As filed with the Securities and Exchange Commission on April 27, 2012
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 8, 1997
REGISTRATION STATEMENT NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ROMAC INTERNATIONAL, INC.
(Exact
Kforce Inc.
(Exact name of registrant as specified in its charter)
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| Florida | 59-3264661 | |
(State or of | (IRS Employer Identification Number) |
1001 East Palm Avenue
Tampa, Florida, 33605
(813) 258-8855
(Address,552-5000
(Address, including zip code, and telephone number, including area code, of registrant'sregistrant’s principal executive offices)
DAVID L. DUNKEL
PRESIDENT AND CHIEF EXECUTIVE OFFICER
ROMAC INTERNATIONAL, INC.
120 WEST HYDE PARK PLACE, SUITE 150
TAMPA, FLORIDA 33606
Joseph J. Liberatore
Executive Vice President, Chief Financial Officer and Secretary
Kforce Inc.
1001 East Palm Avenue
Tampa, Florida 33605
(813) 258-8855
(Name,552-5000
(Name, address, including zip code, and telephone number, including area code, of agent for service)
COPIES OF COMMUNICATIONS TO:
MICHAEL L. JAMIESON, ESQ. BENJAMIN F. GARMER, III, ESQ.
HOLLAND & KNIGHT LLP FOLEY & LARDNER
400 NORTH ASHLEY DRIVE, SUITE 2300 777 EAST WISCONSIN AVENUE
TAMPA, FLORIDA 33602 MILWAUKEE, WISCONSIN 53217
(813) 227-8500 (414) 271-2400
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable
Copies To:
Robert J. Grammig, Esquire
Holland & Knight LLP
100 North Tampa Street, Suite 4100
Tampa, Florida 33602
(813) 227-8500
Facsimile: (813) 229-0134
Approximate date of commencement of proposed sale to the public: From time to time after this Registration Statementregistration statement becomes effective.
If the only securities being registered on this formForm are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ]
¨
If any of the securities being registered on this formForm are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [ ]
x
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
¨
If this formForm is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
¨
If delivery ofthis Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the prospectus is expected to be madeCommission pursuant to Rule 434,
please462(e) under the Securities Act, check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) PER UNIT(2) OFFERING PRICE(2) REGISTRATION FEE
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Common Stock, par value $.01 per
share................................ 4,841,500 shares $22.375 $108,328,563 $32,827
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(1) Includes 631,500 shares¨
If this Form is a post-effective amendment to cover over-allotments, if any,a registration statement filed pursuant to an
over-allotment option grantedGeneral Instruction I.D. filed to the Underwriters.
(2) Estimated solely for purposesregister additional securities or additional classes of determining the registration fee,securities pursuant to Rule 457(c)413(b) under the Securities Act, check the following box. ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of 1933,“large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ¨ | Accelerated filer | x | |||
| Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ | |||
CALCULATION OF REGISTRATION FEE
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TITLE OF EACH CLASS OF SECURITIES TO BE REGISTERED | AMOUNT TO BE REGISTERED (1)(2)(3)(4) | PROPOSED MAXIMUM OFFERING PRICE PER UNIT (1)(3) | PROPOSED MAXIMUM AGGREGATE OFFERING PRICE | AMOUNT OF (5) | ||||
Common Stock | ||||||||
Preferred Stock | ||||||||
Warrants | ||||||||
Debt Securities | ||||||||
Depositary Shares | ||||||||
Units | ||||||||
Subtotal | $250,000,000.00 | $28,650.00 | ||||||
Common Stock Offerable by the selling shareholders named in this prospectus | 6,188,285 | $14.88 | $92,081,680.80 | $10,552.56 | ||||
Total | $342,081,680.80 | $39,202.56 | ||||||
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| (1) | Not specified as to each class of securities to be registered pursuant to General Instruction II.D. of Form S-3 under the Securities Act. |
| (2) | The registrant is hereby registering an indeterminate amount of each identified class of its securities up to a proposed maximum aggregate offering price of $250,000,000, which may be offered from time to time in unspecified numbers at unspecified prices. The proposed maximum aggregate offering price has been estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) of the Securities Act. |
| (3) | The selling shareholders named in this prospectus are hereby registering 6,188,285 shares of the registrant’s common stock for resale. The proposed maximum aggregate offering price has been estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) of the Securities Act based on the average of the high and low prices reported for the registrant’s common stock traded on The Nasdaq Global Select Market on April 25, 2012. |
| (4) | The registrant is hereby registering such indeterminate amount of each identified class of the identified securities as may be issued upon conversion, exchange, or exercise of any other securities that provide for such conversion, exchange or exercise. |
| (5) | Calculated pursuant to Rule 457(o) under the Securities Act. |
The Registrant hereby amends this Registration Statement on such date or dates as amended, based uponmay be necessary to delay its effective date until the last sale reported byRegistrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Nasdaq National MarketSecurities Act or until the Registration Statement shall become effective on October 7, 1997.
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such date as the Commission, acting pursuant to said Section 8(a), may determine.
THE REGISTRANT HEREBY AMENDSINFORMATION IN THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES ASPROSPECTUS IS NOT COMPLETE AND MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTILCHANGED. WE AND THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THATSELLING SHAREHOLDERS NAMED IN THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THEPROSPECTUS MAY NOT SELL THESE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMESCOMMISSION IS EFFECTIVE. THIS PROSPECTUS SHALLIS NOT CONSTITUTE AN OFFER TO SELL ORTHESE SECURITIES AND NEITHER WE NOR THE SOLICITATION OFSELLING SHAREHOLDERS NAMED IN THIS PROSPECTUS ARE SOLICITING AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCHJURISDICTION WHERE THE OFFER SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED OCTOBER 8, 1997
APRIL 27, 2012.
PROSPECTUS
4,210,000 SHARES
ROMAC INTERNATIONAL
LOGO
$250,000,000
COMMON STOCK, ---------------------------
Of the 4,210,000 sharesPREFERRED STOCK, WARRANTS, DEBT SECURITIES,
DEPOSITARY SHARES, AND UNITS
Kforce Inc.
6,188,285 Shares of Common Stock
Offered by the Selling Shareholders
From time to time, we may offer shares of our common stock, shares of our preferred stock, warrants, debt securities, depositary shares and units, or any combination of any of these securities, at an aggregate initial offering price not to exceed $250,000,000. The securities offered hereby, 4,000,000under this prospectus may be offered separately, together or in series separate, and in amounts, at prices and on terms to be determined at the time of sale. In addition, the selling shareholders named in this prospectus may offer, from time to time, up to an aggregate of 6,188,285 shares are being offered by Romac International, Inc. and 210,000 shares are being
offered by certain Selling Shareholders of the Company. The Companyour common stock. We will not receive any of the proceeds from the sale of Common Stockshares of our common stock by the Selling Shareholders.
See "Principalselling shareholders.
We will provide specific terms of any offering and Selling Shareholders."
The Company's Common Stock is tradedany offered securities in supplements to this prospectus. Any prospectus supplement may also add, update or change information in this prospectus. You should carefully read this prospectus and any prospectus supplement, as well as the documents we incorporate by reference, before you invest in any of these securities.
THIS PROSPECTUS MAY NOT BE USED TO OFFER OR SELL ANY SECURITIES UNLESS ACCOMPANIED BY THE APPLICABLE PROSPECTUS SUPPLEMENT.
Shares of our common stock are quoted on the Nasdaq NationalNASDAQ Global Select Market under the symbol "ROMC." Except as otherwise indicated, all information in this
Prospectus has been adjusted to reflect the two-for-one stock split in the form
of a 100% stock dividend to shareholders, which will be reflected on the Nasdaq
National Market on October 17, 1997.“KFRC.” On October 7, 1997,April 25, 2012, the last reported split
adjusted sale price of the Company's Common Stock on the Nasdaq National Marketour common stock was $22.375$14.81 per share ($44.750 on a pre-split adjusted basis).
SEE "RISK FACTORS" ON PAGE 7 FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED
HEREBY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
We may offer securities through underwriting syndicates managed or co-managed by one or more underwriters, or directly to indemnifypurchasers. The selling shareholders named in this prospectus may also sell shares of our common stock through underwriting syndicates managed or co-managed by one or more underwriters, or directly to purchasers. The prospectus supplement for each offering of securities will describe in detail the several Underwriters against certain liabilities, including liabilities
underplan of distribution for that offering. For general information about the distribution of securities offered, please see “Plan of Distribution” in this prospectus.
Neither the Securities Actand Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of 1933, as amended. See "Underwriting."
(2) Before deducting expenses, estimated at $472,500, allthese securities or passed upon the adequacy or accuracy of whichthis prospectus. Any representation to the contrary is a criminal offense.
Investing in our business involves significant risks. These risks are payableincorporated by the Company.
(3) The Company has granted the several Underwriters a 30-day over-allotment
option to purchase up to 631,500 additional shares of the Common Stock on
the same terms and conditionsreference in this prospectus as set forth aboveunder the caption “Risk Factors”.
The date of this prospectus is April 27, 2012.
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This prospectus is part of a registration statement on Form S-3 that we filed with the SEC using a “shelf” registration or continuous offering process. Under this shelf registration process, from time to cover over-allotments,
if any. Iftime, we may offer the Underwriters exercisesecurities described in this prospectus, in one or more offerings, at an aggregate initial offering price not to exceed $250,000,000. In addition, the over-allotment optionselling shareholders named in full, the
total Pricethis prospectus may offer and sell up to Public will be $ , the total Underwriting Discounts
and Commissions will be $ , the total Proceeds to Company will be
$ and the total Proceeds to Selling Shareholders will be $ .
See "Underwriting."
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The6,188,285 shares of Common Stock are offeredour common stock. We will not receive any of the proceeds from any sale of shares by the Underwriters, subject to
prior sale, when, as and if delivered to and accepted by the Underwriters and
subject to their right to reject orders in whole or in part. It is expected that
the deliveryselling shareholders. This prospectus provides you with a general description of the certificates representing sharessecurities that we or the selling shareholders may offer. Each time we or the selling shareholders sell any of the Common Stocksecurities described in this prospectus, we will be
made onprovide a prospectus supplement that will contain specific information about the terms of that offering. The prospectus supplement may also add, update or about November , 1997 throughchange information contained in this prospectus. You should read both this prospectus and any prospectus supplement together with additional information described below under the Depository Trust Company or at
the offices of Robert W. Baird & Co.headings “Certain Documents Incorporated Milwaukee, Wisconsin.
ROBERT W. BAIRD & CO.
INCORPORATED
NATIONSBANC MONTGOMERY SECURITIES, INC.
PRUDENTIAL SECURITIES INCORPORATED
SMITH BARNEY INC.
THE DATE OFby Reference” and “Where You Can Find More Information.” THIS PROSPECTUS IS OCTOBER , 1997
3
ROMAC INTERNATIONALMAY NOT BE USED TO OFFER OR SELL ANY SECURITIES UNLESS ACCOMPANIED BY THE KNOWLEDGEFORCE RESOURCE(SM)
Romac provides servicesAPPLICABLE PROSPECTUS SUPPLEMENT.
You should rely only upon the information provided in the following specialties: Finance & Accounting,
Information Technology, Human Resources and Operating Specialties.
The table below presents Romac's position within the staffing industry.
With skill on the vertical axis and time on the horizontal axis, Romac provides
services in connection with people of medium skill and above across the time
continuum. These highly skilled professionals are what we call "The
KnowledgeForce" and we are "The KnowledgeForce Resource(sm)."
[TABLE SETTING FORTH THE DESCRIPTION ABOVE]
THE KNOWLEDGEFORCE: Intelligent, technically advanced and capable
professionals who, when effectively organized, achieve the strategic goals of
organizations; the intellectual capital of organizations.
CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,
INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS AND SELLING GROUP
MEMBERS MAY ENGAGE IN PASSIVE MARKET MAKING TRANSACTIONS IN THE COMMON STOCK ON
THE NASDAQ NATIONAL MARKET IN ACCORDANCE WITH RULE 103 OF REGULATION M. SEE
"UNDERWRITING."
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PROSPECTUS SUMMARY
The following is a summary of the more detailed information and financial
statements appearing elsewhere in,this prospectus or incorporated in this prospectus by reference into, this
Prospectus. Unless otherwise indicated,reference. Neither we nor the selling shareholders have authorized anyone to provide you with different information. You should not assume that the information in this Prospectus
assumes thatprospectus, including any information incorporated by reference, is accurate as of any date other than the Underwriters' over-allotment option will not be exercised, and
gives retroactive effect to a two-for-one stock split in the form of a 100%
stock dividend to shareholders, which will be reflecteddate indicated on the Nasdaq National
Market on October 17, 1997. front cover.
Unless stated or the context otherwise requires, references in this prospectus to the "Company" or "Romac" are“the Company,” “Kforce,” “we,” “us” and “our” refer to Romac International,Kforce Inc. THE COMPANY
Romac International, Inc. is a provider of specialty staffing services in
16 markets in the United States. The Company recognizes that it has two distinct
and unique customers: organizationsits subsidiaries.
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, and the knowledgeable people who make them
successful. In order to align itself more closely with the organizational
structure and skills of its customers, the Company provides value-added services
according to functiondocuments incorporated by reference in the following specialties: Information Technology,
Finance and Accounting, Human Resources and Operating Specialties.
Information Technology. The Company's Information Technology
professionals specialize in sophisticated areas of information technology
such as systems/applications programming, systems analysis and networking.
In 1995, the Company created its Emerging Technology Division ("ETD") to
address the shortage of expertise in high-demand information technology
skills, including PeopleSoft, Lotus Notes, Oracle and networking. ETD
provides intensive classroom and experience-based training to the Company's
consultants and helps the Company keep pace with the growing demand for its
high-end services. The Company's Information Technologies servicesthis prospectus, contain certain statements that are, currently offered in 13 of the Company's markets.
Finance and Accounting. The Company's Finance and Accounting
professionals specialize in areas such as corporate taxation, budget
preparation and analysis, financial reporting, cost analysis and audit
services. To augment its traditional Flexible Staffing Services and Search
Services, the Company recently introduced Romac Executive Solutions, which
provides chief financial officers and other high-level financial
professionals on a contract basis for assignment lengths typically in
excess of three months. The Company's Finance and Accounting services are
currently offered in 14 of the Company's markets.
Human Resources. The Company's Human Resources professionals
specialize in the areas of recruiting, benefits administration, labor
relations, workers compensation, training and retirement plans. In
addition, the Company provides human resources outplacement, outsourcing
and consulting services. The Company's Human Resources services are
currently offered in three of the Company's markets.
Operating Specialties. The Company's Operating Specialties
professionals specialize in the pharmaceutical, manufacturing, health care,
life insurance, investment and banking industries. Positions that wouldor may be classified in these categories include: research and regulatory personnel
for pharmaceutical clients, quality engineers for manufacturing clients,
hospital administrators for health care clients and lenders for banking
clients. The Company's Operating Specialties services are currently offered
in three of the Company's markets.
The Company principally serves Fortune 1000 clients. The top ten clients of
the Company represented 11.6% of its revenues in the first six months of 1997.
For the six month period ended June 30, 1997 compared to the same period in
1996, net service revenues grew 94.3% to $74.6 million and earnings grew 95.7%
to $4.5 million. For the six month period ended June 30, 1997 compared to the
same period in 1996, Information Technology net service revenues grew 119.1% to
$34.4 million, Finance and Accounting net service revenues grew 62.3% to $31.0
million, Human Resources net service revenues grew 152.2% to $5.8 million, and
Operating Specialties net service revenues grew 153.9% to $3.3 million.
The Company believes its focus on specialized skills generates increased
placement opportunities and enhances the Company's ability to attract, retain
and motivate highly skilled professionals (the "Knowl-
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edgeForce"). The Company seeks to manage the careers of these experts by making
them aware of market trends, giving them access to training and proactively
marketing them for flexible or permanent assignments.
The Company's growth strategy is to increase revenue and profitability by
expanding its service offerings in existing markets and introducing its full
range of services into new markets. In existing markets, the Company intends to
further develop existing customers and expand its customer base by: (i)
introducing its full range of functional services in all of its markets; (ii)
taking advantage of the cross-selling opportunities provided by the
complementary services offered by its functional service areas; and (iii)
introducing new services. In addition, the Company will continue to evaluate
strategic acquisitions that will add new functional areas or enhance its current
service offerings.
The Company continues to make significant infrastructure investments in
people and systems to allow for further growth. The Company recently changed its
technology platform by installing a three-tiered client server architecture,
thereby positioning the Company to implement new applications and improve
operating efficiencies.
ACQUISITIONS
Since the completion of the Company's initial public offering in August
1995, the Company has completed a number of acquisitions, including two
acquisitions in September 1997, which have expanded the Company's geographic
coverage and its service offerings. Prior to the two September 1997
acquisitions, the purchase price of the Company's acquisitions ranged from
approximately $100,000 to $7.4 million and aggregated $27.0 million, including
only earnouts paid or accrued through September 30, 1997. The aggregate purchase
price of the September 1997 acquisitions was $39.9 million, before consideration
of earnouts. For information regarding the two September 1997 acquisitions, see
"Business -- Recent Acquisitions". The following table sets forth additional
information regarding certain of these acquisitions:
DATE OF FUNCTIONAL PRIMARY
ACQUISITION NAME OF COMPANY SERVICE AREA LOCATION
- --------------- --------------------------------------------- ---------------------- -----------------
January 1996 Venture Networks Information Technology Boston, MA
February 1996 PCS Group Information Technology Louisville, KY
March 1996 Strategic Outsourcing Human Resources Boston, MA
June 1996 Romac F&A Franchise Finance & Accounting San Francisco, CA
January 1997 Career Enhancement International Information Technology Boston, MA
March 1997 Professional Application Resources Information Technology Houston, TX
September 1997 UQ Solutions, Inc. Information Technology Naperville, IL
September 1997 Sequent Associates, Inc. Information Technology San Jose, CA
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The Company continuously evaluates potential acquisitions and is currently
in various stages of investigating and negotiating with several candidates. The
Company has a signed letter of intent to acquire an information technology
company in the western United States, for a purchase price of $3.3 million. The
Company is in the process of completing its due diligence and negotiating a
definitive acquisition agreement. Accordingly, there can be no assurance that
this acquisition will be consummated.
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THE OFFERING
Common Stock offered by the
Company............................ 4,000,000 shares
Common Stock offered by the Selling
Shareholders..................... 210,000 shares
Common Stockdeemed to be, outstanding
after the Offering(1).............. 28,591,142 shares
Use of Proceeds.................... For repayment of certain indebtedness and
general corporate purposes, including
possible acquisitions, expansion of the
Company's operations, and certain capital
expenditures related to the Company's
expansion. See "Use of Proceeds."
Nasdaq National Market Symbol...... ROMC
- ---------------
(1) Does not include 3,390,634 shares of Common Stock subject to outstanding
options under the Company's incentive and nonqualified stock option plans.
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SUMMARY CONSOLIDATED FINANCIAL DATA
(In thousands, except per share data)
The Company was formed by current management in August 1994 through the
combination of a specialty staffing services firm in operation under the
ROMAC(R) name since 1966, and three of its largest franchisees (the "1994
Combination"), including FMA International, Inc. ("Romac-FMA"). The 1994
Combination became effective on August 31, 1994 and all of the financial data
set forth below have been restated to give effect to the 1994 Combination, which
was accounted for as a pooling of interests. Since August 31, 1994, the
Company's business has been conducted under common ownership and its operations
have been conducted by the former management of Romac-FMA, which became the
management of the Company. The information below reflects a two-for-one stock
split in the form of a 100% stock dividend to shareholders, which will be
reflected on the Nasdaq National Market on October 17, 1997.
Since June 30, 1997, the Company has made two acquisitions which have
significantly reduced the Company's working capital. See "Business -- Recent
Acquisitions" and "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Liquidity and Capital Resources."
SIX MONTHS
YEARS ENDED DECEMBER 31, ENDED JUNE 30,
----------------------------------------------- ------------------------
1992 1993 1994 1995 1996 1996 1997
------- ------- ------- ------- ------- ------- --------------
STATEMENT OF OPERATIONS DATA:
Net service revenues............. $31,250 $40,346 $40,789 $45,655 $94,210 $38,355 $74,592
Gross profit..................... 11,418 14,220 15,938 20,195 40,371 16,607 30,011
Income (loss) before taxes....... 1,091 1,113 (413) 5,021 9,946 3,840 7,401
Net income (loss)(1)............. 714 650 (599) 3,013 5,981 2,313 4,506
Net income (loss) per share(2)... $ 0.05 $ 0.05 $ (0.04) $ 0.18 $ 0.25 $ 0.11 $ 0.18
Weighted average shares
outstanding.................... 13,176 13,237 14,078 16,976 23,560 21,644 25,582
JUNE 30, 1997
-----------------------
AS
ACTUAL ADJUSTED(3)
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BALANCE SHEET DATA:
Working capital*.......................................... $49,526 $134,526
Total assets.............................................. 93,411 178,411
Total long-term debt...................................... 2,527 2,527
Shareholders' equity...................................... $78,041 $163,041
- ---------------
* Subsequent to June 30, 1997, the Company used $39.9 million of cash to fund
two acquisitions. See "Business -- Recent Acquisitions".
(1) Net income (loss) for the years ended December 31, 1994, 1995 and 1996, and
the six months ended June 30, 1996 and 1997, includes franchise termination
income (net of tax) of $336,000, $261,000, $208,000, $157,000 and $100,000,
respectively.
(2) Net income (loss) per share for the years ended December 31, 1994, 1995 and
1996, and the six months ended June 30, 1996 and 1997, includes franchise
termination income per share of $0.02, $0.01, $0.01, $0.01 and $0.00,
respectively.
(3) As adjusted to give effect to the sale by the Company of 4,000,000 shares of
Common Stock offered hereby and after deducting underwriting discounts and
commissions and estimated offering expenses and the application of the net
proceeds therefrom, assuming a public offering price of $22.375 per share.
See "Capitalization."
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RISK FACTORS
Prospective investors should consider carefully, in addition to the other
information contained in this Prospectus, the following factors in evaluating
the Company and its business before purchasing shares of the Common Stock
offered hereby. This Prospectus contains certain forward-looking statements that
involve risks and uncertainties. Future events and the Company's actual results
could differ materially from the results expected in these forward-looking
statements, as a result of certain of the factors set forth below and elsewhere
in this Prospectus.
This Prospectus contains statements that constitute "forward-looking
statements" within the meaning of that term in Section 27A of the Securities Act of 1933, as amended (the "Securities Act"“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"“Exchange Act”). The words "expect," "estimate," "anticipate," "predict,"
"believe", and are made in reliance upon the protections provided by such acts for forward-looking statements. Such statements may include, but may not be limited to, projections of revenue, income, losses, cash flows, capital expenditures, future prospects, anticipated costs and benefits of proposed (or future) acquisitions, integration of acquisitions, anticipated costs and benefits of actual, proposed (or future) divestitures, plans for future operations, capabilities of business operations, effects of interest rate variations, our ability to obtain financing and favorable terms, financing needs or plans, plans relating to services of Kforce, estimates concerning the effects of litigation or other disputes, estimates concerning our ability to collect on our accounts receivable, expectations of the economic environment, developments within the staffing sector including, but not limited to, the penetration rate and growth in temporary staffing, as well as assumptions as to any of the foregoing and all statements that are not based on historical fact but rather reflect our current expectations concerning future results and events. For a further list and description of various risks, relevant factors and uncertainties that could cause future results or events to differ materially from those expressed or implied in our forward-looking statements, see the “Risk Factors” section contained in this prospectus and the applicable prospectus supplement and the “Risk Factors” and “MD&A” sections in the documents incorporated by reference in this prospectus and the applicable prospectus supplement. In addition, when used in this discussion, the terms “anticipates,” “estimates,” “expects,” “intends,” “plans,” “believes,” “will,” “may,” “should” and variations thereof and similar expressions and variations thereof are intended to identify forward-looking statements. Such statements appear in a number of
places in this Prospectus and include statements regarding the intent, belief or
current expectations of the Company, its directors or its officers with respect
to, among other things: (i) trends affecting the Company's financial condition
or results of operations; (ii) the Company's business and growth strategies;
(iii) risks affecting the Company; and (iv) the use of the net proceeds to the
Company of this Offering. Prospective investors are cautioned that any such
forward-lookingForward-looking statements are not guarantees of future performance and involveinherently subject to risks and uncertainties, some of which cannot be predicted. Future events and that actual results maycould differ materially from those projectedset forth in or underlying the forward-looking statements. Readers are cautioned not to place undue reliance on any forward-looking statements as a result of various
factors. The accompanying information contained in this Prospectus, including
without limitationprospectus or the information set forth underdocuments incorporated by reference in this prospectus, which speak only as of their respective dates. Kforce undertakes no obligation to publicly publish the headings "Risk Factors,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business," as well as information contained in the Company's
filings with the Securities and Exchange Commission (the "Commission"), identify
important factors that could cause such differences.
POSSIBLE ADVERSE EFFECTS OF FLUCTUATIONS IN THE GENERAL ECONOMY
Historically, the general level of economic activity has significantly
affected the demand for employment services. As economic activity has slowed,
the use of temporary and contract personnel often has been curtailed before
permanent employees have been laid off. An economic downturn may adversely
affect the demand for temporary and contract personnel and may have a material
adverse effect on the Company's results of operations or financial condition.
Additionally, during periods of slowed economic activity, the use of executive
search firms tends to decline significantly. As economic activity has increased,
temporary and contract personnel often have been added to the work force before
permanent employees have been hired. During these periods of increased economic
activity and generally higher levels of employment, the competition among
staffing services firms for qualified personnel is intense. Further, the Company
may face increased competitive pricing pressures during such periods. There can
be no assurance that during these periods the Company will be able to recruit
the personnel necessary to fill its clients' needs or that such pricing
pressures will not adversely affect the Company's results of operations. See
"Business -- Industry Overview."
DEPENDENCE ON AVAILABILITY OF QUALIFIED PERSONNEL
The Company depends upon its ability to attract and retain personnel,
particularly technical and professional personnel, who possess the skills and
experience necessary to meet the staffing requirements of its clients. The
Company must continually evaluate and upgrade its base of available qualified
personnel to keep pace with changing client needs and emerging technologies.
Competition for individuals with proven technical or professional skills is
intense and demand for such individuals is expected to remain very strong for
the foreseeable future. There can be no assurance that qualified personnel will
continue to be available to the Company in sufficient numbers and upon economic
terms acceptable to the Company. See "Business -- Functional Organization" and
"Business -- Competition."
7
9
ABILITY TO ACHIEVE AND MANAGE GROWTH
The Company has experienced growth, driven primarily by industry trends
toward the increased use of temporary and contract professional and technical
personnel. The Company's continued growth depends on a number of factors,
including the ability to maintain margins in the face of competitive pressures
and changing regulatory environments, the availability of sufficient working
capital, continued improvements in the recruitment, motivation and retention of
its operating employees and temporary and contract personnel, the strength of
demand in the Company's markets, and the Company's ability to open new markets.
Any significant delay in opening new markets could have a material adverse
effect on the Company's results of operations. There can be no assurance that
the Company will be able to attain its desired levels of growth. See
"Business -- Growth Strategy."
RECENT ACQUISITIONS AND IMPLEMENTATION OF ACQUISITION STRATEGY
The Company has completed a number of acquisitions in the past two years,
including two acquisitions in September 1997, and intends to pursue other
acquisitions. Additionally, the Company has entered into a letter of intent
dated September 18, 1997 for the purchase of substantially all of the assets of
a company engaged in the business of providing information technology services,
for a purchase price of approximately $3.3 million. The Company is in the
process of completing its due diligence and negotiating a definitive acquisition
agreement. Accordingly, there can be no assurance that this acquisition will be
consummated. See "Business -- Recent Acquisitions." There can also be no
assurance that the Company will be able to successfully integrate the operations
and management of its recent acquisitions. Similarly, there can be no assurance
that the Company will be able to consummate or, if consummated, successfully
integrate the operations and management of future acquisitions. Acquisitions
involve significant risks which could have a material adverse effect on the
Company, including: (i) the diversion of management's attention to the
assimilation of the businesses to be acquired; (ii) the risk that the acquired
businesses will fail to maintain the quality of services that the Company has
historically provided; (iii) the need to implement financial and other systems
and add management resources; (iv) the risk that key employees of the acquired
business will leave after the acquisition; (v) potential liabilities of the
acquired businesses; (vi) unforeseen difficulties in the acquired operations;
(vii) adverse short- and long-term effects on the Company's operating results;
(viii) lack of success in assimilating or integrating the operations of acquired
businesses with those of the Company; (ix) the dilutive effect of the issuance
of additional equity securities; (x) the incurrence of additional debt; and (xi)
the financial impact of amortizing goodwill and other intangible assets involved
in any acquisitions that are accounted for using the purchase method of
accounting. There can be no assurance that the Company will successfully
implement its acquisition strategy. Furthermore, there can no be assurance any
acquisition will achieve levels of revenue and profitability or otherwise
perform as expected, or be consummated on acceptable terms to enhance
shareholder value.
COMPETITION
The Company faces significant competition in the markets it serves and
there are limited barriers to entry by new competitors. The Company competes for
potential clients with providers of outsourcing services, systems integrators,
computer systems consultants, other providers of staffing services, temporary
personnel agencies, and search firms. A number of the Company's competitors
possess substantially greater resources than the Company. From time to time the
Company has experienced significant pressure from its clients to reduce its
price levels. The Company also faces the risk that certain of its current and
prospective clients will decide to provide similar services internally.
Additionally, the Company faces significant competition for candidates in many
professional and technical specialties. There can be no assurance that the
Company will be able to continue to compete effectively with existing or
potential competitors. See "Business -- Competition."
RELIANCE ON KEY EXECUTIVES AND QUALIFIED OPERATING EMPLOYEES
The Company is highly dependent on its management. The Company expects that
its continued success will largely depend upon the efforts and abilities of
David L. Dunkel, the Company's President and Chief Executive Officer, James D.
Swartz, the Company's Executive Vice President and Chief Operating Officer,
8
10
and certain other executives. The loss of services of Mr. Dunkel, Mr. Swartz or
any other key executive for any reason could have a material adverse effect upon
the Company. The Company maintains key man life insurance with respect to Mr.
Dunkel, Mr. Swartz, and certain other executives. The Company's success also
depends upon its ability to identify, develop and retain qualified operating
employees, particularly management, client servicing and candidate recruiting
employees. The Company expends significant resources in recruiting and training
its employees, and the pool of available applicants for these positions is
limited. There can be no assurance that the Company will continue to be able to
identify, develop, and retain qualified operating management and client
servicing and candidate recruiting employees. In addition, the loss of some of
the Company's operating management and client servicing and candidate recruiting
employees could have an adverse effect on the Company's operations, including
the Company's ability to establish and maintain client, candidate and
professional and technical personnel relationships.
EMPLOYMENT LIABILITY RISK
Providers of staffing services employ and place people in the workplaces of
other businesses. An inherent risk of such activity includes possible claims of
errors and omissions, misuse of client proprietary information, misappropriation
of funds, discrimination and harassment, employment of illegal aliens, theft of
client property, other criminal activity or torts and other claims. The Company
has policies and guidelines in place to reduce its exposureadjustments to these risks.
However, failure of any Company employee or personnel to follow these policies
and guidelines may result in negative publicity, injunctive relief, and the
payment by the Company of monetary damages or fines, or have other material
adverse effects upon the Company. Moreover, the Company could be held
responsible for the actions at a workplace of persons not under the direct
control of the Company. To reduce its exposure, the Company maintains insurance
and fidelity bonds covering general liability, workers' compensation claims,
errors and omissions, and employee theft. Due to the nature of the Company's
assignments, in particular, access to client information systems and
confidential information, and the potential liability with respect thereto,
there can be no assurance that such insurance coverage will continue to be
available economically in amounts adequate to cover any such liability. See
"Business -- Legal Proceedings" and "Business -- Insurance."
POSSIBLE VOLATILITY OF STOCK PRICE
The Common Stock has experienced a significant increase in its market price
since the Company's initial public offering in August 1995. The market price of
the Common Stock could be subject to significant fluctuations in response to
operating results of the Company, changes in general conditions in the economy,
the financial markets, the employment services industry, or other developments
affecting the Company, its clients, or its competitors, some of which may be
unrelated to the Company's performance. See "Price Range of Common Stock."
RELIANCE ON INFORMATION PROCESSING SYSTEMS
The Company's business depends upon its ability to store, retrieve, process
and manage significant databases, and periodically to expand and upgrade its
information processing capabilities. The Company's computer equipment and
software systems are maintained at its Tampa, Florida headquarters. Interruption
or loss of the Company's information processing capabilities through loss of
stored data, breakdown or malfunction of computer equipment and software
systems, telecommunications failure, conversion difficulties, or damage to the
Company's headquarters and systems caused by fire, hurricane, lightning,
electrical power outage, or other disruption could have a material adverse
effect on the Company. See "Business -- Professional Recruiters Operating
System" and "Business -- Legal Proceedings."
INCREASED COSTS FROM GOVERNMENT REGULATION
The Company is required to pay a number of federal, state, and local
payroll and related costs, including unemployment taxes, workers' compensation
and insurance, FICA, and Medicare, among others, for its employees and
personnel. Significant increases in the effective rates of any payroll related
costs likely would have a material adverse effect upon the Company. The
Company's costs could also increase as a result of health care reforms or the
possible imposition of additional requirements and restrictions related to the
9
11
placement of personnel. Recent federal and state legislative proposals have
included provisions extending health insurance benefits to personnel who
currently do not receive such benefits. There can be no assurance that the
Company will be able to increase the fees charged to its clients in a timely
manner and in a sufficient amount to cover increased costs, if any such
proposals are adopted. There is also no assurance that the Company will be able
to adapt to future regulatory changes made by the Internal Revenue Service, the
Department of Labor, or other state and federal regulatory agencies. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
MANAGEMENT DISCRETION CONCERNING USE OF PROCEEDS
The Company intends to use all of the proceeds of this Offering for
repayment of certain indebtedness and for general corporate purposes, including
possible acquisitions, expansion of the Company's operations, and certain
capital expenditures related to the Company's expansion. Accordingly, management
will have substantial discretion in spending the proceeds to be received by the
Company. Pending such uses, the net proceeds will be invested in short-term,
investment grade securities, certificates of deposit, or direct guaranteed
obligations of the United States government. See "Use of Proceeds."
ANTI-TAKEOVER PROVISIONS
The Company's articles of incorporation and bylaws and Florida law contain
provisionsforward-looking statements that may have the effect of inhibiting a non-negotiated merger or
other business combination. In particular, the Company's articles of
incorporation provide for a staggered board of directors and permit the removal
of directors only for cause. Additionally, management may issue up to 15,000,000
shares of preferred stock, and fix the rights and preferences thereof, without a
further vote of the shareholders. In addition, the Company's officers have
employment agreements with the Company containing certain provisions that call
for substantial payments to be made to such officers upon any change in control
of the Company. Certain of these provisions may discourage a future acquisition
of the Company, including an acquisition in which shareholders might otherwise
receive a premium for their shares. As a result, shareholders who might desire
to participate in such a transaction may not have the opportunity to do so.
Moreover, the existence of these provisions may have a depressive effectreflect events on the
market price of the Common Stock.
10
12
USE OF PROCEEDS
The net proceeds to the Company from the sale of the 4,000,000 shares of
Common Stock offered by the Company hereby (after deducting underwriting
discounts and commissions and estimated offering expenses) are estimated to be
approximately $85.0 million (approximately $98.5 million if the Underwriters'
over-allotment option is exercised in full).
The Company intends to use a portion of the net proceeds from the Offering
for repayment of indebtedness outstanding under its Revolving Line of Credit
Loan Agreement with NationsBank, N.A. (the "Line of Credit"). The Line of Credit
expires on March 31, 2000, and at September 30, 1997, had an outstanding
principal balance of $6.0 million. Amounts outstanding under the Line of Credit
accrue interest at an annual rate equal to 65 basis points above the 90-day
London Interbank Offering interest rate ("LIBOR"). As of September 30, 1997, the
interest rate on the Line of Credit was 6.42%. The borrowings under the Line of
Credit were primarily used for the acquisition of Sequent Associates, Inc.
("Sequent"). The Company intends to use the remaining portion of the net
proceeds for general corporate purposes, including possible acquisitions,
expansion of the Company's operations and certain capital expenditures related
to the Company's expansion. Pending such uses, the net proceeds will be invested
in short term, investment grade securities, certificates of deposit, or direct
or guaranteed obligations of the United States government. The Company has
recently entered into a letter of intent for the purchase of substantially all
of the assets of a company engaged in the business of providing information
technology contract services. If consummated, the acquisition price is expected
to be approximately $3.3 million. The Company is in the process of completing
its due diligence and negotiating a definitive acquisition agreement.
Accordingly, there can be no assurance that this possible acquisition will be
consummated. See "Risk Factors -- Recent Acquisitions and Implementation of
Acquisition Strategy," "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources" and
"Business -- Recent Acquisitions."
The Company will not receive any proceeds from the sale of the shares
offered by the Selling Shareholders. See "Principal and Selling Shareholders."
PRICE RANGE OF COMMON STOCK
The following table sets forth, for the periods indicated, the range of
high and low closing sale prices for the Common Stock, as reported on the Nasdaq
National Market since trading began on August 15, 1995, under the symbol ROMC.
The table has been adjusted to reflect two-for-one stock splits, each in the
form of a 100% stock dividend to shareholders, as reflected on the Nasdaq
National Market on May 23, 1996 and October 17, 1997.
HIGH LOW
------- -------
FISCAL YEAR 1995:
Third Quarter (from August 15, 1995)*..................... $ 4.375 $ 3.688
Fourth Quarter............................................ 5.875 4.188
FISCAL YEAR 1996:
First Quarter............................................. $ 8.063 $ 5.750
Second Quarter............................................ 14.875 7.688
Third Quarter............................................. 15.750 10.125
Fourth Quarter............................................ 15.125 10.625
FISCAL YEAR 1997:
First Quarter............................................. $13.500 $ 8.844
Second Quarter............................................ 17.375 8.313
Third Quarter............................................. 22.500 16.875
Fourth Quarter (through October 7, 1997).................. 22.750 22.188
- ------------------------
* The Company's initial public offering occurred on August 14, 1995 at a price
of $3.125 per share, after giving effect to the Company's two-for-one stock
splits in the form of a 100% stock dividend to shareholders, as reflected on
the Nasdaq National Market on May 23, 1996 and October 17, 1997.
DIVIDEND POLICY
The Company does not intend for the foreseeable future to declare or pay
any cash dividends, and intends to retain earnings, if any, for the future
operation and expansion of the Company's business.
11
13
CAPITALIZATION
The following table sets forth the capitalization of the Company at June
30, 1997, and as adjusted at that date to give effect to: (i) the sale of the
4,000,000 shares of Common Stock offered by the Company hereby and the
application of the estimated net proceeds therefrom, and (ii) the two-for-one
stock split in the form of a 100% stock dividend to shareholders, as reflected
on the Nasdaq National Market on October 17, 1997. This table should be read in
conjunction with the Consolidated Financial Statements and Notes thereto,
incorporated by reference into this Prospectus, and with "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
appearing elsewhere in this Prospectus.
Since June 30, 1997, the Company has made two acquisitions which have
significantly reduced the Company's cash position. See "Business -- Recent
Acquisitions" and "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Liquidity and Capital Resources."
JUNE 30, 1997
---------------------
ACTUAL AS ADJUSTED
------- -----------
(IN THOUSANDS)
Cash and cash equivalents(1)................................ $30,352 $115,352
======= ========
Current portion of long-term debt and capital lease
obligations............................................... $ 891 $ 891
======= ========
Long-term debt and capital lease obligations................ $ 1,636 $ 1,636
------- --------
Shareholders' equity:
Preferred Stock, $.01 par value; 15,000,000 shares
authorized; no shares issued........................... $ -- $ --
Common Stock, $.01 par value; 100,000,000 shares
authorized; 24,889,338 shares issued and outstanding;
28,889,338 shares issued and outstanding as
adjusted(2)............................................ 249 289
Additional paid-in capital................................ 63,637 148,597
Retained earnings......................................... 15,081 15,081
Stock subscription receivables............................ (1) (1)
Reacquired stock at cost: 676,748 shares.................. (925) (925)
------- --------
Total shareholders' equity........................ 78,041 163,041
------- --------
Total capitalization.............................. $80,568 $165,568
======= ========
- ---------------
(1) Subsequent to June 30, 1997, the Company used $39.9 million of cash to fund
two acquisitions. See "Business -- Recent Acquisitions."
(2) Does not include 3,560,212 shares of Common Stock subject to outstanding
options under the Company's incentive and nonqualified stock option plans.
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14
SELECTED CONSOLIDATED FINANCIAL DATA
The following table contains certain selected consolidated financial data
that should be read in conjunction with the Consolidated Financial Statements
and Notes thereto incorporated herein by reference. The balance sheet data as of
December 31, 1993, 1994, 1995 and 1996, and the operating statement data for
each of the years ended December 31, 1992, 1993, 1994 and 1995, are derived from
the audited Consolidated Financial Statements of the Company. The balance sheet
data as of December 31, 1992 and the operating statement data for the six months
ended June 30, 1996 and 1997, have been derived from the unaudited Consolidated
Financial Statements of the Company, which have been prepared on the same basis
as the audited Consolidated Financial Statements, and, in the opinion of
management, include all adjustments that are necessary for a fair statement of
the results for such periods.
The data presented below is qualified by, and should be read in conjunction
with, the Consolidated Financial Statements and notes thereto and other
financial information incorporated herein by reference, and with "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
appearing elsewhere in this Prospectus. This information has been adjusted to
reflect a two-for-one stock split in the form of a 100% stock dividend to
shareholders, which will be reflected on the Nasdaq National Market on October
17, 1997.
Since June 30, 1997, the Company has made two acquisitions which have
significantly reduced the Company's working capital. See "Business -- Recent
Acquisitions" and "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Liquidity and Capital Resources."
SIX MONTHS
YEARS ENDED DECEMBER 31, ENDED JUNE 30,
----------------------------------------------- -----------------
1992 1993 1994 1995 1996 1996 1997
------- ------- ------- ------- ------- ------- -------
(IN THOUSANDS, EXCEPT FOR PER SHARE AND OTHER DATA)
STATEMENT OF OPERATIONS DATA:
Net service revenues........................... $31,250 $40,346 $40,789 $45,655 $94,210 $38,355 $74,592
Direct cost of services........................ 19,832 26,126 24,851 25,460 53,839 21,748 44,581
------- ------- ------- ------- ------- ------- -------
Gross profit............................. 11,418 14,220 15,938 20,195 40,371 16,607 30,011
Selling, general and administrative expenses... 9,690 12,775 15,009 15,232 30,348 12,455 22,387
Depreciation and amortization expense.......... 302 298 248 512 1,762 775 1,286
Combination expenses........................... -- -- 2,251 -- -- -- --
Other (income) expense, net(1)................. 335 34 (1,157) (570) (1,685) (463) (1,063)
------- ------- ------- ------- ------- ------- -------
Income (loss) before taxes and minority
interest..................................... 1,091 1,113 (413) 5,021 9,946 3,840 7,401
Provision (benefit) for taxes.................. 330 448 186 2,008 3,965 1,527 2,895
------- ------- ------- ------- ------- ------- -------
Income (loss) before minority interest......... 761 665 (599) 3,013 5,981 2,313 4,506
Minority interest in subsidiary income......... 47 15 -- -- -- -- --
------- ------- ------- ------- ------- ------- -------
Net income (loss)(1)........................... $ 714 $ 650 $ (599) $ 3,013 $ 5,981 $ 2,313 $ 4,506
======= ======= ======= ======= ======= ======= =======
Net income (loss) per share(2)................. $ 0.05 $ 0.05 $ (0.04) $ 0.18 $ 0.25 $ 0.11 $ 0.18
======= ======= ======= ======= ======= ======= =======
Weighted average shares outstanding............ 13,176 13,238 14,078 16,976 23,560 21,644 25,582
OTHER DATA:
Number of markets at period end:
Company...................................... 8 7 6 9 13 13 14
Franchised/licensed.......................... 23 19 15 7 2 4 0
DECEMBER 31, JUNE 30,
----------------------------------------------- -----------------
1992 1993 1994 1995 1996 1996 1997
------- ------- ------- ------- ------- ------- -------
(IN THOUSANDS)
BALANCE SHEET DATA:
Working capital*............................... $ 2,074 $ 2,579 $ 2,093 $13,895 $54,220 $52,462 $49,526
Total assets................................... 5,908 6,135 6,984 20,952 77,559 73,609 93,411
Total long-term debt........................... 314 92 24 500 0 575 2,527
Shareholders' equity........................... 2,489 3,074 2,435 16,924 71,284 67,120 78,041
- ---------------
* Subsequent to June 30, 1997, the Company used $39.9 million of cash to fund
two acquisitions. See "Business -- Recent Acquisitions."
(1) Net income (loss) for the years ended December 31, 1994, 1995 and 1996, and
the six months ended June 30, 1996 and 1997, includes franchise termination
income (net of tax) of $336,000, $261,000, $208,000, $157,000, and $100,000
respectively.
(2) Net income (loss) per share for the years ended December 31, 1995 and 1996,
and the six months ended June 30, 1996 and 1997, includes franchise
termination income per share of $0.02, $0.01, $0.01, $0.01 and $0.00,
respectively.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in connection with the Company's
Consolidated Financial Statements and the related Notes thereto incorporated by
reference herein.
OVERVIEW
Romac is a provider of specialty staffing services in 16 markets in the
United States. The Company recognizes that it has two distinct and unique
customers: organizations and the knowledgeable people who make them successful.
The Company recently changed the manner in which it classifies its service
offerings in order to better serve the specialty needs of its customers. Prior
to this change, the Company's service offerings were organized into three
divisions: Professional Temporary, Contract Services and Search Services, which
reflected the time duration of the assignments in each division. In order to
align itself more closely with the organizational structure and skills of its
customers, the Company now organizes its service offerings by the following
functions: Information Technology, Finance and Accounting, Human Resources and
Operating Specialties.
Revenue Recognition
Net service revenues consist of sales, net of credits and discounts. The
Company recognizes flexible revenue based on hours worked by assigned personnel
on a weekly basis. Search fees are recognized in contingency search engagements
upon the successful completion of the assignment. In retained search engagements
the initial retainer is recognized upon execution of the agreement, with the
balance recognized on completion of the search. Franchise fees were determined
based upon a contractual percentage of the revenue billed by franchisees. Costs
relating to the support of franchised operations were included in the Company's
selling, general and administrative expenses. The last remaining franchisee and
licensee was terminated at the end of the second quarter of 1997. The Company
was the legal employer of temporary and contract personnel under its licensing
arrangements, and accordingly includes revenues and related direct costs of
licensed offices in its net service revenues and direct cost of services,
respectively. Commissions paid to licensees were based upon a percentage of the
gross profit generated, and was included in the Company's direct cost of
services.
Gross Profit
Gross profit for Professional Temporary and Contract Services is determined
by deducting the direct cost of services (temporary and contract personnel
payroll wages, payroll taxes, payroll-related insurance, and licensee
commissions) from net service revenues. Consistent with industry practices,
Search Services classifies all costs as selling, general, and administrative.
RESULTS OF OPERATIONS
The following table sets forth, as a percentage of net service revenues,
certain items in the Company's consolidated statement of income for the
indicated periods:
SIX MONTHS
YEARS ENDED DECEMBER 31, ENDED JUNE 30,
-------------------------- --------------
1994 1995 1996 1996 1997
------ ------ ------ ----- -----
Professional Temporary..................... 60.0% 52.5% 39.3% 40.9% 32.7%
Contract Services.......................... 20.1 26.0 40.9 38.5 51.0
----- ----- ----- ----- -----
Total flexible billings.......... 80.1 78.5 80.2 79.4 83.7
Search Services............................ 19.9 21.5 19.8 20.6 16.3
----- ----- ----- ----- -----
Net service revenues............. 100.0 100.0 100.0 100.0 100.0
Gross profit............................... 39.1 44.2 42.9 43.3 40.2
Selling, general and administrative
expenses................................. 36.8 33.4 32.2 32.5 30.0
Income (loss) before taxes................. (1.0) 11.0 10.6 10.0 9.9
Net income (loss).......................... (1.5) 6.6 6.3 6.0 6.0
14
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SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 1996
Net Service Revenues. Net service revenues increased 94.3% to $74.6
million for the six month period ending June 30, 1997 as compared to $38.4
million for the same period in 1996. This increase was comprised of a $32.0
million increase in Flexible Billings (Professional Temporary and Contract
Services revenues combined) and a $4.2 million increase in Search Services for
the six month period ending June 30, 1997, as described below.
Professional Temporary revenues increased 55.4% to $24.4 million for the
six month period ending June 30, 1997 as compared to $15.7 million for the same
period in 1996. This increase resulted primarily from an increase in the number
of hours billed during the six month period ending June 30, 1997 as compared to
the same period in 1996. Additionally, the average hourly bill rate for the six
month period ending June 30, 1997 increased 14.8% over the prior year due to a
continued demand for the Company's knowledge workers and the Company's ability
to pass on increased wage costs of its knowledge workers to its customers.
Contract Services revenues increased 156.8% to $38.0 million for the six
month period ending June 30, 1997 as compared to $14.8 million for the same
period in 1996. This increase resulted from an increase in the number of hours
billed during the six month period ending June 30, 1997 as compared to the same
period in 1996. Additionally, the average hourly bill rate for Company-owned
operations increased 13.9% for the six month period ending June 30, 1997 due to
the continued penetration into existing markets where hourly bill rates are
higher such as Boston and San Francisco, as well as the increased expansion of
the Company's ETD which concentrates on placing knowledge workers in highly
skilled technologies with the greatest demand.
Search Services increased 53.1% to $12.1 million for the six month period
ending June 30, 1997 as compared to $7.9 million for the same period in 1996.
The increase resulted primarily from an increase in the number of search sales
consultants, which increased the number of placements made during the six month
period ending June 30, 1997 as compared to the same period in 1996. The average
fee for each placement made during the periods remained relatively constant.
Franchise and licensee revenues, which are included in the aforementioned
revenues, decreased 58.3% to approximately $793,000 for the six month period
ending June 30, 1997 from approximately $1.9 million for the same period in
1996. The decrease was primarily due to the effects of discontinued franchisee
and licensee operations in Minneapolis, St. Louis, and Portland during 1996, the
acquisition of the San Francisco franchisee in June 1996 and the discontinuance
of franchisee and licensee operations in Raleigh on March 31, 1997.
The Company has recently begun to report net service revenues based upon
the four functional areas of services offered by the Company. For the six month
period ending June 30, 1997, the net service revenue breakdown for Information
Technology, Finance & Accounting, Human Resources and Operating Specialties was
$34.4 million, $31.0 million, $5.8 million and $3.3 million, respectively, as
compared to $15.7 million, $19.1 million, $2.3 million and $1.3 million,
respectively, for the same period in 1996.
Gross Profit. Gross profit increased 80.7% to $30.0 million for the six
month period ending June 30, 1997 as compared to $16.6 million for the same
period in 1996. Gross profit as a percentage of net service revenues decreased
to 40.2% for the six month period ending June 30, 1997 as compared to 43.2% for
the same period in 1996. This decrease was a result of the continuing change in
the Company's business mix whereby revenues from flexible billings,
traditionally with lower gross margins than Search Services revenues, increased
to 83.6% of the Company's total revenues for the six month period ending June
30, 1997 as compared to 79.4% for the same period in 1996.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased 79.2% to $22.4 million for the six month
period ending June 30, 1997 as compared to $12.5 million for the same period in
1996. Selling, general and administrative expenses as a percentage of net
service revenues decreased to 30.0% for the six month period ending June 30 1997
compared to 32.6% in 1996. This decrease in selling, general and administrative
expense as a percentage of net service revenues resulted from greater operating
efficiencies and economies of scale gained from a larger revenue base.
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Depreciation and Amortization Expenses. Depreciation and amortization
expenses increased 67.7% to approximately $1.3 million for the six month period
ending June 30, 1997 as compared to approximately $775,000 for the same period
in 1996. Depreciation and amortization expenses as a percentage of net service
revenues decreased to 1.7% for the six month period ending June 30, 1997 as
compared to 2.0% for the same period in 1996. This decrease as a percentage of
net service revenues was due to a change in accounting estimate of the
amortization period of goodwill related to certain acquisitions from 15 to 30
years during the six month period which reduced amortization expense by
approximately $160,000. This decrease was partially offset by increased
depreciation of approximately $114,000 on computer equipment for new locations
and additional employees.
Other (Income) Expense. Other (income) expense increased 138.1% to
approximately $1.1 million of income for the six month period ending June 30,
1997 as compared to approximately $462,000 of income for the same period in
1996. This increase was primarily due to interest earned by the Company on the
investment of the proceeds from its May 1996 Common Stock offering.
Income Before Taxes. Income before taxes increased 94.7% to $7.4 million
for the six month period ending June 30, 1997 as compared to $3.8 million for
the same period in 1996, primarily as a result of the above factors.
Provision for Income Taxes. Provision for income taxes increased 93.3% to
$2.9 million for the six month period ending June 30, 1997 as compared to $1.5
million for the same period in 1996. The effective tax rate was 39.1% for the
six month period ending June 30, 1997 as compared to 40.0% for the same period
in 1996.
Net Income. Net income increased 95.7% to $4.5 million for the six month
period ending June 30, 1997 as compared to $2.3 million for the same period in
1996, primarily as a result of the above factors.
1996 COMPARED TO 1995
Net Service Revenues. Net service revenues increased approximately 106.1%
to $94.2 million in 1996 from $45.7 million in 1995. The increase in net service
revenues was partially offset by an approximate $1.5 million decrease in net
service revenues from franchisee and licensee operations for 1996 as compared to
1995, as several franchisee and licensee operations were discontinued during
1996.
Professional Temporary revenues increased approximately 54.2% to $37.0
million in 1996 from $24.0 million in 1995. This increase in revenues was
primarily a result of a $8.6 million increase in revenues from existing
Company-owned operations and a $4.4 million increase in revenues attributable to
acquired operations. The increase attributable to Company-owned operations
resulted primarily from an increase in the number of hours billed by
Company-owned operations during 1996 as compared to 1995, as well as from an
increase in the average hourly bill rate for 1996 to approximately $18 per hour
as compared to approximately $17 per hour in 1995.
Contract Services revenues increased approximately 223.5% to $38.5 million
in 1996 from $11.9 million in 1995. This increase in revenues was a result of a
$16.7 million increase in revenues from existing Company-owned operations and a
$9.9 million increase in revenues attributable to acquired operations. The
increase attributable to Company-owned operations resulted from an increase in
the number of hours billed during 1996 as compared to 1995, as well as from an
increase in the average hourly bill rate for 1996 to approximately $52 per hour
as compared to approximately $44 per hour in 1995.
Search Services revenues increased approximately 90.8% to $18.7 million in
1996 from $9.8 million in 1995. This increase in revenues was a result of a $4.3
million increase in revenues from existing Company-owned operations and a $4.6
million increase in revenues attributable to acquired operations. The increase
in Company-owned operations resulted primarily from an increase in the number of
search sales consultants, which increased the number of search placements made
during 1996 as compared to 1995. The average placement fee for the Search
Services remained relatively constant during the periods involved.
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Franchise and license revenues, which are included in the aforementioned
Professional Temporary and Contract Services revenues, decreased approximately
31.9% to $3.2 million in 1996 from $4.7 million in 1995. The decrease was
primarily due to the effects of discontinued franchisee and licensee operations
during 1996.
After taking into account the decreases in net service revenues
attributable to discontinued franchisee and licensee operations, the net service
revenue comparisons reflect a continued improvement in the demand for the
Company's specialized staffing services. The Company opened two new
Company-owned locations during 1996: Pittsburgh in February and Minneapolis in
April.
Gross Profit. Gross profit increased approximately 100.0% to $40.4 million
in 1996 from $20.2 million in 1995. Gross profit as a percentage of net service
revenues decreased to 42.9% in 1996 from 44.2% in 1995. This decrease in gross
profit margin as a percentage of net service revenues was a result of the
continuing changes in the Company's business mix whereby revenues from flexible
billings, traditionally with lower gross margins than Search Services, increased
to 80.1% of the Company's net service revenues for 1996 as compared to 78.6% for
1995.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased approximately 99.3% to $30.3 million in 1996
from $15.2 million in 1995. Selling, general and administrative expenses as a
percentage of net service revenues decreased to 32.2% in 1996 from 33.3% in
1995. This decrease in selling, general and administrative expenses as a
percentage of net service revenues resulted from greater operating efficiencies
and economies of scale gained from a larger revenue base.
Depreciation and Amortization Expenses. Depreciation and amortization
expenses increased approximately 260.0% to $1.8 million in 1996 from $500,000 in
1995, primarily because the Company incurred a full year of depreciation expense
on approximately $1.2 million of new computer and telephone equipment that was
purchased during 1995, began depreciating approximately $1.3 million of computer
and telephone equipment and approximately $700,000 of furniture and fixtures
acquired in 1996, and incurred additional amortization expense in 1996 related
to goodwill recorded as a result of asset acquisitions made by the Company
during 1996.
Other (Income) Expense. Other (income) expense increased by approximately
198.2% to $1.7 million of income in 1996 from approximately $570,000 of income
in 1995. This increase was primarily due to interest earned by the Company on
the investment of the proceeds from its May 1996 Common Stock offering and
expenses relating to capital lease obligations entered into in 1995 declined in
1996. This increase was partially offset by a decrease in franchisee termination
income received by the Company during the periods involved, as $346,189 was
received in 1996 as compared to $435,000 in 1995.
Income Before Taxes. Income before taxes increased 98.0% to $9.9 million
in 1996 from $5.0 million in 1995, primarily as a result of the above factors.
Provision for Income Taxes. Provision for income taxes increased
approximately 100% to $4.0 million in 1996 as compared to $2.0 million in 1995.
The effective income tax rate was constant at approximately 40.0% for both
periods.
Net Income. Net income increased approximately 100% to $6.0 million in
1996 as compared to $3.0 million in 1995, primarily as a result of the above
factors.
1995 COMPARED TO 1994
Net Service Revenues. Net service revenues increased approximately 12.0%
to $45.7 million in 1995 from $40.8 million in 1994. The increase in net service
revenues was partially off-set by an approximate $3.9 million decrease in net
service revenues from franchisee and licensee operations for 1995 as compared to
1994, as several franchisee and licensee operations were discontinued at the end
of 1994.
Professional Temporary revenues decreased approximately 2.0% to $24.0
million in 1995 from $24.5 million in 1994. This decrease was primarily the
result of an approximate $3.7 million decrease in Professional Temporary
revenues from franchisee and licensee operations for 1995 as compared to 1994,
as several Professional Temporary franchisee and licensee operations were
discontinued at the end of 1994. This
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decrease in revenues was attributable to a decrease in the number of
Professional Temporary hours billed in 1995 as compared to 1994.
Contract Services revenues increased approximately 45.1% to $11.9 million
in 1995 from $8.2 million in 1994. This increase in revenues was attributable to
an increase in the number of Contract Services hours billed in 1995 as compared
to 1994.
Search Services increased approximately 21.0% to $9.8 million in 1995 from
$8.1 million in 1994. This increase was primarily attributable to an increase in
search sales consultants and an improved economic environment which increased
the number of search placements made in 1995 as compared to 1994.
Franchise and license revenues, which are included in the aforementioned
revenues, decreased approximately 45.3% to $4.7 million in 1995 from $8.6
million in 1994. The decrease was primarily attributable to the termination of
four franchise and license arrangements during the later part of 1994, offset in
part by the growth in existing service lines of continuing licensed operations.
After taking into account the decreases in net service revenues
attributable to discontinued franchisee and licensee operations, the net service
revenue comparisons reflected a continued improvement in the demand for the
Company's specialized staffing services. The average hourly bill rate for
Professional Temporary and Contract Services and the placement fee average for
Search Services remained relatively constant for all the periods involved. The
Company opened three new Company-owned locations during 1995: Dallas in
February; Philadelphia in March; and Houston in November.
Gross Profit. Gross profit increased approximately 27.0% to $20.2 million
in 1995 from $15.9 million in 1994. Gross margin increased to 44.2% in 1995 from
39.0% in 1994. The increase in gross margin resulted from the combined effects
of the decrease in franchisee and licensee revenue at lower margins and the
increase in Search Services at higher margins.
Selling, General, and Administrative Expenses. Selling, general, and
administrative expenses increased approximately 1.3% to $15.2 million in 1995
from $15.0 million in 1994. Selling, general and administrative expenses as a
percentage of net service revenues decreased to 33.3% in 1995 from 36.8% in
1994. This decrease in selling, general and administrative expenses as a
percentage of net service revenues resulted from greater operating efficiencies
and economies of scale gained from a larger revenue base, along with expense
savings arising from the 1994 Combination.
Combination Expenses. The Company did not incur any combination expenses
in 1995 as compared to approximately $2.3 million of advisory services,
severance costs and other expenses related to the 1994 Combination that were
incurred in 1994.
Other (Income) Expense. Other income decreased by approximately 52.5% to
$570,000 in 1995 from approximately $1.2 million in 1994 due to a decrease in
franchisee termination income received by the Company during the periods
involved, as $435,000 was recorded in 1995 as compared to $560,000 in 1994. In
addition, the Company received $500,000 in proceeds from a life insurance policy
on a deceased Company employee in 1994.
Income (Loss) Before Taxes. Income before taxes increased to $5.0 million
in 1995 from a loss of $413,000 in 1994, primarily as a result of the above
factors.
Provision for Taxes. Provision for taxes increased 974.3% to $2.0 million
in 1995 or 40.0% of income before income taxes as compared to $186,165 for 1994.
Although the Company had an operating loss for financial reporting purposes in
1994, it had income tax expenses of $186,165 primarily due to non-deductible
advisory fees related to the 1994 Combination.
Net Income (Loss). Net income was $3.0 million in 1995 compared to a loss
of $599,000 in 1994, primarily as a result of the above factors.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 1997, the Company's sources of liquidity included $30.4
million in cash and cash equivalents, $3.9 million in short-term investments,
and $15.3 million in additional net working capital. The
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Company used $39.9 million of cash to fund two acquisitions consummated
subsequent to June 30, 1997. As of September 30, 1997, $6.0 million was
outstanding under the Line of Credit, while $24.0 million was available for
borrowing. See "Business -- Recent Acquisitions". The Company intends to use a
portion of the net proceeds from the Offering for the repayment of indebtedness
outstanding under the Line of Credit, which expires on March 31, 2000, and, as
of September 30, 1997, accrues interest at a rate of 6.42%.
During the first six months of 1997, cash flow provided by operations was
$2.7 million, resulting primarily from net income, non-cash expenses
(depreciation and amortization) and increases in operating payroll liabilities,
partially offset by an increase in accounts receivable. The increase in accounts
receivable reflects the increased volume of business during the first nine
months of 1997 from Company-owned locations and the initial funding of the
accounts receivable base in acquired operations.
During the first six months of 1997, cash flow used in investing activities
was $15.7 million, resulting primarily from the Company's use of $11.5 million
in cash for acquisitions.
The Company has entered into a letter of intent, dated September 18, 1997
regarding the possible purchase of substantially all of the assets of a company
engaged in the business of providing information technology contract services.
The purchase price is expected to be approximately $3.3 million. The Company is
in the process of completing its due diligence and negotiating a definitive
acquisition agreement. Accordingly, there can be no assurance that this possible
acquisition will be consummated. See "Business -- Recent Acquisitions."
The Company believes that cash flow from operations and borrowings under
the Company's Line of Credit, or other credit facilities that may become
available to the Company in the future, will be adequate to meet the working
capital requirements of the Company's current operations for at least the next
12 months. The Company's estimate of the period of time the proceeds of this
Offering will fund its working capital requirements is a forward-looking
statement that is subject to risks and uncertainties. Actual results could
differ from those indicated as a result of a number of factors, including the
use of such proceeds to fund possible acquisitions. See "Use of Proceeds."
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
Earnings Per Share. In February 1997, the Financial Accounting Standards
Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No.
128, "Earnings per Share," which established a new accounting principle for the
calculation of earnings per share. The new pronouncement is effective for
accounting periods ending after December 15, 1997 and earlier application is not
permitted. Upon adoption, all prior period earnings per share data presented
shall be restated to conform to this Statement. Adoption of this standard is not
expected to have a material impact on amounts previously reported as earnings
per share. Although the Company is unable to determine the impact of this
standard on future periods, such impact may materially effect the Company's
earnings per share.
Reporting Comprehensive Income. In June 1997, the FASB issued SFAS No.
130, "Reporting Comprehensive Income," which will require the Company to
disclose, in financial statement format, all non-owner changes in equity. Such
changes include cumulative foreign currency translation adjustments and certain
minimum pension liabilities. SFAS No. 130 is effective for fiscal years
beginning after December 15, 1997 and requires presentation of prior period
financial statements for comparability purposes. The Company expects to adopt
this standard during the year ended December 31, 1998. The adoption of this
standard is not expected to have a material impact on disclosure in the
Company's financial statements.
Disclosures About Segments of an Enterprise and Related Information. In
June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information," which establishes standards for reporting
information about operating segments in annual financial statements and interim
financial reports. It also establishes standards for related disclosures about
products and services, geographic areas and major customers. SFAS No. 131 is
effective for fiscal years beginning after December 15, 1997 and requires
presentation of prior period financial statements for comparability purposes.
The Company is currently evaluating its required disclosures under SFAS No. 131
and expects to adopt this standard during the year ended December 31, 1998.
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BUSINESS
GENERAL
Romac is a provider of specialty staffing services in 16 markets in the
United States. The Company recognizes that it has two distinct and unique
customers: organizations and the knowledgeable people who make them successful.
The Company recently changed the manner in which it classifies its service
offerings in order to better serve the specialty needs of its customers. Prior
to this change, the Company's service offerings were organized into three
divisions: Professional Temporary, Contract Services and Search Services, which
reflected the time duration of the assignments in each division. In order to
align itself more closely with the organizational structure and skills of its
customers, the Company now organizes its service offerings by the following
functions: Information Technology, Finance and Accounting, Human Resources and
Operating Specialties.
RECENT ACQUISITIONS
In the past two years, the Company has completed a number of acquisitions,
including two acquisitions in September 1997. On September 5, 1997, the Company
acquired all of the outstanding shares of capital stock of Uni* Quality
Solutions, Inc., d/b/a UQ Solutions, Inc., ("UQ") for $19.6 million, before
consideration of earnouts. UQ's primary office is located in Naperville,
Illinois (suburban Chicago). UQ provided professional information technology
personnel on a contract basis and had revenues for the year ended December 31,
1996 and the six months ended June 30, 1997 of approximately $12.4 million and
$9.7 million, respectively. On September 29, 1997, the Company acquired
substantially all of the assets of Sequent for $20.3 million, before
consideration of earnouts. Sequent has offices located in San Jose and Orange
County, California, and provided information technology software engineering
professionals on a contract basis to companies in the high-technology industries
located primarily in California. Sequent had revenues for the year ended
December 31, 1996 and the six months ended June 30, 1997 of approximately $15.9
million and $10.1 million, respectively.
The Company has entered into a letter of intent dated September 18, 1997
for the purchase of substantially all of the assets of a company engaged in the
business of providing information technology contract services, for a purchase
price of $3.3 million. This acquisition candidate had revenues for the year
ended December 31, 1996 and the six months ended June 30, 1997 of approximately
$3.9 million and $2.4 million, respectively. This acquisition candidate is
located in the western United States and if consummated, will enable the Company
to enter into a new metropolitan market. The Company is in the process of
completing its due diligence and negotiating a definitive acquisition agreement.
Accordingly, there can be no assurance that this acquisition will be
consummated.
INDUSTRY OVERVIEW
The temporary employment service industry has experienced significant
growth in response to the changing work environment in the United States.
Fundamental changes in the employer-employee relationship continue to occur,
with employers developing increasingly stringent criteria for permanent
employees, while moving toward project-oriented temporary and contract hiring.
This trend has been advanced by increasing automation that has resulted in
shorter technological cycles and by global competitive pressures. Many employers
have responded to these challenges by turning to temporary and contract
personnel to keep personnel costs variable, to achieve maximum flexibility, to
outsource highly specialized skills, and to avoid the negative effects of
layoffs.
Rapidly changing regulations concerning employee benefits, health
insurance, retirement plans, and the highly competitive business climate have
also prompted many employers to take advantage of the flexibility offered
through temporary and contract staffing. Additionally, Internal Revenue Service
and Department of Labor regulations concerning the classification of employees
and independent contractors have significantly increased demand by prompting
many independent contractors to affiliate with employers like the Company.
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The temporary staffing industry has grown rapidly in recent years as
companies have utilized temporary employees to manage personnel costs, while
meeting specialized or fluctuating staffing requirements. According to the
Staffing Industry Report, the United States temporary staffing industry grew
from approximately $20.4 billion in revenue in 1991 to approximately $47.1
billion in revenue in 1996, a compound annual growth rate of 18.2%. One of the
fastest growing sectors for the Company, as well as the industry, is information
technology services. Revenue for this sector in 1996 is estimated to have been
$11.7 billion, a 27.2% increase over 1995. The Company believes that
professional and technical staffing within the temporary staffing industry
requires longer-term, more highly-skilled personnel services and offers the
opportunity for higher profitability than the clerical and light industrial
staffing segments, because of the value-added nature of professional and
technical staffing personnel. The National Association of Temporary and Staffing
Services has estimated that more than 90.0% of all U.S. businesses utilize
temporary staffing services.
BUSINESS STRATEGY
The Company's objective is to be a nationally recognized leader in
providing its specialty staffing services. The key elements of the Company's
business strategy in seeking to achieve this objective include:
Implement the KnowledgeForce Strategy. As the staffing industry
continues to evolve in today's economy, its impact on organizations and
their ability to attract and secure intellectual capital has been enormous.
The Company believes, and government statistics support, that the demand
for and the supply of intellectual capital is moving away from a permanent
employment status towards an increasingly fluid and flexible employment
relationship through temporary and contract staffing. The Company believes
that the intellectual capital of today, and even more so in the future,
will be concentrated in highly skilled individuals whom the Company
collectively refers to as the "KnowledgeForce." In response to its beliefs,
the Company has implemented a strategy to become known as the
"KnowledgeForce Resource" in each market it serves.
Focus on Value-Added Services. The Company focuses exclusively on
providing value-added specialty staffing services to its clients. The
Company believes that providing these specialty services to its clients
offers greater profitability than the clerical and light industrial sectors
of the temporary staffing industry. In addition, the Company believes,
based upon data published by the U.S. Bureau of Labor Statistics and other
sources, that employment growth will be greater in the Company's sectors
than in the traditional clerical and light industrial sectors. The
placement of highly skilled personnel requires a distinct operational
knowledge to effectively recruit and screen candidates, match them to
client needs, and develop and manage the resulting relationships. The
Company believes its historical focus in this market and name recognition,
combined with management's operating expertise, provide it with a
competitive advantage.
Build Long-Term, Consultative Relationships. The Company has
developed long-term relationships with its clients by providing integrated
solutions to their specialty staffing requirements. The Company strives to
differentiate itself by working closely with its clients to maximize their
return on human assets. In addition, the Company's ability to offer a broad
range of temporary and contract personnel services coupled with its
permanent placement capability, offers the client a single-source provider
of specialty staffing services. This ability enables the Company to
emphasize consultative rather than transactional client relationships.
Implement Carve-Out Strategy. The Company has begun implementation of
its carve-out marketing strategy, which encourages large contractors of
staffing services to carve-out the professional and technical sectors of
staffing contracts and award such business to specialty staffing services
providers instead of large generalist staffing firms. As a result of this
strategy, the Company has signed several contracts with major national
corporations for certain of the Company's services. Management believes
there is substantial opportunity for growth through the continued
implementation of this strategy.
Achieve Extensive Client Penetration. The Company's client
development process focuses on repeated contacts with client personnel
responsible for staffing decisions. Contacts are made within numerous
functional departments and at many different organizational levels within
the client. The
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Company's operating employees are trained to develop a thorough
understanding of each client's total staffing requirements. In addition,
although the Company is organized functionally, its employees are trained
and incentivized to recognize cross-selling opportunities for all of the
Company's other services.
Leverage Proprietary Technology. The Company utilizes proprietary
technologies and processes in the staffing, marketing, and management of
its operations. The Company's Professional Recruiters Operating System
("PROS") provides operating employees with a systematic approach to
identifying, monitoring, and serving the needs of the Company's customers
(clients and candidates). Once operating employees obtain information
regarding a customer, the data is entered into the Company's integrated
operating system and is coded for future action. Operating employees are
then prompted by means of an automated planner to contact the customer
periodically to monitor and service the needs that have been identified.
The Company's emphasis on the utilization of technology has resulted in the
delivery of higher quality service, greater operating efficiency, and
increased employee productivity. See "Business -- Professional Recruiters
Operating System."
Recruit and Retain High-Quality Professionals. The Company places
great emphasis on recruiting qualified temporary, contract, and permanent
placement candidates. Each candidate is screened by an operating employee
with a compatible technical background to determine qualifications and to
match them with client needs. The Company believes it has a recruiting
advantage over those of its competitors that lack the ability to offer
candidates temporary, contract and permanent opportunities, as well as
assignments in candidates' specialties. In order to increase its
competitive advantage in recruiting high-quality professionals, the Company
utilizes a stock option plan whereby selected contract services candidates
will receive options to purchase the Company's shares.
Encourage Operating Employee Achievement. The Company's management
promotes a quality-focused, results-oriented culture. Operating employees
are selected based on their willingness to assume responsibility and
promote the Company's philosophy. All operating employees are given
numerous incentives to encourage the achievement of corporate goals. The
Company fosters a team-oriented and high energy environment, celebrates the
successes of its employees, and attempts to create a "spirited" work
environment.
GROWTH STRATEGY
The Company's growth strategy is to expand its services in existing markets
where it does not offer its full range of services, and to enter new markets.
The key elements of the Company's growth strategy are as follows:
Introduce Functional Service Offerings to Existing Markets. The
Company currently offers four areas of functional services and only two of
the Company's 16 markets offers the full range of services. As a result,
the Company believes that a substantial opportunity exists to increase the
number of service offerings within its existing markets. The Company
intends to offer its recently expanded full range of functional services
into each of its existing locations.
Open New Locations. The Company continually evaluates potential
geographic expansion into new metropolitan areas. To facilitate new market
entry, the Company plans to transfer or recruit experienced personnel for
positions in new locations as they are opened. The Company also seeks to
leverage its national accounts to facilitate its entry into new markets.
Since February 1995, the Company has opened offices in Dallas, Houston,
Minneapolis, Philadelphia, Pittsburgh and Washington, D.C.
Leverage Existing Client Relationships and Develop New Clients. The
Company continually identifies additional growth opportunities within
existing and new clients as a result of the interrelationships among its
service offerings. The Company has established goals for cross-selling and
has trained and incentivized its operating employees to actively sell the
Company's full range of services, in an effort to maximize its reach into
the marketplace.
Acquire Strategic Businesses. The Company intends to continue to
pursue the acquisition of complementary specialty staffing businesses. The
Company's preference is to acquire businesses in
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markets in which the Company currently has a location or formerly
maintained a franchised or licensed location, although other markets will
also be explored. The Company's primary acquisition candidates are local or
regional specialty staffing firms with established client relationships in
markets targeted by the Company.
Expand Major and National Accounts Program. The Company will continue
to market its full range of services to existing and new clients in order
to position the Company as the preferred vendor for specialty staffing
services. The Company believes the major accounts program enables it to
further penetrate its clients by giving the Company greater access to key
staffing decision makers including the support of the client's purchasing
and procurement team. This increased access allows the Company to achieve
greater operating leverage through improved efficiencies in the marketing
process. The Company has successfully secured several national agreements
for technical and professional specialty staffing services. The Company
intends to aggressively pursue such agreements to facilitate geographic
expansion and existing market penetration.
Introduce New Services. The Company continually evaluates the
introduction of new services in an effort to meet customer demands. The
Company has introduced contract placement of pharmaceutical, health care,
and manufacturing services personnel to complement its existing search
capabilities in these areas. Additionally, the Company acquired an entity
that provides outplacement services and human resource contract and
outsourcing services. To enhance the technical capabilities and perceived
quality of the Company's Information Technology Contract Services, the
Company has formed ETD through which selected employees receive extensive
training in emerging information technologies and are assigned to client
environments for periods generally ranging from six months to two years.
FUNCTIONAL ORGANIZATION
In March 1997, the Company changed the manner in which it classifies its
service offerings in order to better serve the specialty needs of its customers.
Prior to this change, the Company's service offerings were organized into three
divisions: Professional Temporary, Contract Services and Search Services, which
reflected the time duration of the assignments in each division. In order to
align itself more closely with the organizational structure and skills of its
customers, the Company now organizes its service offerings by function.
The functional areas are defined as:
Information Technology. Computer and Data Processing Services heads
the Bureau of Labor Statistics' list of the fastest growing industries. The
shortage in technical expertise to operate the advanced systems that
businesses have acquired over the last decade is a major catalyst
contributing to the growth of this segment. The Company's Information
Technology workforce focuses on more sophisticated areas of information
technology (i.e., systems/applications programming, systems analysis, and
networking), where the shortage of personnel is the most acute.
The combination of a growing number of available software
applications, the increased complexity of such software applications, and
the short supply of qualified software expertise contributed to the
Company's decision to create ETD in 1995. ETD provides intensive classroom
and experience-based training to the Company's consultants and helps the
Company keep pace with the growing demand for its high-end services. The
Company believes the sophistication of these technologies, coupled with the
significant unmet demand, provide an attractive opportunity for the Company
to generate new, higher margin business, and to add value to its clients.
The Company's Information Technologies services are currently offered in 13
of the Company's markets.
Finance and Accounting. In its markets, the Company believes it has
built a strong reputation for providing qualified finance and accounting
professionals to businesses. The Company believes this reputation
facilitates the Company's recruiting and placement efforts. The Company's
Finance & Accounting professionals specialize in areas such as corporate
taxation, budget preparation and analysis, financial reporting, cost
analysis, and audit services. To augment its traditional Flexible Staffing
Services
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and Search Services, the Company recently introduced Romac Executive
Solutions, which provides chief financial officers, controllers and other
high-level financial professionals on a contract basis for assignment
lengths generally ranging from three to six months. The Company's Finance
and Accounting services are currently offered in 14 of the Company's
markets.
Human Resources. With increasing employment regulations, the
administrative burden on employers is becoming more complex and more
time-consuming than ever before and consequently are increasingly being
outsourced. The Company's Human Resources professionals specialize in the
areas of recruiting, benefits administration, labor relations, workers
compensation, training and retirement plans. In addition, the Company
provides human resources outplacement, outsourcing and consulting services.
The Company's Human Resources services are currently offered in three of
the Company's markets.
Operating Specialties. This segment consists of revenues generated by
the placement of professionals skilled in the pharmaceutical,
manufacturing, health care, life insurance, investment and banking
industries. Positions that would be classified in these categories include:
research and regulatory personnel for pharmaceutical clients, quality
engineers for manufacturing clients, hospital administrators for health
care clients and lenders for banking clients. The Company's Operating
Specialties services are currently offered in three of the Company's
markets.
Once the functional challenges of the client have been identified, the
Company can then consult with the client to determine its staffing and time
duration requirements. The Company offers its staffing services in one of two
categories: Flexible Staffing Services or Search Services.
FLEXIBLE STAFFING SERVICES
Flexible Staffing services are offered by the Company to provide personnel
in the fields of information technology, finance and accounting, human resources
and operating specialties. The Company currently offers flexible staffing
services in sixteen metropolitan markets. The two primary service offerings
within Flexible Staffing are distinguished below:
Professional Temporary. Professional Temporary provides professional
temporary personnel in the fields of finance and accounting.
Professional Temporary offers clients a reliable and cost-effective
means of handling uneven or peak workloads caused by events such as
periodic financial reporting deadlines, tax deadlines, special projects,
systems conversions, and unplanned staffing fluctuations. Professional
Temporary meets such clients' needs with personnel who have an extensive
range of accounting and financial experience, including corporate taxation,
budget preparation and analysis, financial reporting, regulatory filings,
payroll preparation, cost analysis and audit services. Through the use of
the Company's services, clients are able to avoid the cost and
inconvenience of hiring and terminating permanent employees. Typically, the
duration of assignments in the Professional Temporary is six to twelve
weeks.
Candidates for Professional Temporary are obtained from Search
Services, referrals, and advertising in local newspapers and on the
Company's home page on the World-Wide Web. The Company believes it has a
competitive advantage in attracting candidates because of its ability to
provide assignments ranging from short term to permanent. Access by the
Professional Temporary to the Search Services' candidate pool provides a
candidate the opportunity to obtain permanent employment as a result of a
temporary assignment, earnings that may allow a candidate to be more
selective when evaluating permanent opportunities, and additional
experience that can enhance a candidate's skills and overall marketability.
Each candidate is screened by an operating employee with a compatible
background to determine his qualifications and to match these
qualifications with individual client needs. This screening includes an
in-depth interview, skill testing, reference checks, and, in some cases,
credit checks and additional background checks.
Professional Temporary targets Fortune 1000 companies and other large
organizations, with a primary focus on organizations determined to have the
potential need for the Company's full range of services. In order to
maximize its marketing effectiveness, the Company provides extensive
training to its
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employees, which emphasizes the consulting nature of its business. The
Company's employees develop marketing plans composed of multiple visits,
frequent telemarketing activity, monthly mailings and other actions
supported through the use of the PROS and daily staff meetings. The Company
believes that these techniques and processes provide the opportunity to
expand its business within its clients' organizations, solidify client
relationships, and develop new clients. The Company recognizes that in some
cases Professional Temporary personnel will be offered permanent positions.
If a client requests that a temporary employee become a permanent employee,
the Company typically charges a "conversion" fee that is calculated as a
percentage of the candidate's initial annual compensation.
Contract Services. Contract Services provides personnel on a
contractual basis, which typically averages six to nine months in duration.
Contract Services has traditionally focused on providing information
systems personnel to assist clients whose needs range from mainframe
environments to single work stations. These consultants perform a wide
range of services, including software development, database design and
management, system administration, end-user training and acceptance,
network design and integration, information strategy development, business
and systems plans, and standardization of technology and business
procedures. The size and growth of the information services industry in
recent years have been driven largely by rapid technological advances.
These advances have included the availability of increased computing power
at lower costs and the emergence of new information systems capabilities.
As a result, the ability of businesses to benefit from the application of
computer technology has been greatly enhanced and has been accompanied by a
dramatic increase in the number of end users. At the same time, the
sophistication and complexity of the systems needed to serve these
businesses and to deliver the desired benefits have greatly increased.
Additionally, the need to contain costs has caused many businesses to
reduce the number of personnel resulting in increased dependence upon
information systems to support important functions and to improve
productivity.
The Company's base of skilled technical personnel is integral to its
success. Because technical needs are diverse and technology advances occur
frequently, technical talent is in high demand. As a result, Contract
Services focuses heavily on its recruiting efforts. In addition, the
Company focuses on training its Contract Services personnel in
sophisticated technology applications. For example, the Company has formed
ETD, which selects employees to receive extensive training in information
technologies and who are assigned to client environments for periods
generally ranging from six months to two years. The Company believes that
building a base of skilled technical personnel who are available for
assignment is as integral to its success as are its client relationships.
The March 1996 acquisition of Strategic Outsourcing, Inc., which was
renamed Romac-HR ("Romac-HR"), expanded the Company's Contract Services
functions to include human resource personnel. Romac-HR, which was founded
in 1989 in Boston, provides its clients with human resource personnel on a
contractual basis to assist in the development, implementation, and
maintenance of a wide variety of human resource processes. The Company
currently provides the human resource contract services function in the
Boston and Philadelphia markets. The Company plans to continue to introduce
the human resource contract services function into its existing markets.
The Company has expanded its Contract Services functions to include
manufacturing services, health care, and pharmaceutical personnel. Within
manufacturing services, the Company provides a wide range of quality
engineers and quality assurance personnel. Health care contract services
provides hospital administration and management personnel. Pharmaceutical
contract services provides pharmaceutical industry customers with research
and regulatory personnel. Currently, the Company services these other
functional areas on a national basis solely out of its Tampa office.
Company recruiters develop and maintain an active personnel inventory
designed to meet the needs of the Company's clients. To recruit qualified
personnel, the Company uses targeted telephone recruiting, obtains
referrals from its existing personnel and clients, and places newspaper
advertisements. The Search Services' recruiting efforts complement those of
Contract Services, and the Company believes that this combination
distinguishes it from its competitors. To foster loyalty and commitment
from its existing
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personnel, the Company maintains frequent contact and offers competitive
wages, flexible schedules and exposure to a variety of working
environments.
Contract Services concentrates on marketing its services to Fortune
1000 companies and other businesses with information systems, manufacturing
services, human resources, health care, and pharmaceutical personnel
requirements. Sales personnel emphasize the Company's ability to provide
contract personnel who can perform a wide range of services within each of
these areas through consultative contacts with client end-users, personal
visits, mailings, and telemarketing efforts.
SEARCH SERVICES
The Company provides extensive search services for professional and
technical candidates. The professional skills offered by the Search Services are
in the areas of accounting and finance, information services, financial
services, pharmaceutical research, health care, human resources, insurance and
manufacturing.
The Company performs both contingency and retained searches. A contingency
search results in payment to the Company only when a candidate is actually hired
by a client. The Company's strategy is to perform contingency searches only for
skills the Company targets as its "core-businesses." Client searches that are
outside a core-business area typically are at a management or executive level
and require a targeted research and recruiting effort. The Company typically
performs these searches as retained searches where the client pays a part of the
search fee in advance and the remainder upon completion of the search. The
Company's fee is typically structured as a percentage of the placed candidate's
first-year annual compensation.
A database of placement candidates is maintained as the result of its
continuous recruiting efforts and reputation in the industry. In addition,
consultants locate many potential candidates as the result of referrals from the
Flexible Staffing Services activities.
The Company believes that it has developed a reputation for quality search
work and that it is recognized as a leader in its search specialties. To
minimize the risk of changes in skill demand, the Company's marketing plan
incorporates a continual review of client recruitment plans for future periods
to allow for rapid changes to "in-demand" skills. The quality of the
relationship with client personnel is a key component of the strategy, and the
Company seeks to use consultative relationships to obtain insight into emerging
growth areas. The clients targeted by the Search Services are typically the same
as those targeted by the Flexible Staffing Services. This common focus is
intended to contribute to the Company's objective of providing integrated
solutions to its clients' personnel needs.
The Company's search business is highly specialized. Certain skills, such
as finance and accounting, information systems and human resources, may be
served by local offices, while other, more highly specialized operating
specialties require a regional or national focus. The Company believes that a
trend toward greater selectivity in its clients' hiring processes has
contributed to an increased demand for its Search Services. This emphasis on
quality fits well with the Company's inventory of personnel. The Company expects
that the Search Services will continue to add operating specialties in the
majority of markets served.
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MARKETS
The Company serves 16 metropolitan markets with management of the
operations coordinated from its headquarters in Tampa. The Company's
headquarters provides its offices with administrative, marketing, accounting,
training, legal, and information systems support, particularly as it relates to
the standardization of the operating processes of its offices.
The following table lists the services offered by the Company in its 16
metropolitan markets.
SERVICES OFFERED
-----------------------------------------------------
FINANCE YEAR
INFORMATION AND HUMAN OPERATING OPENED/
TECHNOLOGY ACCOUNTING RESOURCES SPECIALTIES ACQUIRED
----------- ---------- --------- ----------- --------
Atlanta, GA.................. X X 1986
Boston, MA................... X X X X 1966
Chicago, IL.................. X X X X 1985
Dallas, TX................... X X 1995
Houston, TX.................. X X 1995
Louisville, KY............... X 1992
Miami/Ft. Lauderdale, FL..... X X 1982
Minneapolis, MN.............. X 1996
Orange County, CA............ X 1997
Orlando, FL.................. X X 1984
Philadelphia, PA............. X X X 1995
Pittsburgh, PA............... X 1996
San Francisco, CA............ X X 1989
San Jose, CA................. X X 1997
Tampa, FL.................... X X X 1980
Washington, DC............... X 1997
PROFESSIONAL RECRUITERS OPERATING SYSTEM
The Company has developed a proprietary integrated system designed to
maximize productivity and to aid in the management of its business. PROS is
designed to be a comprehensive approach to the operation and management of a
specialty staffing firm. It comprises sophisticated and proprietary operating
and computer systems initially developed in 1982 and has been continually
enhanced. The system links each office location through the use of a dedicated
network to the Company's corporate headquarters.
Through the use of PROS, market information concerning target customers is
tracked and prioritized to focus marketing and development efforts. Readily
available management reports indicate the frequency and nature of contact with
the targeted customers to support marketing plans. By using these reports,
managers provide direction and support to operating employees to ensure that
customers are properly served. A manager, concerned with the status of a
particular assignment at any point, can examine the detailed status and degree
of coverage on each assignment. PROS offers both detailed and summary reports to
provide a continuous view of key factors related to customer development and
service and employee and personnel productivity.
In addition to customer service considerations, PROS enhances the
productivity and efficiency of the operating employees. One of the primary
problems facing operating employees is the effective and productive use of
information. PROS simplifies the information recording and retrieval problem and
enables operating employees in different functional and geographical areas to
share information and communicate more effectively.
Finally, PROS helps the Company manage information by passing data from the
operating divisions software to the accounting software. This approach increases
productivity, as data have a single point of entry and can be readily accessed
by all functional areas within the Company. The Company intends to continue to
enhance its systems capabilities to streamline processes in order to improve
customer servicing.
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COMPETITION
The specialty staffing services industry is very competitive and
fragmented. There are relatively limited barriers to entry and new competitors
frequently enter the market. A number of the Company's competitors possess
substantially greater resources than the Company. The Company faces substantial
competition from large national firms and local specialty staffing firms. The
local firms are typically operator-owned, and each market generally has one or
more significant competitors. The Company also faces competition from national
clerical and light industrial staffing firms and national and regional
accounting firms that also offer certain specialty staffing services.
The Company believes that the availability and quality of candidates, the
level of service, the effective monitoring of job performance, scope of
geographic service and the price of service are the principal elements of
competition. The Company believes that availability of quality candidates is an
especially important facet of competition. In order to attract temporary and
contract assignment candidates, the Company places emphasis upon its ability to
provide permanent placement opportunities, competitive compensation and
benefits, quality and varied assignments, and scheduling flexibility. Because
many temporary and contract assignment candidates pursue other employment
opportunities on a regular basis, it is important that the Company respond to
market conditions affecting these candidates. Additionally, in certain markets
the Company has experienced significant pricing pressure from some of its
competitors. Although the Company believes it competes favorably with respect to
these factors, it expects competition to increase, and there can be no assurance
that the Company will remain competitive.
PROPERTIES
The Company owns no real estate. It leases its corporate headquarters in
Tampa, Florida, as well as space for its other locations. The aggregate square
footage of office space under leases for locations is approximately 105,000. The
leases generally run from month-to-month to five years and the aggregate annual
rent paid by the Company in 1996 was approximately $1.4 million. The Company
believes that its facilities are adequate for its needs and does not expect
difficulty replacing such facilities or locating additional facilities, if
needed.
INSURANCE
The Company maintains a number of insurance policies. Its general liability
policy has aggregate coverage of $2.0 million, with a $1.0 million limit per
occurrence. The Company maintains an automobile liability policy with a combined
single coverage limit of $500,000. The Company also carries an excess liability
policy, which covers liabilities that exceed the policy limits of the above
policies, with an aggregate and a per occurrence limit of $4.0 million.
The Company also maintains professional liability, crime and errors and
omissions policies, each with aggregate coverage of $1.0 million, covering
certain liabilities that may arise from the actions or omissions of its
temporary or permanently-placed personnel. The Company currently maintains key
man life insurance on its executive officers in an aggregate amount of $7.5
million. There can be no assurance that any of the above coverages will be
adequate for the Company's needs. See "Risk Factors -- Employment Liability
Risk."
EMPLOYEES
As of September 30, 1997, the Company and its subsidiaries employed
approximately 583 persons. Additionally, as of such date, the Company had
approximately 2,490 individuals on assignment providing professional temporary
or contract services to its clients. As the employer, the Company is responsible
for the regular and temporary payrolls and employer's share of social security
taxes (FICA), federal and state unemployment taxes, workers' compensation
insurance, and other direct labor costs relating to its temporary and contract
personnel. The Company offers access to various insurance programs and other
benefits for its temporary and contract personnel. The Company has no collective
bargaining agreements covering any of its employees or personnel, has never
experienced any material labor disruption, and is unaware of any current efforts
or plans to organize its employees or personnel. The Company considers relations
with its employees and personnel to be good.
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LEGAL PROCEEDINGS
In the ordinary course of its business, the Company is from time to time
threatened with or named as a defendant in various lawsuits, including
discrimination and harassment and other similar claims. The Company maintains
insurance in such amounts and with such coverages and deductibles as management
believes are reasonable. The principal risks that the Company insures against
are workers' compensation, personal injury, bodily injury, property damage,
professional malpractice, errors and omissions, and fidelity losses. The Company
is not currently involved in any material litigation.
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PRINCIPAL AND SELLING SHAREHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of September 30, 1997 by: (i) each of
the Company's directors and executive officers; (ii) all executive officers and
directors of the Company as a group; (iii) each person known by the Company to
own beneficially more than 5% of the Common Stock; and (iv) each of the Selling
Shareholders. Each of the holders listed below has sole voting power and
investment power over the shares beneficially owned.
SHARES BENEFICIALLY
OWNED SHARES BENEFICIALLY
PRIOR TO THE OWNED
OFFERING SHARES AFTER THE OFFERING
------------------- OFFERED -------------------
NAME NUMBER PERCENT FOR SALE NUMBER PERCENT
- ---- --------- ------- -------- --------- -------
William R. Carey, Jr.(1)................................ 40,000 * -- 40,000 *
Thomas Calcaterra(2).................................... -- * -- -- *
Richard M. Cocchiaro(3)................................. 1,598,656 6.5% -- 1,598,656 5.6%
Peter Dominici(4)....................................... 189,780 * -- 189,780 *
David L. Dunkel(5)...................................... 3,890,992 15.8% 200,000 3,690,992 12.9%
Todd W. Mansfield(6).................................... 2,200 * -- 2,200 *
Maureen A. Rorech(7).................................... 391,068 1.6% -- 391,068 1.4%
Howard W. Sutter(8)..................................... 1,623,316 6.6% -- 1,623,316 5.7%
James D. Swartz(9)...................................... 48,000 * -- 48,000 *
Gordon Tunstall(10)..................................... 40,000 * -- 40,000 *
All Directors and Executive Officers as a Group (10
persons).............................................. 7,824,012 31.8% 200,000 7,624,012 30.1%
Sacred Heart Church..................................... 10,000 * 10,000 -- *
- ---------------
* Less than 1%.
(1) The business address for Mr. Carey is 120 West Hyde Park Place, Suite 150,
Tampa, Florida 33606. Mr. Carey has a ten-year option to purchase a total
of 40,000 shares of Common Stock at an exercise price of $4.6875 per share
and 20,000 at an exercise price of $11.00 per share. The number of shares
in the table above includes 40,000 shares subject to options that are
currently exercisable.
(2) The business address for Mr. Calcaterra is 120 West Hyde Park Place, Suite
150, Tampa, Florida 33606. Mr. Calcaterra has a ten year option to purchase
a total of 40,000 shares of Common Stock at an exercise price of $10.25 per
share.
(3) The business address for Mr. Cocchiaro is 20 North Wacker Drive, Suite
1360, Chicago, Illinois 60606. The total number of shares in the table
includes 99,800 shares which are held in the name of Cocchiaro Family
Foundation, an irrevocable trust, of which Mr. Cocchiaro and his wife are
the Trustees.
(4) The business address for Mr. Dominici is 120 West Hyde Park Place, Suite
150, Tampa, Florida 33606. Mr. Dominici has three ten-year options to
purchase a total of 149,444 shares of Common Stock, 89,444 of which are
exercisable at a price of $1.365 per share, 40,000 of which are exercisable
at a price of $4.1875 per share, and 20,000 of which are exercisable at a
price of $11.00 per share. The number of shares in the table above does not
include any shares subject to options that are currently exercisable.
(5) The business address for Mr. Dunkel is 120 West Hyde Park Place, Suite 150,
Tampa, Florida 33606.
(6) The business address for Mr. Mansfield is Security Capital Group, Inc., 125
Lincoln Avenue, Santa Fe, New Mexico 87501. Mr. Mansfield has a ten-year
option to purchase a total of 20,000 shares of Common Stock at an exercise
price of $10.50 per share. The number of shares in the table does not
include any shares that are subject to options that are currently
exercisable.
(7) The business address for Ms. Rorech is 120 West Hyde Park Place, Suite 150,
Tampa, Florida 33606. Ms. Rorech has two ten-year options to purchase a
total of 69,264 shares of Common Stock, 29,264 of which are exercisable at
a price of $1.49 per share, and 40,000 of which are exercisable at a price
of $4.1875 per share. The number of shares shown in the table above does
not include any shares that are subject to options that are currently
exercisable.
(8) The business address for Mr. Sutter is 500 West Cypress Creek, Suite 200,
Ft. Lauderdale, Florida 33309. The number of shares in the table includes
1,623,316 shares held by Sutter Investment Ltd. Partnership, a Nevada
limited partnership. Mr. Sutter beneficially owns these shares as a limited
partner, director, officer and sole shareholder of the general partner,
H.S. Investments, Inc., and as such, he has the right to receive and direct
the receipt of dividends from, and proceeds from the sale of, the shares
shown in the table above.
(9) The business address for Mr. Swartz is 120 West Hyde Park Place, Suite 150,
Tampa, Florida 33606. Mr. Swartz has two ten-year options to purchase a
total of 270,000 shares of Common Stock; 120,000 shares at an exercise
price of $6.25 per share and 150,000 shares at an exercise price of $11.00
per share. The number of shares shown in the table above includes 32,000
shares subject to options that are currently exercisable.
(10) The business address for Mr. Tunstall is 13153 North Dale Mabry, Tampa,
Florida 33688. Mr. Tunstall has a ten-year option to purchase a total of
40,000 shares of Common Stock at an exercise price of $4.6875 per share and
20,000 at an exercise price of $11.00 per share. The number of shares in
the table above includes 40,000 shares subject to options that are
currently exercisable.
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UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement, the Company and the Selling Shareholders have agreed to sell to each
of the underwriters named below (the "Underwriters"), and each of the
Underwriters has severally agreed to purchase from the Company the respective
number of shares of Common Stock set forth opposite its name below:
NUMBER OF
UNDERWRITERS COMMON SHARES
- ------------ -------------
Robert W. Baird & Co. Incorporated..........................
NationsBanc Montgomery Securities, Inc......................
Prudential Securities Incorporated..........................
Smith Barney Inc. ..........................................
---------
Total............................................. 4,210,000
=========
In the Underwriting Agreement, the Underwriters have agreed, subject to the
terms and conditions set forth therein, to purchase all 4,210,000 shares of
Common Stock offered hereby if any such Common Stock are purchased. In the event
of a default by any Underwriter, the Underwriting Agreement provides that, in
certain circumstances, purchase commitments of the non-defaulting Underwriters
may be increased or the Underwriting Agreement may be terminated.
The Company and the Selling Shareholders have been advised by the
Underwriters that the several Underwriters propose to offer such Common Stock to
the public at the public offering price set forth on the cover page of this
Prospectus, and to certain dealers at such price less a concession not in excess
of $ per share. The Underwriters may allow and such dealers may
re-allow a concession not in excess of $ per share to other dealers.
After the shares of Common Stock are released for sale to the public, the
offering price and other selling terms may be changed by the Underwriters.
The Company has granted the Underwriters an option, expiring 30 days from the date of this Prospectus,prospectus or the documents incorporated by reference in this prospectus or to purchase upreflect the occurrence of unexpected events.
CERTAIN DOCUMENTS INCORPORATED BY REFERENCE
The information incorporated by reference is considered to 631,500 additional shares of
Common Stock at the public offering price less underwriting discounts and
commissions set forth on the cover pagebe a part of this Prospectus. The Underwriters may
exercise such option solely to cover over-allotments, ifprospectus, and any made in connectionlater information that we file with the sale of the Common Stock that the Underwriters have agreed to purchase.
To the extent the Underwriters exercise such option, each of the UnderwritersSEC will have a firm commitment, subject to certain conditions, to purchase a number
of option shares proportionate to such Underwriter's initial commitment.automatically update and supersede this information. The Companydocuments and its officers and directors have agreed that, except with
the prior written consent of Robert W. Baird & Co. Incorporated, on behalf of
the Underwriters, during the 90 days following the date of this Prospectus that
they will not directly or indirectly offer for sale, sell, grant any options,
right or warrants with respect to any shares of Common Stock or any other Company capital stock, securities or instruments convertible into or
exchangeable for Common Stock or other Company capital stock, securities or
instruments convertible into or exchangeable for Common Stock of other company
capital stock, or otherwise dispose of, or reduce any risk of ownership,
directly or indirectly, of any shares of Common Stock, such other capital stock
or any other securities, instruments, options or rights convertible into or
exchangeable for, or otherwise exercisable for Common Stock or other Company
capital stock, except for the Common Stock offered hereby. Notwithstanding the
foregoing, the Company may (i) grant options pursuant to the Company's stock
option plans in the ordinary course consistent with past practice and issue
shares of Common Stock upon the exercise of any such options or under options
currently outstanding, (ii) issue shares of Common Stock or other
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33
securities convertible into Common Stock or any other capital stock of any
company solely to owners of capital stock of any company acquired by the Company
subsequent to the date 45 days from the date of this Prospectus. Any permitted
shortening of such periods and any related sales of Common Stock would not
necessarily be preceded by a public announcement of the Company or the
Underwriters that such consent has been given.
The Underwriting Agreement provides that the Company and one of the Selling
Shareholders will indemnify the Underwriters against certain liabilities under
the Securities Act or contribute to payments the Underwriters may be required to
make in respect thereof.
In connection with the Offering, the Underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of the
Common Stock. Specifically, the Underwriters may over-allot the Offering,
creating a syndicate short position. In addition, the Underwriters may bid for,
and purchase, shares of Common Stock in the open market to cover syndicate short
positions or to stabilize the price of the Common Stock. Any of these activities
may stabilize or maintain the market price of the Common Stock above independent
market levels. The Underwriters are not required to engage in these activities,
and may end any of these activities at any time.
The Underwriters and dealers may also engage in passive market making
transactions in the Common Stock in accordance with Rule 103 of Regulation M
promulgated by the Commission. In general, a passive market maker may not bid
for, or purchase, the Common Stock at a price that exceeds the higher
independent bid. In addition, the net daily purchases made by any passive market
maker generally may not exceed 30% of its average daily trading volume in the
Common Stock during a specified two-month prior period, or 200 shares, whichever
is greater. A passive market maker must identify passive market making bids as
such on the Nasdaq electronic inter-dealer reporting system. Passive market
making may stabilize or maintain the market price of the Common Stock above
independent market levels. Underwriters and dealers are not required to engage
in passive market making any may end passive market making activities at any
time.
LEGAL MATTERS
Certain legal matters in connection with the sale of the shares of Common
Stock offered hereby will be passed upon for the Company by Holland & Knight
LLP, Tampa, Florida, and for the Underwriters by Foley & Lardner, Milwaukee,
Wisconsin.
EXPERTS
The financial statementsinformation incorporated in this Prospectus by reference to
theare:
Our Annual Report on Form 10-K for the fiscal year ended December 31, 1996, have been
so incorporated in reliance on the report of Price Waterhouse LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange
Act and in accordance therewith files periodic reports and other information2011 filed with the Commission.SEC on March 9, 2012;
Our Current Reports proxyon Form 8-K filed with the SEC on March 19, 2012 and April 3, 2012, except for the information statementsin such Current Reports furnished pursuant to Item 7.01, and other
information filed by the Company may be inspected and copies may be obtained (at
prescribed rates) at the Commission's Public Reference Section, 450 5th Street,
N.W., Washington, D.C. 20549, as well as the following Regional OfficesApril 5, 2012.
The description of the
Commission: Seven World Trade Center, 13th Floor, New York, New York 10048 and
at Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material can also be obtained by mail from the
Public Reference Section, Securities and Exchange Commission, 450 Fifth Street,
N.W., Washington D.C. 20549, upon payment of prescribed rates. In addition,
electronically filed documents, including reports, proxy and information
statements and other information regarding the Company, can be obtained from the
Commission's Web site at: http://www.sec.gov. The Company'sour Common Stock is
quoted on the Nasdaq National
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34
Market, and reports, proxy statements and other information concerning the
Company can also be inspected at the offices of the National Association of
Securities Dealers, Inc. at 1735 K Street, Washington, D.C. 20006.
The Company has filed a Registration Statement on Form S-3 (together with
all amendments and exhibits thereto referred to herein as the "Registration
Statement") under the Securities Act with respect to the Common Stock offered
hereby. This Prospectus does not contain all the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information with
respect to the Company and such Common Stock offered hereby, reference is made
to the Registration Statement. Statements contained in the Prospectus with
respect to the contents of any contract or other document filed as an exhibit to
the Registration Statement are not necessarily complete, and in each such
instance reference is made to the copy of such contract or other document filed
as an exhibit to the Registration Statement. Each such statement is qualified in
all respects by such reference to such exhibit. Copies of all or any part of the
Registration Statement, including the documents incorporated by reference
therein or exhibits thereto, may be obtained upon payment of the prescribed
rates at the offices of the Commission set forth above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been previously filed by the Company with the
Commission and are hereby incorporated by reference in this Prospectus as of
their respective dates.
(1) The Company'sour Registration Statement on Form 8-A datedfiled with the SEC on May 9, 1995,
registering the Common Stock under the Exchange Act;
(2) The Company's Annual Report on Form 10-K for the year ended December
31, 1996;
(3) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997;
(4) The Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1997, as amended;1995; and
(5) The Company's Current Report on Form 8-K dated September 22, 1997.
All documents filed by the Company pursuant to SectionsKforce under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequentafter the date of the initial registration statement and prior to effectiveness of the registration statement and after the date of this Prospectus and priorprospectus (other than any information furnished pursuant to the terminationItem 2.02 or Item 7.01 of the offering of the shares of Common Stock offered hereby
shall be deemedany Current Report on Form 8-K, unless we specifically state in such Current Report that such information is considered to be incorporated“filed” under the Exchange Act, or we specifically incorporate it by reference in this Prospectus. into a filing under the Securities Act or the Exchange Act).
Any statement contained hereinin this prospectus or in a document incorporated or deemed to be incorporated by reference hereinin this prospectus shall be deemed to be modified or superseded for purposes of this Prospectusprospectus to the extent that a statement contained in this prospectus or in any other subsequently filed document which also is or is deemed to be incorporated by reference hereinin this prospectus modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus.
The Companyprospectus.
We will provide upon request, without charge to each person, including any beneficial owner, to whom this Prospectus is delivered, onupon the written or oral request of such person, a copy of any or all of the documents that have been or may be incorporated by reference in this Prospectus, other than exhibits to such documents, unless such exhibits are specifically incorporated by reference into such documents or this Prospectus. You can request those documents from Investor Relations at:
Kforce Inc.
Attention: Investor Relations
1001 East Palm Avenue
Tampa, Florida 33605
(813) 552-5000
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Exchange Act and in accordance therewith we file reports, proxy and information statements, and other documents with the SEC. You may read and copy any document we file with the SEC at the SEC’s public reference room at 100 F Street N.E., Washington, D.C. 20549. For more information about the operation of the public reference room, call the SEC at 1-800-SEC-0330. The SEC also maintains a free web site that contains reports, proxy and information statements, and other information about issuers who file electronically with the SEC. The Internet address of the SEC’s website is http://www.sec.gov. Our SEC filings are also available to the public on our website at http://www.kforce.com. Please note that information contained in our website, whether currently posted or posted in the future, is not a part of this prospectus or the documents incorporated by reference in this prospectus.
This Prospectus is part of a Registration Statement on Form S-3 that we filed with the SEC under the Securities Act. This prospectus omits certain of the information contained in the registration statement in accordance with the rules and regulations of the SEC. You can obtain a copy of the registration statement from the SEC at the address listed above or from the SEC’s website.
We are a national provider of professional and technical specialty staffing services and solutions and operate through our corporate headquarters in Tampa, Florida as well as our 62 field offices, which are located throughout the United States, and an office in Manila, Philippines. Kforce, a Florida corporation, was incorporated in 1994 but its predecessor companies, Source Services Corporation and Romac & Associates, Inc. have been providing staffing services since 1962. Kforce completed its Initial Public Offering in August 1995.
We currently provide our clients staffing services and solutions through four operating segments: Technology (“Tech”), Finance and Accounting (“FA”), Health Information Management (“HIM”) and Government Solutions (“GS”). Kforce organizes and manages its Tech and FA segments on a regional basis: Atlantic, North and West. Our Tech segment includes the results of Kforce Global Solutions, Inc. (“Global”), a wholly-owned subsidiary, which has an office in the Philippines. We believe this operational alignment supports a more customer-centric organization, leverages our best leaders, leverages client relationships across functional offerings, and streamlines the organization by placing senior management closer to the customer. Our HIM segment was reported as a separate operating segment beginning in 2011 due to then-recent and then-projected economic dissimilarities including revenue and gross profit trends, operating environment, and business drivers. HIM and GS segments are organized and managed by specialty because of the unique operating characteristics of each business.
As disclosed in the Current Reports on Form 8-K filed with the SEC on March 19, 2012, April 3, 2012 and April 5, 2012, Kforce sold its former Clinical Research operating segment under a Stock Purchase Agreement (the “Agreement”) that was effective as of March 31, 2012. Pursuant to the Agreement, which was entered into between inVentive Health, Inc. (the buyer), Kforce Clinical Research, Inc. (our wholly-owned subsidiary before the transaction) and Kforce, the total cash purchase price of $50.0 million is subject to a post-closing working capital adjustment. The Agreement is attached as an exhibit to the Current Report on Form 8-K filed with the SEC on March 19, 2012.
Kforce’s staffing services consist of temporary staffing services (“Flex”) and permanent placement services (“Search”).
Flex
We provide our clients with qualified individuals (“consultants”) on a temporary basis when it is determined that the consultants have the appropriate skills and experience and are “the right match” for our clients. Our success is dependent upon our employees’ (“associates”) ability to: (1) understand and acknowledge the clients’ needs; (2) determine and understand the capabilities of the consultants being recruited; and (3) deliver and manage the client-consultant relationship to the satisfaction of both our clients and our consultants. Proper execution by our associates and our consultants directly impacts the longevity of the assignments and increases the likelihood of being able to generate repeat business with our clients.
Flex revenues are driven by the number of total hours billed and established bill rates. Flex gross profit is determined by deducting consultant pay, benefits and other related costs from Flex revenues. Flex associate commissions, related taxes and other compensation and benefits as well as field management compensation are included in Selling, General and Administrative expenses (“SG&A”), along with administrative and corporate compensation. The Flex business model involves attempting to maximize the number of consultant hours and bill rates, while managing consultant pay rates and benefit costs, as well as compensation and benefits for our core associates. Flex revenues also include solutions provided through our GS segment. These revenues involve providing longer-term contract services to the customer primarily on time-and-materials, fixed-price, and cost-plus bases.
Search
The Search business is a significantly smaller, yet important, part of our business that involves locating qualified individuals (“candidates”) for permanent placement with our clients. We primarily perform these searches on a contingency basis; thus, fees are only earned if the candidates are ultimately hired by our clients. The typical structure for search fees is based upon a percentage of the placed individual’s annual compensation in their first year of employment, which is known at the time of placement. We recruit permanent employees from our Flex consultant population, from the job boards, from our associates’ networks, social media networks and from passive candidates we identify who are currently employed and not actively seeking another position. Also, there are occasions where consultants are initially assigned to a client on a Flex basis and later are converted to a permanent placement, for which we also receive a Search fee (referred to as “conversion revenue”). We target clients and recruits for both Flex and Search services, which contributes to our objective of providing integrated solutions for all of our clients’ human capital needs.
Search revenues are driven by placements made and the resulting fees billed and are recognized net of an allowance for “fallouts,” which occur when placements do not complete the applicable contingency period. Although the contingency period varies by contract, it is typically 90 days or less. This allowance for fallouts is estimated based upon historical experience with
Search placements that did not complete the contingency period. There are no consultant payroll costs associated with Search placements, thus all Search revenues increase gross profit by a like amount. Search associate commissions, compensation and benefits are included in SG&A.
Investing in our securities involves a high degree of risk. You should carefully consider the specific risks set forth under the caption “Risk Factors” in the applicable prospectus supplement and under the caption “Risk Factors” in any of our filings with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, incorporated by reference in this prospectus, before making an investment decision. For more information, see the “Certain Documents Incorporated by Reference” and “Where You Can Find More Information” sections in this prospectus. The risks and uncertainties we have described are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our business or our financial condition.
Unless we otherwise specify in the applicable prospectus supplement, we expect to use the net proceeds we receive from the sale of the securities described in this prospectus for general corporate purposes which may include:
capital expenditures;
the repayment or refinancing of debt;
investments in our subsidiaries;
working capital; or
the financing of possible acquisitions or business opportunities.
Pending such uses, we anticipate that we will invest the net proceeds in interest-bearing securities.
We will not receive any proceeds from the sale of shares of our common stock by the selling shareholders. The selling shareholders named in this prospectus will pay any underwriting fees, discounts and commissions, along with any fees and expenses of underwriter’s counsel and certain of the selling shareholders’ out-of-pocket expenses, incurred in connection with their sale of shares registered under this prospectus. We will bear all other costs, fees and expenses incurred by us, or by the selling shareholders, in effecting the registration, offer and sale of the securities covered by this prospectus.
RATIO OF EARNINGS TO FIXED CHARGES
Our ratio of earnings to fixed charges was as follows for the respective periods indicated:
| Fiscal Year Ended December 31, | ||||||||||||||||||||
| 2007 | 2008 | 2009 | 2010 | 2011 | ||||||||||||||||
Ratio of earnings to fixed charges | 8.1 | (1)(2 | ) | 5.6 | 9.6 | 14.1 | ||||||||||||||
| (1) | During 2008, we recognized a goodwill and other intangible asset impairment charge of $129,409, which resulted in a pre-tax net loss from continuing operations for 2008. |
| (2) | Due to our losses in 2008, the coverage ratio was less than 1:1. We must have generated additional earnings before income taxes of $87,104 in 2008 to achieve a coverage ratio of 1:1. |
For purposes of calculating the ratio of earnings to fixed charges, earnings is the amount resulting from: (1) adding (a) pretax income or loss from continuing operations before adjustment for income or loss from equity investees, (b) fixed charges, (c) amortization of capitalized interest, (d) distributed income of equity investees and (e) our share of pre-tax losses of equity investees, for which charges arising from guarantees are included in fixed charges, and (2) subtracting (i) interest capitalized , (ii) preference security dividend requirements of consolidated subsidiaries, and (iii) the non-controlling interest in pre-tax income of subsidiaries that have not incurred fixed charges. Fixed charges is the sum of (x) interest expensed and capitalized, (y) amortized premiums, discounts and capitalized expenses related to indebtedness, and (z) an estimate of the interest within rental expense.
Because we have no preferred stock issued (and have not had any issued during the fiscal years shown above), a ratio of earnings to combined fixed charges and preferred dividends is not presented.
The following description of our capital stock, together with the additional information we may include in any prospectus supplements (which may differ from the terms summarized below), summarizes the material terms and provisions of our capital stock that we may offer under this prospectus. For the complete terms of our capital stock, please refer to our articles of incorporation and bylaws that are filed as exhibits to the reports incorporated by reference into the registration statement that includes this prospectus. Additionally, the Florida Business Corporation Act, as amended (“FBCA”), may also affect the terms of our capital stock.
Description of Common Stock
We currently have 250,000,000 shares of common stock, par value $0.01 per share, authorized under our articles of incorporation. As of April 25, 2012, we had 36,844,195 shares of common stock issued and outstanding. The holders of common stock are entitled to one vote per share on all matters to be voted on by the shareholders. There is no cumulative voting. Subject to preferences that may be applicable to any outstanding preferred stock, the holders of common stock are entitled to receive ratably such dividends, if any, as may be declared from time to time by the board of directors out of funds legally available for the payment of dividends. In the event of the liquidation, dissolution or winding up of Kforce, the holders of common stock are entitled to share ratably in all assets remaining after payment of liabilities, subject to prior distribution rights of preferred stock, if any, then outstanding. The common stock has no preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions applicable to the common stock. All outstanding shares of common stock are fully paid and non-assessable. Since our initial public offering, we have not paid any cash dividends on our common stock.
Description of Preferred Stock
We have 15,000,000 shares of preferred stock, par value $0.01 per share, authorized under our articles of incorporation. As of April 25, 2012, we had no shares of preferred stock outstanding. Our board of directors has the authority, without shareholder approval, to issue the preferred stock in one or more series and to fix the rights, preferences, privileges and restrictions thereof, including dividend rights, dividend rates, conversion rights, voting rights, terms of redemption, redemption prices, liquidation preferences and the number of shares constituting any series or the designation of such series, without further vote or action by the shareholders. The issuance of preferred stock may have the effect of delaying, deferring or preventing a change in control of Kforce without further action by the shareholders and may adversely affect the voting and other rights of the holders of common stock. The issuance of preferred stock with voting and conversion rights may adversely affect the voting power of the holders of common stock, including the loss of voting control to others.
A prospectus supplement relating to a series of preferred stock will describe terms of that series of preferred stock, including:
the designation of such series and the number of shares offered;
the initial public offering price at which the shares will be issued;
the dividend rate of that series, the conditions and dates upon which those dividends will be payable and whether those dividends will be cumulative or noncumulative;
if cumulative, the date from which dividends on the preferred stock shall accumulate;
the relative ranking and preferences of that series as to dividend rights and rights upon any liquidation, dissolution or winding up of our affairs;
any redemption or sinking fund provisions;
any conversion or exchange rights of the holder or us;
any voting rights;
any restrictions on further issuances;
any listing of that series on any securities exchange;
any special United States federal income tax considerations applicable to the series; and
any other terms of that series.
Anti-takeover Effects of Provisions of the Articles of Incorporation, By-laws and Florida Law
Provisions of our articles of incorporation and by-laws are intended to enhance continuity and stability in our board of directors and in our policies, but may have the effect of delaying or preventing a change in control and making it more difficult to remove incumbent management, even if such transactions could be beneficial to the interests of shareholders. A summary description of these provisions follows:
Classified Board
Pursuant to our articles of incorporation, we have a staggered board of directors. Our articles of incorporation provide that our board of directors is divided into three classes. The term of our Class III directors expires at our 2012 annual meeting of shareholders, the term of our Class I directors expires at our 2013 annual meeting of shareholders and the term of our Class II directors expires at our 2014 annual meeting of shareholders. At each of our annual meetings of shareholders, the successors of the class of directors whose term expires at the meeting of shareholders will be elected for a three-year term, one class being elected each year by our shareholders.
Authority to Issue Preferred Stock
Our board of directors may issue, without shareholder approval, up to 15,000,000 shares of preferred stock, and fix the rights and preferences thereof, without a further vote of the shareholders, which may prevent a takeover.
Other Provisions of Our Articles of Incorporation and By-laws
Our articles of incorporation also provide that directors may only be removed for cause and upon the affirmative vote of two-thirds of the voting interest of shareholders entitled to vote. The articles of incorporation also contain advance notice requirements by shareholders for director nominations and other actions to be taken at annual meetings. These provisions of the articles of incorporation and by-laws could discourage potential acquisition proposals and could delay or prevent a change in control of Kforce. In addition, certain of our officers and managers have employment agreements containing certain provisions that call for substantial payments to be made to such employees in certain circumstances upon a change in control.
The articles of incorporation also contain a “fair price” provision, which is intended to ensure that the consideration paid by an acquiror in certain transactions involving the Company that follow a successful tender offer must be no less than the highest consideration offered pursuant to the tender offer. Among other things, such transactions must be approved by: (i) the holders of at least 80% of our outstanding common stock, and (ii) the holders of a majority of our outstanding common stock other than the interested shareholder.
These provisions are intended to enhance the likelihood of continuity and stability in the composition of the board of directors and in the policies formulated by the board of directors and to discourage certain types of transactions that may involve an actual or threatened change of control of Kforce. These provisions are designed to reduce our vulnerability to an unsolicited acquisition proposal. The provisions also are intended to discourage certain tactics that may be used in proxy fights. However, such provisions could have the effect of discouraging others from making tender offers for our shares and, as a consequence, they also may inhibit fluctuations in the market price of our shares that could result from actual or rumored takeover attempts. Such provisions also may have the effect of preventing changes in our management.
Florida Law
We are subject to several anti-takeover provisions under Florida law that apply to a public corporation organized under Florida law, unless the corporation has elected to opt out of those provisions in its articles of incorporation or by-laws. The Company has not elected to opt out of those provisions. The FBCA prohibits the voting of shares in a publicly-held Florida corporation that are acquired in a “control share acquisition” unless the holders of a majority of the corporation’s voting shares (exclusive of shares held by officers of the corporation, inside directors, or the acquiring party) approve the granting of voting rights as to the shares acquired in the control share acquisition. A “control share acquisition” is defined as an acquisition that immediately thereafter entitles the acquiring party to vote in the election of directors within each of the following ranges of voting power: (i) one-fifth or more but less than one-third of such voting power, (ii) one-third or more but less than a majority of such voting power, and (iii) a majority or more of such voting power.
The FBCA also contains an “affiliated transaction” provision that prohibits a publicly-held Florida corporation from engaging in a broad range of business combinations or other extraordinary corporate transactions with an “interested shareholder” unless, among other events, (i) the transaction is approved by a majority of disinterested directors before the person becomes an interested shareholder, (ii) the interested shareholder has owned at least 80% of the corporation’s outstanding voting shares for at least five years, or (iii) the transaction is approved by the holders of two-thirds of the corporation’s voting shares other than those owned by the interested shareholder. An interested shareholder is defined as a person who together with affiliates and associates beneficially owns more than 10% of the corporation’s outstanding voting shares.
Listing
Our common stock is listed on the NASDAQ Global Select Market under the symbol “KFRC.”
Transfer Agent
The transfer agent and registrar for our common stock is Computershare Trust Company, N.A.
General Description of Warrants
We may issue warrants for the purchase of debt securities, common stock, preferred stock, depositary shares or units. Warrants may be issued independently or together with other securities and may be attached to or separate from any offered securities. We will issue warrants under one or more warrant agreements between us and the warrant agent that we will name in the applicable prospectus supplement. The warrant agent will act solely as our agent in connection with the warrants and will not have any obligation or relationship of agency or trust for or with any holders or beneficial owners of warrants.
The prospectus supplement relating to any warrants that we may offer will contain the specific terms of the warrants. These terms may include the following:
the title of the warrants;
the offering price for the warrants, if any;
the aggregate number of the warrants;
the designation, amount and terms of the securities for which the warrants are exercisable;
if applicable, the designation and terms of the securities that the warrants are issued with and the number of warrants issued with each security;
if applicable, the date from and after which the warrants and any securities issued with the warrants will be separately transferable;
the price or prices at which the securities purchasable upon exercise of a warrant may be purchased;
the dates on which the right to exercise the warrants commences and expires;
if applicable, the minimum or maximum amount of the warrants that may be exercised at any one time;
whether the warrants represented by the warrant certificates or the securities that may be issued upon exercise of the warrants will be issued in registered or bearer form;
information relating to book-entry procedures, if any;
if applicable, a discussion of material U.S. federal income tax considerations;
anti-dilution provisions of the warrants, if any;
redemption or call provisions, if any, applicable to the warrants; and
any other terms of the warrants, including terms, procedures and limitations relating to the exchange and exercise of the warrants.
Exercise of Warrants
Each warrant will entitle the holder of the warrant to purchase at the exercise price set forth in the applicable prospectus supplement the amount of debt or equity securities being offered. Holders may exercise warrants at any time up to the close of business on the expiration date set forth in the applicable prospectus supplement. After the close of business on the expiration date, unexercised warrants will be void. Holders may exercise warrants as set forth in the applicable prospectus supplement.
Until a holder exercises the warrants to purchase any securities underlying the warrants, the holder will not have any rights as a holder of the underlying securities by virtue of ownership of warrants.
DESCRIPTION OF DEBT SECURITIES
We may offer secured or unsecured debt securities which may be senior or subordinated, and which may be convertible. Any debt securities that we issue will be issued under an indenture to be entered into between us and a trustee. A form of
indenture is attached as an exhibit to the registration statement of which this prospectus forms a part. The following description of the terms of the debt securities sets forth certain general terms and provisions. The particular terms of the debt securities offered by any prospectus supplement and the extent, if any, to which such general provisions may apply to the debt securities will be described in the applicable prospectus supplement.
This prospectus summarizes what we believe to be the material provisions of the form of indenture attached as an exhibit to the registration statement of which this prospectus forms a part and that is incorporated herein by reference (otherand the debt securities that we may issue under such form of indenture. This summary is not complete and may not describe all of the provisions of the indenture or of the debt securities that may be important to you. For additional information, you should carefully read the form of indenture that is attached as an exhibit to the registration statement of which this prospectus forms a part and that is incorporated herein by reference.
In addition, when we offer to sell a particular series of debt securities, we will describe the specific terms of those debt securities in a supplement to this prospectus. The terms of such a particular series of debt securities may differ from the terms described in this prospectus. As a result, the particular terms of the debt securities offered by any prospectus supplement and the extent, if any, to which these general provisions may apply to the debt securities, will be described in the applicable prospectus supplement. Accordingly, for a description of the terms of a particular issue of debt securities, reference must be made to both the applicable prospectus supplement and to the following description.
General
The debt securities may be issued in one or more series as may be authorized from time to time. Reference is made to the applicable prospectus supplement for the following terms of the debt securities (if applicable):
title and aggregate principal amount;
whether the securities will be senior or subordinated;
whether the securities will be secured or unsecured, and if secured, what the collateral will consist of;
applicable subordination provisions, if any;
conversion or exchange into other securities;
percentage or percentages of principal amount at which such securities will be issued;
maturity date(s);
interest rate(s) or the method for determining the interest rate(s);
dates on which interest will accrue or the method for determining dates on which interest will accrue and dates on which interest will be payable;
redemption (including upon a “change of control”) or early repayment provisions;
authorized denominations;
form;
amount of discount or premium, if any, with which such securities will be issued;
whether such securities will be issued in whole or in part in the form of one or more global securities;
identity of the depositary for global securities;
whether a temporary security is to be issued with respect to such series and whether any interest payable prior to the issuance of definitive securities of the series will be credited to the account of the persons entitled thereto;
the terms upon which beneficial interests in a temporary global security may be exchanged in whole or in part for beneficial interests in a definitive global security or for individual definitive securities;
any covenants applicable to the particular debt securities being issued;
any defaults and events of default applicable to the particular debt securities being issued;
currency, currencies or currency units in which the purchase price for, the principal of and any premium and any interest on, such securities will be payable;
time period within which, the manner in which and the terms and conditions upon which the purchaser of the securities can select the payment currency;
securities exchange(s) on which the securities will be listed, if any;
whether any underwriter(s) will act as market maker(s) for the securities;
extent to which a secondary market for the securities is expected to develop;
our obligation or right to redeem, purchase or repay securities under a sinking fund, amortization or analogous provision;
provisions relating to covenant defeasance and legal defeasance;
provisions relating to satisfaction and discharge of the indenture;
provisions relating to the modification of the indenture both with and without the consent of holders of debt securities issued under the indenture; and
additional terms not inconsistent with the provisions of the indenture.
One or more series of debt securities may be sold at a substantial discount below their stated principal amount, bearing no interest or interest at a rate which at the time of issuance is below market rates. One or more series of debt securities may be variable rate debt securities that may be exchanged for fixed rate debt securities.
United States federal income tax consequences and special considerations, if any, applicable to any such series will be described in the applicable prospectus supplement.
Debt securities may be issued where the amount of principal and/or interest payable is determined by reference to one or more currency exchange rates, commodity prices, equity indices or other factors. Holders of such securities may receive a principal amount or a payment of interest that is greater than or less than the amount of principal or interest otherwise payable on such dates, depending upon the value of the applicable currencies, commodities, equity indices or other factors. Information as to the methods for determining the amount of principal or interest, if any, payable on any date, the currencies, commodities, equity indices or other factors to which the amount payable on such date is linked and certain additional United States federal income tax considerations will be set forth in the applicable prospectus supplement.
The term “debt securities” includes debt securities denominated in U.S. dollars or, if specified in the applicable prospectus supplement, in any other freely transferable currency or units based on or relating to foreign currencies.
We expect most debt securities to be issued in fully registered form without coupons and in denominations of $1,000 and any integral multiples thereof. Subject to the limitations provided in the indenture and in the prospectus supplement, debt securities that are issued in registered form may be transferred or exchanged at the corporate office of the trustee or the principal corporate trust office of the trustee, without the payment of any service charge, other than any tax or other governmental charge payable in connection therewith.
Global Securities
The debt securities of a series may be issued in whole or in part in the form of one or more global securities that will be deposited with, or on behalf of, a depositary identified in the prospectus supplement. Global securities will be issued in registered form and in either temporary or definitive form. Unless and until it is exchanged in whole or in part for the individual debt securities, a global security may not be transferred except as a whole by the depositary for such global security to a nominee of such depositary or by a nominee of such depositary to such depositary or another nominee of such depositary or by such depositary or any such nominee to a successor of such depositary or a nominee of such successor. The specific terms of the depositary arrangement with respect to any debt securities of a series and the rights of and limitations upon owners of beneficial interests in a global security will be described in the applicable prospectus supplement.
Governing Law
The indenture and the debt securities shall be construed in accordance with and governed by the laws of the State of New York.
DESCRIPTION OF DEPOSITARY SHARES
General
We may elect to offer depositary shares, each representing a fraction (to be set forth in the prospectus supplement relating to a particular series of shares of preferred stock) of a share of a particular series of shares of preferred stock as described below. In the event we elect to do so, depositary receipts evidencing depositary shares will be issued to the public.
The shares of any class or series of shares of preferred stock represented by depositary shares will be deposited under a deposit agreement among Kforce, a depositary selected by Kforce and the holders of the depositary receipts. The depositary will be a bank or trust company having its principal office in the U.S. and having a combined capital and surplus of at least $50,000,000. Subject to the terms of the deposit agreement, each owner of a depositary share will be entitled, in proportion to the applicable fraction of a preferred share represented by such depositary share, to all the rights and preferences of the shares of preferred stock represented thereby (including dividend, voting, redemption and liquidation rights).
The depositary shares will be evidenced by depositary receipts issued pursuant to the deposit agreement. Depositary receipts will be distributed to those persons purchasing the fractional shares of the related class or series of shares of preferred stock in accordance with the terms of the offering described in the related prospectus supplement. Copies of the forms of deposit agreement and depositary receipt will be filed as exhibits to such documents
which are not specificallyor incorporated by reference in the registration statement of which this prospectus forms a part, and the following summary is qualified in its entirety by reference to such documents).
Requestsexhibits.
Pending the preparation of definitive depositary receipts, the depositary may, upon the written order of Kforce, issue temporary depositary receipts substantially identical to (and entitling the holders thereof to all the rights pertaining to) the definitive depositary receipts but not in definitive form. Definitive depositary receipts will be prepared thereafter without unreasonable delay, and temporary depositary receipts will be exchangeable for definitive depositary receipts without charge to the holder thereof.
Dividends and Distributions
The depositary will distribute all cash dividends or other distributions received in respect of the related class or series of shares of preferred stock to the record holders of depositary shares relating to such class or series of shares of preferred stock in proportion to the number of such depositary shares owned by such holders.
In the event of a distribution other than in cash, the depositary will distribute property received by it to the record holders of depositary shares entitled thereto, unless the depositary determines that it is not feasible to make such distribution, in which case the depositary may, with the approval of Kforce, sell such property and distribute the net proceeds from such sale to such holders.
Withdrawal of Shares
Upon surrender of the depositary receipts at the corporate trust office of the depositary (unless the related depositary shares have previously been called for redemption), the holder of the depositary shares evidenced thereby is entitled to delivery of the number of whole shares of the related class or series of shares of preferred stock and any money or other property represented by such depositary shares. Holders of depositary shares will be entitled to receive whole shares of the related class or series of shares of preferred stock on the basis set forth in the prospectus supplement for such copies shouldclass or series of shares of preferred stock, but holders of such whole shares of preferred stock will not thereafter be directed to: Romac International, Inc.entitled to exchange them for depositary shares. If the depositary receipts delivered by the holder evidence a number of depositary shares in excess of the number of depositary shares representing the number of whole shares of preferred stock to be withdrawn, the depositary will deliver to such holder at the same time a new depositary receipt evidencing such excess number of depositary shares. In no event will fractional shares of preferred stock be delivered upon surrender of depositary receipts to the depositary.
Redemption of Depositary Shares
Whenever we redeem shares of preferred stock held by the depositary, the depositary will redeem as of the same redemption date the number of depositary shares representing shares of the related class or series of shares of preferred stock so redeemed. The redemption price per depositary share will be equal to the applicable fraction of the redemption price per share payable with respect to such class or series of shares of preferred stock. If less than all the depositary shares are to be redeemed, the depositary shares to be redeemed will be selected by lot or pro rata as may be determined by the depositary.
Voting the Shares of Preferred Stock
Upon receipt of notice of any meeting at which the holders of the shares of preferred stock are entitled to vote, the depositary will mail the information contained in such notice of meeting to the record holders of the depositary shares relating to such shares of preferred stock. Each record holder of such depositary shares on the record date (which will be the same date as the record date for the shares of preferred stock) will be entitled to instruct the depositary as to the exercise of the voting rights pertaining to the amount of the class or series of shares of preferred stock represented by such holder’s depositary shares. The depositary will endeavor, insofar as practicable, to vote the number of shares of preferred stock represented by such depositary shares in accordance with such instructions, and Kforce will agree to take all action which the depositary deems necessary in order to enable the depositary to do so. The depositary will abstain from voting shares of preferred stock to the extent it does not receive specific instructions from the holders of depositary shares representing such shares of preferred stock.
Amendment and Termination of the Deposit Agreement
The form of depositary receipt evidencing the depositary shares and any provision of the deposit agreement may at any time be amended by agreement between Kforce and the depositary. However, any amendment which materially and adversely alters the rights of the holders of depositary receipts will not be effective unless such amendment has been approved by the holders of depositary receipts representing at least a majority (or, in the case of amendments relating to or affecting rights to receive dividends or distributions or voting or redemption rights, 66%, 120
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ANY STAFFING COMPANY CAN OFFER YOU BODIES.
OURS COME WITH SOMETHING EXTRA.
Inunless otherwise provided in the related prospectus supplement) of the depositary shares then outstanding. The deposit agreement may be terminated by Kforce or the depositary only: (1) if all outstanding depositary shares have been redeemed; (2) if there has been a business environment that's rapidly changing, ordinary workers just
won't do. What you needfinal distribution in respect of the related class or series of shares of preferred stock in connection with any liquidation, dissolution or winding up of Kforce and such distribution has been distributed to the holders of depositary receipts; or (3) upon the consent of holders of depositary receipts representing not less than 66% of the depositary shares outstanding.
Charges of Depositary
Kforce will pay all transfer and other taxes and governmental charges arising solely from the existence of the depositary arrangements. Kforce will pay charges of the depositary in connection with the initial deposit of the related class or series of shares of preferred stock and any redemption of such shares of preferred stock. Holders of depositary receipts will pay all other transfer and other taxes and governmental charges and such other charges as are expressly provided in the deposit agreement to be for their accounts.
The depositary may refuse to effect any transfer of a depositary receipt or any withdrawal of shares of a class or series of preferred stock evidenced thereby until all taxes and charges with respect to the depositary receipt or shares of preferred stock are paid by the holders thereof.
Miscellaneous
The depositary will forward all reports and communications from Kforce which are delivered to the depositary and which Kforce is something extra. People who can hitrequired to furnish to the ground
running, setholders of the paceshares of preferred stock.
Neither the depositary nor Kforce will be liable if it is prevented or delayed by law or any circumstance beyond its control in performing its obligations under the deposit agreement. The obligations of Kforce and the depositary under the deposit agreement will be limited to performance in good faith of their duties thereunder, and neither Kforce nor the depositary will be obligated to prosecute or defend any legal proceeding in respect of any depositary shares or class or series of shares of preferred stock unless satisfactory indemnity is furnished. Kforce and the depositary may rely on written advice of counsel or accountants, or information provided by persons presenting shares of preferred stock for fellow employees, then succeed beyond your wildest
expectations.
Romacdeposit, holders of depositary shares or other persons believed to be competent and on the documents believed to be genuine.
Resignation and Removal of the Depositary
The depositary may resign at any time by delivering to Kforce notice of its election to do so, and Kforce may at any time remove the depositary. Any such resignation or removal of the depositary will take effect upon the appointment of a successor depositary, which successor must be appointed within 60 days after delivery of the notice of resignation or removal and must be a bank or trust company having its principal office in the U.S. and having a combined capital and surplus of at least $50,000,000.
We may issue units composed of one or more debt securities, shares of our common stock, shares of our preferred stock, and warrants in any combination. Each unit will be issued so that the holder of the unit is where to find them. Not only do wealso the holder of each security included in the unit. Thus, the holder of a unit will have the rights and obligations of a large sourceholder of each included security. The unit agreement under which a unit is issued may provide that the securities included in the unit may not be held or transferred separately, at any time or at any time before a specified date.
The prospectus supplement may describe:
the designation and terms of the units and of the securities comprising the units, including whether and under what circumstances those hard-to-find "knowledge workers," but we hadsecurities may be held or transferred separately;
any provisions of the insight to provide them long
beforegoverning unit agreement that differ from those described below; and
any provisions for the term became popular.
What's more, ours are backed by a knowledge company. One that not only
seeks out exceptional talent, but analyzes your organization to determine
seasonal demands, corporate structure, corporate personality, short and long
term goalsissuance, payment, settlement, transfer or exchange of the units or of the securities comprising the units.
The provisions described in this section, as well as positionthose described under “Description of Debt Securities,” “Description of Preferred Stock,” “Description of Common Stock” and “Description of Warrants” will apply to each unit and to any debt security, preferred stock, common stock, or warrant included in each unit, respectively.
Issuance in Series
We may issue units in such amounts and in as many distinct series as we wish. This section summarizes terms of the units that apply generally to all series. Most of the financial and other specific terms of a particular series will be described in the prospectus supplement.
Unit Agreements
We will issue the units under one or more unit agreements to be entered into between us and a bank or other financial institution, as unit agent. We may add, replace or terminate unit agents from time to time. We will identify the unit agreement under which each series of units will be issued and the unit agent under that agreement in the prospectus supplement.
The following provision will generally apply to all unit agreements unless otherwise stated in the prospectus supplement.
Enforcement of Rights
The unit agent under a unit agreement will act solely as our agent in connection with the units issued under that agreement. The unit agent will not assume any obligation or relationship of agency or trust for or with any holders of those units or of the securities comprising those units. The unit agent will not be obligated to take any action on behalf of those holders to enforce or protect their rights under the units or the included securities.
Except as indicated in the next paragraph, a holder of a unit may, without the consent of the unit agent or any other holder, enforce its rights as holder under any security included in the unit, in accordance with the terms of that security and the indenture, warrant agreement or other instrument under which that security is issued. Those terms are described elsewhere in this prospectus under the sections relating to debt securities, preferred stock, common stock and warrants.
Notwithstanding the foregoing, a unit agreement may limit or otherwise affect the ability of a holder of units issued under that agreement to enforce its rights, including any right to bring a legal action, with respect to those units or any securities, other than debt securities, that are included in those units. Limitations of this kind will be described in the prospectus supplement.
Modification Without Consent of Holders
We and the applicable unit agent may amend any unit or unit agreement without the consent of any holder:
to cure any ambiguity;
to correct or supplement any defective or inconsistent provision; or
to make any other change that we believe is necessary or desirable and will not adversely affect the interests of the affected holders in any material respect.
We do not need any approval to make changes that affect only units to be issued after the changes take effect. We may also make changes that do not adversely affect a particular unit in any material respect, even if they adversely affect other units in a material respect. In those cases, we do not need to obtain the approval of the holder of the unaffected unit; we need only obtain any required approvals from the holders of the affected units.
Modification With Consent of Holders
We may not amend any particular unit or a unit agreement with respect to any particular unit unless we obtain the consent of the holder of that unit, if the amendment would:
impair any right of the holder to exercise or enforce any right under a security included in the unit if the terms of that security require the consent of the holder to any changes that would impair the exercise or enforcement of that right; or
reduce the percentage of outstanding units or any series or class the consent of whose holders is required to amend that series or class, or the applicable unit agreement with respect to that series or class, as described below.
Any other change to a particular unit agreement and the units issued under that agreement would require the following approval:
if the change affects only the units of a particular series issued under that agreement, the change must be approved by the holders of a majority of the outstanding units of that series; or
if the change affects the units of more than one series issued under that agreement, it must be approved by the holders of a majority of all outstanding units of all series affected by the change, with the units of all the affected series voting together as one class for this purpose.
These provisions regarding changes with majority approval also apply to changes affecting any securities issued under a unit agreement, as the governing document.
In each case, the required approval must be given by written consent.
Unit Agreements Will Not Be Qualified Under the Trust Indenture Act of 1939
No unit agreement will be qualified as an indenture, and no unit agent will be required to qualify as a trustee, under the Trust Indenture Act of 1939. Therefore, holders of units issued under unit agreements will not have the protections of the Trust Indenture Act of 1939 with respect to their units.
Title
Kforce, the unit agents and any of their agents may treat the registered holder of any unit certificate as an absolute owner of the units evidenced by that certificate for any purpose and as the person entitled to exercise the rights attaching to the units so requested, despite any notice to the contrary.
The following table sets forth information about the selling shareholders’ beneficial ownership of our common stock as of April 25, 2012 (such information has been provided by the selling shareholders) and after the sale of the common stock offered by each selling shareholder, assuming all such shares are sold. None of the selling shareholders has committed to sell any shares under this prospectus. The numbers presented under “Shares Beneficially Owned After the Offering” assumes that all of the shares offered by the selling shareholders are sold and that the selling shareholders acquire no additional shares of our common stock before the completion of this offering. The selling shareholders may offer all, some or none of the shares of our common stock beneficially owned by them. We will pay all expenses incurred with respect to the registration and sale of their respective common stock. We will not receive any proceeds from the sale of our common stock by the selling shareholders. The shares offered by this prospectus may be offered from time to time by the selling shareholders named below.
The following table sets forth (1) the name of the selling shareholders and their positions with Kforce; (2) the number and percentage of shares of common stock beneficially owned prior to the offering; (3) the number of shares being offered; and (4) the number and percentage of shares of common stock to be beneficially owned after completion of the offering.
| Number of Shares Beneficially Owned Prior to the Offering (2)(3) | Number of Shares Beneficially Owned After Offering (4)(5) | |||||||||||||||||||||
Name of Selling Shareholder | Position with Kforce (1) | Number | Percent | Number of Shares Being Offered | Number | Percent | ||||||||||||||||
David L. Dunkel | Chairman and Chief Executive Officer | 2,144,346 | 5.82 | % | 1,914,091 | 230,255 | * | |||||||||||||||
Joseph J. Liberatore | Executive Vice President and Chief Financial Officer | 421,826 | 1.14 | % | 108,926 | 312,900 | * | |||||||||||||||
William L. Sanders | President | 606,051 | 1.64 | % | 165,972 | 440,079 | 1.19 | % | ||||||||||||||
Howard W. Sutter | Vice Chairman and Director | 1,855,907 | 5.03 | % | 1,746,855 | 109,052 | * | |||||||||||||||
Richard Cocchiaro | Vice Chairman and Director | 2,276,878 | 6.18 | % | 2,252,441 | 24,437 | * | |||||||||||||||
| * | Less than 1% of the outstanding common stock |
| (1) | Each of the individuals listed in the table are officers or directors of Kforce Inc. |
| (2) | Beneficial ownership is determined based on the number of shares of common stock outstanding as of April 25, 2012 and includes 40,000 shares subject to purchase pursuant to currently exercisable options or options exercisable within 60 days of April 25, 2012, for Mr. Sutter. |
| (3) | Includes 2,766,667 shares as to which voting and/or investment power is shared or controlled by another person and as to which beneficial ownership is not disclaimed, as follows: Mr. Dunkel, 300,000 (shares held by the David L. Dunkel 2011 Irrevocable Trust); Mr. Sanders, 172,058 (shares held by Karen M. Sanders Trust); Mr. Sutter, 5,000 (shares held by spouse), 1,541,316 (shares held by |
| Sutter Investments Ltd. of which H.S. Investments, Inc. is the sole general partner) and 149,176 (shares held by the Dunkel Family Receptacle Trust of which Mr. Sutter is the sole trustee); and Mr. Cocchiaro, 34,845 (shares held by mother), 4,575 (shares held by sons), 55,463 (shares held by Cocchiaro Family Foundation), 493,645 (shares held by the David L. Dunkel Irrevocable Children’s Trust of which Mr. Cocchiaro is the sole trustee) and 10,589 (shares held by the David L. Dunkel 2003 Relatives’ Trust of which Mr. Cocchiaro is the sole trustee. Additionally, includes 19,000 shares as to which beneficial ownership is disclaimed by Mr. Cocchiaro (shares held by spouse). |
| (4) | Assumes all of the shares offered by each of the selling shareholders under this prospectus have been sold. The selling shareholders may sell all, some or no portion of the common stock registered under this prospectus. |
| (5) | Based on 36,844,195 shares of common stock outstanding as of April 25, 2012. Common stock deemed to be beneficially owned by virtue of the right of any person to acquire these shares whether or not exercisable within 60 days of April 25, 2012 is treated as outstanding only for purposes of determining the percentage owned by such person. |
None of the selling shareholders listed above has had within the industry.
The resultpast three years any position, office or other material relationship with us or any of our predecessors or affiliates different than the positions set forth in the above table, except as set forth in the following table:
Selling Shareholder | Position | |
| David L. Dunkel, Joseph J. Liberatore, William L. Sanders and Richard Cocchiaro | • Each of Messrs. Dunkel, Liberatore, Sanders and Cocchiaro has served during the past three years, or is currently serving, in one or more positions with one or more of our subsidiaries. |
We, or any selling shareholder (the selling shareholders will act independently of us in making decisions with respect to the timing, manner and size of each sale by such persons), may sell the securities offered by this prospectus from time to time in one or more transactions, including without limitation:
directly to purchasers;
to or through underwriters or dealers;
through agents; or
through a flexible staffing solutioncombination of any of these methods.
A distribution of the securities offered by this prospectus may also be effected through the issuance of derivative securities, including without limitation, warrants, subscriptions, exchangeable securities, forward delivery contracts and the writing of options.
In addition, the manner in which we, or any selling shareholder, may sell some or all of the securities covered by this prospectus includes, without limitation, through:
a block trade in which a broker-dealer will attempt to sell as agent, but may position or resell a portion of the block, as principal, in order to facilitate the transaction;
purchases by a broker-dealer, as principal, and resale by the broker-dealer for its account;
ordinary brokerage transactions and transactions in which a broker solicits purchasers; or
privately negotiated transactions.
In addition, any shares that qualify for sale pursuant to Rule 144 may combine contingent
employees with permanent hires or contract service professionals and a new
executive. One that fits your entire corporationbe sold under Rule 144 rather than pursuant to this prospectus.
We, or any selling shareholder, may also enter into hedging transactions. For example, we, or any selling shareholder, may:
enter into transactions with a broker-dealer or affiliate thereof in connection with which such broker-dealer or affiliate will engage in short sales of the common stock pursuant to this prospectus, in which case such broker-dealer or affiliate may use shares of common stock received from us to close out its short positions;
sell securities short and redeliver such shares to close out our short positions;
enter into option or other types of transactions that require us to deliver common stock to a broker-dealer or an affiliate thereof, who will then resell or transfer the common stock under this prospectus; or
loan or pledge the common stock to a broker-dealer or an affiliate thereof, who may sell the loaned shares or, in an event of default in the case of a pledge, sell the pledged shares pursuant to this prospectus.
In addition, we, or any selling shareholder, may enter into derivative or hedging transactions with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions. In connection with such a transaction, the third parties may sell securities covered by and pursuant to this prospectus and an applicable prospectus supplement or pricing supplement, as the case may be. If so, the third party may use securities borrowed from us or others to settle such sales and may use securities received from us to close out any related short positions. We, or any selling shareholder, may also loan or pledge securities covered by this prospectus and an applicable prospectus supplement to third parties, who may sell the loaned securities or, in an event of default in the case of a pledge, sell the pledged securities pursuant to this prospectus and the applicable prospectus supplement or pricing supplement, as the case may be.
A prospectus supplement with respect to each series of securities will state the terms of the offering of the securities, including:
the name or names of any underwriters or agents and the amounts of securities underwritten or purchased by each of them, if any;
the public offering price or purchase price of the securities and the net proceeds to be received by us from the sale;
any delayed delivery arrangements;
any underwriting discounts or agency fees and other items constituting underwriters’ or agents’ compensation;
any discounts or concessions allowed or reallowed or paid to dealers; and
any securities exchange on which the securities may be listed.
The offer and sale of the securities described in this prospectus by us, the underwriters or the third parties described above may be effected from time to time in one or more transactions, including privately negotiated transactions, either:
at a fixed price or prices, which may be changed;
at market prices prevailing at the time of sale;
at prices related to the prevailing market prices; or
at negotiated prices.
General
Any public offering price and any discounts, commissions, concessions or other items constituting compensation allowed or reallowed or paid to underwriters, dealers, agents or remarketing firms may be changed from time to time. Underwriters, dealers, agents and remarketing firms that participate in the distribution of the offered securities may be “underwriters” as defined in the Securities Act. Any discounts or commissions they receive from us and any profits they receive on the resale of the offered securities may be treated as underwriting discounts and commissions under the Securities Act. We, or any selling shareholder, will identify any underwriters, agents or dealers and describe their commissions, fees or discounts in the applicable prospectus supplement or pricing supplement, as the case may be.
Underwriters and Agents
If underwriters are used in a sale, they will acquire the offered securities for their own account. The underwriters may resell the offered securities in one or more transactions, including negotiated transactions. These sales may be made at a fixed public offering price or prices, which may be changed, at market prices prevailing at the time of the sale, at prices related to such prevailing market price or at negotiated prices. We, or any selling shareholder, may offer the securities to the public through an underwriting syndicate or through a single position.
Sounderwriter. The underwriters in any particular offering will be mentioned in the applicable prospectus supplement or pricing supplement, as the case may be.
Unless otherwise specified in connection with any particular offering of securities, the obligations of the underwriters to purchase the offered securities will be subject to certain conditions contained in an underwriting agreement that we, or any selling shareholder, will enter into with the underwriters at the time of the sale to them. The underwriters will be obligated to purchase all of the securities of the series offered if you're lookingany of the securities are purchased, unless otherwise specified in connection with any particular offering of securities. Any initial offering price and any discounts or concessions allowed, reallowed or paid to dealers may be changed from time to time.
We, or any selling shareholder, may designate agents to sell the offered securities. Unless otherwise specified in connection with any particular offering of securities, the agents will agree to use their best efforts to solicit purchases for the brainsperiod of their appointment. We, or any selling shareholder, may also sell the offered securities to help you succeedone or more remarketing firms, acting as principals for their own accounts or as agents for us. These firms will remarket the offered securities upon purchasing them in accordance with a redemption or repayment pursuant to the terms of the offered securities. A prospectus supplement or pricing supplement, as the case may be will identify any remarketing firm and will describe the terms of its agreement, if any, with us and its compensation.
In connection with offerings made through underwriters or agents, we, or any selling shareholder, may enter into agreements with such underwriters or agents pursuant to which we, or any selling shareholder, receive our outstanding securities in consideration for the securities being offered to the public for cash. In connection with these arrangements, the underwriters or agents may also sell securities covered by this prospectus to hedge their positions in these outstanding securities, including in short sale transactions. If so, the underwriters or agents may use the securities received from us under these arrangements to close out any related open borrowings of securities.
Dealers
We, or any selling shareholder, may sell the offered securities to dealers as principals. We, or any selling shareholder, may negotiate and pay dealers’ commissions, discounts or concessions for their services. The dealer may then resell such securities to the public either at varying prices to be determined by the dealer or at a fixed offering price agreed to with us at the time of resale. Dealers engaged by us may allow other dealers to participate in resales.
Direct Sales
We, or any selling shareholder, may choose to sell the offered securities directly. In this case, no underwriters or agents
would be involved.
Institutional Purchasers
We, or any selling shareholder, may authorize agents, dealers or underwriters to solicit certain institutional investors to purchase offered securities on a delayed delivery basis pursuant to delayed delivery contracts providing for payment and delivery on a specified future date. The applicable prospectus supplement or pricing supplement, as the case may be will provide the details of any such arrangement, including the offering price and commissions payable on the solicitations.
We, or any selling shareholder, will enter into such delayed contracts only with institutional purchasers that we, or any selling shareholder, approve. These institutions may include commercial and savings banks, insurance companies, pension funds, investment companies and educational and charitable institutions.
Indemnification; Other Relationships
We, or any selling shareholder, may have agreements with agents, underwriters, dealers and remarketing firms to indemnify them against certain civil liabilities, including liabilities under the Securities Act. Agents, underwriters, dealers and remarketing firms, and their affiliates, may engage in transactions with, or perform services for, us in the ordinary course of business. This includes commercial banking and investment banking transactions.
Market-Making, Stabilization and Other Transactions
There is currently no market for any of the offered securities, other than the common stock which is listed on the NASDAQ Global Select Market. If the offered securities are traded after their initial issuance, they may trade at a discount from their initial offering price, depending upon prevailing interest rates, the market for similar securities and other factors. While it is possible that an underwriter could inform us that it intends to make a market in the offered securities, such underwriter would not be obligated to do so, and any such market-making could be discontinued at any time without notice. Therefore, no assurance can be given as to whether an active trading market will develop for the offered securities. We, or any selling shareholder, have no current plans for listing of the debt securities, preferred stock or warrants on any securities exchange or on the National Association of Securities Dealers, Inc. automated quotation system; any such listing with respect to any particular debt securities, preferred stock or warrants will be described in the applicable prospectus supplement or pricing supplement, as the case may be.
In connection with any offering of common stock, the underwriters may purchase and sell shares of common stock in the open market. These transactions may include short sales, syndicate covering transactions and stabilizing transactions. Short sales involve syndicate sales of common stock in excess of the number of shares to be purchased by the underwriters in the offering, which creates a syndicate short position. “Covered” short sales are sales of shares made in an amount up to the number of shares represented by the underwriters’ over-allotment option. In determining the source of shares to close out the covered syndicate short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the over-allotment option. Transactions to close out the covered syndicate short involve either purchases of the common stock in the open market after the distribution has been completed or the exercise of the over-allotment option. The underwriters may also make “naked” short sales of shares in excess of the over-allotment option. The underwriters must close out any naked short position by purchasing shares of common stock in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase in the offering. Stabilizing transactions consist of bids for or purchases of shares in the open market while the offering is in progress for the purpose of pegging, fixing or maintaining the price of the securities.
In connection with any offering, the underwriters may also engage in penalty bids. Penalty bids permit the underwriters to reclaim a selling concession from a syndicate member when the securities originally sold by the syndicate member are purchased in a changing
environment,syndicate covering transaction to cover syndicate short positions. Stabilizing transactions, syndicate covering transactions and penalty bids may cause the best personprice of the securities to be higher than it would be in the absence of the transactions. The underwriters may, if they commence these transactions, discontinue them at any time.
Fees and Commissions
In compliance with the guidelines of the Financial Industry Regulatory Authority, Inc. (the “FINRA”), the aggregate maximum discount, commission or agency fees or other items constituting underwriting compensation to be received by any FINRA member or independent broker-dealer will not exceed 8% of any offering pursuant to this prospectus and any applicable prospectus supplement or pricing supplement, as the case may be.
Certain legal matters with respect to the validity of the securities offered under this prospectus and any prospectus supplement will be passed upon for us by Holland & Knight LLP, Tampa, Florida. Counsel for any underwriter or agent will be noted in the applicable prospectus supplement.
The consolidated financial statements, and the related financial statement schedule, incorporated in this prospectus by reference from the Company’s Annual Report on Form 10-K for the job may not beyear ended December 31, 2011, and the effectiveness of Kforce Inc.’s internal control over financial reporting have been audited by Deloitte & Touche LLP, an individual. More likely,
it's a company who aligns its agenda with your agendaindependent registered public accounting firm, as stated in their report, which is incorporated herein by reference. Such consolidated financial statements and who hasfinancial statement schedule have been so incorporated in reliance upon the core
competencies to leverage intellectual capital resources to meet your strategic
objectives. It's a company like ours.
[DRAWING OF A BRAIN]
ROMAC
THE KNOWLEDGEFORCE
RESOURCE(TM).
EXAMPLE ADVERTISEMENT USED BY THE COMPANY.
36
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NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE SELLING SHAREHOLDERS OR ANY
UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF ANY OFFER TO BUY ANY SECURITY OTHER THAN THE SHARES OF COMMON
STOCK OFFERED HEREBY, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF
AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY PERSON IN ANY
JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER
ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN
IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
---------------------
TABLE OF CONTENTS
PAGE
----
Prospectus Summary.............................. 3
Risk Factors.................................... 7
Use of Proceeds................................. 11
Price Range of Common Stock..................... 11
Dividend Policy................................. 11
Capitalization.................................. 12
Selected Consolidated Financial Data............ 13
Management's Discussion and Analysis of
Financial Condition and Results of
Operations.................................... 14
Business........................................ 20
Principal and Selling Shareholders.............. 30
Underwriting.................................... 31
Legal Matters................................... 32
Experts......................................... 32
Available Information........................... 32
Incorporation of Certain Documents by
Reference..................................... 33
==================================================================
==================================================================
4,210,000 SHARES
ROMAC
INTERNATIONAL
LOGO
COMMON STOCK
-------------------------
PROSPECTUS
-------------------------
ROBERT W. BAIRD & CO.
INCORPORATED
NATIONSBANC
MONTGOMERY SECURITIES, INC.
PRUDENTIAL SECURITIES INCORPORATED
SMITH BARNEY INC.
OCTOBER , 1997
==================================================================
37
report of such firm given upon their authority as experts in accounting and auditing.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. -- OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
DISTRIBUTION.
The following table sets forth the fees andall expenses that we will pay in connection with the issuance and distribution of the securities being registered hereunder.
described in this Registration Statement. Other than the registration fee, each amount shown is an estimate.
Securities and Exchange Commission Registration Fee | $ | 39,203 | ||
Trustee’s Fees and Expenses | $ | * | ||
Rating Agencies’ Fees | $ | * | ||
Transfer Agent and Registrar Fes and Expenses | $ | * | ||
Printing Expenses | $ | * | ||
Accounting Fees and Expenses | $ | * | ||
Legal Fees and Expenses | $ | * | ||
Miscellaneous Expenses | $ | * | ||
Total Expenses | $ | * |
| * | These fees are calculated based on the number of issuances and |
ITEM 15. -- INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The CompanyRegistrant is a Florida corporation. The Florida Business Corporation Act, ("FBCA"as amended (the “FBCA”), provides that, in general, a business corporation may indemnify any person who is or was a party to any proceeding (other than an action by, or in the right of, the corporation) by reason of the fact that he is or was a director or officer of the corporation, against liability incurred in connection with such proceeding, including any appeal thereof, provided certain standards are met, including that such officer or director acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the corporation, and provided further that, with respect to any criminal action or proceeding, the officer or director had no reasonable cause to believe his conduct was unlawful. In the case of proceedings by or in the right of the corporation, the FBCA provides that, in general, a corporation may indemnify any person who was or is a party to any such proceeding by reason of the fact that he is or was a director or officer of the corporation against expenses and amounts paid in settlement actually and reasonably incurred in connection with the defense or settlement of such proceeding,proceedings, including any appeal thereof, provided that such person acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the corporation, except that no indemnification shall be made in respect of any claim as to which such person is adjudged liable unless a court of competent jurisdiction determines upon application that such person is fairly and reasonably entitled to indemnity. To the extent that any officers or directors are successful on the merits or otherwise in the defense of any of the proceedings described above, the FBCA provides that the corporation is required to indemnify such officers or directors against expenses actually and reasonably incurred in connection therewith. However, the FBCA further provides that, in general, indemnification or advancement of expenses shall not be made to or on behalf of any officer or director if a judgment or other final adjudication establishes that his actions, or omissions to act, were material to the cause of the action so adjudicated and constitute: (i) a violation of the criminal law, unless the director or officer had reasonable cause to believe his conduct was lawful or had no reasonable cause to believe it was unlawful; (ii) a transaction from which the director or officer derived an improper personal benefit; (iii) in the case of a director, a circumstance under which the director has voted for or assented to a distribution made in violation of the FBCA or the corporation'scorporation’s articles of incorporation; or (iv) willful misconduct or a conscious disregard for the best interests of the corporation in a proceeding by or in the right of the corporation to procure a judgment in its favor or in a proceeding by or in the right of a shareholder. Article V of the Company's Bylawsour bylaws provides that the
Companywe shall indemnify any director, officer, employee or agent or any former director, officer, employee or agent to the fullfullest extent permitted by Florida law. II-1
38
The underwriters also will agree to indemnify the directors and officers of
the Company against certain liabilities as set forth in the Underwriting
Agreement (see Exhibit 1).
The CompanyRegistrant has purchased insurance with respect to, among other things, any liabilities that may arise under the statutory provisions referred to above.
II-1
ITEM 16. -- Exhibits.
(a) Exhibits
EXHIBITS.
The following is a list of all exhibits filed as a part of this Registration Statement, including those incorporated by reference in this Registration Statement.
Exhibit | Description of Document | Incorporated By Reference | Form Date | Filed Herein | ||||
| 1.1 | Form(s) of Underwriting | |||||||
| 4.1 | Registrant’s Amended and Restated Articles of | S-1 | 5/9/96 | |||||
| 4.2 | Registrant’s Articles of Amendment to Articles of Incorporation | S-4/A | 2/9/04 | |||||
| 4.3 | Registrant’s Articles of Amendment to Articles of Incorporation | S-4/A | 2/9/04 | |||||
| 4.4 | Registrant’s Articles of Amendment to Articles of Incorporation | S-4/A | 2/9/04 | |||||
| 4.5 | Registrant’s Articles of Amendment to Articles of Incorporation | 8-K | 5/17/00 | |||||
| 4.6 | Registrant’s Articles of Amendment to Articles of Incorporation | 10-K | 3/29/02 | |||||
| 4.7 | Registrant’s Amended & Restated Bylaws | 8-K | 2/7/07 | |||||
| 4.8 | Form of Specimen Common Stock Certificate | S-3 | 3/18/09 | |||||
| 4.9 | Form of Indenture | X | ||||||
| 4.10 | Form of Debt Security* | |||||||
| 4.11 | Form of Preferred Stock Certificate* | |||||||
| 4.12 | Form of Warrant Agreement* | |||||||
| 4.13 | Form of Warrant* | |||||||
| 4.14 | Form of Deposit Agreement* | |||||||
| 4.15 | Form of Depositary Receipt* | |||||||
| 4.16 | Form of Unit Agreement* | |||||||
| 5.1 | Opinion of Holland & Knight, | X | ||||||
| 12.1 | Computation of Ratio of Earnings to Fixed Charges | X | ||||||
| 23.1 | Consent of Deloitte & Touche LLP, Independent Registered Certified Public Accounting Firm | X | ||||||
| 23.2 | Consent of Holland & Knight, LLP | X | ||||||
| 24.1 | Power of Attorney (included on | X | ||||||
| 25.1 | Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939, as amended* | |||||||
| * | To be filed, if necessary, by an amendment to this Registration Statement or incorporated by reference pursuant to a Current Report on Form 8-K in connection with the offering of securities registered hereunder. |
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ITEM 17. UNDERTAKINGS.
We hereby undertake:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in the volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; provided, however, that paragraphs (1)(i), (1)(ii) and (1)(iii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by us pursuant to Section 13 and Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the Company's Registration Statement on Form S-1
(File No. 33-91738).
+ To be filed by amendment.
ITEM 17. -- UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes that,registration statement.
(2) That, for purposesthe purpose of determining any liability under the Securities Act of 1933, as amended (the
"Securities Act"), each filing of the Company's annual report pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the "Exchange
Act") (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in this Registration Statementsuch post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at thethat time shall be deemed to be the initial bona fide offering thereof.
(b) Insofar as indemnification
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) That, for liabilities arisingthe purpose of determining liability under the Securities Act mayof 1933 to any purchaser:
(A) Each prospectus filed by the Registrant pursuant to Rule 424(b)(3) shall be permitteddeemed to directors, officers and controlling personsbe part of the registrantregistration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and
(B) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the indemnification provisions described herein, or
otherwise,purpose of providing the registrant has been advised that in the opinioninformation required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and Exchange Commission (the "Commission")included in the registration statement as of the earlier of the date such indemnificationform of prospectus is against
public policyfirst used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as expressedto a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
(5) That, for the purpose of determining liability of the Registrant under the Securities Act and is, therefore,
unenforceable. Inof 1933 to any purchaser in the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling personinitial distribution of the registrantsecurities, the undersigned Registrant undertakes that in a primary offering of securities of the successful defenseundersigned Registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection withof the securities being
registered,following communications, the registrant
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undersigned Registrant will unless inbe a seller to the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Actpurchaser and will be governedconsidered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned Registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned Registrant or used or referred to by the final
adjudicationundersigned Registrant;
(iii) The portion of such issue.
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39
Theany other free writing prospectus relating to the offering containing material information about the undersigned Registrant hereby undertakes that:
(1) Foror its securities provided by or on behalf of the undersigned Registrant; and
(iv) Any other communication that is an offer in the offering made by the undersigned Registrant to the purchaser.
(6) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of the securities at that time shall be deemed to be the initial bona fide offering thereof.
(7) That, for purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this Registration Statementregistration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or Rule 497(h) under the Securities Act shall be deemed to be part of this Registration Statementregistration statement as of the time it was declared effective.
(2) For
(8) That, for the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
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40
(9) To file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed by the Commission under Section 305(b)(2) of the Act.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Exchange Act and will be governed by the final adjudication of such issue.
Each prospectus filed pursuant to Rule 424(b) as part of this Registration Statement, shall be deemed to be part of and included in the Registration Statement as of the date it is first used after effectiveness. Provided, however, that no statement made in the Registration Statement or prospectus that is part of the Registration Statement or made in a document incorporated or deemed incorporated by reference into the Registration Statement or prospectus that is part of the Registration Statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the Registration Statement or prospectus that was part of the Registration Statement or made in any such document immediately prior to such date of first use.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrantregistrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration
Statementregistration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Tampa, State of Florida, on the 8th day of October,
1997.
ROMAC INTERNATIONAL, INC.
By: /s/ DAVID L. DUNKEL
------------------------------------April 27, 2012.
| KFORCE INC. | ||||
| Date: April 27, 2012 | By: | /s/ DAVID L. DUNKEL | ||
| David L. Dunkel | ||||
Chairman of the Board, Chief Executive Officer and Director | ||||
POWER OF ATTORNEY
KNOWN TO ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints David L. Dunkel, PresidentJoseph J. Liberatore and Chief Executive
Officer
POWER OF ATTORNEY
EachWilliam L. Sanders, jointly and severally, his or her attorneys-in-fact, each with the power of the undersigned officers and directors of Romac International, Inc.
(the "Company"), a Florida corporation,substitution, for himself and not for one another,
does hereby constitute and appoint David L. Dunkel, Thomas Calcaterra, James D.
Swartz, and Peter Dominici, and each and any of them and his substitutes, a true
and lawful attorney in his name, place and stead,him or her in any and all capacities, to sign his name to any and all amendments to this registration statement,
including post-effective amendments, and any registration statement for the same
offering covered by this Registration Statement that is to be effective upon
filing pursuant to Rule 462(b) ofand other documents in connection therewith, with the Securities Act, and to cause the same to
be filed with theExchange Commission, granting unto said attorneyshereby ratifying and confirming all that each of them full
power of substitution and full power and authority to do and perform any act and
thing necessary and proper to be done in the premises, as fully to all intents
and purposes as the undersigned could do if personally present, and each of the
undersigned for himself hereby ratifies and confirms all that said attorneysattorneys-in-fact, or any one of them shall lawfullyhis or her substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the
dates indicated.
indicated:
| Date: April 27, 2012 | By: | /s/ DAVID L. DUNKEL | ||
| David L. Dunkel | ||||
| Director and Chief Executive | ||||
| (Principal Executive Officer) | ||||
| Date: April 27, 2012 | By: | /s/ JOSEPH J. LIBERATORE | ||
| Joseph J. Liberatore | ||||
| Executive Vice President | ||||
| (Principal Financial Officer) | ||||
| Date: April 27, 2012 | By: | /s/ JEFFREY B. HACKMAN | ||
| Jeffrey B. Hackman | ||||
| Vice President and | ||||
| (Principal Accounting Officer) | ||||
| Date: April 27, 2012 | By: | /s/ JOHN N. ALLRED | ||
| John N. Allred | ||||
| Director | ||||
| Date: April 27, 2012 | By: | /s/ W.R. CAREY, JR. | ||
| W.R. Carey, Jr. | ||||
| Director | ||||
| Date: April 27, 2012 | By: | /s/ RICHARD M. COCCHIARO | ||
| Richard M. Cocchiaro | ||||
| Vice Chairman and Director | ||||
| Date: April 27, 2012 | By: | /s/ MARK F. FURLONG | ||
| Mark F. Furlong | ||||
| Director | ||||
| Date: April 27, 2012 | By: | /s/ PATRICK D. MONEYMAKER | ||
| Patrick D. Moneymaker | ||||
| Director | ||||
| Date: April 27, 2012 | By: | /s/ ELAINE D. ROSEN | ||
| Elaine D. Rosen | ||||
| Director | ||||
| Date: April 27, 2012 | By: | /s/ A. | ||
| A. | ||||
| Director | ||||
| Date: April 27, 2012 | By: | /s/ RALPH E. STRUZZIERO | ||
| Ralph E. Struzziero | ||||
| Director | ||||
| Date: April 27, 2012 | By: | /s/ HOWARD W. SUTTER | ||
| Howard W. Sutter | ||||
| Vice Chairman and Director | ||||