SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

                 [X] Quarterly Report Pursuant to Section 13 or
                  15(d) of the Securities Exchange Act of 1934.

                  For the quarterly period ended June 30, 1999

                                       or

                    [ ] Transition Report Pursuant to Section
                     13 or 15(d) of the Securities Exchange
                                  Act of 1934.

                    For the transition period _____ to ______

                         Commission File Number 1-12577

                                SITEL CORPORATION
             (Exact name of registrant as specified in its charter)

           MINNESOTA                                           47-0684333
    (State or jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                             Identification No.)

                          111 SOUTH CALVERT, STE. 1900
                               BALTIMORE, MD 21202
                                 (410) 246-1505

     (Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant  was required to file such  reports) and (2) has been subject to such
filing requirements for the past 90 days. YES X NO

     As of July 31,  1999,  the Company had  67,525,984  shares of Common  Stock
outstanding.
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

           Consolidated Condensed Balance Sheets.............................  1

           Consolidated Condensed Statements of Income (Loss)................  2

           Consolidated Condensed Statements of Cash Flows...................  3

           Notes to Consolidated Condensed Financial Statements..............  4


Item 2.  Management's Discussion and Analysis of Results of
         Operations and Financial Condition.................................. 14

Item 3.  Quantitative and Qualitative Disclosures about Market Risk.......... 22

PART II - OTHER INFORMATION

Item 2.  Changes in Securities............................................... 23

Item 4.  Submission of Matters to a Vote of Security Holders................. 23

Item 6.  Exhibits and Reports on Form 8-K.................................... 24

Signature.................................................................... 25

<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                       DECEMBER 31, 1998 AND JUNE 30, 1999
                    (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
                                   ASSETS                          DECEMBER 31,       JUNE 30,
                                                                      1998              1999
                                                                      ----              ----
Current assets:                                                                      (unaudited)
<S>                                                             <C>              <C>
     Cash and cash equivalents ..............................   $      14,472    $      16,235
     Trade accounts receivable (net of allowance
      for doubtful accounts of $ 3,970 and
      $4,071, respectively) .................................         129,809          143,102
     Prepaid expenses .......................................           5,257            7,962
     Other assets ...........................................           6,024            6,444
     Deferred income taxes ..................................           1,658            2,365
                                                                -------------    -------------
         Total current assets ...............................         157,220          176,108
Property and equipment, net .................................         125,615          118,980
Deferred income taxes .......................................          15,425           14,805
Goodwill, net ...............................................          93,288           87,477
Other assets ................................................          14,062           14,509
                                                                -------------    -------------
         Total assets .......................................   $     405,610    $     411,879
                                                                =============    =============

                       LIABILITES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Note payable ...........................................   $      30,545    $      21,614
     Current portion of long-term debt ......................           3,671            3,629
     Current portion of capitalized lease
       obligations ..........................................           3,650            2,144
     Trade accounts payable .................................          30,784           28,740
     Income taxes payable ...................................           3,875            2,467
     Accrued compensation ...................................          15,620           24,765
     Accrued operating expenses .............................          23,527           24,753
     Deferred revenue and other .............................           3,888           16,920
                                                                -------------    -------------
         Total current liabilities ..........................         115,560          125,032
Long-term debt, excluding current portion ...................         107,027          112,735
Capitalized lease obligations, excluding current
  portion ...................................................           9,210            9,093
Deferred compensation .......................................           1,591            1,666

Minority interest ...........................................          10,368            3,867

Stockholders' equity:
     Common  stock,  voting,  $.001 par  value 200,000,000
       shares  authorized, 64,399,645 and 67,481,866 shares
       issued and outstanding, in 1998 and 1999, respectively              64               67
     Paid-in capital ........................................         157,892          164,695
     Accumulated other comprehensive (loss) .................          (4,428)         (12,627)
     Retained earnings ......................................           8,326            7,351
                                                                -------------    -------------
         Total stockholders' equity .........................         161,854          159,486
                                                                -------------    -------------
         Total liabilities and stockholders' equity .........   $     405,610    $     411,879
                                                                =============    =============
</TABLE>
     The accompanying  notes are an integral part of the consolidated  condensed
financial statements.

                                       1
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
               CONSOLIDATED CONDENSED STATEMENTS OF INCOME (LOSS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                        For The Three Months Ended    For The Six Months Ended
                                                       June 30, 1998  June 30, 1999  June 30, 1998  June 30, 1999
                                                       -------------  -------------  -------------  -------------

(in thousands, except per share data)
<S>                                                       <C>          <C>           <C>            <C>
Revenues ............................................     $ 147,307    $ 177,996     $ 285,055      $ 342,181
                                                          ---------    ---------     ---------      ---------
Operating expenses:
     Cost of services ...............................        82,585       95,343       160,405        183,808
     Selling, general and administrative
          expenses ..................................        61,096       77,989       115,768        152,371
     Restructuring expenses .........................         6,607           --         6,607             --
                                                          ---------    ---------     ---------      ---------
                    Total operating expense .........       150,288      173,332       282,780        336,179
                                                          ---------    ---------     ---------      ---------
                   Operating income (loss) ..........        (2,981)       4,664         2,275          6,002
Other income (expense):
     Interest expense, net ..........................        (3,375)      (2,994)       (5,965)        (6,150)
     Other income, net ..............................            34           57           169            120
                                                          ---------    ---------     ---------      ---------
Income (loss) before income taxes
     and minority interest ..........................        (6,322)       1,727        (3,521)           (28)

Income tax expense (benefit) ........................        (1,878)       1,086          (761)           883
Minority interest ...................................            31          133          (263)            64
                                                          ---------    ---------     ---------      ---------

Net income (loss) from continuing operations ........        (4,475)         508        (2,497)          (975)
Extraordinary loss on refinancing of debt,
  net of taxes ......................................            --           --           514             --
                                                          ---------    ---------     ---------      ---------
Net income (loss) ...................................     $  (4,475)   $     508     $  (3,011)     $    (975)
                                                          =========    =========     =========      =========

Income (loss) from continuing operations per common share:
  Basic .............................................     $   (0.07)   $    0.01     $   (0.04)     $   (0.01)
  Diluted ...........................................     $   (0.07)   $    0.01     $   (0.04)     $   (0.01)
Income (loss) per common share:
  Basic .............................................     $   (0.07)   $    0.01     $   (0.05)     $   (0.01)
  Diluted ...........................................     $   (0.07)   $    0.01     $   (0.05)     $   (0.01)
Weighted average common shares outstanding:
  Basic .............................................        63,871       65,917        63,584         65,383
  Diluted ...........................................        63,871       72,197        63,584         65,383
</TABLE>

     The accompanying  notes are an integral part of the consolidated  condensed
financial statements

                                       2
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                                       For Six Months Ended
  (dollars in thousands)                                           June 30, 1998   June 30, 1999
                                                                   -------------   -------------
<S>                                                                  <C>          <C>
Net income (loss) ................................................   $  (3,011)   $    (975)
Adjustments to reconcile net income (loss) to net cash provided by
  (used in) operating activities:
Depreciation and amortization ....................................      19,551       22,448
Extraordinary loss on refinancing of debt ........................         792           --
Gain on marketable securities ....................................        (208)          --
Restructuring provision ..........................................       6,607           --
Change in assets and liabilities:
    Trade accounts receivable ....................................     (21,247)     (18,267)
    Other assets .................................................      (1,400)      (3,082)
    Trade accounts payable .......................................      (4,969)      (1,115)
    Other liabilities ............................................      11,352       24,007
                                                                     ---------    ---------
         Net cash provided by operating activities ...............       7,467       23,016
                                                                     ---------    ---------
Cash flows from investing activities:
     Purchases of property and equipment .........................     (23,986)     (19,784)
     Proceeds from sale-leasebacks of facilities .................       9,397           --
     Acquisition of businesses, net of cash acquired .............      (2,355)          --
     Sale of marketable securities ...............................         257           --
     Changes in other assets, net ................................        (209)          --
                                                                     ---------    ---------
         Net cash used in investing activities ...................     (16,896)     (19,784)
                                                                     ---------    ---------
Cash flows from financing activities:
     Borrowings on note payable ..................................      13,664        3,296
     Repayments of note payable ..................................      (2,866)     (11,266)
     Borrowings on long-term debt ................................     127,339       18,935
     Repayment of long-term debt and capitalized lease obligations    (131,541)     (14,668)
     Capital contribution from subsidiary shareholder ............       1,400           --
     Sale of stock of subsidiaries ...............................       6,541           --
     Other .......................................................           2          (27)
                                                                     ---------    ---------
         Net cash provided by (used in) financing activities .....      14,539       (3,730)
                                                                     ---------    ---------
Effect of exchange rates on cash .................................        (698)       2,261
                                                                     ---------    ---------
         Net increase in cash ....................................       4,412        1,763
Cash and cash equivalents, beginning of period ...................      24,285       14,472
                                                                     ---------    ---------
Cash and cash equivalents, end of period .........................   $  28,697    $  16,235
                                                                     =========    =========
</TABLE>
Supplemental schedule of non-cash financing and investing activities:

The Company issued  approximately  41,000 and 2,205,333  shares of the Company's
common stock in connection with acquisitions in the first six months of 1998 and
1999, respectively.

     The accompanying  notes are an integral part of the consolidated  condensed
financial statements.

                                        3
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
               NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATMENTS

1.       BASIS OF PRESENTATION:

The consolidated  condensed  balance sheet of SITEL Corporation and Subsidiaries
(the  "Company") at December 31, 1998 was obtained  from the  Company's  audited
balance sheet as of that date. All other financial  statements  contained herein
are  unaudited  and,  in the  opinion of  management,  contain  all  adjustments
necessary for a fair presentation of the financial position,  operating results,
and cash flows for the  periods  presented.  Such  adjustments  consist  only of
normal recurring items. The consolidated  condensed financial  statements should
be read in  conjunction  with the  consolidated  financial  statements and notes
thereto,  together  with  management's  discussion  and  analysis  of  financial
condition and results of  operations,  contained in the Company's  Form 10-K for
the year ended December 31, 1998.

2.       INCOME TAXES:

The  difference  between  the  Company's  income tax  expense as reported in the
accompanying  financial  statements and that which would be calculated using the
statutory  Federal  income  tax rate of 34% on  income is  primarily  due to the
impact of the change in operating results combined with non-deductible  business
acquisition expenses and international, state and local income taxes.

3.       COMPREHENSIVE LOSS:

The Company's  comprehensive  loss was  $4,170,000  and $2,613,000 for the three
month periods ended June 30, 1998 and 1999,  respectively,  and  $4,029,000  and
$9,174,000 for the six month periods ended June 30, 1998 and 1999, respectively.
The   difference   between  the   Company's   reported  net  income  (loss)  and
comprehensive  loss for those  periods  is  primarily  due to the  change in the
currency exchange adjustment.  The accumulated other comprehensive loss included
in the Company's  Consolidated  Condensed Balance Sheet at December 31, 1998 and
June 30, 1999 is primarily the accumulated currency exchange adjustment.

4.       RESTRUCTURING:

In the second  quarter of 1998,  the Company  recorded a $6.6 million charge for
restructuring expenses primarily related to its European operations. Included in
that charge were severance and other costs of $6.4 million  related to statutory
or contractual  severance and other costs for approximately  270 employees.  The
restructuring  expenses also included $0.2 million for the cost of excess leased
facilities. The amount of severance and other costs paid during 1998 and the six
month period ended June 30, 1999 was approximately $5.2 million.

5.       ACQUISITION OF MINORITY INTEREST:

In June  1999,  the  Company  acquired  minority  interests  of  certain  of its
Asia-Pacific  subsidiaries  by issuing  approximately  2.2 million shares of the
Company's  common stock to Lend Lease Securities and Investments Pty Limited and
Lend Lease International Pty Limited (collectively "Lend Lease").  Additionally,
Lend Lease purchased approximately 1.5 million of the Company's common stock for
approximately $4.5 million in cash from two SITEL Corporation  shareholders in a
related   transaction.   The  shares  issued  by  the  Company  were  valued  at
approximately  $6.6  million,  based on quoted  market  prices of the  Company's
stock.  There  was no  goodwill  recorded  on the  acquisition  of the  minority
interests as the carrying value of the minority interests  approximated the fair
value of consideration issued in the transaction.

6.       STOCK OPTION PLANS:

On May 6, 1999,  the Company's  stockholders  approved the 1999 Stock  Incentive
Plan,  as  amended  (the  "1999  Plan").  Under the 1999  Plan,  the  Company is
authorized to grant incentive and nonqualified stock options, stock appreciation
rights, restricted stock awards, performance unit awards, stock bonus awards and
other stock-based awards to eligible employees,  consultants and directors.  The
1999 Plan  limits the  aggregate  number of shares of common  stock which may be
issued  under the Plan's  various  forms of stock  awards to  7,000,000  shares.
Through  June 30,  1999,  the Company had  granted  options to purchase  218,000
shares of common  stock  under the 1999 Plan,  at exercise  prices  equal to the
quoted  market price of the Company on the date of the grant.  No other types of
awards have been made under the Plan through June 30, 1999.

                                       4
<PAGE>

On June 3, 1999, the Company's  board of directors  amended the Company's  Stock
Option Plan (for  replacement of EEBs) and Stock Option Plan for  Replacement of
Existing  Options  (collectively,  the "Plans") and the  Compensation  Committee
amended the terms of  approximately  6.3 million  outstanding  and  fully-vested
stock options issued under the Plans.  The amended  options were held by persons
currently employed or serving as consultant to the Company. The amendment to the
Plans  permitted the Company to extend the expiration  date of the options to up
to ten years after the original grant date. The amendment to the certain options
extended  their  expiration  date from May 29, 2000 to May 29,  2001.  All other
contractual terms of the options were unchanged.  The quoted market price of the
Company's  common stock on the date of the modification was less than the sum of
the exercise price of the options and previously recognized compensation expense
recorded upon the initial grant of the options.  Consequently,  no  compensation
expense was recorded for the amendment of the options.

7.       SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION:

The  Company's  9.25%  Senior  Subordinated  Notes  are  guaranteed,  on a full,
unconditional  and  joint  and  several  basis,  by  all  wholly-owned  domestic
subsidiaries  of the Company.  Separate  financial  statements  of the guarantor
subsidiaries are not presented because management has determined that they would
not be material to investors.  However,  the following  condensed  consolidating
information presents:

(1)  Condensed  consolidating  financial  statements as of December 31, 1998 and
June 30, 1999,  and for the three and six months ended June 30, 1998 and 1999 of
(a) SITEL  Corporation,  the parent,  (b) the  guarantor  subsidiaries,  (c) the
nonguarantor subsidiaries and (d) SITEL Corporation on a consolidated basis,

(2) SITEL  Corporation,  the parent,  with the  investments in all  subsidiaries
accounted  for on the equity  method,  and the guarantor  subsidiaries  with the
nonguarantor  subsidiaries  accounted  for  on the  equity  method  (one  of the
guarantor subsidiaries is the parent of the nonguarantor subsidiaries), and

(3) Elimination entries necessary to consolidate SITEL Corporation,  the parent,
with all subsidiaries.

                                       5
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

7.  SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (Continued):

                      CONDENSED CONSOLIDATING BALANCE SHEET
                                DECEMBER 31, 1998
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                  GUARANTOR    NONGUARANTOR
                                       PARENT    SUBSIDIARIES  SUBSIDIARIES   ELIMINATIONS  CONSOLIDATED
                                       ------    ------------  ------------   ------------  ------------
ASSETS
Current assets:
<S>                                    <C>         <C>         <C>            <C>          <C>
Cash and cash equivalents ..........   $   2,410   $   1,190   $  10,872      $      --    $  14,472
Trade accounts receivable, net .....      33,676      33,179      75,540        (12,586)     129,809
Prepaid expenses and other
     current assets ................       2,956         241       9,742             --       12,939
                                       ---------   ---------   ---------      ---------    ---------
Total current assets ...............      39,042      34,610      96,154        (12,586)     157,220
Property and equipment, net ........      31,302      22,523      71,790             --      125,615
Deferred income taxes ..............       9,390          --       6,035             --       15,425
Goodwill, net ......................       1,537      21,021      70,730             --       93,288
Other assets .......................      10,805         126       3,131             --       14,062
Investments in subsidiaries ........     188,690      88,293          --       (276,983)          --
Notes receivable, intercompany .....          --      28,833          --        (28,833)          --
                                       ---------   ---------   ---------      ---------    ---------
     Total assets ..................   $ 280,766   $ 195,406   $ 247,840      $(318,402)   $ 405,610
                                       =========   =========   =========      =========    =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable ......................   $      --   $      --   $  30,545      $      --    $  30,545
Current portion of long-term debt ..       2,136          --       1,535             --        3,671
Current portion of
     capitalized lease obligations .         328          81       3,241             --        3,650
Trade accounts payable .............       1,338       1,655      40,377        (12,586)      30,784
Accrued expenses and other
     current liabilities ...........       9,963       4,922      32,025             --       46,910
                                       ---------   ---------   ---------      ---------    ---------
     Total current liabilities .....      13,765       6,658     107,723        (12,586)     115,560
Long-term debt, excluding
     current portion ...............     103,556          --       3,471             --      107,027
Capitalized lease obligations,
     excluding current portion .....          --          58       9,152             --        9,210

Notes payable, intercompany
     and other .....................          --          --      28,833        (28,833)          --
Deferred compensation ..............       1,591          --          --             --        1,591

Minority interest ..................          --          --      10,368             --       10,368

Stockholders' equity ...............     161,854     188,690      88,293       (276,983)     161,854
                                       ---------   ---------   ---------      ---------    ---------
     Total liabilities and
       stockholders' equity .......... $ 280,766   $ 195,406   $ 247,840      $(318,402)   $ 405,610
                                       =========   =========   =========      =========    =========
</TABLE>

                                       6
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
               NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATMENTS

7.       SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (Continued):

                      CONDENSED CONSOLIDATING BALANCE SHEET
                                  JUNE 30, 1999
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                        GUARANTOR    NONGUARANTOR
                                                             PARENT    SUBSIDIARIES  SUBSIDIARIES   ELIMINATIONS  CONSOLIDATED
                                                             ------    ------------  ------------   ------------  ------------
ASSETS
Current assets:
<S>                                                         <C>         <C>         <C>             <C>            <C>
Cash and cash equivalents ...............................   $   4,483   $   1,797   $   9,955       $      --      $  16,235
Trade accounts receivable, net ..........................      59,907      34,943      80,321         (32,069)       143,102
Prepaid expenses and other current
  assets ................................................       2,886         198      13,687              --         16,771
                                                            ---------   ---------   ---------       ---------      ---------
     Total current assets ...............................      67,276      36,938     103,963         (32,069)       176,108

Property and equipment, net .............................      27,645      23,145      68,190              --        118,980
Deferred income taxes ...................................       8,437          --       6,368              --         14,805
Goodwill, net ...........................................       1,492      20,570      65,415              --         87,477
Other assets ............................................      12,145         143       2,221              --         14,509
Investments in subsidiaries .............................     177,669      89,323          --        (266,992)            --
Notes receivable, intercompany ..........................          --      19,978          --         (19,978)            --
                                                            ---------   ---------   ---------       ---------      ---------
     Total assets .......................................   $ 294,664   $ 190,097   $ 246,157       $(319,039)     $ 411,879
                                                            =========   =========   =========       =========      =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable ...........................................   $      --   $      --   $  21,614       $      --      $  21,614
Current portion of long-term debt .......................         884          --       2,745              --          3,629
Current portion of capitalized lease
  obligations ...........................................         153          76       1,915              --          2,144
Trade accounts payable ..................................       6,877       3,065      50,867         (32,069)        28,740
Accrued expenses and other current
  liabilities ...........................................      20,598       9,274      39,033              --         68,905
                                                            ---------   ---------   ---------       ---------      ---------
     Total current liabilities ..........................      28,512      12,415     116,174         (32,069)       125,032

Long-term debt, excluding current portion ...............     105,000          --       7,735              --        112,735
Capitalized lease obligations, excluding current
     portion ............................................          --          13       9,080              --          9,093
Notes payable, intercompany and other ...................          --          --      19,978         (19,978)            --
Deferred compensation ...................................       1,666          --          --              --          1,666

Minority interest .......................................          --          --       3,867              --          3,867

Stockholders' equity ....................................     159,486     177,669      89,323        (266,992)       159,486
                                                            ---------   ---------   ---------       ---------      ---------
     Total liabilities and stockholders' equity .........   $ 294,664   $ 190,097   $ 246,157       $(319,039)     $ 411,879
                                                            =========   =========   =========       =========      =========
</TABLE>

                                       7
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
               NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATMENTS

7.  SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (Continued):

               CONDENSED CONSOLIDATING STATEMENT OF INCOME (LOSS)
                    FOR THE THREE MONTHS ENDED JUNE 30, 1998
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                               GUARANTOR    NONGUARANTOR
                                     PARENT   SUBSIDIARIES  SUBSIDIARIES  ELIMINATIONS  CONSOLIDATED
                                     ------   ------------  ------------  ------------  ------------
<S>                                <C>          <C>          <C>          <C>           <C>
Revenues .......................   $  36,259    $  45,810    $  65,238    $      --     $ 147,307
                                   ---------    ---------    ---------    ---------     ---------
Operating expenses:
Cost of services ...............      18,932       25,001       38,652           --        82,585
Selling, general and
     administrative expenses ...      17,198       15,730       28,168           --        61,096
Restructuring expenses .........          --           --        6,607           --         6,607
                                   ---------    ---------    ---------    ---------     ---------
Total operating
  expenses .....................      36,130       40,731       73,427           --       150,288
                                   ---------    ---------    ---------    ---------     ---------
Operating income ...............         129        5,079       (8,189)          --        (2,981)

Other income (expense):
Equity in earnings (losses)
   of subsidiaries, net of tax .      (3,111)      (6,711)          --        9,822            --
Intercompany charges ...........          65          440         (505)          --            --
Interest expense, net ..........      (2,467)          20         (928)          --        (3,375)
Other income (expense) .........          33           (1)           2           --            34
                                   ---------    ---------    ---------    ---------     ---------
Total other income (expense) ...      (5,480)      (6,252)      (1,431)       9,822        (3,341)
                                   ---------    ---------    ---------    ---------     ---------
Income (loss) before income
     taxes and minority
     interest ..................      (5,351)      (1,173)      (9,620)       9,822        (6,322)

Income tax expense
  (benefit) ....................        (876)       1,938       (2,940)          --        (1,878)

Minority interest ..............          --           --           31           --            31
                                   ---------    ---------    ---------    ---------     ---------
Net income (loss) ..............   $  (4,475)   $  (3,111)   $  (6,711)   $   9,822     $  (4,475)
                                   =========    =========    =========    =========     =========
</TABLE>

                                       8
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
               NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATMENTS

7.  SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (Continued):

               CONDENSED CONSOLIDATING STATEMENT OF INCOME (LOSS)
                    FOR THE THREE MONTHS ENDED JUNE 30, 1999
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>

                                                GUARANTOR    NONGUARANTOR
                                     PARENT    SUBSIDIARIES  SUBSIDIARIES  ELIMINATIONS  CONSOLIDATED
                                     ------    ------------  ------------  ------------  ------------
<S>                                 <C>          <C>          <C>          <C>            <C>
Revenues ........................   $  41,084    $  50,968    $  85,944    $      --      $ 177,996
                                    ---------    ---------    ---------    ---------      ---------
Operating expenses:
Cost of services ................      17,575       29,841       47,927           --         95,343
Selling, general and
  administrative expenses .......      23,268       15,859       38,862           --         77,989
                                    ---------    ---------    ---------    ---------      ---------
     Total operating expenses ...      40,843       45,700       86,789           --        173,332
                                    ---------    ---------    ---------    ---------      ---------

Operating income ................         241        5,268         (845)          --          4,664

Other income (expense):
Equity in earnings (losses)
  of subsidiaries, net of tax ...       1,999       (1,700)          --         (299)            --
Intercompany charges ............          48          438         (486)          --             --
Interest expense, net ...........      (2,506)         (16)        (472)          --         (2,994)
Other income (expense) ..........          93           --          (36)          --             57
                                    ---------    ---------    ---------    ---------      ---------
     Total other income (expense)        (366)      (1,278)        (994)        (299)        (2,937)
                                    ---------    ---------    ---------    ---------      ---------
Income (loss) before income
  taxes and minority interest ...        (125)       3,990       (1,839)        (299)         1,727

Income tax expense (benefit) ....        (633)       1,991         (272)          --          1,086

Minority interest ...............          --           --          133           --            133
                                    ---------    ---------    ---------    ---------      ---------
     Net income (loss) ..........   $     508    $   1,999    $  (1,700)   $    (299)     $     508
                                    =========    =========    =========    =========      =========
</TABLE>
                                       9
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
               NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATMENTS

7.  SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (Continued):

               CONDENSED CONSOLIDATING STATEMENT OF INCOME (LOSS)
                     FOR THE SIX MONTHS ENDED JUNE 30, 1998
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                     GUARANTOR    NONGUARANTOR
                                           PARENT   SUBSIDIARIES  SUBSIDIARIES  ELIMINATIONS  CONSOLIDATED
                                           ------   ------------  ------------  ------------  ------------
<S>                                      <C>          <C>          <C>          <C>            <C>
Revenues .............................   $  70,331    $  86,816    $ 127,908    $      --      $ 285,055
                                         ---------    ---------    ---------    ---------      ---------
Operating expenses:

Cost of services .....................      36,892       48,347       75,166           --        160,405
Selling, general and
  administrative expenses ............      32,322       30,056       53,390           --        115,768
Restructuring expenses ...............          --           --        6,607           --          6,607
                                         ---------    ---------    ---------    ---------      ---------
     Total operating expenses ........      69,214       78,403      135,163           --        282,780
                                         ---------    ---------    ---------    ---------      ---------

Operating income (loss) ..............       1,117        8,413       (7,255)                      2,275

Other income (expense):
Equity in earnings (losses)
  of subsidiaries, net of tax ........      (1,330)      (6,874)          --        8,204             --
Intercompany charges .................         121          876         (997)          --             --
Interest expense, net ................      (3,580)        (760)      (1,625)          --         (5,965)
Other income (expense) ...............         168           (1)           2           --            169
                                         ---------    ---------    ---------    ---------      ---------
     Total other income (expense) ....      (4,621)      (6,759)      (2,620)       8,204         (5,796)
                                         ---------    ---------    ---------    ---------      ---------
Income (loss) before income
     taxes and minority interest .....      (3,504)       1,654       (9,875)       8,204         (3,521)

Income tax expense (benefit) .........      (1,007)       2,984       (2,738)          --           (761)

Minority interest (income) ...........          --           --         (263)          --           (263)
                                         ---------    ---------    ---------    ---------      ---------
Net income (loss)  from
   continuing operations .............      (2,497)      (1,330)      (6,874)       8,204         (2,497)

Extraordinary loss on
   refinancing of debt, net of taxes .         514           --           --           --            514
                                         ---------    ---------    ---------    ---------      ---------
     Net income (loss) ...............   $  (3,011)   $  (1,330)   $  (6,874)   $   8,204      $  (3,011)
                                         =========    =========    =========    =========      =========
</TABLE>
                                       10
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
               NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATMENTS

7.  SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (Continued):

               CONDENSED CONSOLIDATING STATEMENT OF INCOME (LOSS)
                     FOR THE SIX MONTHS ENDED JUNE 30, 1999
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                 GUARANTOR   NONGUARANTOR
                                      PARENT   SUBSIDIARIES  SUBSIDIARIES  ELIMINATIONS   CONSOLIDATED
                                      ------   ------------  ------------  ------------   ------------

<S>                                 <C>          <C>          <C>          <C>            <C>
Revenues ........................   $  78,873    $ 100,839    $ 162,469    $      --      $ 342,181
                                    ---------    ---------    ---------    ---------      ---------
Operating expenses:
Cost of services ................      34,122       59,479       90,207           --        183,808
Selling, general and
     administrative expenses ....      45,916       31,330       75,125           --        152,371
                                    ---------    ---------    ---------    ---------      ---------
     Total operating expenses ...      80,038       90,809      165,332           --        336,179
                                    ---------    ---------    ---------    ---------      ---------

Operating income (loss) .........      (1,165)      10,030       (2,863)                      6,002

Other income (expense):
Equity in earnings (losses)
  of subsidiaries, net of tax ...       2,493       (4,109)          --        1,616             --
Intercompany charges ............          98          941       (1,039)          --             --
Interest expense, net ...........      (4,224)        (814)      (1,112)          --         (6,150)
Other income (expense) ..........         167           --          (47)          --            120
                                    ---------    ---------    ---------    ---------      ---------
     Total other income (expense)      (1,466)      (3,982)      (2,198)       1,616         (6,030)
                                    ---------    ---------    ---------    ---------      ---------
Income (loss) before income
  taxes and minority interest ...      (2,631)       6,048       (5,061)       1,616            (28)


Income tax expense (benefit) ....      (1,656)       3,555       (1,016)          --            883

Minority interest ...............          --           --           64           --             64
                                    ---------    ---------    ---------    ---------      ---------
     Net income (loss) ..........   $    (975)   $   2,493    $  (4,109)   $   1,616      $    (975)
                                    =========    =========    =========    =========      =========
</TABLE>
                                       11
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
               NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATMENTS

7.  SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (Continued):

                 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
                     FOR THE SIX MONTHS ENDED JUNE 30, 1998
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                              GUARANTOR    NONGUARANTOR
                                   PARENT    SUBSIDIARIES  SUBSIDIARIES  ELIMINATIONS   CONSOLIDATED
                                   ------    ------------  ------------  ------------   ------------
<S>                              <C>          <C>          <C>          <C>             <C>
Net cash provided by (used in)
     operating activities ....   $  (2,010)   $  10,570    $  (1,093)   $      --       $   7,467
                                 ---------    ---------    ---------    ---------       ---------
Cash flows from investing
  activities:
Investments in subsidiaries ..       2,335       (5,924)          --        3,589              --
Dividend on common stock .....          --       10,000           --      (10,000)             --
Purchases of property and
     equipment ...............      (7,290)      (5,075)     (11,621)          --         (23,986)
Acquisition of subsidiary ....          --           --       (2,355)          --          (2,355)
Proceeds from sales of
     property and equipment ..       9,397           --           --           --           9,397
Sale of marketable
     securities ..............         257           --           --           --             257
Changes in other assets ......          --           --         (209)          --            (209)
                                 ---------    ---------    ---------    ---------       ---------
Net cash provided by (used in)
     investing activities ....       4,699         (999)     (14,185)      (6,411)        (16,896)
                                 ---------    ---------    ---------    ---------       ---------
Cash flows from financing
  activities:
Borrowings on notes payable ..          --           --       13,664           --          13,664
Repayments of notes payable ..          --           --       (2,866)          --          (2,866)
Borrowings on long-term debt .     124,478           --        2,861           --         127,339
Repayment of long-term debt
     and capital lease
     obligations .............    (128,124)          --       (3,417)          --        (131,541)
Net capital contribution
     from parent .............          --       (2,335)       5,924       (3,589)             --
Net borrowings and payments
     on note to parent .......          --       (7,295)       7,295           --              --
Dividend on common stock .....          --           --      (10,000)      10,000              --
Capital contribution from
     subsidiary shareholder ..          --           --        1,400           --           1,400
Sale of stock of subsidiaries           --           --        6,541           --           6,541
Other ........................           2           --           --           --               2
                                 ---------    ---------    ---------    ---------       ---------
Net cash provided by (used in)
     financing activities ....      (3,644)      (9,630)      21,402        6,411          14,539
                                 ---------    ---------    ---------    ---------       ---------
Effect of exchange rates on
     cash ....................          --           --         (698)          --            (698)
                                 ---------    ---------    ---------    ---------       ---------
Net decrease in cash .........        (955)         (59)       5,426           --           4,412

Cash and cash equivalents,
     beginning of period .....      11,514        2,075       10,696           --          24,285
                                 ---------    ---------    ---------    ---------       ---------
Cash and equivalents, end of
     period ..................   $  10,559    $   2,016    $  16,122    $      --       $  28,697
                                 =========    =========    =========    =========       =========
</TABLE>
                                       12
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
               NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATMENTS

7.  SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (Continued):

                 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
                     FOR THE SIX MONTHS ENDED JUNE 30, 1999
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>

                                                   GUARANTOR    NONGUARANTOR
                                         PARENT   SUBSIDIARIES  SUBSIDIARIES   ELIMINATIONS   CONSOLIDATED
                                         ------   ------------  ------------   ------------   ------------
<S>                                     <C>         <C>         <C>             <C>             <C>
Net cash provided by (used in)
     operating activities ...........   $ (7,804)   $ 17,133    $ 13,687        $     --        $ 23,016
                                        --------    --------    --------        --------        --------
Cash flows from investing activities:
Investments in subsidiaries .........     14,897       2,684          --         (17,581)             --

Purchases of property and equipment .     (4,961)     (4,313)    (10,510)             --         (19,784)
                                        --------    --------    --------        --------        --------
Net cash provided by (used in)
     investing activities ...........      9,936      (1,629)    (10,510)        (17,581)        (19,784)
                                        --------    --------    --------        --------        --------
Cash flows from financing activities:
Borrowings on notes payable .........         --          --       3,296              --           3,296
Repayments of notes payable .........         --          --     (11,266)             --         (11,266)
Borrowings on long-term debt ........     13,000          --       5,935              --          18,935
Repayment of long-term debt
     and capital lease
     obligations ....................    (13,032)         --      (1,636)             --         (14,668)
Net capital contribution
     from (to) parent ...............         --     (14,897)     (2,684)         17,581              --
Other ...............................        (27)         --          --              --             (27)
                                        --------    --------    --------        --------        --------
Net cash provided by (used in)
     financing activities ...........        (59)    (14,897)     (6,355)         17,581          (3,730)
                                        --------    --------    --------        --------        --------
Effect of exchange rates on cash ....         --          --       2,261              --           2,261
                                        --------    --------    --------        --------        --------
Net decrease in cash ................      2,073         607        (917)             --           1,763
Cash and cash equivalents,
     beginning of period ............      2,410       1,190      10,872              --          14,472
                                        --------    --------    --------        --------        --------
Cash and equivalents, end of
     period .........................   $  4,483    $  1,797    $  9,955        $     --        $ 16,235
                                        ========    ========    ========        ========        ========
</TABLE>

                                       13
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATION AND
         FINANCIAL CONDITION.

OVERVIEW

SITEL Corporation and subsidiaries (the "Company") provide customer relationship
management  services on behalf of clients principally in the financial services,
insurance,   telecommunications,   technology,   utilities,   consumer,   media,
government and travel sectors located in North America, Europe, the Asia Pacific
region, and Latin America.

The following  table sets forth  certain  financial  data and the  percentage of
total  revenues of the Company  for the  periods  indicated.  All amounts are in
thousands.
<TABLE>
<CAPTION>
                                            Three Months Ended June 30,                    Six Months Ended June 30,
                                             1998 (1)               1999                     1998 (1)                1999
                                     ------------------     ------------------     ----------------------    --------------------

<S>                                  <C>            <C>     <C>            <C>     <C>               <C>     <C>             <C>
Revenues .........................   $ 147,307      100%    $ 177,996      100%    $ 285,055         100%    $ 342,181       100%
                                     --------------------   --------------------   ------------------------  ----------------------
Operating expenses:
   Cost of services ..............      82,585       56.1%     95,343       53.6%    160,405          56.3%    183,808        53.7%
   Selling, general, and
     administrative expenses .....      61,096       41.5%     77,989       43.8%    115,768          40.6%    152,371        44.5%
   Restructuring .................       6,607        4.4%         --        0.0%      6,607           2.3%         --         0.0%
                                     --------------------   --------------------   ------------------------  ----------------------
         Total operating expenses      150,288      102.0%    173,332       97.4%    282,780          99.2%    336,179        98.2%
                                     --------------------   --------------------   ------------------------  ----------------------

          Operating income (loss)       (2,981)      (2.0)%     4,664        2.6%      2,275           0.8%      6,002         1.8%

Interest income (expense), net ...      (3,375)      (2.3)%    (2,994)      (1.6)%    (5,965)         (2.1)%    (6,150)       (1.8)%
Other income (expense) ...........          34        0.0 %        57        0.0%        169           0.1 %       120         0.0 %
                                     --------------------   --------------------     ------------------------  ---------------------
Income (loss) before
income taxes and minority interest      (6,322)      (4.3)%     1,727        1.0%     (3,521)         (1.2)%       (28)       (0.0)%
Income tax expense (benefit) .....      (1,878)      (1.3)%     1,086        0.6%       (761)         (0.2)%       883         0.3%
Minority interest (income) .......          31        0.0%        133        0.1%       (263)         (0.1)%        64         0.0%
                                     --------------------   --------------------     ------------------------  ---------------------
Net income (loss) from
  continuing operations ..........      (4,475)      (3.0)%       508        0.3%     (2,497)         (0.9)%      (975)       (0.3)%
Extraordinary loss on
  refinancing of debt, net
  of taxes .......................          --        0.0%         --        0.0%        514           0.2 %        --         0.0%
                                     --------------------   --------------------   ------------------------    --------------------
Net income (loss) ................   $  (4,475)      (3.0)% $     508        0.3%  $  (3,011)         (1.1)%   $  (975)       (0.3)%
                                     ====================   ====================   =======================     ===================
</TABLE>
(1) Includes restructuring expenses. Excluding those expenses, operating income,
net  income,  basic  income  per share and  diluted  income  per share were $3.6
million, $84,000, $0.00 and $0.00 for the three month period ended June 30, 1998
and $8.9 million,  $1.5 million,  $0.03 and $0.02 for the six month period ended
June 30, 1998.

                                       14
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES

THREE MONTHS ENDED JUNE 30, 1999 VS. THREE MONTHS ENDED JUNE 30, 1998

REVENUES:

Revenues  increased  $30.7  million,  or 20.8%,  to $178.0  million in the three
months  ended June 30, 1999 from $147.3  million in the three  months ended June
30, 1998. Of this increase, $26.6 million was attributable to services initiated
for new clients and  approximately  $4.1 million was  attributable  to increased
revenues from existing  clients.  The increase in revenues from existing clients
was primarily the result of higher calling volumes rather than higher rates.

COST OF SERVICES:

Cost of services  represents  primarily  labor and telephone  expenses  directly
related to teleservicing  activities.  Cost of services increased $12.8 million,
or 15.4%,  to $95.3  million in the three  months ended June 30, 1999 from $82.6
million in the three months ended June 30,  1998.  As a percentage  of revenues,
cost of services  decreased to 53.6% in the second quarter of 1999 from 56.1% in
the second quarter of 1998. The decrease was primarily  attributable  to certain
technology  revenues from a large client where the costs  associated  with those
revenues are included in selling, general and administrative expenses. Excluding
the impact of this particular item, cost of services as a percentage of revenues
would have  decreased  to 55.8% for the three  months  ended June 30,  1999 from
56.1% in the second  quarter of 1998.  The  decrease as a percent of revenue was
primarily  attributable  to the  increase  in revenue  in the second  quarter in
several business units combined with increased call center efficiencies.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:

Selling,  general and administrative  expenses  represents  expenses incurred to
directly  support  and  manage the  operations,  including  cost of  management,
administration, facilities expenses, depreciation and amortization, maintenance,
sales and marketing activities,  and client support services.  Selling,  general
and administrative  expenses increased $16.9 million, or 27.6%, to $78.0 million
in the three months  ended June 30, 1999 from $61.1  million in the three months
ended  June  30,  1998.  As a  percentage  of  revenues,  selling,  general  and
administrative  expenses  increased to 43.8% in the second  quarter of 1999 from
41.5% in the second quarter of 1998. Approximately $7.1 million of this increase
was directly  attributed to the technology costs for a large client noted above,
and $2.4 million was related to re-engineering  costs in the United Kingdom, and
severance and consolidation costs in the Asia Pacific region.

OPERATING INCOME (LOSS):

Operating income (loss) increased to $4.7 million in the three months ended June
30, 1999 from  $(3.0)  million in the three  months  ended June 30,  1998.  As a
percentage of revenues, operating income increased to 2.6% in the second quarter
of 1999 from (2.0%) in the second  quarter  1998.  Excluding  the  restructuring
expenses in 1998,  operating  income increased $1.0 million for the three months
ended  June 30,  1999 from $3.6  million in the  second  quarter  of 1998.  This
increase was primarily the result of the Company's  revenue growth and increased
call center efficiencies.

                                       15
<PAGE>
INTEREST EXPENSE, NET:

Interest expense, net of interest income, decreased to $3.0 million in the three
months  ended June 30, 1999 from $3.4 million in the three months ended June 30,
1998. This decrease was primarily due to lower outstanding borrowings during the
period.

INCOME TAX EXPENSE (BENEFIT):

Income tax expense  (benefit)  for the three months ended June 30, 1999 was $1.1
million  compared to a benefit of $(1.9)  million in the three  months  ended in
June 30, 1998. Excluding the restructuring expenses, income tax expense was $0.2
million for the second  quarter of 1998.  The income tax expense as a percent of
income  before  income  taxes and  minority  interest,  excluding  restructuring
expenses and related tax  effects,  increased to 62.9% in the three months ended
June 30, 1999 from 60.0% in the three months ended June 30, 1998,  primarily due
to the impact of non-deductible  expenses associated with acquisitions  combined
with increased operating income.

NET INCOME (LOSS):

For the reasons  discussed  above,  net income  increased to $0.5 million in the
three  months  ended June 30, 1999 from $(4.5)  million loss in the three months
ended June 30, 1998.  Excluding the  restructuring  expenses and the related tax
effects, net income was $0.1 million in the second quarter of 1998.

SIX MONTHS ENDED JUNE 30, 1999 VS. SIX MONTHS ENDED JUNE 30, 1998

REVENUES:

Revenues  increased  $57.1 million,  or 20%, to $342.2 million in the six months
ended June 30, 1999 from $285.1  million in the six months  ended June 30, 1998.
Of this increase,  $41.1 million was attributable to services  initiated for new
clients and approximately  $16.0 million was attributable to increased  revenues
from  existing  clients.  The  increase in revenues  from  existing  clients was
primarily the result of higher calling volumes rather than higher rates.

COST OF SERVICES:

Cost of services increased $23.4 million, or 14.6%, to $183.8 million in the six
months ended June 30, 1999, from $160.4 million in the six months ended June 30,
1998.  As a percentage of revenues,  cost of services  decreased to 53.7% in the
first  six  months  of 1999 from  56.3% in the  first  six  months of 1998.  The
decrease was primarily attributable to certain revenues for a large client where
the costs  associated  with those revenues are included in selling,  general and
administrative  expenses.  Excluding the impact of this particular item, cost of
services as a  percentage  of revenues  would have been 56.3% for the six months
ended June 30, 1999 compared to 56.3% in the first six months of 1998.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:

Selling,  general and administrative expenses increased $36.6 million, or 31.6%,
to $152.4  million in the six months ended June 30, 1999 from $115.8  million in
the six months ended June 30, 1998.  This increase was primarily a result of the
Company's  continued  growth  both  internally  and  through  acquisition.  As a
percentage of revenues,  selling,  general and administrative expenses increased
to 44.5% in the first six  months of 1999 from  40.6% in the first six months of
1998.  Approximately  $15.4 million of this increase was directly  attributed to
the  technology  costs for a large client noted above.  Excluding  the impact of
these technology costs, selling, general and administrative expense increased to
41.9% in the first six months of 1999. This increase was primarily  attributable
to re-engineering costs in the United Kingdom, severance and consolidation costs
in the Asia  Pacific  region and  inefficiencies  related to declines in certain
North America and United Kingdom operations.

                                       16
<PAGE>
OPERATING INCOME:

Operating income increased to $6.0 million in the six months ended June 30, 1999
from $2.3  million in the six months  ended June 30,  1998.  This  increase  was
primarily due to the restructuring expenses in 1998 and the increase in selling,
general and administrative  expenses as a percentage of revenues as noted above.
Excluding the restructuring  expense,  operating income was $8.9 million for the
six months ended June 30, 1998.

INTEREST EXPENSE, NET:

Interest expense,  net of interest income,  increased to $6.2 million in the six
months  ended June 30, 1999 from $6.0  million in the six months  ended June 30,
1998. This increase was primarily due to higher  interest rates  associated with
the issuance of the Company's 9.25% Senior  Subordinated  Notes in March,  1998,
which  refunded  debt  that  had  variable  short  term  interest  rates.   Also
contributing  to the  increase in  interest  expense  was  increased  borrowings
utilized to support the Company's growth.

INCOME TAX EXPENSE (BENEFIT):

Income tax  expense  (benefit)  for the six months  ended June 30, 1999 was $0.9
million compared to a benefit of $(0.8) million in the six months ended June 30,
1998.  This increase is primarily due to the impact of  non-deductible  expenses
associated with acquisitions  combined with higher operating  income.  Excluding
the  restructuring  expenses,  income tax expense  was $1.3  million for the six
months ended June 30, 1998.

NET LOSS FROM CONTINUING OPERATIONS AND NET LOSS:

For the reasons discussed above, net loss from continuing  operations  decreased
to $1.0  million in the six months  ended June 30, 1999 from $2.5 million in the
six months ended June 30, 1998. After the  extraordinary  loss on refinancing of
debt, net loss decreased $2.0 million in the six months ended June 30, 1999 from
$3.0 million for the six months ended June 30, 1998. Excluding the restructuring
expenses and the related tax effects, net income from continuing  operations and
net income for the six months  ended June 30,  1998,  was $2.1  million and $1.5
million, respectively.

LIQUIDITY AND CAPITAL RESOURCES:

Cash provided by operating activities was approximately $23.0 million during the
six month period ended June 30, 1999.  This was  primarily the result of noncash
charges and an increase in accrued  liabilities which was partially offset by an
increase  in accounts  receivable.  The Company  anticipates  that the  accounts
receivable  will  continue  to  grow,  using  working  capital,  as the  Company
continues  to grow.  Cash used in investing  activities  in the six months ended
June 30, 1999 of  approximately  $19.8 million was primarily  related to capital
expenditures. Cash used in financing activities in the six months ended June 30,
1999 of  approximately  $3.7  million  primarily  related to  repayments  of the
Company's notes payable.

At  June  30,  1999,  the  Company  had  available   lines  of  credit  totaling
approximately  $25  million.  The Company  believes  that funds  generated  from
operations, existing cash and the funds available under the credit facility will
be sufficient to finance its current  operations,  planned capital  expenditures
and internal growth for the foreseeable future.

                                       17
<PAGE>
YEAR 2000 ISSUE

The Year 2000  statement  which  follows  is a Year 2000  Readiness  Disclosure,
pursuant to the Year 2000  Information and Readiness  Disclosure Act, Public Law
No. 105-271.

The Company  recognizes the need to ensure its operations  will not be adversely
impacted by Year 2000  software  and  embedded  system  failures.  Specifically,
computational  errors and system failures are a known risk with respect to dates
after  December 31, 1999.  The Company has  established a central Y2K compliance
office that  reports  directly  to the Chief  Information  Officer.  Each of the
Company's  operating  units have also  designated  information  technology  (IT)
personnel to address the issues that the unit faces and to report to the central
Y2K compliance  office.  The Company has implemented a system which allows it to
track all IT and non-IT  systems and  facility  functions  for  compliance  with
industry Y2K standards.  This tracking  system allows the Company to monitor and
track each functional point as a single item grouped by how critical the item is
in the  Company's  ability to perform its daily  functions.  Based on the output
from this data and an analysis of the system reports,  the Company believes that
all  functional  points which are critical to the Company's  functions have been
identified and assessed.  Further,  the Company has developed a remediation plan
for each item in this critical list. Part of the Company's  remediation strategy
is in concert with its efforts to acquire or develop new and innovative  systems
for its internal operations.

IT  issues  - The  Company  is  moving  all of its IT  systems  into a state  of
readiness for the year 2000. The Company believes that it is making satisfactory
progress  to  ensure  that it will be ready  with all IT  systems  by the end of
December  1999.  Internal  systems  represent  approximately  28% of the overall
effort in the IT  applications  area. The remaining 72% of the overall effort in
the IT area is in the interface and  integration  of external  client and vendor
application  systems.  The  Company  has  implemented  a  three-step  process of
contacting  significant  vendors  and clients to request  information  about the
status of their Y2K  compliance  efforts.  In  addition  to  communicating  with
significant  vendors, the Company is testing certain critical vendor application
systems for Y2K  compliance.  The Company has an  initiative  that will identify
mitigation and  contingency  plans at both the business and technical IT levels.
This  initiative is scheduled to be completed by September 30, 1999. In addition
to communicating with significant  clients,  the Company's strategy to deal with
non-compliant  external client customer data is a windowing  technique that will
enable such data to be used by the Company's systems.

Non IT issues  (facilities)  - Non-IT  issues,  with few  exceptions,  have been
classified into a non-critical  category.  The few exceptions  include dial tone
for the Company's  telephony and power from the Company's energy providers.  The
Company has  included  these  functional  points in the  critical  category  for
purposes  of  scheduling.  Based  on  communications  with  providers  of  these
services,  the Company  believes that these  services will not be interrupted by
Year  2000  failures.  The  Company's  contingency  plan  for the  loss of power
includes  generator  systems in the Company's  major  facilities.  The Company's
contingency  plan for loss of dial tone  includes  the  distribution  of network
services  across  several  providers.  This will allow the Company to  minimally
maintain its service levels in the event of a failure. The Company believes that
it is making  satisfactory  progress to ensure that all facility  related issues
will be compliant by the end of December 1999.

Phases - The  Company is  employing  a  four-phase,  nine-process  step  Project
Methodology that covers each aspect of Y2K compliance. The four phases are:

Phase 1           Assessment
Phase 2           Remediation
Phase 3           Verification and Testing
Phase 4           Implementation

                                       18
<PAGE>
Each  process  step  is  necessary  within  the  framework  and  provides  clear
management  checkpoints for gauging the progress of activity during execution of
the project plan. The following table outlines the phases and process steps:
<TABLE>
<CAPTION>

                              Phase1           Phase 2        Phase 3     Phase 4
                              Verification/
Process Steps                 Assessment       Remediation    Testing     Implementation
----------------------------------------------------------------------------------------
<S>                                 <C>               <C>          <C>          <C>
1.  Recognition/Awareness           X                 X            X            X
2.  Inventory                       X
3.  Evaluation                      X
4.  Determination                   X
5.  Remediation                     X
6.  Re-engineering                                    X
7.  Multi-level testing             X                 X            X            X
8.  Implementation                                                              X
9.  Post-implementation                                                         X
</TABLE>

The  Company  has  clearly  defined  each of the  process  steps in the  Project
Methodology.  The  Recognition/Awareness  step included communication of the Y2K
issues and their importance  throughout the Company. The Inventory step included
the  identification  and  cataloging  of each  item that  must be  verified  for
compliance with Y2K processing.  The Evaluation step involved the evaluation and
categorization  of the  critical  nature  of  each  item  based  on  established
criteria.  The Determination step includes making informed management  decisions
regarding the strategy to be taken for each  individual  item.  The  Remediation
step  involves  repair of all  components  of a process  that  could  improperly
process dates.  The  Re-engineering  step consists of rewriting and/or replacing
whole  units of  software  code.  The  Multi-level  testing  step  involves  the
development of detailed testing criteria and the implementation of those testing
plans.  The  Implementation  step  involves the  coordination  of the release of
applications/systems into the live systems environment.  The Post-implementation
step will include the on-going monitoring of applications/systems that have been
repaired and placed into the live systems environment.

The Company has completed the Recognition /Awareness,  Inventory, and Evaluation
process steps for all items. The Company estimates that approximately 84% of all
items are entirely  completed.  Completed  items are either  compliant,  will be
retired prior to 2000, or are low priority items that do not affect business and
will be addressed at a later time (work around  processes will be  implemented).
In addition, the Company estimates that another 8% of all items that the Company
believes it needs to complete to be Y2K  compliant  are in process  steps within
Phase 2 - Remediation, and a small number of items are in Phases 3 and 4.

Contingency  Plans - The Company is developing  Year 2000  Business  Contingency
Plans for conducting its business operations in the event of crises. This effort
is not limited to the risks  posed by the  potential  Year 2000  failures of the
Company's internal information systems or infrastructures, but also includes the
potential  secondary  impact on the  Company  of Year 2000  failures,  including
potential  systems  failures of business  partners  and  infrastructure  service
providers.  Completion of these contingency plans is scheduled for third quarter
1999.

Costs of Y2K  Compliance  - The Company  currently  estimates  that the costs to
become Y2K compliant will  approximate  $12-16  million.  The Company  currently
anticipates  that  approximately  50% of these  costs will be for  hardware  and
software and the  remainder  will be primarily  internal  personnel  costs.  The
Company  estimates  that it has  incurred  less than $9 million  of these  costs
through June 30, 1999. The estimated hardware and software costs are included in
the Company's definition of Y2K costs in cases where such expenditures have been
accelerated in order to address Y2K issues. These are the Company's current cost
estimates and they may change, perhaps materially.

Risks - There are many  risks  associated  with the Year 2000  issue,  including
without  limitation the  possibility  that the Company will be unable to receive
client phone calls or that the Company will be unable to initiate phone calls on
behalf of its clients.  Such possibilities  could have a material adverse effect
on the Company  depending on the

                                       19
<PAGE>

nature  of the  cause  and the  speed  with  which it could be  corrected  or an
alternative  implemented.  If the  Company's  service  providers  are  unable to
provide network switching capability,  the Company will be unable to perform its
revenue-producing  activities.  If the Company's  client  customer data does not
have Year 2000 compliant  dates,  additional  processing will be required before
revenue-producing  activities  using  these data can be  performed.  If internal
systems  or vendor  application  systems  fail,  the  Company  will be unable to
perform  revenue-producing  activities  until  such time as the  problem  can be
isolated and repaired.

As with  other  teleservices  providers,  there  exists  a worst  case  scenario
possibility  that a failure to correct a Year 2000 program in one or more of the
Company's mission critical systems or IT applications  could cause a significant
disruption  of or  interruption  in certain  of the  Company's  normal  business
functions.  Based on assessments and work to date,  management believes that any
such material  disruption to its operations due to failure of an internal system
is  unlikely.  However,  due to the  uncertainty  inherent  in Year 2000  issues
generally  and those that are beyond the Company's  control in particular  (e.g.
the final Year 2000 readiness of our clients, suppliers, electric, gas and other
public  utilities,  telecommunications  carriers,  and joint venture and foreign
investment interests),  there can be no assurance that one or more such failures
would  not have a  material  impact  on the  Company's  results  of  operations,
liquidity or financial condition.

The Company  contracted for an external review of its Y2K compliance  program by
an independent  third party in order to review and validate its program,  assess
its readiness,  and identify areas of additional need on a worldwide  basis. The
external  review has been  completed,  generally  validated  the  Company's  Y2K
compliance  program and concluded  that the Company was proceeding in due course
to become  Y2K  ready.  The  Company  is  addressing  areas of  additional  need
identified by the external review.

The above  information is based on the Company's  current best estimates,  which
were  derived  using  numerous  assumptions  of  future  events,  including  the
continued  availability  and  future  costs of certain  technological  and other
resources,  third  party  modification  actions,  and other  factors.  Given the
complexity of these issues and possible  unidentified  risks, actual results may
vary materially from those  anticipated and discussed  above.  Specific  factors
that might cause such differences  include,  among others,  the availability and
cost of  personnel  trained in this area,  the ability to locate and correct all
affected  computer code, the timing and success of Year 2000 remedial efforts of
our clients, suppliers and business partners, and similar uncertainties.

QUARTERLY RESULTS AND SEASONALITY

The Company has  experienced  and  expects to continue to  experience  quarterly
variations  in its  results  of  operations  principally  due to the  timing  of
clients' teleservicing campaigns and the commencement of new contracts,  revenue
mix, and the timing of additional selling,  general and administrative  expenses
to support new business.  The Company experiences periodic  fluctuations related
to both the start-up costs  associated  with expansion into a new region and the
implementation of clients' teleservicing  activities. In addition, the Company's
business  tends to be slower  in the third  quarter  due to summer  holidays  in
Europe and, to a lesser  degree,  in the first quarter due to the  changeover of
client marketing strategies which often occurs at the beginning of the year.

EFFECTS OF INFLATION

Inflation has not had a significant effect on the Company's operations. However,
there can be no assurance that inflation will not have a material  effect on the
Company's operations in the future.

                                       20
<PAGE>
ACCOUNTING PRONOUNCEMENTS

Statement  of  Financial   Accounting  Standard  ("SFAS")  133,  Accounting  for
Derivative Investments and Hedging Activities, was issued in June 1998. SFAS 133
establishes  accounting  standards for  derivative  instruments  and for hedging
activities.  The standard is effective  for all fiscal  quarters of fiscal years
beginning after June 15, 2001. The Company anticipates  adopting this accounting
pronouncement in the third quarter of 2001; however, management believes that it
will not have a  significant  impact  on the  Company's  consolidated  financial
statements.

FORWARD-LOOKING STATEMENTS

This Form 10-Q contains forward-looking statements within the meaning of Section
27A of the Securities  Act and Section 21E of the Exchange Act. Such  statements
are identified by the use of forward-looking  words or phrases which may include
but are not limited to, "intended," "will be positioned," "expects," "expected,"
"anticipates,"  and  "anticipated,"  "believes"  and  similar  expressions.  The
forward-looking statements are based on the Company's current expectations.  All
statements other than statements of historical facts included in this Form 10-Q,
including those regarding the Company's financial  position,  business strategy,
projected  costs and plans and objectives of management  for future  operations,
are  forward-looking   statements.   Although  the  Company  believes  that  the
expectations reflected in such forward-looking statements are reasonable,  there
can be no assurance  that such  expectations  will prove to be correct.  Because
forward-looking statements involve risks and uncertainties, the Company's actual
results  could  differ  materially.  Important  factors  that could cause actual
results to differ  materially from the Company's  expectations may include,  but
are not limited to, the effects of leverage,  restrictions  imposed by the terms
of  indebtedness,  reliance on major clients,  risks  associated with managing a
global   business,    fluctuations   in   operating    results,    reliance   on
telecommunications and computer technology,  risks associated with the Company's
acquisition  strategy,  the  dependence on telephone  service,  the  competitive
industry,  dependence on labor force,  foreign  currency  risks,  the effects of
business regulation,  dependence on key personnel and control by management, and
risks associated with Year 2000 failures (see discussion above under the caption
"Year 2000 Issue"). All subsequent written and oral  forward-looking  statements
attributable  to the  Company or  persons  acting on behalf of the  Company  are
expressly qualified in their entirety by this paragraph.  The Company disclaims,
however, any intent or obligation to update its forward-looking statements.

                                       21
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The Company is exposed to market  risks  associated  primarily  with  changes in
foreign currency exchange rates. The Company has operations in many parts of the
world  however,  both  revenues and expenses of those  operations  are typically
denominated  in the currency of the country of  operations,  providing a natural
hedge.  The Company entered into certain hedging  transactions  during the first
six months of 1999,  designed to hedge foreign currency exchange risk related to
short term intercompany loans, however the amounts involved were not material.

                                       22
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES

PART II - OTHER INFORMATION

Item 2.  Changes in Securities.

(c)  Effective June 9, 1999, the Company  acquired the shares held by Lend Lease
     Securities and  Investments  Pty Limited and Lend Lease  International  Pty
     Limited   (collectively   "Lend   Lease")  in  certain  of  the   Company's
     Asia-Pacific  subsidiaries  (specifically  1,880,180  shares in SITEL  Asia
     Pacific  Holdings  Pte Ltd and  1,938,903  shares  in SITEL  Australia  Pty
     Limited) by issuing an aggregate of 2,205,333 shares of its Common Stock to
     Lend Lease. The cash  consideration paid by Lend Lease for the newly issued
     shares ($6,615,999)  equaled the cash consideration paid by the Company for
     Lend Lease's shares in the Asia-Pacific subsidiaries.  The Company's shares
     were issued in reliance on the Section  4(2)  exemption  from  registration
     under the Securities Act of 1933, as amended.

Item 4.  Submission of Matters to a Vote of Security Holders.

(a)  Date  and  Type  of  Meeting.  The  Company  held  its  Annual  Meeting  of
     Stockholders on May 6, 1999.

(b)  Matters Voted Upon and Number of Votes Cast.  There were 56,797,014  shares
     of Common  Stock  represented  at the meeting in person or by proxy.  Three
     proposals were  presented to the  stockholders  and all were approved.  The
     voting on the proposals was as follows:

     Proposal 1   (election of two directors for a three-year term)

                  On the election of Bill L. Fairfield as director:
                  55,510,756 votes for
                  1,286,258 votes withheld

                  On the election of Henk P. Kruithof as director:
                  55,487,920 votes for
                  1,309,094 votes withheld

     Proposal 2   (approvals of the 1999 Stock Incentive Plan and amendment
     thereto)

                  34,342,649 votes for 9,010,908 votes against 123,101 abstained
                  13,320,356 broker non-votes

     Proposal 3   (ratification of the selection of KPMG LLP as independent
     auditors for the year ended December 31, 1999)

                  56,577,838 votes for
                  164,181 votes against
                  54,995 abstained

                                       23
<PAGE>
Item 6.  Exhibits

(a)      Exhibits:

         (1)  10.1 Amendment No. 1 to the SITEL Corporation 1999 Stock Incentive
                   Plan
              10.2 Third  Amendment  to  the  SITEL Corporation Executive Wealth
                   Accumulation Plan
              27   Financial Data Schedule

         -----------------------------------------------------------------
(1)      Previously filed as Exhibit 4.2 to the Company's Registration Statement
         on Form S-8 (Registration No. 333-78241)


                                       24
<PAGE>
                                   SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.

Date:  August 13, 1999   SITEL Corporation



                         By:/s/ W. Gar Richlin
                            ----------------------------------------------------
                            W. Gar Richlin
                            Executive Vice-President and Chief Financial Officer
                            (Principal Financial Officer)

                                       25
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES

         Exhibits Index:

         (1)  10.1 Amendment No. 1 to the SITEL Corporation 1999 Stock Incentive
                   Plan
              10.2 Third  Amendment  to  the  SITEL Corporation Executive Wealth
                   Accumulation Plan
              27   Financial Data Schedule

         -----------------------------------------------------------------
(1)      Previously filed as Exhibit 4.2 to the Company's Registration Statement
         on Form S-8 (Registration No. 333-78241)

                                       26