<PAGE>
================================================================================
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 SEPTEMBER 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934.
COMMISSION FILE NO. 0-23635
CONDOR TECHNOLOGY SOLUTIONS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 54-1814931
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
170 JENNIFER ROAD, SUITE 325, ANNAPOLIS, MARYLAND 21401
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(410) 266-8700
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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.
OUTSTANDING AS OF
CLASS NOVEMBER 9, 2000
COMMON STOCK, $.01 PAR VALUE 15,313,486
----------
================================================================================
<PAGE>
CONDOR TECHNOLOGY SOLUTIONS, INC.
INDEX TO FORM 10-Q
<TABLE>
<CAPTION>
PAGE NO.
Part I. FINANCIAL INFORMATION
<S> <C>
Item 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets...................................................................1
Consolidated Statements of Operations.........................................................2
Consolidated Condensed Statements of Cash Flows...............................................3
Notes to Consolidated Financial Statements..................................................4-9
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS....................................................10-14
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK.........................................................................15
Part II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS............................................................................16
Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS ...................................................17
Item 3. DEFAULTS UPON SENIOR SECURITIES..............................................................17
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..........................................17
Item 5. OTHER INFORMATION............................................................................17
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.............................................................17
SIGNATURES...........................................................................................................18
EXHIBIT INDEX........................................................................................................19
</TABLE>
<PAGE>
PART 1 - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
CONDOR TECHNOLOGY SOLUTIONS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1999 2000
================== ==================
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 3,137 $ 336
Restricted cash 2,584 1,370
Accounts receivable, net 29,281 23,932
Prepaids and other current assets 8,235 3,271
--------- ---------
Total current assets 43,237 28,909
PROPERTY AND EQUIPMENT, NET 8,235 7,012
GOODWILL AND OTHER INTANGIBLES, NET 66,422 58,120
OTHER ASSETS 2,026 2,044
--------- ---------
TOTAL ASSETS $ 119,920 $ 96,085
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 9,908 $ 8,748
Accrued expenses and other current liabilities 13,775 8,986
Deferred revenue 5,136 2,138
Current portion of contingent purchase liability 2,388 10,300
Current portion of long-term debt 45,505 37,911
--------- ---------
Total current liabilities 76,712 68,083
LONG-TERM DEBT 178 56
NON-CURRENT CONTINGENT PURCHASE LIABILITY 7,912 -
OTHER LONG-TERM OBLIGATIONS 1,303 1,154
--------- ---------
Total liabilities 86,105 69,293
--------- ---------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par, 1,000,000 authorized; none outstanding - -
Common stock, $.01 par value; authorized 49,000,000 shares;
issued and outstanding, 15,078,864 shares at December 31, 1999
and 15,313,486 shares at September 30, 2000 151 153
Additional paid-in capital 123,142 124,807
Accumulated deficit (89,185) (97,993)
Accumulated other comprehensive income (loss) (99) 19
Treasury stock, at cost (13,178 shares at December 31, 1999 and
September 30, 2000) (194) (194)
--------- ---------
Total stockholders' equity 33,815 26,792
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 119,920 $ 96,085
========= =========
</TABLE>
The accompaning notes are an integral part
of these consolidated financial statements.
1
<PAGE>
CONDOR TECHNOLOGY SOLUTIONS, INC
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1999 2000 1999 2000
======== ======== ========= ========
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
IT service revenues $ 33,018 $ 19,680 $ 108,072 $ 71,067
Hardware procurement revenues 16,435 6,963 54,515 23,447
-------- -------- --------- --------
Total revenues 49,453 26,643 162,587 94,514
Cost of IT services 20,118 13,055 63,018 44,130
Cost of hardware procurement 14,663 6,478 49,042 21,247
-------- -------- --------- --------
Total cost of revenues 34,781 19,533 112,060 65,377
--------- -------- --------- --------
Gross profit 14,672 7,110 50,527 29,137
Selling, general and administrative expenses 12,969 5,527 38,780 26,885
Depreciation and amortization 1,830 1,224 6,322 4,163
Impairment of intangible assets 1,500 - 30,736 -
Other costs 1,535 448 3,953 2,489
-------- -------- --------- --------
Loss from operations (3,162) (89) (29,264) (4,400)
Interest and other expense, net (2,676) (1,376) (4,092) (4,408)
-------- -------- --------- --------
Loss before income taxes (5,838) (1,465) (33,356) (8,808)
Income tax expense (benefit) (1,511) - 243 -
-------- -------- --------- --------
Net loss before extraordinary item (4,327) (1,465) (33,599) (8,808)
Extraordinary loss, net of income taxes of $122 - - (184) -
-------- -------- --------- --------
Net loss $ (4,327) $ (1,465) $ (33,783) $ (8,808)
======== ======== ========= ========
Basic shares outstanding 13,840 15,318 12,954 15,266
======== ======== ========= ========
Diluted shares outstanding 13,840 15,318 12,954 15,266
======== ======== ========= ========
Net loss per share before extraordinary item -
Basic & Diluted $ (0.31) $ (0.10) $ (2.59) $ (0.58)
======== ======== ========= ========
Net loss per share from extraordinary item -
Basic & Diluted $ - $ - $ (0.01) $ -
======== ======== ========= ========
Net loss per share - Basic & Diluted $ (0.31) $ (0.10) $ (2.60) $ (0.58)
======== ======== ========= ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
2
<PAGE>
CONDOR TECHNOLOGY SOLUTIONS, INC
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
( in thousands )
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
1999 2000
-------- -------
(UNAUDITED)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(33,783) $(8,808)
Adjustments to reconcile net loss to net cash provided
by (used in) operating activities:
Impairment of intangible assets and loss on sale of assets to
be disposed of 30,736 -
Writeoff of deferred financing costs 1,617 432
Stock compensation expense - 1,567
Depreciation and amortization 6,322 4,163
Changes in assets and liabilities (7,514) 3,363
-------- -------
Net cash provided by (used in) operating activities (2,622) 717
-------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (4,232) (989)
Proceeds from sale of subsidiary - 4,250
Proceeds from sale of investment securities - 621
Acquisition of subsidiaries, net of cash (5,227) -
Payment of contingent purchase liability (7,000) -
Other 196 (59)
-------- -------
Net cash provided by (used in) investing activities (16,263) 3,823
-------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings (payments) on debt, net 22,462 (7,683)
Deferred financing costs (1,762) (990)
-------- -------
Net cash provided by (used in) financing activities 20,700 (8,673)
-------- -------
EFFECT OF EXCHANGE RATE CHANGES (114) 118
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
AND RESTRICTED CASH 1,701 (4,015)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH,
BEGINNING OF PERIOD 5,809 5,721
-------- -------
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH,
END OF PERIOD $ 7,510 $ 1,706
======== =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
CONDOR TECHNOLOGY SOLUTIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) BASIS OF PRESENTATION
Condor Technology Solutions, Inc., a Delaware corporation (the
"Company"), was founded in August 1996. The Company is an information
technology ("IT") and e-commerce solutions provider to middle market
companies, Fortune 1000 firms and government agencies. In order to
become an end-to-end provider of a wide range of IT services and
solutions, Condor entered into the agreements (the "Mergers") to
acquire all of the outstanding stock of eight established IT service
providers (the "Founding Companies") and concurrently completed an
initial public offering (the "Offering") of its common stock (the
"Common Stock"). On February 5, 1998 and February 10, 1998,
respectively, the Offering and Mergers were completed.
Since February 10, 1998, the Company has acquired seven additional IT
service providers. The Founding Companies along with the additional
acquisitions are referred to herein as "Operating Companies". All
acquisitions have been accounted for using the purchase method of
accounting and are reflected as of their respective acquisition dates.
During 1999, the Company sold two of its Operating Companies and shut
down another one. In June 2000, the Company sold the Safari Solutions
business unit of the Company.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles
for interim financial reporting and Securities and Exchange Commission
regulations. Certain information and footnote disclosures normally
included in the 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 financial statements reflect all adjustments (of a normal and
recurring nature) which are necessary to present fairly the financial
position, results of operations and cash flows for the interim periods.
The results for the three and nine months ended September 30, 2000 are
not necessarily indicative of the results that may be expected for the
year ending December 31, 2000.
The financial statements should be read in conjunction with the
Company's audited consolidated financial statements included in the
Company's most recently filed Form 10-K.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
For a description of the Company's accounting policies, refer to the
Notes to the Financial Statements of the Company included in the
Company's most recently filed Form 10-K.
(3) UNCERTAINTY OF MEETING FUTURE COMMITMENTS
In April 1999, the Company entered into a syndicated credit facility
(the "Credit Facility") underwritten and arranged by a major commercial
bank (the "Bank") as discussed in Note 8. As part of the Credit
Facility, the Company must comply with various loan covenants. At
September 30, 2000, the Company had an outstanding balance of $37.8
million borrowed under the Credit Facility.
In July 1999, the Company and the Bank entered into a forbearance
agreement with respect to the Company's noncompliance with certain
financial covenants of its Credit Facility. On March 1, 2000, the
Company and the Bank entered into the Fifth Amendment Agreement (the
"Fifth Amendment") extending the terms and conditions of forbearance
though February 28, 2001. On May 15, 2000, the Company entered into the
First Amendment to the Fifth Amendment Agreement (the "First Amendment
to the Fifth Amendment"). Under the terms and conditions of the Fifth
Amendment and the First Amendment to the Fifth Amendment, the Company
is required to permanently reduce the outstanding principal balance by
various amounts on or before certain dates and prior to February 28,
2001. In addition, the Company must provide the Bank, on or before
4
<PAGE>
January 31, 2001, with a commitment letter evidencing a refinancing, an
asset sale, an equity infusion or some other transaction generating
sufficient cash proceeds to repay the Bank in full on or prior to
February 28, 2001.
In order to comply with the requirements of the Fifth Amendment and the
First Amendment to the Fifth Amendment, the Company is actively
pursuing an overall business plan that includes the potential
disposition of one or more of the Operating Companies in an orderly and
systematic fashion. The intended consequence of this business plan is
the settlement of the Credit Facility obligation. The implementation of
this business plan may result in one or more of the following: (1) the
disposal of the equity stock or assets of individual Operating
Companies; (2) the disposal of assets of partial and/or entire
divisions; and (3) the refinancing of the Company's remaining Credit
Facility obligation. Management intends to complete this business plan
no later than the end of February 2001. Accordingly, substantial doubt
currently exists about the Company's ability to meet its obligations
under the Fifth Amendment.
If unable to fully implement this business plan or obtain replacement
financing, the Company may experience material adverse financial
effects and its ability to continue as a going concern will depend upon
its ability to renegotiate its Credit Facility arrangement.
(4) ASSETS DISPOSED OF AND OTHER COSTS
ASSETS DISPOSED OF
As part of its overall business plan to settle the Credit Facility
obligation, the Company consummated a transaction for the sale of the
assets of the Safari Solutions business unit to an independent third
party on June 30, 2000. The total sales price was approximately $12.3
million which was composed of $4.3 million in cash received at closing
and $8.0 million in payments contingent upon revenue generated from the
product sales of the Safari Solutions unit. The Company incurred
approximately $0.8 million in direct costs related to the sale.
Consistent with the Company's overall business plan, which contemplated
the sale of the Safari Solutions unit as well as other parts of the
Company, the December 31, 1999 goodwill impairment analysis took this
sale into consideration. Therefore, the value of the purchase price
received and the book value of the net liabilities sold were recorded
as a reduction to the Company's existing goodwill balance. The goodwill
balance was reduced by approximately $5.7 million at June 30, 2000.
Net revenues for the Safari Solutions unit for the nine months ended
September 30, 2000 were $5.3 million. Loss from operations for the nine
months ended September 30, 2000 was $0.2 million. There was no revenue
or loss from operations for the three months ended September 30, 2000.
OTHER COSTS
During the three and nine months ended September 30, 2000, the Company
recorded other special charges of approximately $0.4 million and $2.5
million, respectively, which are included in other costs on the
consolidated statement of operations. Included in this total are
employee retention costs for restricted stock of $0.4 million and $1.6
million for the three and nine months, respectively, as discussed in
Note 5 and voluntary severance benefits of $0.9 million for the nine
months ended September 30, 2000. The Company will pay all of the
severance benefits by December 31, 2000.
(5) RESTRICTED STOCK
During 1999, the Company granted restricted stock awards to certain key
employees to purchase shares of the Company's Common Stock at a
purchase price of $0.01 per share. During the three months ended
September 30, 2000, the Company issued restricted stock awards for
20,000 shares which vest in three installments every twelve months
beginning May 16, 2001. During the three and
5
<PAGE>
nine months ended September 30, 2000, approximately 50,000 and 230,000
shares, respectively, of unvested, restricted shares were forfeited by
employees upon their separation from the Company, and there were
approximately 1.1 million shares of restricted stock still outstanding
at September 30, 2000.
The Company records compensation expense ratably over the vesting
period of the individual issues based on fair value of the Common Stock
on the date of issuance. During the three and nine months ended
September 30, 2000, the Company recorded retention costs of
approximately $0.4 million and $1.2 million, respectively, related to
restricted stock.
(6) EARNINGS PER SHARE
The Company calculates earnings per share ("EPS") on both a basic and
diluted basis. Dilutive securities are excluded from the computation in
periods which they have an anti-dilutive effect. Net loss available to
common stockholders and common equivalent stockholders is equal to net
loss for all periods presented. The weighted average number of shares
used in the calculation of EPS for the three months ended September 30,
1999 and 2000 were 13,840,000 and 15,318,000, respectively. The
weighted average number of shares for the nine months ended September
30, 1999 and 2000 were 12,954,000 and 15,266,000, respectively.
(7) COMPREHENSIVE INCOME
Comprehensive income includes net income (loss) and foreign currency
translation adjustments and is detailed as follows for the periods
presented:
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------------- ----------------------------------
1999 2000 1999 2000
--------------- --------------- ---------------- ----------------
(in thousands)
<S> <C> <C> <C> <C>
Net loss $ (4,327) $ (1,465) $ (33,783) $(8,808)
Foreign currency translation adjustment 35 - (114) 118
--------------- --------------- ---------------- ----------------
Comprehensive income (loss) $ (4,292) $ (1,465) $ (33,897) $ (8,690)
=============== =============== ================ ================
</TABLE>
(8) DEBT
In July 1999, the Company and the Bank entered into a forbearance
agreement with respect to the Company's noncompliance with certain
financial covenants of its Credit Facility. As of March 1, 2000, the
Company and the Bank entered a Fifth Amendment in which the Bank
extended their agreement of forbearance of their rights and remedies
under the Credit Facility through February 28, 2001. As of May 15,
2000, the Company and the Bank entered a First Amendment to the Fifth
Amendment. The Fifth Amendment and First Amendment to the Fifth
Amendment set forth certain permanent debt reduction requirements on or
before certain dates prior to February 28, 2001. The Company is
required to pay $8 million by August 1, 2000, $10 million by December
31, 2000, $50,000 each month from June to August 2000, $125,000 each
month beginning September 2000 and thereafter, and an extension fee of
$650,000. In addition, the Company's ability to obtain additional
advances under the Credit Facility will be limited during the
forbearance period. On July 27, 2000 the Bank agreed to accept a cash
payment of $2.7 million and the assignment of the contingent payments
related to the sale of the Safari Solutions unit in lieu of the $8.0
million payment due on August 1, 2000.
For the three and nine months ended September 30, 2000, the Company
incurred approximately $0.3 million and $1.0 million, respectively, of
financing costs related to the renegotiation of the Company's credit
facility which is included in interest and other expense on the
statement of operations.
6
<PAGE>
(9) SUPPLEMENTAL CASH FLOW INFORMATION
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
------------------------------
1999 2000
--------------- --------------
(in thousands)
<S> <C> <C>
Cash paid during the year for:
Federal income tax payments $ 2,725 $ -
State income tax payments 1,113 48
Interest payments 2,479 3,670
Business acquisitions:
Cash paid for business acquisitions $ 6,780 $ -
Less cash acquired (1,203) -
--------------- --------------
Cash paid for business acquisitions, net 5,577 -
Issuance of common stock for business acquisition 2,330 -
--------------- --------------
Total purchase price 7,907 -
Less fair value of net assets acquired, net of cash 1,700 -
--------------- --------------
Excess of fair value over net assets acquired $ 9,607 $ -
=============== ==============
</TABLE>
(10) SEGMENT REPORTING
The Company has four reporting segments: Consulting Solutions; System
Support Solutions; Government Solutions; and Enterprise Performance
Solutions ("EPS division"). These four segments correspond to the
Company's divisional structure which was changed in the second quarter
of 1999.
The Consulting Solutions division provides decision support, custom
application development, software package implementation, and contract
staffing and recruiting. These services involve the development of near
and long-term technology plans that help clients achieve specific
strategic business objectives and include IT needs analysis, technology
infrastructure design, future technology planning and refreshment,
systems architecture development, decision support planning and
analysis, and business process automation.
The System Support division provides customer management solutions and
support services, call center and help-desk operations, as well as a
complete array of desktop systems maintenance and support services to
its clients, including hardware and software maintenance, systems
testing and engineering, and hardware procurement.
The Government Solutions division offers its public sector clients a
variety of management consulting services, interactive media services,
system maintenance and hardware procurement.
The EPS division offers its clients a single source for enterprise
resource planning and e-commerce solutions focusing on implementation
and consulting related to the SAP and Trilogy software packages. The
Division focuses on the following service lines: installation, business
process design, configuration and implementation, and staff
augmentation.
The accounting policies of the reporting segments are the same as those
described in Note 2. The Company evaluates the performance of its
operating segments based on operating income (excluding the effects of
intercompany transactions). The "Other" column includes the operating
results of the Safari Solutions unit, which was sold on June 30, 2000,
and corporate related items not allocated to the divisions. For the
nine months ended September 30, 1999, "Other" includes the operations
of
7
<PAGE>
two Operating Companies sold in October, 1999 and one Operating Company
shut down in the second quarter of 1999.
Selling, general and administrative costs incurred by the Company's
corporate office have been allocated to the divisions and "Other"
proportionately, based on total revenue and total assets. In addition,
the impairment of intangible assets recorded in 1999 has been allocated
to the Consulting Solutions, EPS division and "Other" segments for the
nine months ended September 30, 2000.
Summarized financial information concerning the Company's reportable
segments is shown in the following tables.
For the nine months ended September 30, 2000:
<TABLE>
<CAPTION>
CONSULTING SYSTEM GOVERNMENT EPS
SOLUTIONS SUPPORT SOLUTIONS DIVISION OTHER CONSOLIDATED
------------ --------- ----------- ---------- ------- --------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
IT service revenues $ 15,690 $13,233 $16,140 $ 20,726 $ 5,278 $71,067
Hardware procurement revenues - 21,589 1,858 - - 23,447
-------- ------- ------- -------- -------- --------
Total revenues $ 15,690 $34,822 $17,998 $ 20,726 $ 5,278 $94,514
-------- ------- ------- -------- -------- --------
Income (loss) from operations $ (2,379) $ 2,250 $ 1,750 $ (3,467) $(2,554) (a) $(4,400)
-------- ------- ------- -------- -------- --------
Total assets $ 10,614 $23,325 $39,728 $ 19,716 $ 2,702 $96,085
-------- ------- ------- -------- -------- --------
For the nine months ended September 30, 1999:
CONSULTING SYSTEM GOVERNMENT EPS
SOLUTIONS SUPPORT SOLUTIONS DIVISION OTHER CONSOLIDATED
------------ --------- ----------- ---------- ------- --------------
(IN THOUSANDS)
IT service revenues $ 23,153 $18,503 $20,191 $ 31,267 $ 14,958 $108,072
Hardware procurement revenues - 22,885 8,510 - 23,120 54,515
-------- ------- ------- -------- -------- --------
Total revenues $ 23,153 $41,388 $28,701 $ 31,267 $ 38,078 $162,587
-------- ------- ------- -------- -------- --------
Income (loss) from operations $ (2,132) $ 5,093 $ 5,508 $ (2,557) $(35,176) (b) $(29,264)
-------- ------- ------- -------- -------- --------
Total assets $ 36,154 $25,910 $39,156 $ 55,936 $ 21,708 $178,864
-------- ------- ------- -------- -------- --------
</TABLE>
-------------------------------------------------
(a) Includes other costs of $2.2 million and operating losses from
"Other" segment of $0.3 million.
(b) Includes impairment of intangible assets of $30.7 million, other
costs of $0.9 million and operating losses from "Other" segment of
$3.5 million.
(11) COMMITMENTS AND CONTINGENCIES
In the course of the Company's consolidation efforts, SCM LLC d/b/a The
Commonwealth Group ("Commonwealth"), the promoter of the Offering, and
the Company negotiated with Emtec, Inc. ("Emtec"), an IT service
company based in Pennsylvania, with a view to turning Emtec into one of
the Founding Companies. As part of the process, Emtec's investment
banker and Commonwealth executed two confidentiality agreements
pursuant to which each agreed, among other things, not to disclose
certain confidential information and Commonwealth agreed that it would
not seek to enter into a business transaction with any companies to be
introduced to it by Emtec's investment banker for a period of two years
without such investment banker's prior written consent. On October 28,
1997, Emtec filed a Complaint in the United States District Court for
the Eastern District of Pennsylvania against the Company, Commonwealth,
J. Marshall Coleman, a Managing Director of Commonwealth and the former
Chairman of the Board of the Company, and Kennard F. Hill, the
Company's Chairman of the Board and Chief Executive Officer, captioned
EMTEC, INC. V. CONDOR
8
<PAGE>
TECHNOLOGY SOLUTIONS, INC., SCM LLC, ET AL., Civil No. 97-6652. The
complaint alleged breach of contract, tortuous interference with
Emtec's business relationship with Corporate Access, Inc. ("Corporate
Access") and Computer Hardware Maintenance Corporation ("CHMC"), two of
the Founding Companies, and misappropriation of a trade secret arising
out of the participation of CHMC and Corporate Access in the
consolidation and the Offering without Emtec's written consent. In
connection with the three causes of action, Emtec demanded that the
defendants disgorge the financial benefits that they have and will
obtain as a result of their alleged breach of contract and seeks
compensatory and punitive damages. On December 31, 1997, the defendants
filed an Answer, denying the allegations and asserting various
affirmative defenses. The court denied Emtec's motion to amend the
complaint to add a claim of unjust enrichment. A motion by the Company
for partial summary judgment was granted in part to eliminate Emtec's
claim for misappropriation of a trade secret and later Emtec stipulated
to a dismissal of its claim of tortuous interference with business
relations, and to the removal of both Mr. Coleman and Mr. Hill as
defendants in the suit. On June 20, 2000, the Company issued Emtec
250,000 shares of its Common Stock to settle the litigation.
On September 29, 2000, the Company was served with a Summons and
Complaint in the action, GEORGE R. BLICK, CHARLES F. CROWE, LOUIS J.
FISHER, R. JOSEPH MARKET AND HARTLAND GROUP LLC v. CONDOR TECHNOLOGY
SOLUTIONS, INC., U. S. District Court, District of Maryland. The
Complaint alleges breach of contract and requests damages in the
aggregate of approximately $4,240,000, plus interest and costs. This
litigation relates to the Company's obligations with respect to a
contingent purchase liability under the agreement to purchase Federal
Computer Corporation, one of the companies acquired by the Company in
the consolidation in February 1998.
The Company is a party to other legal proceedings and disputes related
to the Company's day to day business operations, none of which, in the
opinion of management, are material to the financial position or
results of operations of the Company.
(12) CONTINGENT PURCHASE LIABILITIES
In connection with the acquisition of three of the Operating Companies,
the Company is obligated to issue shares of Common Stock and pay cash
under the contingent payment provisions of certain purchase agreements,
as amended. As of September 30, 2000, the Company has accrued
approximately $10.3 million. Of this amount, approximately $7.9 million
was past due.
As to the share portion which is past due (the equivalent of $4,845,000
in value), one of the purchase agreements calls for valuation of the
shares based on certain NASDAQ National Market prices in March 2000.
Assuming the use of the closing prices of the Common Stock on the OTC
bulletin board for this purpose, 1,469,800 shares of Common Stock would
be issuable as contingent consideration under that agreement. Another
purchase agreement calls for valuing the shares using NASDAQ National
Market prices or if not applicable, an appraiser. Assuming the
appraiser appraised the value of such shares as of March 30, 2000 (the
date set for issuance) and that the appraiser used the closing price of
the Common Stock on the OTC bulletin board, 2,952,637 shares of Common
Stock would be issuable as contingent consideration. With respect to
the cash portion of the contingent consideration which is past due
($3.1 million in aggregate), the Company has notified the recipients
that it is unable to pay such amount at this time.
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion is qualified in its entirety by reference to
and should be read in conjunction with the Annual Report on Form 10-K
of the Company for its fiscal year ended December 31, 1999 (the "Form
10-K"). A number of statements in this Quarterly Report on Form 10-Q
address activities, events or developments which the Company
anticipates may occur in the future, including such matters as the
Company's strategy for internal growth, additional capital expenditures
(including the amount and nature thereof), acquisitions of assets and
businesses, industry trends and other such matters. For a discussion of
important factors which could cause actual results to differ materially
from the forward-looking statements see "Special Note Regarding Forward
Looking Statements."
INTRODUCTION
The Company earns revenues from providing IT services and hardware
procurement. The Company recognizes IT service revenues using formulas
based on time and materials, whereby revenues are recognized as costs
are incurred at agreed-upon billing rates. For projects billed on a
fixed-price basis, revenue is recognized using the percentage of
completion method. Percentage of completion is determined using total
costs as a cost input measure. Revenues from license fees on
proprietary software are recognized when a non-cancelable license
agreement has been signed, the product has been delivered, collection
is probable and all significant obligations relating to the license
have been satisfied. There are no significant post-sales support
obligations related to the Company's license fees. Revenues from
hardware procurement are recognized upon shipment or acceptance of the
equipment. When installation services are an integral component of the
hardware procurement, revenue is recognized at the customer's
acceptance of the equipment.
Cost of revenues includes the provision of services and material
directly related to the revenues, costs of acquisition of hardware
resold to clients, subcontracted labor or other outside services and
other direct costs associated with revenues, as well as an allocation
of certain indirect costs.
Selling, general and administrative costs include salaries, benefits,
commissions payable to the Company's sales and marketing personnel,
recruiting, finance and other general and administrative costs.
In July 1996, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 97 ("SAB 97") relating to business combinations
immediately prior to an initial public offering. SAB 97 requires that
these combinations be accounted for using the purchase method of
acquisition accounting. The Company was identified as the "accounting
acquiror" for financial statement presentation purposes.
RESULTS OF OPERATIONS
The Company's consolidated financial statements have been prepared
based on accounting for all companies acquired using the purchase
method of acquisition accounting. The financial statements include
operations of the Operating Companies from their respective dates of
acquisition.
10
<PAGE>
UNAUDITED CONSOLIDATED RESULTS FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 1999 AND 2000
The following table sets forth certain selected financial data for the
Company and as a percentage of revenues for the periods indicated:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30,
------------------------------------------------------------
1999 2000
--------------------------- ----------------------------
(in thousands, except percentages)
<S> <C> <C> <C> <C>
IT service revenues $ 33,018 66.8% $ 19,680 73.9%
Hardware procurement revenues 16,435 33.2% 6,963 26.1%
-------- ---- -------- ----
Total revenues 49,453 100.0% 26,643 100.0%
-------- ---- -------- ----
Cost of IT services 20,118 60.9% 13,055 66.3%
Cost of hardware procurement 14,663 89.2% 6,478 93.0%
-------- -------
Total cost of revenues 34,781 70.3% 19,533 73.3%
-------- -------
Gross profit 14,672 29.7% 7,110 26.7%
Selling, general and administrative expenses 12,969 26.2% 5,527 20.7%
Depreciation and amortization 1,830 3.7% 1,224 4.6%
Impairment of intangible assets 1,500 3.1% -- -%
Other costs 1,535 3.1% 448 1.7%
-------- ---- -------- ----
Loss from operations $ (3,162) (6.4)% $ (89) (0.3)%
======== ==== ======== ====
</TABLE>
REVENUES. Revenue decreased $22.8 million or 46.1%, from $49.4 million
for the three months ended September 30, 1999 to $26.6 million for the
three months ended September 30, 2000. IT service revenue decreased
$13.3 million, or 40.4%, and hardware procurement revenue decreased
$9.5 million, or 57.6%.
IT service revenue decreased in all of the Company's divisions. The
Government Solutions division revenue decline was primarily
attributable to reduced maintenance revenue. The EPS division
experienced a decline in the ERP market beginning in the second half of
1999 which continued into 2000 in both software sales and
implementation services. The Consulting Solutions division revenue
decline was primarily attributable to a reduction in application
development and installation services as well as a decline in contract
staffing and recruiting placement. The System Solutions Division
revenue decrease was primarily the result of two large call center
contracts not being renewed in 2000. Additionally, the Safari
Solutions unit was sold as of June 30, 2000 which resulted in a
reduction of IT service revenue of $3.2 million.
The decrease in hardware procurement revenue was primarily attributable
to the sale of U.S. Communications, Inc. and Corporate Access, Inc. in
October 1999, fluctuations in product delivery and the shift in the
Company's focus from hardware procurement to higher margin IT service
revenues.
COST OF REVENUES. Cost of revenues decreased $15.3 million or 43.8%
from $34.8 million for the three months ended September 30, 1999 to
$19.5 million for the three months ended September 30, 2000. This
decrease is primarily attributable to the revenue decline discussed
above. Cost of revenues as a percentage of revenues increased from
70.3% of revenues for the three months ended September 30, 1999 to
73.3% for the three months ended September 30, 2000. This increase was
primarily a result of the sale of the Safari Solutions unit.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses decreased $7.5 million, or 57.4%, from $13.0
million to $5.5 million for the three months ended September 30, 1999
and 2000, respectively. This decrease is a result of the sale of two
Operating
11
<PAGE>
Companies and the shutdown of MST in 1999, the sale of the Safari
Solutions unit at June 30, 2000 and the effect of cost reduction
programs initiated by the Company in 2000. Selling, general and
administrative costs decreased from 26.2% of revenues to 20.7% of
revenues for the three months ended September 30, 1999 and 2000,
respectively.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization decreased
$0.6 million or 33.1%, from $1.8 million for the three months ended
September 30, 1999 to $1.2 million for the three months ended September
30, 2000. The decrease is primarily attributable to a reduction in
amortization expense related to the impairment of goodwill recorded in
1999 as well as the reduction of goodwill with the sale of the Safari
Solutions unit at June 30, 2000.
OTHER COSTS. Other costs for the three months ended September 30, 2000
include retention costs of $0.4 million. Other costs for the three
months ended September 30, 1999 include retention costs of $0.7 million
and voluntary severance and other costs of $0.8 million.
The following table sets forth certain selected financial data for the
Company and as a percentage of revenues for the periods indicated:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
---------------------------------------------------------------
1999 2000
----------------------------- ------------------------------
(in thousands, except percentages)
<S> <C> <C> <C> <C>
IT service revenues $ 108,072 66.5% $ 71,067 75.2%
Hardware procurement revenues 54,515 33.5% 23,447 24.8%
----------- ---------- ----------- -----------
Total revenues 162,587 100.0% 94,514 100.0%
----------- ---------- ----------- -----------
Cost of IT services 63,018 58.3% 44,130 62.1%
Cost of hardware procurement 49,042 90.0% 21,247 90.6%
----------- -----------
Total cost of revenues 112,060 68.9% 65,377 69.2%
----------- -----------
Gross profit 50,527 31.1% 29,137 30.8%
Selling, general and administrative expenses 38,780 23.9% 26,885 28.4%
Depreciation and amortization 6,322 3.9% 4,163 4.4%
Impairment of intangible assets 30,736 18.9% -- -%
Other costs 3,953 2.4% 2,489 2.6%
----------- ---------- ----------- -----------
Loss from operations $ (29,264) (18.0)% $ (4,400) (4.6)%
=========== ========== =========== ===========
</TABLE>
REVENUES. Revenue decreased $68.1 million or 41.9%, from $162.6 million
for the nine months ended September 30, 1999 to $94.5 million for the
nine months ended September 30, 2000. IT service revenue decreased
approximately $37.0 million, or 34.2%, and hardware procurement revenue
decreased $31.1 million, or 57.0%.
IT service revenue decreased in all of the Company's divisions. The
Government Solutions division revenue decline was primarily
attributable to reduced maintenance revenue as well as a reprocurement
of a large government contract at a reduced revenue rate. The EPS
division experienced a decline in the ERP market beginning in the
second half of 1999. The Consulting Solutions division revenue decline
was primarily attributable to the shut down of MST's operations due to
the loss of a large insurance client during the second quarter of 1999
as well as a decline in contract staffing and recruiting placement. The
System Solutions Division revenue decrease was primarily the result of
the reprocurement of a large call center contract for a five year
period at a reduced revenue rate. Additionally, the Safari Solutions
unit was sold as of June 30, 2000 which resulted in a reduction of
IT service revenue of $5.0 million.
12
<PAGE>
The decrease in hardware procurement revenue was primarily attributable
to the sale of U.S. Communications, Inc. and Corporate Access, Inc. in
October 1999, fluctuations in product delivery and the shift in the
Company's focus from hardware procurement to higher margin IT service
revenues.
COST OF REVENUES. Cost of revenues decreased $46.7 million or 41.7%
from $112.1 million for the nine months ended September 30, 1999 to
$65.4 million for the nine months ended September 30, 2000. This
decrease is primarily attributable to the revenue decline discussed
above. Cost of revenues as a percentage of revenues increased from
68.9% of revenues for the nine months ended September 30, 1999 to 69.2%
for the nine months ended September 30, 2000. This increase was
primarily a result of the sale of the Safari Solutions unit.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses decreased $11.9 million or 30.7%, from $38.8
million to $26.9 million for the nine months ended September 30, 1999
and 2000, respectively. This decrease is a result of the sale of two
Operating Companies and the shutdown of MST in 1999, the sale of the
Safari Solutions unit as of June 30, 2000 and the effect of cost
reduction programs initiated by the Company in 2000. Selling, general
and administrative costs increased from 23.9% of revenues to 28.4% of
revenues for the nine months ended September 30, 1999 and 2000,
respectively.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization decreased
$2.1 million or 34.2%, from $6.3 million for the nine months ended
September 30, 1999 to $4.2 million for the nine months ended September
30, 2000. The decrease is primarily attributable to a reduction in
amortization expense related to the impairment of goodwill recorded in
1999 as well as the reduction of goodwill with the sale of the Safari
Solutions unit at June 30, 2000.
OTHER COSTS. Other costs for the nine months ended September 30, 2000
include retention costs of $1.6 million and voluntary severance and
other costs of $0.9 million. Other costs for the nine months ended
September 30, 1999 include restructuring costs of $1.4 million,
contract losses of $0.8 million, retention costs of $0.7 million and
voluntary severance and other costs of $1.0 million.
LIQUIDITY AND CAPITAL RESOURCES
The Company is a holding company that conducts its operations though
its subsidiaries. Accordingly, the Company's principal sources of
liquidity are the cash flows of its operating divisions and cash
available from its credit facilities. At September 30, 2000, the
Company had $0.3 million in cash and cash equivalents and $38.0 million
of indebtedness outstanding, which consists primarily of borrowings on
its credit facility (the "Credit Facility").
In accordance with its Credit Facility, the Company must comply with
various loan covenants including: (i) maintenance of certain financial
performance ratios; (ii) limits on capital expenditures; (iii)
restrictions on additional indebtedness; (iv) restrictions on liens,
guarantees, advances and dividends; and (v) restrictions on the type,
size and number of acquisitions.
In July 1999, the Company and the Bank entered into a forbearance
agreement with respect to the Company's noncompliance with certain
financial covenants of its Credit Facility. As of March 1, 2000, the
Company and the Bank entered a Fifth Amendment in which the Bank
extended their agreement of forbearance of their rights and remedies
under the Credit Facility through February 28, 2001. As of May 15,
2000, the Company and the Bank entered a First Amendment to the Fifth
Amendment. The Fifth Amendment and First Amendment to the Fifth
Amendment set forth certain permanent debt reduction requirements on or
before certain dates prior to February 28, 2001. The Company is
required to pay $8 million by August 1, 2000, $10 million by December
31, 2000, $50,000 each month from June to August 2000, $125,000 each
month beginning September 2000 and thereafter, and an extension fee of
$650,000. In addition, the Company's ability to obtain additional
advances under the Credit Facility will be limited during the
forbearance period. On July
13
<PAGE>
27, 2000, the Bank agreed to accept a cash payment of $2.7 million and
the assignment of the contingent payments related to the sale of the
Safari Solutions Division in lieu of the $8.0 million payment due on
August 1, 2000.
In order to comply with the requirements of the Fifth Amendment and the
First Amendment to the Fifth Amendment, the Company is actively
pursuing an overall business plan that includes the potential
disposition of one or more of the Operating Companies in an orderly and
systematic fashion. The intended consequence of this business plan is
the settlement of the Credit Facility obligation. The implementation of
this business plan may result in one or more of the following: (1) the
disposal of the equity stock or assets of individual Operating
Companies; (2) the disposal of assets of partial and/or entire
divisions; and (3) the refinancing of the Company's remaining Credit
Facility obligation. Management intends to complete this business plan
no later than the end of February 2001.
If unable to fully implement this business plan or negotiate a new
agreement with existing lenders or obtain replacement financing, the
Company may experience material adverse financial effects and its
ability to continue as a going concern may be impaired.
Net cash provided by operating activities was $0.7 million for the nine
months ended September 30, 2000. Net cash provided by investing
activities was $3.8 million for the nine months ended September 30,
2000, which included $4.3 million provided by the sale of the Safari
Solutions unit and $0.6 million by the sale of equity securities,
offset by $1.0 million used for purchases of property, equipment and
other costs.
Net cash used in financing activities was $8.7 million for the nine
months ended September 30, 2000, which is comprised of debt repayments
of $7.7 million and outflows for deferred financing costs of $1.0
related to the Company's Credit Facility.
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
Statements in this Form 10-Q based on current expectations that are not
strictly historical statements, such as the Company's or management's
intentions, hopes, beliefs, expectations, strategies, or predictions,
are forward-looking statements. Such statements, or any other variation
thereof regarding the Company's future activities or other future
events or conditions within the meaning of Section 27A of the
Securities Act and Section 21E of the Securities Exchange Act of 1934,
as amended, are intended to be covered by the safe harbors for
forward-looking statements created thereby. Investors are cautioned
that all forward-looking statements involve risks and uncertainty,
including without limitation, the sufficiency of the Company's working
capital and the ability of the Company to realize benefits from
consolidating certain general and administrative functions, to pursue
strategic acquisitions and alliances, to retain management and to
implement its focused business strategy, to leverage consulting
services, secure full-service contracts, to expand client
relationships, successfully recruit, train and retain personnel, expand
services and geographic reach and successfully defend itself in ongoing
and future litigation.
14
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to market risk from adverse changes in interest
rates and foreign currency exchange rates.
INTEREST RATE RISKS. The Company is exposed to risk from changes in
interest rates as a result of its borrowing activities. At September
30, 2000, the Company had total debt of $38.0 million of which $37.8
million represents borrowings on its Credit Facility at a variable
interest rate. Interest on the Company's Credit Facility is directly
affected by changes in the Prime interest rate, and therefore
fluctuations may have a material impact on the Company's financial
results.
FOREIGN CURRENCY EXCHANGE RISK. The Company's international operations
are subject to foreign exchange rate fluctuations. The Company derived
none and approximately 1% of its revenue for the three and nine months
ended September 30, 2000, respectively, from services performed in the
Netherlands, Germany and Mexico. Management does not believe that the
Company's exposure to foreign currency rate fluctuations is material.
15
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In the course of the Company's consolidation efforts, SCM LLC d/b/a The
Commonwealth Group ("Commonwealth"), the promoter of the Offering, and
the Company negotiated with Emtec, Inc. ("Emtec"), an IT service
company based in Pennsylvania, with a view to turning Emtec into one of
the Founding Companies. As part of the process, Emtec's investment
banker and Commonwealth executed two confidentiality agreements
pursuant to which each agreed, among other things, not to disclose
certain confidential information and Commonwealth agreed that it would
not seek to enter into a business transaction with any companies to be
introduced to it by Emtec's investment banker for a period of two years
without such investment banker's prior written consent. On October 28,
1997, Emtec filed a Complaint in the United States District Court for
the Eastern District of Pennsylvania against the Company, Commonwealth,
J. Marshall Coleman, a Managing Director of Commonwealth and the former
Chairman of the Board of the Company, and Kennard F. Hill, the
Company's Chairman of the Board and Chief Executive Officer, captioned
EMTEC, INC. V. CONDOR TECHNOLOGY SOLUTIONS, INC., SCM LLC, ET AL.,
Civil No. 97-6652. The complaint alleged breach of contract, tortuous
interference with Emtec's business relationship with Corporate Access,
Inc. ("Corporate Access") and Computer Hardware Maintenance Corporation
("CHMC"), two of the Founding Companies, and misappropriation of a
trade secret arising out of the participation of CHMC and Corporate
Access in the consolidation and the Offering without Emtec's written
consent. In connection with the three causes of action, Emtec demanded
that the defendants disgorge the financial benefits that they have and
will obtain as a result of their alleged breach of contract and seeks
compensatory and punitive damages. On December 31, 1997, the defendants
filed an Answer, denying the allegations and asserting various
affirmative defenses. The court denied Emtec's motion to amend the
complaint to add a claim of unjust enrichment. A motion by the Company
for partial summary judgment was granted in part to eliminate Emtec's
claim for misappropriation of a trade secret and later Emtec stipulated
to a dismissal of its claim of tortuous interference with business
relations, and to the removal of both Mr. Coleman and Mr. Hill as
defendants in the suit. On June 20, 2000, the Company issued Emtec
250,000 shares of its Common Stock to settle the litigation.
On September 29, 2000, the Company was served with a Summons and
Complaint in the action, GEORGE R. BLICK, CHARLES F. CROWE, LOUIS J.
FISHER, R. JOSEPH MARKET AND HARTLAND GROUP LLC v. CONDOR TECHNOLOGY
SOLUTIONS, INC., U. S. District Court, District of Maryland. The
Complaint alleges breach of contract and requests damages in the
aggregate of approximately $4,240,000, plus interest and costs. This
litigation relates to the Company's obligations with respect to a
contingent purchase liability under the agreement to purchase Federal
Computer Corporation, one of the companies acquired by the Company in
the consolidation in February 1998.
The Company is a party to other legal proceedings and disputes related
to the Company's day to day business operations, none of which, in the
opinion of management, are material to the financial position or
results of operations of the Company.
16
<PAGE>
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits (see index on page 19)
(b) Reports on Form 8-K:
The Company filed the following:
(1) Form 8-K Current Report on July 19, 2000, related to
divestiture of Safari Solutions Division.
(2) Form 8-K Current Report on August 4, 2000 related to a
Letter Agreement between the Company and its Lenders.
(3) Form 8-K Current Report on August 9, 2000 related to
change in registrant's certifying accountant.
(4) Form 8-K/A Current Report on August 14, 2000 related to
change in registrant's certifying accountant.
17
<PAGE>
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.
CONDOR TECHNOLOGY SOLUTIONS, INC.
Date NOVEMBER , 2000 By: /s/ Kennard F. Hill
---------------------- -----------------------------------
Kennard F. Hill
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
(PRINCIPAL EXECUTIVE OFFICER)
Date NOVEMBER , 2000 By: /s/ W. M. Robbins
--------------------- ---------------------------------
W. M. Robbins
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
(PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER)
18
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
------- -----------
27 Financial Data Schedule for the three and nine months ended
September 30, 2000.
19
