SIGNIFICANT CLIENTS AND OTHER CONCENTRATIONS

9 Months Ended

Sep. 30, 2022

SIGNIFICANT CLIENTS AND OTHER CONCENTRATIONS [Abstract]

SIGNIFICANT CLIENTS AND OTHER CONCENTRATIONS

(4)SIGNIFICANT CLIENTS AND OTHER CONCENTRATIONS

The Company had one client that contributed in excess of 10% of total revenue for the nine months ended September 30, 2022; this client operates in the automotive industry and is included in the TTEC Engage segment. This client contributed 10.5% and 9.1% of total revenue for the nine months ended September 30, 2022 and 2021, respectively. The Company had one client that contributed in excess of 10% of total revenue for the nine months ended September 30, 2021; this client operates in the financial services sector. This client contributed 7.4% and 13.3% of total revenue for the nine months ended September 30, 2022 and 2021, respectively. The Company does have clients with aggregate revenue exceeding $100 million annually and the loss of one or more of these clients could have a material adverse effect on the Company’s business, operating results, or financial condition. To mitigate this risk, the Company has multiple contracts with these larger clients, where each individual contract is for an amount below the $100 million aggregate.

To limit the Company’s credit risk with its clients, management performs periodic credit evaluations, maintains allowances for credit losses and may require pre-payment for services from certain clients. Based on currently available information, management does not believe significant credit risk existed as of September 30, 2022.

Activity in the Company’s Allowance for credit losses consists of the following (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Balance, beginning of period	$	5,406	$	5,940	$	5,409	$	5,067
Provision for credit losses		1,363		(189)		1,561		(34)
Uncollectible receivables written-off		(890)		302		(1,110)		41
Effect of foreign currency		(24)		(7)		(5)		(16)
Acquisition		—		—		—		988
Balance, end of period	$	5,855	$	6,046	$	5,855	$	6,046

Accounts Receivable Sales Agreement

The Company is party to an Uncommitted Receivables Purchase Agreement (“Agreement”) with Bank of the West (“Bank”), whereby from time-to-time the Company may elect to sell, on a revolving basis, U.S. accounts receivables of certain clients at a discount to the Bank for cash on a limited recourse basis. The maximum amount of receivables that the Company may sell to the Bank at any given time shall not exceed $100 million. The sales of accounts receivable in accordance with the Agreement are reflected as a reduction of Accounts Receivable, net on the Consolidated Balance Sheets. The Company has retained no interest in the sold receivables but retains all collection responsibilities on behalf of the Bank. The discount on the accounts receivable sold will be recorded within Other expense, net in the Consolidated Statements of Comprehensive Income (Loss). The cash proceeds from this Agreement are included in the change in accounts receivable within the operating activities section of the Consolidated Statements of Cash Flow.

As of September 30, 2022 and December 31, 2021, the Company had factored $85.6 million and $97.7 million, respectively, of accounts receivable; under the Agreement discounts on these receivables were not material during the quarter. As of September 30, 2022, the Company had collected $10.0 million of cash from customers which had not been remitted to the Bank. The unremitted cash is restricted cash and is included within Prepaid and other current assets with the corresponding liability included in Accrued expenses on the Consolidated Balance Sheet. The Company has not recorded any servicing assets or liabilities as of September 30, 2022 as the fair value of the servicing arrangement as well as the fees earned were not material to the financial statements.

Effective November 1, 2022, the Company amended the arrangement to modify the list of eligible clients who may be sold pursuant to the Agreement, and to memorialize the transition from LIBOR to SOFR for discount calculation purposes.