SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
(x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
------------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 0-23534
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CAREER HORIZONS, INC.
-----------------------------------
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 22-3038096
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
177 Crossways Park Drive, Woodbury, NY 11797
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (516) 682-1400
---------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes (X) No ( )
Indicate the number of shares outstanding of each of the issuer's classes
of Common Stock, as of the latest practicable date:
Class Outstanding at October 24, 1996
------- --------------------------------------
Common Stock, $.01 par value 18,051,666
<PAGE>
CAREER HORIZONS, INC. and SUBSIDIARIES
INDEX
PAGE
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Unaudited Condensed Consolidated Balance Sheets -
September 30, 1996 and December 31, 1995 3
Unaudited Condensed Consolidated Statements of Income -
Three and Nine months ended September 30, 1996
and 1995 5
Unaudited Condensed Consolidated Statements of
Cash Flows - Nine months ended September 30, 1996
and 1995 6
Notes to Unaudited Condensed Consolidated Financial
Statements 7
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition 9
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 15
Signatures 18
Index to Exhibits 19
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<PAGE>
CAREER HORIZONS, INC. and SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except par value amounts)
ASSETS
September 30, December 31,
1996 1995
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 29,964 $ 11,712
Reverse repurchase agreements --- 48,449
Accounts receivable, net of allowance
for doubtful accounts
of $3,839 and $1,848 109,412 62,346
Due from Associated Offices, net of
allowance for doubtful accounts
of $1,304 and $1,254 36,592 35,832
Other receivables, net 2,687 1,060
Prepaid expenses 4,213 988
Deferred income taxes 4,539 2,771
-------- --------
Total current assets 187,407 163,158
INTANGIBLE ASSETS, net 166,500 29,719
FURNITURE, FIXTURES AND EQUIPMENT, net 9,685 5,003
OTHER RECEIVABLES, net 337 310
DEFERRED INCOME TAXES 1,460 ---
OTHER ASSETS, net 3,245 3,368
-------- --------
$368,634 $201,558
======== ========
The accompanying notes are an integral part of the unaudited condensed
consolidated financial statements.
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<PAGE>
CAREER HORIZONS, INC. and SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except par value amounts)
LIABILITIES AND STOCKHOLDERS' EQUITY
September 30, December 31,
1996 1995
------------- ------------
CURRENT LIABILITIES:
Bank overdrafts $ 10,885 $ 10,511
Accounts payable and accrued
liabilities 20,350 11,898
Accrued compensation and related taxes 44,519 23,007
Notes payable 3,714 6,966
Current income taxes payable 3,844 1,677
-------- --------
Total current liabilities 83,312 54,059
DEFERRED INCOME TAXES --- 280
NOTES PAYABLE, non-current 2,000 ---
OTHER LIABILITIES 27 66
7% CONVERTIBLE SENIOR NOTES DUE 2002 86,250 86,250
-------- --------
Total liabilities 171,589 140,655
-------- --------
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value;
authorized, 1,000,000 shares;
issued and outstanding - none --- ---
Common stock, $.01 par value;
authorized, 50,000,000 shares;
issued and outstanding
- 17,670,110 and 11,244,076 177 112
Nonvoting common stock, $.01 par value;
shares authorized, issued and
outstanding - none and 392,638 --- 4
Additional paid-in capital 169,824 46,529
Retained earnings 27,099 14,329
-------- --------
197,100 60,974
Less: treasury stock, at cost,
6,321 and 8,136 shares (55) (71)
-------- --------
Total Stockholders' equity 197,045 60,903
-------- --------
$368,634 $201,558
======== ========
The accompanying notes are an integral part of the unaudited condensed
consolidated financial statements.
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<PAGE>
CAREER HORIZONS, INC. and SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
1996 1995 1996 1995
-------- ------- -------- --------
REVENUES $168,491 $96,950 $444,342 $280,683
EXPENSES:
Cost of services 127,563 73,855 337,796 214,970
Selling, general and
administrative expenses 25,345 13,861 66,982 39,290
Remittance to franchisees 5,706 4,514 15,604 13,749
Other expense, net 152 93 541 1,227
-------- ------- -------- -------
Total expenses 158,766 92,323 420,923 269,236
Income from operations 9,725 4,627 23,419 11,447
Interest expense, net (854) (480) (2,656) (1,440)
-------- ------- -------- -------
Income before income taxes 8,871 4,147 20,763 10,007
Provision for income taxes (3,415) (1,659) (7,993) (3,875)
-------- ------- -------- --------
NET INCOME $ 5,456 $ 2,488 $ 12,770 $ 6,132
======== ======= ======== ========
INCOME PER COMMON SHARE:
Primary $.30 $.20 $.75 $.50
==== ==== ==== ====
Fully Diluted $.28 $.20 $.71 $.49
==== ==== ==== ====
The accompanying notes are an integral part of the unaudited condensed
consolidated financial statements.
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<PAGE>
CAREER HORIZONS, INC. and SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
Nine Months Ended
September 30,
--------------------
1996 1995
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES $ (2,647) $ 7,120
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in reverse repurchase agreements, net 48,449 ---
Acquisition of furniture, fixtures and equipment (2,325) (1,804)
Acquisition of businesses, net of cash acquired (143,666) (7,070)
-------- ------
Net cash used by investing activities (97,542) (8,874)
-------- ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in senior credit facility --- 1,518
Increase in bank overdrafts 373 872
Repayment of debt assumed in acquisitions (3,482) (674)
Payments under capital lease obligation (35) (35)
Exercise of stock options 1,512 266
Proceeds from public offering of common stock, net 120,073 ---
-------- ------
Net cash provided by financing activities 118,441 1,947
-------- ------
INCREASE IN CASH AND CASH EQUIVALENTS 18,252 193
CASH AND CASH EQUIVALENTS, AT BEGINNING OF YEAR 11,712 741
-------- -------
CASH AND CASH EQUIVALENTS, AT END OF PERIOD $ 29,964 $ 934
======== ========
The accompanying notes are an integral part of the unaudited condensed
consolidated financial statements.
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<PAGE>
CAREER HORIZONS, INC. and SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with the instructions to Form 10-Q
and, accordingly, do not include all of the information and
disclosures required by generally accepted accounting principles. The
accompanying condensed consolidated financial statements have not been
audited by independent accountants in accordance with generally
accepted auditing standards, but, in the opinion of the Company, such
financial statements contain all adjustments (consisting of only
normal recurring accruals) necessary to present fairly its financial
position as of September 30, 1996, the results of operations for the
three and nine month periods ended September 30, 1996 and 1995 and
changes in cash flows for the nine month periods ended September 30,
1996 and 1995, and are not necessarily indicative of the results to be
expected for the full year.
In reading the interim condensed consolidated financial statements,
reference should be made to the summary of accounting policies and
notes to the financial statements included in the Company's Annual
Report on Form 10-K, as filed with the Securities and Exchange
Commission on February 28, 1996.
2. Agreement and Plan of Merger
On August 26, 1996, the Company entered into an Agreement and Plan of
Merger (the "Merger Agreement") under which it will be acquired by and
merged into a wholly-owned subsidiary of AccuStaff Incorporated (the
Merger ). The companies have received notice from the Federal Trade
Commission of early termination of the waiting period under the
Hart-Scott-Rodino Act. The Joint Proxy Statement/Prospectus relating
to the Merger Agreement was declared effective by the Securities and
Exchange Commission on October 7, 1996. Proxy materials were mailed on
October 8, 1996 to stockholders of record as of October 4, 1996, of both
companies, in advance of the companies' special meetings of stockholders
which will each be held on November 14, 1996. The transaction is
expected to close on the same day.
3. Acquisition of Subsidiaries
In August 1996, the Company acquired all of the outstanding common
stock of the Daedalian Group, Inc. d/b/a Berger & Co. ("Berger"). In
September 1996, the Company acquired all of the outstanding common
stock of TSG Professional Services, Inc. ("TSG"). The acquisition of
TSG was partially financed by the issuance of $2 million of notes
payable to the sellers in September 1998. The aggregate purchase
price of these acquisitions, including notes payable to sellers, fees
and expenses, was approximately $54 million. In addition, the
purchase agreements provide for contingent consideration based upon
operating results of the acquired businesses over a three year period.
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<PAGE>
CAREER HORIZONS, INC. and SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Cont'd.)
3. Acquisition of Subsidiaries (cont'd)
These acquisitions have been accounted for as purchase transactions
and, accordingly, the purchase price was allocated to the assets
acquired and liabilities assumed based on their estimated fair values
as of the dates of acquisition. Goodwill resulting from these
transactions, which represents the excess of the consideration paid
over the estimated fair value of net assets acquired, amounted to
approximately $48 million, and will be amortized over 32 years.
Pro forma data for the three and nine months ended September 30, 1996
and 1995, as if the acquisitions of Berger and TSG and the
acquisitions of Mini-Systems Associates ("Mini-Systems"), Zeitech, Inc.
("Zeitech"), MSI Services and Temps & Co. ("MSI"), American Computer
Professionals ("ACP"), The Richard Michael Group and Richard Michael
Temps ("Richard Michael"), Century Temporary Services and Grant
Management Company ("CenCor"), WHY Systems, Inc. ("WHY") and Dial A
Temporary, completed in the first two quarters of 1996, as well as the
issuance of the 7% Convertible Senior Notes Due 2002 and the public
offering of 5,377,500 shares of common stock (and the related
dilution) all had occurred as of January 1, 1995, is as follows (in
thousands, except per share amounts):
Three months ended Nine months ended
September 30, September 30,
------------------ --------------------
1996 1995 1996 1995
-------- -------- ------- --------
Revenues $185,827 162,482 $528,756 $464,226
Net income 6,131 4,467 15,479 11,214
Income per common share:
Primary $.34 $.30 $.88 $.75
Fully Diluted $.31 $.27 $.81 $.70
Weighted average common
shares outstanding
Primary 18,268 15,015 17,601 14,914
Fully Diluted 23,292 20,077 22,650 19,990
4. Subsequent Event
On October 24, 1996, the Company acquired all of the outstanding
common stock of Legal Support Personnel, Inc., a provider of
supplementary staffing, primarily paralegals, to the legal profession.
-8-
<PAGE>
CAREER HORIZONS, INC. and SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Three Months Ended September 30, 1996 compared to Three Months Ended
September 30, 1995
Revenues. Revenues for the three months ended September 30, 1996 were
$168.5 million, an increase of $71.5 million, or 73.8%, from revenues of
$97.0 million for the three months ended September 30, 1995. The
increase was primarily attributable to the inclusion of the operations of
Mini-Systems, Zeitech, MSI, ACP, CenCor, Richard Michael, WHY, Dial A
Temporary, Berger and TSG (the "Acquired Businesses"), which the Company
has purchased since September 30, 1995. In addition to the growth from
the Acquired Businesses, the Company generated internal revenue growth
across all lines of business.
Gross profit. Gross profit increased by $17.8 million to $40.9
million, or 24.3% of revenues, for the three months ended September 30,
1996, compared to $23.1 million, or 23.8% of revenues, for the three
months ended September 30, 1995. The increase in gross profit as a
percentage of revenues is primarily the result of higher margins
generated by the Company's Acquired Businesses.
Selling, general and administrative expenses. Selling, general and
administrative expenses ("SG&A") increased by $11.4 million to $25.3
million, or 15.0% of revenues, for the three months ended September 30,
1996, compared to $13.9 million, or 14.3% of revenues, for the three
months ended September 30, 1995. The increase of 0.7% as a percentage of
revenues was primarily attributable to the Acquired Businesses which
generate higher gross margins, but require higher operating expense
levels. In addition, new offices opened and franchises acquired since
September 1995 accounted for $495,000 of the increase in SG&A.
Remittance to franchisees. Remittance to franchisees was $5.7 million,
or 3.4% of revenues, for the three months ended September 30, 1996,
compared to $4.5 million, or 4.7% of revenues, for the three months ended
September 30, 1995. The decrease of 1.3% was attributable to the
increase in the Company's revenue base from the Acquired Businesses,
which, with the exception of MSI, have no franchised operations.
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<PAGE>
CAREER HORIZONS, INC. and SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION (Cont'd.)
Interest expense, net. Net interest expense increased by $374,000 to
$854,000 for the three months ended September 30, 1996, compared to
$480,000 for the three months ended September 30, 1995. The increase in
net interest expense reflects interest expense incurred from the issuance
of the 7% Convertible Senior Notes Due 2002 in October 1995, partially
offset by the investment of proceeds from the public offering of common
stock in March 1996 and the elimination of interest on borrowings under
the Company's Senior Credit Facility.
Income taxes. The Company's effective income tax rate was 38.5% for
the three months ended September 30, 1996, compared to 40.0% for the
three months ended September 30, 1995. The lower effective income tax
rate for the three months ended September 30, 1996 was attributable to
Company programs to reduce state income tax expense.
Net income. Net income was $5.5 million for the three months ended
September 30, 1996, compared to $2.5 million for the three months ended
September 30, 1995. The increase in profitability is a result of the
above-mentioned items.
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<PAGE>
CAREER HORIZONS, INC. and SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION (Cont'd)
Nine Months Ended September 30, 1996 compared to Nine Months Ended
September 30, 1995
Revenues. Revenues for the nine months ended September 30, 1996 were
$444.3 million, an increase of $163.6 million, or 58.3%, from revenues of
$280.7 million for the nine months ended September 30, 1995. The
increase was primarily attributable to the inclusion of the operations of
the Acquired Businesses, which the Company has purchased since September
30, 1995. In addition to the growth from the Acquired Businesses, the
Company generated internal revenue growth across all lines of business.
Gross profit. Gross profit increased by $40.8 million to $106.5
million, or 24.0% of revenues, for the nine months ended September 30,
1996, compared to $65.7 million, or 23.4% of revenues, for the nine
months ended September 30, 1995. The increase in gross profit as a
percentage of revenues is primarily the result of higher margins
generated by the Company's Acquired Businesses.
Selling, general and administrative expenses. SG&A increased by $27.7
million to $67.0 million, or 15.1% of revenues, for the nine months
ended September 30, 1996, compared to $39.3 million, or 14.0% of
revenues, for the nine months ended September 30, 1995. The increase of
1.1% as a percentage of revenues was primarily attributable to the
Acquired Businesses which generate higher gross margins, but require
higher operating expense levels. In addition, new offices opened and
franchises acquired since September 1995 accounted for $1,415,000 of the
increase in SG&A.
Remittance to franchisees. Remittance to franchisees was $15.6
million, or 3.5% of revenues, for the nine months ended September 30,
1996, compared to $13.7 million, or 4.9% of revenues, for the nine months
ended September 30, 1995. The decrease of 1.4% was attributable to the
increase in the Company's revenue base from the Acquired Businesses,
which, with the exception of MSI, have no franchised operations.
Other expense, net. Other expense, net for the nine months ended
September 30, 1995 includes a one-time charge of $965,000 for expenses
relating to the registration of the former chief executive officer.
Interest expense, net. Net interest expense increased by $1,216,000 to
$2,656,000 for the nine months ended September 30, 1996, compared to
$1,440,000 for the nine months ended September 30, 1995. The increase in
net interest expense reflects interest expense incurred from the issuance
of the 7% Convertible Senior Notes Due 2002 in October 1995, partially
offset by the investment of proceeds from the public offering of common
stock in March 1996 and the elimination of interest on borrowings under
the Company's Senior Credit Facility.
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<PAGE>
CAREER HORIZONS, INC. and SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION (Cont'd.)
Income taxes. The Company's effective income tax rate was 38.5% for
the nine months ended September 30, 1996, compared to 38.7% for the nine
months ended September 30, 1995. The decrease in the effective income
tax rate was primarily attributable to Company programs to reduce state
income tax expense.
Net income. Net income was $12.8 million for the nine months ended
September 30, 1996, compared to $6.1 million for the nine months ended
September 30, 1995. The increase in profitability is a result of the
above-mentioned items.
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<PAGE>
CAREER HORIZONS, INC. and SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION (Cont'd.)
Liquidity and Capital Resources
On March 6, 1996, the Company received, net of fees and expenses,
approximately $120.1 million from the issuance of 5,377,500 shares of
common stock. Such proceeds were used to fund the acquisitions of MSI,
ACP, CenCor, Richard Michael, WHY, Dial A Temporary, Berger and TSG and
the remainder will be used for general corporate purposes, including
acquisitions.
As of September 30, 1996, the Company had no borrowings under the Senior
Credit Facility and had outstanding letters of credit, totaling
approximately $11.1 million, primarily to guarantee the payment of its
workers' compensation expenses. In addition, the Company could borrow an
additional $48.9 million under the Senior Credit Facility. While the
amounts available under the Senior Credit Facility are determined by the
terms of that Facility, management believes that, based on the Company's
current financial position, borrowings of up to $100 million could
readily be attained. Management believes that this borrowing capacity
and cash flow from operations, together with amounts invested in cash
equivalents will be sufficient to fund the Company's current operations
and anticipated capital expenditure requirements, as well as provide at
least a portion of the funds for future acquisitions. However, depending
on the size and extent of any such acquisitions, additional acquisition
or working capital financing might be required.
In connection with the Merger, the Company has given notice to its Senior
Credit Facility lender of the Company s intent to terminate the Senior
Credit Facility effective November 30, 1996 pending consummation of the
Merger.
As collateral for its obligations under the Facility, the Company has
granted its lender a security interest in substantially all of the
Company's assets. Since the Company's borrowings under the Senior Credit
Facility are primarily subject to variable interest rates, a significant
increase in interest rates at a time when the Company has substantial
outstanding borrowings would have a negative effect on the Company's
results of operations.
The 7% Convertible Senior Notes Due 2002 are guaranteed by all of the
direct and indirect subsidiaries of the Company ("the guarantor
subsidiaries"). All of the guarantor subsidiaries are wholly-owned, and
the guarantee of the guarantor subsidiaries is full and unconditional,
and joint and several. There are no restrictions on the ability of any
of the guarantor subsidiaries to distribute funds to the Company.
Capital expenditures, generally for computer equipment and peripherals
and office furniture and fixtures, were $2,325,000 for the nine months
ended September 30, 1996. The Company is presently considering various
enhancements to its health care management information system, which, if
implemented, may require, depending on the final configuration and system
requirements, an investment of not less than $2.0 million. Other than
the possible enhancement of its health care management information
system, the Company anticipates that recurring capital expenditures,
primarily for computer equipment and peripherals, will be approximately
$3.0 million per year.
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<PAGE>
CAREER HORIZONS, INC. and SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION (Cont'd.)
Inflation
The effects of inflation on the Company's operations were not significant
during the periods presented in the financial statements.
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<PAGE>
CAREER HORIZONS, INC. and SUBSIDIARIES
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
a) Exhibit No. Description
----------- -----------
Exhibit 2.1 Agreement and Plan of Merger by and among
AccuStaff Incorporated, Sunrise Merger
Corporation and Career Horizons, Inc. dated
as of August 25, 1996 (without schedules).
(Incorporated by reference to Exhibit 2.1 of
the Registrant's Current Report on Form 8-K
dated August 25, 1996).
Exhibit 2.2 Stock Purchase Agreement dated August 28,
1996 by and among Career Horizons, Inc., Wayne
Berger, Juan Solano, III, Mary Turner, Drew
Verret, The Juan Solano III Charitable
Remainder Trust, the Wayne Berger Charitable
Remainder Trust and the Wayne Berger
Charitable Remainder Trust II. (Incorporated
by reference to Exhibit 2.1 of the
Registrant's Current Report on Form 8-K
dated August 28, 1996).
Exhibit 2.3 Stock Purchase Agreement dated September 16,
1996 by and among Career Horizons, Inc., TSG
Professional Services, Inc., Richard P. Merriam
and Stephen I. Evanoff. (Incorporated by
reference to Exhibit 2.1 of the Registrant's
Current Report on Form 8-K dated September 16,
1996).
Exhibit 11 Computation of Earnings Per Share
Exhibit 23.1 Consent of Levine, Hughes & Mithuen, Inc.
(Incorporated by reference to Exhibit 23.1 of
the Registrant's Current Report on Form 8-K
dated August 28, 1996).
Exhibit 23.2 Consent of Dubois & Bornstein, P.C.
(Incorporated by reference to Exhibit 23.1 of
the Registrant's Current Report on Form 8-K
dated September 16, 1996).
Exhibit 27 Financial Data Schedule
Exhibit 99.1 Press release, dated August 26, 1996
(Incorporated by reference to Exhibit
99.1 of the Registrant's Current Report
on Form 8-K dated August 25, 1996).
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<PAGE>
CAREER HORIZONS, INC. and SUBSIDIARIES
Item 6. Exhibits and Reports on Form 8-K (Cont'd)
-----------------------------------------
Exhibit No. Description
----------- -----------
Exhibit 99.2 Press release announcing the acquisition
of Berger & Co. (Incorporated by reference
to Exhibit 99.1 of the Registrant's Current
Report on Form 8-K dated August 28, 1996).
Exhibit 99.3 Press release announcing the acquisition of
TSG (Incorporated by reference to Exhibit
99.1 of the Registrant's Current Report on
Form 8-K dated September 16, 1996).
Exhibit 99.4 Press release dated October 9, 1996
(Incorporated by reference to Exhibit 99.1
of the Registrant's Current Report on Form
8-K dated October 9, 1996).
Exhibit 99.5 Press release announcing the results of
operations for the three and nine months
ended September 30, 1996 and 1995
(Incorporated by reference to Exhibit 99.1
of the Registrant's Current Report on Form
8-K dated October 22, 1996).
Exhibit 99.6 Press release announcing the acquisition
of Legal Support Personnel, Inc.
(Incorporated by reference to Exhibit 99.1
of the Registrant's Current Report on
Form 8-K dated October 24, 1996).
b) Since July 1, 1996, the Company has filed the following
Reports on Form 8-K with the Securities and Exchange
Commission:
Date of Report Explanation
-------------- -----------
July 24, 1996 Press release reporting the results of
operations for the three and six months
ended June 30, 1996 and 1995.
August 25, 1996 Agreement and Plan of Merger by and
among AccuStaff Incorporated, Sunrise
Merger Corporation and Career Horizons,
Inc. dated as of August 25, 1996 and
press release dated August 26, 1996.
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<PAGE>
CAREER HORIZONS, INC. and SUBSIDIARIES
Date of Report Explanation (Cont'd)
-------------- --------------------
August 28, 1996 Consolidated financial statements of
Daedalian Group, Inc. and Subsidiaries
as of April 30, 1996 and 1995 and for
the three months then ended (Unaudited).
Consolidated financial statements of
Daedalian Group, Inc. and Subsidiaries
as of January 31, 1996 and 1995 and for
the years then ended (Audited).
Unaudited pro forma financial information
as follows:
Pro forma combined balance sheet as
of June 30, 1996
Pro forma combined statements of
income for the year ended June 30,
1995, the six months ended December
31, 1995 and the six months ended
June 30, 1996.
September 16, 1996 Financial Statements of TSG Professional
Services, Inc. as of June 30, 1996 and
1995 and for the six months then ended
(Unaudited).
Financial Statements of TSG Professional
Services, Inc. as of December 31, 1995
and January 1, 1995 and for the years
then ended (Audited).
Unaudited pro forma financial information
as follows:
Pro forma combined balance sheet as of
June 30, 1996.
Pro forma combined statements of income
for the year ended June 30, 1995, the six
months ended December 31, 1995 and the
six months ended June 30, 1996.
October 9, 1996 Press release announcing that the Joint
Proxy Statement/Prospectus relating the
Agreement and Plan of Merger under which
Career Horizons will be acquired by and
merged into a subsidiary of AccuStaff
Incorporated was declared effective by
the Securities and Exchange Commission
and mailed to stockholders.
October 22, 1996 Press release reporting the results of
operations for the three and nine months
ended September 30, 1996 and 1995.
October 24, 1996 Press release announcing the acquisition
of Legal Support Personnel, Inc.
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<PAGE>
CAREER HORIZONS, INC. and SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CAREER HORIZONS, INC.
-----------------------
Registrant
Date: November 11, 1996 /s/ Michael T. Druckman
------------------ ------------------------
Michael T. Druckman
Senior Vice President,
Treasurer and Asst. Secretary
(Principal Financial and
Accounting Officer)
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<PAGE>
CAREER HORIZONS, INC. and SUBSIDIARIES
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
----------- -----------
Exhibit 11 Computation of Earnings Per Share
Exhibit 27 Financial Data Schedule
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EXHIBIT 11
CAREER HORIZONS, INC. and SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
----------------------- ------------------------
1996 1995 1996 1995
---------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Net income $5,456,000 $2,488,000 $12,770,000 $6,132,000
Add: Interest expense on 7%
Convertible Senior Notes
Due 2002, net of taxes 1,001,000 --- 2,870,000 ---
---------- ---------- ----------- ----------
Net income - "if converted" $6,457,000 $2,488,000 $15,640,000 $6,132,000
========== ========== =========== ==========
Shares outstanding (1):
Weighted average number of
common shares outstanding 17,652,801 11,962,100 16,428,695 11,896,438
Additional shares assuming
exercise of employee
stock options 615,237 522,802 610,431 487,558
---------- ---------- ---------- ----------
Weighted average number
of common shares
outstanding - primary
earnings per share 18,268,038 12,484,902 17,039,126 12,383,996
Incremental shares deemed
outstanding based upon
period ending fair
market value:
employee stock options 56,046 94,270 79,957 108,037
Add: Deemed conversion of
7% Convertible
Senior Notes Due 2002 4,968,318 --- 4,968,318 ---
---------- ---------- ---------- ----------
Weighted average number of
common shares outstanding
- fully diluted earnings
per share 23,292,402 12,579,172 22,087,401 12,492,033
========== ========== ========== ==========
Income per common share:
Primary $.30 $.20 $.75 $.50
==== ==== ==== ====
Fully Diluted $.28 $.20 $.71 $.49
==== ==== ==== ====
</TABLE>
(1) Restated for the Company's two-for-one stock split effective
February 22, 1996.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 29,964
<SECURITIES> 0
<RECEIVABLES> 148,691
<ALLOWANCES> 5,143
<INVENTORY> 0
<CURRENT-ASSETS> 187,407
<PP&E> 9,685
<DEPRECIATION> 0
<TOTAL-ASSETS> 368,634
<CURRENT-LIABILITIES> 83,312
<BONDS> 86,250
0
0
<COMMON> 177
<OTHER-SE> 196,868
<TOTAL-LIABILITY-AND-EQUITY> 368,634
<SALES> 444,342
<TOTAL-REVENUES> 444,342
<CGS> 337,796
<TOTAL-COSTS> 337,796
<OTHER-EXPENSES> 83,127
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,656
<INCOME-PRETAX> 20,763
<INCOME-TAX> 7,993
<INCOME-CONTINUING> 12,770
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,770
<EPS-PRIMARY> .75
<EPS-DILUTED> .71
</TABLE>
