TTEC Holdings, Inc. [TTEC] Filings

10-Q 1 ttec-20230630x10q.htm 10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-11919

TTEC Holdings, Inc.

(Exact name of registrant as specified in its charter)


Delaware		84-1291044
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

6312 South Fiddlers Green Circle, Suite 100N

Greenwood Village, Colorado 80111

(Address of principal executive offices)

Registrant’s telephone number, including area code: (303) 397-8100

Securities registered pursuant to Section 12(b) of the Act:


Title of each Class	Trading Symbol	Name of each exchange on which registered
Common stock of TTEC Holdings, Inc., $0.01 par value per share	TTEC	NASDAQ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer ☑	Accelerated Filer ☐	Non-accelerated Filer ☐	Smaller Reporting Company ☐
			Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

As of July 31, 2023, there were 47,417,560 shares of the registrant’s common stock outstanding.

Table of Contents

TTEC HOLDINGS, INC. AND SUBSIDIARIES

JUNE 30, 2023 FORM 10-Q

TABLE OF CONTENTS


		Page No.

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022 (unaudited)	1

	Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2023 and 2022 (unaudited)	2

	Consolidated Statements of Stockholders’ Equity and Mezzanine Equity as of and for the three and six months ended June 30, 2023 and 2022 (unaudited)	3

	Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022 (unaudited)	4

	Notes to the Consolidated Financial Statements (unaudited)	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	37

Item 4.	Controls and Procedures	39

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	40

Item 1A.	Risk Factors	40

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40

Item 5.	Other Information	40

Item 6.	Exhibits	40

SIGNATURES		42

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

TTEC HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(Amounts in thousands, except share amounts)

(Unaudited)


	June 30,		December 31,
	2023		2022
ASSETS
Current assets
Cash and cash equivalents	$	114,776	$	153,435
Accounts receivable, net of allowance of $2,347 and $3,524		402,664		417,637
Prepaids and other current assets		152,472		133,365
Income and other tax receivables		51,225		45,533
Total current assets		721,137		749,970

Long-term assets
Property, plant and equipment, net		189,049		183,360
Operating lease assets		111,764		92,431
Goodwill		808,613		807,845
Deferred tax assets, net		39,733		18,713
Other intangible assets, net		216,168		233,909
Other long-term assets		84,845		67,734
Total long-term assets		1,450,172		1,403,992
Total assets	$	2,171,309	$	2,153,962

LIABILITIES, STOCKHOLDERS’ EQUITY AND MEZZANINE EQUITY
Current liabilities
Accounts payable	$	84,335	$	93,937
Accrued employee compensation and benefits		149,919		145,096
Other accrued expenses		73,360		34,451
Income tax payable		10,952		7,166
Deferred revenue		91,757		87,846
Current operating lease liabilities		35,620		35,271
Other current liabilities		5,295		7,597
Total current liabilities		451,238		411,364

Long-term liabilities
Line of credit		915,000		960,000
Deferred tax liabilities, net		3,451		3,829
Non-current income tax payable		4,967		9,140
Non-current operating lease liabilities		89,388		69,575
Other long-term liabilities		65,726		66,304
Total long-term liabilities		1,078,532		1,108,848
Total liabilities		1,529,770		1,520,212

Commitments and contingencies (Note 10)

Redeemable noncontrolling interest		3,997		55,645

Stockholders’ equity
Preferred stock; $0.01 par value; 10,000,000 shares authorized; zero shares outstanding as of June 30, 2023 and December 31, 2022		—		—
Common stock; $0.01 par value; 150,000,000 shares authorized; 47,276,039 and 47,224,074 shares outstanding as of June 30, 2023 and December 31, 2022, respectively		473		472
Additional paid-in capital		396,444		367,673
Treasury stock at cost; 34,776,214 and 34,828,179 shares as of June 30, 2023 and December 31, 2022, respectively		(592,306)		(593,164)
Accumulated other comprehensive income (loss)		(90,463)		(126,301)
Retained earnings		906,518		911,233
Noncontrolling interest		16,876		18,192
Total stockholders’ equity		637,542		578,105
Total liabilities, stockholders’ equity and mezzanine equity	$	2,171,309	$	2,153,962

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

TTEC HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Loss)

(Amounts in thousands, except per share amounts)

(Unaudited)


	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Revenue	$	600,394	$	604,250	$	1,233,680	$	1,192,976

Operating expenses
Cost of services (exclusive of depreciation and amortization presented separately below)		464,686		463,510		947,364		910,725
Selling, general and administrative		75,338		66,766		149,348		131,605
Depreciation and amortization		24,946		26,314		50,773		52,944
Restructuring charges, net		1,474		2,528		3,527		3,148
Impairment losses		2,652		9,248		6,959		10,360
Total operating expenses		569,096		568,366		1,157,971		1,108,782

Income from operations		31,298		35,884		75,709		84,194

Other income (expense)
Interest income		1,126		271		2,290		471
Interest expense		(18,991)		(6,194)		(36,382)		(9,960)
Other income (expense), net		(3,574)		6,111		(2,919)		7,371
Total other income (expense)		(21,439)		188		(37,011)		(2,118)

Income before income taxes		9,859		36,072		38,698		82,076

Provision for income taxes		(6,102)		(7,274)		(14,024)		(15,308)

Net income		3,757		28,798		24,674		66,768

Net income attributable to noncontrolling interest		(2,546)		(3,564)		(4,816)		(8,130)

Net income attributable to TTEC stockholders	$	1,211	$	25,234	$	19,858	$	58,638

Other comprehensive income (loss)
Net income	$	3,757	$	28,798	$	24,674	$	66,768
Foreign currency translation adjustments		19,367		(23,370)		28,765		(23,074)
Derivative valuation, gross		712		(8,515)		9,573		(7,666)
Derivative valuation, tax effect		(187)		2,208		(2,497)		1,988
Other, net of tax		108		313		180		354
Total other comprehensive income (loss)		20,000		(29,364)		36,021		(28,398)
Total comprehensive income (loss)		23,757		(566)		60,695		38,370

Less: Comprehensive income attributable to noncontrolling interest		(2,560)		(2,134)		(4,385)		(5,749)

Comprehensive income (loss) attributable to TTEC stockholders	$	21,197	$	(2,700)	$	56,310	$	32,621

Weighted average shares outstanding
Basic		47,264		47,047		47,249		47,026
Diluted		47,453		47,383		47,417		47,381

Net income per share attributable to TTEC stockholders
Basic	$	0.03	$	0.54	$	0.42	$	1.25
Diluted	$	0.03	$	0.53	$	0.42	$	1.24

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

TTEC HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Statements of Stockholders’ Equity and Mezzanine Equity

(Amounts in thousands)

(Unaudited)

Three months ended June 30, 2022 and 2023


	Stockholders’ Equity of the Company
								Accumulated
								Other
	Common Stock			Treasury		Additional		Comprehensive		Retained		Noncontrolling				Mezzanine
	Shares	Amount		Stock		Paid-in Capital		Income (Loss)		Earnings		interest		Total Equity		Equity
Balance as of March 31, 2022	47,036	$	470	$	(596,279)	$	362,601	$	(97,464)	$	865,951	$	16,547	$	551,826	$	56,666
Net income	—		—		—		—		—		25,234		3,512		28,746		51
Dividends to shareholders ($0.00 per common share)	—		—		—		—		—		—		—		—		—
Dividends distributed to noncontrolling interest	—		—		—		—		—		—		(2,768)		(2,768)		(965)
Foreign currency translation adjustments	—		—		—		—		(21,992)		—		(1,378)		(23,370)		—
Derivatives valuation, net of tax	—		—		—		—		(6,307)		—		—		(6,307)		—
Vesting of restricted stock units	57		1		948		(2,493)		—		—		—		(1,544)		—
Equity-based compensation expense	—		—		—		4,143		—		—		—		4,143		—
Other, net of tax	—		—		—		—		313		—		—		313		—
Balance as of June 30, 2022	47,093	$	471	$	(595,331)	$	364,251	$	(125,450)	$	891,185	$	15,913	$	551,039	$	55,752


	Stockholders’ Equity of the Company
								Accumulated
								Other
	Common Stock			Treasury		Additional		Comprehensive		Retained		Noncontrolling				Mezzanine
	Shares	Amount		Stock		Paid-in Capital		Income (Loss)		Earnings		interest		Total Equity		Equity
Balance as of March 31, 2023	47,252	$	473	$	(592,685)	$	391,294	$	(110,389)	$	905,309	$	16,836	$	610,838	$	3,936
Net income	—		—		—		—		—		1,209		2,486		3,695		61
Dividends to shareholders ($0.00 per common share)	—		—		—		—		—		—		—		—		—
Dividends distributed to noncontrolling interest	—		—		—		—		—		—		(2,520)		(2,520)		—
Foreign currency translation adjustments	—		—		—		—		19,293		—		74		19,367		—
Derivatives valuation, net of tax	—		—		—		—		525		—		—		525		—
Vesting of restricted stock units	24		—		379		(498)		—		—		—		(119)		—
Equity-based compensation expense	—		—		—		5,648		—		—		—		5,648		—
Other, net of tax	—		—		—		—		108		—		—		108		—
Balance as of June 30, 2023	47,276	$	473	$	(592,306)	$	396,444	$	(90,463)	$	906,518	$	16,876	$	637,542	$	3,997

Six months ended June 30, 2022 and 2023


	Stockholders’ Equity of the Company
								Accumulated
								Other
	Common Stock			Treasury		Additional		Comprehensive		Retained		Noncontrolling				Mezzanine
	Shares	Amount		Stock		Paid-in Capital		Income (Loss)		Earnings		interest		Total Equity		Equity
Balance as of December 31, 2021	46,990	$	470	$	(597,031)	$	361,135	$	(98,426)	$	856,065	$	15,812	$	538,025	$	56,316
Net income	—		—		—		—		—		58,638		7,123		65,761		1,006
Dividends to shareholders ($0.50 per common share)	—		—		—		—		—		(23,518)		—		(23,518)		—
Dividends distributed to noncontrolling interest	—		—		—		—		—		—		(5,648)		(5,648)		(1,570)
Foreign currency translation adjustments	—		—		—		—		(21,700)		—		(1,374)		(23,074)		—
Derivatives valuation, net of tax	—		—		—		—		(5,678)		—		—		(5,678)		—
Vesting of restricted stock units	103		1		1,700		(4,766)		—		—		—		(3,065)		—
Equity-based compensation expense	—		—		—		7,882		—		—		—		7,882		—
Other, net of tax	—		—		—		—		354		—		—		354		—
Balance as of June 30, 2022	47,093	$	471	$	(595,331)	$	364,251	$	(125,450)

TTEC Holdings, Inc. [TTEC] Filings
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10-Q	[2023-05-05]
10-K	[2023-02-28]
10-Q	[2022-11-09]
10-Q	[2022-08-09]
10-Q	[2022-05-05]
10-K	[2022-03-03]
10-Q	[2021-11-09]
10-Q	[2021-08-03]
10-Q	[2021-05-04]
10-K	[2021-03-01]
10-Q	[2020-11-04]
10-Q	[2020-08-05]
10-Q	[2020-05-04]
10-K	[2020-03-04]
10-Q	[2019-11-05]
10-Q	[2019-08-07]
10-Q	[2019-05-07]
10-K	[2019-03-06]
10-Q	[2018-11-07]
10-Q	[2018-08-07]
10-Q	[2018-05-10]
10-K	[2018-03-13]
10-Q	[2017-11-08]
10-Q	[2017-08-07]
10-Q	[2017-05-09]
10-K	[2017-03-16]
10-Q	[2016-11-14]
10-Q	[2016-08-03]
10-Q	[2016-05-09]
10-K	[2016-03-14]
10-Q	[2015-11-09]
10-Q	[2015-08-05]
10-Q	[2015-05-11]
10-K	[2015-03-09]
10-Q	[2014-11-05]
10-Q	[2014-08-11]
10-Q	[2014-05-05]
10-K	[2014-02-28]
10-Q	[2013-10-30]
10-Q	[2013-07-30]
10-Q	[2013-05-01]
10-K	[2013-02-26]
10-Q	[2012-11-07]
10-Q	[2012-08-01]
10-Q	[2012-05-01]
10-K	[2012-02-28]