<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(b) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997.
or
[_] TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(b) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______________ TO
_______________.
Commission file number: 001-12447
AccuStaff Incorporated
(Exact name of registrant as specified in its charter)
Florida 59-3116655
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6440 Atlantic Boulevard, Jacksonville, Florida 32211
(Address of principal executive offices) (Zip Code)
(904) 725-5574
(Registrant's telephone number including area code)
N/A
(Former name, former address and former fiscal year, if changed since last
report)
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.
May 14, 1997
------------
Common Stock, $0.01 par value: 98,944,556
(No. of Shares)
<PAGE>
ACCUSTAFF INCORPORATED AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I Financial Information
ITEM 1 Financial Statements
Consolidated Balance Sheets as of March 31, 1997 and
December 31, 1996............................................. 2
Consolidated Statements of Income for the Three Months Ended
March 31, 1997 and 1996....................................... 3
Consolidated Statements of Cash Flows for the Three Months
Ended March 31, 1997 and 1996................................. 4
Notes to Consolidated Financial Statements.................... 5-6
ITEM 2 Management's Discussion and Analysis of Financial............. 7-10
Condition and Results of Operations
PART II Other Information
ITEM 6 Exhibits and Reports on Form 8-K.............................. 10
Signatures.................................................... 11
</TABLE>
1
<PAGE>
ACCUSTAFF INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
ASSETS
------
MARCH 31, DECEMBER 31,
1997 1996
---------- ------------
(unaudited) (audited)
<S> <C> <C>
Current assets:
Cash and cash equivalents.................................. $ 12,310 $108,664
Accounts receivable, net................................... 307,484 249,161
Due from associated offices, net........................... 39,524 38,897
Prepaid expenses........................................... 12,072 7,216
Deferred income taxes...................................... 5,854 3,605
---------- --------
Total current assets................................... 377,244 407,543
---------- --------
Furniture, equipment, and leasehold improvements, net....... 31,011 25,803
Goodwill, net............................................... 581,912 447,595
Other assets................................................ 16,973 16,174
---------- --------
Total assets........................................... $1,007,140 $897,115
========== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Notes payable and convertible debt......................... $ 8,187 $ 13,723
Accounts payable and accrued expenses...................... 62,215 58,694
Accrued payroll and related taxes.......................... 71,605 64,201
---------- --------
Total current liabilities................................. 142,007 136,618
---------- --------
Convertible debt............................................ 86,250 86,250
Notes payable, long-term portion............................ 81,163 17,283
Deferred income taxes....................................... 3,737 2,043
---------- --------
Total liabilities...................................... 313,157 242,194
---------- --------
Commitments and contingencies
Stockholders' Equity:
Preferred stock, $.01 par value; 10,000,000 shares
authorized; no shares issued and outstanding........... - -
Common stock, $.01 par value; 150,000,000 shares
authorized; 98,440,474 and 96,551,702 shares issued
and outstanding on March 31, 1997 and December 31,
1996, respectively..................................... 984 966
Additional contributed capital........................... 610,305 592,948
Retained earnings........................................ 86,878 65,441
---------- --------
698,167 659,355
---------- --------
Less: deferred stock compensation...................... (4,184) (4,434)
---------- --------
Total stockholders' equity................................ 693,983 654,921
---------- --------
Total liabilities and stockholders' equity................ $1,007,140 $897,115
========== ========
</TABLE>
See Notes to Consolidated Financial Statements
2
<PAGE>
ACCUSTAFF INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in thousands, except per share data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
-------------------------------
MARCH 31, 1997 MARCH 31, 1996
-------------- --------------
<S> <C> <C>
Revenue...................................... $477,226 $279,032
Cost of revenue.............................. 362,145 216,870
-------- --------
Gross profit.............................. 115,081 62,162
-------- --------
Operating expenses:
General and administrative................ 66,446 39,885
Remittance to franchisees................. 5,417 4,652
Depreciation and amortization............. 6,396 3,129
-------- --------
Total operating expenses.............. 78,259 47,666
-------- --------
Income from operations.................... 36,822 14,496
-------- --------
Other expense:
Interest expense.......................... (1,965) (2,183)
-------- --------
Income before provision for income taxes..... 34,857 12,313
Provision for income taxes................... 13,420 4,287
-------- --------
Net income................................ $ 21,437 $ 8,026
======== ========
Pro forma data:
Net income before provision for
pro forma income taxes.................. 21,437 8,026
Provision for pro forma income taxes...... - 455
-------- --------
Pro forma net income...................... $ 21,437 $ 7,571
======== ========
Pro forma earnings per share................. $0.21 $0.09
======== ========
Weighted average number of common shares and
common share equivalents outstanding......... 108,304 81,277
======== ========
</TABLE>
See Notes to Consolidated Financial Statements
3
<PAGE>
ACCUSTAFF INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
---------------------------------
MARCH 31, MARCH 31,
1997 1996
---------------------------------
<S> <C> <C>
Cash flows used in operating activities............................. $ (15,802) $ (6,652)
Cash flows provided by (used in) investing activities:
Investment in repurchase agreements, net.......................... - 6,541
Purchase of furniture, equipment and leasehold improvements....... (3,162) (2,030)
Purchase of businesses, including additional earn-outs on
acquisitions, net of cash acquired............................. (130,219) (160,376)
--------- ---------
Net cash used in investing activities........................ (133,381) (155,865)
--------- ---------
Cash flows provided by (used in) financing activities:
Proceeds from issuance of common stock........................... - 120,423
Proceeds from stock options exercised............................ 4,313 1,340
Borrowings on notes payable...................................... 59,000 96,308
Repayments on notes payable...................................... (10,484) (29,016)
Distributions to former shareholders of acquired S-corporations.. - (210)
--------- ---------
Net cash provided by financing activities................. 52,829 188,845
--------- ---------
Net increase (decrease) in cash and cash and cash equivalents....... (96,354) 26,328
--------- ---------
Cash and cash equivalents, beginning of period...................... 108,664 35,695
--------- ---------
Cash and cash equivalents, end of period............................ $ 12,310 $ 62,023
========= =========
</TABLE>
See Notes to Consolidated Financial Statements
4
<PAGE>
ACCUSTAFF INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION.
The accompanying consolidated financial statements are unaudited and have
been prepared by the Company in accordance with the rules and regulations
of the Securities and Exchange Commission. Accordingly, certain
information and footnote disclosures usually found in financial statements
prepared in accordance with generally accepted accounting principles have
been condensed or omitted. The financial statements should be read in
conjunction with the consolidated financial statements and related notes
included in the Company's Form 10-K, as filed with the Securities and
Exchange Commission on April 11, 1997. .
The accompanying consolidated financial statements reflect all adjustments
(including normal recurring adjustments) which, in the opinion of
management, are necessary to present fairly the financial position and
results of operations for the interim periods presented. The results of
operations for an interim period are not necessarily indicative of the
results of operations for a full fiscal year.
All share and per share data have been restated to reflect the Company's
stock splits in the form of a 100% stock dividend and a 200% stock dividend
which were effective November 27, 1995 and March 27, 1996, respectively.
In addition, the Company completed the acquisitions of PTA International
("Perma Temps") on January 2, 1996, The McKinley Group, Inc. and an
affiliated company ("McKinley") on June 19, 1996, Career Horizons, Inc.
("Career") on November 14, 1996, and HJM Consulting, Inc. ("HJM") on
December 12, 1996, each of which was accounted for as a pooling of
interests. Perma Temps, McKinley, and HJM were treated as S-corporations
for federal income tax purposes prior to their acquisition and accordingly
were not subject to income tax at the corporate level. Therefore, all
prior period financial statements presented have been restated as if the
acquisitions had taken place at the beginning of such periods and each was
treated as a C-corporation for federal income tax purposes.
2. ACQUISITIONS.
The Company completed ten acquisitions in the three months ended March 31,
1997. In January, the Company acquired Executive's Monitor Inc.,
Manchester, Inc., Consultants in Computer Software, Inc., Preferred
Consulting, Inc., Lenco Computer Consulting, Inc., Legal Information
Technology, Inc., CGS Services, Inc., and The Placers, Inc. and affiliated
companies. In February, the Company completed the acquisition of Esprit
Staffing Services, Inc. In March, the Company completed the acquisition of
Computer Action Inc.
All acquisitions completed in the three months ended March 31, 1997 have
been accounted for under the purchase method of accounting. The aggregate
purchase price of the acquisitions was $126.1 million, which was comprised
of $112.2 million in cash, notes payable to former shareholders of acquired
companies in the amount of $5.8 million, and common stock with a fair
market value of $8.1 million. In addition, certain former shareholders of
the acquired companies are eligible to receive contingent consideration
upon attainment of certain earnings targets. For acquisitions accounted
for under the purchase method of accounting, the excess of the purchase
price (including any contingent consideration) over the fair value of the
tangible assets acquired (goodwill) is being amortized on a straight line
basis over 30 years.
The pro forma results of operations for the three months ended March 31,
1997 and 1996 listed below reflect purchase accounting adjustments and pro
forma adjustments, including reduction of officers' compensation as the
result of negotiated employment agreements and calculation of a tax
provision for subsidiaries which were formerly treated as S-corporations
for federal income tax purposes, assuming the acquisitions which occurred
during the three months ended
5
<PAGE>
March 31, 1997 had occurred at the beginning of the three month periods
ended March 31, 1997 and 1996. These pro forma amounts are not necessarily
indicative of what actually would have occurred if the acquisitions had
been in effect for the entire period presented, nor do they take into
account any adjustments made to prior period financial statements in
determining the acquisition prices. In addition, they are not
intended to be projections of future results and do not reflect any
synergies that might be achieved from combined operations.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
--------------------------------------
MARCH 31, 1997 MARCH 31, 1996
----------------- ------------------
(in thousands, except per share data)
<S> <C> <C>
Revenue.......................... $485,126 $420,474
Net income....................... 21,753 9,671
Earnings per share............... $ 0.21 $ 0.12
</TABLE>
3. SUMMARY DATA OF SUBSIDIARY
The following table details the summarized financial information (in
thousands) of the Company's wholly owned subsidiary, Career Horizons, Inc.,
and Career Horizons' subsidiaries as of and for the three months ended.
<TABLE>
<CAPTION>
MARCH 31, 1997 DECEMBER 31, 1996
------------------ -----------------
<S> <C> <C>
Current assets................... $168,962 $184,987
Non-current assets............... 223,930 187,482
Current liabilities.............. 88,490 77,893
Non-current liabilities.......... 88,560 88,250
</TABLE>
<TABLE>
<CAPTION>
MARCH 31, 1997 MARCH 31, 1996
------------------ -----------------
<S> <C> <C>
Revenue.......................... $201,995 $127,192
Gross profit..................... 50,304 29,783
Income from operations........... 12,685 5,295
</TABLE>
4. NEWLY ISSUED ACCOUNTING STANDARDS
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards (SFAS) No. 128, Earnings per Share. SFAS
No. 128 establishes standards for computing and presenting earnings per
share (EPS) and applies to entities with publicly held common stock or
potential common stock. This statement simplifies the standards for
computing earnings per share previously found in APB Opinion 15, Earnings
per Share, and makes them comparable to international EPS standards. It
replaces the presentation of basic and diluted EPS on the face of the
income statement for all entities with complex capital structures and
requires a reconciliation of the numerator and denominator of the basic EPS
computation to the numerator and denominator of the diluted EPS
computation. Basic EPS excludes dilution and is computed by dividing
income available to common stockholders by the weighted-average number of
common shares outstanding for the period. Diluted EPS reflects the
potential dilution that could occur if securities or other contracts to
issue common stock were exercised or converted into common stock or
resulted in the issuance of common stock that then shared in the earnings
of the entity. Diluted EPS is computed similarly to fully diluted EPS
pursuant to APB Opinion 15. This statement is effective for financial
statements issued for periods ending after December 15, 1997, including
interim periods; earlier application is not permitted. This statement
requires restatement of all prior-period EPS data presented. The Company
does not expect SFAS No. 128 to have a material effect to EPS as the
Company already reports its EPS on a fully dilutive basis pursuant to
APB Opinion 15.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THREE MONTHS ENDED MARCH 31, 1996.
Revenue. Revenue increased $198.2 million, or 71.0%, to $477.2 million in
the three months ended March 31, 1997 from $279.0 million in the year earlier
period. The increase was attributable by division to: Commercial, $44.3 million,
or an increase of 35.6%; Information Technology, $96.2 million, or an increase
of 132.5%; Professional Services, $46.2 million, or an increase of 168.9%;
Teleservices, $6.4 million, or an increase of 25.4%; Health Care, $4.8 million,
or an increase of 18.2%; and Private Label $0.4 million or an increase of 12.7%.
The increases in the Commercial, Information Technology, and Professional
Services Divisions are primarily due to the revenue contribution of acquired
companies, with the remaining increase being provided by internal growth, while
the increase in the Telecommunications, Private Label and Health Care divisions
are due to internal growth.
Gross Profit. Gross profit increased $52.9 million, or 85.1%, to $115.1
million in the three months ended March 31, 1997 from $62.2 million in the year
earlier period. Gross margin increased to 24.1% in the three months ended March
31, 1997 from 22.3% in the year earlier period. The overall increase in gross
margin is primarily due to the increase in revenue of the Company's Information
Technology and Professional Services divisions which produce higher gross
margins than the Company's Commercial and Teleservices divisions. In addition,
the Commercial division experienced increasing margins. This increase in margin
coupled with the volume of Commercial division revenue produced a significant
increase in overall gross margin. The gross margins in the Teleservices, Health
Care, and Private Label divisions remained relatively stable.
Operating Expenses. Operating expenses increased $30.6 million, or 64.2%,
to $78.3 million in the three months ended March 31, 1997 from $47.7 million in
the year earlier period. Operating expenses as a percentage of revenue decreased
to 16.4% in the three months ended March 31, 1997, from 17.1% in the year
earlier period. Operating expenses before depreciation and amortization expense
as a percentage of revenue decreased to 15.1% in the three months ended March
31, 1997 from 16.0% in the year earlier period. The decline in operating
expenses before depreciation and amortization expense as a percentage of revenue
is attributable to the Company's ability to spread expenses over a larger
revenue base.
Income from Operations. As a result of the foregoing, income from
operations increased $22.3 million, or 154.0%. to $36.8 million in the three
months ended March 31, 1997 from $14.5 million in the year earlier period.
Income from operations as a percentage of revenue increased to 7.7% in the three
months ended March 31, 1997 from 5.2% in the year earlier period.
Interest Expense. Interest expense decreased $0.2 million, or 10.0%, to
$2.0 million in the three months ended March 31, 1997 from $2.2 million in the
year earlier period. The interest expense resulted from a combination of the
utilization of the Company's credit facility, the notes payable to shareholders
of acquired companies, and the 7% Convertible Senior Notes.
Net Income. As a result of the foregoing, net income increased $13.9
million or 183.1%, to $21.4 million in the three months ended March 31, 1997
from $7.5 million in the year earlier period. Net income as a percentage of
revenue increased to 4.5% in the three months ended March 31, 1997 from 2.7% in
the year earlier period.
LIQUIDITY AND CAPITAL RESOURCES
During the three months ended March 31, 1997 and 1996, the Company
experienced a large increase in accounts receivable which was the primary reason
the Company used $15.8 million and $6.7 million, respectively, of cash to fund
operating activities. The increase in the accounts receivable was primarily
7
<PAGE>
due to several acquisitions in which the Company purchased the business
operations and certain assets of the acquired companies, excluding accounts
receivable. Therefore, the Company must finance the acquired companies' initial
accounts receivable balances causing a large increase in accounts receivable.
The Company may continue to experience these temporary fluctuations if any
similarly structured acquisitions are completed in the future. The Company will
use either its credit facility or other cash on hand to fund these temporary
operational cash flow needs.
The Company's primary sources of funds are from operations, proceeds of
Common Stock offerings and borrowings under its $150 million revolving credit
facility. The Company's principal uses of cash are to fund acquisitions, working
capital and capital expenditures. The Company generally pays its temporary
employees weekly for their services while receiving payments from customers 35
to 60 days from the date of invoice. As new offices are established or acquired,
or as existing offices expand, there will be increasing requirements for cash
resources to fund current operations.
During April 1996, the Company completed a secondary offering of 11.8
million shares of common stock from which the Company received net proceeds of
approximately $304.9 million. In addition, the Company's subsidiary, Career,
prior to the date of the merger with the Company, completed an offering in which
Career issued 8.2 million shares of common stock, adjusted for the conversion to
the Company's shares of common stock, from which the Company received net
proceeds of $120.4 million. The net proceeds have been used, in part, to repay
the outstanding indebtedness under the Company's revolving credit facility,
while the remaining proceeds were used to fund acquisitions and for other
general corporate purposes through March 31, 1997.
The Company is also obligated under various acquisition agreements to make
earn-out payments to former stockholders of acquired companies over the next
five years. The Company cannot currently estimate the total amount of these
payments; however, the Company anticipates that the cash generated by the
operations of the acquired companies will provide a substantial part of the
capital required to fund the earn-out payments.
The Company anticipates that capital expenditures for improvements to its
management information and operating systems will require capital expenditures
during the next twelve months of approximately $6.0 million. The Company
anticipates recurring capital expenditures in future years to be approximately
$5.0 million per year.
The Company believes that funds provided by operations, available
borrowings under the credit facility, current amounts of cash and the net
proceeds from the sale of Common Stock offered hereby will be sufficient to meet
its presently anticipated needs for working capital, capital expenditures and
acquisitions for at least the next 12 months.
INDEBTEDNESS OF THE COMPANY
The Company has a revolving credit facility with a group of commercial
banks which is secured by substantially all of the Company's assets. The
facility currently has a limit of $150 million. The facility is syndicated to a
group of 13 banks, with NationsBank (South), N.A. as agent. The Company has
entered into a commitment with NationsBank to expand the facility to $350
million on terms similar to the existing facility. The expanded facility is
expected to be completed by May 31, 1997.
The current credit facility has a term of five years expiring February 1,
2001. Outstanding amounts under the credit facility bear interest at certain
floating rates as specified by the credit facility. The credit facility contains
certain affirmative and negative covenants relating to the Company's operations,
including a prohibition on making any business acquisition without the consent
of the lenders holding not less than two-thirds of the credit exposure, under
the credit facility for acquisitions of a size requiring lender consent, if the
cost of the acquisition (including cash or non-cash consideration paid and the
amount of indebtedness assumed) exceeds the lesser of $20 million or 10% of the
Company's consolidated stockholders equity.
8
<PAGE>
As of May 14, 1997, the Company has a balance of $108.0 million outstanding
under the credit facility. The Company also has outstanding letters of credit in
the amount of $15.7 million, which reduce the amount of funds available under
the facility. Therefore, the remaining balance of funds available to the Company
as of May 14, 1997 is $26.3 million.
The Company has outstanding $86.25 million of 7% Convertible Senior Notes
Due 2002. Interest on the notes is paid semiannually on May 1 and November 1 of
each year. The notes are convertible at the option of the holder thereof, at any
time after 90 days following the date of original issuance thereof and prior to
maturity, unless previously redeemed, into shares of common stock of the Company
at a conversion price of $11.35 per share, subject to adjustment in certain
events.
The notes are redeemable, in whole or in part, at the option of the
Company, at any time on or after November 1, 1998, at stated redemption prices,
together with accrued interest. The notes do not provide for any sinking fund.
Upon a Designated Event (as defined and including a change of control) holders
of the notes will have the right, subject to certain restrictions and
conditions, to require the Company to purchase all or any part of the Notes at a
purchase price equal to 101% of the principal amount thereof together with
accrued and unpaid interest to the date of purchase.
The notes have been unconditionally guaranteed by the Company and joint and
severally guaranteed by each of Career's present and any future subsidiaries.
The guarantee of the Company and each subsidiary of Career is an unsecured
general obligation of the Company and such subsidiary, ranking equally with
other unsecured obligations of the Company and such subsidiary. The ability of
(i) Career's subsidiaries to make distributions to Career, and (ii) Career to
make distributions to the Company, are and will continue to be restricted by
applicable provisions of law. The Indenture for the Notes does not limit the
ability of Career or its subsidiaries to make distributions, incur indebtedness,
grant security interests or liens in respect of their assets or the ability of
Career's subsidiaries to incur contractual restrictions on their ability to make
distributions to Career. The obligation of the Company and each of Career's
present and any future subsidiaries under its guarantee is full and
unconditional.
The Company has certain notes payable to shareholders of acquired
companies. The notes payable bear interest at rates ranging from 5.0% to 8.0%
and have repayment terms from April 1997 to March 1999. As of May 14, 1997,
the Company owed approximately $30.4 million in such acquisition indebtedness.
The Company had $1.0 million of 6% Convertible Subordinated Debentures
outstanding as of December 31, 1996, which were converted into 727,272 shares of
the Company's common stock on January 31, 1997.
INFLATION
The effects of inflation on the Company's operations were not significant
during the periods presented in the financial statements. Generally, throughout
the periods discussed above, the increases in revenue have resulted primarily
from higher volumes, rather than price increases.
OTHER MATTERS
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards (SFAS) No. 128, Earnings per Share. SFAS No.
128 establishes standards for computing and presenting earnings per share (EPS)
and applies to entities with publicly held common stock or potential common
stock. This statement simplifies the standards for computing earnings per share
previously found in APB Opinion 15, Earnings per Share, and makes them
comparable to international EPS standards. It replaces the presentation of
basic and diluted EPS on the face of the income statement for all entities with
complex capital structures and requires a reconciliation of the numerator and
denominator of the basic EPS computation to the numerator and denominator of the
9
<PAGE>
diluted EPS computation. Basic EPS excludes dilution and is computed by dividing
income available to common stockholders by the weighted-average number of common
shares outstanding for the period. Diluted EPS reflects the potential dilution
that could occur if securities or other contracts to issue common stock were
exercised or converted into common stock or resulted in the issuance of common
stock that then shared in the earnings of the entity. Diluted EPS is computed
similarly to fully diluted EPS pursuant to Opinion 15. This statement is
effective for financial statements issued for periods ending after December 15,
1997, including interim periods; earlier application is not permitted. This
statement requires restatement of all prior-period EPS data presented.
FORWARD LOOKING STATEMENTS
Statements made in this Report regarding the Company's expectation or
beliefs concerning future events, including capital spending, expected results
and the Company's liquidity situation during 1997, should be considered forward-
looking and subject to various risks and uncertainties. The Company's actual
results may differ materially from the results anticipated in these forward-
looking statements as a result of certain factors set forth under Risk Factors
and elsewhere in the Company's Joint Proxy Statement/Prospectus dated October 8,
1996, the Company's Prospectus dated January 16, 1997, and as discussed in the
Company's reports on Forms 10-K, 10-Q and 8-K made under the Securities Exchange
Act of 1934. For instance, the Company's results of operations may differ
materially from those anticipated in the forward-looking statements due to,
among other things: management's ability to effectively integrate the combined
operations of Career and the Company; the Company's ability to successfully
identify suitable acquisition candidates, complete acquisitions or integrate the
acquired business into its operations; the general level of economic activity in
the Company's markets; increased price competition; changes in government
regulations or interpretations thereof; and the continued availability of
qualified temporary personnel-particularly in the information technology and
other professional segments of the Company's businesses. In addition, the market
price of the Company's stock may from time to time be significantly volatile as
a result of, among other things: the Company's operating results; the operating
results of other temporary staffing companies; and changes in the performance of
the stock market in general.
PART II OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES
(a) Not applicable.
(b) Not applicable.
(c) In January 1997, the Company issued 405,320 shares of common stock to
the former shareholders of Legal Information Technology, Inc. in exchange
for all their shares of Legal Information Technology, Inc. common stock.
This issuance of securities was made in reliance on the exemption from
registration provided under Section 4(2) of the Securities Act of 1933 as a
transaction by an issuer not involving a public offering. All of the
securities were acquired by the recipients for investment and with no view
toward the public resale or distribution thereof without registration. In
each instance, the recipient was either an accredited or a sophisticated
investor, the offers and sales were made without any public solicitation
and the stock certificates bear restrictive legends.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS.
11 Calculation of Per Share Earnings.
27 Financial Data Schedule.
(B) REPORTS ON FORM 8-K.
The Company has not filed any reports on Form 8-K during the quarter
ended March 31, 1997.
10
<PAGE>
ACCUSTAFF INCORPORATED AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of Securities Exchange Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
ACCUSTAFF INCORPORATED
May 14, 1997 /S/ Derek E. Dewan
--------------------------------------------
DEREK E. DEWAN
Chairman, President and Chief Executive
Officer
May 14, 1997 /S/ Michael D. Abney
--------------------------------------------
MICHAEL D. ABNEY
Senior Vice President and Chief Financial
Officer
11
<PAGE>
EXHIBIT 11
ACCUSTAFF INCORPORATED AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(in thousands, except per share data)
<TABLE>
<CAPTION>
MARCH 31, 1997 MARCH 31, 1996
----------------- ------------------
<S> <C> <C>
Net income.............................. $ 21,437 $ 7,571
Add: Interest Expense on 6% Convertible
Subordinated Debentures.............. 3 21
----------------- ------------------
Net income available - primary.......... 21,440 7,592
----------------- ------------------
Add: Interest Expense on 7%
Convertible Senior Notes Due 2002,
net of taxes (1)....................... 928 -
----------------- ------------------
Net income available - fully diluted... 22,368 7,592
----------------- ------------------
Shares outstanding:
Weighted average number of common shares
outstanding.......................... 97,631 74,653
Additional shares assuming exercise of
employee stock options................. 2,830 4,857
Deemed conversion of 6% Convertible
Subordinated Debentures................ 242 1,767
----------------- ------------------
Weighted average number of common shares
outstanding - primary earnings per
share................................... 100,703 81,277
----------------- ------------------
Incremental shares outstanding based
upon period ending fair market value:
employee stock options.................. 2 174
Add: Deemed conversion of 7% Convertible
Senior Notes Due 2002................... 7,599 -
----------------- ------------------
Weighted average number of common shares
outstanding - fully diluted earnings
per share............................... 108,304 81,451
----------------- ------------------
Income per common share:
Primary.................................. $0.21 $ 0.09
================= ==================
Fully Diluted............................ $0.21 $ 0.09
================= ==================
</TABLE>
(1) The 7% Convertible Senior Notes due 2002 did not have a dilutive effect on
earnings per share for the three months ended March 31, 1996.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 12,310
<SECURITIES> 0
<RECEIVABLES> 310,615
<ALLOWANCES> 3,131
<INVENTORY> 0
<CURRENT-ASSETS> 377,244
<PP&E> 47,824
<DEPRECIATION> 16,813
<TOTAL-ASSETS> 1,007,140
<CURRENT-LIABILITIES> 142,007
<BONDS> 0
0
0
<COMMON> 984
<OTHER-SE> 692,999
<TOTAL-LIABILITY-AND-EQUITY> 1,007,140
<SALES> 477,226
<TOTAL-REVENUES> 477,226
<CGS> 362,145
<TOTAL-COSTS> 362,145
<OTHER-EXPENSES> 77,576
<LOSS-PROVISION> 683
<INTEREST-EXPENSE> 1,965
<INCOME-PRETAX> 34,857
<INCOME-TAX> 13,420
<INCOME-CONTINUING> 21,437
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 21,437
<EPS-PRIMARY> 0.21
<EPS-DILUTED> 0.21
</TABLE>
