services, (xv) rapid technological change,
(xvi) political and country-specific risks inherent in conducting business abroad, (xvii) SYKES
ability to attract and retain key management personnel, (xviii) SYKES ability to further penetrate
into vertically integrated markets, (xix) SYKES ability to expand its global presence through
strategic alliances and selective acquisitions, (xx) SYKES ability to continue to establish a
competitive advantage through sophisticated technological capabilities, (xxi) the ultimate outcome
of any lawsuits or penalties (regulatory or otherwise), (xxii) SYKES
dependence on trends toward outsourcing, (xxiii) risk of interruption of technical and customer
contact management center operations due to such factors as fire, earthquakes, inclement weather
and other disasters, power failures, telecommunications failures, unauthorized intrusions, computer
viruses and other emergencies, (xxiv) the existence of substantial competition, (xxv) the ability
to obtain and maintain grants and other incentives, including tax holidays or otherwise, (xxvi) the
potential of cost savings/synergies associated with the ICTG acquisition not being realized, or not
being realized within the anticipated time period, (xxvii) risks related to the integration of the
businesses of SYKES and ICTG and (xxviii) other risk factors listed from time to time in SYKES
registration statements and reports as filed with the Securities and Exchange Commission. All
forward-looking statements included in this press release are made as of the date hereof, and SYKES
undertakes no obligation to update any such forward-looking statements, whether as a result of new
information, future events, or otherwise.
For additional information contact:
Subhaash Kumar
Sykes Enterprises, Incorporated
Sykes Enterprises, Incorporated
(813) 233-7143
6
Sykes Enterprises, Incorporated
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
Exhibit 1
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
Exhibit 1
Three Months | ||||||||
SYKES + ICT | SYKES + ICT* | |||||||
March 31, | March 31, | |||||||
2011 | 2010 | |||||||
Revenues |
$ | 310,156 | $ | 266,582 | ||||
Direct salaries and related costs |
(203,689 | ) | (171,650 | ) | ||||
General and administrative |
(90,375 | ) | (100,023 | ) | ||||
Impairment of long-lived assets |
(726 | ) | - | |||||
Income (loss) from continuing operations |
15,366 | (5,091 | ) | |||||
Other income (expense), net |
(1,615 | ) | (3,543 | ) | ||||
Income (loss) from continuing operations before taxes |
13,751 | (8,634 | ) | |||||
Income taxes |
(573 | ) | 467 | |||||
Income (loss) from continuing operations, net of taxes |
13,178 | (8,167 | ) | |||||
Loss from discontinued operations |
- | (1,346 | ) | |||||
Net Income (loss) |
$ | 13,178 | $ | (9,513 | ) | |||
Net Income (loss) per share: |
||||||||
Basic: |
||||||||
Continuing operations |
$ | 0.28 | $ | (0.18 | ) | |||
Discontinued operations |
0.00 | (0.03 | ) | |||||
Net Income (loss) per share |
$ | 0.28 | $ | (0.21 | ) | |||
Diluted: |
||||||||
Continuing operations |
$ | 0.28 | $ | (0.18 | ) | |||
Discontinued operations |
0.00 | (0.03 | ) | |||||
Net Income (loss) per share |
$ | 0.28 | $ | (0.21 | ) | |||
Weighted average shares: |
||||||||
Basic |
46,409 | 44,590 | ||||||
Diluted |
46,577 | 44,766 | ||||||
* | Three month of SYKES financial data and only two-months of ICT financial data in first quarter 2010 due to the February 2nd, 2010 closing of the ICT acquisition. |
7
Sykes Enterprises, Incorporated
Segment Results
(in thousands)
(Unaudited)
Exhibit 2
Segment Results
(in thousands)
(Unaudited)
Exhibit 2
Three Months | ||||||||
SYKES + ICT | SYKES + ICT* | |||||||
March 31, | March 31, | |||||||
2011 | 2010 | |||||||
Revenues: |
||||||||
Americas |
$ | 246,535 | $ | 206,902 | ||||
EMEA |
63,621 | 59,680 | ||||||
Total |
$ | 310,156 | $ | 266,582 | ||||
Operating Income (loss): |
||||||||
Americas |
$ | 27,753 | $ | 27,311 | ||||
EMEA |
519 | (705 | ) | |||||
Corporate G&A expenses |
(12,180 | ) | (31,697 | ) | ||||
Impairment of long-lived assets |
(726 | ) | - | |||||
Income (loss) from continuing operations |
15,366 | (5,091 | ) | |||||
Other income (expense), net |
(1,615 | ) | (3,543 | ) | ||||
(Provision) benefit for income taxes |
(573 | ) | 467 | |||||
Income (loss) from continuing operations, net of taxes |
$ | 13,178 | $ | (8,167 | ) | |||
* | Three months of SYKES financial data and only two-months of ICT financial data in first quarter 2010 due to the February 2nd, 2010 closing of the ICT acquisition. |
8
Sykes Enterprises, Incorporated
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
Exhibit 3
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
Exhibit 3
Three Months Ended | ||||||||||||||||||||||||
March 31, 2011 | ||||||||||||||||||||||||
Acquisition related Costs | ||||||||||||||||||||||||
ICT | ||||||||||||||||||||||||
ICT | Depreciation and | ICT | ||||||||||||||||||||||
Severance | Amortization of | Merger | ||||||||||||||||||||||
SYKES + ICT | & Consulting | Property & Equipment and | & Integration | SYKES + ICT | ||||||||||||||||||||
Reported | Engagement | Intangibles Write-Ups | Costs | Other | Adjusted | |||||||||||||||||||
Revenues |
$ | 310,156 | $ | 310,156 | ||||||||||||||||||||
Direct salaries and related costs |
(203,689 | ) | (203,689 | ) | ||||||||||||||||||||
General and administrative |
(90,375 | ) | 346 | 3,058 | 13 | (86,958 | ) | |||||||||||||||||
Impairment of long-lived assets |
(726 | ) | 726 | | ||||||||||||||||||||
Income from operations |
15,366 | 346 | 3,058 | 739 | 19,509 | |||||||||||||||||||
Other (expense), net |
(1,615 | ) | (1,615 | ) | ||||||||||||||||||||
Income from continuing operations before taxes |
13,751 | 346 | 3,058 | 739 | 17,894 | |||||||||||||||||||
(Provision) for income taxes |
(573 | ) | (85 | ) | (752 | ) | (182 | ) | (1,592 | ) | ||||||||||||||
Income from continuing operations, net of taxes |
13,178 | 261 | 2,306 | 557 | | $ | 16,302 | |||||||||||||||||
Income from continuing operations, net of taxes per basic share |
$ | 0.28 | $ | 0.01 | $ | 0.05 | $ | 0.01 | $ | | $ | 0.35 | ||||||||||||
Shares outstanding, basic |
46,409 | 46,409 | 46,409 | 46,409 | 46,409 | 46,409 | ||||||||||||||||||
Income from continuing operations, net of taxes per diluted share |
$ | 0.28 | $ | 0.01 | $ | 0.05 | $ | 0.01 | $ | | $ | 0.35 | ||||||||||||
Shares outstanding, diluted |
46,577 | 46,577 | 46,577 | 46,577 | 46,577 | 46,577 |
Acquisition related Costs | ||||||||||||||||||||||||
ICT | ||||||||||||||||||||||||
ICT | Depreciation and | ICT | ||||||||||||||||||||||
Severance | Amortization of | Merger | ||||||||||||||||||||||
SYKES + ICT | & Consulting | Property & Equipment and | & Integration | SYKES + ICT | ||||||||||||||||||||
Reported | Engagement | Intangibles Write-Ups | Costs | Other | Adjusted | |||||||||||||||||||
Revenues: |
||||||||||||||||||||||||
Americas |
$ | 246,535 | $ | 246,535 | ||||||||||||||||||||
EMEA |
63,621 | 63,621 | ||||||||||||||||||||||
Total |
$ | 310,156 | $ | | $ | | $ | | $ | 310,156 | ||||||||||||||
Operating Income: |
||||||||||||||||||||||||
Americas |
$ | 27,027 | 220 | 3,058 | 726 | $ | 31,031 | |||||||||||||||||
EMEA |
519 | 519 | ||||||||||||||||||||||
Corporate G&A expenses |
(12,180 | ) | 126 | 13 | (12,041 | ) | ||||||||||||||||||
Income from continuing operations |
15,366 | 346 | 3,058 | 739 | 19,509 | |||||||||||||||||||
Other (expense), net |
(1,615 | ) | (1,615 | ) | ||||||||||||||||||||
(Provision) for income taxes |
(573 | ) | (85 | ) | (752 | ) | (182 | ) | | (1,592 | ) | |||||||||||||
Income from continuing operations, net of taxes |
$ | 13,178 | $ | 261 | $ | 2,306 | $ | 557 | $ | | $ | 16,302 | ||||||||||||
9
Sykes Enterprises, Incorporated
Segment Results
(in thousands)
(Unaudited)
Exhibit 4
Segment Results
(in thousands)
(Unaudited)
Exhibit 4
Three Months Ended | ||||||||
SYKES + ICT | SYKES + ICT | |||||||
Adjusted | Adjusted | |||||||
March 31, | December 31, | |||||||
2011 | 2010 | |||||||
Revenues |
$ | 310,156 | $ | 309,146 | ||||
Direct salaries and related costs |
(203,689 | ) | (200,149 | ) | ||||
General and administrative |
(86,958 | ) | (86,193 | ) | ||||
Income from continuing operations |
19,509 | 22,804 | ||||||
Other (expense), net |
(1,615 | ) | (355 | ) | ||||
Income from continuing operations before taxes |
17,894 | 22,449 | ||||||
(Provision) for income taxes |
(1,592 | ) | (8,078 | ) | ||||
Income from continuing operations, net of taxes |
$ | 16,302 | $ | 14,371 | ||||
Income from continuing operations, net of taxes per basic share |
$ | 0.35 | $ | 0.31 | ||||
Shares outstanding, basic |
46,409 | 46,451 | ||||||
Income from continuing operations, net of taxes per diluted share |
$ | 0.35 | $ | 0.31 | ||||
Shares outstanding, diluted |
46,577 | 46,563 | ||||||
Three Months Ended | ||||||||
SYKES + ICT | SYKES + ICT | |||||||
Adjusted | Adjusted | |||||||
March 31, | December 31, | |||||||
2011 | 2010 | |||||||
Revenues: |
||||||||
Americas |
$ | 246,535 | $ | 250,759 | ||||
EMEA |
63,621 | 58,387 | ||||||
Total |
$ | 310,156 | $ | 309,146 | ||||
Operating Income: |
||||||||
Americas |
$ | 31,031 | $ | 35,589 | ||||
EMEA |
519 | (2,567 | ) | |||||
Corporate G&A expenses |
(12,041 | ) | (10,218 | ) | ||||
Income from continuing operations |
19,509 | 22,804 | ||||||
Other (expense), net |
(1,615 | ) | (355 | ) | ||||
(Provision) for income taxes |
(1,592 | ) | (8,078 | ) | ||||
Income from continuing operations, net of taxes |
$ | 16,302 | $ | 14,371 | ||||
10
Sykes Enterprises, Incorporated
Condensed Consolidated Balance Sheets
(in thousands)
Exhibit 5
Condensed Consolidated Balance Sheets
(in thousands)
Exhibit 5
March 31, | December 31, | |||||||
2011 | 2010 | |||||||
Assets: |
||||||||
Current assets |
$ | 494,441 | $ | 472,288 | ||||
Property and equipment, net |
106,386 | 113,703 | ||||||
Goodwill & Intangibles, net |
175,351 | 175,055 | ||||||
Other noncurrent assets |
35,506 | 33,554 | ||||||
Total assets |
$ | 811,684 | $ | 794,600 | ||||
Liabilities & Shareholders Equity: |
||||||||
Current liabilities |
$ | 163,523 | $ | 158,730 | ||||
Noncurrent liabilities |
50,698 | 52,675 | ||||||
Shareholders equity |
597,463 | 583,195 | ||||||
Total liabilities and shareholders equity |
$ | 811,684 | $ | 794,600 | ||||
Sykes Enterprises, Incorporated
Supplementary Data
Supplementary Data
Q1 2011 | Q1 2010* | |||||||
Geographic Mix (% of Total Revenues): |
||||||||
Americas (1) |
79.5 | % | 77.6 | % | ||||
Europe, Middle East & Africa (EMEA) |
20.5 | % | 22.4 | % | ||||
Total: |
100.0 | % | 100.0 | % |
(1) | Includes the United States, Canada, Latin America, South Asia and the Asia Pacific (APAC) Region. Latin America, South Asia and APAC are included in the Americas due to the nature of the business and client profile, which is primarily made up of U.S. based clients. |
Q1 2011 | Q1 2010* | |||||||
Vertical Industry Mix (% of Total Revenues): |
||||||||
Communications |
32 | % | 35 | % | ||||
Financial Services |
27 | % | 21 | % | ||||
Technology / Consumer |
20 | % | 23 | % | ||||
Transportation & Leisure |
6 | % | 8 | % | ||||
Healthcare |
6 | % | 7 | % | ||||
Other |
9 | % | 6 | % | ||||
Total: |
100 | % | 100 | % |
* | Three months of SYKES financial data and only two-months of ICT financial data in first quarter 2010 due to the February 2nd, 2010 closing of the ICT acquisition. |
11
Sykes Enterprises, Incorporated
Cash Flow from Operations
(in thousands)
(Unaudited)
Exhibit 6
Cash Flow from Operations
(in thousands)
(Unaudited)
Exhibit 6
Three Months Ended | ||||||||
March 31, | March 31,* | |||||||
2011 | 2010 | |||||||
Cash Flow From Operating Activities: |
||||||||
Net income (loss) |
$ | 13,178 | $ | (9,513 | ) | |||
Depreciation and amortization |
$ | 14,232 | $ | 12,763 | ||||
Changes in assets and liabilities and other |
(7,381 | ) | (20,050 | ) | ||||
Net cash provided by (used for) operating activities |
$ | 20,029 | $ | (16,800 | ) | |||
Capital expenditures |
$ | 6,175 | $ | 6,128 | ||||
Cash interest paid |
$ | 261 | $ | 1,092 | ||||
Cash taxes paid |
$ | 6,821 | $ | 6,745 |
* | Three months of SYKES financial data and only two-months of ICT financial data in first quarter 2010 due to the February 2nd, 2010 closing of the ICT acquisition. |
12
Sykes Enterprises, Incorporated
Business Outlook Reconciliation*
Exhibit 7
Business Outlook Reconciliation*
Exhibit 7
Business Outlook | ||||
Second Quarter | ||||
2011 | ||||
Adjusted Diluted Earnings Per Share |
$0.31 - $0.34 | |||
Severance & Consulting Engagement Costs |
- | |||
Merger and Integration Costs, including Impairment |
- | |||
Depreciation & Amortization of Property & Equipment and Intangibles Write-Ups |
($0.05) | |||
Earnings (loss) Per Share |
$0.26 - $0.29 |
Business Outlook | ||||
Full Year | ||||
2011 | ||||
Adjusted Diluted Earnings Per Share |
$1.43 - $1.53 | |||
Severance & Consulting Engagement Costs |
($0.01) | |||
Merger and Integration Costs |
($0.01) | |||
Depreciation & Amortization of Property & Equipment and Intangibles Write-Ups |
($0.20) | |||
Diluted Earnings Per Share |
$1.21 - $1.31 |
13