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 19, 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 October 19, 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 October 19, 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: October 19, 1998 APAC TELESERVICES, INC.
By: /s/ John I. Abernethy
John I. Abernethy
Chief Financial Officer
CONTACT:
Thomas Eberhardt
Director of Investor Relations
APAC TeleServices, Inc.
847-374-1949
FOR IMMEDIATE RELEASE:
APAC REPORTS THIRD QUARTER RESULTS
Deerfield, Ill. (October 19, 1998) -- APAC TeleServices, Inc. (NASDAQ:APAC), a
premier provider of outsourced customer service and sales, today reported
consolidated financial results for its third quarter of 1998. The Company
reported net income of $3.4 million or $0.07 per share for the third quarter of
1998 compared to $2.0 million of net income or $0.04 per share for the third
quarter of 1997. Earnings before interest, taxes, depreciation and amortization
were $20.0 million for the thirteen weeks ended September 27, 1998, compared to
$11.0 million for the same period of 1997.
The Company announced net revenue of $119.3 million for the thirteen weeks ended
September 27, 1998, up 49% from $79.8 million in the same period a year ago. The
results for the third quarter of 1998 include the revenues contributed by ITI
Marketing Services, Inc. subsequent to its acquisition on May 20, 1998.
For the thirty-nine weeks ended September 27, 1998, APAC reported consolidated
net revenue of $318.1 million, an increase of 22% from net revenue of $261.7
million for the same period in 1997. Consolidated net income for the first
three quarters of fiscal 1998 was $4.8 million as compared to $19.1 million for
the same period in 1997. Earnings per share, for the thirty-nine weeks ended
September 27, 1998, were $0.21, compared to $0.40 for the same period in 1997,
prior to the effect of the $0.11 per share restructuring charge recorded in the
second quarter of 1998.
Net revenue for the company's outbound operations, the Sales Solutions division,
increased 41% to $56.4 million for the third quarter of 1998, compared to $40.0
million for the third quarter of 1997. Net revenue for inbound operations, the
Service Solutions division, was $62.9 million, up 58% from $39.8 million in the
same period a year ago.
"We continue to capture the strengths of the two organizations as we integrate
the operations of ITI and APAC", stated Theodore G. Schwartz, APAC's chairman
and chief executive officer. "The management team is proceeding rapidly on the
integration plan designed to increase efficiencies, share best practices,
improve capacity utilization and more closely align expenses with projected
revenues. We continue to focus on achieving our profitability objectives and
maximizing shareowner value," Schwartz also stated.
Headquartered in the Chicago suburb of Deerfield, Illinois, APAC operates 87
customer contact centers with more than 20,000 employees in 20 states. The
company's Web site address is www.apacteleservices.com.
Paragren Technologies, Inc., APAC's wholly owned subsidiary, is headquartered in
Reston, Virginia. Paragren provides innovative marketing solutions to drive
enterprise-wide customer intelligence for organizations in the communications,
financial services, energy and retail industries. Additional information is
available on their Web site at www.paragren.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 its growth rate and effectively
manage its profitability. 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. APAC's revenues and profitability may also
be affected by changes in clients' use of telemarketing programs as a method for
customer acquisition and available telemarketing capacity from APAC's
competitors. In addition, the amount of net revenue 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
December 28, 1997, which describes other important factors that may affect
APAC's business, results of operations and financial condition
--END--
APAC REPORTS THIRD QUARTER EARNINGS
PAGE 3
<TABLE>
APAC TeleServices, Inc. and Subsidiaries
Statements of Income
<CAPTION>
(In thousands, except for per share data)
Thirteen Weeks Ended
(Unaudited)
September 27, September 28,
1998 1997
<S> <C> <C>
Net Revenue:
Sales Solutions $56,440 $40,041
Service Solutions 62,903 39,800
Total net revenue 119,343 79,841
Operating expenses:
Cost of services 94,245 64,000
Selling, general and
administrative expenses 15,712 11,970
Total operating expenses 109,957 75,970
Income from operations 9,386 3,871
Interest expense, net 2,983 349
Income before income taxes 6,403 3,522
Income taxes 2,980 1,504
Net income $3,423 $2,018
Net income per share:
Basic $0.07 $0.04
Diluted $0.07 $0.04
Weighted average shares:
Basic 48,505 47,637
Diluted 48,956 48,810
</TABLE>
<TABLE>
APAC TeleServices, Inc. and Subsidiaries
Statements of Income
<CAPTION>
(In thousands, except for per share data)
Thirty-Nine Weeks Ended
(Unaudited)
September 27, September 28,
1998 1997
<S> <C> <C>
Net Revenue:
Sales Solutions $154,936 $137,698
Service Solutions 163,136 124,047
Total net revenue 318,072 261,745
Operating expenses:
Cost of services 251,086 195,399
Selling, general and
administrative expenses 43,594 34,276
Restructuring charge 9,000 -
Total operating expenses 303,680 229,675
Income from operations 14,392 32,070
Interest expense, net 5,140 987
Income before income taxes 9,252 31,083
Income taxes 4,500 11,979
Net income $4,752 $19,104
Net income per share:
Basic $0.10 $0.40
Diluted $0.10 $0.40
Weighted average shares:
Basic 48,773 46,983
Diluted 49,590 48,193
</TABLE>
