FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the quarterly period ended March 31, 1998
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the transition period from ________ to ___________
Commission file number: 0-24484
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.)
One Independent Drive
Jacksonville, Florida
32202
(Address of principal executive offices) (Zip code)
(904) 360-2000
(Registrant's telephone
number including area code)
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 registrant's classes of
common stock, as of the latest practicable date. May 13, 1998
Common Stock, $0.01 par value Outstanding: 110,410,976 (No. of shares)
<PAGE>
<TABLE>
<CAPTION>
AccuStaff Incorporated and Subsidiaries
Index
<S> <C> <C>
Part I Financial Information
Item 1 Financial Statements
Consolidated Balance sheets as of March 31, 1998 and December 31, 1997....................... 3
Consolidated Statements of Income for the Three Months ended March 31, 1998 and 1997......... 4
Consolidated Statements of Cash Flows for the Three Months ended March 31, 1998 and 1997..... 5
Notes to Consolidated Financial Statements................................................... 6
Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations........ 7
Part II Other Information
Item 2 Changes in Securities and Use of Proceeds.................................................... 11
Item 6 Signatures................................................................................... 12
Exhibits
</TABLE>
2
<PAGE>
Part I. Financial Information
Item 1. Financial Statements
AccuStaff Incorporated and Subsidiaries
Consolidated Balance Sheets
(dollar amounts in thousands except per share amounts)
<TABLE>
<CAPTION>
March 31, 1998 December 31, 1997
------------------- -------------------
(unaudited) (unaudited)
Assets
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 61,546 $ 23,938
Accounts receivable, net 470,212 438,955
Due from associated offices 37,293 41,749
Prepaid expenses 28,211 19,635
Deferred income taxes 11,361 10,149
------------------- -------------------
Total current assets 608,623 534,426
Furniture, equipment and leasehold improvements, net 54,398 50,665
Goodwill, net 939,972 882,986
Other assets 26,992 26,934
------------------- -------------------
Total assets $ 1,629,985 $ 1,495,011
=================== ===================
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable $ 26,426 $ 18,024
Accounts payable and accrued expenses 123,991 97,997
Accrued payroll and related taxes 97,049 82,676
------------------- -------------------
Total current liabilities 247,466 198,697
Convertible debt 86,250 86,250
Notes payable, long-term portion 411,155 372,620
Other 13,982 12,157
------------------- -------------------
Total liabilities 758,853 669,724
------------------- -------------------
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
109,914,472 and 108,290,786 shares issued and outstanding on
March 31, 1998 and December 31, 1997, respectively 1,099 1,082
Additional contributed capital 666,631 637,178
Retained earnings 206,587 190,483
------------------- -------------------
874,317 828,743
Less: deferred stock compensation (3,185) (3,456)
------------------- -------------------
Total stockholders' equity 871,132 825,287
------------------- -------------------
Total liabilities and stockholders' equity $ 1,629,985 $ 1,495,011
=================== ===================
See accompanying notes to consolidated financial statements.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
AccuStaff Incorporated and Subsidiaries
Consolidated Statements of Income
(unaudited)
(dollar amounts in thousands except per share amounts)
Three Months Ended
--------------------------------------
March 31, March 31,
1998 1997
(unaudited) (unaudited)
----------------- ----------------
<S> <C> <C>
Revenue $ 710,068 $ 533,030
Cost of revenue 526,657 403,007
----------------- ----------------
Gross profit 183,411 130,023
----------------- ----------------
Operating expenses:
General and administrative 104,577 78,933
Depreciation and amortization 11,459 7,076
Remittance to franchisees 6,447 5,417
Merger related costs 9,800 -
----------------- ----------------
Total operating expenses 132,283 91,426
----------------- ----------------
Income from operations 51,128 38,597
----------------- ----------------
Interest expense, net (7,302) (2,038)
----------------- ----------------
Income before provision for income taxes 43,826 36,559
Provision for income taxes 22,272 13,473
----------------- ----------------
Net income $ 21,554 $ 23,086
================= ================
Basic net income per common $ 0.20 $ 0.22
================= ================
Average common shares outstanding, basic 109,100 105,149
================= ================
Diluted net income per common share $ 0.19 $ 0.21
================= ================
Average common shares outstanding, diluted 120,346 116,284
================= ================
Pro forma data:
Net income before provision for pro forma income taxes $ 21,554 $ 23,086
Provision for pro forma income taxes (3,587) 611
----------------- ----------------
Pro forma net income $ 25,141 $ 22,475
================= ================
Pro forma basic net income per common share $ 0.23 $ 0.21
================= ================
Pro forma diluted net income per common share $ 0.22 $ 0.20
================= ================
See accompanying notes to consolidated financial statements.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
AccuStaff Incorporated and Subsidiaries
Consolidated Statements of Cash Flows
(dollar amounts in thousands except for per share amounts)
Three Months Ended
-------------------------------
March 31, March 31,
1998 1997
(unaudited) (unaudited)
--------------- ---------------
<S> <C> <C>
Cash flows from operating activities:
Net Income $ 21,554 $ 23,086
Adjustments to net income to net cash provided
by (used in) operating activities:
Depreciation and amortization 11,459 7,076
Deferred income taxes 4,225 (286)
Changes in certain assets and liabilities
Accounts receivable (29,599) (42,410)
Due from associated offices 4,456 (311)
Prepaid expenses and other assets (8,597) (4,778)
Accounts payable and accrued expenses 25,434 931
Accrued payroll and related taxes 14,372 7,043
Other, net (3,609) 1,191
--------------- ---------------
Net cash provided by (used in) operating
Activities 39,695 (8,458)
--------------- ---------------
Cash flows from investing activities:
Purchase of furniture, equipment and leasehold
improvements, net of disposals (7,022) (4,222)
Purchase of businesses, including additional earn-outs on
acquisitions, net of cash acquired (64,021) (130,591)
--------------- ---------------
Net cash used in investing activities (71,043) (134,813)
--------------- ---------------
Cash flows from financing activities:
Proceeds from stock options exercised 29,469 4,313
Borrowings on indebtedness 75,000 67,555
Repayments on indebtedness (30,063) (21,313)
Distributions to former shareholders of acquired
S-Corporations (5,450) (21)
--------------- ---------------
Net cash provided by financing activities 68,956 50,534
--------------- ---------------
Net increase (decrease) in cash and cash equivalents 37,608 (92,737)
Cash and cash equivalents, beginning of period 23,938 109,599
--------------- ---------------
Cash and cash equivalents, end of period 61,546 16,862
=============== ===============
See accompanying notes to consolidated financial statements.
</TABLE>
5
<PAGE>
AccuStaff Incorporated and Subsidiaries
Notes to Consolidated Financial Statements
(unaudited)
(dollar amounts in thousands except for per share amounts)
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 March 31,
1998.
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 amounts have been adjusted to reflect the Company's acquisitions of Office
Specialists, Inc. on December 1, 1997 and Actium, Inc. on March 26, 1998 which
were accounted for as poolings of interests. Additionally, Actium was treated as
an S-Corporation for federal income tax purposes prior to acquisition and
accordingly was 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. 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, 1998 December 31, 1997
-------------------------- -----------------------
<S> <C> <C>
Current assets $ 185,135 $ 186,674
Non-current assets 286,158 251,261
Current liabilities 75,056 67,459
Non-current liabilities 113,140 114,520
March 31, 1998 March 31, 1997
-------------------------- -----------------------
<S> <C> <C>
Revenue $ 225,134 $ 201,995
Gross profit 57,834 50,304
Income from operations 17,627 12,685
</TABLE>
3. Newly Issued Accounting Standards
During 1997, the Financial Accounting Standards Board (FASB) issued Statement of
Financial Accounting Standards (SFAS) No. 130 Reporting Comprehensive Income,
which requires that changes in comprehensive income be shown in a financial
statement that is displayed with the same prominence as other financial
statements. This statement is effective for the Company's 1998 fiscal year. The
Company has determined that comprehensive income, as defined, is not materially
different than net income as already presented and as a result has not amended
its reporting format.
6
<PAGE>
Additionally, during 1997, the FASB issued SFAS No. 131, Disclosures About
Segments of an Enterprise and Related Information. SFAS No. 131 requires, among
other things, that certain general and financial information be disclosed for
reportable operating segments of a company. SFAS No. 131 is effective for fiscal
years beginning after December 15, 1997, with interim application not required
in the initial year of adoption.
During 1998, the American Institute of Certified Public Accountants' Executive
Committee issued Statement of Position Number 98-1 (SOP 98-1), Accounting for
the Cost of Computer Software Developed or Obtained for Internal Use. SOP 98-1
is effective for fiscal years beginning after December 15, 1998. Management
believes that the Company is substantially in compliance with this pronouncement
and that the implementation of this pronouncement will not have a material
effect on the Company's consolidated financial position, results of operations
or cash flows.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Three Months ended March 31, 1998 Compared to Three Months ended March 31, 1997.
Revenue. Revenue increased $177.1 million, or 33.2%, to $710.1 million in the
three months ended March 31, 1998 from $533.0 million in the year earlier
period. The increase was attributable by division to: Commercial, $41.8 million,
or an increase of 15.1%; Information Technology, $87.2 million or an increase of
47.9%; and Professional Services, $48.1 million, or an increase of 65.3%. The
increase in the Commercial division was due primarily to internal growth and,
less significantly, to the revenue contribution from acquired companies. In
fiscal 1998, the Company restructured its Commercial division to include the
operations of the teleservices, health care and private label divisions which
were reported separately in prior periods. The change in revenue above in the
Commercial division reflects the combined results of the restructured division
for both periods presented. In addition, the Company sold the operating assets
of the health care division which contributed revenue of $30.1 million and $31.3
million for the quarters ended March 31, 1998 and 1997, respectively. The
increases in each of the Information Technology and Professional Services
divisions were due to both internal growth and, more significantly, the revenue
contribution of acquired companies.
Gross Profit. Gross profit increased $53.4 million or 41.1% to $183.4 million in
the three months ended March 31, 1998 from $130.0 million in the year earlier
period. The increase was attributable by division to: Commercial, $13.4 million,
or an increase of 22.3%; Information Technology, $22.6 million or an increase of
46.0%; and Professional Services, $17.4 million, or an increase of 83.4%.
Overall gross margin increased to 25.8% in the three months ended March 31, 1998
from 24.4% in the year earlier period. The gross margin in the newly
restructured Commercial division increased to 23.0% in the three months ended
March 31, 1998 from 21.7% in the year earlier period. The Information Technology
division experienced an overall decrease in gross margin to 26.6% in the three
months ended March 31, 1998 from 26.9% in the year earlier period. The decrease
was attributable to the lower gross margins of the division's international
operations, the majority of which were acquired in November of 1997 and are
therefore not included in the March 31, 1997 results. Excluding the results of
the international operations, which produced a gross margin of 18.1%, the
overall gross margin in the Information Technology division increased to 28.3%
for the three months ended March 31, 1998 from 26.9% in the year earlier period.
The gross margin in the Professional Services division increased to 31.5% in the
three months ended March 31, 1998 from 28.4% in the year earlier period.
Operating Expenses. Operating expenses increased $40.9 million, or 44.7%, to
$132.3 million in the three months ended March 31, 1998 from $91.4 million in
the year earlier period. Operating expenses before merger related costs as a
percentage of revenue remained constant at 17.2% in the three months ended March
31, 1998 and 1997, respectively. Included in operating expenses are the costs
associated with projects underway to ensure accurate date recognition and data
processing with respect to the Year 2000 as it relates to the Company's
business, operations, customers and vendors. The related costs, which are
expensed as incurred, are included in general and administrative expenses. The
Company expects to substantially complete the Year 2000 conversion projects by
the end of 1998. These costs have been immaterial to date and are not expected
to have a material impact on the Company's results of operations, financial
condition or liquidity in the future.
7
<PAGE>
Income from Operations. As a result of the foregoing, income from operations
increased $12.5 million or 32.4% to $51.1 million in the three months ended
March 31, 1998 from $38.6 million in the year earlier period. Income from
operations before merger related costs increased $22.3 million, or 57.8% to
$60.9 million in the three months ended March 31, 1998 from $38.6 million in the
year earlier period. Income from operations before merger related costs as a
percentage of revenue increased to 8.6% in the three months ended March 31, 1998
from 7.2% in the year earlier period.
Interest Expense. Interest expense increased $5.3 million, or 265.0%, to $7.3
million in the three months ended March 31, 1998 from $2.0 million in the year
earlier period. The increase in interest expense resulted from a combination of
the utilization of the Company's credit facility used to fund acquisitions, and
the amount of cash on hand as of December 31, 1996.
Income Taxes. The Company's effective tax rate was 50.8% in the three months
ended March 31, 1998 compared to 36.9% in the year earlier period. The increase
in the effective tax rate is due to the acquisition of Actium, Inc., formerly a
cash basis S-Corporation for federal income tax purposes, which was accounted
for as a pooling of interests. The Company incurred a $3.6 million increase in
tax provision for the three month period ended March 31, 1998 as a result of the
conversion of Actium from the cash to accrual basis for federal income tax
purposes. In addition, the Company incurred $6.0 million of non-deductible
merger related costs which resulted in an increase taxable income. Exclusive of
these merger related tax expenses, the Company's effective tax rate would have
decreased to 37.5% in the three months ended March 31, 1998 from 38.5% in the
year earlier period due to tax savings realized from corporate restructurings.
Pro Forma Net Income. Pro forma net income includes an adjustment to net income
in the first quarter of 1998 to reverse the taxes which relate to the conversion
of Actium, Inc. from an S-Corporation to a C-corporation. Pro forma net income
increased $2.6 million, or 11.6%, to $25.1 million in the three months ended
March 31, 1998 from $22.5 million in the year earlier period. Pro forma net
income as a percentage of revenue decreased to 3.5% in the three months ended
March 31, 1998 from 4.2% in the year earlier period due to the non-recurring
merger expenses of which $6.0 million were not deductible for tax purposes.
Exclusive of these merger expenses, pro forma net income would have increased $
6.8 million to $33.5 million, resulting in an increase to pro forma net income
as a percentage of revenue to 4.7%.
Liquidity and Capital Resources
The Company's primary sources of funds are from operations, proceeds of Common
Stock offerings and borrowings under its 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.
The Company is obligated under various acquisition agreements to make earn-out
payments to former stockholders of acquired companies over the next five years.
The Company anticipates the maximum amount of these payments will total $35
million for the remainder of fiscal 1998, and $46 million, $28 million, $26
million and $3.0 million annually for the four subsequent fiscal years. 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 $15 million. The Company
anticipates recurring expenditures in future years to be approximately $15
million per year.
The Company believes that funds provided by operations, available borrowings
under the credit facility and current amounts of cash 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 entered into an agreement on May 23, 1997 expanding its credit
facility to $500 million and extending the term of the facility to May 23, 2002.
The facility is unsecured but is guaranteed by each of the Company's
subsidiaries. The facility was syndicated to a group of 20 banks, with
NationsBank (South) N.A. as agent.
8
<PAGE>
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 acquisitions which would result
in pro forma noncompliance with the related covenants if the acquired company
would meet or exceed 10% of total assets or income on a consolidated basis. In
addition, approval is required by the majority lenders at such time that the
cash consideration of an individual acquisition exceeds 10% of consolidated
stockholders' equity.
On February 6, 1998, the Company received a commitment from NationsBank (South),
N.A. to extend the Company an additional amount of borrowings in the form of a
revolving credit facility equal to $300 million. If the Company chooses not to
enter into the facility, the commitment will expire June 15, 1998. Borrowings
pursuant to this commitment would be payable on February 5, 2000. The commitment
contains substantially all of the same terms as the Company's existing $500
million facility.
As of May 13, 1998, the Company has a balance of $ 381.0 million outstanding
under the credit facility. The Company also has outstanding letters of credit in
the amount of $29.4 million, which reduce the amount of funds available under
the facility. Therefore, the remaining balance of funds available to the Company
as of May 13, 1998 is $389.6 million.
The Company's wholly owned subsidiary, Career Horizons, Inc., 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, 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
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 bear interest at rates ranging from 5.0% to 8.0% and have repayment terms
from April, 1998 to June, 2000. As of April 13, 1998, the Company owed
approximately $42.4 million in such acquisition indebtedness.
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
Impact of Year 2000. Some of the Company's older computer software programs were
written using two digits rather than four to define the applicable year. As a
result, those computer programs have time-sensitive software that may recognize
a date using "00" as the year 1900 rather than the year 2000.
The Company commenced a company-wide assessment and will modify or replace
affected software so that its computer systems will function properly with
respect to dates beginning in the year 2000. To the best of management's
knowledge and belief, and based on the work completed to date, the required
modifications or replacements of the Company's software to process data after
the turn of the century are not anticipated to pose significant operational
problems.
9
<PAGE>
Forward Looking Statements
Statements made in this Report regarding the Company's expectations or beliefs
concerning future events, including capital spending, expected results and the
Company's liquidity situation during 1998, 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 prospectus dated January 15, 1997, and as discussed
in the Company's reports on Forms 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: 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.
10
<PAGE>
Part II. Other Information
Item 1. Legal Proceedings
No disclosure required.
Item 2. Changes in Securities
On March 26, 1998, the Company issued 4,598,698 shares of its common stock
pursuant to a merger transaction in which the Company's subsidiary, modis, inc.,
acquired all of the outstanding shares of Actium corporation, Actium
Technologies, Inc. and Actium Tools, Inc. The Company's 4,598,698 shares were
issued in reliance upon an exemption from registration under the Securities Act
of 1933, as amended (the "Act"), provided by Section 4(2) of the Act.
Item 3. Defaults Upon Senior Securities
No disclosure required.
Item 4. Submission of Matters to a Vote of Security Holders
No disclosure required.
Item 5. Other Information
No disclosure required.
Item 6. Exhibits and Reports on Form 8-K
11
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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.
AccuStaff Incorporated
May 15, 1998
Date By:/s/ Derek E. Dewan
--------------------------------------------
Derek E. Dewan, Chairman, President and
Chief Executive Officer
May 15, 1998 By:/s/ Michael D. Abney
Date --------------------------------------------
Michael D. Abney, Senior Vice President and
Chief Financial Officer
May 15, 1998 By:/s/ Robert P. Crouch
Date --------------------------------------------
Robert P. Crouch, Vice President and Controller
12
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<FISCAL-YEAR-END> Dec-31-1998
<PERIOD-START> Jan-01-1998
<PERIOD-END> Mar-31-1998
<PERIOD-TYPE> 3-MOS
<CASH> 61,546
<SECURITIES> 0
<RECEIVABLES> 480,479
<ALLOWANCES> 10,267
<INVENTORY> 0
<CURRENT-ASSETS> 608,623
<PP&E> 95,474
<DEPRECIATION> 41,076
<TOTAL-ASSETS> 1,629,985
<CURRENT-LIABILITIES> 247,466
<BONDS> 0
0
0
<COMMON> 1,099
<OTHER-SE> 870,033
<TOTAL-LIABILITY-AND-EQUITY> 1,629,985
<SALES> 710,068
<TOTAL-REVENUES> 710,068
<CGS> 526,657
<TOTAL-COSTS> 526,657
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 3,024
<INTEREST-EXPENSE> 7,302
<INCOME-PRETAX> 43,826
<INCOME-TAX> 22,272
<INCOME-CONTINUING> 51,128
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 21,554
<EPS-PRIMARY> 0.20
<EPS-DILUTED> 0.19
</TABLE>
3
<TABLE>
<CAPTION>
(dollar amounts in thousands except per share amounts) Three Months Ended
------------------------------------
March 31, 1998 March 31, 1997
----------------- ------------------
<S> <C> <C>
Basic net income per common share computation:
Income available to common shareholders $ 21,554 $ 23,086
----------------- ------------------
Average common shares outstanding 109,100 105,149
================= ==================
Basic net income per common share $ 0.20 $ 0.22
================= ==================
Diluted net income per common share computation
Income available to common shareholders $ 21,554 $ 23,086
Interest paid on convertible debt, net of tax benefit 928 928
Income available to common shareholders and
assumed conversions $ 22,482 $ 24,014
----------------- ------------------
Average common shares outstanding 109,100 105,149
Incremental shares from assumed conversions:
Convertible debt 7,599 7,599
Stock options 3,647 3,536
----------------- ------------------
Diluted average common shares outstanding 120,346 116,284
================= ==================
Diluted net income per common share $ 0.19 $ 0.21
================= ==================
</TABLE>
