Exhibit 99.1
ROBERT W. BAIRD & CO.’S 2006 BUSINESS SOLUTIONS CONFERENCE
ICT GROUP, INC.
NASDAQ: ICTG
John Brennan, Chairman & CEO
March 1, 2006
Company Statements
This presentation contains certain forward-looking statements that are subject to risks and uncertainties. Forward-looking statements include without limitation certain information relating to the effect of competition in the telemarketing industry, ICT Group’s ability to execute its business strategy, the development of alliances upon terms acceptable to ICT Group and the achievement of the anticipated benefits of such alliances, as well as statements that are preceded by, followed by or include the words “believes,” “expects,” “estimates,” “anticipates,” “plans,” “should,” or similar expressions. For such statements, ICT Group claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Actual events or results may differ materially from those discussed in the forward-looking statements as a result of various factors, including without limitation, those discussed in ICT Group’s annual report on Form 10-K for the year ended December 31, 2004 and other documents filed by ICT Group with the Securities and Exchange Commission. ICT Group makes no undertaking and disclaims any obligation to update such forward-looking statements.
This presentation shows net income for 1996, 2002, 2003, 2004 and 2005 exclusive of special charges. In 1996 the Company reported a pre-tax, nonrecurring, non-cash charge of $12.7M which was primarily associated with the granting of options, concurrent with the Company’s IPO, to replace certain previously granted expiring options. In 2002 the Company incurred special charges of $12.6M, pre-tax. This included charges of $8.9M, pre-tax, associated with the closing and scaling back of facilities and staff in the U.S. and Europe. It also included $3.7M, pre-tax, of additional charges, including a $1.4M charge for a client claim, a $1.7M charge for the costs associated with the defense of a class action litigation and a $0.6M charge for costs associated with a postponed underwritten public offering. In 2003, the Company incurred special charges of $4.0M, pre-tax associated with a class action litigation which were partially offset by a $0.7M partial reversal of the 2002 restructuring charge. In 2004, the Company incurred special charges of $10.3M, pre-tax associated with costs incurred to defend and the settlement of a class action litigation.
In 2005, the Company received $4.2M of insurance recoveries and incurred $0.6M, pre-tax associated with the class action litigation.
Company Overview
Leading global provider of outsourced customer management and related marketing/BPO solutions Focus on mid-sized opportunities within Fortune 500 Target select group of high-growth vertical industries Extensive offshore operations supported from U.S. 41 service centers in U.S. and 7 foreign countries 16,200 employees—820 full-time LTM Revenues: $401M
March 1, 2006
U.S. Customer Interaction Services ($B) $40.0 $30.0 $20.0 $10.0 $0.0 $20.4 $23.1 $26.3 $30.0 $34.3 $38.7
2004 2005 2006 2007 2008 2009
CAGR 13.7%
Customer Service
Sales
Marketing
Technical Support/Help Desk
Source: IDC
March 1, 2006
Return to
Historical Financial Performance $500 $450 $400 $350 $300 $250 $200 $150 $100 $50 $0
Revenue (millions)
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006E
EBITDA (millions) $50 $45 $40 $35 $30 $25 $20 $15 $10 $5 $0
See slide 2
Revenue EBITDA
March 1, 2006
Strong Financial Performance in 4Q05 and FY 2005*
(millions) | | 4Q05 4Q04 V% FY05 FY04 V% |
Revenue | | $110.4 $92.5 19% $401.3 $325.5 23% |
EBITDA | | $11.1 $8.3 33% $36.0 $25.4 41% |
EBIT | | $5.7 $3.4 70% $15.2 $7.6 99% |
Net | | Income $3.8 $1.9 100% $9.3 $4.0 131% |
Diluted | | EPS $0.29 $0.15 93% $0.72 $0.31 132% |
* | | Excluding special charges [see Slide 2] |
March 1, 2006
Revenue and Earnings Growth $120 $110 $100 $90 $80 $70 $60 $50
1Q04 2Q04 3Q04 4Q04 1Q05 2Q05
3Q 05
4Q 05
1Q06
Revenue (millions) $0.32 $0.28 $0.24 $0.20 $0.16 $0.12 $0.08 $0.04 $0.00
1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06
Diluted EPS
Excluding special charges [see Slide 2]
March 1, 2006
Key Growth Drivers
Shifted to more consistent services business while improving operating performance of sales business Focused on select verticals while diversifying customer base Developed and implemented successful offshore strategy Added higher margin marketing and technology services
March 1, 2006
Rapid Growth of Services Revenue
- 32% Per Annum Since 2001 -
2001
32% 62% 6% $239M
2003
41%
52%
7% $298M
2005
30%
59%
11% $401M
Customer Service
Other Services
Sales
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March 1, 2006
Focusing Resources on Select Markets
ICT differentiates itself through its vertical marketing expertise and application knowledge base Have become an industry leader in financial services and health care sectors: account for 65% of revenue Improved our sales close rate and enabled cross-selling of additional services to existing clients Now applying vertical strategy to expand into new markets: government, technology and energy services
10
March 1, 2006
Key Clients in Major Verticals
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March 1, 2006
Diversification of Client Base
100%
80%
60%
40%
20%
0%
2001 2003 2005
$239M $298M $401M
All Other Second 5 Top 5
March 1, 2006
12
Global Capabilities
Based on proven international expertise Initially supported local country markets Expanded to provide low cost near-shore and offshore solutions Launched home shoring alternative in 2H05 Evaluating additional expansion for 2006
13
March 1, 2006
Global Strategy: Markets & Operations
U.K. Canada Ireland
U.S.
Philippines Mexico Caribbean India
Argentina
Australia
Served Market
Served Market with External Production External Production
Under Evaluation
Consistent Technology Platform Worldwide
Best-in-class technology platform:
Centralized architecture for reliability/flexibility VoIP telephony to reduce costs Redundant private network for voice & data communications
Intense focus on quality
All centers are ISO 9001:2000 certified
15
March 1, 2006
Leveraging Offshore Operations to Target New BPO Opportunities
Use offshore operations during off-peak hours to support other BPO services for new and existing clients Amortize infrastructure over expanded business base Raise utilization rates resulting in higher revenue and margin per workstation and higher ROIC
Add services through internal expansion, strategic relationships and acquisitions
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March 1, 2006
Workstation Growth & Increased Utilization
Annualized Revenue ($000’s) / Average # of Workstations $43 $42 $41 $40 $39 $38 $37 $36 $35 $37.7 $37.5
$36.5
$35.4
$37.1
$36.7
$35.4 $41.1 $41.1 $40.6 $40.3 $42.3
1Q03
2Q03
3Q03
4Q03
1Q04
2Q04
3Q04
4Q04
1Q05
2Q05
3Q05
4Q05
10,500 10,000 9,500 9,000 8,500 8,000 7,500
Average # of Workstations
Utilization Workstations
17
March 1, 2006
Margin Enhancement from CRM Technology Services
Expanded service offerings now include:
Hosted CRM, e-mail and knowledge-base software Hosted ACD, IVR and message alert services
Small but growing part of business achieving operating margins in excess of 25%
Strong pipeline for message alert services across multiple applications
Added management and sales staff
Establishing strategic alliances to target key markets
18
March 1, 2006
Strategic Expansion from ICT’s Core CRM Business
Technology Services
E-Mail Management IVR
Active Alerts Knowledge Base Quality Monitoring
Key: Current Services Potential Services
Marketing Services
Technology Hosting
CRM
Tele-Sales
Customer Care
Market Research DBMS
Lead Generation Data Analytics Voice Mining Business Intelligence
Collections Data Capture
Application Processing Claims Processing Mortgage Processing
BPO Services
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March 1, 2006
Balance Sheet and Cash Flow December 31, 2005 $10 million of Cash and Cash Equivalents $57 million of Working Capital
2.1 current ratio
Generated $12.7 million of Free Cash Flow in 2005 Expanded bank credit facility to $125 million $90 million available borrowing capacity, Plus $50 million accordion feature $81 million in Shareholders’ Equity
Annualized 4Q05 Return on Equity of 19.4%
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March 1, 2006
Positive Outlook
Solid top-line growth and improved profitability Three year internal targets of:
Revenue growth of 10-15% per annum (2006 – 2008) Operating margins to reach 7-8% in 2008
Strong pipeline of new business opportunities Expanded near-shore and offshore operations
Broader technology, marketing and BPO service offerings Strong financial position to invest in future internal growth and pursue strategic acquisitions to accelerate revenue, margin and earnings growth
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March 1, 2006
NASDAQ: ICTG
March 1, 2006
