<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, 1997
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)
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
1 Press release of the Company dated June 26, 1997
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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: July 2, 1997 By: TECHNOLOGY SOLUTIONS COMPANY
(Registrant)
By: /s/ Martin T. Johnson
-------------------------------------
Martin T. Johnson
Chief Financial and Accounting Officer
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[LETTERHEAD]
NEWS RELEASE
For further information, contact:
Tork Johnson, CFO
Andrea Stack, Investor Relations
Technology Solutions Company Date: June 26, 1997
312/228-4500 For Release: Immediate
web http://www.TechSol.com
______________________________________________________________________________
TECHNOLOGY SOLUTIONS COMPANY ANNOUNCES
RECORD FOURTH QUARTER AND YEAR-END RESULTS;
DECLARES 3-FOR-2 STOCK SPLIT
FOURTH QUARTER REVENUES UP 82%; NET INCOME DOUBLES FROM YEAR AGO;
EARNINGS PER SHARE REACH $0.29
CHICAGO June 26, 1997 -- Technology Solutions Company (TSC) (NASDAQ: TSCC)
today announced year-end revenues of $165.1 million for the fiscal year ended
May 31, 1997, up 69 percent from the $97.6 million of the prior year.
TSC posted the highest quarterly revenues in the company's history with
record fourth quarter revenues of $51.1 million, up 82 percent over the $28.1
million recorded in the fourth quarter of fiscal 1996.
Additionally, the company's board of directors approved a three-for-two
stock split of the company's common stock. The stock split effects a 50 percent
stock dividend to be distributed on August 1, 1997, to shareholders of record as
of the close of business on July 10, 1997.
"Our results mark the thirteenth consecutive quarter of increased revenues
for TSC and are a clear indication of our continued business and financial
strength," explained John T. Kohler, president and chief executive officer.
"Additionally, we are extremely pleased to announce the stock split, enabling a
broader range of investors to participate in the company's future."
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GROWTH AND INVESTMENT SPENDING CONTINUES
Total company operating income for the fiscal 1997 fourth quarter was $7.8
million, compared to operating income of $3.6 million for the fiscal 1996 fourth
quarter. Total company net income for the fiscal 1997 fourth quarter was $5.2
million, up 100 percent from $2.6 million for the same period in fiscal 1996.
Earnings per share for the fiscal 1997 fourth quarter were $0.29 on 18.1
million shares and equivalent shares outstanding, compared to earnings per share
of $0.16 on 16.5 million shares and equivalent shares outstanding in the fourth
quarter of fiscal 1996.
On annual revenues of $165.1 million, net income for fiscal 1997 was $15.1
million, up 229 percent from the $4.6 million recorded in fiscal 1996. The
fiscal 1996 results include two litigation settlement charges totaling a pretax
amount of $3.3 million. Excluding these charges, net income was $6.5 million for
fiscal 1996.
Earnings per share were $0.85 on 17.7 million shares and equivalent shares
outstanding for fiscal 1997 compared to $0.30 on 16.1 million shares and
equivalent shares outstanding for the prior fiscal year.
"We have made some significant, strategic investments this year," noted
Kohler. "We completed three acquisitions, introduced new capabilities in the
telecommunications marketplace and continued our international expansion in
Europe, Canada and Latin America. We believe these strategic investments will
help ensure TSC's continued financial success."
INTERNATIONAL REVENUE AND EMPLOYEE HEADCOUNT INCREASES
TSC's international revenues for the fiscal 1997 fourth quarter continued
to grow, and represented approximately 14 percent of total company revenues, up
from 5 percent for the same period in 1996.
TSC increased the total number of project managers by over 50 percent,
employing 118 vice presidents up from 72 a year ago. By the end of the fourth
quarter, TSC's total company headcount grew to 1102 employees worldwide, up 77
percent from 622 a year ago. With the recent acquisition of The Bentley Company,
mid-June total company headcount was 1212.
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TSC initiated work at 48 new clients and started 146 new projects this
quarter. Throughout the fourth quarter, TSC managed 374 projects at 217
clients worldwide.
"TSC continues to differentiate itself on the basis of the experience and
expertise of our professionals," said Kohler. "The high caliber of our people
enables us to expand our service offerings through new targeted business
initiatives. In fact, businesses we established in the last 12 months from our
international start-ups to our complementary business services and other key
acquisitions are now contributing in excess of 15 percent of total company
revenues. We will continue to consider appropriate strategic investments to
support our long-term strategy and corporate growth objectives."
As previously announced, TSC combined with HRM Resources, Inc., a New York
firm specializing in packaged software solutions, in a pooling of interest
transaction that closed March 1. Additionally, subsequent to the end of the
fourth quarter, TSC announced that it had acquired The Bentley Company, a
Boston-area based consulting organization focused on internal information
technology service and support, as well as external customer relationship
management services for Fortune 500 companies.
Technology Solutions Company provides 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 relationship management, 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.
###
Any forward-looking statements, including those referring to market outlook and
company prospects included in this news release 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 acquired businesses and business combinations, 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.
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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
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May 31, May 31, May 31, May 31,
1997 1996 1997 1996
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<S> <C> <C> <C> <C>
REVENUES:
Professional fees $50,782 $28,040 $164,238 $97,004
Software and hardware products 277 61 850 595
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51,059 28,101 165,088 97,599
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COSTS AND EXPENSES:
Project personnel 22,550 13,270 76,508 46,744
Other project expenses 7,137 3,741 23,374 13,010
Cost of products sold -- 71 54 476
Management and administrative support 10,891 5,558 32,074 22,605
Goodwill amortization 265 -- 811 --
Shareholder litigation settlement -- -- -- 2,345
Company founders litigation settlement -- -- -- 944
Incentive compensation 2,425 1,830 9,394 6,611
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43,268 24,470 142,215 92,735
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OPERATING INCOME 7,791 3,631 22,873 4,864
INVESTMENT INCOME 613 495 2,104 1,904
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INCOME BEFORE INCOME TAXES 8,404 4,126 24,977 6,768
INCOME TAX PROVISION 3,201 1,518 9,910 2,194
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NET INCOME $ 5,203 $ 2,608 $ 15,067 $ 4,574
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------- ------- -------- -------
EARNINGS PER COMMON SHARE $ 0.29 $ 0.16 $ 0.85 $ 0.30
------- ------- -------- -------
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WEIGHTED AVERAGE NUMBER OF
COMMON AND COMMON
EQUIVALENT SHARES
OUTSTANDING 18,077,340 16,499,960 17,719,520 16,142,027
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SHARE DATA AS ADJUSTED FOR AUGUST 1, 1997 THREE-FOR-TWO STOCK SPLIT:
EARNINGS PER COMMON SHARE $ 0.19 $ 0.11 $ 0.57 $ 0.20
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WEIGHTED AVERAGE NUMBER OF
COMMON AND COMMON
EQUIVALENT SHARES
OUTSTANDING 27,116,010 24,749,940 26,579,280 24,213,040
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</TABLE>
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TECHNOLOGY SOLUTIONS COMPANY
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
ASSETS
May 31, May 31,
1997 1996
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CURRENT ASSETS:
Cash and cash equivalents $ 27,951 $12,990
Marketable securities 15,988 11,580
Receivables 43,907 23,537
Refundable income taxes 1,398 5,117
Deferred income taxes 7,234 1,194
Other current assets 11,196 6,166
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Total current assets 107,674 60,584
COMPUTERS, FURNITURE AND EQUIPMENT, NET 6,416 4,443
LONG-TERM INVESTMENTS 8,118 17,140
COST IN EXCESS OF NET ASSETS OF ACQUIRED
BUSINESSES AND OTHER INTANGIBLES 3,521 3,079
LONG-TERM RECEIVABLES AND OTHER 8,137 4,191
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Total assets $133,866 $89,437
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,604 $ 1,344
Accrued compensation and related costs 17,001 11,621
Capitalized lease obligations 240 2,616
Deferred compensation 6,842 2,660
Other current liabilities 2,392 1,167
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Total current liabilities 28,079 19,408
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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 - 17,903,593 179 179
Capital in excess of par value 62,048 50,344
Retained earnings 51,627 35,983
Unrealized holding loss (319) (642)
Cumulative translation adjustment (318) --
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113,217 85,864
Less: Treasury stock, at cost (1,415,590 and
3,014,045 shares) (7,430) (15,835)
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Total stockholders' equity 105,787 70,029
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Total liabilities and stockholders'
equity $133,866 $89,437
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