UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or
15(d) of the Securities Exchange Act of
1934.
For the quarterly period ended June 30, 2000
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 Identification No.)
incorporation or organization)
111 SOUTH CALVERT STREET - SUITE 1900
BALTIMORE, MARYLAND 21202
(410) 246-1505
(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 July 31, 2000, the Company had 71,778,193 shares of Common Stock
outstanding.
<PAGE>
SITEL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Condensed Balance Sheets.....................................1
Consolidated Condensed Statements of Income (Loss)........................2
Consolidated Condensed Statements of Cash Flows...........................3
Notes to Consolidated Condensed Financial Statements......................4
Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition.................................14
Item 3. Quantitative and Qualitative Disclosures about Market Risk............20
PART II -- OTHER INFORMATION
Item 2. Changes in Securities.................................................21
Item 4. Submission of Matters to a Vote of Security Holders...................21
Item 5. Other Information.....................................................21
Item 6. Exhibits and Reports on Form 8-K......................................22
Signature.....................................................................23
<PAGE>
SITEL CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
JUNE 30, 2000 AND DECEMBER 31, 1999
(dollars in thousands, except share data)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
2000 1999
-------------- ---------------
ASSETS (UNAUDITED)
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 13,594 $ 22,305
Trade accounts receivable (net of allowance for doubtful accounts of
$5,246 and $5,622 in 2000 and 1999, respectively) 155,394 164,473
Prepaid expenses 8,461 7,997
Deferred income taxes 787 1,950
Other current assets 7,339 7,825
------------- -------------
Total current assets 185,575 204,550
Property and equipment, net 105,606 118,349
Goodwill, net 80,880 85,258
Deferred income taxes 16,738 15,649
Other assets 8,158 8,440
------------- -------------
Total assets $ 396,957 $ 432,246
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ -- $ 7,337
Current portion of long-term debt 7,019 2,838
Current portion of capitalized lease obligations 3,461 4,308
Trade accounts payable 30,110 37,592
Income taxes payable 6,553 7,135
Accrued wages, salaries and bonuses 26,071 19,893
Accrued operating expenses 31,071 28,922
Deferred revenue and other 7,365 9,141
Deferred income taxes 1,270 --
------------- -------------
Total current liabilities 112,920 117,166
Long-term debt, excluding current portion 103,540 136,077
Capitalized lease obligations, excluding current portion 10,429 12,253
Deferred compensation 2,268 1,905
Minority interest 4,708 4,147
Stockholders' equity:
Common stock, voting, $.001 par value 200,000,000 shares authorized,
71,722,048 and 68,170,828 shares issued and outstanding,
in 2000 and 1999, respectively 72 68
Paid-in capital 168,489 165,870
Accumulated other comprehensive loss (18,430) (12,757)
Retained earnings 12,961 7,517
------------- -------------
Total stockholders' equity 163,092 160,698
------------- -------------
Total liabilities and stockholders' equity $ 396,957 $ 432,246
============= =============
</TABLE>
The accompanying notes are an integral part of the consolidated condensed
financial statements.
1
<PAGE>
SITEL CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (LOSS)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE FOR THE SIX
MONTHS ENDED MONTHS ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
2000 1999 2000 1999
------------ ------------ ------------- ------------
<S> <C> <C> <C> <C>
Revenues $ 193,805 $ 177,996 $ 392,416 $ 342,181
Operating expenses:
Cost of services 105,305 95,343 215,292 183,808
Selling, general and administrative expenses 77,074 77,989 156,446 152,371
Asset impairment and restructuring expenses 3,520 -- 3,520 --
------------ ------------ ------------- ------------
Total operating expense 185,899 173,332 375,258 336,179
------------ ------------ ------------- ------------
Operating income 7,906 4,664 17,158 6,002
Other income (expense):
Interest expense, net (3,166) (2,994) (6,602) (6,150)
Other income (expense), net (132) 57 (198) 120
------------ ------------ ------------- ------------
Income (loss) before income taxes
and minority interest 4,608 1,727 10,358 (28)
Income tax expense 1,981 1,086 4,455 883
Minority interest 201 133 459 64
------------ ------------ ------------- ------------
Net income (loss) $ 2,426 $ 508 $ 5,444 $ (975)
============ ============ ============= ============
Income (loss) per common share:
Basic $ 0.03 $ 0.01 $ 0.08 $ (0.01)
Diluted $ 0.03 $ 0.01 $ 0.07 $ (0.01)
Weighted average common shares outstanding:
Basic 71,246 65,917 70,209 65,383
Diluted 75,415 72,197 75,599 65,383
The accompanying notes are an integral part of the consolidated condensed financial statements
</TABLE>
2
<PAGE>
SITEL CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR SIX MONTHS ENDED
JUNE 30, JUNE 30,
2000 1999
------------- -------------
<S> <C> <C>
Net income (loss) $ 5,444 $ (975)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization 22,858 22,448
Asset impairment and restructuring expenses 3,520 --
Change in assets and liabilities:
Trade accounts receivable 4,607 (18,267)
Other assets 401 (3,082)
Trade accounts payable (6,381) (1,115)
Other liabilities 6,280 24,007
------------- -------------
Net cash provided by operating activities 36,729 23,016
------------- -------------
Cash flows from investing activities:
Purchases of property and equipment (12,603) (19,784)
Proceeds from sale of property and equipment 37 --
------------- -------------
Net cash used in investing activities (12,566) (19,784)
------------- -------------
Cash flows from financing activities:
Borrowings on notes payable -- 3,296
Repayments of notes payable (10,756) (11,266)
Borrowings on long-term debt 9,108 18,935
Repayment of long-term debt and capitalized lease obligations (35,311) (14,668)
Common stock issued, net of expenses 2,638 --
Other (15) (27)
------------- -------------
Net cash used in financing activities (34,336) (3,730)
Effect of exchange rates on cash 1,462 2,261
------------- -------------
Net increase (decrease) in cash (8,711) 1,763
Cash and cash equivalents, beginning of period 22,305 14,472
------------- -------------
Cash and cash equivalents, end of period $ 13,594 $ 16,235
============= =============
</TABLE>
The accompanying notes are an integral part of the consolidated condensed
financial statements.
3
<PAGE>
SITEL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION:
The consolidated condensed balance sheet of SITEL Corporation and Subsidiaries
(the "Company") at December 31, 1999 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, 1999.
2. COMPREHENSIVE INCOME (LOSS):
The Company's comprehensive income (loss) was $112,000 and ($2,613,000) for the
three month periods ended June 30, 2000 and 1999, respectively, and ($229,000)
and ($9,174,000) for the six month periods ended June 30, 2000 and 1999,
respectively. The difference between the Company's reported net income (loss)
and comprehensive income (loss) for those periods is due to the impact of the
change in currency exchange rates on the translation of the assets and
liabilities of the Company's foreign subsidiaries. The accumulated other
comprehensive loss included in the Company's Consolidated Condensed Balance
Sheet at June 30, 2000 and December 31, 1999 is the accumulated currency
exchange adjustment.
3. ASSET IMPAIRMENT AND RESTRUCTURING EXPENSE:
In May 2000, the Company formed a strategic partnership with Bellsystem24, Inc.,
Japan's largest comprehensive marketing agency. Under the terms of the
partnership, Bellsystem24 will provide services and support for the Company's
clients in Japan and the Company will provide services and support for
Bellsystem24's clients in the United States. In connection with the formation of
the partnership, the Company restructured its operations in Japan and
transferred its existing Japanese business to Bellsystem24. In the second
quarter, the Company recorded a $3.5 million asset impairment and restructuring
charge, or $2.0 million net of tax, related to the transaction with
Bellsystem24. The restructuring charge included a $3.3 million loss on the sale
of assets and transfer of its business and estimated severance of $.2 million
for 12 employees.
4. MULTI-CURRENCY REVOLVING CREDIT FACILITY
On April 11, 2000, the Company secured a $75 million five-year senior secured
credit facility with lender pre-approval to increase the size of the facility to
$100 million. Under the terms of this agreement, the Company may borrow in U.S.
dollars, British pounds sterling and euros, thereby allowing the Company to
consolidate its U.S. and European bank lines into a single multi-borrower,
multi-currency facility. In connection with securing this facility, the Company
terminated its existing $50 million long-term credit facility and various lines
of credit which were used to fund local operations in British pounds sterling
and euros. The funds available under the new facility are approximately equal to
the total of the funds available under the facilities which were terminated. At
June 30, 2000, the unused line of credit relating to this facility was $65.4
million.
(Continued)
4
<PAGE>
SITEL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
5. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION:
The Company's 9.25% Senior Subordinated Notes are guaranteed, on a full,
unconditional and joint and several basis, by substantially 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, 1999
and June 30, 2000, and for the three and six months ended June 30,
1999 and 2000 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
non-guarantor subsidiaries); and
(3) Elimination entries necessary to consolidate SITEL Corporation, the
parent, with all subsidiaries.
5
(Continued)
<PAGE>
SITEL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
5. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (CONTINUED):
CONDENSED CONSOLIDATING BALANCE SHEET
DECEMBER 31, 1999
(IN THOUSANDS)
<TABLE>
<CAPTION>
GUARANTOR NONGUARANTOR
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------ ------------ ------------ ------------ ------------
ASSETS
Current assets:
<S> <C> <C> <C> <C> <C>
Cash and cash equivalents $ 7,477 $ 2,102 $ 12,726 $ -- $ 22,305
Trade accounts receivable, net 120,500 4,310 85,204 (45,541) 164,473
Prepaid expenses and other
current assets 4,024 (7) 13,755 -- 17,772
------------ ---------- ----------- ----------- ---------------
Total current assets 132,001 6,405 111,685 (45,541) 204,550
Property and equipment, net 51,231 3,793 63,325 -- 118,349
Goodwill, net 21,564 -- 63,694 -- 85,258
Deferred income taxes 8,111 -- 7,538 -- 15,649
Other assets 7,945 89 406 -- 8,440
Investments in subsidiaries 113,151 84,945 -- (198,096) --
Notes receivable, intercompany -- 20,259 -- (20,259) --
------------ ---------- ----------- ----------- ---------------
Total assets $ 334,003 $ 115,491 $ 246,648 $ (263,896) $ 432,246
============ ========== =========== =========== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ -- $ -- $ 7,337 $ -- $ 7,337
Current portion of long-term debt 695 -- 2,143 -- 2,838
Current portion of capitalized
lease obligations 1,496 48 2,764 -- 4,308
Trade accounts payable 12,143 1,085 69,905 (45,541) 37,592
Accrued expenses and other
current liabilities 22,555 1,207 41,329 -- 65,091
------------ ---------- ----------- ----------- ---------------
Total current liabilities 36,889 2,340 123,478 (45,541) 117,166
------------ ---------- ----------- ----------- ---------------
Long-term debt, excluding
current portion 130,000 -- 6,077 -- 136,077
Capitalized lease obligations,
excluding current portion 4,511 -- 7,742 -- 12,253
Notes payable, intercompany -- -- 20,259 (20,259) --
Deferred compensation 1,905 -- -- -- 1,905
Minority interest -- -- 4,147 -- 4,147
Stockholders' equity 160,698 113,151 84,945 (198,096) 160,698
------------ ---------- ----------- ----------- ---------------
Total liabilities and
stockholders'
equity $ 334,003 $ 115,491 $ 246,648 $ (263,896) $ 432,246
============ ========== =========== =========== ===============
</TABLE>
6
(Continued)
<PAGE>
SITEL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
5. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (CONTINUED):
CONDENSED CONSOLIDATING BALANCE SHEET
JUNE 30, 2000
(IN THOUSANDS)
<TABLE>
<CAPTION>
GUARANTOR NONGUARANTOR
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------ ------------ ------------ ------------ ------------
ASSETS
Current assets:
<S> <C> <C> <C> <C> <C>
Cash and cash equivalents $ (918) $ 3,403 $ 11,109 $ $ 13,594
Trade accounts receivable, net 119,629 2,625 83,687 (50,547) 155,394
Prepaid expenses and other
current assets 3,490 54 13,043 16,587
------------- ------------ ------------ ------------- ---------------
Total current assets 122,201 6,082 107,839 (50,547) 185,575
Property and equipment, net 45,286 3,057 57,263 105,606
Goodwill, net 21,068 -- 59,812 80,880
Deferred income taxes 10,090 -- 6,648 16,738
Other assets 7,579 87 492 8,158
Investments in subsidiaries 107,815 81,727 -- (189,542) --
Notes receivable, intercompany -- 19,830 -- (19,830) --
------------- ------------ ------------ ------------- ---------------
Total assets $ 314,039 $ 110,783 $ 232,054 $ (259,919) $ 396,957
============= ============ ============ ============= ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term
debt -- -- 7,019 7,019
Current portion of capitalized
lease obligations 2,257 20 1,184 3,461
Trade accounts payable 11,031 1,222 68,404 (50,547) 30,110
Accrued expenses and other
current liabilities 29,015 1,726 41,589 72,330
------------- ------------ ------------ ------------- ---------------
Total current liabilities 42,303 2,968 118,196 (50,547) 112,920
Long-term debt, excluding current
portion 103,000 -- 540 103,540
Capitalized lease obligations,
excluding current portion 3,376 -- 7,053 10,429
Notes payable, intercompany
and other -- -- 19,830 (19,830) --
Deferred compensation 2,268 -- -- 2,268
Minority interest -- -- 4,708 4,708
Stockholders' equity 163,092 107,815 81,727 (189,542) 163,092
------------- ------------ ------------ ------------- ---------------
Total liabilities and
stockholders' equity $ 314,039 $ 110,783 $ 232,054 $ (259,919) $ 396,957
============= ============ ============ ============= ===============
</TABLE>
7
(Continued)
<PAGE>
SITEL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
5. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (CONTINUED):
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATING STATEMENT OF INCOME (LOSS)
FOR THE THREE MONTHS ENDED JUNE 30, 1999
(IN THOUSANDS)
GUARANTOR NONGUARANTOR
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenues $ 41,084 $ 50,968 $ 85,944 $ -- $ 177,996
------------- ------------- ------------- ------------- ---------------
Operating expenses:
Cost of services 17,575 29,841 47,927 -- 95,343
Selling, general and administrative
expenses 23,268 15,859 38,862 -- 77,989
------------- ------------- ------------- ------------- ---------------
Total operating expenses 40,843 45,700 86,789 -- 173,332
------------- ------------- ------------- ------------- ---------------
Operating income (loss) 241 5,268 (845) -- 4,664
Other income (expense):
Equity in earnings (losses) of
subsidiaries, net of tax 1,999 (1,700) -- (299) --
Intercompany charges 48 438 (486) -- --
Interest expense, net (2,506) (16) (472) -- (2,994)
Other income (expense), net 93 -- (36) -- 57
------------- ------------- ------------- ------------- ---------------
Total other income
(expense) (366) (1,278) (994) (299) (2,937)
------------- ------------- ------------- ------------- ---------------
Income (loss) before
income taxes and
minority interest (125) 3,990 (1,839) (299) 1,727
Income tax expense (benefit) (633) 1,991 (272) -- 1,086
Minority interest -- -- 133 -- 133
------------- ------------- ------------- ------------- ---------------
Net income (loss) $ 508 $ 1,999 $ (1,700) $ (299) $ 508
============= ============= ============= ============= ===============
</TABLE>
8
(Continued)
<PAGE>
SITEL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
5. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (CONTINUED):
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATING STATEMENT OF INCOME (LOSS)
FOR THE THREE MONTHS ENDED JUNE 30, 2000
(IN THOUSANDS)
GUARANTOR NONGUARANTOR
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenues $ 99,790 $ 8,533 $ 85,807 $ (325) $ 193,805
------------- ------------- ------------- ------------- ---------------
Operating expenses:
Cost of services 52,440 4,629 48,236 105,305
Selling, general and administrative
expenses 42,095 2,622 32,682 (325) 77,074
Asset impairment and
restructuring expenses 2,019 -- 1,501 3,520
------------- ------------- ------------- ------------- ---------------
Total operating expenses 96,554 7,251 82,419 (325) 185,899
------------- ------------- ------------- ------------- ---------------
Operating income 3,236 1,282 3,388 -- 7,906
Other income (expense):
Equity in earnings (losses) of
subsidiaries, net of tax 2,564 1,355 (3,919) --
Intercompany charges -- 568 (568) --
Interest expense, net (2,851) 9 (324) (3,166)
Other income (expense), net (70) -- (62) (132)
------------- ------------- ------------- ------------- ---------------
Total other income
(expense) (357) 1,932 (954) (3,919) (3,298)
------------- ------------- ------------- ------------- ---------------
Income (loss) before
income taxes and
minority interest 2,879 3,214 2,434 (3,919) 4,608
Income tax expense 453 650 878 1,981
Minority interest -- -- 201 201
------------- ------------- ------------- ------------- ---------------
Net income (loss) $ 2,426 $ 2,564 $ 1,355 $ (3,919) $ 2,426
============= ============= ============= ============= ===============
</TABLE>
9
(Continued)
<PAGE>
SITEL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
5. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (CONTINUED):
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATING STATEMENT OF INCOME (LOSS)
FOR THE SIX MONTHS ENDED JUNE 30, 1999
(IN THOUSANDS)
GUARANTOR NONGUARANTOR
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenues $ 78,873 $ 100,839 $ 162,469 $ -- $ 342,181
------------- ------------- ------------- ------------- ---------------
Operating expenses:
Cost of services 34,122 59,479 90,207 -- 183,808
Selling, general and administrative
expenses 45,916 31,330 75,125 -- 152,371
------------- ------------- ------------- ------------- ---------------
Total operating expenses 80,038 90,809 165,332 -- 336,179
------------- ------------- ------------- ------------- ---------------
Operating income (loss) (1,165) 10,030 (2,863) -- 6,002
Other income (expense):
Equity in earnings (losses) of
subsidiaries, net of tax 2,493 (4,109) -- 1,616 --
Intercompany charges 98 941 (1,039) -- --
Interest expense, net (4,224) (814) (1,112) -- (6,150)
Other income (expense), net 167 -- (47) -- 120
------------- ------------- ------------- ------------- ---------------
Total other income
(expense) (1,466) (3,982) (2,198) 1,616 (6,030)
------------- ------------- ------------- ------------- ---------------
Income (loss) before
income taxes and
minority interest (2,631) 6,048 (5,061) 1,616 (28)
Income tax expense (benefit) (1,656) 3,555 (1,016) -- 883
Minority interest -- -- 64 -- 64
------------- ------------- ------------- ------------- ---------------
Net income (loss) $ (975) $ 2,493 $ (4,109) $ 1,616 $ (975)
============= ============= ============= ============= ===============
</TABLE>
10
(Continued)
<PAGE>
SITEL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
5. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (CONTINUED):
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATING STATEMENT OF INCOME (LOSS)
FOR THE SIX MONTHS ENDED JUNE 30, 2000
(IN THOUSANDS)
GUARANTOR NONGUARANTOR
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenues $ 197,217 $ 16,863 $ 179,029 $ (693) $ 392,416
------------- ------------- ------------- ------------- ---------------
Operating expenses:
Cost of services 104,888 9,069 101,335 215,292
Selling, general and administrative
expenses 83,320 5,606 68,213 (693) 156,446
Asset impairment and
restructuring expenses 2,019 -- 1,501 3,520
------------- ------------- ------------- ------------- ---------------
Total operating expenses 190,227 14,675 171,049 (693) 375,258
------------- ------------- ------------- ------------- ---------------
Operating income 6,990 2,188 7,980 -- 17,158
Other income (expense):
Equity in earnings (losses) of
subsidiaries, net of tax 4,719 2,679 -- (7,398) --
Intercompany charges -- 1,071 (1,071) --
Interest expense, net (5,815) (121) (666) (6,602)
Other income (expense), net (76) -- (122) (198)
------------- ------------- ------------- ------------- ---------------
Total other income
(expense) (1,172) 3,629 (1,859) (7,398) (6,800)
------------- ------------- ------------- ------------- ---------------
Income (loss) before
income taxes and
minority interest 5,818 5,817 6,121 (7,398) 10,358
Income tax expense (benefit) 374 1,098 2,983 4,455
Minority interest -- -- 459 459
------------- ------------- ------------- ------------- ---------------
Net income (loss) $ 5,444 $ 4,719 $ 2,679 $ (7,398) $ 5,444
============= ============= ============= ============= ===============
</TABLE>
11
(Continued)
<PAGE>
SITEL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
5. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (CONTINUED):
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1999
(IN THOUSANDS)
GUARANTOR NONGUARANTOR
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net cash provided by (used in)
operating activities $ (7,804) $ 17,133 $ 13,687 $ -- $ 23,016
------------ ------------ ------------ ------------ ---------------
Cash flows from investing activities:
Investments in subsidiaries 14,897 2,684 -- (17,581) --
Purchases of property and
equipment (4,961) (4,313) (10,510) -- (19,784)
------------ ------------ ------------ ------------ ---------------
Net cash provided by
(used in) investing
activities 9,936 (1,629) (10,510) (17,581) (19,784)
------------ ------------ ------------ ------------ ---------------
Cash flows from financing activities:
Borrowings on notes payable -- -- 3,296 -- 3,296
Repayments on notes payable -- -- (11,266) -- (11,266)
Borrowings on long-term debt 13,000 -- 5,935 -- 18,935
Repayment of long-term debt
and capital lease obligations (13,032) -- (1,636) -- (14,668)
Net capital contribution from
(to) parent -- (14,897) (2,684) 17,581 --
Other (27) -- -- -- (27)
------------ ------------ ------------ ------------ ---------------
Net cash provided by
(used in) financing
activities (59) (14,897) (6,355) 17,581 (3,730)
------------ ------------ ------------ ------------ ---------------
Effect of exchange rates on cash -- -- 2,261 -- 2,261
------------ ------------ ------------ ------------ ---------------
Net increase (decrease) in cash 2,073 607 (917) -- 1,763
Cash and cash equivalents,
beginning of period 2,410 1,190 10,872 -- 14,472
------------ ------------ ------------ ------------ ---------------
Cash and cash equivalents,
end of period $ 4,483 $ 1,797 $ 9,955 $ -- $ 16,235
============ ============ ============ ============ ===============
</TABLE>
12
(Continued)
<PAGE>
SITEL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
5. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (CONTINUED):
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2000
(IN THOUSANDS)
GUARANTOR NONGUARANTOR
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net cash provided by (used in)
operating activities $ 21,085 $ 4,185 $ 11,459 $ -- $ 36,729
------------ ------------ ------------ ------------ --------------
Cash flows from investing activities:
Investments in subsidiaries 3,862 1,080 -- (4,942) --
Purchases of property and
equipment (6,050) (102) (6,451) -- (12,603)
Proceeds from sale of
property and equipment 5 -- 32 -- 37
------------ ------------ ------------ ------------ --------------
Net cash provided by
(used in) investing
activities (2,183) 978 (6,419) (4,942) (12,566)
------------ ------------ ------------ ------------ --------------
Cash flows from financing activities:
Repayments on notes payable -- -- (10,756) (10,756)
Borrowings on long-term debt 3,000 -- 6,108 9,108
Repayment of long-term debt
and capital lease obligations (31,097) -- (4,214) (35,311)
Common stock issued, net
of expenses 2,638 -- -- 2,638
Net borrowings and payments
on intercompany balances (1,823) -- 1,823 --
Net capital contribution from
(to) parent -- (3,862) (1,080) 4,942 --
Other (15) -- -- (15)
------------ ------------ ------------ ------------ --------------
Net cash provided by
(used in) financing
activities (27,297) (3,862) (8,119) 4,942 (34,336)
------------ ------------ ------------ ------------ --------------
Effect of exchange rates on cash 1,462 1,462
------------ ------------ ------------ ------------ --------------
Net increase (decrease) in cash (8,395) 1,301 (1,617) -- (8,711)
Cash and cash equivalents,
beginning of period 7,477 2,102 12,726 22,305
------------ ------------ ------------ ------------ --------------
Cash and cash equivalents,
end of period $ (918) $ 3,403 $ 11,109 $ -- $ 13,594
============ ============ ============ ============ ==============
</TABLE>
13
(Continued)
<PAGE>
SITEL CORPORATION AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATION AND
FINANCIAL CONDITION.
OVERVIEW
SITEL Corporation ("SITEL") and subsidiaries (collectively, the "Company")
provide customer relationship management services on behalf of clients in North
America, Europe, Asia Pacific and Latin America. The Company finds, acquires and
retains customers and helps organizations enhance and grow these relationships
through a variety of value-added services via electronic media, including the
telephone and the Internet, and, to a lesser extent, traditional mail. The
Company provides services to clients principally in the consumer, financial
services, insurance, telecommunications, technology and utilities sectors.
The following table sets forth certain financial data and the percentage of
total revenues of the Company for the periods indicated. All amounts are in
thousands.
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
2000 1999 2000 1999
---------------------- ---------------------- --------------------- ----------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues $ 193,805 100.0 % 177,996 100.0 % 392,416 100.0 % 342,181 100.0 %
Operating expenses:
Cost of services 105,305 54.3 % 95,343 53.6 % 215,292 54.9 % 183,808 53.7 %
Selling, general, and
administrative expenses 77,074 39.8 % 77,989 43.8 % 156,446 39.9 % 152,371 44.5 %
Restructuring expenses 3,520 1.8 % -- -- % 3,520 0.9 % -- -- %
---------------------- ---------------------- --------------------- ----------------------
Total operating
expenses 185,899 95.9 % 173,332 97.4 % 375,258 95.7 % 336,179 98.2 %
---------------------- ---------------------- --------------------- ----------------------
Operating income 7,906 4.1 % 4,664 2.6 % 17,158 4.3 % 6,002 1.8 %
Interest expense, net (3,166) (1.6)% (2,994) (1.6)% (6,602) (1.7)% (6,150) (1.8)%
Other income (expense), net (132) (0.1)% 57 -- % (198) (0.1)% 120 -- %
---------------------- ---------------------- --------------------- ----------------------
Income (loss) before
income taxes and
minority interest 4,608 2.4 % 1,727 1.0 % 10,358 2.5 % (28) -- %
Income tax expense 1,981 1.0 % 1,086 0.6 % 4,455 1.1 % 883 0.3 %
Minority interest 201 0.1 % 133 0.1 % 459 0.1 % 64 -- %
---------------------- ---------------------- --------------------- ----------------------
Net income (loss)$ 2,426 1.3 % 508 0.3 % 5,444 1.3 % (975) (0.3)%
====================== ====================== ===================== ======================
</TABLE>
14
<PAGE>
SITEL CORPORATION AND SUBSIDIARIES
THREE MONTHS ENDED JUNE 30, 2000 VS. THREE MONTHS ENDED JUNE 30, 1999
REVENUES
Revenues increased $15.8 million, or 8.9%, to $193.8 million in the three months
ended June 30, 2000 from $178.0 million in the three months ended June 30, 1999.
The increase was attributable to $19.6 million of services initiated for new
clients, offset by a net $3.8 million decrease in revenues from existing
clients. The increase in the value of the U.S. dollar versus the British pound
and Euro since June 1999 reduced the reported revenues from the Company's
European operations by approximately $4.6 million compared to the second quarter
of 1999.
COST OF SERVICES
Cost of services represents primarily labor and telephone usage expenses
directly related to customer relationship management activities. Cost of
services as a percent of revenue can vary based on the nature of the contract,
the nature of the work and the market in which the service is provided.
Accordingly, cost of services as a percent of revenue can vary, sometimes
significantly, from quarter to quarter. Cost of services increased $10.0
million, or 10.5%, to $105.3 million in the three months ended June 30, 2000,
from $95.3 million in the three months ended June 30, 1999. As a percentage of
revenues, cost of services increased to 54.3% in the second quarter of 2000 from
53.6% in the second quarter of 1999. This increase was primarily due to a change
in the mix of services compared to the second quarter of 1999.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses represent expenses incurred to
directly support and manage the business, including costs of management,
administration, technology, facilities, depreciation and amortization,
maintenance, sales and marketing, and client support services. Selling, general
and administrative expenses decreased $0.9 million, or 1.2%, to $77.1 million in
the three months ended June 30, 2000 from $78.0 million in the three months
ended June 30, 1999. As a percentage of revenues, selling, general and
administrative expenses decreased to 39.8% in the second quarter of 2000 from
43.8% in the second quarter of 1999. This decrease reflects the increased
leveraging of overhead through revenue growth, improved expense controls and
non-recurring expenses in the second quarter of 1999 related to re-engineering
costs in the Company's United Kingdom operations and severance and consolidation
costs in the Asia Pacific region.
ASSET IMPAIRMENT AND RESTRUCTURING EXPENSES
In May 2000, the Company formed a strategic partnership with Bellsystem24, Inc.,
Japan's largest comprehensive marketing agency. Under the terms of the
partnership, Bellsystem24 will provide services and support for the Company's
clients in Japan, and the Company will provide services and support for
Bellsystem24's clients in the United States. In connection with the formation of
the partnership, the Company restructured its operations in Japan and
transferred its existing Japanese business to Bellsystem24. In the second
quarter, the Company recorded a $3.5 million asset impairment and restructuring
charge, or $2.0 million net of tax, related to the transaction with
Bellsystem24.
15
<PAGE>
SITEL CORPORATION AND SUBSIDIARIES
OPERATING INCOME
Operating income increased 69.5% to $7.9 million for the three months ended June
30, 2000 from $4.7 million for the three months ended June 30, 1999. As a
percent of revenues, operating income increased to 4.1% in the second quarter of
2000 from 2.6% in the second quarter 1999. Excluding the restructuring expense
related to the Company's operations in Japan, operating income increased 145% to
$11.4 million, and operating income as a percent of revenues increased to 5.9%,
for the three months ended June 30, 2000.
INTEREST EXPENSE, NET
Interest expense, net of interest income, increased to $3.2 million in the three
months ended June 30, 2000 from $3.0 million in the three months ended June 30,
1999. This increase was primarily due to higher interest rates offset by lower
outstanding debt.
INCOME TAX EXPENSE
Income tax expense for the three months ended June 30, 2000 was $2.0 million
compared to $1.1 million for the three months ended June 30, 1999. Income tax
expense as a percent of income before taxes and minority interest was 43.0% for
the quarter. The difference between the company's income tax rate of 43.0% and
the statutory U.S. Federal rate of 35% is primarily due to non-deductible
goodwill and U.S. state and local income taxes.
NET INCOME (LOSS)
For the reasons discussed above, net income increased to $2.4 million for the
three months ended June 30, 2000 from $0.5 million for the three months ended
June 30, 1999. Excluding the restructuring expense and the related tax effect,
net income increased over seven fold to $4.4 million for the second quarter of
2000.
SIX MONTHS ENDED JUNE 30, 2000 VS. SIX MONTHS ENDED JUNE 30, 1999
-----------------------------------------------------------------
REVENUES
Revenues increased $50.2 million, or 14.7%, to $392.4 million in the six months
ended June 30, 2000 from $342.2 million in the six months ended June 30, 1999.
Of this increase, $30.5 million was attributable to services initiated for new
clients and approximately $19.7 million was attributable to increased revenues
from existing clients. The increase in revenues from existing clients was
primarily the result of increased activity rather than higher rates.
COST OF SERVICES
Cost of services increased $31.5 million, or 17.1%, to $215.3 million in the six
months ended June 30, 2000, from $183.8 million in the six months ended June 30,
1999. As a percentage of revenues, cost of services increased to 54.9% in the
first six months of 2000 from 53.7% in the first six months of 1999. This
increase was primarily due to a change in the mix of services compared to the
second quarter of 1999 and higher labor costs in Spain.
16
<PAGE>
SITEL CORPORATION AND SUBSIDIARIES
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses increased $4.1 million, or 2.7%, to
$156.4 million in the six months ended June 30, 2000 from $152.4 million in the
six months ended June 30, 1999. This increase was primarily a result of the
Company's continued growth partially offset by improved expense controls. As a
percentage of revenues, selling, general and administrative expenses decreased
to 39.9% in the first six months of 2000 from 44.5% in the first six months of
1999. This decrease reflects the increased leveraging of overhead through
revenue growth, improved expense controls and non-recurring expenses in the
second quarter of 1999 related to re-engineering costs in the Company's United
Kingdom operations and severance and consolidation costs in the Asia Pacific
region.
OPERATING INCOME
Operating income increased 185.9% to $17.2 million in the six months ended June
30, 2000 from $6.0 million in the six months ended June 30, 1999. Excluding the
aforementioned restructuring expense related to the Company's operations in
Japan, operating income increased 244.5% to $20.7 million in the six months
ended June 30, 2000.
INTEREST EXPENSE, NET
Interest expense, net of interest income, increased to $6.6 million in the six
months ended June 30, 2000 from $6.2 million in the six months ended June 30,
1999. This increase was primarily due to higher interest rates.
INCOME TAX EXPENSE
Income tax expense for the six months ended June 30, 2000 was $4.5 million
compared to $.9 million for the six months ended June 30, 1999. Income tax
expense as a percent of income before taxes and minority interest was 43.0% for
the six months ended June 30, 2000. The difference between the company's income
tax rate of 43.0% and the statutory U.S. Federal rate of 35% is primarily due to
non-deductible goodwill and U.S. state and local income taxes.
NET INCOME (LOSS)
For the reasons discussed above, net income increased to $5.4 million in the six
months ended June 30, 2000 from a loss of $1.0 million in the six months ended
June 30, 1999. Excluding the restructuring expense related to the Company's
operations in Japan, and the related tax effect, net income increased to $7.5
million for the six months ended June 30, 2000.
LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operating activities was $36.7 million during the six-month
period ended June 30, 2000. This was primarily the result of income before
depreciation, amortization and asset impairment and restructuring expenses of
$31.8 million and a decrease of $4.6 million in accounts receivable. Although
accounts receivable decreased during the period, as the Company continues to
grow it anticipates that accounts receivable will increase in future periods,
requiring increased working capital. The Company
17
<PAGE>
SITEL CORPORATION AND SUBSIDIARIES
purchased $12.6 million of property and equipment in the six months ended June
30, 2000. The Company anticipates that capital expenditures will increase in
future quarters to support the growth of its business; however, total capital
expenditures in 2000 are currently anticipated to be less than in 1999. The
Company used $37.0 million of cash to repay debt in the six months ended June
30, 2000.
The Company has historically used equity capital, funds generated from
operations, leases of property and equipment, senior subordinated notes and
borrowings under credit facilities with banks to finance business acquisitions,
capital expenditures and working capital requirements. On April 11, 2000, the
Company secured a $75 million five-year senior secured credit facility which
provides funding in U.S. dollars, British pounds sterling and euros, thereby
allowing the Company to consolidate its U.S. and European bank lines into a
single multi-borrower, multi-currency facility. The new facility includes lender
pre-approval to increase the size to $100 million. In connection with securing
this facility, the Company terminated its existing $50 million long-term credit
facility and various lines of credit which were used to fund local operations in
British pounds sterling and euros. The funds available under the new facility
are approximately equal to the total of the funds available under the facilities
which were terminated. The obligations of the Company under the new facility
have been guaranteed by the Company's domestic subsidiaries and certain foreign
subsidiaries and are secured by liens on substantially all of the assets of
SITEL Corporation and such subsidiaries, including a pledge of the Company's
shares in such subsidiaries and certain other foreign subsidiaries. The facility
contains certain financial covenants and certain restrictions on, among other
things, the Company's ability to incur additional debt, pay dividends or make
certain other restricted payments, make certain investments, and sell assets or
merge with another company. The facility becomes due and payable upon a change
of control of the Company as defined in the credit agreement. At June 30, 2000,
the unused line of credit relating to this facility was $65.4 million. The
Company believes that funds generated from operations, existing cash, leases of
property and equipment and funds available under its credit facilities will be
sufficient to finance its current operations, planned capital expenditures and
growth for the foreseeable future. Future acquisitions, if any, may require
additional debt or equity financing.
QUARTERLY RESULTS AND SEASONALITY
The Company has experienced and expects to continue to experience quarterly
variations in its results of operations, principally due to the timing of
clients' customer relationship management initiatives and teleservicing
campaigns, revenue mix, and the timing of additional selling, general and
administrative expenses to support new business. The Company also experiences
periodic fluctuations related to both the start-up costs associated with
expansion and the implementation of new contracts or services. In addition, the
Company's business tends to be slower in the third quarter due to summer
holidays in Europe and, to a lesser degree, in the first quarter due to the
changeover of client marketing strategies that often occur at the beginning of
the year.
EFFECTS OF INFLATION
Inflation has not had a significant effect on the Company's operations. However,
there can be no assurance that inflation will not have a material effect on the
Company's operations in the future.
18
<PAGE>
SITEL CORPORATION AND SUBSIDIARIES
ACCOUNTING PRONOUNCEMENTS
Statement of Financial Accounting Standards ("SFAS") 133, Accounting for
Derivative Investments and Hedging Activities, was issued in June 1998. SFAS 133
establishes accounting standards for derivative instruments and for hedging
activities. The standard, as amended by SFAS 137, is effective for all fiscal
quarters of fiscal years beginning after June 15, 2000. The Company anticipates
adopting this accounting pronouncement in the first quarter of 2001; however,
management believes that it will not have a significant impact on the Company's
consolidated financial statements.
In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin 101 - Revenue Recognition in Financial Statements ("SAB 101"). The
Company is still in the process of evaluating the guidance for revenue
recognition provided by SAB 101 and will report the impact of adoption, if any,
as a cumulative effect of a change in accounting during the fourth quarter of
2000.
FORWARD-LOOKING STATEMENTS
This Form 10-Q contains forward-looking statements within the meaning of Section
27A of the Securities Act and Section 21E of the Exchange Act. Such statements
are identified by the use of forward-looking words or phrases which may include
but are not limited to, "intended," "will be positioned," "expects," "expected,"
"anticipates," "anticipated," "believes" and similar expressions. The
forward-looking statements are based on the Company's current expectations. All
statements other than statements of historical facts included in this Form 10-Q,
including those regarding the Company's financial position, business strategy,
projected costs and plans and objectives of management for future operations,
are forward-looking statements. Although the Company believes that the
expectations reflected in such forward-looking statements are reasonable, there
can be no assurance that such expectations will prove to be correct. Because
forward-looking statements involve risks and uncertainties, the Company's actual
results could differ materially. Important factors that could cause actual
results to differ materially from the Company's expectations may include, but
are not limited to, the effects of leverage, restrictions imposed by the terms
of indebtedness, reliance on major clients, risks associated with managing a
global business, fluctuations in operating results, reliance on
telecommunications and computer technology, risks associated with the Company's
acquisition strategy, the dependence on telephone service, the competitive
industry, dependence on labor force, foreign currency risks, the effects of
business regulation, and dependence on key personnel and control by management.
All subsequent written and oral forward-looking statements attributable to the
Company or persons acting on behalf of the Company are expressly qualified in
their entirety by this paragraph. The Company disclaims, however, any intent or
obligation to update its forward-looking statements.
19
<PAGE>
SITEL CORPORATION AND SUBSIDIARIES
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The Company is exposed to market risks associated primarily with changes in
foreign currency exchange rates. The Company has operations in many parts of the
world; however, both revenues and expenses of those operations are typically
denominated in the currency of the country of operations, providing a natural
hedge. The Company entered into certain hedging transactions during 1999 and
2000 designed to hedge foreign currency exchange risk related to short term
intercompany loans; however, the amounts involved were not material.
20
<PAGE>
SITEL CORPORATION AND SUBSIDIARIES
PART II -- OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES.
(b) On April 11, 2000, the Company secured a $75 million five-year senior
secured credit facility, and terminated its existing long-term credit
facility and various lines of credit. The new credit facility restricts the
payment of cash dividends on Common Stock, as did the previous credit
facility.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
(a) Date and Type of Meeting. The Company held its Annual Meeting of
Stockholders on May 5, 2000.
(b) Matters Voted Upon and Number of Votes Cast. There were 55,997,878 shares
of Common Stock represented at the meeting in person or by proxy. Two
proposals were presented to the stockholders and both were approved. The
voting on the proposals was as follows:
Proposal 1 (election of two directors for a three-year term):
On the election of Kelvin C. Berens as director:
55,375,593 votes for
622,285 votes withheld
On the election of George J. Kubat as director:
55,553,468 votes for
444,410 votes withheld
The following directors serve for terms that expire after 2000:
Phillip A. Clough, Rohit M. Desai, Bill L. Fairfield and James F.
Lynch.
Proposal 2 (ratification of the selection of KPMG LLP as
independent auditors for the year ended December 31, 2000):
55,810,347 votes for
49,438 votes against
138,093 abstained
ITEM 5. OTHER INFORMATION.
On April 21, 2000, Rohit M. Desai was appointed to the Board of
Directors, filling an existing vacancy in Class I. That same date
he was also appointed to the Compensation Committee of the Board of
Directors, to serve as Chairman, replacing Bill L. Fairfield who
resigned from the Committee.
21
<PAGE>
SITEL CORPORATION AND SUBSIDIARIES
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
10.1 Credit Agreement dated as of April 11, 2000 with Bankers
Trust Company as Agent
10.2 Description of consulting arrangement with DreamField
Partners, Inc.
27 Financial Data Schedule
(b) Reports on Form 8-K. The Company did not file a Form 8-K
during the quarter for which this report is filed.
22
<PAGE>
SIGNATURE
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 14, 2000 SITEL Corporation
By: /s/ W. Gar Richlin
-----------------------------------------
W. Gar Richlin
Executive Vice-President and
Chief Financial Officer
(Principal Financial Officer)
23
<PAGE>
Exhibits Index:
10.1 Credit Agreement dated as of April 11, 2000 with Bankers
Trust Company as Agent
10.2 Description of consulting arrangement with DreamField
Partners, Inc.
27 Financial Data Schedule
24
