<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES ACT OF 1934
Date of Report (Date of earliest event reported): June 26, 1996
Technology Solutions Company
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-19433 36-3584201
- ------------------------------------------------------------------------------
(State or Other (Commission (I.R.S. Employer
Jurisdiction File Number) Identification No.)
of Corporation)
205 North Michigan Avenue, Chicago, IL 60601
- -----------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 228-4500
Not Applicable
- -----------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
- ------------------------------------------
(c) Exhibits
1 Press release of the Company dated June 26, 1996.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Current Report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: June 26, 1996 By: TECHNOLOGY SOLUTIONS COMPANY
(Registrant)
By: /s/ Martin T. Johnson
-----------------------------------------
Martin T. Johnson
Chief Financial and Accounting Officer
<PAGE>
NEWS RELEASE
For further information, contact:
Tork Johnson, CFO
Andrea Stack, Investor Relations
Heidi Dethloff, Public Relations
Technology Solutions Company Date: June 26, 1996
312/228-4500 For Release: Immediate
web http://www.TechSol.com
________________________________________________________________________
TECHNOLOGY SOLUTIONS COMPANY ANNOUNCES
FOURTH QUARTER AND YEAR-END RESULTS
FISCAL 1996 REVENUES UP 48% FROM LAST YEAR, NET INCOME UP 36%
FOURTH QUARTER RECORD-BREAKING REVENUES, NET INCOME UP 100%
CHICAGO June 26, 1996 -- Technology Solutions Company (TSC) (NASDAQ:
TSCC) today announced year-end revenues of $97.6 million for the fiscal year
ending May 31, 1996, up 48 percent from the $65.8 million of the prior year.
TSC also closed a record fourth quarter with revenues of $28.1 million, up
43 percent over the $19.6 million recorded in the fourth quarter of fiscal 1995.
Net income for the quarter doubled to $2.6 million from the $1.3 million
recorded in fiscal 1995.
"We've made extraordinary strides this year toward achieving our financial
and strategic goals," said William H. Waltrip, TSC chairman of the board.
"We've begun a successful international expansion, introduced new capabilities
in electronic commerce and Baan packaged software implementation, made two
strategic acquisitions, and brought to closure litigation lingering from our
early years. Our momentum clearly shows in our financial results."
GROWTH IN REVENUES CONTINUES FOR NINTH STRAIGHT QUARTER
- --------------------------------------------------------
With revenues of $28.1 million, TSC achieved the highest quarterly revenues
in the company's history and the ninth straight quarter of increased revenues.
Net income for fourth quarter fiscal 1996 was $2.6 million, up 100 percent
compared to a year ago.
-more-
<PAGE>
Year-End Results/Add One
Fourth quarter 1996 marked the first quarter in which the employee retention
program did not have an impact. This two-year program ended successfully in
February 1996.
Earnings per share for the fourth quarter were $0.24 on 11 million shares
and equivalent shares outstanding. Operating income for fourth quarter fiscal
1996 was $3.6 million, up 154 percent from the year ago period.
During the quarter, TSC managed 107 projects at 80 clients, including 10
new clients. The company also completed two acquisitions: Aspen Consultancy, a
U.K.-based call center consulting firm, and McLaughlin & Associates, a Chicago
area business strategy consulting firm.
FISCAL YEAR 1996 RESULTS
- ------------------------
On revenues of $97.6 million, net income for fiscal 1996 was $6.5 million,
excluding previously recorded special charges associated with the settlement of
litigation in the second and third quarters of the year. Including these
charges, net income was $4.6 million, compared to $3.4 million reported in
fiscal 1995.
Without the special charges, earnings per share were $0.63 on 10.8 million
shares and equivalent shares outstanding. Including the charges, reported
earnings per share for fiscal 1996 were $0.44 compared to $0.35 per share for
the prior year.
Operating income for fiscal 1996 was $8.2 million without the special
charges. Including the charges, operating income for fiscal 1996 was $4.9
million compared to $2.8 million for the prior year.
"Our strong operating performance shows the results of our strategic
efforts," said John T. Kohler, president and chief executive officer. "We are
building deep business and technology skills within our chosen market niches.
And we're now positioned to offer our clients a one-stop solution for business
strategy services and information technology consulting."
-more-
<PAGE>
Year-End Results/Add Two
During the year, TSC served 94 clients, of whom 50 were new clients. Nine
new clients were part of the company's international expansion program, which
includes an already profitable Mexican subsidiary and new offices in London as
part of TSC's European expansion. To support the expanded business base, the
number of employees has increased to 622, up 47 percent from 423 at the close of
fiscal year 1995, and more than 10 percent of TSC employees are now
international employees. The number of vice president/project managers has grown
to 72.
After the close of the fiscal year, TSC announced a three-for-two stock
split of its common stock, effecting a 50 percent stock dividend to be
distributed on July 30, 1996, to shareholders of record as of the close of
business on July 1, 1996. "It's been a rewarding year for all our stakeholders--
employees, clients, partners, and shareholders," said Kohler. "We hope to make
fiscal 1997 just as eventful."
Technology Solutions Company delivers business benefits through business
and technology consulting services that help clients transform customer
relationships and improve operations. TSC partners with clients in a wide range
of industries and has earned recognition as a leader in client/server solutions
for supply chain management, call center and customer service reengineering,
electronic commerce, financial services, and the integration of packaged
software. The company has headquarters in Chicago and offices in New York,
Atlanta, Dallas, Philadelphia, Los Angeles, Mexico City, and London.
The forward-looking statements included in this news release, which reflect
management's best judgment based on factors currently known, involve risks and
uncertainties including the successful completion of client projects and the
development of new consulting services and geographic markets, the successful
integration of the operations of Aspen Consultancy and McLaughlin & Associates,
and other risks detailed from time to time in the company's SEC reports,
including the Report on Form 10-K for the year ended May 31, 1995, and the
annual report to shareholders. Actual results may vary materially.
# # #
<PAGE>
TECHNOLOGY SOLUTIONS COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
For the Quarter Ended For the Year Ended
May 31, May 31,
--------------------- ----------------------
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
REVENUES:
Professional fees............ $28,040 $19,609 $97,004 $65,704
Software and hardware
products.................... 61 -- 595 113
-------- ------- ------- -------
28,101 19,609 97,599 65,817
-------- ------- ------- -------
COSTS AND EXPENSES:
Project personnel............ 13,270 8,775 46,744 29,204
Other project expenses....... 3,741 2,877 13,010 8,991
Cost of products sold........ 71 -- 476 110
Management and
administrative support...... 5,558 5,206 22,605 18,501
Shareholder litigation
settlement.................. -- -- 2,345 --
Company founders litigation
settlement.................. -- -- 944 --
Former company executive
settlements................. -- -- -- 1,590
Incentive compensation....... 1,830 1,323 6,611 4,651
-------- ------- ------- -------
24,470 18,181 92,735 63,047
-------- ------- ------- -------
OPERATING INCOME.............. 3,631 1,428 4,864 2,770
-------- ------- ------- -------
INVESTMENT INCOME............. 495 516 1,904 1,930
-------- ------- ------- -------
INCOME BEFORE INCOME TAXES.... 4,126 1,944 6,768 4,700
INCOME TAX PROVISION.......... 1,518 632 2,194 1,333
-------- ------- ------- -------
NET INCOME.................... $ 2,608 $ 1,312 $ 4,574 $ 3,367
======== ======= ======= =======
EARNINGS PER COMMON SHARE..... $ 0.24 $ 0.14 $ 0.44 $ 0.35
======== ======= ======= =======
WEIGHTED AVERAGE NUMBER OF
COMMON AND COMMON
EQUIVALENT SHARES
OUTSTANDING.................. 10,999,973 10,280,638 10,761,351 10,741,647
========== ========== ========== ==========
Share Data as Adjusted For July 30, 1996 Three-for-Two Stock Split:
- -------------------------------------------------------------------
EARNINGS PER COMMON SHARE..... $ 0.16 $ 0.09 $ 0.30 $ 0.24
======= ======= ======= =======
WEIGHTED AVERAGE NUMBER OF
COMMON AND COMMON
EQUIVALENT SHARES
OUTSTANDING.................. 16,499,960 15,420,957 16,142,027 16,112,471
========== ========== ========== ==========
</TABLE>
<PAGE>
TECHNOLOGY SOLUTIONS COMPANY
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
ASSETS
<TABLE>
<CAPTION>
May 31, May 31,
1996 1995
--------- ---------
CURRENT ASSETS:
<S> <C> <C>
Cash and cash equivalents............. $ 12,990 $ 7,595
Marketable securities................. 11,580 9,714
Receivables........................... 23,537 13,710
Refundable income taxes............... 5,117 1,256
Deferred income taxes................. 1,194 1,757
Other current assets.................. 6,166 3,813
-------- --------
Total current assets............. 60,584 37,845
COMPUTERS, FURNITURE AND EQUIPMENT, NET. 4,443 3,083
LONG-TERM INVESTMENTS................... 17,140 21,422
COST IN EXCESS OF NET ASSETS OF
ACQUIRED BUSINESSES AND OTHER 3,079 --
INTANGIBLES............................
LONG-TERM RECEIVABLES AND OTHER......... 4,191 2,872
-------- --------
Total assets..................... $ 89,437 $ 65,222
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable...................... $ 1,344 $ 772
Accrued compensation and related costs 11,621 8,932
Accrued legal costs................... 953 1,640
Capitalized lease obligations......... 2,616 1,750
Deferred compensation................. 2,660 --
Other current liabilities............. 214 402
-------- --------
Total current liabilities........ 19,408 13,496
-------- --------
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value;
shares authorized -- 10,000,000...... __ __
Common stock, $.01 par value; shares
authorized -- 50,000,000............. 179 119
Capital in excess of par value........ 50,344 44,121
Retained earnings..................... 35,983 31,409
Unrealized holding loss............... (642) (853)
-------- --------
85,864 74,796
Less: Treasury stock, at cost (15,835) (23,070)
-------- --------
Total stockholders' equity....... 70,029 51,726
-------- --------
Total liabilities and
stockholders' equity............ $ 89,437 $ 65,222
======== ========
</TABLE>
