ICT GROUP, INC. (NASDAQ:ICTG) today reported results for the
second quarter ended June 30, 2009.
Second Quarter 2009 Financial Performance
Total revenue for the 2009 second quarter was $98.4 million,
compared to $109.6 million reported for last year’s second quarter.
Core business revenue, comprised primarily of North American
customer care, BPO, technology and international operations,
increased almost 1% to $94.4 million during the period, and
accounted for 96% of total revenue. For the 2008 second quarter,
core business revenue was $93.7 million and represented 86% of
total revenue. On a constant currency basis, (using the same
foreign exchange rates in both periods), core business revenue was
up 7% year-over-year. Core business production volume was 4.7
million hours, up 13% year-over-year and 1.4% sequentially.
Gross margin was 40.3%, in line with the Company’s stated goal
for 2009 and well ahead of last year’s 37.8%. The Company reported
a net loss of $603,000 or $0.04 per share for the 2009 second
quarter as compared to a net loss of $355,000 or $0.02 per share
incurred in the comparable year-ago period. Adjusted net income,
which excludes a restructuring charge of $1.3 million in this
year’s second quarter related to facility closings, was $953,000 or
$0.06 per share.
“The significant improvement in our operating profitability this
quarter reflects our success in continuing to effectively manage
expenses as well as to benefit from our strategic realignment,”
commented John J. Brennan, Chairman and Chief Executive Officer of
ICT GROUP. “Our facilities and related costs declined in the
quarter due to previously implemented cost reduction initiatives
which resulted in lower SG&A expenses both on a year-over-year
comparison as well as sequentially. With a 2% sequential increase
in revenue, our effective cost management allowed us to
significantly improve our pre-tax operating income before
restructuring charges, demonstrating the operating profit potential
of our business as revenue continues to increase.”
Free cash flow for the second quarter was $6.3 million. At June
30, 2009, cash and cash equivalents were $42.3 million, up from
$37.6 million at the end of the first quarter. The Company had no
outstanding debt at June 30, 2009.
Second Quarter 2009 Operating Performance
The table below shows core business revenue and total revenue
for the key vertical markets served by ICT GROUP:
Core
Revenue(millions) Total Revenue(millions)
2Q2009 2Q2008 2Q2009
2Q2008 Financial Services $40.0 $40.2
$44.0 $54.7 Telco/Tech 36.1 33.1 36.1
33.6 Health Care 10.9 12.2 10.9
12.3 Other 7.4 8.2 7.4 9.0
Total
$94.4 $93.7 $98.4
$109.6
Core financial services sector revenue totaled $40.0 million for
the 2009 second quarter, relatively flat with the 2008 second
quarter, but up 4% year-over-year when measured on a constant
currency basis. Core production hours increased 14% driven largely
by customer care, lock box, collections and technical services such
as IVR to new and existing financial services clients. Core
business represented 91% of total financial services revenue
compared to 73% last year.
Core telco/technology sector revenue continues to grow rapidly,
reaching $36.1 million in the period, representing a 9% increase
over the 2008 second quarter and a 23% increase when measured on a
constant currency basis. Core production hours increased 25%,
reflecting additional on-shore and offshore work for clients in the
U.S., Canada, Australia, Argentina and the U.K. as global demand
within this vertical remained robust.
Core health care revenue in the second quarter was $10.9 million
representing a decline from both the second quarter of 2008 and the
first quarter of 2009. Core production hours declined 18% from last
year’s second quarter reflecting the net effect of a fall off in
health insurance and prescription assistance work, partially offset
by growth in patient assistance programs for pharmaceutical clients
and patient access management services for a hospital.
“We had a strong quarter in terms of new business wins and have
seen a modest improvement in the sales cycle,” continued Mr.
Brennan. “Annualized new business totaled almost $30 million in the
quarter with the majority of work coming from new and existing
financial services and telco/technology clients. The pipeline
remains strong, and we have some excellent opportunities to expand
programs with several key clients in the second half of the year.
Capacity utilization was 79% in this year’s second quarter,
remaining flat at 79% in the first quarter of 2009, but up from 73%
in last year’s second quarter.”
Summary and Outlook
“Our business, while subject to macroeconomic conditions,
appears to have stabilized as core business volume and revenue
continues to grow, and we are benefiting from our greatly reduced
exposure to non-core services as well as the more severely impacted
market in the U.K. Clients are expanding existing programs and
adding new services for both on-shore and offshore delivery. As a
result, we are increasingly optimistic about the second half of the
year in terms of revenue growth, profitability improvement and cash
flow projections as we continue to add new business and keep
SG&A and capital expenditures under control,” added Mr.
Brennan.
In the second quarter, ICT GROUP benefited from its strategic
realignment as well as the cost reduction efforts taken in prior
quarters and began to see significantly improved profitability, on
an adjusted basis. The Company believes that this will continue
into the third quarter and expects incremental growth in the range
of 6% to 8% for core business revenue measured in constant currency
as compared to the third quarter of 2008 driven by an expected
increase of 10% to 12% in core production volume. As a result, ICT
GROUP anticipates continued sequential improvement in financial
performance for the upcoming quarter. For the third quarter, the
Company now expects total revenue to be in the range of $98 to $102
million and pre-tax earnings to be modestly above second quarter
adjusted results.
The Company reiterates its guidance of positive year-over-year
growth in core business revenue throughout 2009 and expects to
continue to achieve operating leverage through increased
productivity, greater workstation utilization and lower SG&A
expenses as a percentage of revenue. The Company does not
anticipate taking any additional restructuring charges in the
second half of 2009.
“We are encouraged by the improved outlook for our business and
believe we are on target to reach mid-single digit operating
margins within the next 12 to 18 months based on continued growth
in our core business, consistent program execution, maintenance of
strong expense controls and slowly improving macro economic
conditions,” concluded Mr. Brennan.
Conference Call:
The Company will hold a conference call today, Thursday, July
30, 2009, at 11:00 a.m. EDT. Investors may access the call by
visiting the ICT GROUP website at www.ictgroup.com. If you are unable to
participate during the live webcast, a replay of the call will be
available on the website through August 6, 2009.
About ICT GROUP:
ICT GROUP, headquartered in Newtown, Pa., is a leading global
provider of customer management and business process outsourcing
solutions. The Company provides a comprehensive mix of customer
care/retention, up-selling/cross-selling, technical support and
database marketing as well as e-mail management, data entry,
collections, claims processing and document management services,
using its global network of onshore, near-shore and offshore
operations. ICT GROUP also provides interactive voice response
(IVR) and advanced speech recognition solutions as well as hosted
Customer Relationship Management (CRM) technologies, available for
use by clients at their own in-house facility or on a co-sourced
basis in conjunction with the Company’s fully integrated contact
center operations. To learn more about ICT GROUP, visit the
Company’s website at www.ictgroup.com.
Important Cautionary
Information Regarding Forward-Looking Statements:
This press release contains certain forward-looking statements
relating to matters such as projected revenue, operating
profitability, production volume and productivity. The
forward-looking statements involve assumptions and are subject to
substantial risks and uncertainties. Whenever possible,
forward-looking statements are preceded by, followed by or include
the words "believes," "expects," "anticipates" or similar
expressions, which speak only as of the date the statement is made.
ICT GROUP assumes no obligation to update any such forward-looking
statements. For such statements, ICT GROUP claims the protection of
the safe harbor for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995.
Actual events or results of operations, cash flows and financial
condition of ICT GROUP may differ materially from those discussed
in the forward-looking statements as a result of various factors,
including without limitation, those discussed in ICT GROUP’s annual
report on Form 10-K for the year ended December 31, 2008, and other
documents, such as current reports on Form 8-K and quarterly
reports on Form 10-Q filed by ICT GROUP with the Securities and
Exchange Commission. Although ICT GROUP believes that the
expectations reflected in such forward-looking statements are
reasonable, there can be no assurance that such expectations will
prove to be correct and we undertake no obligation to update such
expectations.
Important factors that could cause actual results to differ
materially from ICT GROUP’s expectations, or that could materially
and adversely affect ICT GROUP’s financial condition, may include,
but are not limited to, the following, many of which are outside
ICT GROUP’s control: global economic conditions, customer demand
for a client's product or service, the client's budgets and plans
and political, economic and other conditions affecting the client's
industry, interest and foreign currency exchange rates (including
the effectiveness of strategies to manage fluctuations in these
rates), a client invoking cancellation or similar provisions of the
client contract, demand for labor and the resulting impact on labor
rates paid by ICT GROUP, unanticipated labor difficulties,
unanticipated contract or technical difficulties, identifying and
opening planned contact centers within timeframes necessary to meet
client demands, reliance on strategic partners, industry and
government regulation affecting ICT GROUP or its clients, reliance
on telecommunications and computer technology, competitive
pressures in ICT GROUP’s industry, the cost to prosecute, defend or
settle litigation by or against ICT GROUP, judgments, orders,
rulings and other developments in or affecting litigation by or
against ICT GROUP, ICT GROUP’s capital and financing needs, changes
in tax laws and regulation, ICT GROUP’s ability to integrate
acquired businesses, terrorist attacks and the impact of war. These
factors, as well as others, such as conditions in the securities
markets and actual or perceived results or developments affecting
companies in our industry, could affect the trading price of our
common stock.
ICT Group, Inc. and Subsidiaries Condensed
Consolidated Statements of Operations (Unaudited) (In
thousands, except per share data)
Three Months Ended
June 30,
Six Months Ended
June 30,
2009 2008 2009
2008 REVENUE $ 98,350 $ 109,569 $
194,408 $ 218,269 OPERATING EXPENSES: Cost of
services 58,714 68,113 115,563 137,765 Selling, general and
administrative 38,627 42,210 77,795 83,038 Restructuring charges
1,319 - 1,234 -
98,660 110,323 194,592
220,803 Operating loss (310 ) (754 ) (184 )
(2,534 ) Interest income (expense), net (18 )
67 (43 ) 189 Loss before income taxes
(328 ) (687 ) (227 ) (2,345 ) Income tax provision (benefit)
275 (332 ) 380 (977 ) Net loss $
(603 ) $ (355 ) $ (607 ) $ (1,368 ) Diluted loss per share $
(0.04 ) $ (0.02 ) $ (0.04 ) $ (0.09 ) Shares used in
computing diluted loss per share 16,051 15,887
16,010 15,865
Reconciliation of Loss Before Income Taxes to Adjusted
Net Income (Loss) to Eliminate the Effect of Charges Related
to Restructuring and a Government Grant (Unaudited) (In
thousands, except per share data) Three Months Ended
June 30,
Six Months Ended
June 30,
2009 2008 2009
2008 Adjusted Results of Operations: Loss before
income taxes $ (328 ) $ (687 ) $ (227 ) $ (2,345 ) Restructuring
charges 1,319 - 1,234 - Government grant adjustment -
(248 ) - (554 ) Adjusted income (loss)
before income taxes 991 (935 ) 1,007 (2,899 ) Adjusted income tax
provision (benefit) 38 (414 ) 143
(1,161 ) Adjusted net income (loss) $ 953 $
(521 ) $ 864 $ (1,738 ) Adjusted earnings (loss) per
share $ 0.06 $ (0.03 ) $ 0.05 $ (0.11 ) Shares
used in computing adjusted earnings (loss) per share 16,194
15,887 16,023 15,865
Reconciliation of Free Cash Flow
(Unaudited) (In thousands) Three Months Ended
June 30,
Six Months Ended
June 30,
2009 2008 2009
2008 Cash Flow from Operating Activities: Net Loss $
(603 ) $ (355 ) $ (607 ) $ (1,368 ) Depreciation and Amortization
5,765 6,725 11,700 13,430 Other Non-cash Charges 1,095 572 1,859
1,197 Changes in Assets and Liabilities 2,569
(15,958 ) 3,185 (16,242 ) Net Cash Provided By
(Used In) Operating Activities 8,826 (9,016 ) 16,137 (2,983 ) Less
Purchases of Property and Equipment (2,507 ) (5,718 )
(5,072 ) (12,116 ) Free Cash Flow $ 6,319 $
(14,734 ) $ 11,065 $ (15,099 )
ICT Group, Inc. and
Subsidiaries Condensed Consolidated Balance Sheets
(Unaudited) (In thousands) June 30,
2009
December 31,
2008
ASSETS CURRENT ASSETS Cash and cash equivalents $
42,310 $ 31,283 Accounts receivable, net 66,904 65,156 Other
current assets 12,372 12,448 Total current assets
121,586 108,887 PROPERTY AND EQUIPMENT, net 51,061 57,841
OTHER ASSETS 11,019 10,833 $ 183,666 $ 177,561
LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT
LIABILITIES Accounts payable and other current liabilities $ 52,389
$ 47,505 OTHER LIABILITIES 9,655 10,555 TOTAL
SHAREHOLDERS' EQUITY 121,622 119,501 $ 183,666 $
177,561 WORKSTATIONS AT PERIOD END 12,400 12,509
ICT Group, Inc. Core / Non-Core Revenue
(Unaudited)
Actuals as Reported On a Constant Currency
Basis $ in millions
TotalRevenue
CoreRevenue
Non-coreRevenue
TotalRevenue
CoreRevenue
Non-coreRevenue
2Q09
2Q09
2Q09
2Q09
2Q09
2Q09
Financial $ 44.0 $ 40.0 $ 4.0 $ 44.0 $ 40.0 $ 4.0 Telco/Tech
36.1 36.1 - 36.1 36.1 - Healthcare 10.9 10.9 - 10.9 10.9 - Other
7.4 7.4 -
7.4 7.4 -
Total $ 98.4 $ 94.4 $ 4.0
$ 98.4 $ 94.4 $ 4.0
$ in millions
2Q08
2Q08
2Q08
2Q08
2Q08
2Q08
Financial $ 54.7 $ 40.2 $ 14.5 $ 52.4 $ 38.5 $ 13.9
Telco/Tech 33.6 33.1 0.5 29.8 29.3 0.5 Healthcare 12.3 12.2 0.1
12.3 12.2 0.1 Other 9.0 8.2
0.8 8.8 8.0
0.8 Total $ 109.6 $ 93.7
$ 15.9 $ 103.3 $ 88.0
$ 15.3
% Variances
Financial -20 % 0 % -72 % -16 % 4 % -71 % Telco/Tech 7 % 9 %
-100 % 21 % 23 % -100 % Healthcare -11 % -11 % NA -11 % -11 % NA
Other -18 % -10 % NA -16 % -8 % NA Total -10 %
1 % -75 % -5 % 7 %
-74 %
Grafico Azioni Ict Grp., Inc. (MM) (NASDAQ:ICTG)
Storico
Da Mag 2024 a Giu 2024
Grafico Azioni Ict Grp., Inc. (MM) (NASDAQ:ICTG)
Storico
Da Giu 2023 a Giu 2024
