TeleTech Earnings and Revenue Swell on Offshore BPO

TeleTech Holdings, Inc., one of the largest global business process outsourcing (BPO) providers with a customer management focus, today announced financial results for the fourth quarter and fiscal year ended December 31, 2006. The Company also filed its Annual Report on Form 10-K with the Securities and Exchange Commission for the fourth quarter and year ended December 31, 2006.

TeleTech reported record fourth quarter 2006 revenue of $336.7 million, the highest quarterly revenue in TeleTech’s history and a 10.7 percent increase over the year-ago quarter. Revenue in TeleTech’s North American and International BPO segments grew 16.0 percent over the year-ago quarter and represented 98 percent of consolidated fourth quarter revenue.

Revenue from services performed for clients in offshore locations grew approximately 40 percent to $400 million in 2006 and represented 33 percent of total revenue. TeleTech currently provides offshore services from seven countries including Argentina, Brazil, Canada, India, Malaysia, Mexico and the Philippines and believes it has the largest and most geographically diverse offshore footprint of any global BPO provider with a customer management focus. TeleTech is currently expanding into two new emerging markets that will exclusively provide offshore services and has plans to continue select expansion into other attractive offshore markets.

Income from operations in the fourth quarter 2006 increased 177 percent to $28.9 million from $10.4 million in the year-ago quarter. Income from operations in the International BPO segment increased $13.1 million to $3.4 million compared to an operating loss of ($9.7) million in the year-ago quarter.

TeleTech exceeded its fourth quarter 2006 operating margin goal of 7 to 8 percent, reporting an 8.6 percent operating margin compared to 3.4 percent in the year-ago quarter. The North American and International BPO segments combined had an operating margin of 10.0 percent. Stock option expense included in income from operations for the current quarter was $1.9 million which lowered operating margin by 56 basis points.

Fully diluted earnings per share in the fourth quarter 2006 was 30 cents, up from 14 cents in the year ago quarter. The current quarter EPS included a $3.3 million (5 cents per share) tax expense reduction related to recording the benefit of certain tax loss carry forwards.

Earnings before interest, taxes, depreciation and amortization (EBITDA) in the fourth quarter 2006 was $43.5 million or 12.9 percent of revenue, an 86.8 percent increase over the year-ago quarter. Please refer to the discussion of Non-GAAP financial measures below.

Capacity utilization in our multi-client delivery centers grew to 80 percent at the end of 2006, up from 72 percent at the end of 2005.

Return on invested capital, defined as earnings before interest and taxes (EBIT) divided by average shareholders’ equity, was 21.4 percent at the end of 2006 up from 10.2 percent at the end of 2005.