FORM 10-Q
UNITED STATES 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 March 31,1999
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 April 30, 1999:
Common Stock, $0.01 par value 6,644,411
----------------------------- --------------------
Class Number of Shares
<PAGE>
<TABLE>
<CAPTION>
Right Management Consultants, Inc.
Condensed Consolidated Balance Sheets
(Dollars in Thousands Except Share Data)
March 31, December 31,
1999 1998
---- ----
(Unaudited)
Assets
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 10,887 $ 20,800
Accounts receivable, trade, net of allowance for doubtful accounts
of $1,360 and $1,066 in 1999 and 1998, respectively 37,248 33,271
Royalties and fees receivable from Affiliates 3,474 3,809
Other current assets 4,500 3,004
----------- -----------
Total current assets 56,109 60,884
Property and equipment, net of accumulated depreciation of $23,560
and $22,086 in 1999 and 1998, respectively 17,494 15,983
Intangible assets, net of accumulated amortization of $8,789 and
$8,114 in 1999 and 1998, respectively 37,763 33,947
Other noncurrent assets 3,804 3,781
----------- -----------
Total Assets $115,170 $114,595
=========== ===========
Liabilities and Shareholders' Equity
Current Liabilities:
Current portion of long-term debt and other obligations $ 5,256 $ 5,124
Accounts and commissions payable 10,220 10,086
Accrued incentive compensation and benefits 6,027 15,490
Other accrued expenses 9,909 8,191
Deferred income 8,315 6,712
----------- -----------
Total current liabilities 39,727 45,603
----------- -----------
Long-term debt and other obligations 13,152 9,065
----------- -----------
Deferred compensation 1,903 1,785
----------- -----------
Minority interest in subsidiaries 1,378 1,324
----------- -----------
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;
7,265,385 and 7,255,765 shares issued in 1999 and 1998, respectively 72 72
Additional paid-in capital 16,808 16,448
Retained earnings 47,451 44,970
Accumulated other comprehensive income (771) (727)
----------- -----------
63,560 60,763
Less treasury stock, at cost, 587,952 and 547,952 shares (4,550) (3,945)
in 1999 and 1998, respectively ----------- -----------
Total shareholders' equity 59,010 56,818
----------- -----------
Total Liabilities and Shareholders' Equity $115,170 $114,595
=========== ===========
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated financial statements.
1
<PAGE>
<TABLE>
<CAPTION>
Right Management Consultants, Inc.
Condensed Consolidated Statements of Income
(Dollars and Shares in Thousands Except Earnings per Share Data)
(Unaudited)
Three Months Ended March 31,
1999 1998
----- ----
<S> <C> <C>
Revenue:
Company office revenue $ 48,647 $ 37,233
Affiliate royalties 1,292 1,040
--------------- ---------------
Total revenue 49,939 38,273
--------------- ---------------
Expenses:
Consultants' compensation 19,684 15,800
Office sales and consulting support 3,622 2,289
Office depreciation 1,160 926
Office administration 15,011 12,137
General sales and administration 4,814 3,335
Depreciation and amortization 1,122 940
--------------- ---------------
Total expenses 45,413 35,427
--------------- ---------------
Income from operations 4,526 2,846
Interest expense 45 237
--------------- ---------------
Income before income taxes 4,481 2,609
Provision for income taxes 1,946 1,116
Minority interest in net income of subsidiary 54 30
--------------- ---------------
Net income $ 2,481 $ 1,463
=============== ===============
Basic earnings per share $ 0.37 $ 0.22
=============== ===============
Diluted earnings per share $ 0.36 $ 0.22
=============== ===============
Basic weighted average number of shares outstanding 6,711 6,695
=============== ===============
Diluted weighted average number of shares outstanding 6,810 6,778
=============== ===============
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated financial statements.
2
<PAGE>
<TABLE>
<CAPTION>
Right Management Consultants, Inc.
Condensed Consolidated Statements of Cash Flows
(Dollars in Thousands)
(Unaudited)
Three Months Ended March 31,
1999 1998
-------- --------
<S> <C> <C>
Operating Activities:
Net income $ 2,481 $ 1,463
Adjustments to reconcile net income to net cash
provided by (utilized for) operating activities:
Depreciation and amortization 2,282 1,866
Deferred income taxes -- 423
Minority interest in net income of subsidiary 54 30
Provision for doubtful accounts 300 120
Other non-cash items 258 254
Changes in operating accounts:
(Increase) in operating assets (3,451) (9,859)
Increase (decrease) in operating liabilities (8,225) 6,961
-------- --------
Net cash provided by (utilized for) operating activities (6,301) 1,258
-------- --------
Investing Activities:
Purchase of property and equipment (2,912) (1,742)
Net cash paid for acquisitions (4,684) (3,748)
-------- --------
Net cash utilized for investing activities (7,596) (5,490)
-------- --------
Financing Activities:
Borrowings 5,529 3,600
Payment of long-term debt and other obligations (1,300) (500)
Repurchase of Common Stock (605) --
Proceeds from stock issuances 360 177
-------- --------
Net cash provided by financing activities 3,984 3,277
-------- --------
Decrease in cash and cash equivalents (9,913) (955)
Cash and cash equivalents, beginning of period 20,800 7,583
-------- --------
Cash and cash equivalents, end of period $ 10,887 $ 6,628
======== ========
Supplemental Disclosures of Cash Flow Information
Cash paid for:
Interest $ 229 $ 237
======== ========
Income taxes $ 668 $ 571
======== ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
<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 three months ended
March 31, 1999 are not necessarily indicative of the results that may be
expected for the year ending December 31, 1999. For further information, refer
to the financial statements and footnotes thereto included in Right Management
Consultants Inc.'s Annual Report on Form 10-K for the year ended December 31,
1998.
Principles of Consolidation
The consolidated financial statements include the accounts of Right Management
Consultants, Inc. ("the Company") and its wholly-owned and majority-owned
subsidiaries. All significant intercompany transactions and balances have been
eliminated in consolidation.
Comprehensive Income
Comprehensive income is defined as net income plus revenues, expenses, gains and
losses that, under generally accepted accounting principles, are excluded from
net income. The Company's comprehensive income includes net income and
unrealized gains and losses from foreign currency translation adjustments. The
earnings associated with the Company's investment in its foreign subsidiaries
are considered to be permanently invested and no provision for U.S. federal and
state income taxes has been provided for on these foreign currency translation
adjustments. Total comprehensive income for the three months ended March 31,
1999 and 1998 was $2,437,000 and $1,550,000, respectively.
Reclassifications
Certain 1998 amounts have been reclassified to conform to the 1999 presentation.
4
<PAGE>
RIGHT MANAGEMENT CONSULTANTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE B - ACQUISITIONS
Effective January 1, 1999, the Company acquired the outstanding stock of two
European consulting firms and one European career transition firm for a
combination of cash and future defined contingent payments. The firms included
Groupe ARJ, with offices in Lyon and Paris France, Jouret Management Center,
based in Brussels, Belgium, and N.V. Claessens Belgium, S.A., with four offices
in Belgium. The aggregate purchase price for these acquisitions totaled
approximately $5,337,000, including costs of acquisitions and will be accounted
for using the purchase method. The Company has funded $5,100,000 of these
acquisitions through borrowings under the Credit Agreement. The Company acquired
$1,000,000 in cash from these acquisitions resulting in net cash paid of
approximately $4,684,000, including earnout payments related to prior
acquisitions. The purchase price exceeded the fair value of the assets acquired
by $4,660,000.
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 C - DEBT AND OTHER OBLIGATIONS
As of March 31, 1999, total borrowings under the Company's Credit Agreement
amounted to $17,358,000, including the $5,100,000 floating rate borrowing for
the three recent European acquisitions (See Note B).
As of March 31, 1999, the Company has entered into five fixed interest rate swap
agreements ("Swap Agreements") with an aggregate notional principal of
$12,258,000 with scheduled quarterly reductions of notional principal over three
to five years. The fixed interest rates under these Swap Agreements range from
5.79% to 7.08% at March 31, 1999. The purpose of these Swap Agreements is to fix
interest rates on variable rate debt and reduce exposure to interest rate
fluctuations. Under these Swap Agreements, the Company pays its lenders interest
at a weighted average fixed rate of 6.61% and its lenders are paying the Company
interest at a weighted average variable rate of 6.06% at March 31, 1999. The
notional amounts do not represent amounts exchanged by the parties and thus are
not a measure of exposure of the Company. The amounts exchanged are normally
based on the notional amounts and other terms of the swaps. The weighted average
variable rates are subject to change over time as LIBOR fluctuates.
At March 31, 1999, the Company has no exposure to credit loss on these interest
rate swaps. The Company is not a party to leveraged derivatives and does not
hold or issue financial instruments for speculative purposes. The Company has
made adjustments to interest expense for the net cash paid or received on
interest rate swap agreements. The impact of the above interest rate swap
agreements on interest expense has been immaterial to date.
5
<PAGE>
RIGHT MANAGEMENT CONSULTANTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE D - EARNINGS PER SHARE
The Company utilizes SFAS No. 128, "Earnings per Share" to calculate its
earnings per share ("EPS"). The calculation of EPS under SFAS No. 128 for March
31, 1999 and 1998 are detailed below.
For the three months
ended 3/31/99
Income Shares EPS
Basic EPS:
Net income $2,481,000 6,711,000 $0.37
=====
Impact of options -- 99,000
---------- ---------
Diluted EPS:
Net income $2,481,000 6,810,000 $0.36
========== ========= =====
For the three months
ended 3/31/98
Income Shares EPS
Basic EPS:
Net income $1,463,000 6,695,000 $0.22
=====
Impact of options -- 83,000
---------- ---------
Diluted EPS:
Net income $1,463,000 6,778,000 $0.22
========== ========= =====
For the three months ended March 31, 1999, outstanding options to purchase
271,188 shares of Company Common Stock at $16.75 to $24.33 were excluded from
the computation of diluted EPS, as the options' exercise price was greater than
the average market price of the Common Stock.
NOTE E - SEGMENTS
In June 1997, SFAS No. 131, "Disclosures about Segments of an Enterprise and
Related Information," was issued effective for fiscal years ending after
December 15, 1998. SFAS No. 131 establishes standards for reporting information
about operating segments and related disclosures about products and services,
geographic areas, and major customers. Operating segments are defined as
components of an enterprise about which separate financial information is
available that is evaluated regularly by the chief operating decision maker in
deciding how to allocate resources and in assessing performance.
6
<PAGE>
RIGHT MANAGEMENT CONSULTANTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE E - SEGMENTS (Continued)
The Company's operations are segregated into two lines of business: career
transition and human resources and career management consulting ("consulting").
The Company operates these lines of business across the geographic segments of
the United States, Canada, Europe and Asia-Pacific. These operations offer
different services and require different marketing strategies. Career transition
offers support for organizational realignment and redeployment, including
assistance in handling the initial difficulties of termination, identifying
continuing career goals and options, and aiding in developing skills for the
search for a new job. Consulting offers organizational and individual
assessment, interventions in change management, leadership and executive
development, transformation planning, cultural integration in mergers and
acquisitions, career development and restructuring planning. With more than 170
service locations worldwide, the Company manages operations by geographic
segments to enhance global growth and establish major accounts with global
clients. The Company primarily delivers its services to mid-size and large
industrial and service companies, with no concentration in specific companies or
industries.
Summarized operations of each of the Company's geographic segments in the
aggregate as of March 31, 1999 and 1998 and for the three month periods then
ended are as follows:
<TABLE>
<CAPTION>
(Dollars in Thousands)
1999 United States Canada Europe Asia-Pacific Consolidated
<S> <C> <C> <C> <C> <C>
Identifiable assets $ 85,850 $ 6,563 $ 16,977 $ 5,780 $115,170
======== ======== ======== ======== ========
Revenue 38,162 2,592 5,725 3,460 49,939
======== ======== ======== ======== ========
Operating income (1) 3,401 268 635 222 4,526
======== ======== ======== ======== ========
Depreciation and amortization 1,860 144 129 149 2,282
======== ======== ======== ======== ========
Capital expenditures 2,274 67 78 493 2,912
======== ======== ======== ======== ========
1998 United States Canada Europe Asia-Pacific Consolidated
Identifiable assets $ 74,644 $ 6,874 $ 6,645 $ 5,193 $ 93,356
======== ======== ======== ======== ========
Revenue 29,084 2,695 3,365 3,129 38,273
======== ======== ======== ======== ========
Operating income (1) 1,739 410 597 100 2,846
======== ======== ======== ======== ========
Depreciation and amortization 1,470 128 112 156 1,866
======== ======== ======== ======== ========
Capital expenditures 1,342 122 150 128 1,742
======== ======== ======== ======== ========
</TABLE>
(1) The operating income reported for the United States segment includes total
general sales and administration expense reported on the Condensed
Consolidated Statements of Income.
7
<PAGE>
RIGHT MANAGEMENT CONSULTANTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE E - SEGMENTS (Continued)
Revenues and expenses of the Company's lines of business for the Company
offices, excluding the total general sales and administration expenses and
Affiliate royalties, are evaluated by management. The Company does not measure
assets by lines of business as assets are generally not distinctive to a
particular line of business and they are not fundamental in assessing segment
performance. Revenue and Company office operating income for each of the
Company's lines of business in the aggregate for the three months ended March
31, 1999 and 1998 are as follows:
<TABLE>
<CAPTION>
Career Consulting Consolidated
1999 Transition
<S> <C> <C> <C>
Company office revenue $ 41,712 $ 6,935 $ 48,647
======== ======= ========
Company office operating 8,691 479 9,170
income ======== ======= ========
Career Consulting Consolidated
1998 Transition
Company office revenue $ 31,773 $ 5,460 $ 37,233
======== ======= ========
Company office operating 5,280 801 6,081
income ======== ======= ========
</TABLE>
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 any 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.
During 1998 and 1997, the Company repurchased 167,500 and 127,500 shares of
Common Stock at an aggregate purchase price of approximately $2,049,000 and
$1,379,000, respectively.
In March 1999, the Company repurchased 40,000 shares of Common Stock at an
aggregate purchase price of $605,000, or $15.125 per share.
Subsequent to March 31, 1999, the Company repurchased 62,000 shares of Common
Stock at an aggregate purchase price of approximately $876,000, or $14.125 per
share.
8
<PAGE>
RIGHT MANAGEMENT CONSULTANTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE F - SHAREHOLDERS' EQUITY (Continued)
As of April 30, 1999, the Company has repurchased a total of 397,000 shares of
Common Stock at an aggregate purchase price of approximately $4,909,000 under
this stock repurchase program.
NOTE G - SUBSEQUENT EVENT
Subsequent to March 31, 1999, the Company has signed a letter of intent to
acquire a 20% equity interest in privately held Way Station, Inc., a leading
career transition consulting firm in Japan, with offices in Tokyo, Nagoya, Osaka
and Fukuoka. The transaction, subject to due diligence and the signing of
definitive agreements, is scheduled to be consummated during June 1999, with an
effective date of April 1, 1999.
The pro-forma impact of this transaction on results of future operations, is
expected to be immaterial.
9
<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 March 31, 1999, revenue generated by Company offices
increased by 31% or $11,414,000 from the corresponding quarter in 1998. This
increase is due to same office revenue growth of approximately 24%, in addition
to $2,629,000 in incremental revenues from acquisitions consummated subsequent
to the first quarter 1998. The same office revenue growth was derived primarily
from the U.S. and European operations.
For the three months ended March 31, 1999, revenue generated by Company offices
within the outplacement line of business increased by 31% or $9,939,000. This
outplacement revenue increase is due to same office revenue growth of
approximately 30%, primarily attributed to increased activity from its new and
existing major international and national accounts across all industries under a
stabilized pricing environment.
For the three months ended March 31, 1999, revenue generated by Company offices
within the consulting line of business increased by 27% or $1,475,000. This
increase in consulting revenues is due to $2,168,000 in incremental revenues
from consulting acquisitions consummated subsequent to the first quarter 1998,
and is partly offset by a same office revenue decrease of 13%.
For the three months ended March 31, 1999, Affiliate royalties increased 24% or
$252,000 from the corresponding quarter in 1998.
For the three months ended March 31, 1999, total Company office expenses
increased 27% or $8,325,000 over the corresponding quarter in 1998. This
increase is due to $2,604,000 in incremental costs from acquisitions consummated
subsequent to the first quarter 1998, as well as an increase in office level
employee incentives, payroll taxes and career center costs. The Company
exceeding target performance for the first quarter 1999 has triggered
corresponding increases in office level incentives and payroll taxes.
Aggregate Company office margin was 19% and 16% for the first quarter 1999 and
1998, respectively. The increase in margin is attributable primarily to the
previously mentioned revenue growth, particularly in the outplacement line of
business, and to improved results in the Asia-Pacific segment over the same
period last year, all of which were partly offset by increased funding for
office level incentives.
For the three months ended March 31, 1999, general sales and administration
expenses increased by 39% or $1,661,000 over the corresponding period in 1998.
This increase is due primarily to Corporate incentive compensation expense,
translation expense and increased charges for depreciation. General sales and
administrative expenses as a percentage of total revenues were approximately 12%
for the first quarter 1999 versus 11% for the first quarter 1998.
10
<PAGE>
PART I - ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
CONTINUED
For the three months ended March 31, 1999, the Company's effective tax rate was
approximately 43% consistent with that of 1998.
Capital Resources and Liquidity
At March 31, 1999 and December 31, 1998, the Company had cash and cash
equivalents of $10,887,000 and $20,800,000, respectively. At March 31, 1999 and
December 31, 1998, the Company had working capital of $16,382,000 and
$15,281,000, respectively.
Net cash utilized for operating activities amounted to $6,301,000 for the first
quarter 1999 versus cash provided by operating activities of $1,258,000 for the
first quarter 1998. The change in cash is the result of incentive compensation
payments made in the first quarter 1999 due to the Company exceeding revenue and
operating income targets in 1998.
Net cash utilized for investing activities amounted to $7,596,000 and $5,490,000
for the three months ended March 31, 1999 and 1998, respectively. During the
first quarter 1999, the Company acquired two European consulting firms and one
European career transition firm for a combination of cash and future defined
contingent payments (See Note B to the Condensed Consolidated Financial
Statements). Additionally, the Company continues to purchase equipment and
technology to meet the needs of its expanding operations and to enhance its
operating efficiency.
Net cash provided by financing activities amounted to $3,984,000 and $3,277,000
for the three months ended March 31, 1999 and 1998, respectively. The net cash
inflow for 1999 was primarily the result of the $5,100,000 borrowing made to
complete the three European acquisitions (see Note B to the Condensed
Consolidated Financial Statements), partly offset by repayments on the Company's
borrowings and the repurchase of Common Stock.
Under its revolving credit facility with its two primary lenders, the Company
has a $40,000,000 borrowing capacity. The Company had approximately $22,642,000
available under the revolving credit facility at March 31, 1999. The Company
plans to utilize the revolving credit facility to assist in the financing of
future 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, outstanding 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.
11
<PAGE>
PART I - ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
CONTINUED
Year 2000
During 1998, the Company completed its evaluation of the potential impact of the
year 2000 and developed a project plan ("the Y2K Plan") to ensure the compliance
of its major operating systems by the year of 2000. As a service company, the
Company's operating systems principally include financial, operational and
communication applications. As part of its year 2000 project plan, the Company
has developed a replacement billing system which began operating in April 1999.
The Y2K Plan also details the timetable to upgrade or replace non-compliant
systems in the above areas as well as to confirm year 2000 compliance with the
Company's key vendors. At this time, the Company is progressing in accordance
with the timetable set forth with respect to all aspects of the Y2K Plan and
believes that the potential risks to its business operations are not material.
The Company estimates that the total capital expenditures to be incurred under
the Y2K Plan will be in the range of $1,400,000 to $1,600,000 during 1999, of
which approximately $800,000 is attributable to normal costs for systems
upgrades or replacements that the Company normally would undertake in its
ongoing operations. Capitalized items will be depreciated over the useful life
of the asset. Non-capitalizable costs related to year 2000 issues are estimated
to be $300,000, which will be expensed as incurred. The Company does not expect
these costs to have a material impact on its business, operations or its
financial condition.
Forward Looking Statements
Statements included in this Report on Form 10-Q, including within this
Management's Discussion and Analysis of Financial Condition and Results of
Operations which are not historical in nature, are intended to be, and hereby
are identified as "forward looking statements" for purposes of the safe harbor
provided by the Private Securities Litigation Reform Act of 1995. The Company
cautions readers that forward looking statements including without limitation
those relating to the Company's future business prospects, revenues, working
capital, liquidity, capital needs, interest costs and income are subject to
certain risks and uncertainties that could cause actual results to differ
materially from those indicated in the forward looking statements due to several
important factors identified from time to time in the Company's reports filed
with the Securities and Exchange Commission (the "SEC"). The Company hereby
incorporates by reference the discussion concerning forward looking statements
set forth in the Management's Discussion and Analysis of Financial Condition and
Results of Operations section of the Company's Annual Report on Form 10-K for
the year ended December 31, 1998 filed with the SEC, as well as the risk factors
identified within the same Annual Report on Form 10-K. Readers of this Report
are cautioned not to place undue reliance upon these forward looking statements,
which speak only as of the date hereof. The Company undertakes no obligation to
publicly release any revisions to these forward looking statements or reflect
events or circumstances after the date hereof.
12
<PAGE>
PART I - ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
CONTINUED
The Company believes that its interest risk associated with the Swap Agreements
(See Note C to the Condensed Consolidated Financial Statements) would have an
immaterial impact on the financial position, the results of operations and
cashflow of the Company. Furthermore, the Company has international operations
and does not anticipate any material currency risk to its business or financial
condition resulting from currency fluctuations.
PART II - OTHER INFORMATION
Items 1, 2, 3, 4 and 5 were not applicable in the three months ended March 31,
1999.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits:
27 - Financial Data Schedule *
b. No reports on Form 8-K were filed during the period for which
this Report is filed.
* - Filed in electronic form only.
13
<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 May 13, 1999
------------------------ ------------
Richard J. Pinola Date
Chairman of the Board and Chief Executive Officer
BY: /S/ G. LEE BOHS May 13, 1999
--------------------------------- ------------
G. Lee Bohs Date
Chief Financial Officer and
Principal Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 10,887
<SECURITIES> 0
<RECEIVABLES> 38,608
<ALLOWANCES> 1,360
<INVENTORY> 0
<CURRENT-ASSETS> 56,109
<PP&E> 41,054
<DEPRECIATION> 23,560
<TOTAL-ASSETS> 115,170
<CURRENT-LIABILITIES> 39,727
<BONDS> 0
0
0
<COMMON> 72
<OTHER-SE> 58,938
<TOTAL-LIABILITY-AND-EQUITY> 115,170
<SALES> 49,939
<TOTAL-REVENUES> 49,939
<CGS> 19,684
<TOTAL-COSTS> 39,477
<OTHER-EXPENSES> 5,936
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 45
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<INCOME-TAX> 1,946
<INCOME-CONTINUING> 2,481
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,481
<EPS-PRIMARY> 0.37
<EPS-DILUTED> 0.36
</TABLE>
