Good morning. Welcome to TeleTech Third Quarter 2014 Earnings Conference Call. [Operator Instructions] This call is being recorded at the request of TeleTech. I would now like to turn the call over to Paul Miller, TeleTech's Senior Vice President and Corporate Treasurer. Thank you, sir. You may begin.

Thank you, operator. Good morning, and thank you for joining us today. TeleTech is hosting this call to discuss its third quarter 2014 results ended September 30. Participating in today's call are Ken Tuchman, our Chairman and Chief Executive Officer; and Regina Paolillo, our Chief Financial and Administrative Officer. Yesterday, TeleTech issued a press release announcing its financial results for the third quarter 2014 and also filed its quarterly report on Form 10-Q with the SEC. While this call will reflect items discussed within those documents, we encourage all listeners to read our Form 10-Q. Before we begin, I want to remind you that matters discussed on today's call may include forward-looking statements related to our operating performance, financial goal and business outlook, which are based upon management's current beliefs and assumptions. Please note that these forward-looking statements reflect our opinion as of the date of this call, and we undertake no obligation to revise this information as a result of new information that may become available. Forward-looking statements are subject to various risks, uncertainties and other factors that may cause our actual results to differ materially from those described. Such factors may include but not be limited to reliance on several large clients, the risks associated with lower profitability from or the loss of one or more significant clients, execution risks associated with ramping new businesses or integrating acquired businesses, the possibility of asset impairments and/or restructuring charges and the potential impact to the financial results due to foreign... [Technical Difficult]

Let me say something. Ladies and gentlemen, I apologize. There was a problem with the conference -- third-party conference system, so we're going to restart the call. I believe, Paul, you did get your intro in, or...

Yes. Operator, was my introduction properly received?

Yes, it was.

Okay, and...

And were the callers able to hear any of my presentation, or did they...

They heard the first few minutes, Mr. Miller, before your line disconnected.

Okay. So why don't we start with Ken [indiscernible]?

Okay. All right, so I apologize for doing a restart. Again, thank you, Paul, and good morning to everybody. We had a busy quarter. When all is said and done, there are 2 important highlights from our third quarter performance. First and foremost, we are finally growing. And second, we've had short-term challenges in our Customer Technology Services segment. In the third quarter, we signed $125 million of new business, a 56% increase over the same period last year and a company record. Year-to-date, we closed $340 million of new business, up 19% over the prior year. Furthermore, our constant currency growth rate was 5.7% versus 1.3% in the same 9-month period last year. Most notably, the organic growth was 3.1% in 2014 versus a negative 3.5% in the prior year. The balance of new business across segments, industries and regions underlines the breadth of our new sales and marketing platform. We are optimistic that with our 2014 bookings; continued investment in sales, marketing and product development; and increased progress in selling multi-tower solutions, we are confident that we can deliver continued improvement in the top line. Now let me address the elephant in the room, the question of profitable growth. The third quarter decline in our operating income margin is specific to our Customer Technology Services segment, also known as CTS. Year-over-year, the operating profit in CTS declined $5.5 million. The impact on third quarter operating margin was 180 basis points. The decline in operating margin is attributable to a handful of items: $2 million in incremental cloud investment, $1 million related to lower revenues and $2 million in onetime expense adjustments. We view this decline to be unique to this quarter. The growth in customer engagement technology is undisputed, especially as it relates to multichannel communications and collaboration.…

Thank you, Ken. And good morning, everyone. Let's start with a review of our third quarter consolidated results, followed by our segment performance and then with some comments on our updated guidance. On a non-GAAP basis, Q3 revenue was $305.8 million. EBITDA was $37.3 million or 12.2% of revenue. Operating income was $21.5 (sic) [ $21.3 ] million or 7%. And diluted earnings per share was $0.31. Additional highlights on the quarter include strong bookings and pipeline development across our 4 business segments, the launch of new technology offerings. We closed the rogenSi acquisition. We continued to improve facility utilization, associate retention and client retention. Regarding bookings. Our expanded suite of offerings is gaining broader market acceptance, as evidenced by the momentum and diversity of our new business signings. We're pleased with the $125 million in third quarter 2014 bookings, a company record. And we're mindful of the potential variability by quarter. We are particularly encouraged by the sequential quarterly increases in our overall bookings over the last 12 months. In the third quarter of 2014, GAAP revenue was $305.9 million compared to $297 million in the third quarter of last year, up 3%. 26% of revenue was generated from our CGS, CSS and CTS segments. Third quarter revenue from acquisitions in their first year was $9.6 million. Non-GAAP EBITDA declined to $37.3 million or 12.2% of adjusted revenue. This compares to $41.2 million or 13.8% of revenue in the year-ago quarter. Our third quarter GAAP operating income was $21.3 million versus $26 million. Operating income was 7% versus 8.7% of revenue in the year-ago quarter. The decline in operating income is related to a $5.4 million decrease in our CTS segment. Operating income in the quarter was further impacted by $1.8 million in investments; $0.6 million in incremental amortization…

Thanks, Regina. [Operator Instructions] Operator, you may open the lines.

[Operator Instructions] We have a question from Mike Malouf.

I was just hoping that you could give a little bit more color on CTS. I know, in the last quarter, we were kind of hoping for a bounce back. And I know that some things are on the -- certainly on the investment side, but do you think there's more competition going on in there? Is there some pricing issues? Is there anything that maybe -- that you were -- as you got deeper into CTS in the last quarter, that you realized -- that you didn't realize when we were in the last quarter? If you can just give us some more color, that would be great.

Mike, it's Ken. I'll answer maybe the first part and let Regina add any other commentary. I do not believe that this is, in any way, tied to more competition or a pricing compression, et cetera. I think that we were very open and very transparent. And I think that this was really a, frankly, self-inflicted situation where we -- where our management in this group did not deliver. And part of it has to do with the fact that this was one unit, TSG, that was not fully integrated. And the fact of the matter is that the other unit, which was eLoyalty, is powering on through and doing just fine, but this particular acquisition brought down the whole group, and it's inexcusable. It's truly just tied to lack of execution, not the proper focus that we should have had. We absolutely see what we need to do. And I think it's why we're confident that -- in the coming quarter, that we're already going to -- we're already seeing a bounce back from just the first half to the second half. The reality is that there should have been some structural changes made probably 1 year ago, and for whatever reason, they weren't made. And we're paying the price for that, and we're very apologetic about it.

Yes. I think the only thing I would add is we were off in the first half. We had good bookings in Q3. I think, relative to the conversations we had coming off of Q2, I would say we believe that we could recoup some of that sooner. And it's going to take a little bit longer for our return to historical-level bookings to work its way into the revenue. We've also seen our way to a number of things that we can do in further integration with these 2 acquisitions, which will naturally, in a very healthy way for our clients and our top line and bottom line, streamline the organization a bit. We've talked during the script about the engagement of GMI. We believe that's going to make a huge difference. That's a nice-sized Avaya business today, but when you take a look at the market share that Avaya does have and the opportunity we have through our embedded base, which has significant Avaya platform, we believe the market's there. I think the market issues have largely been around unified communication. Ours is a contact center play. We have these great relationships with Cisco and Avaya. As I mentioned, we have $60 million of total contract value in our cloud business, and we have another $59 million to $60 million of backlog in our managed service business. So we feel pretty good about the return. It's going to take us a couple of quarters to navigate that. We believe that, as we navigate back to growth in CTS, we are seeing momentum. This is a single quarter. It's... [Technical Difficulty]

Mike, I'm sorry. We're -- the Verizon conferencing system is having an issue. We outsource it. Probably, we shouldn't be doing that anymore. Anyway, so I don't know that you heard my response.

I think they heard your -- my response [ph] and not yours, Ken.

Yes, we heard your response. And most of...

I think you were adding the relationship we have with senior folks.

So you heard the fact that we've got very strong relationships with Avaya, all the way at the very top, and that they're working closely with us. They're very committed to us being successful because they view us as one of the most sophisticated providers in the multichannel space. And that secondly, that the market right now -- Avaya has 72% globally of the contact center market, of which 75% of that 72% is 10 year -- the equipment or the kit is 10 years old. And therefore, we see a real opportunity in transitioning those folks to the cloud.

Our next question is from Tobey Sommer.

This is Frank, on for Tobey. I wanted to ask, just what gives you some confidence? Can you share with us any metrics, as we exit the quarter, over the last 4 or 5 weeks that kind of back up that this is more of a 1-quarter event going forward?

Yes, I mean I guess I'll start. And then I think I'll start quantitatively, and then Ken can kick in with some color. Look, we are in the last -- into the last 7 weeks or so of the quarter. We have good visibility to backlog across each of these businesses. Near term, right in Q4, we can already see obviously October's -- a good part of October's revenue. And so what I would say is we're very confident that -- the tick-up, that is in our -- was in our guidance. I mean the reset on guidance is it's really primarily a reset based on what's happened in CTS. But the seasonal volume is up. It's up from last year. And if you take a look at our lift from Q3 to Q4, you'll definitely see a premium to that lift as we go into Q4. And then as I said earlier, we can already see what the existing business will be; going into last year's were heavily in our planning process, and we most likely have about a 3% lift in the existing business going into next year versus last year. So we feel relatively comfort. We still have a fair amount of nonrecurring business to deliver through bookings and revenue, but the platforms are there to do that. And those platforms have been further improved by the rogenSi and the Sofica acquisitions that we did that are doing very well, albeit rogenSi is with us just a short period of time.

Okay, great. And then within CTS, the $2 million that was related to cloud investments. Is there something that suggests that the pace of those investments will slow? Is there something that you have visibility on as you move into 2015? What are your thoughts in terms of future investments in these cloud capabilities?

Yes, I mean almost $1 million of that was really an accounting adjustment that we had to do relative to capital R&D, so that truly is onetime in nature and really doesn't have anything relative to a tick-up. The balance of it had to do with some onetime expenses related to our managed services. So I really feel that those are truly onetime. They won't repeat. That said, as you hear laced throughout our conversation, delivering that $60 million of backlog TCV, total contract value, for the cloud has taken us CapEx, which is now showing up in depreciation as we put these clients in service, but you can -- I think you can generally look at that $60 million, and while our gross margin on that will change through various levels of seats, the next 5,000 seats give us about a 20% reduction in the cost per seat. But if you look at that $60 million, you can generally count on it driving 40% to 45% of gross margin. And so we continue to look at that investment and feel that the amount of money that we're deploying there -- historically, it's been to build the stadium, if I could use a parallel, and now what we're doing is, as we gain client contracts, we fill out each section. So a lion's share, at least for the next couple of years that the stadium has been built, and now it's a function of, as we get clients, there are things that we need to add to the environment specific to those clients.

Our next conference -- or next question, excuse me, is from Shlomo Rosenbaum. Josh James - Stifel, Nicolaus & Company, Incorporated, Research Division: This is actually Josh James filling in for Shlomo. I just have 2 quick ones. First, can you tell us how much revenue rogenSi added to the CSS business in the quarter? And second, how much currency impact is factored into your revenue guidance for the fourth quarter?

Yes, sure. So rogen is a couple of million dollars in our numbers for the quarter. We had it a short period of time. We'll have it a full quarter next quarter. And our view, our current estimate shows that, from a revenue perspective, we'll have about a $3.5 million impact on -- from FX on our revenue Q3 to Q4.

[Operator Instructions]

Yes, operator, hi. This is Paul. You may end the call.

Thank you.

Thank you.