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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 12b-25
NOTIFICATION OF LATE FILING
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COMMISSION FILE NO. 0-21963
THE JUDGE GROUP, INC.
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 23-1726661
(State or other jurisdiction of (IRS Employer Identification No.)
Incorporation or Organization)
TWO BALA PLAZA, SUITE 400
BALA CYNWYD, PENNSYLVANIA 19004
(Address of principal executive offices, including zip code)
(610) 667-7700
(Registrant's telephone number, including area code)
NOTIFICATION OF LATE FILING
(Check One): |X| Form 10-K |_| Form 11-K |_| Form 20-F
|_| Form 10-Q |_| Form N-SAR
For Period Ended: December 31, 1998
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|_| Transition Report on Form 10-K |_| Transition Report on Form 10-Q
|_| Transition Report on Form 20-K |_| Transition Report on Form N-SAR
|_| Transition Report on Form 11-K
For the Transition Report Ended: ________________________________________
Nothing in this form shall be construed to imply that the Commission
has verified any information contained herein.
If the notification relates to a portion of the filing checked above,
identify the item(s) to which the notification relates: _____________________
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PART I
REGISTRANT INFORMATION
Full name of registrant The Judge Group, Inc.
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Former name if applicable
N/A
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Address of principal executive office (Street and number)
Two Bala Plaza, Suite 400
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City, state and zip code Bala Cynwyd, Pennsylvania 19004
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PART II
RULE 12b-25 (b) AND (c)
If the subject report could not be filed without unreasonable effort or
expense and the registrant seeks relief pursuant to Rule 12b-25, the following
should be completed. (Check box if appropriate.)
| (a) The reason described in reasonable detail in Part III of this
| form could not be eliminated without unreasonable effort or
| expense;
| (b) The subject annual report, semi-annual report, transition
| report on Form 10-K, 20-F, 11-K or Form N-SAR, or portion
| thereof will be filed on or before the 15th calendar day
[X| | following the prescribed due date; or the subject quarterly
| report or transition report on Form 10-Q, or portion thereof
| will be filed on or before the fifth calendar day following
| the prescribed due date; and
| (c) The accountant's statement or other exhibit required by Rule
| 12b-25(c) has been attached if applicable.
PART III
NARRATIVE
State below in reasonable detail the reasons why Form 10-K, 11-K, 20-F,
10-Q, N-SAR or the transition report portion thereof could not be filed within
the prescribed time period. (Attach extra sheets if needed).
The registrant has not been able to complete its Annual Report on Form
10-K within the prescribed period without unreasonable effort and expense
because (1) of complexities associated with incorporating financial information
of subsidiaries acquired during fiscal 1998 into registrant's consolidated
financial statements and with the interpretation of relevant provisions of an
agreement pursuant to which a certain acquisition was effected and (2) although
the registrant and its primary lender have orally agreed to the principal terms
of amendments to certain covenants of a loan agreement between the registrant
and such lender, documenting these terms has been delayed pending receipt by the
registrant of written waivers from the lender. Both of these factors are
expected to significantly affect the information contained in the registrant's
Report on Form 10-K. The registrant contemplates being able to provide the
Commission with its completed Report on Form 10-K within 15 days following the
prescribed due date.
PART IV
OTHER INFORMATION
(1) Name and telephone number of person to contact in regard to this
notification:
F. Douglas Raymond, III, Esq. (610) 993-1233
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(Name) (Area Code) (Telephone No.)
(2) Have all other periodic reports required under Section 13 or 15(d)
of the Securities Exchange Act of 1934 or Section 30 of the Investment Company
Act of 1940 during the preceding 12 months or for such shorter period that the
registrant was required to file such report(s) been filed? If the answer is no,
identify report(s).
Yes |X| No |_|
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(3) Is it anticipated that any significant change in results of
operations from the corresponding period for the last fiscal year will be
reflected by the earnings statements to be included in the subject report or
portion thereof:
Yes |X| No |_|
If so: attach an explanation of the anticipated change, both
narratively and quantitatively, and, if appropriate, state the reasons why a
reasonable estimate of the results cannot be made. See attached copy of the
press release issued by the registrant addressing its results of operations for
fiscal 1998.
The Judge Group, Inc.
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(Name of Registrant as Specified in Charter)
Has caused this notification to be signed on its behalf by the undersigned
thereunto duly authorized.
Date March 30, 1999 By /s/ Martin E. Judge, Jr.
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Martin E. Judge, Jr.,
Chief Executive Officer
Instruction: The form may be signed by an executive officer of the registrant or
by any other duly authorized representative. The name and title of the person
signing the form shall be typed or printed beneath the signature. If the
statement is signed on behalf of the registrant by an authorized representative
(other than an executive officer), evidence of the representative's authority to
sign on behalf of the registrant shall be filed with the form.
ATTENTION
Intentional misstatements or omissions of fact constitute Federal
criminal violations (see 18 U.S.C. 1001).
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The Judge Group Announces Fourth Quarter 1998 Results
Reports Losses Largely Due to One-Time Charges
Bala Cynwyd, PA - March 4, 1999 - The Judge Group, Inc. (NASDAQ: JUDG) today
reported increased revenues for the Fourth Quarter and for the year ended
December 31, 1998, as compared with the prior year periods. Revenues for the
Fourth Quarter of 1998 were approximately $31.5 million, a 33% increase from
Fourth Quarter 1997. The revenues were $114,710,699 for the year, constituting a
16% increase over last year. The revenues in the permanent placement business
were $2.7 million in Fourth Quarter 1998, constituting a 15% increase over the
prior year period. Revenues in the contract placement business were
approximately $23.0 million in the Fourth Quarter 1998, representing an almost
35% increase from the Fourth Quarter of 1997. The contract placement business
also reported a 17% increase in "run rate" from the Third to the Fourth Quarter
of 1998 (ie-the increase in sales for the last full week of the quarter compared
to the last full week of the previous quarter), which, were it to continue,
would be equivalent to an annualized run rate increase of 68%. The Company's
Imaging and Network Services business had revenues of approximately $4.8
million, a 55% increase as compared to the Fourth Quarter 1997. Only the
training business did not show increased revenues compared to the prior year
period. For the Fourth Quarter 1998, revenues in the training business were
$867,000.
Despite the increase in revenues, the Judge Group reported a net loss of
$4,985,509, or 37 cents per share for the quarter ended December 31, 1998, and
$4,974,306, or 37 cents for the year, made up largely of one-time special
charges. These one-time charges, totaling $3,537,275 net of tax, or 26 cents,
reflect the write-offs of goodwill in its Imaging and Network Services and
training divisions, and the establishment of a reserve relating to the
subleasing of office space. The Company attributes the remainder of its losses
to two factors. The first is increased selling and G&A from aggressive
expansion, both internally and through acquisition; the second factor was the
Company's inability, in the Fourth Quarter, to cut costs primarily in its
Imaging and Network Services division. Losses from operations for the Imaging
and Network Services division were $1,146,000, compared to a loss of $475,000 in
Fourth Quarter 1997. This difference is due to increased Selling, General and
Administrative costs that were 11 percentage points of revenues higher than in
the same period in 1997. According to Martin E. Judge, Jr., Chief Executive
Officer of The Judge Group, Inc., "An important part of our vision for
maximizing profitability in addition to focusing on our core business is the
anticipated separation of our IMS division as early as possible to give
shareholders the maximum value. While we currently do not intend to separate the
IMS division until we can bring value to the shareholders, our anticipated
revenue growth, coupled with our planned cost control strategy, causes us to
look for a separation before the end of 1999."
The Company has begun to take steps to improve profitability in its training
division by reducing office space, reducing nonessential staff, and by focusing
on corporate sales. According to Mr. Judge, "Although we do not expect better
than a break-even performance for the training division in the First Quarter, we
do have every hope that this segment of the Judge Group will bring value to the
shareholders."
Mr. Judge added that in the other segments of the business, "We are looking to
control our costs in 1999 through strategic planning and budgeting and to tying
management's compensation to its abilities to meet revenue and profit goals.
Although the losses we reported today are disappointing, we believe that the
one-time charges, causing a large loss this Fourth Quarter 1998, will benefit
the shareholders in the future. While we expect revenues to continue to increase
in the First Quarter, costs will still affect profits, primarily due to our
continuing efforts to control costs in the IMS division. Excluding the IMS
division which will continue to cause a loss in the First Quarter, we look for a
profitable First Quarter in the core business. We are excited about the
remainder of the year and hope that our continuing efforts to control costs and
focus on the core business, while ultimately separating the IMS business, will
bring value to the shareholders."
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<TABLE>
<CAPTION>
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YEAR ENDED THREE MONTHS ENDED
December 31, December 31,
Statement of Operations Data: 1998 1997 1998 1997
- ----------------------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net Revenues $114,710,699 $ 98,526,467 $ 31,485,176 $ 23,666,724
------------ ------------ ------------ ------------
Costs and Expenses
Cost of Sales (exclusive of items shown separately
below) 78,770,638 69,164,039 21,502,256 16,083,421
Selling and Operating 23,434,418 16,256,445 7,247,635 3,879,435
General and Administrative 13,931,394 8,574,811 4,260,649 2,435,342
------------ ------------ ------------ ------------
Total Costs and Expenses 116,136,450 93,995,295 33,010,540 22,398,198
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Income (Loss) Before Non-Recurring Charges and Other
Items (1,425,751) 4,531,172 (1,525,364) 1,268,526
Non-Recurring Charges (2) (4,021,099) *1 -0- (4,021,099) *1 -0-
Other Income (Expense), Net (251,726) 100,586 (170,784) 91,182
------------ ------------ ------------ ------------
Income (Loss) From Continuing Operations Before Tax
Expense (Benefit) (5,698,576) 4,631,758 (5,717,247) 1,359,708
Income Tax Expense (Benefit) (724,270) 1,919,818 (731,738) 461,611
------------ ------------ ------------ ------------
Net Income (Loss) ($4,974,306) $2,711,940 ($4,985,509) $ 898,097
============ ============ =========== ============
YEAR ENDED THREE MONTHS ENDED
December 31, December 31,
Per Common Share 1998 1997 1998 1997
- ----------------------------- ------------ ------------ ------------ ------------
Basic
Income (Loss) Before Non-Recurring Charges ($ 0.11) $ 0.21 ($ 0.11) $ 0.07
Non-Recurring Charges (net of tax effect) ($ 0.26) *1 $ 0.00 ($ 0.26) *1 $ 0.00
------------ ------------ ------------ ------------
Net Income (Loss) ($ 0.37) $ 0.21 ($ 0.37) $ 0.07
============ ============ =========== ============
Weighted Average Shares Outstanding 13,457,841 12,761,000 13,500,106 13,347,969
============ ============ =========== ============
Diluted
Income (Loss) Before Non-Recurring Charges ($ 0.11) $ 0.21 ($ 0.11) $ 0.07
Non-Recurring Charges (net of tax effect) ($ 0.26) *1 $ 0.00 ($ 0.26) *1 $ 0.00
------------ ------------ ------------ ------------
Net Income (Loss) ($ 0.37) $ 0.21 ($ 0.37) $ 0.07
============ ============ =========== ============
Weighted Average Shares Outstanding 13,457,841 12,826,000 13,500,106 13,347,969
============ ============ =========== ============
<CAPTION>
Balance Sheet Data: December 31, 1998 December 31, 1997
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<S> <C> <C>
Working Capital $ 14,326,385 $ 18,525,330
Total Assets $ 43,039,990 $ 33,933,571
Notes Payable, Bank, Including Current Portion $ 9,881,595 -0-
Other Long-Term Obligations, including Current Portion $ 1,996,230 $ 354,600
Shareholders' Equity $ 21,967,697 $ 26,274,296
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(1) Tax benefit of non-recurring charges is $483,824.
(2) Non-recurring charges includes charges for impairment of purchase goodwill
related to the acquisitions of Judge Imaging Systems, Inc. and Berkeley
Associates Corporation, and an estimated loss on the discontinuance of
operations in the New York City office.
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<TABLE>
<CAPTION>
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YEAR ENDED THREE MONTHS ENDED
December 31, December 31,
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(Dollars in thousands) 1998 1997 1998 1997
- -------------------------------------- ---------------------- ---------------------- ---------------------- ----------------------
Net Revenues:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Permanent Placement $ 10,987 9.6% $8,576 8.7% $2,737 8.7% $2,374 10.0%
Contract Placement 81,276 70.8% 70,357 71.4% 23,067 73.3% 17,111 72.3%
Information Management 19,492 17.0% 16,442 16.7% 4,813 15.3% 3,105 13.1%
IT Training 2,955 2.6% 3,151 3.2% 867 2.8% 1,076 4.5%
-------- ----- -------- ----- -------- ----- -------- -----
Consolidated Net Revenues $114,710 100.0% $ 98,526 100.0% $ 31,484 100.0% $ 23,666 100.0%
======== ====== ======== ====== ======== ====== ======== ======
Income (loss) From Operations:
Permanent Placement $ 834 7.6% $1,576 18.4% (164) - 6.0% $ 509 21.4%
Contract Placement 4,396 5.4% 6,760 9.6% 1,016 4.4% 1,669 9.8%
Information Management (2,814) - 14.4% (1,623) - 9.9% (1,146) - 23.8% (475) - 15.3%
IT Training (944) - 31.9% 141 4.5% (326) - 37.6% 171 15.9%
Corporate Overhead Expense (2,897) N/A (2,323) N/A (905) N/A (606) N/A
-------- ------ -------- ----- -------- ----- -------- -----
Consolidated Income From Operations ($ 1,425) - 1.2% $4,531 4.6% (1,525) - 4.8% $1,268 5.4%
======== ====== ======== ====== ======== ====== ======== ======
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The Judge Group, Inc. services the information technology ("IT") and engineering
needs of its clients through the following four complementary operating units:
the Contract Placement business, which provides IT and engineering personnel on
a contract basis; the Permanent Placement business, which provides IT and
engineering personnel on a permanent basis; Information Management Solutions,
which provide networking, imaging, document conversion and management, workflow
and related consulting services; and the IT Training business, which provides
standard and customized IT training for established and emerging software
applications.
This news release is being made pursuant to the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995. Certain matters contained in
this news release including but not limited to the company's ability to improve
the performance of its document imaging business, its revenue, run rate, and
earnings growth assessments, expressions of optimism about opportunities in its
various business areas, its ability to build shareholder value, its ability to
consummate successful acquisitions, its assessment of the labor market and
economic outlook, and other issues discussed herein may constitute
forward-looking statements. In addition, any one, or all, of the following
factors could cause actual financial results to differ materially from those
financial results mentioned or implied by the forward-looking statements:
unavailability of qualified technical consultants; the ability to expand the
client base in each of its businesses; the company's ability to reduce costs and
improve revenues in its Information Management Solutions business; its ability
to increase revenues in its Contract Placement business; its ability to
successfully implement its acquisition and separation strategies; its ability to
manage its growth and to respond to technological developments; its ability to
improve profitability in its IT training business; industry competition factors
and other risks identified in the company's filings with the Securities and
Exchange Commission.
For further information on The Judge Group, Inc., contact:
Martin E. Judge, Jr.
email: [email protected]
