Sykes Enterprises, Incorporated Reports Second-Quarter 2010 Financial Results

08/02/2010
    -- Anticipate early retirement of acquisition-related term loan


    -- Solid progress on operational integration of ICT acquisition


    -- Increasing 2010 and long-term anticipated cost synergy target


                    -- Updating 2010 business outlook


TAMPA, Fla., Aug. 2, 2010 (GLOBE NEWSWIRE) -- 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 second-quarter 2010 financial results.

Second quarter 2010 Highlights

  --  Second quarter 2010 revenues of $299.2 million increased $90.3 million,
      or 43.3%, over the comparable quarter last year; second quarter 2010
      revenues included $98.5 million in contribution from the ICT
      acquisition

  --  Second quarter 2010 operating margin was 2.9% versus 8.2% on a
      comparable basis; on an adjusted basis, a non-GAAP measure, which
      includes the ICT acquisition but excludes ICT acquisition-related costs
      (see Exhibit 4 for reconciliation), second quarter 2010 operating margin
      was 4.9% versus 8.9%, which excludes the KLA impairment loss in the
      year-ago quarter, comparably due to previously-discussed program
      expirations beginning in the second-half of 2009, lower-than-forecasted
      client demand without a commensurate reduction in labor costs and costs
      related to migration of demand to near-shore locations in Egypt, Romania
      and Germany

  --  Excluding the ICT acquisition and on a constant currency basis, second
      quarter 2010 revenues decreased 5.9% comparably due to tougher year-ago
      comparisons driven principally by previously-discussed program
      expirations, migration of demand to near-shore locations as well as
      softness in the technology and communications verticals, which more than
      offset increased demand from the financial services and transportation
      verticals and new client wins

  --  Excluding the ICT acquisition, second quarter 2010 operating margins
      declined 400 basis points (4.9% vs. 8.9%) comparably due principally to
      previously-discussed client program expirations, lower-than-forecasted
      client demand without a commensurate reduction in labor costs, wage
      increases in certain geographies and migration costs

  --  Second quarter 2010 diluted earnings per share was $0.05 versus $0.35 in
      the comparable quarter last year and below the Company's second quarter
      2010 business outlook earnings per share range of $0.20 to $0.22. The
      decrease in the Company's second quarter 2010 diluted earnings per share
      on a comparable basis and relative to the business outlook was due to a
      combination of foreign currency transaction and other expense net
      losses, lower-than- forecasted-demand and a higher tax rate

  --  On an adjusted basis, second quarter 2010 diluted earnings per share was
      $0.14 versus $0.41 per share in the comparable quarter last year, which
      excludes the impact of the impairment loss on KLA and SHPS in the
      year-ago quarter, and versus an adjusted diluted earnings per share
      range of $0.28 to $0.32 provided in the Company's second quarter 2010
      business outlook. Assuming a forecasted tax rate of 13% as projected in
      the Company's second quarter 2010 business outlook and assuming the
      projected net interest expense of approximately $1.0 million for the
      second quarter of 2010, the adjusted diluted earnings per share would
      have been $0.25. The decrease in second quarter 2010 adjusted earnings
      per share was due to principally to lower-than-forecasted client demand


Americas Region

Revenues generated from the Company's Americas segment, including operations in North America and offshore (Latin America, South Asia and the Asia Pacific region), increased 65.1% to $246.0 million, or 82.2% of total revenues, for the second quarter of 2010. Revenues for the prior year period totaled $149.0 million, or 71.3% of total revenues. The ICT acquisition contributed approximately $98.1 million to the Americas second quarter 2010 revenues. Excluding the ICT acquisition and on a constant currency basis, second quarter 2010 Americas revenues decreased 5.0% comparably due principally to expiration of previously-discussed client programs and lower-than-forecasted demand, which more than offset increased demand from the financial services and transportation verticals as well as new client wins.

During the quarter, approximately 49% of the Americas second quarter 2010 revenues was generated from services provided offshore. Excluding the ICT acquisition, approximately 57% of the Americas second quarter 2010 revenues was generated from services provided offshore compared to approximately 60% in the prior year quarter, with the percentage decrease due primarily to an increased revenue contribution from the U.S.

Sequentially, revenues generated from the Americas segment increased 14.1% to $246.0 million, or 82.2% of total revenues, for the second quarter of 2010. First quarter 2010 revenues of $215.5 million, or 78.3% of total revenues, included only two-months of revenue contribution from the ICT acquisition, which closed on February 2nd, 2010. Excluding the ICT acquisition and on a constant currency basis, second quarter 2010 Americas revenues decreased 1.9% sequentially due principally to lower-than-forecasted client demand, program expirations and some seasonality, which more than offset increased demand from primarily the financial services vertical.

The Americas income from operations for the second quarter of 2010 decreased 1.6% to $24.6 million, with an operating margin of 10.0% versus 16.8% in the comparable quarter last year. On an adjusted basis, which includes the ICT acquisition but excludes ICT acquisition-related costs (see Exhibit 4 for reconciliation), the Americas operating margin was 11.5% versus 17.8% in the comparable quarter last year, which excludes the impact of the KLA impairment loss. Excluding the ICT acquisition, the Americas operating margin decreased 230 basis points (15.5% vs. 17.8%) comparably due to expiration of certain previously-discussed client programs and somewhat lower-than-forecasted client demand without a commensurate reduction in labor costs and wage increases in certain geographies.

Sequentially, the Americas income from operations for the second quarter of 2010 decreased 6.3% to $24.6 million, with an operating margin of 10.0% versus 12.2% in the first quarter of 2010. On an adjusted basis, which includes the ICT acquisition but excludes ICT acquisition-related costs (see Exhibit 6 for reconciliation), the Americas operating margins were 11.5% versus 13.6% sequentially. Excluding the ICT acquisition, the Americas operating margin decreased 200 basis points (15.5% vs. 17.5%) sequentially due largely to the above-mentioned factors.

EMEA Region

Revenues from the Company's Europe, Middle East and Africa (EMEA) region decreased 11.2% to $53.2 million, representing 17.8% of SYKES' total revenues for the second quarter of 2010 compared to $59.9 million, or 28.7%, in the prior year's second quarter. The ICT acquisition contributed approximately $0.4 million in revenues to EMEA in the second quarter of 2010. Excluding the ICT acquisition and on a constant currency basis, EMEA revenues decreased 8.0% due largely to previously-discussed client program expirations, near-shore migration and sustained weakness within the technology vertical as well as a decline in demand with certain clients within the communications vertical, which more than offset new client and program wins. The Company continues to enhance its near-shore delivery solution for the EMEA market and is encouraged by the interest it has received from prospective clients for its recently-announced beach heads in Egypt, Romania and Germany.

Sequentially, revenues from the Company's EMEA region decreased 10.8% to $53.2 million, representing 17.8% of SYKES' total revenues for the second quarter of 2010 compared to $59.7 million, or 21.7% of SYKES' total revenues in the first quarter of 2010, which included only two-months of revenue contribution from the ICT acquisition. Excluding the ICT acquisition and on a constant currency basis, EMEA revenues decreased 4.6% sequentially due largely to above-mentioned factors.

The EMEA loss from operations for the second quarter of 2010 was $3.9 million versus an income of $1.8 million, with an operating margin of negative 7.3% versus a positive 2.9% in the comparable quarter last year. On an adjusted basis, which includes the ICT acquisition but excludes ICT acquisition-related costs (see Exhibit 4 for reconciliation), the comparable operating margins remained unchanged. Excluding the ICT acquisition, the EMEA operating margin was a negative 6.4% versus a positive 2.9% due principally to soft client demand related to economic weakness, migration of demand to near-shore locations and the corresponding termination and duplicative ramp costs, including facilities and recruiting.

Sequentially, the EMEA loss from operations for the second quarter of 2010 was $3.9 million versus a loss of $0.7 million in the first quarter of 2010, with an operating margin of negative 7.3% versus a negative 1.2%. On an adjusted basis, which includes the ICT acquisition but excludes ICT acquisition-related costs (see Exhibit 6 for reconciliation), the EMEA operating margins remained unchanged. Excluding the ICT acquisition, the EMEA operating margin was a negative 6.4% versus a negative 0.6% due principally to the above-mentioned factors.

Corporate G&A Expenses

Corporate costs increased to $12.0 million, or 4.0% of revenues, in the second quarter of 2010, compared to $9.7 million, or 4.6% of revenues, in the comparable quarter last year. On an adjusted basis, which includes the ICT acquisition but excludes ICT acquisition-related costs (see Exhibit 4 for reconciliation), corporate costs remained unchanged at $9.7 million, but declined as a percent of revenues to 3.2% in the second quarter of 2010 from 4.6% in comparable period last year. Excluding the ICT acquisition, corporate costs remained essentially unchanged at $9.7 million, or 4.8% of second quarter 2010 revenues.

Sequentially, corporate costs decreased to $12.0 million, or 4.0% of revenues, in the second quarter of 2010, from $31.7 million, or 11.5% of revenues, in the first quarter of 2010. On an adjusted basis, which includes the ICT acquisition but excludes ICT acquisition-related costs (see Exhibit 6 for reconciliation), corporate costs declined to $9.7 million, or 3.2% of revenues, from $11.4 million, or 4.2% of revenues, in the first quarter of 2010. Excluding the ICT acquisition, corporate costs declined to $9.7 million, or 4.8% of revenues, from $11.4 million, or 5.4% of revenues, in the first quarter of 2010 due to a reduction in payroll related expenses.

Interest & Other Income and Taxes

Interest and other expense for the second quarter of 2010 totaled approximately $5.1 million compared to other income of $0.6 million for the same period in the prior year. Of the $5.7 million negative swing in interest and other expense, approximately $3.6 million was 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. Approximately $1.7 million of the swing was net interest expense due to a combination of higher interest expense and related underwriting fees associated with the acquisition-related term loan as well as lower average interest rates on lower cash balances. The remaining $0.4 million was other miscellaneous expenses.

The Company's second quarter 2010 effective tax rate was 27.5% versus 8.1% in the same period last year and above the estimated 8% provided in the Company's second quarter 2010 business outlook. The increase in the Company's second quarter 2010 tax rate was due chiefly to a tax expense resulting from foreign exchange rate fluctuation between a stronger U.S. dollar and a weaker Euro on the planned cash repatriation of $85 million and the recording of a valuation allowance on foreign tax credits, more-than-offsetting the recognition of a tax benefit related to a favorable audit settlement. On an adjusted basis, second quarter 2010 tax rate was 30.4% versus 12.2% in the same period last year and above the estimated 13% provided in the Company's second quarter 2010 business outlook. The increase in tax rate on an adjusted basis both relative to last year and the business outlook was due largely to the above-mentioned factors and a shift in the geographic mix of earnings to higher tax rate jurisdictions.

Earnings Per Diluted Share

The Company's second quarter 2010 earnings per diluted share were $0.05 versus $0.35 in the comparable quarter last year and a range of $0.20 to $0.22 provided in the Company's second quarter 2010 business outlook. The decrease in the Company's second quarter 2010 earnings per share relative to the business outlook was due to foreign currency transaction and other expense net losses (approximately $0.09 per diluted share impact), lower-than-forecasted demand (approximately $0.06 earnings per share impact), and a higher-than-anticipated tax rate (approximately $0.01 earnings per share impact).

On an adjusted basis, second quarter 2010 diluted earnings per share was $0.14 versus a $0.41 per share in the comparable quarter last year, which excludes the impact of the impairment loss on KLA and SHPS, and versus the adjusted diluted earnings per share range of $0.28 to $0.32 provided in the Company's second quarter 2010 business outlook. Assuming a forecasted tax rate of 13% as projected in the Company's second quarter 2010 business outlook and assuming the projected net interest expense of approximately $1.0 million for the second quarter of 2010, the adjusted diluted earnings per diluted share would have been $0.25. The decrease in second quarter 2010 earnings per share was due principally to lower-than-forecasted client demand without a commensurate reduction in labor costs.

Liquidity and Capital Resources

The Company's balance sheet at June 30, 2010 remained strong with cash and cash equivalents of $224.8 million (excluding restricted cash of $0.4 million). Approximately $214.1 million of the Company's June 30th cash balance was held in international operations and would be subject to additional taxes if repatriated back to the U.S. During the quarter, the Company made its first term loan repayment of $2.5 million and an early repayment of $20 million on its existing $75 million three-year term loan related to the ICT acquisition. The Company made an additional $50.0 million term loan repayment in July, with the remaining $2.5 million anticipated for repayment in September. At June 30, 2010, the Company had $75 million of undrawn borrowing capacity available under its revolving credit facility. The Company also purchased three hundred thousand shares of its common stock for a total cost of $5.2 million. Cash flow from operations was $27.1 million versus $25.4 million in same period last year.

Business Outlook

The assumptions driving the business outlook are as follows:

  --  The Company is raising its full-year 2010 synergy estimate to
      approximately $25 million from $21 million previously, while further
      raising its long-term projected synergy target to between $28 million
      and $30 million from between $23 million and $25 million previously. The
      Company's adjusted earnings per share estimates include pre-tax cost
      synergies of approximately $7 million in the third quarter of 2010.
      Separately, although it is not currently reflected in the third quarter
      and full-year 2010 business outlook, the process of capacity
      optimization and related-actions is under way as part of the Company's
      operational integration efforts related to the ICT acquisition. These
      actions could further impact earnings per share relative to the business
      outlook for the third-quarter and full-year 2010;

  --  Due to sustained macroeconomic weakness coupled with the foreign
      exchange volatility within the Americas and EMEA regions, the Company is
      revising its revenue range for full-year 2010. The roughly $68 million
      in revenue reduction on a consolidated basis between the mid-point of
      the previously forecasted full-year 2010 revenue range and the newly
      revised range is apportioned by a third equally across volatile foreign
      exchange rates, a decrease in existing client demand and a
      longer-than-anticipated sales cycle. Roughly two-thirds of the revenue
      reduction is from the Americas region, with the remaining from the EMEA
      region. And more than three-quarters of the revenue reduction is
      attributable to legacy SYKES;

  --  The Company's revenues and adjusted earnings per share assumptions were
      based on foreign exchange rates as of July 2010. Therefore, the
      continued volatility in foreign exchange rates between the U.S. dollar
      and the functional currencies of the markets the Company serves could
      have a significant impact on revenues and adjusted earnings per share
      relative to the business outlook for the third quarter and full-year;

  --  The Company anticipates net interest expense of approximately $1.3
      million for the third quarter of 2010 and net interest expense and other
      of $10.3 million, which includes approximately $5.0 million of net
      interest expense for full-year 2010. Third quarter 2010 net interest
      expense and full-year 2010 net interest expense and other exclude the
      impact of additional foreign exchange gains or losses; and

  --  The Company anticipates a lower tax rate in the third quarter of 2010
      compared to the tax rate in the second quarter of 2010 as there were
      discrete adjustments that drove the second quarter 2010 tax rate. The
      Company anticipates an uptick in the estimated full-year 2010 tax rate
      due to discrete adjustments as well.


Considering the above factors, the Company anticipates the following financial results for the three months ended September 30, 2010:

  --  Revenues in the range of $296 million to $301 million
  --  Tax rate of approximately 16% to 18%, on an adjusted basis, a tax rate
      of approximately 19% to 21%%, subject to volatility from quarter to
      quarter
  --  Fully diluted share count of approximately 46.3 million
  --  *Earnings per share of approximately $0.18 to $0.22
  --  Adjusted diluted earnings per share in the range of $0.24 to $0.26
  --  Capital expenditures in the range of $7.0 million to $9.0 million


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

  --  Revenues in the range of $1,165 million to $1,175 million
  --  Tax rate of approximately 24% to 26%%, on adjusted basis, a tax rate of
      26% to 29% subject to volatility
  --  Fully diluted share count of approximately 46.3 million
  --  *Earnings per share in the range of $0.23 to $0.28
  --  Adjusted diluted earnings per share in the range of $0.81 to $0.83
  --  Capital expenditures in the range of $27.0 million to $31.0 million


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

Conference Call

The Company will conduct a conference call regarding the content of this release tomorrow, August 3rd, 2010 at 10:00 a.m. Eastern 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). Refer to the tables in the release for a detailed reconciliation.

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)
                         Exhibit 1

                                      Three Months Ended

                                     SYKES +
                                       ICT         SYKES
                                     June 30,    June 30,
                                       2010        2009
                                    ----------  ----------

  Revenues                           $ 299,177   $ 208,839
  Direct salaries and related
   costs                             (197,244)   (133,727)
  General and administrative          (93,287)    (56,477)

  Canada's KLA Impairment                   --     (1,584)
                                    ----------  ----------
  Income from operations                 8,646      17,051
  Other income (expense), net          (5,135)         643

  SHPS Impairment                           --     (2,089)
                                    ----------  ----------
  Income before benefit
   (provision) for income taxes          3,511      15,605

  (Provision) for income taxes           (966)     (1,257)
                                    ----------  ----------

  Net income                           $ 2,545    $ 14,348
                                    ==========  ==========

    Net income per basic share          $ 0.05      $ 0.35
    Shares outstanding, basic           46,601      40,654

    Net income per diluted share        $ 0.05      $ 0.35
    Shares outstanding, diluted         46,648      40,953

               Sykes Enterprises, Incorporated
       Condensed Consolidated Statements of Operations
            (in thousands, except per share data)
                         (Unaudited)
                          Exhibit 2

                                        Six Months Ended

                                      SYKES +
                                        ICT         SYKES
                                      June 30,    June 30,
                                        2010        2009
                                     ----------  ----------

  Revenues                            $ 574,394   $ 412,080
  Direct salaries and related costs   (375,765)   (263,980)
  General and administrative          (196,140)   (111,965)

  Canada's KLA Impairment                    --     (1,584)
                                     ----------  ----------
  Income from operations                  2,489      34,551
  Other income (expense), net           (8,958)       2,200

  SHPS Impairment                            --     (2,089)
                                     ----------  ----------
  Income (loss) before (provision)
   for income taxes                     (6,469)      34,662

  (Provision) for income taxes            (499)     (5,544)
                                     ----------  ----------

  Net income (loss)                   $ (6,968)    $ 29,118
                                     ==========  ==========

    Net income (loss) per basic
     share                             $ (0.15)      $ 0.72
    Shares outstanding, basic            45,604      40,632

    Net income (loss) per diluted
     share                             $ (0.15)      $ 0.71
    Shares outstanding, diluted          45,712      40,999

         Sykes Enterprises, Incorporated
                 Segment Results
                 (in thousands)
                   (Unaudited)
                   Exhibit 3

                          Three Months Ended

                         SYKES +
                           ICT         SYKES
                         June 30,    June 30,
                           2010        2009
                        ----------  ----------

  Revenues:
    Americas             $ 245,957   $ 148,935

    EMEA                    53,220      59,904
                        ----------  ----------

      Total              $ 299,177   $ 208,839
                        ==========  ==========

  Operating Income:
    Americas              $ 24,603    $ 24,998
    EMEA                   (3,908)       1,752
    Corporate G&A
     expenses             (12,049)     (9,699)
                        ----------  ----------
    Income from
     operations              8,646      17,051

    SHPS Impairment             --     (2,089)
    Other income
     (expense), net        (5,135)         643
    (Provision) for
     income taxes            (966)     (1,257)
                        ----------  ----------

    Net Income             $ 2,545    $ 14,348
                        ==========  ==========


                           Six Months Ended

                         SYKES +
                           ICT         SYKES
                         June 30,    June 30,
                           2010        2009
                        ----------  ----------

  Revenues:
    Americas             $ 461,495   $ 291,742

    EMEA                   112,899     120,338
                        ----------  ----------

      Total              $ 574,394   $ 412,080
                        ==========  ==========

  Operating Income:
    Americas              $ 50,849    $ 48,376
    EMEA                   (4,614)       6,411
    Corporate G&A
     expenses             (43,746)    (20,236)
                        ----------  ----------
    Income from
     operations              2,489      34,551

    SHPS Impairment             --     (2,089)
    Other income
     (expense), net        (8,958)       2,200
    (Provision) for
     income taxes            (499)     (5,544)
                        ----------  ----------

    Net income (loss)    $ (6,968)    $ 29,118
                        ==========  ==========

                                 Sykes Enterprises, Incorporated
                         Condensed Consolidated Statements of Operations
                             (in thousands, except per share data)
                                           Exhibit 4

                                                      Three Months Ended
                                                         June 30, 2010


                                            --------------------------------------

                                                   Acquisition related Costs
                                            --------------------------------------


                                                              ICT
                                                         Depreciation
                                                              and
                                                         Amortization
                                                              of
                                                ICT       Property &       ICT
                                             Severance    Equipment       Merger
                                 SYKES +         &            and           &        SYKES +
                                   ICT       Consulting   Intangibles  Integration     ICT
                                 Reported    Engagement   Write-Ups       Costs      Adjusted
                                ----------  -----------  ------------  -----------  ----------

  Revenues                       $ 299,177                                           $ 299,177
  Direct salaries and related
   costs                         (197,244)           19                              (197,225)

  General and administrative      (93,287)        1,718         3,243        1,022    (87,304)
                                ----------  -----------  ------------  -----------  ----------
  Income from operations             8,646        1,737         3,243        1,022      14,648

  Other (expense), net             (5,135)                                             (5,135)
                                ----------  -----------  ------------  -----------  ----------
  Income before (provision)
  for income taxes                   3,511        1,737         3,243        1,022       9,513

  (Provision) for income taxes       (966)        (557)       (1,038)        (327)     (2,888)
                                ----------  -----------  ------------  -----------  ----------

  Net income                       $ 2,545      $ 1,180       $ 2,205        $ 695     $ 6,625
                                ==========  ===========  ============  ===========  ==========

    Net income (loss) per
     basic share                    $ 0.05       $ 0.03        $ 0.05       $ 0.01      $ 0.14
    Shares outstanding, basic       46,601       46,601        46,601       46,601      46,601

    Net income (loss) per
     diluted share                  $ 0.05       $ 0.03        $ 0.05       $ 0.01      $ 0.14
    Shares outstanding,
     diluted                        46,648       46,648        46,648       46,648      46,648



                                            --------------------------------------

                                                   Acquisition related Costs
                                            --------------------------------------


                                                              ICT
                                                         Depreciation
                                                              and
                                                         Amortization
                                                              of
                                                ICT       Property &       ICT
                                             Severance    Equipment       Merger
                                 SYKES +         &            and           &        SYKES +
                                   ICT       Consulting   Intangibles  Integration     ICT
                                 Reported    Engagement   Write-Ups       Costs      Adjusted
                                ----------  -----------  ------------  -----------  ----------

  Revenues:
    Americas                     $ 245,957                                           $ 245,957

    EMEA                            53,220                                              53,220
                                ----------  -----------  ------------  -----------  ----------

      Total                      $ 299,177         $ --          $ --         $ --   $ 299,177
                                ==========  ===========  ============  ===========  ==========

  Operating Income:
    Americas                      $ 24,603          407         3,235                 $ 28,245
    EMEA                           (3,908)                          8                  (3,900)

    Corporate G&A expenses        (12,049)        1,330                      1,022     (9,697)
                                ----------  -----------  ------------  -----------  ----------
    Income from operations           8,646        1,737         3,243        1,022      14,648
    Other (expense), net           (5,135)                                             (5,135)
    (Provision) for income
     taxes                           (966)        (557)       (1,038)        (327)     (2,888)
                                ----------  -----------  ------------  -----------  ----------


    Net Income                     $ 2,545      $ 1,180       $ 2,205        $ 695     $ 6,625
                                ==========  ===========  ============  ===========  ==========

                                 Sykes Enterprises, Incorporated
                         Condensed Consolidated Statements of Operations
                             (in thousands, except per share data)
                                           Exhibit 5

                                                       Six Months Ended
                                                         June 30, 2010


                                            --------------------------------------

                                                   Acquisition related Costs
                                            --------------------------------------


                                                              ICT
                                                         Depreciation
                                                              and
                                                         Amortization
                                                              of
                                                ICT       Property &       ICT
                                             Severance    Equipment       Merger
                                 SYKES +         &            and           &        SYKES +
                                   ICT       Consulting   Intangibles  Integration     ICT
                                 Reported    Engagement   Write-Ups       Costs      Adjusted
                                ----------  -----------  ------------  -----------  ----------

  Revenues                       $ 574,394                                           $ 574,394
  Direct salaries and related
   costs                         (375,765)           34                              (375,731)

  General and administrative     (196,140)       15,171         5,381        8,676   (166,912)
                                ----------  -----------  ------------  -----------  ----------
  Income from operations             2,489       15,205         5,381        8,676      31,751

  Other (expense), net             (8,958)                                             (8,958)
                                ----------  -----------  ------------  -----------  ----------
  Income (loss) before
   (Provision)
  for income taxes                 (6,469)       15,205         5,381        8,676      22,793

  (Provision) for income taxes       (499)      (4,056)       (1,436)      (2,314)     (8,305)
                                ----------  -----------  ------------  -----------  ----------

  Net income (loss)              $ (6,968)     $ 11,149       $ 3,945      $ 6,362      14,488
                                ==========  ===========  ============  ===========  ==========

    Net income (loss) per
     basic share                  $ (0.15)       $ 0.24        $ 0.09       $ 0.14      $ 0.32
    Shares outstanding, basic       45,604       45,604        45,604       45,604      45,604

    Net income (loss) per
     diluted share                $ (0.15)       $ 0.24        $ 0.09       $ 0.14      $ 0.32
    Shares outstanding,
     diluted                        45,712       45,712        45,712       45,712      45,712



                                            --------------------------------------

                                                   Acquisition related Costs
                                            --------------------------------------


                                                              ICT
                                                         Depreciation
                                                              and
                                                         Amortization
                                                              of
                                                ICT       Property &       ICT
                                 SYKES +     Severance    Equipment       Merger
                                   ICT           &            and           &        SYKES +
                                 June 30,    Consulting   Intangibles  Integration     ICT
                                   2010      Engagement   Write-Ups       Costs      Adjusted
                                ----------  -----------  ------------  -----------  ----------

  Revenues:
    Americas                     $ 461,495                                           $ 461,495

    EMEA                           112,899                                             112,899
                                ----------  -----------  ------------  -----------  ----------

      Total                      $ 574,394         $ --          $ --         $ --   $ 574,394
                                ==========  ===========  ============  ===========  ==========

  Operating Income:
    Americas                      $ 50,849        1,260       $ 5,366                 $ 57,475
    EMEA                           (4,614)                         15                  (4,599)

    Corporate G&A expenses        (43,746)       13,945                      8,676    (21,125)
                                ----------  -----------  ------------  -----------  ----------
    Income from operations           2,489       15,205         5,381        8,676      31,751

    Other (expense), net           (8,958)                                             (8,958)
    (Provision) for income
     taxes                           (499)      (4,056)       (1,436)      (2,314)     (8,305)
                                ----------  -----------  ------------  -----------  ----------


    Net income (loss)            $ (6,968)     $ 11,149       $ 3,945      $ 6,362    $ 14,488
                                ==========  ===========  ============  ===========  ==========

           Sykes Enterprises, Incorporated
                   Segment Results
                    (in thousands)
                     (Unaudited)
                       Exhibit 6

                                Three Months Ended

                               SYKES +     SYKES +
                                 ICT         ICT
                               Adjusted    Adjusted
                               June 30,    March 31,
                                 2010        2010
                              ----------  ----------

  Revenues                     $ 299,177   $ 275,217
  Direct salaries and
   related costs               (197,225)   (178,506)

  General and administrative    (87,304)    (79,608)
                              ----------  ----------
  Income from operations          14,648      17,103

  Other (expense), net           (5,135)     (3,823)
                              ----------  ----------
  Income before provision
   for income taxes                9,513      13,280
  (Provision) for income
   taxes                         (2,888)     (5,417)
                              ----------  ----------

  Net income                     $ 6,625     $ 7,863
                              ==========  ==========

    Net income per basic
     share                        $ 0.14      $ 0.18
    Shares outstanding,
     basic                        46,601      44,590

    Net income per diluted
     share                        $ 0.14      $ 0.18
    Shares outstanding,
     diluted                      46,648      44,766


                                Three Months Ended

                               SYKES +     SYKES +
                                 ICT         ICT
                               Adjusted    Adjusted
                               June 30,    March 31,
                                 2010        2010
                              ----------  ----------

  Revenues:
    Americas                   $ 245,957   $ 215,537

    EMEA                          53,220      59,680
                              ----------  ----------

      Total                    $ 299,177   $ 275,217
                              ==========  ==========

  Operating Income:
    Americas                    $ 28,245    $ 29,230
    EMEA                         (3,900)       (699)

    Corporate G&A expenses       (9,697)    (11,428)
                              ----------  ----------
    Income from operations        14,648      17,103

    Other (expense), net         (5,135)     (3,823)
    Provision for income
     taxes                       (2,888)     (5,417)
                              ----------  ----------


    Net income                   $ 6,625     $ 7,863
                              ==========  ==========


            Sykes Enterprises, Incorporated
         Condensed Consolidated Balance Sheets
                     (in thousands)
                       Exhibit 7



                                            December
                                June 30,      31,
                                  2010        2009
                               ----------  ----------

  Assets:
  Current assets                $ 493,610   $ 547,854
  Property and equipment, net     126,019      80,264
  Goodwill & Intangibles, net     169,444      23,300

  Other noncurrent assets          44,173      21,053
                               ----------  ----------

    Total assets                $ 833,246   $ 672,471
                               ==========  ==========

  Liabilities & Shareholders'
   Equity:
  Current liabilities           $ 181,582   $ 200,418
  Noncurrent liabilities           90,215      21,379

  Shareholders' equity            561,449     450,674
                               ----------  ----------
    Total liabilities and
     shareholders' equity       $ 833,246   $ 672,471
                               ==========  ==========



            Sykes Enterprises, Incorporated
                   Supplementary Data


                                Q2 2010     Q2 2009
                               ----------  ----------

  Geographic Mix (% of Total
   Revenues):

    Americas (1)                    82.2%       71.3%
    Europe, Middle East &
     Africa (EMEA)                  17.8%       28.7%
                               ----------  ----------
      Total:                       100.0%      100.0%

  (1) Includes the United States, Canada, Latin
   America, South Asia and the Asia Pacific (APAC)
   Region. Latin America,
  South Asia 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.



                                Q2 2010     Q2 2009
                               ----------  ----------

  Vertical Industry Mix (% of Total
   Revenues):

    Communications                    34%         36%
    Financial Services                25%         15%
    Technology / Consumer             20%         30%
    Healthcare                         7%          6%
    Transportation & Leisure           6%          9%

    Other                              8%          4%
                               ----------  ----------
      Total:                         100%        100%

             Sykes Enterprises, Incorporated
                Cash Flow from Operations
                     (in thousands)
                       (Unaudited)
                        Exhibit 8


                                   Three Months Ended

                                   June 30,    June 30,
                                     2010        2009
                                  ----------  ---------

  Cash Flow From Operating
   Activities:
    Net income                       $ 2,545   $ 14,348
    Depreciation and
     amortization                     15,252      7,162
    Changes in assets and
     liabilities and other             9,323      3,933
                                  ----------  ---------
    Net cash provided by
     operating activities           $ 27,120   $ 25,443
                                  ==========  =========

  Capital expenditures               $ 7,342    $ 7,251
  Cash interest paid                   $ 876      $ 560
  Cash taxes paid                    $ 6,362    $ 2,722



                                     Six Months Ended

                                   June 30,    June 30,
                                     2010        2009
                                  ----------  ---------

  Cash Flow From Operating
   Activities:
    Net income (loss)              $ (6,968)   $ 29,118
    Depreciation and
     amortization                     28,015     13,938
    Changes in assets and
     liabilities and other          (10,727)    (9,567)
                                  ----------  ---------
    Net cash provided by
     operating activities           $ 10,320   $ 33,489
                                  ==========  =========

  Capital expenditures              $ 13,470   $ 18,308
  Cash interest paid                 $ 1,968      $ 630
  Cash taxes paid                   $ 13,107    $ 6,274

                 Sykes Enterprises, Incorporated
                Business Outlook Reconciliation*
                           Exhibit 9

                                             Business Outlook


                                               Third Quarter
                                                   2010
                                            ------------------
  Adjusted Diluted Earnings Per Share          $0.24 - $0.26
    Severance & Consulting Engagement
     Costs                                         $0.00
    Merger and Integration Costs             ($0.01) - $0.00
    Depreciation & Amortization of
     Property & Equipment and Intangibles
     Write-Ups                               ($0.05) - $(0.04)
                                            ==================
  Earnings (loss) Per Share                    $0.18 - $0.22


                                             Business Outlook


                                                 Full Year
                                                   2010
                                            ------------------
  Adjusted Diluted Earnings Per Share          $0.81 - $0.83
    Severance & Consulting Engagement
     Costs                                       ($0.24)
    Merger and Integration Costs             ($0.15) - ($0.14)
    Depreciation & Amortization of
     Property & Equipment and Intangibles
     Write-Ups                               ($0.19) - ($0.17)
                                            ==================
  Diluted Earnings Per Share                   $0.23 - $0.28

This news release was distributed by GlobeNewswire, www.globenewswire.com

SOURCE: Sykes Enterprises, Inc.

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