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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
June 29, 1998 (June 29, 1998)
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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 its charter)
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 June 29, 1998.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
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(c) Exhibits
Exhibit 99 -- Press release dated June 29, 1998.
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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: June 29, 1998 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
[email protected]
www.olsten.com
Anthony J. Puglisi
Senior Vice President
and Chief Financial Officer
(516) 844-7110
FOR IMMEDIATE RELEASE
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OLSTEN CORPORATION ANNOUNCES ESTIMATED SECOND QUARTER
RESULTS, RESTRUCTURING OF HOME HEALTH BUSINESS
AND RELATED ADJUSTMENTS AND ONE-TIME CHARGES
Melville, NY, June 29, 1998 - Olsten Corporation (NYSE: OLS) today announced
estimated results for its second quarter ending June 28, 1998, which include
adjustments and one-time charges of approximately $40 million, net of tax, or $
.50 per share, relating primarily to the restructuring of its home health
business. The Company expects the charges and an anticipated loss from its home
health operations to be greater than the anticipated profits in the Company's
Staffing and Information Technology Services businesses, resulting in a second
quarter loss of approximately $34 million, net of tax, or $ .41 per share.
Although the Company is still reviewing its second quarter of 1998, it
believes that its Staffing business will reflect continuing improvement in
Europe and in Information Technology Services, flattening of revenue in North
America and continuing investments in new systems and infrastructure, resulting
in reduced profitability.
The charges and adjustments relate primarily to the Company's
restructuring of its home health operations that have been initiated as part of
its response to the implementation of the Interim Payment System (IPS) for home
care reimbursement under Medicare, and margin pressures arising out of the
Company's fulfillment of certain capitated managed care contracts.
"The home health industry in the United States is experiencing
significant pressures from both government and private payors who have,
respectively, reduced reimbursement and tightened pricing for home care
services," said Frank N. Liguori, Olsten's Chairman and Chief Executive Officer.
"Olsten has initiated a series of actions to respond to these changing
conditions, including the consolidation and closing of offices, investments in
new technology and changes in certain managed care contracts. The charges and
the anticipated results we are announcing today reflect both the new environment
in the home health business, as well as Olsten's determination to adapt to the
changes in the industry. These initiatives, together with the continuing growth
of our Infusion business, our strategic focus on managed care and the strength
of our core competency in nursing, are intended to improve the longer term
outlook for Olsten's health services."
-more-
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The adjustments and charges approximating $40 million, net of tax,
are as follows:
* In response to new Medicare reimbursement methodology under IPS,
the Company initiated the closing of approximately 60 of its more
than 400 offices, and expects to record non-recurring charges and
adjustments of approximately $23 million, net of tax, relating to
lease payments, employee severance, professional fees and related
costs, and an increase in allowance for doubtful accounts.
* In addition, the Company expects to record an $8 million, net of
tax, charge in anticipation of lower Medicare reimbursements
resulting from the new per-visit and per-beneficiary limits that
have been imposed by IPS.
* The Company also expects to record a $9 million, net of tax,
adjustment to reserve for costs associated with the increased
utilization of services under several of the Company's capitated
contracts with managed care customers.
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 more than 900 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 Health Services subsidiaries, the Company's health care
offices in the United States and Canada provide health care Network Services and
caregivers for home health care and institutions, home infusion and other
therapies, and management services to hospital-based home health agencies.
In 1997, Olsten Corporation employed approximately 670,000 people serving
approximately 625,000 client/patient accounts. The Company achieved 1997
systemwide sales of $4.8 billion and revenues of $4.1 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 competition, changing market conditions, changes in
laws and regulations affecting our industries 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 anticipated in any forward-looking statements.
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