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ICT GROUP Updates Financial Guidance and Announces Fourth Quarter ChargesNEWTOWN, Pa.--(BUSINESS WIRE)--Dec. 16, 2002--ICT GROUP, INC. (NASDAQ: ICTG - News): Strategic Outlook: Accelerating Development of Cost-Effective, Near-Shore and Offshore Facilities Scaling Back Less Efficient U.S. and European Operations Continuing Diversification to Faster Growing Customer and Marketing Services Maintaining 2003 Revenue Growth Outlook of at Least 15% ICT GROUP, INC. (NASDAQ: ICTG - News), today announced that revenues for the fourth quarter of 2002 are expected to meet the Company's previously stated guidance of $76 million to $78 million, however it currently expects earnings from operations to be in the range of $0.13 to $0.16 per diluted share before restructuring and other charges described below. The revised fourth quarter earnings outlook is attributable to both the overall softness in the economy as well as current capacity utilization at the Company's operations. "Our diversified revenue base has resulted in strong operating performance throughout the year and has distinguished ICT GROUP within the CRM services industry," commented John J. Brennan, Chairman and CEO. "While we experienced record call volumes and revenues in October, we saw a slowdown starting in the latter part of November which we now believe is due to the softer economic environment. As a result of the strong start to the fourth quarter, we increased capacity in anticipation of revenues beyond our previous expectations which did not materialize and, consequently, the costs associated with the increased capacity impacted profitability for the quarter." Mr. Brennan continued, "As previously discussed, ICT GROUP has been moving operations offshore in order to reduce labor costs and expand operating margins. As a result of the overall shift in our industry to greater dependence on near-shore and offshore operations, combined with the capacity utilization issues we have experienced in the fourth quarter, we believe it is now prudent to accelerate the development of ICT Group's operations outside the United States. Accordingly, we will be scaling back a number of our centers in the U.S. and Europe to better position the Company for future growth and enhanced profitability." The Company announced that it will be taking a restructuring charge in the fourth quarter of approximately $10 to $12 million pre-tax related to the closing and scaling back of facilities and staff in the U.S. and Europe. Additionally, the Company will incur special charges of approximately $2 million pre-tax related to litigation defense costs sustained in the fourth quarter and the write-off of deferred costs associated with the follow-on underwritten public offering which has been postponed. The Company currently expects the loss from operations after the restructuring and other charges to be in the range of $0.46 to $0.59 per diluted share. Mr. Brennan concluded, "Initially, we viewed the offshore solution over a longer-term horizon. However, based on our experience in the fourth quarter and emerging trends in the CRM services industry, we feel compelled to accelerate our program of opening more efficient facilities offshore and closing our higher cost operations. As part of this strategy, we have finalized plans to open our first call center facility in the Philippines during the first quarter of 2003. Overall, ICT GROUP's business strategy has remained constant. We have a well-diversified customer base, inbound revenues have continued to grow, and we have offered clients higher margin, innovative services like our Direct Response Medical Detailing (DrMD(SM)). Based on current market trends, we still anticipate growing revenues in 2003 by 15% or more. While near-term growth has been tempered by the general overall economic slowdown, we are confident that our strategy will enable us to offer a more competitive total solution to customers' CRM needs in order to drive new outsourcing revenues and future profitable growth." Conference Call The Company will hold a conference call today, December 16, 2002 at 10 a.m. Eastern Time. 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 December 23, 2002. ICT GROUP, headquartered in Newtown, Pa., is a leading global provider of integrated customer relationship management (CRM) solutions. The Company helps clients identify, acquire, retain, service, measure and maximize the lifetime value of their customer relationships. The Company manages CRM service operations in the U.S., Europe, Canada, Australia, Mexico and the Caribbean from which it supports domestic and multinational corporations and institutions, primarily in the financial, insurance, telecommunications, healthcare, information technology, media and energy services industries. ICT GROUP also offers a full suite of hosted CRM solutions, for use by clients at their own in-house facility or on a co-sourced basis in conjunction with ICT GROUP's fully compatible Web-enabled customer service 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, such as expected revenues, earnings and charges, plans to expand into new international markets and to increase capacity, ability to maintain growth momentum, expected demand for services, ability to migrate operations to lower cost centers and ability to transition business to faster growing operations. 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, 2001, the Form 10-Q for the quarter ended September 30, 2002 and other documents, such as reports on Form 8-K and other 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. 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: demand for ICT GROUP's services, the cost to defend or settle litigation against ICT GROUP, judgments, orders, rulings and other developments in litigation against ICT GROUP, unanticipated labor difficulties, ICT GROUP's capital and financing needs (including the incurrence of significant expenses of a planned offering of common stock if the offering is abandoned), ICT GROUP's ability to integrate acquired businesses, customer demand for a client's product, the client's budgets and plans, interest rates and other conditions affecting the client's industry, 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, reliance on telecommunications and computer technology, general and local economic conditions, and competitive pressures in ICT GROUP's industry. 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. Editorial Contact: Jackie Amendolari ICT Group, Inc. 267-685-5018 jamendolari@ictgroup.com top of page |
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