TeleTech Holdings, Inc., a global provider of customer management and transaction-based business process outsourcing (BPO) solutions, today provided a business update.


TeleTech continues to execute on its principal goals of enhancing future profitability by continuing to, among other tactics:

  • deliver clients the highest Total Value,
  • win new large global client agreements,
  • renew and expand existing client relationships,
  • improve Newgen’s financial performance, and
  • expand capacity to meet client demand and rationalize unprofitable capacity.


This business update reports upon recent progress on certain aspects of these plans, among other information.


Deliver Clients the Highest Total Value
TeleTech’s strategy is to win new clients and expand existing client relationships by delivering the highest Total Value. This strategy has been executed by continual investment in technology, patented processes, and human capital.


Win New Large Global Client Agreements
Since early November, TeleTech won “New Client Logo” agreements estimated at $10 million annually, primarily in the financial services and utility industries.


2005 Fourth Quarter Revenue
TeleTech currently estimates fourth quarter 2005 revenue will be an all-time historic high of approximately $300 million. As previously announced, TeleTech Government Solutions began work in mid-September 2005 on behalf of a large branch of the U.S. government to assist in the Gulf Coast hurricane relief efforts. This work continued through late November 2005, representing approximately 10 percent of TeleTech’s fourth quarter 2005 revenue.


Renew and Expand Existing Client Relationships
TeleTech’s performance with existing clients has enabled it to renew and expand contracts with its global “Embedded Client Base”, resulting in an estimated $90 million in annual revenue signed since early November, net of attrition. Approximately 70 percent of this is from expanded client relationships. TeleTech believes that its performance levels for clients will enable it to further grow its Embedded Client Base.


Improve Newgen’s Financial Performance
As disclosed in TeleTech’s third quarter 2005 Form 10-Q, the Company indicated that Newgen was working with its largest client to jointly develop a new agreement for 2006. In December of 2005, a new agreement was executed and Newgen will begin its second decade of being a preferred, but not an exclusive, provider to this client and its automotive dealerships. Under this agreement, Newgen now has the flexibility to customize service offerings and to contract directly with the client’s dealerships.


TeleTech has retained a new President for Newgen and will publicly announce his appointment shortly. The new President is a seasoned executive with extensive experience as a general manager with full profit and loss responsibility for significant divisions of multibillion dollar corporations.


Expand Capacity to Meet Client Demand and Rationalize Unprofitable Capacity
As a result of new and expanded client relationships, TeleTech has plans to expand its capacity in select International markets with the addition of an estimated 4,500 workstations in Argentina, Canada, and the Philippines. This figure includes 1,500 workstations in the Philippines that were previously announced in TeleTech’s third quarter 2005 earnings release.


On TeleTech’s third quarter 2005 conference call, the Company stated its intent to reach a decision on its South Korean operation by year-end. Based on TeleTech’s assessment that there is a limited future market opportunity, TeleTech has decided to exit its South Korean facility during the first quarter 2006. This facility generated an operating loss, before corporate allocations, of approximately $3.4 million during the past 12 months.


As a result of exiting this center, TeleTech will record a pre-tax asset impairment charge currently estimated at approximately $2 million in the fourth quarter of 2005. This action is expected to result in an annualized pre-tax profit improvement estimated between $2.5 million and $3.0 million beginning the first quarter of 2006.


Next Article: UK Firm Buys U.S. Payment Processing Company ...

Advertisement