16
17
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[X] Quarterly report under Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended September 30,
1996, or
[ ] Transition report under Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the transition period from
Commission file No. 0-23170
HEADWAY CORPORATE RESOURCES, INC.
(Name of Small Business Issuer as specified in its charter)
Delaware 75-2134871
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
850 Third Avenue, 11th Floor, New York, NY 10022
(Address of Principal Executive Offices) (Zip Code)
Issuer's Telephone Number: (212) 508-3560
AFGL International, Inc.
(Former name, former address, and former fiscal year, if changed)
Check whether the issuer (1) has filed all reports required to be
filed by sections 13 or 15(d) of the Exchange Act during the
preceding 12 months (or for such shorter period that the issuer
was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [ ]
Check whether the issuer filed all documents and reports required
to be filed by Sections 12, 13 or 15(d) of the Exchange Act after
the distribution of securities under a plan confirmed by a court.
Yes [ ] No [ ]
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
6,152,132 shares of common stock.
FORM 10-QSB
HEADWAY CORPORATE RESOURCES, INC., AND SUBSIDIARIES
INDEX
PART I. Financial Information
Item 1. Financial Statements
Unaudited Consolidated Balance Sheet-
September 30, 1996 3
Unaudited Consolidated Statements of Operations
Three months and Nine Months Ended
September 30, 1996 and 1995 5
Unaudited Consolidated Statements of Cash Flows
Nine Months Ended September 30, 1996 and 1995 7
Notes to Consolidated Financial Statements 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results
of Operations 11
PART II. Other Information 15
Signatures 15
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
HEADWAY CORPORATE RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 1996
(UNAUDITED)
ASSETS
CURRENT ASSETS:
Cash and Cash Equivalents $
1,561,068
Accounts Receivable - Trade (Net of
Allowance
for Doubtful Accounts of $135,000) 9,780,722
Due from Employees
265,817
Deferred Income Taxes
181,896
Prepaid Expenses and Other Current
Assets 302,379
TOTAL CURRENT ASSETS $12,091,8
82
PROPERTY AND EQUIPMENT - NET
1,564,324
OTHER ASSETS
Cash Pledged $
85,248
Cash Surrender Value of Officers' Life
Insurance 369,769
Due from Related Parties
409,119
Due from Employees
63,779
Goodwill and Other Intangibles (Net of
Accumulated Amortization of $590,719)
12,378,559
Investment - at Cost
2,368,000
Deferred Income Taxes
615,602
Security Deposits and Other Assets
540,616
TOTAL OTHER ASSETS
16,830,69
2
TOTAL ASSETS $30,486,8
98
HEADWAY CORPORATE RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 1996
(UNAUDITED)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts Payable and Accrued Expenses $1,884,59
7
Capital Lease Obligations
87,136
Notes and Loans Payable
1,250,000
Deferred Income Taxes
58,621
Accrued Payroll
3,582,727
Income Taxes Payable
696,099
Value Added Taxes Payable
112,685
TOTAL CURRENT LIABILITIES $
7,671,865
LONG TERM LIABILITIES:
Notes and Loans Payable - Less Current
Portion 7,750,000
Capital Lease Obligations - Less
Current Portion 135,953
Deferred Rent
1,169,763
TOTAL LONG TERM LIABILITIES
9,055,716
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred Stock-$.001 Par Value,
4,407,912 $
Shares Authorized, None Issued or -
Outstanding
Series A, 8% Convertible Preferred
Stock-$.001
Par Value, 10,000 Shares Authorized,
2,800
Issued and Outstanding (Aggregate 700,000
Liquidation
Value $700,000)
Series B, Convertible Preferred Stock-
$.001 Par
Value, 6,858 Shares Authorized,
Issued and
Outstanding (Aggregate Liquidation 2,400,300
Value
$2,400,300)
Series C, Convertible Preferred Stock-
$.001 Par
Value, 150 Shares Authorized, 23.4
Issued and
Outstanding (Aggregate Liquidation 468,000
Value
$468,000)
Series D, Convertible Preferred Stock-
$.001 Par
Value, 80 Shares Authorized, 44
Issued and
Outstanding (Aggregate Liquidation 2,200,000
Value
$2,200,000)
Series E Convertible Preferred Stock-
$.001 Par
Value, 575,000 Shares Authorized,
None Issued
and Outstanding -
Common Stock-$.01 Par Value, 20,000,000
Shares
Authorized, 6,152,132 Shares Issued
and 61,521
Outstanding
Additional Paid-in Capital
8,029,162
Cumulative Translation Adjustments
78,269
Notes Receivable - Preferred Stock
(507,366)
Accumulated Earnings
329,431
TOTAL STOCKHOLDERS' EQUITY
13,759,31
7
TOTAL LIABILITIES AND STOCKHOLDERS' $30,486,8
EQUITY 98
HEADWAY CORPORATE RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
Revenue From
Temporary $15,295,28 $ $19,482,0 $
Staffing Services 6 - 88 -
Revenue From
Permanent
Staffing Services 3,035,828 2,860,952 13,295,13 9,006,454
6
Advisory Service
Revenue 998,088 1,270,015 2,655,970 3,698,730
Total Revenue $19,329,20 $ $35,433,1 $12,705,1
2 4,130,967 94 84
Cost of Temporary
Staffing Services
12,318,177 - 15,894,80 -
2
General and
Administrative
6,174,208 3,546,647 16,350,68 10,875,12
8 7
Depreciation And
Amortization
351,673 63,544 705,772 197,487
Total Operating
Expenses $18,844,05 $ $32,951,2 $11,072,6
8 3,610,191 62 14
Operating Income $ $ $ $
485,144 520,776 2,481,932 1,632,570
Other Expenses
(Income)
Interest Expense
218,928 30,003 444,853 60,689
Interest Income
(13,577) (16,391) (39,449) (53,896)
Other Expenses- $ $ $ $
Net 205,351 13,621 405,404 6,793
Income Before
Income Taxes And
Minority $ $ $ $
Interest 279,793 507,164 2,076,528 1,625,777
Income Tax Expense
(Benefit)
Current
83,113 174,669 1,063,081 718,255
Deferred
(20,566) (9,407) (54,669) (28,221)
Total Income Tax
Expense $ $ $ $
62,547 165,262 1,008,412 690,034
Income From
Continuing $ $ $ $
Operations - 217,246 341,902 1,068,116 935,743
Forward
HEADWAY CORPORATE RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
Income From
Continuing $ $ $ $
Operations - 217,246 341,902 1,068,116 935,743
Forwarded
Discontinued
Operations
Loss From
Operations
Of Discontinued
Segment [Net Of
Income Tax - (145,137) - (437,625)
Benefit]
Income Before
Minority Interest $ $ $ $
217,246 196,765 1,068,116 498,118
Minority Interest
In
(Earnings) Of
Consolidated
Subsidiary - (50,411) - (41,192)
Net Income $ $ $ $
217,246 146,354 1,068,116 456,926
Preferred Dividend
Requirements
111,258 14,000 211,341 42,000
Net Income
Available
For Common $ $ $ $
Stockholders 105,988 132,354 856,775 414,926
Primary Earnings
Per Common Share
Continuing $ $ $ $
Operations .02 .05 .14 .16
Net Income $ $ $ $
.02 .03 .14 .08
Fully Diluted
Earnings
Per Common Share
Continuing $ $ $ $
Operations .02 .04 .13 .13
Net Income $ $ $ $
.02 .02 .13 .07
HEADWAY CORPORATE RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended
September 30,
1996 1995
OPERATING ACTIVITIES:
Income from Continuing Operations $ 1,068,116 $ 894,551
Adjustments to Reconcile Income from
Continuing
Operations to Net Cash Provided by
[Used for] Operating Activities:
Minority Interest in Earnings of - 41,192
Consolidated 705,772 197,487
Subsidiary
Depreciation and Amortization (296,083) (28,221)
Deferred Income Taxes
Change in Assets and Liabilities:
(Increase) Decrease in:
Accounts Receivable
Prepaid Expenses and Other Current (1,540,953) (1,141,737)
Assets 753,985
Security Deposits and Other Assets (127,565)
(304,241) 2,175
Increase (Decrease) in:
Value Added Taxes Payable 59,555
Accounts Payable and Accrued Expenses (11,727)
Accrued Payroll (18,879)
Income Taxes Payable (684,352)
Deferred Rent 1,798,880 (1,038,731)
557,680 157,753
40,125 85,068
Total Adjustments 1,019,086
(1,811,903)
NET CASH - CONTINUING OPERATIONS 2,087,202
(917,352)
[Loss] from Discontinued Operations -
Adjustments to Reconcile [Loss} from (437,625)
Discontinued Operations to net Cash
Provided by Operating Activities:
Depreciation and Amortization -
Net Change in Assets and - 296,576
Liabilities 717,791
Net Cash - Discontinued Operations - 576,742
NET CASH - OPERATING ACTIVITIES - $ 2,087,202 $
Forward (340,610)
HEADWAY CORPORATE RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended
September 30,
1996 1995
NET CASH - OPERATING ACTIVITIES - $ 2,087,202 $
Forwarded (340,610)
INVESTING ACTIVITIES:
Expenditures for Property and Equipment
Repayments from Employees (180,994) (1,136,480
Advances to Employees 125,619 )
Repayments from Related Parties
Advances to Related Parties (318,325) -
Cash Acquired Through Acquisition of FCI 4,035
Cash Surrender Value of Officers Life -
Insurance (219,092)
Cash Paid for Acquisition - 8,420
(51,769) -
(9,852,739) 311,019
(45,000)
-
NET CASH - INVESTING ACTIVITIES
(10,493,265 (862,041)
)
FINANCING ACTIVITIES:
Cash Dividends Paid
Repayment of Officers Life Insurance (23,686) (28,000)
Loan
Proceeds from Officers Life Insurance (213,132) -
Loan
Borrowings on Notes Payable 213,132 -
Repayment of Notes Payable
Payment of Capital Lease Obligation 10,302,249 500,000
Cash Paid for Loan Acquisition Fees
Net Proceeds from Sale of Preferred (6,727,152) (209,824)
Stock
(46,294) (13,037)
(855,870) -
6,266,500 -
NET CASH - FINANCING ACTIVITIES
8,915,747 249,139
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND
CASH EQUIVALENTS (12,050) 26,947
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 497,634 (926,565)
CASH AND CASH EQUIVALENTS - BEGINNING OF
PERIODS 1,063,434 1,390,619
CASH AND CASH EQUIVALENTS - END OF $ $
PERIODS 1,561,068 464,054
HEADWAY CORPORATE RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) BASIS OF PRESENTATION
These financial statements are presented on a consolidated
basis and include the results of operations of the parent
corporation, Headway Corporate Resources, Inc., formerly AFGL
International, Inc., and its wholly-owned subsidiaries Whitney
Partners Inc. and its United Kingdom subsidiary ("WPI"), Furash &
Company, Inc. ("FCI"), Headway Corporate Staffing Services, Inc.
("HCSSI") and AFGL Inc. ("AFGL") (collectively referred to as the
"Company"), as of and for the three months and nine months ended
September 30, 1996, and Headway Corporate Resources, Inc. and its
wholly-owned subsidiaries WPI, FCI and AFGL for the three months
and nine months ended September 30, 1995. Effective January 1,
1996, WPI acquired the remaining minority interest in its United
Kingdom subsidiary. Also effective January 1, 1996, the Company
closed the sale of substantially all of the operating assets and
assumption of liabilities of AFGL to Citigate Communications
Group Limited ("Citigate") for an 18.3% interest in Citigate
valued at $2,368,000.
In the opinion of management, the accompanying unaudited
financial statements included in this Form 10-QSB reflect all
adjustments (consisting only of normal recurring accruals)
necessary for a fair presentation of the results of operations
for the periods presented. The results of operations for the
periods presented are not necessarily indicative of the results
to be expected for the full year.
For further information, refer to the financial statements
and footnotes included in the Company's Form 10-KSB for the year
ended December 31, 1995, filed on April 15, 1996.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Earnings Per Share - Primary earnings per share of common
stock are based on the weighted average number of common shares
outstanding for each period presented. Common stock equivalents
are included if dilutive. Fully diluted earnings per share of
common stock amounts are based on an increased number of shares
that would be outstanding assuming conversion of the convertible
preferred stock at the highest potential conversion rate. Net
income has been adjusted for the dividend requirements on the
convertible preferred stock. The number of shares used in the
computation of primary earnings per share was 7,059,113 and
5,285,128 for the three months ended September 30, 1996 and 1995,
respectively, and 6,249,905 and 5,370,441 for the nine months
ended September 30, 1996 and 1995, respectively. The number of
shares used in the computation of fully diluted earnings per
share was 9,555,054 and 6,662,277 for the three months ended
September 30, 1996 and 1995, respectively, and 8,337,344 and
6,702,857 for the nine months ended September 30, 1996 and 1995,
respectively.
Reclassifications - Certain reclassifications of 1995
balances have been made to conform to the 1996 presentation.
(3) ACQUISITION
On May 31, 1996, the Company closed the purchase of all of
the capital stock of Irene Cohen Temps, Inc., Corporate Staffing
Alternatives, Inc. and Certified Technical Staffing, Inc. and
certain assets of Irene Cohen Personnel, Inc. through its newly
formed subsidiary, Headway Corporate Staffing Services, Inc. The
capital stock of Irene Cohen Temps, Inc., Corporate Staffing
Alternatives, Inc., and Certified Technical Staffing, Inc. was
purchased at a price of $9,230,391. The operating assets of
Irene Cohen Personnel, Inc. were purchased for $500,000 payable
out of future earnings derived from the use of the assets
acquired. The businesses acquired offer a broad range of
employment-related services.
The operations of HCSSI from June 1, 1996 are included in
the Company's historical financial statements. The following are
the summarized, unaudited pro forma results of operations for the
three months and nine months ended September 30, 1996 and 1995,
assuming the acquisition occurred as of the beginning of the
period:
Three Three Nine Nine
Months Months Months Months
Ended Sept. Ended Ended Ended
30,1996 Sept. Sept. Sept.
30,1995 30, 1996 30, 1995
Net sales $19,329,202 $12,308,13 $58,561,78 $36,415,4
9 8 67
Net income $ 217,246 $ $ $
374,235 1,171,834 1,092,195
Primary earnings
per common share $ .02 $ $ $
.04 .13 .11
Fully diluted
earnings $ .02 $ $ $
per common share .03 .11 .11
(4) EQUITY AND DEBT TRANSACTIONS
A total of $2,532,000 of Series C Convertible Preferred
Stock was converted into 923,290 common shares and $1,800,000 of
Series D Convertible Preferred Stock was converted into 631,484
common shares as of September 30, 1996.
(5) SUBSEQUENT EVENTS
On October 21, 1996, the Company completed the acquisition
of Vogue Personnel Services, Inc., through its Headway Corporate
Staffing Services division. Vogue Personnel Services is a
provider of high-end computer graphics and word processing
temporary staffing services to the financial services community
in New York.
On November 6, 1996, the stockholders of the Company
approved the change of state of incorporation of the Company from
Nevada to Delaware through a merger of the Company with and into
Headway Corporate Resources, Inc., a Delaware company formed for
that purposes. In connection with the merger, the par value of
the Company's common stock and preferred stock will decrease to
$0.0001 par value.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Overview
The Company's financial performance continued to be
favorable in the third quarter of 1996. This can be attributed
to the strong performance by the financial services industry, the
positive results of the newly acquired temporary staffing company
and the return to profitability of the advisory services segment.
The Company expects this trend to continue as long as there is no
drastic change in the economy or the financial services industry.
The Company will continue to grow the temporary staffing service
segment for the financial services industry through acquisitions.
Consolidated
Consolidated revenues from continuing operations were
$19,329,202 for the quarter ended September 30, 1996, compared to
$4,130,967 for the same period in 1995. For the nine months
ended September 30, 1996, revenues were $35,433,194, up from
$12,705,184 a year earlier. The increase in revenue for the
three and nine month periods are primarily due to revenues from
the recently acquired temporary staffing company.
For the three months ended September 30, 1996, net income
increased 48% to $217,246 from $146,354 for the same period in
1995. Net income for the nine months ended September 30, 1996
increased 134% to $1,068,116 from $456,926 a year earlier.
Included in 1996 net income are four months of operations from
the temporary staffing company.
Fully diluted earnings per share were $0.02 for the quarters
ending September 30, 1996 and 1995. Fully diluted earnings per
share were $0.13 for the first nine months of 1996 up from $0.07
a year earlier.
Temporary Staffing Services Segment
The newly acquired temporary staffing services segment is
comprised of three subsidiaries of Headway Corporate Staffing
Services, Inc. For the three months ended September 30, 1996
revenues were $15,295,286 and net income was $462,243. Included
in the 1996 results are four months of operations from this
segment. For the four months ended September 30, 1996, revenues
were $19,482,088 and net income was $542,900. The Company will
continue to focus its growth in the staffing services industry
through internal operations and acquisitions.
Permanent Staffing Services Segment
This segment is comprised of executive search services from
Whitney Partners, Inc. and placement services from recently
acquired Headway Personnel, Inc., d.b.a. Irene Cohen Personnel,
Inc. Revenue increased $174,876 to $3,035,828 for the quarter
ended September 30, 1996, compared to $2,860,952 for the same
period in 1995. For the nine months ended September 30, 1996,
revenues increased $4,288,682 to $13,295,136 from $9,006,454 a
year earlier. Headway Personnel, acquired on May 31, 1996, had
revenues of $461,565 for four months of operations, of which
$317,615 were earned in the third quarter. WPI's revenues
decreased $142,739 in the third quarter of 1996 compared to the
same period in 1995, however, WPI's revenues increased $3,827,117
for the nine months ended September 30, 1996 compared to the same
period in 1995. The slight decrease in WPI's revenues for the
third quarter will be offset by an increase in the fourth
quarter. The backlog of searches continues to be high entering
the fourth quarter which should enable WPI to remain profitable
for the remainder of the year and into 1997.
Total operating expenses increased $569,291 to $3,140,180
for the quarter ended September 30, 1996, from $2,570,889 for the
same period last year. For the nine months ended September 30,
1996, total operating expenses increased $2,534,949 to
$10,214,352 from $7,679,403 for the same period in 1995. The
increase for the three month period is primarily attributable to
the operating expenses from newly acquired Headway Personnel.
The nine month increase occurred from the addition of Headway
Personnel and an increase in the executive search compensation
accrual directly related to the increased revenue.
This segment had a loss of $38,732 for the three months
ended September 30,1996, compared to net income of $148,923 for
the same period last year. Net income increased $927,833 or 136%
to $1,610,647 for the nine months ended September 30, 1996, from
net income of $682,814 for the same period in 1995. The loss in
the third quarter is directly attributable to the decrease in
executive search revenues. The nine month increase is due to
higher revenues offset by an increase in revenue related
compensation accruals and income tax expenses in the executive
search company.
Advisory Services Segment
Revenue from the advisory services offered by Furash
decreased $271,927 to $998,088 for the quarter ended September
30, 1996, compared to $1,270,015 for the same period in 1995.
Revenue for the nine months ended September 30, 1996 decreased
$1,042,760 to $2,655,970 compared to $3,698,730 a year earlier.
The loss of a major client accounted for approximately $596,000
of the decreased revenues. In addition, there was a decline in
billable hours for certain key consultants involved in the
development of new business lines.
FCI's total operating expenses decreased $120,042 to
$902,258 for the quarter ended September 30,1996, from $1,022,300
for the same period in 1995. Total operating expenses for the
nine months ended September 30, 1996 were $3,297,583 compared to
$3,333,884 for the same period in 1995. The decrease in
operating expenses in the third quarter is the result of the
reorganization plan implemented in the second quarter.
FCI contributed $53,910 of net income for the quarter ended
September 30, 1996 as compared to net income of $152,595 for the
same period in 1995. For the nine months ended September 30,
1996, a net loss of $393,323 was incurred as compared to net
income of $243,489 from a year earlier. The decrease is directly
related to the reduction in revenues. The improved results in
the third quarter, as compared to the first half of this year, is
a result of the aforementioned reorganization plan. Management
is optimistic that Furash will continue to show improvement in
their operating results for the balance of 1996 and into 1997.
Corporate
Corporate had operating expenses of $464,871 and net
interest expense of $208,166 for the quarter ended September 30,
1996. Corporate had operating expenses of $965,601 and net
interest expense of $362,736 for the nine months ended September
30, 1996. Operating expenses include amortization of intangibles
and loan acquisition fees of $354,258 and a one time charge of
approximately $335,000 in connection with the Company's
refinancing. Net corporate expenses, after a tax benefit, were
$260,175 and $692,108 for the three and nine months ended
September 30, 1996, respectively.
Liquidity and Capital Resources
The Company generated cash from operations during the nine
months ended September 30, 1996 of $2,087,202, as compared to
cash used in operations of $917,352 during the same period in
1995. The cash generated from operations in 1996 is primarily
attributable to the strong performance of the Company. The cash
used by operations in 1995 was the result of an increase in
accounts receivable and payment of bonus accruals.
The Company's working capital improved dramatically to
$4,420,017 at September 30,1996, from $1,493,696 at December 31,
1995. This was a result of the strong performance by the Company
and the completion of a $7 million equity offering and a $15
million credit facility which replaced existing short term
obligations and financed the acquisition of the temporary
staffing company. Management expects that the Company's working
capital position will continue to improve based on anticipated
continued positive operating results.
For the nine months ended September 30, 1996, the Company
used $10,493,265 in investing activities, compared to cash used
in investing activities of $862,041 for the same period last
year. The cash used for investing activities in 1996 primarily
related to the acquisition of the temporary staffing services
company on May 31, 1996. In 1995 cash was used for the
relocation of the Company's New York operations.
Total net cash received from financing activities was
$8,915,747 for the nine months ended September 30, 1996, compared
to net cash received from financing activities of $249,139 for
the same period in 1995. The cash generated in 1996 related to
the Company's equity offering completed in the second quarter and
the credit facility received in connection with the acquisition
of the temporary staffing company. The cash generated in 1995
was from a loan for furniture and equipment.
The Company expects to have sufficient cash flow from
operations and its financing sources to meet its capital needs
through the remainder of the year and into 1997.
PART II. OTHER INFORMATION
EXHIBITS: Attached only to the electronic filing by the Company
with the Securities and Exchange Commission is the Financial Data
Schedule, Exhibit Reference Number 27, in accordance with Item
601(c) of Regulation S-B.
FORM 8-K: During the last quarter, the Company filed a report on
Form 8-K dated September 16, 1996, reporting under Item 4, the
change in registrant's certifying accountants from Moore
Stephens, P.C., formerly Mortenson & Associates, to the
accounting firm of Ernst & Young LLP.
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HEADWAY CORPORATE RESOURCES, INC.
Date: November 13, 1996 By Barry S. Roseman (Signature)
President and Chief Operating
Officer (Duly Authorized and
Principal Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED FINANCIAL STATEMENTS OF HEADWAY CORPORATE RESOURCES, INC., FOR THE
QUARTER ENDED SEPTEMBER 30, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 1,561,068
<SECURITIES> 0
<RECEIVABLES> 9,780,722
<ALLOWANCES> 135,000
<INVENTORY> 0
<CURRENT-ASSETS> 12,091,882
<PP&E> 1,564,324
<DEPRECIATION> 1,046,378
<TOTAL-ASSETS> 30,486,898
<CURRENT-LIABILITIES> 7,671,865
<BONDS> 7,885,953
5,768,300
0
<COMMON> 61,521
<OTHER-SE> 8,446,082
<TOTAL-LIABILITY-AND-EQUITY> 30,486,898
<SALES> 0
<TOTAL-REVENUES> 35,433,194
<CGS> 0
<TOTAL-COSTS> 32,951,262
<OTHER-EXPENSES> 405,404
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