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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
SCHEDULE 14D-1
(Amendment No. 1)
Tender Offer Statement Pursuant to Section
14(d)(1) of the Securities Exchange Act of 1934
Barefoot Inc.
(Name of Subject Company)
ServiceMaster Limited Partnership
(Bidder)
Common Stock, $.01 par value
(Title of Class of Securities)
067512103
---------
(CUSIP Number of Class of Securities)
Vernon T. Squires
Senior Vice President and General Counsel
One ServiceMaster Way
Downers Grove, Illinois 60515-9869
Telephone: (630) 271-1300
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications on Behalf of Bidder)
Copies to:
Robert H. Kinderman
Kirkland & Ellis
200 E. Randolph Drive
Chicago, Illinois 60601
_______________________
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ServiceMaster Limited Partnership, a Delaware limited partnership
("ServiceMaster") hereby amends its Tender Offer Statement on Schedule 14D-1
relating to its offer to acquire each outstanding share ("Barefoot Share") of
common stock, par value $.01 per share, of Barefoot Inc. ("Barefoot") a Delaware
corporation, together with the associated Series A Junior Participating
Preferred Stock Purchase Rights not already owned by ServiceMaster.
Item 11. Material to be Filed as Exhibits.
(a)(9) Text of press release issued by ServiceMaster on January 23,
1997.
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
DATED: January 28, 1997
SERVICEMASTER LIMITED PARTNERSHIP
By: /s/ Vernon T. Squires
-------------------------------
Name : Vernon T. Squires
Title: Senior Vice President and
General Counsel
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EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
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(a)(9) Text of press release issued by ServiceMaster on January 23, 1997.
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NEWS RELEASE
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SERVICEMASTER(R) THE SERVICEMASTER
COMPANY L.P.
One ServiceMaster Way
Downers Grove, IL 60515-1700
630/271-1300
For further information contact:
Ernie Mrozek, CFO, ext. 2637
Claire Buchan, VP Comm., ext. 2150
FOR IMMEDIATE RELEASE
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January 23, 1997
SERVICEMASTER ACHIEVES 26TH CONSECUTIVE YEAR
OF GROWTH IN REVENUES AND PROFITS
---------------------------------
DOWNERS GROVE, Illinois -- SERVICEMASTER (NYSE:SVM) today reported record
revenue and net income for 1996, representing its 26th consecutive year of
growth. Customer level revenue increased 9 percent to $4.9 billion, with earned
revenue rising 8 percent to $3.5 billion. Net income of $245 million was up 43
percent over last year, while earnings per share of $1.70 represented a 17
percent increase. Cash flow from operations was strong, up 15 percent to $341
million, and again substantially exceeded net income. Return on weighted average
equity was 32 percent, well above market averages.
Fourth quarter 1996 revenue was $874 million, up 11 percent over 1995. Net
income rose 43 percent to $65 million, with earnings per share up 18 percent to
$.45. Operating income rose 23 percent, with double-digit increases in all four
segments.
As noted in previous quarters, the difference between net income and
earnings per share growth rates is primarily attributable to the Company's
December 1995 repurchase of a 28
Page 1 of 7
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percent minority ownership interest in its Consumer Services subsidiary in
exchange for 27 million unregistered and restricted ServiceMaster shares. Net
income was favorably affected by the resulting reduction in minority interest
expense, but there was no significant impact on earnings per share.
ServiceMaster Consumer Services achieved another year of strong
double-digit growth in 1996. Revenues were up 13 percent to $1.3 billion, while
profits increased 23 percent to $166.5 million. TruGreen-ChemLawn posted
double-digit increases in both revenues and profits, despite poor weather, with
sharp improvements in commercial sales and ancillary services to residential
customers. American Home Shield reported excellent growth and very strong
performance in all aspects of the business. Each of the other market leading
companies comprising the segment also achieved strong revenue growth and
increased profits.
ServiceMaster Management Services profits increased 11 percent due to
strong cost controls and improved customer retention, as well as the elimination
of losses from the Education Food Service business that was sold in 1995.
Revenues of $1.8 billion were up 3 percent, with stronger growth experienced
during the fourth quarter. Healthcare profits increased modestly, as improved
efficiencies offset a slight decline in revenues. Education achieved a solid
increase in revenues and improved customer retention, while profits were below
prior year levels due to lower margins on a higher mix of large school district
contracts. The Business and Industry Group posted double-digit growth in
revenues and profits, with a substantial increase in services to the aviation
industry.
Page 2 of 7
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ServiceMaster Diversified Health Services had another year of exceptional
growth in both revenues and profits, with significant improvements in management
and rehabilitation services and a sharp increase in transaction-related fees and
gains.
ServiceMaster International continued to experience strong growth in
revenues and profits from its direct pest control operations and its licensed
partners. Revenues increased 15 percent with a 23 percent improvement in
operating income. Net income was adversely affected by a nonrecurring charge
associated with a joint venture, and was consistent with prior year levels.
ServiceMaster Chief Executive Officer Carlos H. Cantu said, "1996 financial
results were excellent and we are pleased with the continuing momentum of the
ServiceMaster enterprise. Our Consumer Services segment continued its
outstanding track record, demonstrating the market demand for reliable,
professional home services. Management Services again achieved double-digit
profit growth, reflecting the benefits of our market-based reorganization.
Diversified Health Services had another exceptional year, and is well poised to
capitalize on the significant opportunities in long-term care that are presented
by the aging population. Our International operations reflect opportunities for
successful expansion in both our direct operations and licensed businesses. We
are excited about the new leadership in our major segments as we capitalize on
these growth opportunities.
Page 3 of 7
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"As we celebrate the 50th anniversary of ServiceMaster in 1997, we are
proud of our long record of outstanding customer service, financial performance
and returns to shareholders. ServiceMaster shareholders realized a total return
on their investment of 33 percent in 1996, and total compounded annual returns
in excess of 20 percent over the last five, ten and twenty year periods, all
significantly exceeding market averages," Cantu said.
ServiceMaster serves more than 6 million customers in the United States and
in 30 countries around the world, with annual customer level revenue of almost
$5 billion. ServiceMaster is a network of quality service companies with two
major operating segments, ServiceMaster Consumer Services and ServiceMaster
Management Services, and two emerging units, ServiceMaster Diversified Health
Services and International.
ServiceMaster Consumer Services includes seven market-leading companies --
TruGreen-Chemlawn, Terminix, ServiceMaster Residential and Commercial Services,
Merry Maids, American Home Shield, AmeriSpec and Furniture Medic--which operate
through the ServiceMaster Quality Service Network of over 5,500 U.S.
company-owned and franchised businesses.
ServiceMaster Management Services has over 2,500 customers and is the
leading facilities management company serving education, health care and
business and industrial facilities with management of plant operations and
maintenance, housekeeping, clinical equipment maintenance, food service,
laundry, grounds and energy.
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ServiceMaster Diversified Health Services provides a broad range of
services to home health care, assisted living, subacute and long-term care
markets, with more than 145 health care facilities under contract.
ServiceMaster International includes both direct operations and a variety
of license agreements in 30 foreign countries, which provide the broad range of
the company's services.
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SERVICEMASTER LIMITED PARTNERSHIP
Consolidated Statements of Income
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
December 31, December 31,
1996 1995 1996 1995
-------- -------- ---------- ----------
<S> <C> <C> <C> <C>
Operating Revenue................................. $873,871 $787,566 $3,458,328 $3,202,504
Operating Costs and Expenses:
Cost of services rendered and products sold....... 679,299 618,632 2,681,008 2,499,700
Selling and administrative expenses............... 114,632 104,028 482,102 450,937
-------- -------- ---------- ----------
Total operating costs and expenses................ 793,931 722,660 3,163,110 2,950,637
-------- -------- ---------- ----------
Operating Income.................................. 79,940 64,906 295,218 251,867
Non-operating Expense (Income):
Interest expense.................................. 9,640 8,673 38,298 38,855
Interest and investment income.................... (2,718) (1,764) (10,183) (7,310)
Minority interest................................. 6,485 10,820 14,706 45,715
-------- -------- ---------- ----------
Income before Income Taxes........................ 66,533 47,177 252,397 177,607
Provision for income taxes........................ 1,970 1,948 7,257 5,588
-------- -------- ---------- ----------
Net Income........................................ $ 64,563 $ 45,229 $ 245,140 $ 172,019
======== ======== ========== ==========
Per Limited Partners' Share................... $0.45 $0.38 $1.70 $1.45
===== ===== ===== =====
Number of Shares.................................. 144,752 118,965 144,439 118,970
======= ======= ======= =======
Cash Distributions Per Share...................... $0.17 $0.16 $0.66 $0.63
===== ===== ===== =====
Price Range Per Share:
High Price...................................... $26.63 $20.25 $26.63 $20.25
Low Price....................................... $23.75 $18.38 $19.38 $14.38
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</TABLE>
Notes:
1. The Partnership is not currently subject to federal and state income taxes.
However, under current law this tax status will expire at the end of 1997,
after which the Partnership will be taxed as a corporation. A reincorporating
plan has been approved by the shareholders and the Partnership currently
expects to reincorporate, on a tax-free basis to shareholders, on December
31, 1997. It is currently estimated that the effective tax rate upon
reincorporation will be approximately 40% of pretax earnings. This estimate
is necessarily subject to change based on changes in circumstances, statutory
tax rates, etc. Pro forma earnings per share for the years ended December 31,
1996 and 1995 would be $1.04 and $0.89, respectively, assuming
reincorporation had occurred at the beginning of each respective year.
2. All share and per share data have been restated for all periods presented to
reflect the three-for-two share split effective June 24, 1996.
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SERVICEMASTER LIMITED PARTNERSHIP
Condensed Consolidated Balance Sheets (In thousands)
<TABLE>
<CAPTION>
AS OF
December 31, December 31,
ASSETS 1996 1995
------------ ------------
<S> <C> <C>
Current Assets:
Cash and marketable securities, including cash and cash equivalents
of $72,009 and $23,113, respectively $ 114,413 $ 49,429
Receivables, net of allowances 270,401 243,649
Inventories and other current assets 114,520 100,161
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Total current assets 499,334 393,239
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Intangible assets, primarily trade names and goodwill, net of accumulated amortization 1,088,444 1,021,050
Property and equipment, net of accumulated depreciation 146,400 145,852
Notes receivable, long-term securities, and other assets 112,663 89,749
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Total assets 1,846,841 1,649,890
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LIABILITIES AND EQUITY
Current liabilities $ 425,525 $ 372,930
Long-term debt 482,315 411,903
Other long-term obligations 125,299 105,700
Minority interest 16,908 12,697
Shareholders' equity 796,767 746,660
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Total liabilities and shareholder's equity $1,846,841 $ 1,649,890
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS)
Twelve Months Ended
December 31,
1996 1995
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CASH AND CASH EQUIVALENTS AT JANUARY 1 $ 23,113 $ 14,333
CASH FLOWS FROM OPERATIONS:
NET INCOME 245,140 172,019
Adjustments to reconcile net income to net cash flows from operations:
Depreciation 41,658 38,332
Amortization 37,348 27,656
Change in working capital, net of acquisitions 9,294 10,039
Minority interests and other, net 7,946 49,379
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NET CASH PROVIDED FROM OPERATIONS 341,386 297,425
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Property additions (42,952) (44,624)
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FREE OPERATING CASH FLOWS 298,434 252,801
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CASH FLOWS FROM INVESTING ACTIVITIES:
Business acquisitions net of cash acquired (58,473) (42,763)
Net purchases of investments securities (20,075) (6,820)
Proceeds from sale of businesses 4,526 23,255
Notes receivble and financial investments 3,304 (12,250)
Payments to sellers of acquired businesses (3,742) (2,908)
Sales of equipment and other assets 2,664 2,250
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NET CASH USED FOR INVESTING ACTIVITIES (71,796) (39, 236)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings, net 123,732 96,067
Payment of borrowings and other obligations (82,857) (85,945)
Distributions to shareholders and shareholders' trust (146,520) (127,070)
Distributions to holders of minority interests (3,074) (32,794)
Purchase of treasury shares (76,556) (58,500)
Proceeds from employee share option plans 6,835 3,183
Other 698 274
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NET CASH USED FOR FINANCING ACTIVITIES (177,742) (204,785)
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CASH INCREASE DURING THE PERIOD 48,896 8,780
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CASH AND CASH EQUIVALENTS AT DECEMBER 31 $ 72,009 $ 23,113
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</TABLE>
