<PAGE> 1
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UNITED STATES
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 QUARTER ENDED OCTOBER 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 0-27612
DATA PROCESSING RESOURCES CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
CALIFORNIA 95-3931443
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
4400 MACARTHUR BOULEVARD, SUITE 600
NEWPORT BEACH, CA 92660
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (714) 553-1102
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 [ ]
Number of shares of common stock outstanding as of October 31, 1997 is
11,079,683.
================================================================================
<PAGE> 2
DATA PROCESSING RESOURCES CORPORATION
INDEX TO CONSOLIDATED FINANCIAL INFORMATION, OTHER INFORMATION
AND SIGNATURE
<TABLE>
<CAPTION>
PAGE
-----
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements...........................................
Condensed Consolidated Balance Sheets as of October 31, 1997 and July 31,
1997........................................................................ 3
Condensed Consolidated Statements of Income for the Three Months Ended
October 31, 1997 and 1996................................................... 4
Condensed Consolidated Statements of Cash Flows for the Three Months Ended
October 31, 1997 and 1996................................................... 5
Notes to Condensed Consolidated Financial Statements........................ 6-8
Item 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations.................................................................. 9-11
PART II. OTHER INFORMATION............................................................. 12
Item 1. Legal Proceedings........................................................... 12
Item 2. Changes in Securities....................................................... 12
Item 3. Defaults Upon Senior Securities............................................. 12
Item 4. Submission of Matters to Vote of Security Holders........................... 12
Item 5. Other Information........................................................... 12
Item 6. Exhibits and Reports on Form 8-K............................................ 12
SIGNATURE.............................................................................. 13
</TABLE>
2
<PAGE> 3
DATA PROCESSING RESOURCES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
OCTOBER 31, JULY 31,
1997 1997
------------ ------------
(UNAUDITED)
<S> <C> <C>
Current Assets:
Cash and Cash Equivalents..................................... $ 15,781,000 $ 17,812,000
Accounts Receivable (net of allowance for doubtful accounts of
$547,000 and $262,000 as of October 31, 1997 and July 31,
1997, respectively)........................................ 25,943,000 21,839,000
Prepaid Expenses and Other Current Assets..................... 1,128,000 1,076,000
------------ ------------
Total Current Assets.................................. 42,852,000 40,727,000
Property, net................................................... 1,734,000 1,429,000
Other Assets.................................................... 344,000 158,000
Intangible Assets, net.......................................... 68,046,000 67,973,000
------------ ------------
$112,976,000 $110,287,000
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts Payable and Accrued Liabilities...................... $ 7,756,000 $ 9,003,000
Income Taxes Payable.......................................... 1,717,000 1,489,000
Deferred Income Taxes......................................... 55,000 55,000
------------ ------------
Total Current Liabilities............................. 9,528,000 10,547,000
Long-Term Deferred Income Taxes................................. 81,000 81,000
Commitments and Contingencies
Shareholders' Equity:
Preferred Stock; 2,000,000 shares authorized; no shares issued
and outstanding............................................
Common Stock; 20,000,000 shares authorized; 11,079,683 and
11,013,686 shares issued and outstanding as of October 31,
1997 and July 31, 1997, respectively....................... 91,212,000 90,472,000
Additional Paid-in Capital.................................... 2,642,000 2,196,000
Retained Earnings............................................. 9,513,000 6,991,000
------------ ------------
Total Shareholders' Equity............................ 103,367,000 99,659,000
------------ ------------
$112,976,000 $110,287,000
============ ============
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
<PAGE> 4
DATA PROCESSING RESOURCES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
OCTOBER 31,
---------------------------
1997 1996
----------- -----------
<S> <C> <C>
Revenues.......................................................... $45,094,000 $20,134,000
Cost of Professional Services..................................... 32,690,000 15,434,000
----------- -----------
Gross Margin.................................................... 12,404,000 4,700,000
Selling, General and Administrative Expenses...................... 8,027,000 2,853,000
----------- -----------
Operating Income.................................................. 4,377,000 1,847,000
Interest Income, net.............................................. 127,000 202,000
----------- -----------
Income Before Provision for Income Taxes.......................... 4,504,000 2,049,000
Provision for Income Taxes........................................ 1,982,000 801,000
----------- -----------
Net Income........................................................ $ 2,522,000 $ 1,248,000
=========== ===========
Net Income per Share.............................................. $ 0.22 $ 0.16
=========== ===========
Weighted Average Shares Outstanding............................... 11,457,000 7,864,000
=========== ===========
Supplemental Operating Data:
Earnings before Interest, Taxes and Amortization................ $ 5,131,000 $ 1,958,000
=========== ===========
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
4
<PAGE> 5
DATA PROCESSING RESOURCES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
OCTOBER 31,
-------------------------
1997 1996
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income.......................................................... $ 2,522,000 $ 1,248,000
Adjustments to Reconcile Net Income to Net Cash Provided by
Operating Activities:
Depreciation and Amortization..................................... 873,000 170,000
Changes in Operating Assets and Liabilities, net of the Effect of
Acquisitions:
Accounts Receivable............................................ (4,104,000) (781,000)
Prepaid Expenses and Other Assets.............................. (325,000) (207,000)
Accounts Payable and Accrued Liabilities....................... (141,000) 171,000
Income Taxes Payable........................................... 612,000 576,000
----------- -----------
Net Cash (Used in) Provided by Operating Activities............ (563,000) 1,177,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash Paid for Contingent Acquisition Obligations.................... (1,496,000) --
Purchase of Property................................................ (430,000) (87,000)
----------- -----------
Net Cash Used in Investing Activities.......................... (1,926,000) (87,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Employee Stock Purchase Plan.......................... 144,000 --
Proceeds from the Exercise of Stock Options......................... 252,000 --
Other............................................................... 62,000 --
----------- -----------
Net Cash Provided by Financing Activities...................... 458,000 --
----------- -----------
NET (DECREASE) INCREASE IN CASH..................................... (2,031,000) 1,090,000
Cash and Cash Equivalents, Beginning of Year........................ 17,812,000 21,855,000
----------- -----------
Cash and Cash Equivalents, End of Year.............................. $15,781,000 $22,945,000
=========== ===========
SUPPLEMENTAL INFORMATION -- CASH PAID FOR:
Interest............................................................ $ 17,000 $ 4,000
=========== ===========
Income Taxes........................................................ $ 1,370,000 $ 225,000
=========== ===========
SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING AND INVESTING ACTIVITIES:
Tax Benefit of Stock Options Exercised.............................. $ 384,000 $ --
Detail of Businesses Acquired in Purchase Transactions:
Fair Value of Assets Acquired.................................. $ 734,000 $(1,129,000)
Common Stock Issued in Acquisitions............................ $ (344,000) $ 1,129,000
Cash Paid for Acquisitions..................................... $(1,496,000) $ --
----------- -----------
Liabilities Relieved........................................... $(1,106,000) $ --
=========== ===========
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
5
<PAGE> 6
DATA PROCESSING RESOURCES CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED OCTOBER 31, 1997 AND 1996
1. GENERAL
Business
Data Processing Resources Corporation (the Company) is a leading
multi-regional specialty staffing company providing information technology
services to a diverse group of corporate clients.
Interim Financial Data
The interim financial data as of October 31, 1997 and for the three months
ended October 31, 1997 and 1996 is unaudited. The information reflects all
adjustments, consisting only of normal recurring entries, that, in the opinion
of management, are necessary to present fairly the financial position and
results of operations of the Company for the periods indicated. Results of
operations for the interim periods are not necessarily indicative of the results
of operations for the full fiscal year. For further information refer to the
Company's Annual Report on Form 10-K for the fiscal year ended July 31, 1997 and
the Company's registration statement on Form S-1 (Registration No. 333-18719)
originally filed with the Securities and Exchange Commission on December 24,
1996, as amended by Amendment No. 1 to such registration statement filed with
the Securities and Exchange Commission on January 7, 1997. Certain
reclassifications have been made in the condensed consolidated financial
statements to conform amounts previously reported for fiscal year 1997 to the
fiscal year 1998 presentation.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Property -- The cost of furniture, fixtures and equipment is depreciated
using straight-line and accelerated methods based on the estimated useful lives
of the related assets, generally five to seven years.
Intangible Assets -- Intangible assets include goodwill which represents
the excess of cost over fair value of net assets acquired, and is amortized
using the straight-line method over 25 years. Long-lived assets and certain
identifiable intangibles are reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be
recoverable.
Revenue Recognition -- The Company recognizes revenues as services are
performed.
Income Taxes -- The Company provides for income taxes in accordance with
Statement of Financial Accounting Standards No. 109 (SFAS 109). SFAS 109 is an
asset and liability approach that requires the recognition of deferred tax
assets and liabilities for the expected future tax consequences of events that
have been recognized in the Company's consolidated financial statements or tax
returns. In estimating future tax consequences, the Company generally considers
all expected future events other than the enactment of changes in the tax law or
rates.
Recent Accounting Pronouncements -- In February 1997, the Financial
Accounting Standards Board ("FASB") issued SFAS No. 128, Earnings per Share. The
statement establishes standards for computing and presenting earnings per share
(EPS) and applies to entities with publicly held common stock or potential
common stock. This statement simplifies the standards for computing earnings per
share previously found in Accounting Principles Board ("APB") Opinion No. 15,
Earnings per Share, and makes them comparable to international EPS standards. It
replaces the presentation of primary EPS with a presentation of basic EPS. It
also requires dual presentation of basic and diluted EPS on the face of the
income statement for all entities with complex capital structures and requires a
reconciliation of the numerator and denominator of the basic EPS computation to
the numerator and denominator of the diluted EPS computation. The disclosure
requirements of SFAS No. 128 are effective for periods ending after December 15,
1997. Net income per
6
<PAGE> 7
DATA PROCESSING RESOURCES CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE THREE MONTHS ENDED OCTOBER 31, 1997 AND 1996
share, as reported and as would be reportable under SFAS No. 128 for the three
months ended October 31, 1997 are:
<TABLE>
<S> <C>
Primary Net Income per Share as Reported...................................... $.22
Pro Forma Basic Net Income per Share.......................................... $.23
Pro Forma Diluted Net Income per Share........................................ $.22
</TABLE>
In February 1997, the FASB issued SFAS No. 129, Disclosure of Information
About Capital Structure. The statement establishes standards for disclosing
information about an entity's capital structure. The disclosure requirements of
SFAS No. 129 are effective for periods ending after December 15, 1997.
Management does not believe that the adoption of SFAS No. 129 will have a
significant impact on its consolidated financial statements.
In June 1997, the FASB issued SFAS No. 130, Reporting Comprehensive Income,
and SFAS No. 131, Disclosures about Segments of an Enterprise and Related
Information. SFAS No. 130 establishes standards for reporting and display of
comprehensive income and its components in a full set of general-purpose
financial statements. SFAS No. 131 establishes standards of reporting by
publicly-held business enterprises and disclosure of information about operating
segments in annual financial statements and, to a lesser extent, in interim
financial reports issued to shareholders. SFAS Nos. 130 and 131 are effective
for the Company beginning in fiscal 1999. As both SFAS Nos. 130 and 131 deal
with financial disclosure, the Company does not anticipate the adoption of these
new standards will have a material impact on its financial position or results
of operations.
3. ACQUISITIONS
The Company has completed five acquisitions including: the Applications
Design and Development division ("AD&D") of ADD Consulting, Inc., Professional
Software Consultants, Inc. ("PSC"), LEARDATA Info-Services, Inc. ("Leardata"),
Computec International Strategic Resources, Inc. ("Computec") and SelecTech,
Inc. ("SelecTech"), collectively, the "Acquisitions". The Acquisitions were
accounted for as purchases. The excess of cost over fair value of net assets
acquired was allocated to goodwill, which is amortized using the straight-line
method over 25 years. An adjustment to the value of common stock issued in
transactions was recorded to reflect the impact of restrictions on disposal of
the stock. The consolidated financial statements of the Company include the
results of operations for each acquired business from the acquisition date.
Unaudited pro forma consolidated results of operations for the three months
ended October 31, 1996 would have been as follows had the acquisitions occurred
as of the beginning of the period:
<TABLE>
<CAPTION>
1996
-----------
<S> <C>
Revenues........................................................ $34,340,000
Pro Forma Net Income............................................ $ 1,882,000
Pro Forma Net Income Per Share.................................. $ 0.21
Weighted Average Shares Outstanding............................. 8,920,000
</TABLE>
Pro forma adjustments have been applied to reflect the purchase, which
includes the elimination of expenses that are not expected to have a continuing
impact on the Company, such as certain redundant personnel costs, and excess
owner's compensation, and the addition of amortization related to the intangible
assets acquired.
7
<PAGE> 8
DATA PROCESSING RESOURCES CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE THREE MONTHS ENDED OCTOBER 31, 1997 AND 1996
4. RELATED PARTY TRANSACTIONS
Information Technology Resources, Inc. ("ITR") was formed by the founder of
the Company and certain other persons, including former employees of ITR, with
the founder owning approximately 75.6% of the outstanding capital stock. As a
result of this arrangement, the Company provides certain management services to
ITR to support its operations, for which the Company receives a management fee
pursuant to a management services agreement. Effective August 1, 1997 the
management service agreement with ITR was renegotiated to reflect a reduction in
the management fee. Management fees earned by the Company were $153,000 and
$300,000 for the three months ended October 31, 1997 and 1996, respectively. ITR
also contracts with the Company for technical consultants to meet its staffing
needs. For the three months ended October 31, 1997 and 1996, the Company
recorded revenues of $720,000 and $1,023,000 from billing of ITR technical
consultants, respectively.
8
<PAGE> 9
DATA PROCESSING RESOURCES CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Form 10-Q contains forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended. These
forward-looking statements involve a number of risks and uncertainties,
including, without limitation, the Company's ability to recruit and retain
qualified technical consultants; identify, acquire and integrate suitable
acquisition candidates; obtain sufficient working capital to support such
growth; compete successfully with existing and future competitors; and other
factors described throughout this Form 10-Q and in the Company's Form 10-K for
the year ended July 31, 1997. The actual results that the Company achieves may
differ materially from any forward-looking statements due to such risks and
uncertainties. Words such as "believes", "anticipates", "expects", "intends",
and similar expressions are intended to identify forward-looking statements, but
are not the exclusive means of identifying such statements. The Company
undertakes no obligation to revise any forward-looking statements in order to
reflect events or circumstances that may arise after the date of this report.
Readers are urged to carefully review and consider the various disclosures made
by the Company in this report and in the Company's other reports filed with the
Securities and Exchange Commission that attempt to advise interested parties of
the risks and factors that may affect the Company's business, including the risk
factors set forth in the Company's prospectus dated January 21, 1997.
THREE MONTHS ENDED OCTOBER 31, 1997 COMPARED TO THREE MONTHS ENDED OCTOBER 31,
1996
Revenues. Revenues increased $25.0 million, or 124.0%, to $45.1 million for
the three months ended October 31, 1997 as compared to $20.1 million for the
three months ended October 31, 1996. This increase resulted primarily from the
contribution of revenues from the acquisitions of PSC (acquired in November
1996), Leardata (acquired in January 1997), Computec (acquired in April 1997)
and SelecTech (acquired in July 1997). In addition, recently opened branch
locations such as Seattle (opened in June 1996), Des Moines (opened in September
1996), Portland (opened in February 1997), St. Louis (opened in May 1997) and
the Company's locations in California have also contributed to the increase in
revenue. The internal growth rate, excluding the effect of acquisitions
completed in fiscal 1997, for the three months ended October 31, 1997 was 32%.
This increase represents sequential improvements from the 14%, 20%, 23% and 28%
internal growth rates reported in the first through fourth quarters of fiscal
1997, respectively. The increases were also due to: (i) new information
technology projects; (ii) increased demand in the networking and communications
market; and (iii) a broadening of the types of services being provided such as
network management and desktop services and Year 2000 Conversions.
Gross Margin. Gross margin increased $7.7 million, or 163.9%, to $12.4
million, for the three months ended October 31, 1997 as compared to $4.7 million
for the three months ended October 31, 1996. As a percentage of revenues, gross
margin increased for the three months ended October 31, 1997 to 27.5% as
compared to 23.3% for the prior year period. This gross margin percentage
improvement reflects higher gross margins from: (i) the Acquisitions due to
their higher mix of salaried consultants; (ii) the opening of the branch
locations in Seattle, Des Moines and Portland; and (iii) a gross margin
improvement program in existing markets and a change in the mix of service
offerings, with an increased component of higher margin services for the three
months ended October 31, 1997.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased approximately $5.2 million, or 181.4%, to $8.0
million for the three month ended October 31, 1997, as compared to $2.9 million
for the three months ended October 31, 1996. Selling, general and administrative
expenses also increased as a percentage of revenues to 17.8% for the three
months ended October 31, 1997, as compared to 14.2% for the prior year period.
This increase primarily resulted from: (i) amortization of intangible assets
related to acquisitions; (ii) investment in additional management personnel and
corporate infrastructure required to support planned Company growth,
particularly sales and recruiting personnel; (iii) costs related to new branch
openings; (iv) an increase in bad debt expense; and (v) an increase in
management information systems expenses required to support planned growth.
9
<PAGE> 10
Operating Income. Operating income increased $2.5 million, or 137.0%, to
$4.4 million for the three months ended October 31, 1997 from $1.8 million for
the same period in 1996. As a percentage of revenues, operating income increased
to 9.7% for the three months ended October 1997 as compared to 9.2% for the
three months ended October 31, 1996 reflecting the gross margin improvement
offset, in part, by an increase in selling, general and administrative expenses
as a percentage of revenues.
Interest Income, net. The Company had net interest income of $127,000 for
the three months ended October 31, 1997 as compared to $202,000 for the three
months ended October 31, 1996 as a result of the investment of the proceeds of
the Company's initial public offering of securities in March 1996 and of the
Company's second public offering of securities (the "Offering") in January 1997
in interest bearing investment grade securities, offset in part, by the use of
proceeds for acquisitions.
Provision for Income Taxes. The Company's effective tax rate increased to
44.0% in the three months ended October 31, 1997 from 39.1% in the three months
ended October 31, 1996. The increase in the effective tax rate is primarily due
to the effect of a full year of nondeductible amortization of goodwill on
certain acquisitions offset by the tax benefit associated with investment in
short-term tax exempt cash equivalents.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents and net working capital totaled $15.8 million and
$33.3 million, respectively, as of October 31, 1997. The Company used $563,000
in cash flow from operations for the three months ended October 31, 1997,
primarily to fund increases in accounts receivable. The Company used $1.5
million in cash in connection with its ongoing acquisition program to acquire
companies.
Accounts receivable balances have increased on a days sales outstanding
basis partially due to the effect of differing accounts receivable terms and
cycles maintained by companies acquired during fiscal 1997. Expansion of
personnel in credit and collections as a part of the Company's overall
acquisition integration strategy has taken place.
On September 25, 1997, the Company obtained a five-year, $60,000,000
Revolving/Term Loan Agreement (the "New Credit Agreement") with a bank
syndicate. The New Credit Agreement, which supersedes and replaces a prior
credit agreement, consists of a revolving line of credit in the principal amount
of $60,000,000, and bears interest at the prime rate to prime rate plus 1% or
LIBOR plus .75% to 2.25% depending on defined financial covenants. At the end of
three years, the outstanding balance on the facility converts to a two-year
fully amortized term loan. The facility is secured by substantially all of the
assets of the Company and its subsidiaries, including accounts receivable and
equipment. Additional pricing options and alternatives are available depending
on certain financial conditions. The New Credit Agreement contains various
covenants, including the maintenance of defined financial ratios such as net
worth. As of October 31, 1997, the Company had no outstanding borrowings and was
in compliance with bank covenants.
On April 30, 1997, the Company completed the acquisition by merger of
Computec. Under the terms of the agreement, a contingent earnout payment in the
amount of $734,000 consisting of $390,000 in cash and 14,970 shares of
restricted common stock was paid in October 1997. The definitive agreement also
obligates the Company to make additional earnout payments semi-annually
contingent upon Computec's earnings before interest and taxes through December
31, 1998. Should Computec achieve its contingent earnout thresholds, the
obligation under this arrangement could be material to the consolidated
financial statements.
On July 10, 1997, the Company completed the acquisition of SelecTech. Under
the terms of the agreement, a purchase price adjustment of $1.1 million in cash
was paid in September 1997.
The Company anticipates that its primary uses of working capital in future
periods will be for acquisitions, the internal development of new branches,
investments in its management information systems, earnouts and the funding of
increases in accounts receivable. Although the Company seeks to use its common
stock to make acquisitions, to the extent possible, a substantial portion of the
purchase price for acquisitions
10
<PAGE> 11
was paid in cash. The Company continually reviews and evaluates acquisition
candidates to complement and expand its existing business, and is at various
stages of evaluation and discussion with a number of such candidates. Such
acquisition candidates may also require that all or a significant portion of the
purchase price be paid in cash. The Company's ability to grow through
acquisitions is dependent on the availability of suitable acquisition candidates
and the terms on which such candidates may be acquired, which may be adversely
affected by competition for such acquisitions. The Company cannot predict to
what extent new branches will be added through acquisitions as compared to
internal development.
The Company anticipates that the opening of new branches will require an
investment of approximately $150,000 to $200,000 per branch to acquire equipment
and supplies and to fund operating losses for the initial nine- to twelve-month
period of operations which management believes will generally be required for a
new branch to achieve profitability. The Company expenses the costs of opening a
new branch as incurred, except for the cost of equipment and other capital
assets, which are capitalized. Generally, expenditures for such capital assets
for a new branch will be less than $60,000. There can be no assurance that
future branches will achieve profitability within a nine- to twelve-month period
after opening. The Company anticipates making additional capital expenditures in
connection with the development of new branch facilities in future periods and
the improvement of its network and operating system infrastructure and
management reporting system.
The Company believes that the existing cash and cash equivalents, cash flow
from operations and available borrowings under the New Credit Agreement, will be
sufficient to meet the Company's presently anticipated working capital needs for
at least the next 12 months, although the Company is evaluating various
potential acquisitions which could require all or a substantial portion of the
existing cash and cash equivalents and availability under the New Credit
Agreement and could be completed within the next 12 months. To the extent the
Company uses all of its cash resources and existing credit for acquisitions, the
Company may be required to obtain additional funds, if available, through
additional borrowings or equity financings. There can be no assurance that such
capital will be available on acceptable terms. If the Company is unable to
obtain sufficient financing, it may be unable to implement its growth strategy
fully.
11
<PAGE> 12
DATA PROCESSING RESOURCES CORPORATION
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not applicable
ITEM 2. CHANGES IN SECURITIES
In connection with the Company's acquisition by merger of Computec
International Strategic Resources, Inc. ("Computec"), on April 30, 1997, the
Company issued 14,970 shares of common stock in October 1997 as part of the
contingent earnout payment to certain shareholders of Computec. The issuance of
such shares was exempt from the registration requirements of the Securities Act
of 1933 by virtue of Section 4(2) thereunder.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
Not applicable
ITEM 5. OTHER INFORMATION
Not applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
Exhibit 27 Financial Data Schedule
(b) REPORTS ON FORM 8-K
The Registrant filed the following reports on Form 8-K with the
Securities and Exchange Commission during the third quarter of fiscal
1997:
None
12
<PAGE> 13
SIGNATURE
Pursuant to the requirements of the Securities Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Newport Beach, State of California, on
the 15th day of December, 1997.
DATA PROCESSING RESOURCES
CORPORATION
By: /s/ Michael A. Piraino
------------------------------------
Michael A. Piraino, Senior Vice
President
and Chief Financial Officer
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM INTERNALLY
PREPARED CONSOLIDATED FINANCIAL STATEMENTS FOR THE 3 MONTHS ENDED OCTOBER 31,
1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-Q FOR PERIOD
ENDED OCTOBER 31, 1997.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-01-1997
<PERIOD-END> OCT-31-1997
<CASH> 15,781
<SECURITIES> 0
<RECEIVABLES> 25,943
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 42,852
<PP&E> 1,734
<DEPRECIATION> 0
<TOTAL-ASSETS> 112,976
<CURRENT-LIABILITIES> 9,528
<BONDS> 0
0
0
<COMMON> 91,212
<OTHER-SE> 2,642
<TOTAL-LIABILITY-AND-EQUITY> 112,976
<SALES> 0
<TOTAL-REVENUES> 45,094
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<OTHER-EXPENSES> 8,027
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<INCOME-TAX> 1,982
<INCOME-CONTINUING> 2,522
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,522
<EPS-PRIMARY> .22
<EPS-DILUTED> .22
</TABLE>
