This discussion should be read in conjunction with the condensed consolidated
financial statements and notes included elsewhere in this report and the
consolidated financial statements and notes in the Sykes Enterprises,
Incorporated ("SYKES," "our," "we" or "us")   Annual Report on Form 10-K for the
year ended December 31, 2019  , as filed with the Securities and Exchange
Commission ("SEC").

Our discussion and analysis may contain forward-looking statements (within the
meaning of the Private Securities Litigation Reform Act of 1995) that are based
on current expectations, estimates, forecasts, and projections about SYKES, our
beliefs, and assumptions made by us, including our belief that our operations
have not been materially impacted by the April 2020 cyber incident, as discussed
in   Note 18, Subsequent Event, in our Form 10-Q for the three months ended
March 31, 2020  , as filed with the SEC. In addition, we may make other written
or oral statements, which constitute forward-looking statements, from time to
time. Words such as "believe," "estimate," "project," "expect," "intend," "may,"
"anticipate," "plan," "seek," variations of such words, and similar expressions
are intended to identify such forward-looking statements. Similarly, statements
that describe our future plans, objectives, or goals also are forward-looking
statements. Further, statements about the effects of the novel coronavirus
("COVID-19") pandemic on our business, operations, financial performance and
prospects may constitute forward-looking statements and are subject to the risk
that the actual impacts may differ, possibly materially, from what is reflected
in those forward-looking statements due to factors and future developments that
are uncertain, unpredictable and in many cases beyond our control, including the
scope and duration of the pandemic, actions taken by governmental authorities in
response to the pandemic, and the direct and indirect impact of the pandemic on
our clients, third parties and us. These statements are not guarantees of future
performance and are subject to a number of risks and uncertainties, including
those discussed below and elsewhere in this report. Our actual results may
differ materially from what is expressed or forecasted in such forward-looking
statements, and undue reliance should not be placed on such statements. All
forward-looking statements are made as of the date hereof, and we undertake no
obligation to update any such forward-looking statements, whether as a result of
new information, future events or otherwise.

Factors that could cause actual results to differ materially from what is
expressed or forecasted in such forward-looking statements include, but are not
limited to: (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) currency fluctuations, (iv) the timing of significant orders for
our products and services, (v) variations in the terms and the elements of
services offered under our standardized contract including those for future
bundled service offerings, (vi) changes in applicable accounting principles or
interpretations of such principles, (vii) difficulties or delays in implementing
our bundled service offerings, (viii) failure to achieve sales, marketing and
other objectives, (ix) construction delays of new or expansion of existing
customer engagement centers, (x) delays in our ability to develop new products
and services and market acceptance of new products and services, (xi) rapid
technological change, (xii) loss or addition of significant clients, (xiii)
political and country-specific risks inherent in conducting business abroad,
(xiv) our ability to attract and retain key management personnel, (xv) our
ability to continue the growth of our support service revenues through
additional technical and customer engagement centers, (xvi) our ability to
further penetrate into vertically integrated markets, (xvii) our ability to
expand our global presence through strategic alliances and selective
acquisitions, (xviii) our ability to continue to establish a competitive
advantage through sophisticated technological capabilities, (xix) the ultimate
outcome of any lawsuits, (xx) our ability to recognize deferred revenue through
delivery of products or satisfactory performance of services, (xxi) our
dependence on the demand for outsourcing, (xxii) risk of interruption of
technical and customer engagement center operations due to such factors as fire,
earthquakes, inclement weather and other disasters, power failures,
telecommunication failures, unauthorized intrusions, computer viruses and other
emergencies, (xxiii) the existence of substantial competition, (xxiv) the early
termination of contracts by clients, (xxv) the ability to obtain and maintain
grants and other incentives (tax or otherwise), (xxvi) the potential of cost
savings/synergies associated with acquisitions not being realized, or not being
realized within the anticipated time period, (xxvii) risks related to the
integration of the acquisitions and the impairment of any related goodwill, and
(xxviii) other risk factors that are identified in our most recent   Annual
Report on Form 10-K for the year ended December 31, 2019  , including factors
identified under the headings "Business," "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

Executive Summary

We are a leading provider of multichannel demand generation and global comprehensive customer engagement services. We provide differentiated full lifecycle customer engagement solutions and services primarily to Global 2000 companies and their end customers, principally in the financial services, communications, technology,


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transportation & leisure, healthcare and other industries. Our differentiated
full lifecycle management services platform effectively engages customers at
every touchpoint within the customer journey, including digital marketing and
acquisition, sales expertise, customer service, technical support and retention,
many of which can be optimized by a suite of robotic process automation ("RPA")
and artificial intelligence ("AI") solutions. We serve our clients through two
geographic operating regions: the Americas (United States, Canada, Latin
America, Australia and the Asia Pacific Rim) and EMEA (Europe, the Middle East
and Africa). Our Americas and EMEA regions primarily provide customer engagement
solutions and services with an emphasis on inbound multichannel demand
generation, customer service and technical support to our clients' customers.
These services, which represented 98.9% and 97.4% of consolidated revenues
during the three months ended June 30, 2020 and 2019, respectively, and 98.7%
and 97.8% during the six months ended June 30, 2020 and 2019, respectively, are
delivered through multiple communication channels including phone, e-mail,
social media, text messaging, chat and digital self-service. We also provide
various enterprise support services in the United States ("U.S.") that include
services for our clients' internal support operations, from technical staffing
services to outsourced corporate help desk services. In Europe, we also provide
fulfillment services, which include order processing, payment processing,
inventory control, product delivery and product returns handling. Additionally,
through our acquisition of RPA provider Symphony Ventures Ltd ("Symphony")
coupled with our investment in AI through XSell Technologies, Inc. ("XSell"), we
also provide a suite of solutions such as consulting, implementation, hosting
and managed services that optimizes our differentiated full lifecycle management
services platform. Our complete service offering helps our clients acquire,
retain and increase the lifetime value of their customer relationships. We have
developed an extensive global reach with customer engagement centers across six
continents, including North America, South America, Europe, Asia, Australia and
Africa. We deliver cost-effective solutions that generate demand, enhance the
customer service experience, promote stronger brand loyalty, and bring about
high levels of performance and profitability.

Recent Developments

Coronavirus



On March 11, 2020, the World Health Organization characterized COVID-19 a
pandemic. The global nature, rapid spread and continually evolving response by
governments throughout the world to combat the spread has had a negative impact
on the global economy. Certain of our customer engagement centers have been
impacted by local government actions restricting facility access or are
operating at lower capacity utilization levels to achieve social distancing. We
are committed to the health and safety of our workforce and ensuring business
continuity for the brands we serve. In response, we have shifted as many
employees as possible to a work-at-home model. As of the middle of July 2020,
approximately 95% of agents assigned to our brick-and-mortar facilities are
working at our centers or from home across the world with 70% having
transitioned to a work-at-home model. Approximately 5% of our agents lack the
technical infrastructure to work from home. Our operations in the Philippines,
El Salvador and Mexico have been most impacted by the governmental restrictions.

We continue to closely monitor the prevalence of COVID-19 in the communities
where our centers are located as well as guidance from public health
authorities, federal and local agencies and municipalities. We will work with
employees and clients to transition agents back to our centers based on that
guidance, but risk further disruption to our business if COVID-19 returns or
governments reimpose restrictions.

Exit Plans

Americas 2019 Exit Plan



During the first quarter of 2019, we initiated a restructuring plan to simplify
and refine our operating model in the U.S. (the "Americas 2019 Exit Plan"), in
part to improve agent attrition and absenteeism. The Americas 2019 Exit Plan
included the closure of customer engagement centers, the consolidation of leased
space in various locations in the U.S. and management reorganization. We
finalized the actions under the Americas 2019 Exit Plan as of September 30,
2019.

Americas 2018 Exit Plan



During the second quarter of 2018, we initiated a restructuring plan to manage
and optimize capacity utilization, which included the closure of customer
engagement centers and the consolidation of leased space in various locations in
the U.S. and Canada (the "Americas 2018 Exit Plan"). We finalized the site
closures under the Americas 2018 Exit Plan as of December 2018, which resulted
in a decrease of approximately 5,000 seats.

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See Note 4, Costs Associated with Exit or Disposal Activities, in the accompanying "Notes to Condensed Consolidated Financial Statements" for further information.



Results of Operations

The following table sets forth, for the periods indicated, the amounts presented
in the accompanying Condensed Consolidated Statements of Operations as well as
the change between the respective periods:



                              Three Months Ended June 30,                Six Months Ended June 30,
(in thousands)             2020          2019        $ Change        2020          2019        $ Change
Revenues                 $ 416,833     $ 389,006     $  27,827     $ 827,999     $ 791,931     $  36,068
Operating expenses:
Direct salaries and
related costs              268,433       252,161        16,272       535,378       513,889        21,489
General and
administrative             102,664       104,282        (1,618 )     205,911       208,962        (3,051 )
Depreciation, net           12,630        13,052          (422 )      25,091        26,949        (1,858 )
Amortization of
intangibles                  4,093         4,127           (34 )       8,212         8,413          (201 )
Impairment of long-lived
assets                       1,800           129         1,671         1,800         1,711            89

Total operating expenses 389,620 373,751 15,869 776,392 759,924 16,468 Income from operations 27,213 15,255 11,958 51,607 32,007 19,600



Other income (expense):
Interest income                165           192           (27 )         428           377            51
Interest (expense)            (560 )      (1,179 )         619        (1,280 )      (2,357 )       1,077
Other income (expense),
net                          1,797          (533 )       2,330        (2,996 )          77        (3,073 )
Total other income
(expense), net               1,402        (1,520 )       2,922        

(3,848 ) (1,903 ) (1,945 )



Income before income
taxes                       28,615        13,735        14,880        47,759        30,104        17,655
Income taxes                 6,385         2,466         3,919        11,611         7,148         4,463
Net income               $  22,230     $  11,269     $  10,961     $  36,148     $  22,956     $  13,192




Three Months Ended June 30, 2020 Compared to Three Months Ended June 30, 2019

Revenues



                               Three Months Ended June 30,
                          2020                            2019
(in thousands)  Amount       % of Revenues      Amount       % of Revenues     $ Change
Americas       $ 339,272         81.4%         $ 310,307         79.8%         $  28,965
EMEA              77,561         18.6%            78,676         20.2%            (1,115 )
Other                  -         0.0%                 23         0.0%                (23 )
Consolidated   $ 416,833        100.0%         $ 389,006        100.0%         $  27,827

Consolidated revenues increased $27.8 million, or 7.2%, for the three months ended June 30, 2020 from the comparable period in 2019.



The increase in Americas' revenues was due to higher volumes from existing
clients of $40.6 million and new clients of $11.4 million, partially offset by
end-of-life client programs of $21.5 million primarily in the communications
vertical and an unfavorable foreign currency impact of $1.6 million. Revenues
from our offshore operations represented 42.6% of Americas' revenues in 2020,
compared to 43.1% for the comparable period in 2019.

The decrease in EMEA's revenues was due to end-of-life client programs of $2.6
million primarily in the communications and other verticals and an unfavorable
foreign currency impact of $2.4 million, partially offset by new clients of $2.5
million and higher volumes from existing clients of $1.4 million.

On a consolidated basis, we had 48,600 brick-and-mortar seats as of June 30,
2020, an increase of 1,200 seats from the comparable period in 2019. Virtually
all of this additional capacity was demand driven and was contracted at the
start of the year. On a segment basis, 40,400 seats were located in the
Americas, an increase of 700 seats from the comparable period in 2019, and 8,200
seats were located in EMEA, an increase of 500 seats from the comparable period
in 2019.

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On a consolidated basis, the capacity utilization rate was 73%, compared to 71%
in the comparable period in 2019, primarily driven by higher demand coupled with
our ability to rapidly mobilize our brick-and-mortar agents to the home agent
platform globally to service that demand. As of the middle of July 2020,
approximately 70% of agents who typically work in our brick-and-mortar
facilities have transitioned to work at home, 25% are working in our facilities
and the remaining 5% of agents are at home but idle.

The capacity utilization rate for the Americas in 2020 was 73%, compared to 70%
in the comparable period in 2019, with the increase driven by higher demand. The
capacity utilization rate for EMEA in 2020 was 69%, compared to 74% in the
comparable period in 2019, with the decrease due to the timing of the capacity
additions contracted at the start of the year. We strive to attain a capacity
utilization rate of 85% at each of our locations. Capacity utilization is
measured by taking the number of agents and indirect support headcount and
dividing it by the number of seats provisioned for utilization. Capacity
utilization is a critical metric for us as it is used as an input to the
pricing, revenue and margin drivers of our business as well as capital
allocation.

Direct Salaries and Related Costs





                                      Three Months Ended June 30,
                                 2020                            2019
                                                                                                     Change in % of
(in thousands)         Amount       % of Revenues      Amount       % of Revenues     $ Change          Revenues
Americas              $ 214,606         63.3%         $ 197,879         63.8%         $  16,727           -0.5%
EMEA                     53,827         69.4%            54,282         69.0%              (455 )         0.4%

Consolidated $ 268,433 64.4% $ 252,161 64.8% $ 16,272

           -0.4%




The increase of $16.3 million in direct salaries and related costs included a favorable foreign currency impact of $0.7 million in the Americas and a favorable foreign currency impact of $1.9 million in EMEA.



The decrease in Americas' direct salaries and related costs, as a percentage of
revenues, was primarily attributable to lower recruiting costs of 0.5%, lower
auto tow claim costs of 0.4%, lower customer-acquisition advertising costs of
0.3%, lower communications costs of 0.3% and lower other costs of 0.2%,
partially offset by higher travel costs of 0.7% and higher compensation costs of
0.5%.

The increase in EMEA's direct salaries and related costs, as a percentage of
revenues, was primarily attributable to higher compensation costs of 2.3% driven
by a decrease in consultant productivity at Symphony resulting principally from
project delays due to COVID-19 in the current period and higher software and
maintenance costs of 0.2%, partially offset by lower software purchased for
resale of 1.1% due primarily to the aforementioned project delays, lower travel
costs of 0.6%, lower auto and parking costs of 0.2% and lower other costs of
0.2%.

General and Administrative



                                      Three Months Ended June 30,
                                 2020                            2019
                                                                                                     Change in % of
(in thousands)         Amount       % of Revenues      Amount       % of Revenues     $ Change          Revenues
Americas              $  69,018         20.3%         $  71,768         23.1%         $  (2,750 )         -2.8%
EMEA                     17,026         22.0%            17,266         21.9%              (240 )         0.1%
Other                    16,620           -              15,248           -               1,372             -

Consolidated $ 102,664 24.6% $ 104,282 26.8% $ (1,618 ) -2.2%

The decrease of $1.6 million in general and administrative expenses included a favorable foreign currency impact of $0.5 million in the Americas and a favorable foreign currency impact of $0.5 million in EMEA.



The decrease in Americas' general and administrative expenses, as a percentage
of revenues, was primarily attributable to lower facility-related costs of 1.2%
was primarily attributable to COVID-19 restrictions related to the on-site
facility occupancy rates as well as fewer sites in operation, lower compensation
costs of 0.5%, lower travel costs of 0.4%, lower software and maintenance costs
of 0.3% and lower other costs of 0.4%.

The increase in EMEA's general and administrative expenses, as a percentage of
revenues, was primarily attributable to higher compensation costs of 1.0% and
higher software and maintenance costs of 0.4%, partially offset by lower travel
costs of 0.7%, lower legal and professional fees of 0.3%, lower technology
equipment and maintenance costs of 0.2% and lower other costs of 0.1%.

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The increase in Other general and administrative expenses, which includes
corporate and other costs, was primarily attributable to higher compensation
costs of $1.9 million and higher software and maintenance costs of $0.2 million,
partially offset by lower travel costs of $0.4 million and lower other costs of
$0.3 million.

Depreciation, Amortization and Impairment of Long-Lived Assets





                                        Three Months Ended June 30,
                                   2020                               2019
                                                                                                           Change in % of
(in thousands)          Amount         % of Revenues       Amount       % of Revenues       $ Change          Revenues
Depreciation, net:
Americas              $   10,088           3.0%           $ 10,659          3.4%           $     (571 )         -0.4%
EMEA                       1,818           2.3%              1,628          2.1%                  190           0.2%
Other                        724             -                 765            -                   (41 )           -
Consolidated          $   12,630           3.0%           $ 13,052          3.4%           $     (422 )         -0.4%

Amortization of
intangibles:
Americas              $    3,281           1.0%           $  3,288          1.1%           $       (7 )         -0.1%
EMEA                         812           1.0%                839          1.1%                  (27 )         -0.1%
Other                          -             -                   -            -                     -             -
Consolidated          $    4,093           1.0%           $  4,127          1.1%           $      (34 )         -0.1%

Impairment of
long-lived
  assets:
Americas              $    1,800           0.5%           $    129          0.0%           $    1,671           0.5%
EMEA                           -           0.0%                  -          0.0%                    -           0.0%
Other                          -             -                   -            -                     -             -
Consolidated          $    1,800           0.4%           $    129          0.0%           $    1,671           0.4%



The decrease in depreciation was primarily due to the impact since the prior period of certain fully depreciated fixed assets, partially offset by new depreciable fixed assets placed into service supporting site expansions and infrastructure upgrades.

Amortization remained consistent with the comparable period.



See Note 5, Fair Value, in the accompanying "Notes to Condensed Consolidated
Financial Statements" for further information on the impairment of long-lived
assets.

Other Income (Expense)



                                             Three Months Ended June 30,
(in thousands)                                2020                 2019           $ Change
Interest income                          $          165       $          192     $       (27 )

Interest (expense)                       $         (560 )     $       (1,179 )   $       619

Other income (expense), net:
Foreign currency transaction gains
(losses)                                 $           48       $         (361 )   $       409
Gains (losses) on derivative instruments
not
  designated as hedges                             (164 )               (432 )           268
Gains (losses) on investments held in
rabbi trust                                       1,816                  426           1,390
Other miscellaneous income (expense)                 97                 (166 )           263

Total other income (expense), net $ 1,797 $ (533 ) $ 2,330

Interest income remained consistent with the comparable period.

The decrease in interest (expense) was primarily due to lower average outstanding borrowings and lower average interest rates than in the comparable period.





                                       33

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The change in other income (expense), net, was primarily due to an increase in
value of investments held in rabbi trust and an increase in foreign exchange
gains over the comparable period.

See Note 8, Investments Held in Rabbi Trust, in the accompanying "Notes to Condensed Consolidated Financial Statements" for further information.



Income Taxes



                               Three Months Ended June 30,
(in thousands)                  2020                 2019          $ Change
Income before income taxes $       28,615       $       13,735     $  14,880
Income taxes                        6,385                2,466         3,919
                                                                   % Change
Effective tax rate                   22.3 %               18.0 %         4.3 %




The increase in the effective tax rate in 2020 compared to 2019 was primarily
due to an election made during the three months ended June 30, 2019 to step up
tax basis in a foreign subsidiary which resulted in a $0.6 million discrete tax
benefit. The increase was also affected by shifts in earnings among the various
jurisdictions in which we operate. Several additional factors, none of which are
individually material, also impacted the rate.



Six Months Ended June 30, 2020 Compared to Six Months Ended June 30, 2019



Revenues



                                Six Months Ended June 30,
                          2020                            2019
(in thousands)  Amount       % of Revenues      Amount       % of Revenues     $ Change
Americas       $ 672,198         81.2%         $ 635,084         80.2%         $  37,114
EMEA             155,794         18.8%           156,804         19.8%            (1,010 )
Other                  7         0.0%                 43         0.0%                (36 )
Consolidated   $ 827,999        100.0%         $ 791,931        100.0%         $  36,068

Consolidated revenues increased $36.1 million, or 4.6%, for the six months ended June 30, 2020 from the comparable period in 2019.



The increase in Americas' revenues was due to higher volumes from existing
clients of $66.4 million and new clients of $18.7 million, partially offset by
end-of-life client programs of $46.2 million primarily in the communications
vertical and an unfavorable foreign currency impact of $1.8 million. Revenues
from our offshore operations represented 42.7% of Americas' revenues in 2020,
compared to 41.5% for the comparable period in 2019.

The decrease in EMEA's revenues was due to end-of-life client programs of $5.4
million primarily in the communications and other verticals and an unfavorable
foreign currency impact of $5.0 million, partially offset by higher volumes from
existing clients of $5.6 million and new clients of $3.8 million.

Direct Salaries and Related Costs





                                       Six Months Ended June 30,
                                 2020                            2019
                                                                                                     Change in % of
(in thousands)         Amount       % of Revenues      Amount       % of Revenues     $ Change          Revenues
Americas              $ 427,234         63.6%         $ 405,478         63.8%         $  21,756           -0.2%
EMEA                    108,144         69.4%           108,411         69.1%              (267 )         0.3%

Consolidated $ 535,378 64.7% $ 513,889 64.9% $ 21,489

           -0.2%




The increase of $21.5 million in direct salaries and related costs included a unfavorable foreign currency impact of $0.3 million in the Americas and a favorable foreign currency impact of $3.8 million in EMEA.



The decrease in Americas' direct salaries and related costs, as a percentage of
revenues, was primarily attributable to lower customer-acquisition advertising
costs of 0.5%, lower auto tow claim costs of 0.4%, lower communications

                                       34

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costs of 0.3% and lower other costs of 0.2%, partially offset by was primarily
attributable to higher compensation costs of 0.8% and higher travel costs of
0.4%.

The increase in EMEA's direct salaries and related costs, as a percentage of
revenues, was primarily attributable to higher compensation costs of 1.7% driven
by a decrease in consultant productivity at Symphony resulting principally from
project delays due to COVID-19 in the current period and higher other costs of
0.3%, partially offset by lower software purchased for resale of 0.8%, lower
communications costs of 0.3%, lower rebillable costs of 0.3% and lower travel
costs of 0.3%.

General and Administrative



                                       Six Months Ended June 30,
                                 2020                            2019
                                                                                                     Change in % of
(in thousands)         Amount       % of Revenues      Amount       % of Revenues     $ Change          Revenues
Americas              $ 140,218         20.9%         $ 142,351         22.4%         $  (2,133 )         -1.5%
EMEA                     35,224         22.6%            37,300         23.8%            (2,076 )         -1.2%
Other                    30,469           -              29,311           -               1,158             -

Consolidated $ 205,911 24.9% $ 208,962 26.4% $ (3,051 ) -1.5%

The decrease of $3.1 million in general and administrative expenses included a favorable foreign currency impact of $0.3 million in the Americas and a favorable foreign currency impact of $1.1 million in EMEA.



The decrease in Americas' general and administrative expenses, as a percentage
of revenues, was primarily attributable to lower facility-related costs of 0.7%,
lower merger and integration costs of 0.3%, lower compensation costs of 0.3% and
lower travel costs of 0.2%.

The decrease in EMEA's general and administrative expenses, as a percentage of
revenues, was primarily attributable to lower merger and integration costs of
1.0%, lower travel costs of 0.4%, lower legal and professional fees of 0.3% and
lower technology equipment and maintenance costs of 0.2%, partially offset by
higher software and maintenance costs of 0.3%, higher compensation costs of 0.2%
and higher other costs of 0.2%.

The increase in Other general and administrative expenses, which includes
corporate and other costs, was primarily attributable to higher merger and
integration costs of $1.3 million, higher software and maintenance costs of $0.4
million, higher charitable contributions of $0.2 million and higher other costs
of $0.1 million, partially offset by lower compensation costs of $0.4 million
and lower travel costs of $0.4 million.

Depreciation, Amortization and Impairment of Long-Lived Assets





                                        Six Months Ended June 30,
                                  2020                              2019
                                                                                                        Change in % of
(in thousands)         Amount        % of Revenues       Amount       % of Revenues      $ Change          Revenues
Depreciation, net:
Americas              $  20,121          3.0%           $ 22,166          3.5%           $  (2,045 )         -0.5%
EMEA                      3,523          2.3%              3,254          2.1%                 269           0.2%
Other                     1,447            -               1,529            -                  (82 )           -
Consolidated          $  25,091          3.0%           $ 26,949          3.4%           $  (1,858 )         -0.4%

Amortization of
intangibles:
Americas              $   6,567          1.0%           $  6,726          1.1%           $    (159 )         -0.1%
EMEA                      1,645          1.1%              1,687          1.1%                 (42 )         0.0%
Other                         -            -                   -            -                    -             -
Consolidated          $   8,212          1.0%           $  8,413          1.1%           $    (201 )         -0.1%

Impairment of
long-lived
  assets:
Americas              $   1,800          0.3%           $  1,711          0.3%           $      89           0.0%
EMEA                          -          0.0%                  -          0.0%                   -           0.0%
Other                         -            -                   -            -                    -             -
Consolidated          $   1,800          0.2%           $  1,711          0.2%           $      89           0.0%


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The decrease in depreciation was primarily due to the impact since the prior period of certain fully depreciated fixed assets, partially offset by new depreciable fixed assets placed into service supporting site expansions and infrastructure upgrades.

The decrease in amortization was primarily due to the impact since the prior period of certain fully amortized intangible assets.



See Note 5, Fair Value, in the accompanying "Notes to Condensed Consolidated
Financial Statements" for further information on the impairment of long-lived
assets.

Other Income (Expense)



                                              Six Months Ended June 30,
(in thousands)                                2020                 2019           $ Change
Interest income                          $          428       $          377     $        51

Interest (expense)                       $       (1,280 )     $       (2,357 )   $     1,077

Other income (expense), net:
Foreign currency transaction gains
(losses)                                 $       (1,558 )     $         (537 )   $    (1,021 )
Gains (losses) on derivative instruments
not
  designated as hedges                             (410 )               (465 )            55
Gains (losses) on investments held in
rabbi trust                                        (241 )              1,606          (1,847 )
Other miscellaneous income (expense)               (787 )               

(527 ) (260 ) Total other income (expense), net $ (2,996 ) $ 77 $ (3,073 )

Interest income remained consistent with the comparable period.

The decrease in interest (expense) was primarily due to lower average outstanding borrowings and lower average interest rates than in the comparable period.





The change in other income (expense), net, was primarily due to a decline in
value of investments held in rabbi trust and an increase in foreign exchange
losses over the comparable period.

See Note 8, Investments Held in Rabbi Trust, in the accompanying "Notes to Condensed Consolidated Financial Statements" for further information.



Income Taxes



                               Six Months Ended June 30,
(in thousands)                 2020                2019          $ Change
Income before income taxes $      47,759       $      30,104     $  17,655
Income taxes                      11,611               7,148         4,463
                                                                 % Change
Effective tax rate                  24.3 %              23.7 %         0.6 %




The increase in the effective tax rate in 2020 compared to 2019 was primarily
due to an election made during the three months ended June 30, 2019 to step up
tax basis in a foreign subsidiary which resulted in a $0.6 million discrete tax
benefit, partially offset by shifts in earnings among the various jurisdictions
in which we operate. Several additional factors, none of which are individually
material, also impacted the rate.



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Client Concentration



Our top ten clients accounted for 45.9% and 42.9% of our consolidated revenues
in the three months ended June 30, 2020 and 2019, respectively, and 45.3% and
42.5% of our consolidated revenues in the six months ended June 30, 2020 and
2019, respectively.

Total revenues by segment from our largest client in each of the periods, which
was in the financial services vertical for the three and six months ended June
30, 2020 and the communications vertical for the three and six months ended June
30, 2019, were as follows (in thousands):



                              Three Months Ended June 30,                                    Six Months Ended June 30,
                          2020                           2019                           2020                           2019
                Amount      % of Revenues      Amount      % of Revenues      Amount      % of Revenues      Amount      % of Revenues
Americas       $ 32,123         9.5%          $ 28,238         9.1%          $ 61,726         9.2%          $ 58,863         9.3%
EMEA                  -         0.0%                52         0.1%                 -         0.0%                89         0.1%
               $ 32,123         7.7%          $ 28,290         7.3%          $ 61,726         7.5%          $ 58,952         7.4%




Total revenues by segment of our clients that each individually represents 10%
or greater of that segment's revenues in each of the periods were as follows (in
thousands):



                              Three Months Ended June 30,                                    Six Months Ended June 30,
                          2020                           2019                           2020                           2019
                Amount      % of Revenues      Amount      % of Revenues      Amount      % of Revenues      Amount      % of Revenues
Americas       $      -         0.0%          $      -         0.0%          $      -         0.0%          $      -         0.0%
EMEA             17,683         22.8%           10,103         12.8%           35,156         22.6%           20,036         12.8%
               $ 17,683         4.2%          $ 10,103         2.6%          $ 35,156         4.2%          $ 20,036         2.5%




Business Outlook

On March 11, 2020, the World Health Organization characterized COVID-19 as a
pandemic. The global nature, rapid spread and continually evolving response by
governments throughout the world to combat the spread has had a negative impact
on the global economy. Certain of our customer engagement centers have been
impacted by local government actions restricting facility access or are
operating at lower capacity utilization levels. We are committed to the health
and safety of our workforce and ensuring business continuity for the brands we
serve. In response, we have shifted as many employees as possible to a
work-at-home model. As of the middle of July 2020, approximately 95% of agents
assigned to our brick-and-mortar facilities are working at our centers or from
home across the world with 70% having transitioned to a work-at-home model.
Approximately 5% of our agents lack the technical infrastructure to work from
home. Our operations in the Philippines, El Salvador and Mexico have been most
impacted by the governmental restrictions.

We continue to monitor the progression of the pandemic and may take additional
actions in response to government orders or that we believe are in the best
interests of our employees, clients and shareholders. Due to the unprecedented
nature of this pandemic, forward-looking guidance has been suspended.

Liquidity and Capital Resources



Our primary sources of liquidity are typically cash flows generated by operating
activities and from available borrowings under our revolving credit facility. We
utilize these capital resources to make capital expenditures associated
primarily with our customer engagement services, invest in technology
applications and tools to further develop our service offerings and for working
capital and other general corporate purposes, including the repurchase of our
common stock in the open market and to fund acquisitions. In future periods, we
intend similar uses of these funds.

Our Board of Directors authorized us to purchase up to 10.0 million shares of
our outstanding common stock (the "2011 Share Repurchase Program") on August 18,
2011, as amended on March 16, 2016. A total of 7.8 million shares have been
repurchased under the 2011 Share Repurchase Program since inception. The shares
are purchased, from time to time, through open market purchases or in negotiated
private transactions, and the purchases are based on factors, including but not
limited to, the stock price, management discretion and general market
conditions. The 2011 Share Repurchase Program has no expiration date.

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During the six months ended June 30, 2020, cash increased $86.6 million from
operating activities, $23.0 million of debt proceeds and $0.6 million of other
cash inflows, partially offset by $47.0 million used to repay long-term debt,
$35.9 million used to repurchase common stock, $22.9 million used for capital
expenditures and $1.1 million to repurchase common stock for tax withholding on
equity awards, resulting in a $3.3 million increase in available cash, cash
equivalents and restricted cash (including the unfavorable effects of foreign
currency exchange rates on cash, cash equivalents and restricted cash of
$1.8 million).

Net cash flows provided by operating activities for the six months ended June
30, 2020 were $86.6 million, compared to $56.3 million for the comparable period
in 2019. The $30.3 million increase in net cash flows from operating activities
was due to a net increase of $15.9 million in cash flows from assets and
liabilities, a $13.2 million increase in net income and a $1.2 million increase
in non-cash reconciling items such as net unrealized foreign currency
transaction gains (losses), bad debt expense, net unrealized gains (losses) and
premiums on financial instruments and depreciation. The $15.9 million increase
in 2020 from 2019 in cash flows from assets and liabilities was principally a
result of a $7.5 million change in net taxes payable, a $5.0 million decrease in
other assets and a $3.1 million increase in other liabilities. The $7.5 million
increase in net taxes payable was primarily due to extensions of payment
deadlines granted by several jurisdictions. The $5.0 million decrease in other
assets was primarily due to a $3.4 million decrease in deferred charges and
other assets driven by an increase in the prior year in long-term accounts
receivable and deferred finance charges associated with the 2019 Credit
Agreement. The $3.1 million increase in the change in other liabilities was
primarily due to a $5.5 million increase in other long-term liabilities driven
by the deferral of our portion of social security taxes as permitted by the
Coronavirus Aid, Relief, and Economic Security ("CARES") Act, partially offset
by a $1.5 million decrease related to the timing of accrued expenses and current
liabilities and a $1.4 million decrease related to the timing of accounts
payable.

Capital expenditures, which are generally funded by cash generated from
operating activities, available cash balances and borrowings available under our
credit facilities, were $22.9 million for the six months ended June 30, 2020,
compared to $16.4 million for the comparable period in 2019, an increase of $6.5
million.

On February 14, 2019, we entered into a $500 million senior revolving credit
facility (the "2019 Credit Agreement") with a group of lenders, KeyBank National
Association, as Administrative Agent, Swing Line Lender and Issuing Lender
("KeyBank"), the lenders named therein, and KeyBanc Capital Markets Inc. as Lead
Arranger and Sole Book Runner. The 2019 Credit Agreement replaced our previous
$440 million revolving credit facility dated May 12, 2015 (the "2015 Credit
Agreement"), which agreement was terminated simultaneous with entering into the
2019 Credit Agreement. The 2019 Credit Agreement is subject to certain borrowing
limitations and includes certain customary financial and restrictive covenants.
We are not currently aware of any inability of our lenders to provide access to
the full commitment of funds that exist under the 2019 Credit Agreement, if
necessary. However, there can be no assurance that such facility will be
available to us, even though it is a binding commitment of the financial
institutions. The 2019 Credit Agreement will mature on February 14, 2024. As of
June 30, 2020, we were in compliance with all loan requirements of the 2019
Credit Agreement and had $49.0 million of outstanding borrowings under this
facility. For additional discussion of our credit agreements, see Note 18,
Borrowings in the "Notes to the Consolidated Financial Statements" section of
our   Annual Report on Form 10-K for the year ended December 31, 2019  .

Our credit agreements had an average daily utilization of $71.4 million and
$90.0 million during the three months ended June 30, 2020 and 2019,
respectively, and $67.6 million and $92.8 million during the six months ended
June 30, 2020 and 2019, respectively. During the three months ended June 30,
2020 and 2019, the related interest expense, including the commitment fee and
excluding the amortization of deferred loan fees, was $0.4 million and $0.9
million, respectively, which represented weighted average interest rates of 2.3%
and 4.1%, respectively. During the six months ended June 30, 2020 and 2019, the
related interest expense, including the commitment fee and excluding the
amortization of deferred loan fees, was $1.0 million and $1.9 million,
respectively, which represented weighted average interest rates of 3.0% and
4.1%, respectively.

We repaid $24.0 million, net, of long-term debt outstanding under the 2019 Credit Agreement during the six months ended June 30, 2020. Our future interest expense for the remainder of 2020 will vary based on our usage of the 2019 Credit Agreement and market interest rates.



We are currently under audit in several tax jurisdictions and believe we have
adequate reserves related to all matters pertaining to these audits. Should we
experience unfavorable outcomes from these audits, such outcomes could have a
significant impact on our financial condition, results of operations and cash
flows.

As part of the July 1, 2018 WhistleOut acquisition, an AUD 14.0 million three-year retention bonus is payable in


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installments on or around July 1, 2019, 2020 and 2021. We paid the first
installment of AUD 6.0 million ($4.2 million) in July 2019. We accelerated the
2021 installment of the retention bonus and paid AUD 8.0 million ($5.6 million)
in July 2020, which represented both the 2020 and 2021 installments. No further
amounts are due. Also, as part of the Symphony acquisition on November 1, 2018,
a portion of the purchase price, with an acquisition date present value of GBP
7.9 million ($10.0 million), was deferred and is payable in equal installments
over three years, on or around November 1, 2019, 2020 and 2021. We paid the
first installment of GBP 2.7 million ($3.3 million) in October 2019.

As of June 30, 2020, we had $129.1 million in cash and cash equivalents, of
which approximately 81.9%, or $105.6 million, was held in international
operations. Most of these funds will not be subject to additional taxes in the
United States if repatriated; however, certain jurisdictions may impose
additional withholding taxes. There are circumstances where we may be unable to
repatriate some of the cash and cash equivalents held by our international
operations due to country restrictions.

We expect our current cash levels and cash flows from operations to be adequate
to meet our anticipated working capital needs, including investment activities
such as capital expenditures and debt repayment for the next twelve months and
the foreseeable future. However, from time to time, we may borrow funds under
our 2019 Credit Agreement as a result of the timing of our working capital
needs, including capital expenditures.

Our cash resources could also be affected by various risks and uncertainties,
including but not limited to, the risks described in our   Annual Report on Form
10-K for the year ended December 31, 2019  .

Off-Balance Sheet Arrangements



As of June 30, 2020, we did not have any material commercial commitments,
including guarantees or standby repurchase obligations, or any relationships
with unconsolidated entities or financial partnerships, including entities often
referred to as structured finance or special purpose entities or variable
interest entities, which would have been established for the purpose of
facilitating off-balance sheet arrangements or other contractually narrow or
limited purposes.

Contractual Obligations

There have not been any material changes to the outstanding contractual obligations outside of the ordinary course of business from the disclosure in our Annual Report on Form 10-K for the year ended December 31, 2019 .

Critical Accounting Estimates



See "Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations" in our   Annual Report on Form 10-K for the year ended
December 31, 2019   for a discussion of our critical accounting estimates,
including a description of the methods and key assumptions used and how the key
assumptions were determined.

New Accounting Standards Not Yet Adopted



See Note 1, Overview and Basis of Presentation, in the accompanying "Notes to
Condensed Consolidated Financial Statements" for information related to recent
accounting pronouncements.

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