Stream Global Services, Inc., (NYSE AMEX: SGS), a leading global business process outsource (BPO) service provider specializing in customer relationship management and business process outsourcing services for many Fortune 1000 companies, today announced consolidated financial results for the three and nine months ended September 30, 2010. On November 3, 2010, Stream also filed its Quarterly Report on Form 10-Q with the Securities and Exchange Commission for the quarter ended September 30, 2010.
BOSTON, MA -November 3, 2010- Stream Global Services, Inc.,
(NYSE AMEX: SGS), a leading global business process outsource (BPO)
service provider specializing in customer relationship management
and business process outsourcing services for many Fortune 1000
companies, today announced consolidated financial results for the
three and nine months ended September 30, 2010. On November 3,
2010, Stream also filed its Quarterly Report on Form 10-Q with the
Securities and Exchange Commission for the quarter ended September
30, 2010.
Quarter Highlights
- On a GAAP basis:
- Revenue for the quarter ended September 30, 2010 was $197.1
million, an increase of $75.2 million, or 61.7%, from the same
period last year, primarily reflecting the acquisition of eTelecare
Global Services, Inc. ("eTelecare") on October 1, 2009 and the
inclusion of the eTelecare business in Stream's results of
operations. Revenue for the third quarter increased over the second
quarter of 2010 by approximately $13.2 million reflecting the ramp
of new client wins during 2010.
- Gross margin for the quarter ended September 30, 2010 was 42.2%
compared to 40.5% for the same period in 2009.
- Operating margin for the quarter ended September 30, 2010 was
(1.5)% compared to (2.5)% for the same period in 2009.
- Net loss was $12.6 million and $44.6 million for the three and
nine months ended September 30, 2010, compared to net loss of $6.8
million and $7.6 million for the same periods in 2009.
- On a Non-GAAP basis, as if the acquisition of eTelecare had
been completed on January 1, 2009:
- Revenue for the quarter ended September 30, 2010 was $197.1
million, an increase of $3.2 million, or 1.7%, from the same period
in 2009. Gross margin for the quarter ended September 30, 2010 was
43.2% compared to 42.9% to the comparable period in 2009.
- Adjusted Pro Forma Earnings before Interest, Taxes,
Depreciation and Amortization (Adjusted EBITDA) increased from
$10.7 million for the three months ended June 30, 2010 to $21.9
million for the three months ended September 30, 2010, and
increased $5.9 million from $16.0 million for the comparable prior
year period.
- At September 30, 2010 the balance of our revolving line of
credit was $22.6 million, representing a decrease of $2.6 million
from the revolver balance at June 30, 2010. The company had $66.1
million available to draw upon at September 30, 2010.
Americas Region
Revenues generated from our Americas region, which includes the
United States, Canada, the Philippines, India, Costa Rica,
Nicaragua, Dominican Republic and El Salvador, was $146.3 million
and $425.4 million for the three and nine months ended September
30, 2010 compared to $72.1 million and $227.7 million for the three
and nine months ended September 30, 2009. The growth in our revenue
over the prior period is primarily attributed to the acquisition of
eTelecare on October 1, 2009.
Gross profit generated by the Americas region was $62.7 million
and $181.7 million for the three and nine months ended September
30, 2010.
EMEA Region
Revenues generated from our EMEA region, which includes Europe,
the Middle East and Africa, was $50.9 million and $152.2 million
for the three and nine months ended September 30, 2010 compared to
$49.7 million and $155.5 million for the three and nine months
ended September 30, 2009.
Gross profit generated by the EMEA region was $20.5 million and
$58.1 million for the three and nine months ended September 30,
2010.
Selling, General and Administrative Expense
Selling, general and administrative expenses, which includes
certain service center costs, was $66.0 million, or 33.5%, of
revenue during the three months ended September 30, 2010, compared
to $41.9 during the same period in 2009. This increase is primarily
attributed to the acquisition of eTelecare on October 1, 2009. On a
pro forma basis, as if the acquisition of eTelecare had been
completed on January 1, 2009, selling, general and administrative
expenses decreased by approximately $6.5 million for the quarter
ended September 30, 2010 compared to the same period ended
September 30, 2009.
Other Income and Expense, Including Income Taxes
Other income and expense for the quarter ended September 30,
2010 was $6.6 million, an increase of $3.9 million, or 144.4%, for
the same period in 2009. The main driver for this increase was
interest expense incurred for our $200 million high yield bonds
issued October 1, 2009. Interest expense for the three months ended
September 30, 2010 was $7.8 million. Realized and unrealized
foreign exchange gains and losses, net, were a gain of
approximately $1.2 million for the three months ended September 30,
2010.
Liquidity and Capital Resources
At September 30, 2010, our cash and cash equivalents, excluding
restricted cash was $21.2 million. Our accounts receivable at
September 30, 2010 were $171.4 million and our days sales
outstanding were 76 days. Our total debt outstanding at September
30, 2010 was $233.4 million, which included $22.6 million due on
our revolving line of credit and $192.3 million in 11.25% Senior
Secured Notes net of discount. At September 30, 2010, we had
approximately $66 million of availability under our revolving line
of credit. For the quarter ended September 30, 2010, our cash flow
from operating activities was $9.5 million, representing an
increase of $12.2 million from the same period in 2009.
CEO Commentary
Kathryn Marinello, Chairman and Chief Executive Officer of
Stream said; "Since joining Stream on August 19, 2010, I have spent
significant time touring our service centers and meeting our
employees, as well as our clients. I am very pleased and encouraged
by the caliber of our employees and the positive impression our
clients have of our services. These factors, I believe, are why
Stream continues to win new business. Working with our Board of
Directors and senior management team, we are creating a vision that
ensures long-term value for our employees, clients and shareholders
enabling Stream to be both the Employer of Choice in the workplace
and the Supplier of Choice for our clients."
Stream will hold a conference call for investors on November 4,
2010 at 9:00 AM EDT. Investors can participate by calling
800-723-6751 and referencing passcode 2057404.
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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