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Filed Pursuant to Rule 424(b)(3)
Registration Number 333-51131
914,339 SHARES
F.Y.I. INCORPORATED(R)
COMMON STOCK
---------------------
This Prospectus covers 914,339 shares (the "Shares") of common stock, $.01
par value (the "Common Stock"), which may be offered and sold by certain
stockholders (the "Selling Stockholders") of F.Y.I. Incorporated (the "Company"
or "F.Y.I.") from time to time, directly or through one or more broker-dealers,
in one or more transactions. All of the Shares to be sold by any of the Selling
Stockholders were issued in connection with (i) the acquisition by the Company
of various businesses which were previously owned by selected Selling
Stockholders; or (ii) the initial capitalization of the Company.
The Selling Stockholders and any broker-dealer through whom any Shares are
offered and sold may be deemed to be underwriters within the meaning of the
Securities Act of 1933, as amended (the "Securities Act"), in connection with
such offers and sales. The Company will receive none of the proceeds from any
such sales.
Selling Stockholders or pledges, donees, distributees, transferees or other
successors in interest, may sell the Shares being offered hereby from time to
time in transactions (which may involve crosses and block transactions) on The
Nasdaq Stock Market, at market prices prevailing at the time of the sale, at
negotiated prices or otherwise. Selling Stockholders may sell some or all of
such Shares in transactions involving broker-dealers, who may act solely as
agents and/or may acquire Shares as principal. Broker-dealers participating in
such transactions as agent may receive commissions from Selling Stockholders
(and, if any of them act as agent for the purchaser of any such Shares, from
such purchaser), such commissions computed in appropriate cases in accordance
with the applicable rules of The Nasdaq Stock Market, which commissions may be
at negotiated rates where permissible under such rules. Participating
broker-dealers may agree with Selling Stockholders to sell a specified number of
Shares at a stipulated price per share and, to the extent any such broker-dealer
is unable to do so, acting as an agent for a Selling Stockholder, to purchase as
principal any unsold Shares at the price required to fulfill the broker-dealer's
commitment to such Selling Stockholder. In addition or alternatively, Shares may
be sold by Selling Stockholders and/or by or through other broker-dealers in
special offerings, exchange distributions or secondary distributions pursuant to
and in compliance with the governing rules of The Nasdaq Stock Market.
Broker-dealers who acquire Shares as principal may thereafter resell such Shares
from time to time in transactions (which may involve crosses and block
transactions and which may involve sales to or through other broker-dealers,
including transactions of the nature described in the preceding two sentences)
on The Nasdaq Stock Market, at market prices prevailing at the time of sale, at
negotiated prices or otherwise, and in connection with such resales may pay to
or receive commissions from the purchaser of such Shares. Any commissions paid
or concessions allowed to any broker-dealer, and, if any broker-dealer purchases
such Shares as principal, any profits received on the resale of such Shares, may
be deemed to be underwriting discounts and commissions under the Securities Act.
All expenses of registration of the Shares which may be offered hereby
under the Securities Act will be paid by the Company (other than underwriting
discounts and selling commissions, and fees and expenses of advisors to any of
the Selling Stockholders). The Company may agree to indemnify any Selling
Stockholder as an underwriter under the Securities Act against certain
liabilities, including liabilities arising under the Securities Act. Any Selling
Stockholder may indemnify any broker-dealer that participates in transactions
involving sales of the Shares against certain liabilities, including liabilities
arising under the Securities Act.
As of April 20, 1998, the Company had 11,810,344 shares of Common Stock
outstanding. The Common Stock is traded on The Nasdaq Stock Market. On May 7,
1998, the closing price of the Common Stock on The Nasdaq Stock Market was
$28.50 per share, as published in The Wall Street Journal on May 8, 1998.
The Company is a Delaware corporation and all references herein to the
Company refer to the Company and its subsidiaries.
THE SHARES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS"
COMMENCING ON PAGE 5 HEREOF.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS MAY 11, 1998
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IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS AND SELLING GROUP MEMBERS
OR THEIR AFFILIATES MAY ENGAGE IN PASSIVE MARKET MAKING TRANSACTIONS IN THE
COMMON STOCK ON THE NASDAQ STOCK MARKET IN ACCORDANCE WITH RULE 10B-6A UNDER THE
SECURITIES EXCHANGE ACT OF 1934.
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza Building,
450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and its regional
offices located at 7 World Trade Center, 13th Floor, New York, New York 10048
and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661- 2511. Copies of such materials can be obtained from the Commission at
Judiciary Plaza, 450 Fifth Street, N.W. Washington, D.C. 20549, at prescribed
rates. The Commission maintains an Internet Web site that contains reports,
proxy and information statements and other information regarding issuers that
file electronically with the Commission. The address of that site is
http://www.sec.gov.
The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act with respect to the Common Stock offered hereby.
This Prospectus does not contain all the information set forth in the
Registration Statement and the exhibits and schedules thereto. For further
information with respect to the Company and such Common Stock, reference is made
to such Registration Statement and exhibits. A copy of the Registration
Statement on file with the Commission may be obtained from the Commission's
principal office in Washington, D.C. upon payment of the fees prescribed by the
Commission and through the Commission's Internet Web site.
The Company's Common Stock is traded on The Nasdaq Stock Market. Proxy
statements and other information concerning the Company can also be inspected at
the offices of The Nasdaq Stock Market, 1735 K Street, N.W., Washington D.C.
20006.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents of the Company (Commission File No. 0-27444) filed
with the Commission are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997 filed with the Commission on March 11, 1998;
(b) The Company's Current Report on Form 8-K filed with the Commission
on March 20, 1998; and
(c) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A filed with the Commission on
December 22, 1995.
In addition, all reports and other documents filed by the Company with the
Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act
subsequent to the date of effectiveness of the Registration Statement of which
this Prospectus is a part and prior to the termination of the offering made
hereby shall be deemed to be incorporated or deemed to be incorporated by
reference into this Prospectus.
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Any statement contained herein or incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus has been delivered, on the written or oral request of such
person, a copy of any and all of the information that has been or may be
incorporated by reference in this Prospectus (not including exhibits to the
information that is incorporated by reference unless such exhibits are
specifically incorporated by reference into the information that this Prospectus
incorporates). Written requests for such copies should be directed to F.Y.I.
Incorporated, 3232 McKinney Avenue, Suite 900, Dallas, Texas 75204, Attention:
Investor Relations. Telephone requests may be directed to Investor Relations at
(214) 953-7555.
THE COMPANY
F.Y.I. Incorporated ("F.Y.I." or the "Company") was founded in September
1994 to create a national, single source provider of document and information
outsourcing solutions to document and information intensive industries,
including: healthcare, law, banking, insurance, retailing, manufacturing and
government. The Company's primary strategy is to acquire, integrate and operate
companies in the highly fragmented document and information outsourcing
solutions industry. In January 1996, F.Y.I. acquired, simultaneously with the
closing of its initial public offering (the "IPO"), seven document management
services businesses (the "Founding Companies"). Since the IPO, and through
December 31, 1997, the Company acquired 29 additional companies (the "Subsequent
Acquisitions"). Since December 31, 1997, the Company has acquired five
additional companies, for a total of 41 acquisitions since the Company's
inception. The Company intends to continue to aggressively pursue strategic
acquisitions in existing and new markets, cross-sell its full range of services
to its current customer base and expand the marketing of its services to new
customers.
An estimated four trillion documents are generated annually in the United
States. A significant portion of the processing, management and storage of these
documents is outsourced to small service companies. Further, the Company
believes that the document and information outsourcing solutions market is
growing due to several factors, including: (i) government regulations that
require lengthy document retention periods and rapid accessibility for many
types of records; (ii) increased customer expectations of low cost access to
records on short notice and, in many instances, at disparate locations; (iii)
the increasing litigiousness of society, necessitating access to relevant
documents and records for extended periods; and (iv) continuing advancements in
computer, networking, facsimile, printing and other technologies which have
greatly facilitated the production and wide distribution of documents.
The Company's target clients generate large volumes of documents and
require specialized processing, distribution, storage and retrieval of these
documents and the information they contain. The Company believes that these
clients will continue to increase their outsourcing of document and information
management in order to maintain their focus on core operating competencies and
revenue generating activities; reduce fixed costs, including labor and equipment
costs; and gain access to new technologies without incurring the expense and
risk of near-term obsolescence of such technologies.
The document and information outsourcing solutions business is highly
fragmented. The Company believes that many small document management services
businesses: (i) have insufficient capital for expansion; (ii) cannot keep
abreast of rapidly changing technologies; (iii) lack effective marketing
programs; and (iv) are unable to meet the needs of large, geographically
dispersed clients. In addition, there are a limited number of options for owners
of such businesses to obtain liquidity by selling their businesses. As a result,
the Company believes that many owners of such businesses will continue to be
receptive to its acquisition program.
The Company is a Delaware corporation. Its executive offices are located at
3232 McKinney Avenue, Suite 900, Dallas, Texas 75204, and its telephone number
is (214) 953-7555.
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RECENT DEVELOPMENTS
Acquisition Activity. Since December 31, 1997, the Company has acquired the
following document and information outsourcing solutions businesses (the "Recent
Acquisitions"): (i) ACT Medical Record Services, Inc., a medical release of
information business in Wisconsin; (ii) Lifo Systems, Inc., a database creation
and management business in Texas; (iii) Medicopy, Inc., a medical records
release of information business in Mississippi; (iv) Associate Record Technician
Services, Inc., a medical records temporary staffing agency in California; and
(v) DeBari Associates, Inc., a litigation support and systems integration
company in New York City and St. Vincent, The Grenadines.
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RISK FACTORS
An investment in the Company involves a significant degree of risk.
Prospective investors should consider carefully the following factors in
addition to other information included in this Prospectus before making an
investment in the Common Stock.
LIMITED OPERATING HISTORY; RISKS OF INTEGRATION; ABILITY TO MANAGE GROWTH
F.Y.I. was founded in September 1994 and conducted no operations prior to
the consummation of the IPO. F.Y.I. acquired the Founding Companies
simultaneously with the closing of the IPO and has acquired 34 additional
companies since that time (together with the Founding Companies, the "Operating
Companies"). Prior to their acquisition, the Operating Companies operated as
separate independent entities. Currently, the Company has a decentralized
financial reporting system and relies on the existing reporting systems of the
Operating Companies. The success of the Company will depend, in part, on the
Company's ability to integrate the operations of the Operating Companies,
including centralizing certain functions to achieve cost savings and developing
programs and processes that will promote cooperation and the sharing of
opportunities and resources. There can be no assurance that the management group
will effectively be able to oversee the combined entity and implement the
Company's operating or growth strategies. The resulting growth of the
acquisition strategy of the Company places significant demands on management and
on the Company's internal systems and controls. There can be no assurance that
the management group will effectively be able to direct the Company through
periods of significant growth. In addition, no assurance can be given that the
Company's current systems will be adequate for its future needs or that the
Company will be successful in implementing new systems.
A number of the Operating Companies offer different services, utilize
different capabilities and technologies and target different geographic markets
and client segments. While the Company believes that there are substantial
opportunities in integrating these businesses, these differences increase the
risk inherent in successfully completing such integration. Further, there can be
no assurance that the Company's strategy to establish a single source provider
for document management services will be successful, or that the Company's
target client segments will accept the Company as a provider of such services.
In addition, there can be no assurance that the operating results of the Company
will match or exceed the combined individual operating results achieved by the
Operating Companies prior to their acquisition.
ACQUISITION STRATEGY
The Company's primary growth strategy is the acquisition of additional
document and information outsourcing solutions businesses that will complement
its existing businesses. There can be no assurance that the Company will be able
to identify or reach mutually agreeable terms with acquisition candidates and
their owners, or that the Company will be able to profitably manage additional
businesses or successfully integrate such additional businesses into the Company
without substantial costs, delays or other problems. Acquisitions may involve a
number of special risks including: (i) adverse short-term effects on the
Company's reported operating results; (ii) diversion of management's attention;
(iii) dependence on retention, hiring and training of key personnel; (iv) risks
associated with unanticipated problems or legal liabilities; and (v)
amortization of acquired intangible assets. Some or all of these risks could
have a material adverse effect on the Company's operations and financial
performance. In addition, to the extent that consolidation becomes more
prevalent in the industry, the prices for attractive acquisition candidates may
be bid up to higher levels. In any event, there can be no assurance that
businesses acquired in the future will achieve sales and profitability that
justify the investment therein. Unfavorable developments at an acquired company
could have a material adverse impact on the reputation and business of the
Company as a whole.
The Company is regularly in discussions with additional acquisition
candidates and may from time to time enter into letters of intent with respect
to the acquisition of such businesses. No assurance can be given, however, that
the Company will acquire any additional businesses.
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NEED FOR ADDITIONAL FINANCING TO CONTINUE ACQUISITION STRATEGY
The Company currently intends to finance future acquisitions by using cash
and its Common Stock for all or a portion of the consideration to be paid. The
Company's Registration Statement on Form S-4 (Registration No. 333-24015) (the
"Acquisition Shelf") relates to the offering of 2,500,000 shares of Common Stock
to be used as consideration for acquisitions by the Company, of which 1,394,529
shares remained available as of April 23, 1998. In the event that the Company's
Common Stock does not maintain sufficient value, or potential acquisition
candidates are unwilling to accept the Company's Common Stock as consideration
for the sale of their businesses, the Company may be required to utilize more of
its cash resources, if available, in order to continue its acquisition program.
If the Company does not have sufficient cash resources, its growth could be
limited unless it is able to obtain capital through additional debt or equity
financings. Under the Company's amended and restated line of credit with Banque
Paribas and Bank of America Texas, N.A., as co-agents and the lenders named
therein, (the "1998 Credit Agreement"), the Company and its subsidiaries can
borrow, on a revolving credit basis, loans in an aggregate outstanding principal
amount of $50 million for acquisitions, working capital and general corporate
purposes subject to certain restrictions in the 1998 Credit Agreement. As of
April 23, 1998, the availability under the 1998 Credit Agreement was $21,700,000
million. There can be no assurance, however, that funds available under the 1998
Credit Agreement will be sufficient for the Company's needs.
EFFECT OF POTENTIAL FLUCTUATIONS IN OPERATING RESULTS ON PRICE OF COMMON STOCK;
VOLATILITY OF STOCK PRICE
Results for any quarter are not necessarily indicative of the results that
the Company may achieve for any subsequent quarter or a full fiscal year.
Quarterly results may vary materially as a result of the timing and structure of
acquisitions, the timing and magnitude of costs related to such acquisitions,
the gain or loss of material client relationships and variations in the prices
charged by the Company for the services it provides. In addition, since a
significant portion of the Company's revenue is generated on a
project-by-project basis, the timing or completion of material projects could
result in fluctuations in the Company's results of operations for particular
quarterly periods. Such fluctuations in operating results may adversely affect
the market price of the Company's Common Stock. The market price for the
Company's shares may also fluctuate in response to material announcements by the
Company or significant clients or competitors of the Company, changes in the
economic or other conditions impacting the Company's targeted client segments or
changes in general economic conditions. Further, the securities markets have
experienced significant price and volume fluctuations from time to time that
have often been unrelated or disproportionate to the operating performance of
particular companies. These broad fluctuations may adversely affect the market
price of the Common Stock.
DEPENDENCE ON CERTAIN CLIENT SEGMENTS AND TECHNOLOGY
The Company derives its revenue primarily from information and document
intensive industries. Fundamental changes in the business practices of any of
these client segments, whether due to regulatory, technological or other
developments, could cause a material reduction in demand by such clients for the
services offered by the Company. Any such reduction in demand would have a
material adverse effect on the results of operations of the Company. The
document and information outsourcing solutions industry is characterized by
technological change, evolving customer needs and emerging technical standards.
Although the Company believes that it will be able to continue to offer services
based on the newest technologies, there can be no assurance that the Company
will be able to obtain the rights to use any such technologies, that it will be
able to effectively implement such technologies on a cost-effective or timely
basis or that such technologies will not render obsolete the Company's role as a
third party provider of document management services.
COMPETITION
The document and information outsourcing solutions businesses in which the
Company competes and expects to compete are highly competitive. A significant
source of competition is the in-house document handling capability of the
Company's targeted client base. There can be no assurance that these businesses
will outsource more of their document and information needs or that such
businesses will not bring in-house,
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services that they currently outsource. In addition, certain of the Company's
competitors are larger businesses and have greater financial resources than the
Company. Certain of these competitors operate in broader geographic areas than
the Company, and others may choose to enter the Company's areas of operation in
the future. In addition, the Company intends to enter new geographic areas
through internal growth and acquisitions and expects to encounter significant
competition from established competitors in each of such new areas. As a result
of this highly competitive environment, the Company may lose customers or have
difficulty in acquiring new customers and new companies, and its results of
operations may be adversely affected.
RELIANCE ON KEY PERSONNEL
The Company's operations are dependent on the continued efforts of its
executive officers and on senior management of the Operating Companies.
Furthermore, the Company will likely depend on the senior management of
businesses acquired in the future. If any of these people is unable or unwilling
to continue in his or her present role, or if the Company is unable to attract
and retain other skilled employees, the Company's business could be adversely
affected. The Company does not currently have key person life insurance covering
any of its executive officers or other members of senior management.
POTENTIAL LIABILITY FOR BREACH OF CONFIDENTIALITY
A substantial portion of the Company's business involves the handling of
documents containing confidential and other sensitive information. Although the
Company has established procedures intended to prevent any unauthorized
disclosure of confidential information and, in some cases, has contractually
limited its potential liability for unauthorized disclosure of such information,
there can be no assurance that unauthorized disclosures will not result in
material liability to the Company.
CASUALTY; RISK OF BUSINESS INTERRUPTIONS
The Company believes that its future results of operations will be
dependent in large part upon its ability to provide prompt and efficient
services to its customers. Certain of the Company's operations are performed at
a single location and are dependent on continuous computer, electrical and
telephone service. As a result, any disruption of the Company's day-to-day
operations could have a material adverse effect upon the Company. There can be
no assurance that a fire, flood, earthquake, power loss, telephone service loss
or other event affecting one or more of the Company's facilities would not
disable these services. Any significant damage to any such facility or other
failure that causes significant interruptions in the Company's operations may
not be covered by insurance. Any uninsured or underinsured loss could have a
material adverse effect on the Company's business, financial condition or
results of operations.
PUBLIC SECTOR MARKET AND CONTRACTING RISKS
A portion of the Company's present business involves public sector
contracts, and the Company anticipates a growing portion of its business coming
from local, state and federal government agencies. Public sector contracts are
subject to detailed regulatory requirements and public policies, as well as to
funding priorities. Contracts with public sector customers may be conditioned
upon the continuing availability of public funds, which in turn depends upon
lengthy and complex budgetary procedures, and may be subject to certain pricing
constraints. Moreover, public sector contracts may generally be terminated for a
variety of factors, including when it is in the best interests of the respective
governmental entity. There can be no assurance that these factors or others
unique to contracts with governmental entities will not have a material adverse
effect on the Company's future business, financial condition and results of
operations.
CONTROL BY MANAGEMENT
As of April 20, 1998, the directors and executive officers of the Company
beneficially owned approximately 17.3% of the outstanding shares of Common Stock
and exercise substantial control over the Company's affairs. These stockholders
acting together would likely be able to elect a sufficient number of directors
to control the Board of Directors and to approve or disapprove any matter
submitted to a vote of stockholders.
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POTENTIAL EFFECT OF SHARES ELIGIBLE FOR FUTURE SALE ON PRICE OF COMMON STOCK
The market price of the Common Stock of the Company could be adversely
affected by the sale of substantial amounts of Common Stock of the Company in
the public market. In addition, many shares are subject to contractual
restrictions on resale which generally expire two years from the date of
issuance. However, certain contractual restrictions shall be removed upon the
effectiveness of this Registration Statement.
The Company has an aggressive acquisition program under which it recently
completed, and expects to continue to pursue, acquisitions that are accounted
for under the pooling-of-interests method of accounting. Under the
pooling-of-interests method of accounting, the affiliates of the acquired
companies, which are generally all of the stockholders of the companies acquired
by the Company, must be free to sell or otherwise transfer shares of the Common
Stock received in the acquisition, subject to their compliance with federal
securities laws, as soon as the Company releases results of operations that
reflect the combined operations of the Company and the acquired company for a
minimum of 30 days. If a significant number of shares of Common Stock are issued
in acquisitions that are consummated in close proximity to each other, such
shares will become freely tradable at the same time. If a large number of shares
are sold by stockholders in the market as soon as their shares became freely
transferable, the price of the Common Stock could be adversely affected.
The Company has reserved for issuance under the Company's 1995 Stock Option
Plan (the "Plan") an aggregate of 650,000 shares of Common Stock, or 16% of the
aggregate number of shares of the Common Stock outstanding, whichever is
greater. The Company has registered the shares issuable upon exercise of options
granted under the Plan, and such shares will be eligible for resale in the
public market. As of March 31, 1998, the Company had options to purchase
1,673,351 shares of Common Stock outstanding under the Plan.
IMPACT OF THE YEAR 2000 ISSUE
The "Year 2000 Issue" describes the use of two digits rather than four
digits to define the applicable year in certain computer programs. With the
coming millennium, any of the Company's computer programs that have two digit
date-sensitive software may interpret a date of "00" as the year 1900 rather
than the year 2000. This could result in a system failure or miscalculations
causing disruptions of operations, including, among other things, a temporary
inability to process transactions, send invoices or engage in similar normal
business activities.
Management is in the process of evaluating the effect of the Year 2000
Issue on the Company. Based on preliminary findings, the total cost of
addressing the Year 2000 Issue is not expected to have a material adverse effect
on the Company's business, financial condition or results of operations.
However, management is in the process of completing its assessment of the
potential impact of the Year 2000 Issue on the Company and the potential
exposure of the Company to related problems of its customers and suppliers.
There can be no assurance that such exposure or the costs of remediating any
problems associated therewith will not materially adversely affect the Company's
future business, financial condition or results of operations.
ENVIRONMENTAL MATTERS
The Company is subject to regulations and ordinances that govern activities
or operations that may have adverse environmental effects, such as discharges to
air and water.
The Company is not aware of any environmental conditions relating to
present or past waste generation at or from these facilities that would be
likely to have a material adverse effect on the business, financial condition or
results of operations of the Company. However, there can be no assurance that
environmental
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liabilities in the future will not have a material adverse effect on the
business, financial condition or results of operations of the Company.
EFFECT OF CERTAIN CHARTER PROVISIONS
The Board of Directors of the Company is empowered to issue preferred stock
without stockholder action. The existence of this "blank-check" preferred could
render more difficult or discourage an attempt to obtain control of the Company
by means of a tender offer, merger, proxy contest or otherwise.
RISKS ASSOCIATED WITH FORWARD-LOOKING STATEMENTS
This Prospectus contains certain forward-looking statements such as the
Company's or management's intentions, hopes, beliefs, expectations, strategies,
predictions or any other variation thereof or comparable phraseology of the
Company's future activities or other future events or conditions within the
meaning of Section 27A of the Securities Act and Section 21E of the Securities
Exchange Act of 1934, as amended, which are intended to be covered by the safe
harbors created thereby. Investors are cautioned that all forward-looking
statements involve risks and uncertainty, including without limitation,
variations in quarterly results, volatility of the Company's stock price,
development by competitors of new or superior products or services, or entry
into the market of new competitors, the sufficiency of the Company's working
capital and the ability of the Company to realize benefits from consolidating
certain general and administrative functions, to assimilate and integrate
acquisitions, to continue its aggressive acquisition program, to retain
management, to implement its focused business strategy to expand its document
management services geographically, to retain customers or attract customers
from other businesses, to increase revenue by cross-selling services and to
successfully defend itself in ongoing and future litigation. Although the
Company believes that the assumptions underlying the forward-looking statements
contained herein are reasonable, any of the assumptions could be inaccurate,
and, therefore, there can be no assurance that the forward-looking statements
included in this Prospectus will prove to be accurate. In light of the
significant uncertainties inherent in the forward-looking statements included
herein, the inclusion of such information should not be regarded as a
representation by the Company or any other person that the objectives and plans
of the Company will be achieved.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Common Stock
offered hereby.
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SELLING STOCKHOLDERS
The following table sets forth information with respect to the Selling
Stockholders including: (i) the number and approximate percentage of shares
beneficially owned as of April 20, 1998; (ii) the number of Shares registered
for sale; and (iii) the number and approximate percentage of shares to be owned
after the completion of this Offering. The address of each person listed below
is c/o F.Y.I. Incorporated, 3232 McKinney Avenue, Suite 900, Dallas, Texas
75204. All persons listed have sole voting and investment power with respect to
their shares unless otherwise indicated.
<TABLE>
<CAPTION>
COMMON STOCK COMMON STOCK
BENEFICIALLY BENEFICIALLY
OWNED PRIOR OWNED
TO OFFERING AFTER OFFERING
----------------- NUMBER OF SHARES -----------------
NAME NUMBER PERCENT OFFERED NUMBER PERCENT
---- ------- ------- ---------------- ------- -------
<S> <C> <C> <C> <C> <C>
Gregory R. Melanson(1) -- Director........ 349,260 3.0% 34,000 315,260 2.7%
Amended and Restated Craig F. Moncher
Revocable Trust......................... 320,000 2.7% 20,000 300,000 2.5%
Kyle C. Kerbawy TTEE for the Kyle C.
Kerbawy TR as Amended & Restated DTD
5/30/1984(2)............................ 270,000 2.3% 20,000 250,000 2.1%
Jonathan B. Shaw -- Director.............. 185,198 1.6% 20,000 165,198 1.4%
Richard Ross.............................. 228,554 1.9% 111,991 116,563 1.0%
Charles J. Bauer, Jr. .................... 147,333 1.2% 72,333 75,000 *
John E. Drury............................. 83,128 * 25,000 58,128 *
Michael P. Wickman........................ 78,242 * 28,242 50,000 *
Dorothy Green............................. 92,536 * 45,342 47,194 *
Daniel O. Barr............................ 90,791 * 44,488 46,303 *
G. Michael Bellenghi -- Director.......... 50,000 * 10,000 40,000 *
Michael J. Bradley(3) -- Director......... 55,000 * 15,000 40,000 *
Gary D. Embretson......................... 78,140 * 38,289 39,851 *
Jeffrey S. Majkrzak....................... 78,140 * 38,289 39,851 *
William D. Slattery....................... 78,140 * 38,289 39,851 *
John M. Witte............................. 76,370 * 37,421 38,949 *
Christopher Groff......................... 76,370 * 37,421 38,949 *
William Jones............................. 73,464 * 36,732 36,732 *
Gerald E. Pierson......................... 46,246 * 10,000 36,246 *
Neil Dean Patterson....................... 40,003 * 5,024 34,979 *
Eduardo A. Leal........................... 59,754 * 29,000 30,754 *
Myrna T. Leal............................. 59,753 * 29,000 30,753 *
Harry M. Green Trust B c/o Dorothy Green
TTEE.................................... 56,716 * 27,791 28,925 *
James Timothy Weeg & Jennifer M. Weeg as
TTEE of the James Timothy Weeg &
Jennifer M. Weeg 1992 Family Trust...... 44,513 * 16,000 28,513 *
Arthur W. Homan & Rebecca Dudman Homan JT
Ten..................................... 27,243 * 12,243 15,000 *
Wendell Ware & Gloria Ware JTWROS......... 16,325 * 7,999 8,326 *
Peter Nguyen(4)........................... 14,800 * 7,252 7,548 *
Christopher R. Yowell(5).................. 32,092 * 25,092 7,000 *
Stanton Williams(6)....................... 9,867 * 4,835 5,032 *
Fernando Carvajal(7)...................... 3,825 * 382 3,443 *
Fernando Leal(8).......................... 3,825 * 800 3,025 *
Steve R. Bostedt(9)....................... 3,885 * 1,500 2,385 *
Linda M. Wetli(10)........................ 968 * 400 568 *
David L. & Lori E. Delgado TTEES FBO The
David L. & Lori E. Delgado 1994
Revocable LV TR Agreement............... 64,184 * 64,184 0 *
</TABLE>
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* Represents less than 1%.
(1) Does not include 15,000 shares which may be acquired upon the exercise of
options not exercisable within 60 days. Mr. Melanson is also a Senior Vice
President of the Company.
10
<PAGE> 11
(2) Mr. Kerbawy is also a Director of the Company.
(3) Does not include 5,000 shares which may be acquired upon the exercise of
options not exercisable within 60 days.
(4) Does not include 3,000 shares which may be acquired upon the exercise of
options not exercisable within 60 days.
(5) Does not include 3,000 shares which may be acquired upon the exercise of
options not exercisable within 60 days.
(6) Does not include 3,000 shares which may be acquired upon the exercise of
options not exercisable within 60 days.
(7) Does not include 3,000 shares which may be acquired upon the exercise of
options not exercisable within 60 days.
(8) Does not include 5,000 shares which may be acquired upon the exercise of
options not exercisable within 60 days.
(9) Does not include 3,000 shares which may be acquired upon the exercise of
options not exercisable within 60 days.
(10) Does not include 1,000 shares which may be acquired upon the exercise of
options not exercisable within 60 days.
The Company has agreed to use its best efforts to keep this Registration
Statement effective generally for a period of six months.
PLAN OF DISTRIBUTION
The shares of Common Stock registered hereunder and owned by the Selling
Stockholders may be offered and sold by means of this Prospectus from time to
time as market conditions permit in the over-the-counter market, or otherwise at
prices and terms then prevailing or at prices related to the then-current market
price, or in negotiated transactions. These shares may be sold by one or more of
the following methods, without limitation: (a) a block trade in which a broker
or dealer so engaged will attempt to sell the shares as agent but may position
and resell a portion of the block as principal to facilitate the transaction;
(b) a purchase by a broker or dealer as principal and resale by such broker or
dealer for its account pursuant to this Prospectus; (c) ordinary brokerage
transactions and transactions in which the broker solicits a purchase; and (d)
face-to-face transactions between sellers and purchasers without a broker or
dealer. In effecting sales, brokers or dealers engaged by the Selling
Stockholders may arrange for other brokers or dealers to participate. Such
brokers or dealers may receive commissions or discounts from Selling
Stockholders in amounts to be negotiated.
The Selling Stockholders and any brokers or dealers who act in connection
with the sale of the Shares hereunder may be deemed to be "underwriters" within
the meaning of 2(11) of the Securities Act, and any commissions received by them
or any profit on any resale of the Shares as principal might be deemed to be
underwriting discounts and commissions under the Securities Act. The Company may
agree to indemnify the Selling Stockholders and may agree to indemnify any such
broker or dealer who may be deemed to be an underwriter against certain
liabilities, including liabilities under the Securities Act as an underwriter or
otherwise.
11
<PAGE> 12
The Company has advised the Selling Stockholders that, during such time as
they may be engaged in a distribution of the shares of Common Stock included
herein, they must comply with the applicable provisions of Regulation M under
the Exchange Act, as amended ("Regulation M"), and, in connection therewith, the
Selling Stockholders may not engage in any stabilization activity in connection
with any securities of the Company, that they must furnish copies of this
Prospectus to each broker-dealer through which the shares of Common Stock
included herein may be offered, and that they may not bid for or purchase any
securities of the Company or attempt to induce any person to purchase any
securities of the Company except as permitted under Regulation M. The Selling
Stockholders have also agreed to inform the Company and broker-dealers through
whom sales may be made hereunder when the distribution of the shares is
completed.
Rules 102 and 103 under Regulation M prohibit participants in a
distribution from bidding for or purchasing for any account in which the
participant has a beneficial interest any of the of the securities that are the
subject of the distribution.
Rule 104 under Regulation M governs bids and purchases made to stabilize
the price of a security in connection with a distribution of the security.
LEGAL MATTERS
The validity of the issuance of the shares of Common Stock offered by this
Prospectus has been passed upon for the Company by Morgan, Lewis & Bockius LLP,
New York, New York.
EXPERTS
The consolidated financial statements for the year ended December 31, 1997
incorporated by reference in this Prospectus and elsewhere in this Registration
Statement have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in giving
said reports.
12
<PAGE> 13
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NO DEALER, REPRESENTATIVE OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES
OFFERED HEREBY BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION
IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS
NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
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TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
Available Information................. 2
Incorporation of Certain Information
by Reference........................ 2
The Company........................... 3
Recent Developments................... 4
Risk Factors.......................... 5
Use of Proceeds....................... 9
Selling Stockholders.................. 10
Plan of Distribution.................. 11
Legal Matters......................... 12
Experts............................... 12
</TABLE>
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