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SECURITIES AND EXCHANGE COMMISSION PRIVATE
Washington, DC 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) April 23, 1998
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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)
<PAGE> 2
Item 5. Other Events.
Personnel Group of America, Inc. issued a press release on April 23,
1998 (a copy of which is attached as Exhibit 99.1) and a press release on May 8,
1998 (a copy of which is attached as Exhibit 99.2), the contents of which are
incorporated herein by reference.
Item 7. Exhibits.
The following exhibits are filed as part of this report.
Exhibit 99.1 -- Press release dated April 23, 1998
Exhibit 99.2 -- Press release dated May 8, 1998
2
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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: May 8, 1998
PERSONNEL GROUP OF AMERICA, INC.
By: /s/ KEN R. BRAMLETT, JR.
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Ken R. Bramlett, Jr.
Senior Vice President
3
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Exhibit Index
<TABLE>
<CAPTION>
Exhibit Exhibit No.
------- -----------
<S> <C>
Press release dated April 23, 1998 99.1
Press release dated May 8, 1998 99.2
</TABLE>
4
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[PGA letterhead]
FOR IMMEDIATE RELEASE Contact: James C. Hunt
Senior Vice President and
Chief Financial Officer
Ken R. Bramlett, Jr.
Senior Vice President and
General Counsel
PERSONNEL GROUP OF AMERICA, INC.
REPORTS FIRST QUARTER 1998 RESULTS
INCOME FROM CONTINUING OPERATIONS UP 90%
CHARLOTTE, NC (April 23, 1998) - Personnel Group of America, Inc. (NYSE:PGA), a
leading information technology and personnel staffing services company, today
announced its results for the first quarter ended March 29, 1998.
For the first quarter, revenues from continuing operations increased
64% to $154.8 million from $94.2 million in 1997. Income from continuing
operations for the quarter rose 90% to $5.3 million from $2.8 million for the
year-earlier period. Income per diluted share from continuing operations was up
82% to $0.20 compared with $0.11 per share last year. Diluted weighted average
shares outstanding for the first quarter increased by 33% to 32.0 million from
24.1 million for the same quarter in 1997, primarily as the result of a
convertible subordinated notes issuance completed in June and July 1997.
The Company completed the sale of its Nursefinders Division on December
26, 1997, for a purchase price of $65.25 million. As a result of the sale,
Nursefinders has been reflected as a discontinued operation in the Company's
results of operations for all periods presented.
Chairman and Chief Executive Officer Edward P. Drudge, Jr. said, "We
had an excellent quarter and are very pleased with the foundation the first
quarter has set for the remainder of 1998. Our results reflect continuing solid
internal growth in both of our operating divisions, as well as the positive
impact of acquisitions. As expected, we were able to more than replace
Nursefinders' revenues and operating profits by the end of the quarter. We
believe that market conditions and industry trends for future internal growth
and acquisitions continue to be favorable, and we intend to take advantage of
these conditions and trends during the rest of 1998.
-- MORE --
<PAGE> 2
PGA Reports First Quarter Results
Page 2
April 23, 1998
"During the first quarter, revenues from our Information Technology
Division nearly doubled to $85.4 million, or 55%, of our total revenues from
continuing operations from $43.0 million for the first quarter last year; our
Commercial Staffing Division contributed $69.4 million, or 45%, of revenues from
continuing operations. Our operating margins continued to increase, as earnings
before interest, taxes, depreciation and amortization (EBITDA) rose to $14.7
million, or 9.5% of revenues, for the first quarter of 1998 compared with $7.9
million, or 8.5% of revenues, for the same period in 1997."
Acquisitions
"Our acquisition program was very active in the first quarter as we
completed six acquisitions in strategic and dynamic markets," Drudge added.
Acquisitions included:
- -- Ann Wells Personnel Services, a Silicon Valley-based commercial
staffing company, on January 5, 1998. Ann Wells provides high-end
clerical and accounting and finance staffing services from one office
in Sunnyvale, California.
- -- Creative Temporaries and Corporate Staffing Consultants, Charlotte area
commercial staffing providers, on January 15, 1998, and January 27,
1998, respectively. Creative and Corporate provide high-end clerical
and light industrial staffing services through 11 offices between them
in the Charlotte metropolitan area. We are in the process of merging
Creative and Corporate to create the leading commercial staffing
provider in this marketplace.
- -- Advanced Business Consultants, an information technology services
provider in Kansas City, on February 17, 1998. ABC has over 140
consultants on assignment.
- -- IMA plus, an information technology services provider in Jacksonville,
Florida, on March 2, 1998. IMA plus has more than 115 consultants on
assignment.
- -- The Temporary Connection, a commercial staffing provider based in the
Houston area, on March 23, 1998. The Temporary Connection provides
high-end clerical and accounting staffing services from six offices in
Houston, Austin and Dallas, Texas.
"On April 8, 1998, we completed the acquisition of Trilogy Consulting,
a leading Chicago-based provider of information technology services," Drudge
said. "Trilogy has over 350 consultants on assignment and is one of the largest
providers of SAS programmers and developers to the pharmaceutical and biotech
industries in the United States.
-- MORE --
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PGA Reports First Quarter Results
Page 3
April 23, 1998
"Our acquisition program remains very active, and we believe that we
will continue to be a buyer of choice for interested owner-sellers throughout
the year.
Corporate Infrastructure
"To support our expansion strategy, we continued to focus on corporate
infrastructure during the first quarter. In addition to the systems initiatives
that are ongoing in each of our operating divisions, we promoted Craig Newbold
in January to serve as Senior Vice President - Western Operations for the
Information Technology Division. Craig also serves as President of BEST
Consulting, our IT company based in Seattle. Mike Barker joined the Company as
President of our Commercial Staffing Division in January; and in March the
Commercial Staffing Division added its first corporate salesperson, Susan
Garcia, to manage the Division's Vendor on Premise (VOP) and other major account
marketing programs. With these and other infrastructure improvements, PGA is
continuing to build and refine a strong foundation for the future."
Personnel Group of America, Inc. is a diversified staffing services
company providing a full range of information technology and commercial staffing
services. Headquartered in Charlotte, North Carolina, the Company operates
through 137 offices in 25 states and the District of Columbia. PGA's Information
Technology Division is comprised of 14 companies, and its Commercial Staffing
Division is comprised of 24 companies. Each of PGA's companies operates in a
decentralized manner and typically retains its local brand name.
Information contained in this press release, other than historical
information, may be considered forward-looking in nature and is subject to
various risks, uncertainties and assumptions. Should one or more of these risks
or uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those anticipated, estimated or
expected. Among the key factors that may have a direct bearing on PGA's
operating results, performance or financial condition are fluctuations in the
economy, the degree and nature of competition and the demand for PGA's services,
changes in laws and regulations affecting PGA's business, PGA's inability at any
time to complete acquisitions and integrate the operations of acquired
businesses, to recruit and place temporary professionals, to expand into new
markets, and to maintain profit margins in the face of pricing pressures and
wage inflation, and numerous other factors discussed in PGA's filings with the
Securities and Exchange Commission.
-- MORE --
<PAGE> 4
PGA Reports First Quarter Results
Page 4
April 23, 1998
PERSONNEL GROUP OF AMERICA, INC.
FINANCIAL HIGHLIGHTS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FOR THE QUARTER ENDED
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MARCH 29, MARCH 30,
1998 1997 % CHANGE
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<S> <C> <C> <C>
Revenues:
Information technology $ 85,428 $42,990 98.7%
Commercial staffing 69,409 51,171 35.6
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Total revenues 154,837 94,161 64.4
Direct costs of service 113,849 70,152 62.3
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Gross margin 40,988 24,009 70.7
Operating expenses:
Selling, general & administrative 26,302 16,043 63.9
Depreciation & amortization 3,079 1,885 63.3
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Total operating expenses 29,381 17,928 63.9
Operating income 11,607 6,081 90.9
Interest expense 2,487 1,308 90.1
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Income from continuing operations
and before income taxes 9,120 4,773 91.1
Provision for income taxes 3,858 2,004 92.5
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Income from continuing operations 5,262 2,769 90.0
Income from discontinued operations, net of taxes -- 692 N/A
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Net income $ 5,262 $ 3,461 52.0%
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NET INCOME PER DILUTIVE SHARE:
Income from continuing operations $ 0.20 $ 0.11 81.8%
Income from discontinued operations, net of taxes 0.00 0.03 N/A
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Total net income per dilutive share $ 0.20 $ 0.14 42.9%
======== ======= ====
Average dilutive shares outstanding 31,994 24,134 32.6%
======== ======= ====
</TABLE>
NOTE: All share and per share data have been restated to reflect the
two-for-one stock split effected as a stock dividend in March 1998.
-- END --
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[PGA letterhead]
FOR IMMEDIATE RELEASE Contact: James C. Hunt
Senior Vice President and
Chief Financial Officer
Ken R. Bramlett, Jr.
Senior Vice President and
General Counsel
PERSONNEL GROUP OF AMERICA, INC.
ACQUIRES SLOAN STAFFING SERVICES
CHARLOTTE, NC (May 8, 1998) - Personnel Group of America, Inc. (NYSE:PGA), a
leading information technology services and commercial staffing company, today
announced that it has acquired Sloan Staffing Services, one of the oldest and
largest independent commercial staffing companies in New York City, providing
high-end clerical and accounting staffing services throughout the New York
metropolitan area.
"The acquisition of Sloan and our partnership with Bob Marcus, Arlene
Covney and Lynn Malen, who will continue to run the company for PGA following
the acquisition, provides PGA a significant opportunity to expand our service
offerings in New York City," said Edward P. Drudge, Jr., PGA's chairman and
chief executive officer. "Sloan, founded in 1962, is a market leader in clerical
staffing in that marketplace and is precisely the type of company that we want
in the PGA network. With our existing operations in New York City--Word
Processing Professionals, Rosemary Scott Temporaries and Temp Connection in
commercial staffing and Vital Computer Services in information technology
services--Sloan positions PGA to become one of the premier providers of staffing
services in one of the most visible markets in the United States. This
acquisition will provide PGA with opportunities to cross-sell services to all of
these companies' existing clients and expand the services we currently offer to
our clients in this marketplace. Just as we have in the past, we will preserve
the Sloan Staffing Services' brand name and continue to build on the excellent
reputation for quality service that Sloan has developed in New York City."
-- MORE --
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PGA Announces the Acquisition of
Sloan Staffing Services
Page 2
May 8, 1998
Personnel Group of America, Inc. is a diversified staffing services
company providing a full range of information technology and commercial staffing
services. With this acquisition, the Company now operates through 138 offices in
25 states and the District of Columbia. PGA's Information Technology Division is
comprised of 14 companies, and its Commercial Staffing Division is comprised of
25 companies. Each of PGA's companies operates in a decentralized manner and
typically retains its local brand name.
Information contained in this press release, other than historical
information, may be considered forward-looking in nature and is subject to
various risks, uncertainties and assumptions. Should one or more of these risks
or uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those anticipated, estimated or
expected. Among the key factors that may have a direct bearing on PGA's
operating results, performance or financial condition are fluctuations in the
economy, the degree and nature of competition and the demand for PGA's services,
changes in laws and regulations affecting PGA's business, PGA's inability at any
time to complete acquisitions and integrate the operations of acquired
businesses, to recruit and place temporary professionals, to expand into new
markets, and to maintain profit margins in the face of pricing pressures and
wage inflation, and numerous other factors discussed in PGA's filings with the
Securities and Exchange Commission.
-- END --
