<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K (A)
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 3, 1996
SITEL CORPORATION
(Exact name of registrant as specified in its charter)
MINNESOTA 0-26152 47-0684333
(State or jurisdiction of (Commission File (I.R.S. Employer
incorporation or organization) Number) Identification No.)
13215 BIRCH STREET
OMAHA, NEBRASKA 68164
(402) 498-6810
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
------------------------------
This 8-K consists of 16 pages.
<PAGE>
The registrant hereby amends Item 7 of its Form 8-K filed to report an event
occurring on September 3, 1996 to include the following:
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of business acquired.
The following unaudited financial statements of Mitre plc are filed
with this report at pages F-2 through F-4:
Unaudited Condensed Group Profit and Loss Account for the six
months ended June 30, 1996 and June 30, 1995
Unaudited Condensed Group Balance Sheet at June 30, 1996 and
June 30, 1995
Unaudited Condensed Group Cash Flow Statement for the six
months ended June 30, 1996 and June 30, 1995
(b) Pro forma financial information.
The following unaudited pro forma and pro forma combined financial
statements are filed with this report at pages F-5 through F-13:
Unaudited Pro Forma and Pro Forma Combined Financial Information
SITEL Corporation, Mitre plc, and National Action Financial
Services, Inc. Pro Forma Combined Balance Sheet as of
May 31, 1996
SITEL Corporation, Mitre plc, and National Action Financial
Services, Inc. Pro Forma Combined Statements of Operations for
the Year Ended May 31, 1995
SITEL Corporation, Mitre plc, and National Action Financial
Services, Inc. Pro Forma Combined Statements of Operations for
the Year Ended May 31, 1996
SITEL Corporation, Mitre plc, and National Action Financial
Services, Inc. Pro Forma Statement of Operations for the Years
ended May 31, 1993, 1994, 1995 and 1996
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: October 1, 1996 SITEL Corporation
By: /s/ Donald J. Vrana
--------------------------------
Donald J. Vrana
Corporate Controller
3
<PAGE>
INDEX TO FINANCIAL STATEMENTS
MITRE PLC
Notes to Unaudited Condensed Group Financial Statements for the six
months ended June 30, 1995 and 1996 . . . . . . . . . . . . . . . . . . . F-2
Unaudited Condensed Group Profit and Loss Account for the six months ended
June 30, 1995 and 1996 . . . . . . . . . . . . . . . . . . . . . . . . . F-2
Unaudited Condensed Group Balance Sheet as of June 30, 1995 and 1996. . . . F-3
Unaudited Condensed Group Cash Flow Statement for the six months ended
June 30, 1995 and 1996 . . . . . . . . . . . . . . . . . . . . . . . . . F-4
UNAUDITED PRO FORMA AND PRO FORMA COMBINED FINANCIAL INFORMATION
Unaudited Pro Forma and Pro Forma Combined Financial Information. . . . . . F-5
SITEL Corporation, Mitre plc, and National Action Financial Services, Inc.
Pro Forma Combined Balance Sheet as of May 31, 1996 . . . . . . . . . . . F-6
SITEL Corporation, Mitre plc, and National Action Financial Services, Inc.
Pro Forma Combined Statements of Operations for the Year Ended
May 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-8
SITEL Corporation, Mitre plc, and National Action Financial Services, Inc.
Pro Forma Combined Statements of Operations for the Year Ended
May 31, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .F-10
SITEL Corporation, Mitre plc, and National Action Financial Services, Inc.
Pro Forma Combined Statements of Operations for the Year Ended
May 31, 1993, 1994, 1995 and 1996 . . . . . . . . . . . . . . . . . . . .F-12
F-1
<PAGE>
MITRE PLC
NOTES TO UNAUDITED CONDENSED GROUP FINANCIAL STATEMENTS
The condensed group financial statements are unaudited, and have been
prepared under the historical cost accounting rules and in accordance with
applicable UK accounting standards. The financial statements are presented in UK
pounds sterling (L) and reflect all adjustments (consisting only of normal
recurring adjustments) which are, in the opinion of management, necessary for a
fair presentation of the results for the interim period.
The condensed financial statements should be read in conjunction with the
Group financial statements and notes included elsewhere in this report.
The results for the six months ended June 30, 1996 are not necessarily
indicative of the results to be expected for the full year.
MITRE PLC
UNAUDITED CONDENSED GROUP PROFIT AND LOSS ACCOUNT
THE SIX MONTHS ENDED 30 JUNE 1996 AND 1995
<TABLE>
<CAPTION>
L'000 Six m/e Six m/e
30-Jun-96 30-Jun-95
------------- -------------
<S> <C> <C>
TURNOVER................................................... 25,129 12,645
Cost of sales.............................................. (15,765) (7,569)
------------- -------------
GROSS PROFIT............................................... 9,364 5,076
Administrative expenses.................................... (7,175) (3,337)
------------- -------------
OPERATING PROFIT........................................... 2,189 1,739
Interest payable and similar charges....................... (213) (121)
------------- -------------
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION.............. 1,976 1,618
Tax on profit on ordinary activities....................... (652) (534)
------------- -------------
PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION............... 1,324 1,084
Minority interests......................................... (19) (370)
------------- -------------
PROFIT FOR THE FINANCIAL PERIOD............................ 1,305 714
Non equity dividends....................................... (9) (16)
------------- -------------
RETAINED PROFIT FOR THE FINANCIAL PERIOD................... 1,296 698
------------- -------------
------------- -------------
</TABLE>
F-2
<PAGE>
MITRE PLC
UNAUDITED CONDENSED GROUP BALANCE SHEET
AT 30 JUNE 1996 AND 1995
<TABLE>
<CAPTION>
L'000 30-Jun-96 30-Jun-95
--------- ---------
<S> <C> <C>
FIXED ASSETS
Tangible assets..................................................... 8,559 5,761
Investments......................................................... 11 41
--------- ---------
8,570 5,802
--------- ---------
CURRENT ASSETS
Debtors
- amounts receivable within one year.............................. 12,807 6,351
- amounts receivable after more than one year..................... 679 0
Cash at bank and in hand............................................ 662 138
--------- ---------
14,148 6,489
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR...................... (14,387) (7,346)
--------- ---------
NET CURRENT LIABILITIES............................................. (239) (857)
--------- ---------
TOTAL ASSETS LESS CURRENT LIABILITIES............................... 8,331 4,945
--------- ---------
--------- ---------
Creditors: amounts falling due after more than one year............. (2,302) (1,132)
--------- ---------
PROVISION FOR LIABILITIES AND CHARGES............................... (131) (71)
--------- ---------
5,898 3,742
--------- ---------
--------- ---------
CAPITAL AND RESERVES
Called up share capital............................................. 1,709 1,299
Other reserves...................................................... 161 (916)
Profit and loss account............................................. 3,065 1,677
--------- ---------
SHAREHOLDERS' FUNDS................................................. 4,935 2,060
Minority interests.................................................. 963 1,682
--------- ---------
5,898 3,742
--------- ---------
--------- ---------
Shareholders' funds - Equity........................................ 4,585 1,491
- Non equity.................................... 350 569
--------- ---------
4,935 2,060
--------- ---------
--------- ---------
Minority interests - Equity......................................... -- 982
- Non equity..................................... 963 700
--------- ---------
963 1,682
--------- ---------
--------- ---------
</TABLE>
F-3
<PAGE>
MITRE PLC
UNAUDITED CONDENSED GROUP CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
------------- -------------
L000 L000
<S> <C> <C>
NET CASH INFLOW FROM
OPERATING ACTIVITIES.......................................... 2,164 1,761
------------- -------------
RETURNS ON INVESTMENTS AND
SERVICING OF FINANCE
Interest paid.................................................. (129) (81)
Finance lease interest......................................... (97) (50)
Preference dividends paid...................................... (16) (97)
Dividends paid to minority interests........................... (28) (61)
NET CASH OUTFLOW FROM RETURNS ON INVESTMENTS AND SERVICING OF ------------- -------------
FINANCE....................................................... (270) (289)
CORPORATION TAX REPAID......................................... (28) (29)
------------- -------------
NET CASH INFLOW BEFORE INVESTING ACTIVITIES.................... 1,866 1,443
INVESTING ACTIVITIES...........................................
Payments to acquire tangible fixed assets (net)................ (1,475) (1,210)
Purchase of fixed asset investments............................ __ (10)
Purchase of subsidiary undertakings............................ (16) __
------------- -------------
NET CASH OUTFLOW FROM INVESTING ACTIVITIES..................... (1,491) (1,220)
NET CASH OUTFLOW BEFORE FINANCING.............................. 375 223
FINANCING......................................................
Redemption of preference share capital......................... __ (75)
Expenses of capital leases..................................... (47) __
Capital element of finance leases repaid....................... (514) (237)
Repayment of bank loans........................................ (286) (50)
------------- -------------
NET CASH OUTFLOW FROM FINANCING................................ (847) (362)
------------- -------------
DECREASE IN CASH AND CASH EQUIVALENTS.......................... (472) (139)
------------- -------------
------------- -------------
</TABLE>
F-4
<PAGE>
UNAUDITED PRO FORMA AND PRO FORMA COMBINED FINANCIAL INFORMATION
The unaudited Pro Forma Statements of Operations give effect to the
acquisition of Mitre plc ("Mitre" and such acquisition the "Mitre
Acquisition") by combining results of operations of the Company for the years
ended May 31, 1996, May 31, 1995, May 31, 1994 and May 31, 1993, with Mitre,
or its predecessor company Merit Direct, for the twelve months ended May 31,
1996, May 31, 1995, December 31, 1993 and December 31, 1992, and with
National Action Financial Services, Inc. which was acquired June 28, 1996
("NAFS", and such acquisition the "NAFS Acquisition") for the twelve months
ended June 30, 1996 and June 30, 1995, as if the transactions had occurred at
the beginning of the periods presented. NAFS was established in April, 1994
and the results of operations from that time through June 30, 1994 are not
material.
The unaudited Pro Forma Combined Statements of Operations include the
results of operations of the entities listed above and also include the
results of operations of CTC Canadian Telephone Corporation and 2965496
Canada, Inc. (collectively, CTC) for the year ended April 30, 1995 and of
Teleaction, S.A. (Teleaction) for the twelve months ended June 30, 1996 and
June 30, 1995. CTC was acquired by the Company on February 9, 1996 and a
69.2% interest in Teleaction was acquired by the Company on June 12, 1996.
The unaudited Pro Forma Combined Statements of Operations do not include the
results of operations of Telepromotion, Action Data Base and Action Servicos
De Publicidade (subsidiaries of Teleaction), as they are immaterial.
The following pro forma results of Mitre include the results of Merit
Communications NV which was acquired by Mitre on December 21, 1995. Under US
GAAP, this acquisition will be accounted for in a manner similar to a pooling of
interests because Mitre and Merit Communications NV were entities under common
control. The results of Merit Communications NV were derived from financial
statements audited by KPMG and unaudited monthly management information. Merit
Communications NV was established in April 1993.
The following pro forma results reflect the results of Mitre and Teleaction
adjusted to conform to US GAAP and the Company's financial statement
presentation. The historical results have been converted into US dollars at
the exchange rates for the relevant periods.
The unaudited Pro Forma Combined Balance Sheet reflects the combined financial
position of Company, NAFS and Teleaction as of May 31, 1996 and Mitre as of June
30, 1996. The unaudited Pro Forma Combined Balance Sheet is prepared assuming
the transactions occurred on the balance sheet date. The unaudited Pro Forma
Combined Balance Sheet does not reflect the financial position of Telepromotion,
Action Data Base and Action Servicos De Publicidade (subsidiaries of
Teleaction), as they are immaterial.
The unaudited pro forma and pro forma combined financial statements and
accompanying notes reflect the application of the pooling-of-interests method
of accounting for the Mitre and NAFS Acquisitions. Under this method of
accounting, the recorded assets, liabilities, shareholder's equity, income
and expenses are combined and recorded at their historical amounts. The CTC
and Teleaction acquisitions are reflected using the purchase method of
accounting. Under this method of accounting, the purchase price was
allocated to assets acquired and liabilities assumed based on their fair
value estimates at the closing of the acquisition. The amount of the
purchase accounting adjustments included are preliminary estimates and may
differ from actual amounts.
The unaudited pro forma and pro forma combined financial information
presented is for informational purposes only and is not necessarily
indicative of the financial position, results of operations of the entity or
the actual results that would have been achieved had this merger been
consummated prior to the periods indicated. This unaudited pro forma and pro
forma combined information should be read in conjunction with the separate
financial statements, including the notes thereto, of the Company included
in its Form 10-K filed August 29, 1996 and of Mitre, Teleaction , NAFS and
CTC, contained in pages F-27 through F-49, F-53 through F-81, F-82 through
F-94 and F-95 through F-109, respectively , of the Company's Proxy Statement
filed July 29, 1996.
F-5
<PAGE>
SITEL CORPORATION AND MITRE PLC
PROFORMA COMBINED BALANCE SHEET
MAY 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
PROFORMA
SITEL(a) TELEACTION(b) NAFS ADJUSTMENTS
------------- ------------- ------------- -------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents . . . . . . . . . . . $ 4,714 $ 2,067 $ 849
Trade accounts receivable, net. . . . . . . . . 28,072 12,579 1,772
Marketable securities . . . . . . . . . . . . . 42,570 - - $ (25,720) (d,e)
Prepaid expenses. . . . . . . . . . . . . . . . 650 31 53
Other . . . . . . . . . . . . . . . . . . . . . 1,465 163 80
Income taxes receivable . . . . . . . . . . . . 118 130 -
Deferred income taxes . . . . . . . . . . . . . 558 166 -
------------- ------------- ------------- -------------
Total current assets . . . . . . . . . . . . 78,147 15,136 2,754 (25,720)
------------- ------------- ------------- -------------
Property and equipment, net. . . . . . . . . . . . 18,049 1,334 1,502
Deposits and other assets. . . . . . . . . . . . . 1,213 292 75
Loans receivable from related parties. . . . . . . 340 - -
Goodwill, net. . . . . . . . . . . . . . . . . . . 5,908 1,315 43 23,344 (d)
Deferred income taxes. . . . . . . . . . . . . . . 12,839 - -
------------- ------------- ------------- -------------
Total assets . . . . . . . . . . . . . . . . $ 116,496 $ 18,077 $ 4,374 $ (2,376)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable - bank . . . . . . . . . . . . . . $ - $ 510 $ 184
Current portion of long-term
obligations. . . . . . . . . . . . . . . . . . 15 - 156
Trade accounts payable. . . . . . . . . . . . . 2,811 1,154 139
Accrued wages, salaries and bonuses . . . . . . 5,955 822 794
Other accrued expenses. . . . . . . . . . . . . 1,300 2,966 701
Customer deposits and other . . . . . . . . . . 86 - 24
------------- ------------- ------------- -------------
Total current liabilities. . . . . . . . . . 10,167 5,452 1,998 -
------------- ------------- ------------- -------------
Long-term debt obligations, net. . . . . . . . . . 125 650 694 8,909 (d)
Other liabilities. . . . . . . . . . . . . . . . . 1,470 1,206 316 -
Redeemable Preference Shares . . . . . . . . . . . - - - -
Stockholders' equity:
Preferred Stock . . . . . . . . . . . . . . . . - - 285 (285) (h)
Common stock. . . . . . . . . . . . . . . . . . 19 388 285 (688) (d,h)
Paid-in capital . . . . . . . . . . . . . . . . 107,108 - - 569 (h)
Currency exchange adjustment. . . . . . . . . . (10) - - -
Retained earnings (deficit) . . . . . . . . . . (2,383) 10,381 796 (10,881) (d)
------------- ------------- ------------- -------------
Total stockholders' equity . . . . . . . . . 104,734 10,769 1,366 (11,285)
------------- ------------- ------------- -------------
Total liabilities and
stockholders' equity. . . . . . . . . . . . $ 116,496 $ 18,077 $ 4,374 $ (2,376)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
<CAPTION>
SITEL PROFORMA PROFORMA
COMBINED MITRE(c) ADJUSTMENTS COMBINED
------------- ------------- ------------- -------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents . . . . . . . . . . . $ 7,630 $ 591 $ 8,221
Trade accounts receivable, net. . . . . . . . . 42,423 18,786 61,209
Marketable securities . . . . . . . . . . . . . 16,850 - $ (7,035) (f,g) 9,815
Prepaid expenses. . . . . . . . . . . . . . . . 734 1,384 2,118
Other . . . . . . . . . . . . . . . . . . . . . 1,708 614 2,322
Income taxes receivable . . . . . . . . . . . . 248 - 248
Deferred income taxes . . . . . . . . . . . . . 724 - 724
------------- ------------- ------------- -------------
Total current assets . . . . . . . . . . . . 70,317 21,375 (7,035) 84,657
------------- ------------- ------------- -------------
Property and equipment, net. . . . . . . . . . . . 20,885 13,076 33,961
Deposits and other assets. . . . . . . . . . . . . 1,580 1,060 2,640
Loans receivable from related parties. . . . . . . 340 - 340
Goodwill, net. . . . . . . . . . . . . . . . . . . 30,610 4,470 35,080
Deferred income taxes. . . . . . . . . . . . . . . 12,839 209 13,048
------------- ------------- ------------- -------------
Total assets . . . . . . . . . . . . . . . . $ 136,571 $ 40,190 $ (7,035) $ 169,726
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable - bank . . . . . . . . . . . . . . $ 694 $ 5,892 $ 6,586
Current portion of long-term
obligations. . . . . . . . . . . . . . . . . . 171 1,485 1,656
Trade accounts payable. . . . . . . . . . . . . 4,104 6,245 10,349
Accrued wages, salaries and bonuses . . . . . . 7,571 - 7,571
Other accrued expenses. . . . . . . . . . . . . 4,967 9,325 14,292
Customer deposits and other . . . . . . . . . . 110 - 110
------------- ------------- ------------- -------------
Total current liabilities. . . . . . . . . . 17,617 22,947 - 40,564
------------- ------------- ------------- -------------
Long-term debt obligations, net. . . . . . . . . . 10,378 3,384 13,762
Other liabilities. . . . . . . . . . . . . . . . . 2,992 423 3,415
Redeemable Preference Shares . . . . . . . . . . . - 2,035 (2,035) (f) -
Stockholders' equity:
Preferred Stock . . . . . . . . . . . . . . . . - - -
Common stock. . . . . . . . . . . . . . . . . . 4 2,106 (2,073) (h) 37
Paid-in capital . . . . . . . . . . . . . . . . 107,677 4,927 2,073 (h) 114,677
Currency exchange adjustment. . . . . . . . . . (10) (22) (32)
Retained earnings (deficit) . . . . . . . . . . (2,087) 4,390 (5,000) (g) (2,697)
------------- ------------- ------------- -------------
Total stockholders' equity . . . . . . . . . 105,584 11,401 (5,000) 111,985
------------- ------------- ------------- -------------
Total liabilities and
stockholders' equity. . . . . . . . . . . . $ 136,571 $ 40,190 $ (7,035) $ 169,726
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
(SEE NOTES ON FOLLOWING PAGE)
F-6
<PAGE>
- -------------------------
a) The combined balance sheet of CTC has not been presented separately on this
statement as it was included in the consolidated historical statements of
SITEL as of May 31, 1996.
b) The financial position of Teleaction has been translated from Spanish
pesetas to US dollars at the exchange rate in effect at the balance sheet
date (128.94 pesetas per dollar).
c) The financial position of Mitre has been translated from British pounds to
US dollars at the exchange rate in effect at the balance sheet date (1.5500
dollars per pound) and has been presented in accordance with US GAAP. The
significant adjustments necessary to convert to US GAAP were (i) to
reclassify acquisition goodwill from stockholders equity to intangible
assets and to recognize the corresponding amortization over a 25 year
period, and (ii) to account for Merit Communications NV as a pooling of
interests from its incorporation in April 1993.
d) The Teleaction acquisition is reflected using the purchase method of
accounting and is based upon an initial purchase price of $24,220,000, a
deferred guaranteed payment of $10,780,000 and acquisition expenses of
$1,000,000. The deferred guaranteed payment will be paid in 1998 and has
been discounted to its present value ($8,909,000). In addition, a future
contingent payment will be paid based on Teleaction's profitability for
1996 and 1997. Goodwill of $23,344,000 was created by this acquisition.
e) Transaction costs related to the NAFS Acquisition are estimated at
$500,000.
f) The Share Purchase Agreement requires that Mitre repay the face amount of
$2,035,000 of the redeemable preference shares.
g) Transaction costs related to the Mitre Acquisition are estimated at
$5,000,000.
h) The unaudited pro forma combined financial statements reflect the
application of the pooling of interests method of accounting for the Mitre
and NAFS acquisitions. Under this method of accounting, it is necessary to
reclassify common stock to paid-in capital to reflect the par value of
SITEL's common stock which is lower than the par value of Mitre ordinary
shares and NAFS capital stock.
F-7
<PAGE>
SITEL CORPORATION AND MITRE PLC
PROFORMA COMBINED STATEMENTS OF OPERATIONS
YEAR ENDED MAY 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
SITEL CTC(a) TELEACTION(b,c) NAFS(b,d)
------------- ------------- --------------- -------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Revenue. . . . . . . . . . . . . . . . . . . $ 101,378 $ 6,342 $ 25,061 $ 3,767
Operating expenses:
Cost of services . . . . . . . . . . . . . 55,054 3,788 14,017 1,788
Divisional selling, general and
administrative expenses. . . . . . . . . 32,979 1,173 6,852 1,126
Corporate general and
administrative expenses. . . . . . . . . 6,160 758 - 314
Special compensation expense . . . . . . . 34,585 (g) - - -
------------- ------------- --------------- -------------
Operating income (loss). . . . . . . . . . . (27,400) (h) 623 4,192 539
Other income (expense) . . . . . . . . . . . (303) 5 (250) (47)
------------- ------------- --------------- -------------
Income (loss) before income taxes. . . . . . (27,703) 628 3,942 492
Income tax expense (benefit) . . . . . . . . (9,603) 190 1,430 149
------------- ------------- --------------- -------------
Net income (loss). . . . . . . . . . . . . . $ (18,100) (h) $ 438 $ 2,512 $ 343
------------- ------------- --------------- -------------
------------- ------------- --------------- -------------
Earnings (loss) per common and
common equivalent share. . . . . . . . . . ($1.05) (h)
-------------
-------------
Weighted average common and common
equivalent shares outstanding. . . . . . . 17,207
-------------
-------------
<CAPTION>
PROFORMA SITEL PROFORMA
ADJUSTMENTS COMBINED MITRE(d,e) COMBINED
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenue. . . . . . . . . . . . . . . . . . . $ - $ 136,548 $ 37,615 $ 174,163
Operating expenses:
Cost of services . . . . . . . . . . . . . 74,647 21,331 95,978
Divisional selling, general and
administrative expenses. . . . . . . . . 42,130 10,468 52,598
Corporate general and
administrative expenses. . . . . . . . . 1,453 (f) 8,685 1,980 10,665
Special compensation expense . . . . . . . 34,585 (g) - 34,585 (g)
------------- ------------- ------------- -------------
Operating income (loss). . . . . . . . . . . (1,453) (23,499) (h) 3,836 (19,663) (h)
Other income (expense) . . . . . . . . . . . (1,541) (i) (2,136) (285) (2,421)
------------- ------------- ------------- -------------
Income (loss) before income taxes. . . . . . (2,994) (25,635) 3,551 (22,084)
Income tax expense (benefit) . . . . . . . . (809) (i) (8,643) 1,271 (7,372)
------------- ------------- ------------- -------------
Net income (loss). . . . . . . . . . . . . . $ (2,185) $ (16,992) (h) $ 2,280 $ (14,712) (h)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Earnings (loss) per common and
common equivalent share. . . . . . . . . . ($0.91) (h) ($0.53) (h)
------------- -------------
------------- -------------
Weighted average common and common
equivalent shares outstanding. . . . . . . 18,571 (j) 27,742 (k)
------------- -------------
------------- -------------
</TABLE>
(SEE NOTES ON FOLLOWING PAGE)
F-8
<PAGE>
- ---------------
a) The combined results of CTC are for the year ended April 30, 1995 and have
been translated from Canadian dollars to US dollars at the average exchange
rate for the period.
b) The results of operations for Teleaction and NAFS are for the twelve months
ended June 30, 1995.
c) The results of operations of Teleaction have been translated from Spanish
pesetas to US dollars at the average exchange rate for the period.
d) The results of operations reflect the pooling of interests method of
accounting for the Mitre and NAFS acquisitions.
e) The results of operations of Mitre have been translated from British pounds
to US dollars at the average exchange rate for the period and have been
presented in accordance with US GAAP. The significant adjustments
necessary to convert to US GAAP were (i) to reclassify acquisition goodwill
from stockholder's equity to intangible assets and to recognize the
corresponding amortization over a 25 year period, and (ii) to account for
Merit Communications NV as a pooling of interests from its incorporation in
April 1993. On December 21, 1995, all of Mitre's subsidiaries, including
Merit Communications NV, became wholly owned subsidiaries and, therefore,
for purposes of this pro forma presentation, the results of Mitre for the
periods presented do not separately disclose the net income (loss) which
would have been attributable to minority interests.
f) Represents the amortization of goodwill resulting from the CTC and
Teleaction acquisitions, which will be amortized on a straight-line basis
over a period of 25 years, and an adjustment to reduce expenses for fees
paid to a management employee of CTC which will not be paid after the
acquisitions.
g) Represents a non-recurring, non-cash compensation expense of $34.6 million
incurred by SITEL in 1995 resulting from the grant of stock options with an
exercise price of $0.005 per share to 265 employees of the company to
replace stock appreciation rights previously granted under the Company's
Employee Equity Benefit Plan and previously granted stock options.
h) Excluding the special compensation expense and a one-time forgiveness of
$528,000 owed by two stockholders, operating income net income and net
income per share would have been $7.6 million, $5.2 million and $0.30 for
SITEL, $11.6 million, $6.1 million and $0.33 for SITEL combined and $15.5
million, $8.3 million and $0.30 respectively for the Pro Forma entity,
respectively.
i) Represents an assumed increase in interest expense and the related tax
effect which would have occurred had the payment of the CTC and Teleaction
purchase price occurred as of the beginning of the period.
j) Consists of SITEL's historical weighted average common and common stock
equivalent shares outstanding and the shares of SITEL Common Stock issued
for the NAFS Acquisition.
k) Consists of SITEL's historical weighted average common and common stock
equivalent shares outstanding and the shares of SITEL Common Stock issued
for the NAFS and Mitre Acquisitions.
F-9
<PAGE>
SITEL CORPORATION AND MITRE PLC
PROFORMA COMBINED STATEMENTS OF OPERATIONS
TWELVE MONTHS ENDED MAY 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
PROFORMA
SITEL TELEACTION(a,b) NAFS(a,c) ADJUSTMENTS
------------- --------------- ------------- -------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Revenue. . . . . . . . . . . . . . . . . . . $ 140,259 $ 33,425 $ 12,522 $ -
Operating expenses:
Cost of services . . . . . . . . . . . . . 74,528 20,492 6,620 -
Divisional selling, general and
and administrative expenses. . . . . . . 44,555 8,918 3,784 -
Corporate general and
administrative expenses. . . . . . . . . 7,606 - 635 931 (e)
------------- --------------- ------------- -------------
Operating income (loss). . . . . . . . . . . 13,570 4,015 1,483 (931)
Other income(expense). . . . . . . . . . . . 984 (282) (121) (1,332) (f)
------------- --------------- ------------- -------------
Income (loss) before income taxes. . . . . . 14,554 3,733 1,362 (2,263)
Income tax expense (benefit) . . . . . . . . 5,188 1,347 596 (613) (f)
------------- --------------- ------------- -------------
Net income (loss). . . . . . . . . . . . . . $ 9,366 $ 2,386 $ 766 $ (1,650)
------------- --------------- ------------- -------------
------------- --------------- ------------- -------------
Earnings per common and
common equivalent share. . . . . . . . . . $0.43
-------------
-------------
Weighted average common and
common equivalent shares
outstanding. . . . . . . . . . . . . . . . 21,876
-------------
-------------
<CAPTION>
SITEL PROFORMA
COMBINED MITRE (d) COMBINED
------------- ------------- -------------
<S> <C> <C> <C>
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Revenue. . . . . . . . . . . . . . . . . . . $ 186,206 $ 62,600 $ 248,806
Operating expenses:
Cost of services . . . . . . . . . . . . . 101,640 38,121 139,761
Divisional selling, general and
and administrative expenses. . . . . . . 57,257 16,098 73,355
Corporate general and
administrative expenses. . . . . . . . . 9,172 2,399 11,571
------------- ------------- -------------
Operating income (loss). . . . . . . . . . . 18,137 5,982 24,119
Other income(expense). . . . . . . . . . . . (751) (729) (1,480)
------------- ------------- -------------
Income (loss) before income taxes. . . . . . 17,386 5,253 22,639
Income tax expense (benefit) . . . . . . . . 6,518 1,785 8,303
------------- ------------- -------------
Net income (loss). . . . . . . . . . . . . . $ 10,868 $ 3,468 $ 14,336
------------- ------------- -------------
------------- ------------- -------------
Earnings per common and
common equivalent share. . . . . . . . . . $0.47 $0.44
------------- -------------
------------- -------------
Weighted average common and
common equivalent shares
outstanding. . . . . . . . . . . . . . . . 23,240 (g) 32,411 (h)
------------- -------------
------------- -------------
</TABLE>
(SEE NOTES ON FOLLOWING PAGE)
F-10
<PAGE>
- ---------------
a) The results of operations for Teleaction and NAFS are for the twelve months
ended June 30, 1996.
b) The results of Teleaction have been translated from Spanish pesetas to US
dollars at the average exchange rate for the period.
c) The results of operations reflect the pooling of interests method of
accounting for the Mitre and NAFS acquisitions.
d) The results of operations of Mitre have been translated from British pounds
to US dollars at the average exchange rate for the period and have been
presented in accordance with US GAAP. The significant adjustments
necessary to convert to US GAAP were (i) to reclassify acquisition goodwill
from stockholder's equity to intangible assets and to recognize the
corresponding amortization over a 25 year period, and (ii) to account for
Merit Communications NV as a pooling of interests from its incorporation in
April 1993. On December 21, 1995, all of Mitre's subsidiaries, including
Merit Communications NV, became wholly owned subsidiaries and, therefore,
for purposes of this pro forma presentation, the results of Mitre for the
periods presented do not separately disclose the net income (loss) which
would have been attributable to minority interests.
e) Represents the amortization of goodwill resulting from the Teleaction
acquisition, which will be amortized on a straight-line basis over a period
of 25 years.
f) Represents an assumed increase in interest expense and the related tax
effect which would have occurred had the payment of the Teleaction purchase
price occurred as of the beginning of the period.
g) Consists of SITEL's historical weighted average common and common stock
equivalent shares outstanding and the shares of SITEL Common Stock issued
for the NAFS Acquisition.
h) Consists of SITEL's historical weighted average common and common stock
equivalent shares outstanding and the shares of SITEL Common Stock issued
for the NAFS and Mitre Acquisitions.
F-11
<PAGE>
SITEL CORPORATION, MITRE PLC AND
NATIONAL ACTION FINANCIAL SERVICES, INC.
PRO FORMA STATEMENT OF OPERATIONS (a,b)
(UNAUDITED)
<TABLE>
<CAPTION>
FISCAL YEARS ENDED
------------------------------------------------------------
MAY 31, MAY 31, MAY 31, MAY 31,
1993 (c) 1994 (c) 1995 (d) 1996 (d)
---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Revenue. . . . . . . . . . . . . . . . . . . . . . $ 65,010 $ 81,334 $ 142,760 $ 215,381
Operating expenses:
Cost of services. . . . . . . . . . . . . . . . 36,356 43,032 78,173 119,269
Divisional selling, general and
administrative expenses . . . . . . . . . . . 20,618 27,835 44,573 64,437
Corporate general and
administrative expenses . . . . . . . . . . . 4,543 6,568 8,454 10,640
Special compensation expense. . . . . . . . . . - - 34,585 (e) -
---------- ---------- ---------- ----------
Operating income (loss) . . . . . . . . . . . 3,493 3,899 (23,025) (f) 21,035
Interest income (expense). . . . . . . . . . . . . (918) (652) (1,065) 139
Other income (expense) . . . . . . . . . . . . . . 106 1,403 430 (5)
---------- ---------- ---------- ----------
Income (loss) before income taxes . . . . . . 2,681 4,650 (23,660) 21,169
Income tax expense (benefit) . . . . . . . . . . . 577 705 (8,183) 7,569
---------- ---------- ---------- ----------
Net income (loss) . . . . . . . . . . . . . . $ 2,104 $ 3,945 $ (15,477) (f) $ 13,600
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Earnings (loss) per common and
common equivalent share . . . . . . . . . . . . $ 0.08 $ 0.15 $ (0.56) (f) $ 0.42
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Weighted average common and common
equivalent shares outstanding (g) . . . . . . . 27,135 27,742 27,742 32,411
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
F-12
<PAGE>
- ---------------
a) The results of operations reflect the application of the pooling of
interests method of accounting for the Mitre and NAFS Acquisitions.
b) The results of operations of Mitre have been translated from British pounds
to US dollars at the average exchange rate for the period and have been
presented in accordance with US GAAP. The significant adjustments
necessary to convert to US GAAP were (i) to reclassify acquisition goodwill
from stockholder's equity to intangible assets and to recognize the
corresponding amortization over a 25 year period, and (ii) to account for
Merit Communications NV as a pooling of interests from its incorporation in
April 1993. On December 21, 1995, all of Mitre's subsidiaries, including
Merit Communications NV, became wholly owned subsidiaries and, therefore,
for purposes of this pro forma presentation, the results of Mitre for the
periods presented do not separately disclose the net income (loss) which
would have been attributable to minority interests.
c) The results of operations of Mitre that have been included in the combined
statements as of May 31, 1993 and May 31, 1994 are the results of the
predecessor company Merit Direct for the year ended December 31, 1992 and
Mitre for the period ended December 31, 1993.
d) The results of operations of NAFS that have been included in the combined
statements for the years ended May 31, 1995 and May 31, 1996 are for the
twelve months ended June 30, 1995 and June 30, 1996, respectively.
e) Represents a non-recurring, non-cash compensation expense of $34.6 million
incurred by SITEL in 1995 resulting from the grant of stock options with an
exercise price of $0.005 per share to 265 employees of the company to
replace stock appreciation rights previously granted under the Company's
Employee Equity Benefit Plan and previously granted stock options.
f) Excluding the special compensation expense and a one-time forgiveness of
$528,000 owed by two stockholders, operating income, net income and net
income per share would have been $12.1 million, $7.5 million and $0.27 for
the fiscal year ended May 31, 1995.
g) Consists of SITEL's historical weighted average common and common stock
equivalent shares outstanding and the shares of SITEL Common Stock issued
for the NAFS and Mitre Acquisitions.
F-13
