<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 21, 1998
REGISTRATION NO. 333-63499
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
TMP WORLDWIDE INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 13-3906555
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
</TABLE>
--------------------------
1633 BROADWAY
NEW YORK, NEW YORK 10019
(212) 977-4200
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
------------------------------
ANDREW J. MCKELVEY
CHAIRMAN OF THE BOARD AND CEO
TMP WORLDWIDE INC.
1633 BROADWAY
NEW YORK, NEW YORK 10019
(212) 977-4200
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------------
Copies of all communications, including all communications sent to the agent for
service, should be sent to:
GREGG BERMAN, ESQ.
FULBRIGHT & JAWORSKI L.L.P.
666 FIFTH AVENUE
NEW YORK, NEW YORK 10103
--------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
- ------------------
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
- ------------------
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SHARES AMOUNT TO BE AGGREGATE PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED PER UNIT (1) OFFERING PRICE REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock, $.001 par value per share 1,853,868 $29.99 $55,597,501 $16,401.26(2)
</TABLE>
(1) The price is estimated in accordance with Rule 457(c) under the Securities
Act of 1933, as amended, solely for the purpose of calculating the
registration fee and is $29.99, the average of the high and low prices of
the Common Stock of TMP Worldwide Inc. as reported by The Nasdaq Stock
Market on September 11, 1998.
(2) Previously paid.
------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION, DATED SEPTEMBER 21, 1998
TMP WORLDWIDE INC.
1,853,868 Shares of Common Stock
------------------------
This Prospectus relates to (A) the resale of 150,000 shares of Common Stock,
$.001 par value per share (the "Common Stock"), of TMP Worldwide Inc. ("TMP" or
the "Company") from time to time for the account of Gary Knisely ("Knisely") and
(B)(i) the resale of 44,839 shares of Common Stock from time to time for the
account of Pierre Aussure, (ii) the resale of 51,244 shares of Common Stock from
time to time for the account of Gerhard Bartels, (iii) the resale of 6,405
shares of Common Stock from time to time for the account of David Kenneth Bray,
(iv) the resale of 35,230 shares of Common Stock from time to time for the
account of The TASA Ltd. Self Administered Pension Plan F/B/O David Kenneth
Bray, (v) the resale of 9,608 shares of Common Stock from time to time for the
account of Charles Marie Brusselmans, (vi) the resale of 12,811 shares of Common
Stock from time to time for the account of Neil Campbell Callie, (vii) the
resale of 3,202 shares of Common Stock from time to time for the account of
Remtor Nominees Pty. Ltd. F/B/O Trevor Morton Clark, (viii) the resale of 9,608
shares of Common Stock from time to time for the account of Jo Carol Conover,
(ix) the resale of 64,056 shares of Common Stock from time to time for the
account of Manuel Gutierrez Cortines, (x) the resale of 32,028 shares of Common
Stock from time to time for the account of Edgar S.K. Dammroff, (xi) the resale
of 48,042 shares of Common Stock from time to time for the account of Victor
Carlos Dana, (xii) the resale of 38,433 shares of Common Stock from time to time
for the account of The TASA Ltd. Self Administered Pension Plan F/B/O Fiona Mary
Hilton Darby, (xiii) the resale of 51,244 shares of Common Stock from time to
time for the account of Herman DeKesel, (xiv) the resale of 41,636 shares of
Common Stock from time to time for the account of James P. Demchak, (xv) the
resale of 6,405 shares of Common Stock from time to time for the account of
Trevor M. Dunn, (xvi) the resale of 32,028 shares of Common Stock from time to
time for the account of Luis Escudero Ygartua, (xvii) the resale of 54,447
shares of Common Stock from time to time for the account of Joaquim Espriu
Malagelada, (xviii) the resale of 25,622 shares of Common Stock from time to
time for the account of Juan Manuel Farias Gutierrez, (xix) the resale of 41,636
shares of Common Stock from time to time for the account of The TASA Ltd. Self
Administered Pension Plan F/B/O Patrick John Michael Fearon, (xx) the resale of
3,202 shares of Common Stock from time to time for the account of Richard L.
Fleming, (xxi) the resale of 44,839 shares of Common Stock from time to time for
the account of Michael Franzino, (xxii) the resale of 54,447 shares of Common
Stock from time to time for the account of Vito Gioia, (xxiii) the resale of
41,636 shares of Common Stock from time to time for the account of Duane R.
Goar, (xxiv) the resale of 6,405 shares of Common Stock from time to time for
the account of Frans Jacob Gosses, (xxv) the resale of 9,608 shares of Common
Stock from time to time for the account of Christian A.F. Groh, (xxvi) the
resale of 9,608 shares of Common Stock from time to time for the account of
Luminoz Staff Superannuation Fund F/B/O R. Neil Hatherly, (xxvii) the resale of
19,216 shares of Common Stock from time to time for the account of RJ & SG
Ingersoll Superannuation Fund F/B/O Russel J. Ingersoll, (xxviii) the resale of
16,014 shares of Common Stock from time to time for the account of Phoenix
Holdings Pty. Ltd. F/B/O Russel J. Ingersoll, (xxix) the resale of 64,056 shares
of Common Stock from time to time for the account of Klaus Jacobs, (xxx) the
resale of 41,636 shares of Common Stock from time to time for the account of
Thomas R. Keller, (xxxi) the resale of 9,608 shares of Common Stock from time to
time for the account of Dag Einhard Kremer-Nehring, (xxxii) the resale of 6,405
shares of Common Stock from time to time for the account of Michel LeGuillou,
(xxxiii) the resale of 16,014 shares of Common Stock from time to time for the
account of Harvey D. Letcher, (xxxiv) the resale of 12,811 shares of Common
Stock from time to time for the account of Claudia K. Liebesny, (xxxv) the
resale of 35,230 shares of Common Stock from time to time for the account of
David W.H. Lowry, (xxxvi) the resale of 64,056 shares of Common Stock from time
to time for the account of Peter Magnet, (xxxvii) the resale of 9,608 shares of
Common Stock from time to time for the account of Bernhard Mahlo, (xxxviii) the
resale of 32,028 shares of Common Stock from time to time for the account of
Warren L. McGregor, (xxxix) the resale of 70,461 shares of Common Stock from
time to time for the account of John McLaughlin, (xl) the resale of 16,014
shares of Common Stock from time to time for the account of Massimo Misticoni,
(xli) the resale of 6,405 shares of Common Stock from time to time for the
account of Maria Elena Quijada Cordero, (xlii) the resale of 6,405 shares of
Common Stock from time to time for the account of Terteducon Pty. Ltd. F/B/O
Gregor A. Ramsey, (xliii) the resale of 76,867 shares of Common Stock from time
to time for the account of Reinhard Fritz Rijke, (xliv) the resale of 32,028
shares of Common Stock from time to time for the account of Herbert Schmaderer,
(xlv) the resale of 41,636 shares of Common Stock from time to time for the
account of The TASA Ltd. Self Administered Pension Plan F/B/O Andrew R.F.
Simpson, (xlvi) the resale of 64,056 shares of Common Stock from time to time
for the account of Michael T.D. Squires, (xlvii) the resale of 51,244 shares of
Common Stock from time to time for the account of John Barrett Strickland,
(xlviii) the resale of 32,028 shares of Common Stock from time to time for the
account of Hans Uher, (xlix) the resale of 12,811 shares of Common Stock from
time to time for the account of Van Es Superannuation Fund, (l) the resale of
19,216 shares of Common Stock from time to time for the account of Strathwood
Unit Trust F/B/O Alan R. Van Es, (li) the resale of 12,811 shares of Common
Stock from time to time for the account of Victoriano Vila Vilar, (lii) the
resale of 9,608 shares of Common Stock from time to time for the account of
Robert Bruce Whaley, (liii) the resale of 6,405 shares of Common Stock from time
to time for the account of Jeffery C. Wierichs, (liv) the resale of 57,650
shares of Common Stock from time to time for the account of Gabriele D.E.
Willner-Lange, (lv) the resale of 57,650 shares of Common Stock from time to
time for the account of Andrea M. Wine, (lvi) the resale of 16,014 shares of
Common Stock from time to time for the account of J. Herbert Wise, and (lvii)
the resale of 9,608 shares of Common Stock from time to time for the account of
Heinz Henning Witt (collectively, the "TASA Stockholders" and together with
Knisely the "Selling Stockholders"). The Common Stock offered hereby by Knisely
was issued to Knisely by the Company on May 6, 1998 pursuant to a private
placement in connection with the acquisition by the Company of all the
outstanding capital stock of Johnson, Smith & Knisely, Inc. The Common Stock
offered hereby by the TASA Stockholders was issued to the TASA Stockholders by
the Company on August 31, 1998 pursuant to a private placement in connection
with the acquisition by the Company of all the outstanding capital stock of TASA
Holding AG. See "Recent Developments." The Company will not receive any of the
proceeds from the sale of the Common Stock by the Selling Stockholders.
(CONTINUED ON NEXT PAGE)
------------------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 9
FOR A DISCUSSION OF CERTAIN INFORMATION THAT SHOULD BE CONSIDERED
BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED HEREBY.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
The date of this Prospectus is September , 1998
<PAGE>
(CONTINUED FROM PREVIOUS PAGE)
The distribution of the Common Stock by the Selling Stockholders (and their
respective donees and pledgees) may be effected from time to time in one or more
transactions (which may involve block transactions) in the over-the-counter
market (including the Nasdaq National Market) or any exchange on which the
Common Stock may then be listed, in negotiated transactions, through the writing
of options on shares (whether such options are listed on an options exchange or
otherwise), or a combination of such methods of sale, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices. The Selling Stockholders (and their respective
donees and pledgees) may effect such transactions by selling shares to or
through broker-dealers, and such broker-dealers may receive compensation in the
form of underwriting discounts, concessions or commissions from the Selling
Stockholders and/or purchasers of shares for whom they may act as agent (which
compensation may be in excess of customary commissions). The Selling
Stockholders may also sell the shares of Common Stock pursuant to Rule 144
promulgated under the Securities Act of 1933, as amended (the "Securities Act"),
or may pledge shares as collateral for margin accounts and such shares could be
resold pursuant to the terms of such accounts. The Selling Stockholders and any
broker-dealers that act in connection with the sale of Common Stock might be
deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act and any commissions received by them and any profit on the resale
of the shares might be deemed to be underwriting discounts or commissions under
the Securities Act. The Selling Stockholders may agree to indemnify any agent,
dealer or broker-dealer that participates in transactions involving sales of the
Common Stock against certain liabilities, including liabilities arising under
the Securities Act.
The Common Stock trades on the Nasdaq National Market under the symbol
"TWPW." On September 11, 1998, the closing sale price of the Common Stock was
$29.75 per share.
All expenses of the registration of securities covered by this Prospectus
are to be borne by the Company, except that the Selling Stockholders will pay
underwriting discounts, selling commissions, and fees and the expenses, if any,
of counsel or other advisers to the Selling Stockholders.
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS OR A SUPPLEMENT TO THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR ANY OTHER PERSON. NEITHER THIS PROSPECTUS NOR ANY
SUPPLEMENT TO THIS PROSPECTUS CONSTITUTES AN OFFER TO SELL OR THE SOLICITATION
OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES
OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN
ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE
DELIVERY OF THIS PROSPECTUS OR A SUPPLEMENT TO THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF OR THEREOF OR THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT
AS OF ANY TIME SUBSEQUENT TO ITS DATE.
TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
Available Information..................................................................................... 3
Incorporation of Certain Documents by Reference........................................................... 4
The Company............................................................................................... 5
Recent Developments....................................................................................... 8
Risk Factors.............................................................................................. 9
Pro Forma Condensed Consolidated Financial Information.................................................... 15
Use of Proceeds........................................................................................... 21
Dividend Policy........................................................................................... 21
Price Range of Common Stock............................................................................... 21
Selling Stockholders...................................................................................... 22
Plan of Distribution...................................................................................... 23
Legal Matters............................................................................................. 24
Experts................................................................................................... 25
Index to Consolidated Financial Statements................................................................ F-1
</TABLE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Proxy statements, reports
and other information concerning the Company can be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and the regional offices
of the Commission located at Seven World Trade Center, 13th Floor, New York, New
York 10048, and 500 West Madison Street, Chicago, Illinois 60661, and copies of
such material can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and its public
reference facilities in New York, New York and Chicago, Illinois, at prescribed
rates. Copies of such information may also be inspected at the reading room of
the library of the National Association of Securities Dealers, Inc., 1735 K
Street, N.W., Washington, D.C. 20006. The Commission maintains a World Wide Web
site on the Internet at http://www.sec.gov that contains reports, proxy and
information statements and other information regarding the Company and other
registrants that file electronically with the Commission.
This Prospectus constitutes a part of a Registration Statement on Form S-3
(herein, together with all amendments and exhibits, referred to as the
"Registration Statement") filed by the Company with the Commission under the
Securities Act. This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information with respect to the Company and the Common Stock, reference is
hereby made to the Registration Statement. Statements contained herein
concerning the
3
<PAGE>
provisions of any contract, agreement or other document are not necessarily
complete, and in each instance reference is made to the copy of such contract,
agreement or other document filed as an exhibit to the Registration Statement or
otherwise filed with the Commission. Each such statement is qualified in its
entirety by such reference. Copies of the Registration Statement together with
exhibits may be inspected at the offices of the Commission as indicated above
without charge and copies thereof may be obtained therefrom upon payment of a
prescribed fee.
PRIVATE SECURITIES LITIGATION REFORM ACT SAFE HARBOR STATEMENT. This
Prospectus (including the documents incorporated by reference herein) contains
certain forward-looking statements (as such term is defined in the Private
Securities Litigation Reform Act of 1995) and information relating to TMP that
are based on the beliefs of the management of TMP, as well as assumptions made
by and information currently available to the management of TMP. When used in
this Prospectus, the words "estimate," "project," "believe," "anticipate,"
"intend," "expect" and similar expressions are intended to identify forward-
looking statements. Such statements reflect the current views of TMP with
respect to future events and are subject to risks and uncertainties that could
cause actual results to differ materially from those contemplated in such
forward-looking statements, including those discussed under "Risk Factors."
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. TMP does not undertake any
obligation to publicly release any revisions to these forward looking statements
to reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which are on file with the Commission (File No.
000-21571) pursuant to the Exchange Act are incorporated by reference and made a
part hereof:
(i) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997.
(ii) The Company's Quarterly Report on Form 10-Q/A for the quarter ended
March 31, 1998.
(iii) The Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1998.
(iv) The description of the Company's Common Stock contained in Item 1
of the Company's Registration Statement on Form 8-A, dated October 16, 1996.
(v) The Company's Current Report on Form 8-K dated August 26, 1997,
relating to the acquisition of Austin Knight Limited.
All documents and reports subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering of the securities
offered hereby shall be deemed incorporated by reference into this Prospectus
and to be a part hereof from the date of the filing of such documents or
reports. The information relating to the Company in this Prospectus should be
read together with the information in the documents incorporated by reference.
Any statement contained in a document incorporated by reference herein,
unless otherwise indicated therein, speaks as of the date of the document. Any
statement contained in a document incorporated by reference herein shall be
deemed to be modified or superseded for all purposes to the extent that a
statement contained in this Prospectus modifies or replaces such statement.
The Company will furnish without charge to each person to whom this
Prospectus is delivered, upon request, a copy of any or all of the documents
described above, other than exhibits to such documents, unless such exhibits are
specifically incorporated by reference into such documents. Requests should be
addressed to: TMP Worldwide Inc., 1633 Broadway, New York, New York 10019,
Attention: Myron F. Olesnyckyj, Esq., Vice President-General Counsel, (Tel. No.
(212) 977-4200). The Company furnishes its stockholders with an annual report
containing audited financial statements. In addition, the Company may furnish
such other reports as may be authorized, from time to time, by the Board of
Directors.
4
<PAGE>
THE COMPANY
AS USED IN THIS PROSPECTUS, "GROSS BILLINGS" REFERS TO BILLINGS FOR
ADVERTISING PLACED IN TELEPHONE DIRECTORIES, NEWSPAPERS, NEW MEDIA AND OTHER
MEDIA, AND ASSOCIATED FEES FOR RELATED SERVICES. WHILE GROSS BILLINGS ARE NOT
INCLUDED IN THE COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS, THE TRENDS IN GROSS
BILLINGS DIRECTLY IMPACT THE COMMISSIONS AND FEES EARNED BY THE COMPANY. THE
COMPANY, WHICH OPERATES IN ONE BUSINESS SEGMENT, EARNS COMMISSIONS BASED ON A
PERCENTAGE OF THE MEDIA ADVERTISING PURCHASED AT A RATE ESTABLISHED BY THE
RELATED PUBLISHER, AND ASSOCIATED FEES FOR RELATED SERVICES. IN ADDITION, THE
COMPANY EARNS FEES FOR THE PLACEMENT OF ADVERTISEMENTS ON THE INTERNET,
INCLUDING ITS CAREER WEB SITES, AND THROUGH EXECUTIVE SEARCH SERVICES. EARNINGS
BEFORE INTEREST, INCOME TAXES, DEPRECIATION AND AMORTIZATION ("EBITDA") IS
PRESENTED TO PROVIDE ADDITIONAL INFORMATION ABOUT THE COMPANY'S ABILITY TO MEET
ITS FUTURE DEBT SERVICE, CAPITAL EXPENDITURES AND WORKING CAPITAL REQUIREMENTS
AND IS ONE OF THE MEASURES WHICH DETERMINES THE COMPANY'S ABILITY TO BORROW
UNDER ITS CREDIT FACILITY. EBITDA SHOULD NOT BE CONSIDERED IN ISOLATION OR AS A
SUBSTITUTE FOR OPERATING ACTIVITIES AND OTHER INCOME OR CASH FLOW STATEMENT DATA
PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES OR AS A
MEASURE OF THE COMPANY'S PROFITABILITY OR LIQUIDITY. GROSS BILLINGS WITH RESPECT
TO COMPANIES ACQUIRED BY THE COMPANY REFER TO THE COMPANY'S ESTIMATE OF THE
ACQUIRED COMPANIES' ANNUAL GROSS BILLINGS.
TMP Worldwide Inc. ("TMP" or the "Company") is a marketing services,
communications, executive search and technology company that provides
comprehensive, individually tailored advertising services, including development
of creative content, media planning, production and placement of corporate
advertising, market research, direct marketing, executive search and other
ancillary services and products. The Company is one of the world's largest
recruitment advertising agencies and the world's largest yellow page advertising
agency as well as a leader in the use of the Internet for recruiting.
The Company offers advertising programs to more than 17,000 clients,
including more than 70 of the Fortune 100 and more than 285 of the Fortune 500
companies. The Company's growth strategy is to continue to pursue consolidation
opportunities in its core advertising business and to leverage its client base
and its approximately 2,200 sales, marketing and customer service personnel to
expand its Internet-based businesses. For the year ended December 31, 1997, the
Company's gross billings were $1.1 billion, commissions and fees were $237.4
million, net income was $9.6 million and EBITDA was $41.0 million.
TMP is the world's largest yellow page advertising agency, generating
approximately $457.5 million in yellow page gross billings for the year ended
December 31, 1997. TMP is one of the world's largest recruitment advertising
agencies, generating approximately $573.2 million in recruitment advertising
gross billings for the same period. With approximately 30% of the national
accounts segment of the U.S. yellow page advertising market, TMP is
approximately three times larger than its nearest competitor, based on yellow
page gross billings. A substantial part of the Company's growth in each of its
targeted markets has been achieved through acquisitions. From January 1, 1993
through August 31, 1998, TMP completed 61 acquisitions including, in August
1998, the acquisition of all the outstanding capital stock of TASA Holding A.G.
("TASA"), an international executive search firm. See "Recent Developments." The
Company believes additional acquisition opportunities exist, particularly in the
recruitment advertising, executive search and Internet markets, and intends to
continue its strategy of making acquisitions which relate to its core
businesses.
TMP has created innovative solutions to assist its clients in capitalizing
on the growing awareness and acceptance of the Internet. For its recruitment
advertising clients, TMP has developed interactive career sites which can be
accessed by individuals seeking employment via the Internet on a global basis.
The Company has several career sites, including The Monster
Board-Registered Trademark-, Online Career Center-SM- ("OCC"), Be the Boss-SM-
and MedSearch-SM-, which as of August 31, 1998 collectively contain
approximately 167,000 paid job listings from 34,000 clients, and 560,000
resumes. In addition, in May 1998, the Company expanded its suite of online
career products and services, adding new content and community with the
acquisition of About Work (www.aboutwork.com) and the largest online internship
database, with the acquisition of Student Center (www.studentcenter.com).
5
<PAGE>
YELLOW PAGE ADVERTISING. TMP develops yellow page marketing programs for
national accounts, clients which sell products or services in multiple markets.
The national segment of the yellow page advertising market was an approximately
$1.7 billion market in the U.S. for the year ended December 31, 1997. The
national yellow page market has grown each year since 1981. During the period of
1990 through 1997, the market grew at a compound annual growth rate of
approximately 6.2%. Yellow page advertising is a complex process involving the
creation of effective imagery and message and the development of media plans
which evaluate approximately 7,000 yellow page directories of which TMP's larger
accounts utilize over 2,000. Coordinating the placement of advertisements in
this number of directories requires an extensive effort at the local level, and
TMP's yellow page sales, marketing and customer service staff of approximately
680 people provides an important competitive advantage in marketing and
executing yellow page advertising programs. TMP earns commissions from yellow
page advertising paid by directory publishers which result in an effective
commission rate to the Company of approximately 20% of yellow page gross
billings.
TMP takes a proactive approach to yellow page advertising by undertaking
original research on the efficacy of the medium, in many cases quantifying the
effectiveness of a given advertising campaign. The Company also has a rigorous
quality assurance program designed to ensure client satisfaction. The Company
believes that this program has enabled it to maintain a yellow page client
retention rate, year to year, in excess of 90%.
RECRUITMENT ADVERTISING. For the year ended December 31, 1997, total
spending on advertisements globally in the recruitment classified advertisement
section of newspapers was approximately $12 billion. While the recruitment
advertising market has historically been cyclical, during the period of 1990
through 1997, the U.S. market grew at a compound annual growth rate of
approximately 12%. In the U.S., the Company receives commissions generally equal
to 15% of recruitment advertising gross billings. Outside of the U.S., where,
collectively, the Company derives the majority of its recruitment advertising
commissions and fees, TMP's commission rates for recruitment advertising vary,
ranging from approximately 10% in Australia to 15% in Canada and the United
Kingdom. The Company also earns fees from value-added services such as design,
research and other creative and administrative services which resulted in
aggregate commissions and fees equal to approximately 21% of recruitment
advertising gross billings for the year ended December 31, 1997.
The services provided by recruitment advertising agencies can be complex and
range from the design and placement of classified advertisements to the creation
of comprehensive image campaigns which internationally "brand" a client as a
quality employer. Further, shortages of qualified employees in many industries,
particularly in the technology area, have increased the need for recruitment
advertising agencies to expand the breadth of their service offerings to effect
national and sometimes global recruitment campaigns. For these reasons, the
Company believes that over time, the proportion of overall recruitment
advertising placed through recruitment advertising agencies will grow. Given the
scale of its recruitment advertising operations and the scope of its service
offerings, the Company believes it is well positioned to participate in this
market growth.
The Company has decided to expand the scope of its recruitment business to
assist its clients in recruiting executives. Accordingly, in May 1998, the
Company acquired Johnson, Smith & Knisely, Inc., the twelfth largest executive
search firm in the United States. This acquisition, coupled with the acquisition
of TASA, provided the Company with 32 executive search offices in 17 countries.
INTERNET SERVICES. The Company's Internet-based services complement its
traditional advertising businesses. In recruitment, the Company has several
career sites, including The Monster Board-Registered Trademark-, Online Career
Center-SM-, Be the Boss-SM- and MedSearch-SM- which provide continuously
available databases of career opportunities. Users of these sites can search for
employment opportunities by location, type of job and other criteria. Resumes
can be sent to prospective employers electronically and submitted on-line or via
mail. Users can also access other value-added services such as discussion forums
and on-line career advice.
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Based on its experience with its clients, TMP believes that only 20% to 30% of
open job positions are advertised using traditional print media and that on-line
solutions, which are significantly less expensive than traditional recruitment
methods, will significantly expand the recruitment advertising market. More than
55 of the Fortune 100 companies are utilizing the Company's career sites.
Dealer Locator, which is marketed to yellow page accounts, allows clients to
offer World Wide Web ("Web") pages for local offices, dealers or franchise
locations which are linked to the client's corporate Web site. These pages are
designed to generate additional customer flow while reinforcing brand imagery
contained in other advertising programs. Dealer Locator home pages will
typically include address, directions, hours of operation and potentially other
information such as sale items.
TMP believes its pre-existing relationships with yellow page and recruitment
advertising clients and its sales, marketing and customer service staff of over
2,200 people provide an important competitive advantage in pursuing the market
for Internet clients. Further, the Company believes its innovative Internet
products will provide an opportunity to enhance its ability to market both
traditional advertising and Internet services to non-TMP clients.
The Company is the successor to the businesses formerly conducted by TMP
Worldwide Inc. and subsidiaries ("Old TMP"), Worldwide Classified Inc. and
subsidiaries ("WCI") and McKelvey Enterprises, Inc. and subsidiaries, the chief
executive officer of which was Andrew J. McKelvey (the "Principal Stockholder").
McKelvey Enterprises, Inc. was formed in 1967 by Mr. McKelvey. On December 9,
1996, Old TMP merged into McKelvey Enterprises, Inc. Thereafter, WCI merged into
McKelvey Enterprises, Inc. McKelvey Enterprises, Inc. then merged into Telephone
Marketing Programs Incorporated. Such mergers are collectively referred to as
the "Mergers." In addition, Mr. McKelvey sold or contributed his interest in
five other entities to the Company. Following the Mergers, Telephone Marketing
Programs Incorporated changed its name to TMP Worldwide Inc. All historical
financial data contained herein for periods ended prior to December 9, 1996
reflects the historical financial data of Old TMP, WCI, McKelvey Enterprises,
Inc. and the other entities. The Company was incorporated in Delaware in August
1996. Its executive offices are located at 1633 Broadway, 33rd Floor, New York,
New York 10019, and its telephone number at that location is (212) 977-4200.
7
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RECENT DEVELOPMENTS
Subsequent to June 30, 1998, TMP completed the acquisition of TASA, an
executive search firm based in Switzerland, and announced the probable
acquisition of Morgan & Banks Limited ("M&B"), a search and selection firm based
in Australia. A brief description of TASA and M&B follows:
TASA HOLDING AG ACQUISITION
On August 31, 1998, the Company acquired all of the outstanding capital
stock of TASA Holding AG ("TASA"), a Swiss corporation. In connection with the
acquisition of TASA, the Company issued to the TASA Stockholders an aggregate of
1,703,868 shares of TMP Common Stock in a private placement transaction. The
acquisition will be accounted for as a pooling-of-interests.
TASA, an international executive search firm based in Zurich, has offices in
Europe, North America and the Pacific Rim. For the year ended December 31, 1997,
TASA generated revenue of approximately $39 million and had net income of
approximately $600,000.
M&B PROBABLE ACQUISITION
On August 17, 1998, the Company announced an agreement in principle to
acquire all of the outstanding capital stock of M&B, an Australian corporation.
The acquisition, which is expected to be completed by the end of the fourth
quarter of 1998, is expected to be accounted for as a pooling-of-interests.
M&B, one of the largest temporary contracting and search and selection firms
in Australasia, has offices in Australia, New Zealand, the UK, Hong Kong and
Singapore. For the year ended March 31, 1998, M&B generated revenue of
approximately $235.8 million and had net income of approximately $7.9 million.
8
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RISK FACTORS
IN ADDITION TO THE OTHER INFORMATION IN THIS PROSPECTUS, THE FOLLOWING
FACTORS SHOULD BE CONSIDERED CAREFULLY IN EVALUATING AN INVESTMENT IN THE SHARES
OF COMMON STOCK OFFERED BY THIS PROSPECTUS. THIS PROSPECTUS CONTAINS, IN
ADDITION TO HISTORICAL INFORMATION, FORWARD-LOOKING STATEMENTS THAT INVOLVE
RISKS AND UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS COULD DIFFER MATERIALLY.
FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE NOT
LIMITED TO, THOSE DISCUSSED BELOW, AS WELL AS THOSE DISCUSSED ELSEWHERE IN THIS
PROSPECTUS.
UNCERTAIN ABILITY TO MANAGE GROWTH
The Company's business has grown rapidly in recent periods. The growth of
the Company's business has placed a significant strain on the Company's
management and operations. The Company's expansion has resulted, and is expected
in the future to result, in substantial growth in the number of its employees
and in increased responsibility for both existing and new management personnel
and incremental strain on the Company's existing operations, financial and
management information systems. The Company's success depends to a significant
extent on the ability of its executive officers and other members of senior
management to operate effectively both independently and as a group. If the
Company is not able to manage existing or anticipated growth, the Company's
business, financial condition and operating results would be materially
adversely affected.
RISKS ASSOCIATED WITH ACQUISITIONS
The Company expects that it will continue to grow, in part, by acquiring
businesses. The success of this strategy depends upon several factors, including
the continued availability of financing and the Company's ability to identify
and acquire businesses on a cost-effective basis, as well as its continued
ability to integrate acquired personnel, operations, products and technologies
into its organization effectively, to retain and motivate key personnel and to
retain the clients of acquired firms. There can be no assurance that financing
for acquisitions will be available on terms acceptable to the Company, or that
the Company will be able to identify or consummate new acquisitions, or manage
and integrate its recent or future expansions successfully, and any inability to
do so would have a material adverse effect on the Company's business, financial
condition and operating results. There also can be no assurance that the Company
will be able to sustain the rates of growth that it has experienced in the past.
UNCERTAIN VIABILITY OF TRADITIONAL MEDIA
The Company derives a substantial portion of its commissions and fees from
designing and placing recruitment advertisements in traditional media such as
newspapers and trade publications. This business constituted approximately 51.8%
of total commissions and fees for the year ended December 31, 1997. The Company
also derives a substantial portion of its commissions and fees from placing
advertising in yellow page directories. This business constituted approximately
40.3% of total commissions and fees for the year ended December 31, 1997. There
can be no assurance that the commissions received by the Company in the future
will be equal to the commissions which it has historically received. To the
extent that new media, such as the Internet, cause yellow page directories and
other forms of traditional media to be less desirable forms of advertising media
without at least a proportionate fee increase generated from advertising on the
Internet, of which there can be no assurance, the Company's business, financial
condition and operating results will be materially adversely affected.
UNCERTAIN ACCEPTANCE OF THE INTERNET
Use of the Internet by consumers is at a very early stage of development,
and market acceptance of the Internet as a medium for information,
entertainment, commerce and advertising is subject to a high level of
uncertainty. The Company's clients have only limited experience with the
Internet as an advertising medium and such clients have not devoted a
significant portion of their advertising budgets to Internet-
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based advertising in the past. In addition, a significant portion of the
Company's potential clients have no experience with the Internet as an
advertising medium and have not devoted any portion of their advertising budgets
to Internet-based advertising in the past. There can be no assurance that
advertisers will be persuaded to allocate or continue to allocate portions of
their budgets to Internet-based advertising. If Internet-based advertising is
not widely accepted by advertisers and advertising agencies, the Company's
business, financial condition and operating results, including its expected rate
of commissions and fees growth, would be materially adversely affected. Although
the Company generated Internet revenue of $18.6 million for the year ended
December 31, 1997, there can be no assurance that the Company will continue to
generate substantial Internet-based revenue in the future.
UNCERTAIN ACCEPTANCE OF THE COMPANY'S INTERNET CONTENT
The Company's future growth depends in part upon its ability to deliver
original and compelling services in order to attract users valuable to the
Company's advertising clients. There can be no assurance that the Company's
content will be attractive to a sufficient number of Internet users to generate
material advertising revenues. There also can be no assurance that the Company
will be able to anticipate, monitor and successfully respond to rapidly changing
consumer tastes and preferences so as to attract a sufficient number of users to
its Web sites. Internet users can freely navigate and instantly switch among a
large number of Web sites, many of which offer original content, making it
difficult for the Company to distinguish its content and attract users. In
addition, many other Web sites offer very specific, highly targeted content that
could have greater appeal than the Company's sites to particular subsets of the
Company's target audience.
COMPETITION; LOW BARRIERS TO ENTRY
The markets for the Company's services are highly competitive and are
characterized by pressures to reduce prices, incorporate new capabilities and
technologies and accelerate job completion schedules.
The Company faces competition from a number of sources. These sources
include national and regional advertising agencies, specialized and integrated
marketing communication firms and traditional media companies as well as
executive search firms. In addition, with respect to new media, many advertising
agencies and publications have started either to internally develop or acquire
new media capabilities. Some established companies that provide integrated
specialized services (such as advertising services or Web site design) and are
technologically proficient, especially in the new media area, are also competing
with the Company. Many of the Company's competitors or potential competitors
have long operating histories, and some may have greater financial, management,
technological development, sales, marketing and other resources than the
Company. In addition, the Company's ability to maintain its existing clients and
attract new clients depends to a significant degree on the quality of its
services and its reputation among its clients and potential clients.
The Company has no significant proprietary technology that would preclude or
inhibit competitors from entering the yellow page, recruitment or on-line
advertising markets or executive search business. There can be no assurance that
existing or future competitors will not develop or offer services and products
that provide significant performance, price, creative or other advantages over
those offered by the Company, which could have a material adverse effect on the
Company's business, financial condition and operating results.
FLUCTUATIONS IN QUARTERLY OPERATING RESULTS; SEASONALITY AND CYCLICALITY OF
BUSINESS
The Company's quarterly operating results have fluctuated in the past and
may fluctuate in the future as a result of a variety of factors, including the
timing of acquisitions, the timing of yellow page directory closings, the
largest number of which currently occur in the third quarter, and the receipt of
additional commissions, if earned, from yellow page publishers for achieving a
specified volume of advertising, which
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commissions are typically reported in the fourth quarter. The Company's
quarterly commissions and fees earned from recruitment advertising are typically
highest in the first quarter and lowest in the fourth quarter. For the year
ended December 31, 1997, the Company's commissions and fees from recruitment
advertising were 51.8% of the Company's total commissions and fees. Recruitment
advertising commissions and fees tend to be more cyclical than yellow page
commissions and fees, and, therefore, to the extent that a significant
percentage of the Company's commissions and fees are derived from recruitment
advertising, the Company's operating results may be subject to increased
cyclicality.
TECHNOLOGICAL RISKS
The market for Internet products and services is characterized by rapid
technological developments, frequent new product introductions and evolving
industry standards. The emerging character of these products and services and
their rapid evolution will require that the Company continually improve the
performance, features and reliability of its Internet content, particularly in
response to competitive offerings. There can be no assurance that the Company
will be successful in responding quickly, cost effectively and sufficiently to
these developments. In addition, the widespread adoption of new Internet
technologies or standards could require substantial expenditures by the Company
to modify or adapt its Web sites and services and could affect that Company's
financial condition or operating results. In addition, new Internet services or
enhancements which are or may be offered by the Company may contain design flaws
or other defects that could require costly modifications or result in a loss of
client confidence, either of which could have a material adverse effect on the
Company's business, financial condition or operating results. The Monster
Board-Registered Trademark- connects to the Internet through GTE
Internetworking. OCC connects to the Internet directly through its own on-site
servers. Any disruption in Internet access or in the Internet generally could
affect the Company's financial condition or operating results.
DEPENDENCE ON ATTRACTING AND RETAINING QUALIFIED CONSULTANTS
The success of TMP's executive search business depends upon its ability to
attract and retain consultants who possess the skills and experience necessary
to fulfill its clients' executive search needs. TMP believes it has been able to
attract and retain highly qualified, effective consultants as a result of its
reputation, and performance-based compensation system. Consultants have the
potential to earn substantial bonuses based on the amount of revenue generated
by obtaining executive search assignments and executing search assignments and
by assisting other consultants to obtain or complete executive search
assignments. Bonuses represent a significant proportion of consultants' total
compensation. Any diminution of TMP's reputation could impair its ability to
retain existing or attract additional qualified consultants. Any such inability
to attract and retain qualified consultants could have a material adverse effect
on TMP's executive search business, results of operations and financial
condition.
PORTABLE CLIENT RELATIONSHIPS
The success of TMP's executive search business depends upon the ability of
its consultants to develop and maintain strong, long-term relationships with
clients. Usually, one or two consultants have primary responsibility for a
client relationship. When a consultant leaves one executive search firm and
joins another one, clients that have established relationships with the
departing consultant may move their business to the consultant's new employer.
The loss of one or more clients is more likely to occur if the departing
consultant enjoys a widespread name recognition or has developed a reputation as
a specialist in executing searches in a specific industry or management
function. Although client portability for yellow page and recruitment
advertising historically has not caused significant problems for TMP, the
failure to retain its most effective consultants or maintain the quality of
service to which its clients are accustomed, and the ability of a departing
consultant to move business to his or her new employer, could have a material
adverse effect on TMP's executive search business, results of operations and
financial condition.
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MAINTENANCE OF PROFESSIONAL REPUTATION AND BRAND NAME
TMP's ability to secure new executive search engagements and hire qualified
professionals is highly dependent upon its overall reputation and brand name
recognition, including the names Johnson Smith & Knisely and TASA, as well as
the individual reputations of its professionals. Because TMP obtains a majority
of its new engagements from existing clients, or from referrals by those
clients, the dissatisfaction of any such client could have a disproportionate,
adverse impact on its ability to secure new engagements. Any factor that
diminishes the reputation of TMP or any of its personnel, including poor
performance, could make it substantially more difficult for them to compete
successfully for both new engagements and qualified consultants, and could have
an adverse effect on TMP's executive search business, results of operations and
financial condition.
RESTRICTIONS IMPOSED BY BLOCKING ARRANGEMENTS
Either by agreement with clients or for marketing or client relationship
purposes, executive search firms frequently refrain, for a specified period of
time, from recruiting certain employees of a client, and possibly other entities
affiliated with such client, when conducting executive searches on behalf of
other clients (a "blocking" arrangement). Blocking arrangements generally remain
in effect for one or two years following completion of an assignment. However,
the duration and scope of the blocking arrangement or "off limits" period,
including whether it covers all operations of a client and its affiliates or
only certain divisions of a client, generally depends on such factors as the
length of the client relationship, the frequency with which the executive search
firm has been engaged to perform executive searches for the client and the
number of assignments the executive search firm has generated or expects to
generate from the client. Some of TMP's executive search clients are recognized
as industry leaders and/or employ a significant number of qualified executives
who are potential candidates for other companies in that client's industry.
Blocking arrangements with such a client or awareness by a client's competitors
of such an arrangement may make it difficult for TMP to obtain executive search
assignments from, or to fulfill executive search assignments for, competitors
while employees of that client may not be solicited. As TMP's client base grows,
particularly in its targeted business sectors, blocking arrangements
increasingly may impede their growth or their ability to attract and serve new
clients, which could have an adverse effect on TMP's executive search business,
results of operations and financial condition.
CONTROL BY PRINCIPAL STOCKHOLDER
Andrew J. McKelvey beneficially owns all of the outstanding Class B Common
Stock and 11,206,541 shares of Common Stock which together represent
approximately 69.8% of the combined voting power of all classes of voting stock
of the Company. Mr. McKelvey is, therefore, able to direct the election of all
of the members of the Company's Board of Directors and exercise a controlling
influence over the business and affairs of the Company, including any
determinations with respect to mergers or other business combinations involving
the Company, the acquisition or disposition of assets of the Company, the
incurrence of indebtedness by the Company, the issuance of any additional Common
Stock or other equity securities and the payment of dividends with respect to
the Common Stock. Similarly, Mr. McKelvey has the power to determine matters
submitted to a vote of the Company's stockholders without the consent of the
Company's other stockholders and has the power to prevent a change of control of
the Company.
ANTITAKEOVER EFFECT OF CERTAIN PROVISIONS OF CERTIFICATE OF INCORPORATION,
BYLAWS AND DELAWARE LAW
The Company's Board of Directors has the authority to issue up to 800,000
shares of undesignated preferred stock and to determine the price, rights,
preferences, privileges and restrictions, including voting and conversion rights
of such shares, without any further vote or action by the Company's
stockholders. The rights of the holders of Common Stock will be subject to, and
may be adversely affected by, the rights of the holders of any preferred stock
that may be issued in the future. The issuance of preferred stock could have the
effect of making it more difficult for a third party to acquire a majority of
the outstanding
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voting stock of the Company. The Company has no current plans to issue shares of
preferred stock following this offering. Further, certain provisions of the
Company's Certificate of Incorporation and By-Laws and of Delaware law could
delay, prevent or make more difficult a merger, tender offer or proxy content
involving the Company. Among other things, these provisions specify advance
notice requirements for stockholder proposals and director nominations. In
addition, Mr. McKelvey controls approximately 69.8% of the combined voting power
of all classes of voting stock of the Company.
FOREIGN OPERATIONS AND RELATED RISKS
The Company conducts operations in various foreign countries, including
Australia, Austria, Belgium, Canada, France, Germany, Hong Kong, Indonesia,
Italy, Japan, Mexico, the Netherlands, New Zealand, Panama, Singapore, South
Africa, Spain, Switzerland and the United Kingdom. For the year ended December
31, 1997, approximately 33.8% of the Company's commissions and fees were earned
outside of the U.S. and collected in local currency. In addition, the Company
generally pays operating expenses with the corresponding local currency and is
at risk for exchange rate fluctuations between such local currencies and the
dollar. The Company does not conduct any significant hedging activities.
The Company is also subject to taxation in foreign jurisdictions. In
addition, transactions between the Company and its foreign subsidiaries may be
subject to U.S. and foreign withholding taxes. Applicable tax rates in foreign
jurisdictions differ from those of the U.S., and are subject to periodic change.
The extent, if any, to which the Company will receive credit in the U.S. for
taxes paid in foreign jurisdictions will depend upon the application of
limitations set forth in the Internal Revenue Code, as well as the provisions of
any tax treaties which may exist between the U.S. and such foreign
jurisdictions.
POSSIBLE VOLATILITY OF STOCK PRICE
The stock market has, from time to time, experienced extreme price and
volume fluctuations. Factors such as announcements by the Company of variations
in its quarterly financial results and fluctuations in advertising commissions
and fees, including the percentage of the Company's commissions and fees derived
from Internet-based services and products could cause the market price of the
Common Stock to fluctuate significantly. Further, due to the volatility of the
stock market generally, the price of the Common Stock could fluctuate for
reasons unrelated to the operating performance of the Company.
GOVERNMENT REGULATION
As an advertising agency which creates and places print and Internet
advertisements, the Company is subject to Sections 5 and 12 of the Federal Trade
Commission Act (the "FTC Act") which regulate advertising in all media,
including the Internet, and require advertisers and advertising agencies to have
substantiation for advertising claims before disseminating advertisements. The
FTC Act prohibits the dissemination of false, deceptive, misleading, and unfair
advertising, and grants the Federal Trade Commission ("FTC") enforcement powers
to impose and seek civil penalties, consumer redress, injunctive relief and
other remedies upon advertisers and advertising agencies which disseminate
prohibited advertisements. Advertising agencies such as TMP are subject to
liability under the FTC Act if the agency actively participates in creating the
advertisement, and knew or had reason to know that the advertising was false or
deceptive.
In the event that any advertising created by TMP was found to be false,
deceptive or misleading, the FTC Act could potentially subject the Company to
liability. The fact that the FTC has recently brought several actions charging
deceptive advertising via the Internet, and is actively seeking new cases
involving advertising via the Internet, indicates that the FTC Act could pose a
somewhat higher risk of liability to the advertising distributed via the
Internet. The FTC has never brought any actions against the Company.
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Further, there can be no assurance that other current or new government laws
and regulations, or the application of existing laws and regulations will not
subject the Company to significant liabilities, significantly dampen growth in
Internet usage, prevent the Company from offering certain Internet content or
services or otherwise cause a material adverse effect on the Company's business,
financial condition or operating results.
DIVIDEND POLICY
The Company currently intends to retain earnings, if any, to support its
growth strategy and does not anticipate paying dividends on its Common Stock and
Class B Common Stock in the foreseeable future. Payment of dividends on Common
Stock and Class B Common Stock is prohibited by the Company's financing
agreement. See "Dividend Policy."
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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
The Unaudited Pro Forma Condensed Combined Financial Information reflects
financial information which gives effect to the Company's probable acquisition
of all the outstanding stock of M&B and the assumed exercise of all options to
acquire M&B stock in exchange for the issuance of approximately 6,161,000 shares
of the Company's Common Stock. The approximately 6,161,000 shares was calculated
using an exchange formula based upon a per share price for M&B shares of 4.65
Australian dollars translated at 0.57 US dollars per Australian dollar and
approximately 74.4 million M&B shares outstanding after the assumed exercise of
all options to purchase M&B shares. The Pro Forma Statements included herein
reflect the anticipated use of the pooling-of-interests method of accounting,
after giving effect to the pro forma adjustments discussed in the accompanying
notes. Such financial information has been prepared from, and should be read in
conjunction with, the historical consolidated financial statements and notes
thereto of TMP incorporated by reference in this Prospectus and of M&B included
in this Prospectus.
The Pro Forma Condensed Combined Financial Information (i) gives effect to
the acquisition of M&B, (ii) gives effect, in the Combined Statement of
Operations for the year ended December 31, 1997, to the acquisition by TMP, in
August 1997, of all the outstanding stock of Austin Knight Limited, ("Austin
Knight"), for a purchase price of approximately $47.2 million, and (iii)
includes the adjustments described in the notes herein.
The Pro Forma Condensed Combined Balance Sheet gives effect to the merger
with M&B as if it had occurred on June 30, 1998, combining the balance sheets of
TMP at June 30, 1998 with that of M&B as of March 31, 1998. The Pro Forma
Condensed Combined Statements of Operations give effect to the merger with M&B
as if it had occurred at the beginning of the earliest period presented,
combining the results of TMP for the six months ended June 30, 1998 and each
year in the three-year period ended December 31, 1997 with those of M&B for the
six months ended March 31, 1998 and each year in the three-year period ended
March 31, 1998, respectively. In addition, the Pro Forma Condensed Combined
Statement of Operations for the year ended December 31, 1997 includes the
results of Austin Knight for the period prior to its acquisition by TMP on
August 26, 1997.
The consolidated financial statements of M&B included in the Pro Forma
Condensed Combined Financial Information utilize Australian GAAP (which
substantially conforms to US GAAP) and were translated at the following exchange
rates: Australian dollars were translated to US dollars at the rate of 0.6613,
0.6762, 0.7137, 0.7874 and 0.7455, respectively, with respect to the Balance
Sheet at March 31, 1998 and the Statement of Operations for the six months ended
March 31, 1998 and the years ended March 31, 1998, 1997 and 1996. The Statement
of Operations of Austin Knight included in the December 31, 1997 Pro Forma
Condensed Combined Statement of Operations was translated from British Pounds
Sterling to US dollars at the rate of 1.634 US dollars per British Pound
Sterling.
The Pro Forma Condensed Combined Statements of Operations presented do not
include any potential cost savings. The Company believes that it may be able to
reduce salaries and related costs and office and general expenses as it
eliminates duplication of overhead. However, there can be no assurance that the
Company will be successful in effecting any such cost savings.
The Pro Forma Condensed Combined Financial Information is unaudited and is
not necessarily indicative of the consolidated results which actually would have
occurred if the above transactions had been consummated at the beginning of the
periods presented, nor does it purport to present the future financial position
and results of operations for future periods.
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TMP WORLDWIDE INC.
PRO FORMA CONDENSED COMBINED BALANCE SHEET
JUNE 30, 1998
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
TMP MORGAN & BANKS PRO FORMA
WORLDWIDE INC. LIMITED ADJUSTMENTS COMBINED
-------------- ---------------- ------------- -----------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents...................... $ 5,927 $ 9,581 $ -- $ 15,508
Accounts receivable, net....................... 283,409 25,401 -- 308,810
Work-in-process................................ 17,243 -- -- 17,243
Deferred income taxes.......................... -- 1,446 -- 1,446
Prepaid and other.............................. 18,037 2,243 -- 20,280
-------------- ------- ------ -----------
Total current assets....................... 324,616 38,671 -- 363,287
Property and equipment, net...................... 44,837 9,359 -- 54,196
Deferred income taxes............................ 6,238 135 -- 6,373
Intangibles, net................................. 164,064 6,155 -- 170,219
Other assets..................................... 12,619 30 -- 12,649
-------------- ------- ------ -----------
$ 552,374 $ 54,350 $ -- $ 606,724
-------------- ------- ------ -----------
-------------- ------- ------ -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable............................... $ 238,027 $ 4,419 $ -- $ 242,446
Accrued expenses and other liabilities......... 34,782 30,759 4,500(a) 70,041
Accrued restructuring costs.................... 14,242 -- -- 14,242
Deferred revenue............................... 12,335 -- -- 12,335
Deferred income taxes.......................... 11,082 9 -- 11,091
Current portion of long-term debt.............. 6,398 318 -- 6,716
-------------- ------- ------ -----------
Total current liabilities.................. 316,866 35,505 4,500 356,871
Long-term debt, less current portion 124,939 5,370 -- 130,309
Other liabilities 4,254 659 -- 4,913
Minority interests -- 431 -- 431
Stockholders' equity:
Common stock................................... 25 -- 6(b) 31
Class B common stock........................... 2 -- -- 2
Common stock of Morgan & Banks Limited......... -- 1,526 (1,526) (c) --
Additional paid-in capital..................... 166,478 2,780 1,520 (b,c 170,778
Foreign currency translation adjustment........ (789) (204) -- (993)
Retained earnings (deficit).................... (59,401) 8,283 (4,500) (a) (55,618)
-------------- ------- ------ -----------
Total stockholders' equity................. 106,315 12,385 (4,500) 114,200
-------------- ------- ------ -----------
$ 552,374 $ 54,350 $ -- $ 606,724
-------------- ------- ------ -----------
-------------- ------- ------ -----------
</TABLE>
- ------------------------
(a) To accrue for costs to be incurred in connection with the proposed
transaction.
(b) Represents par value of the 6,161 shares to be issued in connection with the
proposed transaction.
(c) Par value of the M&B Shares is reclassified as additional paid-in capital
net of the par value of the newly issued TMP shares.
16
<PAGE>
TMP WORLDWIDE INC.
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
TMP MORGAN & BANKS PRO FORMA
WORLDWIDE INC. LIMITED COMBINED
-------------- ---------------- -----------
<S> <C> <C> <C>
Revenue:
Commissions and fees.............................................. $ 159,275 $ 32,424 $ 191,699
Temporary contracting............................................. -- 82,679 82,679
-------------- -------- -----------
Total revenue................................................. 159,275 115,103 274,378
-------------- -------- -----------
Operating expenses:
Salaries and related costs........................................ 81,839 29,858 111,697
Temporary contracting costs....................................... -- 68,880 68,880
Office and general................................................ 54,056 11,046 65,102
Amortization of intangibles....................................... 4,625 246 4,871
Merger costs...................................................... 2,487 -- 2,487
-------------- -------- -----------
Total operating expenses...................................... 143,007 110,030 253,037
-------------- -------- -----------
Operating income.................................................... 16,268 5,073 21,341
Interest expense, net............................................... (4,858) (127) (4,985)
Other expense, net.................................................. (93) (7) (100)
-------------- -------- -----------
Income before provision for income taxes, minority interests and
equity in losses of affiliates.................................... 11,317 4,939 16,256
Provision for income taxes.......................................... 5,346 2,029 7,375
Minority interests.................................................. -- (32) (32)
Equity in losses of affiliates...................................... (174) -- (174)
-------------- -------- -----------
Net income.......................................................... $ 5,797 $ 2,942 $ 8,739
-------------- -------- -----------
-------------- -------- -----------
Net income per common and Class B common share:
Basic............................................................. $ 0.22 $ 0.27
Diluted........................................................... $ 0.21 $ 0.26
Weighted average shares outstanding:
Basic............................................................. 26,519 32,680(a)
Diluted........................................................... 27,229 33,390(a)
</TABLE>
- ------------------------
(a) Gives effect to the 6,161 additional shares expected to be issued in
connection with the proposed transaction.
17
<PAGE>
TMP WORLDWIDE INC.
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
SUPPLEMENTAL
TMP MORGAN & BANKS PRO FORMA AUSTIN KNIGHT PRO FORMA
WORLDWIDE INC. LIMITED COMBINED LIMITED(A) ADJUSTMENTS COMBINED
-------------- ---------------- ----------- ------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Revenue:
Commissions and fees............... $ 237,417 $ 71,950 $ 309,367 $ 34,800 $ -- $ 344,167
Temporary contracting.............. -- 163,831 163,831 -- -- 163,831
-------------- -------- ----------- ------------- ----------- ------------
Total revenue.................. 237,417 235,781 473,198 34,800 -- 507,998
-------------- -------- ----------- ------------- ----------- ------------
Operating expenses:
Salaries and related costs......... 121,313 60,342 181,655 28,480 -- 210,135
Temporary contracting costs........ -- 136,185 136,185 -- -- 136,185
Office and general................. 82,712 25,258 107,970 5,758 -- 113,728
Amortization of intangibles........ 6,160 558 6,718 -- 1,323(b) 8,041
-------------- -------- ----------- ------------- ----------- ------------
Total operating expenses....... 210,185 222,343 432,528 34,238 1,323 468,089
-------------- -------- ----------- ------------- ----------- ------------
Operating income..................... 27,232 13,438 40,670 562 (1,323) 39,909
Interest expense, net................ (8,772) (247) (9,019) (244) (2,896)(c) (12,159)
Other income (expense), net.......... (90) (22) (112) 1,547 -- 1,435
-------------- -------- ----------- ------------- ----------- ------------
Income before provision for income
taxes, minority interests and
equity in losses of affiliates..... 18,370 13,169 31,539 1,865 (4,219) 29,185
Provision for income taxes........... 8,571 5,153 13,724 1,442 (1,158)(d) 14,008
Minority interests................... 143 153 296 -- -- 296
Equity in losses of affiliates....... (33) -- (33) -- -- (33)
-------------- -------- ----------- ------------- ----------- ------------
Net income........................... 9,623 7,863 17,486 423 (3,061) 14,848
Preferred stock dividends............ (123) -- (123) -- -- (123)
-------------- -------- ----------- ------------- ----------- ------------
Net income applicable to common and
Class B common stockholders........ $ 9,500 $ 7,863 $ 17,363 $ 423 $ (3,061) $ 14,725
-------------- -------- ----------- ------------- ----------- ------------
-------------- -------- ----------- ------------- ----------- ------------
Net income per common and Class B
common share:
Basic.............................. $ 0.39 $ 0.57 $ 0.48
Diluted............................ $ 0.38 $ 0.56 $ 0.48
Weighted average shares outstanding:
Basic.............................. 24,243 30,404(e) 30,404(e)
Diluted............................ 24,735 30,896(e) 30,896(e)
</TABLE>
- ------------------------
(a) For the period January 1, 1997 through the date of acquisition by TMP, of
Austin Knight on August 26, 1997.
(b) To record amortization of intangibles arising from the acquisition of Austin
Knight, as if such acquisition occurred on January 1, 1997. Such
amortization is based on a 30 year life and is computed on an intangible
asset of $59,523, amortized for eight months.
(c) To record interest expense on borrowings in connection with the acquisition
of Austin Knight, as if such acquisition occurred on January 1, 1997. Debt
of $47,208 at 9.2% for eight months.
(d) To record the tax benefit on interest expense of $2,896 on borrowings for
the acquisition of Austin Knight, at an estimated tax rate of 40%.
(e) Gives effect to the 6,161 additional shares expected to be issued in
connection with the proposed transaction.
18
<PAGE>
TMP WORLDWIDE INC.
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1996
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
TMP MORGAN & BANKS PRO FORMA
WORLDWIDE INC. LIMITED COMBINED
-------------- ---------------- -----------
<S> <C> <C> <C>
Revenue:
Commissions and fees.............................................. $ 162,631 $ 61,084 $ 223,715
Temporary contracting............................................. -- 113,299 113,299
-------------- -------- -----------
Total revenue................................................. 162,631 174,383 337,014
-------------- -------- -----------
Operating expenses:
Salaries and related costs........................................ 80,291 45,507 125,798
Temporary contracting costs....................................... -- 93,585 93,585
Office and general................................................ 60,101 21,944 82,045
Amortization of intangibles....................................... 4,440 292 4,732
Special compensation.............................................. 52,019 -- 52,019
-------------- -------- -----------
Total operating expenses...................................... 196,851 161,328 358,179
-------------- -------- -----------
Operating income (loss)............................................. (34,220) 13,055 (21,165)
Interest expense, net............................................... (14,265) (27) (14,292)
Other income (expense), net......................................... (164) 141 (23)
-------------- -------- -----------
Income (loss) before provision for income taxes, minority interests
and equity in earnings of affiliates.............................. (48,649) 13,169 (35,480)
Provision for income taxes.......................................... 3,270 4,812 8,082
Minority interests.................................................. 434 583 1,017
Equity in earnings of affiliates.................................... 114 -- 114
-------------- -------- -----------
Net income (loss)................................................... (52,239) 7,774 (44,465)
Preferred stock dividends........................................... (210) -- (210)
-------------- -------- -----------
Net income (loss) applicable to common and Class B common
stockholders...................................................... $ (52,449) $ 7,774 $ (44,675)
-------------- -------- -----------
-------------- -------- -----------
Net income (loss) per common and Class B common share:
Basic............................................................. $ (2.72) $ (1.75)
Diluted........................................................... $ (2.72) $ (1.75)
Weighted average shares outstanding:
Basic............................................................. 19,299 25,460(a)
Diluted........................................................... 19,299 25,460(a)
Pro forma:
Historical net income (loss) applicable to common and Class B
common stockholders............................................. $ (52,449) $ 7,774 $ (44,675)
Pro forma adjustment for special compensation..................... 52,019 -- 52,019
Pro forma adjustment for interest................................. 2,603 -- 2,603
-------------- -------- -----------
Pro forma net income applicable to common and Class B common
stockholders...................................................... $ 2,173 $ 7,774 $ 9,947
-------------- -------- -----------
-------------- -------- -----------
Pro forma net income per common and Class B common share:
Basic............................................................. $ 0.11 $ 0.39
Diluted........................................................... $ 0.11 $ 0.38
Weighted average shares outstanding:
Basic............................................................. 19,299 25,460(a)
Diluted........................................................... 19,732 25,893(a)
</TABLE>
- ------------------------
(a) Gives effect to the 6,161 additional shares expected to be issued in
connection with the proposed transaction.
19
<PAGE>
TMP WORLDWIDE INC.
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1995
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
TMP MORGAN & BANKS PRO FORMA
WORLDWIDE INC. LIMITED COMBINED
-------------- ---------------- -----------
<S> <C> <C> <C>
Revenue:
Commissions and fees.............................................. $ 123,907 $ 44,881 $ 168,788
Temporary contracting............................................. -- 61,768 61,768
-------------- -------- -----------
Total revenue................................................. 123,907 106,649 230,556
-------------- -------- -----------
Operating expenses:
Salaries and related costs........................................ 58,329 31,701 90,030
Temporary contracting costs....................................... -- 49,503 49,503
Office and general................................................ 43,432 17,032 60,464
Amortization of intangibles....................................... 3,237 118 3,355
-------------- -------- -----------
Total operating expenses...................................... 104,998 98,354 203,352
-------------- -------- -----------
Operating income.................................................... 18,909 8,295 27,204
Interest income (expense), net...................................... (10,894) 77 (10,817)
Other income, net................................................... 150 123 273
-------------- -------- -----------
Income before provision for income taxes, minority interests and
equity in losses of affiliates.................................... 8,165 8,495 16,660
Provision for income taxes.......................................... 4,222 3,136 7,358
Minority interests.................................................. 435 326 761
Equity in losses of affiliates...................................... (279) -- (279)
-------------- -------- -----------
Net income.......................................................... 3,229 5,033 8,262
Preferred stock dividends........................................... (210) -- (210)
-------------- -------- -----------
Net income applicable to common and Class B common stockholders..... $ 3,019 $ 5,033 $ 8,052
-------------- -------- -----------
-------------- -------- -----------
Net income per common and Class B common share:
Basic............................................................. $ 0.16 $ 0.32
Diluted........................................................... $ 0.15 $ 0.31
Weighted average shares outstanding:
Basic............................................................. 19,064 25,225(a)
Diluted........................................................... 19,355 25,516(a)
</TABLE>
- ------------------------
(a) Gives effect to the 6,161 additional shares expected to be issued in
connection with the proposed transaction.
20
<PAGE>
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Common Stock by
the Selling Stockholders.
DIVIDEND POLICY
TMP has never declared or paid any cash dividends on its Common Stock. The
Company currently anticipates that all future earnings will be retained by the
Company to support its growth strategy. Accordingly, TMP does not anticipate
paying cash dividends on the Common Stock for the foreseeable future. The
payment of any future dividends will be at the discretion of the Company's Board
of Directors and will depend upon, among other things, future earnings,
operations, capital requirements, the general financial condition of the
Company, contractual restrictions and general business conditions. The Company's
financing agreement prohibits the payment of dividends on Common Stock.
PRICE RANGE OF COMMON STOCK
The Common Stock is quoted on the Nasdaq National Market under the symbol
"TMPW." The Common Stock was initially offered to the public on December 12,
1996 at $14.00 per share. The following table sets forth for the periods
indicated the high and low reported sale prices per share for the Common Stock
as reported by the Nasdaq National Market.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1998 HIGH LOW
- --------------------------------------------------------------------------- --------- ---------
<S> <C> <C>
First Quarter.............................................................. $ 32.62 $ 21.62
Second Quarter............................................................. $ 34.88 $ 24.75
Third Quarter (through September 11, 1998)................................. $ 39.19 $ 28.50
--------- ---------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1997 HIGH LOW
- --------------------------------------------------------------------------- --------- ---------
<S> <C> <C>
First Quarter.............................................................. $ 22.00 $ 12.88
Second Quarter............................................................. $ 24.25 $ 17.00
Third Quarter.............................................................. $ 25.62 $ 19.00
Fourth Quarter............................................................. $ 28.75 $ 15.00
</TABLE>
The number of stockholders of record of Common Stock on September 4, 1998
was 379. On September 11, 1998, the last reported sale price of the Common Stock
as reported by the Nasdaq National Market was $29.75.
21
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth information as of September 1, 1998, except
as otherwise noted, with respect to the number of shares of Common Stock
beneficially owned by each of the Selling Stockholders. All of the shares
offered hereby were acquired by the Selling Stockholders from the Company
pursuant to the acquisition of Johnson, Smith & Knisely, Inc. and TASA. See
"Recent Developments." Except for Gary Knisely, who currently owns 2.7% of the
Common Stock and who will own 2.2% of the Common Stock after his sale of 150,000
shares of Common Stock hereby, no other Selling Stockholder owns more than one
percent of the outstanding Common Stock.
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES
OF COMMON STOCK NUMBER OF SHARES OF COMMON STOCK
BENEFICIALLY OF COMMON STOCK BENEFICIALLY
OWNED PRIOR TO REGISTERED OWNED AFTER
SELLING STOCKHOLDER OFFERING HEREIN OFFERING(2)
- ---------------------------------------------------------- ---------------- ---------------- ----------------
<S> <C> <C> <C>
Gary Knisely (1).......................................... 771,353 150,000 621,353
Pierre Aussure............................................ 44,839 44,839 0
Gerhard Bartels........................................... 51,244 51,244 0
David Kenneth Bray........................................ 6,405 6,405 0
The TASA Ltd. Self Administered Pension Plan
F/B/O David Kenneth Bray................................ 35,230 35,230 0
Charles Marie Brusselmans................................. 9,608 9,608 0
Neil Campbell Callie...................................... 12,811 12,811 0
Remtor Nominees Pty. Ltd.
F/B/O Trevor Morton Clark............................... 3,202 3,202 0
Jo Carol Conover 9,608 9,608 0
Manuel Gutierrez Cortines................................. 64,056 64,056 0
Edgar S.K. Dammroff....................................... 32,028 32,028 0
Victor Carlos Dana........................................ 48,042 48,042 0
The TASA Ltd. Self Administered Pension Plan
F/B/O Fiona Mary Hilton Darby........................... 38,433 38,433 0
Herman DeKesel............................................ 51,244 51,244 0
James P. Demchak.......................................... 41,636 41,636 0
Trevor M. Dunn............................................ 6,405 6,405 0
Luis Escudero Ygartua..................................... 32,028 32,028 0
Joaquim Espriu Malagelada................................. 54,447 54,447 0
Juan Manuel Farias Gutierrez.............................. 25,622 25,622 0
The TASA Ltd. Self Administered Pension Plan
F/B/O Patrick John Michael Fearon....................... 41,636 41,636 0
Richard L. Fleming........................................ 3,202 3,202 0
Michael Franzino.......................................... 44,839 44,839 0
Vito Gioia................................................ 54,447 54,447 0
Duane R. Goar............................................. 41,636 41,636 0
Frans Jacob Gosses........................................ 6,405 6,405 0
Christian A.F. Groh....................................... 9,608 9,608 0
Luminoz Staff Superannuation Fund
F/B/O R. Neil Hatherly.................................. 9,608 9,608 0
RJ & SG Ingersoll Superannuation Fund
F/B/O Russel J. Ingersoll............................... 19,216 19,216 0
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES
OF COMMON STOCK NUMBER OF SHARES OF COMMON STOCK
BENEFICIALLY OF COMMON STOCK BENEFICIALLY
OWNED PRIOR TO REGISTERED OWNED AFTER
SELLING STOCKHOLDER OFFERING HEREIN OFFERING(2)
- ---------------------------------------------------------- ---------------- ---------------- ----------------
<S> <C> <C> <C>
Phoenix Holdings Pty. Ltd.
F/B/O Russel J. Ingersoll............................... 16,014 16,014 0
Klaus Jacobs.............................................. 64,056 64,056 0
Thomas R. Keller.......................................... 41,636 41,636 0
Dag Einhard Kremer-Nehring................................ 9,608 9,608 0
Michel LeGuillou.......................................... 6,405 6,405 0
Harvey D. Letcher......................................... 16,014 16,014 0
Claudia K. Liebesny....................................... 12,811 12,811 0
David H. W. Lowry......................................... 35,230 35,230 0
Peter Magnet.............................................. 64,056 64,056 0
Bernhard Mahlo............................................ 9,608 9,608 0
Warren L. McGregor........................................ 32,028 32,028 0
John McLaughlin........................................... 70,461 70,461 0
Massimo Misticoni......................................... 16,014 16,014 0
Maria Elena Quijada Cordero............................... 6,405 6,405 0
Terteducon Pty. Ltd.
F/B/O Gregor A. Ramsey.................................. 6,405 6,405 0
Reinhard Fritz Rijke...................................... 76,867 76,867 0
Herbert Schmaderer........................................ 32,028 32,028 0
The TASA Self Administered Pension Plan
F/B/O Andrew R.F. Simpson............................... 41,636 41,636 0
Michael T.D. Squires...................................... 64,056 64,056 0
John Barrett Strickland................................... 51,244 51,244 0
Hans Uher................................................. 32,028 32,028 0
Van Es Superannuation Fund................................ 12,811 12,811 0
Strathwood Unit Trust
F/B/O Alan R. Van Es.................................... 19,216 19,216 0
Victoriano Vila Vilar..................................... 12,811 12,811 0
Robert Bruce Whaley....................................... 9,608 9,608 0
Jeffrey C. Wierichs....................................... 6,405 6,405 0
Gabriele D.E. Willner-Lange............................... 57,650 57,650 0
Andrea M. Wine............................................ 57,650 57,650 0
J. Herbert Wise........................................... 16,014 16,014 0
Heinz Henning Witt........................................ 9,608 9,608 0
</TABLE>
- ------------------------
(1) Gary Knisely is CEO of the Company's executive search division.
(2) Assumes that all shares offered by each Selling Stockholder are sold in this
offering.
PLAN OF DISTRIBUTION
The Company is registering the shares of Common Stock offered hereby on
behalf of the Selling Stockholders. All expenses of the registration of the
shares offered hereby are to be borne by the
23
<PAGE>
Company, except that the Selling Stockholders will pay underwriting discounts,
selling commissions, and fees and expenses, if any, of counsel or other advisers
to the Selling Stockholders.
The distribution of the shares of Common Stock by the Selling Stockholders
(or their respective donees and pledgees) may be effected from time to time in
one or more transactions (which may involve block transactions) in the
over-the-counter market (including the Nasdaq National Market) or any exchange
on which the Common Stock may then be listed, in negotiated transactions,
through the writing of options on shares (whether such options are listed on an
options exchange or otherwise), or a combination of such methods of sale, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Selling Stockholders (or
their respective donees and pledgees) may effect such transactions by selling
shares to or through broker-dealers, and such broker-dealer may receive
compensation in the form of underwriting discounts, concessions or commissions
from the Selling Stockholders and/or purchasers of shares for whom they may act
as agent (which compensation may be in excess of customary commissions). The
Selling Stockholders (or their respective donees and pledgees) may also sell
such shares of Common Stock pursuant to Rule 144 promulgated under the
Securities Act, or may pledge shares as collateral for margin accounts and such
shares could be resold pursuant to the terms of such accounts. The Selling
Stockholders and any broker-dealers that act in connection with the sale of the
Common Stock might be deemed to be "underwriters" within the meaning of Section
2(11) of the Securities Act and any commission received by them and any profit
on the resale of the shares of Common Stock as principal might be deemed to be
underwriting discounts and commissions under the Securities Act. The Selling
Stockholders may agree to indemnify any agent, dealer or broker-dealer that
participates in transactions involving sales of the shares against certain
liabilities, including liabilities arising under the Securities Act.
Because the Selling Stockholders may be deemed to be "underwriters" within
the meaning of Section 2(11) of the Securities Act, the Selling Stockholders
will be subject to prospectus delivery requirements under the Securities Act.
Furthermore, in the event of a "distribution" of the shares, such Selling
Stockholders, any selling broker or dealer and any "affiliated purchasers" may
be subject to Regulation M under the Exchange Act, which Regulation prohibits,
with certain exceptions, any such person from bidding for or purchasing any
security which is the subject of such distribution until his participation in
that distribution is completed. In addition, Regulation M under the Exchange Act
prohibits, with certain exceptions, any "stabilizing bid" or "stabilizing
purchase" for the purpose of pegging, fixing or stabilizing the price of Common
Stock in connection with this offering.
The Selling Stockholders have agreed with the Company not to effect any sale
or distribution of Common Stock during any period that is designated by TMP as
"restricted" under TMP's normal policies governing sales of Common Stock by its
directors, officers and employees. The TASA Stockholders have agreed with the
Company not to effect any sale or distribution of Common Stock until after
financial results covering at least thirty (30) days of combined operations of
TMP and TASA Holding AG after August 31, 1998 are published, and otherwise
during any period of time or in a manner which would call into question the
accounting treatment of TMP's acquisition of TASA Holding AG as a "pooling-of-
interests."
In order to comply with certain state securities laws, if applicable, the
Common Stock will not be sold in a particular state unless the Common Stock has
been registered or qualified for sale in such state or an exemption from
registration or qualification is available and complied with.
LEGAL MATTERS
Legal matters relating to the Common Stock have been passed upon for the
Company by Fulbright & Jaworski L.L.P., New York, New York 10103.
24
<PAGE>
EXPERTS
The consolidated financial statements and schedule included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1997, which are
incorporated by reference in this Prospectus, have been audited by BDO Seidman,
LLP, independent certified public accountants, to the extent and for the periods
set forth in their reports incorporated herein by reference, and are
incorporated herein in reliance upon the authority of said firm as experts in
accounting and auditing. The audited consolidated financial statements of M&B
included in this Prospectus and elsewhere in the Registration Statement have
been audited by Pannell Kerr Forster, independent chartered accountants, as
indicated in their report with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in accounting and auditing.
25
<PAGE>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
MORGAN & BANKS LIMITED
REPORT OF INDEPENDENT AUDITORS............................................................................. F-2
CONSOLIDATED FINANCIAL STATEMENTS:
Consolidated profit and loss accounts for the years ended 31 March 1998, 1997 and 1996................... F-3
Consolidated balance sheets as at 31 March 1998 and 1997................................................. F-4
Consolidated cash flow statements for the years ended 31 March 1998, 1997 and 1996....................... F-5
Notes to and forming part of the consolidated financial statements for the years ended 31 March, 1998,
1997 and 1996.......................................................................................... F-6
</TABLE>
F-1
<PAGE>
INDEPENDENT AUDITOR'S REPORT TO MEMBERS
SCOPE
We have audited the financial statements of Morgan & Banks Limited for the
financial years ended 31 March 1998, 1997 and 1996 as set out on pages F-3 to
F-26. The financial statements include the consolidated accounts of the economic
entity comprising the company and the entities it controlled at each year's end
or from time to time during the financial year. The company's directors are
responsible for the preparation and presentation of the financial statements and
the information they contain. We have conducted an independent audit of these
financial statements in order to express an opinion on them to the members of
the company.
Our audit has been conducted in accordance with Australian Auditing
Standards which do not differ in any material respects from generally accepted
auditing standards in the United States of America to provide reasonable
assurance as to whether the financial statements are free of material
misstatement. Our procedures included examination, on a test basis, of evidence
supporting the amounts and other disclosures in the financial statements, and
the evaluation of accounting policies and significant accounting estimates.
These procedures have been undertaken to form an opinion as to whether, in all
material respects, the financial statements are presented fairly in accordance
with Australian Accounting Standards and other mandatory professional reporting
requirements (Urgent Issues Group Consensus Views) and statutory requirements so
as to present a view which is consistent with our understanding of the company's
and the economic entity's financial position, and the results of their
operations and their cash flows.
The names of the entities controlled during all or part of, or at the end
of, the financial year, but of which we have not acted as auditors are set out
in Note 32 to the financial statements. We have, however, received sufficient
information and explanations concerning these controlled entities to enable us
to form an opinion on the consolidated accounts. The audit opinion expressed in
this report has been formed on the above basis.
AUDIT OPINION
In our opinion, the financial statements of Morgan & Banks Limited are
properly drawn up:
(a) so as to give a true and fair view of
- the state of affairs as at 31 March 1998 and 1997 and the profit and cash
flows for the financial years ended 31 March 1998, 1997 and 1996 of the
company and the economic entity; and
- the other matters required by Divisions 4, 4A and 4B of Part 3.6 of the
Corporations Law to be dealt with in the financial statements;
(b) in accordance with the provisions of the Corporations Law; and
(c) in accordance with applicable Australian Accounting Standards and other
mandatory professional reporting requirements.
<TABLE>
<S> <C>
/s/ A.P. WHITING
[LOGO] ----------------------------
A.P. Whiting
- ---------------------------- Partner
Pannell Kerr Forster
Chartered Accountants
New South Wales Partnership
Sydney, 16 June 1998, except for Note 2 of
Notes to and Forming Part of the Consolidated
Financial Statements, for which the date is
21 September 1998.
</TABLE>
F-2
<PAGE>
MORGAN & BANKS LIMITED
CONSOLIDATED PROFIT AND LOSS ACCOUNTS
(IN AUSTRALIAN DOLLARS)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED 31 MARCH
-------------------------------
1998 1997 1996
NOTES $000 $000 $000
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Sales revenue.......................................................... 4 330,364 221,467 143,057
--------- --------- ---------
Operating profit before depreciation, amortisation, interest and income
tax.................................................................. 25,466 20,002 13,440
Depreciation, amortisation and interest................................ 6,312 3,276 2,046
--------- --------- ---------
Operating profit before abnormal items and income tax.................. 3 19,154 16,726 11,394
Abnormal loss before income tax........................................ 5 703 -- --
--------- --------- ---------
Operating profit before income tax..................................... 18,451 16,726 11,394
Income tax attributable to operating profit............................ 6 7,220 6,118 4,200
--------- --------- ---------
Operating profit after income tax...................................... 11,231 10,608 7,194
Outside equity interests in operating profit after income tax.......... 214 741 437
--------- --------- ---------
Operating profit after income tax attributable to members of Morgan &
Banks Limited........................................................ 11,017 9,867 6,757
Retained profits at the beginning of the financial year................ 8,699 4,848 2,499
Retrospective adjustments for the introduction of AASB 1028............ -- -- (123)
--------- --------- ---------
Total available for appropriation...................................... 19,716 14,715 9,133
Dividends provided for or paid......................................... 7,190 6,016 4,285
--------- --------- ---------
Retained profits at the end of the financial year...................... 12,526 8,699 4,848
--------- --------- ---------
--------- --------- ---------
</TABLE>
The above Profit and Loss Accounts are to be read in conjunction with the
attached Notes.
F-3
<PAGE>
MORGAN & BANKS LIMITED
CONSOLIDATED BALANCE SHEETS
(IN AUSTRALIAN DOLLARS)
<TABLE>
<CAPTION>
AS AT 31 MARCH
--------------------
1998 1997
NOTES $000 $000
----------- --------- ---------
<S> <C> <C> <C>
CURRENT ASSETS
Cash................................................................................... 22 14,488 11,067
Receivables............................................................................ 9 39,446 30,175
Other.................................................................................. 10 2,357 1,844
--------- ---------
TOTAL CURRENT ASSETS................................................................... 56,291 43,086
--------- ---------
NON-CURRENT ASSETS
Receivables............................................................................ 11 46 42
Plant and equipment.................................................................... 12 14,152 10,385
Intangibles............................................................................ 13 9,308 10,147
Other.................................................................................. 14 2,993 2,339
--------- ---------
TOTAL NON-CURRENT ASSETS............................................................... 26,499 22,913
--------- ---------
TOTAL ASSETS........................................................................... 82,790 65,999
--------- ---------
CURRENT LIABILITIES
Accounts payable....................................................................... 15 43,665 34,029
Borrowings............................................................................. 16 481 665
Provisions............................................................................. 17 9,530 8,230
--------- ---------
TOTAL CURRENT LIABILITIES.............................................................. 53,676 42,924
--------- ---------
NON-CURRENT LIABILITIES
Borrowings............................................................................. 18 8,121 5,915
Provisions............................................................................. 19 1,613 1,719
--------- ---------
TOTAL NON-CURRENT LIABILITIES.......................................................... 9,734 7,634
--------- ---------
TOTAL LIABILITIES...................................................................... 63,410 50,558
--------- ---------
NET ASSETS............................................................................. 19,380 15,441
--------- ---------
--------- ---------
Shareholders' Equity
Issued capital......................................................................... 21 2,308 2,283
Reserves............................................................................... 8 3,895 3,664
Retained profits....................................................................... 12,526 8,699
--------- ---------
Shareholders' equity attributable to members
of Morgan & Banks Limited............................................................ 18,729 14,646
Outside equity interests in controlled entities........................................ 31 651 795
--------- ---------
TOTAL SHAREHOLDERS' EQUITY............................................................. 19,380 15,441
--------- ---------
--------- ---------
</TABLE>
The above Balance Sheets are to be read in conjunction with the attached Notes.
F-4
<PAGE>
MORGAN & BANKS LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN AUSTRALIAN DOLLARS)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED 31 MARCH
----------------------------------
1998 1997 1996
NOTES $000 $000 $000
----------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers............................................... 322,055 216,454 135,179
Payments to suppliers and employees................................... (296,859) (192,397) (122,187)
Interest received..................................................... 188 220 259
Borrowing costs including interest and cost of finance paid........... (472) (99) (165)
Dividends received.................................................... -- 151 --
Income taxes paid..................................................... (7,217) (6,577) (4,025)
---------- ---------- ----------
Net cash provided by operating activities............................. 23(a) 17,695 17,752 9,061
---------- ---------- ----------
CASH FLOWS TO INVESTING ACTIVITIES
Payments for businesses acquired 23(b) -- -- (102)
Payments for investments in controlled entities....................... 23(b) -- (6,647) --
Payments for additional shares in controlled entities................. (665) (1,075) --
Payment for investments -- -- (1,491)
Payment for plant and equipment....................................... (9,407) (4,558) (4,324)
Proceeds from sale of plant and equipment............................. 155 104 --
Long-term loans to related bodies corporate........................... (4) -- (61)
---------- ---------- ----------
Net cash used in investing activities................................. (9,921) (12,176) (5,978)
---------- ---------- ----------
CASH FLOWS TO FINANCING ACTIVITIES
Proceeds from borrowings.............................................. 2,900 6,815 --
Repayments of borrowings.............................................. (179) (1,500) --
Payments under hire purchase contracts................................ (608) (608) (359)
Proceeds from exercise of options..................................... 420 -- --
Dividends paid........................................................ (7,148) (5,325) (4,060)
---------- ---------- ----------
Net cash used in financing activities................................. (4,615) (618) (4,419)
---------- ---------- ----------
Net increase (decrease) in cash held.................................. 3,159 4,958 (1,336)
Cash at the beginning of the year..................................... 11,067 6,141 7,514
Effects of exchange rate changes on the balances of cash held in
foreign currencies at the beginning of the year..................... 262 (32) (37)
---------- ---------- ----------
Cash at the end of the year........................................... 22 14,488 11,067 6,141
---------- ---------- ----------
---------- ---------- ----------
Non-cash financing and investing activities........................... 23(c)
Financing arrangements................................................ 23(d)
</TABLE>
The above Statements of Cash Flows are to be read in conjunction with the
attached Notes.
F-5
<PAGE>
MORGAN & BANKS LIMITED
NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
(IN AUSTRALIAN DOLLARS)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted by the economic entity comprising
the chief entity Morgan & Banks Limited and its controlled entities are stated
in order to assist in a general understanding of the financial statements. These
policies have been consistently applied except as otherwise indicated.
The financial statements, which constitute a general purpose financial
report, have been drawn up in accordance with applicable Accounting Standards
and other mandatory professional requirements, and comply with other
requirements of the law.
ACCOUNTS PAYABLE
Accounts payable represent the principal amounts outstanding at balance
date. The carrying amounts of accounts payable approximate net fair values.
NON-CURRENT ASSETS
The carrying amounts of non-current assets do not exceed the net amounts
that are expected to be recovered through the cash inflows and outflows arising
from their continued use and subsequent disposal. The expected net cash flows
included in determining the recoverable amount have not been discounted to their
present values.
DEPRECIATION AND AMORTISATION OF PLANT AND EQUIPMENT
Items of plant and equipment are depreciated over their estimated useful
lives using the straight line method. Leasehold improvements are amortised over
the period of the lease.
GOODWILL
Goodwill, representing the excess of the cost of acquisition over the fair
values of the net assets acquired, is being amortised over the period of time
during which benefits are expected to arise. The period over which goodwill is
being amortised is reviewed annually and does not exceed 20 years.
RECEIVABLES
Trade accounts receivable, amounts due from related parties and other
receivables represent the principal amounts due at balance date less any
provisions for doubtful debts and approximate net fair value.
EMPLOYEE ENTITLEMENTS
AASB 1028 Accounting for Employee Entitlements was adopted as at 1 April
1995. The net effect of the adoption was accounted for against profits at that
date. The adjustment to retained profits net of the tax effect of $69,000 was
$123,000.
REVENUE RECOGNITION
Income from contracting activities is brought to account when earned. All
other fee income is brought to account when billed.
F-6
<PAGE>
MORGAN & BANKS LIMITED
NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN AUSTRALIAN DOLLARS)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
SUPERANNUATION
The economic entity contributes to superannuation funds which provide
benefits to employees and contractors and their dependants on retirement, total
and permanent disability or death. The economic entity's commitment in respect
of these accumulation funds is limited to making the specified contributions as
required by the relevant award and legislation. The economic entity's
contributions to the superannuation funds are expensed in the profit and loss
accounts as incurred.
TRANSLATION OF FOREIGN CURRENCY TRANSACTION
Transactions in foreign currencies are initially measured and brought to
account at the rate of exchange in affect at the date of each transaction.
As foreign controlled entities are self sustaining, the assets and
liabilities are translated into Australian currency at rates of exchange current
at balance date, while its revenue and expenses are translated at the average of
rates ruling during the year. Exchange differences arising on translation are
taken to the foreign currency translation reserve.
Foreign currency monetary items outstanding at balance date have been
translated at the spot rates current at balance date.
Exchange differences arising on the translation of foreign currency
borrowings designated as hedges of investments in controlled foreign entities
are taken to the foreign currency translation reserve.
BORROWINGS
Bank loans are recognised in the financial statements on the basis of the
nominal amounts outstanding at balance date plus accrued interest. The carrying
amounts of borrowings approximate net fair values.
F-7
<PAGE>
MORGAN & BANKS LIMITED
NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN AUSTRALIAN DOLLARS)
NOTE 2. RECONCILIATIONS FROM AUSTRALIAN GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES TO US GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
Reconciliation of operating profit after income tax for the year ended 31 March,
<TABLE>
<CAPTION>
1998 1997 1996
$000 $000 $000
--------- --------- ---------
<S> <C> <C> <C>
Operating profit after income tax attributable to members of
Morgan & Banks Limited.......................................................... 11,017 9,867 6,757
Deferred income taxes............................................................. -- 7 (7)
--------- --------- ---------
Net income in accordance with US Generally
Accepted Accounting Principles.................................................. 11,017 9,874 6,750
--------- --------- ---------
--------- --------- ---------
Reconciliation of shareholders' equity at 31 March,
<CAPTION>
1998 1997 1996
$000 $000 $000
--------- --------- ---------
<S> <C> <C> <C>
Shareholders' equity attributable to members of
Morgan & Banks Limited.......................................................... 18,729 14,646 9,495
Deferred income taxes............................................................. -- -- 7
--------- --------- ---------
Shareholders' equity in accordance with US Generally
Accepted Accounting Principles.................................................. 18,729 14,646 9,502
--------- --------- ---------
--------- --------- ---------
</TABLE>
Generally accepted accounting principles in Australia ("Australian GAAP") as
utilized by the Company differ in certain respects from generally accepted
accounting principles in the United States ("US GAAP"). With respect to the
Company's financial statements, these differences primarily relate to accounting
for income taxes. Australian GAAP stipulates that an announcement of the
Government's intention to change the rate of company income tax in advance of
the periods in which the change will apply is adequate evidence for deferred tax
balances to be restated. US GAAP requires the adjustment in the year that a
change in tax rate is effective.
The provision for employee entitlements prepared in accordance with AASB
1028 "Accounting for Employee Entitlements" substantially approximates the
required provision under US GAAP. As such the provision for employee
entitlements for 1996, 1997 and 1998 as prepared under Australian GAAP require
no adjustment. In order to reflect the adoption of AASB 1028 in 1996, and
therefore US GAAP in preceding years, the adjustment booked through opening
retained profits in 1996 has been reversed and effected through net income in
1994 and 1995.
Under Australian GAAP, companies were not allowed to use the equity method
of accounting for investments in associates in the consolidated profit and loss
statement or balance sheet. Instead companies record the investment at cost and
bring to account dividend income. US GAAP requires investments in associates to
be accounted for under the equity method after elimination of unrealised profits
on transactions with associates. The adjustment was not material and therefore
not included in the summary of differences.
Under Australian GAAP, no cost attributable to executive options has been
recognised in the profit and loss statement. Under US GAAP the compensation cost
is zero for each year ended to date.
F-8
<PAGE>
MORGAN & BANKS LIMITED
NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN AUSTRALIAN DOLLARS)
NOTE 3. OPERATING PROFIT
<TABLE>
<CAPTION>
FOR THE YEAR ENDED 31 MARCH
-------------------------------
<S> <C> <C> <C>
1998 1997 1996
$000 $000 $000
--------- --------- ---------
Operating profit before income tax has been determined after:
(A) CREDITING AS REVENUE:
Dividends received/receivable
Associated entities............................................................ -- 151 189
--------- --------- ---------
--------- --------- ---------
Interest:
Others......................................................................... 188 229 259
--------- --------- ---------
--------- --------- ---------
(B) CHARGING AS EXPENSE:
Net expenses resulting from movements in provision for:
Amortisation of goodwill....................................................... 782 274 158
Amortisation of leasehold improvements......................................... 1,318 565 299
Depreciation of plant and equipment............................................ 3,866 2,402 1,692
Employee entitlements.......................................................... 204 748 278
--------- --------- ---------
6,170 3,989 2,427
--------- --------- ---------
--------- --------- ---------
Borrowing Costs:
Interest expense other persons................................................. 440 116 --
Hire purchase interest charges................................................. 94 147 156
--------- --------- ---------
534 263 156
--------- --------- ---------
--------- --------- ---------
Other:
Net bad and doubtful debts expense............................................. 814 671 781
Goodwill written off........................................................... -- 97 --
(Gain) loss on sales/write-off of plant & equipment............................ (1) (11) 24
Operating lease rental expense................................................. 7,293 5,493 3,769
--------- --------- ---------
8,106 6,250 4,574
--------- --------- ---------
--------- --------- ---------
</TABLE>
NOTE 4. OPERATING REVENUE
<TABLE>
<CAPTION>
FOR THE YEAR ENDED 31 MARCH
-------------------------------
<S> <C> <C> <C>
1998 1997 1996
$000 $000 $000
--------- --------- ---------
Sales revenue.................................................................... 330,364 221,467 143,057
Interest......................................................................... 188 229 259
Dividends........................................................................ -- 151 189
Proceeds from sales of non-current assets........................................ 155 104 --
--------- --------- ---------
Total operating revenue.......................................................... 330,707 221,951 143,505
--------- --------- ---------
--------- --------- ---------
</TABLE>
F-9
<PAGE>
MORGAN & BANKS LIMITED
NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN AUSTRALIAN DOLLARS)
NOTE 5. ABNORMAL ITEM
<TABLE>
<CAPTION>
FOR THE YEAR ENDED 31 MARCH
-------------------------------
<S> <C> <C> <C>
1998 1997 1996
$000 $000 $000
--------- --------- ---------
INDONESIAN OPERATION
Set-up of operations............................................................. 494 -- --
Office closure costs............................................................. 209 -- --
--------- --------- ---------
703 -- --
Income tax expense............................................................... 8 -- --
Outside equity interest.......................................................... (2) -- --
--------- --------- ---------
709 -- --
--------- --------- ---------
--------- --------- ---------
</TABLE>
NOTE 6. INCOME TAX
<TABLE>
<CAPTION>
FOR THE YEAR ENDED 31 MARCH
-------------------------------
<S> <C> <C> <C>
1998 1997 1996
$000 $000 $000
--------- --------- ---------
The amount provided in respect of income tax differs from the amount prima facie
payable on operating profit. The difference is reconciled as follows:
Prima facie tax on operating profit at 36%....................................... 6,642 6,021 4,102
Add tax effect of:
(Over)/Under provision in prior years.......................................... (35) 95 --
Entertainment not allowable.................................................... 181 174 194
Goodwill amortisation.......................................................... 266 93 57
Non-deductible expenses........................................................ 30 114 23
Abnormal item not allowable (Note 5)........................................... 8 -- --
Deduct tax effect of:
Overseas income tax differential............................................... 128 (334) (78)
Non-assessable profit of overseas subsidiaries................................. -- -- (30)
Exempt income.................................................................. -- (45) (68)
--------- --------- ---------
Income tax attributable to operating profit...................................... 7,220 6,118 4,200
--------- --------- ---------
--------- --------- ---------
</TABLE>
NOTE 7. EVENTS SUBSEQUENT TO BALANCE DATE
No matter or circumstance has arisen since the end of the financial year
that has significantly affected or may significantly affect the operations of
the economic entity, the results of those operations, or the state of affairs of
the economic entity, in subsequent financial years.
F-10
<PAGE>
MORGAN & BANKS LIMITED
NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN AUSTRALIAN DOLLARS)
NOTE 8. RESERVES
<TABLE>
<CAPTION>
AS AT 31 MARCH
--------------------
1998 1997
$000 $000
--------- ---------
<S> <C> <C>
Share premium account.......................................................................... 4,204 3,809
Foreign currency translation reserve........................................................... (309) (145)
--------- ---------
3,895 3,664
--------- ---------
--------- ---------
MOVEMENTS IN RESERVES
Share premium account:
Balance at beginning of the financial year................................................... 3,809 2,399
Exercise of 250,000 options at a premium of $1.58 per share.................................. 395 --
Issue of 275,170 ordinary shares at a premium of $5.124 per share............................ -- 1,410
--------- ---------
Balance at end of the financial year......................................................... 4,204 3,809
--------- ---------
--------- ---------
Foreign currency translation reserve:
Balance at beginning of the financial year................................................... (145) (7)
Exchange differences arising from the translation of the net assets of self-sustaining
foreign operations......................................................................... (164) (138)
--------- ---------
Balance at end of the financial year........................................................... (309) (145)
--------- ---------
--------- ---------
</TABLE>
NOTE 9. CURRENT RECEIVABLES
<TABLE>
<CAPTION>
AS AT 31 MARCH
--------------------
1998 1997
$000 $000
--------- ---------
<S> <C> <C>
Trade accounts receivable...................................................................... 40,422 31,374
Provision for doubtful debts................................................................... (2,012) (1,837)
--------- ---------
38,410 29,537
Non-trade accounts receivable from:
Other debtors................................................................................ 1,036 638
--------- ---------
39,446 30,175
--------- ---------
--------- ---------
Amounts receivable in foreign currencies
New Zealand dollars.......................................................................... 6,137 4,789
British pounds............................................................................... 1,980 1,814
Singapore dollars............................................................................ 568 1,447
Hong Kong dollars............................................................................ 1,352 1,736
Trade accounts receivable are subject to normal terms of trade which provide for settlement
within seven to fourteen days. Non-trade accounts receivable are due within various periods of
less than 12 months.
</TABLE>
NOTE 10. OTHER CURRENT ASSETS
<TABLE>
<CAPTION>
AS AT 31 MARCH
--------------------
1998 1997
$000 $000
--------- ---------
<S> <C> <C>
Prepayments.................................................................................... 2,357 1,844
--------- ---------
--------- ---------
</TABLE>
F-11
<PAGE>
MORGAN & BANKS LIMITED
NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN AUSTRALIAN DOLLARS)
NOTE 11. NON-CURRENT RECEIVABLES
<TABLE>
<CAPTION>
AS AT 31 MARCH
--------------------
1998 1997
$000 $000
--------- ---------
<S> <C> <C>
Loans to related bodies corporate.............................................................. 46 42
--------- ---------
--------- ---------
</TABLE>
NOTE 12. PLANT AND EQUIPMENT
<TABLE>
<CAPTION>
AS AT 31 MARCH
--------------------
1998 1997
$000 $000
--------- ---------
<S> <C> <C>
Leasehold improvements
At cost...................................................................................... 6,992 3,421
Provision for amortisation................................................................... 2,535 1,172
--------- ---------
4,457 2,249
--------- ---------
Plant and equipment
At cost...................................................................................... 19,882 14,364
Provision for depreciation................................................................... 10,187 6,228
--------- ---------
9,695 8,136
--------- ---------
Total plant and equipment at cost.............................................................. 26,874 17,785
Provision for depreciation and amortisation.................................................... 12,722 7,400
--------- ---------
14,152 10,385
--------- ---------
--------- ---------
</TABLE>
NOTE 13. INTANGIBLES
<TABLE>
<CAPTION>
AS AT 31 MARCH
--------------------
1998 1997
$000 $000
--------- ---------
<S> <C> <C>
Goodwill--at cost.............................................................................. 10,551 10,608
Accumulated amortisation....................................................................... 1,243 461
--------- ---------
9,308 10,147
--------- ---------
--------- ---------
</TABLE>
F-12
<PAGE>
MORGAN & BANKS LIMITED
NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN AUSTRALIAN DOLLARS)
NOTE 14. OTHER NON-CURRENT ASSETS
<TABLE>
<CAPTION>
AS AT 31 MARCH
------------------------
<S> <C> <C>
1998 1997
$000 $000
----------- -----------
Future income tax benefits -- timing differences.............................................. 2,684 2,339
-- tax losses.......................................................... 309 --
----------- -----------
2,993 2,339
----------- -----------
----------- -----------
</TABLE>
NOTE 15. CURRENT ACCOUNTS PAYABLE
<TABLE>
<CAPTION>
AS AT 31 MARCH
------------------------
<S> <C> <C>
1998 1997
$000 $000
----------- -----------
Trade accounts payable........................................................................ 6,683 4,264
Other creditors:
Commissions/bonus accrual................................................................... 13,108 10,392
On hire contractors, wages.................................................................. 11,412 9,876
Employee related taxes accrued.............................................................. 3,190 1,370
Other general accruals...................................................................... 9,272 8,127
----------- -----------
43,665 34,029
----------- -----------
----------- -----------
Amounts payable in foreign currencies:
New Zealand dollars......................................................................... 7,089 6,032
British pounds.............................................................................. 3,589 2,898
Singapore dollars........................................................................... 746 548
Hong Kong dollars........................................................................... 740 848
</TABLE>
NOTE 16. CURRENT BORROWINGS
<TABLE>
<CAPTION>
AS AT 31 MARCH
------------------------
<S> <C> <C>
1998 1997
$000 $000
----------- -----------
Hire purchase creditors (Note 24)--secured*................................................... 481 486
Bank loan--secured............................................................................ -- 179
----------- -----------
481 665
----------- -----------
----------- -----------
</TABLE>
- ------------------------
* Partly secured by a first ranking fixed charge over the book debts of the
chief entity to an amount of $1 million, and also secured by the assets
acquired.
NOTE 17. CURRENT PROVISIONS
<TABLE>
<CAPTION>
AS AT 31 MARCH
------------------------
<S> <C> <C>
1998 1997
$000 $000
----------- -----------
Dividends..................................................................................... 3,497 3,196
Taxation...................................................................................... 4,581 3,772
Employee entitlements......................................................................... 1,452 1,262
----------- -----------
9,530 8,230
----------- -----------
----------- -----------
</TABLE>
F-13
<PAGE>
MORGAN & BANKS LIMITED
NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN AUSTRALIAN DOLLARS)
NOTE 18. NON-CURRENT BORROWINGS
<TABLE>
<CAPTION>
AS AT 31 MARCH
------------------------
<S> <C> <C>
1998 1997
$000 $000
----------- -----------
Hire purchase creditors (Note 24)--secured*................................................... 91 600
Commercial bills--unsecured (Note 23(d))...................................................... 8,030 5,315
----------- -----------
8,121 5,915
----------- -----------
----------- -----------
</TABLE>
- ------------------------
* Partly secured by a first ranking fixed charge over the book debts of the
chief entity to an amount of $1 million, and also secured by the assets
acquired.
NOTE 19. NON-CURRENT PROVISIONS
<TABLE>
<CAPTION>
AS AT 31 MARCH
------------------------
<S> <C> <C>
1998 1997
$000 $000
----------- -----------
Employee entitlements......................................................................... 996 983
Deferred income taxation...................................................................... 617 736
----------- -----------
1,613 1,719
----------- -----------
----------- -----------
</TABLE>
NOTE 20. FOREIGN CURRENCY MONETARY ITEMS
Current and non-current assets and liabilities not effectively hedged to a
date at least 12 months after balance date:
<TABLE>
<CAPTION>
AS AT 31 MARCH
------------------------
<S> <C> <C>
1998 1997
$000 $000
----------- -----------
British pounds:
Current assets.............................................................................. 1,029 577
Non-current assets.......................................................................... 729 636
----------- -----------
1,758 1,213
----------- -----------
----------- -----------
New Zealand dollars:
Non-current assets.......................................................................... 8,658 10,629
Current liabilities......................................................................... (7,139) (7,452)
----------- -----------
1,519 3,177
----------- -----------
----------- -----------
Hong Kong dollars:
Current assets.............................................................................. 1,433 930
Non-current assets.......................................................................... 345 441
----------- -----------
1,778 1,371
----------- -----------
----------- -----------
Singapore dollars:
Current assets.............................................................................. 256 966
Non-current assets.......................................................................... 389 216
----------- -----------
645 1,182
----------- -----------
----------- -----------
</TABLE>
F-14
<PAGE>
MORGAN & BANKS LIMITED
NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN AUSTRALIAN DOLLARS)
NOTE 21. ISSUED CAPITAL
The Shareholders of the company approved a capital reconstruction of
three-new-shares-for-one-old at a General Shareholders' Meeting on 25 February
1998.
<TABLE>
<CAPTION>
AS AT 31 MARCH
------------------------
<S> <C> <C>
1998 1997
$000 $000
----------- -----------
ISSUED
Ordinary shares:
69,239,148 (1997: 22,829,716) ordinary shares of 3.33 cents (1997: 10 cents) each fully
paid...................................................................................... 2,308 2,283
----------- -----------
----------- -----------
Shares issued (all issued prior to capital reconstruction):
During the current year 250,000 ordinary shares of $0.10 each were issued at a premium of
$1.58 per share following the exercise of options......................................... 25 --
----------- -----------
----------- -----------
During the prior year 275,170 ordinary shares of $0.10 each were issued at a premium of
$5.124 per share as partial consideration for the acquisition of 64.5% of Morgan & Banks
Limited, New Zealand...................................................................... -- 28
----------- -----------
----------- -----------
</TABLE>
OPTIONS
Prior to the capital reconstruction and during the year 788,750 options were
issued under the Morgan & Banks Employee Share Option Scheme and 530,000 options
were issued under the new Morgan & Banks Executive Option Plan. Of such amounts,
188,500 options (1997: 212,250) were forfeited under the Morgan & Banks Employee
Share Option Scheme and 50,000 were forfeited under the Morgan & Banks Executive
Option Plan. During the year ended March 31, 1998, 250,000 options were
exercised. As at 31 March 1998, unissued shares, following the capital
reconstruction, under all option plans were as follows:
<TABLE>
<CAPTION>
SHARES UNDER EXERCISE EXERCISE
ISSUE DATE OPTION PRICE PERIOD
- ------------ ------------- --------- ------------------------
<S> <C> <C> <C>
10/11/1994 600,000 $ 0.5600 10/11/1997-09/11/1999
21/04/1995 769,875 $ 0.5233 21/04/1998-20/04/2000
19/08/1996 1,863,000 $ 1.2167 19/08/1999-17/08/2001
17/10/1997 1,440,000 $ 3.4733 17/10/2000-17/10/2002
</TABLE>
F-15
<PAGE>
MORGAN & BANKS LIMITED
NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN AUSTRALIAN DOLLARS)
NOTE 22. CASH
<TABLE>
<CAPTION>
AS AT 31 MARCH
--------------------
1998 1997
$000 $000
--------- ---------
<S> <C> <C>
Cash........................................................................................... 7,671 8,076
Short-term deposits............................................................................ 6,817 2,991
--------- ---------
14,488 11,067
--------- ---------
--------- ---------
</TABLE>
For the purposes of the statements of cash flows, cash includes cash on hand
and in banks and investments in money market instruments, net of outstanding
bank overdrafts.
The average floating interest rate for short-term deposits is 5.39%.
NOTE 23. NOTES TO THE STATEMENTS OF CASH FLOWS
(A) RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO OPERATING
PROFIT AFTER INCOME TAX:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED 31 MARCH
-------------------------------
1998 1997 1996
$000 $000 $000
--------- --------- ---------
<S> <C> <C> <C>
Operating profit after income tax.................................................... 11,231 10,608 7,194
Depreciation and amortisation...................................................... 5,184 2,967 1,991
Amortisation of goodwill........................................................... 782 274 158
Goodwill written-off............................................................... -- 97 --
Hire purchase interest charges..................................................... 94 146 --
(Gain) loss on sales/write-off of non-current assets............................... (1) (11) 24
Provision for doubtful debts....................................................... 175 216 550
Abnormal item...................................................................... 198 -- --
Changes in assets and liabilities net of effects of
purchases of new businesses:
Increase/(decrease) in income taxes payable........................................ 787 (124) 771
(Decrease)/increase in provision for deferred income tax........................... (120) 254 (135)
(Increase) in future income tax benefit............................................ (664) (590) (461)
(Increase) in trade debtors........................................................ (8,675) (5,013) (7,878)
(Increase) in other debtors and prepayments........................................ (910) (684) (375)
Increase in trade creditors........................................................ 2,482 1,487 1,111
Increase in other creditors........................................................ 6,928 7,377 5,857
Decrease in lease liabilities -- -- (24)
Increase in employee entitlements.................................................. 204 748 278
--------- --------- ---------
Net cash provided by operating activities............................................ 17,695 17,752 9,061
--------- --------- ---------
--------- --------- ---------
</TABLE>
(B) ENTITIES ACQUIRED
During the 1997 financial year the economic entity acquired the remaining
71.38% interest in Morgan & Banks, New Zealand in a number of stages. These
acquisitions were financed through the issue of shares and cash as detailed
below. As a result of the issue of shares, the chief entity became the
beneficial owner of 16.1% of the issued capital of Morgan & Banks, New Zealand.
This beneficial ownership was on-sold at
F-16
<PAGE>
MORGAN & BANKS LIMITED
NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN AUSTRALIAN DOLLARS)
NOTE 23. NOTES TO THE STATEMENTS OF CASH FLOWS (CONTINUED)
cost to Maldon Holdings Limited, a wholly owned controlled entity, and therefore
not reflected in the statements of cash flows.
During the 1996 financial year, the economic entity acquired the trading
operations of Westside Employment (Aust) Pty Limited.
Details of the acquisitions are as follows:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED 31 MARCH
---------------------------------
1998 1997 1996
$000 $000 $000
--------- --------- -----
<S> <C> <C> <C>
Consideration
275,170 ordinary shares of Morgan & Banks Limited issued at
$5.224 per share............................................................... -- 1,437 --
Cash............................................................................. -- 7,557 102
--------- --------- ---
-- 8,994 102
Equity interest at date of acquisition............................................. -- 1,491 --
--------- --------- ---
-- 10,485 102
--------- --------- ---
--------- --------- ---
Fair value of net assets acquired
Current Assets
Cash........................................................................... -- 910 --
Trade debtors.................................................................. -- 3,947 --
Sundry debtors and prepayments................................................. -- 264 --
Non-Current Assets
Plant and equipment............................................................ -- 1,792 --
Intangible assets.............................................................. -- 929 --
Investments.................................................................... -- 68 --
Future income tax benefit...................................................... -- 346 --
Current Liabilities
Trade creditors................................................................ -- (1,194) --
Provisions and accruals........................................................ -- (3,816) --
Related party payable.......................................................... -- (19) --
Bank loan--secured............................................................. -- (179) --
--------- --------- ---
Net assets acquired.............................................................. -- 3,048 --
Goodwill on acquisition.......................................................... -- 7,437 102
--------- --------- ---
-- 10,485 102
--------- --------- ---
Cash consideration................................................................. -- 7,557 102
Less: Cash balances acquired....................................................... -- 910 --
--------- --------- ---
Cash outflow....................................................................... -- 6,647 102
--------- --------- ---
--------- --------- ---
</TABLE>
On 1 April 1997, an additional 7.5% of the ordinary shares of Morgan & Banks
(Hong Kong) Limited was acquired.
On 24 January 1997, an additional 16.5% of the ordinary shares of Morgan &
Banks (Hong Kong) Limited was also acquired.
F-17
<PAGE>
MORGAN & BANKS LIMITED
NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN AUSTRALIAN DOLLARS)
NOTE 23. NOTES TO THE STATEMENTS OF CASH FLOWS (CONTINUED)
(C) NON-CASH FINANCING AND INVESTING ACTIVITIES
During the 1997 financial year the chief entity acquired plant and equipment
with an aggregate fair value of $72,315 (1996: $814,440) by means of hire
purchase contracts. During the 1997 financial year the chief entity issued
275,170 ordinary shares as part consideration of the acquisition of 64.5% of the
ordinary shares of Morgan & Banks Limited, New Zealand (refer to Note 23(b)).
These transactions are not reflected in the statements of cash flows.
(D) FINANCING ARRANGEMENTS
<TABLE>
<CAPTION>
FOR THE YEAR ENDED 31 MARCH
-------------------------------
1998 1997 1996
$000 $000 $000
--------- --------- ---------
<S> <C> <C> <C>
FACILITIES SUMMARY
Bank loan facilities............................................................... -- 179 --
Fixed rate commercial bill facility................................................ 2,500 -- --
Fixed and variable rate commercial bill acceptance/discount facility............... 2,630 5,675 --
Interchangeable overdraft or fixed and variable rate commercial bill
acceptance/discount facility..................................................... 8,196 1,992 --
Overdraft facilities............................................................... -- 447 2,000
--------- --------- ---------
13,326 8,293 2,000
--------- --------- ---------
--------- --------- ---------
USED AT BALANCE DATE
Bank loan facilities............................................................... -- 179 --
Fixed rate commercial bill facility................................................ 2,500 -- --
Fixed and variable rate commercial bill acceptance/discount facility............... 2,630 5,315 --
Interchangeable overdraft or fixed and variable rate commercial bill
acceptance/discount facility..................................................... 2,900 -- --
--------- --------- ---------
8,030 5,494 --
--------- --------- ---------
--------- --------- ---------
UNUSED AT BALANCE DATE
Fixed and variable rate commercial bill acceptance/discount facility............... -- 360 --
Interchangeable overdraft or fixed and variable rate commercial bill
acceptance/discount facility..................................................... 5,296 1,992 --
Overdraft facilities............................................................... -- 447 2,000
--------- --------- ---------
5,296 2,799 2,000
--------- --------- ---------
--------- --------- ---------
</TABLE>
The bank loan facility was repaid in August 1997.
The fixed rate commercial bill facility matures in August 2001 with a fixed
interest rate of 5.74%.
The fixed and variable rate commercial bill acceptance/discount facility and
the interchangeable facility are subject to annual review, with the exception of
$2,630,000 of the commercial bill facility which matures in 2000. The commercial
bill facility of $2,630,000 and an additional amount of $796,000 of the
interchangeable facility may only be drawn in New Zealand dollars.
F-18
<PAGE>
MORGAN & BANKS LIMITED
NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN AUSTRALIAN DOLLARS)
NOTE 23. NOTES TO THE STATEMENTS OF CASH FLOWS (CONTINUED)
An interest rate option was taken out on the fixed and variable commercial
bill acceptance/discount facility drawn in New Zealand dollars until 15
September 1998. The interest rate cap is 8.50%.
Interest rates on the interchangeable overdraft and fixed and variable rate
commercial bill acceptance/ discount facility are determined by reference to the
prevailing bank bill or overdraft rate as applicable.
NOTE 24. COMMITMENTS FOR EXPENDITURE
<TABLE>
<CAPTION>
AS AT 31 MARCH
-------------------------------
1998 1997 1996
$000 $000 $000
--------- --------- ---------
<S> <C> <C> <C>
CAPITAL EXPENDITURE CONTRACTED FOR
AT 31 MARCH BUT NOT PROVIDED FOR:
Payable:
Not later than 1 year.............................................................. 76 426 179
--------- --------- ---------
--------- --------- ---------
NON-CANCELLABLE OPERATING LEASES WITH A TERM OF
MORE THAN ONE YEAR--COMMITMENTS NOT PROVIDED FOR:
Payable:
Not later than 1 year.............................................................. 7,056 5,892 3,894
Later than 1 year but not later than 2 years....................................... 6,332 5,193 3,500
Later than 2 years but not later than 5 years...................................... 13,742 12,757 7,091
Later than 5 years................................................................. 867 3,866 2,501
--------- --------- ---------
27,997 27,708 16,986
--------- --------- ---------
--------- --------- ---------
HIRE PURCHASE AGREEMENTS--ANALYSIS OF COMMITMENTS:
Payable:
Not later than 1 year.............................................................. 516 608 586
Later than 1 year but not later than 2 years....................................... 94 516 586
Later than 2 years but not later than 5 years...................................... -- 94 552
--------- --------- ---------
Total minimum lease payments......................................................... 610 1,218 1,724
Future finance charges............................................................... (38) (132) (249)
--------- --------- ---------
572 1,086 1,475
--------- --------- ---------
--------- --------- ---------
Current liability (Note 16).......................................................... 481 486 445
Non-current liability (Note 18)...................................................... 91 600 1,030
--------- --------- ---------
572 1,086 1,475
--------- --------- ---------
--------- --------- ---------
</TABLE>
The average interest rate for hire purchase liabilities is 10.776%.
NOTE 25. SUPERANNUATION COMMITMENTS
The economic entity contributes to accumulation plans to provide benefits to
permanent employees and contractors as required by Superannuation Guarantee
legislation. The economic entity does not guarantee the performance of these
funds.
The economic entity's commitment in respect of these accumulation plans is
limited to making the specified contributions as required by the relevant award
and legislation.
F-19
<PAGE>
MORGAN & BANKS LIMITED
NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN AUSTRALIAN DOLLARS)
NOTE 25. SUPERANNUATION COMMITMENTS (CONTINUED)
Funds are available for the purposes of the fund to satisfy all benefits
that would have been vested under the fund in the event of the termination of
the fund or the voluntary or compulsory termination of employment of each
employee member.
NOTE 26. CONTINGENT LIABILITIES
MORGAN & BANKS LIMITED
Particulars and estimated maximum amounts of contingent liabilities arising
in respect of:
Morgan & Banks New Zealand Limited has had proceedings issued against the
company for an amount of NZ$5.9 million. These proceedings are in relation to
the acquisition of the claimant's business in New Zealand prior to Morgan &
Banks New Zealand Limited becoming a controlled entity of the Group. The
directors of Morgan & Banks Limited are of the opinion that the claim is without
substance and accordingly the action will be vigorously defended.
Bank guarantees provided to third parties at 31 March 1998 amount to
$1,402,987 (1997: $1,286,391, 1996: $1,286,391).
In order to secure certain financing facilities, a deed of cross guarantee
and indemnity has been signed between Morgan & Banks Limited, Morgan & Banks New
Zealand Limited, and Maldon Holdings Limited to guarantee payment and indemnify
against losses.
F-20
<PAGE>
MORGAN & BANKS LIMITED
NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN AUSTRALIAN DOLLARS)
NOTE 27. REMUNERATION OF AUDITORS
<TABLE>
<CAPTION>
FOR THE YEAR ENDED 31 MARCH
-------------------------------
1998 1997 1996
$000 $000 $000
--------- --------- ---------
<S> <C> <C> <C>
Total of all remuneration received or due and receivable for the audit and review of
financial reports by:
Auditors of the chief entity........................................................... 95 82 67
Other auditors......................................................................... 85 56 27
--------- --------- ---------
180 138 94
--------- --------- ---------
--------- --------- ---------
Total of all remuneration received or due and receivable for other services by:
Auditors of the chief entity........................................................... 71 124 68
Other auditors......................................................................... 35 3 8
--------- --------- ---------
106 127 76
--------- --------- ---------
286 265 170
--------- --------- ---------
--------- --------- ---------
</TABLE>
NOTE 28. DIRECTORS' INCOME
<TABLE>
<CAPTION>
FOR THE YEAR ENDED 31 MARCH
-------------------------------
1998 1997 1996
$000 $000 $000
--------- --------- ---------
<S> <C> <C> <C>
Aggregate of income paid or payable or otherwise made available from entities within the
economic entity and any related parties:............................................... 5,545 5,298 3,452
--------- --------- ---------
--------- --------- ---------
</TABLE>
The total income reported above excludes income of directors of wholly-owned
controlled corporations who are executives but not directors of the chief entity
and who are required as part of their executive duties to be directors of
controlled entities.
Directors of the chief entity in office at any time during the financial
years 1998, 1997 and 1996 were:
<TABLE>
<S> <C> <C>
W S Cutbush I G Burns A A Cox
G K Morgan M Hinves A W Whatmore
A R Banks P S Laidlaw
</TABLE>
NOTE 29. EXECUTIVES' INCOME
<TABLE>
<CAPTION>
FOR THE YEAR ENDED 31 MARCH
-------------------------------
1998 1997 1996
$000 $000 $000
--------- --------- ---------
<S> <C> <C> <C>
Total income received, or receivable by executive officers (including income received or
receivable from related parties) whose total income exceeds $100,000................... 7,624 6,997 6,442
--------- --------- ---------
--------- --------- ---------
</TABLE>
F-21
<PAGE>
MORGAN & BANKS LIMITED
NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN AUSTRALIAN DOLLARS)
NOTE 29. EXECUTIVES' INCOME (CONTINUED)
Number of executive officers whose total income exceeds $100,000:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED 31 MARCH
-------------------------------------------
1998 1997 1996
NUMBER NUMBER NUMBER
------------- ------------- -------------
<S> <C> <C> <C>
$100,000-$109,899................................................................... -- -- 1
$110,000-$119,999................................................................... 1 -- 1
$120,000-$129,999................................................................... 1 -- --
$130,000-$139,999................................................................... -- 1 3
$140,000-$149,999................................................................... 1 1 1
$150,000-$159,999................................................................... -- 1 --
$160,000-$169,999................................................................... 1 1 1
$180,000-$189,999................................................................... 2 -- --
$190,000-$199,999................................................................... -- -- 1
$200,000-$209,999................................................................... -- 1 --
$210,000-$219,999................................................................... -- 1 1
$220,000-$229,999................................................................... 1 1 2
$240,000-$249,999................................................................... 1 -- 1
$250,000-$259,999................................................................... 1 1 1
$260,000-$269,999................................................................... -- 1 --
$270,000-$279,999................................................................... -- 1 --
$290,000-$299,999................................................................... 1 1 1
$300,000-$309,999................................................................... 2 2 --
$320,000-$329,999................................................................... -- -- 2
$340,000-$349,999................................................................... -- 1 --
$350,000-$359,999................................................................... 1 1 --
$370,000-$379,999................................................................... 1 1 --
$390,000-$399,999................................................................... 1 -- --
$430,000-$439,999................................................................... 1 -- --
$450,000-$459,999................................................................... 1 -- --
$470,000-$479,999................................................................... -- -- 1
$500,000-$509,999................................................................... -- -- 2
$550,000-$559,999................................................................... 1 3 --
$560,000-$569,999................................................................... 1 -- --
$570,000-$579,999................................................................... 1 -- --
$590,000-$599,999................................................................... -- -- 2
$670,000-$679,999................................................................... -- 2 --
$690,000-$699,999................................................................... 2 -- --
</TABLE>
The total income reported above includes the income of executive directors. This
is also included in the income of all directors reported in Note 28.
NOTE 30. SEGMENT INFORMATION
INDUSTRY SEGMENTS
The economic entity operates in the field of human resource services.
F-22
<PAGE>
MORGAN & BANKS LIMITED
NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN AUSTRALIAN DOLLARS)
NOTE 30. SEGMENT INFORMATION (CONTINUED)
GEOGRAPHICAL SEGMENTS
The economic entity operated in the following geographic segments during the
year--Australia, the United Kingdom, New Zealand and Asia.
A statement of operations of geographical segments are as follows:
<TABLE>
<CAPTION>
TOTAL REVENUE TOTAL ASSETS AS AT
------------------------------- -------------------------------------
<S> <C> <C> <C> <C> <C> <C>
YEAR ENDED 31 MARCH
------------------------------- 31 MARCH 31 MARCH 31 MARCH
(A$ THOUSAND) 1998 1997 1996 1998 1997 1996
- ----------------------------------------------- --------- --------- --------- ----------- ----------- -----------
Australia...................................... 235,738 179,952 122,645 53,913 38,803 35,512
United Kingdom................................. 37,091 23,951 15,504 5,190 3,941 2,221
Asia........................................... 11,092 9,144 5,356 6,203 6,083 2,470
New Zealand*................................... 46,786 8,904 -- 17,484 17,172 --
--------- --------- --------- ----------- ----------- -----------
Consolidated................................... 330,707 221,951 143,505 82,790 65,999 40,203
--------- --------- --------- ----------- ----------- -----------
--------- --------- --------- ----------- ----------- -----------
</TABLE>
<TABLE>
<CAPTION>
OPERATING PROFIT
BEFORE TAX AND GOODWILL OPERATING PROFIT
GOODWILL AMORTISATION AMORTISATION BEFORE TAX
YEAR ENDED 31 MARCH ------------------------------- ------------------------------- -------------------------------
(A$ THOUSAND) 1998 1997 1996 1998 1997 1996 1998 1997 1996
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Australia............ 17,753 14,259 10,163 (9) (106) (19) 17,744 14,153 10,144
United Kingdom....... 526 531 239 -- -- -- 526 531 239
Asia................. 839 1,934 1,150 (262) (153) (139) 577 1,781 1,011
Asia (abnormal
loss).............. (703) -- -- -- -- -- (703) -- --
New Zealand*......... 818 373 -- (511) (112) -- 307 261 --
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Consolidated......... 19,233 17,097 11,552 (782) (371) (158) 18,451 16,726 11,394
--------- --------- --------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- --------- --------- ---------
</TABLE>
- ------------------------
There were no material intersegment sales.
* The results for New Zealand for 1997 are for the period 1 February to 31 March
1997.
NOTE 31. OUTSIDE EQUITY INTEREST
<TABLE>
<CAPTION>
AS AT 31 MARCH
--------------------
1998 1997
$000 $000
--------- ---------
<S> <C> <C>
Outside equity interest in controlled entities comprises:
Share capital..................................................................................... 25 33
Foreign currency translation reserve.............................................................. 60 (31)
Retained profits.................................................................................. 566 793
--------- ---------
651 795
--------- ---------
--------- ---------
</TABLE>
F-23
<PAGE>
MORGAN & BANKS LIMITED
NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN AUSTRALIAN DOLLARS)
NOTE 32. CONTROLLED ENTITIES
<TABLE>
<CAPTION>
PERCENTAGE
OF SHARES HELD
--------------------
AS AT 31 MARCH
COUNTRY OF --------------------
FORMATION/ 1998 1997
CONTROLLED ENTITY INCORPORATION % %
- ------------------------------------------------------------------------------- --------------- --------- ---------
<S> <C> <C> <C>
SHARES HELD BY MORGAN & BANKS LIMITED
Morgan & Banks Management Services Pty Ltd..................................... Australia 100 100
Credential Check Pty Ltd....................................................... Australia 100 100
Labour LinQ Pty Ltd............................................................ Australia 100 100
Alectus Personnel Pty Ltd...................................................... Australia 100 100
Tristram Investments Limited................................................... Australia 100 100
The Labour LinQ Business Solution Pty Ltd j.................................... Australia 100 100
Morgan & Banks Reward Consulting Pty Ltd....................................... Australia 100 100
Morgan & Banks Investor No. 1 Pty Ltd.......................................... Australia 100 100
H. Neumann International Pty Ltd............................................... Australia 67.5 67.5
S.B.N. Convenience Pty Limited................................................. Australia 100 100
M&B Search Pte Ltd bd.......................................................... Singapore 75 67.5
Maldon Holdings Limited a...................................................... New Zealand 100 100
Morgan & Banks Holdings Ltd a.................................................. UK 100 100
Morgan & Banks Recruitment Ltd a............................................... Hong Kong 100 100
Health Resources International Pty Limited k................................... Australia 100 --
H. Neumann International Limited a............................................. New Zealand 47.5 47.5
PT Morgan Nusantara ac......................................................... Indonesia 99 --
SHARES HELD BY MALDON HOLDINGS LIMITED
Morgan & Banks New Zealand Limited ag.......................................... New Zealand 100 100
SHARES HELD BY MORGAN & BANKS NEW ZEALAND LIMITED
Compuforce Recruitment Limited ae.............................................. New Zealand 100 100
Alectus Recruitment Consultants Ltd a.......................................... New Zealand 100 100
H. Neumann International Limited a............................................. New Zealand 47.5 47.5
Sibson & Company Limited ae.................................................... New Zealand 100 100
Compubank Limited e............................................................ New Zealand -- 100
Executive Leasing & Consulting Ltd a........................................... New Zealand 100 100
Job Bank (NZ) Ltd e............................................................ New Zealand -- 100
Labour Linq Limited a.......................................................... New Zealand 100 100
MB Management Systems Ltd e.................................................... New Zealand -- 100
Job Index Limited af........................................................... New Zealand 100 --
H. Neumann International Limited............................................... Australia 27.5 27.5
</TABLE>
F-24
<PAGE>
MORGAN & BANKS LIMITED
NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN AUSTRALIAN DOLLARS)
NOTE 32. CONTROLLED ENTITIES (CONTINUED)
<TABLE>
<CAPTION>
PERCENTAGE
OF SHARES HELD
--------------------
AS AT 31 MARCH
COUNTRY OF --------------------
FORMATION/ 1998 1997
CONTROLLED ENTITY INCORPORATION % %
- ------------------------------------------------------------------------------- --------------- --------- ---------
<S> <C> <C> <C>
SHARES HELD BY MORGAN & BANKS HOLDINGS LTD
Morgan & Banks PLC a........................................................... UK 100 100
Morgan & Banks Payroll Services Ltd al......................................... UK 100 100
SHARES HELD BY MORGAN & BANKS RECRUITMENT LTD
Morgan & Banks (Hong Kong) Ltd ad.............................................. Hong Kong 75 67.5
SHARES HELD BY MORGAN & BANKS (HONG KONG) LTD
The Wright Company (S) Pte Ltd b............................................... Singapore 100 100
The Wright Company (Beijing) Ltd a............................................. Hong Kong 100 100
The Wright Company (Guangzhou) Ltd a........................................... Hong Kong 100 100
H. Neumann International (Asia) Ltd ah......................................... Hong Kong 95 100
The Wright Company (M) Sdn Bhd a............................................... Malaysia 100 100
Maston Development Limited a................................................... Hong Kong 100 100
PT Morgan Nusantara ac......................................................... Indonesia 1 --
</TABLE>
- ------------------------
All controlled entities carried on business in their countries of incorporation.
a Controlled entities audited by other member firms of the Pannell Kerr
Forster worldwide association.
b Controlled entities audited by firms other than Pannell Kerr Forster
worldwide association.
c Incorporated on 26 February 1997.
d Acquired an additional 16.5% effective 24 January 1997 and an additional 7.5%
effective 1 April 1997.
e Controlled entity wound up.
f Incorporated 12 June 1997.
g Name changed from Morgan & Banks Limited on 5 March 1998.
h Name changed from The Wright Company (Shanghai) Ltd. on 12 December 1997.
j Name changed from Inform International Pty Ltd on 1 August 1997.
k Incorporated on 20 May 1997.
l Name changed from Morgan & Banks Executive Leasing Ltd on 7 March 1997.
On 24 January 1997, the economic entity acquired an additional 16.5% of the
share capital of Morgan & Banks (Hong Kong) Ltd for $1,075,635 and the
additional percentage of the operating results were included in Profit and Loss
Accounts from that date. During the 1998 financial year the economic entity
F-25
<PAGE>
MORGAN & BANKS LIMITED
NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN AUSTRALIAN DOLLARS)
NOTE 32. CONTROLLED ENTITIES (CONTINUED)
acquired a further 7.5% of the share capital of Morgan & Banks (Hong Kong) Ltd
for an amount of $664,778. The acquisition took place on 1 April 1997 and the
operating results of the increased ownership interest was included in the profit
and loss account from that date.
NOTE 33. EARNINGS PER SHARE
<TABLE>
<CAPTION>
FOR THE YEAR ENDED 31 MARCH
----------------------------------------
<S> <C> <C> <C>
1998 1997 1996
$ $ $
------------ ------------ ------------
Basic earnings per share--before abnormal items......................... 0.169 0.144 0.10
Basic earnings per share--after abnormal items.......................... 0.159 0.144 0.10
<CAPTION>
NUMBER NUMBER NUMBER
------------ ------------ ------------
<S> <C> <C> <C>
Weighted average number of ordinary shares outstanding during the year
used in the calculation of basic earnings per share................... 69,239,148 68,489,148 67,663,638
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
Diluted earnings per share is not materially different from basic earnings
per share and is therefore not disclosed in the accounts.
The prior year numbers have been adjusted to reflect the capital
reconstruction for the purposes of comparability.
NOTE 34. RELATED PARTY TRANSACTIONS
During the financial period to 31 March 1998 the following transactions took
place with related parties:
Dividends totalling $1,555,334 (1997: $1,501,253, 1996: $1,522,260) were
paid during the year to entities associated with directors, this being in
accordance with normal shareholder entitlements.
An amount of $20,000 (1997: $20,000, 1996: $20,000) was paid under a
sponsorship agreement to Geoff Morgan Motor Sports, a director related entity of
Mr G K Morgan.
Director related entities of non-executive directors, Mr W S Cutbush, Mr A A
Cox, Mr A W Whatmore and joint managing directors, Mr G K Morgan and Mr A R
Banks, have from time to time utilised the services of the economic entity, this
being in the normal course of business and on standard terms and conditions.
F-26
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses payable by the Registrant in connection with the issuance and
distribution of the securities being registered (other than underwriting
accounts and commissions) are estimated to be as follows:
<TABLE>
<S> <C>
SEC Registration Fee........................................... $16,401.26
Accountants' Fees and Expenses................................. 75,000.00
Legal Fees and Expenses........................................ 20,000.00
Miscellaneous.................................................. 3,598.74
----------
Total.......................................................... $115,000.00
----------
----------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of Delaware permits
indemnification of directors, officers and employees of a corporation under
certain conditions and subject to certain limitations. Article VI of the By-Laws
of the Registrant contains provision for the indemnification of directors,
officers and employees within the limitations permitted by Section 145. In
addition, the Company has entered into Indemnity Agreements with its directors
and officers which provide the maximum indemnification allowed by Section 145.
The Company's officers and directors are insured against losses arising from any
claim against them as such for wrongful acts or omissions, subject to certain
limitations.
ITEM 16. EXHIBITS
<TABLE>
<S> <C>
2.1 Scheme Implementation Agreement by and between Morgan & Banks Limited and TMP
Worldwide Inc. dated August 17, 1998.*
5.1 Opinion of Fulbright & Jaworski L.L.P. regarding legality.*
10.1 Agreement dated as of August 31, 1998, by and among TMP Worldwide Inc., TASA Holding
A.G. and the Shareholders named therein.*
23.1 (a) Consent of Fulbright & Jaworski L.L.P. (included in Exhibit 5.1).*
(b) Consent of BDO Seidman, LLP
(c) Consent of Pannell Kerr Forster
(d) Consent of KPMG
24 Power of Attorney (on signature page).*
</TABLE>
- ------------------------
* Previously filed.
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement to include any
material information with respect to the plan
II-1
<PAGE>
of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof;
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer, or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer, or controlling person of the Registrant in connection with
the securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on September 18, 1998.
<TABLE>
<S> <C> <C>
TMP WORLDWIDE INC.
By: /s/ ANDREW J. MCKELVEY
-----------------------------------------
Andrew J. McKelvey
CHAIRMAN AND CEO
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, as amended, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------
<C> <S> <C>
/s/ ANDREW J. MCKELVEY Chairman, CEO and Director
- ------------------------------ (PRINCIPAL EXECUTIVE September 21, 1998
Andrew J. McKelvey OFFICER)
*
- ------------------------------ Vice Chairman (PRINCIPAL September 21, 1998
Thomas G. Collison FINANCIAL OFFICER)
* Chief Financial Officer
- ------------------------------ (PRINCIPAL ACCOUNTING September 21, 1998
Roxane Previty OFFICER)
*
- ------------------------------ Director September 21, 1998
(George R. Eisele)
*
- ------------------------------ Director September 21, 1998
(John R. Gaulding)
*
- ------------------------------ Director September 21, 1998
(Michael Kaufman)
*
- ------------------------------ Director September 21, 1998
(John Swann)
</TABLE>
<TABLE>
<S> <C> <C> <C>
*By: /s/ ANDREW J. MCKELVEY
-------------------------
ATTORNEY-IN-FACT
</TABLE>
II-3
<PAGE>
EXHIBIT 23.1(B)
CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
TMP Worldwide Inc.
New York, New York
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement of our reports dated March
20, 1998, relating to the consolidated financial statements and schedule of TMP
Worldwide Inc. appearing in the Company's Annual Report on Form 10-K for the
year ended December 31, 1997.
We also consent to the reference to us under the caption "Experts" in the
Prospectus.
BDO SEIDMAN, LLP
New York, New York
September 21, 1998
<PAGE>
EXHIBIT 23.1(C)
The Board of Directors
Morgan & Banks Limited
Level 11, Grosvenor Place
225 George Street
SYDNEY NSW 2000
CONSENT OF INDEPENDENT CHARTERED ACCOUNTANTS
We hereby consent to the use of our report dated 16 June 1998, except for Note 2
of Notes to and forming Part of the Consolidated Financial Statements, for which
the date is 21 September 1998, relating to the consolidated balance sheets of
Morgan & Banks Limited as at 31 March 1998 and 1997, and the consolidated profit
and loss statements and cash flow statements for each of the years in the three
year period ended 31 March 1998, which report is incorporated by reference in
Amendment 1 to the Registration Statement on Form S-3 of TMP Worldwide Inc.
dated 21 September 1998.
We also consent to the reference to us under the caption "Experts" in the
Prospectus constituting a part of this Registration Statement.
Sydney, Australia
21 September 1998
[LOGO]
PANNELL KERR FORSTER
<PAGE>
EXHIBIT 23.1(D)
PRIVATE & CONFIDENTIAL
The Directors
TMP Worldwide Inc
1633 Broadway
New York NY 10019
21 September, 1998
Dear Sir
We consent to the inclusion of our report dated 4 February 1997, with respect to
the consolidated balance sheets of Austin Knight Limited as of 31 December 1995
and 1996, and the related consolidated statements of earnings, stockholders'
equity and cash flows for each of the years in the two year period ended 31
December 1996, which report is incorporated by reference in Amendment 1 to the
Registration Statement on Form S-3 of TMP Worldwide Inc. dated 21 September
1998.
Yours sincerely
KPMG
