<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): December 19, 1996
Technology Solutions Company
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(Exact name of registrant as specified in its charter)
Delaware 0-19433 36-3584201
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(State or Other (Commission (I.R.S. Employer
Jurisdiction File Number) Identification No.)
of Corporation)
205 North Michigan Avenue, Chicago, IL 60601
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 228-4500
Not Applicable
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(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 December 19, 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: December 19, 1996 By: TECHNOLOGY SOLUTIONS COMPANY
(Registrant)
By: /s/ Martin T. Johnson
----------------------------------
Martin T. Johnson
Sr. Vice President -Chief Financial Officer
<PAGE>
NEWS RELEASE
For further information, contact:
Tork Johnson, Chief Financial Officer
Andrea Stack, Investor Relations
Heidi Dethloff, Public Relations Date: December 18, 1996
Technology Solutions Company
312/228-4500 For Release: Immediate
web: http://www.TechSol.com
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TECHNOLOGY SOLUTIONS COMPANY
REPORTS RECORD SECOND QUARTER 1997 RESULTS
REVENUES INCREASED BY 70 PERCENT;
15 PERCENT OPERATING INCOME MARGIN TARGET ACHIEVED
CHICAGO December 18, 1996 -- Technology Solutions Company (TSC) (Nasdaq:
TSCC) today announced fiscal 1997 second quarter revenues of $39.5 million for
the period ended November 30, 1996, up 70 percent from the $23.3 million in the
second quarter of fiscal 1996. Revenues for the first half of fiscal 1997 were
$71.7 million, up 63 percent from $44.0 million in the first half of fiscal
1996.
Total company operating income for the fiscal 1997 second quarter was $5.9
million, compared to a reported operating loss of ($560,000) in the fiscal 1996
second quarter which includes the one-time securities litigation settlement
charge of $2.3 million. Total company net income for the second quarter was
$3.7 million, compared to reported net income of $43,000 in the fiscal 1996
second quarter reflecting the one-time charge. Earnings per share for the
second quarter 1997 were $0.21 on 17.7 million shares and equivalent shares
outstanding, compared with earnings per share of $0.01 on 15.9 million shares
and equivalent shares outstanding in second quarter 1996 (including the one-time
charge). All per share figures reflect the three-for-two stock split effective
July 1996.
"This is another record-setting quarter for TSC, representing our eleventh
consecutive quarter of increased revenues and employee headcount. On an equally
positive note, we are
-more-
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TSC SECOND QUARTER RESULTS/ADD ONE
pleased to report that the company has achieved its 15 percent operating
margin," said John T. Kohler, president and CEO of TSC. "Further, our fiscal
1997 first half revenue results exceed the company's full year revenues for
fiscal 1995."
The first half of fiscal 1997 net income was $5.9 million, compared to $1.2
million in the first half of fiscal 1996 including the one-time charge.
Earnings per share for the first half of fiscal 1997 were $0.34 on 17.4 million
shares and equivalent shares outstanding.
Kohler noted that TSC's aggressive recruiting of highly experienced
professionals is helping fuel the company's growth. The total number of project
managers increased to 94 from 88 on August 31, 1996. TSC's total company
headcount is 836 employees worldwide up from 537 a year ago. TSC, both
domestically and internationally, managed 172 projects at 107 clients, including
13 new clients and 35 new projects this quarter.
"Our three core businesses -- U.S. Consulting and Systems Integration,
International Consulting, and Strategic and Complementary Services -- give us
the opportunity to sharpen our focus on the needs of the marketplace," said
Kohler. "This structure provides our executives with the authority and
responsibility to manage multiple business units, encourages strong
collaboration, and provides our global customers with greater value."
The company's U.S. Consulting and Systems Integration business is comprised
of six business units: Call Center, Enterprise Applications,
Telecommunications, Products, Financial Services, and Managed Health Care.
Kohler noted that Enterprise Applications, responsible for the large-scale
implementation of the enterprise application software packages, is TSC's fastest
growing business unit and fueled the company's revenue growth this quarter.
TSC's international consulting revenues for the second quarter 1997
represented approximately 12 percent of TSC's total company revenues. During
the quarter, 15 percent of TSC's total employees worked outside of the U.S. on
consulting and implementation projects in Latin America, Canada, and Europe.
Earlier this month, the company expanded its European operations with the
formation of TSC Europe (Deutschland) GmbH.
-more-
<PAGE>
TSC SECOND QUARTER RESULTS/ADD TWO
"Our work in call center and customer relationship management consulting
continues to drive our business in Europe and Canada, while our Enterprise
Applications business is the primary focus of our work in Latin America," added
Kohler.
The company will continue to expand geographically, regionalize marketing
and recruiting, and broaden its service offerings in targeted niches that
provide clients with value-added services, noted Kohler. TSC's Strategic and
Complementary Services business includes among others, McLaughlin & Associates,
the company's strategic management consulting unit, and Change & Learning
Technologies, its education and training business, which was announced in a
separate press release earlier this week.
Technology Solutions Company delivers 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 with major offices throughout the U.S., Canada, Latin
America, and Europe.
# # #
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, 1996, 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 Six Months Ended
November 30, November 30,
------------------------ --------------------------
1996 1995 1996 1995
---- ---- ---- ----
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
REVENUES:
Professional fees . . . . . . . . . . . . $39,521 $23,128 $71,336 $43,860
Software and hardware products. . . . . . -- 172 347 172
------- ------- ------- -------
39,521 23,300 71,683 44,032
------- ------- ------- -------
COSTS AND EXPENSES:
Project personnel . . . . . . . . . . . . 17,746 10,583 33,823 20,646
Other project expenses. . . . . . . . . . 5,266 3,651 10,059 6,154
Cost of products sold . . . . . . . . . . -- 21 54 21
Management and administrative support . . 7,960 5,684 13,643 11,211
Shareholder litigation settlement . . . . -- 2,345 -- 2,345
Incentive compensation. . . . . . . . . . 2,621 1,576 5,025 2,974
------- ------- ------- -------
33,593 23,860 62,604 43,351
------- ------- ------- -------
OPERATING INCOME (LOSS). . . . . . . . . . . 5,928 (560) 9,079 681
INVESTMENT INCOME. . . . . . . . . . . . . . 490 440 953 907
------- ------- ------- -------
INCOME (LOSS) BEFORE INCOME TAXES. . . . . . 6,418 (120) 10,032 1,588
INCOME TAX PROVISION (BENEFIT) . . . . . . . 2,672 (163) 4,161 390
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NET INCOME . . . . . . . . . . . . . . . . . $ 3,746 $ 43 $ 5,871 $ 1,198
------- ------- ------- -------
------- ------- ------- -------
EARNINGS PER COMMON SHARE. . . . . . . . . . $ 0.21 $ 0.01 $ 0.34 $ 0.08
------- ------- ------- -------
------- ------- ------- -------
WEIGHTED AVERAGE NUMBER OF
COMMON AND COMMON
EQUIVALENT SHARES
OUTSTANDING . . . . . . . . . . . . . . . 17,721,736 15,882,476 17,400,407 15,845,439
---------- ---------- ---------- ----------
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</TABLE>
<PAGE>
TECHNOLOGY SOLUTIONS COMPANY
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
ASSETS
<TABLE>
<CAPTION>
November 30, May 31,
1996 1996
---- ----
(unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents . . . . . . . . . . . . . $ 17,593 $12,990
Marketable securities . . . . . . . . . . . . . . . 14,697 11,580
Receivables . . . . . . . . . . . . . . . . . . . . 38,222 23,537
Refundable income taxes . . . . . . . . . . . . . . 7,011 5,117
Deferred income taxes . . . . . . . . . . . . . . . 3,457 1,194
Other current assets. . . . . . . . . . . . . . . . 6,043 6,166
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Total current assets. . . . . . . . . . . . . . . 87,023 60,584
COMPUTERS, FURNITURE AND EQUIPMENT, NET . . . . . . 4,513 4,443
LONG-TERM INVESTMENTS . . . . . . . . . . . . . . . 11,044 17,140
COST IN EXCESS OF NET ASSETS OF ACQUIRED
BUSINESSES AND OTHER INTANGIBLES. . . . . . . . . . 3,625 3,079
LONG-TERM RECEIVABLES AND OTHER . . . . . . . . . . 4,239 4,191
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Total assets. . . . . . . . . . . . . . . . . . . $110,444 $89,437
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable. . . . . . . . . . . . . . . . . . $ 1,937 $ 1,344
Accrued compensation and related costs. . . . . . . 10,537 11,621
Capitalized lease obligations . . . . . . . . . . . 1,918 2,616
Deferred compensation . . . . . . . . . . . . . . . 5,426 2,660
Other current liabilities . . . . . . . . . . . . . 2,205 1,167
-------- -------
Total current liabilities . . . . . . . . . . . . 22,023 19,408
-------- -------
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value; shares authorized --
10,000,000, none issued . . . . . . . . . . . . . . __ __
Common stock, $.01 par value; shares authorized --
50,000,000, shares issued - 15,704,153. . . . . . . 179 179
Capital in excess of par value . . . . . . . . . . . . 58,405 50,344
Retained earnings. . . . . . . . . . . . . . . . . . . 41,854 35,983
Unrealized holding loss. . . . . . . . . . . . . . . . (450) (642)
Cumulative Translation Adjustment. . . . . . . . . . . (19) --
-------- -------
99,969 85,864
Less: Treasury stock, at cost (2,199,440 and
3,014,045 shares) . . . . . . . . . . . . . . . . . (11,548) (15,835)
-------- -------
Total stockholders' equity. . . . . . . . . . . . . 88,421 70,029
-------- -------
Total liabilities and stockholders' equity. . . . . $110,444 $89,437
-------- -------
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</TABLE>
