943820--9/14/2006--SITEL

related topics

{debt, indebtedness, cash}

{control, financial, internal}

{customer, product, revenue}

{loss, insurance, financial}

{provision, law, control}

{system, service, information}

{operation, international, foreign}

{stock, price, share}

{personnel, key, retain}

{operation, natural, condition}

{product, market, service}

{acquisition, growth, future}

{interest, director, officer}

{competitive, industry, competition}

{financial, litigation, operation}

{cost, regulation, environmental}

{stock, price, operating}

{cost, contract, operation}

The Company has material weaknesses in internal control over financial reporting and cannot assure you that additional material weaknesses will not be identified in the future. Our failure to implement and maintain effective internal control over financial reporting could result in material misstatements in the financial statements. Our exploration of strategic alternatives may create uncertainties that could affect our business We cannot predict the ultimate outcome of our ongoing discussions with the SEC regarding irregularities identified in our Brazilian subsidiary that raised the possibility of FCPA violations Our credit facilities contain restrictive covenants that may limit our ability to pursue or expand our business strategy, including the pay down of certain indebtedness Our level of indebtedness, and the security provided for this indebtedness, could adversely affect our business and our ability to fulfill our obligations. We have had to obtain waivers and amendments under our existing credit facilities to avoid future defaults or cure past defaults. We may not be able to obtain future waivers and amendments without significant fees or at all, which could materially adversely affect our financial condition. Our revenue is generated from a limited number of clients, and the loss of one or more of our significant clients or the reduction in margin due to a renegotiation or a substantial reduction of the amount of services performed by us for a significant client, could have a material adverse effect on our business. We incurred net losses in four of the last five fiscal years. If we incur future net losses we may need additional capital to meet our future cash requirements and execute our business strategy. Consolidation among our major clients could materially adversely affect our business. If our clients are not successful, the amount of business that they outsource and the prices that they are willing to pay for such services may be diminished and could result in reduced revenue for us. Our growth and financial results are largely dependent on continued demand for our services from clients in the industries we serve. We are susceptible to business and political risks from international operations that could result in reduced revenue or earnings. Our operating results fluctuate quarterly depending, among other things, the timing of clients marketing campaigns and customer service initiatives and commencement of new contracts. Our failure to keep our telecommunications and computer technology up-to-date may prevent us from remaining competitive. Any interruptions in service or the inability of telephone companies to provide additional capacity to meet our needs would adversely affect our growth and could adversely affect our existing business. The markets for our services are highly competitive, subject to rapid change, and highly fragmented. Management and operation of large-scale contact center solutions is a highly people intensive business. We have operations in many parts of the world and therefore our results of operations can be impacted by foreign exchange fluctuations. We are subject to the risk of litigation and regulatory proceedings or actions in connection with the restatement of prior period financial statements. The nature of our business makes us subject to various laws and regulations. We are highly dependent on the efforts of our senior management team. A decline in the trend toward outsourcing or in the trend toward migration offshore or difficulties in our offshore operations could materially adversely impact our business. Continued war and terrorist attacks or other civil disturbances could lead to economic weakness and could disrupt our operations resulting in a decrease of our revenue and earnings. Service fees we charge may not cover our costs. If we do not effectively manage our capacity, our results of operations could be adversely affected. A significant uninsured loss or a loss in excess of our insurance coverage could materially adversely affect our financial condition. Our forecasts and other forward-looking statements are based upon various assumptions that are subject to significant uncertainties that may result in our failure to achieve our forecasted results. The trading price of our common stock is subject to significant fluctuations. We have the ability to issue additional equity securities, which would lead to dilution of our issued and outstanding common stock. We have the ability to issue preferred shares without shareholder approval. Certain provisions of our charter and Minnesota law may make it difficult for a third party to acquire us, even in situations that may be viewed as desirable by our shareholders. Our rights and the rights of our shareholders to take action against our directors and officers are limited, which could limit shareholder recourse in the event of actions not in shareholder best interests. Minnesota law may discourage a third party from acquiring us.

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943820--9/14/2006--SITEL_CORP