Sykes Enterprises, Incorporated Reports Fourth-Quarter and Full-Year 2009 Financial Results

03/01/2010
Fourth Quarter 2009 Revenues of $220.5 Million Surpass Business Outlook Range of $213 Million to $215 Million; 2010 Business Outlook: Sustained Revenue Growth & Solid Progress Toward Achieving Anticipated Cost Synergies

TAMPA, Fla., Mar 1, 2010 (GlobeNewswire via COMTEX) -- Sykes Enterprises, Incorporated ("SYKES" or the "Company") (Nasdaq:SYKE), a global leader in providing outsourced customer contact management solutions and services in the business process outsourcing (BPO) arena, announced today fourth-quarter and full-year 2009 financial results.

Fourth quarter 2009 Highlights

  --  Fourth quarter 2009 revenues of $220.5 million increased $19.7 million,
      or 9.8%, over the comparable quarter last year; on a constant currency
      basis, revenues increased 4.0% comparably, driven by the communications,
      financial services, healthcare and transportation verticals
  --  SYKES and ICT Group, Inc. ("ICTG") entered into a definitive merger
      agreement under which SYKES acquired ICTG on February 2, 2010; the
      acquisition provides strategic benefits of revenue scale with minimal
      client overlap, broader and deeper vertical expertise, enhanced global
      delivery footprint, risk diversification and opportunity for sustainable
      long-term revenue growth and operating margin expansion
  --  Fourth quarter 2009 operating margin was 6.7% versus 6.8% on a
      comparable basis; fourth quarter 2009 operating margin included $2.3
      million (1.1% of revenues) in transaction costs related to the ICTG
      acquisition and $0.7 million (0.3% of revenues) related to Kelly,
      Luttmer & Associates Limited (KLA) lease termination; excluding the
      transaction costs and lease termination, the 130 basis points comparable
      operating margin increase was due principally to higher-than-expected
      revenue growth and expense leverage
  --  The Company sustained its strong balance sheet with a year-end cash
      balance of $360.2 million
  --  Cash flow from operations during the quarter was up comparably by
      approximately 14% to $27.8 million, with capital expenditures of $7.1
      million


Fourth Quarter 2009 Review

Americas

Revenues generated from the Company's Americas segment, including operations in North America and offshore (Latin America and the Asia Pacific region), increased 10.5% to $152.8 million, or 69.3% of total revenues, for the fourth quarter of 2009. Revenues for the prior year period totaled $138.3 million, or 68.9% of total revenues. The comparable revenue increase of $14.5 million included a $9.7 million increase in customer care demand and $4.8 million in favorable translation impact from stronger currencies within the Americas region relative to the U.S. dollar. Excluding the currency impact, the 7.0% constant currency comparable increase in customer care demand was from existing and new clients across the communications, transportation, healthcare and financial services verticals. In particular, demand within the healthcare vertical was driven partly by Canadian call volumes related to the H1N1 virus. Approximately 57% of the Americas fourth quarter 2009 revenues was generated from services provided offshore compared to approximately 63% in the prior year quarter, with the percentage decrease due primarily to an increased revenue contribution from the U.S.

The Americas income from operations for the fourth quarter of 2009 increased $3.1 million to $22.3 million, with an operating margin of 14.6% versus 13.9% in the comparable quarter last year. The Americas fourth quarter 2009 operating margin reflects the impact of the KLA lease termination, approximately 0.4% of Americas revenues. Excluding the lease termination, the 110 basis points comparable increase in the Americas operating margin was due to higher-than-expected revenue growth, lower weather related auto tow claims costs in Canada and expense leverage, including lower salaries, travel, recruiting and depreciation and amortization as a percentage of Americas revenues.

EMEA

Revenues from the Company's Europe, Middle East and Africa (EMEA) region increased 8.3% to $67.7 million, representing 30.7% of SYKES' total revenues for the fourth quarter of 2009 compared to $62.5 million, or 31.1%, in the prior year's fourth quarter. The $5.2 million comparable revenue increase was due to a $6.9 million contribution from a stronger Euro relative to the U.S. dollar, partially offset by $1.7 million decrease in customer care demand. Excluding the currency impact, the 2.8% constant currency revenue decrease in customer care demand was due largely to weakness within the technology vertical, which was more than offset by higher-than-expected demand from the communications and transportation verticals. Although there are some encouraging signs about end market demand for technology products in EMEA, the Company's outlook remains cautious until it sees a sustained pick-up in that demand. In the meantime, the Company continues to gain traction in EMEA with new client wins within the communications and financial services verticals

The EMEA income from operations for the fourth quarter of 2009 decreased $0.6 million to $4.8 million, with an operating margin of 7.1% versus 8.7% in the comparable quarter last year. The 160 basis points comparable decrease in the EMEA operating margin was chiefly the result of soft customer care demand without the commensurate reduction in labor costs, offsetting benefits from lower travel expenses and recruiting fees. The Company continues to make headway in reducing its direct and indirect expenses, positioning itself for margin improvement as demand eventually stabilizes.

Corporate G&A Expenses

Corporate costs increased 10.7% to $12.2 million, or 5.5% of revenues, in the fourth quarter of 2009, compared to $11.0 million, or 5.5% of revenues, in the comparable quarter last year. Excluding $2.3 million in transaction costs (legal and professional fees) associated with the ICTG acquisition, or 1.1% of revenues, corporate costs declined due principally to expense control, including lower marketing, travel and non-transaction related professional fees.

Interest & Other Income and Taxes

Interest and other expense for the fourth quarter of 2009 totaled approximately $1.4 million compared to other income of $5.2 million for the same period in the prior year. The $6.6 million negative swing in interest and other income was primarily attributable to realized and unrealized foreign currency transaction losses which resulted primarily from U.S. dollar denominated assets and liabilities held by the Company's international subsidiaries, coupled with lower interest income resulting from lower interest rates on higher average cash balances and higher interest expense reflecting higher average levels of outstanding short-term debt, primarily related to the short-term loan extended to SYKES in December 2009.

The Company's fourth quarter 2009 effective tax rate was 134.7% versus 59.3% in the same period last year and above the 23% to 25% range provided in the Company's fourth quarter 2009 business outlook. The increase in the effective tax rate on a comparable basis and from the range provided in last quarter's business outlook was due principally to the Company's deemed change of assertion in the fourth quarter of 2009 regarding permanent reinvestment of $85 million of its foreign subsidiaries' accumulated and undistributed earnings, which came about due to the Company's borrowing of a $75 million Term Loan on February 2, 2010, to close the ICT Group acquisition and a $10 million increase in its estimate of costs related to the ICT Group acquisition (please see SYKES' Annual Report on Form 10-K for the year ending December 31, 2009, which will be filed with the SEC on March 1, 2010, for further details).

The Company's fourth quarter 2009 earnings per share was a loss of $0.11 versus earnings of $0.19 in the comparable quarter last year and $0.32 to $0.35 provided in the Company's fourth quarter 2009 business outlook. The $0.11 per share loss included the unfavorable impact of approximately $0.36 per share related to the deemed change of assertion in the fourth quarter of 2009, $0.04 per share related to ICTG transaction costs and $0.01 per share related to the KLA lease termination.

The Company's fourth quarter 2009 business outlook provided an earnings per share range of $0.32 to $0.35, which did not include the impact of the deemed change of assertion, ICTG transaction costs and KLA lease termination expense. Excluding the previously mentioned items and assuming a tax rate of 23% to 25% provided in the Company's fourth quarter 2009 business outlook and including the $0.4 million in interest income earned during the fourth quarter, earnings per share would have been $0.34.

2009 Financial Highlights

  --  Consolidated 2009 revenues of $846.0 million, increased $26.8 million,
      or 3.3%, on a comparable basis; on a constant currency basis, revenues
      increased 8.3% comparably, driven by the communications and financial
      services verticals
  --  Consolidated 2009 income from operations increased 6.7% to $70.1
      million, with operating margins at 8.3% vs. 8.0% on a comparable basis;
      full year 2009 operating margin included $3.3 million (0.4% of revenues)
      in transaction costs related to the ICTG acquisition, a $1.9 million
      (0.2% of revenues) impairment loss on intangibles related to the March
      2005 acquisition of Kelly, Luttmer & Associates Limited (KLA) and $0.7
      (0.1% of revenues) million in lease termination costs related to KLA;
      excluding the transaction costs, impairment loss and lease termination,
      the 100 basis points comparable operating margin increase was due
      principally to higher-than-expected revenue growth and expense leverage,
      coupled with favorable translation of certain non-dollar denominated
      expenses


2009 Twelve-Month Review

Americas

For the twelve-months ended December 31, 2009, revenues generated from the Company's clients in the Americas segment increased 8.3% to $597.5 million, or 70.6% of total revenues. This compared to revenues of $551.8 million, or 67.4% of total revenues, for the twelve-months of 2008. The comparable revenue increase of $45.7 million included a $64.6 million increase in customer care demand offsetting the negative impact of $18.9 million from weaker currencies within the Americas region relative to the U.S. dollar. Excluding the currency impact, the 11.7% constant currency comparable increase in customer care demand was driven by growth from existing and new clients primarily across the communications and financial services verticals. Approximately 60% of the Americas 2009 revenues was generated from services provided offshore compared to approximately 62% in the prior year, with the percentage decrease due primarily to an increased revenue contribution from the U.S.

The Americas income from operations for 2009 was up 15.4% to $98.5 million, with an operating margin of 16.5% versus 15.5% in 2008. The Americas 2009 operating margin reflects the impact of $1.9 million (0.3% of Americas revenues) impairment loss on intangibles and $0.7 (0.1% of Americas revenues) million in lease termination related to KLA. Excluding the impairment loss and lease termination, the 140 basis points comparable increase in the Americas operating margin was due to higher-than-anticipated revenue growth, favorable translation of certain non-dollar denominated expenses, lower weather-related auto tow claims costs and expense leverage, including lower depreciation and amortization, recruiting and travel expenses.

EMEA

For the twelve-months ended December 31, 2009, revenues from the Company's EMEA region decreased 7.1% to $248.5 million, representing 29.4% of SYKES' total revenues, compared to $267.4 million, or 32.6%, in the prior year. Of the $18.9 million decrease in year-over-year EMEA revenues, $22.4 million was due to a weaker Euro relative to the U.S. dollar for most of the year, offset by $3.5 million growth in customer care demand. Excluding the currency impact, the 1.3% comparable growth in customer care demand was driven by existing and new client programs principally within the communications vertical.

The EMEA income from operations for 2009 decreased 28.6% to $15.1 million, with an operating margin of 6.1% versus 7.9% in 2008. The 180 basis points comparable decrease in the EMEA operating margin was due to negative operating leverage owing to a reduction in customer care demand without the commensurate reduction in labor costs, offsetting benefits from lower travel, recruiting and other costs.

Corporate G&A Expenses

Corporate costs for the twelve months ended December 31, 2009 increased $2.7 million to $43.5 million, or 5.1% of revenues, from $40.8 million, or 5.0% of revenues, in 2008. Excluding $3.3 million in transaction costs associated with the ICTG acquisition, or 0.4% of revenues, the decline in corporate costs was due principally to expense control, including lower marketing, travel and non-transaction related professional fees.

Impairment Loss on Investment in SHPS

During the year, the Company recorded an impairment loss on its investment in SHPS of $2.1 million, or 0.2% of revenues. The details surrounding the SHPS impairment are included in the Current Report on Form 8-K filed with the Securities and Exchange Commission on July 7, 2009.

Interest & other Income and Taxes

Interest and other income for 2009 totaled approximately $1.3 million compared to interest and other income of $16.3 million for the same period in the prior year. The $15.0 million decrease in other income was primarily attributable to realized and unrealized foreign currency transaction losses which resulted primarily from U.S. dollar denominated assets and liabilities held by the Company's international subsidiaries, coupled with lower interest income resulting from lower interest rates on higher average cash balances and higher interest expense reflecting higher average levels of outstanding short-term debt, primarily related to the short-term loan extended to SYKES.

For 2009, the Company's tax rate was 37.7% versus 26.1% in 2008 and above the 16% to 18% range provided in the Company's full-year 2009 business outlook. The increase in the effective tax rate on a comparable basis and relative to the full-year outlook was due principally to the Company's deemed change of assertion in the fourth quarter of 2009 regarding permanent reinvestment of $85 million of its foreign subsidiaries' accumulated and undistributed earnings, which came about due to the Company's borrowing of a $75 million Term Loan on February 2, 2010, to close the ICT Group acquisition and a $10 million increase in its estimate of costs related to the ICT Group acquisition (please see SYKES' Annual Report on Form 10-K for the year ending December 31, 2009, which will be filed with the SEC on March 1, 2010, for further details).

Liquidity and Capital Resources

The Company's balance sheet at December 31, 2009 remained strong with a total cash balance of $360.2 million, including restricted cash of $80.3 million resulting from the $75 million short-term loan (maturing March 31, 2010) extended by KeyBank National Association related to the funding of the ICT Group acquisition. At December 31, 2009, the Company also had $50 million of capacity available under its credit facility. For the twelve months ended December 31, 2009, the Company generated $87.6 million in cash flow from operations and incurred capital expenditures of $30.3 million.

On February 2, 2010, the Company entered into a new Credit Agreement with a group of lenders and KeyBank National Association. The New Credit Agreement provides for a $75 million term loan and a $75 million revolving credit facility, replacing the Company's previous senior revolving credit facility of $50 million. The Company drew down the full $75 million term loan on February 2, 2010 in connection with the acquisition of ICT Group.

Business Outlook

Due to the acquisition of ICT Group described in a press release issued October 6, 2009, the Company's earnings per share business outlook effective first quarter 2010 will be presented on an adjusted earnings per share basis, a non-GAAP measure. The adjusted earnings per share outlook will exclude the impact of severance and consulting engagement costs by former ICT Group executives, merger and integration costs and the amortization of acquisition-related intangible assets, while including anticipated cost synergies. Management believes it is helpful to present a non-GAAP measure of performance that reflects the ongoing operations of the Company which allows investors to better understand and evaluate the business as it is expected to operate in future periods. The non-GAAP measures of financial performance used by the Company are not measures of performance under accounting principles generally accepted in the United States and should not be considered an alternative to net income or other GAAP figures as an indicator of the company's financial performance or liquidity. SYKES' non-GAAP presentation of net income may not be comparable to similarly titled measures used by other companies.

The assumptions driving the business outlook are as follows:

  --  Since the close of the acquisition of ICT Group on February 2, 2010, the
      Company has made solid progress toward achieving the $20 million in
      anticipated cost synergies in 2010. The Company's adjusted earnings per
      share estimates include pre-tax cost synergies of $2 million in the
      first quarter of 2010 and $18 million for the full-year;
  --  Overall, the Company continues to experience sustained growth in
      customer care demand. Within the Americas region, customer care demand
      is expected to be driven by new programs with certain existing clients
      as well as expansion of existing programs within the communications and
      financial services verticals, partially tempered by lower demand with
      certain existing clients due to macroeconomic weakness. In the EMEA
      region, as discussed in previous quarters, the Company continues to
      experience soft demand and weak pricing trends among certain clients
      largely within the technology and, to a limited extent, communications
      verticals. To address the pricing issue, the Company plans to shift some
      demand to new lower-cost delivery geographies within EMEA, where
      practicable, while exiting certain client programs. Although the Company
      is gaining traction in EMEA with new client wins within the
      communications and financial services verticals, the overall
      macro-economic environment remains a headwind. Separately, since the
      acquisition of ICT Group closed February 2, 2010, the combined company's
      first quarter and full-year 2010 results will not include revenue and
      earnings per share contribution from ICT Group for the month of January
      versus full three-months and twelve months in the comparable periods of
      2009;
  --  The Company's revenues and adjusted earnings per share assumptions were
      based on foreign exchange rates as of February 2010. Therefore, the
      continued volatility in foreign exchange rates between the U.S. dollar
      and the functional currencies of the markets it serves could have a
      significant impact on revenues and adjusted earnings per share relative
      to the business outlook;
  --  Although the Company's primary focus will be optimizing and driving
      utilization from existing seats due to the acquisition of ICT Group, it
      expects new seat additions of 1,500 to 1,600 on a gross basis in the
      first-half of 2010 in order to serve both existing and new clients.
      Accordingly, ramp-related expenses associated with the capacity
      additions are anticipated to be weighted more toward the first-half of
      2010, which is expected to negatively impact margins;
  --  Anticipated net interest expense of approximately $2.0 million and $5.5
      million for the first quarter and full-year 2010, respectively, which
      includes interest expense related to the funding of the ICT Group
      acquisition. These amounts exclude the potential impact of any foreign
      exchange gains or losses in other income; and
  --  An increase in the comparable first-quarter and full-year 2010 estimated
      tax rate versus the year-ago periods reflects a shift in the mix of
      earnings to higher tax jurisdictions and the absence of the benefit
      related to the release of the valuation allowance. The tax rate for
      first quarter 2010 could still vary significantly from what is currently
      estimated due to the timing of costs related to ICT Group.


Considering the above factors, the Company anticipates the following financial results for the three months ended March 31, 2010:

  --  Revenues in the range of $267 million to $270 million
  --  Tax rate of approximately of 25%, subject to volatility from quarter to
      quarter
  --  Fully diluted share count of approximately 45 million
  --  *Earnings (loss) per share in the range of ($0.16) to ($0.18)
  --  Adjusted diluted earnings per share in the range of $0.20 to $0.24
  --  Capital expenditures in the range of $10.0 million to $13.0 million


For the twelve months ended December 31, 2010, the Company anticipates the following financial results:

  --  Revenues in the range of $1,240 million to $1,255 million
  --  Tax rate of approximately 23% to 25%
  --  Fully diluted share count of approximately 46.5 million
  --  *Diluted earnings per share in the range of $0.83 to $0.94
  --  Adjusted diluted earnings per share in the range of $1.38 to $1.55
  --  Capital expenditures in the range of $40 million to $45 million


*See "Business Outlook Reconciliation" for First Quarter and Full-Year 2010 earnings per share.

Conference Call

The Company will conduct a conference call regarding the content of this release tomorrow, March 2, 2010 at 10:00 a.m. Eastern Standard Time. The conference call will be carried live on the Internet. Instructions for listening to the call over the Internet are available on the Investors page of SYKES' website at www.sykes.com. A replay will be available at this location for two weeks. This press release is also posted on the SYKES website at http://investor.sykes.com/phoenix.zhtml?c=119541&p=irol-news&nyo=0.

Non-GAAP Financial Measure

Adjusted earnings per diluted share is an important indicator of performance as this non-GAAP financial measure assists readers in further understanding the Company's results of operations and trends from period-to-period exclusive of certain acquisition-related items. Adjusted earnings per diluted share, however, is a supplemental measure of performance that is not required by, or presented in accordance with, U.S. Generally Accepted Accounting Principles (GAAP).

About Sykes Enterprises, Incorporated

SYKES is a global leader in providing customer contact management solutions and services in the business process outsourcing (BPO) arena. SYKES provides an array of sophisticated customer contact management solutions to Fortune 1000 companies around the world, primarily in the communications, financial services, healthcare, technology and transportation and leisure industries. SYKES specializes in providing flexible, high quality customer support outsourcing solutions with an emphasis on inbound technical support and customer service. Headquartered in Tampa, Florida, with customer contact management centers throughout the world, SYKES provides its services through multiple communication channels encompassing phone, e-mail, web and chat. Utilizing its integrated onshore/offshore global delivery model, SYKES serves its clients through two geographic operating segments: the Americas (United States, Canada, Latin America, India and the Asia Pacific region) and EMEA (Europe, Middle East and Africa). SYKES also provides various enterprise support services in the Americas and fulfillment services in EMEA, which include multi-lingual sales order processing, payment processing, inventory control, product delivery and product returns handling. For additional information please visit www.sykes.com.

Forward-Looking Statements

This press release may contain "forward-looking statements," including SYKES' estimates of future business outlook, prospects or financial results, statements regarding SYKES' objectives, expectations, intentions, beliefs or strategies, or statements containing words such as "believe," "estimate," "project," "expect," "intend," "may," "anticipate," "plans," "seeks," or similar expressions. It is important to note that SYKES' actual results could differ materially from those in such forward-looking statements, and undue reliance should not be placed on such statements. Among the important factors that could cause such actual results to differ materially are (i) the impact of economic recessions in the U.S. and other parts of the world, (ii) fluctuations in global business conditions and the global economy, (iii) SYKES' ability to continue the growth of its support service revenues through additional technical and customer contact centers, (iv) currency fluctuations, (v) the timing of significant orders for SYKES' products and services, (vi) loss or addition of significant clients, (vii) the early termination of contracts by clients, (viii) SYKES' ability to recognize deferred revenue through delivery of products or satisfactory performance of services, (ix) construction delays of new or expansion of existing customer support centers, (x) difficulties or delays in implementing SYKES' bundled service offerings, (xi) failure to achieve sales, marketing and other objectives, (xii) variations in the terms and the elements of services offered under SYKES' standardized contract including those for future bundled service offerings, (xiii) changes in applicable accounting principles or interpretations of such principles, (xiv) delays in the Company's ability to develop new products and services and market acceptance of new products and services, (xv) rapid technological change, (xvi) political and country-specific risks inherent in conducting business abroad, (xvii) SYKES' ability to attract and retain key management personnel, (xviii) SYKES' ability to further penetrate into vertically integrated markets, (xix) SYKES' ability to expand its global presence through strategic alliances and selective acquisitions, (xx) SYKES' ability to continue to establish a competitive advantage through sophisticated technological capabilities, (xxi) the ultimate outcome of any lawsuits or penalties (regulatory or otherwise), (xxii) SYKES' dependence on trends toward outsourcing, (xxiii) risk of interruption of technical and customer contact management center operations due to such factors as fire, earthquakes, inclement weather and other disasters, power failures, telecommunications failures, unauthorized intrusions, computer viruses and other emergencies, (xxiv) the existence of substantial competition, (xxv) the ability to obtain and maintain grants and other incentives, including tax holidays or otherwise, (xxvi) the potential of cost savings/synergies associated with the ICTG acquisition not being realized, or not being realized within the anticipated time period, (xxvii) the potential loss of key clients related to the ICTG acquisition, (xxviii) risks related to the integration of the businesses of SYKES and ICTG and (xxix) other risk factors listed from time to time in SYKES' registration statements and reports as filed with the Securities and Exchange Commission. All forward-looking statements included in this press release are made as of the date hereof, and SYKES undertakes no obligation to update any such forward-looking statements, whether as a result of new information, future events, or otherwise.

  Sykes Enterprises, Incorporated
  Condensed Consolidated Statements of Operations
  (in thousands, except per share data)
  (Unaudited)

                                      Three Months Ended
                                     December    December
                                       31,         31,

                                       2009        2008
                                    ----------  ----------

  Revenues                           $ 220,467   $ 200,774
  Direct salaries and related
   costs                             (142,540)   (128,936)

  General and administrative          (63,048)    (58,266)
                                    ----------  ----------
  Income from operations                14,879      13,572

  Other income (expense), net          (1,382)       5,193
                                    ----------  ----------
  Income before provision for
   income taxes                         13,497      18,765

  Provision for income taxes          (18,186)    (11,135)
                                    ----------  ----------

  Net income (loss)                  $ (4,689)     $ 7,630
                                    ----------  ----------

   Net income (loss) per basic
    share                             $ (0.11)      $ 0.19
   Shares outstanding, basic            40,827      40,687

   Net income (loss) per diluted
    share                             $ (0.11)      $ 0.19
   Shares outstanding, diluted          41,151      41,092

  Sykes Enterprises, Incorporated
  Condensed Consolidated Statements of Operations
  (in thousands, except per share data)
  (Unaudited)

                                    Twelve Months Ended
                                    December    December
                                      31,         31,

                                      2009        2008
                                   ----------  ----------

  Revenues                          $ 846,041   $ 819,190
  Direct salaries and related
   costs                            (540,949)   (524,133)
  General and administrative        (233,061)   (229,349)

  Canada's KLA Impairment             (1,908)          --
                                   ----------  ----------
  Income from operations               70,123      65,708
  Other income, net                     1,295      16,274

  SHPS Impairment                     (2,089)          --
                                   ----------  ----------
  Income before provision for
   income taxes                        69,329      81,982

  Provision for income taxes         (26,118)    (21,421)
                                   ----------  ----------

  Net income                         $ 43,211    $ 60,561
                                   ----------  ----------

   Net income per basic share          $ 1.06      $ 1.49
   Shares outstanding, basic           40,707      40,618

   Net income per diluted share        $ 1.05      $ 1.48
   Shares outstanding, diluted         41,026      40,961

  Sykes Enterprises, Incorporated
  Segment Results
  (in thousands)
  (Unaudited)

                          Three Months Ended
                         December    December
                           31,         31,

                           2009        2008
                        ----------  ----------

  Revenues:
   Americas              $ 152,808   $ 138,292

   EMEA                     67,659      62,482
                        ----------  ----------

    Total                $ 220,467   $ 200,774
                        ==========  ==========

  Operating Income:
   Americas               $ 22,289    $ 19,205
   EMEA                      4,820       5,414
   Corporate G&A
    expenses              (12,230)    (11,047)
                        ----------  ----------
   Income from
    operations              14,879      13,572
   Other income
    (expense), net         (1,382)       5,193
   Provision for
    income taxes          (18,186)    (11,135)
                        ----------  ----------


   Net income (loss)     $ (4,689)     $ 7,630
                        ==========  ==========


                         Twelve Months Ended
                         December    December
                           31,         31,

                           2009        2008
                        ----------  ----------

  Revenues:
   Americas              $ 597,490   $ 551,761

   EMEA                    248,551     267,429
                        ----------  ----------

    Total                $ 846,041   $ 819,190
                        ==========  ==========

  Operating Income:
   Americas               $ 98,494    $ 85,383
   EMEA                     15,130      21,178
   Corporate G&A
    expenses              (43,501)    (40,853)
                        ----------  ----------
   Income from
    operations              70,123      65,708
   SHPS Impairment         (2,089)          --
   Other income, net         1,295      16,274
   Provision for
    income taxes          (26,118)    (21,421)
                        ----------  ----------


   Net income             $ 43,211    $ 60,561
                        ==========  ==========

  Sykes Enterprises, Incorporated
  Condensed Consolidated Balance Sheets
  (in thousands)


                                December    December
                                  31,         31,

                                  2009        2008
                               ----------  ----------

  Assets:
  Current assets                $ 547,854   $ 396,518
  Property and equipment, net      80,264      80,390

  Other noncurrent assets          44,353      52,634
                               ----------  ----------

   Total assets                 $ 672,471   $ 529,542
                               ==========  ==========

  Liabilities & Shareholders'
   Equity:
  Current liabilities           $ 200,418   $ 126,110
  Noncurrent liabilities           21,379      19,402

  Shareholders' equity            450,674     384,030
                               ----------  ----------
   Total liabilities and
    shareholders' equity        $ 672,471   $ 529,542
                               ==========  ==========


  Sykes Enterprises, Incorporated
  Supplementary Data


                                Q4 2009     Q4 2008
                               ----------  ----------

  Geographic Mix (% of Total
   Revenues):

   Americas (1)                     69.3%       68.9%
   Europe, Middle East &
    Africa (EMEA)                   30.7%       31.1%
                               ----------  ----------
    Total:                         100.0%      100.0%

  (1) Includes the United States, Canada, Latin
   America and the Asia Pacific (APAC) Region. Latin
   America
  and APAC are included in the Americas due to the
   nature of the business and client profile, which
   is primarily
  made up of U.S. based
   clients.


                                Q4 2009     Q4 2008
                               ----------  ----------

  Vertical Industry Mix (% of Total
   Revenues):

   Communications                     36%         31%
   Technology / Consumer              30%         35%
   Financial Services                 14%         15%
   Transportation & Leisure            9%          8%
   Healthcare                          6%          5%

   Other                               5%          6%
                               ----------  ----------
    Total:                           100%        100%

  Sykes Enterprises, Incorporated
  Cash Flow from Operations
  (in thousands)
  (Unaudited)

                                   Three Months Ended
                                   December    December
                                     31,         31,

                                     2009        2008
                                  ----------  ---------

  Cash Flow From Operating
   Activities:
   Net income                      $ (4,689)    $ 7,630
   Depreciation and amortization       7,406      6,840
   Changes in assets and
    liabilities and other             25,061      9,957
                                  ----------  ---------
   Net cash provided by
    operating activities            $ 27,778   $ 24,427
                                  ==========  =========

  Capital expenditures               $ 7,070    $ 8,947
  Cash interest paid                   $ 256       $ 92
  Cash taxes paid                    $ 3,138    $ 9,933


                                   Twelve Months Ended
                                   December    December
                                     31,         31,

                                     2009        2008
                                  ----------  ---------

  Cash Flow From Operating
   Activities:
   Net income                       $ 43,211   $ 60,561
   Depreciation and amortization      28,323     27,965
   Changes in assets and
    liabilities and other             16,078    (7,669)
                                  ----------  ---------
   Net cash provided by
    operating activities            $ 87,612   $ 80,857
                                  ==========  =========

  Capital expenditures              $ 30,277   $ 34,677
  Cash interest paid                 $ 1,008      $ 369
  Cash taxes paid                   $ 14,660   $ 23,635

  Sykes Enterprises, Incorporated
  Business Outlook Reconciliation*


                                            Business Outlook

                                             First Quarter

                                                  2010
                                         ---------------------
  Adjusted Diluted Earnings Per Share    $0.20 - $0.24
   Severance & Consulting Engagement
    Costs                                ($0.20) - ($0.22)
   Merger and Integration Costs          ($0.13) - ($0.15)

   Amortization of Intangibles           ($0.03) - ($0.05)
                                         ---------------------
  Earnings (loss) Per Share              ($0.16) - ($0.18)


                                         Business Outlook

                                               Full Year

                                                  2010
                                         ---------------------
  Adjusted Diluted Earnings Per Share    $1.38 -$1.55
   Severance & Consulting Engagement
    Costs                                ($0.19) - ($0.21)
   Merger and Integration Costs          ($0.16) - ($0.18)

   Amortization of Intangibles           ($0.20) - ($0.22)
                                         ---------------------
  Diluted Earnings Per Share             $0.83 -- $0.94

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SOURCE: Sykes Enterprises, Inc.

CONTACT:
Sykes Enterprises, Incorporated
Subhaash Kumar
(813) 233-7143