SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Amendment No. 2)
(Mark One)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 1999
------------------
/ / 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
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THE SOLOMON-PAGE GROUP LTD.
--------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 51-0353012
--------------------------------------------------------------------------------
(State or other jurisdiction of (IRS Employer Identification
incorporation or organization Number)
1140 Avenue of the Americas, New York, New York 10036
--------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (212) 403-6100
--------------
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.001
Common Stock Purchase Warrants
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 / /
<PAGE>
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-K contained in this form, and no disclosure will be
contained, to the best of the Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. / /
The aggregate market value of the voting stock held by non-affiliates
of the Registrant computed by reference to the price at which the stock was sold
on December 17, 1999 was approximately $5,093,064. Solely for the purposes of
this calculation, shares held by directors and officers of the Registrant have
been excluded. Such exclusion should not be deemed a determination or an
admission by the Registrant that such individuals are, in fact, affiliates of
the Registrant.
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date: At January 20, 2000,
there were outstanding 4,153,948 shares of the Registrant's Common Stock, $.001
par value.
<PAGE>
PART II
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
THE SOLOMON-PAGE GROUP LTD. AND SUBSIDIARY
INDEX TO FINANCIAL STATEMENTS
Page
Independent Auditor's Report ...............................................F-2
Consolidated Balance Sheets as of September 30, 1999 and 1998...............F-3
Consolidated Statements of Operations for the years ended
September 30, 1999, 1998 and 1997...........................................F-5
Consolidated Statements of Stockholders' Equity for the years ended
September 30, 1999, 1998 and 1997...........................................F-6
Consolidated Statements of Cash Flows for the years ended
September 30, 1999, 1998 and 1997...........................................F-7
Notes to Consolidated Financial Statements .................................F-9
F-1
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Stockholders and Board of Directors of
The Solomon-Page Group Ltd.
We have audited the accompanying consolidated balance sheets of The
Solomon-Page Group Ltd. and subsidiary as of September 30, 1999 and 1998, and
the related consolidated statements of operations, stockholders' equity, and
cash flows for each of the three fiscal years in the period ended September 30,
1999. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
consolidated financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
The Solomon-Page Group Ltd. and subsidiary as of September 30, 1999 and 1998,
and the consolidated results of their operations and their cash flows for each
of the three fiscal years in the period ended September 30, 1999, in conformity
with generally accepted accounting principles.
/s/ MOORE STEPHENS, P. C.
-------------------------
MOORE STEPHENS, P. C.
Certified Public Accountants.
Cranford, New Jersey
November 16, 1999
F-2
<PAGE>
THE SOLOMON-PAGE GROUP LTD. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
[AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS]
<TABLE>
<CAPTION>
September 30,
1 9 9 9 1 9 9 8
Assets:
Current Assets:
<S> <C> <C>
Cash and Cash Equivalents $ 580 $ 935
Investments 849 603
Accounts Receivable - [Net of Allowances of $280 and $200,
Respectively] 11,416 10,161
Other Current Assets 391 246
------- -------
Total Current Assets 13,236 11,945
------- -------
Property and Equipment:
Equipment 2,022 1,727
Furniture and Fixtures 797 563
Leasehold Improvements 1,103 938
------- -------
Totals - At Cost 3,922 3,228
Less: Accumulated Depreciation 1,659 1,113
------- -------
Property and Equipment -Net 2,263 2,115
------- -------
Other Assets:
Investments 686 1,112
Intangible Assets - [Net of Accumulated Amortization of $310 and
$195, Respectively] 1,444 1,019
Deferred Tax Asset 324 177
Due from Related Parties 135 136
Other Assets 260 231
------- -------
Total Other Assets 2,849 2,675
------- -------
Total Assets $18,348 $16,735
======= =======
</TABLE>
The Accompanying Notes are an Integral Part of these Consolidated Financial
Statements.
F-3
<PAGE>
THE SOLOMON-PAGE GROUP LTD. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
[AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS]
<TABLE>
<CAPTION>
September 30,
1 9 9 9 1 9 9 8
<S> <C> <C>
Liabilities and Stockholders' Equity:
Current Liabilities:
Accrued Payroll and Commissions $ 4,607 $ 3,498
Accounts Payable and Accrued Expenses 1,276 968
Income Taxes Payable 1,417 298
Line of Credit 350 3,100
Term Loan Payable 500 --
Deferred Revenue 380 131
Other Current Liabilities 576 156
-------- -------------
Total Current Liabilities 9,106 8,151
-------- -------------
Long-Term Liabilities:
Term Loan Payable - Net of Current Portion 750 --
Deferred Credit 638 545
-------- -------------
Total Long-Term Liabilities 1,388 545
-------- -------------
Commitments and Contingencies -- --
-------- -------------
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, 5,163,948 and 5,162,282 Shares
Issued and 4,153,948 and 5,121,282 Shares Outstanding
at September 30, 1999 and 1998, Respectively 5 5
Additional Paid-in Capital 7,428 7,426
Accumulated Other Comprehensive Income (7) 11
Treasury Stock - At Cost; 1,010,000 and 41,000 Common Shares
at September 30, 1999 and 1998, Respectively (2,248) (80)
Retained Earnings 2,676 677
-------- -------------
Total Stockholders' Equity 7,854 8,039
-------- -------------
Total Liabilities and Stockholders' Equity $ 18,348 $ 16,735
======== =============
</TABLE>
The Accompanying Notes are an Integral Part of these Consolidated Financial
Statements.
F-4
<PAGE>
THE SOLOMON-PAGE GROUP LTD. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
[AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS]
<TABLE>
<CAPTION>
Y e a r s e n d e d
S e p t e m b e r 30,
1 9 9 9 1 9 9 8 1 9 9 7
<S> <C> <C> <C>
Revenue $ 56,329 $ 44,639 $ 28,996
----------- ----------- -----------
Operating Expenses:
Selling Expenses 44,139 35,015 22,413
General and Administrative 7,771 7,486 4,555
Depreciation and Amortization 660 516 337
----------- ----------- -----------
Total Operating Expenses 52,570 43,017 27,305
----------- ----------- -----------
Income from Operations 3,759 1,622 1,691
----------- ----------- -----------
Other Income [Expenses]:
Interest and Dividend Income 110 128 133
Interest Expense (269) (219) (27)
Realized Gain on Investments 3 2 37
----------- ----------- -----------
Total Other [Expenses] Income (156) (89) 143
----------- ----------- -----------
Income Before Income Tax Expense 3,603 1,533 1,834
Income Tax Expense 1,604 710 552
----------- ----------- -----------
Net Income $ 1,999 $ 823 $ 1,282
=========== =========== ===========
Basic Earnings Per Common Share $ .44 $ .16 $ .25
=========== =========== ===========
Diluted Earnings Per Common Share $ .41 $ .14 $ .23
=========== =========== ===========
Basic Weighted Average Shares 4,517,298 5,134,122 5,131,751
=========== =========== ===========
Diluted Weighted Average Shares 4,885,699 5,985,319 5,633,806
=========== =========== ===========
</TABLE>
The Accompanying Notes are an Integral Part of these Consolidated Financial
Statements.
F-5
<PAGE>
THE SOLOMON-PAGE GROUP LTD. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
[AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS]
<TABLE>
<CAPTION>
Additional
Preferred Stock Common Stock Paid-in
Shares Amount Shares Amount Capital
<S> <C> <C> <C> <C> <C>
Balance - October 1, 1996 -- $ -- 5,139,285 $ 5 $ 8,488
Treasury Shares
Purchased -- -- -- -- --
Net Income -- -- -- -- --
------ -------- --------- ------- -----------
Balance - September 30, 1997 -- -- 5,139,285 5 8,488
Repurchase of 1,000,000
Class A Warrants -- -- -- -- (1,054)
Costs Associated with
Registering Class A
Warrants -- -- -- -- (37)
Exercise of Options -- -- 22,997 -- 29
Treasury Shares Purchased -- -- -- -- --
Unrealized Gain on Available
for Sale Securities - Net -- -- -- -- --
Net Income -- -- -- --
------ -------- --------- ------- -----------
Balance - September 30, 1998 -- -- 5,162,282 5 7,426
Exercise of Options -- -- 1,666 -- 2
Treasury Shares Purchased -- -- -- -- --
Unrealized [Loss] on Available
for Sale Securities - Net -- -- -- -- --
Net Income -- -- -- --
------ -------- --------- ------- -----------
Balance - September 30, 1999 -- $ -- 5,163,948 $ 5 $ 7,428
====== ======== ========= ======= ===========
</TABLE>
<TABLE>
<CAPTION>
Accumulated
Other Retained Total
Comprehensive Treasury Stock Earnings Stockholders'
Income Shares Amount [Deficit] Equity
<S> <C> <C> <C> <C> <C>
Balance - October 1, 1996 $ -- -- $ -- $ (1,428) $ 7,065
Treasury Shares
Purchased -- 10,000 (16) -- (16)
Net Income -- -- -- 1,282 1,282
-------- ------ --------- --------- ----------
Balance - September 30, 1997 -- 10,000 (16) (146) 8,331
Repurchase of 1,000,000
Class A Warrants -- -- -- -- (1,054)
Costs Associated with
Registering Class A
Warrants -- -- -- -- (37)
Exercise of Options -- -- -- -- 29
Treasury Shares Purchased -- 31,000 (64) -- (64)
Unrealized Gain on Available
for Sale Securities - Net 11 -- -- -- 11
Net Income -- -- -- 823 823
-------- ------ --------- --------- ----------
Balance - September 30, 1998 11 41,000 (80) 677 8,039
Exercise of Options -- -- -- -- 2
Treasury Shares Purchased -- 969,000 (2,168) -- (2,168)
Unrealized [Loss] on Available
for Sale Securities - Net (18) -- -- -- (18)
Net Income -- -- -- 1,999 1,999
-------- --------- --------- --------- ----------
Balance - September 30, 1999 $ (7) 1,010,000 $ (2,248) $ 2,676 $ 7,854
======== ========= ========= ========= ==========
</TABLE>
The Accompanying Notes are an Integral Part of these Consolidated Financial
Statements.
F-6
<PAGE>
THE SOLOMON-PAGE GROUP LTD. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
[AMOUNTS IN THOUSANDS]
<TABLE>
<CAPTION>
Y e a r s e n d e d
S e p t e m b e r 30,
1 9 9 9 1 9 9 8 1 9 9 7
Operating Activities:
<S> <C> <C> <C>
Net Income $ 1,999 $ 823 $ 1,282
------- ------- -------
Adjustments to Reconcile Net Income to
Net Cash Provided by [Used for] Operating Activities:
Depreciation and Amortization 660 516 337
Deferred Credit 93 161 118
Provision for Losses on Accounts Receivable 80 75 35
Net Realized Gain on Investments (3) (2) (37)
Deferred Taxes (297) (79) (84)
Changes in Assets and Liabilities:
[Increase] Decrease in:
Accounts Receivable (1,335) (2,858) (3,253)
Other Assets (27) (49) (32)
Increase [Decrease] in:
Accounts Payable, Accrued Expenses,
Accrued Payroll and Commissions 1,417 1,004 1,492
Income Tax Payable 1,119 31 290
Deferred Revenue 249 155 --
Other Current Liabilities 448 (245) 36
------- ------- -------
Total Adjustments 2,404 (1,291) (1,098)
------- ------- -------
Net Cash - Operating Activities 4,403 (468) 184
------- ------- -------
Investing Activities:
Capital Expenditures (693) (1,089) (791)
Purchases of Investments (602) (800) (2,845)
Proceeds from Sales of Investments 750 1,249 2,042
Acquisitions of and Additions to Trade Names (540) (350) (265)
Cash Received from Related Parties 1 55 10
Increase in Cash Surrender Value of Officer
Life Insurance (8) (46) (23)
------- ------- -------
Net Cash - Investing Activities (1,092) (981) (1,872)
------- ------- -------
Financing Activities:
Borrowings Under Term Loan and Line of Credit 4,164 3,100 --
Repayments Under Term Loan and Line of Credit (5,664) -- --
Purchase of Treasury Stock and Warrants (2,168) (1,118) (16)
Warrant Registration Costs -- (37) --
Proceeds from Exercise of Stock Options 2 29 --
------- ------- -------
Net Cash - Financing Activities (3,666) 1,974 (16)
------- ------- -------
Net [Decrease] Increase in Cash and
Cash Equivalents - Forward $ (355) $ 525 $(1,704)
</TABLE>
The Accompanying Notes are an Integral Part of these Consolidated Financial
Statements.
F-7
<PAGE>
THE SOLOMON-PAGE GROUP LTD. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
[AMOUNTS IN THOUSANDS
<TABLE>
<CAPTION>
Y e a r s e n d e d
S e p t e m b e r 30,
1 9 9 9 1 9 9 8 1 9 9 7
<S> <C> <C> <C>
Net [Decrease] Increase in Cash and
Cash Equivalents - Forwarded $ (355) $ 525 $(1,704)
Cash and Cash Equivalents - Beginning of Years 935 410 2,114
------- ------- -------
Cash and Cash Equivalents - End of Years $ 580 $ 935 $ 410
======= ======= =======
Supplemental Disclosures of Cash Flow Information:
Cash paid during the years for:
Interest $ 269 $ 219 $ 27
Income Taxes $ 861 $ 777 $ 422
</TABLE>
The Accompanying Notes are an Integral Part of these Consolidated Financial
Statements.
F-8
<PAGE>
THE SOLOMON-PAGE GROUP LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS]
[1] Nature of Operations
The Solomon-Page Group Ltd. and its wholly-owned subsidiary [the "Company"]
provides staffing services comprised of two primary operating divisions: (i)
temporary staffing and consulting, which provides approximately 58% of the
Company's revenue and (ii) retained executive search and full-time contingency
search which provides approximately 42% of the Company's revenue. The Company
provides its services principally in the New York metropolitan area through its
offices located in New York and New Jersey. The Company also provides services
in California and Georgia through its offices located in those areas.
[2] Summary of Significant Accounting Policies
Principles of Consolidation - The consolidated financial statements include the
accounts of the Company and its subsidiary. All material intercompany accounts
and transactions are eliminated.
Revenue Recognition - Search revenues are recognized in full-time contingency
search engagements upon the successful completion of the assignment. In a
retained executive search engagement, the non-refundable retainer is recognized
according to the terms of the search contract, with the unearned portions of the
retainer reflected as deferred revenue. The balance of the contract is
recognized upon successful completion of the search. Temporary staffing and
consulting revenue is recognized when the temporary personnel provide the
service.
Receivable Allowances - The Company records allowances against accounts
receivable, based on historical experience to estimate losses due to placed
candidates not fulfilling the terms of the search agreement or not remaining in
employment for the Company's guarantee period which generally ranges from 30 to
120 days but may extend up to one year. Losses from bad debts are charged to
expense and losses related to contract fulfillment are charged to revenue. The
Company recognizes a loss on receivables when placed candidates do not fulfill
the terms of search agreement or for not remaining in employment for the
guarantee period.
Investments - The Company accounts for investments in accordance with Statement
of Financial Accounting Standards ["SFAS"] No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." Management determines the
appropriate classification of its investments in debt and equity securities at
the time of purchase and reevaluates such determination at each balance sheet
date. Equity securities, and debt securities which the Company does not have the
intent to hold to maturity, are classified as trading or available for sale.
Securities available for sale are carried at fair value, with any unrealized
holding gains and losses, net of tax, reported in a separate component of
stockholders' equity until realized. Trading securities are carried at fair
value with any unrealized gains or losses included in earnings. Held to maturity
securities are carried at amortized cost. Marketable debt and equity securities
available for current operations, and maturing within one year, are classified
in the balance sheet as current assets while securities held for non-current
uses, and maturing after one year, are classified as long-term assets. Realized
gains and losses are calculated utilizing the specific identification method
[See Note 3].
Depreciation - Depreciation of furniture, fixtures and equipment is computed
utilizing the straight-line method based on estimated useful lives ranging from
5 to 7 years. Depreciation of leasehold improvements is computed utilizing the
straight-line method over the lesser of the life of the improvement or the
remaining lease term. Depreciation expense was $545, $431 and $273 for the years
ended September 30, 1999, 1998 and 1997, respectively.
F-9
<PAGE>
THE SOLOMON-PAGE GROUP LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS]
[2] Summary of Significant Accounting Policies [Continued]
Deferred Income Taxes - The Company accounts for deferred income taxes in
accordance with SFAS No. 109, "Accounting for Income Taxes." The statement
requires that deferred income taxes reflect the tax consequences on future years
of differences between the tax bases of assets and liabilities and their
financial reporting amounts.
Deferred Credit - The Company's lease on its premises provides for periodic
increases over the lease term. Pursuant to SFAS No. 13, "Accounting for Leases,"
the Company records rent expense on a straight-line basis. The effect of these
differences is recorded as a deferred credit.
Cash and Cash Equivalents - Cash equivalents are comprised of certain highly
liquid investments with a maturity of three months or less when purchased.
Earnings Per Common Share - Basic earnings per share represents 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 computation of diluted earnings per share does not assume conversion,
exercise, or contingent issuance of securities that would have an antidilutive
effect on earnings per share. The dilutive effect of outstanding options and
warrants and their equivalents is reflected in diluted earnings 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 earning 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.
Potential future dilutive securities include 2,050,000, 2,050,000 and 3,050,000
shares issuable under outstanding warrants and 350,500, 225,500 and 0 shares
issuable under outstanding options as of September 30, 1999, 1998 and 1997,
respectively.
Intangibles - Intangibles which consist of trade names and customer lists are
recorded at cost and are amortized utilizing the straight-line method over
periods ranging from 4 to 15 years. When changing circumstances warrant, the
Company evaluates the carrying value and the periods of amortization based on
the current and expected future non-discounted cash flows from operations to
determine whether revised estimates of carrying value or useful lives is
required. Amortization expense was $115, $85 and $64 for the years ended
September 30, 1999, 1998 and 1997, respectively [See Note 9].
Accumulated Other Comprehensive Income - Accumulated other comprehensive income
consists entirely of unrealized gains and losses on available for sale
securities. The financial statement and footnote disclosures required by SFAS
130 have not been presented as they are not material.
F-10
<PAGE>
THE SOLOMON-PAGE GROUP LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS]
[2] Summary of Significant Accounting Policies [Continued]
Concentrations of Credit Risk - Financial instruments that potentially subject
the Company to concentrations of credit risk include cash, cash equivalents and
accounts receivable arising from its normal business activities. The Company
places its cash and cash equivalents with high credit quality financial
institutions. The Company had approximately $370 and $561 in financial
institutions that is subject to normal credit risk beyond insured amounts at
September 30, 1999 and 1998, respectively.
The Company believes that credit risk related to accounts receivable is limited
due to the large number of Fortune 1000 companies comprising the Company's
customer base and the diversified industries in which the Company operates. The
Company does not require collateral on accounts receivable or other financial
instruments.
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Advertising - The Company expenses advertising costs as incurred. Total
advertising costs charged to expense amounted to approximately $410, $430 and
$207 for the years ended September 30, 1999, 1998 and 1997, respectively.
Stock Based Compensation - The Company accounts for employee stock-based
compensation under the intrinsic value based method as prescribed by Accounting
Principles Board ["APB"] Opinion No. 25. The Company applies the provisions of
SFAS No. 123, "Accounting for Stock Based Compensation," to non-employee
stock-based compensation and the pro forma disclosure provisions of that
statement to employee stock-based compensation.
Reclassifications - Certain amounts in prior years consolidated financial
statements have been reclassified to conform with the current year presentation.
[3] Investments in Debt and Equity Securities
At September 30, 1999 and 1998, the Company's securities consisted of certain
highly liquid debt securities which were classified as available for sale and
held to maturity. A summary of the Company's investments in debt securities is
as follows:
<TABLE>
<CAPTION>
September 30, 1999 September 30, 1998
Financial Statement Caption Cost Fair Value Cost Fair Value
--------------------------- ---- ---------- ---- ----------
Available for Sale:
<S> <C> <C> <C> <C>
Investments $ 1,550 $ 1,535 $ 1,695 $ 1,715
Held to Maturity:
Restricted Investment - Noncurrent $ -- $ -- $ 34 $ 34
</TABLE>
Gross proceeds from sale of available for sale securities was $750, $1,249 and
$2,042 and realized gains on sales was $3, $2 and $37 for the years ended
September 30, 1999, 1998 and 1997, respectively.
F-11
<PAGE>
THE SOLOMON-PAGE GROUP LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS]
[3] Investments in Debt and Equity Securities [Continued]
At September 30, 1999 and 1998, gross unrealized [losses] gains on available for
sale securities was $(15) and $20 and is included in stockholders' equity net of
taxes of $8 and $(9), respectively.
Contractual maturities of debt securities classified as available for sale and
held to maturity are as follows:
<TABLE>
<CAPTION>
September 30, 1999 September 30, 1998
Available for Sale Held to Maturity Available for Sale Held to Maturity
------------------ ---------------- ------------------ ----------------
<S> <C> <C> <C> <C>
Within 1 year $ 850 $ -- $ 600 $ 36
Between 1 and 5 years $ 700 $ -- $ 1,100 $ --
</TABLE>
[4] Due From Related Parties
At September 30, 1999 and 1998, the Company had a balance due from various
officers of the Company aggregating $135 and $136, respectively. The advances
bear interest at 8%. Interest income on the advances was $10, $13, and $12 for
the years ended September 30, 1999, 1998 and 1997, respectively. No interest was
receivable at September 30, 1999 and 1998.
[5] Line of Credit
In February 1999, the Company entered into a $6,500 credit facility agreement.
The facility agreement consists of a $5,000 working capital line of credit under
which up to $250 can be borrowed under standby letters of credit at a commitment
rate of 2%, and a term loan of $1,500. The facility agreement is collateralized
by all of the Company's assets. The agreement provides for borrowings under the
working capital line of credit at 1% above the bank reference rate and expires
on February 28, 2002. The bank's reference rate at September 30, 1999 was 8.5%.
At September 30, 1999, there was $350 of borrowings under the working capital
line of credit and $161 under standby letters of credit leaving $4,489 of credit
available. The agreement contains various covenants among which are minimum
working capital and tangible net worth requirements and a provision that
restricts the payment of dividends in excess of 50% of net profits.
In February 1998, the Company entered into a one year $4,000 demand line of
credit facility agreement, which was collateralized by all the Company's assets.
The agreement provided for borrowing at 1% above the bank's reference rate (8.5%
at September 30, 1998). Borrowings were limited to 80% of eligible accounts
receivable and expired in February 1999, on which date the outstanding principal
amount was repaid. As of September 30, 1998, the full balance under the line was
available and the Company borrowed approximately $3,100 under the credit
facility, of which approximately $1,118 was used for the repurchase of the
Company's common stock, and Class A redeemable common stock purchase warrants
with the balance used to fund current working capital requirements.
The weighted average interest rate on short-term borrowings outstanding as of
September 30, 1999 and 1998 was 9.3% and 9.5%, respectively.
F-12
<PAGE>
THE SOLOMON-PAGE GROUP LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS]
[6] Long-Term Debt
At September 30, 1999 and 1998, long-term debt consisted of the following:
<TABLE>
<CAPTION>
1 9 9 9 1 9 9 8
<S> <C> <C>
Note payable under credit facility agreement [See Note 5], payable in equal
quarterly principal installments of $125 plus interest at 1.25% above bank's
reference rate per annum through February 2002 $1,250 $ --
Less: Current Portion 500 --
------ -------
Totals $ 750 $ --
====== =======
</TABLE>
<TABLE>
<CAPTION>
Long-term debt at September 30, 1999 matures as follows:
<S> <C>
2000 $ 500
2001 500
2002 250
------
Total $1,250
======
</TABLE>
[7] Leases
Operating Leases - The Company leases office space under operating leases
expiring through September 2006.
Minimum future rental payments under noncancelable operating leases having
remaining terms in excess of one year as of September 30, 1999 for each of the
next five years and in the aggregate are:
Year ending
September 30,
2000 $ 1,111
2001 1,137
2002 1,151
2003 1,057
2004 993
Subsequent to 2004 1,776
--------
Total Minimum Future Rental Payments $ 7,225
========
In addition, the Company is liable for its pro-rata share of increases in real
estate taxes and escalations as provided in the lease agreements.
Rent expense was approximately $1,231, $1,017 and $617 for the years ended
September 30, 1999, 1998 and 1997, respectively.
F-13
<PAGE>
THE SOLOMON-PAGE GROUP LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS]
[8] Capital Stock
On September 11, 1998, the Company's Board of Directors authorized the
repurchase of 1,000,000 shares of the Company's common stock, from time to time,
in the open market or in privately negotiated transactions. During the year
ended September 30, 1999, 969,000 shares were repurchased at a cost of $2,168.
During the year ended September 30, 1998, 31,000 shares were repurchased at a
cost of $64.
On December 18, 1996, the Company's Board of Directors authorized the repurchase
of up to 500,000 shares of the Company's common stock, from time to time, in the
open market or in privately negotiated transactions. The Company repurchased
10,000 shares during the year ended September 30, 1997, at a cost of $16. On
October 31, 1997, the Company's Board of Directors terminated the December 18,
1996 common stock repurchase plan.
[9] Commitments and Contingencies
Litigation - The Company is party to litigation arising from the normal course
of business. In managements' opinion, this litigation will not materially affect
the Company's financial position, results of operations or cash flows.
Intangibles - In connection with certain acquisitions, the Company will be
required to pay purchase price adjustments through September 2004 based on the
achievement of various criteria. These additional payments are charged to
intangibles and are amortized over the then remaining life of the intangible.
Purchase price adjustments amounted to approximately $190 and $350 during the
years ended September 30, 1999 and 1998, respectively. During the fiscal year
ending September 30, 1999, the Company acquired two trade names for $350. The
acquisitions also include potential purchase price adjustments.
[10] Options and Warrants
On April 1, 1994, the Company issued 175,000 Class A warrants and 175,000 Class
B warrants in connection with certain bridge financing which was repaid on
October 20, 1994. The Class A warrants are identical to those issued in the
Company's initial public offering. The Class B warrants are identical to the
Class A warrants except that the exercise price is $6.00 per share.
On October 20, 1994, in connection with its initial public offering the Company
issued 2,300,000 Class A redeemable common stock purchase warrants. Each Class A
warrant entitles the holder to purchase one share of common stock at $4.50 per
share commencing October 20, 1995 and expired on October 20, 1999.
The Class A warrants are redeemable at $.05 per warrant based on the achievement
of certain criteria.
On October 20, 1994, in connection with its initial public offering, the Company
granted to its underwriter an option to purchase an aggregate of 200,000 units
of Company securities [consisting of one share of common stock and one Class A
redeemable common stock purchase warrant] exercisable at $6.60 per unit
commencing October 20, 1995 and expired on October 20, 1999.
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 $1,054.
F-14
<PAGE>
THE SOLOMON-PAGE GROUP LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS]
[10] Options and Warrants [Continued]
On August 17, 1995, the Company adopted the 1995 Director's Stock Option Plan
[the "Director's Plan"]. The Director's Plan provides for the grant of options
to purchase up to 100,000 shares of common stock to Directors who are not
employees of the Company. Options granted under the Director's Plan will be
exercisable commencing a minimum of 6 months from the date of grant for a period
of 10 years from the date of grant at an exercise price which is not less than
the fair market value of the common stock on the date of the grant. Options vest
at a rate of 50% after one year and 50% after two years.
On August 6, 1993, the Company adopted the 1993 Long Term Incentive Plan [the
"1993 Plan"], which was amended on June 24, 1994. The 1993 Plan provides for the
issuance of incentive awards in the form of but not limited to stock options,
stock appreciation rights, restricted stock and performance grants to purchase
up to 1,500,000 shares of common stock and provides that all individuals
performing services for the Company are eligible to receive incentive awards.
The 1993 Plan is administered by a committee designated by the Board of
Directors. The selection of participants, allotment of shares, determination of
price and other conditions of purchase of any awards granted will be determined
by such committee at its sole discretion. The purpose of the 1993 Plan is to
attract and retain persons instrumental to the success of the Company. Incentive
stock options granted under the 1993 Plan will be exercisable for a period of up
to 10 years from the date of grant at an exercise price which is not less than
the fair market value of the common stock on the date of the grant, except that
the term of an incentive stock option granted under the 1993 Plan to a
stockholder owning more than 10% of the outstanding shares of the common stock
may not exceed five years and its exercise price may not be less than 110% of
the fair market value of the common stock on the date of the grant.
Non-executive officer options vest at a rate of 33 1/3% after three years, 33
1/3% after four years and 33 1/3% after five years. Options to purchase 450,000
shares of common stock have been granted to executive officers and vest at a
rate of 33 1/3% upon grant, 33 1/3% after six months and 33 1/3% after thirteen
months.
On September 17, 1996, the Company adopted the 1996 Stock Option Plan [the "1996
Plan"]. The 1996 Plan provides for awards of incentive stock options and
non-qualified options to purchase up to 1,000,000 shares of common stock to
employees and directors of the Company. The 1996 Plan provides that
non-qualified options must be granted at not less than 80% of fair market value
on the date granted. No options at less than fair market value have been
awarded. Non-executive officer options vest at a rate of 33 1/3% after three
years, 33 1/3% after four years and 33 1/3% after five years. Executive officers
vest at a rate of 33 1/3% after one year, 33 1/3% after two years and 33 1/3%
after three years.
A summary of the activity in the option plans is as follows:
<TABLE>
<CAPTION>
Weighted Average
Shares Exercise Price
<S> <C> <C>
Outstanding at October 1, 1996 1,773,500 $ 1.71
Granted 246,750 2.33
Exercised --
Expired/Canceled (55,000) 1.43
---------
Outstanding at September 30, 1997 1,965,250 1.80
Granted 355,500 2.70
Exercised (22,997) 1.27
Expired/Canceled (128,169) 1.85
---------
Outstanding at September 30, 1998 2,169,584 1.95
Granted 190,000 2.13
Exercised (1,666) 1.25
Expired/Canceled (94,000) 2.35
---------
Outstanding at September 30, 1999 2,263,918 1.95
=========
Exercisable at September 30, 1999 1,429,888 $ 1.80
=========
</TABLE>
F-15
<PAGE>
THE SOLOMON-PAGE GROUP LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS]
[10] Options and Warrants [Continued]
No compensation cost was charged to earnings during the years ended September
30, 1999, 1998 and 1997. If compensation cost for the stock option plans had
been determined based on the fair value at the grant dates for awards under the
plans, consistent with the alternative method set forth under SFAS No. 123, the
Company's net income, basic and diluted earnings per share would have been
reduced on a pro forma basis as indicated below:
<TABLE>
<CAPTION>
1 9 9 9 1 9 9 8 1 9 9 7
Year ended September 30:
Net Income:
<S> <C> <C> <C>
As Reported $ 1,999 $ 823 $ 1,282
Pro Forma $ 1,888 $ 500 $ 953
Basic Earnings Per Common Share:
As Reported $ .44 $ .16 $ .25
Pro Forma $ .42 $ .10 $ .19
Diluted Earnings Per Common Share:
As Reported $ .41 $ .14 $ .23
Pro Forma $ .40 $ .09 $ .17
</TABLE>
The fair value of each option grant is estimated on the date of grant using the
Black-Scholes option-pricing model with the following weighted-average
assumptions used for the grants awarded in 1999 and 1998, respectively:
S e p t e m b e r 30,
1 9 9 9 1 9 9 8 1 9 9 7
Dividend Yields 0.00% 0.00% 0.00%
Expected Volatility 88.86% 131.54% 105.29%
Risk-Free Interest Rate 5.41% 4.32% 5.99%
Expected Lives 4 Years 5.5 Years 4 Years
The weighted-average fair value of options granted was $1.42, $2.40 and $1.73
for the years ended September 30, 1999, 1998 and 1997, respectively.
The following table summarizes information about stock options at September 30,
1999:
<TABLE>
<CAPTION>
Outstanding Exercisable
Weighted Weighted Weighted
Range of Remaining Average Average
Exercise Prices Shares Contractual Life Exercise Price Shares Exercise Price
--------------- ------ ---------------- -------------- ------ --------------
<S> <C> <C> <C> <C> <C> <C>
$0.56 - $2.00 1,157,918 4.2 Years $ 1.47 717,988 $ 1.35
$2.01 - $3.69 1,106,000 6.3 Years $ 2.45 712,000 $ 2.25
--------- ---------
2,263,918 4.9 Years $ 1.95 1,429,988 $ 1.80
========= =========
</TABLE>
F-16
<PAGE>
THE SOLOMON-PAGE GROUP LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS]
[11] Income Taxes Expense
The provision for income tax expense consists of the following:
<TABLE>
<CAPTION>
S e p t e m b e r 30,
1 9 9 9 1 9 9 8 1 9 9 7
------- ------- -------
Current:
<S> <C> <C> <C>
Federal $ 1,283 $ 524 $ 836
Utilization of Net Operating Loss Carryforward (5) (13) (423)
State and City 623 278 453
Utilization of Net Operating Loss Carryforward -- -- (230)
------- ------- -------
Total Current 1,901 789 636
------- ------- -------
Deferred [Benefit]:
Federal (200) (50) (61)
State and City (97) (29) (23)
------- ------- -------
Total Deferred (297) (79) (84)
------- ------- -------
Total Income Tax Expense $ 1,604 $ 710 $ 552
======= ======= =======
</TABLE>
Income tax at the federal statutory rate reconciled to the Company's effective
rate is as follows:
<TABLE>
<CAPTION>
S e p t e m b e r 30,
1 9 9 9 1 9 9 8 1 9 9 7
------- ------- -------
<S> <C> <C> <C>
Federal Statutory Rate 34.0% 34.0% 34.0%
Non Deductible Expenses 2.2 1.9 4.4
Benefit of Net Operating Loss Carryforward (.1) (.9) (23.1)
Change in Deferred Tax Asset Valuation Allowance -- -- 7.8
State and City Income Taxes [Net of Federal Tax Benefit] 11.5 12.0 8.1
Other (3.1) (.7) (1.1)
----- ---- ----
Effective Rate 44.5% 46.3% 30.1%
===== ==== ====
</TABLE>
The major components of deferred income tax assets and liabilities are as
follows:
September 30,
1 9 9 9 1 9 9 8
Deferred Tax Liabilities:
Cash Basis Adjustments $ -- $ (89)
Accelerated Depreciation (65) (90)
Other -- (9)
--------- --------
Total Deferred Tax Liabilities (65) (188)
--------- --------
Deferred Tax Assets:
Rent Deferrals 276 240
Net Operating Loss -- 5
Reserves 121 79
Other 47 --
Deferred Revenue 72 27
--------- --------
Total Deferred Tax Assets 516 351
--------- --------
Net Deferred Tax Asset $ 451 $ 163
========= ========
F-17
<PAGE>
THE SOLOMON-PAGE GROUP LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS]
[11] Income Taxes Expense [Continued]
The provision for income tax expense consists of the following:
September 30,
1 9 9 9 1 9 9 8
------- -------
Net Current Deferred Tax Asset [Liability] $ 127 $ (14)
Net Noncurrent Deferred Tax Asset 324 177
-------- --------
Net Deferred Tax Asset $ 451 $ 163
======== ========
As of September 30, 1999, the net current deferred tax asset is included in
other current assets in the accompanying balance sheet.
As of September 30, 1998, the net current deferred tax liability is included in
other current liabilities in the accompanying balance sheet.
[12] Earnings Per Share
The following is a reconciliation of basic earnings per share to diluted
earnings per share for the years ended September 30, 1999, 1998 and 1997:
<TABLE>
<CAPTION>
S e p t e m b e r 30,
1 9 9 9 1 9 9 8 1 9 9 7
------- ------- -------
<S> <C> <C> <C>
Basic Earnings Per Common Share $ .44 $ .16 $ .25
=========== ========= ==========
Weighted Average Shares Outstanding - Basic 4,517,298 5,134,122 5,131,751
Dilutive Options 368,401 851,197 502,055
----------- --------- ----------
Weighted Average Shares Outstanding - Diluted 4,885,699 5,985,319 5,633,806
=========== ========= ==========
Diluted Earnings Per Common Share $ .41 $ .14 $ .23
=========== ========= ==========
</TABLE>
[13] Retirement Plan
The Company maintains a 401[k] savings plan which covers substantially all
employees. Under the plan, employees may elect to defer up to 15% of their
salary, subject to the Internal Revenue Code limits. The Company may make a
discretionary match as well as a discretionary contribution. No discretionary
match or contribution was made, and no amount was charged to operations, during
the years ended September 30, 1999, 1998 or 1997.
[14] Segment Information
Significant Customers - For the year ended September 30, 1999, one customer
accounted for 10% of revenues from continuing operations. For the year ended
September 30, 1998, another customer accounted for 14% of revenues from
continuing operations. For the year ended September 30 1997, two customers each
accounted for 11% of revenues from continuing operations.
Geographic Information - For the years ended September 31, 1999, 1998 and 1997,
the Company derived substantially all of its revenues from businesses located in
the United States, and no other country accounted for more than 10% of the
Company's revenues.
F-18
<PAGE>
THE SOLOMON-PAGE GROUP LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS]
[14] Segment Information [Continued]
Business Segments - The Company is provider of staffing services organized into
two primary operating divisions: temporary staffing and consulting and executive
search and full-time contingency recruitment. The temporary staffing and
consulting division provides services to companies seeking personnel in the
information technology, accounting, human resources and legal areas. The
executive search and full-time contingency recruitment division comprises ten
lines of business, including five industry [capital markets, publishing and new
media, healthcare and fashion services and banking], and five functional
[information technology, accounting, human resources, legal and administrative
support].
The Company evaluates performance based on the segments' profit from operations
before unallocated corporate overhead. The accounting policies of the reportable
segments are the same as those described in the summary of significant
accounting policies [see Note 2].
<TABLE>
<CAPTION>
Temporary Executive
Staffing and Search and
Consulting Full-Time Corporate Total
---------- --------- --------- -----
Year ended September 30, 1999:
<S> <C> <C> <C> <C>
Revenues $ 32,894 $ 23,435 $ -- $ 56,329
Income from Operations $ 2,424 $ 2,328 $ (993) $ 3,759
Capital Expenditures $ 235 $ 354 $ 104 $ 693
Total Assets $ 6,401 $ 7,508 $ 4,439 $ 18,348
Depreciation and Amortization $ 253 $ 210 $ 197 $ 660
Year ended September 30, 1998:
Revenues $ 26,865 $ 17,774 $ -- $ 44,639
Income from Operations $ 1,206 $ 1,159 $ (743) $ 1,622
Capital Expenditures $ 185 $ 740 $ 164 $ 1,089
Total Assets $ 6,268 $ 6,643 $ 3,824 $ 16,735
Depreciation and Amortization $ 209 $ 162 $ 145 $ 516
Year ended September 30, 1997:
Revenues $ 14,479 $ 14,517 $ -- $ 28,996
Income from Operations $ 1,129 $ 1,085 $ (523) $ 1,691
Capital Expenditures $ 201 $ 471 $ 119 $ 791
Segment Assets $ 5,064 $ 3,980 $ 3,771 $ 12,815
Depreciation and Amortization $ 122 $ 113 $ 102 $ 337
Reconciliation to Net Income:
</TABLE>
Ye a r s e n d e d
S e p t e m b e r 30,
1 9 9 9 1 9 9 8 1 9 9 7
Segment Income from Operations $ 3,759 $ 1,622 $ 1,691
Unallocated Amounts:
Interest and Dividend Income 110 128 133
Interest Expense (269) (219) (27)
Realized Gain on Investments 3 2 37
---------- --------- ---------
Income Before Income Tax Expense $ 3,603 $ 1,533 $ 1,834
========== ========= =========
F-19
<PAGE>
THE SOLOMON-PAGE GROUP LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS]
[15] Fair Value of Financial Instruments
Effective October 1, 1995, the Company adopted SFAS No. 107, "Disclosure about
Fair Value of Financial Instruments," which requires disclosing fair value to
the extent practicable for financial instruments which are recognized or
unrecognized in the balance sheet. The fair value of the financial instruments
disclosed herein is not necessarily representative of the amount that could be
realized or settled, nor does the fair value amount consider the tax
consequences of realization or settlement. Carrying value approximates fair
value for amounts classified as due from related parties as the receivables
carry market rates of interest. For certain instruments, including cash and cash
equivalents, trade receivables and trade payables and line of credit, it was
estimated that the carrying amount approximates fair value for the majority of
these instruments because of their short maturities.
[16] Quarterly Information [Unaudited]
<TABLE>
<CAPTION>
Q u a r t e r E n d e d
December 31, March 31, June 30, September 30,
Fiscal 1999:
<S> <C> <C> <C> <C>
Revenues $ 11,516 $ 12,779 $ 16,151 $ 15,928
Income from Operations 342 733 1,768 926
Net Income 165 372 929 533
Net Income per Share - Basic .03 .08 .21 .12
Net Income per Share - Diluted .03 .08 .20 .11
</TABLE>
[17] New Authoritative Accounting Pronouncements
The Financial Accounting Standards Board ["FASB"] issued SFAS No. 137,
"Accounting for Derivative Instruments and Hedging Activities-Deferral of
Effective Date of FASB Statements No. 133." The Statement defers for one year
the effective date of FASB Statement No. 133, "Accounting for Derivative
Instruments and Hedging Activities". The rule now will apply to all fiscal
quarters of all fiscal years beginning after June 15, 2000. In June 1998, the
FASB issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities," which is required to be adopted in years beginning after June 15,
1999. The Statement permits early adoption as of the beginning of any fiscal
quarter after its issuance. The Statement will require the Company to recognize
all derivatives on the balance sheet at fair value. Derivatives that are not
hedges must be adjusted to fair value through income. If the derivative is a
hedge, depending on the nature of the hedge, changes in the fair value of
derivatives will either be offset against the change in fair value of the hedged
assets, liabilities, or firm commitments through earnings or recognized in other
comprehensive income until the hedged item is recognized in earnings. The
ineffective portion of a derivative's change in fair value will be immediately
recognized in earnings. The Company has not yet determined what the effect of
SFAS No. 133 will be on the earnings and financial position of the Company.
In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin ("SAB") No. 101, Revenue Recognition in Financial Statements ("SAB
101"). SAB 101 summarizes certain of the staff's views in applying generally
accepted accounting principles to revenue recognition in financial statements.
The Company is in the process of evaluating this SAB and the effect it will have
on our future consolidated financial statements and future revenue recognition
policy.
F-20
<PAGE>
Pursuant to the requirements of Section 13 or 15(d) 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.
THE SOLOMON-PAGE GROUP LTD.
Dated August 21, 2000 By /s/ Lloyd Solomon
------------------------------
Lloyd Solomon
Vice Chairman
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
Signature Title Date
/s/ Herbert Solomon Chairman of the Board August 21, 2000
----------------------------- and Director
Herbert Solomon
/s/ Lloyd Solomon Vice Chairman of the Board, August 21, 2000
----------------------------- Chief Executive Officer
Lloyd Solomon and Director (Principal
Executive Officer)
/s/ Scott Page President and Director August 21, 2000
-----------------------------
Scott Page
/s/ Eric M. Davis Vice President - Finance, August 21, 2000
----------------------------- Chief Financial Officer and
Eric M. Davis Director (Principal Financial
and Accounting Officer)
* Director August 21, 2000
-----------------------------
Edward Ehrenberg
* Director August 21, 2000
-----------------------------
Joel A. Klarreich
/s/ Eric M. Davis
----------------------
* By: Eric M. Davis
Attorney-in-Fact
