UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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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): November 2, 2006
APAC Customer Services, Inc.
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(Exact Name of Registrant as Specified in Charter)
Illinois 0-26786 36-2777140
(State or Other Jurisdiction of (Commission File Number) (IRS Employer
Incorporation) Identification No.)
Six Parkway North, Deerfield, Illinois 60015
(Address of Principal Executive Offices) (ZIP Code)
Registrant's telephone number, including area code: (847) 374-4980
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 1.01. Results of Operations and Financial Condition.
On November 2, 2006, APAC Customer Services, Inc. (the "Company") issued a press
release setting forth the Company's financial results for the third fiscal
quarter ended October 1, 2006. A copy of this press release is attached hereto
as Exhibit 99.1 and is incorporated by reference in this filing in its entirety.
Item 2.05 Costs Associated with Exit or Disposal Activities.
As previously reported on a Current Report on Form 8-K dated July 29, 2005, and
subsequently updated on Current Reports on Form 8-K dated November 3, 2005,
February 7, 2006 and April 25, 2006, on July 26, 2005, the Company's Board of
Directors approved a restructuring plan of the Company. Pursuant to the
restructuring plan, the Company exited virtually all of its outbound customer
acquisition business, closed over half of its customer interaction centers,
eliminated 400 salaried positions and pursued other operational improvements.
The Company exited non-strategic and unprofitable client relationships in order
to focus on profitable client relationships in a limited number of industries in
an effort to improve its near term financial performance and position the
Company for long-term growth.
As of July 26, 2005, the Company expected to incur approximately $10 to $15
million in restructuring charges, including approximately $3 to $6 million of
one-time termination benefit charges, approximately $3 to $4 million of lease
termination charges and approximately $4 to $5 million in asset impairment
charges. At that time, the Company expected that approximately $6 to $10 million
of such costs would result in future cash expenditures.
Based on progress to date of the restructuring, as of November 2, 2005, the
Company expected to incur approximately of $8 to $13 million in restructuring
charges, including approximately $3 to $4 million in one-time termination
benefits charges, approximately $3 to $6 million in lease termination charges,
and approximately $2 to $3 million in asset impairment charges. The Company
expected that approximately $6 to $10 million of such costs would result in
future cash expenditures.
As of February 8, 2006, the restructuring plan was substantially completed;
however, the wind-down of a limited number of client applications and the
closing of some customer care centers continues into 2006.
Based on progress to date of the restructuring, as of February 8, 2006, the
Company expected to incur approximately $8 to $11 million in restructuring
charges, including approximately $2.0 to $2.5 million in one-time termination
benefits charges, approximately $5.0 to $6.5 million in lease termination
charges, and approximately $1 to $2 million in asset impairment charges. The
Company expected that approximately $7 to $9 million of such costs would result
in future cash expenditures.
Based on progress to date of the restructuring plan, as of April 26, 2006, the
Company expected to incur approximately $9 to $11 million in restructuring
changes, including approximately $2.0 to $2.5 million in one-time termination
benefit charges, approximately $5.5 to $6.5 million in lease termination
charges, and approximately $1.5 to $2.0 million in asset impairment charges. The
Company expected that approximately $7.5 to $9.0 million of such costs would
result in future cash expenditures.
Based on progress to date of the restructuring plan, as of July 26, 2006, the
Company expected to incur approximately $8 to $10 million in restructuring
changes, including approximately $2.0 to $2.5 million in one-time termination
benefit charges, approximately $5 to $6 million in lease termination charges,
and approximately $1.0 to $1.5 million in asset impairment charges. The Company
expected that approximately $7.0 to $8.5 million of such costs would result in
future cash expenditures.
As of October 1, 2006, the restructuring plan is complete. Overall, the Company
incurred $9.8 million in restructuring charges, including $2.0 million in
one-time termination benefits, $6.4 million in lease termination charges and
$1.4 million in asset write-down charges. The Company expects cash expenditures
to total $8.4 million, of which $4.2 million has been paid to date. The
remaining $4.2 million will be paid in future periods.
Item 9.01 Financial Statements and Exhibits.
99.1 Press Release, dated November 2, 2006, of the Company.
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.
APAC Customer Services, Inc.
Date: November 2, 2006 By: /s/ George H. Hepburn III
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Name: George H. Hepburn III
Title: Senior Vice President
and Chief Financial Officer
EXHIBIT INDEX
Exhibit Number Exhibit Description
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99.1 Press Release, dated November 2, 2006, of APAC
Customer Services, Inc.