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) October 21, 1997
APAC TELESERVICES, INC.
(Exact name of registrant as specified in charter)
Illinois 0-26786 36-2777140
(State or other jurisdiction (Commission (IRS Employer
of incorporation) file number) Identification No.)
One Parkway North Center, Suite 510, Deerfield, IL 60015
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code (847) 374-4980
N/A
(Former name or former address, if changed since last report)
Item 5. OTHER EVENTS
On October 21, 1997, Registrant issued a press release, a copy of which is
attached as Exhibit 99.1 to this Form 8-K and incorporated herein by reference.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
Exhibit No. Description of Document
(99.1) Press release dated October 21, 1997, issued
by the Registrant.
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 hereunto duly authorized.
Date: October 21, 1997 APAC TELESERVICES, INC.
By: /s/ Marc S. Simon
Marc S. Simon, Chief Financial Officer
FOR IMMEDIATE RELEASE
INVESTOR CONTACT:
Thomas W. Eberhardt
Director, Treasury Operations
(847) 374-1949
MEDIA CONTACT:
Kevin R. Petschow
Director, Corporate Communications
(847) 374-1964
APAC REPORTS THIRD QUARTER NET REVENUE AND EARNINGS
(DEERFIELD, Ill., Oct. 21, 1997) -- APAC TeleServices, Inc. (NASDAQ Symbol
"APAC"), a leading provider of outsourced customer service and sales, today
reported financial results for its third quarter of fiscal 1997.
APAC announced net revenue of $79.8 million for the 13 weeks ended Sept.
28, 1997, up 5.9% from $75.4 million in the same period a year ago. Despite an
increase in net revenue, net income decreased from $8.6 million for the third
quarter of 1996 to $2.0 million for the third quarter of 1997. Earnings per
share for the 1997 third quarter amounted to $0.04 as compared to $0.18 in the
same quarter last year.
The effects of a labor strike within a large APAC client, tactical
marketing changes by other clients, and charges associated with the acquisition
of Paragren Technologies, Inc. accounted for the reduction in net income in the
third quarter of 1997. The acquisition-related write-off of Paragren in-
process research and development costs were approximately $600,000, and the
amortization of other purchase consideration for the portion of the quarter
following the acquisition amounted to approximately $800,000, totaling $1.4
million, or $0.03 per share for the quarter.
For the 39 weeks ended Sept. 28, 1997, APAC reported net revenue of $261.7
million, an increase of 38.8% over the prior year's net revenue of $188.6
million for the same period. Net income for the 39 weeks ended Sept. 28, 1997
was $19.1 million as compared to $20.5 million for the same period in 1996.
Earnings per share for the 39 weeks ended Sept. 28, 1997 were $0.40 compared to
$0.43 for the same period in 1996.
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APAC REPORTS THIRD QUARTER EARNINGS
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"As we have absorbed the tremendous growth in 1996 and 1997, we have
emerged with a very strong track record of service, quality and results," said
Theodore G. Schwartz, APAC's chairman and CEO. "Superior performance is a key
differentiator in the marketplace for growth among existing and new clients."
Schwartz continued, "We have made significant investments in technology in
addition to our acquisition of Paragren. These investments will further fuel
our success, enhance our leadership position and deliver added value to our
clients' businesses."
In August, APAC acquired Paragren Technologies, Inc., specialists in
software-based consumer marketing to optimize customer relationships.
Paragren's software enables marketing professionals to perform on-line
exploratory analysis, descriptive and predictive modeling, promotion planning,
detailed customer segmentation, and campaign execution and evaluation. The
company is located in Reston, Va.
Separately, APAC said today it has entered into a five-year agreement to
provide a leading telecommunications company with inbound customer service to
its existing customers. Initially, the company is expected to service this
client in two of APAC's newer customer contact centers.
APAC TeleServices, Inc., headquartered in the Chicago suburb of Deerfield,
Ill., is ranked as the nation's largest provider of inbound and third largest
provider of outbound teleservices. APAC optimizes the value of its clients'
customer relationships by improving customer service, increasing sales,
leveraging technology and managing change for corporate growth. The company
operates 69 customer contact centers and has more than 14,000 employees in 14
states. APAC's Web site address is www.apacteleservices.com.
Statements contained herein regarding APAC's expected growth, prospective
business opportunities and future expansion plans are forward-looking statements
that involve substantial risks and uncertainties. In accordance with the
Private Securities Litigation Reform Act of 1995, following are important
factors that could cause actual results to differ materially from those
expressed or implied by such forward-looking statements: There can be no
assurance that APAC will be able to maintain or accelerate its growth rate,
effectively manage its rapid growth or maintain its profitability. There also
can be no assurance that APAC can build out facilities in a timely and economic
manner. In the future, APAC may experience excess peak period capacity when it
opens a new customer contact center or terminates or completes a large client
program. APAC's agreements with its clients generally do not ensure that APAC
will generate a specific level of net revenue, do not designate APAC as the
client's exclusive service provider, and are terminable by the client on
relatively short notice. In addition, the amount of net revenue APAC generates
from a particular client generally is dependent upon customers' interest in, and
use of, the client's products or services. Readers are encouraged to review the
section captioned "Information Regarding Forward-Looking Statements" on Form 10-
K in APAC's Annual Report for the year ended Dec. 29, 1996, which describes
other important factors that may impact APAC's business, results of operations
and financial condition.
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APAC REPORTS THIRD QUARTER EARNINGS
PAGE 3
APAC TELESERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED
SEPT. 28, SEPT. 29,
1997 1996
(UNAUDITED)
<S> <C> <C>
Net revenue $79,841 $75,361
Operating expenses:
Cost of services 64,000 52,372
Selling, general and
administrative expenses 11,970 8,979
Total operating expenses 75,970 61,351
Income from operations 3,871 14,010
Interest income (expense), net (349) (39)
Income before income taxes 3,522 13,971
Provision for income taxes 1,504 5,351
Net income $2,018 $8,620
Net income per share $0.04 $0.18
Weighted average number of
shares outstanding 48,810 48,116
</TABLE>
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APAC REPORTS THIRD QUARTER EARNINGS
PAGE 4
APAC TELESERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
<TABLE>
<CAPTION>
THIRTY-NINE WEEKS ENDED
SEPT. 28, SEPT. 29,
1997 1996
(UNAUDITED)
<S> <C> <C>
Net revenue $261,745 $188,604
Operating expenses:
Cost of services 195,399 132,547
Selling, general and
administrative expenses 34,276 22,762
Total operating expenses 229,675 155,309
Income from operations 32,070 33,295
Interest income (expense), net (987) 240
Income before income taxes 31,083 33,535
Provision for income taxes 11,979 13,079
Net income $19,104 $20,456
Net income per share $0.40 $0.43
Weighted average number of
shares outstanding 48,193 47,815
</TABLE>
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