FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission File Number 0-15539
RIGHT MANAGEMENT CONSULTANTS, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 23-2153729
(State of other jurisdiction of (IRS Employer
incorporation of organization) Identification No.)
1818 Market Street, Philadelphia, Pennsylvania 19103
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (215) 988-1588
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 July 31, 1997:
Common Stock, $0.01 par value 6,601,429
Class Number of Shares
<PAGE>
Right Management Consultants, Inc.
Condensed Consolidated Balance Sheets
(Amounts in Thousands Except Share Data)
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
(Unaudited)
Assets
<S> <C> <C>
Current Assets:
Cash and cash equivalents $14,421 $18,055
Accounts receivable, trade, net of allowance for doubtful accounts
of $620 and $552 in 1997 and 1996, respectively 20,603 18,878
Royalties and fees receivable from Affiliates 2,856 3,505
Other current assets 2,278 2,270
-------- --------
Total current assets 40,158 42,708
Property and equipment, net of accumulated depreciation of $14,718
and $12,917 in 1997 and 1996, respectively 10,797 9,666
Other Assets:
Intangible assets, net of accumulated amortization of $9,492 and
$8,525 in 1997 and 1996, respectively 21,742 18,724
Other noncurrent assets 3,012 2,837
-------- --------
Total Assets $75,709 $73,935
======== ========
Liabilities and Shareholders' Equity
Current Liabilities:
Current portion of long-term debt and other obligations $3,255 $1,011
Accounts and commissions payable 5,968 5,536
Accrued expenses 2,670 6,951
Deferred income 4,735 3,868
-------- --------
Total current liabilities 16,628 17,366
-------- --------
Long-term debt and other obligations 8,025 6,904
-------- --------
Deferred compensation 1,647 1,864
-------- --------
Shareholders' Equity:
Preferred stock, no par value; 1,000,000 shares authorized; no
shares issued or outstanding -- --
Common stock, $.01 par value; 20,000,000 shares authorized; 6,869,813 and
6,713,573 shares issued in 1997 and 1996, respectively 69 67
Additional paid-in capital 12,750 11,956
Retained earnings 38,211 36,290
Cumulative translation adjustment (244) 5
-------- --------
50,786 48,318
Less treasury stock, at cost, 330,452 shares and 252,952 shares in 1997
and 1996, respectively (1,377) (517)
-------- --------
Total shareholders' equity 49,409 47,801
-------- --------
Total Liabilities and Shareholders' Equity $75,709 $73,935
======== ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
2
<PAGE>
Right Management Consultants, Inc.
Condensed Consolidated Statements of Income
(Dollars and Shares in Thousands Except Earnings per Share Data)
(Unaudited)
Three Months Ended June 30,
1997 1996
Revenue:
Company office revenue $30,057 $31,590
Affiliate royalties 770 1,031
-------- --------
Total revenue 30,827 32,621
-------- --------
Expenses:
Consultants' compensation 12,523 12,027
Office sales and consulting support 1,623 1,170
Office administration 11,414 10,855
General sales and administration 3,202 4,127
-------- --------
Total expenses 28,762 28,179
-------- --------
Income from operations 2,065 4,442
Other income (expense):
Interest income 104 105
Interest expense (143) (163)
-------- --------
(39) (58)
-------- --------
Income before income taxes 2,026 4,384
Provision for income taxes 830 1,787
-------- --------
Net income $1,196 $2,597
======== ========
Earnings per share $0.18 $0.38
======== ========
Weighted average number of shares outstanding 6,720 6,809
======== ========
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
<PAGE>
Right Management Consultants, Inc.
Condensed Consolidated Statements of Income
(Dollars and Shares in Thousands Except Earnings per Share Data)
(Unaudited)
Six Months Ended June 30,
1997 1996
Revenue:
Company office revenue $59,047 $62,807
Affiliate royalties 1,825 2,277
-------- --------
Total revenue 60,872 65,084
-------- --------
Expenses:
Consultants' compensation 25,308 24,002
Office sales and consulting support 3,113 2,548
Office administration 22,398 22,092
General sales and administration 6,246 7,987
Restructuring costs (Note B) 630 --
-------- --------
Total expenses 57,695 56,629
-------- --------
Income from operations 3,177 8,455
Other income (expense):
Interest income 308 258
Interest expense (253) (335)
-------- --------
55 (77)
-------- --------
Income before income taxes 3,232 8,378
Provision for income taxes 1,311 3,372
-------- --------
Net income $1,921 $5,006
======== ========
Earnings per share $0.28 $0.75
======== ========
Weighted average number of shares outstanding 6,751 6,720
======== ========
The accompanying notes are an integral part of these condensed consolidated
financial statements.
4
<PAGE>
Right Management Consultants, Inc.
Condensed Consolidated Statements of Cash Flows
(Dollars in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
1997 1996
<S> <C> <C>
Operating Activities:
Net income $1,921 $5,006
Adjustments to reconcile net income to net cash
(utilized for) provided by operating activities:
Depreciation and amortization 2,845 2,334
Restricted stock compensation (593) 430
Tax benefit from the exercise of stock options 400 1,919
Restructuring costs 630 --
Other non-cash items (388) 245
Provision for doubtful accounts 150 150
Changes in operating accounts:
(Increase) in operating assets (530) (3,290)
(Decrease) increase in operating liabilities (6,050) 1,667
-------- --------
Net cash (utilized for) provided by operating activities (1,615) 8,461
-------- --------
Investing Activities:
Purchase of property and equipment (2,558) (2,159)
Net cash paid for acquisitions (4,472) (169)
-------- --------
Net cash utilized for investing activities (7,030) (2,328)
-------- --------
Financing Activities:
Proceeds from borrowings 5,500 --
Repurchase of common stock (228) --
Payment of long-term debt and other obligations (1,250) (2,539)
Proceeds from stock issuances 989 1,217
-------- --------
Net cash provided by (utilized for) financing activities 5,011 (1,322)
-------- --------
(Decrease) increase in cash and cash equivalents (3,634) 4,811
Cash and cash equivalents, beginning of period 18,055 8,965
-------- --------
Cash and cash equivalents, end of period $14,421 $13,776
======== ========
Supplemental Disclosures of Cash Flow Information
Cash paid for:
Interest $228 $223
======== ========
Income taxes $1,746 $3,030
======== ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
5
<PAGE>
RIGHT MANAGEMENT CONSULTANTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnote disclosures necessary for a fair presentation of consolidated financial
position, results of operations and cash flows in conformity with generally
accepted accounting principles. In the opinion of management, all adjustments
(consisting of normal recurring adjustments) considered necessary for a fair
presentation have been included. Operating results for the six months ended June
30, 1997 are not necessarily indicative of the results that may be expected for
the year ending December 31, 1997. For further information, refer to the
financial statements and footnotes thereto included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1996.
Principles of Consolidation
The consolidated financial statements include the accounts of Right Management
Consultants, Inc., and its wholly-owned subsidiaries. All significant
intercompany transactions and balances have been eliminated in consolidation.
Reclassifications
Certain 1996 amounts have been reclassified to conform to the 1997 presentation.
NOTE B - RESTRUCTURING COSTS
During the first quarter 1997, the Company announced a corporate restructuring.
The restructuring charge of $630,000 ($380,000 or $0.06, net of taxes) was
primarily for severance payments related to reductions in force and lease
termination costs for the closure of several small "satellite" offices with
limited future economic benefit to the Company. The Company anticipates that all
payments for severance and office closures will be completed during 1997.
6
<PAGE>
RIGHT MANAGEMENT CONSULTANTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE C - ACQUISITIONS
Effective January 1, 1997, the Company acquired the assets and/or the
outstanding stock of six career transition firms and one search firm for a
combination of cash and future defined incentive payments. The six career
transition firms included Nelson, O'Connor & Associates (Phoenix, Arizona),
Corporate Resource Group (San Francisco, California), Cavendish Partners
(London, England) and the former St. Louis, Missouri, Knoxville, Tennessee, and
Richmond, Virginia Affiliates. The search firm acquired was Nelson, O'Connor Cox
(Tucson, Arizona).
Effective April 1, 1997, the Company acquired the outstanding stock of another
career transition firm, Chapel Stowell, Inc. (Portland, Oregon).
The acquisitions were accounted for under the purchase method. The accompanying
consolidated financial statements reflect the year to date results from the
effective date of acquisition for all of the above acquisitions.
The purchase price for these acquisitions was approximately $4,472,000,
including the costs of acquisitions. The purchase price exceeded the fair value
of the assets acquired by $4,947,000. The Company funded all of the above
acquisitions through operating cash.
The pro-forma impact of these acquisitions on results of operations, if any one
of the acquisitions had been consummated at the beginning of each period
presented, is immaterial to the consolidated financial statements as a whole and
has been omitted.
NOTE D - ACCRUED EXPENSES
The decrease in accrued expenses existing at December 31, 1996 is a result of
payments made by the Company during the first quarter of 1997 for 1996 income
taxes and incentive compensation.
NOTE E- DEBT
In order to reduce the impact of changes in interest rates on a portion of the
Company's floating rate debt under its revolving credit facility, the Company
entered into two interest rate swap agreements with an aggregate notional
principal of $9,300,000 and maturities of three to five years. The Company's
fixed rate under these interest rate swap agreements is approximately 6.33%.
Subsequent to June 30, 1997, the Company entered into another interest rate swap
agreement with a notional principal of $2,000,000, a three year maturity and a
5.99% fixed rate.
The net cash paid or received on interest rate swap agreements is recognized as
an adjustment to interest expense. The impact of the above interest rate swap
agreements has been immaterial to date.
7
<PAGE>
RIGHT MANAGEMENT CONSULTANTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE F - SHAREHOLDERS' EQUITY
In March 1997, the Board of Directors (the "Board") approved a stock repurchase
program under which the Company is authorized to repurchase up to 10% of its
currently outstanding common stock. Any shares repurchased will be held as
treasury shares and be available to the Company for use in various benefit plans
and, when authorized by the Board, for other general corporate purposes. The
Board has authorized Company management to pursue the repurchase program in open
market transactions from time-to-time, depending upon market conditions and
other factors.
As of June 30, 1997, the Company had repurchased 77,500 shares of common stock
at an aggregate purchase price of $860,000. The Company had funded only 22,500
of the total shares purchased, or $228,000, prior to June 30, 1997. Subsequent
to June 30, 1997, in addition to funding the remaining $632,000 of pre-June 30,
1997 share purchases, the Company purchased an additional 50,000 shares at an
aggregate purchase price of $519,000.
Stock option activity for the six month period ended June 30, 1997 is summarized
as follows:
Wtd. Avg.
Exercise
Shares Price
Outstanding at January 1, 1997 1,238,295 $10.92
Granted 210,288 18.21
Canceled or expired during the period (7,500) 10.84
Exercised during the period (138,944) 5.64
--------- ------
Outstanding at June 30, 1997 1,302,139 $12.66
========== ======
Exercise prices for options outstanding as of June 30, 1997 ranged from $4.22 to
$24.33. The weighted average remaining contractual life of these options is
approximately 6 years.
NOTE G - EARNINGS PER SHARE
The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards ("SFAS") No. 128, "Earnings per Share." SFAS No. 128
replaces the presentation of primary earnings per share ("EPS") with a
presentation of basic EPS. Additionally, SFAS No. 128 requires a dual
presentation of basic and diluted EPS within the consolidated income statement
and a reconciliation of the numerator and denominator of the basic EPS
computation to the numerator and denominator of the diluted EPS calculation.
SFAS No. 128 is effective for financial statements for periods ending after
December 15, 1997, with earlier adoption not permitted. Accordingly, the Company
will adopt SFAS No. 128 for the year ending December 31, 1997.
The following table details the pro forma amounts that would have been reported
by the Company in both the current and prior year periods had SFAS No. 128 been
adopted.
8
<PAGE>
RIGHT MANAGEMENT CONSULTANTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE G - EARNINGS PER SHARE (Continued)
Three Months Six Months
Ended June 30, Ended June 30,
1997 1996 1997 1996
Primary EPS as reported $0.18 $0.38 $0.28 $0.75
Effect of SFAS No. 128 -- 0.03 0.01 0.05
----- ----- ----- -----
Basic EPS as restated $0.18 $0.41 $0.29 $0.80
===== ===== ===== =====
Fully diluted EPS as reported $0.18 $0.38 $0.28 $0.74
Effect of SFAS No. 128 -- -- -- 0.01
----- ----- ----- -----
Diluted EPS as reported $0.18 $0.38 $0.28 $0.75
===== ===== ===== =====
NOTE H - GEOGRAPHIC SEGMENTS
Summarized operations of each of the Company's geographic segments in the
aggregate as of June 30, 1997 and 1996 and for the six month periods then ended
are as follows:
(Dollars in Thousands)
1997 U.S. Canada Europe Consolidated
Identifiable assets $62,435 $7,209 $6,065 $75,709
======= ======= ======= =======
Revenue $48,901 $5,689 $6,282 $60,872
======= ======= ======= =======
Operating income $1,433 $1,135 $609 $3,177
======= ======= ======= =======
Depreciation and amortization $2,499 $132 $214 $2,845
======= ======= ======= =======
Capital expenditures $1,838 $76 $644 $2,558
======= ======= ======= =======
1996
Identifiable assets $59,312 $6,605 $6,055 $71,972
======= ======= ======= =======
Revenue $53,863 $5,539 $5,682 $65,084
======= ======= ======= =======
Operating income $8,165 $9 $281 $8,455
======= ======= ======= =======
Depreciation and amortization $1,929 $179 $226 $2,334
======= ======= ======= =======
Capital expenditures $2,037 $52 $70 $2,159
======= ======= ======= =======
9
<PAGE>
RIGHT MANAGEMENT CONSULTANTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE I - SUBSEQUENT EVENTS
Effective July 1, 1997, the Company completed the acquisition of 51% of the
outstanding shares of the Australia based career management firm, Davidson &
Associates, Pty., Ltd. Davidson & Associates has operations in eleven locations
throughout Australia, New Zealand, Singapore and Hong Kong. The purchase price
of this acquisition approximated $6,700,000, including costs of acquisition, 85%
of which was paid in cash (approximately $5,695,000) and the remaining 15% in
shares of the Company's common stock (96,577 shares). The Company borrowed
$5,500,000 from the revolving credit facility in order to complete this
transaction. The $5,500,000 borrowing is reflected in both the Company's cash
and long-term debt balances at June 30, 1997, as the distribution of the
consideration paid for the acquisition was subsequently funded in early July
1997. As a part of the purchase agreement, Davidson & Associates has agreed to
provide the Company with the option to acquire the remaining 49% of the
outstanding shares of Davidson & Associates. Additionally, Davidson & Associates
has the right to require the Company to purchase the remaining 49% of the
outstanding shares of Davidson & Associates.
Effective August 1, 1997, the Company acquired the business and certain assets
of a Minneapolis, Minnesota career management firm, Career Dynamics, Inc. The
purchase price of the acquisition approximated $2,000,000, including costs of
acquisition, and was funded through borrowings under the Company's revolving
credit facility. The acquisition also included future defined incentives
contingent upon the results of the operations in Minnesota subsequent to the
transaction.
The Company accounted for both of the above acquisitions using the purchase
method.
10
<PAGE>
PART I - ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
For the three months ended June 30, 1997, revenue generated by Company offices
decreased 5% or $1,533,000 from the corresponding quarter in 1996. This decrease
is due to a same office revenue decrease of approximately 11%, partly offset by
$2,043,000 in incremental revenues from the acquisitions detailed in Note C to
the Condensed Consolidated Financial Statements, as well as revenue growth
within the consulting line of business. The same office revenue decrease was due
primarily to a general slow down in the North American career transition market.
On a sequential basis, the second quarter 1997 same office revenue decrease of
11% is a modest improvement from the 13% decrease reported in the first quarter
1997.
For the six months ended June 30, 1997, revenue generated by Company offices
decreased 6% or $3,760,000 from the corresponding period in 1996. This decrease
is due primarily to a same office revenue decrease of approximately 12%, partly
offset by revenue growth within the consulting line of business and $3,913,000
in incremental revenues from the acquisitions detailed in Note C to the
Condensed Consolidated Financial Statements. The previously mentioned slow down
in the North American career transition market contributed to the same office
revenue decrease, partly offset by same office revenue growth in the Company's
European operations. For the six months ended June 30 ,1997, European revenues
on same office basis increased by 6% or $321,000. The revenue growth in Europe
has been negatively impacted by the strength of the U.S. Dollar. For the six
months ended June 30, 1997, European revenues on a constant dollar basis
increased by approximately 20%.
For the three months ended June 30, 1997, Affiliate royalties decreased 25% or
$261,000 from the corresponding quarter in 1996. For the six months ended June
30, 1997, Affiliate royalties decreased 20% or $452,000 from the corresponding
period in 1996. The decreases for the quarter and year-to-date 1997 are
attributable to the aforementioned decline in the North American career
transition market, as well as the acquisitions of three former Affiliates in the
first quarter 1997 (see Note C to the Condensed Consolidated Financial
Statements). Affiliate royalties, on a same office basis, decreased 23% and 16%,
respectively, from the corresponding periods in 1996.
For the three months ended June 30, 1997, total Company office expenses in the
aggregate increased 6% or $1,508,000 over the corresponding quarter in 1996.
This dollar increase is due to approximately $1,837,000 in incremental costs
from acquisitions, offset by a reduction of costs of $329,000 in Company office
locations. This decrease resulted despite the fact that the Company has added
personnel in the sales and marketing areas in certain regions to expand its
business development efforts.
11
<PAGE>
PART I - ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
CONTINUED
For the six months ended June 30, 1997, total Company office expenses, exclusive
of restructuring costs (see Note B to the Condensed Consolidated Financial
Statements), increased 4% or $2,177,000 over the corresponding period in 1996.
This dollar increase is due to approximately $3,637,000 in incremental costs
from acquisitions, offset by a reduction of costs in existing Company office
locations.
Aggregate Company office margins, exclusive of restructuring costs, were 15% and
14% for the quarter and year-to-date 1997, respectively, versus 24% for both of
the same periods in 1996. The decrease in margins is attributable to the decline
in career transition revenues, partly offset by improved margins in the
consulting line of business and improved year-to-date results in the European
operations. For the six months ended June 30, 1997, European office margins
approximated 10% versus 5% for the corresponding period in 1996.
General sales and administration expenses decreased 22% for both the quarter and
year-to-date 1997 versus the corresponding 1996 periods. Due to the Company's
decreasing stock price during 1997 and the forfeiture of certain awards of
common stock, total compensation expense related to restricted stock grants
included within general sales and administration expenses was reduced by
approximately $470,000 and $593,000 for the quarter and year-to-date 1997,
respectively. The remaining decreases are a result of reduced incentive
compensation costs as the Company's internal targets were not achieved.
The Company's effective tax rate for the three months ended June 30, 1997 and
1996 was approximately 41%. The Company's effective tax rate for the six months
ended June 30, 1997 and 1996 was approximately 41% and 40%, respectively.
Capital Resources and Liquidity
At June 30, 1997 and December 31, 1996, the Company had cash and cash
equivalents of $14,421,000 and $18,055,000, respectively. The significant
decrease in cash and cash equivalents is the result of lower net income, and
payments made for acquisitions, income taxes and 1996 incentive compensation
(see Notes C and D to the Condensed Consolidated Financial Statements).
12
<PAGE>
PART I - ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
CONTINUED
Net cash utilized for investing activities amounted to $7,030,000 and $2,328,000
for the six months ended June 30, 1997 and 1996, respectively. The Company
continues to invest in equipment and technology to meet the needs of its
operations and enhance operating efficiencies. Additionally during the first six
months of 1997, the Company acquired eight career management firms for a
combination of cash and future defined incentive payments (see Note C to the
Condensed Consolidated Financial Statements). The approximate $4,472,000 net
cash paid for acquisitions was funded by operating cash.
Net cash provided by (utilized for) financing activities amounted to $5,011,000
and ($1,322,000) for the six months ended June 30, 1997 and 1996, respectively.
The net cash inflow during 1997 is a result of the $5,500,000 borrowing
completed for the Davidson & Associates acquisition, which was not funded until
July 1997 (see Note I to the Condensed Consolidated Financial Statements).
Exclusive of the Davidson & Associates borrowing, net cash utilized for
financing activities for the six months ended June 30, 1997 was $489,000. This
net cash outlay was due to repayments on the Company's existing borrowings and
defined incentives for acquisitions made in previous years, as well as the
repurchase of common stock (see Note F to the Condensed Consolidated Financial
Statements), in excess of proceeds from the issuance of stock.
During 1996, the Company increased its borrowing capacity to $40,000,000 from
the previous $15,000,000 level through the execution of its revolving credit
facility with its two primary lenders. Including the borrowing made for the
Davidson & Associates acquisition (see Note I to the Condensed Consolidated
Financial Statements), the Company had approximately $29,200,000 available under
the revolving credit facility at June 30, 1997. The Company plans to utilize the
revolving credit facility to assist in the financing of acquisitions as they
arise and for other general corporate purposes.
The Company anticipates that its cash and working capital will be sufficient to
service its existing debt, commitments and to maintain Company operations at
current levels for the foreseeable future. The Company will continue to consider
acquisitions and other expansion opportunities as they arise, although the
economics, strategic implications and other circumstances justifying the
expansion will be key factors in determining the amount and type of resources
the Company will commit.
Forward Looking Statements
This report includes certain forward-looking statements that involve risks and
uncertainties that could cause actual results to differ materially from the
results discussed herein. Recipients of this report are cautioned to consider
these risks and uncertainties and to not place undue reliance on these
forward-looking statements.
13
<PAGE>
PART II - OTHER INFORMATION
Items 1, 2, 3, and 5 were not applicable in the period ended June 30, 1997.
Item 4. Submission of Matters to a Vote of Security Holders
The Company held its annual meeting of shareholders on May 8, 1997. At
the meeting, nine of the nominees for the election of directors, being
Frank P. Louchheim, Richard J. Pinola, Joseph T. Smith, Larry A.
Evans, John R. Bourbeau, Raymond B. Langton, Rebecca J. Maddox,
Catherine Y. Selleck and Marti D. Smye were elected as directors. The
selection by the Board of Directors of Arthur Andersen LLP as the
Company's independent public accountants for the current fiscal year
was also ratified.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits:
11 - Consolidated Earnings per Share Calculation
27 - Financial Data Schedule *
b. The Company filed a Form 8-K on May 19, 1997 reporting that a
letter of intent had been signed to acquire 51% of the
outstanding shares of Davidson & Associates, Pty., Ltd.
* - Filed in electronic form only.
14
<PAGE>
SIGNATURES
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.
RIGHT MANAGEMENT CONSULTANTS, INC.
BY:/S/ RICHARD J. PINOLA August 13, 1997
Richard J. Pinola Date
Chairman of the Board and Chief Executive Officer
BY: /S/ G. LEE BOHS August 13, 1997
G. Lee Bohs Date
Chief Financial Officer and
Principal Accounting Officer
15
Right Management Consultants, Inc.
Exhibit 11 - Consolidated Earnings Per Share Calculation
<TABLE>
<CAPTION>
For the Three Months For the Six Months
Ended June 30, Ended June 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Primary EPS
Net income $1,196,000 $2,597,000 $1,921,000 $5,006,000
========== ========== ========== ==========
Weighted average number of shares
issued and outstanding 6,582,000 6,303,000 6,549,000 6,224,000
Dilutive effect (excess of number
of shares issuable over number
of shares assumed to be issued
using the average market price
during the period) of
outstanding options 138,000 506,000 202,000 496,000
---------- ---------- ---------- ----------
Adjusted weighted average number
of shares outstanding 6,720,000 6,809,000 6,751,000 6,720,000
========== ========== ========== ==========
Earnings per common share $0.18 $0.38 $0.28 $0.75
========== ========== ========== ==========
Fully Diluted EPS
Net income $1,196,000 $2,597,000 $1,921,000 $5,006,000
========== ========== ========== ==========
Weighted average number of shares
issued and outstanding 6,582,000 6,303,000 6,549,000 6,224,000
Dilutive effect (excess of number
of shares issuable over number of
shares assumed to be issued using the
greater of the market price at the end
of the period or the average market price
during the period) of outstanding options 155,000 521,000 202,000 573,000
---------- ---------- ---------- ----------
Adjusted weighted average number
of shares outstanding 6,737,000 6,824,000 6,751,000 6,797,000
========== ========== ========== ==========
Earnings per common share $0.18 $0.38 $0.28 $0.74
========== ========== ========== ==========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
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0
0
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</TABLE>
