SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
Annual Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
(Mark One)
| x | Annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934 |
For the fiscal year ended December 31, 2007
OR
| ¨ | Transition report pursuant to Section 15(d) of the Securities Exchange Act of 1934 |
For the transition period from to
Commission file number 000-24484
A. Full title of the plan and the address of the plan, if different from that of the issuer named below:
MPS Group, Inc. Retirement Savings Plan
B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:
MPS Group, Inc.
One Independent Drive
Jacksonville, Florida 32202
MPS Group, Inc. Retirement Savings Plan
Index
December 31, 2007 and 2006
| * | Other schedules required by 29 CFR 2520.103-10 of the Department of Labor’s Rules and Regulations for Reporting and Disclosure under ERISA have been omitted because they are not applicable, or are not required for participant directed investment transactions. |
Report of Independent Registered Certified Public Accounting Firm
To the Participants and Administrator of
MPS Group, Inc. Retirement Savings Plan
In our opinion, the accompanying statements of net assets available for benefits and the related statement of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of MPS Group, Inc. Retirement Savings Plan (the “Plan”) at December 31, 2007 and 2006, and the changes in net assets available for benefits for the year ended December 31, 2007 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets (held at end of year) is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
PricewaterhouseCoopers LLP
Jacksonville, Florida
June 27, 2008
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MPS Group, Inc. Retirement Savings Plan
Statements of Net Assets Available for Benefits
December 31, 2007 and 2006
| 2007 | 2006 | |||||
Assets | ||||||
Investments, at fair value | $ | 150,205,900 | $ | 140,181,668 | ||
Total investments | 150,205,900 | 140,181,668 | ||||
Receivables | ||||||
Participants’ contributions | 343,127 | 650,036 | ||||
Employer contributions | 3,875,069 | 3,313,871 | ||||
Total receivables | 4,218,196 | 3,963,907 | ||||
Liabilities | ||||||
Excess contributions payable | 983,584 | 719,318 | ||||
Net assets available for benefits at fair value | 153,440,512 | 143,426,257 | ||||
Adjustment from fair value to contract value for fully benefit-responsive investment contracts | 143,297 | 263,222 | ||||
Net assets available for benefits at contract value | $ | 153,583,809 | $ | 143,689,479 | ||
The accompanying notes are an integral part of these financial statements.
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MPS Group, Inc. Retirement Savings Plan
Statement of Changes in Net Assets Available for Benefits
Year Ended December 31, 2007
Additions to net assets attributed to | ||||
Investment income | ||||
Interest and dividends | $ | 10,241,741 | ||
Net depreciation in fair value of investments | (1,288,039 | ) | ||
Total investment income | 8,953,702 | |||
Other income, net | 58,673 | |||
Contributions | ||||
Participants | 18,134,323 | |||
Employer | 3,875,069 | |||
Total contributions | 22,009,392 | |||
Total additions | 31,021,767 | |||
Deductions from net assets attributed to | ||||
Benefits paid to participants | 21,127,437 | |||
Total deductions | 21,127,437 | |||
Net increase | 9,894,330 | |||
Net assets available for benefits | ||||
Beginning of year | 143,689,479 | |||
End of year | $ | 153,583,809 | ||
The accompanying notes are an integral part of these financial statements.
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MPS Group, Inc. Retirement Savings Plan
Notes to Financial Statements
December 31, 2007 and 2006
| 1. | Description of Plan |
The following description of the MPS Group, Inc. Retirement Savings Plan (the “Plan”) provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan’s provisions.
General
The Plan is a defined contribution plan covering professional employees of MPS Group, Inc. (the “Company”) who have completed at least 375 hours of service in any three consecutive month period or at least 1,000 hours in one year. To continue to vest in company contributions, a participant must work at least 1,000 hours each year. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”).
Contributions
Each participant may elect to defer all or a portion of their compensation which would have been received in the Plan year. For any given pay period (in accordance with the employer’s payroll practices), the deferral shall not exceed a participant’s total compensation earned during such plan year and on or after the pay period for which such deferral is made. Participants may also contribute amounts representing distributions from other qualified defined benefit or defined contribution plans. Participants direct the investment of their contributions into various investment options offered by the Plan. The Plan currently offers two common/collective trusts, twelve mutual funds, and the Company stock as investment options for participants. The Company, at its discretion, contributes a uniform percentage of the amount of salary elected to be deferred. Contributions are subject to certain limitations. The statement of changes in net assets available for benefits includes a reduction for excess contributions of approximately $984,000 which were refunded to participants during 2007.
Participant Accounts
Each participant’s account is credited with the participant’s contribution and allocations of (a) the Company’s contribution and (b) plan earnings. Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.
Vesting
Participants are vested immediately in their contributions plus actual earnings thereon. Vesting in the Company’s contribution is based on years of continuous service at 25% per year of service. A participant is 100% vested after four years of credited service.
In the event of death or total and permanent disability while under the Company’s employment, all amounts credited to the participant’s account as of the subsequent plan anniversary date are considered fully vested.
Participant Loans
Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum of $50,000 or 50% of their account balance, whichever is less. The loans are collateralized by the balance in the participant’s account and bear interest at rates that range from 5.00% to 10.50%, which were commensurate with local prevailing rates at the time of issuance as determined quarterly by the Plan administrator.
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MPS Group, Inc. Retirement Savings Plan
Notes to Financial Statements
December 31, 2007 and 2006
Payment of Benefits
On termination of service or retirement, a participant or participant’s beneficiary will receive a lump sum amount equal to the value of the participant’s vested interest in his or her account.
Forfeiture Allocation
Forfeited nonvested accounts totaled approximately $271,000 and $125,000 at December 31, 2007 and 2006, respectively. These accounts are used to reduce future employer contributions.
| 2. | Summary of Significant Accounting Policies |
Basis of Accounting
The financial statements of the Plan are prepared under the accrual method of accounting.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make significant estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates.
Investment Valuation and Income Recognition
The Plan’s investments in common stock are stated at fair value based upon quoted market prices. Shares in mutual funds are stated at the net asset value of shares held by the Plan at year end. Units in common/collective trusts are stated at net asset value of units held by the Plan at year end.
The Plan presents in the statement of changes in net assets available for benefits the net appreciation in fair value of its investments which consists of realized and unrealized gains and losses on these investments.
Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date.
The Plan has adopted the provisions of the Financial Accounting Standards Board Staff Position (FSP) AAG INV-1 and SOP 94-4-1, Reporting of Fully Benefit-Responsive Investment Contracts Held by Certain Investment Companies Subject to the AICPA Investment Company Guide and Defined-Contribution Health and Welfare and Pension Plan (the FSP), which are effective for financial statements issued for annual periods ended after December 15, 2006.
As described in the FSP, fully benefit-responsive investment contracts held by a defined contribution plan are required to be reported at fair value. However, contract value is the relevant measurement attribute for that portion of the net assets available for benefits of a defined-contribution plan attributable to fully benefit-responsive investment contracts, because contract value is the amount participants would receive if they were to initiate permitted transactions under the terms of the Plan. The Plan invests in investment contracts through participation in the Merrill Lynch Retirement Preservation Trust, a collective trust fund. As required by the FSP, investments in the accompanying statements of net assets available for benefits present the fair value of the Merrill Lynch Retirement Preservation Trust as well as the adjustment of the portion of the Merrill Lynch Retirement Preservation Trust related to fully benefit-responsive investment contracts from fair value to contract value. The statement of changes in net assets available for benefits is prepared on a contract value basis. The requirements of the FSP have been applied retroactively to the statement of net assets available for benefits as of December 31, 2006 presented for comparative purposes.
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MPS Group, Inc. Retirement Savings Plan
Notes to Financial Statements
December 31, 2007 and 2006
Risks and Uncertainties
The Plan provides for various investment options in any combination of fixed income securities and mutual funds. Investment securities are exposed to various risks, such as interest rate, market and credit. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that changes in risks in the near term would materially affect participants’ account balances and the amounts reported in the statement of net assets available for plan benefits and the statement of changes in net assets available for plan benefits.
Benefits
Benefits are recorded when paid.
New Accounting Pronouncement
In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“SFAS 157”). SFAS 157 establishes: (1) a common definition for fair value to be applied to generally accepted accounting principles requiring use of fair value, (2) a framework for measuring fair value, and (3) disclosure requirements related to fair value measurements. SFAS 157 does not require new fair value measurements and is effective for the Plan beginning January 1, 2008. SFAS 157 is not expected to have a material impact on the Plan’s statement of net assets available for benefits and statement of changes in net assets available for benefits.
| 3. | Investments |
The following presents investments that represent 5% or more of the Plan’s net assets at December 31:
| 2007 | 2006 | |||||
Common/Collective Trusts | ||||||
Merrill Lynch Retirement Preservation Trust (at contract value) | $ | 15,921,932 | $ | 14,623,460 | ||
Merrill Lynch Equity Index Trust I | 12,600,601 | 12,914,090 | ||||
Mutual Funds | ||||||
Alliance Bernstein | 14,999,007 | — | ||||
Federated Kaufman Fund | 21,714,741 | 18,718,721 | ||||
Blackrock Mid Cap Value OPP I | 17,065,616 | 16,962,539 | ||||
J Hancock US Global Fund | 15,850,257 | 16,396,978 | ||||
Calvert Income Fund | 14,517,376 | 14,620,562 | ||||
Van Kampen Growth & Income Fund CL A | 14,580,112 | 14,262,447 | ||||
Templeton Foreign Fund | — | 11,614,328 | ||||
During 2007, the Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) depreciated in value by $1,288,039 as follows:
Mutual funds | $ | (1,394,896 | ) | |
MPS stock | (592,859 | ) | ||
Common/collective trusts | 699,716 | |||
| $ | (1,288,039 | ) | ||
| 4. | Plan Termination |
Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of plan termination, participants will become 100% vested in all amounts credited to their account.
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MPS Group, Inc. Retirement Savings Plan
Notes to Financial Statements
December 31, 2007 and 2006
| 5. | Tax Status |
The Internal Revenue Service has determined and informed the Company by letter dated August 30, 2002 that the Plan and related trust were designed in accordance with applicable sections of the Internal Revenue Code (IRC). The Plan has been amended since receiving the determination letter. However, the Plan administrator believes the Plan is designed and is currently being operated in compliance with the applicable provisions of the IRC.
| 6. | Financial Instruments |
Certain financial instruments potentially subject the Plan to concentrations of credit risk. These financial instruments consist of pooled accounts with a mutual fund company.
The Plan limits its credit risk by maintaining its accounts with what it believes to be high quality financial institutions.
| 7. | Related Party Transactions |
Certain plan investments are shares of mutual funds, the MPS Stock Pool Fund, and common/collective trusts managed by Merrill Lynch Retirement Services. Merrill Lynch is the trustee as defined by the Plan and, therefore, these transactions qualify as party-in-interest transactions. Administrative expenses paid by the Plan to Merrill Lynch totaled approximately $25,000 and $27,000 in 2007 and 2006, respectively.
Employees can elect to allocate their contributions to the purchase of MPS stock.
| 8. | Reconciliations to Form 5500 |
The following is a reconciliation of net assets available for benefits per the financial statements at December 31, 2007 to Form 5500:
Net assets available for benefits per the financial statements | $ | 153,583,809 | ||
Adjustment from fair value to contract value for fully benefit-responsive investment contracts | (143,297 | ) | ||
Net assets available for benefits per Form 5500 | $ | 153,440,512 | ||
The following is a reconciliation of investment income per the financial statements at December 31, 2007 to Form 5500:
Total investment income per the financial statements | $ | 8,953,702 | ||
Adjustment from fair value to contract value for fully benefit-responsive investment contracts | (143,297 | ) | ||
Total investment income per Form 5500 | $ | 8,810,405 | ||
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MPS Group, Inc. Retirement Savings Plan
Schedule H, line 4i – Schedule of Assets (Held at End of Year)
December 31, 2007
(a) | (b) Identity of issue, borrower, lessor or similar party | (c) Description of investment including maturity date, rate of interest, collateral, par or maturity value | (d) **Cost | (e) Current Value | |||||
| Cash | Cash | $ | 336,076 | ||||||
* | MPS Group Inc Fla Com | Common Stock | 2,036,162 | ||||||
* | Ml Ret Preservation Trust | Common/Collective Trusts | 15,778,635 | ||||||
* | ML Equity Index Trust I | Common/Collective Trusts | 12,600,601 | ||||||
| Federated Kaufman Fd Cl A | Mutual Fund | 21,714,741 | |||||||
* | Blackrock Mdcp Val Opp I | Mutual Fund | 17,065,616 | ||||||
| J Hancock US Glob Lrds Gr Cl A | Mutual Fund | 15,850,257 | |||||||
| Alliance Bern Intl Val Cl A | Mutual Fund | 14,999,007 | |||||||
| Van Kampen Grwth & Inc Fd Cl A | Mutual Fund | 14,580,112 | |||||||
| Calvert Income Fund | Mutual Fund | 14,517,376 | |||||||
| Davis NY Venture Fd Cl A | Mutual Fund | 4,026,093 | |||||||
* | Blackrock Value Opps I | Mutual Fund | 3,278,761 | ||||||
| The Oakmark Eq & Inc Fd Cl II | Mutual Fund | 3,228,512 | |||||||
* | Blackrock Government | Mutual Fund | 3,042,020 | ||||||
| Seligman Comm & Info Fd Cl A | Mutual Fund | 2,976,913 | |||||||
| Pioneer Oak Ridge Sm Cap Grw A | Mutual Fund | 2,805,702 | |||||||
* | Participant Loans | Loans with rates from 5.0% to 10.5% | 1,369,316 | ||||||
| $ | 150,205,900 | ||||||||
| * | Party-in-interest as defined by ERISA |
| ** | Not required for participant directed investments |
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Exhibit No. | Description | |
| 23 | Consent of Independent Registered Certified Public Accounting Firm |
Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
| MPS GROUP, INC. |
| As Plan Administrator of the MPS Group, Inc. Retirement Savings Plan |
/s/ Robert P. Crouch |
| Robert P. Crouch |
| Senior Vice President, |
| Chief Financial Officer, |
| Treasurer & Chief Accounting Officer |
| June 27, 2008 |
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