<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended June 30, 1997 or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ________________ to ________________________,
Commission File Number: 0-20807
-------
ICT GROUP, INC.
------------------------------------------
(Exact name of registrant as specified in its charger)
Pennsylvania 23-2458937
- --------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
800 Town Center Drive, Langhorne, PA 19047
- ---------------------------------------- ------------------------------------
(Address of principal executive offices) (Zip code)
215-757-0200
----------------------------------------
Registrant's telephone number, including area code.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes _X_ No ___
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of the latest practicable date.
Common Shares, $0.01 par value, 11,542,300 shares outstanding as of
August 8, 1997.
1
<PAGE>
ICT GROUP, INC.
INDEX
PART 1 FINANCIAL INFORMATION PAGE
Item 1 CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Consolidated Balance Sheets -
June 30, 1997 and December 31, 1996 3
Consolidated Statements of Operations -
Three months and six months ended
June 30, 1997 and 1996 5
Consolidated Statements of Cash Flows -
Six months ended June 30, 1997 and
1996 6
Notes to Consolidated Financial Statements 7
Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 8
PART II OTHER INFORMATION
Item 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS 13
Item 6 EXHIBITS AND REPORTS ON FORM 8-K 13
SIGNATURES 14
2
<PAGE>
ICT GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
-------- ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $16,611 $18,298
Accounts receivable, net 16,359 13,539
Grant receivable 537 535
Prepaid expenses and other 1,110 433
-------- -------
Total current assets 34,617 32,805
-------- -------
PROPERTY AND EQUIPMENT, net
Communications and computer equipment 21,281 16,753
Furniture and fixtures 3,715 2,936
Leasehold improvements 1,707 1,581
-------- -------
26,703 21,270
Less: Accumulated depreciation and amortization (11,387) (9,638)
-------- -------
Net property and equipment 15,316 11,632
-------- -------
DEFERRED INCOME TAXES 3,251 3,251
-------- -------
OTHER ASSETS 1,505 1,424
-------- -------
$54,689 $49,112
======== =======
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE>
ICT GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
--------- -------------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 867 $ 284
Current portion of capitalized lease obligations 584 725
Accounts payable 3,926 2,807
Accrued expenses 3,112 1,923
------- -------
Total current liabilities 8,489 5,739
------- -------
LONG-TERM DEBT 3,218 1,057
------- -------
CAPITALIZED LEASE OBLIGATIONS 1,021 1,296
------- -------
SHAREHOLDERS' EQUITY:
Preferred stock, $0.01 par value 5,000 shares authorized,
none issued -- --
Common Stock, $0.01 par value, 40,000 shares authorized,
11,542 and 11,538 shares issued and outstanding 115 115
Additional paid-in capital 49,343 49,339
Deferred compensation (134) (161)
Accumulated deficit (7,221) (8,290)
Cumulative translation adjustment (142) 17
------- -------
Total shareholders' equity 41,961 41,020
------- -------
$54,689 $49,112
======= =======
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE>
ICT GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- ------------------------
1997 1996 1997 1996
------- -------- -------- -------
<S> <C> <C> <C> <C>
NET REVENUES $22,865 $18,361 $43,357 $34,581
OPERATING EXPENSES:
Cost of services 12,756 9,886 24,171 18,653
Selling, general and administrative 9,256 7,630 17,696 14,426
Non-recurring compensation expense -- 12,689 -- 12,689
------- ------- ------- -------
22,012 30,205 41,867 45,768
------- ------- ------- -------
Operating income (loss) 853 (11,844) 1,490 (11,187)
INTEREST EXPENSE (INCOME), NET (129) 247 (267) 480
------- ------- ------- -------
Income (loss) before taxes 982 (12,091) 1,757 (11,667)
INCOME TAX EXPENSE (BENEFIT) 386 (3,446) 688 (3,446)
------- ------- ------- -------
NET INCOME (LOSS) $596 ($8,645) $1,069 ($8,221)
======= ======= ======= =======
Net income per share $0.05 $0.09
======= =======
Shares used in computing net income
per share 12,121 12,121
======= =======
PRO FORMA DATA:
Historical loss before taxes ($12,091) ($11,667)
Pro forma income tax benefit (4,385) (4,215)
------- -------
Pro forma net loss ($7,706) ($7,452)
======= =======
Pro forma net loss per share ($0.81) ($0.81)
======= =======
Shares used in computing pro forma
net loss per share 9,467 9,234
======= =======
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE>
ICT GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
----------------------------
1997 1996
------ -------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $1,069 ($8,221)
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating activities:
Minority interest in subsidiary earnings -- 37
Depreciation and amortization 1,816 1,245
Deferred income tax benefit -- (3,680)
Non-recurring compensation charge -- 12,689
(Increase) decrease in:
Accounts receivable (2,820) (4,735)
Prepaid expenses and other (677) (551)
Receivable from related party -- 111
Grant receivable (2) 118
Other assets (121) (416)
Increase (decrease) in:
Accounts payable 1,119 895
Accrued expenses 1,189 (172)
Deferred revenue -- (421)
------- -------
Net cash provided by (used in) operating activities 1,573 (3,101)
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (5,433) (3,530)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net payments on lines of credit -- (5,486)
Proceeds from long-term debt 2,915 --
Payments on long-term debt (171) (791)
Borrowings (payments) on capitalized lease obligations (416) 16
Payments on subordinated notes -- (300)
Payment of Subchapter S distribution -- (2,718)
Proceeds from initial public offering, net of offering costs -- 35,511
Proceeds from exercise of stock options 4 9
------- -------
Net cash provided by financing activities 2,332 26,241
EFFECT OF FOREIGN EXCHANGE RATE CHANGE ON CASH (159) 13
------- -------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (1,687) 19,623
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 18,298 447
------- -------
CASH AND CASH EQUIVALENTS, END OF PERIOD $16,611 $20,070
======= =======
</TABLE>
The accompanying notes are an integral part of these statements.
6
<PAGE>
ICT GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1: BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three and six month periods ended June
30, 1997 and 1996, are not necessarily indicative of the results that may be
expected for the complete fiscal year. For additional information, refer to the
consolidated financial statements and footnotes thereto included the Form 10-K
for the year ended December 31, 1996.
Note 2: PRO FORMA INFORMATION
Pro Forma Income Data
Shortly before the effective date of the Company's initial public
offering in June 1996, the Company terminated its status as an S Corporation and
became subject to federal and state income taxes. Accordingly, for informational
purposes, the accompanying statement of operations for the three and six months
ended June 30, 1996 include a pro forma adjustment for income taxes which would
have been recorded if the Company had not been an S Corporation, based on the
tax laws in effect during the period. For the three and six months ended June
30, 1997, the Company was fully subject to federal and state income taxes.
Note 3: EARNINGS PER SHARE
Pro Forma Net Income Per Share
Pro forma net income per share for the three and six months ended June
30, 1996 was calculated by dividing pro forma net income by the weighted average
number of shares of Common Stock outstanding for the respective periods,
adjusted for the dilutive effect of Common Stock equivalents, if applicable,
which consist of stock options, using the treasury stock method. Pursuant to the
requirements of the Securities and Exchange Commission, Common Stock equivalents
issued by the Company during the twelve months immediately preceding the
Offering have been included in the calculation of the shares used in computing
pro forma net income per share as if they were outstanding for all periods
presented.
New Accounting Pronouncement
In February 1997, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 128, Earnings
per Share, which the Company is required to adopt for both interim and annual
periods ending after December 15, 1997. SFAS No. 128 simplifies the EPS
calculation by replacing primary EPS with basic EPS. Basic EPS is computed by
dividing reported earnings available to common stockholders by the weighted
average shares outstanding. Diluted EPS reflects the potential dilution from the
exercise or conversion of securities into common stock, such as stock options.
Early application is prohibited, although footnote disclosure of pro forma EPS
amounts is required. For the three and six months ended June 30, 1997 and 1996
the Company believes the effect of the application of SFAS No. 128 would be
immaterial.
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
JUNE 30, 1997
GENERAL
ICT GROUP is an independent multinational provider of call center
teleservices, which consists of outbound and inbound telemarketing and customer
support services, together with related value-added services such as marketing,
research, management and consulting services. The Company's call center
management experience, technological leadership and expertise in target
industries enable it to provide clients with high quality, cost-effective call
center services. In addition to supporting customers' teleservice programs from
its own call centers, the Company is pursuing additional opportunities to manage
clients' call centers on a contract basis.
The Company has broadened its market position from its original
outbound consumer telemarketing orientation to its present range of call center
services through both internal growth and a series of strategic acquisitions.
ICT has expanded beyond its traditional markets of insurance, financial
services, publishing and telecommunications to include the pharmaceutical,
health care services and computer software and hardware industries, which are
emerging as areas of rapid growth in the use and outsourcing of call center
teleservices. The Company intends to pursue continued expansion through a
combination of internal growth, strategic alliances, and acquisitions of
domestic and international businesses that provide teleservices that are
complementary to ICT's core telemarketing expertise.
With the increasing use of teleservices by businesses and the trend
toward outsourcing call center activities, ICT believes significant
opportunities exist to expand its business. The Company's growth strategy
includes the following key elements:
[ ] Pursue Outsourced Call Center Management Opportunities
[ ] Increase International Presence
[ ] Develop Strategic Alliances and Acquisitions
[ ] Expand Value-Added Marketing Services
[ ] Maintain Industry Specialization
[ ] Maintain Technology Leadership
[ ] Continue Commitment to Quality Service
8
<PAGE>
RESULTS OF OPERATIONS
Three Months Ended June 30, 1997 and 1996:
Net Revenues. Net revenues increased 25% to $22.9 million for the three
months ended June 30, 1997 from $ 18.4 million for the comparable 1996 period
primarily due to growth in teleservice revenues. TeleService division revenues
increased 31% to $19.4 million for the three months ended June 30, 1997 from $
14.8 million in the second quarter of 1996 resulting from continued strong
growth in both international and domestic markets. International TeleService
revenues grew 100% to $ 3.4 million in 1997 from $ 1.7 million in 1996. Domestic
TeleService revenues increased 22% in 1997 to $ 16.0 million from $ 13.1 million
in 1996 as a result of growth in the insurance, telecommunications and health
care industries. Marketing services revenues decreased 34% to $ 2.1 million in
1997 from $ 3.2 million in 1996 due to reduced revenues from financial service
clients within this division. Management services revenues increased to
$1.3 million in 1997 from $ .5 million in 1996 as a result of the Management
Services division commencing operations in the latter half of the second quarter
of 1996.
Cost of Service. Cost of services, which consist primarily of direct
labor and telecommunications costs, increased 29% to $ 12.8 million for the
three months ended June 30, 1997 from $ 9.9 million for the three months ended
June 30, 1996. This increase is due to increased direct labor force costs to
support the increased revenue volume and expanded quality control and assurance
operations.
Selling, General and Administration Expenses. Selling, general and
administrative expenses increased 21% to $ 9.3 million for the three months
ended June 30, 1997 from $ 7.6 million for the three months ended June 30, 1996
due to increased numbers of call centers and workstation capacity and additional
sales and systems support implemented primarily in the latter half of 1996.
Non-recurring Compensation Expense. In the second quarter of 1996 the
Company recorded a non-recurring, non-cash compensation expense of $ 12.7
million in connection with its initial public offering resulting from granting
and extension of stock options.
Interest Expense (Income), net. Net interest income of $129,000 in the
second quarter reflects the investment of funds obtained through the Company's
initial public offering partially offset by interest expense related to capital
leases and borrowings against the Company's equipment line of credit for capital
expansion. Subsequent to the Company's initial public offering in June 1996, the
Company repaid all indebtedness under its revolving line of credit and term
loans with its bank and subordinated debt. In 1997 the Company intends to
finance capital equipment purchases under its equipment line of credit. In the
second quarter of 1997 the Company borrowed approximately $ 2.1 million under
its equipment line.
Pro Forma Provision For Income Taxes. Prior to the effective date of
the Company's initial public offering, the Company was subject to taxation under
Subchapter S of the Internal Revenue Code. As a result, the net income of the
Company, for federal and state tax purposes, had been reported by and taxed
directly to the Company's shareholders. Subsequent to its initial public
offering, the Company has been fully subject to federal and state income taxes.
9
<PAGE>
Six Months Ended June 30, 1997 and 1996:
Net Revenues. Net revenues increased 25% to $ 43.4 million for the six
months ended June 30, 1997 from $ 34.6 million for the comparable 1996 period
primarily due to growth in teleservice revenues. TeleService division revenues
increased 30% to $ 36.4 million for the six months ended June 30, 1997 from $
27.9 million in the comparable 1996 period resulting from continued strong
growth in both international and domestic markets. International TeleService
revenues grew 121% to $ 6.4 million in 1997 from $ 2.9 million in 1996. Domestic
TeleService revenues increased 20% to $ 29.9 million in 1997 from $ 25.0 million
in 1996 as a result of growth in the insurance, telecommunications and health
care industries. Marketing services revenues decreased 32% to $ 4.2 million in
1997 from $ 6.2 million in 1996 due to reduced revenues from financial service
clients within the division. Management services revenues increased to
$2.8 million in 1997 from $ .5 million in 1996 as a result of the Management
Services division commencing operations in the latter half of the second quarter
of 1996.
Cost of Services. Cost of Services increased 30% to $ 24.2 million for
the six months ended June 30, 1997 compared to $ 18.7 million for the six months
ended June 30, 1996 primarily due to increased labor costs to support the
increased revenue volume and increased emphasis on quality assurance and
control. This was partially offset by lower telecommunications costs resulting
from renegotiated telecommunications rates and additional lower cost
telecommunication providers.
Selling, General and Administration Expenses. Selling, general and
administrative expenses increased 23% to $ 17.7 million for the six months ended
June 30, 1997 from $ 14.4 million for the six months ended June 30, 1996 due to
increased numbers of call centers and workstation capacity and additional sales
and systems support implemented primarily in the latter half of 1996.
Non-recurring Compensation Expense. In the second quarter of 1996 the
Company recorded a non-recurring, non-cash compensation expense of $ 12.7
million in connection with its initial public offering resulting from granting
and extension of stock options.
Interest Expense (Income), net. Net interest income of $ 267,000 in the
second quarter reflects the investment of funds obtained through the Company's
initial public offering partially offset by interest expense related to capital
leases and borrowings against the Company's equipment line of credit for capital
expansion. Subsequent to the Company's initial public offering in June 1996, the
Company repaid all indebtedness under its revolving line of credit and term
loans with its bank and subordinated debt. In 1997 the Company intends to
finance capital equipment purchases under its equipment line of credit. In the
first half of 1997 the Company borrowed approximately $ 2.9 million under its
equipment line.
Pro Forma Provision For Income Taxes. Prior to the effective date of
the Company's initial public offering, the Company was subject to taxation under
Subchapter S of the Internal Revenue Code. As a result, the net income of the
Company, for federal and state tax purposes, had been reported by and taxed
directly to the Company's shareholders. Subsequent to its initial public
offering, the Company has been fully subject to federal and state income taxes.
Quarterly Results and Seasonality
The Company has experienced and expects to continue to experience
significant quarterly variations in operating results, principally as a result
of the timing of clients' telemarketing campaigns, the commencement and
expiration of contracts, the timing and amount of new business generated by the
Company, the Company's revenue mix, the timing of additional selling, general
and administrative expenses to support the growth and development of new
business units and the competitive conditions in the telemarketing industry. The
Company's business tends to be strongest in the fourth quarter due to the high
level of client telemarketing activity prior to the holiday season.
10
<PAGE>
In the first quarter, business generally slows as a result of reduced
telemarketing activities and client transitions to new marketing programs during
the first quarter of the calendar year. In addition, the Company typically
expands its operations in the first quarter to support anticipated business
growth beginning in the second quarter. As a result, selling, general and
administrative costs typically increase in the first quarter without a
commensurate increase in revenues, which results in decreased profitability for
the first quarter versus the previous fourth quarter. Also, demand for the
Company's services typically slows or decreases in the third quarter as the
volume of telemarketing projects decreases during the summer months. In
addition, the Company's operating expenses increase during the third quarter in
anticipation of higher demand for its services during the fourth quarter.
Liquidity and Capital Resources
Prior to the Company's initial public offering in June 1996, ICT's
primary sources of liquidity had been cash flow from operations and borrowing on
its bank revolving line of credit. Acquisitions and capital expenditures had
been financed through bank term loans and capitalized lease obligations.
Cash provided by operating activities was $ 1.6 million for the six
months ended June 30, 1997 compared to $ 3.1 million used in operating
activities for the same period in 1996. The $ 4.7 million increase resulted from
increased earnings before depreciation and amortization and reduced working
capital requirements.
Cash provided by financing activities was $ 2.3 million for the six
months ended June 30, 1997 compared to $ 26.2 million for the same period in
1996. In 1996, the Company raised $ 35.5 million in its initial public offering
and repaid certain indebtedness. In 1997, the Company borrowed $ 2.9 million
under an equipment line of credit to partially fund its capital expenditures.
For the six months ended June 30, 1997, the Company's capital
expenditures were $ 5.4 million reflecting an increase in the number of work
stations to 2,246 at June 30, 1997 from 2,068 at December 31, 1996, upgraded
telephony equipment and continued development and implementation of Informix and
IMA/Edge Software.
The Company's telemarketing activities will continue to require
significant capital expenditures. Historically, equipment purchases have been
financed through the Company's equipment line of credit and through capitalized
lease obligations with various equipment vendors and lending institutions. The
lease obligations are payable in varying installments through 2001. Outstanding
obligations under capitalized leases and its equipment line of credit at June
30, 1997 were $ 5.7 million. The Company maintains an equipment line of credit
of $6.5 million with a bank which expires in October 1997. The Company is
currently negotiating increases in its equipment line of credit and intends to
finance capital purchases under this line during 1997.
The Company maintains a revolving line of credit with a bank of $15.0
million. Borrowings on the line of credit are limited to 80% of eligible
accounts receivable and bear interest at the bank's prime rate (8.50% at June
30, 1997). At June 30, 1997, there were no borrowings outstanding under the line
of credit. The line of credit expires on October 31, 1997. The Company is
currently negotiating increases in its domestic financing arrangements, as well
as seeking similar arrangements for its international operations.
The Company believes that the funds generated from operations, together
with the net proceeds to the Company from the offering and available credit
under its revolving line of credit and equipment line, will be sufficient to
finance its current operations and planned capital expenditures at least through
1998.
11
<PAGE>
FORWARD LOOKING STATEMENTS
This report contains certain forward-looking statements that are
subject to risks and uncertainties. Forward-looking statements include certain
information relating to trends in the telemarketing industry and the overall
domestic economy, the Company's business strategy including the markets in which
it operates, the services it provides and the customers it targets, the benefits
of certain technologies the Company's has acquired, variations in operating
results and liquidity, as well as information contained elsewhere in this Report
where statements are preceded by, followed by or include the words "believes,"
"expects," "anticipates" or similar expressions. For such statements, the
Company claims the protection of the safe harbor for forward- looking statements
contained in the Private Securities Litigation Reform Act of 1995. The
forward-looking statements in this document are subject to risks and
uncertainties that could cause the assumptions underlying such forward-looking
statements and the actual results to differ materially from those expressed in
or implied by the statements.
The most important factors that could prevent the Company from
achieving its goals--and cause the assumptions underlying the forward-looking
statements and the actual results of the Company to differ materially from those
expressed in or implied by those forward-looking statements--include, but are
not limited to, the following: (I) The competitive nature of the telemarketing
industry and the ability of the Company to continue to distinguish its services
from other telemarketing companies and other marketing activities on the basis
of quality, effectiveness, reliability and value; (ii) Economic conditions which
could alter the desire of businesses to outsource certain sales and service
functions and the ability of the Company to obtain additional contracts to
manage outsourced sales and service functions; (iii) The ability of the Company
to offer value-added services to businesses in its targeted industries and the
ability of the Company to benefit from its industry specialization strategy;
(iv) Risks associated with investments and operations in foreign countries
including, but not limited to, those related to local economic conditions,
exchange rate fluctuations, local regulatory requirements, political factors,
generally higher telecommunications costs, barriers to the repatriation of
earnings and potentially adverse tax consequences; (v) Technology risks
including the ability of the Company to select or develop new and enhanced
technology on a timely basis, anticipate and respond to technological shifts and
implement new technology to remain competitive; (vi) The ability of the Company
to successfully identify, complete and integrate strategic acquisitions that
expand or complement its business; and (vii) The results of operations which
depend on numerous factors including, but not limited to, the timing of clients'
telemarketing campaigns, the commencement and expiration of contracts, the
timing and amount of new business generated by the Company, the Company's
revenue mix, the timing of additional selling, general and administrative
expenses and the general competitive conditions in the telemarketing industry
and the overall economy.
12
<PAGE>
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The Company's 1997 Annual Meeting of Shareholders was held on May 20,
1997. At the meeting, the following items were submitted to a vote of
shareholders.
(A) The following nominees were elected to serve on the Board of
Directors:
Name of Nominee Votes Cast For Votes Withheld
--------------- -------------- --------------
John J. Brennan 10,693,806 22,140
John A. Stoops 10,693,906 22,040
Bernard Somers and Donald P. Brennan are directors continuing in
office with terms expiring in 1998 and 1999, respectively.
(B) The appointment of Arthur Andersen LLP as independent public
accountants of the Company for 1997 was ratified with 10,699,481
votes for, 10,705 votes against, and 5,760 abstentions.
Item 6. Exhibits and Reports on Form 8-K
(a) The following documents are furnished as exhibits and numbered
pursuant to Item 601 of Regulation S-K: None.
(b) The registrant was not required to file any reports on Form 8-K for
the three months ended June 30, 1997.
13
<PAGE>
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.
ICT GROUP, INC.
Date: August 14 , 1997 By: /s/ John J. Brennan
------------------------
John J. Brennan
Chairman, President and
Chief Executive Officer
Date: August 14, 1997 By: /s/ Carl E. Smith
------------------------
Carl E. Smith
Senior Vice President,
Finance and Administration,
Chief Financial Officer
14
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001013149
<NAME> ICT GROUP, INC.
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1996
<PERIOD-START> JAN-01-1997 JAN-01-1996
<PERIOD-END> JUN-30-1997 JUN-30-1996
<EXCHANGE-RATE> 1 1
<CASH> 16,611 20,070
<SECURITIES> 0 0
<RECEIVABLES> 16,359 13,716
<ALLOWANCES> 563 289
<INVENTORY> 0 0
<CURRENT-ASSETS> 34,617 35,111
<PP&E> 26,703 17,432
<DEPRECIATION> 11,387 8,178
<TOTAL-ASSETS> 54,689 49,708
<CURRENT-LIABILITIES> 8,489 6,384
<BONDS> 0 0
0 0
0 0
<COMMON> 115 115
<OTHER-SE> 41,846 41,100
<TOTAL-LIABILITY-AND-EQUITY> 54,689 49,708
<SALES> 0 0
<TOTAL-REVENUES> 43,357 34,581
<CGS> 0 0
<TOTAL-COSTS> 24,171 18,653
<OTHER-EXPENSES> 17,557 26,982
<LOSS-PROVISION> 139 133
<INTEREST-EXPENSE> (267) 480
<INCOME-PRETAX> 1,757 (11,667)
<INCOME-TAX> 688 (4,215)
<INCOME-CONTINUING> 1,069 (8,221)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 1,069 (8,221)
<EPS-PRIMARY> 0.09 (0.81)
<EPS-DILUTED> 0.09 (0.81)
</TABLE>
