<PAGE> 1
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 0-22141
COMPLETE BUSINESS SOLUTIONS, INC.
(Exact Name of Registrant as Specified in its Charter)
MICHIGAN
(State or Other Jurisdiction of
Incorporation or Organization)
38-2606945
(IRS Employer
Identification No.)
32605 WEST TWELVE MILE ROAD
SUITE 250
FARMINGTON HILLS, MICHIGAN 48334
(Address of Principal Executive Offices and Zip Code)
Registrant's telephone number, including area code: (248) 488-2088
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 for 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 [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
NO PAR VALUE
(Class of Common Stock)
9,300,000
(Outstanding as of August 4, 1997)
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<PAGE> 2
COMPLETE BUSINESS SOLUTIONS, INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements........................................ 3
Condensed Consolidated Statements of Income................. 3
Condensed Consolidated Balance Sheets....................... 4
Condensed Consolidated Statements of Shareholders' Equity... 5
Condensed Consolidated Statements of Cash Flows............. 6
Notes to Condensed Consolidated Financial Statements........ 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................... 9
PART II. OTHER INFORMATION
Item 5. Other Information........................................... 11
Item 6. Exhibits and Reports on Form 8-K............................ 11
SIGNATURES............................................................. 12
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
COMPLETE BUSINESS SOLUTIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------ ------------------
1997 1996 1997 1996
------- ------- ------- -------
<S> <C> <C> <C> <C>
Revenues................................................ $26,662 $20,420 $50,937 $39,548
Cost of revenues:
Salaries, wages and employee benefits................. 15,774 13,566 30,490 26,103
Contractual services.................................. 2,137 777 3,905 1,496
Project travel and relocation......................... 1,275 793 2,345 1,488
Depreciation and amortization......................... 293 382 657 715
------- ------- ------- -------
Total cost of revenues........................ 19,479 15,518 37,397 29,802
------- ------- ------- -------
Gross profit.................................. 7,183 4,902 13,540 9,746
Selling, general and administrative expenses............ 4,809 3,618 9,385 7,231
------- ------- ------- -------
Income from operations........................ 2,374 1,284 4,155 2,515
Interest expense (income)............................... (313) 159 (378) 300
------- ------- ------- -------
Income before provision for income taxes and
minority interest........................... 2,687 1,125 4,533 2,215
Provision for income taxes.............................. 856 19 1,991 36
Minority interest....................................... -- 78 82 113
------- ------- ------- -------
Net income.................................... $ 1,831 $ 1,028 $ 2,460 $ 2,066
======= ======= ======= =======
<CAPTION>
PRO FORMA INFORMATION
(UNAUDITED)
-----------------------------
<S> <C> <C> <C> <C>
Net income as reported.................................. $ 1,028 $ 2,460 $ 2,066
Adjustment to provision for income taxes................ 385 (560) 759
------- ------- -------
Net income.............................................. $ 643 $ 3,020 $ 1,307
======= ======= =======
Net income per common share............................. $ .19 $ .08 $ .35 $ .17
======= ======= ======= =======
Weighted average shares outstanding..................... 9,600 7,627 8,712 7,576
======= ======= ======= =======
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
<PAGE> 4
COMPLETE BUSINESS SOLUTIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
-------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $17,763 $ 3,382
Accounts receivable, net.................................. 21,141 20,741
Prepaid expenses and other................................ 1,303 1,136
------- -------
Total current assets................................... 40,207 25,259
------- -------
Property and equipment, net................................. 5,076 5,167
Goodwill, net............................................... 2,882 --
Other assets................................................ 613 832
------- -------
Total assets........................................... $48,778 $31,258
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable.......................................... $ 3,051 $ 2,304
Accrued payroll and related costs......................... 5,405 4,907
Revolving credit facility................................. -- 5,400
Distribution and loan payable to shareholders............. 422 --
Current portion of deferred revenue....................... 1,866 1,124
Current portion of long-term debt......................... -- 486
Other accrued liabilities................................. 1,951 961
------- -------
Total current liabilities.............................. 12,695 15,182
------- -------
Deferred revenue, less current portion...................... 262 317
Long-term debt, less current portion........................ -- 305
Deferred taxes.............................................. 300 --
Minority interest........................................... -- 1,503
Commitments and contingencies
Shareholders' equity:
Preferred stock, no par value, 1,000,000 shares
authorized, none issued................................ -- --
Common stock, no par value, 30,000,000 shares authorized,
9,300,000 and 6,447,368 shares issued and outstanding
as of June 30, 1997 and December 31, 1996,
respectively........................................... -- --
Additional paid-in capital................................ 35,803 3,226
Retained earnings......................................... 2,117 13,049
Stock subscriptions receivable............................ (2,125) (2,125)
Cumulative translation adjustment......................... (274) (199)
------- -------
Total shareholders' equity............................. 35,521 13,951
------- -------
Total liabilities and shareholders' equity............. $48,778 $31,258
======= =======
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
balance sheets.
4
<PAGE> 5
COMPLETE BUSINESS SOLUTIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON ADDITIONAL STOCK CUMULATIVE TOTAL
SHARES PAID-IN RETAINED SUBSCRIPTIONS TRANSLATION SHAREHOLDERS'
OUTSTANDING CAPITAL EARNINGS RECEIVABLE ADJUSTMENT EQUITY
----------- ---------- -------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance -- December 31, 1995.... 5,942,275 $ 1 $ 9,346 $ -- $(159) $ 9,188
Net income...................... -- -- 2,066 -- -- 2,066
Translation adjustment.......... -- -- -- -- (27) (27)
--------- ------- -------- ------- ----- -------
Balance -- June 30, 1996........ 5,942,275 1 11,412 -- (186) 11,227
--------- ------- -------- ------- ----- -------
Net income...................... -- -- 1,637 -- -- 1,637
Translation adjustment.......... -- -- -- -- (13) (13)
Capital contribution............ -- 1,100 -- -- -- 1,100
Stock options exercised......... 505,093 2,125 -- (2,125) -- --
--------- ------- -------- ------- ----- -------
Balance -- December 31, 1996.... 6,447,368 3,226 13,049 (2,125) (199) 13,951
--------- ------- -------- ------- ----- -------
Net income...................... -- -- 2,460 -- -- 2,460
Translation adjustment.......... -- -- -- -- 2 2
Conversion of minority
shareholder................... 552,632 4,593 -- -- (77) 4,516
Initial public offering, net.... 2,300,000 23,792 -- -- -- 23,792
Distribution to shareholders.... -- -- (9,200) -- -- (9,200)
Recapitalization................ -- 4,192 (4,192) -- -- --
--------- ------- -------- ------- ----- -------
Balance -- June 30, 1997........ 9,300,000 $35,803 $ 2,117 $(2,125) $(274) $35,521
========= ======= ======== ======= ===== =======
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
5
<PAGE> 6
COMPLETE BUSINESS SOLUTIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
------------------
1997 1996
------- -------
<S> <C> <C>
Net income.................................................. $ 2,460 $ 2,066
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization............................. 1,195 1,098
Provision for doubtful accounts........................... 150 60
Minority interest......................................... 82 113
Change in assets and liabilities --
Accounts receivable.................................... (550) (3,815)
Prepaid expenses and other............................. (167) (103)
Accounts payable....................................... 747 (68)
Accrued payroll and related costs and other
liabilities........................................... 1,574 504
Deferred revenue....................................... 687 150
Other.................................................. 303 (2)
------- -------
Net cash provided by operating activities............ 6,481 3
------- -------
Cash flows from investing activities:
Investment in computer software........................... -- (407)
Purchases of property and equipment....................... (876) (1,019)
------- -------
Net cash used in investing activities................ (876) (1,426)
------- -------
Cash flows from financing activities:
Net borrowings (payments) on revolving credit facility.... (5,400) 1,500
Payments on long-term debt................................ (791) (259)
Net proceeds from issuance of common stock................ 23,792 --
S corporation distribution................................ (8,825) --
------- -------
Net cash provided by financing activities............ 8,776 1,241
------- -------
Effect of exchange rate changes on cash..................... -- (7)
------- -------
Increase (decrease) in cash and cash equivalents............ 14,381 (189)
------- -------
Cash and cash equivalents at beginning of period............ 3,382 830
------- -------
Cash and cash equivalents at end of period.................. $17,763 $ 641
======= =======
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest............................................... $ 69 $ 266
Income taxes........................................... $ 1,678 $ --
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
6
<PAGE> 7
COMPLETE BUSINESS SOLUTIONS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(UNAUDITED)
NOTE (1) BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements have been
prepared by management, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. In the opinion of management, the
accompanying unaudited condensed consolidated financial statements contain all
adjustments, consisting of normal recurring adjustments, necessary to present
fairly the financial position of Complete Business Solutions, Inc. (the Company)
as of June 30, 1997, the results of its operations for the three and six-month
periods ended June 30, 1997 and 1996, and cash flows for the six-month periods
ended June 30, 1997 and 1996. These financial statements should be read in
conjunction with the consolidated financial statements and footnotes thereto
included in the Company's Registration Statement on Form S-1, dated August 4,
1997.
The results of operations for the three-month period ended June 30, 1997
are not necessarily indicative of the results to be expected in future quarters
or for the full fiscal year ending December 31, 1997.
NOTE (2) PRINCIPLES OF CONSOLIDATION AND ORGANIZATION
The condensed consolidated financial statements include the accounts of the
Company and its subsidiaries. All significant intercompany accounts and
transactions have been eliminated in the accompanying condensed consolidated
financial statements.
As of December 31, 1996, the Company owned 72% of CBS Complete Business
Solutions (Mauritius) Limited (CBS Mauritius) and an unrelated entity owned the
remaining 28%. CBS Mauritius owns 100% of Complete Business Solutions (India)
Private Limited (CBS India). As authorized in the CBS Mauritius Shareholders
Agreement and in connection with the initial public offering of the Company's
Common Stock, the 28% shareholder of CBS Mauritius converted its ownership
interest in CBS Mauritius into 552,632 shares of the Company's Common Stock. The
acquisition of the minority shares was accounted for under the purchase method
of accounting. The excess of the aggregate purchase price over the fair value of
the net assets acquired has been recognized as goodwill of approximately $2,931
in the condensed consolidated balance sheets. The impact of this transaction on
prior years was not significant, therefore pro forma information has not been
provided.
NOTE (3) COMMON STOCK OFFERINGS
In March 1997, the Company completed an initial public offering of
2,500,000 shares of its Common Stock at a price of $12.00 per share. This
offering consisted of 2,300,000 shares of newly issued Common Stock and 200,000
shares sold by a selling shareholder. After underwriting discounts, commissions
and other issuance costs, net proceeds to the Company from that offering were
approximately $23,792. The net proceeds from that offering have been invested in
cash equivalents with an initial maturity of three months or less.
On August 4, 1997, the Company filed a Registration Statement on Form S-1
with the Securities and Exchange Commission for the sale of an additional
2,250,000 shares of its Common Stock. This secondary offering is contemplated to
consist of 1,250,000 shares of newly issued Common Stock and 1,000,000 shares
sold by selling shareholders at an assumed offering price of $27 1/2. The net
proceeds to the Company from this offering are intended to be used for:
expansion of existing operations, including the Company's offshore software
development operations; development of new service lines and possible
acquisitions of related businesses; and general corporate purposes, including
working capital.
7
<PAGE> 8
NOTE (4) INCOME TAXES
Prior to March 4, 1997, the shareholders of the Company had elected, under
the provisions of Subchapter S of the United States Internal Revenue Code, to
have income and related tax benefits of the Company included in the taxable
income of the shareholders. As a result, no provision for U.S. federal or state
income taxes has been included in the condensed consolidated statements of
income prior to March 4, 1997.
On March 4, 1997, in connection with the initial public offering discussed
in Note 3, the shareholders and the Company revoked the Subchapter S election,
thereby subjecting future income of the Company to federal and state income
taxes at the corporate level. Accordingly, the application of the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes," resulted in the recognition of deferred tax assets and liabilities, and
a corresponding charge to the provision for income taxes of approximately $920
during the six-month period ended June 30, 1997.
Subsequent to March 4, 1997, the Company has provided federal and state
income taxes in the condensed consolidated statements of income based on the
anticipated effective tax rate for fiscal year 1997. The unaudited pro forma net
income in the condensed consolidated statements of income reflect applicable
after pro forma adjustments to the provision for income taxes to reflect net
income as if the Subchapter S election had been revoked prior to January 1,
1996. The differences between the United States Federal statutory rate and the
consolidated effective rate for the six month period ended June 30, 1997 are as
follows:
<TABLE>
<S> <C>
Statutory Federal income tax rate........................... 34.0%
Foreign earnings not subject to U.S. tax.................... (4.0)
Other....................................................... 1.6
-----
31.6%
S corporation termination................................... 20.0
S corporation earnings...................................... (7.7)
-----
Effective tax rate.......................................... 43.9%
=====
</TABLE>
CBS Mauritius is incorporated in Mauritius and is not subject to income
taxes. CBS India is an Indian corporation subject to income taxes and receives
exemptions from Indian income taxes under free trade zone and software exporters
provisions of Indian tax law. The Company considers all undistributed earnings
of its foreign subsidiaries to be permanently invested. Therefore, no United
States income taxes have been provided on these earnings.
NOTE (5) EARNINGS PER SHARE
Statement of Financial Accounting Standards No. 128, "Earnings per Share,"
was issued in February 1997. The Company will be required to adopt the new
standard for the year and the quarter ended December 31, 1997. Early adoption of
this standard is not permitted. The primary requirements of this standard are;
(i) replacement of primary earnings per share with basic earnings per share
which eliminates the dilutive effect of options and warrants; (ii) use of
average share price in applying the treasury method to compute dilution for
options and warrants for diluted earnings per share; and (iii) disclosure
reconciling the numerator and denominator of earnings per share calculations.
The effect of this accounting change on pro forma net income per share is as
follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JUNE 30,
-----------------
1997 1996
----- -----
<S> <C> <C>
Per share amounts --
Pro forma net income per common share as reported........... $0.35 $0.17
Effect of SFAS No. 128...................................... 0.01 0.03
----- -----
Pro forma basic net income per common share................. $0.36 $0.20
===== =====
Pro forma diluted net income per common share............... $0.35 $0.17
===== =====
</TABLE>
8
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following Management's Discussion and Analysis of Financial Condition
and Results of Operations should be read in conjunction with the condensed
consolidated financial statements and the notes thereto included in this
Quarterly Report, and with Management's Discussion and Analysis of Financial
Condition and Results of Operations contained in the Company's Registration
Statement on Form S-1, dated August 4, 1997.
RESULTS OF OPERATIONS
The Company's revenues increased approximately 31% to $26.7 million for the
three month period ended June 30, 1997 from $20.4 million for the same period in
1996. Revenue increased approximately 29% to $50.9 million for the six month
period ended June 30, 1997 from $39.5 million for the same period in 1996. This
growth in revenues is primarily attributable to increases in the Company's IT
professional workforce , increases in average billing rates, further expansion
of the Company's international operations and additional services provided to
existing clients. The Company's IT professional workforce increased
approximately 15% for the three month period ended June 30, 1997 from the
comparable three month period in 1996, and approximately 13% for the six month
period ended June 30, 1997 from the comparable six month period in 1996.
Revenues from international operations, principally offshore development
centers, increased approximately 81% to $4.9 million for the six month period
ending June 30, 1997 from $2.7 million for the same six month period in 1996.
Revenues from existing clients increased $3.3 million and $5.2 million for the
three month and six month periods ended June 30, 1997, respectively, over the
same periods in 1996.
GROSS PROFIT
Gross profit increased approximately 47% to $7.2 million for the three
month period ended June 30, 1997 from $4.9 million for the same period in 1996,
and approximately 39% to $13.5 million for the six month period ended June 30,
1997 from $9.7 million for the same six month period in 1996. These increases
are primarily attributable to increases in the Company's IT professional
workforce and average U.S. billing rates, as well as the continued expansion of
the Company's offshore development centers. Gross profit as a percentage of
revenues increased to approximately 27% for the three month period ended June
30, 1997 from approximately 24% for the same period in 1996. For the six month
period ended June 30, 1997, gross profit margin increased to approximately 27%
from 25% for the same period in 1996. These increases in gross profit margin as
a percentage of revenues are primarily attributable to the Company's continued
strategic shift of its business toward higher margin service offerings,
including Year 2000 services, and the increasing utilization and expansion of
the Company's offshore development centers which operate at higher gross profit
and operating margins. For the three month period ended June 30, 1997,
approximately 22% of revenues were generated from contract programming services,
as compared with approximately 25% for the three month period ended March 31,
1997 and approximately 36% for the three month period ended June 30, 1996. Gross
profit margin for contract programming services and other service offerings was
approximately 22% and 28%, respectively, for the six month period ended June 30,
1997.
SELLING, GENERAL AND ADMINISTRATIVE
Selling, general and administrative expenses increased approximately 33% to
$4.8 million for the three month period ended June 30, 1997 from $3.6 million
for the same period in 1996, and approximately 30% to $9.4 million for the six
month period ended June 30, 1997 from $7.2 million for the same six month period
in 1996. These increases resulted from the continued expansion of the Company's
direct selling and marketing effort, further enhancement of the infrastructure,
and other general overhead cost increases necessary to support the Company's
continued revenue growth. As a percentage of revenues, selling, general and
administrative expenses represented approximately 19% for all periods presented.
9
<PAGE> 10
OTHER EXPENSE (INCOME)
Other expense (income) represents interest earned on cash equivalents, net
of interest expense on borrowings. The decrease in other expense to $(378)
thousand for the six month period ended June 30, 1997 from $300 thousand for the
same period in 1996 is primarily due to reduced interest expense resulting from
the repayment of outstanding debt during the first quarter of 1997, and interest
earned resulting from the investment of net proceeds from the Company's initial
public offering of Common Stock in March 1997.
LIQUIDITY AND CAPITAL RESOURCES
From the Company's inception in 1985 through March 5, 1997, the Company
generally funded its operations and working capital needs through internally
generated funds, periodically supplemented by borrowings under the Company's
revolving credit facility with a commercial bank. The Company's cash provided by
operations was $6.5 million and $3 thousand for the six month periods ended June
30, 1997 and 1996, respectively. The increase in cash provided by operations is
primarily attributable to a continued reduction in the accounts receivable days
sales outstanding during the six months ended June 30, 1997, as compared to the
same period in 1996.
The principal use of cash for investing activities during the six month
periods ended June 30, 1997 and 1996 was for the purchase of property and
equipment and computer software primarily related to the continued development
and enhancement of the Company's offshore software development centers.
Historically, borrowings and repayments under the Company's revolving
credit facility represented the most significant components of cash provided or
used by financing activities. However, net cash provided by financing activities
increased to $8.8 million during the six month period ended June 30, 1997
primarily due to the Company realizing net proceeds of approximately $23.8
million from the initial public offering of its Common Stock in March 1997.
Outstanding borrowings under the revolving credit facility were repaid from the
proceeds of its initial public offering. In connection with the termination of
the Company's S corporation status, the Company has made partial distributions
of its previously undistributed S corporation earnings totalling approximately
$8.8 million during the six month period ended June 30, 1997.
On August 4, 1997, the Company filed a Registration Statement on Form S-1
with the Securities and Exchange Commission for the sale of an additional
2,250,000 shares of its Common Stock. This secondary offering is contemplated to
consist of 1,250,000 shares of newly issued Common Stock and 1,000,000 shares
sold by selling shareholders at an assumed offering price of $27 1/2. The net
proceeds to the Company from this offering are intended to be used for:
expansion of existing operations, including the Company's offshore software
development operations; development of new service lines and possible
acquisitions of related businesses; and general corporate purposes, including
working capital.
Under an arrangement with a commercial bank, the Company may borrow an
amount not to exceed $21 million with interest at the bank's prime interest rate
or the Libor rate. The borrowings under this facility are short-term, payable on
demand and are secured by trade accounts receivable and equipment of the
Company. As of June 30, 1997, there were no borrowings outstanding under this
facility. In recent years, the Company executed several short-term notes with
the bank to finance the purchase of equipment and software. During the six month
period ended June 30, 1997, the balances outstanding on these notes were repaid.
10
<PAGE> 11
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
On August 4, 1997, the Company filed a Registration Statement on Form S-1
with the Securities and Exchange Commission for the sale of an additional
2,250,000 shares of its Common Stock. This secondary offering is contemplated to
consist of 1,250,000 shares of newly issued Common Stock and 1,000,000 shares
sold by selling shareholders at an assumed offering price of $27 1/2. The net
proceeds to the Company from this offering are intended to be used for:
expansion of existing operations, including the Company's offshore software
development operations; development of new service lines and possible
acquisitions of related businesses; and general corporate purposes, including
working capital.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<CAPTION>
NUMBER EXHIBIT
------ -------
<C> <S>
(11) Computation of Earnings per share
(27) Financial Data Schedule
</TABLE>
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the three month
period ended June 30, 1997.
11
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
COMPLETE BUSINESS SOLUTIONS, INC.
By: /s/ RAJENDRA B. VATTIKUTI
------------------------------------
Rajendra B. Vattikuti
President and Chief Executive
Officer
*
------------------------------------
Timothy Manney
Executive Vice President of Finance
and
Administration, Treasurer and
Director
Dated: August 4, 1997
12
<PAGE> 13
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<C> <S>
11 Computation of Earnings per share
27 Financial Data Schedule
</TABLE>
<PAGE> 1
EXHIBIT 11
COMPUTATION OF PER SHARE EARNINGS
COMPLETE BUSINESS SOLUTIONS, INC. AND SUBSIDIARIES
PRO FORMA OR ACTUAL NET INCOME PER COMMON SHARE
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30,
------------------------
1997 1996
---------- ----------
<S> <C> <C>
Weighted average number of shares of Common Stock
outstanding............................................... 9,300,000 5,942,275
Common Stock equivalents calculated using the weighted
average stock price per share for the periods presented... 299,924 237,215
Stock options and convertible stock issued during the twelve
months immediately preceding the offering date............ -- 641,501
Stock issued to satisfy S corporation distribution based
upon the estimated initial public offering price per
share..................................................... -- 806,452
---------- ----------
Weighted average shares outstanding......................... 9,599,924 7,627,443
========== ==========
Actual or pro forma net income.............................. $1,831,000 $ 643,000
========== ==========
Actual or pro forma net income per common share............. $ .19 $ .08
========== ==========
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
------------------------
1997 1996
---------- ----------
<S> <C> <C>
Weighted average number of shares of Common Stock
outstanding............................................... 8,300,828 5,942,275
Common Stock equivalents calculated using the weighted
average stock price per share for the periods presented... 227,322 185,462
Stock options and convertible stock issued during the twelve
months immediately preceding the offering date............ 184,211 641,501
Stock issued to satisfy S corporation distribution based
upon the estimated initial public offering price per
share..................................................... -- 806,452
---------- ----------
Weighted average shares outstanding......................... 8,712,361 7,575,690
========== ==========
Pro forma net income........................................ $3,020,000 $1,307,000
========== ==========
Pro forma net income per common share....................... $ .35 $ .17
========== ==========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 17,763
<SECURITIES> 0
<RECEIVABLES> 21,505
<ALLOWANCES> (364)
<INVENTORY> 0
<CURRENT-ASSETS> 40,207
<PP&E> 10,855
<DEPRECIATION> (5,779)
<TOTAL-ASSETS> 48,778
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0
0
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<EPS-PRIMARY> .35
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</TABLE>
