SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM 8-K
Current Report
--------------
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
-----------------------
Date of Report (Date of earliest event reported): May 14, 1998
------------------------
SOS Staffing Services, Inc.
---------------------------
(Exact name of registrant as specified in its charter)
Utah 0-26094 87-0295503 .
---- ------- ------------
(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
1415 South Main Street
----------------------
Salt Lake City, Utah 84115 .
(Address of principal executive offices, including zip code)
(801) 484-4400 .
----------------
(Registrant's telephone number, including area code)
1
<PAGE>
TABLE OF CONTENTS
Page
----
Item 2. Acquisition or Disposition of Assets 3
------------------------------------
Item 7. Financial Statements and Exhibits 4
---------------------------------
SIGNATURES 5
2
<PAGE>
Item 2. Acquisition or Disposition of Assets
------------------------------------
SOS Staffing Services, Inc. (the "Company") is reporting the following
two separate and independent acquisitions as required pursuant to the Securities
Exchange Act of 1934:
Acquisition of Aquas, Inc.
--------------------------
Pursuant to an agreement entered into on May 14, 1998 to be effective
April 1, 1998, the Company completed the acquisition of substantially all of the
assets of Aquas, Inc. ("Aquas"). Aquas is engaged in providing temporary
technology staffing specializing in Internet development, network technologies
and database development in the area commonly referred to as Silicon Valley,
California. The assets purchased from Aquas consist principally of office
furniture and equipment and goodwill used in Aquas' information technology
staffing business. The Company intends to use all such assets to continue and
expand its information technology staffing business.
The purchase price for the Aquas assets was $5.0 million in cash plus
future earnouts not to exceed an additional $9.9 million based on profitability.
In connection with the purchase, the Company assumed a real property lease,
certain contracts, and entered into non-competition agreements with the former
principals of Aquas. The Company also entered into employment agreements with
certain former principals of Aquas. The purchase price for the assets and
business was determined in arms-length negotiations conducted by principals of
the Company and representatives of Aquas. There was no material relationship
between the owners of Aquas and the Company or any of its affiliates, any
director or officer of the Company, or any associate of any such director or
officer. The initial purchase price for the Aquas assets was funded through
borrowings against the Company's credit facility. The Company presently
anticipates that the future earnout payments will be funded from the additional
revenues generated by the acquisition coupled with cash flows from normal
Company operations.
Acquisition of Abacab Software, Inc.
------------------------------------
Pursuant to an agreement entered into on May 21, 1998 to be effective
May 1, 1998, the Company completed the acquisition of substantially all of the
assets of Abacab Software, Inc. ("Abacab"). Abacab is engaged in providing
specialized, high-level information technology temporary staffing solutions to
client server, database and Internet technologies and conducts business
operations in Cupertino, California. The assets purchased from Abacab consist
principally of office furniture and equipment, accounts receivable, customer
lists, employee lists, and goodwill used in Abacab's information technology
staffing business. The Company intends to use all such assets to continue and
expand its information technology staffing business.
The purchase price for the Abacab assets was $6.0 million in cash plus
future earnouts not to exceed an additional $8.9 million based on profitability.
In connection with the purchase, the Company assumed real property leases,
certain contracts, and entered into employment and non-competition agreements
with the previous owner of Abacab. The purchase price for the assets and
business was determined in arms-length negotiations conducted by principals of
the Company and the owner of Abacab. There was no material relationship between
the owner of Abacab and the Company, or any of its affiliates, any director or
officer of the Company, or any associate of any such director or officer. The
initial purchase price for the Abacab assets was funded through borrowings
against the Company's credit facility. The Company presently anticipates that
the future earnout payments will be funded from the additional revenues
generated by the acquisition coupled with cash flows from normal Company
operations.
3
<PAGE>
Item 7. Financial Statements and Exhibits
---------------------------------
(a) Financial statements of business acquired
Not applicable
(b) Pro forma financial information
Not applicable
(c) Exhibits
2.1 Acquisition agreements (Acquisition agreements relating to
the transactions described in this Report were unavailable at
the time of filing this Report, but will be filed as exhibits
to an Amendment to this Report on Form 8-K/A when the
agreements are received by the Company).
99.1 Press Release dated May 26, 1998
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this Current Report on Form 8-K to be signed on its
behalf by the undersigned thereto duly authorized.
SOS STAFING SERVICES, INC.
\S\ Gary B. Crook
-----------------
Gary B. Crook
Executive Vice President and
Chief Financial Officer
Date: May 28, 1998
5
FOR IMMEDIATE RELEASE: Tuesday, May 26, 1998
CONTACT: Gary Crook Madeleine Franco
Chief Financial Officer or Andrew Graft
SOS Staffing Services, Inc. Jordan Richard Assoc.
801-484-4400 801-595-8611
SOS STAFFING SERVICES, INC. ACQUIRES TWO COMPANIES
SPECIALIZING IN INFORMATION TECHNOLOGY
SALT LAKE CITY, UTAH -- SOS Staffing Services, Inc. (NASDAQ/NMS: SOSS) today
announced that it has purchased Aquas Inc. (Sunnyvale, Calif.),[IT staffing
division only] and Abacab Software, Inc. (Cupertino, Calif.), specialists in
information technology (IT) staffing support. SOS plans to retain the
operational management of each company.
Aquas is a three-year-old information technology staffing company specializing
in leading-edge Internet development and networking technologies, including
JAVA, CORBA, and database development. The company posted revenue of $3.4
million in 1997 and currently generates annualized revenue of approximately $6.5
million.
Founded in 1993, Abacab provides specialized, high-level IT staffing solutions
in client server, database and Internet technologies. With twelve-month trailing
revenue of $4.6 million, Abacab's annualized revenue for 1998 is $6.5 million.
Approximately 40 percent of Aquas' and 33 percent of Abacab's consultant
workforce, is attributable to international recruitment for specialty IT
personnel. Both companies provide an entree for SOS' IT division into the global
recruiting arena. This capability allows for the recruitment of scarce IT
professionals.
Howard Scott, Jr., chief executive officer of SOS Staffing Services, called
these latest acquisitions a solid and strategic fit for SOS' IT division.
"Servicing the advanced technological needs of a blue-chip client base, Aquas
and Abacab complement our existing IT division expertise of providing high end,
advanced skilled personnel." said Scott. "The acquisitions of Aquas and Abacab
will enable us to increase our IT staffing presence throughout our entire served
market and capture important synergies in a rapidly growing and profitable
specialty area, while greatly enhancing our recruitment capability," he said.
SOS Staffing Services, Inc. is a full-service provider of staffing services,
operating through a network of more than 140 offices located in 17 states.
# # #
NOTE: Any statements released by SOS Staffing Services, Inc. that are
forward-looking are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Editors and investors are cautioned
that forward-looking statements invoke risk and uncertainties that may affect
the company's business prospects and performance. These include, economic,
competitive, governmental, technological and other factors discussed in the
company's filings with the Securities and Exchange Commission.
