Sykes Enterprises, Incorporated Important Announcements

Sykes Enterprises, Incorporated Announces:

• The sale of SPH, Incorporated for $165.5 million
• One-time restructuring and other charges of approximately $6.7 million, net of income tax
• EPS expectation of $2.23 for 2000
• Strategic focus on business solutions and services
• Addition of three new technical support centers and the expansion of two existing centers

TAMPA, Fla., June 13, 2000 /PRNewswire/ — Sykes Enterprises, Incorporated (“Sykes” or the “Company”) (Nasdaq: SYKE), a global leader in providing vertically integrated, technology-based solutions and services worldwide, today announced it has reached a definitive agreement to sell its wholly owned subsidiary SHPS, Incorporated (“SHPS”) to Welsh, Carson, Anderson and Stowe (“WCAS”). Pursuant to the agreement, WCAS will acquire SHPS for an enterprise value of $170 million. In the transaction, Sykes will receive $165.5 million in cash and will retain a 6.5% interest in SHPS going forward. Of the cash consideration, approximately $47.4 million shall be used to repay intercompany debt, $688,000 shall be used to retire other debt, and $7.5 million will be paid to SHPS’ option holders. In addition, certain members of SHPS’ management will acquire a 2.9% interest in SHPS. The Company anticipates it will realize a gain of approximately $92.9 million ($68.7 million net of income taxes or $1.60 per share) from its investment in SHPS. The agreement is subject to normal regulatory approval and is anticipated to be completed prior to June 30, 2000.

Proceeds from the sale of SHPS will be used to pay down approximately $90 million in borrowings outstanding under Sykes’ existing credit facilities. Remaining proceeds will be used for capital expenditures, possible acquisitions and for general working capital purposes.

John H. Sykes, Chairman and Chief Executive Officer, stated: “We are extremely pleased with the financial results of the sale of our ownership interest in SHPS, having delivered a significant return on the two-and-one-half year investment to shareholders while eliminating debt. We believe, with respect to the 6.5% interest we retained, Welsh, Carson, Anderson and Stowe is well positioned to provide additional value to SHPS based on their historical track record in the information services and health care industries. In conjunction with the sale of SHPS, we are also taking steps to streamline operations to focus on value-added solutions and services integrated with the Internet and e-Business.”

Donaldson, Lufkin & Jenrette acted as Sykes’ financial advisor with respect to the sale of SHPS.

WCAS, a New York-based, private equity firm founded in 1979, has organized eleven partnerships with total capital of $8 billion. WCAS focuses on three industries: telecommunications, information services and health care.

Sykes also announced today that as a result of its strategic realignment, its Board of Directors approved a restructuring plan that provides for closing several European and one U.S. fulfillment location, the closure or consolidation of six IT staffing facilities, as well as the elimination of certain corporate overhead, in order to reduce costs, improve operating efficiencies and tightly focus on value-added services. Under the plan, a charge of approximately $9.3 million ($6.7 million after income taxes or $0.16 per share) will be taken during the second quarter of 2000. This charge primarily relates to the write-down to fair value of redundant or obsolete assets, severance related to the termination of certain employees, lease terminations, professional fees and other costs.

In view of the adjustments based on the sale of SHPS and the restructuring plan, and based on an estimated 43 million fully diluted shares outstanding for the year 2000, management expects total earnings per diluted share for the year 2000 to approximate $2.23. This earnings-per-share amount includes an estimated $1.60 per diluted share from the gain on the sale of SHPS, an estimated $(0.11) per diluted share from a one-time charge from stock option exercises in connection with the sale of SHPS, and an estimated $(0.16) per diluted share from one-time restructuring and other costs.

“By taking an aggressive approach to maximize shareholder value in the sale of SHPS, combined with a reduction of certain technologically obsolete assets and a reduction of personnel associated with certain operations, we will be in a position to focus our abilities into two business segments-Solutions and Services,” stated David L. Grimes, President and Chief Operating Officer.

Business Solutions will provide totally integrated solution sets in the areas of e-Business/e-Commerce and Customer Relationship Management (CRM/e-CRM) that will focus on the implementation, integration and overall management of solutions and services for the new digital marketplace. Business Solutions evolved from a combination of the IT Staffing organization, Localization and existing internal intellectual capital to provide professional consulting services that were driven by customer demands. Business Solutions will bridge customers’ business challenges with Sykes’ Business Service offerings to create a completely integrated value proposition.

Business Services is positioning its workforce globally to meet increasing customer care demands now being placed on the outsourcing and service industry. The massive industry transformation being brought on by new technology and the Internet, has led many industries into re-evaluating how they do business and how their clients expect them to deliver services in the new economy and the age of the Internet. This same transformation led Sykes to begin its own re-evaluation in 1999. Out of this evaluation, Sykes began a deployment of a global virtual private network, combined with CRM tools and diagnostic technology in order to integrate and strategically realign its core capabilities of traditional technical support, distribution and Internet-enabled services within the areas of e-Commerce and e-Business applications. As a product of this transformation, Business Services will provide consolidated activities such as pre-sale, order fulfillment, distribution and post-sale support resulting in a value-added customer integrated service solution.

Today, in order to maintain the continued pace of growth within its core business, the Company also announced that it will build three additional technical support centers and expand two existing facilities. The new centers will be located in Marianna and Palatka, Florida, and Wise, Virginia. Each of the new 42,500 square foot, state-of-the-art technical support centers will add capacity of 432 seats on a single-shift operating basis and are expected to be fully operational in the fourth quarter of 2000.

In addition, the existing technical support centers in Charlotte, North Carolina, and the strategically important Heredia, Costa Rica facilities, are increasing seat capacity. The Charlotte technical support center will increase the number of seats from 500 currently to 800, while the number of seats in Costa Rica will increase from 375 to 625. Completion of the expansion of these locations is also expected by the fourth quarter of 2000.

This expansion provides an additional 1,846 seats to the approximate 12,500 seats currently existing on a global basis and are required as a result of the continued growth in the vertical markets the Company supports. The new and expanded contracts received provide for electronic and traditional telephony-based support and are comprised of established, new economy and dot.com organizations.

The Company will conduct a conference call regarding the content of this release on June 13, 2000 at 10 a.m. Eastern Standard Time. Parties interested in participating in this call should dial 888-276-0007 five minutes before the scheduled time. A replay will be available 24 hours after the call by dialing 800-475-6701. The access code is 523464.

Sykes, with approximately 14,000 employees, is a global leader in providing vertically integrated, technology-based solutions and services worldwide. By utilizing its technical support centers and e-business platform, Sykes is able to provide traditional and e-commerce services at all stages in the life cycle of its clients’ products and services, including initial development, documentation and localization, customer product services and end-user support. Sykes, headquartered in Tampa, FL, currently operates 39 technical support centers, nine e-commerce centers and 25 offices throughout the United States, Canada, Europe, Africa, Central America and the Philippines. SHPS, Incorporated, a wholly owned subsidiary based in Louisville, KY, provides on-line clinical managed care services, medical protocol products and employee benefit administration and support services. Visit the Sykes web site at http://www.sykes.com .

The statements contained in this press release that are not purely historical, including statements regarding Sykes’ objectives, expectations, hopes, intentions, beliefs or strategies regarding the future, are “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. 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: * customer resistance to Sykes’ standardized contract for future bundled service offerings; * variations in the term and the elements of services offered under Sykes’ standardized contract for future bundled service offerings; * changes in applicable accounting principles; * difficulties or delays in implementing Sykes’ bundled service offerings; * failure to achieve sales, marketing, and other objectives of Sykes’ strategic alliance; * construction delays of new call centers;

• difficulties in managing growth; * rapid technological change; * loss of significant customers; * risks inherent in conducting business abroad;
• currency fluctuations; * changes in legislation; * fluctuations in business conditions and the economy; * Sykes’ ability to attract and retain key management personnel; * the marketplace’s continued receptivity to Sykes’ bundled service offering; * Sykes’ ability to continue the growth of its support service revenues through additional technical support centers;
• Sykes’ ability to further penetrate into vertically integrated markets;
• Sykes’ ability to expand its global presence through strategic alliances and selective acquisitions; * Sykes’ ability to expand its e-commerce service platform revenues; * Sykes’ ability to continue to establish a competitive advantage through sophisticated technological capabilities; * and the risk factors listed from time to time in Sykes’ registration statements and reports as filed with the Securities 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. SOURCE Sykes Enterprises, Incorporated