-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CU0ldIJHKiyQ5sXVoQSnCRD1RBKtyOUme03XwXeUHwi8MsX3SqR/yrFw4K4JsXqZ T34vqbMQQlkP7q6CfDa4tQ== 0000074386-98-000011.txt : 19980514 0000074386-98-000011.hdr.sgml : 19980514 ACCESSION NUMBER: 0000074386-98-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980329 FILED AS OF DATE: 19980513 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: SEC FILE NUMBER: 001-08279 FILM NUMBER: 98618464 BUSINESS ADDRESS: STREET 1: 175 BROAD HOLLOW RD CITY: MELVILLE STATE: NY ZIP: 11747 BUSINESS PHONE: 5168447800 MAIL ADDRESS: STREET 1: 175 BROAD HOLLOW RD CITY: MELVILLE STATE: NY ZIP: 11747 10-Q 1 OLSTEN CORP. FORM 10-Q FOR QUARTER ENDING 03/29/98 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 March 29, 1998 -------------- 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 ------------------- Not Applicable - -------------------------------------------------------------------------- (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 8, 1998 - ------------------------------------ ------------------------------ Common Stock, $.10 par value 68,164,160 shares Class B Common Stock, $.10 par value 13,150,228 shares INDEX ------- Page No. --------- PART I - FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheets - March 29, 1998 (Unaudited) and December 28, 1997 2 Consolidated Statements of Income (Unaudited) - Quarters Ended March 29, 1998 and March 30, 1997, respectively 3 Consolidated Statements of Cash Flows (Unaudited) - Three Months Ended March 29, 1998 and March 30, 1997, respectively 4 Notes to Consolidated Financial Statements (Unaudited) 5 - 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 - 8 PART II - OTHER INFORMATION Item 1. Legal Proceedings 9 Item 5. Other Information 9 - 10 Item 6. Exhibits and Reports on Form 8-K 11 SIGNATURES 12 PART I - FINANCIAL INFORMATION ITEM 1. Financial Statements. --------------------- Olsten Corporation Consolidated Balance Sheets (In thousands, except share amounts) March 29, 1998 December 28, 1997 ASSETS -------------- ----------------- (Unaudited) CURRENT ASSETS: Cash $ 29,910 $ 84,810 Receivables, net 855,929 847,419 Other current assets 93,672 90,715 ---------- ---------- Total current assets 979,511 1,022,944 FIXED ASSETS, NET 187,673 186,347 INTANGIBLES, NET 557,161 534,284 OTHER ASSETS 10,710 6,626 ---------- ---------- $1,735,055 $1,750,201 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accrued expenses $ 180,992 $ 152,239 Payroll and related taxes 87,081 86,071 Accounts payable 44,407 55,851 Insurance costs 30,878 41,270 --------- ---------- Total current liabilities 343,358 335,431 LONG-TERM DEBT 447,333 461,178 OTHER LIABILITIES 96,513 111,815 SHAREHOLDERS' EQUITY: Common stock $.10 par value; authorized 110,000,000 shares; issued 68,161,849 and 68,151,708 shares, respectively 6,816 6,815 Class B common stock $.10 par value; authorized 50,000,000 shares; issued 13,151,760 and 13,157,617 shares, respectively 1,315 1,316 Additional paid-in capital 447,292 447,297 Retained earnings 397,898 390,786 Accumulated other comprehensive income (5,470) (4,437) ---------- ---------- Total shareholders' equity 847,851 841,777 ---------- ---------- $1,735,055 $1,750,201 ========== ========== See notes to consolidated financial statements. Olsten Corporation Consolidated Statements of Income (In thousands, except share amounts) (Unaudited)
First Quarter Ended ------------------- March 29, March 30, 1998 1997 --------- -------- Service sales, franchise fees, management fees and other income $1,049,942 $950,851 Cost of services sold 783,885 695,892 ---------- --------- Gross profit 266,057 254,959 Selling, general and administrative expenses 236,860 218,971 Interest expense, net 5,906 4,148 --------- --------- Income before income taxes and minority interests 23,291 31,840 Income taxes 9,026 12,418 --------- --------- Income before minority interests 14,265 19,422 Minority interests 1,464 255 ---------- --------- Net income $ 12,801 $ 19,167 ========== ========= SHARE INFORMATION: Basic earnings per share: Net income $ .16 $ .24 ========== ========= Average shares outstanding 81,312 81,161 ========== ========= Diluted earnings per share: Net income $ .16 $ .24 ========== ========= Average shares outstanding 81,467 83,012 ========== =========
See notes to consolidated financial statements. Olsten Corporation Consolidated Statements of Cash Flows (In thousands) (Unaudited) Three Months Ended ------------------ March 29, 1998 March 30, 1997 -------------- -------------- OPERATING ACTIVITIES: Net income $ 12,801 $ 19,167 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 14,541 12,097 Changes in assets and liabilities, net of effects from acquisitions and dispositions: Accounts receivable and other current assets (15,703) (45,514) Current liabilities (17,307) (2,190) Other, net (10,551) (2,833) --------- --------- NET CASH USED IN OPERATING ACTIVITIES (16,219) (19,273) --------- --------- INVESTING ACTIVITIES: Purchases of fixed assets (13,048) (20,729) Acquisitions of businesses including franchises, net of cash acquired (2,306) (27,492) Sale of investment securities -- 9,415 --------- --------- NET CASH USED IN INVESTING ACTIVITIES (15,354) (38,806) --------- --------- FINANCING ACTIVITIES: Net repayment of line of credit agreements (10,000) (4,786) Repayment of notes payable (6,202) -- Cash dividends (5,689) (5,680) Issuances of common stock under stock plans 54 377 --------- --------- NET CASH USED IN FINANCING ACTIVITIES (21,837) (10,089) --------- --------- EFFECT OF EXCHANGE RATE CHANGES ON CASH (1,490) -- --------- --------- NET DECREASE IN CASH (54,900) (68,168) CASH AT BEGINNING OF PERIOD 84,810 105,725 --------- --------- CASH AT END OF PERIOD $ 29,910 $ 37,557 ========= ========= NON-CASH TRANSACTIONS: Assets acquired through the issuance of a note $ -- $ 19,535 Issuance of restricted stock $ -- $ 6,437 See notes to consolidated financial statements. Olsten Corporation Notes to Consolidated Financial Statements (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. Interest Expense, Net --------------------- Interest expense, net, consists primarily of interest on long-term debt for the quarter of $6.8 million in 1998 and $6 million in 1997, offset by interest income from investments of $900 thousand and $2 million for 1998 and 1997, respectively. 3. Acquisitions ------------ Under the terms of the 1997 purchase agreement for Sogica S.A., an additional payment of $31 million related to their 1997 results of operations was paid in the second quarter of 1998 and is included in accrued expenses as of March 29, 1998. During the first three months of 1998, the Company purchased various businesses which were accounted for by the purchase method of accounting. The aggregate cash outlay for these acquisitions was $2.3 million. 4. Adoption of SFAS 130, "Reporting Comprehensive Income" ------------------------------------------------------ As of December 29, 1998, the Company adopted Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS 130"). SFAS 130 establishes new rules for the reporting and display of comprehensive income and its components; however, the adoption of this Statement had no impact on the Company's net income or shareholders' equity. SFAS 130 requires unrealized gains or losses on the Company's foreign currency translation adjustments, which prior to adoption were reported separately in shareholders' equity to be included in other comprehensive income. Prior year financial statements have been reclassified to conform to the requirements of SFAS 130. During the first quarter of 1998 and 1997, total comprehensive income amounted to $11.8 million and $20.1 million, respectively. 5. Subsequent Event ---------------- In May 1998, the Company's wholly-owned Dutch subsidiary, Olsten International B.V., was the issuer in a public offering of 800 million French franc (approximately U.S. $133 million) 6 percent Euronotes due 2008, which are fully guaranteed by the Company. The net proceeds of the debt offering will be used to repay existing indebtedness and for general financing purposes of the issuer and its related companies. Item 2. Management's Discussion and Analysis of Financial Condition and ----------------------------------------------------------------- Results of Operations. ----------------------- Results of Operations - ---------------------- Net income for the first quarter of 1998 decreased 33 percent to $12.8 million, or $.16 per share, compared to $19.2 million, or $.24 per share for last year's first quarter. Revenues increased $99 million or 10 percent to $1.05 billion for the first quarter, as compared to $951 million for last year's first quarter. Staffing Services reported increased revenues of 22 percent to $716 million for the first quarter over last year's first quarter of $587 million. Acquisitions accounted for approximately 13 percent of the first quarter revenue growth, European operations contributed 4 percent, with the remaining 5 percent primarily attributable to internal growth in North American information technology and professional services operations, while traditional services were relatively flat. Health Services' revenues declined 8 percent to $332 million for the first quarter compared to $359 million for the same period in 1997. The decline in Health Services' revenues was due to decreases in both Medicare nursing visits and in management fees generated by hospital-based home health agencies. The recently enacted Medicare Interim Payment System, continued Federal Government focus on the home care industry and the reluctance of physicians to refer patients to home care have negatively impacted the Medicare segment of both businesses. An overall increase in Network Services, Infusion Services and other Health Services' business lines partly offset the above. Cost of services sold increased $88 million, or 12.6 percent, to $784 million for the first quarter of 1998 from $696 million for the same period in 1997 due primarily to the growth in revenues. Gross profit margins, as a percentage of revenues, decreased to 25.3 percent for the first quarter from 26.8 percent for last year's first quarter. Staffing Services' gross profit margin increased primarily as a result of profit improvements in Europe, with improved utilization and bill rates, particularly in Germany, offset by a decline in the U.S. Information Technology division related to an increased level of large contracts which are at lower margins. Health Services' gross profit margin decreased due to the decline in Medicare and health management volume and increased costs related to the servicing of capitated contracts. Selling, general and administrative expenses increased $18 million, or 8.2 percent, to $237 million for the first quarter from $219 million for the same period in 1997. The increase in the quarter results from significant investments in new systems, infrastructure, development of professional services divisions and the inclusion in our first quarter of 1998 Sogica S.A. results, which was acquired in the second quarter of 1997. As a percentage of revenues, such expenses were essentially flat at 23 percent compared to last year's first quarter Net interest expense was $5.9 million and $4.1 million for the first quarters of 1998 and 1997, respectively. Net interest primarily reflected borrowing costs on long-term debt offset by interest income on investments. The increase resulted from interest expense incurred as the Company continued to fund its acquisition program. Liquidity and Capital Resources - -------------------------------- Working capital decreased from $688 million at December 28, 1997 to $636 million at March 29, 1998. Cash decreased $55 million primarily as a result of a $10 million pay down of line of credit agreements; $13 million for capital expenditures and a $16 million decrease in cash from operations. Accounts receivable and other current assets increased $16 million for the three months. This increase is primarily attributed to revenue growth, as well as consolidated billing requirements of large corporate accounts in the staffing services division, coupled with revenue growth of managed care and infusion therapy accounts, which impacted the timing of the collection process. In May 1998, the Company's wholly-owned Dutch subsidiary, Olsten International B.V., was the issuer in a public offering of 800 million French franc (approximately U.S. $133 million), 6 percent Euronotes due 2008, which are fully guaranteed by the Company. The net proceeds of the debt offering will be used to repay existing indebtedness and for general financing purposes of the issuer and its related companies. The Company has a revolving credit agreement with a consortium of eleven banks for up to $400 million in borrowings and letters of credit. As of March 29, 1998, there were $162 million in borrowings outstanding and $47 million in standby letters of credit. The Company has invested available funds in short-term, interest-bearing investments. The Company believes that its levels of working capital, liquidity and 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. OTHER - ----- INFORMATION CONTAINED HEREIN, OTHER THAN HISTORICAL INFORMATION, SHOULD BE CONSIDERED FORWARD-LOOKING AND IS SUBJECT TO VARIOUS RISK FACTORS AND UNCERTAINTIES. FOR INSTANCE, THE COMPANY'S STRATEGIES AND OPERATIONS INVOLVE RISKS OF COMPETITION, CHANGING MARKET CONDITIONS, CHANGES IN LAWS AND REGULATIONS AFFECTING THE COMPANY'S INDUSTRIES AND NUMEROUS OTHER FACTORS DISCUSSED IN THIS DOCUMENT AND IN OTHER COMPANY FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. ACCORDINGLY, ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN ANY FORWARD-LOOKING STATEMENTS CONTAINED HEREIN. PART II - OTHER INFORMATION Item 1. Legal Proceedings. ------------------ By Order of the Magistrate Judge dated May 4, 1998 (the "Order"), the United States District Court for the Eastern District of New York consolidated the four previously disclosed purported class action lawsuits pending against Olsten and certain of its officers and directors, Weichman v. Olsten Corporation, et al., No. CV 97-1946; Goldman v. Olsten Corporation, et al., No. CV 97-4501; Waldman v. Olsten Corporation, et al., No. CV 97-5056; and Cannold v. Olsten Corporation, et al., No. CV 97-5408. (The Weichman, Goldman, Waldman and Cannold lawsuits are referred to collectively herein as the "Class Action.") The Order also appointed a Lead Plaintiff, selected Plaintiffs' Lead Counsel and directed the Lead Plaintiff to file a Consolidated Amended Complaint within 21 days of the entry of the Order. It is possible that one or more of the parties to the Class Action will object to part or all of the Order and petition the United States District Judge to review the Order. While the Company is unable at this time to assess the probable outcome of the Class Action or the materiality of the risk of loss in connection therewith (given the preliminary stage of the Class Action and the fact that the Consolidated Amended Complaint has not yet been served), the Company believes that it acted responsibly with respect to its shareholders and intends to vigorously defend the Class Action. Item 5. Other Information. ------------------ The Company's home health care business is subject to extensive federal and state regulations which govern, among other things, Medicare, Medicaid, CHAMPUS and other government-funded reimbursement programs, reporting requirements, certification and licensure standards for certain home health agencies and, in some cases, certificate-of-need and pharmacy-licensing requirements. The Company is also subject to a variety of federal and state regulations which prohibit fraud and abuse in the delivery of health care services, including, but not limited to, prohibitions against the offering or making of direct or indirect payments for the referral of patients. As part of the extensive federal and state regulation of the Company's home health care business, the Company is subject to periodic audits, examinations and investigations conducted by or at the direction of governmental investigatory and oversight agencies. Violation of the applicable federal and state regulations can result in a health care provider's being excluded from participation in the Medicare, Medicaid and/or CHAMPUS programs, and can subject the provider to civil and/or criminal penalties. The Company continues to cooperate with the previously disclosed health care industry investigations being conducted by certain governmental agencies (collectively, the "Heathcare Investigations"). Among the Healthcare Investigations with which Olsten continues to cooperate is that being conducted into the Company's preparation of Medicare cost reports by the Office of Investigations section of the Office of Inspector General (an agency within the U.S. Department of Health & Human Services) and the U.S. Department of Justice. The Company also continues to cooperate with the U.S. Department of Justice and other federal agencies investigating the relationship between Columbia/HCA Healthcare Corporation and Olsten in connection with the purchase, sale and operation of certain home health agencies which are now owned by Columbia/HCA and managed under contract by Olsten Health Management, a unit of Olsten Health Services that provides management services to hospital-based home health agencies. Olsten continues to cooperate with various state and federal agencies, including the U.S. Department of Justice, the Office of the Attorney General of New Mexico and the New Mexico Health Care Anti-Fraud Task Force ("Task Force"), in connection with their investigations into certain health care practices of Quantum Health Resources ("Quantum"). Among the matters into which those agencies are inquiring are allegations of improper billing and fraud against various federally-funded medical assistance programs on the part of Quantum and its post-acquisition successor, the Infusion Therapy Services division of Olsten Health Services. Most of the time period which the Company understands to be at issue in the Task Force investigation predates Olsten's June 1996 acquisition of Quantum. The Company believes that certain of the Healthcare Investigations may have been triggered by or given rise to lawsuits under federal and/or state whistleblower statutes against Olsten and/or Quantum. Notwithstanding the Company's continuing cooperation with the Healthcare Investigations, Olsten has been notified that it is a target of a federal grand jury investigation by the U.S. Attorney's Office for the Southern District of Florida, which investigation Olsten believes focuses upon the Company's above-referenced relationship with Columbia/HCA in connection with the purchase, sale and operation of certain home health agencies. In addition to the U.S. Attorney's Office for the Southern District of Florida, other agencies of the federal and/or state governments may regard the Company and/or certain of its employees as subjects or targets of one or more of the other Healthcare Investigations. If Olsten were to be found to have violated the laws and regulations at issue in the Healthcare Investigations, the Company could be subjected to a variety of sanctions, including substantial monetary fines, civil and/or criminal penalties and exclusion from participation in the Medicare, Medicaid and/or CHAMPUS programs. While the Company is unable at this time to predict the ultimate outcome of the Healthcare Investigations, any one of the foregoing sanctions could have a material adverse effect upon the Company's financial position and results of operations. Item 6. Exhibits and Reports on Form 8-K. --------------------------------- (a) The following exhibits are filed herewith: Exhibit 10 - Amendment No. 2, dated as of February 24, 1998, to Credit Agreement, dated as of August 9, 1996, as amended, among the Company, the Banks signatory thereto and The Chase Manhattan Bank, as Agent, covering $400 million credit facility. 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. 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 13, 1998 /s/ Frank N. Liguori -------------------- Frank N. Liguori Chairman and Chief Executive Officer Date: May 13, 1998 /s/ Anthony J. Puglisi ---------------------- Anthony J. Puglisi Senior Vice President and Chief Financial Officer EX-10 2 AMENDMENT NO.2 - CREDIT AGREEMENT AMENDMENT NO. 2 CREDIT AGREEMENT AMENDMENT NO. 2 TO CREDIT AGREEMENT, dated as of February 24, 1998 (this "Amendment No. 2"), among OLSTEN CORPORATION, a corporation organized under the laws of the State of Delaware (the "Borrower"), each of the Banks which is signatory hereto and THE CHASE MANHATTAN BANK, a New York banking corporation, as agent for the Banks (in such capacity, the "Agent"). RECITALS: --------- A. The parties hereto entered into that certain Credit Agreement, dated as of August 9, 1996, as amended by Amendment No. 1, dated as of August 27, 1997 (the "Credit Agreement"). B. The Borrower has requested that the Credit Agreement be amended as set forth herein, and certain requirements under the Credit Agreement be waived, as specified herein, and the Banks have agreed to such amendment and waiver, subject to the terms and conditions of this Amendment No. 2. C. Any capitalized terms used herein and not defined herein shall have the meanings ascribed to such terms in the Credit Agreement. NOW, THEREFORE, the parties hereto agree as follows: ARTICLE 1. AMENDMENTS TO CREDIT AGREEMENT The amendments set forth in this Amendment No. 2 shall be deemed to be an amendment to the Credit Agreement and shall not be construed in any way as a replacement or substitution therefor. All of the terms and provisions of this Amendment No. 2 are hereby incorporated by reference into the Credit Agreement as if such terms were set forth in full therein. Section 1.1. "Schedule 6.10" to the Credit Agreement is hereby amended by adding new paragraph d. immediately following and below the last sentence of paragraph c. under the heading "2) Long Term Debt:", which new paragraph d. shall be and read in its entirety as follows: "d. The issuance by Olsten International B.V., a corporation organized and existing under the laws of the Netherlands and a wholly-owned subsidiary of the Borrower ("Olsten B.V.") of up to $US 300,000,000 principal amount due on a date which is not less than seven years, but not more than twelve years from the date of issuance thereof (the "Olsten B.V. Notes"), of which up to $US 200,000,000 shall be denominated in French Francs and underwritten by Credit Lyonnais, as lead manager and up to $US 100,000,000 shall be denominated in Deutsche Marks and underwritten by SBC Warburg Dillon Read Inc., as lead manager." Section 1.2. Schedule 6.10 to the Credit Agreement is further amended by adding a new paragraph c. immediately following and below the last sentence of paragraph b. under the heading "3) Guarantees:" which new paragraph c. shall be and read in its entirety as follows: "c. Unconditional guarantee by the Borrower of the payment obligations of Olsten B.V. with respect to the Olsten B.V. Notes." Section 1.3. Section 8.3(a) of the Credit Agreement is hereby amended by adding a new subclause (vii) immediately following and below clause (a)(vi) thereof, and immediately above clause (b), which new subclause (vii) shall be and read in its entirety as follows: "(vii) the repurchase of shares by Borrower of its issued and outstanding Common Stock, par value $.10 per share, in an amount up to $US 100,000,000, provided, however, that such share repurchase does not result in a Default or an Event of Default hereunder, including without limitation, Article 9 hereof." ARTICLE 2. REPRESENTATIONS AND WARRANTIES The Borrower hereby represents and warrants to the Banks that: Section 2.1. Except to the extent previously disclosed in writing to the Banks, each and every of the representations and warranties set forth in Article 6 of the Credit Agreement is true as of the date hereof with respect to the Borrower and, to the extent applicable, the Guarantor and each of their Subsidiaries and with the same effect as though made on the date hereof, and is hereby incorporated herein in full by reference as if fully restated herein in its entirety. In addition, in order to induce the Banks to enter into this Amendment, the Borrower hereby covenants, represents and warrants to the Banks that since December 28, 1997, there has been no material adverse change in the business, operations, properties or financial condition of the Borrower or of the Borrower, Guarantor and their Subsidiaries taken as a whole. Section 2.2. To induce the Banks and the Agent to enter into this Amendment No. 2 and to continue to make advances to the Borrower pursuant to the Credit Agreement, as amended hereby, the Borrower hereby acknowledges and agrees that, as of the date hereof, and after giving effect to the terms hereof, there exists (i) no Event of Default (or any event which, with the giving of notice or the passage of time, or both, would constitute an Event of Default); and (ii) no right of offset, defense, counterclaim, claim or objection in favor of the Borrower arising out of or with respect to any of the Obligations. Section 2.3. The Borrower has the corporate power and authority to enter into, perform and deliver this Amendment No. 2 and any other documents, instruments, agreements or other writings to be delivered in connection herewith. This Amendment No. 2 and all documents contemplated hereby or delivered in connection herewith, have each been duly authorized, executed and delivered and the transactions contemplated herein have been duly authorized. Section 2.4. This Amendment No. 2 and any other documents, agreements or instruments now or hereafter executed and delivered to the Banks by the Borrower in connection herewith constitute (or shall, when delivered, constitute) valid and legally binding obligations of Borrower, each of which is and shall be enforceable against Borrower in accordance with their respective terms. Section 2.5. No representation, warranty or statement by the Borrower contained herein or in any other document to be furnished by the Borrower in connection herewith contains, or at the time of delivery shall contain, any untrue statement of material fact, or omits or at the time of delivery shall omit to state a material fact necessary to make such representation, warranty or statement not misleading. Section 2.6. No consent, waiver or approval of any entity is or will be required in connection with the execution, delivery, performance, validity or enforcement of this Amendment No. 2, or any other agreements, instruments or documents to be executed and/or delivered in connection herewith or pursuant hereto. ARTICLE 3. MISCELLANEOUS Section 3.1. This Amendment No.2 may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any party hereto may execute this Amendment No. 2 by signing any such counterpart. Section 3.2. This Amendment No.2 shall be effective when, and only when, the Agent shall have received counterparts of this Amendment No. 2 executed by the Borrower and each of the Banks. Section 3.3. This Amendment No.2 shall be governed by, and interpreted and construed in accordance with, the laws of the State of New York (without giving effect to the conflict of laws provisions thereof). Section 3.4. On and after the effective date of this Amendment No. 2, each reference in the Credit Agreement to "this Agreement", "hereunder", "hereof" or words of like import referring to the Credit Agreement, and each reference in the Facility Documents to "the Credit Agreement", "thereunder", "thereof" or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement as amended by this Amendment No. 2. The Credit Agreement, as amended by this Amendment No. 2, is and shall continue to be in full force and effect and is hereby in all respects ratified and confirmed. Section 3.5. The Borrower agrees to take such further actions as the Agent shall reasonably request in connection herewith to evidence the amendments herein contained to the Credit Agreement. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the day and year first above written. OLSTEN CORPORATION By:/s/ Laurin L. Laderoute, Jr. ---------------------------- Name: Laurin L. Laderoute, Jr. Title: Vice President THE CHASE MANHATTAN BANK, as Agent and a Bank By:/s/ Sallyanne K. Ballweg ------------------------ Name: Sallyanne K. Ballweg Title: Vice President NATIONSBANK, N.A. By:/s/ Michael Sylvester --------------------- Name: Michael Sylvester Title: Vice President WELLS FARGO BANK, N.A. By:/s/ Frieda Youlios and Judy A. Vodhanel --------------------------------------- Name:Frieda Youlios and Judy A. Vodhanel Title: Vice President and Vice President DRESDNER BANK AG, New York Branch and Grand Cayman Branch By:/s/ A. Nesi ----------- Name: A. Nesi Title: Vice President By:/s/ Felix K. Camacho -------------------- Name: Felix K. Camacho Title: Assistant Treasurer FIRST UNION NATIONAL BANK By:/s/ John J. Wedemeyer --------------------- Name: John J. Wedemeyer Title: Sr. Vice President FLEET BANK, NATIONAL ASSOCIATION By:/s/ Philip A. Davi ------------------ Name: Philip A. Davi Title: Vice President CREDIT LYONNAIS, NEW YORK BRANCH By:/s/ Vladimir Labun ------------------ Name: Vladimir Labun Title: First Vice President - Manager EUROPEAN AMERICAN BANK By:/s/ Richard Romano ------------------ Name: Richard Romano Title: Vice President KEYBANK NATIONAL ASSOCIATION By:/s/ Marianne T. Meil -------------------- Name: Marianne T. Meil Title: Vice President MARINE MIDLAND BANK By:/s/ Robin M. Coleman -------------------- Name: Robin M. Coleman Title: Vice President THE BANK OF NEW YORK By:/s/ Russell A. Burr ------------------- Name: Russell A. Burr Title: Senior Vice President EX-27 3 ARTICLE 5 FDS FOR 1ST QUARTER 10-Q
5 This schedule contains summary financial information extracted from Olsten Corporation and Subsidiaries Consolidated Balance Sheets at March 29, 1998 (unaudited) and Olsten Corporation and Subsidiaries Consolidated Statements of Income for the three months ended March 29, 1998 (unaudited) and is qualified in its entirety by reference to such financial statements. 1,000 3-MOS JAN-03-1999 MAR-29-1998 29,910 0 878,208 22,279 0 93,672 325,870 138,197 1,704,512 312,815 0 0 0 8,131 839,720 1,704,512 1,049,942 1,049,942 783,885 783,885 0 0 6,812 23,291 9,026 12,801 0 0 0 12,801 .16 .16
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