~ Company Comments on Strong 2005 Outlook ~
Newtown, PA, March 2, 2005 - ICT GROUP, INC. (NASDAQ: ICTG) today reported results for the fourth quarter and year ended December 31, 2004.
Revenue for the 2004 fourth quarter increased 19% to a record $92.5 million compared to $77.7 million in the prior-year period. Net loss for the fourth quarter of 2004, which includes a separately announced pre-tax charge of $8.4 million related to the settlement of the class action suit in West Virginia, was $3.5 million, or $0.28 per diluted share. This compares to net income of $2.7 million, or $0.21 per diluted share, in last year's fourth quarter.
Fourth quarter 2004 revenue exceeded the Company's previous guidance of $87 to $89 million and adjusted earnings were at the high end of the Company's forecasted range. Adjusted net income for the 2004 fourth quarter was $1.9 million, or $0.15 per diluted share, approximately double the adjusted net income for the 2003 fourth quarter of $984,000, or $0.08 per diluted share.
For the year ended December 31, 2004, revenue increased 9% to $325.5 million from $298.1 million. The Company's net loss was $2.7 million, or $0.21 per diluted share, compared to a net loss of $1.1 million, or $0.09 per diluted share, for 2003. On an adjusted basis, net income for 2004 was $4.0 million, or $0.31 per diluted share, versus net income of $1.7 million, or $0.13 per diluted share, in 2003.
Adjusted net income for the fourth quarter and fiscal year 2004 excludes the impact of charges associated with the class action litigation. Adjusted net income for the fourth quarter and fiscal year 2003 excludes the impact of the Company's reduction of its litigation accrual, litigation defense costs and partial reversal of previously recorded restructuring charges.
"We capped off a year of new capabilities, new industry verticals and new clients with record fourth quarter results," commented John J. Brennan, Chairman and Chief Executive Officer of ICT GROUP.
Services revenue for the 2004 fourth quarter increased 30% year-over-year and 18% sequentially from the 2004 third quarter. Services revenue totaled $63.2 million and represented 68% of fourth quarter revenue. Fourth quarter Sales revenue was $29.3 million, or 32% of total Company revenue, versus $28.9 million, or 37% of total revenue in the same period last year. At year-end, the Company had 9,264 workstations in operation and achieved $41,100 of annualized revenue per average workstation in operation during the fourth quarter.
"We are very pleased with the renewed revenue and earnings growth we achieved in 2004. Services revenue jumped 22% on the year as we added more than a dozen significant contract wins during the year. We also realized significant gains throughout the year in leveraging our global infrastructure to offer business process outsourcing, customer relationship management (CRM) technology and marketing services solutions. Revenue from these sources, which is included in Services revenue, grew 73% in 2004, to represent 11% of total Company revenue, compared to 7% in 2003. In addition to our strong top-line performance, we generated significant, sustainable improvement in profitability throughout the year on an adjusted basis," Mr. Brennan added.
For 2005, the Company still anticipates double-digit revenue growth on top of higher-than-expected 2004 results with revenue in the range of $365 to $375 million. Earnings are forecasted to double 2004 adjusted earnings and be in the range of $0.60 to $0.65 per diluted share. This includes first quarter earnings in the range of $0.08 to $0.10 per diluted share on revenue of approximately $88 million to $90 million. First quarter and full-year 2005 earnings guidance is before any expenses incurred in 2005 related to the class action litigation and before any potential insurance recovery.
"We are off to a very strong start in 2005 and are pleased to announce that we have already captured two important contract wins this year, including a value-added marketing services contract with a leading global software solutions company and a major technical support contract to build a dedicated contact center assisting business- and consumer-based customers of a leading computer hardware manufacturer. Together, these contracts are expected to generate $8 to $12 million of revenue in 2005. The pipeline for additional opportunities remains strong across the breadth of our targeted verticals and we are looking forward to a very successful year," Mr. Brennan concluded.