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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
 For the quarterly period ended April 3, 2011
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
 For the Transition Period From  to
 Commission file number: 0-26786
 APAC Customer Services, Inc.
  Illinois
    
    36-2777140(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)
 Bannockburn Lake Office, 2201 Waukegan Road, Suite 300, Bannockburn, Illinois 60015
 (847) 374-4980
  þ o
  o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer* o
    
    Smaller reporting company o(*Do not check if a smaller reporting company)
  o þ




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##### 



INDEX
 PageForward-Looking Statements and Factors That May Affect Future Results
    
    
    3Part I. Financial Information
    
    
    5Item 1. Condensed Consolidated Financial Statements (Unaudited)
    
    
    5Condensed Consolidated Balance Sheets as of April 3, 2011 and
January 2, 2011
    
    
    5Condensed Consolidated Statements of Operations for the Thirteen
Weeks Ended April 3, 2011 and April 4, 2010
    
    
    6Condensed Consolidated Statements of Cash Flows for the Thirteen
Weeks Ended April 3, 2011 and April 4, 2010
    
    
    7Notes to Condensed Consolidated Financial Statements
    
    
    8Item 2. Managements Discussion and Analysis of Financial Condition and Results
of Operations
    
    
    16Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    24Item 4. Controls and Procedures
    
    
    24Part II. Other Information
    
    
    25Item 1A. Risk Factors
    
    
    25Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    25Item 6. Exhibits
    
    
    25EX-31.1EX-31.2Exhibit 32.1
   2




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Forward-Looking Statements and Factors That May Affect Future Results
      
    
    A large portion of our revenue is generated from a limited number
of clients and the loss of one or more of them, or a reduction in
their demand for our services, could materially and adversely
affect our financial results.
    
    Our operating results and financial condition may be affected by
the performance of our clients and unfavorable general economic
conditions.
    
    The failure to effectively manage our production capacity and our
workforce could negatively impact our financial results.
    
    Our success is subject to the terms of our client contracts and if
we are unable to continue operating under existing client
contracts or renew existing client contracts with terms favorable
to us, our results of operations and financial condition may be
adversely affected by the loss of clients or by the less favorable
terms.
    
    Our business may be affected by our cash flows from operations and
our ability to comply with our debt covenants and funding
requirements under our credit facility.
    
    Our financial results may be affected by risks associated with
international operations and expansion, including, but not limited
to foreign currency fluctuations, tax obligations and changes to
laws in other countries.
    
    Our principal shareholder can exercise significant control over us
and, as a result of such control may be able to exert considerable
influence over our future direction and operations.
    
    Our success depends on our ability to recruit and retain a
sufficient number of qualified key personnel and the loss of the
services of key personnel without adequate replacement or the
inability to attract new qualified personnel could have a material
adverse effect on us.
    
    We operate in a highly competitive industry and our financial
results may suffer if we are unable to adequately address
potential downward pricing pressures and other competitive
factors.
  3




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
    
    Circumstances outside our control such as typhoons, hurricanes,
earthquakes, floods and other acts of God, political instability,
equipment malfunction, telephone or data service interruptions,
changes in the telecommunications market, war and terrorism could
seriously harm our domestic or international business operations.
    
    Unauthorized disclosure of sensitive or confidential client and
customer data could expose us to protracted and costly litigation,
penalties and may cause us to lose clients.
    
    Our business and our clients businesses are subject to federal
and state regulation and industry standards and the costs of
compliance with, or liability for violation of, existing or future
regulations or standards could significantly increase our costs of
doing business.
    
    The costs and management time and attention associated with
litigation could result in a negative impact to our financial
results.
    
    Our business is subject to rapid changes in technology and if our
technology is rendered obsolete or we are unable to compete
effectively, our operating results and financial condition could
be materially and adversely affected.
    
    Volatility in our stock price may result in loss of investment for
shareholders, potential litigation and substantial cost associated
with litigation, as well as diversion of managements attention.
    4




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PART I. FINANCIAL INFORMATION
 
 Item 1.
    
    Condensed Consolidated Financial Statements
 APAC CUSTOMER SERVICES, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (Dollars in thousands)
 April 3,
    
    
    January 2,2011
    
    
    2011(Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    51,268
    
    
    $
    41,399Accounts receivable, net
    
    
    46,772
    
    
    
    52,483Deferred tax assets, current
    
    
    7,606
    
    
    
    11,051Other current assets
    
    
    8,288
    
    
    
    8,204Total current assets
    
    
    113,934
    
    
    
    113,137Property and equipment, net
    
    
    28,065
    
    
    
    28,030Goodwill and intangible assets, net
    
    
    13,783
    
    
    
    13,763Deferred tax assets, non-current
    
    
    5,387
    
    
    
    5,387Other assets
    
    
    2,761
    
    
    
    2,848Total assets
    
    $
    163,930
    
    
    $
    163,165LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Capital leases  current portion
    
    $
    617
    
    
    $
    696Accounts payable
    
    
    3,719
    
    
    
    4,964Income taxes payable
    
    
    401
    
    
    
    93Accrued payroll and related items
    
    
    22,477
    
    
    
    22,205Accrued liabilities
    
    
    8,324
    
    
    
    9,200Total current liabilities
    
    
    35,538
    
    
    
    37,158Other non-current liabilities
    
    
    4,510
    
    
    
    4,536Commitments and contingencies
    
    
    
    
    
    
    Shareholders equity:Common shares, $0.01 per share; authorized 200,000,000 shares;
53,417,300 shares issued and 51,625,975, shares outstanding at
April 3, 2011, and 53,359,090 shares issued and 52,488,457 shares
outstanding at January 2, 2011
    
    
    534
    
    
    
    533Additional paid-in capital
    
    
    113,145
    
    
    
    112,668Accumulated earnings
    
    
    18,187
    
    
    
    11,166Accumulated other comprehensive income
    
    
    2,323
    
    
    
    1,980Treasury shares: 1,791,325 and 870,633 shares at cost at April 3, 2011
and January 2, 2011, respectively
    
    
    (10,307
    )
    
    
    (4,876
    )Total shareholders equity
    
    
    123,882
    
    
    
    121,471Total liabilities and shareholders equity
    
    $
    163,930
    
    
    $
    163,165
   5




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APAC CUSTOMER SERVICES, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (Dollars in thousands, except per share data)
 (Unaudited)
 Thirteen Weeks EndedApril 3,
    
    
    April 4,2011
    
    
    2010Net revenue
    
    $
    88,043
    
    
    $
    85,254Cost of services
    
    
    68,544
    
    
    
    64,808Gross profit
    
    
    19,499
    
    
    
    20,446Operating expenses:Selling, general and administrative expenses
    
    
    8,301
    
    
    
    8,146Legal settlement
    
    
    2
    
    
    
    2,400Severance and other charges
    
    
    425
    
    
    
    1Total operating expenses
    
    
    8,728
    
    
    
    10,547Operating income
    
    
    10,771
    
    
    
    9,899Other (income) expense, net
    
    
    20
    
    
    
    (109
    )Interest (income) expense, net
    
    
    32
    
    
    
    (8
    )Income before income taxes
    
    
    10,719
    
    
    
    10,016Income tax expense
    
    
    3,698
    
    
    
    3,456Net income
    
    $
    7,021
    
    
    $
    6,560Net income per share:Basic
    
    $
    0.14
    
    
    $
    0.13Diluted
    
    $
    0.13
    
    
    $
    0.12Weighted average number of shares outstanding:Basic
    
    
    51,797
    
    
    
    52,309Diluted
    
    
    53,528
    
    
    
    54,630
   6




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APAC CUSTOMER SERVICES, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Dollars in thousands)
 (Unaudited)
 Thirteen Weeks EndedApril 3,
    
    
    April 4,2011
    
    
    2010Operating activities:Net income
    
    $
    7,021
    
    
    $
    6,560Adjustments to reconcile net income to net cash provided
by operating activities:Depreciation and amortization
    
    
    2,921
    
    
    
    3,112Deferred income taxes
    
    
    3,445
    
    
    
    138Stock compensation expense
    
    
    372
    
    
    
    500Amortized gain on sale leaseback
    
    
    (40
    )
    
    
    (23
    )Loss (gain) on sale of property and equipment
    
    
    8
    
    
    
    (1
    )Income taxes payable
    
    
    309
    
    
    
    3,296Change in operating assets and liabilitie
    
    
    3,650
    
    
    
    8,661Net cash provided by operating activities
    
    
    17,686
    
    
    
    22,243Investing activities:Purchases of property and equipment, net
    
    
    (2,408
    )
    
    
    (2,231
    )Net proceeds from sale of property and equipment
    
    
    
    
    
    
    1Net cash used in investing activities
    
    
    (2,408
    )
    
    
    (2,230
    )Financing activities:Payment of capital lease obligations
    
    
    (285
    )
    
    
    (124
    )Stock option transactions
    
    
    106
    
    
    
    11Purchase of treasury stock
    
    
    (5,431
    )
    
    
    Net cash used in financing activities
    
    
    (5,610
    )
    
    
    (113
    )Effect of exchange rate change on cash
    
    
    201
    
    
    
    209Net increase in cash and cash equivalents
    
    
    9,869
    
    
    
    20,109Cash and cash equivalents:Beginning balance
    
    
    41,399
    
    
    
    20,557Ending balance
    
    $
    51,268
    
    
    $
    40,666
   7




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APAC CUSTOMER SERVICES, INC. AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 (Dollars in thousands, except per share data)
 1. Basis of Presentation and Principles of Consolidation
  http://www.sec.gov
 
 2. New Accounting Pronouncements
 Revenue Recognition
 Revenue Recognition
  8




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APAC CUSTOMER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands, except per share data)
 3. Accrued Liabilities
  April 3,
    
    
    January 2,2011
    
    
    2011Non-qualified retirement plan obligation
    
    $
    2,260
    
    
    $
    2,375Accrued capital expenditures
    
    
    967
    
    
    
    1,901Accrued severance
    
    
    732
    
    
    
    536Accrued professional fees
    
    
    703
    
    
    
    654Deferred rent
    
    
    582
    
    
    
    473Accrued telecom
    
    
    432
    
    
    
    424Accrued workers compensation
    
    
    412
    
    
    
    431Other accrued liabilities
    
    
    2,236
    
    
    
    2,406Total
    
    $
    8,324
    
    
    $
    9,200
 4. Accounting for Stock-Based Compensation
    Number of SharesOutstanding on January 2, 2011
    
    
    250,000Granted
    
    
    Issued
    
    
    Cancelled
    
    
    Outstanding on April 3, 2011
    
    
    250,000
   9




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APAC CUSTOMER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands, except per share data)
  Weighted Average
    
    
    AggregateNumber of
    
    
    Grant Price Range Per
    
    
    Exercise Price Per
    
    
    IntrinsicOptions
    
    
    Share
    
    
    Share
    
    
    ValueOutstanding on January 2, 2011
    
    
    5,644,478
    
    
    $
    0.79
    
    
    $
    6.43
    
    
    $
    3.09Granted
    
    
    119,875
    
    
    
    5.86
    
    
    
    6.12
    
    
    
    5.90Exercised
    
    
    (58,210
    )
    
    
    1.10
    
    
    
    5.13
    
    
    
    1.81Forfeited
    
    
    (186,000
    )
    
    
    1.49
    
    
    
    5.86
    
    
    
    5.26Expired
    
    
    (4,250
    )
    
    
    2.81
    
    
    
    5.31
    
    
    
    3.75Outstanding on April 3, 2011
    
    
    5,515,893
    
    
    $
    0.79
    
    
    $
    6.43
    
    
    $
    3.09
    
    
    $
    16,065Exercisable on April 3, 2011
    
    
    2,745,621
    
    
    $
    0.79
    
    
    $
    6.05
    
    
    $
    2.31
    
    
    $
    10,128
  5. Comprehensive Income
  Thirteen Weeks EndedApril 3,
    
    
    April 4,2011
    
    
    2010Net income
    
    $
    7,021
    
    
    $
    6,560Foreign currency translation adjustment
    
    
    262
    
    
    
    190Unrealized gain on derivative contracts
    
    
    81
    
    
    
    270Total comprehensive income
    
    $
    7,364
    
    
    $
    7,020
 6. Legal Proceedings
  Tiffany Sharpe, et al. v.
APAC Customer Services, Inc.
  10




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APAC CUSTOMER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands, except per share data)
    7. Debt
      11




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APAC CUSTOMER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands, except per share data)
   8. Severance and Other Charges
   9. Income Taxes
    12




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APAC CUSTOMER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands, except per share data)
 10. Earnings Per Share
 :
 Thirteen Weeks EndedApril 3,
    
    
    April 4,2011
    
    
    2010Net income
    
    $
    7,021
    
    
    $
    6,560Shares used in basic per share calculation
    
    
    51,797
    
    
    
    52,309Effects of dilutive securities:Stock options
    
    
    1,695
    
    
    
    2,312Non-vested stock
    
    
    36
    
    
    
    9Shares used in diluted per share calculation
    
    
    53,528
    
    
    
    54,630Net income per share:Basic
    
    $
    0.14
    
    
    $
    0.13Diluted
    
    $
    0.13
    
    
    $
    0.12
  11. Fair Value Measurements
  
    
    Level 1  Quoted prices in active markets for identical assets or liabilities.
 
    
    Level 2  Inputs, other than the quoted prices in active markets, that are observable
either directly or indirectly.
 
    
    Level 3  Unobservable inputs based on the Companys own assumptions.
  13




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APAC CUSTOMER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands, except per share data)
  Fair Value Measurements as of April 3, 2011Level 1
    
    
    Level 2
    
    
    Level 3Assets:Cash equivalents(1)
    
    $
    51,073
    
    
    $
    
    
    
    $
    Non-qualified retirement plan(2)
    
    
    2,260
    
    
    
    
    
    
    
    Foreign currency contracts(3)
    
    
    
    
    
    
    1,234
    
    
    
    Non-current investments(4)
    
    
    1,199
    
    
    
    
    
    
    
    Liabilities:Non-qualified retirement plan obligation(2)
    
    $
    2,260
    
    
    $
    
    
    
    $
    
 
 (1)
    
    Cash equivalents: The carrying amount of these items approximates fair value at period end.(2)
    
    Non-qualified retirement plan: The Company maintains a non-qualified retirement plan (Select
Plan) for highly compensated employees who are limited in the amount of contributions that they
can make in the Companys 401K plan. As of April 3, 2011, the fair value of investments in the
Select Plan totaled $2.3 million and is reflected on the Companys balance sheet in other current
assets. The offsetting obligation to employees participating in the Select Plan, which will always
equal the fair value of the investments, are recorded on the Companys balance sheet in other
current liabilities.(3)
    
    Foreign currency contracts: The carrying amount of these items is based on the market valuation
approach which is provided by the counter-party institutions and uses the closing or mid-market
rate and forward points obtained from external sources on the date of valuation. There are no
guaranteed selling prices for these forward currency contracts.(4)
    
    Non-current investments: The carrying amount of these items, which represent Philippine
treasury bills, approximates fair value as of April 3, 2011 and is recorded as a component of other
assets on the Companys balance sheet.   12. Derivative Instruments
    14




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APAC CUSTOMER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands, except per share data)
   Asset DerivativesFair ValueBalance Sheet
    
    April 3,
    
    
    January 2,Location
    
    2011
    
    
    2011Derivatives designated as hedging instruments :Foreign currency contracts
    
    Other Current Assets
    
    $
    1,234
    
    
    $
    1,109Total derivatives
    
    
    
    $
    1,234
    
    
    $
    1,109Liability DerivativesFair ValueBalance Sheet
    
    April 3,
    
    
    January 2,Location
    
    2011
    
    
    2011Derivatives designated as hedging instruments :Foreign currency contracts
    
    Accrued Liabilities
    
    $
    
    
    
    $
    22Total derivatives
    
    
    
    $
    
    
    
    $
    22
  Amount of Gain (Loss)Recognized in OCI on
    
    
    Gain (Loss) Reclassified fromDerivatives Designated
    
    Derivatives (Effective
    
    
    Accumulated OCI into Incomeas
    
    Portion)
    
    
    (Effective Portion)Cash Flow
    
    Thirteen Weeks EndedHedging
    
    April 3,
    
    
    April 4,
    
    
    
    
    April 3,
    
    
    April 4,Instruments
    
    2011
    
    
    2010
    
    
    Location
    
    2011
    
    
    2010Foreign currency contracts
    
    $
    81
    
    
    $
    270
    
    
    Cost of Services
    
    $
    249
    
    
    $
    251
  13. Subsequent Events
   15




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Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
  Overview
      16




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Critical Accounting Policies and Estimates
    17




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Results of Operations
  Thirteen Weeks EndedApril 3,
    
    
    April 4,
    
    
    Fav (Unfav)2011
    
    
    2010
    
    
    % ChangeNet Revenue
    
    $
    88,043
    
    
    $
    85,254
    
    
    
    3.3
    %Cost of Services:Direct labor
    
    
    46,171
    
    
    
    45,202
    
    
    
    (2.1
    )Other facility expenses
    
    
    22,373
    
    
    
    19,606
    
    
    
    (14.1
    )Total cost of services
    
    
    68,544
    
    
    
    64,808
    
    
    
    (5.8
    )Percentage of revenue
    
    
    77.9
    %
    
    
    76.0
    %
    
    
    Gross profit
    
    
    19,499
    
    
    
    20,446
    
    
    
    (4.6
    )Gross profit margin
    
    
    22.1
    %
    
    
    24.0
    %
    
    
    Operating Expenses:Selling, general and administrative expenses
    
    
    8,301
    
    
    
    8,146
    
    
    
    (1.9
    )Legal settlement
    
    
    2
    
    
    
    2,400
    
    
    
    *Severance and other charges
    
    
    425
    
    
    
    1
    
    
    
    *Total operating expenses
    
    
    8,728
    
    
    
    10,547
    
    
    
    17.2Operating income
    
    
    10,771
    
    
    
    9,899
    
    
    
    8.8Other (income) expense, net
    
    
    20
    
    
    
    (109
    )
    
    
    *Interest (income) expense, net
    
    
    32
    
    
    
    (8
    )
    
    
    *Income before income taxes
    
    
    10,719
    
    
    
    10,016
    
    
    
    7.0Income tax expense
    
    
    3,698
    
    
    
    3,456
    
    
    
    (7.0
    )Net income
    
    $
    7,021
    
    
    $
    6,560
    
    
    
    7.0
    %
 
 *
    
    Means that the percentage change is not meaningful Non-GAAP Financial Measures
     18




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Thirteen Weeks Ended (1)April 3,
    
    
    April 4,
    
    
    Fav (Unfav)2011
    
    
    2010
    
    
    % Change(Dollars in thousands except statistical data andnotes)EBITDA (2)
    
    $
    13,672
    
    
    $
    13,120
    
    
    
    4.2
    %Adjusted EBITDA (2)
    
    $
    14,099
    
    
    $
    15,521
    
    
    
    (9.2
    )%Statistical information:Number of customer care centers:Domestic
    
    
    10
    
    
    
    10International
    
    
    5
    
    
    
    5Total
    
    
    15
    
    
    
    15Number of workstations, end of period:Domestic
    
    
    6,296
    
    
    
    6,260International
    
    
    4,680
    
    
    
    4,201Total
    
    
    10,976
    
    
    
    10,461
 
 Notes to Non-GAAP Financial Measures(1)
    
    We operate on a thirteen-week fiscal quarter that ends on the Sunday closest to March 31.(2)
    
    We define EBITDA as net income plus income tax expense, depreciation and amortization, and
interest expense. We define adjusted EBITDA as EBITDA adjusted for legal settlement expense and
severance and other charges.    19




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Thirteen Weeks EndedApril 3,
    
    
    April 4,2011
    
    
    2010(Dollars in thousands)Net income
    
    $
    7,021
    
    
    $
    6,560Interest (income) expense, net
    
    
    32
    
    
    
    (8
    )Income tax expense
    
    
    3,698
    
    
    
    3,456Depreciation and amortization
    
    
    2,921
    
    
    
    3,112EBITDA
    
    $
    13,672
    
    
    $
    13,120Legal Settlement
    
    
    2
    
    
    
    2,400Severance and other charges
    
    
    425
    
    
    
    1Adjusted EBITDA
    
    $
    14,099
    
    
    $
    15,521
  20




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Comparison of Results of Operations for the Thirteen Weeks Ended April 3, 2011 and April 4, 2010
     Tiffany Sharpe, et al. v. APAC Customer Services, Inc.
     21




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##### Table of Contents



Liquidity and Capital Resources
  Thirteen Weeks EndedApril 3,
    
    
    April 4,2011
    
    
    2010(Dollars in thousands)Net cash provided by operating activities
    
    $
    17,686
    
    
    $
    22,243Net cash used in investing activities
    
    
    (2,408
    )
    
    
    (2,230
    )Net cash used in financing activities
    
    
    (5,610
    )
    
    
    (113
    )Effect of exchange rate changes on cash
    
    
    201
    
    
    
    209Net increase in cash and cash equivalents
    
    $
    9,869
    
    
    $
    20,109
 Operating Activities
  Investing Activities
   22




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##### Table of Contents



Financing Activities
  Bank Financing
    Future Liquidity
    23




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##### Table of Contents



Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
 Item 4.
    
    Controls and Procedures
 Disclosure Controls and Procedures
  Internal Control Over Financial Reporting
   24




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##### Table of Contents



Part II. Other Information
 
 Item 1A.
    
    Risk Factors
  
 Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
  Issuer Purchases of Equity Securities
 Total Number of
    
    
    Maximum NumberTotal Number
    
    
    
    
    
    
    Shares Purchased
    
    
    of Shares that Mayof Shares (or
    
    
    Average Price
    
    
    as Part of Publicly
    
    
    Yet Be PurchasedUnits)
    
    
    Paid per Share
    
    
    Announced Plans
    
    
    Under the Plans orPeriod
    
    Purchased
    
    
    (or Unit)
    
    
    or Programs (1)
    
    
    Programs (1)Beg Balance 1/02/2011
    
    
    870,633
    
    
    $
    5.60
    
    
    
    870,633
    
    
    
    4,129,3671/03/2011  1/30/2011
    
    
    261,438
    
    
    
    5.96
    
    
    
    261,438
    
    
    
    3,867,9291/31/2011  2/27/2011
    
    
    331,657
    
    
    
    5.79
    
    
    
    331,657
    
    
    
    3,536,2722/28/2011  4/03/2011
    
    
    327,597
    
    
    
    5.96
    
    
    
    327,597
    
    
    
    3,208,675Total
    
    
    1,791,325
    
    
    $
    5.75
    
    
    
    1,791,325
    
    
    
    3,208,675
 (1)
    
    On August 18, 2010, we announced that our Board of Directors had authorized the
repurchase of up to an aggregate of five million shares of our common stock. Under the stock
repurchase program, purchases will be made from time to time on the open market at prevailing
market prices or in negotiated transactions off the market. The repurchase program is expected to
continue over the next 12 months unless extended or shortened by the Board of Directors. We are
not obligated to acquire any particular amount of common stock as a result of the plan, which may
be suspended at any time at our discretion. 
 Item 6.
    
    Exhibits
   25




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##### Table of Contents



SIGNATURES
  APAC Customer Services, Inc.Date: May 12, 2011
    By:
    /s/ Kevin T. KeleghanKevin T. KeleghanPresident and
Chief Executive Officer
(Principal Executive Officer)Date: May 12, 2011
    By:
    /s/ Andrew B. SzafranAndrew B. SzafranSenior Vice President and
Chief Financial Officer
(Principal Financial Officer)Date: May 12, 2011
    By:
    /s/ Joseph R. DoolanJoseph R. DoolanVice President and Controller
(Principal Accounting Officer)  26




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Exhibit Index
 ExhibitNumber
    
    Description3.1
    
    
    Amended and Restated Articles of Incorporation of APAC Customer
Services, Inc., incorporated by reference to APAC Customer
Services, Inc.s Annual Report on Form 10-K for the fiscal year
ended January 1, 2006.3.2
    
    
    Second Amended and Restated Bylaws of APAC Customer Services,
Inc., dated August 20, 2007, incorporated by reference to APAC
Customer Services, Inc.s Current Report on Form 8-K, dated August
22, 2007.4.1
    
    
    Specimen Common Stock Certificate, incorporated by reference to
APAC Customer Services, Inc.s Annual Report on Form 10-K for the
fiscal year ended December 28, 2008.10.1
    
    
    Second Amendment to Revolving
Credit and Security Agreement, dated April 27, 2011, incorporated by reference to APAC Customer Services,
Inc.s Current Report on Form 8-K, filed on May 3, 2011.31.1
    
    
    Certification of Chief Executive Officer, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    
    Certification of Chief Financial Officer, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    
    Certification of the Chief Executive Officer and Chief Financial
Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
  27