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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K/A
(Amendment No. 1)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 26, 1997
PERSONNEL GROUP OF AMERICA, INC.
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(Exact Name of Registrant as Specified in its Charter)
Delaware 001-13956 56-1930691
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(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
6302 Fairview Road, Suite 201
Charlotte, North Carolina 28210
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(Address of Principal Executive Offices)
(Zip Code)
(704) 442-5100
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former name or address, if changed from last report)
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PRELIMINARY NOTE
This Amendment No. 1 on Form 8-K/A (this "Amendment") amends the
Current Report on Form 8-K of Personnel Group of America, Inc. (the "Company")
dated December 29, 1997 reporting the disposition by the Company of its
Nursefinders division. This Amendment adds the pro forma financial data required
under Item 7(b) of Form 8-K.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements
Financial statements are not required.
(b) Pro Forma Financial Information
Pro Forma condensed consolidated financial information
(unaudited) of the Company as of September 28, 1997 and for
the year ended December 29, 1996 and the nine months ended
September 28, 1997.
(c) Exhibits
Exhibit 2.1 -- Stock Purchase Agreement dated as of
November 15, 1997 among Nursefinders
Acquisition Corp., Nursefinders, Inc. and
PFI Corp. (The Company agrees to furnish
supplementally to the Commission upon
request any schedule or exhibit to Exhibit
2.1, which have been omitted.)
Exhibit 2.2 -- Letter dated December 26, 1997 from
Nursefinders Acquisition Corp. to PFI Corp.
waiving certain closing conditions.
Exhibit 2.3 -- Letter agreement dated December 26, 1997
between Nursefinders Acquisition Corp. and
PFI Corp. with respect to the payment of a
portion of the purchase price by delivery of
a promissory note.
Exhibit 99.1 -- Press release of Personnel Group of America,
Inc. dated December 29, 1997.
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PERSONNEL GROUP OF AMERICA INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL INFORMATION
The following pro forma condensed consolidated statements of income of Personnel
Group of America Inc. and Subsidiaries (collectively, the "Company") for the
nine months ended September 28, 1997, and the year ended December 29, 1996, and
the pro forma condensed consolidated balance sheet of the Company as of
September 28, 1997, are based on historical financial statements of the Company
and have been adjusted to reflect the sale of the Company's Nursefinders
division.
On December 26, 1997, the Company completed the sale of its Nursefinders
division to Nursefinders Acquisition Corp. (the "Purchaser"), a corporation
organized by Atlantic Medical Management, L.L.C. and CIBC Capital Partners, for
$65.25 million. Of such amount, $34.6 million was paid by delivery by the
Purchaser of its promissory note in the principal amount of $34.6 million due
upon the earlier of January 31, 1998, or the completion by the Purchaser of
permanent debt financing (the "Bridge Loan"). The bridge loan bears interest at
a rate of 12% per annum through January 16, 1998, and 14% per annum thereafter
and is secured by a pledge of the stock of the Nursefinders division sold to the
Purchaser.
The pro forma condensed consolidated statements of income for the periods ended
September 28, 1997, and December 29, 1996, gives effect to the sale of the
Company's Nursefinders division as if it had been completed as of January 1,
1996. The pro forma condensed consolidated balance sheet as of September 28,
1997, gives effect to the sale of the Company's Nursefinders division as if the
sale had been completed on September 28, 1997.
The pro forma condensed consolidated financial information does not purport to
represent the actual financial position or results of operations of the Company
had the sale of the Company's Nursefinders division in fact occurred on the
dates specified, nor are they necessarily indicative of the results of
operations that may be achieved in the future. The pro forma condensed
consolidated financial information is based on certain assumptions and
adjustments described in the notes hereto and should be read in conjunction
therewith. The pro forma financial information should also be read in
conjunction with the historical financial statements of the
Company included in its 1996 annual report on Form 10-K and its quarterly
reports on Form 10-Q.
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PERSONNEL GROUP OF AMERICA INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
FOR THE NINE MONTHS ENDED SEPTEMBER 28, 1997
<TABLE>
<CAPTION>
PRO FORMA
EFFECT OF
HEALTHCARE PRO FORMA
HISTORICAL DIVESTITURE(a) AS ADJUSTED
---------- -------------- -----------
<S> <C> <C> <C>
REVENUES $436,450 $(100,090) $336,360
OPERATING EXPENSES:
Direct costs of services 313,126 (64,217) 248,909
Selling, general and administrative 78,254 (21,883) 56,371
Depreciation and amortization 8,349 (1,980) 6,369
License fees 6,627 (6,627) --
-------- --------- --------
Total Operating Expenses 406,356 (94,707) 311,649
OPERATING INCOME 30,094 (5,383) 24,711
INTEREST EXPENSE 6,424 (2,913) (e) 3,511
-------- --------- --------
INCOME BEFORE INCOME TAXES 23,670 (2,470) 21,200
PROVISION FOR INCOME TAXES 9,993 (1,043) (b) 8,950
-------- --------- --------
NET INCOME $ 13,677 $ (1,427) $ 12,250
======== ========= ========
NET INCOME PER SHARE:
PRIMARY $ 1.11 $ 0.99
FULLY DILUTED $ 1.09 $ 0.99
======== ========
WEIGHTED AVERAGE SHARES OUTSTANDING:
PRIMARY 12,316 12,316
FULLY DILUTED 13,575 13,575
======== ========
</TABLE>
See Notes to Pro Forma Condensed Consolidated Financial Statements
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PERSONNEL GROUP OF AMERICA INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 28, 1997
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA
EFFECT OF
HEALTHCARE PRO FORMA
HISTORICAL DIVESTITURE(a) AS ADJUSTED
---------- -------------- -----------
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 247 $ (901) $ (654)
Accounts receivable, net 95,277 (21,533) 73,744
Prepaid expenses and other current assets 2,469 (1,476) 993
Note receivable and escrow -- 35,455 (c) 35,455
Deferred income taxes 3,830 (1,577) 3,545
1,292 (c)
--------- --------- ---------
Total Current Assets 101,823 11,260 113,083
Property and equipment, net 10,198 (1,698) 8,500
Excess of cost over fair value of net assets acquired,
net 301,683 (42,186) 259,497
Other intangibles, net 4,063 (1,308) 2,755
Other assets 5,239 (111) 5,128
--------- --------- ---------
Total Assets $ 423,006 $ (34,043) $ 388,963
========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 7,790 $ (191) $ 7,599
Accounts payable 5,054 (241) 4,813
Accrued liabilities 36,710 (8,146) 33,329
4,765 (c)
Income taxes payable 4,130 7,870 (c) 12,000
--------- --------- ---------
Total Current Liabilities 53,684 4,057 57,741
Long-term debt 161,907 (207) 131,724
(29,976) (d)
Deferred income taxes 8,988 (8,006) 982
--------- --------- ---------
Total Liabilities 224,579 (34,132) 190,447
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock 121 121
Additional paid-in capital 170,765 170,765
Retained earnings 27,541 89 (c) 27,630
--------- --------- ---------
Total Shareholders' Equity
Total Liabilities and Shareholders' Equity 198,427 89 198,516
========= ========= =========
$ 423,006 $ (34,043) $ 388,963
========= ========= =========
</TABLE>
See Notes to Pro Forma Condensed Consolidated Financial Statements
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PERSONNEL GROUP OF AMERICA INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
FOR THE YEAR ENDED DECEMBER 29, 1996
<TABLE>
<CAPTION>
PRO FORMA
EFFECT OF
HEALTHCARE PRO FORMA
HISTORICAL DIVESTITURE(a) AS ADJUSTED
---------- ------------- -----------
<S> <C> <C> <C>
REVENUES $366,545 $(122,937) $243,608
OPERATING EXPENSES:
Direct costs of services 263,277 (77,632) 185,645
Selling, general and administrative 68,329 (29,182) 39,147
Depreciation and amortization 5,969 (2,632) 3,337
License fees 7,689 (7,689) --
-------- --------- --------
Total Operating Expenses 345,264 (117,135) 228,129
OPERATING INCOME 21,281 (5,802) 15,479
INTEREST EXPENSE 1,432 (1,432) (e) --
-------- --------- --------
INCOME BEFORE INCOME TAXES 19,849 (4,370) 15,479
PROVISION FOR INCOME TAXES 8,332 (1,837) (b) 6,495
-------- --------- --------
NET INCOME $ 11,517 $ (2,533) $ 8,984
======== ========= ========
NET INCOME PER SHARE:
PRIMARY $ 1.13 $ 0.88
FULLY DILUTED $ 1.13 $ 0.88
======== ========
WEIGHTED AVERAGE SHARES OUTSTANDING:
PRIMARY 10,216 10,216
FULLY DILUTED 10,216 10,216
======== ========
</TABLE>
See Notes to Pro Forma Condensed Consolidated Financial Statements
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PERSONNEL GROUP OF AMERICA AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
(AMOUNTS IN THOUSANDS)
a) To reflect the elimination of amounts related to the Company's
Nursefinders division, which will be reported as a discontinued
operation in the Company's 1997 annual report on Form 10-K.
b) To reflect the aggregate tax benefit of eliminating the Healthcare
business and reducing borrowings.
c) To reflect the stock sale of the company's healthcare division. The net
book value of this business as of September 28, 1997 is not expected to
vary materially with its book value as of the sale date.
The estimated pro forma increase to retained earnings of $89 is
calculated as follows (in thousands):
Proceeds:
Cash $ 29,976
Bridge Loan 34,600
Escrow 856
--------
65,432
Less:
Estimated book value of
business sold (including cash) 54,000
Transaction related costs 4,765
--------
6,667
Income Tax Benefit (Expense):
Current (7,870)
Deferred 1,292
--------
Estimated net increase to retained
earnings $ 89
========
Transaction related costs include investment banking expenses, legal
and accounting fees, transaction related compensation costs and
transaction related cost indemnifications.
d) To reflect the usage of the cash proceeds to reduce outstanding
indebtedness.
e) To reflect the usage of the proceeds after taxes and certain
transaction related costs to reduce debt.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: January 12, 1998
PERSONNEL GROUP OF AMERICA, INC.
By: /s/ Ken R. Bramlett
-----------------------------------------
Ken R. Bramlett
Senior Vice President and General Counsel
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EXHIBIT INDEX
Exhibit No. Exhibit
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Exhibit 2.1 Stock Purchase Agreement dated as of November 15,
1997 among Nursefinders Acquisition Corp.,
Nursefinders, Inc. and PFI Corp., incorporated by
reference to Exhibit 2.1 to the Company's Current
Report on Form 8-K dated December 29, 1997.
Exhibit 2.2 Letter dated December 26, 1997 from Nursefinders
Acquisition Corp. to PFI Corp. waiving certain
closing conditions, incorporated by reference to
Exhibit 2.2 to the Company's Current Report on Form
8-K dated December 29, 1997.
Exhibit 2.3 Letter agreement dated December 26, 1997 between
Nursefinders Acquisition Corp. and PFI Corp. with
respect to the payment of a portion of the purchase
price by delivery of a promissory note, incorporated
by reference to Exhibit 2.3 to the Company's Current
Report on Form 8-K dated December 29, 1997.
Exhibit 99.1 Press release of Personnel Group of America, Inc.
dated December 29, 1997, incorporated by reference to
Exhibit 2.4 to the Company's Current Report on Form
8-K dated December 29, 1997.
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