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As filed with the Securities and Exchange Commission on January 20, 1999
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
January 10, 1999
SPR INC.
(Exact name of registrant as specified in its charter)
Delaware 0-22097 36-3932665
(State or other jurisdiction of (Commission File (I.R.S Employer
incorporation or organization) Number) Identification No.)
2015 Spring Road, Suite 750
Oak Brook, Illinois 60523
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(630) 575-6200
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ITEM 5. OTHER EVENTS
METAMOR WORLDWIDE, INC. AND SPR, INC. TO MERGE
HOUSTON, JANUARY 11, 1999--METAMOR WORLDWIDE, INC. (NASDAQ: MMWW), one of the
leading providers of information technology (IT) services, and SPR, INC.
(NASDAQ: SPRI), a leading IT services corporation providing innovative
solutions to Fortune 1000 companies, today announced that they will merge to
form a global IT solutions and services company with one of the most
comprehensive service offerings in the industry. The merger is expected to be
accretive to Metamor's 1999 earnings per share.
The transaction will be structured as a pooling-of-interest, tax-free merger.
Each of SPR's common shares will be exchanged for 0.8 shares of Metamor's common
stock, which would result in 77 percent of the combined company owned by Metamor
shareholders and 23 percent owned by SPR shareholders. The merger is subject to
regulatory and shareholder approvals. Closing is expected in April 1999,
following the votes of each company's shareholders.
The combined company will be one of the nation's largest IT solutions and
services providers, employing approximately 8,200 consultants in 73 offices and
21 development centers. The combined company expects to generate 1999 revenues
of over $1.25 billion.
Rob Figliulo, SPR's chairman and chief executive officer, will join Metamor's
board of directors after the merger is completed. All of the members of SPR's
Executive Operating Committee and management will become part of the management
team of the combined company. In addition, all of the members of SPR's
Executive Operating Committee have granted Metamor a proxy to vote in favor of
the merger and, under certain circumstances an option to purchase shares
representing approximately 22 percent of the outstanding shares of SPR's common
stock.
The strategic merger with SPR will broaden Metamor's service offerings by
creating a vertical practice group focused on the mainframe and its emerging
role with new technologies such as data warehousing, Internet/intranet and
electronic commerce. In addition, the combination will permit Metamor to
compete for mainframe outsourcing assignments. Metamor believes it will be able
to scale SPR's established and unique operating model into major metropolitan
markets where Metamor has strong market position, customer relationships and
existing infrastructure.
Michael T. Willis, Metamor's chairman and chief executive officer, said, "Our
strategic merger with SPR is an important step in expanding our service
offerings. Through this merger, we gain additional project-based management and
resources that will allow Metamor to provide value-added outsourcing solutions
to customers using mainframe technologies."
According to industry sources, the IT outsourcing market was estimated at $173
billion in 1998 and will achieve a 16 percent compound annual growth rate
through 2000.
Willis further stated, "The more corporate America does business over the
Internet, the more it becomes necessary to link the mainframe to the web. SPR's
mainframe clientele has an
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immediate need to connect their mainframe environments to newer technologies.
Because Metamor has extensive e-commerce and Internet capabilities, the combined
companies can now provide complete solutions to all their customers."
"The mainframe computer is in the early stages of a renaissance," Figliulo
stated. "This merger gives us a unique position to drive IT solutions that
maximize our clients' significant mainframe investments. We will continue to
offer our customers proven expertise in mainframe services, as well as tap into
other Metamor divisions to provide a broader range and greater depth of IT
services. We can now say 'yes' to the full range of our clients' IT needs
beyond mainframe services, and we can do it backed by the distinction and power
of Metamor's resources."
Figliulo continued, "In addition, because Metamor is a global operation, we will
be able to serve our customers' mainframe technology needs both domestically and
through Metamor's four offshore development centers, offering customers a truly
international scope of services."
Metamor also announced that, in connection with this transaction, it has
rescinded its stock buy-back program.
Metamor Worldwide, a diversified global IT solutions and services provider,
offers customers project management and project delivery capabilities for a
broad range of technology solutions including Internet and Web-enabled
applications, custom application development, data warehousing, ERP package
implementation, systems integration, software engineering, application support
and training. With IT professionals and development centers located
domestically and abroad, Metamor Worldwide's flexible delivery of value-added
services is provided through a combination of geographic presence, industry
focus and specialized technology practices.
Founded in 1973 and headquartered in the Chicago area, SPR Inc. provides Fortune
1000 companies with IT services including general consulting as well as five
outsourcing services: software modernization, mass change, application
management, information delivery and software quality services. SPR's
outsourcing services help customers derive maximum value from their existing IT
investments with comprehensive solutions for maintaining, improving and
transitioning legacy systems. In September 1998, SPR was named to "The Fast
Fifty" list of America's fastest growing small cap companies published by
Individual Investors Group, Inc. SPR has offices in Oak Brook, IL, Dallas,
Milwaukee and Tulsa.
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METAMOR WORLDWIDE, INC. AND SUBSIDIARIES
SUMMARY HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL DATA (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
PRO FORMA FOR SPR INC.
HISTORICAL MERGER (1)
------------------- ----------------------
1998 1997 1998 1997
------------------- ----------------------
<S> <C> <C> <C> <C>
Revenues $620,169 $373,719 $682,984 $410,621
Gross profit 204,615 106,407 230,488 120,990
EBITDA 69,086 33,049 81,850 37,291
Operating Income 56,587 27,516 67,553 31,442
Interest (expense) and other (11,527) (6,045) (10,031) (6,197)
-------------------- ---------------------
Income before Income taxes 45,060 21,471 57,522 25,245
Income from continuing operations 26,133 12,451 33,610 14,716
Income from discontinued operations 22,691 9,245 22,691 9,245
-------------------- ---------------------
Net Income $ 48,824 $ 21,696 $ 56,301 $ 23,961
==================== =====================
Earnings per share (diluted):
Income from continuing operations $ 0.78 $ 0.38 $ 0.76 $ 0.36
Discontinued operations 0.61 0.29 0.46 0.23
-------------------- ---------------------
Net income $ 1.39 $ 0.67 $ 1.22 $ 0.59
==================== =====================
Number of shares used to calculated EPS 38,806 32,558 49,599 40,606
==================== =====================
Margins:
Gross 33.0% 28.5% 33.7% 29.5%
EBITDA 11.1% 8.8% 12.0% 9.1%
Operating 9.1% 7.4% 9.9% 7.7%
</TABLE>
SEPTEMBER 30, 1998
---------------------
HISTORICAL PRO FORMA
---------- ---------
Balance Sheet Data:
Cash and cash equivalents $60,539 $65,921
Short-term marketable securities - 43,440
Long-term debt 193,935 193,935
Stockholders' equity 331,973 390,180
(1) The Pro forma data adjusts the historical operating results of Metamor
Worldwide, Inc. to give effect to the merger of SPR, Inc. as if the acquisition
had been consummated as of the beginning of the periods presented. The
estimated merger costs of $8.0 million are not included in costs and expenses,
but will be recognized as incurred.
Except for historical information, all of the statements, expectations and
assumptions contained in the foregoing are forward-looking statements that
involve a number of risks and uncertainties. Although the companies have used
their best efforts to be accurate in making those forward-looking statements, it
is possible that the assumptions made by management may not materialize. In
addition, the information set forth in each of the companies' Form 10-K for the
fiscal year ended December 31, 1997 and Form 10-Q for the fiscal quarter ended
September 30, 1998, describes certain additional risks and uncertainties that
could cause actual results to vary materially from the results covered in such
forward-looking statements.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, SPR
Inc. has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
SPR INC.
Date: January 19, 1999 By: /s/ STEPHEN T. GAMBILL
------------------------
Stephen T. Gambill
Chief Financial Officer
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