GlobeNewswire
2010-03-01
Fourth Quarter 2009 Revenues of $220.5 Million Surpass
Business Outlook Range of $213 Million to $215 Million; 2010
Business Outlook: Sustained Revenue Growth & Solid Progress
Toward Achieving Anticipated Cost Synergies
TAMPA, Fla., March 1, 2010 (GLOBE NEWSWIRE) -- 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 fourth-quarter and full-year 2009 financial results.
Fourth quarter 2009 Highlights
-- Fourth quarter 2009 revenues of $220.5 million increased $19.7 million,
or 9.8%, over the comparable quarter last year; on a constant currency
basis, revenues increased 4.0% comparably, driven by the communications,
financial services, healthcare and transportation verticals
-- SYKES and ICT Group, Inc. ("ICTG") entered into a definitive merger
agreement under which SYKES acquired ICTG on February 2, 2010; the
acquisition provides strategic benefits of revenue scale with minimal
client overlap, broader and deeper vertical expertise, enhanced global
delivery footprint, risk diversification and opportunity for sustainable
long-term revenue growth and operating margin expansion
-- Fourth quarter 2009 operating margin was 6.7% versus 6.8% on a
comparable basis; fourth quarter 2009 operating margin included $2.3
million (1.1% of revenues) in transaction costs related to the ICTG
acquisition and $0.7 million (0.3% of revenues) related to Kelly,
Luttmer & Associates Limited (KLA) lease termination; excluding the
transaction costs and lease termination, the 130 basis points comparable
operating margin increase was due principally to higher-than-expected
revenue growth and expense leverage
-- The Company sustained its strong balance sheet with a year-end cash
balance of $360.2 million
-- Cash flow from operations during the quarter was up comparably by
approximately 14% to $27.8 million, with capital expenditures of $7.1
million
Fourth Quarter 2009 Review
Americas
Revenues generated from the Company's Americas segment, including
operations in North America and offshore (Latin America and the Asia
Pacific region), increased 10.5% to $152.8 million, or 69.3% of total
revenues, for the fourth quarter of 2009. Revenues for the prior year
period totaled $138.3 million, or 68.9% of total revenues. The
comparable revenue increase of $14.5 million included a $9.7 million
increase in customer care demand and $4.8 million in favorable
translation impact from stronger currencies within the Americas region
relative to the U.S. dollar. Excluding the currency impact, the 7.0%
constant currency comparable increase in customer care demand was from
existing and new clients across the communications, transportation,
healthcare and financial services verticals. In particular, demand
within the healthcare vertical was driven partly by Canadian call
volumes related to the H1N1 virus. Approximately 57% of the Americas
fourth quarter 2009 revenues was generated from services provided
offshore compared to approximately 63% in the prior year quarter, with
the percentage decrease due primarily to an increased revenue
contribution from the U.S.
The Americas income from operations for the fourth quarter of 2009
increased $3.1 million to $22.3 million, with an operating margin of
14.6% versus 13.9% in the comparable quarter last year. The Americas
fourth quarter 2009 operating margin reflects the impact of the KLA
lease termination, approximately 0.4% of Americas revenues. Excluding
the lease termination, the 110 basis points comparable increase in the
Americas operating margin was due to higher-than-expected revenue
growth, lower weather related auto tow claims costs in Canada and
expense leverage, including lower salaries, travel, recruiting and
depreciation and amortization as a percentage of Americas revenues.
EMEA
Revenues from the Company's Europe, Middle East and Africa (EMEA)
region increased 8.3% to $67.7 million, representing 30.7% of SYKES'
total revenues for the fourth quarter of 2009 compared to $62.5
million, or 31.1%, in the prior year's fourth quarter. The $5.2 million
comparable revenue increase was due to a $6.9 million contribution from
a stronger Euro relative to the U.S. dollar, partially offset by $1.7
million decrease in customer care demand. Excluding the currency
impact, the 2.8% constant currency revenue decrease in customer care
demand was due largely to weakness within the technology vertical,
which was more than offset by higher-than-expected demand from the
communications and transportation verticals. Although there are some
encouraging signs about end market demand for technology products in
EMEA, the Company's outlook remains cautious until it sees a sustained
pick-up in that demand. In the meantime, the Company continues to gain
traction in EMEA with new client wins within the communications and
financial services verticals
The EMEA income from operations for the fourth quarter of 2009
decreased $0.6 million to $4.8 million, with an operating margin of
7.1% versus 8.7% in the comparable quarter last year. The 160 basis
points comparable decrease in the EMEA operating margin was chiefly the
result of soft customer care demand without the commensurate reduction
in labor costs, offsetting benefits from lower travel expenses and
recruiting fees. The Company continues to make headway in reducing its
direct and indirect expenses, positioning itself for margin improvement
as demand eventually stabilizes.
Corporate G&A Expenses
Corporate costs increased 10.7% to $12.2 million, or 5.5% of revenues,
in the fourth quarter of 2009, compared to $11.0 million, or 5.5% of
revenues, in the comparable quarter last year. Excluding $2.3 million
in transaction costs (legal and professional fees) associated with the
ICTG acquisition, or 1.1% of revenues, corporate costs declined due
principally to expense control, including lower marketing, travel and
non-transaction related professional fees.
Interest & Other Income and Taxes
Interest and other expense for the fourth quarter of 2009 totaled
approximately $1.4 million compared to other income of $5.2 million for
the same period in the prior year. The $6.6 million negative swing in
interest and other income was primarily attributable to realized and
unrealized foreign currency transaction losses which resulted primarily
from U.S. dollar denominated assets and liabilities held by the
Company's international subsidiaries, coupled with lower interest
income resulting from lower interest rates on higher average cash
balances and higher interest expense reflecting higher average levels
of outstanding short-term debt, primarily related to the short-term
loan extended to SYKES in December 2009.
The Company's fourth quarter 2009 effective tax rate was 134.7% versus
59.3% in the same period last year and above the 23% to 25% range
provided in the Company's fourth quarter 2009 business outlook. The
increase in the effective tax rate on a comparable basis and from the
range provided in last quarter's business outlook was due principally
to the Company's deemed change of assertion in the fourth quarter of
2009 regarding permanent reinvestment of $85 million of its foreign
subsidiaries' accumulated and undistributed earnings, which came about
due to the Company's borrowing of a $75 million Term Loan on February
2, 2010, to close the ICT Group acquisition and a $10 million increase
in its estimate of costs related to the ICT Group acquisition (please
see SYKES' Annual Report on Form 10-K for the year ending December 31,
2009, which will be filed with the SEC on March 1, 2010, for further
details).
The Company's fourth quarter 2009 earnings per share was a loss of
$0.11 versus earnings of $0.19 in the comparable quarter last year and
$0.32 to $0.35 provided in the Company's fourth quarter 2009 business
outlook. The $0.11 per share loss included the unfavorable impact of
approximately $0.36 per share related to the deemed change of assertion
in the fourth quarter of 2009, $0.04 per share related to ICTG
transaction costs and $0.01 per share related to the KLA lease
termination.
The Company's fourth quarter 2009 business outlook provided an earnings
per share range of $0.32 to $0.35, which did not include the impact of
the deemed change of assertion, ICTG transaction costs and KLA lease
termination expense. Excluding the previously mentioned items and
assuming a tax rate of 23% to 25% provided in the Company's fourth
quarter 2009 business outlook and including the $0.4 million in
interest income earned during the fourth quarter, earnings per share
would have been $0.34.
2009 Financial Highlights
-- Consolidated 2009 revenues of $846.0 million, increased $26.8 million,
or 3.3%, on a comparable basis; on a constant currency basis, revenues
increased 8.3% comparably, driven by the communications and financial
services verticals
-- Consolidated 2009 income from operations increased 6.7% to $70.1
million, with operating margins at 8.3% vs. 8.0% on a comparable basis;
full year 2009 operating margin included $3.3 million (0.4% of revenues)
in transaction costs related to the ICTG acquisition, a $1.9 million
(0.2% of revenues) impairment loss on intangibles related to the March
2005 acquisition of Kelly, Luttmer & Associates Limited (KLA) and $0.7
(0.1% of revenues) million in lease termination costs related to KLA;
excluding the transaction costs, impairment loss and lease termination,
the 100 basis points comparable operating margin increase was due
principally to higher-than-expected revenue growth and expense leverage,
coupled with favorable translation of certain non-dollar denominated
expenses
2009 Twelve-Month Review
Americas
For the twelve-months ended December 31, 2009, revenues generated from
the Company's clients in the Americas segment increased 8.3% to $597.5
million, or 70.6% of total revenues. This compared to revenues of
$551.8 million, or 67.4% of total revenues, for the twelve-months of
2008. The comparable revenue increase of $45.7 million included a $64.6
million increase in customer care demand offsetting the negative impact
of $18.9 million from weaker currencies within the Americas region
relative to the U.S. dollar. Excluding the currency impact, the 11.7%
constant currency comparable increase in customer care demand was
driven by growth from existing and new clients primarily across the
communications and financial services verticals. Approximately 60% of
the Americas 2009 revenues was generated from services provided
offshore compared to approximately 62% in the prior year, with the
percentage decrease due primarily to an increased revenue contribution
from the U.S.
The Americas income from operations for 2009 was up 15.4% to $98.5
million, with an operating margin of 16.5% versus 15.5% in 2008. The
Americas 2009 operating margin reflects the impact of $1.9 million
(0.3% of Americas revenues) impairment loss on intangibles and $0.7
(0.1% of Americas revenues) million in lease termination related to
KLA. Excluding the impairment loss and lease termination, the 140 basis
points comparable increase in the Americas operating margin was due to
higher-than-anticipated revenue growth, favorable translation of
certain non-dollar denominated expenses, lower weather-related auto tow
claims costs and expense leverage, including lower depreciation and
amortization, recruiting and travel expenses.
EMEA
For the twelve-months ended December 31, 2009, revenues from the
Company's EMEA region decreased 7.1% to $248.5 million, representing
29.4% of SYKES' total revenues, compared to $267.4 million, or 32.6%,
in the prior year. Of the $18.9 million decrease in year-over-year EMEA
revenues, $22.4 million was due to a weaker Euro relative to the U.S.
dollar for most of the year, offset by $3.5 million growth in customer
care demand. Excluding the currency impact, the 1.3% comparable growth
in customer care demand was driven by existing and new client programs
principally within the communications vertical.
The EMEA income from operations for 2009 decreased 28.6% to $15.1
million, with an operating margin of 6.1% versus 7.9% in 2008. The 180
basis points comparable decrease in the EMEA operating margin was due
to negative operating leverage owing to a reduction in customer care
demand without the commensurate reduction in labor costs, offsetting
benefits from lower travel, recruiting and other costs.
Corporate G&A Expenses
Corporate costs for the twelve months ended December 31, 2009 increased
$2.7 million to $43.5 million, or 5.1% of revenues, from $40.8 million,
or 5.0% of revenues, in 2008. Excluding $3.3 million in transaction
costs associated with the ICTG acquisition, or 0.4% of revenues, the
decline in corporate costs was due principally to expense control,
including lower marketing, travel and non-transaction related
professional fees.
Impairment Loss on Investment in SHPS
During the year, the Company recorded an impairment loss on its
investment in SHPS of $2.1 million, or 0.2% of revenues. The details
surrounding the SHPS impairment are included in the Current Report on
Form 8-K filed with the Securities and Exchange Commission on July 7,
2009.
Interest & other Income and Taxes
Interest and other income for 2009 totaled approximately $1.3 million
compared to interest and other income of $16.3 million for the same
period in the prior year. The $15.0 million decrease in other income
was primarily attributable to realized and unrealized foreign currency
transaction losses which resulted primarily from U.S. dollar
denominated assets and liabilities held by the Company's international
subsidiaries, coupled with lower interest income resulting from lower
interest rates on higher average cash balances and higher interest
expense reflecting higher average levels of outstanding short-term
debt, primarily related to the short-term loan extended to SYKES.
For 2009, the Company's tax rate was 37.7% versus 26.1% in 2008 and
above the 16% to 18% range provided in the Company's full-year 2009
business outlook. The increase in the effective tax rate on a
comparable basis and relative to the full-year outlook was due
principally to the Company's deemed change of assertion in the fourth
quarter of 2009 regarding permanent reinvestment of $85 million of its
foreign subsidiaries' accumulated and undistributed earnings, which
came about due to the Company's borrowing of a $75 million Term Loan on
February 2, 2010, to close the ICT Group acquisition and a $10 million
increase in its estimate of costs related to the ICT Group acquisition
(please see SYKES' Annual Report on Form 10-K for the year ending
December 31, 2009, which will be filed with the SEC on March 1, 2010,
for further details).
Liquidity and Capital Resources
The Company's balance sheet at December 31, 2009 remained strong with a
total cash balance of $360.2 million, including restricted cash of
$80.3 million resulting from the $75 million short-term loan (maturing
March 31, 2010) extended by KeyBank National Association related to the
funding of the ICT Group acquisition. At December 31, 2009, the Company
also had $50 million of capacity available under its credit facility.
For the twelve months ended December 31, 2009, the Company generated
$87.6 million in cash flow from operations and incurred capital
expenditures of $30.3 million.
On February 2, 2010, the Company entered into a new Credit Agreement
with a group of lenders and KeyBank National Association. The New
Credit Agreement provides for a $75 million term loan and a $75 million
revolving credit facility, replacing the Company's previous senior
revolving credit facility of $50 million. The Company drew down the
full $75 million term loan on February 2, 2010 in connection with the
acquisition of ICT Group.
Business Outlook
Due to the acquisition of ICT Group described in a press release issued
October 6, 2009, the Company's earnings per share business outlook
effective first quarter 2010 will be presented on an adjusted earnings
per share basis, a non-GAAP measure. The adjusted earnings per share
outlook will exclude the impact of severance and consulting engagement
costs by former ICT Group executives, merger and integration costs and
the amortization of acquisition-related intangible assets, while
including anticipated cost synergies. Management believes it is helpful
to present a non-GAAP measure of performance that reflects the ongoing
operations of the Company which allows investors to better understand
and evaluate the business as it is expected to operate in future
periods. The non-GAAP measures of financial performance used by the
Company are not measures of performance under accounting principles
generally accepted in the United States and should not be considered an
alternative to net income or other GAAP figures as an indicator of the
company's financial performance or liquidity. SYKES' non-GAAP
presentation of net income may not be comparable to similarly titled
measures used by other companies.
The assumptions driving the business outlook are as follows:
-- Since the close of the acquisition of ICT Group on February 2, 2010, the
Company has made solid progress toward achieving the $20 million in
anticipated cost synergies in 2010. The Company's adjusted earnings per
share estimates include pre-tax cost synergies of $2 million in the
first quarter of 2010 and $18 million for the full-year;
-- Overall, the Company continues to experience sustained growth in
customer care demand. Within the Americas region, customer care demand
is expected to be driven by new programs with certain existing clients
as well as expansion of existing programs within the communications and
financial services verticals, partially tempered by lower demand with
certain existing clients due to macroeconomic weakness. In the EMEA
region, as discussed in previous quarters, the Company continues to
experience soft demand and weak pricing trends among certain clients
largely within the technology and, to a limited extent, communications
verticals. To address the pricing issue, the Company plans to shift some
demand to new lower-cost delivery geographies within EMEA, where
practicable, while exiting certain client programs. Although the Company
is gaining traction in EMEA with new client wins within the
communications and financial services verticals, the overall
macro-economic environment remains a headwind. Separately, since the
acquisition of ICT Group closed February 2, 2010, the combined company's
first quarter and full-year 2010 results will not include revenue and
earnings per share contribution from ICT Group for the month of January
versus full three-months and twelve months in the comparable periods of
2009;
-- The Company's revenues and adjusted earnings per share assumptions were
based on foreign exchange rates as of February 2010. Therefore, the
continued volatility in foreign exchange rates between the U.S. dollar
and the functional currencies of the markets it serves could have a
significant impact on revenues and adjusted earnings per share relative
to the business outlook;
-- Although the Company's primary focus will be optimizing and driving
utilization from existing seats due to the acquisition of ICT Group, it
expects new seat additions of 1,500 to 1,600 on a gross basis in the
first-half of 2010 in order to serve both existing and new clients.
Accordingly, ramp-related expenses associated with the capacity
additions are anticipated to be weighted more toward the first-half of
2010, which is expected to negatively impact margins;
-- Anticipated net interest expense of approximately $2.0 million and $5.5
million for the first quarter and full-year 2010, respectively, which
includes interest expense related to the funding of the ICT Group
acquisition. These amounts exclude the potential impact of any foreign
exchange gains or losses in other income; and
-- An increase in the comparable first-quarter and full-year 2010 estimated
tax rate versus the year-ago periods reflects a shift in the mix of
earnings to higher tax jurisdictions and the absence of the benefit
related to the release of the valuation allowance. The tax rate for
first quarter 2010 could still vary significantly from what is currently
estimated due to the timing of costs related to ICT Group.
Considering the above factors, the Company anticipates the following
financial results for the three months ended March 31, 2010:
-- Revenues in the range of $267 million to $270 million
-- Tax rate of approximately of 25%, subject to volatility from quarter to
quarter
-- Fully diluted share count of approximately 45 million
-- *Earnings (loss) per share in the range of ($0.16) to ($0.18)
-- Adjusted diluted earnings per share in the range of $0.20 to $0.24
-- Capital expenditures in the range of $10.0 million to $13.0 million
For the twelve months ended December 31, 2010, the Company anticipates
the following financial results:
-- Revenues in the range of $1,240 million to $1,255 million
-- Tax rate of approximately 23% to 25%
-- Fully diluted share count of approximately 46.5 million
-- *Diluted earnings per share in the range of $0.83 to $0.94
-- Adjusted diluted earnings per share in the range of $1.38 to $1.55
-- Capital expenditures in the range of $40 million to $45 million
*See "Business Outlook Reconciliation" for First Quarter and Full-Year
2010 earnings per share.
Conference Call
The Company will conduct a conference call regarding the content of
this release tomorrow, March 2, 2010 at 10:00 a.m. Eastern Standard
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 is an important indicator of
performance as this non-GAAP financial measure assists readers in
further understanding the Company's results of operations and trends
from period-to-period exclusive of certain acquisition-related items.
Adjusted earnings per diluted share, however, is a supplemental measure
of performance that is not required by, or presented in accordance
with, U.S. Generally Accepted Accounting Principles (GAAP).
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. 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," 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 Company's 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) the potential loss of key clients related to the ICTG
acquisition, (xxviii) risks related to the integration of the
businesses of SYKES and ICTG and (xxix) 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.
Sykes Enterprises, Incorporated
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
Three Months Ended
December December
31, 31,
2009 2008
---------- ----------
Revenues $ 220,467 $ 200,774
Direct salaries and related
costs (142,540) (128,936)
General and administrative (63,048) (58,266)
---------- ----------
Income from operations 14,879 13,572
Other income (expense), net (1,382) 5,193
---------- ----------
Income before provision for
income taxes 13,497 18,765
Provision for income taxes (18,186) (11,135)
---------- ----------
Net income (loss) $ (4,689) $ 7,630
---------- ----------
Net income (loss) per basic
share $ (0.11) $ 0.19
Shares outstanding, basic 40,827 40,687
Net income (loss) per diluted
share $ (0.11) $ 0.19
Shares outstanding, diluted 41,151 41,092
Sykes Enterprises, Incorporated
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
Twelve Months Ended
December December
31, 31,
2009 2008
---------- ----------
Revenues $ 846,041 $ 819,190
Direct salaries and related
costs (540,949) (524,133)
General and administrative (233,061) (229,349)
Canada's KLA Impairment (1,908) --
---------- ----------
Income from operations 70,123 65,708
Other income, net 1,295 16,274
SHPS Impairment (2,089) --
---------- ----------
Income before provision for
income taxes 69,329 81,982
Provision for income taxes (26,118) (21,421)
---------- ----------
Net income $ 43,211 $ 60,561
---------- ----------
Net income per basic share $ 1.06 $ 1.49
Shares outstanding, basic 40,707 40,618
Net income per diluted share $ 1.05 $ 1.48
Shares outstanding, diluted 41,026 40,961
Sykes Enterprises, Incorporated
Segment Results
(in thousands)
(Unaudited)
Three Months Ended
December December
31, 31,
2009 2008
---------- ----------
Revenues:
Americas $ 152,808 $ 138,292
EMEA 67,659 62,482
---------- ----------
Total $ 220,467 $ 200,774
========== ==========
Operating Income:
Americas $ 22,289 $ 19,205
EMEA 4,820 5,414
Corporate G&A
expenses (12,230) (11,047)
---------- ----------
Income from
operations 14,879 13,572
Other income
(expense), net (1,382) 5,193
Provision for
income taxes (18,186) (11,135)
---------- ----------
Net income (loss) $ (4,689) $ 7,630
========== ==========
Twelve Months Ended
December December
31, 31,
2009 2008
---------- ----------
Revenues:
Americas $ 597,490 $ 551,761
EMEA 248,551 267,429
---------- ----------
Total $ 846,041 $ 819,190
========== ==========
Operating Income:
Americas $ 98,494 $ 85,383
EMEA 15,130 21,178
Corporate G&A
expenses (43,501) (40,853)
---------- ----------
Income from
operations 70,123 65,708
SHPS Impairment (2,089) --
Other income, net 1,295 16,274
Provision for
income taxes (26,118) (21,421)
---------- ----------
Net income $ 43,211 $ 60,561
========== ==========
Sykes Enterprises, Incorporated
Condensed Consolidated Balance Sheets
(in thousands)
December December
31, 31,
2009 2008
---------- ----------
Assets:
Current assets $ 547,854 $ 396,518
Property and equipment, net 80,264 80,390
Other noncurrent assets 44,353 52,634
---------- ----------
Total assets $ 672,471 $ 529,542
========== ==========
Liabilities & Shareholders'
Equity:
Current liabilities $ 200,418 $ 126,110
Noncurrent liabilities 21,379 19,402
Shareholders' equity 450,674 384,030
---------- ----------
Total liabilities and
shareholders' equity $ 672,471 $ 529,542
========== ==========
Sykes Enterprises, Incorporated
Supplementary Data
Q4 2009 Q4 2008
---------- ----------
Geographic Mix (% of Total
Revenues):
Americas (1) 69.3% 68.9%
Europe, Middle East &
Africa (EMEA) 30.7% 31.1%
---------- ----------
Total: 100.0% 100.0%
(1) Includes the United States, Canada, Latin
America and the Asia Pacific (APAC) Region. Latin
America
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.
Q4 2009 Q4 2008
---------- ----------
Vertical Industry Mix (% of Total
Revenues):
Communications 36% 31%
Technology / Consumer 30% 35%
Financial Services 14% 15%
Transportation & Leisure 9% 8%
Healthcare 6% 5%
Other 5% 6%
---------- ----------
Total: 100% 100%
Sykes Enterprises, Incorporated
Cash Flow from Operations
(in thousands)
(Unaudited)
Three Months Ended
December December
31, 31,
2009 2008
---------- ---------
Cash Flow From Operating
Activities:
Net income $ (4,689) $ 7,630
Depreciation and amortization 7,406 6,840
Changes in assets and
liabilities and other 25,061 9,957
---------- ---------
Net cash provided by
operating activities $ 27,778 $ 24,427
========== =========
Capital expenditures $ 7,070 $ 8,947
Cash interest paid $ 256 $ 92
Cash taxes paid $ 3,138 $ 9,933
Twelve Months Ended
December December
31, 31,
2009 2008
---------- ---------
Cash Flow From Operating
Activities:
Net income $ 43,211 $ 60,561
Depreciation and amortization 28,323 27,965
Changes in assets and
liabilities and other 16,078 (7,669)
---------- ---------
Net cash provided by
operating activities $ 87,612 $ 80,857
========== =========
Capital expenditures $ 30,277 $ 34,677
Cash interest paid $ 1,008 $ 369
Cash taxes paid $ 14,660 $ 23,635
Sykes Enterprises, Incorporated
Business Outlook Reconciliation*
Business Outlook
First Quarter
2010
---------------------
Adjusted Diluted Earnings Per Share $0.20 - $0.24
Severance & Consulting Engagement
Costs ($0.20) - ($0.22)
Merger and Integration Costs ($0.13) - ($0.15)
Amortization of Intangibles ($0.03) - ($0.05)
---------------------
Earnings (loss) Per Share ($0.16) - ($0.18)
Business Outlook
Full Year
2010
---------------------
Adjusted Diluted Earnings Per Share $1.38 -$1.55
Severance & Consulting Engagement
Costs ($0.19) - ($0.21)
Merger and Integration Costs ($0.16) - ($0.18)
Amortization of Intangibles ($0.20) - ($0.22)
---------------------
Diluted Earnings Per Share $0.83 -- $0.94
CONTACT: Sykes Enterprises, Incorporated
Subhaash Kumar
(813) 233-7143
