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) July 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 July 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 July 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: July 20, 1998 APAC TELESERVICES, INC.
By: /s/ John I. Abernethy
John I. Abernethy
Chief Financial Officer
CONTACT:
Thomas Eberhardt
Director, Treasury Operations
APAC TeleServices, Inc.
847-374-1949
FOR IMMEDIATE RELEASE:
APAC REPORTS SECOND QUARTER RESULTS
Deerfield, Ill. (July 20, 1998) -- APAC TeleServices, Inc. (NASDAQ:APAC), a
premier provider of outsourced customer service and sales, today reported
financial results for its second quarter of 1998. Consistent with APAC's
announcement of June 25, 1998, the Company reported net income of $1.95 million
or $0.04 per share for the second quarter of 1998, prior to the pre-tax
acquisition restructuring charge of $9 million.
The Company announced revenue of $107.2 million for the thirteen weeks ended
June 28, 1998, up 17% from $91.6 million in the same period a year ago. The
increase is principally attributable to revenues contributed by ITI subsequent
to its acquisition on May 20, 1998. After recording the effect of a
restructuring charge, APAC recorded a net loss of $3.6 million or $0.07 per
share for the second quarter of 1998 compared to net income of $8.6 million or
$.18 per share for the second quarter of 1997.
For the twenty-six weeks ended June 28, 1998, APAC reported revenue of $198.7
million, an increase of 9.2% from the prior year's revenue of $181.9 million for
the same period. Net income for the first half of fiscal 1998 was $1.3 million
as compared to $17.1 million for the same period in 1997. Earnings per share,
prior to the effect of the restructuring charge for the period ended June 28,
1998, were $0.14, compared to $0.36 for the same period in 1997.
Net revenue for the company's outbound operations, the Sales Solutions division,
increased 6.6% to $55.2 million for the second quarter of 1998, compared to
$51.8 million for the second quarter of 1997. Net revenue for inbound
operations, the Service Solutions division, was $52.0 million, up 30.5% from
$39.8 million in the same period a year ago.
"We are combining the strengths of the two organizations as we continue to
integrate the operations", stated Theodore G. Schwartz, APAC's chairman and
chief executive officer. "The management team is implementing an aggressive
integration plan to increase efficiencies, share best practices, improve
capacity utilization by leveraging infrastructure, and more closely align
expenses with projected revenues. APAC is focused on the successful integration
of ITI and committed to achieving our profitability objectives."
Headquartered in the Chicago suburb of Deerfield, Illinois, APAC operates 90
customer contact centers with more than 25,000 employees in 19 states. Founded
in 1973, APAC 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, delivery, energy, financial services, government, insurance,
retail and technology. 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. Paragren's solutions
transform information in data warehouses to support customer-centric, one-to-one
marketing. The company's core competencies include the One-By-One marketing
software suite, consumer-panel market intelligence, data warehouse consulting
and database outsourcing. 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 SECOND QUARTER EARNINGS
PAGE 2
<TABLE>
APAC TELESERVICES, INC.
STATEMENTS OF OPERATIONS
<CAPTION>
(IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
THIRTEEN WEEKS ENDED
JUNE 28, 1998 JUNE 29, 1997
(UNAUDITED)
<S> <C> <C>
Net Revenue $107,248 $91,586
Operating expenses:
Cost of services 86,157 66,036
Selling, general and
administrative expenses 15,673 11,353
Restructuring charge 9,000 --
Total operating expenses 110,830 77,389
Income (loss) from operations (3,582) 14,197
Interest expense, net 1,686 309
Income (loss) before income taxes (5,268) 13,888
Income taxes (credit) (1,680) 5,275
Net income (loss) ($3,588) $8,613
Net income (loss) per share:
Basic ($0.07) $0.18
Diluted
($0.07) $0.18
Weighted average shares:
Basic 48,852 46,729
Diluted 49,585 48,172
</TABLE>
APAC REPORTS SECOND QUARTER EARNINGS
PAGE 3
<TABLE>
APAC TELESERVICES, INC.
STATEMENTS OF OPERATIONS
<CAPTION>
(IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
TWENTY-SIX WEEKS ENDED
JUNE 28, 1998 JUNE 29, 1997
(UNAUDITED)
<S> <C> <C>
Net Revenue $198,729 $181,904
Operating expenses:
Cost of services 156,841 131,399
Selling, general and
administrative expenses 27,882 22,306
Restructuring charge 9,000 --
Total operating expenses 193,723 153,705
Income from operations 5,006 28,199
Interest expense, net 2,157 638
Income before income taxes 2,849 27,561
Income taxes 1,520 10,475
Net income $1,329 $17,086
Net income per share:
Basic $0.03 $0.37
Diluted $0.03 $0.36
Weighted average shares:
Basic 48,832 46,634
Diluted 49,731 48,058
</TABLE>
