APAC Customer Services, Inc. Q2 2010 Earnings Call Transcript

APAC Customer Services, Inc. Q2 2010 Earnings Call Transcript
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APAC Customer Services, Inc. (APAC)

Q2 2010 Earnings Call

August 12, 2010 11:00 am ET

Executives

Harriet Fried – Lippert, Heilshorn & Associates

Theodore G. Schwartz – Chairman, Board of Directors

Arthur D. DiBari – Interim Chief Executive Officer

Andrew B. Szafran – Chief Financial Officer & Director

Analysts

David J. Koning – Robert W. Baird & Company

Matthew J. McCormack – BGB Securities

Michael Kim – Imperial Capital, LLC

Robert Riggs – William Blair & Company

Howard Smith – First Analysis Securities Corp.

Josh Vogel – Sidoti and Company

Mark Cooper – Pacific Ridge Capital

David Cohen – Midwood Capital

Presentation

Operator

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Good day Ladies and Gentlemen. And welcome to the APAC Customer Service Second Quarter 2010 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions)

I’d now like to turn the conference over to your host, Ms. Harriet Fried from LHA. Please go ahead.

Harriet Fried

Good morning, and thanks for joining us for APAC Customer Services Second Quarter 2010 Conference Call.

The company issued a press release yesterday afternoon containing financial results for the second quarter. This release is available on APAC’s website as well as on various financial websites.

The company representatives on today's call are Ted Schwartz, Chairman of APAC’s Board of Directors; Art DiBari, Interim Chief Executive Officer; and Andrew Szafran, Chief Financial Officer.

Before opening the call, I’d like to remind you that statements about future operating and financial results are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to various risks, uncertainties and other factors that could cause the company’s actual results to differ materially.

Yesterday’s earnings release and the company’s annual report on Form 10-K for the fiscal year ended January 3, 2010, and there’s quarterly reports on Form 10-Q for the fiscal quarters ended April 4, 2010 and July 4, 2010, discuss some of these factors.

The company’s forward-looking statements speak only as of today's date. To supplement the company’s consolidated financial statements, APAC uses EBITDA, a measure defined at a non-GAAP financial measure by the SEC.

A reconciliation of these results to GAAP is attached to yesterday’s earnings release and additional information can be found in APAC’s Annual Report on Form 10-K for the fiscal year ended January 3, 2010, and in its subsequent filings on Form 10-Q.

The company has posted a downloadable presentation to accompany the webcast in the investor relations section of its website at

www.apaccustomerservices.com

. The presentation can be viewed in the webcast section of APAC’s investor relations website by clicking on the link shown under the title of today's event. It will also be posted under investor presentations after this call.

I’d now like to turn the call over to our Chairman, Ted Schwartz. Go ahead please, Ted.

Theodore G. Sch

wartz

Thank you, Harriet. And good morning, everyone. It’s my pleasure to kick off the APAC Second Quarter Earnings Call this quarter.

And I’d of course, like to start by saying most of you have probably heard by now, our CEO Mike Marrow has taken a medical leave of absence. Mike underwent a successful medical procedure a week ago and is now recovering with his wife, Irene.

We of course, wish Mike and Irene, the very, very best and look forward to his full recovery and return. While we understand that some of you may have further questions, in respect for Mike’s privacy, this is all we’re going to say about his leave of absence, or its duration, and his future plans at this time.

As part of our continuity planning and debt succession planning on the Board and management level, we are very, very fortunate and pleased to appoint Art DiBari APAC’s COO, as interim CEO.

Art is a critical part of our success, a seasoned veteran of the industry, and has been a part of APAC’s success for the last 2 ½ years, in charge of all of the aspects of our operations, including operations, IP, and account management functions.

The Board of Directors has the highest level of confidence in Art and the APAC management team. Under Art’s leadership, APAC will successfully continue to grow our business.

Thank you very much, and I’m going to turn over to – at this point Art DiBari to introduce himself.

Art

hur D. DiBari

Thank you, Ted. I’d like to express my gratitude for the confidence that the Board has shown, both in me and the rest of the APAC team. We all wish Mike a speedy recovery.

I do want to say that my father once told me that when you borrow something, you have to give it back in better shape than when you received it. And that is exactly what we intend to do with the company.

And with that in mind, we will continue to delight our customers with best-in-class service, grow our revenues while expanding capabilities, improve our profitability through greater efficiency, and keep building our team for the future.

As we noted in our press release, we had a strong quarter and have continued our trend for a good year. We are reaffirming our guidance for 2010 and continue to expect revenue to be in the range of 320 million to 330 million. And our full-year EPS to be in the range of $0.44 to $0.46.

I am now going to turn over the call to Andrew Szafran, our Chief Financial Officer, and he’ll provide additional detail on our results for the quarter.

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