SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
[x] AMENDMENT NO. 1 TO QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 29, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________to__________
Commission File Number 0-26094
SOS STAFFING SERVICES, INC.
(Exact name of registrant as specified in its charter)
Utah 87-0295503
(State or other jurisdiction of incorporation) (I.R.S. Employer ID No.)
1415 South Main Street
Salt Lake City, Utah 84115
(Address of principal executive offices)
(801) 484-4400
(Telephone number)
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 and 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 filings
requirements for the past 90 days.
Yes X No
--------- ---------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class of Common Stock Outstanding at March 29, 1998
--------------------- -----------------------------
Common Stock, $0.01 par value 12,665,462
<PAGE>
SOS Staffing Services, Inc. (the "Company") is filing this Amendment No. 1 to
Quarterly Report on Form 10-Q/A for the purpose of replacing the Condensed
Consolidated Statements of Income and Note 2. "Net Income Per Common Share" set
forth in the Notes to Condensed Consolidated Financial Statements filed
previously by the Company under "Part I - Financial Information, Item 1.
Financial Statements" of the Company's Quarterly Report on Form 10-Q filed May
12, 1998.
<PAGE>
<TABLE>
SOS STAFFING SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
<CAPTION>
13 Weeks Ended
------------------------------------------------------------------
March 29, 1998 March 30, 1997
-------------------------- ----------------------------
(Unaudited) (Unaudited)
<S> <C> <C>
SERVICE REVENUES $ 70,158,302 $ 40,846,085
DIRECT COSTS OF SERVICES 54,151,982 32,139,009
-------------------------- ----------------------------
Gross profit 16,006,320 8,707,076
-------------------------- ----------------------------
OPERATING EXPENSES;
Selling, general and administrative 11,353,712 6,357,130
Intangibles amortization 760,087 274,993
-------------------------- ----------------------------
Total operating expenses 12,113,799 6,632,123
-------------------------- ----------------------------
INCOME FROM OPERATIONS 3,892,521 2,074,953
-------------------------- ----------------------------
OTHER INCOME (EXPENSE):
Interest expense (32,959) (36,861)
Interest income 109,802 83,641
Other, net 60,972 61,739
-------------------------- ----------------------------
Total, net 137,815 108,519
-------------------------- ----------------------------
INCOME BEFORE PROVISION
FOR INCOME TAXES 4,030,336 2,183,472
PROVISION FOR INCOME TAXES (1,633,587) (865,719)
-------------------------- ----------------------------
NET INCOME $ 2,396,749 $ 1,317,753
========================== ============================
NET INCOME PER COMMON SHARE:
Basic $ 0.19 $ 0.15
Diluted $ 0.19 $ 0.15
WEIGHTED AVERAGE COMMON SHARES:
Basic 12,660,209 8,986,774
Diluted 12,848,894 9,060,421
</TABLE>
The accompanying notes to condensed consolidated financial statements
are an integral part of these condensed consolidated statements.
2
<PAGE>
SOS STAFFING SERVICES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. Basis of Presentation
The accompanying condensed consolidated financial statements have been
prepared by the Company, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to such
rules and regulations. These condensed consolidated financial statements reflect
all adjustments (consisting only of normal recurring adjustments), which in the
opinion of management, are necessary to present fairly the results of operations
of the Company for the periods presented. It is suggested that these condensed
consolidated financial statements be read in conjunction with the consolidated
financial statements and the notes thereto included in the Company's Annual
Report to Shareholders on Form 10-K.
The results of operations for the thirteen week period ended March 29,
1998 are not necessarily indicative of the results to be expected for the full
year.
Note 2. Net Income Per Common Share
Basic net income per common share ("Basic EPS") excludes dilution and
is computed by dividing net income by the weighted-average number of common
shares outstanding during the year. Diluted net income per common share
("Diluted EPS") reflects the potential dilution that could occur if stock
options or other common stock equivalents were exercised or converted into
common stock.
The following is a reconciliation of the numerator and denominator used
to calculate Basic and Diluted EPS:
<TABLE>
<CAPTION>
Thirteen Weeks Ended March 29, 1998 Thirteen Weeks Ended March 30, 1997
-------------------------------------------- -----------------------------------------
Per-Share Per-Share
Income Shares Amount Income Shares Amount
------------ ------------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Basic EPS $2,396,749 12,660,209 $0.19 $1,317,753 8,986,774 $0.15
Effect of stock options -- 188,685 -- -- 73,647 --
------------ ------------- ---------- ----------- ---------- -----------
Diluted EPS $2,396,749 12,848,894 $0.19 $1,317,753 9,060,421 $0.15
============ ============= ========== =========== ========== ===========
</TABLE>
Note 3. Acquisitions
All of the Company's acquisitions have been accounted for using the
purchase method. Certain acquisitions have contingent earnout components of the
purchase price. Earnout amounts are accrued when payment becomes probable and
increase the amount of goodwill related to the acquisition.
During the thirteen weeks ended March 29, 1998, the Company acquired
certain assets or stock and substantially all of the operations of five
businesses. The aggregate purchase price was approximately $15.0 million. Three
of the acquisitions have contingent future earnouts up to a combined maximum of
$6.8 million. The excess of the purchase price (excluding earnouts) over the
estimated fair value of the acquired assets, less liabilities assumed, was
approximately $14.2 million and has been allocated to goodwill and other
intangible assets.
Earnouts and Acquisition Costs - During the thirteen weeks ended March
29, 1998 the Company paid earnouts totaling $5.5 million. As of March 29, 1998
accrued acquisition costs and earnouts totaled $0.6 million.
3
<PAGE>
SIGNATURES
In accordance to the requirements of Exchange Act, the
Registrant has caused this Amendment No. 1 to Quarterly Report on Form 10-Q/A to
be signed on its behalf by the undersigned, thereunto duly authorized.
SOS STAFFING SERVICES, INC.
Registrant
Dated: May 18, 1998 /s/ Howard W. Scott
-------------------
Howard W. Scott
Chief Executive Officer
Dated: May 18, 1998 /s/ Gary B. Crook
-----------------
Gary B. Crook
Vice President,
Chief Financial Officer
<TABLE> <S> <C>
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<S> <C>
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<FISCAL-YEAR-END> JAN-03-1999
<PERIOD-END> MAR-29-1998
<CASH> 1680720
<SECURITIES> 0
<RECEIVABLES> 36051569
<ALLOWANCES> (771712)
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0
0
<COMMON> 126655
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<TOTAL-LIABILITY-AND-EQUITY> 118204159
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<EPS-PRIMARY> 0.19
<EPS-DILUTED> 0.19
</TABLE>
