| William Blair Emerging Growth Conference October 6, 2009 |
| Forward-Looking Statements Certain statements, including discussions of the Company's expectations for 2009 and beyond, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are inherently uncertain as they are based on various expectations and assumptions about future events, and they are subject to known and unknown risks, uncertainties and other factors, which may cause actual events and results to differ materially from historical results or the future results expressed or implied by the forward-looking statements. Please refer to the Company's Annual Report on Form 10-K for the year ended December 28, 2008 and our subsequent filings on Form 10-Q for the fiscal quarters ended March 29, 2009 and June 28, 2009 for a description of the factors that could cause such results to differ. The Company intends our forward-looking statements to speak only as of the date made and undertakes no obligation to update or revise any forward-looking statements. To supplement the Company's condensed consolidated financial statements presented in accordance with GAAP, the Company uses certain measures defined as non-GAAP financial measures by the SEC. Information regarding the reconciliation of the non-GAAP measures used in this presentation to our GAAP results is contained in the appendix and is also available on our website at http://www.apaccustomerservices.com and through the SEC. 2 |
| APAC Presenters & Support Michael P. Marrow President & CEO Andrew B. Szafran Senior Vice President & CFO Harriet Fried Investor Relations - Lippert / Heilshorn & Assoc. 3 |
| APAC Overview Provide Outsourced Solutions for Clients Call Center Services Related BPO Services Customized Innovative High Quality & Cost Effective Help our Clients Care For and Retain their Customers Results Driven Clients Shareholders 4 |
| APAC Fundamentals Client Satisfaction Continuous improvement of the services we offer Help them save money and satisfy their customers Profitability Starts with the contract Selective about the work we sign up for Constant focus on lowering costs Revenue Growth Happy clients will grow with us Happy clients will recommend us People Team environment Results-based compensation Bench strength to execute on new opportunities 5 |
| Service Delivery Locations / Workstations Tucson, Arizona 851 Tucson West, Arizona NEW 676 Davenport, Iowa 655 Cedar Rapids, Iowa 529 Utica, New York 408 Corpus Christi, Texas 365 Green Bay, Wisconsin 649 LaCrosse, Wisconsin 378 Tampa, Florida (client owned) 677 Newport News, Virginia (client owned) 717 At Home 125 Total US 6,030 Alabang, Philippines 1,309 Alabang, Philippines 442 Cubao, Philippines 1,766 Leyte, Philippines NEW 600 Total Offshore 4,117 Total APAC 10,147 Acquired Client's facility Base Business plus Leyte Phased Construction 600 of 800 seats Next Location: Near Shore Dominican Republic 6 |
| Who We Serve - a sampling... Two of the largest U.S. based wireless telecommunications companies The largest worldwide logistics company A number of leading healthcare insurance and pharmacy services companies The largest provider of subscriber based satellite radio programming Several leading publishers of print media A leading online travel services company NEW: A leading worldwide financial and travel services company 7 |
| Vertical Markets 8 |
| Revenue $248.8 $224.7 ? 10.7% Gross Margin 16.4% 9.3% ? 710 bp Adjusted EBITDA** $23.1 $6.8 ? 240% Net Income / (Loss) $3.0 $5.1* ? 41% ($ in millions) FY 2008 FY 2007 Change *Includes a one-time tax benefit of $17.6 million related to the favorable resolution of APAC's IRS appeal ** See appendix Debt $6.1 $26.3 ? $20.2 Last Year 9 |
| Revenue $139.3 $124.2 ? 12.1% Gross Margin 24.4% 14.9% ? 950 bp Adjusted EBITDA** $24.4 $8.7 ? 180.5% Net Income / (Loss) $18.4 $(4.1) NM* ($ in millions) YTD 2009 YTD 2008 Change * Percentage change is not meaningful ** See appendix Debt / (Cash) ($9.6) $17.7 ? $27.3 This Year to Date (as of Q2) 10 |
| Competitive Landscape: Turnaround On Track 11 |
| APAC vs. S&P500 and Nasdaq YTD 12 |
| Ongoing Priorities Continue to enhance the quality and dependability of APAC's services Constant cost improvement through eliminating waste and reducing overhead Win business with both new logos and existing clients Continue to develop and recruit talented staff to operate business and service clients 13 |
| Outlook for FY 2009 Full Year 2009 Growth of low double-digit to mid-teens Earnings Per Share of 0.60 to 0.65 No U.S. Federal Income Taxes in 2009 Continue to generate positive cash-flow 14 |
| Investors Nasdaq: APAC URL: www.apaccustomerservices.com Website contains: Bios for Senior Management Team Bios for Board of Directors Investor Relations Section 15 |
| APPENDIX 16 |
| Appendix - Non-GAAP Financial Measures To supplement our condensed consolidated financial statements presented in accordance with accounting principles generally accepted in the United States (GAAP), we use the following measures defined as non-GAAP financial measures by the SEC: EBITDA and adjusted EBITDA. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. The items excluded from these non^GAAP financial measures are significant components of our financial statements and must be considered so in performing a comprehensive analysis of our overall financial results. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses that may not be indicative of our core business operating results. We believe management, investors and lenders benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting and analyzing future periods. These non-GAAP financial measures also facilitate internal comparisons to our historical performance and liquidity. We believe that these non-GAAP financial measures are useful to investors and analysts in allowing for greater transparency with respect to supplemental information used by us in our financial and operational decision making. We use consistent methods for computation of non-GAAP financial measures. Our calculations of non-GAAP financial measures may not be consistent with calculations of similar measures used by other companies. The accompanying table has more details on the GAAP financial measures that are most directly comparable to non-GAAP financial measures and the related reconciliations between these financial measures. Additional information on these non-GAAP financial measures can be found in our Annual Report on Form 10-K for the year ended December 28, 2008 and our subsequent filings on Form 10-Q for the fiscal quarters ended March 29, 2009 and June 28, 2009. 17 |
| We operate on a thirteen-week fiscal quarter that ends on the Sunday closest to June 30. We define EBITDA as net income (loss) plus the provision (benefit) for income taxes, depreciation and amortization, and interest expense. We define adjusted EBITDA as EBITDA adjusted for restructuring and other charges and asset impairment charges. EBITDA and adjusted EBITDA are measures used by our lenders, investors and analysts to evaluate our financial performance and our ability to pay interest and repay debt. These measures are also indicative of our ability to fund the capital investments necessary for our continued growth. We use these measures, together with our GAAP financial metrics, to assess our financial performance, allocate resources, measure our performance against debt covenants, and evaluate our overall progress towards meeting our long-term financial objectives. EBITDA and adjusted EBITDA are not intended to be considered in isolation or as a substitute for net income (loss) or cash flow from operations data presented in accordance with GAAP or as a measure of liquidity. The items excluded from EBITDA and adjusted EBITDA are significant components of our financial statements and must be considered in performing a comprehensive assessment of our overall financial results. EBITDA and adjusted EBITDA can be reconciled to net income (loss), which we believe to be the most directly comparable financial measure calculated and presented in accordance with GAAP, as follows: Appendix - Non-GAAP Financial Measures 18 |