SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) : January 26, 2000
Precision Response Corporation
(Exact name of Registrant as specified in its charter)
Florida 0-20941 59-2194806
(State of (Commission File No.) (IRS Employer
Incorporation) Identification Number)
1505 N.W. 167th Street
Miami, Florida 33169
(Address of principal executive offices, including zip code)
(305) 816-4600
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Item 5. Other Events
On January 26, 2000, the Registrant issued a press release
concerning its revenues and earnings for the fourth quarter and year ended
December 31, 1999. A copy of the press release is attached hereto as
Exhibit 99.1 and is hereby incorporated by reference.
Item 7. Financial Statements and Exhibits
99.1 Press Release of the Registrant, dated January 26, 2000.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Precision Response Corporation
By: /s/ Richard D. Mondre
-------------------------------
Name: Richard D. Mondre
Title: Executive Vice President, General
Counsel and Secretary
Date: January 27, 2000
EXHIBIT INDEX
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99.1 Press Release of the Registrant, dated January 26, 2000
EXHIBIT 99.1
Wednesday January 26, 4:08 pm Eastern Time
Company Press Release
SOURCE: Precision Response Corporation
Precision Response Corporation Reports Record
Revenues And Earnings For Fourth Quarter And
1999 Results
Fourth Quarter Revenues Up 35%; 1999 EPS Climbs to $0.37
MIAMI, Jan. 26 /PRNewswire/ -- Precision Response Corporation (Nasdaq: PRRC
- - news) today reported strong financial results for the fourth quarter and
year ended December 31, 1999.
The Company announced that revenue increased to a record $62.6 million for
the quarter ended December 31, 1999, up 35% compared to $46.3 million for
the same period a year ago. Net income totaled $3.0 million, or $0.13 per
share (diluted), verses $1.2 million, or $0.06 per share (diluted) for the
fourth quarter of 1998.
For the year ended December 31, 1999, the Company reported record revenue
of $215.9 million, up 23% from $175.2 million in 1998. Net income increased
131% to $8.3 million or $0.37 per share (diluted) for the year ended
December 31, 1999, compared to net income of $3.6 million or $0.17 per
share (diluted), excluding restructuring and other non-recurring charges,
for the same period in 1998.
PRC continued trends in the fourth quarter that developed throughout 1999
including growth in traditional customer care operations, the ramp-up of
its Internet-based customer care or eCare operations, and improved asset
utilization. PRC's eCare subsidiary, prcnetcare.com(SM), generated $3.2
million in revenue for the fourth quarter ended December 31, 1999, up 65%
from $2.0 million for the third quarter of 1999. The subsidiary incurred
expenses of approximately $4.2 million for the quarter as compared to
approximately $2.6 million for the third quarter of 1999. For the fiscal
year ended December 31, 1999, the subsidiary generated revenues of $6.7
million and incurred expenses of $9.7 million.
As previously announced on January 12, PRC signed a definitive agreement
with USA Networks, Inc. (Nasdaq: USAI - news) whereby USAi would acquire
all of the outstanding shares of PRC in a tax-free merger. The transaction
is expected to close in the 2nd quarter of 2000. The Company's growing
leadership position in eCare provided the impetus for the transaction, as
PRC will integrate with USA's Electronic Commerce and Services division to
manage a worldwide network of customer support activities focused on USA's
electronic commerce initiatives as well as PRC's existing clients.
David Epstein, Chief Executive Officer of Precision Response Corporation,
commented, "PRC's fourth quarter performance capped a defining year for the
Company. Accelerating performance throughout the year led to the
restoration of solid profitability and growth in our traditional call
center operations, while we firmly established PRC as a first mover in
migrating top-quality customer care to the Internet. The agreement to merge
with USA, we believe, is a recognition by a true industry leader in
electronic commerce of the power of our service offering. We feel that this
combined entity will become the dominant market leader of the currently
fragmented customer care sector."
In the fourth quarter, the Company added several significant new clients to
its core teleservices business, including Franklin Health and Intuit. The
Company continued to expand existing relationships with blue-chip clients
such as AT&T, and also successfully commenced work on the priceline.com
WebHouse Club venture, a key business win for prcnetcare.com(SM).
About PRC
Precision Response Corporation is a leader in outsourced customer care,
providing a fully integrated mix of traditional call center and e-commerce
customer care technologies and services. The prcnetcare.com(SM) subsidiary
integrates interactive communications capabilities, such as telephone,
e-mail and online chat/IP telephony, to better support e-commerce and
customer relationship management. It was the first service to provide
real-time live customer support over the Internet via the "click-to-talk",
"click-to-e-mail", and "click-to-chat" functions. PRC partners with large
corporations and high- growth Internet-focused companies, including
American Express, priceline.com's WebHouse Club, AT&T, British Airways, and
DIRECTV, to help them better develop pre- and post-sales customer
relationships. The company is headquartered in Miami, Florida.
Forward-Looking Statements
This press release contains certain forward-looking statements made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995, representing PRC's current expectations or beliefs
concerning future events and goals. If and when used in this press release,
the words "believes", "feels", "estimates", "plans", "expects", "intends",
"anticipates", "made", "contemplates", "may", "could", "will" and similar
expressions as they relate to PRC or its management are intended to
identify forward-looking statements. Although PRC believes the expectations
contained in such forward-looking statements are reasonable, it can give no
assurance that such expectations will prove to be correct. These
expectations (such as the expected consummation of the acquisition of PRC
by USA Networks, Inc., PRC's continuing growth and PRC's leadership
position in eCare) involve risks and uncertainties that could cause actual
results to differ materially from the forward-looking statements. Factors
which could cause or contribute to such differences and impact future
events include, but are not limited to: the failure of the acquisition of
PRC by USA Networks, Inc. to be consummated at all or on a timely basis,
the over estimation of the level of need and demand for customer support
through the use of the Internet, the effective and timely marketing of
InfiniteAccess and other Internet offerings by prcnetcare.com as well as
its ability to increase utilization by existing clients, technical
difficulties or errors, problems or excess costs incurred in connection
with the development, implementation and/or further enhancement of
InfiniteAccess and other Internet services and products and/or the
integration of Internet technologies with current Company products and
services, the maintenance of client relationships and existing programs
(particularly since the Company's agreements with its clients generally do
not assure that it will generate a specific level of revenue, do not
designate it as the client's exclusive service provider and are terminable
by the client on relatively short notice), the level of acceptance of use
of InfiniteAccess and other Internet products and services offered by
prcnetcare.com as compared to the products and services offered by its
competitors, the achievement of satisfactory levels of both gross and
operating margins and all other factors or risks detailed in the Company's
other press releases and Securities and Exchange Commission filings.
See Consolidated Statements of Operations.
PRECISION RESPONSE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
For the Three Months For the Fiscal Year
Ended December 31, Ended December 31,
1999 1998 1999 1998
Revenues $62,576 $46,281 $ 215,920 $175,173
Operating expenses:
Cost of services 50,727 39,365 177,668 153,638
Selling, general
and administrative
expenses 6,560 4,806 23,249 23,290
Restructuring and
asset impairment
charges --- --- --- 13,583
Total operating
expenses: 57,287 44,171 200,917 190,511
Operating income/
(loss): 5,289 2,110 15,003 (15,338)
Other income
(expense):
Interest income 28 65 74 261
Interest expense (398) (56) (1,195) (1,050)
Income (loss) before
income tax
provision (benefit) 4,919 2,119 13,882 (16,127)
Income tax provision
(benefit) 1,954 906 5,591 (5,938)
Net income (loss) $2,965 $1,213 $8,291 $(10,189)
Net income (loss)
per common share:
Basic $0.14 $0.06 $0.38 $(0.47)
Diluted $0.13 $0.06 $0.37 $(0.47)
Weighted average number of
common shares outstanding:
Basic 21,683 21,549 21,587 21,548
Diluted 23,571 21,624 22,445 21,548
Note:
In the third quarter ended September 30, 1998, the Company recorded non-
recurring restructuring and other special charges of $22.1 million before
taxes with an after-tax impact of $13.8 million. Before non-recurring
restructuring and other special charges, net income and earnings per share
(diluted) for the year ended December 31, 1998, were $3.6 million and
$0.17, respectively.
SOURCE: Precision Response Corporation
