A year ago, the situation looked bleak. TeleSpectrum was on the way to delivering three consecutive quarters of operating losses to close out FY97. It had spent a lot to build capacity to meet projected growth expectations only to find itself with excess capacity in a marketplace dominated by cutthroat pricing resulting from other players making the same mistake. So it started closing call centers, a process that continued through Q2 1998. It was also forced to renegotiate its credit facility because it had fallen out of compliance with certain requirements.
Successful turnarounds are usually painful, and they tend to depend on management changes.
While some hyped turnaround experts like Al Dunlap eventually fall on their faces, it's simply worth watching when a downtrodden company brings in a quality exec to run the joint. Alessi brought credibility to TeleSpectrum that the company had lacked. Given the highly competitive nature of this business, a Fool would have wanted to wait for tangible signs that Alessi was making progress. The third quarter numbers reveal the challenging nature of this business. Still, one would like to see increasing revenue from existing customers.