SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
[X] Quarterly Report Pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934.
For the quarterly period ended March 31, 1998
or
[ ] Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934.
For the transition period _____ to ______
Commission File Number 1-12577
SITEL CORPORATION
(Exact name of registrant as specified in its charter)
MINNESOTA 47-0684333
(State or jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
111 SOUTH CALVERT, STE. 1910
BALTIMORE, MD 21202
(410) 659-5700
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. YES X NO
_____ _____
As of May 4, 1998, the Company had 63,777,115 shares of Common Stock
outstanding.
<PAGE>
SITEL CORPORATION AND SUBSIDIARIES
__________________________________
PART I
_______
The registrant hereby amends Part I, Item 1 of its Form 10-Q for the period
ended March 31, 1998 to provide additional disclosure regarding Supplemental
Guarantor Financial Information in Note #8 to its financial statements. The
Consolidated Condensed Balance Sheets, Statements of Income, and Statements of
Cash Flows included in the 10-Q are not changed by this amendment.
Item 1. Financial Statements
Consolidated Condensed Balance Sheets....................... 1
Consolidated Condensed Statements of Income................. 2
Consolidated Condensed Statements of Cash Flows............. 3
Notes to Consolidated Condensed Financial Statements........ 4
PART II - OTHER INFORMATION
Signature...................................................... 13
<PAGE>
SITEL CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
December 31, 1997 and March 31, 1998
(dollars in thousands, except share data)
December 31, March 31,
ASSETS
1997 1998
____________ ___________
Current assets: (unaudited)
Cash and cash equivalents....................... $ 24,285 $ 12,318
Trade accounts receivable (net of allowance for
doubtful accounts of $ 5,099 and$4,904,
respectively)................................... 107,697 120,430
Marketable securities........................... 159 --
Prepaid expenses................................ 3,916 5,469
Other assets.................................... 9,548 20,438
Deferred income taxes........................... 3,153 2,787
____________ __________
Total current assets...................... 148,758 161,442
Property and equipment, net .................... 120,600 113,444
Deferred income taxes .......................... 11,114 12,689
Goodwill, net................................... 94,381 92,792
Other assets.................................... 11,027 12,799
____________ __________
Total assets.............................. $ 385,880 $ 393,166
============ ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable-bank............................... $ 14,376 $ 23,748
Current portion of long-term debt............... 10,793 7,014
Current portion of capitalized lease 4,934 4,215
obligations ....................................
Trade accounts payable.......................... 27,322 23,459
Income taxes payable............................ 8,398 6,494
Accrued compensation............................ 14,120 14,636
Accrued operating expenses...................... 22,984 20,017
Deferred revenue and other...................... 6,286 5,044
____________ __________
Total current liabilities................. 109,213 104,627
Long-term debt, excluding current portion.......... 102,505 107,620
Capitalized lease obligations, excluding current
portion............................................ 12,983 11,506
Deferred compensation ............................. 1,407 1,466
Minority interest.................................. 1,384 7,707
Stockholders' equity:
Common stock, voting, $.001 par value
200,000,000 shares authorized, 63,099,597 and
63,745,558 shares issued and outstanding,
respectively.................................... 63 64
Paid-in capital................................. 155,326 157,036
Accumulated other comprehensive income.......... (6,415) (7,738)
Retained earnings............................... 9,414 10,878
____________ ___________
Total stockholders' equity............... 158,388 160,240
____________ ___________
Total liabilities and stockholders'
equity................................... $ 385,880 $ 393,166
============ ===========
The accompanying notes are an integral part of the consolidated condensed
financial statements.
<PAGE>
SITEL CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(unaudited)
For The Three Months Ended
March 31, 1997 March 31,1998
______________ _____________
(in thousands, except per share data)
Revenues................................ $ 104,260 $ 137,748
______________ ______________
Operating expenses:
Cost of services...................... 56,357 77,820
Selling, general and administrative
expenses.............................. 37,242 54,672
______________ _____________
Total operating expense........... 93,599 132,492
______________ _____________
Operating income ................. 10,661 5,256
Other income (expense):
Interest expense, net................. (534) (2,590)
Other income, net..................... -- 135
______________ _____________
Income before income taxes
and minority interest.............. 10,127 2,801
Income tax expense.................... 3,643 1,117
Minority interest .................... 30 (294)
______________ _____________
Net income from continuing operations. 6,454 1,978
Extraordinary loss on refinancing of
debt, net of taxes.................... -- 514
______________ _____________
Net income............................ $ 6,454 $ 1,464
============== =============
Income from continuing operations per common share:
Basic.................................. $ 0.11 $ 0.03
Diluted................................ $ 0.10 $ 0.03
Income per common share:
Basic.................................. $ 0.11 $ 0.02
Diluted................................ $ 0.10 $ 0.02
Weighted average common shares outstanding:
Basic.................................. 59,875 63,295
Diluted................................ 67,509 69,611
The accompanying notes are an integral part of the consolidated condensed
financial statements.
<PAGE>
SITEL CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
For Three Months Ended
(dollars in thousands) March 31, 1997 March 31, 1998
<S> <C> <C>
______________ ______________
Net income.................................. $ 6,454 $ 1,464
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation and amortization............. 4,881 9,654
Extraordinary loss on refinancing of debt. -- 792
Gain on marketable securities............. -- (208)
Change in assets and liabilities:
Trade accounts receivable.............. (21,528) (12,829)
Other assets........................... (1,204) (4,711)
Trade accounts payable................. 1,525 (3,808)
Other liabilities...................... (3,133) (4,552)
_______________ ______________
Net cash used in operating activities. (13,005) (14,198)
_______________ ______________
Cash flows from investing activities:
Purchases of property and equipment....... (18,692) (11,683)
Proceeds from sale-leasebacks of
facilities................................ -- 9,336
Acquisition of businesses, net of cash
acquired.................................. (20,666) --
Sale of marketable securities............. -- 257
Changes in other assets, net.............. 108 55
_______________ ______________
Net cash used in investing activities. (39,250) (2,035)
_______________ ______________
Cash flows from financing activities:
Borrowings on note payable................ 28,862 10,720
Repayments of note payable................ (9,291) (1,303)
Borrowings on long-term debt ............. 14,574 125,808
Repayment of long-term debt and
capitalized lease obligations............. (27) (130,354)
State incentive credits received.......... 900 --
Common stock issued for option exercises.. 200 76
_______________ ______________
Net cash provided by financing
activities............................ 35,218 4,947
_______________ ______________
Effect of exchange rates on cash...... (526) (681)
_______________ ______________
Net increase (decrease) in cash....... (17,563) (11,967)
Cash and cash equivalents, beginning
of period............................. 25,710 24,285
_______________ ______________
Cash and cash equivalents, end of
period................................ $ 8,147 $ 12,318
=============== ==============
Supplemental schedule of non-cash financing and investing activities:
In the first quarter of 1997, the Company issued approximately 1,298,000
shares of the Company's common stock in connection with acquisitions.
The accompanying notes are an integral part of the consolidated condensed
financial statements.
<PAGE>
SITEL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATMENTS
1. BASIS OF PRESENTATION:
The consolidated condensed balance sheet of SITEL Corporation and Subsidiaries
(the "Company") at December 31, 1997 was obtained from the Company's audited
balance sheet as of that date. All other financial statements contained herein
are unaudited and, in the opinion of management, contain all adjustments
necessary for a fair presentation of the financial position, operating results,
and cash flows for the periods presented. Such adjustments consist only of
normal recurring items. The consolidated condensed financial statements should
be read in conjunction with the consolidated financial statements and notes
thereto, together with management's discussion and analysis of financial
condition and results of operations, contained in the Company's Form 10-K for
the year ended December 31, 1997.
2. SALE OF STOCK OF SUBSIDIARIES:
During the first quarter of 1998 the Company sold newly issued stock of certain
subsidiaries located in the Asia Pacific region to Lend Lease Corporation
Limited, Sydney, Australia and certain of its subsidiaries ("Lend Lease"). Lend
Lease paid approximately $6.6 million for a 20% interest in these subsidiaries,
which provide outsourced call center solutions throughout the region.
Lend Lease has several options to increase its ownership percentage in amounts
up to a total of 49% which, subject to meeting certain conditions, expire at
various times through on or about March 2004. The option exercise prices are
intended to approximate fair value through formulas tied to the subsidiary's
revenue levels for certain prior periods. The Company also has an option to
reacquire the original shares sold to Lend Lease at an agreed formula price from
on or about March 2000 through on or about March 2001 so long as Lend Lease has
not exercised its option to increase its ownership percentage. Lend Lease also
has an option to sell its shares back to the Company at an agreed formula price
(the "put option"). The put option expires upon the earlier of Lend Lease
exercising its option to increase its ownership percentage or on or about March
2001.
Operations of these subsidiaries are controlled by a management committee on
which Lend Lease and the Company have equal representation. The Company,
however, effectively controls the operations of these subsidiaries through
certain dispute resolution processes that are included in the shareholder
agreements. Should the Company exercise its control through these dispute
resolution processes, Lend Lease has the option to sell its shares back to the
Company at an agreed formula price which is intended to approximate fair value.
Although the purchase price paid by Lend Lease exceeds the book value of the 20%
ownership that they acquired, due to the put option the Company has included the
entire amount of the stock purchase price as minority interest. The Company will
accrete to the put option formula price if earnings credited to the minority
interest are not sufficient to record the amount that would be required to be
paid to Lend Lease upon their exercise of the put option.
3. INCOME TAXES:
The difference between the Company's income tax expense as reported in the
accompanying financial statements and that which would be calculated using the
statutory Federal income tax rate of 34% on income is primarily due to non-
deductible business acquisition expenses and international, state and local
income taxes.
<PAGE>
SITEL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATMENTS
4. LONG TERM DEBT AND NOTES PAYABLE:
On March 10, 1998, the Company completed the private placement of $100 million
of 9.25% Senior Subordinated Notes due 2006 (the "Notes"). The proceeds from
the offering were used to repay borrowings outstanding under the Company's long
term revolving credit facility (the "Credit Facility"), which was also amended
on that date.
The Notes, which include interest payable semiannually, are general unsecured
obligations of the Company and will be subordinated in right of payment to all
existing and future senior debt of the Company. The Notes are guaranteed by
certain of the Company's subsidiaries and contain certain covenants that limit
the ability of the Company and certain of its subsidiaries to, among other
things, incur additional indebtedness, pay dividends or make certain other
restricted payments, consummate certain asset sales, enter into certain
transactions with affiliates, incur liens, merge or consolidate with another
company and sell or otherwise dispose of all or substantially all of the assets
of the Company.
The Notes are redeemable, at the Company's option, in whole or in part from time
to time on or after March 15, 2002. If redeemed during the twelve-month period
commencing on March 15 of the year set forth below, the redemption prices are as
follows, plus in each case, accrued and unpaid interest thereon, if any, to the
date of redemption:
Year Percentage
____ __________
2002 .......................... 104.625%
2003 .......................... 103.083%
2004 .......................... 101.542%
2005 and thereafter .............. 100.000%
In addition, the Company may redeem up to 35% of the aggregate principal amount
of the Notes at any time on or prior to March 15, 2001 at 109.25% of the
principal amount thereof, plus accrued interest to the date of redemption, from
the net proceeds of one or more public equity offerings, as defined. Also, upon
a change of control of the Company, as defined, the Company may be required to
repurchase the Notes at a price equal to 101% of the principal amount thereof,
plus accrued interest to the date of repurchase.
In connection with the repayment of the amounts due under the existing Credit
Facility from the proceeds of the Notes, the Company also reached an agreement
with a syndicate of commercial banks to amend the Company's existing Credit
Facility to limit borrowings under the Credit Facility to an amount based upon a
percentage of the Company's eligible domestic accounts receivable, as defined,
up to $75 million. Certain of the financial covenants and restrictions were
amended and the Company's eligible domestic accounts receivable were pledged as
security. As a result of the amendment the Company recognized an extraordinary
charge of $514,000, net of tax, to write off the deferred costs of the original
Credit Agreement.
5. EMPLOYEE STOCK PURCHASE PLAN:
During the first quarter of 1998, the Company implemented an Employee Stock
Purchase Plan ("ESPP" or the "Plan"). The Plan enables eligible employees to
Purchase the Company's stock at 85% of the current market value on a quarterly
basis.
<PAGE>
SITEL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATMENTS
6. ACCOUNTING PRONOUNCEMENT:
Statement of Financial Accounting Standard ("SFAS") 130, Reporting Comprehensive
Income establishes standards for the reporting and display of comprehensive
income and its components in a full set of general purpose financial statements.
The standard also requires disclosure of the total of comprehensive income in
interim financial statements. The Company's comprehensive income was $1,706,000
and $141,000 for the three month periods ended March 31, 1997 and 1998,
respectively. The difference between the Company's reported net income and
comprehensive income for those three month periods is primarily due to the
change in the currency exchange adjustment. The accumulated other comprehensive
income included in the Company's Consolidated Condensed Balance Sheet at
December 31, 1997 and March 31, 1998 is primarily the accumulated currency
exchange adjustment.
7. RESTRUCTURING:
In the fourth quarter of 1997, the Company recorded a $15.7 million charge for
restructuring expenses. Included in that charge were severance and other costs
of $3.6 million, of which $3.4 million was recorded as a liability at December
31, 1997, as well as $1.1 million of liabilities related to losses on
contractual obligations. The amount of actual termination benefits paid and
actual losses charged against the liability for contractual obligations during
the three months ended March 31, 1998 was approximately $650,000 and $100,000,
respectively.
8. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION:
The Notes are guaranteed, on a full, unconditional and joint and several basis,
by all wholly-owned domestic subsidiaries of the Company. Separate financial
statements of the guarantor subsidiaries are not presented because management
has determined that they would not be material to investors. However, the
following condensed consolidating information presents:
(1) Condensed consolidating financial statements as of December 31, 1997
and March 31, 1998, and for the three months ended, March 31, 1997 and 1998 of
(a) SITEL Corporation, the parent, (b) the guarantor subsidiaries, (c) the
nonguarantor subsidiaries and (d) SITEL Corporation on a consolidated basis,
(2) SITEL Corporation, the parent, with the investments in all
subsidiaries accounted for on the equity method, and the guarantor subsidiaries
with the nonguarantor subsidiaries accounted for on the equity method (one of
the guarantor subsidiaries is the parent of the nonguarantor subsidiaries), and
(3) Elimination entries necessary to consolidate SITEL Corporation, the
parent, with all subsidiaries.
<PAGE>
</TABLE>
<TABLE>
SITEL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATMENTS
8. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (Continued):
Condensed Consolidating Balance Sheet
December 31, 1997
(in thousands)
Guarantor Nonguarantor
Parent Subsidiaries Subsidiaries Eliminations Consolidated
_________ ____________ _____________ ____________ ____________
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.............. $ 11,514 $ 2,075 $ 10,696 $ -- $ 24,285
Trade accounts receivable, net......... 21,832 22,167 65,313 (1,615) 107,697
Marketable securities.................. 159 -- -- -- 159
Prepaid expenses and other current
asset.................................. 6,523 264 9,830 -- 16,617
_________ ____________ _____________ ____________ ____________
Total current assets................. 40,028 24,506 85,839 (1,615) 148,758
Property and equipment, net............ 37,585 24,251 58,764 -- 120,600
Deferred income taxes.................. 11,070 -- 44 -- 11,114
Goodwill, net.......................... 1,627 21,926 70,828 -- 94,381
Other assets........................... 7,532 121 3,374 -- 11,027
Investments in subsidiaries............ 180,112 94,999 -- (275,111) --
Notes receivable, intercompany......... -- 22,203 -- (22,203) --
_________ ____________ _____________ ____________ ____________
Total assets......................... $ 277,954 $ 188,006 $ 218,849 $ (298,929) $ 385,880
========= ============ ============= ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable.......................... $ -- $ -- $ 14,376 $ -- $ 14,376
Current portion of long-term debt........ 2,026 -- 8,767 -- 10,793
Current portion of capitalized lease
obligations............................ 308 98 4,528 -- 4,934
Trade accounts payable................. 2,841 1,202 24,894 (1,615) 27,322
Accrued expenses and other current
liabilities............................ 11,168 6,210 34,410 -- 51,788
_________ ____________ _____________ ____________ ____________
Total current liabilities............ 16,343 7,510 86,975 (1,615) 109,213
Long-term debt, excluding current
portion................................ 101,488 -- 1,017 -- 102,505
Capitalized lease obligations, excluding
current portion........................ 328 140 12,515 -- 12,983
Notes payable, intercompany and
other.................................. -- 244 21,959 (22,203) --
Deferred compensation ................. 1,407 -- -- -- 1,407
Minority interest...................... -- -- 1,384 -- 1,384
Stockholders' equity................... 158,388 180,112 94,999 (275,111) 158,388
_________ ____________ _____________ ____________ ____________
Total liabilities and stockholders'
equity............................... $ 277,954 $ 188,006 $ 218,849 $ (298,929) $ 385,880
========= ============ ============= ============ ============
</TABLE>
<TABLE>
SITEL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
8. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (Continued):
Condensed Consolidating Balance Sheet
March 31, 1998
(in thousands)
Guarantor Nonguarantor
Parent Subsidiaries Subsidiaries Eliminations Consolidated
__________ ______________ _____________ ____________ ____________
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.......... $ 5,561 $ 1,491 $ 5,266 $ -- $ 12,318
Trade accounts receivable, net..... 28,342 26,355 67,662 (1,929) 120,430
Prepaid expenses and other current 7,614 172 20,908 -- 28,694
assets............................. __________ ______________ _____________ ____________ ____________
Total current assets............... 41,517 28,018 93,836 (1,929) 161,442
Property and equipment, net........ 30,823 22,278 60,343 -- 113,444
Deferred income taxes.............. 9,733 (244) 3,200 -- 12,689
Goodwill, net...................... 1,605 21,699 69,488 -- 92,792
Other assets....................... 9,947 100 2,752 -- 12,799
Investments in subsidiaries........ 184,112 90,546 -- (274,658) --
Notes receivable, intercompany..... -- 27,683 -- (27,683) --
__________ ______________ _____________ ____________ ____________
Total assets......................... $ 277,737 $ 190,080 $ 229,619 $ (304,270) $ 393,166
========== ============== ============= ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable........................ $ -- $ -- $ 23,748 $ -- $ 23,748
Current portion of long-term debt.... 2,323 -- 4,691 -- 7,014
Current portion of capitalized lease
obligations........................ 314 98 3,803 -- 4,215
Trade accounts payable............... 2,908 1,041 21,439 (1,929) 23,459
Accrued expenses and other current
liabilities........................ 8,714 4,727 32,750 -- 46,191
__________ ______________ _____________ ____________ ____________
Total current liabilities............ 14,259 5,866 86,431 (1,929) 104,627
Long-term debt, excluding current
portion............................ 101,524 -- 6,096 -- 107,620
Capitalized lease obligations, excluding
current portion.................... 248 102 11,156 -- 11,506
Notes payable, intercompany.......... -- -- 27,683 (27,683) --
Deferred compensation................ 1,466 -- -- -- 1,466
Minority interest.................... -- -- 7,707 -- 7,707
Stockholders' equity................. 160,240 184,112 90,546 (274,658) 160,240
__________ ______________ _____________ ____________ ____________
Total liabilities and stockholders'
equity.......................... $ 277,737 $ 190,080 $ 229,619 $ (304,270) $ 393,166
========= ============== ============= ============ ============
</TABLE>
<TABLE>
SITEL CORPORATION AND SUBSIDIARIES
NOTES TOCONSOLIDATED CONDENSED FINANCIAL STATMENTS
8. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (Continued):
Condensed Consolidating Statement of Income
For the three months ended March 31, 1997
(in thousands)
Guarantor Nonguarantor
Parent Subsidiaries Subsidiaries Eliminations Consolidated
__________ _____________ _____________ ____________ ____________
<S> <C> <C> <C> <C> <C>
Revenues.............................. $ 34,763 $ 17,455 $ 52,042 $ -- $ 104,260
__________ ______________ _____________ ____________ ____________
Operating expenses:
Cost of services.................... 18,380 9,212 28,765 -- 56,357
Selling, general and administrative
expenses............................ 13,722 6,038 17,482 -- 37,242
__________ ______________ _____________ ____________ ____________
Total operating expenses......... 32,102 15,250 46,247 -- 93,599
__________ ______________ _____________ ____________ ____________
Operating income................. 2,661 2,205 5,795 -- 10,661
__________ ______________ _____________ ____________ ____________
Other income (expense):
Equity in earnings of subsidiaries,
net of tax.......................... 4,197 2,972 -- (7,169) --
Intercompany charges................ -- 369 (369) -- --
Interest income (expense), net ..... 481 (571) (444) -- (534)
__________ ______________ _____________ ____________ ____________
Total other income (expense)..... 4,678 2,770 (813) (7,169) (534)
__________ ______________ _____________ ____________ ____________
Income before income taxes and
minority interest..................... 7,339 4,975 4,982 (7,169) 10,127
Income tax expense.................... 885 778 1,980 -- 3,643
Minority interest..................... -- -- 30 -- 30
__________ ______________ _____________ ____________ ____________
Net income....................... $ 6,454 $ 4,197 $ 2,972 $ (7,169) $ 6,454
========== ============= ============= ============ ============
</TABLE>
<TABLE>
SITEL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATMENTS
8. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (Continued):
Condensed Consolidating Statement of Income
For the three months ended March 31, 1998
(in thousands)
Guarantor Nonguarantor
Parent Subsidiaries Subsidiaries Eliminations Consolidated
________ ____________ ____________ ____________ ____________
<C> <S> <C> <C> <C> <C>
Revenues..................................... $ 34,072 $ 41,006 $ 62,670 $ -- $ 137,748
________ ____________ ____________ ____________ ____________
Operating expenses:
Cost of services............................ 17,960 23,346 36,514 -- 77,820
Selling, general and administrative
expenses.................................. 15,124 14,326 25,222 -- 54,672
________ ____________ ____________ ____________ ____________
Total operating expenses................. 33,084 37,672 61,736 -- 132,492
________ ____________ ____________ ____________ ____________
Operating income............................ 988 3,334 934 -- 5,256
________ ____________ ____________ ____________ ____________
Other income (expense):
Equity in earnings (losses) of subsidiaries,
net of tax................................ 1,781 (163) -- (1,618) --
Intercompany charges........................ 56 436 (492) -- --
Interest expense, net....................... (1,113) (780) (697) -- (2,590)
Other income................................ 135 -- -- -- 135
________ ____________ ____________ ____________ ____________
Total other income (expense).............. 859 (507) (1,189) (1,618) (2,455)
________ ____________ ____________ ____________ ____________
Income (loss) before income taxes and
minority interest.......................... 1,847 2,827 (255) (1,618) 2,801
Income tax expense (benefit)................ (131) 1,046 202 -- 1,117
Minority interest............................ -- -- (294) -- (294)
________ ____________ ____________ ____________ ____________
Net income (loss) from continuing
operations............................. 1,978 1,781 (163) (1,618) 1,978
Extraordinary loss on refinancing of debt, net
of taxes................................... 514 -- -- -- 514
________ ____________ ____________ ____________ ____________
Net income (loss) .......................... $ 1,464 $ 1,781 $ (163) $ (1,618) $ 1,464
======== ============ ============ ============ ============
</TABLE>
<TABLE>
SITEL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATMENTS
8. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (Continued):
Condensed Consolidating Statement of Cash Flows
For the three months ended March 31, 1997
(in thousands)
Guarantor Nonguarantor
Parent Subsidiaries Subsidiaries Eliminations Consolidated
________ ____________ ____________ ____________ ____________
<S> <C> <C> <C> <C> <C>
Net cash provided by (used in) operating
activities................................ $ (12,705) $ (749) $ 449 $ -- $ (13,005)
________ ____________ ____________ ____________ ____________
Cash flows from investing activities:
Investments in subsidiaries................ (11,979) (9,050) -- 21,029 --
Purchases of property and equipment........ (9,099) (2,772) (6,821) -- (18,692)
Acquisitions of businesses, net of cash
acquired................................... (11,941) -- (8,725) -- (20,666)
Changes in other assets, net............... -- -- 108 -- 108
________ ____________ ____________ ____________ ____________
Net cash used in investing activities...... (33,019) (11,822) (15,438) 21,029 (39,250)
________ ____________ ____________ ____________ ____________
Cash flows from financing activities:
Borrowings on notes payable............... 27,380 -- 1,482 -- 28,862
Repayments of notes payable............... (9,152) -- (139) -- (9,291)
Borrowings on long-term debt.............. 14,300 -- 274 -- 14,574
Repayment of long-term debt and capital
lease obligations......................... (3) (24) -- -- (27)
Net capital contribution from parent...... -- 11,979 9,050 (21,029) --
State incentive credits received.......... 900 -- -- -- 900
Common stock issued for option exercises.. 200 -- -- -- 200
________ ____________ ___________ ____________ ____________
Net cash provided by financing 33,625 11,955 10,667 (21,029) 35,218
activities................................ ________ ____________ ___________ ____________ ____________
Effect of exchange rates on cash............ -- -- (526) -- (526)
________ ____________ ___________ ____________ ____________
Net decrease in cash........................ (12,099) (616) (4,848) -- (17,563)
Cash and cash equivalents, beginning of
period.................................... 13,302 1,859 10,549 -- 25,710
________ ____________ ___________ ____________ ____________
Cash and equivalents, end of period........ $ 1,203 $ 1,243 $ 5,701 $ -- $ 8,147
======== ============ =========== ============ ============
</TABLE>
<TABLE>
SITEL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATMENTS
8. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (Continued):
Condensed Consolidating Statement of Cash Flows
For the three months ended March 31, 1998
(in thousands)
Guarantor Nonguarantor
Parent Subsidiaries Subsidiaries Eliminations Consolidated
__________ ____________ ____________ ____________ ____________
<S> <C> <C> <C> <C> <C>
Net cash provided by (used in) operating
activities............................... $ (4,746) $ 1,105 $ (10,557) $ -- $ (14,198)
__________ ____________ ____________ ____________ ____________
Cash flows from investing activities:
Investments in subsidiaries.............. (4,246) (7,781) -- 12,027 --
Dividend on common stock................. -- 10,000 -- (10,000) --
Purchases of property and equipment...... (3,532) (3,154) (4,997) -- (11,683)
Proceeds from sales of property and
equipment................................ 9,336 -- -- -- 9,336
Sale of marketable securities............ 257 -- -- -- 257
Changes in other assets.................. -- -- 55 -- 55
__________ ____________ ____________ ____________ ____________
Net cash provided by (used in) investing
activities............................... 1,815 (935) (4,942) 2,027 (2,035)
__________ ____________ ____________ ____________ ____________
Cash flows from financing activities:
Borrowings on notes payable.............. -- -- 10,720 -- 10,720
Repayments of notes payable.............. -- -- (1,303) -- (1,303)
Borrowings on long-term debt............. 124,399 -- 1,409 -- 125,808
Repayment of long-term debt and capital
lease obligations........................ (127,422) -- (2,932) -- (130,354)
Net capital contribution from parent..... -- 4,246 7,781 12,027) --
Net borrowings and payments on note to
parent................................... -- (5,000) 5,000 -- --
Dividend on common stock................... (10,000) 10,000 --
-- --
Other...................................... 1 -- 75 -- 76
__________ ____________ ____________ ____________ ____________
Net cash provided by (used in) financing
activities............................... (3,022) (754) 10,750 (2,027) 4,947
__________ ____________ ____________ ____________ ____________
Effect of exchange rates on cash........... -- -- (681) -- (681)
__________ ____________ ____________ ____________ ____________
Net decrease in cash....................... (5,953) (584) (5,430) -- (11,967)
Cash and cash equivalents, beginning of
period................................... 11,514 2,075 10,696 -- 24,285
__________ ____________ ____________ ____________ ____________
Cash and equivalents, end of
period................................... $ 5,561 $ 1,491 $ 5,266 $ -- $ 12,318
========== ============ ============ ============ ============
</TABLE>
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: August 13, 1998 SITEL Corporation
By: /s/ W. Gar Richlin
____________________________________
W. Gar Richlin
Executive Vice-President and Chief
Financial Officer (Principal
Financial Officer)
