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): June 23, 1998
SITEL CORPORATION
(Exact name of registrant as specified in its charter)
Minnesota 1-12577 47-0684333
(State or jurisdiction of (Commission File (I.R.S. Employer
incorporation or organization) Number) Identification No.)
111 S. Calvert, Suite 1910
Baltimore, Maryland 21202
(410) 659-5700
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
____________________________________________
This 8-K consists of 11 pages.
<PAGE>
Item 5. OTHER EVENTS
On June 23, 1998 the registrant announced that it expects to record a
restructuring charge of approximately $6.5 million in its second quarter ending
June 30, 1998. The registrant also indicated that it expects to report near
break-even results before provision for income taxes and the effect of the
restructuring charge for its second quarter. With respect to the registrant's
third and fourth quarters of 1998, the registrant indicated that it expects to
report improved overall results, as compared to the second quarter of 1998,
excluding the effects of the expected $6.5 million restructuring charge.
Details of such announcement are contained in the news release issued by the
registrant on June 23, 1998, a copy of which is filed as an Exhibit to this Form
8-K. In light of the registrant's expectations for the remainder of the year,
the registrant sought and obtained certain modifications to its existing credit
facility to permit continued availability of borrowing under such facility.
Forward looking information:
This Form 8-K contains forward-looking statements regarding SITEL's anticipated
restructuring charge, anticipated second quarter 1998 financial results, and
anticipated improvements in profitability and overall results by the end of
1998. Such forward-looking statements involve substantial risks and
uncertainties. While the substantial risks and uncertainties cannot all be
predicted or quantified, important factors that could cause SITEL's actual
results to differ materially from those expressed or implied by such forward-
looking statements include, without limitation, because the second quarter of
1998 has not been completed and the remaining quarters of 1998 have not even
commenced, additional major expense items may yet occur or may become further
identified or quantified and anticipated revenues may not occur or may fall into
later periods. Readers are encouraged to review the Risk Factors section of
SITEL's most recent prospectus filed April 24, 1998 and SITEL's most recent Form
10-K filed March 30, 1998, which describe other important factors that may
impact SITEL's business, results of operations and financial condition and
certain of which are discussed from time to time in the Company's filings with
the Securities and Exchange Commission. Future events and actual results could
differ materially from those set forth in, contemplated by or underlying the
forward-looking statements.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits:
10.1 First Amendment dated June 19, 1998 to Credit Agreement
99.1 News release of SITEL Corporation dated June 23, 1998
<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, thereunto duly authorized.
Date July 1, 1998 SITEL Corporation
By: /s/ W. Gar Richlin
__________________________________
W. Gar Richlin
Executive Vice President - Finance
and Chief Financial Officer
<PAGE>
INDEX TO EXHIBITS
Exhibit
No.
_______
10.1 First Amendment dated June 19, 1998 to Credit Agreement
99.1 News Release of SITEL Corporation dated June 23, 1998
EXHIBIT 10.1
FIRST AMENDMENT TO CREDIT AGREEMENT
___________________________________
FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated as of June
19, 1998, among SITEL CORPORATION, a corporation organized and existing under
the laws of the state of Minnesota (the "Borrower"), the lenders party to the
Credit Agreement referred to below (the "Banks"), U.S. BANK NATIONAL
ASSOCIATION, as Syndication Agent, FIRST UNION NATIONAL BANK, as Documentation
Agent, and BANKERS TRUST COMPANY, as Agent. Unless otherwise defined herein,
capitalized terms used herein and defined in the Credit Agreement referred to
below are used herein as so defined.
W I T N E S S E T H :
_ _ _ _ _ _ _ _ _ _
WHEREAS, the Borrower, the Banks, the Documentation Agent, the Syndication
Agent and the Agent have entered into a Credit Agreement, dated as of July 24,
1997 and amended and restated as of March 10, 1998 (as amended, modified or
supplemented through, but not including, the date hereof, the "Credit
Agreement"); and
WHEREAS, subject to the terms and conditions set forth below, the parties
hereto wish to amend the Credit Agreement as herein provided;
NOW, THEREFORE, it is agreed;
1. Section 7.13 of the Credit Agreement is hereby amended by (i) deleting
the text "options or warrants" appearing therein and inserting the text
"options, warrants or rights" in lieu thereof and (ii) inserting the text "or
Qualified Preferred Stock" immediately following the text "Borrower's common
stock" appearing therein.
2. Section 9.03(iii) of the Credit Agreement is hereby amended by
deleting the text "common Stock Dividends" appearing therein and inserting the
text "Dividends payable in respect of common stock and/or Qualified Preferred
Stock of the Borrower" in lieu thereof.
3. Section 9.04(v) of the Credit Agreement is hereby amended by deleting
the text "$50,000,000" appearing therein and inserting the text "$100,000,000"
in lieu thereof.
4. Section 9.05(xiii) of the Credit Agreement is hereby amended by
deleting the text "for the purpose of enabling such Wholly-Owned Foreign
Subsidiaries to consummate a Permitted Acquisition" appearing therein.
5. Section 9.09 of the Credit Agreement is hereby amended by (i) deleting
the following portion of the table appearing therein:
"Restatement Effective Date through
and including June 30, 2000 3.00:1.00"
and (ii) inserting the following text in lieu thereof:
"Restatement Effective Date through and
including March 31, 1998 3.00:1.00
April 1, 1998 through and including June
30, 1998 3.90:1.00
July 1, 1998 through and including
September 30, 1998 3.75:1.00
October 1, 1998 through and including
December 31, 1998 3.50:1.00
January 1, 1999 through and including
March 31, 1999 3.25:1.00
April 1, 1999 through and including
June 30, 2000 3.00:1.00".
6. Section 9.10 of the Credit Agreement is hereby amended by (i) deleting
the following portion of the table appearing therein:
"June 30, 1998 $50,000,000
September 30, 1998 $60,000,000"
and (ii) inserting the following text in lieu thereof:
"June 30, 1998 $45,000,000
September 30, 1998 $50,000,000".
7. Section 10 of the Credit Agreement is hereby amended as follows:
(a) The definition of "Consolidated EBITDA" appearing in Section 10
of the Credit Agreement is amended by (i) inserting the text "(x)"
immediately after the text "but determined without giving effect to any"
appearing therein and (ii) inserting the text "and (y) cash restructuring
charges of up to $7,000,000 in the aggregate in connection with severance
costs incurred by Subsidiaries of the Borrower on or prior to December 31,
1998" immediately prior to the period appearing at the end thereof.
(b) The definition of "Dividends" appearing in Section 10 of the
Credit Agreement is amended by deleting, in its entirety, the first
parenthetical appearing therein and inserting the text "(other than common
stock of such Person or rights to purchase common stock or Qualified
Preferred Stock of such Person)" in lieu thereof.
(c) The definition of "Qualified Preferred Stock" appearing in
Section 10 of the Credit Agreement is amended by deleting, in its entirety,
clause (iv) thereof and re-numbering clause (v) thereof as the new clause
(iv) thereof.
8. In order to induce the Banks to enter into this Amendment, the
Borrower hereby represents and warrants that (i) the representations, warranties
and agreements contained in Section 7 of the Credit Agreement are true and
correct in all material respects on and as of the First Amendment Effective Date
(as defined below) (except with respect to any representations and warranties
limited by their terms to a specific date, which shall be true and correct in
all material respects as of such date) and (ii) there exists no Default or Event
of Default on the First Amendment Effective Date, in each case after giving
effect to this Amendment.
9. This Amendment is limited as specified and shall not constitute a
modification, acceptance or waiver of any other provision of the Credit
Agreement or any other Credit Document.
10. This Amendment may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A complete set of
counterparts shall be lodged with the Borrower and the Agent.
11. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF
NEW YORK.
12. This Amendment shall become effective on the date (the "First
Amendment Effective Date") when (i) the Borrower and the Required Banks shall
have signed a counterpart hereof (whether the same or different counterparts)
and shall have delivered (including by way of telecopier) the same to the Agent
at the Notice Office and (ii) the Borrower shall have paid to each of the Banks
which has signed a counterpart of this Amendment and delivered the same to the
Agent on or before 5:30 p.m. (New York time) on June 25, 1998 an amendment fee
equal to the product of (x) 0.10 and (y) the Revolving Loan Commitment of each
such Bank on the first Amendment Effective Date.
13. From and after the First Amendment Effective Date, all references in
the Credit Agreement and the other Credit Documents to the Credit Agreement
shall be deemed to be references to the Credit Agreement as modified hereby.
* * * *
IN WITNESS WHEREOF, the undersigned has caused this Amendment to be duly
executed and delivered as of the date first above written.
SITEL CORPORATION
By: ______________________________
Title:
BANKERS TRUST COMPANY,
Individually and as Agent
By: ______________________________
Title:
U.S. BANK NATIONAL ASSOCIATION,
Individually and as Syndication Agent
By: ______________________________
Title:
FIRST UNION NATIONAL BANK,
Individually and as Documentation Agent
By: ______________________________
Title:
THE BANK OF NEW YORK
By: ______________________________
Title:
THE BANK OF NOVA SCOTIA
By: ______________________________
Title:
COMERICA BANK
By: ______________________________
Title:
CREDIT AGRICOLE INDOSUEZ
By: ______________________________
Title:
THE FIRST NATIONAL BANK OF CHICAGO
By: ______________________________
Title:
WACHOVIA BANK, N.A.
By: _______________________________
Title:
EXHIBIT 99.1
FROM: FOR:
Swenson NHB Investor Relations SITEL Corporation
121 South Eighth St. Suite 1111 300 East Lombard, Suite 850
Minneapolis, Minn. 55402 Baltimore, Md. 21202
Contact: Doug Ewing 612-371-0000 Contact: Gar Richlin, EVP and CFO, or
Jim Jacobson, Investor
Relations
410-659-5700
FOR IMMEDIATE RELEASE
SITEL CORPORATION COMMENTS ON SECOND-QUARTER RESULTS
BALTIMORE, June 23 -- SITEL Corporation (NYSE:SWW), the global leader in
teleservicing, announced today that it expects to record a restructuring charge
of approximately $6.5 million for its second quarter ending June 30. Excluding
the effect of the restructuring charge, SITEL also expects to report near break-
even results before provision for income taxes for its second quarter.
The restructuring charge relates to SITEL's European operations, and is
principally for severance arrangements. The charge is driven by two principal
factors, a lower level of campaign business, which has been the Company's
historical focus in Europe, and the need to reposition its infrastructure for
increasing amounts of outsourcing business.
Phil Clough, SITEL's Chief Executive Officer said, "Once this restructuring is
completed, our resources will be in line with existing levels of business, and
the Company will be more appropriately positioned for increasing levels of
outsourcing business, such as the recently announced contracts with Philips and
3Com."
The difference between SITEL's anticipated results and current analysts'
estimates relates primarily to Europe's lower level of campaign business. With
a more appropriate expense structure and increasing levels of outsourcing
business, the Company expects to begin approaching its targeted levels of
profitability in Europe by the end of the year. The company also expects to
report improved overall results for the third and fourth quarters, as compared
to the anticipated second quarter, excluding the effect of the restructuring
charge.
Clough commented that SITEL's business in its other regions - North America,
Asia Pacific and Latin America - continues to perform in line with management's
expectations. While European results are below expectations, SITEL remains the
largest teleservicing company in Europe and the global leader in teleservices.
Jim Lynch, SITEL's Chairman said, "Over the past few weeks, Phil Clough and I,
as well as several other senior and experienced executives, have spent time in
Europe reviewing our operations there. We are convinced that the appropriate
plans are in place to move the business forward. We have dedicated and talented
people who are committed to the highest performance levels." Lynch further
stated, "It is the clear focus of SITEL's senior leadership, management and
employees to return the company to increasing profitability as soon as
possible."
- more -
- 2 -
SITEL Corporation is the global leader in outsourced telephone and Internet-
based customer service and sales programs for corporations worldwide. The
company operates over 12,900 workstations in more than 70 call centers in 18
countries throughout North America, Europe, Latin America and Asia-Pacific. It
covers more than 25 languages and dialects, serves over 400 clients in nine
industries and employs more than 20,000 people. Further information about the
company is located on the Internet at http://www.sitel.com
# # # #
This news release contains forward-looking statements regarding SITEL's
anticipated restructuring charge, anticipated second quarter 1998 financial
results, and anticipated improvements in profitability and overall results by
the end of 1998. Such forward-looking statements involve substantial risks and
uncertainties. While the substantial risks and uncertainties cannot all be
predicted or quantified, important factors that could cause SITEL's actual
results to differ materially from those expressed or implied by such forward-
looking statements include, without limitation, because the second quarter of
1998 has not been completed and the remaining quarters of 1998 have not even
commenced, additional major expense items may yet occur or may become further
identified or quantified and anticipated revenues may not occur or may fall into
later periods. Readers are encouraged to review the Risk Factors section of
SITEL's most recent prospectus filed April 24, 1998 and SITEL's most recent Form
10-K filed March 30, 1998, which describe other important factors that may
impact SITEL's business, results of operations and financial condition and
certain of which are discussed from time to time in the Company's filings with
the Securities and Exchange Commission. Future events and actual results could
differ materially from those set forth in, contemplated by or underlying the
forward-looking statements.
06/23/98
