-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, s6VEDS8LhBUY8hJMjD0MLU7ySRCCQQ/4aJRplORp8WXpm+8ix8nx0OlW++jQsEHm vXJPSCooS+9ZeCzweu1A7g== 0000074386-95-000004.txt : 19950509 0000074386-95-000004.hdr.sgml : 19950509 ACCESSION NUMBER: 0000074386-95-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950402 FILED AS OF DATE: 19950508 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: OLSTEN CORP CENTRAL INDEX KEY: 0000074386 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HELP SUPPLY SERVICES [7363] IRS NUMBER: 132610512 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08279 FILM NUMBER: 95535272 BUSINESS ADDRESS: STREET 1: 175 BROAD HOLLOW ROAD CITY: MELVILLE STATE: NY ZIP: 11747 BUSINESS PHONE: 516-844-7800 MAIL ADDRESS: STREET 1: 175 BROAD HOLLOW ROAD STREET 2: ONE MERRICK AVE CITY: MELVILLE STATE: NY ZIP: 11747 10-Q 1 OLSTEN CORP. FORM 10-Q FOR QUARTER ENDING 04/02/95 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q - ----- QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES | X | EXCHANGE ACT OF 1934 - ----- For the quarterly period ended April 2, 1995 --------------- Commission File No. 0-3532 -------- OLSTEN CORPORATION ------------------------------------------------------ (Exact name of registrant as specified in its charter) DELAWARE 13-2610512 - ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 175 Broad Hollow Road, Melville, New York 11747-8905 - ----------------------------------------- ------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (516) 844-7800 ------------------- The Olsten Corporation - -------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) 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 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 filing 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 Outstanding at May 2, 1995 - ------------------------------------ --------------------------- Common Stock, $.10 par value 32,456,574 shares Class B Common Stock, $.10 par value 9,251,718 shares 2 INDEX ------- Page No. --------- PART I - FINANCIAL INFORMATION Item 1. Financial Statements. Consolidated Balance Sheets - April 2, 1995 (Unaudited) and January 1, 1995 2 Consolidated Statements of Income (Unaudited) - Quarters Ended April 2, 1995 and April 3, 1994, respectively 3 Consolidated Statements of Cash Flows (Unaudited) - Quarters Ended April 2, 1995 and April 3, 1994 4 Notes to Consolidated Financial Statements (Unaudited) 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. 6 - 7 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. 7 SIGNATURES 8 1 3 PART I - FINANCIAL INFORMATION ITEM 1. Financial Statements. --------------------- Olsten Corporation and Subsidiaries Consolidated Balance Sheets (In thousands, except share amounts) ASSETS April 2, 1995 January 1, 1995 ------------- --------------- (Unaudited) CURRENT ASSETS: Cash (Note 2) $ 89,131 $ 68,338 Receivables, net 323,238 319,613 Other current assets 40,745 51,575 --------- --------- Total current assets 453,114 439,526 FIXED ASSETS, NET 81,556 72,543 INTANGIBLES, NET 197,130 200,972 OTHER ASSETS 6,087 12,917 --------- --------- $737,887 $725,958 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accrued expenses $ 66,746 $ 71,889 Insurance costs 41,224 47,301 Payroll and related taxes 33,986 30,241 Accounts payable 13,856 15,625 --------- --------- Total current liabilities 155,812 165,056 LONG-TERM DEBT (Note 3) 125,000 125,000 OTHER LIABILITIES 53,378 49,899 SHAREHOLDERS' EQUITY: Common stock $.10 par value; authorized 110,000,000 shares; issued 32,445,354 and 32,257,321 shares, respectively 3,245 3,226 Class B common stock $.10 par value; authorized 50,000,000 shares; issued 9,252,717 and 9,266,496 shares, respectively 925 927 Additional paid-in capital 234,499 232,594 Retained earnings 165,875 150,506 Cumulative translation adjustment (847) (1,250) --------- --------- Total shareholders' equity 403,697 386,003 --------- --------- $737,887 $725,958 ========= ========= See notes to consolidated financial statements. 2 4 Olsten Corporation and Subsidiaries Consolidated Statements of Income (In thousands, except share amounts) (Unaudited) First Quarter Ended --------------------- April 2, April 3, 1995 1994 --------- --------- Service sales, franchise fees, management fees and other income $575,503 $537,483 Cost of services sold 402,602 375,533 --------- --------- Gross profit 172,901 161,950 Selling, general and administrative expenses 140,157 134,715 Interest expense, net (Note 3) 646 2,155 --------- --------- Income before income taxes 32,098 25,080 Income taxes 13,385 10,734 --------- --------- Net income from operations before minority interest 18,713 14,346 Minority interest 11 -- --------- --------- Net income $ 18,702 $ 14,346 ========= ========= SHARE INFORMATION: ----------------- Primary: Net income $ .44 $ .35 ========= ========= Average shares outstanding 42,328 41,463 ========= ========= Filly diluted: Net income $ .43 $ .34 ========= ========= Average shares outstanding 45,977 45,720 ========= ========= See notes to consolidated financial statements. 3 5 Olsten Corporation and Subsidiaries Consolidated Statements of Cash Flows (In thousands) (Unaudited) First Quarter Ended --------------------- April 2, 1995 April 3, 1994 ------------- ------------- OPERATING ACTIVITIES: Net income $ 18,702 $ 14,346 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 6,356 6,000 Deferred income taxes 4,100 15,500 Changes in assets and liabilities: Accounts receivable, and other current assets 3,105 (9,413) Current liabilities (9,244) 4,260 Other, net 13,901 (14,576) --------- --------- NET CASH PROVIDED BY OPERATING ACTIVITIES 36,920 16,117 INVESTING ACTIVITIES: Purchases of fixed assets (13,294) (4,276) Acquisitions of businesses and reacquisitions of franchises (1,246) (679) --------- --------- NET CASH USED IN INVESTING ACTIVITIES (14,540) (4,955) FINANCING ACTIVITIES: Net repayments of line of credit agreements -- (3,000) Cash dividends (3,333) (2,435) Issuances of common stock under stock plans 1,746 4,013 --------- --------- NET CASH USED IN FINANCING ACTIVITIES (1,587) (1,422) --------- --------- NET INCREASE IN CASH 20,793 9,740 CASH AT BEGINNING OF PERIOD 68,338 24,709 --------- --------- CASH AT END OF PERIOD $ 89,131 $ 34,449 ========= ========= See notes to consolidated financial statements. 4 6 Olsten Corporation and Subsidiaries Notes to Consolidated Financial Statements (In thousands) (Unaudited) 1. Accounting Policies -------------------- The consolidated financial statements have been prepared by Olsten Corporation (the "Company") pursuant to the rules and regulations of the Securities and Exchange Commission and, in the opinion of management, include all adjustments necessary for a fair presentation of results of operations, financial position and cash flows for each period presented. 2. Investment in Norsk Personal A.S. ---------------------------------- On March 30, 1995, the Company entered into an agreement to acquire a 50.1 percent interest in Norsk Personal A.S. for $24.8 million. At April 2, 1995, these funds were held in escrow pending Norwegian government approval of the transaction and are included in cash. 3. Long-Term Debt --------------- Interest expense, net, consists of interest on long-term debt for the quarter of $1.4 million in 1995 and $2.5 million in 1994 offset by interest income from investments of $759 thousand and $386 thousand, respectively. 5 7 Item 2. Management's Discussion and Analysis of Financial Condition and ----------------------------------------------------------------- Results of Operations. ----------------------- Results of Operations - ---------------------- Net income for the first quarter increased 30.4% to $18.7 million, or $.44 per share, compared to $14.3 million or $.35 per share. The increases over 1994 resulted from increased profit growth in each of its businesses, as the Company capitalized on continuing strong demand for Staffing Services and its strategic positioning of HealthCare Services. Revenues increased $38 million or 7% to $575.5 million for the first quarter, as compared to $537.5 million for last year's first quarter. Staffing Services reported increased revenues of 26%, reflecting gains in volume and bill rates, as major corporate clients utilize the Company's services on an increasing basis. As anticipated, revenues for HealthCare Services declined 8% primarily due to the sale in the fourth quarter of operations to Columbia HCA and the resulting shift in certain Medicare business from company-owned to a managed operation under the Hospital Contract Program. Costs of services increased $27.1 million, or 7.2%, to $402.6 million for the quarter due primarily to the growth in revenues. As a percentage of revenues, such expenses increased .1% to 70% for the quarter. Gross margins as a percentage of revenues decreased to 30% for the quarter from 30.1% for last year's first quarter primarily as a result of the faster rate of growth of Staffing Services which operates at lower gross margins than HealthCare Services. Selling, general and administrative expenses for the first quarter increased $5.4 million, or 4%, to $140.2 million from $134.7 million last year. As a percentage of revenues, such expenses decreased .7% to 24.4% for the quarter as a result of the Company's ability to effectively manage operating costs and the transfer of former company-owned HealthCare operations to a managed business under the Hospital Contract Program. Net interest expense was $646 thousand and $2.2 million for the first quarters of 1995 and 1994, respectively. This primarily reflects borrowing costs on long-term debt offset by interest income on investments. The decrease resulted from repayment of debt in the second quarter of 1994 and increased income on investments from improved concentration and investment of operating cash. Liquidity and Capital Resources - -------------------------------- Working capital at April 2, 1995, including $89.1 million in cash, was $297.3 million. The Company has temporarily invested available funds primarily in short-term, interest-bearing investments. Included in cash was $24.8 million held in escrow pending approval by the Norwegian government of the acquisition of Norsk Personal A.S. 6 8 The Company has a revolving credit agreement with six banks for up to $200 million in borrowings and letters of credit. At April 2, 1995, there were no borrowings and $65 million in standby letters of credit outstanding. The Company believes that its levels of working capital and liquidity and its available sources of funds are sufficient to support present operations and to continue to fund future growth and business opportunities as the Company increases its scope of services. PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. ---------------------------------- (a) The following exhibit is filed herewith: Exhibit 27 - Financial Data Schedule (b) The Company has not filed any report on Form 8-K during the period for which this report is filed. 7 9 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 thereunto duly authorized. OLSTEN CORPORATION (REGISTRANT) Date: May 8, 1995 By: /s/ Frank N. Liguori ------------------------------ Frank N. Liguori Chairman and Chief Executive Officer Date: May 8, 1995 By: /s/ Anthony J. Puglisi ------------------------------- Anthony J. Puglisi Senior Vice President - Finance Chief Financial Officer 8 10 EXHIBIT INDEX Exhibit 27 - Financial Data Schedule EX-27 2 ARTICLE 5 FDS FOR 1ST QUARTER 10-Q
5 This schedule contains summary financial information extracted from The Olsten Corporation and Subsidiaries Consolidated Balance Sheets at April 2, 1995 (unaudited) and The Olsten Corporation and Subsidiaries Consolidated Statements of Income for the three months ended April 2, 1995 (unaudited) and is qualified in its entirety by reference to such financial statements. 1,000 3-MOS DEC-31-1995 APR-02-1995 89,131 0 336,197 12,959 0 453,114 136,953 55,397 737,887 155,812 0 4,170 0 0 399,527 737,887 575,503 575,503 402,602 402,602 139,422 735 1,405 32,098 13,385 18,702 0 0 0 18,702 .44 .43
-----END PRIVACY-ENHANCED MESSAGE-----