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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) October 29, 1998
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National TechTeam, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-16284 38-2774613
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
835 Mason Street. Suite 200 Dearborn, MI 48224
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(Address of principal executive offices) (City, State) (Zip Code)
Registrant's telephone number, including area code (313) 277-2277
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(Former name of former address, if changed since last report.)
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ITEM 5. OTHER EVENTS.
On October 29, 1998, the Company issued the press release attached as Exhibit
2.1 to this Form 8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) EXHIBITS.
2.1 Press release dated on October 29, 1998 "NATIONAL TECHTEAM, INC. ANNOUNCES
REVENUES AND EARNINGS FOR THE THIRD QUARTER AND FIRST NINE MONTHS OF 1998"
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.
NATIONAL TECHTEAM, INC.
Dated: October 29, 1998 BY: /s/ Lawrence A. Mills
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Lawrence A. Mills
Vice President, Chief Financial
Officer, And Treasurer
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Exhibit Index
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<TABLE>
<CAPTION>
Exhibit No. Description
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<S> <C>
2.1 Press Release
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[TECHTEAM LOGO] EXHIBIT 2.1
NEWS RELEASE
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FOR IMMEDIATE RELEASE-- OCTOBER 29, 1998 International Provider of
- ---------------------------------------- Computer Services
National TechTeam, Inc.
835 Mason Street, Suite 200
Dearborn, Michigan 48124 NASDAQ/NM - "TEAM"
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CONTACT:
NATIONAL TECHTEAM, INC. NATIONAL TECHTEAM, INC. NATIONAL TECHTEAM, INC.
William F. Coyro, Jr. Harry A. Lewis Lawrence A. Mills
Chief Executive Officer President and Chief Financial Officer
(313) 277-2277 Chief Operating Officer (313) 277-2277
(313) 277-2277
NATIONAL TECHTEAM, INC. ANNOUNCES REVENUES
AND EARNINGS FOR THE THIRD QUARTER AND FIRST NINE MONTHS OF 1998
DEARBORN, MICHIGAN, October 29, 1998...NATIONAL TECHTEAM Inc., Nasdaq symbol
("TEAM"), today reported revenues and earnings for the third quarter and first
nine months of 1998. For the quarter ended September 30, 1998, revenues were
$31,306,544, a 56% increase over the $20,019,438 reported for the third quarter
of 1997 and the highest revenues ever reported in the Company's history. Net
income for the quarter was $1,000,565, or $0.07 per share, compared with a loss
of ($1,201,228), or ($0.08) per share, for the corresponding quarter in 1997.
For the first nine months of 1998, National TechTeam earned $1,974,642, or $0.13
per share, on revenues of $85,429,805. This represents a 47% increase in
revenues, which were $58,029,228 in the first nine months of 1997. Net income
for the first nine months of 1998 IMPROVED BY $3,766,620 compared to the ($0.12)
per share loss reported for the first nine months of 1997.
The strong growth in revenues reflects the increasing demand for all of National
TechTeam's computer services. Corporate Services revenues increased 16% to
$20,989,024 from $18,068,022 in the third quarter 1997. Corporate Services
revenues increased 12% to $56,339,981 from $50,205,594 for the first nine months
of 1997. The OEM Call Center Services line also contributed significantly to
overall results for the quarter. Revenues increased 188% to $5,610,708 in the
third quarter of 1998 from $1,951,416 in the third quarter of 1997. OEM Call
Center Services revenues increased 142% to $18,911,709 from $7,823,634 for the
first nine months of 1997. Additionally, as a result of the acquisition of
TechTeam Capital Group in January 1998, TechTeam reported revenues from TECHTEAM
CAPITAL GROUP of $4,706,812 in the third quarter of 1998 and $10,178,115 for the
first nine months of 1998.
Commenting on TechTeam's third quarter 1998 earnings, Harry A. Lewis, President
and Chief Operating Officer said, "We are definitely on track in our efforts to
reduce waste and inefficiency throughout the Company, while at the same time
attracting new customers and expanding our business with existing clients. In
the fourth quarter 1998, TechTeam will also continue to implement new actions to
improve operating margins. Additionally, new business commenced in the third
quarter by our joint venture operation is expected to be profitable for the
fourth quarter. Overall, I again wish to congratulate and thank our employees
for the continuing ideas and efforts to make our operations more profitable and
to deliver useful, cost-effective services to our customers."
-more-
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[TECHTEAM LOGO]
NEWS RELEASE
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This press release contains statements that are forward looking. These
statements are based on current assumptions and expectations that are subject to
numerous risks and uncertainties. Actual results will vary because of factors
such as customer demand for the Company's services; interest rates; events
having broad economic impact, such as the ongoing world-wide financial crisis;
technological shifts; competition from other service providers and its effect on
pricing; life cycles; costs and timing of new projects; the effectiveness of
cost cutting and measures to improve operating efficiency; contractual terms and
conditions; litigation, including the class action litigation and the SEC
investigation involving the Company; and other issues discussed in the Company's
Form 10-Q. Given the uncertainties, risks and the possibility that the
underlying expectations or assumptions may prove incorrect, actual future
results may vary materially from the forward looking statements.
NATIONAL TECHTEAM, INC. is a leading provider of information technology
outsourcing support services to large national and multi-national corporations,
government agencies and service organizations. The Company offers its services
through three global units: (i) CORPORATE SERVICES, which provides corporations
with help desk support, technical staffing, systems integration, and
instructor-led and computer-based training; (ii) OEM CALL CENTER SERVICES, which
provides end user customers of its clients with inbound telephone support for
their computer products; and (iii) TECHTEAM CAPITAL GROUP, which consists
primarily of leasing computer-related hardware and integrated services to
corporate customers. National TechTeam is traded under the symbol "TEAM".
<TABLE>
<CAPTION> NATIONAL TECHTEAM, INC.
THIRD QUARTER RESULTS OF OPERATIONS
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Quarter Ended September 30
1998 1997
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<S> <C> <C>
Revenues $31,306,544 $20,019,438
Income/(Loss) Before Tax Provisions 1,630,165 (1,873,492)
Tax Provisions 629,600 (672,264)
Net Income/(Loss) 1,000,565 (1,201,228)
Earnings/(Loss) Per Share
Basic 0.07 (0.08)
Diluted 0.07 (0.08)
Weighted Average Number of Common
Shares and Common Share
Equivalents Outstanding
Basic 14,233,234 15,887,531
Diluted 14,307,105 15,887,531
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First Nine Months
1998 1997
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Revenues $85,429,805 $58,029,228
Income/(Loss) Before Tax Provisions 3,759,242 (2,538,052)
Tax Provisions 1,784,600 (746,074)
Net Income/(Loss) 1,974,642 (1,791,978)
Earnings/(Loss) Per Share
Basic 0.13 (0.12)
Diluted 0.13 (0.12)
Weighted Average Number of Common
Shares and Common Share
Equivalents Outstanding
Basic 15,134,620 16,053,730
Diluted 15,272,849 16,053,730
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National TechTeam, Inc.
Supplementary Data for Quarterly Press Release
Third Quarter 1998
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<CAPTION>
Third Quarter Year to Date
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1998 1998
Over/(Under) Over/(Under)
1998 1997 1997 1998 1997 1997
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Revenues
<S> <C> <C> <C> <C> <C> <C>
Corporate Services
Corporate help desk/call center services $ 8,336,782 $ 6,134,470 $ 2,202,312 $ 21,206,744 $ 18,244,428 $ 2,962,316
Technical staffing 6,083,630 6,492,563 (408,933) 19,536,675 18,178,027 1,358,648
Systems integration 4,892,311 3,640,404 1,251,907 10,299,186 8,678,516 1,620,670
Training programs 1,676,301 1,800,585 (124,284) 5,297,376 5,104,623 192,753
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20,989,024 18,068,022 2,921,002 56,339,981 50,205,594 6,134,387
OEM Call Center Services 5,610,708 1,951,416 3,659,292 18,911,709 7,823,634 11,088,075
TechTeam Capital Group 4,706,812 - 4,706,812 10,178,115 - 10,178,115
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Total revenues $31,306,544 $20,019,438 $11,287,106 $ 85,429,805 $ 58,029,228 $27,400,577
=========== =========== =========== ============ =========== ===========
Gross profit
Amount $ 5,005,481 $ 856,541 $ 4,148,940 $ 14,333,345 $ 6,488,200 $ 7,845,145
Percentage 16.0% 4.3% 11.7% 16.8% 11.2% 5.6%
Earnings before interest, taxes, depreciation
and amortization
Amount $ 3,086,323 $(1,104,772) $ 4,191,095 $ 5,899,273 $ (662,048) $ 6,561,321
Percentage 9.9% (5.5)% 15.4% 6.9% (1.1)% 8.0%
Sales, General and Administrative
Amount $ 3,518,262 $ 3,494,614 $ 23,648 $ 10,911,743 $ 11,215,685 $ (303,942)
Percentage 11.2% 17.5% (6.3)% 12.8% 19.3% (6.5)%
Interest expense
Amount $ 379,814 $ - $ 379,814 $ 1,168,171 $ 70,492 $ 1,097,679
Percentage 1.2% 0% 1.2% 1.4% 0.1% 1.3%
Interest income
Amount $ 522,760 $ 764,580 $ (241,820) $ 1,505,811 $ 2,259,925 $ (754,114)
Percentage 1.7% 3.8% (2.1)% 1.8% 3.9% (2.1)%
Income before tax provisions
Amount $ 1,630,165 $(1,873,492) $ 3,503,657 $ 3,759,242 $(2,538,052) $ 6,297,294
Percentage 5.2% (9.4)% 14.6% 4.4% (4.4)% 8.8%
Tax provisions
Amount $ 629,600 $ (672,264) $ 1,301,864 $ 1,784,600 $ (746,074) $ 2,530,674
Effective tax rate
Federal 38.4% 44.4% (6.1)% 38.9% 41.6% (2.7)%
Other 0.4% (1.7)% 2.2% 14.1% (18.8)% 32.9%
=========== ============ =========== ============ ============ ===========
Total 38.6% 42.6% (4.0)% 47.5% 30.6% 16.9%
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<CAPTION>
Third Quarter Year to Date
1998 1998
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Percentage of Business by Sector
Automotive 46.6% 42.0%
OEM support 18.1% 22.2%
Transportation services 16.3% 9.8%
Financial services 3.3% 4.0%
Government 7.1% 4.5%
Insurance 3.9% 3.8%
All Other 4.7% 13.7%
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100% 100%
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