|
The following items were the subject of a Form 12b-25 and are included herein: PART I (Items 1-3) |
UNITED STATES
FORM 10-QA AMENDMENT #1
[X] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2000
[ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number: 000-21407
LASON, INC.
DELAWARE (State or other jurisdiction of incorporation or organization) |
38-3214743 (I.R.S. Employer identification number) |
1305 Stephenson Highway
Telephone: (248) 597-5800
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
As of November 20, 2000, 19,601,542 shares of Common Stock, $.01 par value were outstanding.
Page No. | ||||||
Table of Contents
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1 | |||||
Part I.
|
Item 1. Financial Statements
|
|||||
Condensed Consolidated Balance Sheets
|
2 | |||||
Condensed Consolidated Statements of Operations and
Comprehensive Income, Three and Nine Months Ended
September 30, 2000 and 1999, (Unaudited)
|
3 | |||||
Condensed Consolidated Statements of Cash Flows, Nine Months
Ended September 30, 2000 and 1999 (Unaudited)
|
4 | |||||
Notes to Condensed Consolidated Financial Statements (Unaudited)
|
5 | |||||
Item 2. Managements Discussion and Analysis of
Financial Condition and Results of Operations
|
11 | |||||
Item 3. Quantitive and Qualitative Disclosures about
Market Risk
|
14 | |||||
Part II.
|
Other Information
|
|||||
Item 1. Legal Proceedings
|
16 | |||||
Item 2. Changes in Securities and Use of Proceeds
|
16 | |||||
Item 3. Defaults upon Senior Securities
|
17 | |||||
Item 4. Submission of Matters to a Vote of Security
Holders
|
17 | |||||
Item 5. Other Information
|
17 | |||||
Item 6. Exhibits and Reports on Form 8-K
|
17 | |||||
Signatures
|
20 |
1
LASON, INC.
September 30, | December 31, | ||||||||
2000 | 1999 | ||||||||
ASSETS
|
|||||||||
Cash and cash equivalents
|
$ | 8,076 | $ | 9,753 | |||||
Accounts receivable (net)
|
104,851 | 117,760 | |||||||
Supplies
|
10,626 | 13,181 | |||||||
Deferred income taxes
|
10,888 | 5,861 | |||||||
Net assets of discontinued operations
|
18,682 | 18,682 | |||||||
Prepaid expenses and other
|
30,602 | 27,541 | |||||||
Total current assets
|
183,725 | 192,778 | |||||||
Property and equipment (net)
|
104,265 | 106,102 | |||||||
Intangible assets (net)
|
499,362 | 529,146 | |||||||
Employee loans receivable
|
2,546 | 3,168 | |||||||
Deferred income taxes
|
1,450 | 207 | |||||||
Other
|
1,421 | 5,031 | |||||||
Total assets
|
$ | 792,769 | $ | 836,432 | |||||
LIABILITIES AND STOCKHOLDERS EQUITY
|
|||||||||
Accrued expenses
|
$ | 36,902 | $ | 31,349 | |||||
Accounts payable
|
31,097 | 27,816 | |||||||
Notes payable
|
931 | 294 | |||||||
Acquisition-related obligations
|
53,603 | 32,806 | |||||||
Accrued restructuring expenses
|
10,596 | 13,310 | |||||||
Customer deposits
|
4,041 | 6,079 | |||||||
Revolving credit line borrowings
|
175,900 | | |||||||
Term loan
|
142,500 | | |||||||
Current portion of term loan
|
| 11,250 | |||||||
Deferred income taxes
|
347 | | |||||||
Other
|
12,842 | 9,013 | |||||||
Total current liabilities
|
468,759 | 131,917 | |||||||
Revolving credit line borrowings
|
| 134,000 | |||||||
Term loan
|
| 138,750 | |||||||
Deferred income taxes
|
| 1,299 | |||||||
Convertible debentures
|
1,864 | 3,034 | |||||||
Other
|
5,767 | 7,910 | |||||||
Total liabilities
|
476,390 | 416,910 | |||||||
STOCKHOLDERS EQUITY
|
|||||||||
Common stock, $.01 par value; 100,000,000 shares authorized,
19,510,572 and 18,986,910 shares issued and outstanding, 527,370
and 698,712 shares held in escrow
|
188 | 182 | |||||||
Preferred stock, $.01 par value; 5,000,000 shares authorized,
none issued and outstanding
|
| | |||||||
Additional paid-in capital
|
435,349 | 421,544 | |||||||
Retained deficit
|
(107,708 | ) | (3,977 | ) | |||||
Treasury stock (at cost)
|
(5,541 | ) | (5,541 | ) | |||||
Accumulated other comprehensive income
|
(5,909 | ) | 7,314 | ||||||
Total stockholders equity
|
316,379 | 419,522 | |||||||
Total liabilities and stockholders equity
|
$ | 792,769 | $ | 836,432 | |||||
The accompanying Notes are an integral part of the condensed consolidated financial statements.
2
LASON, INC.
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2000 | 1999 | 2000 | 1999 | ||||||||||||||
Revenues, net of postage
|
$ | 135,489 | $ | 140,501 | $ | 420,170 | $ | 349,567 | |||||||||
Cost of revenues
|
106,584 | 85,421 | 308,126 | 220,004 | |||||||||||||
Gross profit
|
28,905 | 55,080 | 112,044 | 129,563 | |||||||||||||
Selling, general and administrative expenses
|
43,135 | 31,493 | 115,497 | 77,531 | |||||||||||||
Compensatory stock option expense
|
121 | 65 | 280 | 208 | |||||||||||||
Amortization of intangibles
|
9,297 | 4,499 | 20,384 | 9,853 | |||||||||||||
Asset impairment charge
|
74,853 | | 74,853 | | |||||||||||||
Restructuring expenses
|
| | | 7,755 | |||||||||||||
Income from operations
|
(98,501 | ) | 19,023 | (98,970 | ) | 34,216 | |||||||||||
Net interest expense
|
7,063 | 3,100 | 19,155 | 6,735 | |||||||||||||
Income (loss) from continuing operations before income taxes
|
(105,564 | ) | 15,923 | (118,125 | ) | 27,481 | |||||||||||
Provision (benefit) for income taxes
|
(14,924 | ) | 6,464 | (17,263 | ) | 12,347 | |||||||||||
Net income (loss) from continuing operations
|
(90,640 | ) | 9,459 | (100,862 | ) | 15,134 | |||||||||||
Income (loss) from discontinued operations, net of tax
|
(1,023 | ) | (1,257 | ) | (2,869 | ) | (1,124 | ) | |||||||||
Net income (loss)
|
(91,663 | ) | 8,202 | (103,731 | ) | 14,010 | |||||||||||
Other comprehensive income:
|
|||||||||||||||||
Foreign currency translation adjustments
|
(5,102 | ) | 5,945 | (13,223 | ) | 5,928 | |||||||||||
Comprehensive income (loss)
|
$ | (96,765 | ) | $ | 14,147 | $ | (116,954 | ) | $ | 19,938 | |||||||
Basic earnings per share:
|
|||||||||||||||||
Net income (loss) from continuing operations
|
$ | (4.81 | ) | $ | 0.53 | $ | (5.38 | ) | $ | 0.84 | |||||||
Net income (loss) from discontinued operations
|
(0.05 | ) | (0.07 | ) | (0.15 | ) | (0.06 | ) | |||||||||
Net income (loss)
|
$ | (4.86 | ) | $ | 0.46 | $ | (5.53 | ) | $ | 0.78 | |||||||
Diluted earnings per share:
|
|||||||||||||||||
Net income (loss) from continuing operations
|
$ | (4.81 | ) | $ | 0.50 | $ | (5.38 | ) | $ | 0.80 | |||||||
Net income (loss) from discontinued operations
|
(0.05 | ) | (0.07 | ) | (0.15 | ) | (0.06 | ) | |||||||||
Net income (loss)
|
$ | (4.86 | ) | $ | 0.43 | $ | (5.53 | ) | $ | 0.74 | |||||||
The accompanying Notes are an integral part of the condensed consolidated financial statements.
3
LASON, INC.
Nine Months Ended | |||||||||
September 30, | |||||||||
2000 | 1999 | ||||||||
Cash Flows Provided By (Used In) Operating Activities
|
$ | 24,383 | $ | 8,999 | |||||
Cash Flows From Investing Activities:
|
|||||||||
Payments for acquisition of businesses
|
(35,156 | ) | (127,934 | ) | |||||
Additions to fixed assets and intangibles
|
(17,593 | ) | (29,135 | ) | |||||
Other, net
|
(310 | ) | 881 | ||||||
Net cash used in investing activities
|
(53,059 | ) | (156,188 | ) | |||||
Cash Flows From Financing Activities:
|
|||||||||
Borrowings on revolving line of credit
|
192,550 | 335,218 | |||||||
Repayments on revolving line of credit
|
(150,650 | ) | (304,218 | ) | |||||
Borrowings on term loan
|
| 150,000 | |||||||
Repayments on term loan
|
(7,500 | ) | | ||||||
Repayments of notes payable
|
106 | (18,606 | ) | ||||||
Repayment on capital lease liabilities and other debt
|
(4,273 | ) | (3,506 | ) | |||||
Payments to amend credit agreement
|
(1,235 | ) | (2,260 | ) | |||||
Other, net
|
30 | (461 | ) | ||||||
Net cash provided by financing activities
|
29,028 | 156,167 | |||||||
Effect of foreign exchange rate changes on cash and cash
equivalents
|
(2,029 | ) | 161 | ||||||
Net increase (decrease) in cash and cash equivalents
|
(1,677 | ) | 9,139 | ||||||
Cash and cash equivalents at beginning of period
|
9,753 | 1,315 | |||||||
Cash and cash equivalents at end of period
|
$ | 8,076 | $ | 10,454 | |||||
The accompanying Notes are an integral part of the condensed consolidated financial statements.
4
Note 1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of Lason, Inc. (together with its subsidiaries, Lason or the Company) have been prepared in conformity with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, such interim financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete consolidated financial statements.
In the opinion of management, all necessary adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. The operating results for the nine month period ended September 30, 2000 are not necessarily indicative of the results to be expected for the year ending December 31, 2000.
For further information, refer to the consolidated financial statements and notes thereto included in the Companys Annual Report on Form 10-K for the year ended December 31, 1999 filed with the Securities and Exchange Commission on March 31, 2000.
Certain reclassifications have been made to the condensed consolidated financial statements for 1999 to conform to the 2000 presentation.
Note 2. Discontinued Operations
In December 1999, Lason announced its intention to discontinue, by sale or exit from the market, its activities providing traditional litigation support, software development and other services. Those services are no longer consistent with Lasons long-term growth strategy. The businesses to be discontinued consist of nine litigation copy businesses, an offset print business, a digital graphics business and the software development business that was acquired as part of the acquisition of M-R Group plc (M-R) in 1999. The results of operations of these businesses have been classified as discontinued operations in the accompanying condensed consolidated financial statements.
Following is summary financial information for the Companys discontinued operations (in thousands):
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2000 | 1999 | 2000 | 1999 | ||||||||||||||
Revenues, net
|
$ | 5,182 | $ | 8,384 | $ | 18,529 | $ | 24,873 | |||||||||
Cost of revenues
|
3,910 | 6,238 | 14,108 | 16,561 | |||||||||||||
Gross profit
|
1,272 | 2,146 | 4,421 | 8,312 | |||||||||||||
Selling, general and administrative expenses
|
1,743 | 2,985 | 6,014 | 7,306 | |||||||||||||
Amortization of intangibles
|
| 289 | | 732 | |||||||||||||
Income (Loss) from operations
|
(471 | ) | (1,128 | ) | (1,593 | ) | 274 | ||||||||||
Net interest expense
|
932 | 677 | 2,746 | 1,887 | |||||||||||||
Net Loss from discontinued operations before income taxes
|
(1,403 | ) | (1,805 | ) | (4,339 | ) | (1,613 | ) | |||||||||
Provision for income taxes
|
(380 | ) | (548 | ) | (1,470 | ) | (489 | ) | |||||||||
Net Loss from discontinued operations
|
$ | (1,023 | ) | $ | (1,257 | ) | $ | (2,869 | ) | $ | (1,124 | ) | |||||
Net loss from discontinued operation includes interest costs totaling $932,000 and $677,000 for the three months ended September 30, 2000 and 1999, respectively, and $2.7 million and $1.9 million for the nine months ended September 30, 2000 and 1999, respectively, which was allocated based on the ratio of net assets to be discontinued to total consolidated net assets. The net assets of the discontinued businesses primarily
5
In October 2000, the Company sold a portion of its litigation copy business for approximately $6.0 million in cash before deduction of commissions and other selling expenses and subject to certain purchase price adjustments. The purchaser has received an option for a portion of the remaining business which expires November 22, 2000.
Note 3. Restructuring
In the fourth quarter of 1999, management completed a thorough review of its operations and approved a restructuring plan to make the Company more efficient and to lower overall costs. These decisions resulted in the Company recording a one-time pre tax charge to operations of $14.9 million in the fourth quarter of 1999. The charge consisted of severance; facility closure and exit costs related primarily to discontinued leases and equipment write downs. The restructuring plan calls for the consolidation of facilities and operations, the closure of facilities, and the streamlining of the administrative support functions.
A summary of the accrued restructuring accrual for the nine months ended September 30, 2000 follows (in thousands):
Accrual at | 2000 | Accrual at | |||||||||||
January 1, 2000 | Activity | September 30, 2000 | |||||||||||
Severance
|
$ | 1,623 | $ | (1,195 | ) | $ | 428 | ||||||
Facility closure
|
11,651 | (1,509 | ) | 10,142 | |||||||||
Other
|
36 | (10 | ) | 26 | |||||||||
Accrual
|
13,310 | (2,714 | ) | 10,596 | |||||||||
Equipment write down to estimated recovery
|
1,433 | (1,317 | ) | 116 | |||||||||
Total
|
$ | 14,743 | $ | (4,031 | ) | $ | 10,712 | ||||||
Note 4. Asset Impairment Charge
The Company evaluates the recoverability of long lived assets not held for sale by measuring the carrying amount of the assets against the estimated undiscounted cash flows associated with them. The recoverability of long lived assets held for sale is evaluated by comparing the assets carrying value to its estimated net sale proceeds. As part of its continuing restructuring activities, the Company has identified certain business units (located within and outside the United States) with a combined net book value of $136.2 million for possible sale or closure. During the third quarter of 2000, the Company recorded an impairment charge of $74.9 million ($3.97 per share), which is made up principally of a goodwill write-down of $73.3 million. Operating income (loss) (excluding the impairment charge) for these units for the quarter ended September 30, 2000 and 1999 was $1.1 million and $(0.6) million, and for the nine months ended September 30, 2000 and 1999 were $5.0 million and $2.1 million, respectively.
A substantial amount of the impairment charge will result in a capital loss for tax reporting purposes which the Company will not currently be able to use. This loss can be carried forward for five years to offset future capital gains. A valuation reserve has been provided against this tax benefit, as it is unlikely that the benefit will be recovered through future capital gains.
Note 5. Acquisitions
From June 1995 through December 31, 1999, the Company, through certain of its subsidiaries, completed the acquisition of either substantially all the assets or all the stock ownership interest in a substantial number of companies. The Company has not completed any acquisitions for the nine months ended September 30, 2000.
6
Certain of the purchase agreements for acquisitions previously completed provide for an increase to the purchase price if operating income of the acquired business exceeds targeted levels. The maximum amount of additional purchase price which may be recorded over the next sixteen months should such targets be achieved is approximately $110.7 million. As of September 30, 2000, approximately $43.1 million of additional purchase price has been earned but not paid and is included in acquisition related obligations in the condensed consolidated balance sheet.
For the nine months ended September 30, 2000, the Company has recorded additional purchase price related to previous acquisitions totaling approximately $26.9 million primarily resulting from acquired businesses achieving their targeted operating income. These amounts have been recorded as an adjustment to the purchase price of the related acquisitions and charged to goodwill.
Note 6. Debt
The Company has a credit agreement with a bank group. Borrowings under the credit agreement are expected to support the financing requirements relating to the additional purchase price for certain prior acquisitions, working capital, capital expenditures and other corporate purposes. Such borrowings are collateralized by a lien on all property of the Company, guarantees of certain of the Companys subsidiaries, as well as pledges of the capital stock of certain subsidiaries. Interest on amounts outstanding is calculated based on interest rates determined at the time of borrowing. Borrowings bear interest at a base percentage rate plus a maximum of 1.25% (10.75% at September 30, 2000). The credit agreement contains restrictions on acquisitions, disposition of assets, and the incurrence of other liabilities and contains certain financial ratio covenants.
On September 15, 2000, the Company amended its credit agreement with its lenders extending the effective date through September 14, 2001. The amendment limited the revolving credit facility to $176.4 million, imposed new restrictions on capital expenditures and cash payments related to earnout obligations, and required minimum consolidated EBITDA and cash flow levels. The outstanding borrowings at September 30, 2000 were $175.9 million.
The credit agreement also has a term loan facility of $150 million. As the term loan is a part of the credit agreement, it has been classified as a current liability. The outstanding borrowings at September 30, 2000 were $142.5 million. The term facility calls for monthly principal payments with final maturity May 2004, as follows (in thousands):
2000
|
$ | 5,000 | ||
2001
|
21,563 | |||
2002
|
37,187 | |||
2003
|
53,750 | |||
2004
|
25,000 | |||
Total
|
$ | 142,500 | ||
In addition to the monthly principal payments, the credit agreement calls for term loan principal reductions equal to 80% of the net cash proceeds received from the sale or disposition of assets designated by the Company prior to the amendment.
Note 7. Comprehensive Income
The assets and liabilities of foreign subsidiaries are translated into United States dollars using period-end exchange rates, while the income statements are translated using average exchange rates during the periods. Differences arising from the translation of assets and liabilities in comparison with the translation of the previous periods are included as a separate component of stockholders equity. The net accumulated foreign currency translation adjustment is $(5,909,000) at September 30, 2000.
7
Note 8. Earnings Per Share
The following table presents a reconciliation of the denominator (weighted average common shares outstanding) for the basic and diluted earnings per share calculations for the three months and nine months ended September 30, 2000 and 1999 (in thousands):
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2000 | 1999 | 2000 | 1999 | |||||||||||||
Weighted average shares outstanding Basic
|
||||||||||||||||
Effect of Dilutive Securities
|
18,845 | 17,977 | 18,753 | 18,004 | ||||||||||||
Contingently issuable shares of common stock
|
| 732 | | 643 | ||||||||||||
Potential shares of common stock from debentures and stock
options outstanding
|
| 363 | | 376 | ||||||||||||
Weighted average shares outstanding Diluted
|
18,845 | 19,072 | 18,753 | 19,023 | ||||||||||||
The weighted average common shares and common share equivalents outstanding used to compute the dilutive effect of common stock options outstanding was computed using the treasury stock method prescribed by Statement of Financial Accounting Standards (SFAS) No. 128. During the three and nine months ended September 30, 2000, the effects of contingently issuable shares of common stock and potential shares of common stock from debentures and stock options outstanding are not included in the denominator for diluted earnings per share, as such effects would be antidilutive.
Note 9. Segment and Related Information
The Companys reportable segments consist of groups of business units that are organized geographically. Each of the Companys geographic regions has a separate management team and infrastructure and offers different combinations of the Companys services. Additionally, a group of business units in the United States providing certain data management services are managed as a separate segment with a separate management team, regardless of geographic location.
The Company evaluates the performance of its operating segments based on income before income taxes and net corporate interest expenses. Intersegment sales and transfer are not significant.
The following table presents summarized financial information for the Companys reportable segments for the three and nine months ended September 30, 2000 and 1999 (in thousands). The other balances include corporate related items, results of insignificant operations and, as it relates to segment profit (loss), income and expenses not allocated to reportable segments. The international and data management segments were previously included in other but are now shown separately as certain quantitative thresholds have now been met. The international segment includes the United Kingdom, Canada and Mexico. The prior period has
8
Three Months Ended | Nine Months Ended | |||||||||||||||||
September 30, | September 30, | |||||||||||||||||
2000 | 1999 | 2000 | 1999 | |||||||||||||||
Revenue
|
||||||||||||||||||
Midwest
|
$ | 4,546 | $ | 3,898 | $ | 14,665 | $ | 7,756 | ||||||||||
Central
|
30,805 | 32,483 | 93,173 | 83,810 | ||||||||||||||
Northeast
|
16,676 | 21,557 | 54,859 | 57,331 | ||||||||||||||
Southeast
|
18,490 | 18,551 | 57,151 | 44,317 | ||||||||||||||
Southwest
|
10,819 | 13,709 | 34,410 | 41,176 | ||||||||||||||
West
|
22,995 | 19,373 | 68,093 | 51,149 | ||||||||||||||
Data Management
|
15,746 | 12,593 | 51,130 | 37,998 | ||||||||||||||
International
|
20,867 | 21,918 | 64,419 | 33,512 | ||||||||||||||
Other
|
(5,455 | ) | (3,581 | ) | (17,730 | ) | (7,482 | ) | ||||||||||
Total
|
$ | 135,489 | $ | 140,501 | $ | 420,170 | $ | 349,567 | ||||||||||
Segment profit (loss):
|
||||||||||||||||||
Midwest
|
$ | (38 | ) | $ | 470 | $ | 907 | $ | 1,102 | |||||||||
Central
|
(13,226 | ) | 2,999 | (11,062 | ) | 6,790 | ||||||||||||
Northeast
|
(1,645 | ) | 4,697 | (2,111 | ) | 9,177 | ||||||||||||
Southeast
|
(2,322 | ) | 2,719 | (325 | ) | 7,005 | ||||||||||||
Southwest
|
(5,157 | ) | 1,877 | (4,026 | ) | 7,189 | ||||||||||||
West
|
(5,642 | ) | 4,569 | (482 | ) | 10,888 | ||||||||||||
Data Management
|
(826 | ) | 39 | 615 | 3,780 | |||||||||||||
International
|
(51,047 | ) | 3,823 | (47,738 | ) | 5,461 | ||||||||||||
Other
|
(25,661 | ) | (5,270 | ) | (53,903 | ) | (23,911 | ) | ||||||||||
Total
|
$ | (105,564 | ) | $ | 15,923 | $ | (118,125 | ) | $ | 27,481 | ||||||||
Details of other segment profit (loss):
|
||||||||||||||||||
Net corporate interest expense
|
$ | (6,885 | ) | $ | (3,012 | ) | $ | (18,697 | ) | $ | (6,106 | ) | ||||||
Corporate expenses not allocated to operating segments
|
(17,611 | ) | (1,609 | ) | (32,318 | ) | (16,610 | ) | ||||||||||
Amortization of intangibles not allocated to operating segments
|
(1,044 | ) | (585 | ) | (2,602 | ) | (989 | ) | ||||||||||
Compensatory stock option expense
|
(121 | ) | (63 | ) | (286 | ) | (206 | ) | ||||||||||
Other
|
| (1 | ) | | | |||||||||||||
Total
|
$ | (25,661 | ) | $ | (5,270 | ) | $ | (53,903 | ) | $ | (23,911 | ) | ||||||
Note 10. Commitments and Contingencies
On April 20, 2000, ConEng, Inc. (formerly Content Engineering, Inc.)(Content) and the former owners of Content, Terri Erickson, Lili Finnegan and Darrell Clark, filed an arbitration claim against the Company with the American Arbitration Association in San Francisco, California alleging it is owed approximately $2,500,000 in additional purchase payments for having achieved certain performance levels as provided under its acquisition agreement with the Company in November 1998.
On June 5, 2000, Michael Rittlinger, the former owner of Addressing Services, Inc. (ASCO) brought an action against the Company in the United States District Court for the District of Connecticut alleging among other things, that he is owed an aggregate of approximately $10,000,000 in connection with the decline in the value of the Lason Common Stock he received for his stock in ASCO and in additional purchase payments for having achieved certain performance levels as provided under his acquisition agreement with the
9
On August 18, 2000, James Stewart, the former owner of Marketing Associates, Inc., brought an action in Oakland County Circuit Court alleging, among other things, that he is owed an aggregate of approximately $4,500,000 in connection with certain tax liabilities the Company agreed to assume and in additional purchase payments for having achieved certain performance levels as provided in the acquisition agreement with the Company in May 1999.
On August 24, 2000, The Coverdale Family Trust and James Coverdale, the former owners of Cover-All Computer Holdings Company, brought an action against the Company in the Ontario Superior Court of Justice (Toronto) alleging, among other things, that they are owed approximately $6,100,000 (CN) in additional purchase payments for having achieved certain performance levels as provided under their acquisition agreement with the Company.
On April 11, 2000, the Company filed for arbitration with the American Arbitration Association in New York, New York against Steven Fruchter, Philip Fruchter and Laurence Braun, the former owners of BSJG, Inc. (formerly API Systems, Inc.)(API) alleging, among other things, racketeering, securities fraud and breach of representations and warranties and seeking generally in excess of $5,000,000 and rescission, in connection with the Companys acquisition of API in March 1998. The former owners and API have filed a counterclaim against the Company alleging, among other things that they are owed an aggregate of approximately $13,700,000 in connection with an alleged wrongful termination of Brauns employment and in additional purchase payments for having achieved certain performance levels as provided under the acquisition agreement.
The Company has accrued additional amounts due under acquisition agreements, if any, related to the above as described in Note 5 of notes to condensed consolidated financial statements.
The Company is vigorously defending the foregoing claims and is determining whether and the extent to which the applicable performance criteria relating to each of the additional purchase payments have been achieved.
On September 15, 2000, the Company and certain of its officers who are defendants in that certain consolidated action most recently disclosed in the Companys Form 10-Q for the quarter ended June 30, 2000, filed a motion to dismiss the consolidated action with prejudice. In its motion, the Company contends that plaintiffs failed to state any claim upon which relief can be granted. On November 15, 2000, plaintiffs filed a brief in opposition to the Companys motion.
Various other claims have been made against the Company in the normal course of business which Management believes will not have a material adverse effect on the Companys business, financial condition or results of operations.
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Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations |
Overview
Lason is a leading provider of information management services. The Companys strategy is to process information in the following ways: (1) to provide integrated solutions that capture information across a variety of formats; (2) to manage information through database development; (3) to manage information through electronic storage and retrieval services; and (4) to disseminate information through hardcopy output, print on demand and electronic formats.
Lasons capability to capture, manage and output information includes both traditional and digital services that support customer migration to new technologies including internal-based applications.
Acquisitions
From 1995 through December 31, 1999, the Company has acquired a significant number of businesses. The information management industry is highly fragmented, consisting of a large number of small companies providing limited service offerings. An important element of the Companys growth strategy has been to selectively make acquisitions of companies with complementary technologies or customer bases to consolidate its position as a provider of comprehensive information management services across a broad geographic area. However, as part of the Companys restructuring, management has now shifted its focus away from acquisitions and has accelerated the integration of its businesses to enhance the Companys future profitability. Accordingly, business acquisitions are not expected to be a significant part of the Companys growth and operating strategy going forward. The Company did not complete any acquisitions for the nine months ended September 30, 2000.
Results of Operations Three Months Ended September 30, 2000 Compared with Three Months Ended September 30, 1999.
Consolidated net revenues decreased 4% to $135.5 million for the three months ended September 30, 2000 from $140.5 million for the comparable 1999 period, excluding the results of discontinued operations. Revenues increased by $5.1 million due to companies acquired after September 30, 1999, net of a decline in the Companys existing business of $10.1 million.
Gross profit decreased to $28.9 million for the three months ended September 30, 2000 from $55.0 million for the comparable 1999 period, and gross profit as a percentage of net revenues declined to 21% for the three months ended September 30, 2000 from 39% for the comparable period of 1999. The lower gross profit as a percentage of revenue is the result of the decrease in revenues due to customer concerns over the Companys financial condition and the over capacity in the image capture and output operations.
Selling, general and administrative expenses increased $11.6 million to $43.1 million for the three months ended September 30, 2000 from $31.5 million for the comparable 1999 period. Selling, general and administrative expenses were approximately 32% of net revenues for the three months ended September 30, 2000, versus 22% in the comparable period of 1999. Approximately $780,000 of the increase is due to selling, general and administrative expenses of companies acquired after September 30, 1999. The Company incurred approximately $7.8 million in additional costs related to its ongoing restructuring activities for professional fees, financing amendment fees, employee severance payments, and charges related to employee retention plans. In addition, the provision for doubtful accounts increased by $3.9 million.
Amortization of intangibles increased to $9.3 million for the three months ended September 30, 2000 from $4.5 million for the third quarter of 1999 due to an increase in goodwill related to business acquisitions that were completed subsequent to September 30, 1999 and purchase price adjustments for prior acquisitions. In addition, management identified various projects that were no longer being used and accordingly, wrote off the net book value of these projects of $3.3 million.
On June 30, 1999, the Company completed its merger with M-R, a leading document and data management company headquartered in the United Kingdom. In connection with the M-R merger, the
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In the fourth quarter of 1999, management completed a thorough review of its operations and approved a restructuring plan to make the Company more efficient and to lower overall costs. These decisions resulted in the Company recording a one-time pre tax charge to operations of $14.9 million in the fourth quarter of 1999. The charge consisted of severance costs ($1.7 million), facility closures and exit costs related primarily to discontinued leases ($11.6 million) and equipment write-downs ($1.6 million). The restructuring plan calls for the consolidation of facilities and operations, the closure of facilities, and streamlining of the administrative support functions. As of September 30, 2000, approximately $10.7 million of this restructuring accrual remains to be used consisting of severance costs ($428,000), facility closures and exit costs ($10.2 million) and equipment write-downs ($116,000).
In December 1999, Lason announced its intention to discontinue, by sale or exit from the market, its activities providing traditional litigation support, software development and other services. Those services are no longer consistent with Lasons long-term growth strategy. The businesses to be discontinued consist of nine litigation copy businesses, an offset print business, a digital graphics business and the software development business that was acquired as part of the M-R acquisition in 1999. The results of operations of these businesses have been classified as discontinued operations in the Companys condensed consolidated financial statements. Combined, these businesses had net revenue of approximately $5.2 million for the three months ended September 30, 2000 compared to approximately $8.4 million in 1999, respectively. The discontinued operations reported a net loss of approximately $1.0 million for the three months ended September 30, 2000 compared to $1.3 million for the comparable period of 1999. The net assets of the discontinued businesses primarily consist of accounts receivable and goodwill, and have been segregated as net assets of discontinued operations, net of allowance for estimated loss on disposal, in the Companys condensed consolidated balance sheets. The Company has engaged brokers and is actively marketing these businesses.
In October 2000, the Company sold a portion of its litigation copy business for approximately $6.0 million in cash before deduction of commissions and other selling expenses and subject to certain purchase price adjustments. The purchaser has received an option for a portion of the remaining business, which expires November 22, 2000.
Net interest expense was $7.1 million for the 2000 third quarter compared to $3.1 million in 1999. The increase is primarily due to higher average line of credit balances resulting from borrowings used to fund business acquisitions during 1999 and the effects of higher average borrowing rates in 2000 compared to 1999.
The majority of the Companys goodwill amortization expense is not deductible for federal income tax purposes. As a result, the Company has recorded an income tax benefit of $14.9 million on a pre tax loss of $105.6 million from continuing operations for the three months ended September 30, 2000.
In August 2000, the Company hired Conway, MacKenzie & Dunleavy (CM&D) as its financial advisors, and one of CMDs principals to assume the role of Chief Restructuring Officer (CRO). In this role, CM&D will be working with the Board of Directors and senior management of the Company on a variety of initiatives designed to secure adequate short term and long term financing and implement an effective restructuring strategy.
Results of Operations Nine Months Ended September 30, 2000 compared with Nine Months Ended September 30, 1999
Consolidated net revenues increased $70.6 million to $420.2 million for the nine months ended September 30, 2000 from $349.6 million in the comparable 1999 period. Approximately $55.9 million was due to growth in the Companys existing business. The remaining increase was due to revenue contributed by companies acquired after September 30, 1999.
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Gross profit decreased to $112.0 million for the nine months ended September 30, 2000 from $129.6 for the comparable 1999 period and gross profit as a percentage of net revenues declined to 27% in 2000 from 37% in 1999. The lower gross profit as a percentage of net revenue is the result of the over capacity in the image capture and output operations and customer concerns over the companys financial condition affecting gross revenue.
Selling, general and administrative expenses increased $38.0 million to $115.5 million for the nine months ended September 30, 2000 from $77.5 million for the comparable 1999 period. Selling, general and administrative expenses were approximately 27% of net revenues for the first nine months of 2000 compared to 22% in 1999. Approximately $2.2 million of the increase is due to selling, general and administrative expenses of companies acquired after September 30, 1999. The Company incurred approximately $7.8 million in additional costs related to its ongoing restructuring activities for professional fees, financing amendment fees, employee severance payments, and charges related to employee retention plans. In addition, the provision for doubtful accounts increased by $3.9 million.
Amortization of intangibles increased $10.5 million to $20.4 million for the nine months ended September 30, 2000 from $9.9 million for the comparable 1999 period, due to an increase in goodwill related to business acquisitions that were completed subsequent to September 30, 1999 and purchase price adjustments for prior acquisitions. In addition, management identified various projects that were no longer being used and accordingly, wrote off the net book value of these projects of $3.3 million.
Net interest expense was $19.2 million for the nine months ended September 30, 2000 compared to $6.7 million for the comparable 1999 period. The increase is primarily due to higher average borrowing balances, which were used to fund operations in 2000 and the effects of higher average borrowing rates in 2000 as compared to 1999.
The majority of the Companys goodwill amortization expense is not deductible for federal income tax purposes. As a result, the Company has recorded an income tax benefit of $17.3 million on a pre tax loss of $118.1 million from continuing operations for the nine months ended September 30, 2000.
Discontinued operations reported aggregate revenues of $18.5 million for the nine months ended September 30, 2000, down from $24.9 million reported for the comparable 1999 period. The decrease in revenues in 2000 is primarily due to lower revenues from the discontinued offset print business. Discontinued operations reported a loss from operations of $2.9 million for the nine months ended September 30, 2000 compared to $1.1 million comparable 1999 period. The significant decrease in operating income is primarily due to losses at the Companys discontinued offset print business and losses at its discontinued software development company.
Liquidity and Capital Resources
The Company has funded its operations and acquisitions through a combination of cash from operations, bank borrowings and the issuance of shares of common stock.
Cash provided by operating activities was $24.4 million for the nine months ended September 30, 2000 compared to $9.0 million for the comparable 1999 period. The increase in 2000 versus 1999 is primarily due to faster accounts receivable turnover and higher accounts payable balances, partially offset by lower net income before non-cash charges.
Cash used in investing activities totaled $53.1 million for the nine months ended September 30, 2000 compared to $156.2 million for the comparable 1999 period. For the nine months ended September 30, 2000, approximately $35.2 million was used to fund the additional purchase price resulting from acquired businesses achieving their targeted operating income during the relevant measurement period. In 1999, cash used in investing activities was largely used to fund the acquisition of businesses. Cash used for acquisitions totaled $127.9 million for the nine months ended September 30, 1999. Cash used for investments in capital assets totaled $17.6 million for the nine months ended September 30, of 2000 compared to $29.1 million in the comparable 1999 period.
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Cash provided by financing activities was $29.0 million for the nine months ended September 30, 2000 compared $156.2 million for the comparable 1999 period and largely consisted of borrowings on the Companys revolving line of credit.
Credit Agreement Borrowings
The Company has a credit agreement with a bank group. Borrowings under the credit agreement are expected to support the financing requirements relating to the additional purchase price for certain prior acquisitions, working capital, capital expenditures and other corporate purposes. Such borrowings are collateralized by a lien on all property of the Company, guarantees of certain of the Companys subsidiaries, as well as pledges of the capital stock of certain subsidiaries. Interest on amounts outstanding is calculated based on interest rates determined at the time of borrowing. Borrowings bear interest at a base percentage rate plus a maximum of 1.25% (10.75% at September 30, 2000). The credit agreement contains restrictions on acquisitions, disposition of assets, and the incurrence of other liabilities and contains certain financial ratio covenants.
On September 15, 2000, the Company amended its credit agreement with its lenders extending the effective date through September 14, 2001. The amendment limited the revolving credit facility to $176.4 million, imposed new restrictions on capital expenditures and cash payments related to current obligations, and required minimum consolidated EBITDA and cash flow levels. The outstanding borrowings at September 30, 2000 were $175.9 million.
The credit agreement also has a term loan facility of $150 million. As the term loan is a part of the credit agreement, it has been classified as a current liability. The outstanding borrowings at September 30, 2000 were $142.5 million. The credit agreement calls for monthly principal payments with final maturity May 2004.
In addition to the monthly principal payments, the credit agreement calls for term loan principal reductions equal to 80% of the net cash proceeds received from the sale or disposition of assets designated by the Company prior to the amendment.
Future Capital Needs
The Companys ability to obtain cash adequate to fund its needs depends generally on the results of its operations, proceeds from the sale of assets, and the availability of financing. Management believes that cash flow from operations, proceeds from the sale of assets, and the borrowings from its existing and any future credit agreement, will be sufficient to meet debt services requirements and fund capital expenditures in the future. However, there can be no assurance in this regard or that the terms available for any future financing, if required, would be favorable to the Company.
In addition to its operational needs, the Company has cash requirements related to additional purchase price payments (the Payments) to be made, contingent upon certain targets being achieved, in connection with prior acquisitions. The maximum amount of the Payments, if any, that could be paid over a period of sixteen months from September 30, 2000 totals approximately $110.7 million. It is anticipated that the actual amount of the Payments will be less than the maximum amount. As of September 30, 2000, approximately $43.1 million of additional purchase price has been earned but not paid and is included in acquisition-related obligations in the condensed consolidated balance sheet. The ability of the Company to make the Payments is dependent on the availability of financing, and there can be no assurance that any future financing will be available or that the terms of any future financing will be favorable to the Company. See Note 5 of Notes to Condensed Consolidated Financial Statements.
Inflation
Certain of the Companys expenses, such as wages and benefits, occupancy costs, and equipment repair and replacement, are subject to normal inflation. Supplies, such as paper and related products, can be subject to significant price fluctuations. Although the Company to date has been able to substantially offset any such cost increases through increased operating efficiencies, there can be no assurance that the Company will be
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Item 3. Quantitive and Qualitative Disclosures about Market Risk
Lason has exposure to interest rate risk on its obligations outstanding under the existing credit agreement, which bears interest at a variable rate. Based on the Companys outstanding balance under the credit agreement on September 30, 2000 of $318.4 million, a one-percent increase or decrease in interest rates would decrease or increase, respectively, the Companys pre tax earnings and operating cash flows by appropriately $3.2 million on an annualized basis.
Due to Lasons operations outside of the United States, the Company experiences foreign currency exchange gains and losses. Fluctuations between the United States dollar and other currencies may adversely affect Lasons results of operations. While the Company may engage in foreign currency hedging transactions in the future, which may moderate the overall effect of such currency rate fluctuations, the Company will be affected by such fluctuations, and there is no assurance that the Company will be successful in any hedging activities. Also, there is no assurance that such exchange rate fluctuations will not cause significant fluctuations in the Companys results of operations.
Forward-Looking Statements
Lason may from time to time provide information including certain statements included in or incorporated by reference in this Form 10-Q which constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Those forward-looking statements include the intent, belief or current expectations of the company and its management. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties, and that actual results could differ materially from those indicated by such forward-looking statements. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: (i) variations in quarterly results; (ii) the assimilation of acquisitions; (iii) the management of the Companys growth and expansion; (iv) dependence on major customers, dependence on key personnel; (v) development by competitors of new or superior products or services, or entry into the market of new competitors; (vi) fluctuations in paper prices; (vii) reliability of the Companys data; (viii) volatility of the Companys stock price; (ix) managements ability to successfully complete its restructuring initiatives; (x) any financial and legal impact of the class action litigation; (xi) changes in the business services outsourcing industry; (xii) significance of intangible assets; (xii) changes related to compensatory stock options; and (xiv) other risks identified from time to time in the Companys reports and registration statements filed with the Securities and Exchange Commission.
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Item 1. Legal Proceedings
On April 20, 2000, ConEng, Inc. (formerly Content Engineering, Inc.) (Content) and the former owners of Content, Terri Erickson, Lili Finnegan and Darrell Clark, filed an arbitration claim against the Company with the American Arbitration Association in San Francisco, California alleging it is owed approximately $2,500,000 in additional purchase payments for having achieved certain performance levels as provided under its acquisition agreement with the Company in November 1998.
On June 5, 2000, Michael Rittlinger, the former owner of Addressing Services, Inc. (ASCO) brought an action against the Company in the United States District Court for the District of Connecticut alleging among other things, that he is owed an aggregate of approximately $10,000,000 in connection with the decline in the value of the Lason Common Stock he received for his stock in ASCO and in additional purchase payments for having achieved certain performance levels as provided under his acquisition agreement with the Company in July 1999. The claims with respect to the Lason Common Stock allege, among others, securities fraud, misrepresentation, negligent representation and other state law claims.
On August 18, 2000, James Stewart, the former owner of Marketing Associates, Inc., brought an action in Oakland County Circuit Court alleging, among other things, that he is owed an aggregate of approximately $4,500,000 in connection with certain tax liabilities the Company agreed to assume and in additional purchase payments for having achieved certain performance levels as provided in the acquisition agreement with the Company in May 1999.
On August 24, 2000, The Coverdale Family Trust and James Coverdale, the former owners of Cover-All Computer Holdings Company, brought an action against the Company in the Ontario Superior Court of Justice (Toronto) alleging, among other things, that they are owed approximately $6,100,000 (CN) in additional purchase payments for having achieved certain performance levels as provided under their acquisition agreement with the Company.
On April 11, 2000, the Company filed for arbitration with the American Arbitration Association in New York, New York against Steven Fruchter, Philip Fruchter and Laurence Braun, the former owners of BSJG, Inc. (formerly API Systems, Inc. )(API) alleging, among other things, racketeering, securities fraud and breach of representations and warranties and seeking generally in excess of $5,000,000 and rescission, in connection with the Companys acquisition of API in March 1998. The former owners and API have filed a counterclaim against the Company alleging, among other things that they are owed an aggregate of approximately $13,700,000 in connection with an alleged wrongful termination of Brauns employment and in additional purchase payments for having achieved certain performance levels as provided under the acquisition agreement.
The Company has accrued additional amounts due under acquisition agreements, if any, related to the above as described in Note 5 of notes to condensed consolidated financial statements.
The Company is vigorously defending the foregoing claims and is determining whether and the extent to which the applicable performance criteria relating to each of the additional purchase payments have been achieved.
On September 15, 2000, the Company and certain of its officers who are defendants in that certain consolidated action most recently disclosed in the Companys Form 10-Q for the quarter ended June 30, 2000, filed a motion to dismiss the consolidated action with prejudice. In its motion, the Company contends that plaintiffs failed to state any claim upon which relief can be granted. On November 15, 2000, plaintiffs filed a brief in opposition to the Companys motion.
Various other claims have been made against the Company in the normal course of business which Management believes will not have a material adverse effect on the Companys business, financial condition or results of operations.
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Item 2. Changes in Securities and Use of Proceeds
During a third quarter of 2000, the Company issued 22,514 shares of its common stock to shareholders of a company that it had previously acquired in connection with conversion of non-negotiable convertible debentures issued in connection with such acquisition. The shares were issued at a price of approximately $51.95 per share, for a total value of $1,169,590. The issuance of shares of the common stock were exempt from registration under the Securities Act of 1933 by virtue of Section 4(2) thereof as transactions not involving a public offering.
Item 3. Defaults upon Senior Securities
Prior to September 15, 2000, the Company was not in compliance with certain financial covenants contained in its credit agreement with lenders in effect at such time. On September 15, 2000, the Company amended its credit agreement with its lenders. Since such time, the Company has been in compliance with the financial and other covenants contained in the amended credit agreement.
Item 4. Submission of Matters to a vote of Security Holders
On June 1, 2000, the Company held its Annual Meeting of Shareholders. There was only one matter voted on, the election of a director to the Board of Directors. The one director nominee was elected. The following table sets forth the results of the voting:
Election of Directors
Nominee: | Votes For | Votes Withheld | Votes Against | Abstained | ||||||||||||||
Gary L. Monroe | 13,126,637 | 966,220 |
Item 5. Other Information
On November 14, 2000, Gary L. Monroe resigned as a Director of the Company and John R. Messinger was elected as a Director in his stead. Mr. Monroe did not resign because of a disagreement with the Company. As of November 14, 2000, the following persons constitute the Board of Directors of the Company: William C. Brooks, John R. Messinger, Allen J. Nesbitt and Robert A. Yanover.
On November 14, 2000, the Company removed the interim status of John R. Messinger as Acting Chief Executive Officer and made him its Chief Executive Officer.
On September 25, 2000, the Company hired John R. Stelter of Conway MacKenzie & Dunleavy to assume the role of Interim Chief Financial Officer.
At November 14, 2000, the following persons constitute the executive officers of the Company:
Name | Title | |
Robert A. Yanover
|
Chairman of the Board | |
John R. Messinger
|
Chief Executive Officer, President and Chief Operating Officer | |
Donald S. MacKenzie
|
Chief Restructuring Officer | |
John R. Stelter
|
Interim Chief Financial Officer | |
Randy L. Baker
|
Executive Vice President, Business Integration and Human Resources |
On October 30, 2000, Lasons common stock was delisted from The Nasdaq Stock Market. Effective on such date, Lason shares began trading on the OTC Bulletin Board under the symbol LSON.
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Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
2.9 | Agreement of Purchase and Sale of Stock dated July 17, 1997 between Lason and Image Conversion Systems, Inc.(1) | |||
2.10 | Asset Purchase Agreement dated November 25, 1997 between Lason and VIP Imaging, Inc.(2) | |||
2.11 | Stock Purchase Agreement dated February 12, 1998 with respect to the acquisition of Racom Corporation and its affiliates by Lason.(3) | |||
2.12 | Asset Purchase Agreement dated March 5, 1998 between Lason and API Systems, Inc.(4) | |||
2.13 | Agreement for the Purchase and Sale of Stock dated July 24, 1998 between Lason and Consolidated Reprographics.(5) | |||
2.15 | Transaction Agreement between Lason and M-R Group plc dated March 25, 1999.(6) | |||
2.16 | Amendment Agreement between Lason and M-R Group plc dated April 30, 1999.(6) | |||
2.17 | Amendment Agreement between Lason and M-R Group plc dated May 13, 1999.(6) | |||
3.1 | Form of Amended and Restated Certificate of Incorporation of the Company.(7) | |||
3.2 | Form of Revised Amended and Restated Bylaws.(8) | |||
4.1 | Form of Certificate representing Common Stock of the Company.(7) | |||
4.3 | Third Amended and Restated Credit Agreement dated as of August 16, 1999 among the the Company, the Lenders named therein, Bank One, Michigan as administrative agent, and Comerica Bank, as syndication agent.(9) | |||
4.4 | Second Amendment to Third Amended and Restated Credit Agreement.(10) | |||
4.5 | Third Amendment to Third Amended and Restated Credit Agreement. | |||
10.5 | Registration Agreement dated January 17,1995 by and among the Company and the 1995 Stockholders.(7) | |||
10.10 | Offer of employment dated June 12, 1996 from Lason Systems, Inc. to Mr. Jablonski.(7) | |||
10.11 | 1995 Stock Option Plan of the Company.(7) | |||
10.17 | 1996 Lason Management Bonus Plan.(7) | |||
10.18 | Lason Systems, Inc. 401 (k) Profit Sharing Plan & Trust.(7) | |||
10.19 | Amendments to Lason Systems, Inc. 401 (k) Profit Sharing Plan & Trust.(7) | |||
10.20 | Lease Agreement dated as of September 3, 1985 by and between Lason Systems, Inc. and Mart Associates, as amended. (7) | |||
10.25 | Amended and Restated Secured Promissory Note, dated as of June 5, 1999 Gary L. Monroe.(9) | |||
10.26 | Amended and Restated Pledge and Security Agreement dated June 5, 1999 Gary L. Monroe.(9) | |||
10.29 | Amended and Restated Secured Promissory Note, dated as of June 5, 1999 John R. Messinger.(9) | |||
10.30 | Amended and Restated Pledge and Security Agreement dated June 5, 1999 John R. Messinger.(9) | |||
10.42 | 1998 Equity Participation Plan of Lason, Inc.(11) |
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10.43 | Employment Agreement of John R. Messinger dated April 27, 1999.(6) | |||
27 | Financial Data Schedule | |||
27.1 | Financial Data Schedule 1999 Restated |
(1) | Incorporated herein by reference to Registrants Form 8-K filed on August 4, 1997, Commission File No. 0-21407. | |
(2) | Incorporated herein by reference to Registrants Form 8-K filed on December 10, 1997, Commission File No. 0-21407. | |
(3) | Incorporated herein by reference to Registrants Form 8-K filed on March 17, 1998, Commission File No. 0-21407. | |
(4) | Incorporated herein by reference to Registrants Form 8-K filed on March 20, 1998, Commission File No. 0-21407. | |
(5) | Incorporated herein by reference to Registrants Form S-1 filed on July 30, 1998, Commission File No. 333-60143. | |
(6) | Incorporated herein by reference to Registrants Form 10-Q filed on May 17, 1999, Commission File No. 0-21407. | |
(7) | Incorporated herein by reference to Registrants Form S-1 filed on October 7, 1996, Commission File No. 333-09799. | |
(8) | Incorporated herein by reference to Registrants Form 10-Q filed on May 15, 1998, Commission File No. 0-21407. | |
(9) | Incorporated herein by reference to Registrants Form 10-Q filed on August 16, 1999, Commission File No. 0-21407. |
(10) | Incorporated herein by reference to Registrants Form 10-K filed on March 30, 2000, Commission File No. 0-21407. |
(11) | Incorporated herein by reference to registrants 1998 proxy statement, Appendix A, filed on April 28, 1998, Commission File No. 0-21407. |
b. Reports on Form 8-K
On July 12, 2000, the Company filed a Form 8-K disclosing in Item 5 that it had obtained an extension until August 15, 2000 of the waiver of violations related to certain of the covenants in its credit agreement.
On August 16, 2000, the Company filed a Form 8-K disclosing in Item 5 that it had obtained an extension until September 15, 2000 of the waiver of violations related to certain of the covenants in its credit agreement.
On August 1, 2000, the Company filed a Form 8-K disclosing in Item 5 that Gary L. Monroe resigned his positions as Chairman of the Board and Chief Executive Officer, Robert A. Yanover was elected Chairman of the Board and John R. Messinger, the President and Chief Operating Officer, was also elected Acting Chief Executive Officer, effective July 26, 2000.
On August 25, 2000, the Company filed a Form 8-K disclosing in Item 5 that William J. Rauwerdink resigned as a director effective August 7, 2000.
On September 18, 2000, the Company filed a Form 8-K disclosing in Item 5 that it had reached a definitive agreement with a group of banks, whose agent is Bank One, to extend its existing bank credit facility for a one-year term.
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Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
/s/ LASON, Inc. |
|
|
(Registrant) | |
/s/ JOHN R. MESSINGER | |
|
Chief Executive Officer; President and | |
Chief Operating Officer | |
/s/ JOHN R. STELTER | |
|
|
Interim Chief Financial Officer |
November 20, 2000
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Exhibit No. | Description | |||
4.5 | Third Amendment to Third Amended and Restated Credit Agreement. | |||
27.1 | Financial Data Schedule - 1999 restated |
|