<PAGE>
Exhibit 99.3
EDGEWATER TECHNOLOGY, INC. - FORM 8-K
UNAUDITED PRO FORMA FINANCIAL STATEMENTS
INTRODUCTION
Edgewater Technology, Inc. ("Edgewater" or the "Company"), formerly known as
StaffMark Inc., provides human resource and business solutions through four
specialty platforms: IntelliMark information technology staffing and solutions;
ClinForce clinical trials support services; Strategic Legal Resources legal
staffing and Edgewater Technology, an e-business consulting firm. The Company
recognizes revenues upon the performance of services. The Company generally
compensates its associates and consultants only for hours actually worked;
therefore, wages of the associates and consultants are a variable cost that
increase or decrease as revenues increase or decrease. However, certain of the
Company's professional and information technology consultants are full-time,
salaried employees. Cost of services primarily consists of wages paid to
associates, payroll taxes, workers' compensation and other related employee
benefits. Selling, general and administrative expenses are comprised primarily
of administrative salaries, benefits, marketing, rent and recruitment expenses.
On July 13, 2000, the Company completed an initial public offering ("IPO")
of 69,500,000 shares of its indirect wholly-owned subsidiary Robert Walters plc
("Robert Walters") at a price of 170 pence per share. The shares began trading
on a conditional basis on the London Stock Exchange on July 6, 2000. The
offering included 67,200,000 ordinary shares being sold by Edgewater, and
2,300,000 new shares being sold by Robert Walters. Edgewater has also granted
the underwriters a thirty (30) day over-allotment option of an additional
10,400,000 ordinary shares. Edgewater's share of offering gross proceeds were
$172.5 million prior to offering commissions, fees and expenses. With the
exercise of the over-allotment option on July 14, 2000, Edgewater's share of
offering gross proceeds were $199.2 million prior to offering commissions, fees
and expenses.
The following unaudited pro forma consolidated statements of income set
forth the results of operations for the twelve months ended December 31, 1999
and for the three months ended March 31, 2000 as if the Robert Walters IPO had
occurred at the beginning of fiscal 1999. The unaudited pro forma consolidated
balance sheet sets forth the financial position as of March 31, 2000, as if the
IPO had occurred as of that date.
The pro forma results of operations are not necessarily indicative of future
operations or the actual results that would have occurred had the Robert Walters
IPO been completed at the beginning of fiscal 1999. These statements should be
read in conjunction with the accompanying notes herein and the historical
consolidated financial statements and related notes of the Company included in
its 1999 Annual Report of Form 10-K and Quarterly Report on Form 10-Q for the
three months ended March 31, 2000.
<PAGE>
Edgewater Technology, Inc.
Unaudited Pro Forma Combined
Balance Sheet
As of March 31, 2000
(In Thousands)
<TABLE>
<CAPTION>
Edgewater Commercial Pro Forma
Technology, Inc. Division (a) Adjustments Pro Forma
--------------------- -------------- --------------- ----------------
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 228 $ 6,717 $ (7,701) (b) $ 80,275
199,200 (d)
(103,215) (e)
(14,954) (f)
Accounts receivable, net 186,837 (84,565) (49,144) (b) 53,128
Prepaid expenses and other 18,471 (3,407) (4,164) (b) 10,900
Deferred income taxes 5,992 (4,906) 528 (c) 1,614
--------- ---------- --------- ---------
Total current assets 211,528 (86,161) 20,550 145,917
PROPERTY AND EQUIPMENT, net 30,055 (18,135) (4,424) (b) 7,496
INTANGIBLE ASSETS, net 433,222 (133,206) (9,620) (b) 290,396
OTHER ASSETS 2,700 (507) (34) (b) 2,159
--------- ---------- --------- ---------
$ 677,505 $ (238,009) $ 6,472 445,968
========= ========== ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and other accrued liabilities $ 35,390 $ (3,891) $ (18,530) (c) $ 12,969
Payroll and related liabilities 34,807 (19,028) (5,622) (c) 10,157
Reserve for workers' compensation claims 9,915 (9,795) - 120
Income taxes payable 9,675 2,026 (3,693) (c) 22,725
14,717 (g)
--------- ---------- --------- ---------
Total current liabilities 89,787 (30,688) (13,128) 45,971
LONG-TERM DEBT 288,268 (185,053) (103,215) (e) -
OTHER LONG-TERM LIABILITIES 101 - - 101
DEFERRED INCOME TAXES 9,049 (8,728) (321) (c) -
STOCKHOLDERS' EQUITY:
Common stock 294 - 294
Paid-in capital 216,759 - 216,759
Retained earnings 78,406 (13,540) 123,136 (h) 188,002
Accumulated other comprehensive income (5,159) - (5,159)
--------- ---------- --------- ---------
Total stockholders' equity 290,300 (13,540) 123,136 399,896
--------- ---------- --------- ---------
Total Liabilities and Stockholders' Equity $ 677,505 $ (238,009) $ 6,472 $ 445,968
========= ========== ========= =========
</TABLE>
<PAGE>
EDGEWATER TECHNOLOGY, INC.
NOTES TO UNAUDITED PRO FORMA BALANCE SHEET
AS OF MARCH 31, 2000
(a) Represents the pro forma adjustments made by Edgewater for the sale of its
Commercial Division effective June 29, 2000.
(b) Represents the assets of Robert Walters that were sold by Edgewater via the
IPO on the London Stock Exchange.
(c) Represents the liabilities of Robert Walters that were sold by Edgewater
via the IPO on the London Stock Exchange.
(d) Records the proceeds received by Edgewater for the IPO.
(e) Records the repayment of debt obligations with proceeds from the IPO.
(f) Records the payment of transaction fees associated with the IPO.
(g) Records the income tax obligation that resulted from the tax gain on IPO.
(h) Records the book gain generated from the IPO.
<PAGE>
Eedgewater Technology, Inc.
Unaudited Pro Forma Combined
Statement of Income
for the Three Months Ended
March 31, 2000
(In Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
Disposition Related Adjustments
------------------------------------------
Edgewater Commercial Robert Pro Forma Total
Technology, Inc. Division (a) Walters (b) Adjustments Adjustments Pro Forma
------------------ -------------- ------------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
SERVICE REVENUES $294,285 $(154,113) $(68,971) $ - $ (68,971) $71,201
COST OF SERVICES 221,268 (121,725) (49,301) - (49,301) 50,242
-------- ---------- -------- -------- --------- -------
Gross profit 73,017 (32,388) (19,670) - (19,670) 20,959
OPERATING EXPENSES:
Selling, general and administrative 58,655 (25,729) (15,482) - (15,482) 17,444
Depreciation and amortization 6,586 (1,780) (499) - (499) 4,307
-------- ---------- -------- -------- --------- -------
Operating income 7,776 (4,879) (3,689) - (3,689) (792)
-------- ---------- -------- -------- --------- -------
OTHER INCOME (EXPENSE):
Interest expense (5,444) 3,447 19 2,991 (c) 3,010 1,013
Other, net 503 72 49 - 49 624
-------- ---------- -------- -------- --------- -------
INCOME BEFORE INCOME TAXES 2,835 (1,360) (3,621) 2,991 (630) 845
INCOME TAX PROVISION 904 (434) (1,155) 954 (d) (201) 269
-------- ---------- -------- -------- --------- -------
Net income (loss) $ 1,931 $ (926) $ (2,466) $ 2,037 $ (429) $ 576
======== ========== ======== ======== ========= =======
NET INCOME PER COMMON SHARE
BASIC $ 0.07 $ 0.02
======== =======
DILUTED $ 0.07 $ 0.02
======== =======
WEIGHTED AVERAGE SHARES OUTSTANDING
BASIC 29,461 29,461
======== =======
DILUTED 29,676 29,676
======== =======
</TABLE>
<PAGE>
EDGEWATER TECHNOLOGY, INC.
NOTES TO UNAUDITED PRO FORMA STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2000
(a) Represents the pro forma adjustments made by Edgewater for the sale of its
Commercial Division effective June 29, 2000.
(b) Represents the unaudited financial results of Robert Walters, which was
sold by Edgewater via the IPO on the London Stock Exchange.
(c) Adjustment to reflect the net interest income that results from investing
cash in excess of the amounts necessary to repay debt obligations.
(d) Records the provision for federal and state income taxes at an effective
combined tax rate of approximately 31.9%.
<PAGE>
Edgewater Technology, Inc.
Unaudited Pro Forma Combined
Statement of Income
for the Twelve Months Ended
December 31, 1999
<TABLE>
<CAPTION>
(In Thousands, Except Per Share Data) Disposition Related Adjustments
-------------------------------
Edgewater Commercial Robert Pro Forma Total
Technology, Inc. Division (a) Walters (b) Adjustments Adjustments Pro Forma
---------------- ----------- ----------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
SERVICE REVENUES $ 1,220,852 $ (608,807) $ (291,038) $ $ (291,038) $ 321,007
COST OF SERVICES 918,574 (479,080) (214,442) - (214,442) 225,052
------------ ----------- ----------- -------- ----------- ---------
Gross profit 302,278 (129,727) (76,596) - (76,596) 95,955
OPERATING EXPENSES:
Selling, general and administrative 214,824 (92,943) (56,564) - (56,564) 65,317
Depreciation and amortization 21,448 (6,964) (1,520) - (1,520) 12,964
Non-recurring charges 2,153 - - - 2,153
------------ ----------- ----------- -------- ----------- ---------
Operating income 63,853 (29,820) (18,512) - (18,512) 15,521
------------ ----------- ----------- -------- ----------- ---------
OTHER INCOME (EXPENSE):
Interest expense (17,419) 12,084 518 8,261 (c) 8,779 3,444
Other, net (227) - 22 - 22 (205)
------------ ----------- ----------- -------- ----------- ---------
INCOME BEFORE INCOME TAXES 46,207 (17,736) (17,972) 8,261 (9,711) 18,760
INCOME TAX PROVISION 15,994 (6,139) (6,221) 2,859 (d) (3,361) 6,494
------------ ----------- ----------- -------- ----------- ---------
Net income (loss) $ 30,213 $ (11,597) $ (11,751) $ 5,402 $ (6,349) $ 12,267
============ =========== =========== ======== =========== =========
NET INCOME PER COMMON SHARE
BASIC $ 1.03 $ 0.42
============ =========
DILUTED $ 1.02 $ 0.42
============ =========
WEIGHTED AVERAGE SHARES OUTSTANDING
BASIC 29,280 29,280
============ =========
DILUTED 29,526 29,526
============ =========
</TABLE>
<PAGE>
EDGEWATER TECHNOLOGY, INC.
NOTES TO UNAUDITED PRO FORMA STATEMENT OF INCOME
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1999
(a) Represents the pro forma adjustments made by Edgewater for the sale of its
Commercial Division effective June 29, 2000.
(b) Represents the unaudited financial results of Robert Walters, which was
sold by Edgewater via the IPO on the London Stock Exchange.
(c) Adjustment to reflect the net interest income that results from investing
cash in excess of the amount necessary to repay debt
obligations.
(d) Records the provision for federal and state income taxes at an effective
combined tax rate of approximately 34.6%.
