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As filed with the Securities and Exchange Commission on November 30, 1999
Registration Statement No. 333-91483
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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SUPERIOR CONSULTANT HOLDINGS CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 38-3306717
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4000 TOWN CENTER, SUITE 1100
SOUTHFIELD, MICHIGAN 48075
(248) 386-8300
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
RICHARD D. HELPPIE, JR., CHIEF EXECUTIVE OFFICER
SUPERIOR CONSULTANT HOLDINGS CORPORATION
4000 TOWN CENTER, SUITE 1100
SOUTHFIELD, MICHIGAN 48075
(248) 386-8300
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent For Service)
---------------------------------------------
COPIES TO:
WILLIAM E. DORAN
SACHNOFF & WEAVER, LTD.
30 S. WACKER DRIVE, 29TH FLOOR
CHICAGO, ILLINOIS 60606
(312) 207-6412
---------------------------------------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable 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, 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, 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.
-----------------
THE REGISTRANT 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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42,553 SHARES
SUPERIOR CONSULTANT HOLDINGS CORPORATION
COMMON STOCK
$0.01 PAR VALUE
<TABLE>
<S> <C>
THE COMPANY: THE OFFERING:
- - We are a leading national provider of - The selling stockholder (or its
Digital Business Transformation(TM) successors, distributees or permitted
services to the healthcare industry, assigns) is offering 42,553 shares.
providing a wide range of consulting, The Company will not receive any of
outsourcing, systems integration and the proceeds from the sale of the
e-commerce services shares.
- - Superior Consultant Holdings Corporation - The selling stockholder may sell the
4000 Town Center, Suite 1100 shares from time to time, using a
Southfield Michigan 48075 broker, dealer or agent, or directly,
in open market transactions, block
trades, ordinary brokers trades or in
privately negotiated transactions.
The selling stockholder or any broker
or dealer may use the prospectus. The
price at which the selling
stockholder will sell the shares and
commissions, if any, to be paid, may
vary based on prevailing market
prices or may be privately negotiated
and as a result are not known at this
time.
- - Nasdaq Symbol: SUPC - There is an existing trading market
for these shares. The last reported
sale price on November 18, 1999 was
$12.813.
</TABLE>
THIS INVESTMENT INVOLVES RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 1
-----------------------
NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS DETERMINED WHETHER THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. NOR HAVE THEY MADE, NOR WILL THEY MAKE, ANY
DETERMINATION AS TO WHETHER ANY ONE SHOULD BUY THESE SECURITIES. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------------------
The date of this Prospectus is November 30, 1999.
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TABLE OF CONTENTS
<TABLE>
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RISK FACTORS..................................................................1
AVAILABLE INFORMATION........................................................10
INFORMATION INCORPORATED BY REFERENCE........................................10
THE COMPANY..................................................................11
USE OF PROCEEDS..............................................................11
SELLING STOCKHOLDER..........................................................12
PLAN OF DISTRIBUTION AND OFFERING PRICE......................................13
VALIDITY OF STOCK............................................................14
EXPERTS......................................................................14
</TABLE>
We have not authorized any dealer, salesperson or other person to give you
written information other than this prospectus or to make representations as to
matters not stated in this prospectus. You must not rely on unauthorized
information. This prospectus is not an offer to sell these securities or our
solicitation of your offer to buy the securities in any jurisdiction where that
would not be permitted or legal. Neither the delivery of this prospectus nor any
sales hereunder after the date of this prospectus shall create an implication
that the information contained herein or the affairs of the Company have not
changed since the date hereof.
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RISK FACTORS
Some of the information in this prospectus contains forward-looking
statements that involve substantial risks and uncertainties. You can identify
these statements by forward-looking words such as "may," "will," "expect,"
"anticipate," "believe," "estimate," and "continue" or similar words. You should
read statements that contain these words carefully because they: (1) discuss our
future expectations; (2) contain projections of our future results of operations
or of our financial condition; or (3) state other "forward-looking" information.
We believe it is important to communicate our expectations to our investors.
However, there will be events in the future that we are not able to accurately
predict or over which we have no control. The risk factors listed in this
section, as well as any other cautionary language in this prospectus, provide
examples of risks, uncertainties and events that may cause our actual results to
differ materially from the expectations we describe in our forward-looking
statements. Before you invest in our common stock, you should be aware that the
occurrence of the events described in these risk factors and elsewhere in this
prospectus, or in our other publicly filed reports which are or later will be
incorporated herein, could have a material adverse effect on our business,
operating results and financial condition.
In addition to the other information in this prospectus, or in our other
publicly filed reports which are or later will be incorporated herein, you
should consider the following factors carefully in evaluating an investment in
the shares offered by this prospectus:
VARIABILITY OF QUARTERLY OPERATING RESULTS
We have experienced significant quarterly fluctuations in our operating
results. Variations in our revenues and operating results may continue from
quarter to quarter as a result of a number of factors, including:
- Employee billing and utilization rates;
- The failure to secure and deliver new client contracts at the budgeted
rate, and the resulting negative impact on utilization of our
consultants;
- Industry spending patterns and market conditions that may affect
adversely the buying decisions of our current and prospective clients,
such as the uncertain level of spending on information technology
before and after the year 2000 conversion, the continued consolidation
among healthcare provider entities and the projected reduction in
reimbursements available to healthcare providers;
- The relatively longer sales cycle in obtaining new clients and larger
contracts;
- The number and significance of active client engagements during a
quarter;
- Increased investment in new services and other strategic initiatives;
- The decision of clients to defer commitments on new projects until
after the end of the calendar year or the client's fiscal year; and
- Client budgetary cycles and pressures;
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- The loss or reduction in scope of significant client relationships;
and
- General economic conditions and adverse developments in the financial
condition of our clients.
Our existing clients can generally reduce the scope of or cancel their use
of our services without penalty and with little or no notice. If a client
defers, modifies or cancels an engagement or chooses not to retain us for
additional phases of a project, we must be able to rapidly redeploy our
employees to other engagements in order to minimize underutilization of
employees and the resulting harm to our operating results.
Because a substantial percentage of our expenses, particularly personnel,
facilities and technology, are relatively fixed in advance of any particular
quarter, variations in the size or number of client assignments or the timing of
the initiation or the completion of client assignments can cause significant
variations in operating results from quarter to quarter. Given the possibility
of such fluctuations, we believe that comparisons of our results of operations
for preceding quarters are not necessarily meaningful and that you should not
rely upon the results for one quarter as an indication of future performance.
Based on the preceding factors, it is possible that we may experience a
shortfall in revenue or earnings from expected levels or otherwise fail to meet
expectations of securities analysts or the market in general. In such event, the
price of our common stock could be materially adversely affected.
OUR LONG SALES AND PROJECT DELIVERY CYCLES EXPOSE US TO POTENTIAL LOSSES.
Our sales process for outsourcing and network related projects is often
subject to delays associated with the lengthy approval process that typically
accompanies significant capital expenditures by our clients. During this
process, we expend substantial time, effort and resources marketing our
services, preparing contract proposals and negotiating contracts. Any failure to
obtain a signed contract and receive payment for our services after expending
significant time, effort and resources could materially and adversely affect our
revenues and financial condition.
HEALTHCARE INDUSTRY CONCENTRATION
We derived the substantial majority of our revenues in 1997, 1998 and the
first nine months of 1999, from clients involved in the healthcare industry. As
a result of our focus on healthcare consulting, our business, financial
condition and results of operations are influenced by conditions affecting this
industry, including changing political, economic and regulatory influences that
may affect the procurement practices and operation of healthcare providers.
Current conditions affecting the healthcare industry and the risks they create
include:
- Regulatory Change. The Balanced Budget Act of 1997 has resulted in
substantial limitations on capital expenditures and investments in the
healthcare industry. In addition, many federal and state legislators
have announced that they intend to propose programs to reform the
United States healthcare system at both the federal and state level
and government agencies have intensified efforts to monitor fraud and
abuse in healthcare programs reimbursed by federal and state agencies.
These efforts could adversely affect our clients, result in lower
reimbursement rates and change the environment in which providers
operate and could otherwise adversely affect service providers such as
ourselves. The ongoing impact of the Balanced Budget Act of 1997 on
the Company's healthcare
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industry clients cannot be predicted with certainty. Reduced revenues
to the healthcare industry could adversely affect service providers
such as ourselves.
- Cost Pressure. Large private purchasers of healthcare services are
placing increasing cost pressure on providers. Healthcare providers
have and may continue to react to these cost pressures and other
uncertainties by curtailing or deferring investments, including
investments in our services.
- Industry Consolidation. Many healthcare providers are consolidating to
create larger healthcare delivery organizations and are forming
affiliations for purchasing products and services. These
consolidations and affiliations reduce the number of potential
customers for our services and the increased bargaining power of these
organizations could lead to reductions in the amounts paid for our
services. In addition, this consolidation is likely to result in the
acquisition of certain of our clients, and such clients may scale back
or terminate their relationship with us following their acquisition.
The impact of these developments in the healthcare industry is difficult to
predict and could have a material adverse effect on our business.
RISK OF NEW BUSINESS INITIATIVES
We have and intend to continue to enter into strategic affiliations with
and make substantial economic investments in start-up and early-stage business
ventures engaged in e-commerce and other web based initiatives focused on the
healthcare industry (e-health). There is no assurance that our investment in any
particular e-health venture will yield any investment return or produce any
appreciable amount of services revenue. We are presently holding substantially
all of e-health investments for strategic purposes, and there can be no
assurance that we will ultimately be able to sell these investments at a profit.
In addition to our strategic investments, we are making significant investments
in directing significant portions of our internal business toward the provision
of e-health services. We believe that the market developing for e-health and
systems integration services markets will require a different set of skills and
capabilities from traditional information technology services. In contrast to
traditional information technology, e-health and system integration services
combine Internet application development skills with business intelligence and
strategy focused on the client and its customers. We cannot be certain that a
viable market for e-health will emerge or be sustainable. If a viable and
sustainable market for our e-health services does not develop, our growth could
be negatively affected. Even if an e-health market develops, we may not be able
to differentiate our services from those of our competitors. If we do not
differentiate our services, our revenue growth and operating margins may
decline.
PROJECT RISKS
Many of our engagements involve projects which are critical to the
operations of our clients' business and which provide benefits that may be
difficult to measure. Our inability to meet a client's expectations in the
performance of our services could damage our reputation and adversely affect our
ability to attract new business. In addition, we could incur substantial costs
and expend significant resources correcting errors in our work, and could
possibly become liable for damages caused by such
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errors. For example, the healthcare industry faces potential difficulties with
its information systems and business operations arising out of potential Year
2000 problems. We currently assist clients in auditing Year 2000 compliance in
their efforts to develop programs to render information systems Year 2000
compliant. The year 2000 problem is the result of prior computer programs being
written using two digits, rather than four digits, to define the applicable
year. Any of our client's programs that have time-sensitive software may
recognize a date using "00" as the year 1900 rather than the year 2000. This
could result in major system failure or miscalculations. Additionally, we have
assisted and continue to assist our clients in selecting and implementing
software applications for the clients' use in their business. While we are not
aware of any existing or potential claims, if Year 2000 related systems failures
in the information systems or other systems of our clients occur, we could
become involved in disputes which could negatively impact client relationships.
A negative impact on client relationships could adversely affect our business
whether or not we bear any responsibility, legal or otherwise, for the
occurrence of those problems.
OUTSOURCING RISKS; FIXED PRICE CONTRACTS
We have established a program to provide healthcare IT outsourcing which
includes interim management, personnel acquisition and facilities management,
and/or the transfer of a client's information system assets--hardware/software
and human resources--from an internal business function to an outsourced
service. To implement our outsourcing program, we may be required to make
substantial investments in capital assets and personnel for certain outsourcing
contracts. We may also be dependent upon our ability to hire and retain some or
all of an outsourcing client's former IT staff in order to provide appropriate
service levels. The recent increase in government scrutiny of provider
reimbursement practices could also adversely affect the provision of outsourcing
services and its profitability. There can be no assurance that we will in each
instance either assess accurately the investment required for an outsourcing
contract, or negotiate and perform any of our outsourcing contracts in a
profitable manner. Competitors have and we anticipate that competitors will
continue to increase their focus on this market. This increased focus has to
date and may continue to adversely affect our ability to obtain new outsourcing
contracts as well as the profitability of any such contracts. In addition, our
ability to perform adequately under our outsourcing agreements could adversely
affect our ability to obtain future consulting engagements from these or other
clients. As a result of our obtaining additional outsourcing contracts and the
nature of the practices of certain recently acquired companies, an increasing
portion of our projects are billed on a fixed-fee basis as opposed to our
general method of billing on a time and materials basis. Our inability to
estimate accurately the resources and related expenses required for a fixed-fee
project or failure to complete our contractual obligations in a manner
consistent with the project plan upon which our fixed-fee contract was based
could adversely affect our business.
RECRUITMENT AND RETENTION OF PROFESSIONAL STAFF
Our business involves the delivery of professional services and is
labor-intensive. Our success depends in large part upon our ability to attract,
develop, motivate and retain highly skilled consultants. Other consulting firms,
healthcare providers and other healthcare industry participants, health
information systems vendors, clients, systems integrators and many other
enterprises compete with us for employees with the skills required to perform
the services we offer. We may not be able to attract and retain a sufficient
number of highly skilled employees in the future, and we may not continue to be
successful in training, retaining and motivating employees. The loss of a
significant
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number of consultants and/or our inability to hire a sufficient number of
qualified consultants would adversely affect our ability to secure, service and
complete client engagements and could have an adverse effect on our business.
MANAGEMENT OF GROWTH
In the past, our growth has strained our internal resources, and this
strain could continue in the future. We attempt to manage the demands on our
resources by: (1) implementing and improving our operational, financial and
management information systems, and (2) motivating and effectively managing our
evolving workforce. In addition, our success will depend in large part on our
ability to maintain high levels of consultant utilization, maintain or increase
billing rates, maintain quality and accurately set and meet schedules. Our
inability to manage effectively any of these variables could adversely affect
the quality of our services, our ability to retain key personnel and our results
of operations.
RISKS OF COMPLETED ACQUISITIONS AND INVESTMENTS; RISKS OF ACQUISITION AND
INVESTMENT STRATEGY
Since our initial public offering, we have consummated numerous
acquisitions and strategic equity investments and we expect to continue to
expand through acquisitions and strategic equity investments as a part of our
growth strategy. However, we may not achieve the anticipated benefits of these
acquisitions and strategic investments and may not fully implement our growth
strategies, if we do not successfully integrate with our acquired businesses and
investment partners in a timely manner. The necessity of integrating personnel
with disparate business backgrounds and corporate cultures may initially
increase the difficulties of such integration. Management's focus on the
integration of acquired companies and the implementation of our strategy may
cause interruption, or loss of momentum, in our ongoing activities or one or
more of the acquired companies. Such interruption or loss of momentum could
adversely affect our business. The Company's strategic investments and related
operating relationships have been principally directed toward enhancing the
Company's ability to provide a growing menu of internet related solutions to our
client base. There can be no assurance that the entities in which the Company
has invested, and with whom we have entered into operating agreements, will be
successful in developing product or service offerings that will enhance the
Company's business.
We intend to continue to expand our geographic presence, industry expertise
and technical scope through strategic acquisitions and alliances with companies
that provide additional and complementary products, services or skills or have
strategic client relationships. We may not be able to identify suitable
acquisition candidates or, if identified, we may not be able to acquire such
companies on suitable terms. Moreover, many other companies are competing for
acquisition candidates, which could increase the price of acquisition targets
and decrease the number of attractive companies available for acquisition.
Acquisitions also involve a number of special risks, including:
- Adverse effects on our reported operating results including increased
goodwill amortization and interest expense;
- Diversion of management attention;
- Risks associated with unanticipated problems, liabilities or
contingencies;
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- Difficulties related to the integration and management of the acquired
business;
- Risks of entering markets in which we have limited or no direct
expertise; and
- The potential loss of key employees of the acquired companies.
In addition, acquisitions may require us to spend significant funds. An
acquisition may not result in long-term benefits, and management may not be able
to manage effectively the resulting business. The occurrence of some or all of
the events described in these risks could have a material adverse effect on our
business.
In May 1999 we entered into a strategic alliance with Microsoft Corporation
under which Microsoft and the Company will advance the Microsoft enterprise
products and solutions as the premier information management platform for the
healthcare industry. In furtherance of this alliance, we have and will continue
to make substantial investments and financial commitments for software licenses,
facilities development and recruitment and training of personnel. There is no
assurance we will be successful in our efforts to recruit and train necessary
personnel, nor as to how rapidly, if at all, we will be able to deploy these
newly trained personnel in billable engagements. Additionally, there can be no
assurance as to what extent the Microsoft platform will be embraced by the
healthcare community. The lack of such acceptance could materially and adversely
effect the Company's return on these investments.
CLIENT CONCENTRATION
We derive a significant portion of our revenues from a relatively limited
number of clients. For example, during 1997 and 1998 our five largest clients
accounted for approximately 23.6% and 27.7%, respectively, of our revenues.
During the first nine months of 1999 our five largest clients accounted for
approximately 26.4% of our revenues. Four of our top five clients in 1997 were
also among our five largest clients during 1998. Except for our outsourcing
contracts, which typically are for more than one year, clients engage us on an
assignment-by-assignment basis, and a client can generally terminate an
assignment at any time without penalty. In addition, the level of our consulting
services required by any individual client can diminish over the life of its
relationship with us, and we cannot give any assurance that we will be
successful in establishing relationships with new clients as this occurs.
Moreover, we cannot give any assurance that our existing clients will continue
to engage us for additional projects or do so at the same revenue level. In 1999
we have essentially terminated our relationship with one of our largest clients
which has had a materially adverse impact on our business. The loss of any other
significant client or significant contract (such as a large outsourcing
agreement) could also adversely effect our business.
VENDOR SYSTEMS CONCENTRATION
The healthcare industry can choose among numerous healthcare information
systems solutions. Vendors of these products come into and out of favor
depending on a variety of factors. Although our consultants have expertise with
the information systems developed by numerous healthcare information system
vendors, we have historically experienced periodic revenue concentration from
client projects involving the products of an evolving relatively small group of
vendors. We believe that this concentration generally reflects the current favor
of the healthcare industry participants that we serve to these vendors. Should
any one or more of these vendors (or any other vendors with whose products we
have substantial involvement) lose favor in the healthcare industry, we would be
required to refocus our efforts on alternative information systems products of
other vendors. The loss of a
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major portion of our business with respect to any one of these vendors could
adversely affect our business.
DEPENDENCE ON SENIOR MANAGEMENT
Our success is highly dependent upon the efforts, abilities and business
generation capabilities of our senior management team, including our three most
senior executive officers: Richard D. Helppie, Jr., Chairman and Chief Executive
Officer; Charles O. Bracken, Vice Chairman and Executive Vice President; and
Robert R. Tashiro, President and Chief Operating Officer. Although we manage
client relationships at many levels, the loss of the services of any of these
key executives for any reason could adversely affect our business. Moreover,
certain client and industry relationships and areas of expertise depend on the
efforts, abilities and business generation capabilities of other members of our
management team. The loss of any of these management team members could
adversely affect our business.
COMPETITION
The market for our services is highly fragmented, highly competitive and is
subject to rapid change. We believe that we currently compete principally with a
variety of market segments, including:
- systems integration firms;
- national consulting firms, including the consulting divisions of large
accounting firms;
- general management consulting firms;
- regional and specialty consulting firms;
- internet development and e-commerce firms;
- information system vendors;
- service groups of computer equipment companies; and
- facilities management companies.
Many of our competitors have significantly greater financial, technical and
marketing resources, generate greater revenues and have greater name recognition
than we do. Moreover, those competitors that sell or license their own software
may in the future attempt to limit or eliminate the use of third party
consultants, such as ourselves, to implement and/or customize such software. In
addition, vendors whose systems may enjoy wide market acceptance and large
market share could enter into exclusive or restrictive agreements with other
consulting firms which could eliminate or substantially reduce our
implementation work for those systems. Entry barriers into our markets are
relatively low, and we have faced and expect to face additional competition from
new entrants into the healthcare consulting industry. In addition, combinations
and consolidations in the consulting industry will give rise to larger
competitors whose relative strengths are impossible to predict. We
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also compete with our clients' internal resources, particularly where these
resources represent a fixed cost to the client. This internal client competition
may heighten as consolidation of healthcare providers creates organizations
large enough to support more sophisticated internal information management
capabilities. Our inability to compete effectively with current and future
competitors, and competitive pressures facing us (including wage pressures as
the consultant labor market tightens) may reduce our revenue or operating
margins or otherwise adversely affect our business.
LIMITED PROTECTION OF PROPRIETARY SYSTEMS AND PROCEDURES
Our success depends in part upon our information and communication systems,
databases, tools, and the methods and procedures that we have developed
specifically to serve our clients. In addition, our enterprise-wide
communications segment has and will continue to develop groupware tools and
applications. Because we have no patents or registered copyrights, we rely on a
combination of nondisclosure and other contractual arrangements and copyright,
trademark and trade secret laws to protect our proprietary systems, information
and procedures. We can offer no assurance that the steps we have taken to
protect these rights will be adequate to prevent theft or detect unauthorized
use, and we may not take appropriate steps to enforce our proprietary rights. We
believe that our systems and procedures and other proprietary rights do not
infringe upon the rights of third parties. However, if a party sues us in the
future claiming that our business or systems infringe on their intellectual
property, we may have to enter into expensive litigation regardless of the
merits of such claims.
INFLUENCE OF PRINCIPAL STOCKHOLDER
When this offering is complete, our principal stockholder and Chief
Executive Officer Richard D. Helppie, Jr., will beneficially own approximately
31% of our outstanding shares of Common Stock. As a result, Mr. Helppie will
retain the voting power to exercise significant influence over the outcome of
matters requiring a stockholder vote, including the election of directors and
the approval of significant corporate matters. Such a concentration of control
could adversely affect the market price of the common stock or could delay or
prevent a change in control.
STOCK PRICE VOLATILITY
The trading price of our common stock has fluctuated widely. In addition,
in recent years the stock market has experienced extreme price and volume
fluctuations. The overall market and the price of our common stock may continue
to fluctuate greatly in the future.
Our common stock was first publicly traded on October 10, 1996 after our
initial public offering of common stock to the public at $16 per share. Between
October 10, 1996 and November 15, 1999 the sale price has ranged from a low of
$10.625 per share to a high of $47.250 per share. The market price of our common
stock could continue to fluctuate substantially due to a variety of factors,
including:
- Quarterly fluctuations in results of operations;
- Changes in the healthcare and IT consulting environments;
- Announcement and market acceptance of acquisitions;
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- Adverse circumstances affecting the introduction or market acceptance
of new services we might offer in the future;
- Announcements of key developments by competitors;
- Changes in earnings estimates by analysts;
- Sales of common stock by existing holders; and
- Loss of key personnel.
The market price for our common stock has and could also be affected by our
ability to meet analysts' expectations. Failure to meet such expectations, has
had in the past and could in the future, have a material adverse effect on the
market price of our common stock. In addition, the stock market is subject to
extreme price and volume fluctuations. This volatility has had a significant
effect on the market prices of securities issued by many companies for reasons
unrelated to the operating performance of these companies. In the past,
following periods of volatility in the market price of a company's securities,
securities class action litigation has often been instituted against such a
company. If similar litigation were instituted against us, it could result in
substantial costs and a diversion of our management's attention and resources,
which could have an adverse effect on our business, operating results and
financial condition.
IMPACT OF ANTI-TAKEOVER PROVISIONS ON OUR STOCK PRICE
Our certificate of incorporation and by-laws and the Delaware General
Corporation Law include provisions that may be deemed to have antitakeover
effects and may delay, defer or prevent a takeover attempt that stockholders
might consider in their best interests. Our board of directors is divided into
three classes, each of which is elected for staggered, three-year terms. Our
by-laws contain provisions under which only the chairman of the board, a
majority of the board of directors or stockholders owning at least 50% of our
capital stock may call meetings of stockholders and which require certain
advance notice procedures for nominating candidates for election to the board of
directors. Our board of directors is empowered to issue up to 1,000,000 shares
of preferred stock and to determine the price, rights, preferences and
privileges of such shares, without any further stockholder action. The existence
of this "blank-check" preferred stock could make more difficult or discourage an
attempt to obtain control of the Company by means of a tender offer, merger,
proxy contest or otherwise. In addition, this "blank check" preferred stock, and
an issuance thereof, may have an adverse effect on the market price of our
common stock. Furthermore, we are subject to the antitakeover provisions of
Section 203 of the Delaware General Corporation Law that prohibit us from
engaging in a "business combination" with an "interested stockholder" for a
period of three years after the date of the transaction in which the person
first becomes an "interested stockholder," unless the business combination is
approved in a prescribed manner. The application of Section 203 and certain
other provisions of the certificate of incorporation could also have the effect
of delaying or preventing a change of control of the Company, which could
adversely affect the market price of our common stock.
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AVAILABLE INFORMATION
We file reports, proxy statements and other information with the
Commission. Those reports, proxy statements and other information may be
obtained:
- - At the Public Reference Room of the Commission, Room 1024 - Judiciary
Plaza, 450 Fifth Street, N.W., Washington, DC 20549;
- - At the public reference facilities at the Commission's regional offices
located at Seven World Trade Center, 13th Floor, New York, New York 10048
or Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661;
- - By writing to the Commission, Public Reference Section, Judiciary Plaza,
450 Fifth Street, N.W., Washington, DC 20549;
- - At the offices of the National Association of Securities Dealers, Inc.,
Reports Section, 1735 K Street, N.W., Washington, DC 20006; or
- - From the Internet site maintained by the Commission at http://www.sec.gov.
which contains reports, proxy and information statements and other
information regarding issuers that file electronically with the Commission.
Some locations may charge prescribed or modest fees for copies.
The Company has filed with the Commission a Registration Statement on
Form S-3 (together with any amendments or supplements thereto, the "Registration
Statement") under the Securities Act covering the shares of Common Stock offered
by this prospectus. As permitted by the Commission, this prospectus, which
constitutes a part of the Registration Statement, does not contain all the
information included in the Registration Statement. You may obtain such
additional information from the locations described above. Statements contained
in this prospectus as to the contents of any contract or other document are not
necessarily complete. You should refer to the contract or other document for all
the details.
INFORMATION INCORPORATED BY REFERENCE
We have previously filed the following documents with the Commission under
the Securities Exchange Act of 1934, as amended, and they are incorporated into
this prospectus by reference:
(a) Our Annual Report on Form 10-K for the fiscal year ended December
31, 1998, filed on March 31, 1999;
(b) Our Proxy Statement for our Annual Meeting of Stockholders held on
May 6, 1999, filed on April 9, 1999;
(c) Our Quarterly Reports on Form 10-Q for the quarterly periods ended
March 31, 1999 (filed on May 9, 1999), June 30, 1999 (filed on August 16, 1999)
and September 30, 1999 (filed on November 15, 1999); and
10
<PAGE> 14
(d) the description of our Common Stock contained in the Company's
Registration Statement on Form 8-A, declared effective October 9, 1996.
All documents filed by us pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act after the date of this prospectus and before the termination
of this offering are incorporated by reference and become a part of this
prospectus from their date of filing. Any statements contained in this
prospectus or in a document incorporated by reference are modified or superseded
for purposes of this prospectus to the extent that a statement contained in any
such document modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this prospectus.
On request, we will provide anyone who receives a copy of this
prospectus with a copy of any or all of the documents incorporated in this
prospectus by reference. Written or telephone requests for such copies should be
directed to our principal office: Superior Consultant Holdings Corporation,
Investor Relations Department, 4000 Town Center, Suite 1100, Southfield, MI
48075.
THE COMPANY
Superior Consultant Holdings Corporation, conducts its business
in three segments through its primary operating subsidiary, Superior Consultant
Company, Inc. ("Superior"). Superior is a leading provider of Digital Business
TransformationTM services to the healthcare industry. Superior's services assist
clients to compete in the information driven economy. Through consulting,
outsourcing, systems integration and e-commerce services, Superior provides all
segments of the healthcare and other industries with the tools and strategies
needed to effectively serve customers and capitalize on e-commerce
opportunities. The healthcare consulting segment provides information
technology, as well as strategic and operations management consulting and
outsourcing services to a broad cross-section of healthcare industry
participants and information systems vendors. The enterprise-wide communications
segment assists companies in various industries, including healthcare, with
network and telecommunication design and acquisition, enterprise messaging,
intranet and web strategies, workgroup consulting, as well as software and
application development solutions. The e-commerce / systems integration segment,
which was established effective July 1, 1999, has a national focus on promoting
the use of electronic information exchange to address the opportunities and
challenges of the health care industry. The e-commerce / systems integration
segment assists hospitals, payors, physician networks, internet based healthcare
companies, and ancillary healthcare providers in developing and implementing
strategic business objectives as they relate to e-commerce / systems integration
and the efficient use of the internet in healthcare.
Our executive offices are located at 4000 Town Center, Suite 1100,
Southfield, MI 48075. Our telephone number is (248) 386-8300.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of any of the
Shares by the Selling Stockholder herein.
11
<PAGE> 15
SELLING STOCKHOLDER
We issued 42,553 shares of Common Stock to Gary W. Clark (the "Selling
Stockholder"), pursuant to a recent amendment to the Asset Purchase Agreement,
dated as of November 4, 1998, among Superior, the Selling Stockholder and Clark
Information Services, Inc. ("Clark"), under which we acquired certain assets and
business operations of Clark (the "Purchase Agreement"). The Selling Stockholder
is currently a Division Vice President with Superior.
The following table sets forth for the Selling Stockholder the number
of shares beneficially owned by the Selling Stockholder prior to this offering,
the maximum number of shares to be offered and the number of shares beneficially
owned by the Selling Shareholder after this offering, assuming that all of the
shares being offered for sale are actually sold by the Selling Stockholder. The
percentage of outstanding shares held by the Selling Stockholder is less than
one percent.
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES NUMBER OF SHARES
---------------- ---------------- ----------------
OWNED PRIOR TO BEING OFFERED AFTER OFFERING
-------------- ------------- --------------
SELLING STOCKHOLDER OFFERING
------------------- --------
<S> <C> <C> <C>
Gary W. Clark 55,886 42,553 13,333
</TABLE>
12
<PAGE> 16
PLAN OF DISTRIBUTION AND OFFERING PRICE
The Selling Stockholder, or his pledgees, donees, transferees or other
successors in interest may sell the shares offered hereby from time to time.
Such sales may be made on one or more exchanges or in the over-the-counter
market, or otherwise, at prices and at terms then prevailing or at prices
related to the then current market price or in negotiated transactions. The
shares may be sold by any method including one or more of the following: (a) a
block trade in which the broker or dealer so engaged will attempt to sell the
shares as agent but may purchase and resell a portion of the block as principal
to facilitate the transaction; (b) purchases by a broker or dealer as principal
and resale by such broker or dealer for its account pursuant to this prospectus;
(c) an exchange distribution in accordance with the rules of such exchange; and
(d) ordinary brokerage transactions and transactions in which the broker
solicits purchasers. In effecting sales, brokers or dealers engaged by the
Selling Stockholder may arrange for other brokers or dealers to participate.
Brokers and dealers will receive commissions or discounts from the Selling
Stockholder in amounts to be negotiated prior to the sale. The Selling
Stockholder and any brokers or dealers participating in the distribution of the
shares may be deemed to be "underwriters" within the meaning of the Securities
Act in connection with such sales, and any commissions received by such
broker-dealers and any profits realized on the resale of shares by them may be
deemed to be underwriting discounts and commissions under the Securities Act.
The Selling Stockholder may agree to indemnify such broker-dealers with respect
to the shares offered hereby against certain liabilities, including certain
liabilities under the Securities Act. In addition, the Company has agreed to
indemnify the Selling Stockholder with respect to the shares offered hereby
against certain liabilities, including certain liabilities under the Securities
Act or, if such indemnity is unavailable, to contribute toward amounts required
to be paid in respect of such liabilities. In addition, any securities covered
by this Prospectus which qualify for sale pursuant to Rule 144 may be sold under
Rule 144 rather than pursuant to this Prospectus.
The Company will pay the registration expenses incident to the offering
and sale of the shares by the Selling Stockholder to the public. Such expenses
(estimated to be $20,000) include legal and accounting expenses, filing fees
payable to the Commission, applicable state "blue sky" filing fees and printing
expenses. The Company, however, will not pay for any expenses, commissions or
discounts of underwriters, dealers or agents for the Selling Stockholder.
Any underwriters, brokers, dealers and agents who participate in any
such sale may also be customers of, engage in transactions with or perform
services for us or the Selling Stockholder in the ordinary course of business.
Our Common Stock is currently traded on the Nasdaq National Market. The
public offering price for any shares that are sold will be determined by the
price indicated on such system at the time such sale occurs, or at such price as
shall be determined through private negotiations between the buyer and the
Selling Stockholder, or his agent.
13
<PAGE> 17
VALIDITY OF STOCK
The validity of the shares will be passed upon for the Company by
Sachnoff & Weaver, Ltd., Chicago, Illinois ("S&W").
EXPERTS
The consolidated financial statements of the Company as of December 31,
1998 and 1997 and the related statements of operations, stockholders' equity and
cash flows for each of the three years in the period ended December 31, 1998
have been incorporated by reference herein in reliance upon the report of Grant
Thornton LLP, independent certified public accountants, incorporated by
reference herein and upon the authority of said firm as experts in accounting
and auditing.
14
<PAGE> 18
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by the Company in connection
with the sale of the Common Stock being registered hereby. All the amounts shown
are estimated, except the SEC registration fee.
SEC registration fee.......................$ 147
Printing expenses...........................3,500
Legal fees and expenses.....................6,000
Accounting fees and expenses................6,000
Miscellaneous expenses......................4,353
Total....................$20,000
=======
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company is a Delaware corporation, subject to the applicable
indemnification provisions of the General Corporation Law of the State of
Delaware (the "DGCL"). Section 145 of the DGCL empowers a Delaware corporation
to indemnify, subject to the standards therein prescribed, any person in
connection with any action, suit or proceeding brought or threatened because
such person is or was a director, officer, employee or agent of the corporation
or was serving as such with respect to another corporation or other entity at
the request of such corporation.
In accordance with Section 102(b)(7) of the DGCL, Article XIII of the
Company's Amended and Restated Certificate of Incorporation provides that "no
director of the Corporation shall be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
notwithstanding any provision of law imposing such liability except for
liability (i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the DGCL, as the same exists or hereafter may be amended, or (iv)
for any transaction from which the director derived an improper personal
benefit. If the DGCL is amended to authorize the further elimination or
limitation of liability of directors, then the liability of a director of the
Corporation, in addition to the limitation on personal liability provided
herein, shall be limited to the fullest extent permitted by an amended DGCL. Any
repeal or modification of this Article XIII by the stockholders of the
Corporation shall be prospective only, and shall not adversely affect any
limitation on the personal liability of a director of the Corporation existing
at the time of such repeal or modification."
The Company's Certificate of Incorporation and By-Laws contain
provisions that require the Company to indemnify its directors and officers to
the fullest extent permitted by Delaware law.
II-1
<PAGE> 19
The Company has entered into indemnification agreements with each of
its executive officers and directors in which the Company agrees to indemnify
and hold harmless the officer or director to the fullest extent permitted by
applicable law against any and all attorneys' fees and all other expense, cost,
liability and loss (including a mandatory obligation by the Company to advance
reimbursement of legal fees and expenses) paid or incurred by such officer or
director or on his or her behalf in connection with any threatened, pending or
completed action, suit or proceeding, or any inquiry or investigation not
initiated by the officer or director that he or she believes in good faith might
lead to a proceeding, inquiry or investigation (a proceeding) relating to the
fact that the officer or director is or was a director, officer, employee or
agent of the Company, or is or was serving at the request of the Company as a
director, officer, employee, trustee, agent or fiduciary of another corporation,
partnership, joint venture, employee benefit plan, trust or other enterprise, or
by reason of any action or inaction by the officer or director in such capacity.
However, the Company's obligation to indemnify the officer or director is
subject to a determination by: (i) the Company's Board of Directors, by vote of
the majority of disinterested directors, or such person or body appointed by the
Board of Directors who is a disinterested party; (ii) under certain
circumstances, independent legal counsel appointed by the Board of Directors in
a written opinion; or (iii) a court of competent jurisdiction in a final,
nonappealable adjudication, that the officer or director acted in good faith and
in a manner he or she reasonably believed to be in or not opposed to the best
interests of the Company and, with respect to any criminal Proceeding, the
officer or director acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the Company, and with
respect to any criminal Proceeding, the officer or director had no reasonable
cause to believe that his or her conduct was unlawful.
ITEM 16. EXHIBITS.
(a) Exhibits:
4 Specimen Common Stock Certificate (1)
5 Opinion of Sachnoff & Weaver, Ltd. regarding the legality of the
securities being registered
23.1 Consent of Grant Thornton LLP
23.2 Consent of Sachnoff & Weaver, Ltd. (included in Exhibit 5)
24 Powers of Attorney (included on the Signature Page of the
Registration Statement on Form S-3 filed with the SEC on
November 23, 1999)
(1) Incorporated by reference from the Registrant's Form S-1 Registration
Statement as filed with the SEC on August 15, 1996 (File No. 333-10213).
II-2
<PAGE> 20
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:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
with or furnished to the Commission by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference 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
herein, 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 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
Securities Act and is, therefore, unenforceable. In the event that a claim for
the 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 in
connection with the securities being
II-3
<PAGE> 21
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 Securities Act and will be governed by the final
adjudication of such issue.
II-4
<PAGE> 22
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 Amendment
No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Southfield, State of
Michigan, on November 29, 1999.
SUPERIOR CONSULTANT HOLDINGS
CORPORATION
BY: /s/ James T. House*
-------------------------------------------
James T. House, Chief Financial Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE
FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------ ------------------------------------- -----------------
<S> <C> <C>
/s/ Richard D. Helppie, Jr.* Chairman, Chief Executive Officer and November 29, 1999
- ------------------------------ Director
Richard D. Helppie, Jr.
/s/ James T. House* Chief Financial Officer November 29, 1999
- ------------------------------
James T. House
/s/ Richard P. Saslow Vice President, General Counsel and November 29, 1999
- ------------------------------ Director
Richard P. Saslow
/s/ Charles O. Bracken* Vice Chairman, Executive Vice President November 29, 1999
- ------------------------------ and Director
Charles O. Bracken
Director November 29, 1999
- ------------------------------
Reginald M. Ballantyne III
/s/ Bernard J. Lachner* Director November 29, 1999
- ------------------------------
Bernard J. Lachner
</TABLE>
II-5
<PAGE> 23
<TABLE>
<S> <C> <C>
/s/ Kenneth S. George*
Director November 29, 1999
- ------------------------------
Kenneth S. George
/s/ John L. Silverman*
Director November 29 1999
- ------------------------------
John L. Silverman
/s/ Douglas S. Peters* Director November 29, 1999
- ------------------------------
Douglas S. Peters
Director November 29, 1999
- ------------------------------
C. Everett Koop
</TABLE>
* /s/ Richard P. Saslow
- ------------------------------
Richard P. Saslow
Attorney-in-Fact
II-6
<PAGE> 1
EXHIBIT 5
(312) 207-1000
November 29, 1999
Superior Consultant Holding Corporation
4000 Town Center, Suite 1100
Southfield, Michigan 48075
Re: Amendment No. 1 to the Registration Statement on Form S-3
("Registration Statement")
Gentlemen and Ladies:
In connection with the proposed registration for resale of 42,553
shares of Common Stock, $0.01 par value (the "Common Stock"), of Superior
Consultant Holding Corporation (the "Company"), covered by the above-referenced
Registration Statement, we have examined such documents and have reviewed such
questions of law as we have considered necessary and appropriate for the
purposes of this opinion. We have assumed the genuineness of all signatures, the
authenticity of all documents submitted to as originals, the conformity to
original documents of all the documents submitted to us as certified or
photostatic copies and the authenticity of the originals of such latter
documents.
Based upon such examination, we advise you that, in our opinion:
(i) The Company had corporate authority to issue the shares of
Common Stock proposed to be offered as set forth in the Registration
Statement.
(ii) The shares of Common Stock registered for resale as set
forth in the Registration Statement have been duly authorized and were
validly issued and fully paid and nonassessable, and will continue to be so
when sold as set forth in the Registration Statement.
We hereby consent to the filing of this opinion as an exhibit to the
above-referenced Registration Statement and the reference to this firm under the
caption "Validity of Stock" in the Prospectus constituting a part of such
Registration Statement. In giving this consent, we do not hereby admit that we
are in the category of persons whose consent is required under Section 7 of the
Securities Act of 1933 or the rules and regulations of the Securities and
Exchange Commission.
Very truly yours,
/s/ SACHNOFF & WEAVER, LTD.
Sachnoff & Weaver, Ltd.
JAS/WED
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated February 25, 1999 accompanying the consolidated
financial statements of Superior Consultant Holdings Corporation and
Subsidiaries appearing in the 1998 Annual Report on Form 10-K for the year
ended December 31, 1998 which is incorporated by reference in this Registration
Statement. We consent to the incorporation by reference in the Registration
Statement of the aforementioned report and to the use of our name as it appears
under the caption "Experts".
/S/ Grant Thornton LLP
GRANT THORNTON LLP
Detroit, Michigan
November 29, 1999
