<PAGE>
Filed Pursuant to Rule 424(B)(3)
Registration No. 333-35451-01
COMFORCE CORPORATION
PROSPECTUS SUPPLEMENT
Supplement to the Offer to Purchase any and all
outstanding shares of Common Stock of
Uniforce Services, Inc.
UNIFORCE SERVICES, INC.
PROXY STATEMENT SUPPLEMENT
Supplement to Proxy Statement in connection with
Solicitation of Proxies for Special Meeting of
Shareholders to be held on December 2, 1997.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON NOVEMBER 25, 1997, UNLESS EXTENDED (THE "EXPIRATION DATE"). SHARES
WHICH ARE TENDERED PURSUANT TO THE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO
THE EXPIRATION OF THE OFFER.
THIS PROSPECTUS/PROXY STATEMENT SUPPLEMENT IS DATED AND IS BEING MAILED TO
SHAREHOLDERS ON OR ABOUT NOVEMBER 19, 1997.
INTRODUCTION
This supplement ("Supplement") amends and supplements the Prospectus/Proxy
Statement, dated October 27, 1997 (the "Prospectus/Proxy Statement") (i)
pursuant to which COMFORCE Corporation, a Delaware corporation ("COMFORCE"), has
offered to purchase all of the outstanding shares of Common Stock, par value
$0.01 per share ("Uniforce Common Stock") of Uniforce Services, Inc., a New York
corporation ("Uniforce"), for a per share price (the "Per Share Amount") of
$28.00 in cash and 0.5217 shares of Common Stock, par value of $0.01 per share
("COMFORCE Common Stock") (the "Offer") and (ii) which was furnished to holders
of Uniforce Common Stock in connection with the solicitation by the Board of
Directors of Uniforce of proxies for use at a special meeting of shareholders of
Uniforce to consider and vote upon an Agreement and Plan of Merger among
COMFORCE, Uniforce and COMFORCE Columbus, Inc., an indirect wholly-owned
subsidiary of COMFORCE ("Subsidiary"), providing for the merger of Uniforce with
Subsidiary, with Uniforce to be the surviving corporation and an indirect
wholly-owned subsidiary of COMFORCE. Capitalized terms used herein but not
otherwise defined herein have the meanings set forth in the Prospectus/Proxy
Statement.
EXTENSION OF THE EXPIRATION DATE
COMFORCE and Subsidiary hereby extend the Expiration Date to 12:00 Midnight,
New York City Time, on November 25, 1997. This is an extension of one day.
Shares which are tendered pursuant to the Offer may be withdrawn at any time
prior to the expiration of the Offer. As of the date of this Supplement, at
least 1,892,406 Shares, representing approximately 62% of the issued and
outstanding Shares, have been tendered into the Offer.
THE FINANCING
On November 19, 1997 COMFORCE, through its wholly-owned subsidiary, COMFORCE
Operating, Inc. ("COI") entered into a Purchase Agreement with NatWest Capital
Markets Limited ("NatWest") pursuant to which NatWest agreed to purchase from
COI $110,000,000 aggregate principal amount of COI's 12% Senior Notes due 2007
(the "Notes") at a purchase price of 97% of the principal amount. Pursuant to
the Purchase Agreement, the Notes will be purchased and sold on or about
November 26, 1997. The material terms of the Notes are as described in the
Prospectus/Proxy Statement under the heading "The Financing--The Notes", except
that the Notes will be senior unsecured obligations of COI and will not be
guaranteed by the subsidiaries of COI.
<PAGE>
On November 19, 1997 COMFORCE entered into a Purchase Agreement with NatWest
pursuant to which NatWest agreed to purchase from COMFORCE $20,000,000 aggregate
principal amount of 15% Senior Secured PIK Debentures due 2009 (the
"Debentures") at 96% of the principal amount. Pursuant to the Purchase
Agreement, the Debentures will be purchased and sold on or about November 26,
1997. The material terms of the Debentures are as described in the
Prospectus/Proxy Statement under the heading "The Financing--The Debentures,"
except that (i) to the extent COMFORCE is prohibited from paying interest in
cash when cash payment is otherwise required by the terms of the Debentures, the
interest payable will increase by 2% per annum, not 20% per annum as described
in the prospectus/proxy statement; and (ii) the Debentures may be redeemed in
full at any time after issuance at a redemption price of 103% if such redemption
occurs in the first year after issuance of the Debentures and of 107.5% if such
redemption occurs anytime after the first year except that if the Debentures are
paid at their term there will be no redemption premium payable. The Debentures
will be sold in units with warrants as described in the Prospectus/Proxy
Statement. Each warrant will entitle the holder to acquire 8.45 shares of
COMFORCE Common Stock at an exercise price of $7.55 per share.
On November 18, 1997, Heller issued to COMFORCE a commitment letter (the
"Commitment Letter") pursuant to which Heller committed, subject to certain
conditions precedent, to provide a $75 million revolving loan facility. This
financing will be provided to the active subsidiaries of COI as borrower and
will be guaranteed by COI. As of the date of this Supplement, the parties are
preparing the documentation of the New Credit Agreement which will be consistent
with the terms of the Commitment Letter. COMFORCE anticipates that the New
Credit Agreement will be executed on or about November 26, 1997 which will also
serve as the Closing Date of the New Credit Agreement. The terms of the
Commitment Letter are consistent with the terms of the Proposal letter described
in the Prospectus/Proxy Statement under the heading "The Financing--The New
Credit Facility".
As a result of the financing described above, the table of sources and uses
of funds necessary to consummate the Offer and Merger and the refinancing of
COMFORCE and Uniforce debt described in the Prospectus/Proxy Statement has been
amended as follows:
<TABLE>
<S> <C> <C> <C>
SOURCES: Notes to be issued by COI ......................................... $ 110.0
Debentures......................................................... 20.0
Bank Financing..................................................... 37.0
Existing Cash Balances............................................. 7.2
---------
Total.......................................................... $ 174.2
---------
---------
USES: Purchase of Shares of Uniforce..................................... $ 93.6
Refinance Existing Debt of Uniforce................................ 36.1
Refinance Existing Debt of COMFORCE................................ 36.5
Transaction Costs.................................................. 8.0
---------
Total.......................................................... $ 174.2
---------
---------
</TABLE>
<PAGE>
UNAUDITED PRO FORMA FINANCIAL STATEMENTS
OF COMFORCE CORPORATION AND SUBSIDIARIES
Attached to this supplement are unaudited pro forma financial statements
reflecting the third quarter results of COMFORCE and Uniforce and the interest
rates of the Notes and the Debentures, which differ from the rates assumed in
the unaudited pro forma financial statements included in the Prospectus/Proxy
Statement, which should be substituted in their entirety with the attached
statements:
UNIFORCE SERVICES, INC. AND SUBSIDIARIES
FINANCIAL INFORMATION
Due to a clerical error, certain lines from the Uniforce Services, Inc. and
subsidiaries consolidated Balance Sheets for December 31, 1996 and 1995 were
inadvertently omitted from page F-3 of the Prospectus/Proxy Statement. The
following page is a corrected copy of page F-3.
Included with this Supplement for your information is a copy of the
Quarterly Report on Form 10-Q of Uniforce Services, Inc. for the period ended
September 30, 1997.
<PAGE>
UNIFORCE SERVICES, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
---------- ---------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents......................................... $5,283,422 6,444,859
Accounts receivable (net of allowance for doubtful accounts of
$68,000 and $167,000, in 1996 and 1995, respectively)........... 17,224,885 14,827,862
Funding and service fees receivable (net of allowance for doubtful
accounts of $212,000 and $402,000 in 1996 and 1995,
respectively)................................................... 18,759,814 20,918,753
Current maturities of notes receivable from licensees (net of
allowance for possible loss of $42,000 and $67,000 in 1996 and
1995, respectively)............................................. 87,051 132,258
Prepaid expenses and other current assets......................... 1,710,969 1,270,268
Deferred income taxes............................................. 201,149 347,149
---------- ---------
Total current assets............................................ 43,267,290 43,941,149
---------- ---------
Notes receivable from licensees (net of current maturities and
allowance for possible loss of $64,000 and $92,000 in 1996 and
1995, respectively)............................................... 136,157 182,642
Fixed assets--net................................................... 3,775,661 2,125,413
Deferred costs and other assets (net of accumulated amortization of
$2,105,777 and $1,685,970 in 1996 and 1995, respectively)......... 1,402,032 821,244
Cost in excess of fair value of net assets acquired (net of
accumulated amortization of $681,601 and $335,954 in 1996 and
1995, respectively)............................................... 6,388,240 3,525,741
---------- ---------
$54,969,380 50,596,189
---------- ---------
---------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Loan payable...................................................... $1,000,000 750,000
Payroll and related taxes payable................................. 6,372,319 7,540,947
Payable to licensees and clients.................................. 1,484,238 2,025,563
Income taxes payable.............................................. -- 351,690
Accrued expenses and other liabilities............................ 5,408,070 4,092,058
---------- ---------
Total current liabilities....................................... 14,264,627 14,760,258
---------- ---------
Loan payable--non-current........................................... 25,750,000 11,250,000
Capital lease obligation--non-current............................... 732,658 426,109
Stockholders' equity:
Common stock $.01 par value, authorized 10,000,000 shares; issued
5,109,788 and 4,991,213 shares in 1996 and 1995, respectively... 51,098 49,912
Additional paid-in capital........................................ 8,825,128 7,789,598
Retained earnings................................................. 27,296,463 23,990,043
---------- ---------
36,172,689 31,829,553
Treasury stock, at cost, 2,084,245 and 829,500 shares in 1996 and
1995, respectively.............................................. (21,950,594) (7,669,731)
---------- ---------
Total stockholders' equity...................................... 14,222,095 24,159,822
---------- ---------
$54,969,380 50,596,189
---------- ---------
---------- ---------
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
COMFORCE CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma combined financial statements reflect (i)
the treatment of the operation of the Company's jewelry business prior to
January 1, 1996 as a discontinued operation; (ii) the acquisition of business
operating in the staffing industry, including COMFORCE Telecom, Inc. ("COMFORCE
Telecom") in 1995, Williams Communications Services, Inc. ("Williams"), RRA,
Inc., Project Staffing Support Team, Inc. and DataTech Technical Services, Inc.
(collectively, "RRA"), Force Five, Inc. ("Force Five"), Continental Field
Services Corp. ("Continental"), and AZATAR Computer Systems, Inc. ("AZATAR"),
completed in 1996, RHO Company Incorporated ("Rhotech"), completed in 1997, and
the proposed acquisition of Uniforce Services, Inc. ("Uniforce") as if such
acquisitions had occurred on January 1, 1996 (other than the unaudited pro forma
balance sheet at September 30, 1997, which has been prepared as if all such
acquisitions were consummated as of such date) (and accounted for by the
purchase method); and (iii) the financing of $167 million of debt contemplated
by this transaction as if such debt were outstanding for all periods presented
and replaced all historical financing arrangements. Prior to its acquisition by
the Company, each of these acquired businesses operated as a separate
independent entity. Since the unaudited pro forma combined financial statements
set forth below show the combined financial condition and operating results of
these recently acquired businesses during periods when they were not under
common control or management, the information presented may not be indicative of
the results which would have actually been obtained had such acquisitions been
completed on the dates indicated, or the Company's future financial or operating
results. These unaudited pro forma combined financial statements should be read
in conjunction with the financial statements of the respective entities included
therein, and the related notes thereto.
F-2
<PAGE>
COMFORCE CORPORATION
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
AS OF SEPTEMBER 30, 1997
(IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
COMFORCE UNIFORCE ADJUSTMENTS(1) (THE COMPANY)
------------ ---------- -------------- --------------
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents................................... $ 2,670 $ 6,555 $ (7,151) $ 2,074
Restricted cash and equivalents............................. 360 -- -- 360
Accounts receivable and Service fees receivable, net........ 26,547 46,522 -- 73,069
Prepaid expenses............................................ 1,050 803 -- 1,853
Deferred financing fees..................................... 1,628 -- (1,628) --
Income tax receivable....................................... 590 -- -- 590
Deferred income taxes....................................... 2,028 201 3,000 5,229
Other assets................................................ 243 -- -- 243
------------ ---------- -------------- --------------
Total current assets.................................... 35,116 54,081 (5,779) 83,418
------------ ---------- -------------- --------------
Deferred financing fees..................................... -- 324 7,676 8,000
Property and equipment, net of accumulated depreciation..... 1,449 4,336 -- 5,785
Intangible assets, net of accumulated amortization.......... 38,722 7,051 85,614 131,387
Other assets................................................ 452 -- -- 452
------------ ---------- -------------- --------------
Total assets............................................ $ 75,739 $ 65,792 $ 87,511 $ 229,042
------------ ---------- -------------- --------------
------------ ---------- -------------- --------------
Current liabilities:
Borrowings under revolving line of credit................... $ 16,488 $ 2,000 $ (14,488) $ 4,000
Current portion of capitalized lease obligations............ -- 204 -- 204
Accounts payable............................................ 956 1,274 -- 2,230
Accrued expenses............................................ 5,232 2,502 -- 7,734
Accrued payroll and payroll taxes........................... 3,337 7,220 -- 10,557
Income taxes................................................ -- 485 -- 485
------------ ---------- -------------- --------------
Total current liabilities............................... 26,013 13,685 (14,488) 25,210
------------ ---------- -------------- --------------
Capitalized lease obligations............................... -- 577 -- 577
Deferred income tax......................................... 90 -- -- 90
Long-term bank debt......................................... 20,000 34,098 (21,098) 33,000
Notes and Senior Debentures................................. -- -- 130,000 130,000
Other....................................................... 690 -- -- 690
Commitments and contingencies............................... -- -- -- --
Stockholders' equity:
Series F Senior convertible preferred stock................. 1 -- -- 1
Common stock................................................ 137 51 (35) 153
Additional paid-in capital.................................. 30,485 9,028 3,113 42,626
Retained deficit, since January 1, 1996..................... (1,677) -- (1,628) (3,305)
Retained earnings........................................... -- 30,304 (30,304) --
Treasury stock.............................................. -- (21,951) 21,951 --
------------ ---------- -------------- --------------
Total stockholders' equity.............................. 28,946 17,432 (6,903) 39,475
------------ ---------- -------------- --------------
Total liabilities and stockholders' equity.................. $ 75,739 $ 65,792 $ 87,511 $ 229,042
------------ ---------- -------------- --------------
------------ ---------- -------------- --------------
</TABLE>
See notes to unaudited pro forma combined financial statements.
F-3
<PAGE>
COMFORCE CORPORATION
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997(2)
(IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
COMFORCE RHOTECH UNIFORCE ADJUSTMENTS(3) (THE COMPANY)
------------ --------- ---------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Revenues.................................... $ 145,986 $ 15,416 $ 132,953 -- $ 294,355
Cost of revenues............................ 127,227 14,411 107,449 -- 249,087
------------ --------- ---------- ------- --------------
Gross profit.............................. 18,759 1,005 25,504 -- 45,268
Operating expenses:
Selling, general and administrative....... 11,842 1,524 17,325 -- 30,691
Depreciation and amortization............. 1,241 40 953 1,480 3,714
------------ --------- ---------- ------- --------------
Income (loss) from operations............... 5,676 (559) 7,226 (1,480) 10,863
Other (income) expense:
Bridge financing costs...................... 5,822 -- -- -- 5,822
Other....................................... (344) 384 (9) -- 31
Interest expense............................ 2,151 207 1,829 11,091 15,278
------------ --------- ---------- ------- --------------
7,629 591 1,820 11,091 21,131
------------ --------- ---------- ------- --------------
Income (loss) before income taxes........... (1,953) (1,150) 5,406 (12,571) (10,268)
Provision (credit) for income taxes......... (646) -- 2,126 (4,721) (3,241)
------------ --------- ---------- ------- --------------
Net income (loss)........................... (1,307) $ (1,150) $ 3,280 $ (7,850) (7,027)
--------- ---------- -------
--------- ---------- -------
Dividends on preferred stock................ 732 18
------------ --------------
Loss available for common stockholders...... $ (2,039) $ (7,045)
------------ --------------
------------ --------------
Loss per share from operations.............. $ (0.15) $ (0.45)
------------ --------------
------------ --------------
Weighted average shares outstanding......... 13,256 15,512(4)
------------ --------------
------------ --------------
</TABLE>
See notes to unaudited pro forma combined financial statements.
F-4
<PAGE>
COMFORCE CORPORATION
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996(2)
(IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FORCE
COMFORCE WILLIAMS RRA FIVE AZATAR CONTINENTAL RHOTECH UNIFORCE
------------ ----------- --------- --------- ----------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues......................... $ 33,514 $ 657 $ 22,799 $ 4,598 $ 5,781 $ 7,377 $ 63,556 $ 103,393
Cost of revenues................. 28,690 499 20,959 3,454 4,619 6,259 56,656 82,047
------------ ----- --------- --------- ----------- ----------- --------- ----------
Gross profit..................... 4,824 158 1,840 1,144 1,162 1,118 6,900 21,346
Operating expenses:
Selling, general and
administrative................. 2,891 64 1,375 1,274 555 802 5,321 14,556
Depreciation and amortization.... 343 1 34 24 25 13 226 783
------------ ----- --------- --------- ----------- ----------- --------- ----------
Income (loss) from operations.... 1,590 93 431 (154) 582 303 1,351 6,007
Other expense (income)........... (29) -- -- -- (54) (23) 197 (19)
Interest expense (income)........ 102 -- 34 7 29 5 984 1,564
------------ ----- --------- --------- ----------- ----------- --------- ----------
73 -- 34 7 (25) (18) 1,181 1,545
------------ ----- --------- --------- ----------- ----------- --------- ----------
Income (loss) before income
taxes.......................... 1,517 93 397 (161) 607 321 172 4,462
Provision (credit) for income
taxes.......................... 610 39 -- (49) 254 -- -- 1,695
------------ ----- --------- --------- ----------- ----------- --------- ----------
Net income (loss)................ 907 $ 54 $ 397 $ 112 $ 353 $ 321 $ 172 $ 2,767
----- --------- --------- ----------- ----------- --------- ----------
----- --------- --------- ----------- ----------- --------- ----------
Less dividends on preferred
stock.......................... 193
------------
Add dividends on common stock
equivalents.................... 18
------------
Income (loss) available for
common stockholders............ $ 732
------------
------------
Income (loss) per share from
operations..................... $ 0.06
------------
------------
Weighted average shares
outstanding.................... 12,661
------------
------------
<CAPTION>
PRO FORMA PRO FORMA
MONTARE ADJUSTMENTS(3) (THE COMPANY)
----------- -------------- --------------
<S> <C> <C> <C>
Revenues......................... $ 2,474 -- $ 244,149
Cost of revenues................. 1,671 -- 204,854
----------- -------------- --------------
Gross profit..................... 803 -- 39,295
Operating expenses:
Selling, general and
administrative................. 546 -- 27,384
Depreciation and amortization.... 6 2,184 3,639
----------- -------------- --------------
Income (loss) from operations.... 251 (2,184) 8,272
Other expense (income)........... (14) -- 58
Interest expense (income)........ -- 12,553 15,278
----------- -------------- --------------
(14) 12,553 15,336
----------- -------------- --------------
Income (loss) before income
taxes.......................... 265 (14,737) (7,064)
Provision (credit) for income
taxes.......................... -- (4,509) (1,960)
----------- -------------- --------------
Net income (loss)................ $ 265 $ (10,228) (5,104)
----------- --------------
----------- --------------
Less dividends on preferred
stock.......................... 18(5)
--------------
Add dividends on common stock
equivalents....................
--------------
Income (loss) available for
common stockholders............ $ (5,122)
--------------
--------------
Income (loss) per share from
operations..................... $ (0.40)
--------------
--------------
Weighted average shares
outstanding.................... 12,980(4)
--------------
--------------
</TABLE>
See notes to unaudited pro forma combined financial statements.
F-5
<PAGE>
COMFORCE CORPORATION
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996 (2)
(IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FORCE
COMFORCE WILLIAMS RRA FIVE AZATAR CONTINENTAL RHOTECH UNIFORCE
------------ ----------- --------- --------- ----------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues......................... $ 55,867 $ 657 $ 22,799 $ 4,598 $ 6,403 $ 8,368 $ 85,746 $ 142,151
Cost of revenues................. 47,574 499 20,959 3,454 5,054 7,017 76,457 112,663
------------ ----- --------- --------- ----------- ----------- --------- ----------
Gross profit..................... 8,293 158 1,840 1,144 1,349 1,351 9,289 29,488
Operating expenses:
Selling, general and
administrative................. 5,266 64 1,375 1,274 612 898 7,215 20,434
Depreciation and amortization.... 614 1 34 14 28 13 297 1,074
------------ ----- --------- --------- ----------- ----------- --------- ----------
Income(loss) from operations..... 2,413 93 431 (144) 709 440 1,777 7,980
Other (income) expense........... (40) -- (54) (25) 260 (45)
Interest expense (income)........ 201 -- 34 7 29 5 1,317 2,170
------------ ----- --------- --------- ----------- ----------- --------- ----------
161 -- 34 7 (25) (20) 1,577 2,125
------------ ----- --------- --------- ----------- ----------- --------- ----------
Income (loss) before income
taxes.......................... 2,252 93 397 (151) 734 460 200 5,855
Provision (credit) for income
taxes.......................... 900 39 -- (49) 301 -- -- 2,185
------------ ----- --------- --------- ----------- ----------- --------- ----------
Net income (loss)................ 1,352 $ 54 $ 397 $ (102) $ 433 $ 460 $ 200 $ 3,670
----- --------- --------- ----------- ----------- --------- ----------
----- --------- --------- ----------- ----------- --------- ----------
Dividends on preferred stock..... 325
Accretive dividend on Series F
Preferred Stock................ 665
------------
Income (loss) available for
common stockholders............ $ 362
------------
------------
Income (loss) per share from
operations..................... $ 0.03
------------
------------
Weighted average shares
outstanding.................... 12,991
------------
------------
<CAPTION>
PRO FORM PRO FORMA
MONTARE ADJUSTMENTS(3) (THE COMPANY)
----------- -------------- --------------
<S> <C> <C> <C>
Revenues......................... $ 2,474 -- $ 329,063
Cost of revenues................. 1,671 -- 275,348
----------- -------------- --------------
Gross profit..................... 803 -- 53,715
Operating expenses:
Selling, general and
administrative................. 546 -- 37,684
Depreciation and amortization.... 6 2,769 4,850
----------- -------------- --------------
Income(loss) from operations..... 251 (2,769) 11,181
Other (income) expense........... (14) -- 82
Interest expense (income)........ -- 16,607 20,370
----------- -------------- --------------
(14) 16,607 20,452
----------- -------------- --------------
Income (loss) before income
taxes.......................... 265 (19,376) (9,271)
Provision (credit) for income
taxes.......................... -- (5,937) (2,561)
----------- -------------- --------------
Net income (loss)................ $ 265 $ (13,439) $ (6,710)
----------- --------------
----------- --------------
Dividends on preferred stock..... $ 25(5)
Accretive dividend on Series F
Preferred Stock................ $ 100
--------------
Income (loss) available for
common stockholders............ $ (6,835)
--------------
--------------
Income (loss) per share from
operations..................... $ (0.51)
--------------
--------------
Weighted average shares
outstanding.................... 13,527(4)
--------------
--------------
</TABLE>
See notes to unaudited pro forma combined financial statements.
F-6
<PAGE>
COMFORCE CORPORATION
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(1) Adjustment to record the acquisition of Uniforce and related financing as
follows (based on balance sheet data as of September 30, 1997):
<TABLE>
<CAPTION>
(IN
Source of Funds: THOUSANDS)
-----------
<S> <C>
Notes...................................................... $ 110,000
Units...................................................... 20,000
Borrowings under New Credit Facility....................... 37,000
Existing cash balances..................................... 7,151
-----------
Total Sources.................................................. $ 174,151
-----------
-----------
Use of Funds:
Refinance Existing Credit Facility......................... $ 36,488
Refinance Uniforce Credit Facility......................... 36,098
Purchase of Uniforce shares................................ 93,565
Transaction Costs.......................................... 8,000
-----------
Total Uses..................................................... $ 174,151
-----------
-----------
</TABLE>
In addition, the Company will issue approximately 1,585,000 shares of
COMFORCE common stock with a value of $12,157,000, which, together with the
cash portion of the purchase price of $93,565,000, will result in additional
intangibles, principally goodwill, of approximately $85,614,000.
In addition, the Company will write off $1,628,000 of deferred financing fees
associated with COMFORCE's previous financing arrangements, which amount has
not been recorded as an expense in the pro forma statement of operations.
(2) The unaudited pro forma statements of operations include the statements of
operations for the companies listed for the periods prior to their
acquisition by COMFORCE. The unaudited pro forma statement of operations for
the period ended September 30, 1997 presents the financial statements of
COMFORCE and Uniforce for their respective 1997 nine month periods and the
results of operations for Rhotech (which was acquired on February 28, 1997
for a purchase price of $14.8 million and a contingent payout not to exceed
$3.3 million) from January 1, 1997 to February 28, 1997. The unaudited pro
forma statement of operations for the period ended September 30, 1996
presents the financial statements of COMFORCE, Uniforce (to be acquired for
a purchase price of $105.7 million), Rhotech, Force Five (which was acquired
for a purchase price of $2 million and contingent payouts not to exceed $2
million), AZATAR (which was acquired for a purchase price of $5.15 million
and a contingent payout not to exceed $1.2 million) and Continental (which
was acquired for a purchase price of $5 million and contingent payout not to
exceed $1.02 million) for their respective 1996 nine month periods and the
results of operations for companies acquired during the nine month period
ended September 30, 1996 as follows: Williams (which was acquired for a
purchase price of $2 million and a contingent payout not to exceed $2
million) (January 1 through March 3, 1996), RRA (which was acquired for a
purchase price of $5.1 million and a contingent payout not to exceed
$650,000) (January 1 through May 10, 1996) and Montare International
("Montare") January 1, 1996 through May 17, 1996. Montare was acquired by
Uniforce on May 17, 1996. The acquisition of Montare did not have a material
impact on Uniforce results of operations. The unaudited pro forma statement
of operations for the year ended December 31, 1996 includes the annual 1996
results of operations for COMFORCE, Uniforce, and Rhotech and the results of
operations for companies acquired during the period as follows: Williams
(January 1 through March 3, 1996), RRA (January 1 through May 10, 1996),
Force Five (January 1 through July 31, 1996), AZATAR (January 1 through
F-7
<PAGE>
COMFORCE CORPORATION
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS (CONTINUED)
November 3, 1996), Continental (January 1 through November 17, 1996) and
Montare (January 1, 1996 through May 17, 1996). The pro forma results of
operations are presented as if these companies were acquired on January 1,
1996 (and accounted for by the purchase method) and do not purport to be an
indication of the results of operations had these acquisitions been made as
of that date or of results which may occur in the future.
(3) Pro forma adjustments include the following:
<TABLE>
<CAPTION>
YEAR ENDED
NINE MONTHS ENDED DECEMBER
SEPTEMBER 30, 31,
--------------------
1997 1996 1996
--------- --------- -----------
(IN THOUSANDS)
<S> <C> <C> <C>
Additional amortization of intangibles (a)......... $ (1,480) $ (2,184) $ (2,769)
(Increase) in interest expense (b)................. (11,091) (12,553) (16,607)
Decrease in provision for income taxes (c)......... 4,721 4,509 5,937
--------- --------- -----------
Total pro forma adjustments........................ $ (7,850) $ (10,228) $ (13,439)
--------- --------- -----------
--------- --------- -----------
</TABLE>
(a) Amortization of intangibles assumes all of the acquisitions and
proposed acquisitions occurred on January 1, 1996. The table below reflects
the amortization of intangibles with lives ranging from 5 to 40 years,
including Uniforce goodwill amortized over 40 years:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
--------------------
<S> <C> <C> <C>
1997 1996 1996
--------- --------- -------------
<CAPTION>
(IN THOUSANDS)
<S> <C> <C> <C>
Pro forma amortization:
Telecom........................................................ $ 194 $ 194 $ 258
Williams....................................................... 39 39 52
RRA............................................................ 127 127 169
Force Five..................................................... 39 39 52
Continental.................................................... 100 100 133
AZATAR......................................................... 168 168 224
Rhotech........................................................ 268 268 357
Uniforce....................................................... 2,028 2,028 2,704
Less: historical amortization...................................... (1,483) (779) (1,180)
--------- --------- ------
Pro forma adjustment............................................... $ 1,480 $ 2,184 $ 2,769
--------- --------- ------
--------- --------- ------
</TABLE>
The allocation of excess purchase price over the fair value of the assets
acquired has not been finalized and management believes that any change to
the allocation will not have a material effect on the pro forma financial
statements of COMFORCE.
(b) The pro forma adjustment to interest expense reflects interest
expense on the placement of the Notes and Senior Debentures, borrowings
under the New Credit Facility and capital lease obligations aggregating
$167.8 million. Pro forma interest expense has been calculated using an
average interest rate of 12.20% per annum plus the amortization of debt
financing costs. Financing costs do not include the effects of the warrants.
(c) The pro forma adjustment for income taxes reflects the tax effect of
the proforma adjustments (excluding non-deductible amortization), the tax
effect of S Corporation earnings treated as C
F-8
<PAGE>
COMFORCE CORPORATION
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS (CONTINUED)
Corporation earnings and the tax benefit of losses by other entities within
the pro forma combined group.
(4) Pro forma weighted average shares outstanding are calculated as follows:
<TABLE>
<CAPTION>
NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
--------------------
<S> <C> <C> <C>
1997 1996 1996
--------- --------- -------------
<CAPTION>
(IN THOUSANDS OF SHARES)
<S> <C> <C> <C>
Historical weighted average shares outstanding..................... 13,256 12,661 12,991
Shares issued--Uniforce acquisition................................ 1,585 1,585 1,585
Shares issued as compensation...................................... * * *
Shares issued--Telecom acquisition................................. * * *
Shares issued--Force Five acquisition.............................. * * *
Shares issued--AZATAR acquisition.................................. * 243 *
Shares issued--Continental acquisition............................. * 37 *
Common stock sold to fund Continental acquisition.................. * 460 *
Common stock equivalents Series D and E preferred stock............ 671 1,107 893
Common stock equivalents on Series F preferred stock............... ** ** **
Warrants issued in connection with the Continental acquisition..... ** ** **
Warrants issued in connection with the Telecom acquisition......... ** ** **
Shares issued to certain shareholders.............................. * ** **
Common stock equivalents which have become anti-dilutive........... ** (3,113) (1,942)
Contingent shares.................................................. ** ** **
--------- --------- ------
Total Pro Forma Shares......................................... 15,512 12,980 13,527
--------- --------- ------
--------- --------- ------
</TABLE>
- ------------------------
* Included in historical weighted average shares outstanding.
** Excluded as the effect would be anti-dilutive.
(5) Pro forma dividends for all periods presented represent dividends and
accretive dividends on $500,000 of Series F preferred stock remaining
outstanding as of September 30, 1997 and deemed outstanding for all periods
presented. Proceeds from this transaction of $167 million have been deemed
to be fully outstanding on a pro forma basis for all periods presented.
Accordingly, Series D preferred stock, the proceeds of which were utilized
for working capital purposes, and Series E preferred stock, the proceeds of
which were utilized to acquire RRA, have been deemed to have been converted
to common stock effective January 1, 1996, with the effects of such common
shares included in weighted average shares outstanding for all periods
presented.
F-9
