TTEC Holdings, Inc. (TTEC) Earnings Call Transcript & Summary

Good morning, and welcome to TTEC Holdings, Inc.'s 2021 Annual Stockholders' Meeting. I will turn the meeting over to Ken Tuchman.

Good morning. I'm Ken Tuchman, Chairman and Chief Executive Officer of TTEC Holdings, Inc. I am pleased to welcome you to our 2021 Annual Stakeholder Meeting. Margaret McLean, TTEC's General Counsel, will act as Secretary of the meeting today. Margaret?

Good morning, everybody. This meeting is being held virtually as is customary these days. [Operator Instructions] At the end of the presentation, we will open the meeting for Q&A. [Operator Instructions] And the host will present your questions at the appropriate time. As we begin, I would like to note that any statements made at this meeting today may refer to future prospects of the company, and they are known as forward-looking statements within the meaning of the Private Securities Litigation Act of 1995. These statements represents management's reasonable expectations about the performance of the business, but there can be no assurance that the actual results of operation or financial condition of the company will conform to any forward-looking statements that we share with you today. We'll refer you to our 2020 annual report on Form 10-K and the most current filings on quarterly Form 10-Q, which provide additional information as appropriate. Ken, may I turn it over to you?

Sure. 2020 was a breakthrough year for TTEC. We set aggressive operational and financial objectives and dramatically exceeded them all. Like every business around the world, we faced a "once in a century" challenge as the world lost mobility, consumers shifted to virtual interactions and workers shifted to virtual productivity. Across the globe, people quickly accepted virtual as their new reality and embraced a new way of life, most of which is here to stay. In the midst of this massive digital migration, our clients depended on us for the technology and digitally enabled services they needed to meet rising customer demands. We digested what felt like 10 years of digital transformation in 10 months. Our systems and operations were tested and succeeded. Our teams worked around the clock and went above and beyond. We responded from a solid foundation, weathered the 100-year storm and emerged stronger than ever. In 2020, our revenue was a record $1.95 billion, an increase of 18.6% over the year ago period. Our income from operations was $204.7 million or 10.5% of revenue, a 65.5% increase year-over-year. Income from operations on a non-GAAP basis was $242.4 million or 12.4% of revenue compared to 9.3% in the prior year. Our net cash provided by operating activities was $271.9 million compared to $238 million in the prior year. We booked $659 million in new business, a 35% increase over the prior year. Our earnings per share on a fully diluted basis were $2.52 compared to $1.65 in the prior year, and $3.82 compared to $2.25 in the prior year on a non-GAAP basis. We paid a total of $34.5 million in semi-annual cash dividends and a onetime special dividend of $100 million to our shareholders. In 2020, we were tested and we thrived. For our clients, in their time of need, we became an engine of the virtual economy. We broke records for bookings, revenue and profits. Today, we are better positioned than ever to continue capitalizing on our strong position and market demand. We could not have done it without our incredible employees. We've invested heavily in creating an environment where our people feel engaged, empowered and inspired by their work. Our philosophy is simple. Happy employees make happy customers, and a happy customer translates into increased shareholder value. Earlier in the year, we were thrilled and honored to learn that Forbes Magazine named TTEC to its America's Best Large Employers 2021 list. Meeting the needs of present without compromising the future continues to be a core value at TTEC. We believe that proactively managing environmental, social and governance issues as part of our business strategy is critical to our sustainable growth. Our ESG program is built on 4 pillars, including sustainable operations, diversity and inclusion, philanthropy and responsible data management. These programs are well resourced, active and vital to our future. We live and breathe these values every day, and as a result, it was a privilege to be named one of the best companies for diversity in 2020 by Comparably. Today, we have all the necessary ingredients to continue to accelerate our growth and margin potential beyond 2021. On behalf of our executive team, Board of Directors and our global employee base, thank you for your continued support. Margaret will go through the business items for this meeting, and we'll open the floor to questions thereafter. I'd now like to turn the meeting over to Margaret McLean.

Thank you, Ken. The first order of business is to determine whether we have a quorum. Paul Miller, TTEC's Treasurer, will serve as the registrar of the 2021 Annual Shareholder Meeting and has executed an oath to carry out his duties impartially to the best of his ability. All stockholders who are holding a proxy that has not yet been filed, please let us know now by using the chat feature to make sure that your shares have been counted for the quorum. With respect to the quorum, the Board of Directors set the close of business on April 5, 2021, as the record date for the stockholders' meeting. [Voting]

Notice of the meeting, the proxy statements and the proxy card were shared with all shareholders of record timely. The company's transfer agent, Broadridge, prepared the list of stockholders entitled to vote at the meeting. And this list have been maintained at the principal executive offices of the company and have been available since April 5, 2021, for examination. Paul will tabulate the votes. Various affidavits dealing with mailed-in proxy materials, the maintenance of stockholder list and the oath and certificate of the registrar will be filed with the minutes of the meeting. Do we have any chat inquiries from stockholders at this time? It sounds like we do not. Paul, please share with us the number of shares represented and entitled to vote at this meeting.

Thank you, Margaret. The holders of common stock have 1 vote per share on all matters submitted to a vote of stockholders. According to the list of stockholders from Broadridge, there were 46,819,468 shares of common stock issued, outstanding and entitled to vote at the meeting. Of the shares of common stock entitled to vote at this meeting, there are present in person or represented by proxy at least 45,785,141 shares or 97.79% of the shares entitled to vote. The voting results reported are tabulated votes as of the end of business as of May 25, 2021. The voting results will be further adjusted, if necessary, for votes received during the meeting.

Thank you, Paul. Based on what Paul just shared with us, the quorum is present, and we may proceed with the business of the meeting. We have 2 ballot items for consideration today. The first order of business is the election of directors to hold office until 2022 Annual Stockholder Meeting or until their successors have been duly elected and qualified. The Board of Directors has nominated 8 persons to serve until 2022 Annual Stockholder Meeting. They include Kenneth Tuchman, Steven Anenen, Tracy Bahl, Gregory Conley, Robert Frerichs, Marc Holtzman, Gina Loften, Ekta Singh-Bushell. Information regarding the qualifications and experience of each director is contained in the proxy statement. Ken, may I have you move for the election of these individuals?

I move to elect these individuals to TTEC's Board of Directors.

Does anybody second this nomination?

I will second that motion.

Thank you. The second order of business today is to ratify the appointment of PricewaterhouseCoopers as the company's independent registered public accounting firm for the fiscal year 2021. This is -- PricewaterhouseCoopers is an incumbent and the current auditor of the company. The Board of Director recommends that stockholders vote to approve this proposal.

I move to approve PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for the fiscal year 2021.

Can I have a second, please?

I'll second that motion.

Very good. While the registrar is tabulating the results of the voting, we will open the floor for questions for PricewaterhouseCoopers, if any. [Operator Instructions] Meantime, [ for Robert Ward ], would you mind introducing yourself? [ Host ], do we have PricewaterhouseCoopers on the line?

This is [ Robert Ward ] from PricewaterhouseCoopers. Happy to take questions, if any.

Thank you, [ Robert ]. Host, do we have any questions via chat? It doesn't sound like we have any questions. The polls for the voting have now closed. I've received the report of the registrar. And I'm pleased to announce that all directors who stood for election at this Annual Stockholder Meeting have been elected to serve until 2022 Annual Stockholder Meeting. [ Our ] directors have been elected with at least 88% of voted shares. Congratulations, directors. And we also would like to welcome Gina Loften, our new director, to the Board. The ballot 2 items, the resolution to ratify the engagement of PricewaterhouseCoopers as the company's independent registered public accounting firm, has also been approved. PricewaterhouseCoopers got 99% of voted shares. The report of the registrar will be annexed to the minutes of the meeting, and the ballot cast will be filed with the records of the meeting as well. Ken?

If there is no further business, I move for the meeting to be adjourned.

The meeting is now adjourned. Thank you, everybody.