Fourth Quarter Gross Margins increased to 40% in Q4 2008 as compared to 33% in Q4 2007 for Predecessor Company
BOSTON, MA March 17, 2009 -- Stream Global Services, Inc. (Amex:
OOO), a leading provider of customer relationship management and
other business process outsourcing services ("Stream"), today
reported consolidated financial results for its 2008 fourth quarter
and year end.(1)
GAAP Consolidated Results
On July 31, 2008, Stream (formerly known as Global BPO Services
Corp.), a development stage company completed its acquisition of
Stream Holdings Corporation ("SHC").
On a GAAP basis revenue for the three and twelve-month periods
ended December 31, 2008 was $129.8 million and $211.4 million,
respectively, as compared to zero in the prior year for both
periods.
GAAP net loss was $0.1 million for the three months ended
December 31, 2008 as compared to net income of $1.1 million for the
three months ended December 31, 2007. For the year ended
December 31, 2008, GAAP net income was $0.8 million compared to net
income of $1.1 million for the year ended December 31, 2007.
Pro Forma Combined Consolidated
Results
On a pro forma combined consolidated basis, the Company posted
record revenue for the year ended December 31, 2008 of $523.5
million compared to $483.6 million for the prior year ended
December 31, 2007. For the fourth quarter ended December 31,
2008, revenue was $129.8 million compared to $137.9 million for the
fourth quarter ended December 31, 2007.
Stream's gross profit as a percentage of revenue increased to
37% in the year ended December 31, 2008 compared to 34% in the year
ended December 31, 2007. For the three month period ended
December 31, 2008, gross profit as a percentage of revenue improved
to 40% compared to 33% for the three months ended December 31,
2007.
For the three months ended December 31, 2008, adjusted earnings
before interest taxes depreciation and amortization ("Adjusted
EBITDA") increased 80% to $11.5 million compared to $6.4 million in
the year-earlier period. Adjusted EBITDA increased 44% to $31.7
million in the year ended December 31, 2008 as compared to $22.0
million in the year earlier period (see attached Reconciliation of
GAAP to non-GAAP Information).
2008 Accomplishments
Scott Murray, Chairman and Chief Executive Officer of Stream
said; "Since our purchase of SHC on July 31, 2008, we have made
tremendous progress in building our client relationships and
strengthening our performance with our global clients by improving
operating metrics that they consider key to the success of their
businesses. We have substantially improved the financial
performance of Stream by focusing on operations, growing our
existing accounts and adding new logos, opening new global centers
for service and attracting many industry veterans back to Stream to
join our management team. "
Our 2008 accomplishments included the following:
- We consummated the acquisition of SHC on July 31, 2008. The
purchase was valued at $128.8 million for accounting purposes
(which reflected the $200 million purchase price less assumed
indebtedness and other transaction related costs). In
connection with the acquisition we completed a $108 million asset
backed revolving credit facility.
- We issued 150,000 shares of our Series A Convertible Preferred
Stock, for an aggregate purchase price of $150 million to Ares
Corporate Opportunities Fund II, L.P. ("Ares"). Ares then became
our largest stockholder with approximately 73% effective
ownership.
- We completed a self-tender offer and a share redemption
pursuant to which we purchased a total of 29.6 million shares of
our common stock for approximately $236 million.
- We expanded operations into new geographies such as El
Salvador, the Philippines and Egypt. We also increased our
presence in India to over 1500 seats.
- We have sold a number of new logo clients representing over $70
million of annualized revenues on a full year basis once fully
implemented.
- Over 35 industry veterans have returned to SGS in various
senior management positions in areas such as client management and
sales, operations and other areas of administration.
Murray concluded, "During 2009, we expect to build on the
operating improvements made in the fourth quarter to streamline our
business. At the same time, we have upgraded both the quality and
the quantity of our sales force, and are committed to increasing
our market penetration."
Contact Information:
Nancy Finn
Global Marketing Communications
nancy.finn@stream.com
781-304-1846 About Stream Global Services
Stream Global Services is a premium business process outsource (BPO) service provider specializing
in customer relationship management including sales, customer care and technical support for Fortune
1000 companies. Stream is a trusted partner to some of the world's leading technology, computing,
telecommunications, retail, entertainment/media, and financial services companies. Our service programs
are delivered through a set of standardized best practices and sophisticated technologies by a highly
skilled workforce of approximately 30,000 employees based out of 50 solution centers in 22 countries
supporting more than 35 languages. Stream continues to expand its global presence and service offerings
to increase revenue, improve operational efficiencies and drive brand loyalty for its clients. To learn
more about the company and its complete service offering, please visit www.stream.com.
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