<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): June 12, 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 6 pages
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The registrant hereby amends Item 7 of its Form 8-K filed to report an event
occurring on June 12, 1996 to include the following:
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of businesses acquired.
The Company hereby incorporates by reference in this Form 8-K the
financial statements of Teleaction, S.A. contained in pages F-53 through F-81 of
the Company's Proxy Statement filed July 29, 1996 on Schedule 14A.
(b) Pro forma financial information.
UNAUDITED PRO FORMA COMBINED FINANCIAL DATA
The unaudited pro forma combined statement of income (loss) for the year ended
May 31, 1995 and for the nine months ended February 29, 1996 give effect to the
Company's acquisition of a 69.2% interest in Teleaction, S.A.
(collectively, "Teleaction"; and such acquisition, the "Teleaction
Acquisition"), accounted for as a "purchase," as if it had occurred on June 1,
1994. The unaudited pro forma combined balance sheet as of February 29, 1996,
gives effect to the Teleaction Acquisition as if it had occurred on February 29,
1996. The historical financial data of the Company included in the pro forma
combined financial data are for and as of the periods presented. The historical
financial data of Teleaction included in the pro forma combined financial data
are for and as of the periods presented. The historical financial data of
Teleaction included in the pro forma combined financial data presented herein
for the year ended May 31, 1995 are from Teleaction's separate unaudited
statements of earnings (loss) and retained earnings for the twelve months ended
June 30, 1995. The historical financial data of Teleaction included in the pro
forma combined financial data presented herein as of February 29, 1996 and for
the nine months then ended are from Teleaction's separate unaudited financial
statements as of March 31, 1996 and the nine months then ended. The pro forma
combined financial data does not include the financial position or operating
results of Telepromotion, Action Data Base and Action Servicos De Publicidade
(subsidiaries of Teleaction) as they are immaterial.
On February 9, 1996, the Company acquired substantially all the assets of C.T.C.
Canadian Telephone Corporation and 2965496 Canada, Inc. (collectively, "CTC"),
consequently, the pro forma combined statements of operations include the
historical financial data of CTC for the year ended April 30, 1995 and the nine
months ended January 31, 1996.
The pro forma combined statements of operations are not necessarily indicative
of the results of operations that would have been achieved had the transactions
described therein been consummated on the above dates or that may be achieved in
the future and should be read in conjunction with the separate financial
statements of the Company, Teleaction and CTC respectively, contained in pages
F-11 through F-26, F-53 through F-81, and F-95 through F-109, respectively, of
the Company's Proxy Statement filed July 29, 1996 on Schedule 14A.
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UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME (LOSS)
FOR THE YEAR ENDED MAY 31, 1995
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
HISTORICAL HISTORICAL HISTORICAL PRO FORMA PROFORMA
SITEL CTC(a) TELEACTION(b,c) ADJUSTMENTS COMBINED
---------- ---------- --------------- ----------- --------
<S> <C> <C> <C> <C> <C>
Revenue.............................. $ 101,378 $ 6,342 $ 25,061 $ 132,781
Operating expenses:
Cost of services................... 55,054 3,788 14,017 72,859
Divisional selling, general and
administrative expenses.......... 32,979 1,173 6,852 41,004
Corporate general and
administrative expenses.......... 6,160 758 ----- 1,453(d) 8,371
Special compensation expense....... 34,585(e) ----- ----- 34,585(e)
---------- -------- --------- --------- ----------
Total operating expenses....... 128,778 5,719 20,869 1,453 156,819
---------- -------- --------- --------- ----------
Operating income..................... (27,400)(f) 623 4,192 (1,453) (24,038)(f)
Other income(expense)................ (303) 5 (250) (1,541)(g) (2,089)
---------- -------- --------- --------- ----------
Income before income taxes........... (27,703) 628 3,942 (2,994) (26,127)
Income tax expense................... (9,603) 190 1,430 (809)(g) (8,792)
---------- -------- --------- --------- ----------
Net income........................... $ (18,100)(f) $ 438 $ 2,512 $ (2,185) $ (17,335)(f)
---------- -------- --------- --------- ----------
---------- -------- --------- --------- ----------
Earnings(loss) per common and
common equivalent share............ ($1.05)(f) ($1.01)(f)
---------- ----------
---------- ----------
Weighted average common and common
equivalent shares outstanding..... 17,207 17,207
---------- ----------
---------- ----------
</TABLE>
______________________________
(a) The combined results of operations 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 Teleaction 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) 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 acquisition.
(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 $0.01 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 $7.6 million, $5.2 million and $0.30 for SITEL and
$11.1 million, $5.8 million and $0.34 for the Pro Forma Combined entity.
(g) 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 at the beginning of the period.
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UNAUDITED PRO FORMA COMBINED BALANCE SHEET
FEBRUARY 29, 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
HISTORICAL HISTORICAL PRO FORMA PRO FORMA
SITEL(a) TELEACTION (b,c) ADJUSTMENTS COMBINED
---------- ---------------- ----------- ---------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................ $ 6,325 $ 1,075 $ 7,400
Trade accounts receivable, net........................... 23,036 11,712 34,748
Marketable securities.................................... 47,175 ---- $ (25,220)(d) 21,955
Prepaid expenses......................................... 735 57 792
Other.................................................... 1,597 161 1,758
Income taxes receivable.................................. 629 75 704
Deferred income taxes ................................... 476 174 650
--------- -------- ----------- ---------
Total current assets.............................. 79,973 13,254 (25,220) 68,007
Property and equipment, net................................... 14,791 1,273 16,064
Deposits and other assets..................................... 558 292 850
Loans receivable from related parties......................... 340 318 658
Goodwill, net................................................. 5,958 1,082 23,544(d) 30,584
Deferred income taxes ........................................ 13,467 ---- 13,467
--------- -------- ----------- ---------
Total assets...................................... $ 115,087 $ 16,219 $ (1,676) $ 129,630
--------- -------- ----------- ---------
--------- -------- ----------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable - bank...................................... $ 700 $ 331 $ 1,031
Current portion of long-term obligations................. 20 ---- 20
Trade accounts payable................................... 5,163 1,153 6,316
Accrued wages, salaries and bonuses...................... 6,070 193 6,263
Other accrued expenses................................... 737 2,580 3,317
Customer deposits and other.............................. 429 ---- 429
--------- -------- ----------- ---------
Total current liabilities......................... 13,119 4,257 ---- 17,376
Long-term debt obligations, net............................... 129 642 8,909(d) 9,680
Other liabilities............................................. 726 735 1,461
Stockholders' equity:
Common stock ............................................ 9 404 (404)(d) 9
Paid-in capital.......................................... 106,511 ---- 106,511
Currency exchange adjustment............................. 20 ---- 20
Retained earnings (deficit).............................. (5,427) 10,181 (10,181)(d) (5,427)
--------- -------- ----------- ---------
Total stockholders' equity........................ 101,113 10,585 (10,585) 101,113
--------- -------- ----------- ---------
Total liabilities and stockholders' equity........ $ 115,087 $ 16,219 $ (1,676) $ 129,630
--------- -------- ----------- ---------
--------- -------- ----------- ---------
</TABLE>
(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 February 29,1996.
(b) The balance sheet of Teleaction is as of March 31,1996.
(c) 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
(123.89 pesetas per dollar).
(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 $23,544,000 was created by this acquisition.
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UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME (LOSS)
FOR THE NINE MONTHS ENDED FEBRUARY 29, 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
HISTORICAL HISTORICAL HISTORICAL PRO FORMA PRO FORMA
SITEL CTC(a) TELEACTION(b,c) ADJUSTMENTS COMBINED
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenue. . . . . . . . . . . . . . . . $ 98,861 $ 4,054 $ 23,156 $ (433) (d)$ 125,638
Operating expenses:. . . . . . . . . .
Cost of services. . . . . . . . . . . 52,951 2,880 14,301 (215) (d) 69,917
Divisional selling, general and
and administrative expenses. . . . . 31,485 1,279 5,618 (227) (d) 38,155
Corporate general and
administrative expenses. . . . . . . 5,170 301 ---- 831 (e) 6,302
------------ ------------ ------------ ------------ ------------
Total operating expenses. . . . . . 89,606 4,460 19,919 389 114,374
Operating income. . . . . . . . . . 9,255 (406) 3,237 (822) 11,264
Other income(expense) . . . . . . . . 533 32 (257) (1,156) (f) (848)
------------ ------------ ------------ ------------ ------------
Income before income taxes . . . . . . 9,788 (374) 2,980 (1,978) 10,416
Income tax expense (benefit) . . . . . 3,466 (134) 1,012 (516) (f) 3,828
------------ ------------ ------------ ------------ ------------
Net income . . . . . . . . . . . . . . $ 6,322 $ (240) $ 1,968 $ (1,462) $ 6,598
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Earnings (loss) per common and
common equivalent share . . . . . . . $0.30 $0.31
------------ ------------
------------ ------------
Weighted average common and common
equivalent shares outstanding . . . . 21,111 21,111
------------ ------------
------------ ------------
- ------------------------------------------
</TABLE>
(a) The combined results of operations of CTC are for the nine months ended
January 31, 1996 and have been translated from Canadian dollars to US
dollars at the average exchange rate for the period.
(b) The results of Teleaction are for the nine months ended March 31, 1996.
(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) SITEL's consolidated results of operations for the nine months ended
February 29, 1996 include one month of CTC's operations. Since CTC's
results of operations presented are for the nine months ended January 31,
1996, the results of CTC operations for the month of February 1996 are
being removed to avoid the inclusion of 10 months of activity.
(e) 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
acquisition.
(f) 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 at the beginning of the period.
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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: August 23, 1996 SITEL Corporation
By: /s/ Barry S. Major
-----------------------------------
Barry S. Major
Executive Vice President and
Chief Financial Officer
