SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
----------------------------------------
FORM 10-Q
(mark one)
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the Quarter Ended January 2, 1999.
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934.
Commission File Number 0-18095
THE RANDERS KILLAM GROUP INC.
(Exact name of Registrant as specified in its charter)
Delaware 38-2788025
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
27 Bleeker Street
Milburn, New Jersey 49444
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (781) 622-1000
The Randers Group Incorporated
570 Seminole Road, Norton Shores, Michigan, 07041
(Former name and former address)
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 the latest practicable date.
Class Outstanding at February 1, 1999
------------------------------ -------------------------------
Common Stock, $.0001 par value 2,823,136 Actual
25,429,347 Pro Forma
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
- -----------------------------
THE RANDERS KILLAM GROUP INC.
Consolidated Balance Sheet
(Unaudited)
Assets
January 2, April 4,
(In thousands) 1999 1998
- ---------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents (includes $14,347
and $8,713 under repurchase agreement
with related party) $15,541 $ 9,763
Accounts receivable, less allowances of $1,347
and $760 13,985 14,304
Unbilled contract costs and fees 9,393 9,333
Prepaid income taxes 1,342 1,359
Prepaid expenses 448 373
------- -------
40,709 35,132
------- -------
Property, Plant, and Equipment, at Cost 16,241 15,716
Less: Accumulated depreciation and
amortization 4,936 4,052
------- -------
11,305 11,664
------- -------
Other Assets 1,966 1,177
------- -------
Cost in Excess of Net Assets of Acquired
Companies 44,324 45,220
------- -------
$98,304 $93,193
======= =======
2
<PAGE>
THE RANDERS KILLAM GROUP INC.
Consolidated Balance Sheet (continued)
(Unaudited)
Liabilities and Shareholders' Investment
January 2, April 4,
(In thousands except share amounts) 1999 1998
- --------------------------------------------------------------------------
Current Liabilities:
Notes payable and current maturities of
long-term obligations $ 190 $ 187
Accounts payable 6,174 3,809
Accrued payroll and employee benefits 2,981 3,254
Accrued income taxes 1,730 1,016
Other accrued expenses 566 725
Due to affiliated companies 673 319
------- -------
12,314 9,310
------- -------
Deferred Income Taxes 888 888
------- -------
Other Deferred Items 939 1,049
------- -------
Long-term Obligations 1,785 1,948
------- -------
Shareholders' Investment:
Common stock, $.0001 par value, 30,000,000
shares authorized; 25,429,347 pro forma shares
issued and outstanding (Note 2) 13 13
Capital in excess of par value 79,321 79,321
Retained earnings 3,044 664
------- -------
82,378 79,998
------- -------
$98,304 $93,193
======= =======
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
THE RANDERS KILLAM GROUP INC.
Consolidated Statement of Income
(Unaudited)
Three Months Ended
--------------------------
January 2, January 3,
(In thousands except per share amounts) 1999 1998
- --------------------------------------------------------------------------
Revenues $ 20,816 $ 18,269
-------- --------
Costs and Operating Expenses:
Cost of revenues 16,140 13,245
Selling, general, and administrative
expenses 3,372 3,370
-------- --------
19,512 16,615
-------- --------
Operating Income 1,304 1,654
Interest Income 177 25
Interest Expense (38) (44)
Other Income 40 -
-------- --------
Income Before Provision for Income Taxes 1,483 1,635
Provision for Income Taxes 710 729
-------- --------
Net Income $ 773 $ 906
======== ========
Basic and Diluted Earnings per Share
(Notes 2 and 3) $ .03 $ .04
======== ========
Weighted Average Shares (Notes 2 and 3):
Basic 25,429 25,429
======== ========
Diluted 25,429 25,567
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
THE RANDERS KILLAM GROUP INC.
Consolidated Statement of Income
(Unaudited)
Nine Months Ended
-------------------------
January 2, January 3,
(In thousands except per share amounts) 1999 1998
- --------------------------------------------------------------------------
Revenues $ 61,887 $ 53,344
-------- --------
Costs and Operating Expenses:
Cost of revenues 47,483 39,083
Selling, general, and administrative
expenses 10,251 9,264
-------- --------
57,734 48,347
-------- --------
Operating Income 4,153 4,997
Interest Income 461 70
Interest Expense (121) (160)
Other Income 40 -
-------- --------
Income Before Provision for Income Taxes 4,533 4,907
Provision for Income Taxes 2,153 2,176
-------- --------
Net Income $ 2,380 $ 2,731
======== ========
Basic and Diluted Earnings per Share
(Notes 2 and 3) $ .09 $ .11
======== ========
Weighted Average Shares (Notes 2 and 3):
Basic 25,429 25,005
======== ========
Diluted 25,446 25,059
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE>
THE RANDERS KILLAM GROUP INC.
Consolidated Statement of Cash Flows
(Unaudited)
Nine Months Ended
--------------------------
January 2, January 3,
(In thousands) 1999 1998
- --------------------------------------------------------------------------
Operating Activities:
Net income $ 2,380 $ 2,731
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 2,086 2,033
Provision for losses on accounts
receivable 584 157
Other noncash items (307) (117)
Changes in current accounts, excluding
the effects of transfer of business
from parent company:
Accounts receivable (627) (2,877)
Unbilled contract costs and fees (60) (1,114)
Other current assets (91) (159)
Accounts payable 2,365 1,232
Other current liabilities 624 (1,700)
------- -------
Net cash provided by operating activities 6,954 186
------- -------
Investing Activities:
Purchases of property, plant, and equipment (873) (1,308)
Proceeds from sale of property, plant, and
equipment 121 18
Other (131) (24)
------- -------
Net cash used in investing activities (883) (1,314)
------- -------
Financing Activities:
Repayment of note payable (293) (177)
Net transfer from parent company - 2,808
Cash acquired from transfer of business from
parent company - 1,442
------- -------
Net cash provided by (used in) financing
activities (293) 4,073
------- -------
Increase in Cash and Cash Equivalents 5,778 2,945
Cash and Cash Equivalents at Beginning of Period 9,763 1,737
------- -------
Cash and Cash Equivalents at End of Period $15,541 $ 4,682
======= =======
6
<PAGE>
THE RANDERS KILLAM GROUP INC.
Consolidated Statement of Cash Flows (continued)
(Unaudited)
Nine Months Ended
--------------------------
January 2, January 3,
(In thousands) 1999 1998
- --------------------------------------------------------------------------
Noncash Activities:
Transfer of acquired business from parent
company $ - $ 4,700
======= =======
The accompanying notes are an integral part of these consolidated financial
statements.
7
<PAGE>
THE RANDERS KILLAM GROUP INC.
Notes to Consolidated Financial Statements
1. General
The interim consolidated financial statements presented have been prepared
by The Randers Killam Group Inc. (formerly The Randers Group Incorporated; the
Company) without audit and, in the opinion of management, reflect all
adjustments of a normal recurring nature necessary for a fair statement of the
financial position at January 2, 1999, the results of operations for the three-
and nine-month periods ended January 2, 1999, and January 3, 1998, and the cash
flows for the nine-month periods ended January 2, 1999, and January 3, 1998. The
Company's results of operations for the three-month periods ended January 2,
1999, and January 3, 1998, include 13 weeks and 14 weeks, respectively, and its
results of operations and cash flows for the nine-month periods ended January 2,
1999, and January 3, 1998, include 39 weeks and 40 weeks, respectively. Interim
results are not necessarily indicative of results for a full year.
The consolidated balance sheet presented as of April 4, 1998, has been
derived from the consolidated financial statements that have been audited by the
Company's independent public accountants. The consolidated financial statements
and notes are presented as permitted by Form 10-Q and do not contain certain
information included in the annual financial statements and notes of the
Company. The consolidated financial statements and notes included herein should
be read in conjunction with the financial statements and notes included in the
Company's Annual Report on Form 10-K for the fiscal year ended April 4, 1998,
filed with the Securities and Exchange Commission.
2. Special Meeting of Shareholders
Common Stock Reverse Split
In January 1998, the Company's Board of Directors declared a one-for-five
reverse stock split, subject to the approval of the Company's shareholders. On
January 28, 1999, at a Special Meeting of the Company's Shareholders, the
Company's shareholders voted to approve the one-for-five reverse stock split,
which was effective as of February 1, 1999. All share and per share information
has been restated to reflect the reverse stock split.
Name Change
At the January 1999 Special Meeting of Shareholders, the Company's
shareholders approved a change of the Company name to The Randers Killam Group
Inc.
Approval of Issuance of Shares for Killam Acquisition
Also at the January 1999 Special Meeting of Shareholders, the Company's
shareholders approved the listing on the American Stock Exchange's Emerging
Company Marketplace of the 22,606,210 shares of common stock to be issued to
Thermo TerraTech Inc. for the acquisition of The Killam Group Inc., which has
been accounted for as a reverse acquisition in the Company's current and prior
Exchange Act filings subsequent to September 1997.
8
<PAGE>
3. Earnings per Share
Basic and diluted earnings per share were calculated as follows:
Three Months Ended Nine Months Ended
------------------ -------------------
(In thousands except Jan. 2, Jan. 3, Jan. 2, Jan. 3,
per share amounts) 1999 1998 1999 1998
- --------------------------------------------------------------------------
Basic
Net Income $ 773 $ 906 $ 2,380 $ 2,731
-------- -------- -------- --------
Shares Issuable in Connection
With the Acquisition of The
Killam Group 22,606 22,606 22,606 22,606
Randers' Weighted Average
Shares Outstanding From
May 12, 1997, Date of
Acquisition by Thermo
TerraTech Inc. 2,823 2,823 2,823 2,399
-------- -------- -------- --------
Pro Forma Weighted Average
Shares 25,429 25,429 25,429 25,005
-------- -------- -------- --------
Basic Earnings per Share $ .03 $ .04 $ .09 $ .11
======== ======== ======== ========
Diluted
Net Income $ 773 $ 906 $ 2,380 $ 2,731
-------- -------- -------- --------
Pro Forma Weighted Average
Shares 25,429 25,429 25,429 25,005
Effect of Stock Options - 138 17 54
-------- -------- -------- --------
Pro Forma Weighted Average
Shares, as Adjusted 25,429 25,567 25,446 25,059
-------- -------- -------- --------
Diluted Earnings per Share $ .03 $ .04 $ .09 $ .11
======== ======== ======== ========
The computation of diluted earnings per share excludes the effect of
assuming the exercise of certain outstanding stock options because the effect
would be antidilutive. As of January 2, 1999, there were 1,237,550 shares of
such options outstanding, with exercise prices ranging from $1.90 to $4.40 per
share.
4. Comprehensive Income
During the first quarter of fiscal 1999, the Company adopted Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income." This
pronouncement sets forth requirements for disclosure of the Company's
comprehensive income and accumulated other comprehensive items. In general,
comprehensive income combines net income and "other comprehensive items," which
represents certain items reported as components of shareholders' investment. The
Company has no such items and, accordingly, its comprehensive income is equal to
its net income for all periods presented.
9
<PAGE>
5. Option Exchange
In November 1998, the Company's employees, excluding its officers and
directors, were offered the opportunity to exchange previously granted options
to purchase shares of Company common stock for an amount of options equal to
half of the number of options previously held, exercisable at a price equal to
the fair market value at the time of the exchange offer. Holders of options to
acquire 482,000 shares at a weighted average exercise price of $3.30 elected to
participate in this exchange and, as a result, received options to purchase
241,000 shares of Company common stock at $1.90 per share. The other terms of
the new options are the same as the exchanged options except that the holders
may not sell shares purchased pursuant to such new options for six months from
the exchange date.
6. Proposed Reorganization
On August 12, 1998, Thermo Electron Corporation announced a proposed
reorganization involving certain of Thermo Electron's subsidiaries, including
the Company. As part of this reorganization, Thermo Electron announced that the
Company may be taken private and become a wholly owned subsidiary of Thermo
TerraTech. It is currently contemplated that shareholders of the Company would
receive shares of common stock, $.10 par value per share, of Thermo TerraTech in
exchange for their shares of the Company's common stock. The completion of this
transaction is subject to numerous conditions, including the establishment of
prices or exchange ratios; confirmation of anticipated tax consequences; the
approval of the Board of Directors of Thermo TerraTech; the negotiation and
execution of a definitive merger agreement; the receipt of a fairness opinion
from an investment banking firm that the transaction is fair to the Company's
shareholders (other than Thermo TerraTech and Thermo Electron) from a financial
point of view; the approval of an independent committee of the Company's Board
of Directors; and clearance by the Securities and Exchange Commission of any
necessary documents regarding the proposed transaction.
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
Forward-looking statements, within the meaning of Section 21E of the
Securities Exchange Act of 1934, are made throughout this Management's
Discussion and Analysis of Financial Condition and Results of Operations. For
this purpose, any statements contained herein that are not statements of
historical fact may be deemed to be forward-looking statements. Without limiting
the foregoing, the words "believes," "anticipates," "plans," "expects," "seeks,"
"estimates," and similar expressions are intended to identify forward-looking
statements. There are a number of important factors that could cause the results
of the Company to differ materially from those indicated by such forward-looking
statements, including those detailed under the heading "Forward-looking
Statements" in Exhibit 13 to the Company's Annual Report on Form 10-K for the
fiscal year ended April 4, 1998, filed with the Securities and Exchange
Commission.
10
<PAGE>
Overview
The Company provides comprehensive engineering and outsourcing services in
such areas as water and wastewater treatment, highway and bridge projects,
process engineering, construction management, and inspection and operational
services.
In May 1997, Thermo TerraTech Inc. purchased a controlling interest in The
Randers Group Incorporated. (Randers), a provider of design, engineering,
project management, and construction services for industrial clients in the
manufacturing, pharmaceutical, and chemical-processing industries. Subsequently,
Thermo TerraTech entered into a definitive agreement to transfer its wholly
owned engineering and consulting businesses (known as The Killam Group) to
Randers in exchange for additional shares of Randers' common stock. As a result
of these transactions, the Killam Group was deemed to be the "accounting
acquiror," as approved at the January 1999 Special Meeting of the Company's
Shareholders (Note 2), and historical results for Randers have been restated to
solely reflect the financial information of The Killam Group for periods prior
to May 12, 1997, and to reflect the combined results of The Killam Group and
Randers (collectively, the Company) from May 12, 1997, the date on which Thermo
TerraTech became the majority-owner of Randers. The Company's Killam Associates,
Inc. subsidiary provides environmental consulting and engineering services and
specializes in wastewater treatment and water resources management. The
Company's BACKillam subsidiary provides both private- and public-sector clients
with a range of consulting services that address transportation planning and
design. In addition, in November 1996, Thermo TerraTech acquired Carlan
Consulting Group, Inc., a provider of transportation and environmental
consulting and professional engineering and architectural services, and
subsequently transferred it to the Company.
Results of Operations
Third Quarter Fiscal 1999 Compared With Third Quarter Fiscal 1998
Revenues increased 14% to $20.8 million in the third quarter of fiscal 1999
from $18.3 million in the third quarter of fiscal 1998, primarily due to two
construction and labor management contracts which commenced during the first
quarter of fiscal 1999 and are expected to be completed by the end of the first
quarter of fiscal 2000.
The gross profit margin decreased to 22% in the third quarter of fiscal 1999
from 28% in the third quarter of fiscal 1998, primarily due to a change in sales
mix to lower-margin construction-management contracts from higher-margin design
contracts.
Selling, general, and administrative expenses as a percentage of revenues
decreased to 16% in the third quarter of fiscal 1999 from 18% in the third
quarter of fiscal 1998 due to the increase in revenues from the construction and
labor management contracts.
11
<PAGE>
Third Quarter Fiscal 1999 Compared With Third Quarter Fiscal 1998
(continued)
Interest income increased $0.2 million in the third quarter of fiscal 1999
compared with the third quarter of fiscal 1998, primarily due to higher average
invested balances.
The effective tax rates were 48% and 45% in the third quarter of fiscal 1999
and 1998, respectively. The effective tax rates exceeded the statutory federal
income tax rate primarily due to nondeductible amortization of cost in excess of
net assets of acquired companies and the impact of state income taxes. The tax
rate increased in the third quarter of fiscal 1999 primarily due to the higher
relative effect of nondeductible expenses.
First Nine Months Fiscal 1999 Compared With First Nine Months Fiscal 1998
Revenues increased 16% to $61.9 million in the first nine months of fiscal
1999 from $53.3 million in the first nine months of fiscal 1998, primarily due
to two construction and labor management contracts which commenced during the
first quarter of fiscal 1999 and are expected to be completed by the end of the
first quarter of fiscal 2000, as well as the inclusion of revenues from Randers
for the full nine months in fiscal 1999, which resulted in a $3.5 million
increase in revenues. Randers was acquired effective May 1997 for accounting
purposes.
The gross profit margin decreased to 23% in the first nine months of fiscal
1999 from 27% in the first nine months of fiscal 1998, primarily due to a change
in sales mix to lower-margin construction-management contracts from
higher-margin design contracts.
Selling, general, and administrative expenses as a percentage of revenues
remained unchanged at 17% in the first nine months of fiscal 1999 and fiscal
1998.
Interest income increased $0.4 million in the first nine months of fiscal
1999 compared with the first nine months of fiscal 1998, primarily due to higher
average invested balances.
The effective tax rates were 47% and 44% in the first nine months of fiscal
1999 and 1998, respectively. The effective tax rates exceeded the statutory
federal income tax rate primarily due to nondeductible amortization of cost in
excess of net assets of acquired companies and the impact of state income taxes.
The tax rate increased in the first nine months of fiscal 1999 primarily due to
the higher relative effect of nondeductible expenses.
Liquidity and Capital Resources
Consolidated working capital was $28.4 million at January 2, 1999, compared
with $25.8 million at April 4, 1998. Included in working capital are cash and
cash equivalents of $15.5 million at January 2, 1999, compared with $9.8 million
at April 4, 1998. During the first nine months
12
<PAGE>
Liquidity and Capital Resources (continued)
of fiscal 1999, $7.0 million of cash was provided by operating activities.
During this period, $2.4 million of cash was provided by an increase in accounts
payable, primarily due to increased subcontract work, as well as the timing of
payments. In addition, $0.6 million of cash was provided by an increase in other
current liabilities, primarily due to an increase in due to affiliated
companies. These sources of cash were offset in part by an increase of $0.6
million in accounts receivable due to the timing of receipts from a construction
and labor management contract. The days sales outstanding in unbilled contract
costs and fees and accounts receivable at January 2, 1999, were 41 and 59 days,
respectively, compared with 47 and 68 days, respectively at April 4, 1998.
Management does not believe that the change in the number of days sales
outstanding is indicative of any trend that would materially affect the
Company's future results of operations or liquidity.
The Company's investing activities in the first nine months of fiscal 1999
primarily consisted of capital additions. The Company expended $0.9 million for
purchases of property, plant, and equipment in the first nine months of fiscal
1999. The Company expects to expend approximately $0.7 million for capital
additions during the remainder of fiscal 1999.
In the first nine months of fiscal 1999, the Company's financing activities
used cash of $0.3 million for the repayment of a note payable.
The Company generally expects to have positive cash flow from its existing
operations. Although the Company does not presently intend to actively seek to
acquire additional businesses in the near future, it may acquire one or more
complimentary businesses if they are presented to the Company on terms the
Company believes to be attractive. Such acquisitions may require significant
amounts of cash. The Company expects that it will finance any such acquisitions
through a combination of internal funds and/or short-term borrowings from Thermo
TerraTech or Thermo Electron Corporation, although it has no agreement with
these companies to ensure that funds will be available on acceptable terms, or
at all. The Company believes that its existing resources are sufficient to meet
the capital requirements of its existing businesses for the foreseeable future.
Year 2000
The Company continues to assess the potential impact of the year 2000 on the
Company's internal business systems, products, and operations. The Company's
year 2000 initiatives include (i) testing and upgrading significant information
technology systems and facilities; (ii) contacting key suppliers and vendors to
determine their year 2000 compliance status; and (iii) developing a contingency
plan.
The Company's State of Readiness
The Company has implemented a compliance program to ensure that its critical
information technology systems and facilities will be ready for the year 2000.
The first phase of the program, testing and evaluating the Company's critical
information technology systems and facilities for year 2000 compliance, has
largely been completed. During phase one, the
13
<PAGE>
Year 2000 (continued)
Company tested and evaluated its significant computer systems, software
applications, and related equipment for year 2000 compliance. The Company also
evaluated the potential year 2000 impact on its critical facilities. The Company
is currently in phase two of its program, during which any noncompliant systems
or facilities that were identified during phase one are prioritized and
remediated. The Company is currently upgrading or replacing such noncompliant
information technology systems, and this process was approximately 75% complete
as of January 2, 1999. In many cases, such upgrades or replacements are being
made in the ordinary course of business, without accelerating previously
scheduled upgrades or replacements. The Company expects that all of its material
information technology systems and critical facilities will be year 2000
compliant by September 1999. For phase three of the program, the Company will
continue periodic testing of its critical internal business systems and
facilities in an effort to minimize operating disruptions due to year 2000
issues.
The Company is in the process of identifying and assessing the year 2000
readiness of key suppliers and vendors that are believed to be significant to
the Company's business operations. As part of this effort, the Company has
developed and is distributing questionnaires relating to year 2000 compliance to
its significant suppliers and vendors. The Company has started to follow-up and
monitor the year 2000 compliance progress of significant suppliers and vendors
that indicate that they are not year 2000 compliant or that do not respond to
the Company's questionnaires. The Company has not completed the majority of its
assessment of third party risk, but expects to be substantially completed by
June 1999.
Contingency Plan
The Company intends to develop a contingency plan that will allow its
primary business operations to continue despite disruptions due to year 2000
problems. This plan may include identifying and securing other suppliers. As the
Company continues to evaluate the year 2000 readiness of its business systems
and facilities and significant suppliers and vendors, it will modify and adjust
its contingency plan as may be required.
Estimated Costs to Address the Company's Year 2000 Issues
The Company had not incurred material expenses to third parties (External
Costs) related to year 2000 issues as of January 2, 1999, and the total External
Costs of year 2000 remediation are not expected to be material.
The Company does not track the internal costs incurred for its year 2000
compliance project. Such costs are principally the related payroll costs for its
information systems group.
Risks of the Company's Year 2000 Issues
While the Company is attempting to minimize any negative consequences
arising from the year 2000 issue, there can be no assurance that year 2000
problems will not have a material adverse impact on the Company's
14
<PAGE>
Year 2000 (continued)
business, operations, or financial condition. While the Company expects that
upgrades to its internal business systems will be completed in a timely fashion,
there can be no assurance that the Company will not encounter unexpected costs
or delays. Some services provided by the Company may involve the delivery to
clients of third-party software and hardware. Accordingly, the Company may see
an increase in warranty and other claims related to Company services that
incorporate such software or hardware. In addition, certain older third-party
products, which the Company no longer uses in providing its services to clients,
may not be year 2000 compliant, which may expose the Company to claims. If any
of the Company's material suppliers or vendors experience business disruptions
due to year 2000 issues, the Company might also be materially adversely
affected. There is expected to be a significant amount of litigation relating to
the year 2000 issue and there can be no assurance that the Company will not
incur material costs in defending or bringing lawsuits. In addition, if any year
2000 issues are identified, there can be no assurance that the Company will be
able to retain qualified personnel to remedy such issues. Any unexpected costs
or delays arising from the year 2000 issue could have a significant adverse
impact on the Company's business, operations, and financial condition in amounts
that cannot be reasonably estimated at this time.
PART II - OTHER INFORMATION
Item 6 - Exhibits
See Exhibit Index on the page immediately preceding exhibits.
15
<PAGE>
THE RANDERS KILLAM GROUP INC.
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 as of the 4th day of February 1999.
THE RANDERS KILLAM GROUP INC.
/s/ Paul F. Kelleher
------------------------
Paul F. Kelleher
Chief Accounting Officer
/s/ Theo Melas-Kyriazi
------------------------
Theo Melas-Kyriazi
Chief Financial Officer
16
<PAGE>
THE RANDERS KILLAM GROUP INC.
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
- --------------------------------------------------------------------------------
3.1 Certificate of Amendment to the Company's Certificate of
Incorporation (filed as Exhibit 3 to Amendment No. 1 to the Company's
Registration Statement on Form 8-A and incorporated herein by
reference).
4.1 Specimen Common Stock Certificate (filed as Exhibit 6 to Amendment
No. 1 to the Company's Registration Statement on Form 8-A, and
incorporated herein by reference).
27.1 Financial Data Schedule.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE RANDERS
KILLAM GROUP INC. REPORT ON FORM 10-Q FOR THE QUARTER ENDED JANUARY 2, 1999 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> APR-03-1999
<PERIOD-END> JAN-02-1999
<CASH> 15,541
<SECURITIES> 0
<RECEIVABLES> 15,332
<ALLOWANCES> 1,347
<INVENTORY> 0
<CURRENT-ASSETS> 40,709
<PP&E> 16,241
<DEPRECIATION> 4,936
<TOTAL-ASSETS> 98,304
<CURRENT-LIABILITIES> 12,314
<BONDS> 1,785
0
0
<COMMON> 13
<OTHER-SE> 82,365
<TOTAL-LIABILITY-AND-EQUITY> 98,304
<SALES> 0
<TOTAL-REVENUES> 61,887
<CGS> 0
<TOTAL-COSTS> 57,734
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 584
<INTEREST-EXPENSE> 121
<INCOME-PRETAX> 4,533
<INCOME-TAX> 2,153
<INCOME-CONTINUING> 4,533
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,533
<EPS-PRIMARY> 0.09<F1>
<EPS-DILUTED> 0.09<F1>
<FN>
<F1>THE FINANCIAL STATEMENTS OF THE COMPANY HAVE BEEN RESTATED FOR A REVERSE
STOCK SPLIT, EFFECTIVE 2/01/1999.
</FN>
</TABLE>
