2
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Amendment No. 1
Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of event reported): July 28, 1997.
HEADWAY CORPORATE RESOURCES, INC.
(Exact name of registrant as specified in its charter)
Commission File Number: 0-23170
DELAWARE 75-2134871
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
850 Third Avenue, 11th Floor
New York, NY 10022
(Address of principal executive (Zip Code)
offices)
Registrant's Telephone Number: (212) 508-3560
NOT APPLICABLE
(Former name, former address and former fiscal year,
if changed since last report)
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
On or about August 6, 1997, Headway Corporate Resources,
Inc. ("Company"), filed a current report on Form 8-K reporting
that the Company acquired on July 28, 1997, substantially all the
assets of Administrative Sales Associates Temporaries, Inc. and
Administrative Sales Associates, Inc., (collectively "ASA") both
New York corporations engaged in the business of offering
permanent and temporary staffing services to the financial
services industry. This amendment to that report is filed for
the purpose of presenting the unaudited combined financial
statements of ASA for the period ended June 30, 1997, and the pro
forma financial information required by Item 7(b).
(a) Financial Statements. Included with this report are the
historical combined audited financial statements of ASA for the
calendar years ended December 31, 1996 and 1995, and the
historical unaudited combined audited financial statements of ASA
for the period ended June 30, 1997 and 1996. The financial
statements presented include the following:
Combined Balance Sheets as of December 31, 1995 and 1996 and
June 30, 1997 (Unaudited)
Combined Statements of Income and Retained Earnings for the
years ended December 31, 1995 and 1996 and six months ended
June 30, 1996 and 1997 (Unaudited)
Combined Statement of Cash Flows for the years ended December
31, 1995 and 1996 and six months ended June 30, 1996 and
1997 (Unaudited)
Notes to Combined Financial Statements
(b) Pro Forma Financial Information
Balance Sheet. Included with this amendment beginning on page P-
2 is the pro forma condensed combined balance sheet as of June
30, 1997, giving effect to the acquisition of ASA.
Income Statements. Included with this amendment beginning on
page P-3 are the pro forma condensed combined statements of
operations of the Company for the year ended December 31, 1996,
and the six months ended June 30, 1997, giving effect to the
acquisition of ASA.
(c) Exhibits. Included in this report at page E-1 is the
Consent of Ernst & Young LLP (SEC Ref. No. 23).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, as amended, the Registrant has duly caused this report
to be signed on its behalf by the undersigned hereunto duly
authorized.
HEADWAY CORPORATE RESOURCES, INC.
DATED: September 29, 1997 By: Barry Roseman (Signature)
President
<PAGE>
Administrative Sales Associates Temporaries, Inc.
and
Administrative Sales Associates, Inc.
Combined Financial Statements
Index to Financial Statements
Report of Independent Auditors F-2
Combined Balance Sheets as of December 31, 1995
and 1996 and June 30, 1997 (Unaudited) F-3
Combined Statements of Income and Retained Earnings
for the years ended December 31, 1995 and 1996 and
six months ended June 30, 1996 and 1997 (Unaudited) F-4
Combined Statement of Cash Flows for the years ended
December 31, 1995 and 1996 and six months ended
June 30, 1996 and 1997 (Unaudited) F-5
Notes to Combined Financial Statements F-6
<PAGE>
Report of Independent Auditors
The Shareholders of
Administrative Sales Associates Temporaries, Inc.
and Administrative Sales Associates, Inc.
We have audited the accompanying combined balance sheets of
Administrative Sales Associates Temporaries, Inc. and
Administrative Sales Associates, Inc. (collectively, the
"Company") as of December 31, 1996 and 1995, and the related
statements of income and retained earnings and cash flows for the
years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Administrative Sales Associates Temporaries, Inc. and
Administrative Sales Associates, Inc. at December 31, 1996 and
1995, and the results of their operations and their cash flows
for the years then ended, in conformity with generally accepted
accounting principles.
ERNST & YOUNG LLP
New York, New York
June 30, 1997
<PAGE>
Administrative Sales Associates Temporaries, Inc.
and
Administrative Sales Associates, Inc.
Combined Balance Sheets
December 31 June 30
1995 1996 1997
(Unaudited)
Assets
Current assets:
Cash $ 131,212 $ 224,638 $1,018,794
Accounts receivable 2,670,499 3,647,433 3,399,007
Prepaid expenses and other
current assets 70,151 113,678 129,607
Amounts due from shareholders - - 22,164
Total current assets 2,871,862 3,985,749 4,569,572
Property and equipment-net 16,250 23,214 22,919
Deposits 12,105 12,105 12,105
Total assets $ 2,900,217 $4,021,068 $4,604,596
Liabilities and shareholders'equity
Current liabilities:
Line of credit $ 350,000 $ 500,000 $ -
Notes payable-bank 133,333 33,333 5,555
Loans from shareholders 366,652 254,546 -
Accounts payable and accrued expenses 353,143 113,126 301,110
Accrued payroll taxes 157,293 196,823 103,826
Commission payable 320,323 364,934 347,914
Accrued pension 83,732 95,289 146,493
Income taxes payable 10,732 70,382 200,007
Deferred income taxes 222,000 311,000 285,000
Total current liabilities 1,997,208 1,939,433 1,389,805
Shareholders' equity:
Capital stock (Note 5) 7,000 7,000 7,000
Retained earnings 896,009 2,074,635 3,207,691
Total shareholders' equity 903,009 2,081,635 3,214,691
Total liabilities and
shareholders' equity $ 2,900,217 $4,021,068 $4,604,596
See accompanying notes.
<PAGE>
Administrative Sales Associates Temporaries, Inc.
and
Administrative Sales Associates, Inc.
Combined Statements of Income and Retained Earnings
Year ended Six months ended
December 31 June 30
1995 1996 1996 1997
(Unaudited)
Revenue from human
resource management $13,202,677 $17,938,563 $8,906,543 $9,145,575
Direct cost of human
resource management 10,573,482 13,580,235 6,530,439 6,526,546
Selling, general and
administrative expenses 2,451,923 2,993,611 1,400,192 1,345,556
Interest expense 27,365 41,091 21,439 14,417
13,052,770 16,614,937 7,952,070 7,886,519
Income before provision
for income taxes 149,907 1,323,626 954,473 1,259,056
Provision for income taxes:
Current 13,000 56,000 60,000 152,000
Deferred 12,000 89,000 45,000 (26,000)
25,000 145,000 105,000 126,000
Net income 124,907 1,178,626 849,473 1,133,056
Retained earnings,
beginning of period 771,102 896,009 896,009 2,074,635
Retained earnings,
end of period $ 896,009 $2,074,635 $1,745,482 $3,207,691
See accompanying notes.
<PAGE>
Administrative Sales Associates Temporaries, Inc.
and
Administrative Sales Associates, Inc.
Combined Statements of Cash Flows
Year ended Six months
December 31 ended June 30
1995 1996 1996 1997
(Unaudited)
Operating activities
Net income $ 124,907 $1,178,626 $ 849,473 $1,133,056
Adjustments to reconcile net
income to net cash
provided by operations:
Depreciation and
amortization 12,106 8,779 4,089 4,516
Deferred income taxes 12,000 89,000 45,000 (26,000)
Changes in assets and
liabilities:
Accounts receivable (146,250) (976,934) (903,737) 248,426
Prepaid expenses and
other current assets (45,441) (43,527) (24,874) (15,929)
Amounts due from
shareholders - - - (22,164)
Accounts payable and
accrued expenses 132,241 (240,017) (78,720) 187,984
Accrued payroll taxes (29,971) 39,530 249 (92,997)
Commission payable 125,238 44,611 160,868 (17,020)
Accrued pension 31,927 11,557 17,645 51,204
Income taxes payable 9,947 59,650 60,000 129,625
Net cash provided by
operating activities 226,704 171,275 129,993 1,580,701
Investing activities
Purchase of property
and equipment (5,259) (15,743) (12,729) (4,221)
Net cash used in
investing activities (5,259) (15,743) (12,729) (4,221)
Financing activities
Proceeds from line of credit 150,000 150,000 - -
Repayment of line of credit - - (50,000) (500,000)
Repayments of notes
payable-bank (116,667) (100,000) (58,333) (27,778)
Proceeds from loans
from shareholders - 165,000 - -
Repayments of loans
from shareholders (141,905) (277,106) (58,737) (254,546)
Net cash used in
financing activities (108,572) (62,106) (167,070) (782,324)
Net increase in cash 112,873 93,426 (49,806) 794,156
Cash, beginning of period 18,339 131,212 131,212 224,638
Cash, end of period $ 131,212 $ 224,638 $ 81,406 $1,018,794
Supplemental disclosure of
cash flow information
Cash paid during the year for:
Interest $ 27,365 $ 41,091 $ 21,439 $ 14,417
Income taxes $ 3,053 $ - $ - $ 22,375
See accompanying notes.
<PAGE>
Administrative Sales Associates Temporaries, Inc.
and
Administrative Sales Associates, Inc.
Notes to Combined Financial Statements
Years ended December 31, 1995 and 1996
and the six months ended June 30, 1996 and 1997
(Information as of June 30, 1997 and for the six months
ended June 30, 1996 and 1997 is unaudited)
1. Organization and Summary of Significant Accounting Policies
Basis of Presentation and Description of Business
The accompanying combined financial statements include the
accounts of Administrative Sales Associates Temporaries, Inc.
("ASA-TEMP"), and Administrative Sales Associates, Inc. ("ASA-
PERM") (collectively the "Company"). ASA-TEMP and ASA-PERM are
both under common control.
ASA-TEMP is engaged in the placement of temporary personnel
throughout New York City. ASA-PERM is engaged in the placement of
permanent personnel in the New York metropolitan area.
Recognition of Income
Temporary staffing revenue is recognized when the temporary
personnel perform the related services and revenue from permanent
placement services is recognized when the placement is employed.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported
in the financial statements and accompanying notes. Actual
results could differ from those estimates.
Principles of Combination
All significant intercompany transactions and balances have been
eliminated in combination.
<PAGE>
Administrative Sales Associates Temporaries, Inc.
and
Administrative Sales Associates, Inc.
Notes to Combined Financial Statements (continued)
1. Organization and Summary of Significant Accounting Policies
(continued)
Unaudited Information
The unaudited financial statements at June 30, 1997 and the six
months ended June 30, 1996 and 1997 reflect adjustments, all of
which are of a normal recurring nature, which are, in the opinion
of management, necessary to a fair presentation. The results for
the interim periods presented are not necessarily indicative of
full year results.
Cash and Cash Equivalents
The Company considers all highly liquid investments with a
maturity of three months or less when purchased to be cash
equivalents.
Property and Equipment
Property and equipment are carried at cost. Depreciation is
computed using the straight-line method over the estimated useful
lives of the assets which range from 5 to 10 years. Leasehold
improvements are amortized using the straight-line method over
the leasehold's useful life or the term of the lease, whichever
is shorter.
Advertising Expense
The cost of advertising is expensed when incurred. The Company
incurred advertising expense of approximately $319,000 and
$230,000 for the years ended December 31, 1995 and 1996,
respectively ($129,000 and $177,000 for the six months ended June
30, 1996 and 1997, respectively).
Concentration of Credit Risk
Financial instruments that potentially subject the Company to
concentrations of credit risk consist of cash and accounts
receivable. The Company maintains its cash balances in two
financial institutions in New York City.
<PAGE>
Administrative Sales Associates Temporaries, Inc.
and
Administrative Sales Associates, Inc.
Notes to Combined Financial Statements (continued)
1. Organization and Summary of Significant Accounting Policies
(continued)
Concentration of Credit Risk (continued)
The Company believes that its concentration of credit risk with
respect to accounts receivable is limited due to the large number
of entities comprising the Company's customer base. The Company
performs ongoing credit evaluations of its customers and
generally does not require collateral. The Company periodically
reviews the status of its accounts receivable and, accordingly,
establishes reserves for uncollectible accounts.
2. Property and Equipment
Property and equipment consist of the following:
Six months
December 31 ended June 30
1995 1996 1997
(unaudited)
Leasehold improvements $ 92,946 $ 92,946 $92,946
Furniture and fixtures 59,072 59,072 59,072
Office equipment 124,313 140,056 144,277
276,331 292,074 296,295
Less accumulated depreciation
and amortization 260,081 268,860 273,376
Property and equipment-net $ 16,250 $ 23,214 $ 22,919
3. Line of Credit and Notes Payable
The Company has a line of credit with a bank (the "Bank") to
borrow up to $500,000 ($350,000 at December 31, 1995). Borrowings
under the line of credit have been guaranteed by the two
shareholders of the Company and bear interest at 1.25% above the
Bank's prime rate (9.75% and 9.5% at December 31, 1995 and 1996,
respectively). Borrowings under this line of credit were repaid
in full in 1997.
<PAGE>
Administrative Sales Associates Temporaries, Inc.
and
Administrative Sales Associates, Inc.
Notes to Combined Financial Statements (continued)
3. Line of Credit and Notes Payable (continued)
In 1994, the Company borrowed $200,000 from the Bank. The loan is
payable in thirty-five monthly principal payments commencing July
1994 of approximately $5,550, plus interest at 1.50% over the
bank's reference rate (9.75% and 10% at December 31, 1996 and
1995, respectively). Borrowings under this note amounted to
$33,333 and $100,000 at December 31, 1996 and 1995, respectively,
and were repaid in full in 1997.
In August 1993, the Company borrowed $150,000 from the Bank,
payable in thirty-five monthly principal payments of
approximately $4,167, plus interest at 1.50% over the bank's
reference rate (10% at December 31, 1995). Borrowings under this
note amounted to $33,333 at December 31, 1995 and were repaid in
full in 1996.
4. Loans from Shareholders
Loans from shareholders represent amounts borrowed from the two
shareholders, are interest-free and have no fixed repayment
terms.
5. Common Stock
ASA-TEMP
Common stock, no par value, authorized-200 shares,
issued and outstanding-100 shares $5,000
ASA-PERM
Common stock, no par value, authorized,
issued and outstanding-100 shares 2,000
$7,000
<PAGE>
Administrative Sales Associates Temporaries, Inc.
and
Administrative Sales Associates, Inc.
Notes to Combined Financial Statements (continued)
6. Income Taxes
The Company accounts for income taxes using the liability method
in accordance with Statement of Financial Accounting Standards
No. 109, "Accounting for Income Taxes." ASA-Temp and ASA-Perm
file separate income tax returns, are cash basis taxpayers and
have elected to be treated as S Corporations under Subchapter S
of the Internal Revenue Code for Federal and New York State
income tax purposes. Accordingly, ASA-Temp and ASA-Perm are not
subject to federal income taxes because the shareholders include
the Company's income in their own personal income tax returns.
For New York State purposes, S Corporations were subject to a
minimum income tax. The Company is also subject to New York City
income taxes. The provision for income taxes includes New York
City income tax and New York State minimum income tax.
7. Defined Contribution Plan
The Company sponsors a defined contribution plan for eligible
employees and makes annual contributions of 5% of each employee's
eligible wages, as defined. Pension expense for the years ended
December 31, 1995 and 1996 was $83,732 and $95,289, respectively,
($47,645 and $51,204 for the six months ended June 30, 1996 and
1997).
8. Leases
The Company leases office space under a noncancelable operating
lease that expires in August 1997. Rent expense amounted to
approximately $123,000 for each of the two years in the period
ended December 31, 1996 ($62,500 for the six months ended June
30, 1996 and 1997).
9. Major Customers
One customer accounted for approximately 14% of revenue for the
year ended December 31, 1996. Two customers accounted for
approximately 15% and 10%, respectively, of revenue for the year
ended December 31, 1995.
<PAGE>
HEADWAY CORPORATE RESOURCES, INC.
PRO FORMA UNAUDITED CONDENSED COMBINED
FINANCIAL STATEMENTS
The following pro forma condensed combined balance sheet as of
June 30, 1997 and the pro forma condensed combined statements of
operations for the year ended December 31, 1996, and the six
months ended June 30, 1997 give effect to Headway Corporate
Resources, Inc. ("Headway" or the "Company") acquiring, through a
wholly-owned subsidiary, substantially all the assets of
Administrative Sales Associates Temporaries, Inc. and
Administrative Sales Associates, Inc. (collectively referred to
as "ASA").
On or about April 14, 1997, the Company filed a current report on
Form 8-K reporting that on March 31, 1997 the Company acquired
substantially all of the assets of Advanced Staffing Solutions,
Inc. ("Advanced").
The pro forma information is based on the historical financial
statements of the Company, Advanced and ASA, giving effect to the
transactions under the purchase method of accounting and the
assumptions and adjustments in the accompanying notes to the pro
forma financial statements.
The historical balance sheet of the Company as of June 30, 1997
includes Advanced. The pro forma condensed combined balance
sheet as of June 30, 1997 gives effect to the ASA acquisition as
if it occurred on the balance sheet date.
The pro forma condensed combined statements of operations for the
year ended December 31, 1996 and the six months ended June 30,
1997 give effect to both acquisitions as if they occurred at the
beginning of the respective periods presented.
The pro forma condensed combined financial statements have been
prepared by the Company's management based upon the historical
financial statements of the Company, Advanced and ASA. These pro
forma condensed combined financial statements may not be
indicative of the results that actually would have occurred if
the acquisitions and related financing had been in effect on the
dates indicated. The pro forma condensed combined financial
statements should be read in conjunction with the historical
financial statements and notes contained in the Company's annual
report on Form 10KSB, the Company's quarterly report on Form
10QSB, the historical financial statements of Advanced contained
in the Form 8-K dated April 14, 1997 and the historical financial
statements of ASA contained in the Company's Form 8-K dated July
28, 1997.
<PAGE>
Headway Corporate Resources, Inc.
Pro Forma Condensed Combined Balance Sheet (Unaudited)
As of June 30, 1997
(In Thousands of Dollars, except Share and Per Share Amounts)
Historical Pro
Headway Pro Forma Adjustments Forma
Consolidated ASA Debit Credit Combined
Assets
Cash and cash equivalents $ 3,393 $ 1,019 $ - $ 175(12) $ 3,093
125(13)
1,019(14)
Accounts receivable (net) 17,378 3,399 - 3,399(14) 17,378
Other current assets 1,285 152 - 152(14) 1,285
Total current assets 22,056 4,570 - 4,870 21,756
Property and equipment, net 2,544 23 - 3(14) 2,564
Intangibles, net 17,973 - 5,106(12) - 23,079
Investments 1,945 - - - 1,945
Deferred financing costs 2,712 - 125(13) - 2,837
Other assets 2,140 12 - 12(14) 2,140
Total assets $49,370 $4,605 $10,357 $10,011 $54,321
Liabilities and equity
Liabilities:
Notes payable and line
of credit-current $ 9,743 $ 6 $ 6(14)$ 775(12) $10,518
Accrued payroll 5,639 452 452(14) - 5,639
Other current
liabilities 4,795 932 932(14) - 4,795
Total current liabilities 20,177 1,390 1,390 775 20,952
Long-term liabilities 13,376 - - 3,676(12) 17,052
Equity:
Preferred stocks 2,000 - - - 2,000
Common stock 1 7 7(14) - 1
Additional paid-in
capital 11,484 - - 500(12) 11,984
Cumulative translation
adjustment 82 - - - 82
Notes receivable-
preferred stock (390) - - - (390)
Retained earnings 2,640 3,208 3,208(14) - 2,640
Total equity 15,817 3,215 3,215 500 16,317
Total liabilities and
equity $49,370 $4,605 $4,605 $ 4,951 $54,321
<PAGE>
Headway Corporate Resources, Inc.
Pro Forma Condensed Combined Statement of Operations (Unaudited)
Six months ended June 30, 1997
(In Thousands of Dollars, except Share and Per Share Amounts)
Historical Pro Forma Pro
Headway Adjustments Forma
Consolidated Advanced* ASA Debit Credit Combined
Revenue:
Human resource
management $56 252 $ 780 $ 9,146 $ - $ - $66,178
Advisory services 1,860 - - - - 1,860
Total revenue 58,112 780 9,146 - - 68,038
Direct costs of human
resource management 38,586 29 6,527 - - 45,142
License fee - 246(6) - - - 246
Other operating
expenses 15,742 474 1,346 127(10) 17,769
Operating income 3,784 31 1,273 207 - 4,881
Interest and other
expenses (income), net 89(1)
17(2)
192(8)
(142) 5 14 13(9) - 188
Income before
income taxes 3,926 26 1,259 518 - 4,693
Provision for income
taxes 1,581 - 126 300(11) 64(5) 1,943
Net income 2,345 26 1,133 818 64 2,750
Preferred dividend
requirements (83) - - - - (83)
Net income available
for common
stockholder $2,262 $ 26 $ 1,133 $818 $64 $ 2,667
Primary net income
per common and
common equivalent
share $.28 $.32
Fully diluted net
income per common
and common
equivalent share $.24 $.27
Average common and
common equivalent
shares outstanding:
Primary 8,161,797 8,282,863
Fully diluted 9,917,178 10,038,244
*Represents statement of operations of Advanced for the period
January 1, 1997 to March 31, 1997. On March 31, 1997, substantially
all the assets of Advanced were acquired by Headway and,
accordingly, the consolidated results of operations of Headway
include the results of operations of Advanced from April 1, 1997
through June 30, 1997.
<PAGE>
Headway Corporate Resources, Inc.
Pro Forma Condensed Combined Statement of Operations (Unaudited)
Year ended December 31, 1996
(In Thousands of Dollars, except Share and Per Share Amounts)
Historical Pro Forma Pro
Headway Adjustments Forma
Consolidated Advanced ASA Debit Credit Combined
Revenue:
Human resource
management $53,389 $3,079 $17,939 $ - $ - $74,407
Advisory services 3,808 - - - - 3,808
Total revenue 57,197 3,079 17,939 - - 78,215
Direct costs of human
resource management 29,703 170 13,580 - - 43,453
License fee - 926(6) - - - 926
Stock compensation - 850(7) - - - 850
Other operating
expenses 318(3)
24,551 2,127 2,994 255(10) 425(4) 29,820
Operating income
(loss) 2,943 (994) 1,365 573 425 3,166
Interest and other
expenses 352(1)
66(2)
379(8)
1,061 16 41 25(9) - 1,940
Income (loss) before
income taxes 1,882 (1,010) 1,324 1,395 425 1,226
Provision for income
taxes 700 - 145 161(11) 528(5) 478
Net income (loss) 1,182 (1,010) 1,179 1,556 953 748
Deemed dividend on
preferred stock (1,470) - - - - (1,470)
Preferred dividend
requirements (276) - - - - (276)
Net (loss) available
for common
stockholders $ (564) $(1,010) $1,179 $1,556 $953 $(998)
Primary net (loss)
per common and
common equivalent
share $(.08) $(.15)
Average common and
common equivalent
shares outstanding:
Primary 6,643,326 6,764,392
<PAGE>
Headway Corporate Resources, Inc.
Notes to Pro Forma Condensed Combined Financial Statements
(Unaudited)
Advanced
(1) To record interest expense on borrowings to finance the
acquisition at an assumed rate of 8.87% for the three months
ended March 31, 1997 and 8.79% for the year ended December 31,
1996.
(2) To record amortization of loan acquisition costs over the
five year term of related loan.
(3) To record amortization of intangibles resulting from the
transaction over 20 years.
(4) To eliminate the fee associated with the election by
Advanced to terminate its licensing agreement. Under the terms of
the licensing agreement, the licensor was responsible for
invoicing and collection from clients and the employment of the
temporary workers. The election to terminate the licensing
agreement was made in connection with the sale of its client list
to the Company.
(5) To record income tax expense based on a 40% effective tax
rate.
(6) These services are now provided by the Company and it is
anticipated that the cost to provide these services will be
reduced.
(7) This expense is a one-time charge relating to an option
granted to an officer to purchase shares of common stock. This
value was based on an independent appraisal.
ASA
(8) To record interest expense on (i) borrowings to finance the
acquisition at an assumed rate of 8.94% for the six months ended
June 30, 1997 and 8.79% for the year ended December 31, 1996 and
(ii) on the two promissory notes issued to seller at a rate of
6%.
(9) To record amortization of loan acquisition costs over the
five-year term of related loan.
(10) To record amortization of intangibles resulting from the
transaction over 20 years.
(11) To record income tax expense based on a 46% effective tax
rate.
(12) To record purchase price in the amount of $5,126,433
consisting of cash of $4,000,000 from borrowings under the
Company's credit agreement, two promissory notes aggregating
$451,433; 121,066 shares of the Company's restricted common stock
valued at $500,000; $175,000 of acquisition costs and related
good will.
(13) To record costs incurred in connection with financing of the
acquisition.
(14) To eliminate assets and liabilities of ASA not acquired.
Exhibit No. 1
Headway Corporate Resources, Inc.
Form 8-K/A dated September 29, 1997
File No. 0-23170
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-3 No. 333-08615) and related Prospectus of
Headway Corporate Resources, Inc., of our report dated June 30,
1997, with respect to the combined financial statements of
Administrative Sales Associates Temporaries, Inc. and
Administrative Sales Associates, Inc. included in Headway
Corporate Resources, Inc.'s, Form 8-K/A dated July 28, 1997, filed
with the Securities and Exchange Commission.
ERNST & YOUNG LLP
New York, New York
September 24, 1997
