10-K
TTEC HOLDINGS, INC. filed this Form 10-K on 03/06/2019
Entire Document
 

Customer Growth Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

 

 

 

 

    

2017

    

2016

    

$ Change

    

% Change

 

Revenue

 

$

128,698

 

$

141,005

 

$

(12,307)

 

(8.7)

%

Operating Income

 

 

7,803

 

 

6,969

 

 

834

 

12.0

%

Operating Margin

 

 

6.1

%  

 

4.9

%  

 

 

 

 

 

 

The decrease in revenue for the Customer Growth Services segment was due to a $9.0 million increase in client programs and a decrease for program completions of $21.3 million.

The operating income as a percentage of revenue increased to 6.1% in 2017 as compared to 4.9% in 2016. This was attributable to pricing improvements and other profit optimization actions, along with reductions in amortization expense and a reduction in the operating loss for the Digital Marketing unit, which was sold effective December 22, 2017 (see Part II. Item 8. Financial Statements and Supplementary Data, Note 2 to the Consolidated Financial Statements). Included in the operating income was amortization related to acquired intangibles of zero and $1.8 million for the years ended December 31, 2017 and 2016, respectively.

Customer Technology Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

 

 

 

 

    

2017

    

2016

    

$ Change

    

% Change

 

Revenue

 

$

138,581

 

$

141,254

 

$

(2,673)

 

(1.9)

%

Operating Income

 

 

12,047

 

 

933

 

 

11,114

 

1,191.2

%

Operating Margin

 

 

8.7

%  

 

0.7

%  

 

 

 

 

 

 

The decrease in revenue for the Customer Technology Services segment was driven by an increase in the CISCO offerings offset by a decrease in the Avaya offerings as we wound down and then sold the business unit in the second quarter of 2017.

The operating income as a percentage of revenue increased to 8.7% in 2017 as compared to 0.7% in 2016.  This increase was primarily due to a $12.1 million charge recorded in 2016 related to the impairment of customer relationships, trade name, non-compete intangible assets and technology fixed assets due to the lower financial performance of the Avaya business unit offset by the 2017 $3.3 million impairment of a trade name intangible asset (see Part II. Item 8. Financial Statements and Supplementary Data, Note 7 to the Consolidated Financial Statements). Included in the operating income was amortization related to acquired intangibles of $1.1 million and $4.6 million for the years ended December 31, 2017 and 2016, respectively.

Customer Strategy Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

 

 

 

 

    

2017

    

2016

    

$ Change

    

% Change

 

Revenue

 

$

68,326

 

$

68,674

 

$

(348)

 

(0.5)

%

Operating Income

 

 

2,433

 

 

(5,691)

 

 

8,124

 

142.8

%

Operating Margin

 

 

3.6

%  

 

(8.3)

%  

 

 

 

 

 

 

The decrease in revenue for the Customer Strategy Services segment was related to growth in the Content and Collaboration and Service Optimization practices offset by decreases in the Mindset and Sales Transformation and Customer Insights practices across multiple delivery regions.

The operating income as a percentage of revenue was 3.6% in 2017 as compared to an operating loss of (8.3)% in 2016. The increase is primarily related to the 2016 $7.5 million charge for the impairment of two trade name intangibles offset by the 2017 $2.0 million impairment of one trade name intangible asset (see Part II. Item 8. Financial Statements and Supplementary Data, Note 7 to the Consolidated Financial Statements). Included in the operating income was amortization expense related to acquired intangibles of $1.8 million and $2.9 million for the years ended December 31, 2017 and 2016, respectively.

36