FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[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 0-24928
THE SOLOMON-PAGE GROUP LTD.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 51-0353012
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1140 AVENUE OF THE AMERICAS, NEW YORK, NY 10036
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 764-9200
--------------
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 of 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 / /
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: At May 11, 1998, there were
outstanding 5,129,285 shares of the Registrant's Common Stock, $.001 par value.
Transitional Small Business Disclosure Format:
Yes / / No /X/
<PAGE>
THE SOLOMON-PAGE GROUP LTD.
- --------------------------------------------------------------------------------
FORM 10-QSB
QUARTERLY REPORT
FOR THE SIX MONTHS ENDED MARCH 31, 1998
- --------------------------------------------------------------------------------
INDEX
- --------------------------------------------------------------------------------
PART I: FINANCIAL INFORMATION
ITEM 1: Financial Statements Page Number
-----------
Consolidated Balance Sheet as of March 31, 1998 [Unaudited]...................1
Consolidated Statements of Operations for the three months and six months
ended March 31, 1998 and 1997 [Unaudited].....................................3
Consolidated Statements of Cash Flows for the three months and six months
ended March 31, 1998 and 1997 [Unaudited].....................................4
Notes to Consolidated Financial Statements [Unaudited] .......................6
ITEM 2: Management's Discussion and Analysis or
Plan of Operation................................................7
PART II: OTHER INFORMATION
ITEM 4: Submission of Matters to a Vote of Security Holders.............10
ITEM 6: Exhibits and Reports on Form 8-K................................10
SIGNATURES...................................................................11
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
THE SOLOMON-PAGE GROUP LTD.
CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 1998 [UNAUDITED]
<TABLE>
<CAPTION>
ASSETS:
CURRENT ASSETS:
<S> <C>
Cash and Cash Equivalents $611,707
Investments 600,814
Accounts Receivable - [Net of Allowances of $156,000] 9,164,715
Other Current Assets 689,972
-----------
TOTAL CURRENT ASSETS 11,067,208
-----------
PROPERTY AND EQUIPMENT [NET OF ACCUMULATED
DEPRECIATION OF $884,228] 1,808,072
-----------
OTHER ASSETS:
Investments 1,051,158
Intangible Assets - [Net of Accumulated Amortization of $153,023] 711,110
Due from Related Parties 162,920
Security Deposits 128,714
Restricted Investment 34,466
-----------
TOTAL OTHER ASSETS 2,088,368
-----------
TOTAL ASSETS $14,963,648
===========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
1
<PAGE>
THE SOLOMON-PAGE GROUP LTD.
CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 1998 [UNAUDITED]
LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES:
Accrued Payroll and Commissions $3,101,060
Accounts Payable and Accrued Expenses 805,342
Income Taxes Payable 206,372
Line of Credit 2,400,000
Current Portion of Obligations Under Capital Leases 54,281
Other Current Liabilities 3,500
-----------
TOTAL CURRENT LIABILITIES 6,570,555
-----------
COMMITMENTS AND CONTINGENCIES --
LONG-TERM LIABILITIES:
Obligations Under Capital Leases 8,938
Deferred Credit 464,287
-----------
TOTAL LONG-TERM LIABILITIES 473,225
-----------
STOCKHOLDERS' EQUITY:
Preferred Stock - Par Value $.001 Per Share; Authorized
2,000,000 Shares, None Issued or Outstanding --
Common Stock - Par Value $.001 Per Share;
Authorized 20,000,000 Shares, 5,139,285 Shares
Issued and 5,129,285 Shares Outstanding 5,139
Additional Paid-in Capital 8,488,247
Treasury Stock and Warrants; 10,000 Common Shares;
1,000,000 Warrants - At Cost (1,070,248)
Retained Earnings 496,730
-----------
TOTAL STOCKHOLDERS' EQUITY 7,919,868
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $14,963,648
===========
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
2
<PAGE>
THE SOLOMON-PAGE GROUP LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
[UNAUDITED]
<TABLE>
<CAPTION>
Three months ended Six months ended
------------------ ----------------
March 31, March 31,
--------- ---------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUE $11,277,761 $6,274,218 $21,491,189 $11,752,281
----------- ---------- ----------- ------------
SELLING EXPENSES 8,812,023 4,920,474 16,580,213 8,944,111
GENERAL AND ADMINISTRATIVE 1,891,095 964,449 3,492,459 1,950,361
DEPRECIATION AND AMORTIZATION 128,963 79,292 243,845 154,108
----------- ---------- ----------- -------------
TOTAL OPERATING EXPENSES 10,832,081 5,964,215 20,316,517 11,048,580
----------- ---------- ----------- -------------
INCOME FROM OPERATIONS 445,680 310,003 1,174,672 703,701
----------- ---------- ----------- -------------
OTHER INCOME [EXPENSES]
Interest and Dividend Income 36,507 33,331 64,249 67,054
Interest Expense (47,779) (10,002) (64,354) (22,169)
Net Realized and Unrealized Gain (Loss) on Investments (598) 3,049 490 14,678
----------- ---------- ----------- -------------
TOTAL OTHER INCOME [EXPENSES] (11,870) 26,378 385 59,563
----------- ---------- ----------- -------------
INCOME BEFORE INCOME TAX EXPENSE 433,810 336,381 1,175,057 763,264
INCOME TAX EXPENSE 198,316 80,959 532,656 166,212
----------- ---------- ----------- -------------
NET INCOME $235,494 $255,422 $642,401 $597,052
=========== ========== =========== =============
BASIC EARNINGS PER COMMON SHARE $0.05 $0.05 $0.13 $0.12
=========== ========== =========== =============
DILUTED EARNINGS PER COMMON SHARE $0.04 $0.04 $0.11 $0.11
=========== ========== =========== =============
BASIC WEIGHTED AVERAGE SHARES 5,129,285 5,134,230 5,129,285 5,134,230
=========== ========== =========== =============
DILUTED WEIGHTED AVERAGE SHARES 5,969,147 5,759,882 6,052,669 5,574,795
=========== ========== =========== =============
</TABLE>
See Notes to Consolidated Financial Statements.
3
<PAGE>
THE SOLOMON-PAGE GROUP LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS [UNAUDITED]
<TABLE>
<CAPTION>
Six months ended
----------------
March 31,
---------
1998 1997
---- ----
OPERATING ACTIVITIES:
<S> <C> <C>
Net Income $642,401 $597,052
------------ ------------
Adjustments to Reconcile Net Income
to Net Cash [Used for] Operating Activities:
Depreciation and Amortization 243,856 154,108
Provision for losses on Accounts Receivable 31,000 7,000
Deferred Credit 80,424 47,612
Net Realized and Unrealized Gain on Investments (490) (14,678)
Change in Assets and Liabilities:
[Increase] Decrease in:
Accounts Receivable (1,817,688) (755,408)
Other Assets (369,330) (131,132)
Security Deposits 4,458 (24,136)
Increase [Decrease] in:
Accounts Payable and Accrued Expenses 444,414 96,878
Income Tax Payable (60,732) 82,316
Other Liabilities (267,738) 70,650
------------ ------------
Total Adjustments ($1,711,826) ($466,790)
------------ ------------
NET CASH - OPERATING ACTIVITIES-
FORWARD ($1,069,425) $130,262
------------ ------------
INVESTING ACTIVITIES:
Capital Expenditures (552,092) (149,794)
Purchase of Investments (449,710) (2,449,740)
Cash Received from Related Parties 15,000 --
Proceeds from Sales of Investments 948,655 1,741,911
------------ ------------
NET CASH - INVESTING ACTIVITIES -
FORWARD ($38,147) ($857,623)
------------ ------------
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
4
<PAGE>
THE SOLOMON-PAGE GROUP LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS [UNAUDITED]
<TABLE>
<CAPTION>
Six months ended
----------------
March 31,
---------
1998 1997
---- ----
NET CASH - OPERATING ACTIVITIES -
<S> <C> <C>
FORWARDED ($1,069,425) $130,262
------------- ----------
NET CASH - INVESTING ACTIVITIES -
FORWARDED ($38,147) ($857,623)
------------- ----------
.
FINANCING ACTIVITIES:
Principal Payments Under Capital
Lease Obligations (36,579) (60,667)
Borrowings Under the Line of Credit 2,400,000 --
Purchase of Treasury Stock and Warrants (1,053,998) (16,250)
------------- ----------
NET CASH - FINANCING ACTIVITIES $1,309,423 ($76,917)
------------- ----------
NET INCREASE [DECREASE] IN CASH AND CASH EQUIVALENTS 201,851 (804,278)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIODS 409,856 2,113,556
------------- ----------
CASH AND CASH EQUIVALENTS - END OF PERIODS $611,707 $1,309,278
============= ==========
SUPPLEMENTAL DISCLOSURES FOR CASH FLOW INFORMATION:
Cash paid during the periods for:
Interest $64,354 $22,169
Income Taxes 615,567 136,335
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
5
<PAGE>
THE SOLOMON-PAGE GROUP LTD.
- --------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[UNAUDITED]
- --------------------------------------------------------------------------------
[1] BASIS OF REPORTING
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Item 310(b)
of Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements.
In the opinion of management, such statements include all adjustments
[consisting only of normal recurring items] which are considered necessary for a
fair presentation of the financial position of the Company at March 31, 1998 and
the results of its operations for the three and six months ended March 31, 1998
and 1997 and cash flows for the three and six months ended March 31, 1998 and
1997. The results of operations for the periods presented are not necessarily
indicative of the results to be expected for the full year or subsequent
periods.
The accompanying unaudited consolidated financial statements include the
accounts of The Solomon-Page Group Ltd. and its wholly-owned subsidiary. All
significant intercompany balances and transactions have been eliminated in
consolidation.
It is suggested that these financial statements be read in conjunction with the
audited financial statements and notes for the fiscal year ended September 30,
1997 included in The Solomon-Page Group Ltd. Form 10-KSB.
[2] EARNINGS PER COMMON SHARE
The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards (SFAS) No. 128, Earnings per Share, which is effective for
financial statements issued for periods ending after December 15, 1997.
Accordingly, earnings per share data in the financial statements for the three
and six months ended March 31, 1998 and 1997 have been calculated in accordance
with SFAS No. 128.
SFAS No. 128 supersedes Accounting Principles Board Opinion No. 15, Earnings per
Share, and replaces its primary earnings per share with a new basic earnings per
share representing the amount of earnings for the period available to each share
of common stock outstanding during the reporting period. Diluted earnings per
share reflects the amount of earnings for the period available to each share of
common stock outstanding during the reporting period, while giving effect to all
dilutive potential common shares that were outstanding during the period, such
as common shares that could result from the potential exercise or conversion of
securities into common stock. The dilutive effect of outstanding options and
warrants and their equivalents is reflected in dilutive earning per share by the
application of the treasury stock method which recognizes the use of proceeds
that could be obtained upon exercise of options and warrants in computing
diluted earnings per share. It assumes that any proceeds would be used to
purchase common stock at the average market price during the period. Options and
warrants will have a dilutive effect only when the average market price of the
common stock during the period exceeds the exercise price of the option or
warrants.
[3] RECLASSIFICATION
Certain prior period amounts have been reclassified to conform with the current
period presentation.
6
<PAGE>
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
- --------------------------------------------------------------------------------
OVERVIEW
The Company is a specialty niche provider of staffing services
organized into two primary operating divisions: temporary staffing/consulting
and executive search/full-time contingency recruitment. The temporary
staffing/consulting division provides services to companies seeking personnel in
the information technology, accounting and human resources areas and generated
approximately 58% of the Company's revenue for the six months ended March 31,
1998. The executive search/full-time contingency recruitment division comprises
eight lines of business, including four industry (capital markets, publishing
and new media, healthcare and fashion services), and four functional
(information technology, accounting, human resources and legal). The executive
search/full-time contingency recruitment division generated approximately 42% of
the Company's revenue for the six months ended March 31, 1998.
The following is a summary of the Company's consolidated financial
and operating data.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------ ----------------
March 31, March 31,
--------- ---------
STATEMENT OF OPERATIONS DATA: 1998 1997 1998 1997
- ----------------------------- ---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue $11,277,761 $6,274,218 $21,491,189 $11,752,281
Income from Operations 445,680 310,003 1,174,672 703,701
Income Before Income Tax Expense 433,810 336,381 1,175,057 763,264
Income Tax Expense 198,316 80,959 532,656 166,212
Net Income 235,494 255,422 642,401 597,052
Basic Earnings Per Common Share $0.05 $0.05 $0.13 $0.12
Diluted Earnings Per Common Share $0.04 $0.04 $0.11 $0.11
BALANCE SHEET DATA: March 31, 1998
- ------------------- --------------
Working Capital $4,496,653
Total Assets 14,963,648
Line of Credit 2,400,000
Long-term Debt, Net of Current Maturities 8,938
Stockholders' Equity 7,919,868
</TABLE>
RESULTS OF OPERATIONS
The following discussion of the Company's financial condition and results of
operations should be read in conjunction with the financial statements and notes
thereto appearing elsewhere in this document.
Revenue increased to approximately $11,278,000 for the three months
ended March 31, 1998 from approximately $6,274,000 for the three months ended
March 31, 1997, an increase of approximately $5,004,000 or 80%. Revenue of the
Company's temporary staffing/consulting division were approximately $6,591,000
for the three months ended March 31, 1998 compared to approximately $3,034,000
for the same period in 1997, an increase of approximately $3,557,000 or 117%.
Revenue of the Company's executive search/full-time contingency recruitment
division experienced an increase of 45% to approximately $4,687,000 for the
three months ended March 31, 1998 compared to approximately $3,240,000 for the
same period in 1997.
Revenue increased to approximately $21,491,000 for the six months
ended March 31, 1998 from approximately $11,752,000 for the six month period
ended March 31, 1997, an increase of approximately $9,739,000 or 83%. Revenue of
the Company's temporary staffing/consulting division were approximately
$12,515,000 for the six months ended March 31, 1998 compared to approximately
$5,730,000 for the same period in 1997, an increase of approximately $6,785,000
or 118%. Revenue of the Company's executive search/full-time contingency
recruitment division increased 49% to approximately $8,976,000 for the six
months ended March 31, 1998 compared to approximately $6,022,000 for the same
period in 1997.
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION [CONTINUED]
The increase in revenue for the three and six months ended March
31, 1998 compared to the three and six months ended March 31, 1997 of the
Company's temporary staffing/consulting division were due to expansion in the
accounting, human resource and information technology businesses. Revenue of the
Company's information technology temporary staffing/consulting business
experienced significant increases in revenue to approximately $5,604,000 and
$10,769,000 for the three and six months ended March 31, 1998 respectively,
compared to approximately $2,625,000 and $5,321,000 for the same periods in
1997, an increase of 113% and 102%, respectively. The increase was attributable
to the hiring of revenue generating personnel as well as the establishment of
various customer relationships. The increase in revenue for the three and six
months ended March 31, 1998 compared to the three and six months ended March 31,
1997 of the Company's executive search/full-time contingency recruitment
division is primarily attributable to the expansion of its client base, strong
demand for personnel from existing clients as well as the hiring of revenue
generating personnel. In addition, during the three months ended March 31, 1998,
the Company expanded into providing administrative support services to clients
within the New York metropolitan area, which contributed to the increase in
revenue.
Selling expenses for the three months ended March 31, 1998 totaled
approximately $8,812,000 (78% of revenues) compared with approximately
$4,920,000 (78% of revenues) for the three months ended March 31, 1997. Selling
expenses for the six months ended March 31, 1998 totaled approximately
$16,580,000 (77% of revenues) compared with approximately $8,944,000 (76% of
revenues) for the six months ended March 31, 1997. The increase in selling
expenses as a percentage of revenue is primarily related to costs associated
with payroll requirements within the temporary staffing/consulting division. In
addition, costs associated with hiring revenue generating personnel within
various lines of business, contributed to these increases. Selling expenses
consist primarily of temporary staffing/consulting payroll, salaries and
commissions of revenue generating personnel, employee benefits, telephone and
advertising.
General and Administrative expenses increased to approximately
$1,891,000 (17% of revenues) and $3,492,000 (16% of revenues) for the three and
six months ended March 31, 1998 respectively, compared to approximately $964,000
(15% of revenues) and $1,950,000 (17% of revenues) for the three and six months
ended March 31, 1997 respectively. The increase is primarily a result of the
hiring of additional operating employees and increased expenses associated with
the expansion of the Company's infrastructure support the business.
Depreciation and Amortization expense for the three and six months
ended March 31, 1998 totaled approximately $129,000 and $244,000 respectively,
compared to approximately $79,000 and $154,000 for the same periods in 1997. The
increase is due to increased capital expenditures during fiscal 1997 and the
amortization of intangible assets related to the acquisition of trade names.
Income from operations was approximately $446,000 and $1,175,000
for the three and six months ended March 31, 1998 respectively, compared to
approximately $310,000 and $704,000 for the three and six months ended March 31,
1997. The increases are primarily the result of the above mentioned factors.
Income Tax Expense for the three and six months ended March 31, 1998
was $198,000 (46% effective tax rate) and $533,000 (45% effective tax rate)
respectively, compared to $81,000 (24% effective tax rate) and $166,000 (22%
effective tax rate) for the same periods in 1997. The lower effective tax rates
for the three and six months ended March 31, 1997 were primarily a result of net
operating loss carryforwards utilized in those periods.
Net income was approximately $235,000 and $642,000 for the three
and six months ended March 31, 1998 respectively, compared to approximately
$255,000 and $597,000 for the three and six months ended March 31, 1997.
8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION [CONTINUED]
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 1998, the Company's sources of liquidity included
approximately $1,213,000 in cash and cash equivalents and short-term
investments. The Company's working capital at March 31, 1998 was approximately
$4,497,000. In addition, the Company has available approximately $1,052,000 of
long term investments as a source of liquidity if required.
On October 31, 1997, the Company's Board of Directors authorized
the repurchase of up to 1,000,000 of the Company's Class A redeemable common
stock purchase warrants in open market or privately negotiated transactions. On
February 12, 1998, the Company completed the repurchase of 1,000,000 Class A
redeemable common stock purchase warrants at a cost of $1,053,997.
In February 1998, the Company entered into a one year $4,000,000
demand line of credit facility agreement with The Dime Savings Bank, which is
collateralized by all the Company's assets. The agreement provides for
borrowings at 1% above the Dime Reference Rate (Dime Reference Rate at March 31,
1998 was 8.5%), in amounts not exceeding 80% of eligible accounts receivable (as
defined therein) and expires on February 28, 1999, on which date the outstanding
principal amount is required to be repaid. As of March 31, 1998, the Company had
borrowed approximately $2,400,000 under this credit facility, of which
approximately $1,054,000 was used for the repurchase of the Company's Class A
redeemable common stock purchase warrants and the balance to fund current
working capital requirements.
Cash flows used in operating activities were approximately
$1,711,000 for the six months ended March 31, 1998. The primary use of cash was
to fund the increase in accounts receivable related to higher revenues. Accounts
receivable increased approximately $1,818,000 compared to September 30, 1997.
Cash provided by financing activities for the six months ended March 31, 1998
was approximately $1,309,000, which was primarily due to $2,400,000 of
borrowings under the line of credit and $1,054,000 used for the repurchase of
the Company's Class A redeemable common stock purchase warrants
Capital expenditures for the remainder of fiscal 1998 are expected
to be approximately $250,000, which will primarily relate to the upgrading of
computers, additional rental space and various leasehold improvements.
The Company believes that its current cash position and investment
balances, together with financing available under its working capital facility
will be sufficient to support current working capital requirements for the next
twelve months.
NEW AUTHORITATIVE ACCOUNTING PRONOUNCEMENTS
The Financial Accounting Standards Board ["FASB"] has issued
Statement of Financial Accounting Standards, [SFAS] No. 129, "Disclosure of
Information about Capital Structure," in February 1997. SFAS No. 129 does not
change any previous disclosure requirements, but rather consolidates existing
disclosure requirements for ease of retrieval.
The Financial Accounting Standards Board ["FASB"] issued Statement
of Financial Accounting Standards ["SFAS"] No. 130, "Reporting Comprehensive
Income." SFAS No. 130 is effective for fiscal years beginning after December 15,
1997. Earlier application is permitted. Reclassification of financial statements
for earlier periods provided for comparative purposes is required. The Company
is in the process of determining its preferred format. The adoption of SFAS No.
130 will have no impact on the Company's consolidated results of operations,
financial position or cash flows.
The FASB has issued SFAS No. 131, "Disclosures About Segments of an
Enterprise and Related Information." SFAS No. 131 changes how operating segments
are reported in annual financial statements and requires the reporting of
selected information about operating segments in interim financial reports
issued to shareholders. SFAS No. 131 is effective for periods beginning after
December 15, 1997, and comparative information for earlier years is to be
restated. SFAS No. 131 need not be applied to interim financial statements in
the initial year of its application. The Company is in the process of evaluating
the disclosure requirements. The adoption of SFAS No. 131 will have no impact on
the Company's consolidated results of operations, financial position or cash
flows.
9
<PAGE>
PART II: OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of Stockholders of the Corporation
was held on April 3, 1998. Votes were cast with respect to the
election of two directors to Class II of the Board of Directors to
serve until the 2001 Annual Meeting of Stockholders as follows:
NUMBER OF SHARES NUMBER OF SHARES OF COMMON
OF COMMON STOCK STOCK AS TO WHICH AUTHORITY
NOMINEES VOTED IN FAVOR TO VOTE WAS WITHHELD
Herbert Solomon 4,239,609 2,300
Eric M. Davis 4,239,609 2,300
The terms of the following directors of the corporation
continued following the Annual Meeting of Stockholders: Lloyd
Solomon and Joel Klarreich, Class I Directors until 2000; Scott Page
and Edward Ehrenberg, Class III Directors until 1999.
The Stockholders also ratified the appointment of Moore
Stephens, P.C. as the independent public accountants for the
Corporation for the fiscal year ending September 30, 1998 by a vote
of 4,216,904 shares in favor, 3,100 shares against. There were no
abstentions and no broker non-votes with respect to this action.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS:
27 Financial Data Schedule
(B) REPORTS ON FORM 8-K: NONE
10
<PAGE>
THE SOLOMON-PAGE GROUP LTD.
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE SOLOMON-PAGE GROUP LTD.
(Registrant)
Date: May 11, 1998 /S/ LLOYD B. SOLOMON
-----------------------------------------
Lloyd B. Solomon, Chief Executive Officer
Date: May 11, 1998 /S/ ERIC M. DAVIS
-----------------------------------------
Eric M. Davis, Chief Financial Officer
Vice President - Finance
11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Company's Form 10-QSB for the six months ended March 31, 1998 and is qualified
in its entirety by reference to such FInancial Statements and Notes, thereto.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1997
<PERIOD-END> MAR-31-1998
<CASH> 611,707
<SECURITIES> 1,651,972
<RECEIVABLES> 9,320,715
<ALLOWANCES> 156,000
<INVENTORY> 0
<CURRENT-ASSETS> 11,067,208
<PP&E> 1,808,072
<DEPRECIATION> 201,402
<TOTAL-ASSETS> 14,963,648
<CURRENT-LIABILITIES> 6,570,555
<BONDS> 0
0
0
<COMMON> 5,139
<OTHER-SE> 7,914,729
<TOTAL-LIABILITY-AND-EQUITY> 14,963,648
<SALES> 21,491,189
<TOTAL-REVENUES> 21,491,189
<CGS> 16,580,213
<TOTAL-COSTS> 20,316,517
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 64,354
<INCOME-PRETAX> 1,175,057
<INCOME-TAX> 532,656
<INCOME-CONTINUING> 1,174,672
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 642,401
<EPS-PRIMARY> .13
<EPS-DILUTED> .11
</TABLE>
