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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Filed pursuant to Section 13 or 15(d) of
THE SECURITIES EXCHANGE ACT OF 1934
November 21, 1996 (November 21, 1996)
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(Date of Report (Date of earliest event reported))
OLSTEN CORPORATION
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(Exact name of registrant as specified in charter)
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Delaware
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(State or other jurisdiction of incorporation)
0-3532
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(Commission File Number)
13-2610512
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(IRS Employer Identification No.)
175 Broad Hollow Road
Melville, New York 11747-8905
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(Address of principal executive offices)
(516) 844-7800
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(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
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Registrant released the press release attached hereto as
Exhibit 99 on November 21, 1996.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
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(c) Exhibits
Exhibit 99 -- Press release dated November 21, 1996
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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 hereunto duly authorized.
OLSTEN CORPORATION
(REGISTRANT)
Date: November 21, 1996 By:/s/ Laurin L. Laderoute, Jr.
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Laurin L. Laderoute, Jr.
Vice President
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CONTACTS: David R. Fluhrer
Vice President-Communications
(516) 844-7590
Anthony J. Puglisi
Senior Vice President-Finance
(516) 844-7110
FOR IMMEDIATE RELEASE
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OLSTEN CORPORATION ANTICIPATES LOWER FOURTH QUARTER
NET INCOME OF APPROXIMATELY $.20 PER SHARE
Melville, NY, November 21, 1996 -- Olsten Corporation (NYSE:OLS) today
said that ongoing margin pressures affecting its two primary businesses --
staffing services and home health care services -- and reduced revenues from
Medicare operations will result in lower than expected net income of
approximately $.20 per share for the fourth quarter ending December 29, 1996
and approximately $1.30 per share for fiscal year 1996, exclusive of merger,
integration and other non-recurring charges.
This compares to fully diluted fourth quarter and full year 1995 net
income, respectively, of $.36 and $1.27 per share, exclusive of merger,
integration and other non-recurring charges. Projected results for the fourth
quarter and fiscal year 1996 include the financial performance of Quantum Health
Resources, Inc. and Co-Counsel, Inc., acquired by Olsten Corporation earlier
this year and accounted for as a pooling of interests. All prior year
comparisons are restated to reflect the acquisitions of Quantum and Co-Counsel.
"Anticipated fourth quarter results are a reflection of the near-term
challenges in the staffing services and home health care industries," said
Olsten Chairman and Chief Executive Officer Frank N. Liguori. "The staffing
services industry is experiencing margin pressure due to an increasing number of
longer-term, higher-volume, lower-margin national account contracts and large
regional partnerships with major companies. Also contributing to pressure on
profitability are the costs associated with these contracts that are typically
disproportionate to revenues in the early stages."
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Liguori said that while large contracts are strategically important to
Olsten's long-term growth and profitability, they must be carefully managed in
the current tight labor market. "Looking ahead, we also see these large
contracts providing an excellent opportunity for us to introduce and leverage
our expanding, higher-margin accounting and legal services, as well as our
information technology services business that has reached over $200 million in
annualized revenues in little more than a year," he said. "Furthermore, given
the current economic environment and recruiting challenges, we are working
closely with our customers to ensure high quality services at appropriate
pricing."
Margins in the home health care industry are being affected by continued
pricing pressure from managed care and by reduced Medicare visits as patients
move into health maintenance organizations, Liguori said. Medicare is a cost-
reimbursed system under which home health care providers allocate certain of
their expenses to Medicare, he noted. Thus, a reduction in Medicare visits
affects profitability as less cost can be allocated and reimbursed.
Liguori also said that the home health care industry is becoming
increasingly competitive as hospitals establish their own home health agencies.
He noted that about two years ago, in anticipation of this trend, Olsten
established a business that currently provides management services to over 190
hospital-based home health agencies.
"We are reducing costs and enhancing efficiency by structuring a network
management operation that leads the industry in cost-effective services for both
managed care and Medicare patients," Liguori said. "The Quantum acquisition --
which is meeting our expectations -- allows us to provide more direct services,
such as infusion and chronic care therapies, broadening our range of services
which should allow us to expand our already strong portfolio of managed care
contracts. Here, again, we are working closely with customers to provide
efficient, high quality services at appropriate pricing.
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"Notwithstanding the anticipated fourth quarter results, we remain
confident that the pursuit of our strategies will allow us to capitalize on the
excellent long-term prospects for these growing businesses," he said.
"Furthermore, our Company is financially strong and management is intensely
working to deal with these challenging issues as we continue to play leadership
roles in both the staffing services and home health care industries."
Olsten Corporation is a world leader in staffing services and North
America's largest provider of home health care and related services. Primarily
through Olsten Staffing Services, the Company operates 700 staffing or
information technology offices in North America, South America and Europe,
providing assignment employees to business, industry and government, as well as
services for the design, development and maintenance of information systems.
Through its Olsten Kimberly QualityCare subsidiary, the Company's 600 health
care offices in the United States and Canada provide health care network
management and caregivers for home health care and institutions, as well as
management services to hospital-based home health agencies.
In 1995, Olsten Corporation employed 650,000 people and provided services
to more than 500,000 client/patient accounts. The Company achieved 1995
systemwide sales of $3.3 billion and revenues of $2.8 billion.
Information contained in this news release, other than historical
information, should be considered forward-looking and is subject to various risk
factors and uncertainties. For instance, the Company's strategies and operations
involve risks of intense competition, changing market conditions, changes in
regulations affecting the home health care industry and numerous other factors
discussed in this release and in the Company's filings with the Securities and
Exchange Commission. Accordingly, actual results may differ materially from
those in the forward-looking statements.
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