Business Services Industry
TeleSpectrum Worldwide Inc. Announces Results for Third Quarter Ended Sept. 30, 2001
Business Wire, Nov 19, 2001
Business Editors/Hi-Tech Writers
KING OF PRUSSIA, Pa.--(BUSINESS WIRE)--Nov. 19, 2001
TeleSpectrum Worldwide Inc. (OTC: TLSP) today announced a consolidated third quarter net loss of $9.2 million or ($0.28) per share, compared to a net loss of $8.7 million, or ($0.27) per share in the same period a year ago.
The third quarter loss includes $2.5 million of restructuring expense related to the closure of four additional call centers. Consolidated revenue for the third quarter of 2001 was $52.3 million versus $73.1 million in revenue for the third quarter of 2000.
Earnings before interest, taxes, depreciation, amortization and charges for nonrecurring items (EBITDA) were $1.6 million for the third quarter of 2001 compared to $4.3 million in the same period a year ago.
Credit Agreement
The Company is in covenant and payment default under its credit agreement. It failed to meet its EBITDA financial covenant for September 2001 and it did not make the interest payment due to its lenders for October 2001. Accordingly, all amounts outstanding are currently due and payable upon demand.
The Company is currently in negotiations with its lenders to restructure the Company's highly leveraged debt position. If a restructure is consummated, it is very likely the investment of the Company's current equity holders will be severely diluted.
J. Peter Pierce, Chairman and CEO commented, "Although the events of September 11th had a substantial short-term effect on our company as a result of the suspension of our outbound calling activity due to customer sensitivity concerns, we do not anticipate that future operating results will be impacted. With the cost savings programs having reduced costs more than anticipated, upon completion of negotiations with our lenders, our focus on improving operating performance will begin to prove beneficial."
TeleSpectrum will not be conducting a third quarter Earnings Conference Call.
About TeleSpectrum Worldwide Inc.
Headquartered in King of Prussia, PA, TeleSpectrum Worldwide Inc. is a leading full-service provider of multi-channel customer relationship management (CRM) solutions for Global 1,000 companies in diverse industries, including financial services, telecommunications, technology, insurance, healthcare, pharmaceuticals and government.
In addition to providing both traditional business-to-consumer and business-to-business teleservices, TeleSpectrum also offers inbound customer service, customer care, as well as web-based sales and service, e-mail response, web telephony, web chat and fax. The Company operates in 20 customer contact centers and employs over 6,000 people in the United States, Canada and the United Kingdom.
Forward-looking Statements
Many statements contained in this release regarding future events or our financial performance are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
Readers are cautioned that these forward-looking statements involve substantial risks and uncertainties. Actual future events or results may differ materially.
The factors that could cause such differences include, among others: our ability to negotiate successfully appropriate modifications of our debt arrangements, refinance our debt or otherwise improve our capital structure; our ability to maintain our current business and generate new business; our ability to implement successfully a cost reduction program; our ability to improve profitability and cash flow and meet our projected financial performance; our ability to hire and retain effective management; increased competition; and changes in laws regulating our industry.
A more extensive discussion of the risk factors that could impact these areas and our overall business and financial performance can be found in our reports filed with the Securities and Exchange Commission. The forward-looking statements are made as of the date of this press release, and we assume no obligation to update these statements or the reasons why actual results could differ.
TeleSpectrum Worldwide Inc. and Subsidiaries
Condensed Consolidated Results of Operations
(unaudited)
(Thousands of dollars - except per share data)
Three Months Ended Nine Months Ended
---------------------- --------------------
30-Sep-01 30-Sep-00 30-Sep-01 30-Sep-00
----------- --------- --------- ---------
Revenues $ 52,349 $ 73,119 $ 172,687 $ 231,057
----------- --------- --------- ---------
Operating Expenses:
Cost of Services 42,406 57,541 133,676 179,128
Selling, General &
Administrative 11,682 18,605 39,503 52,489
Restructuring Charge 2,493 - 6,531 -
Goodwill Amortization 301 2,488 879 6,429
----------- --------- --------- ---------
Total Operating
Expenses 56,882 78,634 180,589 238,046
----------- --------- --------- ---------
Operating (Loss)
Income (4,533) (5,515) (7,902) (6,989)
Interest Expense (net) (4,623) (4,137) (15,729) (11,513)
----------- --------- --------- ---------
(Loss) Income From
Continuing Operations
Before Income Taxes and
Minority Interest (9,156) (9,652) (23,631) (18,502)
Minority Interest - 960 - 1,966
Income Tax Benefit - - - -
Extraordinary Loss on
Early Extinguishment
of Debt - - (20,286) -
----------- --------- --------- ---------
Net Loss $ (9,156) $ (8,692) $(43,917) $(16,536)
=========== ========= ========= =========
Basic and Diluted
Loss Per Share:
Before Extraordinary
Loss $ (0.28) $ (0.27) $ (0.74) $ (0.52)
Extraordinary Loss $ - $ - $ (0.63) $ -
----------- --------- --------- ---------
Net Loss $ (0.28) $ (0.27) $ (1.37) $ (0.52)
=========== ========= ========= =========
Earning Before Interest,
Taxes, Depreciation and
Amortization (EBITDA):
Three Months Ended Nine Months Ended
---------------------- --------------------
Net (Loss) Income $ (9,156) $ (8,692) $(43,917) $(16,536)
Add back restructuring
charge 2,493 - 6,531 -
----------- --------- --------- ---------
Net (Loss) Income
without Restructuring
Charge (6,663) (8,692) (37,386) (16,536)
Goodwill Amortization 301 2,488 879 6,429
Interest expense 4,623 4,137 15,729 11,513
Depreciation 3,365 6,368 10,564 14,464
Gain on Sale of Assets - - (172) -
Extraordinary Loss - - 20,286 -
----------- --------- --------- ---------
Total EBITDA
without
Restructuring
Charge $ 1,626 $ 4,301 $ 9,900 $ 15,870
=========== ========= ========= =========
TeleSpectrum Worldwide Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(unaudited)
September 30, December 31,
2001 2000
---------------------------------
ASSETS
Cash and cash equivalents $ 7,728 $ 5,258
Accounts receivable, net 38,240 54,745
Prepaid expenses and other 4,221 6,173
---------------------------------
Current Assets 50,189 66,176
Property and Equipment, net 28,034 39,967
Intangibles and Goodwill, net 14,136 15,003
Other Noncurrent Assets 2,043 3,721
---------------------------------
Total Assets $ 94,402 $ 124,867
=================================
LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)
Current Liabilities $ 195,244 $ 54,726
Long-Term Debt 7,673 132,413
Other Noncurrent Liabilities 127 2,001
Stockholder's Equity (Deficit) (108,642) (64,273)
---------------------------------
Total Liabilities and
Stockholders' Equity (deficit) $ 94,402 $ 124,867
=================================
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