-----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, NyU2zEjpQ+SCYkFBSva7XAIEBExwK6KJaiIH5U8zH3Rj+sNuJ1EwFYm543G9sqa2 BDBUTy8NLvmipaQFEp5jaQ== 0000898430-98-002659.txt : 19980727 0000898430-98-002659.hdr.sgml : 19980727 ACCESSION NUMBER: 0000898430-98-002659 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19980612 FILED AS OF DATE: 19980724 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PINKERTONS INC CENTRAL INDEX KEY: 0000078666 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-DETECTIVE, GUARD & ARMORED CAR SERVICES [7381] IRS NUMBER: 135318100 STATE OF INCORPORATION: DE FISCAL YEAR END: 1227 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-03017 FILM NUMBER: 98670876 BUSINESS ADDRESS: STREET 1: 15910 VENTURE BLVD STE 900 CITY: ENCINO STATE: CA ZIP: 91436-3095 BUSINESS PHONE: 8183808800 MAIL ADDRESS: STREET 1: 15910 VENTURA BLVD., SUITE 900 CITY: ENCINO STATE: CA ZIP: 91436-2810 10-Q 1 FORM 10-Q ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 12, 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: 1-11841 PINKERTON'S, INC. (Exact name of registrant as specified in its charter) Delaware 13-5318100 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization)
15910 Ventura Boulevard, Suite 900, Encino, California 91436-2810 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (818) 380-8800 Not Applicable (Former name, former address, and formal 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 --- --- The number of shares of the Registrant's Common Stock, par value $.001 per share, outstanding on July 10, 1998 was 12,648,206. ================================================================================ PINKERTON'S, INC. AND SUBSIDIARIES FORM 10-Q INDEX
PART I. FINANCIAL INFORMATION Page No. -------- Item 1. Condensed Financial Statements (Unaudited) Consolidated Balance Sheets- June 12, 1998 and December 26, 1997....................................................3 Consolidated Statements of Operations- For the Quarters and Six Periods Ended June 12, 1998 and June 13, 1997.................4 Consolidated Statements of Cash Flows- For the Six Periods Ended June 12, 1998 and June 13, 1997..............................5 Notes to Consolidated Financial Statements...............................................6-7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.........................................................8-10 PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders...............................11 Item 6. Exhibits and Reports on Form 8-K..................................................11 Signatures..................................................................................12
2 PART I. FINANCIAL INFORMATION Item 1. Financial Statements Pinkerton's, INC. and Subsidiaries CONSOLIDATED BALANCE SHEETS (in thousands)
June 12, 1998 December 26, ASSETS (Unaudited) 1997 --------------------- --------------------- Current assets: Cash and cash equivalents $ 14,770 $ 24,243 Investment in marketable securities 22,000 - Accounts receivable (includes unbilled amounts of $30,016 in 1998 and $32,397 in 1997) 148,363 149,668 Less allowance for doubtful receivables 2,674 2,948 -------- -------- 145,689 146,720 -------- -------- Inventory 4,634 4,190 Prepaid expenses 5,633 8,111 Deferred income taxes 6,652 6,129 -------- -------- Total current assets 199,378 189,393 -------- -------- Equipment and leasehold improvements, net of accumulated depreciation and amortization of $29,506 in 1998 and $29,685 in 1997 15,368 16,745 Other assets: Intangible assets, net 58,946 68,210 Deferred income taxes 27,465 24,924 Other 25,560 24,924 -------- -------- 111,971 118,058 -------- -------- $326,717 $324,196 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 12,910 $ 14,021 Accrued liabilities 86,146 80,198 Income taxes payable 5,035 - Current maturities of long-term debt 8,575 8,575 -------- -------- Total current liabilities 112,666 102,794 -------- -------- Accrued retirement benefits and other non-current liabilities 54,370 52,754 Long-term debt, less current maturities 24,323 25,019 Commitments and contingencies Stockholders' equity: Common stock 13 12 Additional paid-in capital 76,251 75,329 Accumulated other comprehensive income (8,042) (7,368) Retained earnings 67,136 75,656 -------- -------- 135,358 143,629 -------- -------- $326,717 $324,196 ======== ======== See accompanying notes to condensed consolidated financial statements.
3 Pinkerton's, Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share data)
For the Quarter Ended For the Six Periods Ended ------------------------------- ------------------------------- June 12, 1998 June 13, 1997 June 12, 1998 June 13, 1997 -------------- -------------- -------------- -------------- Service revenues $234,301 $230,789 $465,596 $451,257 Cost of services 206,693 203,191 410,973 397,524 -------- -------- -------- -------- Gross profit 27,608 27,598 54,623 53,733 Operating expenses 24,154 19,900 46,009 38,850 Amortization of intangible assets 1,899 1,824 3,789 4,444 Write-down of long-lived assets and other special charges 9,853 - 9,853 - -------- -------- -------- -------- Operating profit (loss) (8,298) 5,874 (5,028) 10,439 Other (income) deductions: Interest income (177) (360) (422) (693) Interest expense 872 1,111 1,722 2,272 -------- -------- -------- -------- 695 751 1,300 1,579 -------- -------- -------- -------- Income (loss) before income taxes (8,993) 5,123 (6,328) 8,860 Provision for income taxes 992 2,408 2,192 4,164 -------- -------- -------- -------- Net income (loss) $ (9,985) $ 2,715 $ (8,520) $ 4,696 ======== ======== ======== ======== Basic earnings (loss) per share $(.79) $.22 $(.68) $.37 ======== ======== ======== ======== Diluted earnings (loss) per share $(.79) $.21 $(.68) $.36 ======== ======== ======== ========
See accompanying notes to condensed consolidated financial statements. 4 Pinkerton's, Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands)
For the Six Periods Ended ----------------------------------------------------- June 12, 1998 June 13, 1997 ------------------------- ------------------------- OPERATING ACTIVITIES: Net income (loss) $ (8,520) $ 4,696 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Amortization of intangible assets 3,789 4,444 Depreciation and other amortization 4,027 3,399 Provision for losses on doubtful receivables 479 290 Deferred income taxes (3,064) (1,612) Write-down of long-lived assets and other special charges 7,891 - Provision for relocation costs 1,962 - Changes in assets, liabilities and stockholders' equity: Accounts receivable 552 (5,728) Inventory (444) 701 Prepaid expenses and taxes 2,478 2,678 Other assets (140) (2,670) Accounts payable (1,111) (1,028) Accrued and other non-current liabilities 5,297 548 Income taxes payable 5,035 2,286 Foreign currency revaluation of net assets (2) (340) -------- -------- Net cash provided by operating activities 18,229 7,664 -------- -------- INVESTING ACTIVITIES: Purchase of marketable securities (22,000) (3,081) Sales/redemptions of marketable securities - 9,534 Purchase of equipment and leasehold improvements (6,063) (3,867) Payments for net assets of acquired businesses, net of cash acquired - (21,453) -------- -------- Net cash used in investing activities (28,063) (18,867) -------- -------- FINANCING ACTIVITIES: Principal payments on long-term debt (562) (592) Exercise of stock options 923 153 -------- -------- Net cash provided by (used in) financing activities 361 (439) -------- -------- Net decrease in cash and cash equivalents (9,473) (11,642) Cash and cash equivalents at beginning of year 24,243 33,761 -------- -------- Cash and cash equivalents at end of period $ 14,770 $ 22,119 ======== ========
See accompanying notes to condensed consolidated financial statements. 5 Pinkerton's, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) PRESENTATION OF FINANCIAL INFORMATION The condensed consolidated financial statements included herein have been prepared by the Company and include all adjustments which are, in the opinion of management, necessary for a fair presentation of the financial position and the results of operations as of and for the fiscal quarters and six periods ended June 12, 1998 and June 13, 1997. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted, although the Company believes the disclosures in these condensed consolidated financial statements are adequate to make the information presented not misleading. The following material is written with the presumption that the users of the interim financial statements have read or have access to the Company's Form 10-K filed with the Securities and Exchange Commission for the fiscal year ended December 26, 1997 and the Company's 1997 Annual Report to Stockholders. The 1997 Annual Report contains the latest audited consolidated financial statements and notes thereto, together with Management's Discussion and Analysis of Financial Condition and Results of Operations as of December 26, 1997 and for the year then ended. The results of operations for the fiscal quarters and six periods ended June 12, 1998 and June 13, 1997 are not necessarily indicative of the results for a full year. (2) ACCOUNTING CYCLE Pinkerton's fiscal year comprises the 52-week (or 53-week) period ending on the Friday closest to December 31, within the reporting year. The Company's quarterly reporting periods generally consist of three four-week periods for the first, second and third quarters, and four four-week periods for the fourth quarter. (3) EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings (loss) per share:
For the Quarter Ended For the Six Periods Ended In thousands, ------------------------------ ------------------------------ except per share data June 12, 1998 June 13, 1997 June 12, 1998 June 13, 1997 - ---------------------------------------------------------------------------------------------------------- Numerator: Net income (loss) $(9,985) $ 2,715 $(8,520) $ 4,696 ================================================================== DENOMINATOR: Denominator for basic earnings per share - weighted average common shares outstanding 12,630 12,549 12,610 12,548 Effect of dilutive securities: Employee stock options - 434 - 409 ------------------------------------------------------------------ Denominator for diluted earnings per share - weighted average common shares and dilutive potential common shares outstanding 12,630 12,983 12,610 12,957 ================================================================== Basic earnings (loss) per share $ (.79) $ .22 $ (.68) $ .37 Diluted earnings (loss) per share $ (.79) $ .21 $ (.68) $ .36 ==================================================================
6 For both the quarter and six periods ended June 12, 1998, employee stock options relating to 694,000 shares, and for the six periods ended June 13, 1997, employee stock options relating to 248,000 shares, were not included in the computation of diluted earnings (loss) per share because the options' exercise prices were greater than the average market price of the common shares, and therefore, the effect would be antidilutive. In addition, employee stock options relating to 591,000 shares and 624,000 shares for the quarter and six periods ended June 12, 1998, respectively, were not included in the computation of diluted (loss) per share because their effect is antidilutive due to the net loss. (4) COMPREHENSIVE INCOME The Company adopted the reporting required in SFAS No. 130, Reporting Comprehensive Income. The following table shows the Company's comprehensive income:
For the Quarter Ended For the Six Periods Ended ------------------------------ ------------------------------- In thousands June 12, 1998 June 13, 1997 June 12, 1998 June 13, 1997 - ----------------------------------------------------------------------------------------------------------- Net income (loss) $ (9,985) $2,715 $(8,520) $4,696 Other comprehensive income, net of tax: Foreign currency translation adjustments (397) 69 (674) (688) ------------------------------------------------------------------ Comprehensive income (loss) $(10,382) $2,784 $(9,194) $4,008 ==================================================================
(5) WRITE-DOWN OF LONG-LIVED ASSETS AND OTHER SPECIAL CHARGES The Company accrued $1,962,000 for lease termination and moving costs in connection with the finalization of a lease agreement on the new location for corporate offices. The move is expected to commence in September, 1998. Other write-downs for goodwill and fixed assets associated with the Company's United Kingdom and System Integration operations were recorded in the second quarter. These write-downs and other costs amounted to $7,891,000. The Company has determined that these assets are not recoverable and has written them off. (6) NEWLY ISSUED ACCOUNTING STANDARDS The Company will implement the provisions of Financial Accounting Standards Board No. 133, Accounting for Derivative Instruments and Hedging Activities, effective June 15, 1999. The Company expects that the implementation of this new accounting standard will not have a material impact on the reported earnings per share. (7) SUBSEQUENT EVENTS The Board of Directors has authorized the repurchase of up to 500,000 shares of the Company's common stock. These shares may be purchased in the open market with the timing and terms of such purchases to be determined by management based on market conditions. Any such purchases would be made from cash on-hand and any shares acquired would be held as treasury shares. 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE QUARTERS AND SIX PERIODS ENDED JUNE 12, 1998 AND JUNE 13, 1997. Pinkerton's fiscal year comprises the 52-week (or 53-week) period ending on the Friday closest to December 31, within the reporting year. The Company's quarterly reporting periods consist of three four-week periods for the first, second and third quarters, and four four-week periods for the fourth quarter. RESULTS OF OPERATIONS Service Revenues - The Company's service revenues increased by $3.5 million, or 1.5%, from $230.8 million in the second quarter of 1997 to $234.3 million in the second quarter of 1998. For the six periods ended June 12, 1998 and June 13, 1997, service revenues increased by $14.3 million, or 3.2%, from $451.3 million in 1997 to $465.6 in 1998. Domestic Service Revenues - The Company's domestic service revenues increased by $5.3 million, or 2.9%, from $185.9 million in the second quarter of 1997 to $191.2 million in the second quarter of 1998. For the six periods ended June 12, 1998 and June 13, 1997, domestic service revenues increased by $19.6 million, or 5.4%, from $362.6 million in 1997 to $382.2 million in 1998. These increases reflect revenues from additional business. International Service Revenues - Service revenues of the Company's international operations decreased by $1.8 million, or 4.0%, from $44.9 million in the second quarter of 1997 to $43.1 million in the second quarter of 1998. For the six periods ended June 12, 1998 and June 13, 1997, service revenues of the Company's international operations decreased by $5.3 million or 6.0%, from $88.7 million in 1997 to $83.4 million in 1998. The decrease in the second quarter reflects reductions arising from currency fluctuations of $1.3 million and a $0.5 million decrease resulting primarily from lower revenues at the Company's United Kingdom subsidiary. The decrease in the six periods reflects reductions arising from currency fluctuations of $2.6 million and a $2.7 million decrease resulting primarily from lower revenues at the Company's United Kingdom subsidiary. Cost of Services and Gross Profit - The Company's cost of services increased by $3.5 million, or 1.7%, from $203.2 million in the second quarter of 1997 to $206.7 million in the second quarter of 1998. Cost of services in the first six periods of 1997 increased by $13.5 million, or 3.4%, from $397.5 in 1997 to $411.0 million in 1998. This increase was primarily due to payroll and related expenses accompanying the increase in service revenues, noted above and higher insurance and risk costs. Gross profit as a percentage of service revenues decreased from 12.0% in the second quarter of 1997 to 11.8% in the second quarter of 1998. For the six periods ended June 12, 1998 and June 13, 1997, the gross profit percentage decreased from 11.9% in 1997 to 11.7% in 1998. Operating Expenses - Operating expenses increased by $4.3 million, or 21.6%, from $19.9 million in the second quarter of 1997 to $24.2 million in the second quarter of 1998. For the six periods ended June 12, 1998 and June 13, 1997, operating expenses increased by $7.1 million, or 18.3%, from $38.9 million in 1997 to $46.0 million in 1998. As a percentage of service revenues, operating expenses were 10.3% and 9.9% respectively for the quarter and six periods ended June 12, 1998, and 8.6% for both the comparable 1997 periods. Higher operating expenses in the second quarter resulted from 8 higher operating expenses at the Company's systems integration businesses, continuing high operating expenses at the Company's United Kingdom subsidiary as well as the Company's share of losses from its equity investment in Chile amounting to $691,000. Higher operating expenses for the first half reflect the items discussed above as well a provision for closing an administrative office in Germany recorded in the first quarter. Write-Down of Long-Lived Assets and Other Special Charges - The Company accrued $1,962,000 for lease termination and moving costs in connection with the finalization of a lease agreement on the new location for corporate offices. The move is expected to commence in September, 1998. Other write-downs for goodwill and fixed assets associated with the Company's United Kingdom and System Integration operations were recorded in the second quarter. These write-downs and other costs amounted to $7,891,000. The Company has determined that these assets are not recoverable and has written them off. Amortization of Intangible Assets- Amortization of intangible assets increased by $0.1 million from $1.8 million in the second quarter of 1997 to $1.9 million in the second quarter of 1998. This increase reflects a change in amortization in the second quarter of 1997 related to an adjustment to a preliminary estimate of intangible assets related to the WKD acquisition and additional amortization from 1997 acquisitions, partially offset by the completion during the latter part of 1997 of the amortization of several intangible assets. For the six periods ended June 12, 1998 and June 13, 1997, amortization decreased $0.6 million, from $4.4 million in 1997 to $3.8 million in 1998, primarily reflecting the completion during the latter part of 1997 of the amortization of several intangible assets, partially offset by additional amortization from 1997 acquisitions. Operating Profit (Loss) - Operating loss was $8.3 million, or (3.5%) of service revenues, for the second quarter of 1998 as compared to an operating profit of $5.9 million, or 2.5% of service revenues, for the same period last year. For the six periods ended June 12, 1998, operating loss was $5.0 million, or (1.1%), of service revenues as compared to an operating profit of $10.4 million, or 2.3%, in the corresponding 1997 period. Operating profit decreased as a percentage of revenues due to a decrease in the gross profit margin, higher operating expenses discussed above and the write-down of long-lived assets and other special charges also discussed above. Income Taxes - The Company's positive tax provision in the quarter and year-to-date, in spite of an overall loss, reflects the non-deductibility of the Company's write-down of goodwill and other intangibles previously discussed. The incremental statutory rate for the six months ended June 12, 1998 and June 13, 1997 was 40% (35% federal and 5% state). 9 FINANCIAL CONDITION CAPITAL RESOURCES AND LIQUIDITY At June 12, 1998, the Company had $14.8 million in cash, a decrease of $9.5 million from December 26, 1997; and $22.0 million in marketable securities, a $22.0 million increase from December 26, 1997. Net cash provided by operating activities of $18.2 million and $0.4 million of net cash provided by financing activities was reduced by $28.1 million of net cash payments relating to investing activities. The Company's principal financing activities during the first six periods of 1998 were $0.5 million of payments on the revolving line of credit and $0.9 million of cash receipts related to the exercise of stock options. The Company's principal investing activities during the first six periods of 1998 were net purchases of marketable securities ($22.0 million) and the purchase of computer and other equipment ($6.1 million). Pinkerton's cash needs during the first six months of each year are greater because of higher payroll taxes. In addition, the Company is required to make annual principal payments of approximately $8.6 million (in the month of June) through the year 2000 in repayment of its Senior Notes. Semi-annual interest payments of approximately $1.3 million and $0.9 million related to the Senior Notes are due in June and December 1998, respectively. The principal and interest payments described above to be made in June 1998 occur in the Company's third fiscal quarter. The Company has an acquisitions program intended to implement its strategy to become a world-class, global security solutions provider. The Company also has an ongoing program to replace capital equipment and upgrade systems as required. Both of these activities will continue for the foreseeable future. The Company has an unsecured revolving credit facility with a group of banks for borrowings up to $100.0 million, of which $50.0 million may be letters of credit. No cash borrowings have been made during the first six periods of 1998. At June 12, 1998 there were DM 13.0 million ($7.2 million) of cash borrowings outstanding under the revolving line of credit and $29.5 million in letters of credit had been issued by the Company to secure obligations under the Company's self-insurance programs. The Company believes existing liquid resources, cash generated from operations and funds available under the revolving credit facility are sufficient for all planned operating and capital requirements. The Company also has access to capital markets, if necessary, to raise funds for working capital, capital spending and other investments for business growth. FORWARD-LOOKING STATEMENTS Certain statements contained in this report may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve estimates, assumptions and uncertainties, and accordingly, actual results could differ materially from those expressed in the forward-looking statements. Such uncertainties include, among others, the factors referred to in the Company's Annual Report on Form 10- K for the fiscal year ended December 26, 1997. 10 PART II. OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The 1998 Annual Meeting of Stockholders of the Company was held on April 30, 1998. At the Annual Meeting the stockholders elected three directors of the Company for a term of three years, approved an amendment to the 1995 Pinkerton Performance and Equity Incentive Plan to increase the number of shares with respect to which awards may be made under the Plan, and ratified the selection of the Company's independent auditors for the current fiscal year. The votes for the election of directors were:
Shares Voted "FOR" Shares "WITHHELD" ------------------ ----------------- Gerald D. Murphy 10,927,952 197,527 J. Kevin Murphy 10,927,502 197,977 William H. Webster 10,926,911 198,568
The votes for the approval of the amendment to the 1995 Pinkerton Performance and Equity Incentive Plan were:
Shares Voted "FOR" Shares voted "AGAINST" Abstentions/ Non-Votes - ------------------ ---------------------- ---------------------- 7,482,710 2,907,780 734,989
The votes for the ratification of the selection of independent auditors were:
Shares Voted "FOR" Shares voted "AGAINST" Abstentions / Non-Votes - ------------------ ---------------------- ----------------------- 11,119,024 2,271 4,184
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 10.1 Fifth Amendment to the 1995 Pinkerton Performance and Equity Incentive Plan 10.2 Sixth Amendment to the 1995 Pinkerton Performance and Equity Incentive Plan 27.1 Financial Data Schedule 27.2 Financial Data Schedule (Restated) (b) Form 8-K No Current Reports on Form 8-K were filed during the period covered by this report. 11 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. PINKERTON'S, INC. Date: July 24, 1998 BY: /S/ JAMES P. McCLOSKEY ----------------------------------- James P. McCloskey ITS: Executive Vice President and Chief Financial Officer (Principal Financial Officer) Date: July 24, 1998 BY: /S/ STEVEN A. LINDSEY ----------------------------------- Steven A. Lindsey ITS: Vice President and Controller (Principal Accounting Officer) 12 EX-10.1 2 5TH AMENDMENT TO THE 1995 INCENTIVE PLAN FIFTH AMENDMENT TO THE 1995 PINKERTON PERFORMANCE AND EQUITY INCENTIVE PLAN The 1995 Pinkerton Performance and Equity Incentive Plan is hereby amended to replace in its entirety the first sentence of Section 4(a) - Maximum Number of Shares of Common Stock with the following sentence: The maximum number of shares of Common Stock in respect of which Awards may be granted under the Plan, subject to adjustment as provided in Section 15 of the Plan, shall be Two Million, Two Hundred Ninety-Six Thousand, Eighty- Seven (2,296,087). IN WITNESS THEREOF, the undersigned authorized officer of Pinkerton's, Inc. certifies that the foregoing Amendment has been duly approved and adopted by the Board of Directors on December 18, 1997 and the stockholders on April 30, 1998. PINKERTON'S, INC. By: /s/ C. Michael Carter --------------------------- C. Michael Carter Executive Vice President, General Counsel and Corporate Secretary EX-10.2 3 6TH AMENDMENT TO THE 1995 INCENTIVE PLAN SIXTH AMENDMENT TO THE 1995 PINKERTON PERFORMANCE AND EQUITY INCENTIVE PLAN The 1995 Pinkerton Performance and Equity Incentive Plan is hereby amended by deleting it its entirety Section 7(a) thereof and substituting the following in lieu therefor: "(a) Automatic Stock Option Grants to Non-Employee Directors. -------------------------------------------------------- Notwithstanding any other provision of the Plan, each Non-Employee Director shall receive on the day of each annual stockholders meeting of the Company during the term of the Plan, a Non-Qualified Stock Option to purchase 4,500 shares of Common Stock provided that the Non-Employee Director continues in office after such annual meeting. Each such Non-Qualified Stock Option shall have a term of ten years and shall not be exercisable unless the holder thereof shall have continued in office until the business day immediately preceding the date of the following year's annual stockholders meeting. Except as provided in Section 13 of the Plan, no Stock Option may be exercised by a Non-Employee Director unless the holder thereof is at the time of such exercise a member of the Board and has been continuously a member of the Board since the date such Non-Qualified Stock Option was granted. The price per share of Common Stock to be paid by the Non-Employee Director shall equal the Fair Market Value of one share of Common Stock on the date the Non-Qualified Option is granted and the purchase price of the shares of Common Stock as to which such an option is exercised shall be paid only in cash." IN WITNESS THEREOF, the undersigned authorized officer of Pinkerton's, Inc. certifies that the foregoing Amendment has been duly approved and adopted by the Board of Directors on April 30, 1998. PINKERTON'S, INC. By: /s/ C. Michael Carter ------------------------- C. Michael Carter Executive Vice President, General Counsel and Corporate Secretary EX-27.1 4 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE REGISTRANT'S CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 YEAR 6-MOS DEC-26-1997 JUN-12-1998 DEC-27-1996 DEC-27-1997 DEC-26-1997 JUN-12-1998 24,243 14,770 0 22,000 149,668 148,363 2,948 2,674 4,190 4,634 189,393 199,378 46,430 44,874 29,685 29,506 324,196 326,717 102,794 112,666 25,019 24,323 0 0 0 0 75,341 76,264 68,288 59,094 324,196 135,358 1,001,889 465,596 1,001,889 465,596 877,016 410,973 877,016 410,973 97,551 59,172 885 479 2,897 1,300 23,540 (6,328) 8,807 2,192 14,733 (8,520) 0 0 0 0 0 0 14,733 (8,520) 1.17 (.68) 1.12 (.68)
EX-27.2 5 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE REGISTRANT'S CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 6-MOS JUN-13-1997 DEC-28-1996 JUN-13-1997 22,119 2,007 147,007 3,154 3,629 188,286 45,722 30,218 326,086 106,311 35,759 0 0 75,048 58,884 326,086 451,257 451,257 397,524 397,524 43,004 290 1,579 8,860 4,164 4,696 0 0 0 4,696 .37 .36 EARNINGS PER SHARE OF THE REGISTRANT HAVE BEEN RESTATED TO REFLECT A THREE-FOR-TWO STOCK SPLIT DISTRIBUTED ON AUGUST 27, 1997 AND TO REFLECT THE APPLICATION OF SFAS NO. 128, "EARNINGS PER SHARE."
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