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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) July 30, 1998
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 July 30, 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 July 30, 1998 "NATIONAL TECHTEAM, INC. ANNOUNCES
REVENUES AND EARNINGS FOR THE SECOND QUARTER 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: July 30, 1998 By: /s/ Lawrence A. Mills
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Lawrence A. Mills,
Vice President, Chief
Financial Officer, and
Treasurer
2
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[TECH TEAM LOGO]
NEWS RELEASE
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FOR IMMEDIATE RELEASE-- JULY 30, 1998 International Provider of Computer
Services
National TechTeam, Inc.
835 Mason Street, Suite 200
Dearborn, Michigan 48124 NASDAQ/NM - "TEAM"
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 SECOND QUARTER AND FIRST SIX MONTHS OF 1998
DEARBORN, MICHIGAN, July 30, 1998...NATIONAL TECHTEAM INC., Nasdaq symbol
("TEAM"), today reported revenues and earnings for the second quarter and first
six months of 1998. For the quarter ended June 30, 1998, revenues were
$27,666,174, a 42% increase over the $19,433,198 reported for the second quarter
of 1997 and the highest revenues ever reported in the Company's history. Net
income for the quarter was $833,017, or $0.06 per share, compared with a loss of
$226,397, or $0.01 per share, for the corresponding quarter in 1997.
For the first six months of 1998, National TechTeam earned $974,076, or $0.06
per share, on revenues of $54,123,261. This represents a 42% increase in
revenues, which were $38,009,790 in the first six months of 1997. Net income for
the first six months of 1998 IMPROVED BY $1,564,826 compared to the $0.04 per
share loss reported for the first six months of 1997.
The strong growth in revenues reflected the increasing demand for all of
National TechTeam's computer services. Corporate Services revenues increased 25%
to $17,662,810 from $14,149,405 in the second quarter 1997. Corporate Services
revenues increased 23% to $35,350,957 from $28,782,204 for the first six months
of 1997. The OEM Call Center Services line also contributed significantly to
overall results for the quarter. Revenues increased 26% to $6,641,207 in the
second quarter of 1998 from $5,283,793 in the second quarter of 1997. OEM Call
Center Services revenues increased 44% to $13,301,001 from $9,227,586 for the
first six months of 1997. Additionally, as a result of the acquisition of
Capricorn Capital Group, Inc. (now TechTeam Capital Group, Inc.) in January
1998, TechTeam reported revenues from TECHTEAM CAPITAL GROUP of $3,362,157 in
the second quarter of 1998 and $5,471,303 for the first six months of 1998.
Commenting on TechTeam's second quarter 1998 earnings, Harry A. Lewis, President
and Chief Operating Officer said, "TechTeam is very pleased with its
accomplishments in the second quarter 1998. Our employees' ideas and efforts to
improve operations and get TechTeam back to a profitable position have begun to
pay off after six months of hard work. As we continue our efforts to improve
operations and reduce fixed costs, we anticipate the coming quarter's results to
be much improved over the third quarter of 1997. We will also continue to focus
on our successful core strategy of delivering outsourced integrated IT services,
that provide a total solution, to major corporate and government customers."
-more-
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[TECH TEAM LOGO]
NEWS RELEASE
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The foregoing contains forward-looking statements relating to revenues and
earnings for the third quarter of 1998. The matters expressed in those
statements are subject to numerous uncertainties and risks, the most significant
of which include, among other things, the impact upon demand for the Company's
services as an outgrowth of the Asian financial crisis and from possible
increases in interest rates and other events having broad economic impact,
changes in Management's present expectations regarding the timing of new
projects and the costs incurred in connection with new projects and the extent
to which cost cutting and measures intended to enhance operating efficiencies
will be effective in achieving those objectives, and potential developments in
the class action litigation and the SEC investigation in which the Company has
been involved. Should one or more of those uncertainties or risks materialize,
or should underlying expectations or assumptions prove incorrect, actual results
may vary materially from those described as forward-looking statements.
TechTeam does not intend to update those 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".
NATIONAL TECHTEAM, INC.
SECOND QUARTER RESULTS OF OPERATIONS
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<TABLE>
<CAPTION>
Quarter Ended June 30
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1998 1997
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<S> <C> <C>
Revenues $27,666,174 $ 19,433,198
Income/(Loss) Before Tax Provisions 1,684,617 (333,697)
Tax Provisions 851,600 (107,300)
Net Income/(Loss) 833,017 (226,397)
Earnings/(Loss) Per Share
Basic 0.06 (0.01)
Diluted 0.05 (0.01)
Weighted Average Number of Common
Shares and Common Share
Equivalents Outstanding
Basic 15,059,884 15,636,473
Diluted 15,220,212 15,915,166
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</TABLE>
<TABLE>
<CAPTION>
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First Six Months
1998 1997
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<S> <C> <C>
Revenues $54,123,261 $ 38,009,790
Income/(Loss) Before Tax Provisions 2,129,076 (664,560)
Tax Provisions 1,155,000 (73,810)
Net Income/(Loss) 974,076 (590,750)
Earnings/(Loss) Per Share
Basic 0.06 (0.04)
Diluted 0.06 (0.04)
Weighted Average Number of Common
Shares and Common Share
Equivalents Outstanding
Basic 15,592,523 15,597,147
Diluted 15,949,816 15,911,203
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</TABLE>
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Press Release Addendum
National TechTeam, Inc.
Supplementary Data for Quarterly Press Release
Second Quarter 1998
<TABLE>
<CAPTION>
Second Quarter Year to Date
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1998 1998
Over/(Under) Over/(Under)
1998 1997 1997 1998 1997 1997
------------ ------------ ------------ ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Revenues
Corporate Services
Corporate help desk and related
services $ 6,811,010 $ 3,530,502 $ 3,280,508 $12,869,962 $ 8,754,591 $ 4,115,371
Technical staffing 6,423,039 5,999,283 423,756 13,453,045 11,685,469 1,767,576
Systems integration 2,655,925 2,758,783 (102,858) 5,406,875 5,038,111 368,764
Training programs 1,772,836 1,860,837 (88,001) 3,621,075 3,304,033 317,042
----------- ------------ ------------ ----------- ------------ ------------
17,662,810 14,149,405 3,513,405 35,350,957 28,782,204 6,568,753
OEM Call Center Services 6,641,207 5,283,793 1,357,414 13,301,001 9,227,586 4,073,415
TechTeam Capital Group 3,362,157 - 3,362,157 5,471,303 - 5,471,303
----------- ------------ ------------ ----------- ------------ ------------
Total revenues $27,666,174 $ 19,433,198 $ 8,232,976 $54,123,261 $ 38,009,790 $ 16,113,471
=========== ============ ============ =========== ============ ============
Gross profit
Amount $ 5,414,771 $ 3,096,350 $ 2,318,421 $ 9,327,864 $ 5,631,658 $ 3,696,206
Percentage 19.6% 15.9% 3.6% 17.2% 14.8% 2.4%
Earnings before interest, taxes,
depreciation and amortization
Amount $ 2,970,039 $ 238,015 $ 2,732,024 $ 4,210,691 $ 372,233 $ 3,838,458
Percentage 10.7% 1.2% 9.5% 7.8% 1.0% 6.8%
Sales, General and Administrative
Amount $ 3,646,832 $ 4,146,302 $ (499,470) $ 7,393,481 $ 7,721,071 $ (327,590)
Percentage 13.2% 21.3% (8.2)% 13.7% 20.3% (6.7)%
Interest expense
Amount $ 452,286 $ 55,492 $ 396,794 $ 788,358 $ 70,492 $ 717,866
Percentage 1.6% 0% 4.8% 1.5% 0.2% 4.5%
Interest income
Amount $ 368,964 $ 771,747 $ (402,783) $ 983,051 $ 1,495,345 $ (512,294)
Percentage 1.3% 4.0% (2.6)% 1.8% 3.9% (2.1)%
Income before tax provisions
Amount $ 1,684,617 $ (333,697) $ 2,018,314 $ 2,129,076 $ (664,560) $ 2,793,636
Percentage 6.1% (1.7)% 7.8% 3.9% (1.7)% 5.7%
Tax provisions
Amount $ 851,600 $ (107,300) $ 958,900 $ 1,155,000 $ (73,810) $ 1,228,810
Effective tax rate
Federal 40.1% 61.2% (21.1)% 39.4% 41.6% (2.2)%
Other 17.4% (349.3)% 366.7% 24.5% (18.8)% 43.3%
----------- ------------ ------------ ----------- ------------ ------------
Total 50.6% (74.4)% 125.0% 54.3% 30.6% 23.7%
=========== ============ ============ =========== ============ ============
</TABLE>
<TABLE>
<CAPTION>
Second Quarter Year to Date
1998 1998
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<S> <C> <C>
Percentage of Business by Sector
Automotive 38.6% 39.3%
OEM support 24.0% 24.6%
Transportation services 5.7% 6.0%
Financial Services 4.7% 4.3%
Government 3.6% 3.0%
Insurance 3.2% 3.7%
All Other 20.1% 19.2%
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100% 100%
=============== ===============
</TABLE>
