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| 8-K - TECHTEAM GLOBAL INC | v187394_8k.htm |
Exhibit
99.1
Operator
Good
morning, ladies and gentlemen, and welcome to the TechTeam Global Inc. Investor
Conference Call. My name is XXXXXXXX and I'll be
your coordinator for today. At this time, all participants are in a listen-only
mode. For your reference, we are NOT planning to have a question-and-answer
session at the end of this conference call.
As a
reminder, this conference is being recorded for replay purposes. I would now
like to turn the call over to Ms. Mollie McAlary of FD. You may
proceed.
Mollie
McAlary - FD - IR
Thank
you, and good morning everyone. Thank you for joining us today as we review the
sale of TechTeam Global’s government solutions subsidiary, TechTeam Government
Solutions, Inc., to Jacobs Engineering Group, Inc. This announcement
was made in a press release issued earlier this morning and is available on the
Company’s website, techteam.com, in the Investor Section.
On the
call today are Seth Hamot, chairman of the board and Gary Cotshott, president
and chief executive officer.
Before we
proceed, please be aware that TechTeam Global plans to file with the U. S.
Securities and Exchange Commission (SEC) and mail to its stockholders a proxy
statement and other relevant materials in connection with the proposed sale of
its government solutions subsidiary and the other corporate matters described
therein.
The proxy
statement will contain important information about TechTeam Global, Jacobs
Engineering Group, Inc., the proposed sale of TechTeam Government Solutions and
the other corporate matters described therein.
Investors
and security holders are urged to read the proxy statement and other relevant
materials filed by TechTeam Global with the SEC carefully when they become
available before making any voting or investment decision with respect to the
proposed sale of TechTeam Government Solutions and the other corporate matters
described therein.
Investors
and security holders will be able to obtain free copies of the proxy statement,
including all exhibits thereto, and other documents filed with the SEC by
TechTeam Global through the web site maintained by the SEC at
http://www.sec.gov.
In
addition, investors and security holders will be able to obtain, without charge,
a copy of the proxy statement, and all exhibits thereto, from TechTeam Global by
submitting a written request to TechTeam Global, Inc.,
Attention: Investor Relations, 27335 West 11 Mile Road, Southfield,
Michigan, 48033; or by calling 1-248-357-2866; or by visiting TechTeam Global’s
Web site at http://www.techteam.com/investors.
TechTeam
Global, Jacobs Engineering and their respective directors and executive
officers, and certain other employees of TechTeam Global, may be deemed to be
participants in the solicitation of proxies with respect to the proposed sale of
TechTeam Government Solutions and the other matters to be brought before the
special meeting of TechTeam Global’s stockholders to which the proxy statement
will relate.
Information
regarding the directors and executive officers of TechTeam Global and their
ownership of TechTeam Global shares is contained in the annual report of
TechTeam Global on Form 10-K for the year ended December 31, 2009 and its proxy
statement for its 2010 Annual Meeting of Stockholders which was filed with the
SEC on April 30, 2010, and is supplemented by other public filings made, and to
be made, with the SEC.
Information
regarding the directors and executive officers of Jacobs Engineering Group Inc.
is contained in the annual report of Jacobs Engineering Group, Inc. on Form 10-K
for the year ended October 2, 2009, which was filed with the SEC on November 20,
2009, and its proxy statement for its 2010 Annual Meeting of Shareholders, which
was filed with the SEC on December 17, 2009.
A more
complete description will be available in the proxy statement to be filed by
TechTeam Global, Inc. in connection with the proposed sale of TechTeam
Government Solutions.
TechTeam
Global investors and security holders may obtain additional information
regarding the direct and indirect interests of TechTeam Global, Jacobs
Engineering and their respective directors and executive officers with respect
to the proposed sale of TechTeam Government Solutions by reading the proxy
statement and other filings referred to earlier.
Certain
statements on this conference call may be considered forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995,
including, but not limited to, forward-looking statements about expected future
financial and operating performance, the proposed sale of TechTeam Government
Solutions to Jacobs Engineering, the anticipated timing of a special meeting of
the stockholders, the anticipated timing of the closing of the proposed sale of
TechTeam Government Solutions to Jacobs Engineering,
the
anticipated range of transaction-related cash costs, and the expected accounting
treatment of the transaction.
These
statements are based on management’s expectations as of the date of this
conference call and are subject to uncertainty and changes in circumstances.
Actual results may differ materially from these expectations due to risks and
uncertainties including, but not limited to, approval of the proposed sale of
the TechTeam Government Solutions Business to Jacobs Engineering by TechTeam
Global’s stockholders, receipt of the required consents and approvals, closing
of the proposed sale within the anticipated timeframe, the implementation of
TechTeam Global’s strategy to focus exclusively on its commercial business, the
implementation of TechTeam Global’s strategic repositioning and market
acceptance of its refocused strategy, quarterly fluctuations in financial
results, and other risks.
These and
other risks, including, but not limited to, those set forth in our press
release, are detailed from time to time in the company's reports filed with the
SEC, including our annual report on Form 10-K for the year ended December 31,
2009. We recommend that you review these risks as you make any
investment or voting decision.
In
addition, while management may elect to update forward-looking statements at
some point in the future, management specifically disclaims any obligation to do
so, even if estimates change. Any references to our Web site in this
press release is not intended to incorporate the contents thereof into the press
release or any other public announcement.
With
that, let me turn the call over to TechTeam Global’s chairman of the board, Seth
Hamot.
Seth?
Thank
you, Mollie.
Good
morning and thank you very much for joining us on this call. Earlier
this morning, we announced that the Company has signed a definitive agreement to
sell its government solutions subsidiary, Tech Team Government Solutions, Inc.,
to the Jacobs Engineering Group, one of the world’s largest and most diverse
providers of technical, professional, and construction services. Our
government solutions subsidiary represented $76 million of the Company’s $211
million of revenue reported for the fiscal year ended December 31,
2009.
Under the
terms of the definitive agreement, Jacobs Engineering will acquire 100 percent
of the stock in TechTeam Government Solutions, Inc. for total consideration
of $59 million in cash, which is subject to certain escrows and
adjustments as set forth in the definitive agreement. The transaction
has been unanimously approved by the TechTeam Global Board of Directors and is
expected to close in the third quarter of 2010, subject to the satisfaction of
certain closing conditions. One of the closing conditions is the
approval of the transaction by the stockholders of TechTeam Global. A
special meeting of TechTeam Global’s stockholders is anticipated to be held
during the third quarter of 2010. Further details will be provided in filings
with the U.S. Securities and Exchange Commission.
We are
pleased with this agreement, which comes at the end of a thorough review and
sale process. The decision to sell TechTeam Government Solutions
resulted from the board’s evaluation, over the past year, of various strategic
alternatives to enhance shareholder value and position the company for stability
and growth. After this review, the board determined that focusing the
company’s efforts on the attractive commercial market would be the right course
of action for TechTeam Global and its shareholders.
This
transaction will provide the Company with significant financial flexibility
which will enhance our more focused business efforts. We intend to use the
proceeds from the sale initially to eliminate our bank borrowings and increase
our present cash position.
With
respect to the post divestiture commercial business that will be the focus of
TechTeam Global, I’d now like to turn the call over to Gary Cotshott, president
and chief executive officer, to provide more comments
in this area.
Gary?
Thanks,
Seth.
Narrowing
the focus of TechTeam and aligning all of our resources behind our core business
of serving the commercial market is a key step in realizing our strategic plan
for the company and positioning it for growth, profitability and long term
success. In addition to the significant reduction in debt achieved throughout
2009 and again in the first quarter of 2010, this action will add significantly
to our financial strength.
With an
intense focus on our customers, we deliver industry-leading IT outsourcing and
business process outsourcing services in the commercial sector across the globe.
Our leadership and excellence in this market are recognized by our customers and
industry analysts alike.
Leading
industry analyst Gartner, Inc. has positioned the Company in the Leaders
Quadrant in both the Magic
Quadrant for Help Desk Outsourcing, North America, and the Magic Quadrant for Desktop
Outsourcing Services, North America reports. Also notably, through direct
customer feedback, we have received significant recognition in Datamonitor’s
2009 Black Book of Outsourcing, having achieved the no. 1 ranking globally in
Help Desk Outsourcing across Tier 1 and Mid Tier customers, and the no. 1
ranking globally in IT Infrastructure Outsourcing for Mid Tier customers. These
recognitions have paid considerable benefit to our ability to expand our
business relationships with existing clients and gain access to new business
opportunities.
We have a
strong base of commercial market customers around the world and we have as a
foundation, many deep and long-standing relationships. Our customers will
clearly benefit as we exclusively focus and invest in their needs on a
go-forward basis. We are proud of our customer-base and work hard to
provide them best-in-class service every day.
From a
capabilities standpoint, we recognize that customers are seeking even more
innovative solutions to their problems and a full commitment to an ITIL-based
continuous improvement approach to meeting their needs. We bring substantial
technology and language expertise, excellence in execution, and ongoing
innovation to our customer engagements. Using this as a foundation, we will
expand our capabilities in key areas such as customer support automation and
remote infrastructure management. In addition, we will expect to remain closely
aligned with the needs and new offerings of our key alliance partners -- CA and
Orange -- as well as begin new partnerships with other industry
leaders.
With
respect to geographic expansion, we recently announced an important
partnership with Stefanini IT Solutions to provide Latin America-based support
services. Up to this point, we have supported customers requiring
services in Latin America from outside the region. We now have access to a wide
array of in-region service delivery resources. Further expansion in Latin
America is an important element in our strategy. We expect to continue to
increase our global footprint with an emphasis on a deeper presence in
Asia.
From a
financial perspective, we believe that the commercial business is positioned for
growth and profitability on a post-divestiture basis. It is important to note
that our restructuring actions completed during the last quarter of 2009 and the
first quarter of 2010 were largely in anticipation of this transaction and were
designed to align the company’s cost structure with the post-divestiture
business. The details of certain historical financials for the newly-focused
commercial business, including the one-time embedded costs of enabling the
transaction, will be presented in the proxy statement that we will file with the
U.S. Securities and Exchange Commission and mail to our stockholders in
connection with the proposed sale of TechTeam Government Solutions.
From an
operational standpoint, our commercial and government solutions businesses are
largely stand-alone and self-sustaining, operating for the most part as
completely separate entities. As a result, we do not anticipate
any disruption or adverse impact from the divestiture on either
business.
In
summary, we are excited about the prospects for TechTeam. We have a new level of
focus in our company, … great commercial market potential, …an outstanding base
of existing commercial customers, …a solid new business pipeline, …..a strong
balance sheet -- and a global team of committed, high performing professionals.
All of this adds up to great opportunity for our customers, prospects,
shareholders and employees.
Due to
the significance of today’s transaction and the upcoming release of proxy
materials, we will not be taking questions on today’s call. This
concludes today’s TechTeam Global Investor Conference Call and once again, thank
you for joining us today.