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) April 20, 1998
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 April 20, 1998, 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 April 20, 1998, 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: April 20, 1998 APAC TELESERVICES, INC.
By: /s/ John I. Abernethy
John I. Abernethy
Chief Financial Officer
FOR IMMEDIATE RELEASE
INVESTOR CONTACT:
Thomas W. Eberhardt
Director, Treasury Operations
(847) 374-1949
MEDIA CONTACT:
Daniel Bauer
Vice President
(847) 374-1943
APAC REPORTS FIRST QUARTER RESULTS
(DEERFIELD, Ill., April 20, 1998) -- APAC TeleServices, Inc. (NASDAQ:APAC),
a leading provider of outsourced customer service and sales, today reported
financial results for its first quarter of fiscal 1998.
APAC announced revenue of $91.5 million for the 13 weeks ended March 29,
1998, up 1.3% from $90.3 million in the same period a year ago. Net income
decreased to $4.9 million for the 1998 first quarter compared to $8.5 million
for the first quarter of 1997. Earnings per share in the first quarter of 1998
were $0.10 as compared to $0.18 in the same quarter last year.
Net revenue for the Sales Solutions division was $43.3 million for the
first quarter of 1998, a decrease of 5.5%, compared to $45.8 million for the
first quarter of 1997. The Service Solutions division net revenue was $48.2
million, up 8.3% from $44.5 million in the same period a year ago. Revenues
from the company's two largest clients were $33 million in the first quarter of
1998, a decrease of $14.7 million (or 31%) from the same quarter last year.
Revenues from all other clients increased by 37%, more than offsetting the
declines from these two major accounts.
Overall operating margins for the first quarter of 1998 were 9.4% versus
5.9% (excluding special charges) and 15.6% in the fourth quarter and first
quarter of 1997, respectively. The company expects to continue its progress on
improvements in operating margins through better efficiencies and capacity
utilization. The earnings before interest, taxes, depreciation and amortization
for the first quarter of 1998 were $15.6 million compared to $17.9 million for
the same period in 1997.
Client decisions relating to significant outsourcing opportunities may be
deferred into the second half of 1998. Consequently, these opportunities may
not impact the 1998 financial results to the degree originally expected. As a
result, the company forecasts revenue and earnings to grow at a modest rate each
quarter for the remainder of the year as compared to the actual results of the
first quarter of 1998.
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"Our pipeline of new business opportunities for both inbound and outbound
applications has never been stronger," said Theodore G. Schwartz, chairman and
chief executive officer of APAC. "The opportunities are significant. Our key
challenge is to secure this new business and restore our growth trajectory. The
commitment, energy and skills of our people will continue to deliver excellence
in service to our valued clients."
Headquartered in the Chicago suburb of Deerfield, Ill., APAC operates 66
customer contact centers and has more than 15,000 employees in 14 states. The
company seeks to optimize the value of its clients' customer relationships by
improving customer service, increasing sales, leveraging technology and managing
change for corporate growth. Clients include some of the best-managed, most
highly respected corporations in America. These organizations represent a wide
range of industries including business and consumer products, communications,
energy, financial services, insurance, delivery, retail and technology. The
company'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 many 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. 28, 1997, which describes
other important factors that may impact APAC's business, results of operations
and financial condition.
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<TABLE>
APAC TeleServices, Inc. and Subsidiaries
Consolidated Statements of Income
(In thousands, except per share data)
<CAPTION>
Thirteen Weeks Ended
March 29, March 30,
1998 1997
<S> <C> <C>
Revenue:
Sales Solutions $43,292 $45,857
Service Solutions 48,189 44,461
Total Revenue, net 91,481 $90,318
Operating expenses:
Cost of services 70,684 65,363
Selling, general and administrative
expenses 12,209 10,953
Total operating expenses 82,893 76,316
Income from operations 8,588 14,002
Interest expense, net 471 329
Income before income taxes 8,117 13,673
Income taxes 3,200 5,200
Net income $4,917 $8,473
Net income per share:
Basic $0.10 $0.18
Diluted $0.10 $0.18
Weighted average number of shares
outstanding:
Basic 48,812 46,586
Diluted 49,804 48,001
</TABLE>
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