SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): NOVEMBER 30, 2005
TECHTEAM GLOBAL, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-16284 38-2774613
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File No.) Identification No.)
27335 West 11 Mile Road
Southfield, Michigan 48034
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (248) 357-2866
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(Former name or former address if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230 .425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On November 30, 2005, Ford Motor Company ("Ford") and
TechTeam Global, Inc. ("TechTeam" or the "Company") entered
into an agreement renewing the Ford Global SPOC Program for a
three year period from December 1, 2005 through November 30,
2008 (the "SPOC Contract"). For the first three quarters of
2005, the SPOC Program contract represented approximately 17%
of the Company's revenue.
Under the SPOC Contract, TechTeam will provide, as
core services, first level help desk and deskside support for
Ford's information technology ("IT") infrastructure to Ford's
employees, contractors and suppliers in the regions covered by
the SPOC Contract. These services are provided under a global
consolidated support model that simplifies the service
delivery through a set of global standards and measurements.
TechTeam will invoice each supported region on a
monthly basis for the number of end users ("seats") within the
region multiplied by the per seat price applicable to the
region. The region will be invoiced in the currency of the
location from which the services are delivered. The number of
seats supported will be determined bi-annually on December 1
and June 1 of each year. If certain contractual conditions are
met, Ford and TechTeam will have the right during each six
month period to request one out-of-cycle seat adjustment.
The regions that are being supported are Ford Motor
Company North America, Ford Motor Credit North America, Ford
Germany, and Ford United Kingdom. During the first half of
2006, the SPOC Program will expand to include Ford's Jaguar
and Land Rover divisions in the United Kingdom.
Under the SPOC Contract, the standard global support
model has been modified from the expiring contract in order to
satisfy Ford's requirement for a reduction in the price of the
service provided. The initial reduction in the per seat price
paid by each region is effective December 1, 2005. We
anticipate an additional reduction in the seat price will take
place in approximately three to five months, depending upon
when certain technology has been implemented by Ford.
The supported regions are able to enhance the level
of support and/or expand the scope of support provided to them
at an additional cost by supplementing the standard global
support services with services selected from a catalog of
services, which include but are not limited to, distributed
server support, premium deskside support, presentation
equipment support, fax and copier support, hardware warranty
maintenance, and distributed network support. Some of these
additional services are provided on a time and materials
basis.
The effect of this renewal on the revenue earned by
the Company due to the SPOC Contract is difficult to determine
at this time, due to the large number
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of variables that will effect this calculation, which include
but are not limited to, the timing of the launch of the
additional business with Jaguar and Land Rover, the timing of
the implementation of the technology required prior to the
second price reduction, the timing and the size of the
anticipated employee reductions at Ford, the timing of the
potential growth of the SPOC Program into different regions
and business units within Ford, and the amount of services
purchased by Ford from the catalog of services. However, we
expect the total reduction in the annual revenue in 2006 to be
5% or less of the amount of revenue earned by the Company from
the SPOC Program in 2005. While the support model is changing,
we do not anticipate the Company's gross margin from this
business to be negatively impacted. Further, we do not
anticipate significant unfunded expenses related to severance
for employees as a result of the support model modification.
On December 1, 2005, TechTeam issued a Press Release
reporting this contract. A copy of the Press Release is
attached as Exhibit 99.1.
The statements contained in this Current Report on
Form 8-K that are not purely historical, including statements
regarding the Company's expectations, hopes, beliefs,
intentions, or strategies regarding the future, are
forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended.
Forward-looking statements include statements regarding, among
other things, the growth of the Company's core business,
revenue, and earnings performance going forward, management of
overhead expenses, productivity, and operating expenses.
Forward-looking statements may be identified by words
including, but not limited to, "anticipates," "believes,"
"intends," "estimates," "promises," "expects," "should,"
"conditioned upon," and similar expressions. Investors are
cautioned that any such forward-looking statements are not
guarantees of future performance and involve risks and
uncertainties, and that actual results may differ materially
from those projected in the forward-looking statements as a
result of various factors. Such factors include, but are not
limited to, the timing of the launch of the additional
business with Jaguar and Land Rover, the timing of the
implementation of the technology required prior to the second
price reduction, the timing and the size of the anticipated
employee reductions at Ford, the timing of potential growth of
the SPOC Program into different regions and business units
within Ford, the amount of services purchased by Ford from the
catalog of services, changes in Ford's business or the
requirements, unanticipated problems that arise from the
transition from Jaguar and Land Rover's former vendor,
difficulties in obtaining Jaguar and Land Rover's knowledge,
procedures, security clearance or authorizations, deviation
from the anticipated seat counts, difficulties in providing
the service solutions for Ford, which includes products or
services delivered by Ford, the Company or Ford's
subcontractors or technology vendors. All forward-looking
statements included in this press release are based on
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information available to the Company on the date hereof, and
the Company assumes no obligation to update any such
forward-looking statement. Prospective investors should also
review all aspects of the Company's Reports on Forms 8-K,
10-Q, and 10-K filed with the United States Securities and
Exchange Commission, including Management's Discussion and
Analysis, and the risks described therein from time to time.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(C) THE FOLLOWING EXHIBITS ARE INCLUDED WITH THE
REPORT
EXHIBIT 99.1 Press Release of TechTeam Global, Inc. dated December 1, 2005.
SIGNATURE
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.
TECHTEAM GLOBAL, INC.
By /s/ Michael A. Sosin
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Michael A. Sosin
Vice President, General Counsel and
Secretary
Date: December 1, 2005
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
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99.1 TechTeam Global, Inc. Press Release, dated December 1, 2005
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