<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[MARK ONE]
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______ to______
Commission File No. 0-22195
AHL SERVICES, INC.
(Exact name of registrant as specified in its charter)
GEORGIA 58-2277249
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3353 Peachtree Road, NE, Atlanta, GA 30326
- ------------------------------------ -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (404) 267-2222
---------------
Not Applicable
--------------------------------------------------------------
Former name, former address and former fiscal year, if changed
since last report.
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: 16,474,292 shares on May 10,
2000.
<PAGE> 2
AHL SERVICES, INC.
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C> <C>
PART I FINANCIAL INFORMATION
ITEM 1. Financial Statements
Condensed Consolidated Balance Sheets (Unaudited)
March 31, 2000 and December 31, 1999 1
Condensed Consolidated Statements of Operations (Unaudited)
Three Months Ended March 31, 2000 and 1999 2
Condensed Consolidated Statements of Cash Flows (Unaudited)
Three Months Ended March 31, 2000 and 1999 3
Notes to Condensed Consolidated Financial Statements 4
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6
ITEM 3. Quantitative and Qualitative Disclosures
About Market Risk 8
PART II OTHER INFORMATION AND SIGNATURE
ITEM 1. Legal Proceedings 9
ITEM 4. Submission of Matters to a Vote of Security Holders 10
ITEM 6. Exhibits and Reports on Form 8-K 10
SIGNATURE 11
</TABLE>
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
AHL SERVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
ASSETS 2000 1999
--------- ------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 12,641 $ 9,527
Accounts receivable, less allowance for doubtful accounts
of $3,942 and $4,040 in 2000 and 1999, respectively 151,627 149,816
Reimbursable customer expenses 14,326 13,280
Work-in-process 3,053 11,109
Uniforms in service, net 2,465 2,760
Prepaid expenses and other 8,560 8,464
Income taxes receivable 1,420 886
--------- ---------
Total current assets 194,092 195,842
Property and equipment, net 36,237 35,775
Intangibles, net 302,692 305,791
Other assets 906 1,137
--------- ---------
$ 533,927 $ 538,545
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 8,405 $ 10,265
Accrued payroll and other current liabilities 79,933 78,867
Current portion of self-insurance reserves 1,390 1,300
Deferred income taxes 794 488
Current portion of long-term debt 167 216
--------- ---------
Total current liabilities 90,689 91,136
--------- ---------
Long-term debt, less current portion 221,860 216,148
--------- ---------
Self-insurance reserves, less current portion 5,560 5,200
--------- ---------
Deferred income taxes 4,049 4,933
--------- ---------
Other non-current liabilities 613 772
--------- ---------
SHAREHOLDERS' EQUITY:
Common stock, $.01 par value; 50,000,000 shares
authorized, 16,474,292 and 17,409,892 shares issued and
outstanding, respectively 175 175
Preferred stock, no par value; 5,000,000 shares
authorized, no shares outstanding -- --
Shares held in treasury (935,600 shares at March 31, 2000) (10,094) --
Paid-in capital 176,836 176,836
Retained earnings 44,576 44,287
Foreign currency translation adjustment (337) (942)
--------- ---------
Total shareholders' equity 211,156 220,356
--------- ---------
$ 533,927 $ 538,545
========= =========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
1
<PAGE> 4
AHL SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-----------------------
2000 1999
---- ----
<S> <C> <C>
Revenues $220,038 $ 170,638
Cost of services 151,692 119,728
-------- ---------
Gross margin 68,346 50,910
Operating expenses:
Field operating 50,513 33,751
Corporate, general and administrative 4,881 5,139
Special charge-Philadelphia settlement 2,668 --
Depreciation and amortization 5,340 4,003
-------- ---------
Operating income 4,944 8,017
Interest expense 4,444 2,126
Other income, net -- (30)
-------- ---------
Income before income taxes 500 5,921
Income tax provision 211 2,190
-------- ---------
Net income $ 289 $ 3,731
======== =========
Earnings per share: Net income per common and common equivalent share:
Basic $ 0.02 $ 0.23
======== =========
Diluted $ 0.02 $ 0.22
======== =========
Weighted average common and common equivalent shares:
Basic 16,967 16,475
======== =========
Diluted 17,107 17,102
======== =========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
2
<PAGE> 5
AHL SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-----------------------
2000 1999
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 289 $ 3,731
Adjustments to reconcile net income to net cash provided by (used in)
operating activities:
Depreciation and amortization 5,340 4,003
Changes in current assets and liabilities, net of assets of acquired
businesses 5,711 (18,743)
-------- --------
Net cash provided by (used in) operating activities 11,340 (11,009)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition consideration (3,235) (10,479)
Purchases of property and equipment (2,964) (3,207)
Other activities, net -- (660)
-------- --------
Net cash used in investing activities (6,199) (14,346)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (repayments) under credit facility 8,388 (60,527)
Treasury stock purchases (10,094) --
Repayment of subordinated convertible debenture -- (10,000)
Proceeds from exercise of stock options -- 62
Net proceeds from follow-on offering -- 96,171
Other -- (383)
-------- --------
Net cash (used in) provided by financing activities (1,706) 25,323
-------- --------
Effect of exchange rates on cash and cash equivalents (321) (1,250)
-------- --------
Net change in cash and cash equivalents 3,114 (1,282)
Cash and cash equivalents at beginning of period 9,527 18,239
-------- --------
Cash and cash equivalents at end of period $ 12,641 $ 16,957
======== ========
CASH PAID DURING THE PERIOD FOR:
Interest $ 4,421 $ 2,626
======== ========
Income taxes $ 745 $ 1,471
======== ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
<PAGE> 6
AHL SERVICES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000
(UNAUDITED)
1. SUMMARY OF PRESENTATION - The condensed consolidated financial
statements included herein have been prepared by AHL Services, Inc.
("AHL" or the "Company"), 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, although the Company believes that the disclosures are
adequate to make the information not misleading. In the opinion of
management, the condensed consolidated financial statements contain all
adjustments necessary to present fairly the financial position of the
Company as of March 31, 2000 and the results of its operations and its
cash flows for the three months ended March 31, 2000 and 1999. All such
adjustments are of a normal recurring nature. The results of operations
for the three months ended March 31, 2000 are not necessarily
indicative of the results to be expected for the year ended December
31, 2000. For further information, refer to the consolidated financial
statements and footnotes thereto for the year ended December 31, 1999
included in the Company's annual report on Form 10-K for such period.
2. BUSINESS SEGMENT INFORMATION - The following table presents information
regarding the Company's operating segments (in thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------------
Operating
Revenues Income
2000 -------- ----------
----
<S> <C> <C>
Aviation services $ 58,449 $ 2,931
Facility services 51,946 2,625
Operational support services 59,195 4,306
Marketing support services 50,448 2,631
Special charge - Philadelphia settlement -- (2,668)
Corporate and other -- (4,881)
-------- --------
$220,038 $ 4,944
======== ========
1999
----
Aviation services $ 46,990 $ 3,048
Facility services 56,382 3,748
Operational support services 38,796 3,410
Marketing support services 28,470 2,950
Corporate and other -- (5,139)
-------- --------
$170,638 $ 8,017
======== ========
</TABLE>
4
<PAGE> 7
3. COMPREHENSIVE INCOME - Other comprehensive income includes only foreign
currency translation adjustments. The calculation of other
comprehensive income is as follows (in thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
------------------------
2000 1999
------- --------
<S> <C> <C>
Net income $ 289 $ 3,731
Other comprehensive
Income (loss) 605 (1,279)
------- -------
Comprehensive income $ 894 $ 2,452
======= =======
</TABLE>
4. LEGAL MATTERS - As reported in the Quarterly Report on Form 10Q for the
quarter ended June 30, 1999, AHL learned that the U.S. Attorney's
Office for the Eastern District of Pennsylvania was investigating prior
recruiting and training practices and other matters at the Philadelphia
location of Argenbright Holdings Limited ("Argenbright Holdings"), a
subsidiary of the Company, and that Argenbright Holdings was a target
of this investigation.
On April 17, 2000, the U.S. Attorney for the Eastern District of
Pennsylvania filed criminal charges against three former employees of
Argenbright Holdings. These individuals are alleged to have falsified
billing information and training and background records for
pre-departure screeners at the Philadelphia International Airport.
Argenbright Holdings immediately terminated the indicted individuals
when the Company first learned of the violations. Since that time,
Argenbright Holdings has cooperated fully with the U.S. Attorney in its
investigation.
While the alleged violations were confined to former employees at the
Philadelphia Airport, the Government held Argenbright Holdings
"vicariously liable" for these individuals' criminal actions. To bring
closure to this matter, on April 17, 2000, Argenbright Holdings
finalized a settlement agreement with the U.S. Attorney. Argenbright
Holdings agreed to pay $1.2 million in fines and investigation expenses
and to reimburse $350,000 to Philadelphia airport clients for improper
billings. As a result of the actions of these terminated individuals,
Argenbright Holdings admitted to two counts of providing false
information to the Federal Aviation Administration (FAA).
The Company has recorded a special, non-recurring charge in the first
quarter of 2000 of $2.7 million to cover all remaining costs associated
with the settlement, including fines, legal and other professional fees
and expenses.
The FAA has reviewed Argenbright Holdings other major airport locations
and has not uncovered any similar issues. Since learning of the issues,
the Company has taken the necessary actions to ensure compliance with
all FAA regulations and Company policies and procedures in
Philadelphia. Additionally, management has reviewed this investigation
with the major clients of its Philadelphia operations and the Company
does not believe that this investigation has had a material adverse
affect on its relationship with these clients.
5
<PAGE> 8
Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations
OPERATING RESULTS - THREE MONTHS ENDED MARCH 31, 2000 AND 1999 - Revenues
increased $49.4 million, or 29%, to $220.0 million for the first quarter of 2000
from $170.6 million for the first quarter of 1999. First quarter 2000 revenues
included approximately $36.2 million attributable to acquisitions owned less
than one year and first quarter 1999 revenues included approximately $2.5
million attributable to the UK transportation business sold on June 30, 1999.
The remaining increase was a result of providing additional services to existing
clients, entering into contracts to provide services to new clients and rate
increases on existing contracts.
Cost of services represents the direct costs attributable to a specific
contract, predominantly wages and related benefits, as well as certain related
expenses such as workers' compensation and other direct labor related expenses.
Cost of services increased $32.0 million, or 27%, to $151.7 million for the
first quarter of 2000 from $119.7 million for the first quarter of 1999. As a
percentage of revenues, cost of services decreased to 68.9% for the first
quarter of 2000 from 70.2% for the first quarter of 1999. This decrease was
primarily due to the effect of the growth in revenues of the Company's higher
margin marketing support services businesses. Marketing support services
represented 22.9% of total Company revenues for the first quarter of 2000 as
compared to 16.7% for the first quarter of 1999.
Gross margin increased $17.4 million, or 34%, to $68.3 million for the first
quarter of 2000 from $50.9 million for the first quarter of 1999. As a
percentage of revenues, gross margin improved to 31.1% for the first quarter of
2000 from 29.8% for the first quarter of 1999.
Field operating expenses represent expenses which directly support field
operations, such as each district's management, facility expenses (such as rent,
communication costs and taxes), employee uniforms, equipment leasing,
maintenance, local sales and marketing activities. These expenses increased
$16.7 million, or 50%, to $50.5 million for the first quarter of 2000 from $33.8
million for the first quarter of 1999. As a percentage of revenues, field
operating expenses increased to 23.0% for the first quarter of 2000 as compared
to 19.8% for the first quarter of 1999. This is a result of a larger percentage
of the Company's revenues for the first quarter of 2000 as compared to the first
quarter of 1999 being from the marketing support services businesses, which have
higher field operating expenses (and correspondingly higher gross margins).
Corporate, general and administrative expenses, which includes the cost of
services the Company provides to support and manage its field activities,
decreased $258,000, or 5%, to $4.9 million for the first quarter of 2000 from
$5.1 million in the first quarter of 1999. As a percentage of revenues, these
expenses decreased to 2.2% for the first quarter of 2000 from 3.0% for the first
quarter of 1999. This percentage decrease was primarily due to better leveraging
of corporate personnel.
Special charge - Philadelphia settlement of $2.7 million for the first quarter
of 2000 represents legal fees, fines and other costs for the settlement of the
Philadelphia legal matter discussed in Note 4 to the Condensed Consolidated
Financial Statements.
Depreciation and amortization increased $1.3 million, or 33%, to $5.3 million
for the first quarter of 2000 from $4.0 million for the first quarter of 1999.
As a percentage of revenues, these expenses increased to 2.4% for the first
quarter of 2000 from 2.3% for the first quarter of 1999. The increase was
primarily due to the depreciation and amortization expense of acquisition
related fixed and intangible assets.
6
<PAGE> 9
Operating income decreased $3.1 million, or 38%, to $4.9 million for the first
quarter of 2000 from $8.0 million for the first quarter of 1999. As a percentage
of revenues, operating income was 2.3% for the first quarter of 2000 as compared
to 4.7% for the first quarter of 1999.
Interest expense increased $2.3 million, or 109%, to $4.4 million for the first
quarter of 2000 from $2.1 for the first quarter of 1999. This increase was due
to the use of the Company's credit facility to fund acquisitions during 1999 and
the increase in interest rates in 2000 compared to 1999.
Income tax provision decreased $2.0 million, or 90%, to $211,000 for the first
quarter of 2000 from $2.2 million in the first quarter of 1999. The Company
provided income taxes at a rate of 42.2% for the first quarter of 2000 and 37.0%
for the first quarter of 1999. The increase in the effective tax rate in 2000 as
compared to 1999 is due to the change in business mix by country as a result of
acquisitions.
Net income decreased $3.4 million, or 92%, to $289,000, or 0.1% of revenues, for
the first quarter of 2000 from net income of $3.7 million, or 2.2% of revenues,
for the first quarter of 1999.
LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operating activities was $11.3 million for the first quarter of
2000 compared to cash used in operating activities of $11.0 million for the
first quarter of 1999. This increase was primarily the result of an increase of
$24.5 million of changes in working capital due to decreases in days outstanding
in accounts receivable and the timing of payments of accounts payable and
accrued expenses offset by a $2.1 million decrease in net income before
depreciation and amortization. Cash used in investing activities for the first
quarter of 2000 was $6.2 million compared to $14.3 million for the first quarter
of 1999. The use of cash for investing activities was principally a result of
the acquisition consideration paid and additions to property and equipment made
during those periods. Cash used for financing activities for the first quarter
of 2000 was $1.7 million compared to cash provided by financing activities of
$25.3 million for the first quarter of 1999. The Company repurchased 935,600
shares of its common stock in the first quarter of 2000 for $10.1 million.
During the first quarter of 1999, the Company completed a follow-on public
offering of its common stock. The Company issued 3,255,570 shares at an offering
price of $31 per share. The total proceeds, net of underwriting discounts and
offering expenses, were approximately $96.1 million, of which the Company used a
portion to repay a $10 million subordinated convertible debenture. The remaining
$86.1 million was used to reduce the outstanding balance under the credit
facility.
Capital expenditures were approximately $3.0 million for the first quarter of
2000 compared to $3.2 million for the first quarter of 1999. Historically,
capital expenditures have been, and future expenditures are anticipated to be,
primarily to support expansion of the Company's operations, including equipment
and management information systems.
Effective October 15, 1999, the Company expanded its credit facility to $375
million with a syndicate of banks led by First Union National Bank. The Company
plans to utilize the facility to grow its business through strategic
acquisitions.
7
<PAGE> 10
The Company believes that funds generated from operations, together with
existing cash and borrowings under the credit facility, will be sufficient to
finance its current operations, planned capital expenditures and internal growth
for at least the next twelve months. If the Company were to make a significant
acquisition or series of acquisitions for cash, it may be necessary for the
Company to obtain additional debt or equity financing.
FORWARD-LOOKING STATEMENTS
Certain statements made in this report, and other written or oral statements
made by or on behalf of the Company, may constitute "forward-looking statements"
within the meaning of the federal securities laws. When used in this report, the
words "believes," "expects," "estimates" and similar expressions are intended to
identify forward-looking statements. Statements regarding future events and
developments and the Company's future performance, as well as our expectations,
beliefs, plans, estimates or projections relating to the future, are
forward-looking statements within the meaning of these laws. All forward-looking
statements are subject to certain risks and uncertainties that could cause
actual events to differ materially from those projected. Such risks and
uncertainties include, among others, conditions affecting our reliance on major
clients; our ability to manage a growing business; the availability of labor;
conditions affecting our international operations; the impact of competition;
general economic conditions; and changes in foreign currency and interest rates.
Management believes that these forward-looking statements are reasonable;
however, you should not place undue reliance on such statements. These
statements are based on current expectations and speak only as of the date of
such statements. The Company undertakes no obligation to publicly update or
revise any forward-looking statement, whether as a result of future events, new
information or otherwise. Additional information concerning the risks and
uncertainties listed above, and other factors that you may wish to consider, is
contained in the Company's filings with the Securities and Exchange Commission,
including the Company's Annual Report on Form 10-K. Copies of these filings are
available from the Company free of charge.
Item 3 - Quantitative and Qualitative Disclosures About Market Risk
FOREIGN CURRENCY RISK - A substantial amount of the Company's revenues are
received, and operating costs are incurred, in foreign currencies (primarily the
British pound and the German deutsche mark), with a significant amount of
operating income being derived from operations in the United Kingdom and
Germany. The denomination of foreign subsidiaries' account balances in their
local currency exposes the Company to certain foreign exchange rate risks. The
Company addresses the exposure by financing most working capital needs in the
applicable foreign currencies. The Company has not engaged in hedging
transactions to reduce exposure to fluctuations in foreign currency exchange
rates.
INTEREST RATE RISK - The Company maintains a Credit Facility, two interest rate
swap agreements and other long-term debt which subjects the Company to the risk
of loss associated with movements in market interest rates. The Company's
five-year Credit Facility had a balance outstanding at March 31, 2000 of $216.0
million, which was at a variable rate of interest. In order to hedge against
increasing interest rates, effective October 6, 1998, the Company entered into a
four-year interest rate swap agreement in the notional amount of approximately
$30.0 million to offset a portion of the floating interest rate risk. On May 14,
1999, this swap agreement was replaced with a three-year interest rate swap
agreement with a notional amount of approximately $45.0 million.
8
<PAGE> 11
On January 31, 2000, the Company entered into an additional interest rate swap
agreement in the notional amount of approximately $15.0 million which terminates
on May 1, 2003. The fair value of the swap agreements at March 31, 2000
approximates $60.0 million. A change in the prevailing interest rates of 10%
would result in a change in the total fair value of long-term debt of
approximately $5.4 million. Fair values were determined from discounted cash
flows.
PART II - OTHER INFORMATION AND SIGNATURE
Item 1 - Legal Proceedings
As reported in the Quarterly Report on Form 10Q for the quarter ended June 30,
1999, AHL learned that the U.S. Attorney's Office for the Eastern District of
Pennsylvania was investigating prior recruiting and training practices and other
matters at the Philadelphia location of Argenbright Holdings Limited
("Argenbright Holdings"), a subsidiary of the Company, and that Argenbright
Holdings was a target of this investigation.
On April 17, 2000, the U.S. Attorney for the Eastern District of Pennsylvania
filed criminal charges against three former employees of Argenbright Holdings.
These individuals are alleged to have falsified billing information and training
and background records for pre-departure screeners at the Philadelphia
International Airport. Argenbright Holdings immediately terminated the indicted
individuals when the Company first learned of the violations. Since that time,
Argenbright Holdings has cooperated fully with the U.S. Attorney in its
investigation.
While the alleged violations were confined to former employees at the
Philadelphia Airport, the Government held Argenbright Holdings "vicariously
liable" for these individuals' criminal actions. To bring closure to this
matter, on April 17, 2000, Argenbright Holdings finalized a settlement agreement
with the U.S. Attorney. Argenbright Holdings agreed to pay $1.2 million in fines
and investigation expenses and to reimburse $350,000 to Philadelphia airport
clients for improper billings. As a result of the actions of these terminated
individuals, Argenbright Holdings admitted to two counts of providing false
information to the Federal Aviation Administration (FAA).
The Company has recorded a special, non-recurring charge in the first quarter of
2000 of $2.7 million to cover all remaining costs associated with the
settlement, including fines, legal and other professional fees and expenses.
The FAA has reviewed Argenbright Holdings other major airport locations and has
not uncovered any similar issues. Since learning of the issues, the Company has
taken the necessary actions to ensure compliance with all FAA regulations and
Company policies and procedures in Philadelphia. Additionally, management has
reviewed this investigation with the major clients of its Philadelphia
operations and the Company does not believe that this investigation has had a
material adverse affect on its relationship with these clients.
9
<PAGE> 12
Item 4 - Submission of Matters to a Vote of Security Holders
The Company's Annual Meeting of Shareholders was held on May 9, 2000. The
matters voted upon and the results of voting were as follows:
To elect one director to serve until the annual meeting of shareholders
in 2003 or until such director's successor is duly elected and
qualified: The nominee, Frank A. Argenbright, Jr. was elected to the
Company's board of directors to serve until the annual meeting of
shareholders in 2003. There were 16,031,773 votes for Mr. Argenbright.
To ratify the appointment of Arthur Andersen LLP as independent public
accountants for the Company for the year ending December 31, 2000:
There were 16,293,093 votes for ratification of the appointment of
Arthur Andersen LLP as the Company's independent public accountants.
Effective May 4, 2000, Hamish Leslie Melville resigned from the Company's board
of directors. As of May 9, 2000, the Company's continuing directors are: Edwin
R. Mellett (term expiring 2001); Edwin C. "Skip" Gage and Robert F. McCullough
(terms expiring 2002); and Frank A. Argenbright, Jr. (term expiring 2003).
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits:
<TABLE>
<CAPTION>
Exhibit Number Description
-------------- -----------
<S> <C>
11 Computation of Earnings Per Share
27 Financial Data Schedule (For SEC
Filing Purposes Only)
</TABLE>
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the quarter ended
March 31, 2000.
10
<PAGE> 13
SIGNATURE
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.
AHL SERVICES, INC.
(REGISTRANT)
Date: May 15, 2000 By: /s/ Barry J. Jenkins
------------------------------------------
Barry J. Jenkins
Vice President Finance
(On behalf of the Registrant and as
Chief Accounting Officer)
11
<PAGE> 1
EXHIBIT 11
AHL SERVICES, INC.
COMPUTATION OF EARNINGS PER SHARE
(IN THOUSANDS, EXCEPT PER-SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------
2000 1999
------- -------
<S> <C> <C>
Income Applicable to Common Stock:
Net income $ 289 $ 3,731
======= =======
Weighted Average Shares:
Common shares 16,967 16,475
Common share equivalents applicable to
stock options outstanding 140 627
------- -------
Weighted average common and common
equivalent shares outstanding during
the period 17,107 17,102
======= =======
Per Share Amount:
Net income:
Basic $ 0.02 $ 0.23
======= =======
Diluted $ 0.02 $ 0.22
======= =======
</TABLE>
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AHL
SERVICES, INC. CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) AT MARCH 31,
2000 AND THE CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) FOR THE
THREE MONTHS ENDED MARCH 31, 2000, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 12,641
<SECURITIES> 0
<RECEIVABLES> 155,569
<ALLOWANCES> 3,942
<INVENTORY> 0
<CURRENT-ASSETS> 194,092
<PP&E> 56,871
<DEPRECIATION> 20,634
<TOTAL-ASSETS> 533,927
<CURRENT-LIABILITIES> 90,689
<BONDS> 221,860
0
0
<COMMON> 175
<OTHER-SE> 210,981
<TOTAL-LIABILITY-AND-EQUITY> 533,927
<SALES> 220,038
<TOTAL-REVENUES> 220,038
<CGS> 151,692
<TOTAL-COSTS> 151,692
<OTHER-EXPENSES> 63,402
<LOSS-PROVISION> 200
<INTEREST-EXPENSE> 4,444
<INCOME-PRETAX> 500
<INCOME-TAX> 211
<INCOME-CONTINUING> 289
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 289
<EPS-BASIC> 0.02
<EPS-DILUTED> 0.02
</TABLE>
