<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
----------
Date of Report (Date of earliest event reported): APRIL 19, 1999
METAMOR WORLDWIDE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
0-26970 76-0407849
(Commission File Number) (I.R.S. Employer Identification No.)
FIVE POST OAK PARK
4400 POST OAK PARKWAY, SUITE 1100
HOUSTON, TEXAS 77027-3413
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 548-3400
================================================================================
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On April 19, 1999, Metamor Worldwide, Inc. (the "Company") completed
its tender offer for the publicly held shares of Decan Groupe ("Decan"), a
French societe anonyme listed on the Paris Stock Exchange Secondary Market
(Second Marche) and registered with the Lyon Registry of Commerce and Companies.
The tender offer commenced in February 1999 following the purchase by the
Company of shares in Decan from Delphi, plc and from Jacques Mottard, chairman
and managing director of Decan.
Currently, the Company has acquired approximately 98.4 percent of the
outstanding common stock of Decan and 94.9 percent of its convertible notes, or
96.3 percent of Decan assuming conversion of the outstanding convertible notes.
Purchase consideration totaled approximately $161 million, consisting of $154.8
million in cash and 0.2 million shares of the Company's common stock valued at
$6.2 million.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
The undersigned Registrant hereby amends the following items, financial
statements, exhibits or other portions of its Current Report on Form 8-K dated
April 19, 1999 as set forth in the pages attached hereto:
<TABLE>
<CAPTION>
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED PAGE
----
<S> <C>
Audited Consolidated Financial Statements:
Report of Independent Auditors F-1
Consolidated Assets F-2
Consolidated Liabilities F-3
Consolidated Income Statement F-4
Notes to Consolidated Financial Statements F-5
Interim Consolidated Financial Statements (Unaudited):
Basis of Presentation F-19
Consolidated Statements of Operations (Unaudited) for the nine
months ended March 31, 1999 and 1998 F-20
Consolidated Statements of Cash Flows (Unaudited) for the nine
months ended March 31, 1999 and 1998 F-21
Notes to Unaudited Consolidated Financial Statements F-22
</TABLE>
<TABLE>
<CAPTION>
(b) PRO FORMA FINANCIAL INFORMATION PAGE
----
<S> <C>
Basis of Presentation F-24
Pro Forma Condensed Consolidated Balance Sheet (Unaudited) as of
March 31, 1999 F-25
Pro Forma Condensed Consolidated Statement of Operations (Unaudited) for
the three months ended March 31, 1999 F-26
Pro Forma Condensed Consolidated Statement of Operations (Unaudited) for
the year ended December 31, 1998 F-27
Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements F-28
</TABLE>
<PAGE> 3
(c) EXHIBITS
23.1 Consent of Deloitte & Touche Tomatsu - B.M.A.
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 hereunto duly authorized.
METAMOR WORLDWIDE, INC.
(Registrant)
Dated: July 2, 1999 By: /s/ Edward L. Pierce
------------------------------------
Edward L. Pierce
Chief Financial Officer, Senior Vice
President and Assistant Secretary
<PAGE> 4
INDEX TO FINANCIAL STATEMENTS
ATTACHMENT 7(a) - FINANCIAL STATEMENTS OF DECAN GROUPE
<TABLE>
<CAPTION>
Page
----
<S> <C>
Audited Consolidated Financial Statements:
Report of Independent Auditors F-1
Consolidated Assets F-2
Consolidated Liabilities F-3
Consolidated Income Statement F-4
Notes to Consolidated Financial Statements F-5
Interim Consolidated Financial Statements (Unaudited):
Basis of Presentation F-20
Consolidated Statements of Operations (Unaudited) for the nine
months ended March 31, 1999 and 1998 F-21
Consolidated Statements of Cash Flows (Unaudited) for the nine
months ended March 31, 1999 and 1998 F-22
Notes to Unaudited Consolidated Financial Statements F-23
</TABLE>
<PAGE> 5
FIGEREC DELOITTE TOUCHE TOHMATSU -
BMA
28, RUE JEAN BROQUIN 81 BOULEVARD STALINGRAD
69006 LYON - FRANCE 69100 VILLEURBANNE - FRANCE
DECAN
Societe Anonyme
6 avenue Claude Chappe - Zone d'activite Telebase
69370 SAINT-DIDIER AU MONT D'OR
AUDITORS' REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 1998
In accordance with our appointment as auditors by your Annual General Meeting,
we have audited the accompanying consolidated financial statements of DECAN,
stated in French francs, for the year ended June 30, 1998.
These consolidated financial statements have been approved by the Board of
Directors. Our role is to express an opinion on these financial statements,
based on our audit.
We conducted our audit in accordance with professional standards applicable in
France. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements give a true and fair view
of the financial position and the assets and liabilities of the Group as at June
30, 1998 and the results of its operations for the year then ended in accordance
with accounting principles generally accepted in France.
We have also performed the procedures required by law on the Group financial
information given in the report of the Board of Directors. We have no comment to
make as to the fair presentation of this information nor its consistency with
the consolidated financial statements.
October 7, 1998
(July 2, 1999 as to Note 10)
FIGEREC DELOITTE TOUCHE TOHMATSU - BMA
Georges Bonnepart Jacques Convert
Partner Partner
F-1
<PAGE> 6
DECAN
CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 1998
CONSOLIDATED ASSETS
<TABLE>
<CAPTION>
JUNE 30, 1998
(12 months)
- ---------------------------------------------------------------------------------------------------------------
In French Francs NOTES GROSS AMORTIZATION & NET
DEPRECIATION
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FIXED ASSETS
- - Intangible assets 3.1 114,780,466 5,329,901 109,450,565
- - Property Plant and Equipment 3.2 28,697,999 15,308,312 13,389,687
- - Financial assets 3.3 3,930,482 1,541,598 2,388,884
- ---------------------------------------------------------------------------------------------------------------
TOTAL 147,408,947 22,179,811 125,229,136
- ---------------------------------------------------------------------------------------------------------------
CURRENT ASSETS
- - Inventories -
- - Prepayments to suppliers - 668,028 668,028
- - Trade accounts receivable and other
receivables 3.5 132,061,102 3,661,552 128,399,550
- - Taxes and other receivables - 15,427,688 6,791 15,420,897
- - Short-term investments - 59,452,364 59,452,364
- - Cash and cash equivalents - 18,975,519 18,975,519
- - Prepaid expenses - 2,541,860 2,541,860
- ---------------------------------------------------------------------------------------------------------------
TOTAL 229,126,561 3,668,343 225,458,218
- ---------------------------------------------------------------------------------------------------------------
- - Deferred charges 3.4 3,009,603 3,009,603
- ---------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 379,545,111 25,848,154 353,696,957
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
F-2
<PAGE> 7
DECAN
CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 1998
CONSOLIDATED LIABILITIES
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
In French Francs NOTES JUNE 30, 1998
(12 months)
<S> <C> <C>
EQUITY
- - Share capital 3.6 30,104,400
- - Restricted retained earnings - 75,058,914
- - Group net income - 26,031,008
- -------------------------------------------------------------------
TOTAL 131,194,322
- -------------------------------------------------------------------
Minority interests - 654,517
Other -
Convertible loans 1.8 96,786,229
- -------------------------------------------------------------------
TOTAL 228,635,068
- -------------------------------------------------------------------
CURRENT LIABILITIES
- - Contingencies 3.9 3,988,036
- - Financial liabilities 3.10 12,584,378
- - Advances on contracts - 200,740
- - Trade accounts payable and other payables 17,691,854
- - Tax and social liabilities
Accrued taxes and social charges - 79,689,040
- - Other liabilities - 3,554,657
- - Billings in excess of cost
and estimated earnings on
uncompleted contracts - 7,353,184
- -------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 125,061,889
- -------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 353,696,957
- -------------------------------------------------------------------
</TABLE>
F-3
<PAGE> 8
DECAN
CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 1998
CONSOLIDATED INCOME STATEMENTS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
In French Francs NOTES JUNE 30, 1998
(12 months)
- --------------------------------------------------------------------------------
<S> <C> <C>
- - Net sales 7 and 8 312,322,196
- - Reversal of provisions and transfers 14,358,385
- - Government grants 2,063,054
- - Other income 447,932
- --------------------------------------------------------------------------------
TOTAL OPERATING INCOME 329,191,567
- --------------------------------------------------------------------------------
- - Consumption of raw materials and supplies - 5,696,770
- - External services 3.12 66,033,989
- - Taxes, levies and similar payments - 9,945,382
- - Salaries and wages - 143,047,372
- - Social charges - 60,234,350
- - Depreciation and amortization - 5,280,260
- - Other charges - 178,443
- --------------------------------------------------------------------------------
TOTAL OPERATING EXPENSES 290,416,566
- --------------------------------------------------------------------------------
INCOME FROM OPERATIONS 38,775,001
- --------------------------------------------------------------------------------
OTHER EXPENSE NET 3.13 (148,556)
- --------------------------------------------------------------------------------
INCOME BEFORE INCOME TAX 38,626,445
- --------------------------------------------------------------------------------
EXCEPTIONAL LOSS 3.14 (5,526,123)
- --------------------------------------------------------------------------------
- - Employee profit sharing expense - 140,370
- - Amortization of goodwill - 637,067
- - Income tax expense - 6,138,356
- --------------------------------------------------------------------------------
NET INCOME 26,184,163
- --------------------------------------------------------------------------------
CONSOLIDATED NET INCOME 26,031,001
- --------------------------------------------------------------------------------
Minority interest net income 153,162
- --------------------------------------------------------------------------------
</TABLE>
F-4
<PAGE> 9
DECAN
CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 1998
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 PRINCIPLES AND METHODS OF CONSOLIDATION
The consolidated financial statements as of June 30, 1998 are established in
conformity with the provisions of the French law of January 3, 1985 and its
decree of application of February 17, 1986.
1.1 CONSOLIDATION
All significant investments in subsidiaries for which DECAN has exclusive
control, directly or indirectly, are fully consolidated. All significant
transactions between consolidated companies are eliminated.
1.2 INTANGIBLE ASSETS
Intangible assets, except goodwill, are amortized using the straight-line method
over the following useful lives:
Organization costs 5 years
Licenses, patents and trademarks 1 to 5 years
Goodwill results from acquisitions or from business valuations made when DECAN
was incorporated. Goodwill is not amortized. However, a reserve will be
established if the net result of the related company, adjusted for items not
directly resulting from operations and the application of a valuation
coefficient based on market factors, is inferior to the value of the goodwill
recorded in the balance sheet.
Research and development expenses are recorded in the income statement in the
period in which they are incurred.
1.3 GOODWILL
Acquisition differences resulting from investments in other entities (difference
between the purchase price and the respective portion of adjusted shareholders'
equity acquired) are recorded in the appropriate balance sheet accounts. For
acquired interests in companies which have external sales activities, a portion
of the goodwill is recorded to the "commercial funds" account which represents
the value assigned to the customer base acquired which is not amortized. This
value is determined in accordance with evaluations performed by and limited to
the interests of the group. Commercial funds are included in intangible assets
in the balance sheet.
The remaining goodwill recorded in the balance sheet relate to the real estate
companies DECAN and BERODE and INGENIA, which was acquired during the period
ended June 30, 1998. The goodwill related to the real estate companies are
amortized over a period identical to the remaining useful lives of the real
estate owned by the companies. The goodwill related to the acquisition of
INGENIA is amortized over a period of 10 years.
1.4 PROPERTY: PLANT AND EQUIPMENT
Tangible assets are stated at historical cost. Depreciation is calculated over
the estimated useful lives of the assets using straight-line or accelerated
depreciation methods.
The principal useful lives are :
- Computer software and hardware 3-5 years (SL or Accelerated)
- Furniture and fixtures 10 years (SL)
- Other tangible assets 5 to 10 years (SL)
F-5
<PAGE> 10
Real estate under capital leases has been reclassified as capital assets using
the following principles:
- Land and buildings are stated at historical cost
- Buildings are amortized using the straight-line method over a period
of 20 years
- Debt is recorded and classified as current or non-current based upon the
present value of rental payments and maturities as specified in the
capital case agreement.
1.5 FINANCIAL ASSETS
Financial assets consist of investments in non-consolidated entities and
deposits relating to the rental of operating facilities (see footnote 3.3.).
1.6 ACCOUNTS RECEIVABLE
Accounts receivable are stated at historical cost and are due within 1 year. A
provision is recorded when book value is higher than the net realizable value.
Revenue is recognized using the percentage of completion method. For work
performed as of the balance sheet date that has not yet been invoiced, the
corresponding revenue is recognized and an asset "cost in estimated earnings in
excess of billings on uncompleted contracts" is created. In situations where the
amounts invoiced as of the balance sheet date exceed the amounts relative to the
work performed to date, a liability "Billings in excess of costs and estimated
earnings on uncompleted contracts" is recorded.
If necessary, reserves are established to cover anticipated losses on contracts
in process.
1.7 SHORT-TERM INVESTMENTS
Short-term investments consist primarily of investments in money market funds.
The market value of these investments at June 30, 1998 is not significantly
different from the net book value recorded in the balance sheet.
1.8 CONVERTIBLE LOANS
Two convertible loans are outstanding as of June 30, 1998, one for DECAN and one
for INGENIA.
1.8.1 CONVERTIBLE LOAN - DECAN
<TABLE>
<S> <C>
Nominal value of loan as of June 30, 1998 F 94,614,400
Number of bonds 118,268
Issue price F 800 per bond
Date of issuance and payment March 10, 1998
Period of loan 5 years and 113 days
Annual interest rate 2.5%
</TABLE>
NORMAL MATURITY
The bonds mature in their totality on July 1, 2003 by reimbursement of F 891.20
per bond, or 111.4% of the issue price.
EARLY MATURITY
Early reimbursement of the bonds can only occur at the discretion of the
company. This can be done by:
1) Purchase of the bonds on the market and public offers
2) Early reimbursement, beginning on July 1, 2001 and extending until the
maturity date, under under the following conditions:
F-6
<PAGE> 11
- - the early reimbursement price will be determined in a manner through which
this price, including accrued interest from July 1 of the year of
reimbursement, provides the subscriber, after substracting dividends received
in prior years, with a gross actuarial rate of return equal to that offered in
the case of reimbursement at the normal maturity date, or 4.45%.
- - this early reimbursement will only be possible if the arithmetical average of
the first price of the bonds quoted on the Second Market of the Paris Stock
Exchange, for a period of 10 consecutive days including the 20 days prior to
the appearance of the opinion of the "Journal Officiel" announcing the
reimbursement, exceeds 120% of the early reimbursement price.
3) When less than 10% of the bonds remain in circulation.
CONVERSION OF BONDS INTO SHARES
At any time after March 10, 1998, the bonds can be converted into shares of
DECAN stock at a ratio of one share for one bond.
REDEMPTION PREMIUM
The amount of the loan represents the debt excluding any redemption premium.
Considering the condition of the actual market price of the DECAN stock and the
maturity date of the loan, the company has estimated the risk of non-conversion
of the bonds to be negligible and has not established a reserve to account for
the potential risk of payment of redemption premiums. The total amount that
would be due, at maturity, in the case of non-conversion is F 10,786,042. As of
June 30, 1998, the portion of this amount that would have been incurred amounts
to F 571,186.
1.8.2 CONVERTIBLE LOAN - INGENIA
<TABLE>
<S> <C>
Nominal value of loan as of June 30, 1998 F 2,823,912
Number of bonds 468
Issue price F 6,034 per bond
Date of issuance and payment December 8, 1995
Period of loan 4 years and 5 years
Annual interest rate 6%
</TABLE>
NORMAL MATURITY
The reimbursement of non-converted bonds will be made at par value upon maturity
of the loan. The maturity date for one-half of the bonds is December 1, 1999 and
December 1, 2000 for the other half of the bonds.
CONVERSION OF BONDS INTO SHARES
Beginning on December 1, 1996, the owners of the bonds will have the option to
convert the bonds into shares of the company in exchange for forgiveness of the
debt. Each F 6,034 bond is convertible into 18 shares of common stock with a
nominal value of F 100 per share.
NON-REDEMPTION PREMIUM
Additional interest payable in the event of non-conversion of the bonds into
shares of stock is equal to 3% of the nominal amount of the debt and has been
fully reserved.
F-7
<PAGE> 12
1.9 CONTINGENCIES
The financial statement line item "contingencies" represents reserves
established to cover related to completed services or services in process as
well as severance reserves.
1.10 FOREIGN CURRENCY TRANSLATION
Transactions in foreign currencies are translated at the closing exchange rate
(June 30, 1998). Only unrealized losses resulting from these transactions are
recorded in the income statement for the period.
Sales in foreign currencies represent approximately F 11.5 million. The group
covers the exchange rate risk relative to these operations through the use of
option contracts.
The accounts of DECAN SUISSE, DECAN INC. and INGENIA INC. are converted to
French Francs using the closing exchange rate for the balance sheet accounts and
the average exchange rate for the income statement accounts.
1.11 CURRENT AND DEFERRED INCOME TAXES
Deferred taxes are calculated for significant temporary differences between book
and tax income using the legal tax rate for the period. For purposes of
conservatism, it is the Group's policy not to recognize net deferred tax assets
for the individual companies in the Group. It must be noted that as of June 30,
1998, the subsidiary INGENIA had operating loss carryforwards in the amount of F
72.2 million. The deferred tax assets relating to these carryforwards have not
been recognized.
1.12 OFF BALANCE SHEET COMMITTMENTS
The provision for retirement indemnities has not been calculated as it is not
considered to be significant in light of the average age of the employees and
the young age of the companies concerned.
2. CONSOLIDATION
In comparison to the consolidated accounts as of June 30, 1997, the following
changes have occurred in the consolidation:
- - the inclusion of the company INGENIA and its affiliates IDEC, INGENIA
DIALEXIS, ACS, INGENIA INC.,
- - the inclusion of the company SIGMA CONSEIL,
- - the exclusion of the company ATIX,
- - the spin-off of the company DECAN S.A. and the creation of two new
companies DECAN CONSEIL and DECAN RESEAUX.
INGENIA was acquired in December 1997 with an effective date retroactive to July
1, 1997 (the results taken into account cover a period of 12 months). SIGMA
CONSEIL was acquired in April 1998 with an effective date retroactive to January
1, 1998 (the results taken into account cover a period of 6 months).
ATIX was sold on July 1, 1997.
The spin-off of DECAN and the creation of DECAN RESEAUX and DECAN CONSEIL were
effective on July 1, 1997. As concerns intra-group operations, this spin-off did
not have any significant impact on the consolidated accounts.
F-8
<PAGE> 13
List of consolidated companies as of June 30, 1998:
<TABLE>
<CAPTION>
% shareholding Activity
-------------- --------
<S> <C> <C> <C>
- - DECAN (1) parent Holding company
- - DECAN CONSEIL (1) 98.04 Consulting
- - DECAN RESEAUX (1) 98.04 Communication engineering
- - INGENIA (1) 100.00 All group activities
- - INGENIA INC. (2) 100.00 Document engineering and
knowledge
- - INGENIA DIALEXUS (1) 84.99 Information systems engineering
- - IDEC (1) 50.98 Information systems engineering
- - ACS (2) 67.00 Information systems engineering
- - SIGMA CONSEIL (1) 98.00 Consulting
- - GRETI INGENIERIE S.A.R.L. (1) 96.67 Information systems engineering
- - GEOLINK S.A. (1) 99.98 Document engineering and
knowledge
- - H.I.D. S.A. (1) 99.98 Holding company
- - SARDE S.A. (1) 99.23 Scientific, industrial, document
engineering and knowledge
- ALSIS S.A.R.L. (1) 99.97 Information systems engineering
- - DECAN SUISSE S.A. (1) 99.00 Group activities in Switzerland
- - COMELOG S.A. (1) 99.97 Information systems engineering
- - INTERFACE S.A. (1) 99.72 Industrial and scientific
engineering
- - DECAN TELECOM S.A. (1) 99.86 Communication engineering
- - DECAN INC. (1) 100.00 Group activities in the U.S.
- - SCI DECAN (1) 99.95 Real estate
- - SCI BERODE (1) 99.00 Real estate
</TABLE>
(1) Year end of June 30, 1998
(2) Establishment of interim accounts at June 30, 1998 for consolidation
purposes
F-9
<PAGE> 14
3. SIGNIFICANT BALANCE SHEET AND INCOME STATEMENT AMOUNTS
3.1 INTANGIBLE ASSETS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
GROSS BOOK ACCUMULATED NET BOOK
VALUE AS OF AMORTIZATION VALUE AS OF
In French Francs JUNE 30, 1998 JUNE 30, 1998
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
- - Organization costs 36,195 22,560 13,635
- - Concessions, patents, licenses 3,442,175 3,077,233 364,942
- - Goodwill- Commercial funds 103,835,068 1,447,444 102,387,624
- - Goodwill- Acquisition differences 7,467,028 782,664 6,684,364
- --------------------------------------------------------------------------------------------
TOTAL 114,780,466 5,329,901 109,450,565
- --------------------------------------------------------------------------------------------
</TABLE>
BUSINESS VALUE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------
In thousands of French Francs JUNE 30, 1998
- ----------------------------------------------------------------------------
<S> <C>
- - GROUPE DECAN 854
- - DECAN CONSEIL ET RESEAUX 2,214
- - GRETI INGENIERIE 10,254
- - SIGMA CONSEIL 16,557
- - SARDE 22,166
- - COMELOG INGENIERIE 2,464
- - INTERFACE 7,458
- - DECAN TELECOM 3,120
- - GATEC 119
- - INGENIA 37,447
- - ATIX -
- - GEOLINK 1,180
- --------------------------------------------------------------------------
TOTAL 103,835
- --------------------------------------------------------------------------
</TABLE>
3.2 PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
GROSS BOOK NET BOOK
VALUE AS OF DEPRECIATION VALUE AS OF
In French Francs JUNE 30, 1998 JUNE 30, 1998
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
- - Land 1,466,652 - 1,466,652
- - Buildings 11,260,843 4,557,026 6,703,817
- - Other 15,970,504 10,751,286 5,219,218
- - Advances on tangible fixed assets - - -
- -----------------------------------------------------------------------------------------
TOTAL 28,697,999 15,308,312 13,389,687
- -----------------------------------------------------------------------------------------
</TABLE>
F-10
<PAGE> 15
3.3 FINANCIAL ASSETS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
GROSS BOOK RESERVE NET BOOK
VALUE AS OF FOR VALUE AS OF
In French Francs JUNE 30, 1998 IMPAIRMENT JUNE 30, 1998
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
- - Investments 1,995,009 994,409 1 000,600
- - Receivables on investments 549,923 547,189 2,734
- - Loans receivable 29,600 - 29,600
- - Deposits 1,355,950 - 1 355,950
- -------------------------------------------------------------------------------------
TOTAL 3,930,482 1,541,598 2,388,884
- -------------------------------------------------------------------------------------
</TABLE>
Investments consist primarily of:
- - 15% ownership in SCC of F 150,000
- - 10% ownership in TRINOVA of F 1,000,000
- - 25% ownership in EASIREM of F 250,000
- - 88% ownership in BUREAUTIQUE S.A. of F 594,409
The investments in SCC, EASIREM and BUREAUTIQUE S.A. are 100% reserved for
through a provision for impairment.
3.4 DEFERRED CHARGES
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Amortization
In French Francs Amount rate (annual)
- -------------------------------------------------------------------------------
<S> <C> <C>
- - Convertible debt issuance costs 3,009,603 20%
</TABLE>
3.5 ACCOUNTS RECEIVABLE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
In thousands of French Francs JUNE 30, 1998
- ---------------------------------------------------------------------------------------------
<S> <C>
- - Accounts receivable - trade 95,415
- - Other 16
- - Notes receivable 4,238
- - Cost and estimated earnings in excess of billings on uncompleted contracts 28,775
- - Doubtful accounts receivable 3,636
- ---------------------------------------------------------------------------------------------
TOTAL 132,080
- ---------------------------------------------------------------------------------------------
</TABLE>
3.6 CAPITAL
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
In French Francs Number of shares Nominal Value
per
share
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
- - Shares outstanding at the beginning of the period 666,446 40
- - Shares issued during the period 86,164 40
- - Shares re-purchased during the period - -
- - Shares outstanding at the June 30, 1998 785,610 40
- -------------------------------------------------------------------------------------------------
</TABLE>
F-11
<PAGE> 16
SHARES WITH DOUBLE VOTING RIGHTS
The articles of DECAN provide double voting rights to shareholders who have held
the shares for 3 years or more.
STOCK OPTIONS
The Extraordinary Shareholders General Meeting on December 10, 1997 authorized
the Board of Directors to grant options providing the right to the subscription
of new DECAN shares. In accordance with articles 208-1 and in conformity with
the Law of July 24, 1966 for commercial companies, the Board of Directors
designated the recipients of the options to be the management and salaried
employees of DECAN and its related companies.
The Board of Directors Meeting on December 10, 1997 used the authorization noted
above to grant options to 27 members of group management. These options permit
the recipients to subscribe to 5,450 shares at a nominal value of F 40. The
subscription price was fixed at F 543.
The Board of Directors Meeting on February 16, 1998 used the same authorization
to grant options to 37 members of group management. These options permit the
recipients to subscribe to 9,580 shares at a nominal value of F 40. The
subscription price was fixed at F 689.
No options were exercised during the period.
3.7 CHANGES IN CONSOLIDATED SHAREHOLDERS' EQUITY - CONSOLIDATED
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
In French Francs CAPITAL RESERVES NET INCOME TOTAL
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- - At June 30, 1997 26,857,840 63,187,398 15,176,302 105,021,540
- - Capital contributions 3,446,560 45,528,560 - 48,975,120
- - Imputation of acquisition differences - -45,528,560 - -45,528,560
- - Allocation of income to reserves - 15,176,302 -15,176,302 -
- - Dividends distributed - -3,332,230 - -3,332,230
- - Translation adjustments - 27,444 - 27,444
- - Net income for the period - - 26,031,008 26,031,008
- ------------------------------------------------------------------------------------------------------------
As of June 30, 1998 30,104,400 75,058,914 26,031,008 131,194,322
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(1) As a result of the taking of control of the company INGENIA, the
acquisition difference has been offset against the issuance premiums in the
amount of F 45,528,560 (shareholders' meeting December 10, 1997).
3.8 CHANGES IN CONSOLIDATED SHAREHOLDERS' EQUITY - MINORITY INTERESTS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
In French Francs RESERVES NET INCOME TOTAL
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
- - At June 30, 1997 120,521 160,501 281,022
- - Changes in scope of consolidation 258,277 - 258,277
- - Translation adjustments 2,092 - 2,092
- - Dividends distributed -40,035 - -40,035
- - Allocation of income to reserves 160,501 -160,501 -
- - Net income for the period - 153,161 153,161
- --------------------------------------------------------------------------------------
As of June 30, 1998 501,356 153,161 654,517
- --------------------------------------------------------------------------------------
</TABLE>
F-12
<PAGE> 17
3.9 PROVISIONS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
In thousands of French Francs JUNE 30, 1998
- ---------------------------------------------------------------------------------------------
<S> <C>
- - Litigation with employees 443
- - Litigation or losses on work contracts 1,874
- - Building reserve 450
- - Restructuring reserves 1,207
- - Receivables reserves -
- - Foreign exchange risk reserves 14
- ---------------------------------------------------------------------------------------------
TOTAL 3,988
- ---------------------------------------------------------------------------------------------
</TABLE>
3.10 CASH, CASH EQUIVALENTS AND DEBT
<TABLE>
- ---------------------------------------------------------------------------------------------
In French Francs JUNE 30, 1998
- ---------------------------------------------------------------------------------------------
<S> <C>
- - Cash and cash equivalents 78,427,883
- - Less: loans and financial debts, current portion 3,118,815
- ---------------------------------------------------------------------------------------------
TREASURY, NET 75,309,068
- ---------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
In French Francs JUNE 30, 1998
- ---------------------------------------------------------------------------------------------
<S> <C>
- - Loans and financial debts greater than 1 but less than 5 years 8,230,226
- - Convertible loans 96,786,229
- - Loans and financial debts greater than 5 years 1,235,337
- ---------------------------------------------------------------------------------------------
MEDIUM AND LONG-TERM LOANS 106,251,792
- ---------------------------------------------------------------------------------------------
</TABLE>
3.11 ACQUISITIONS
The tables below compare the significant balance sheet amounts as of June 30,
1998 considering the effect of current year movements (acquisitions and
disposals) in the scope of consolidation.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
In Millions of French Francs New scope of consolidation Constant scope of consolidation
June 30, 1998 June 30, 1998 (1)
ASSETS Net Net
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
FIXED ASSETS
- - Intangible assets 109.5 53.2
- - Property plant and equipment 13.4 11.4
- - Financial assets 2.4 82.9
- ----------------------------------------------------------------------------------------------------
TOTAL 125.3 147.5
- ----------------------------------------------------------------------------------------------------
</TABLE>
F-13
<PAGE> 18
<TABLE>
<S> <C> <C>
CURRENT ASSETS
- - Inventories
- - Payments on account on orders 0.7 0.1
- - Trade accounts receivable and other
receivables 128.4 88.4
- - Other receivables 15.4 44.8
- - Short-term investments 59.5 45.9
- - Cash and cash equivalents 19.0 10.9
- - Prepaid expenses 2.5 1.2
- --------------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 225.5 191.3
- --------------------------------------------------------------------------------------------------
- - Deferred charges 3.0 3.0
- --------------------------------------------------------------------------------------------------
TOTAL ASSETS 353.7 341.8
- --------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
In Millions of French Francs New scope of consolidation Constant scope of consolidation
June 30, 1998 June 30, 1998 (1)
LIABILITIES Net Net
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
- - Common stock 30.1 30.1
- - Restricted retained earnings 75.0 120.6
- - Net income 26.0 16.0
- --------------------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY 131.1 166.7
- --------------------------------------------------------------------------------------------------
Minority interests 0.7 0.4
Convertible loans 96.8 94.6
CURRENT LIABILITIES
- - Contingenci 4.0 1.3
- - Financial liabilities 12.6 10.7
- - Advances on contracts 0.2
- - Accounts payable and other payables 17.7 12.5
- - Accrued taxes and social charges 79.7 49.5
- - Other liabilities 3.6 1.4
- - Billings in excess of cost and
estimated earnings on uncompleted
contracts 7.3 4.7
- --------------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 124.9 80.1
- --------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 353.7 341.8
- --------------------------------------------------------------------------------------------------
</TABLE>
(1) At June 30, 1998, the principle movements in the consolidation perimeter
for the period (acquisition of INGENIA and SIGMA CONSEIL) have been
neutralized.
F-14
<PAGE> 19
3.12 EXTERNAL SERVICES
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
In thousands of French Francs JUNE 30, 1998
- -------------------------------------------------------------------------------
<S> <C>
- - Sub-contracting 16,898
- - Miscellaneous 3,161
- - Rent (buildings) 7,735
- - Other rent 5,870
- - Maintenance 1,257
- - Insurance 1,717
- - Document training studies 1,175
- - Contractors 2,541
- - Commissions
- - Fees 4,359
- - Advertising inserts 1,653
- - Receiving expenses 479
- - Travel expenses 12,954
- - Telephone and postal expenses 2,891
- - Bank service charges 3,345
- -------------------------------------------------------------------------------
TOTAL 66,034
- -------------------------------------------------------------------------------
</TABLE>
3.13 OTHER EXPENSE, NET
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
In French Francs JUNE 30, 1998
- -------------------------------------------------------------------------------
<S> <C>
- - Financial expenses, net -2,654,202
- - Gains on sales of short-term investments 2,164,323
- - Realized foreign exchange gains 341,323
- -------------------------------------------------------------------------------
TOTAL OTHER EXPENSE, NET -148,556
- -------------------------------------------------------------------------------
</TABLE>
3.14 EXCEPTIONAL LOSS
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
In French Francs JUNE 30, 1998
- ----------------------------------------------------------------------------------------------------------
<S> <C>
- - Miscellaneous exceptional income, net 241,659
- - Reversal of reserves 9,225,709
- - Costs related to reversal of contingencies (restructuring, rents, etc.) -9,356,941
- - Current year provisions for contingencies -2,430,074
- - Exceptional fees -1,272,365
- - Bad debt expense -1,174,596
- - Settlements of salary litigation -287,000
- - Tax assessments -443,355
- - Loss on sales of fixed assets -29,160
- ----------------------------------------------------------------------------------------------------------
TOTAL EXCEPTIONAL LOSS -5,526,123
- ----------------------------------------------------------------------------------------------------------
</TABLE>
F-15
<PAGE> 20
4. LEASES
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
In French Francs JUNE 30, 1998
- ----------------------------------------------------------------------------------------------------------
<S> <C>
- - Original value 1,001,284
- - Amortization
Cumulative prior periods 474,581
Current period 222,637
- ----------------------------------------------------------------------------------------------------------
Total 697,218
- ----------------------------------------------------------------------------------------------------------
- - Lease payments
Cumulative prior periods 605,489
Current period 264,731
- ----------------------------------------------------------------------------------------------------------
Total 870,219
- ----------------------------------------------------------------------------------------------------------
- - Lease payments remaining
Greater than one year 176,358
Greater than one year but less than five years 158,350
Greater than five years
- ----------------------------------------------------------------------------------------------------------
Total 334,708
- ----------------------------------------------------------------------------------------------------------
- - Residual value
Greater than one year 2,833
Greater than one year but less than five years 23,011
Greater than five years
- ----------------------------------------------------------------------------------------------------------
Total 25,844
- ----------------------------------------------------------------------------------------------------------
Charges incurred during the period 264,731
- ----------------------------------------------------------------------------------------------------------
</TABLE>
5. OFF BALANCE SHEET LIABILITIES
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
In French Francs JUN 30, 1998
- ----------------------------------------------------------------------------------------------------------
<S> <C>
- - Guarantees on contracts 757,467
- ----------------------------------------------------------------------------------------------------------
</TABLE>
6. GUARANTEES ON LOANS
None.
F-16
<PAGE> 21
7. SALES BY ACTIVITY
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
In Millions of French Francs JUNE 30, 1998
- ----------------------------------------------------------------------------------------------
<S> <C>
- - Network/Telecom 69.2
- - Management information systems 98.7
- - Document engineering 61.6
- - Industrial and scientific engineering 64.2
- - Consulting and data 18.6
- ----------------------------------------------------------------------------------------------
TOTAL 312.3
- ----------------------------------------------------------------------------------------------
</TABLE>
F-17
<PAGE> 22
8. SALES BY GEOGRAPHICAL AREA
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
In Thousands of French Francs JUNE 30, 1998
- --------------------------------------------------------------------------------------------------------
<S> <C>
- - Sales France 280,367
- - Sales Export 15,393
- - Sales - cost and estimated earnings in excess of billings on uncompleted 16,562
contracts less billings in excess of cost and estimated earnings
on uncompleted contracts
- --------------------------------------------------------------------------------------------------------
TOTAL 312,322
- --------------------------------------------------------------------------------------------------------
</TABLE>
9. HEADCOUNT
The average headcount of the consolidated companies is as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
1997/1998
- --------------------------------------------------------------------------------------------------------
<S> <C>
- - Managers 547
- - Non-managers 78
- --------------------------------------------------------------------------------------------------------
TOTAL 625
- --------------------------------------------------------------------------------------------------------
</TABLE>
10. SUBSEQUENT EVENTS
Effective July 1, 1998, DECAN acquired the whole capital share of SWORD, a
company specialized in management of trademarks and patents, which has sales of
approximately FF 30 000 000 per year.
In the beginning of the second half of 1998, DECAN started up two new
companies:
- - DECAN EMS, a company which is specialized in ERP systems; its expected
sales for the year ended June 30, 1999 is approximately FF 8 000 000.
- - FIRCOSOFT, a company which will market the software FIRCO, related to swift
messages reconstruction ; this software was first developped by INGENIA, a
subsidiary of DECAN.
In order to simplify DECAN's legal structure, a merger between DECAN and its
parent company, GD took place on December 22, 1998. The share capital of DECAN
decreased FF 80.280 and the "paid in capital" increased by FF 1.289.406.
On January 29, 1999, an internal legal restructuring was carried out. DECAN CS
(ex INGENIA), the main subsidiary of DECAN, merged with ten operating companies
fully owned by DECAN. This operation had no effect on the consolidated equity.
On April 13, 1999, DECAN acquired the whole share capital of IB NEXT, a company
specialized in ERP systems, which had sales of approximately FF 7 000 000 for
the fiscal year ended December 31, 1998.
On April 19,1999, Metamor Worldwide, Inc. ("Metamor"), a provider of information
technology services located in Houston, Texas, completed its tender offer for
the publicly held shares of Decan. Currently, Metamor owns approximately 98% of
the Decan shares.
F-18
<PAGE> 23
DECAN GROUPE
UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
BASIS OF PRESENTATION
The following interim consolidated financial statements of Decan Groupe
("Decan") have been prepared without audit pursuant to the rules and regulations
of the Securities and Exchange Commission and in accordance with generally
accepted accounting principles. Accordingly, certain information and disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been omitted. Management of Decan believes
that the presentations and disclosures herein are adequate to make the
information not misleading and reflect all adjustments (consisting of normal
recurring adjustments) necessary for a fair presentation of the interim periods
presented.
The results of operations for the interim periods are not necessarily
indicative of the results of operations to be expected for the full year. These
statements should be read in conjunction with Decan's audited financial
statements included elsewhere herein.
F-19
<PAGE> 24
DECAN
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands of U.S. dollars)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
MARCH 31,
--------------------
1999 1998
-------- --------
<S> <C> <C>
Revenues from Services $ 53,284 $ 40,411
Cost of Services 30,043 26,220
-------- --------
Gross Profit 23,241 14,191
Operating Costs and Expenses:
Selling, general and administrative 15,245 8,411
Depreciation and amortization 1,364 659
-------- --------
16,609 9,070
-------- --------
Operating Income 6,632 5,121
Other Expense:
Interest expense (1,105) --
Other, net -- (758)
-------- --------
(1,105) (758)
-------- --------
Income before Income Taxes 5,527 4,363
Provision for Income Taxes 2,642 715
-------- --------
Net Income $ 2,885 $ 3,648
======== ========
</TABLE>
See notes to unaudited consolidated financial statements.
F-20
<PAGE> 25
DECAN
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands of U.S. dollars)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
MARCH 31,
--------------------
1999 1998
-------- --------
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 2,885 $ 3,648
Adjustments to reconcile net income to net cash provided by (used in) operating
activities:
Depreciation and amortization 1,364 659
Amortization of debt costs and discount on convertible notes 145 --
Deferred income tax provision 1,164 --
Provision for doubtful accounts 81 297
Other 329 (241)
Changes in assets and liabilities net of effects of acquisitions:
Accounts receivable (2,726) (9,749)
Prepaid expenses and other (2,987) (1,113)
Accounts payable (711) (588)
Accrued liabilities 4,799 8,018
-------- --------
Net cash provided by operating activities 4,343 931
-------- --------
Cash Flows from Investing Activities:
Cash paid for acquisitions, net of cash acquired (1,621) (9,118)
Capital expenditures (1,498) (817)
Other (184) --
-------- --------
Net cash used in investing activities (3,303) (9,935)
-------- --------
Cash Flows from Financing Activities:
Net proceeds from issuance of long-term debt -- 15,965
Net proceeds from sale of common stock -- 432
Conversion of bonds into common stock (397) --
-------- --------
Net cash (used in) provided by financing activities (397) 16,397
-------- --------
Net increase in cash and cash equivalents 643 7,393
Cash and cash equivalents at beginning of period 12,937 5,592
-------- --------
Cash and cash equivalents at end of period $ 13,580 $ 12,985
======== ========
Cash paid during the periods for:
Interest, net of amounts capitalized $ 172 $ --
======== ========
Income taxes $ 2,642 $ 715
======== ========
</TABLE>
See notes to unaudited consolidated financial statements.
F-21
<PAGE> 26
DECAN
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. INCOME TAXES
Decan follows the liability method of accounting for income taxes.
Under this method, deferred income tax assets and liabilities are determined
based on differences between the financial statement and income tax bases of
assets and liabilities using enacted tax rates in effect for the year in which
the differences are expected to reverse. Decan's interim provisions for income
taxes were computed using its estimated effective tax rate for the year.
2. SALE OF DECAN
In April 1999, Metamor Worldwide, Inc. ("Metamor") completed its tender
offer for the publicly held shares of Decan. The tender offer commenced in
February 1999 following the purchase by Metamor of Decan shares from Delphi, plc
and from Jacques Mottard, chairman and managing director of Decan. Currently,
Metamor has acquired 98.4% of the Decan common shares outstanding and 94.9% of
the convertible bonds outstanding, resulting in a 96.3% ownership on a fully
diluted basis. The acquisition has been accounted for by Metamor using the
purchase method of accounting and the effects of the acquisition by Metamor have
been "pushed down" to Decan.
F-22
<PAGE> 27
Attachment 7(b) - Index to Pro Forma Condensed Consolidated Financial Statements
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Basis of Presentation F-24
Unaudited Pro Forma Condensed Consolidated Balance Sheet as of
March 31, 1999 F-25
Pro Forma Condensed Consolidated Statement of Operations (Unaudited) for
the three months ended March 31, 1999 F-26
Pro Forma Condensed Consolidated Statement of Operations (Unaudited) for
the year ended December 31, 1998 F-27
Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements F-28
</TABLE>
<PAGE> 28
METAMOR WORLDWIDE, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
BASIS OF PRESENTATION
The following Unaudited Pro Forma Condensed Consolidated Financial
Statements give effect to the completion of the acquisition by Metamor
Worldwide, Inc. ("Metamor" or the "Company") of 98.4% of the voting stock and
94.9 percent of the convertible notes of Decan Groupe ("Decan") on April 19,
1999. The Unaudited Pro Forma Condensed Consolidated Balance Sheet adjusts the
Company's consolidated balance sheet as of March 31, 1999 for the acquisition of
additional interests in Decan that occurred after the balance sheet date. The
Unaudited Pro Forma Condensed Consolidated Statements of Operations adjusts the
historical consolidated statements of operations of the Company and Decan to
give effect to the acquisition of Decan as if it had occurred as of the
beginning of the periods presented.
The unaudited pro forma condensed consolidated financial statements are
based on a preliminary allocation of the purchase price. The final allocation
may vary as additional information is obtained, and accordingly, the ultimate
allocations may differ from the allocations used in the unaudited pro forma
condensed consolidated financial statements.
The pro forma condensed consolidated financial statements have been
prepared from and should be read in conjunction with the historical consolidated
financial statements and related notes thereto of Decan included elsewhere
herein and the consolidated financial statements and related notes thereto of
Metamor Worldwide, Inc. for the year ended December 31, 1998 and the three
months ended March 31, 1999, previously filed with the Securities and Exchange
Commission.
The unaudited pro forma condensed consolidated financial statements are not
necessarily indicative of the financial position or operating results that would
have occurred had the acquisition been consummated on the date or at the
beginning of the periods for which the acquisition is being given effect nor is
it necessarily indicative of future operating results or financial position.
F-24
<PAGE> 29
METAMOR WORLDWIDE, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
AS OF MARCH 31, 1999
(in thousands)
<TABLE>
<CAPTION>
HISTORICAL
--------------
METAMOR (1) ADJUSTMENTS(a) PRO FORMA
-------------- -------------- --------------
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 31,154 $ -- $ 31,154
Accounts Receivable, net of allowance of $6,632 266,288 -- 266,288
Prepaid expenses 20,028 -- 20,028
Deferred income taxes and other 135 -- 135
-------------- -------------- --------------
Total current assets 317,605 -- 317,605
Fixed Assets, net 58,589 -- 58,589
Intangible Assets, net of accumulated amortization of $20,186 719,657 46,194 765,851
Investments and Other 8,701 -- 8,701
-------------- -------------- --------------
Total Assets $ 1,104,552 $ 46,194 $ 1,150,746
============== ============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term debt $ 2,000 $ -- $ 2,000
Accounts payable and accrued expenses 27,373 -- 27,373
Payroll and related taxes 63,363 -- 63,363
Amounts due sellers of acquired businesses 37,832 -- 37,832
Amount due buyer of staffing services business 16,000 -- 16,000
Other 20,600 -- 20,600
-------------- -------------- --------------
Total current liabilities 167,168 -- 167,168
Long-term Debt, net of current maturities 497,322 54,745 552,067
Deferred Income Taxes and Other 7,403 -- 7,403
Minority Interests 10,239 (8,551) 1,688
Commitments and Contingencies -- -- --
Total Stockholders' equity 422,420 -- 422,420
-------------- -------------- --------------
Total Liabilities and Stockholders' Equity $ 1,104,552 $ 46,194 $ 1,150,746
============== ============== ==============
</TABLE>
(1) Includes the accounts of Decan as Metamor owned in excess of 50 percent at
March 31, 1999. The adjustments reflect the acquisition of additional
interests in Decan after March 31, 1999.
See notes to unaudited pro forma condensed consolidated financial statements.
F-25
<PAGE> 30
METAMOR WORLDWIDE, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1999
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
HISTORICAL
--------------------------------
METAMOR DECAN (1) ADJUSTMENTS PRO FORMA
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Revenues from Services $ 249,101 $ 5,911 -- $ 255,012
Cost of Services 161,241 3,686 -- 164,927
-------------- -------------- -------------- --------------
Gross Profit 87,860 2,225 -- 90,085
Operating Costs and Expenses:
Selling, general and administrative 58,460 1,340 -- 59,800
Depreciation and amortization 5,960 (132) 922(a) 6,750
-------------- -------------- -------------- --------------
64,420 1,208 922 66,550
Operating Income 23,440 1,017 (922) 23,535
Other Income (Expense):
Interest expense (5,104) (7) (835)(b) (5,946)
Minority interests (1,417) -- 571(c) (846)
-------------- -------------- -------------- --------------
(6,521) (7) (264) (6,792)
-------------- -------------- -------------- --------------
Income from Continuing Operations before
Income Taxes 16,919 1,010 (1,186) 16,743
Provision for Income Taxes 7,106 327 (401)(d) 7,032
-------------- -------------- -------------- --------------
Net Income $ 9,813 $ 683 $ (785) $ 9,711
============== ============== ============== ==============
Earnings per Common Share:
Basic $ 0.30 $ 0.29
============== ==============
Diluted $ 0.30 $ 0.29
============== ==============
Number of Shares Used in Computing
Earnings per Common Share:
Basic 32,723 32,956(e)
============== ==============
Diluted 32,937 33,170(e)
============== ==============
</TABLE>
(1) Reflects the results of Decan for the three months ended March 31, 1999
less the Decan results included in Metamor's results of operations for the
three months ended March 31, 1999. (See Note 1)
See notes to unaudited proforma condensed consolidated financial statements.
F-26
<PAGE> 31
METAMOR WORLDWIDE, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE YEAR ENDED DECEMBER 31, 1998
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
HISTORICAL
----------------------------------
METAMOR DECAN ADJUSTMENTS PRO FORMA
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Revenues from Services $ 850,487 $ 62,763 -- $ 913,250
Cost of Services 567,568 35,408 -- 602,976
-------------- -------------- -------------- --------------
Gross Profit 282,919 27,355 -- 310,274
Operating Costs and Expenses:
Selling, general and administrative 187,727 20,200 -- 207,927
Depreciation and amortization 16,276 1,385 3,168(a) 20,829
-------------- -------------- -------------- --------------
204,003 21,585 3,168 228,756
Operating Income 78,916 5,770 (3,168) 81,518
Other Income (Expense):
Interest expense (15,965) (203) (9,443)(b) (25,611)
Minority interests -- -- (152)(c) (152)
Other, net 608 -- -- 608
-------------- -------------- -------------- --------------
(15,357) (203) (9,595) (25,155)
-------------- -------------- -------------- --------------
Income from Continuing Operations before
Income Taxes 63,559 5,567 (12,763) 56,363
Provision for Income Taxes 26,697 1,855 (4,880)(d) 23,672
-------------- -------------- -------------- --------------
Net Income from Continuing Operations $ 36,862 $ 3,712 $ (7,883) $ 32,691
============== ============== ============== ==============
Earnings per Common Share from
Continuing Operations:
Basic $ 1.13 $ 0.99
============== ==============
Diluted $ 1.11 $ 0.99
============== ==============
Number of Shares Used in Computing
Earnings per Common Share:
Basic 32,690 32,923(e)
============== ==============
Diluted 38,665 38,898(e)
============== ==============
</TABLE>
See notes to unaudited condensed consolidated financial statements.
F-27
<PAGE> 32
METAMOR WORLDWIDE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL
In February 1999, Metamor Worldwide, Inc. (the "Company") acquired 41.9
percent of the common stock of Decan Groupe ("Decan"), a publicly held,
French-based Information Technology Solutions business, for $54.9 million in
cash and 0.2 million shares of the Company's common stock valued at $6.2
million. Following this purchase, the Company instituted a cash tender offer for
the remaining shares and completed the tender offer in April 1999. Currently,
the Company owns 98.4 percent of Decan's common stock and 94.9 percent of its
convertible notes, which are convertible into common stock of Decan. The
consideration for the Decan purchase totaled approximately $161 million,
consisting of $154.8 million in cash and 0.2 million shares of Metamor stock
having a value of $6.2 million.
The acquisition of Decan has been accounted for using the purchase method
of accounting. Accordingly, the Company included the results of operations of
Decan in its consolidated results in February 1999 when its ownership interest
in Decan exceeded 50 percent. Prior thereto, the Company accounted for its
ownership interest using the equity method of accounting.
2. PRO FORMA ADJUSTMENTS
The following pro forma adjustments give effect to the acquisition of
Decan by the Company (See "Basis of Presentation" on page F-24).
BALANCE SHEET ADJUSTMENTS:
(a) To reflect (i) the increase in goodwill and the decrease in minority
interest related to the acquisition of interests in Decan that
occurred after March 31, 1999 and (ii) the related increase in
borrowing under the Company's Senior Credit Agreement to fund the
purchase of additional interests.
STATEMENTS OF OPERATIONS ADJUSTMENTS:
(a) To reflect amortization of goodwill resulting from the acquisition of
Decan using a 40 year amortization period.
(b) To reflect interest expense from borrowings under the Company's Senior
Credit Agreement to fund the acquisition.
(c) To adjust the minority interest for the amount outstanding after
completion of the acquisition.
(d) To adjust income taxes for the estimated effective tax rate.
(e) To reflect the issuance of 0.2 million shares of Metamor's common
stock in connection with the purchase of Decan.
F-28
<PAGE> 33
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- ------- -----------
<S> <C>
23.1 Consent of Deloitte & Touche Tomatsu B.M.A.
</TABLE>
<PAGE> 1
EXHIBIT 23.1
FIGEREC DELOITTE TOUCHE TOHMATSU - BMA
28, RUE JEAN BROQUIN 81 BOULEVARD STALINGRAD
69006 LYON - FRANCE 69100 VILLEURBANNE - FRANCE
DECAN
Societe Anonyme
6 avenue Claude Chappe - Zone d'activite Telebase
69370 SAINT-DIDIER AU MONT D'OR
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in Registration Statement No.
33-80325 on Form S-8 pertaining to the Metamor Worldwide, Inc., 1995 Long Term
Incentive Plan, Registration Statement No. 333-3030 on Form S-8 pertaining to
the Metamor Worldwide Inc., Employee Stock Purchase Plan, Registration Statement
No. 333-46347 on Form S-8 pertaining to the Metamor Technologies, Ltd Restricted
Stock Plan and related prospectuses of our report dated October 7, 1998, (July,
2, 1999 as to Note 10) with respect to the consolidated financial statements of
Decan for the year ended June 30, 1998 which report is included in this current
report on Form 8-K/A of Metamor Worldwide, Inc.
July 2, 1999
FIGEREC DELOITTE TOUCHE TOHMATSU - BMA
Georges Bonnepart Jacques Convert
Partner Partner
