SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 27, 1998
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Commission File No. 0-3532
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OLSTEN CORPORATION
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(Exact name of registrant as specified in its charter)
DELAWARE 13-2610512
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
175 Broad Hollow Road, Melville, New York 11747-8905
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (516) 844-7800
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Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at November 6, 1998
- ------------------------------------ -------------------------------
Common Stock, $.10 par value 68,205,970 shares
Class B Common Stock, $.10 par value 13,074,396 shares
INDEX
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Page No.
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets (Unaudited) -
September 27, 1998 and December 28, 1997 2
Consolidated Statements of Income (Unaudited) -
Quarters and Nine Months Ended September 27, 1998 and
September 28, 1997, respectively 3
Consolidated Statements of Cash Flows (Unaudited) -
Nine Months Ended September 27, 1998 and
September 28, 1997, respectively 4
Notes to Consolidated Financial Statements (Unaudited) 5-6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7-9
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 5. Other Information 10-11
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 13
1
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
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Olsten Corporation
Consolidated Balance Sheets
(In thousands, except share amounts)
(Unaudited)
September 27, 1998 December 28, 1997
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ASSETS
CURRENT ASSETS:
Cash $ 21,092 $ 84,810
Receivables, net 971,016 847,419
Other current assets 107,232 90,715
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Total current assets 1,099,340 1,022,944
FIXED ASSETS, NET 216,300 186,347
INTANGIBLES, NET 587,303 534,284
OTHER ASSETS 13,259 6,626
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$1,916,202 $1,750,201
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accrued expenses $ 180,040 $ 152,239
Payroll and related taxes 115,370 86,071
Accounts payable 97,026 55,851
Insurance costs 36,642 41,270
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Total current liabilities 429,078 335,431
LONG-TERM DEBT 566,513 461,178
OTHER LIABILITIES 101,698 111,815
SHAREHOLDERS' EQUITY:
Common stock $.10 par value;
authorized 110,000,000 shares;
issued 68,250,519 and 68,151,708
shares, respectively 6,825 6,815
Class B common stock $.10 par value;
authorized 50,000,000 shares;
issued 13,074,121 and 13,157,617
shares, respectively 1,307 1,316
Additional paid-in capital 447,463 447,297
Retained earnings 368,026 390,786
Accumulated other comprehensive income (4,253) (4,437)
Less treasury stock, at cost:
45,700 shares in 1998 (455) --
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Total shareholders' equity 818,913 841,777
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$1,916,202 $1,750,201
========= =========
See notes to consolidated financial statements.
2
Olsten Corporation
Consolidated Statements of Income
(In thousands, except share amounts)
(Unaudited)
Third Quarter Ended Nine Months Ended
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September 27, September 28, September 27, September 28,
1998 1997 1998 1997
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Service sales, franchise fees,
management fees and other income $1,170,037 $1,063,281 $3,346,121 $3,028,519
Cost of services sold 886,121 779,946 2,553,023 2,220,043
---------- ----------- ---------- ----------
Gross profit 283,916 283,335 793,098 808,476
Selling, general and administrative
expenses 250,998 233,965 774,449 674,692
Interest expense, net 8,242 5,536 21,624 14,885
---------- ----------- ---------- ----------
Income (loss) before income taxes and
minority interests 24,676 43,834 (2,975) 118,899
Income tax charge (benefit) 9,561 17,095 (1,153) 46,371
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Income (loss) before minority interests 15,115 26,739 (1,822) 72,528
Minority interests 2,581 1,482 6,307 2,775
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Net income (loss) $ 12,534 $ 25,257 $ (8,129) $ 69,753
========== =========== ========== ==========
SHARE INFORMATION:
Basic earnings (loss) per share:
Net income (loss) $ .15 $ .31 $ (.10) $ .86
========== =========== =========== ===========
Average shares outstanding 81,289 81,268 81,307 81,214
========== =========== =========== ===========
Diluted earnings (loss) per share:
Net income (loss) $ .15 $ .31 $ (.10) $ .86
========== =========== =========== ===========
Average shares outstanding 81,295 83,239 81,307 83,137
========== =========== =========== ===========
See notes to consolidated financial statements.
3
Olsten Corporation
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Nine Months Ended
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September 27, 1998 September 28, 1997
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OPERATING ACTIVITIES:
Net income (loss) $ (8,129) $ 69,753
Adjustments to reconcile net income (loss) to net
cash (used in) provided by operating activities:
Depreciation and amortization 49,895 39,365
Changes in assets and liabilities,
net of effect from acquisitions:
Accounts receivable and other current assets (123,582) (97,064)
Current liabilities 87,965 (10,457)
Other, net (11,817) 27,662
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NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES (5,668) 29,259
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INVESTING ACTIVITIES:
Acquisitions of businesses including franchises, net of
cash acquired (73,164) (145,985)
Purchases of fixed assets (64,353) (54,219)
Sale of investment securities -- 9,415
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NET CASH USED IN INVESTING ACTIVITIES (137,517) (190,789)
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FINANCING ACTIVITIES:
Net proceeds from issuance of notes 133,806 --
Net (repayments of) proceeds from line of credit agreements (40,862) 104,735
Cash dividends (14,630) (17,049)
Repayment of notes payable (6,202) --
Payment for purchase of treasury stock (455) --
Issuances of common stock under stock plans 72 1,683
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NET CASH PROVIDED BY FINANCING ACTIVITIES 71,729 89,369
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EFFECT OF EXCHANGE RATE CHANGES ON CASH 7,738 --
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NET DECREASE IN CASH (63,718) (72,161)
CASH AT BEGINNING OF PERIOD 84,810 105,725
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CASH AT END OF PERIOD $ 21,092 $ 33,564
======== ========
NON-CASH TRANSACTIONS:
Assets acquired through the issuance of a note $ -- $ 19,535
Issuance of restricted stock $ -- $ 6,437
See notes to consolidated financial statements.
4
Olsten Corporation
Notes to Consolidated Financial Statements
(Unaudited)
1. Accounting Policies
-------------------
The unaudited consolidated financial statements have been prepared by
Olsten Corporation (the "Company") pursuant to the rules and regulations of
the Securities and Exchange Commission and, in the opinion of management,
include all adjustments necessary for a fair presentation of results of
operations, financial position and cash flows for each period presented.
Results for interim periods are not necessarily indicative of results for a
full year. The year-end balance sheet data was derived from audited
financial statements, but does not include all disclosures required by
generally accepted accounting principles.
2. Long-Term Debt
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In May 1998, the Company's wholly-owned subsidiary, Olsten International
B.V. issued, in a public offering, 800 million French Franc (approximately
U.S. $134 million at that date), 6 percent Euronotes due 2008, which are
fully guaranteed by the Company. The net proceeds were used to repay
existing indebtedness and for general financing purposes of the issuer and
its related companies.
On July 30, 1998, the Company's revolving credit agreement, dated August 9,
1996, was amended to revise the provision related to the maintenance of
various financial ratios and covenants.
Interest expense, net, consists primarily of interest on long-term debt for
the quarter of $9 million in 1998 and $7 million in 1997, offset by
interest income from investments of $1 million for both 1998 and 1997.
Interest expense for the nine months was $24 million, net of interest
income of $2 million in 1998 and $18 million, net of interest income of $3
million in 1997.
3. Acquisitions
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Under the terms of the 1997 purchase agreement for Sogica S.A., an
additional payment of approximately $31 million, related to its 1997
results of operations, was paid in the second quarter of 1998. An
additional purchase price payment will be required in the year 2000,
calculated based upon the average net income for the three fiscal years
ended December 31, 1999. The Company is obligated in the year 2000 to
purchase the remaining Sogica S.A. shares at a price to be determined by a
multiple ranging from an upper limit of 16 and a lower limit of 10, applied
to average net income for the two fiscal years ended 1998 and 1999.
During the first nine months of 1998, the Company purchased various
businesses for $42 million in cash. Included in these acquisitions was the
purchase of a Danish company, Attention Personalservice A/S, several small
acquisitions in France, Norway and Sweden, as well as the acquisition in
Brazil of Top Services S.A. All acquisitions have been accounted for by the
purchase method of accounting.
5
4. Adjustments and One-Time Charges
--------------------------------
The results for the nine months include second quarter 1998 adjustments and
one-time charges of $66 million ($40 million, net of tax), or $.50 per
diluted share, related primarily to the restructuring of the Company's home
health business.
5. Adoption of SFAS 130, "Reporting Comprehensive Income"
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As of December 29, 1997, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS
130"). SFAS 130 establishes new rules for the reporting and displaying of
comprehensive income and its components; however, the adoption of this
Statement had no impact on the Company's net income or shareholders'
equity. SFAS 130 requires unrealized gains or losses on the Company's
foreign currency translation adjustments, which prior to adoption were
reported separately in shareholders' equity, to be included in other
comprehensive income. Prior year financial statements have been
reclassified to conform to the requirements of SFAS 130.
Total comprehensive income (loss) amounted to $17 million and $(8) million
during the third quarter and nine months of 1998, respectively, and $25
million and $73 million for the same periods in 1997.
6. Subsequent Events
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On October 28, 1998, the Company announced it had entered into a final
settlement agreement with several Government agencies investigating certain
past practices of Quantum Health Resources, acquired by the Company in June
1996. The settlement calls for the Company to reimburse the Government
approximately $4.5 million for certain disputed claims involving the
provision of anti-hemophilia factor products to patients covered by certain
federal health care programs. The Company had provided for the settlement
in its fiscal second quarter ended June 28, 1998. Both the investigation
and resulting settlement relate predominately to matters that predate the
Company's ownership of this subsidiary. Quantum has since become part of
Olsten Health Services, the Company's home health care division. This
settlement is not related to an ongoing probe into certain Quantum health
care practices in New Mexico.
On November 6, 1998, the Company completed the acquisition, for cash, of
all of Columbia/HCA Healthcare Corporation's home health care operations in
the state of Florida in an asset transaction valued at approximately $34
million.
6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Results of Operations
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Net income for the third quarter was $13 million, or $.15 per diluted share, a
50 percent decrease compared to $25 million, or $.31 per diluted share, reported
in 1997. The results of operations for the nine months include second quarter
1998 adjustments and one-time charges of $66 million ($40 million, net of tax),
or $.50 per diluted share, related primarily to the restructuring of the
Company's home health business. Excluding the effect of these adjustments and
one-time charges, net income for the nine months of 1998 decreased 54 percent to
$32 million, or $.40 per diluted share, compared to $70 million, or $.86 per
diluted share, for the same period last year.
Revenues increased $107 million, or 10 percent, to $1.2 billion for the third
quarter, as compared to $1.1 billion for last year's third quarter. Revenues
increased $318 million, or 10 percent, to $3.3 billion for the first nine months
of 1998, as compared to $3 billion for the comparable period of 1997.
Staffing Services' revenues increased 20 percent to $847 million for the third
quarter and 22 percent to $2.4 billion for the nine months over last year's
third quarter and nine-month periods of $708 million and $1.9 billion,
respectively. Acquisitions accounted for approximately 9 percent of the third
quarter revenue growth, while European operations contributed 6 percent
reflecting industry growth and favorable economic conditions. The remaining 5
percent growth is primarily attributable to internal growth in our North
American Information Technology Services business, increased Latin American
revenues and increases in professional services operations, while traditional
North American Staffing operations were relatively flat compared to the third
quarter of 1997.
Health Services' revenues declined 9 percent to $321 million for the third
quarter, and 10 percent to $968 million for the nine months, compared to $353
million and $1.1 billion for the comparable periods of 1997. The decline in
Health Services' revenues for the quarter reflects an industry-wide decline in
patient visits and reimbursement rates that have resulted from Medicare's
Interim Payment System (IPS), and from continuing pricing and utilization
pressure in managed care business. An overall increase in Infusion Therapy,
Clinical Solutions and Medical Staffing businesses partly offset the above
decline.
Cost of services sold increased 14 percent to $886 million for the third quarter
and 15 percent to $2.6 billion for the nine months of 1998, from $780 million
and $2.2 billion for the same periods of 1997. Gross profit margins, as a
percentage of revenues, decreased to 24.3 percent for the third quarter and 23.7
percent for the nine months from 26.6 percent and 26.7 percent for last year's
third quarter and nine months, respectively. Staffing Services' gross profit
margins declined for the quarter primarily as a result of reduced margins on
large contracts within the Information Technology Services business, offset by
margin improvements in Germany and Scandinavia. In Germany, the margin
improvement resulted from decreased wages and increased utilization while in
Scandinavia, the improvement was primarily related to an increase in high-margin
business and favorable contract negotiations. Health Services' gross profit
margins decreased for the quarter primarily as a result of a reduction in both
Medicare visits and reimbursement rates that have resulted from Medicare's
Interim Payment System. The reduction in visits was offset slightly by
productivity enhancements and pricing increases.
7
Selling, general and administrative expenses increased 7 percent to $251 million
for the third quarter from $234 million for the third quarter in 1997. For the
nine months of 1998, expenses increased 15 percent to $774 million from $675
million for the nine months in 1997. As a percentage of revenues, such expenses
were essentially flat for the quarter at 22 percent and increased to 23.1
percent from 22.3 percent for the nine months. The increase in expenses for the
nine month period resulted primarily from investments in infrastructure,
including new systems in both Staffing Services and Health Services businesses,
and the development of professional services' divisions, offset by positive
results of cost reduction initiatives, including closing and consolidating
offices within the Health Services division as announced in the second quarter
as part of our restructuring and recovery plan.
Net interest expense was $8 million and $6 million for the third quarters of
1998 and 1997, respectively, and $22 million and $15 million for the nine month
periods of 1998 and 1997, respectively. Net interest primarily reflected
borrowing costs on long-term debt offset by interest income on investments. The
increase resulted from interest expense incurred as the Company continued to
fund its acquisition program, as well as the financing of accounts receivable.
Year 2000
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The Year 2000 issue concerns the inability of information systems to properly
recognize and process date-sensitive information beyond January 1, 2000. The
failure to correct a material Year 2000 problem could result in an interruption
or a failure of certain normal business activities or operations. Such failures
could materially and adversely affect the Company's results of operations,
liquidity and financial condition.
The Company's technical infrastructure, encompassing all business applications,
is planned to be Year 2000 ready. Systems not directly related to the financial
operations of the business, primarily voice communications, are also being
upgraded to help ensure readiness. In addition, the Company has, through
questionnaires, interviews and written confirmations, contacted significant
suppliers and vendors to ascertain their stage of Year 2000 readiness.
The North American Staffing Services business is achieving Year 2000 readiness
by replacing all business applications and related infrastructure with compliant
technology. This project, referred to as Project REach, is being implemented to
increase efficiencies and improve the Company's ability to provide services to
customers. The selected systems are Year 2000 compliant and, therefore, no
remediation of current applications is necessary. Project REach is approximately
75 percent completed and is on schedule to be fully implemented by July 1999.
The Company's European and Latin American staffing operations are achieving
readiness primarily through remediation of existing systems which are
anticipated to be completed by the second quarter of 1999.
In the Health Services segment, systems critical to the business, which have
been identified as non-year 2000 compliant, are being replaced as part of a
project referred to as Project REO, which similarly is being implemented to
increase efficiencies and improve the Company's ability to provide services to
customers. The new infrastructure, which is Year 2000 compliant, is currently
being implemented in field offices and is scheduled for completion by the first
quarter of 1999 with the balance of the Project scheduled for completion in the
fourth quarter of 1999. Other Health Services systems which require remediation
are expected to be compliant by July 1999.
The total cost of the Company's remediation plan (exclusive of Project REach and
Project REO costs) is estimated at approximately $2 million to $3 million.
8
Due to the general uncertainty inherent in the Year 2000 issue resulting, in
part, from the uncertainty of the Year 2000 readiness of third-party suppliers
and customers, the Company is unable to determine at this time whether the
consequences of Year 2000 failures will have a material impact on the Company's
results of operations, liquidity or financial condition. The continuing Year
2000 effort is expected to help reduce the Company's level of uncertainty about
the Year 2000 issue and, in particular, about the Year 2000 readiness. The
Company believes that the implementation of new business systems and the
completion of its Year 2000 plan as scheduled should help reduce the likelihood
of significant interruptions of normal operations.
The Company's plan is to address its significant Year 2000 issues prior to being
affected by them. Should the Company identify significant risks related to its
Year 2000 readiness or its progress deviates from the anticipated timeline, the
Company will develop contingency plans as deemed necessary at that time.
Liquidity and Capital Resources
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Working capital decreased from $688 million at December 28, 1997 to $670 million
at September 27, 1998. For the nine month period, net cash decreased $64 million
primarily resulting from a paydown of borrowings under the Company's line of
credit, the acquisition of businesses and capital expenditures totaling $178
million, dividend payments of $15 million and a $6 million decrease in cash from
operations, offset by $134 million in proceeds received from the issuance of the
6 percent Euronotes by the Company's subsidiary, Olsten International B.V.
Accounts receivable and other current assets increased $124 million for the nine
months. This increase is primarily attributed to acquisitions, Staffing
Services' revenue growth, the consolidated billing requirements of large
corporate accounts in the Staffing Services division, and the growth of managed
care and infusion therapy accounts, which impacted the timing of the collection
process.
The Company has a revolving credit agreement with a consortium of eleven banks
for up to $400 million in borrowings and letters of credit. As of September 27,
1998, there were $139 million in borrowings outstanding and $57 million in
standby letters of credit. On July 30, 1998, the Company's revolving credit
agreement, dated August 9, 1996, was amended to revise the provisions related to
the maintenance of various financial ratios and covenants. The Company has
invested available funds in short-term, interest-bearing investments. The
Company believes that its levels of working capital, liquidity and available
sources of funds are sufficient to support present operations. See PART II, Item
5.
OTHER
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INFORMATION CONTAINED HEREIN, OTHER THAN HISTORICAL INFORMATION, SHOULD BE
CONSIDERED FORWARD-LOOKING AND IS SUBJECT TO VARIOUS RISK FACTORS AND
UNCERTAINTIES. FOR INSTANCE, THE COMPANY'S STRATEGIES AND OPERATIONS INVOLVE
RISKS OF COMPETITION, CHANGING MARKET CONDITIONS, CHANGES IN LAWS AND
REGULATIONS AFFECTING THE COMPANY'S INDUSTRIES AND NUMEROUS OTHER FACTORS
DISCUSSED IN THIS DOCUMENT AND IN OTHER COMPANY FILINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION. ACCORDINGLY, ACTUAL RESULTS MAY DIFFER MATERIALLY FROM
THOSE PROJECTED IN ANY FORWARD-LOOKING STATEMENTS CONTAINED HEREIN.
9
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
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On September 8, 1998, a Consolidated Amended Class Action Complaint
(the "Amended Complaint") was filed by the plaintiffs in the four
previously disclosed purported class action lawsuits (Weichman,
Goldman, Waldman and Cannold) pending against Olsten and certain of
its officers and directors (collectively, the "Class Action"). The
Amended Complaint asserts claims under Sections 10(b) (including Rule
10b-5 promulgated thereunder), 14(a) and 20(a) of the Securities
Exchange Act of 1934 and Sections 11, 12(a)(2) and 15 of the
Securities Act of 1933. On October 19, 1998, the Company and the
individual defendants served a motion seeking an Order dismissing the
Amended Complaint; that motion is scheduled to be fully briefed by
December 23, 1998. While the Company is unable at this time to assess
the probable outcome of the Class Action or the materiality of the
risk of loss in connection therewith (given the preliminary stage of
the Class Action and the fact that the Amended Complaint does not
allege damages with any specificity), the Company believes that it
acted responsibly with respect to its shareholders and intends to
vigorously defend the Class Action.
Item 5. Other Information.
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Government Investigations. The Company's home health care business is
subject to extensive federal and state regulations which govern, among
other things, Medicare, Medicaid, CHAMPUS and other government-funded
reimbursement programs, reporting requirements, certification and
licensure standards for certain home health agencies and, in some
cases, certificate-of-need and pharmacy-licensing requirements. The
Company is also subject to a variety of federal and state regulations
which prohibit fraud and abuse in the delivery of health care
services, including, but not limited to, prohibitions against the
offering or making of direct or indirect payments for the referral of
patients. As part of the extensive federal and state regulation of the
Company's home health care business, the Company is subject to
periodic audits, examinations and investigations conducted by or at
the direction of governmental investigatory and oversight agencies.
Violation of the applicable federal and state regulations can result
in a health care provider being excluded from participation in the
Medicare, Medicaid and/or CHAMPUS programs, and can subject the
provider to civil and/or criminal penalties.
The Company continues to cooperate with the previously disclosed
health care industry investigations being conducted by certain
governmental agencies (collectively, the "Healthcare Investigations").
Among the Healthcare Investigations with which Olsten continues to
cooperate is that being conducted into the Company's preparation of
Medicare cost reports by the Office of Investigations section of the
Office of Inspector General (an agency within the U.S. Department of
Health and Human Services) and the U.S. Department of Justice.
The Company also continues to cooperate with the U.S. Department of
Justice and other federal agencies investigating the relationship
between Columbia/HCA Healthcare Corporation and Olsten in connection
with the purchase, sale and operation of certain home health agencies
which had been owned by Columbia/HCA and managed under contract by
10
Olsten Health Management, a unit of Olsten Health Services that
provides management services to hospital-based home health agencies.
On October 28, 1998, Olsten announced that it had entered into a final
settlement agreement with several Government agencies investigating
certain past practices of Quantum Health Resources ("Quantum"), a
provider of home infusion therapy services which was acquired by
Olsten in June 1996. The agreement was entered into with the U.S.
Department of Justice; the Office of Inspector General of the U.S.
Department of Health and Human Services; the U.S. Secretary of Defense
(for the CHAMPUS/Tricare program); and the Attorneys General for the
States of New York and Oklahoma. Pursuant to the settlement, Olsten
reimbursed the government approximately $4.5 million for certain
disputed claims involving the provision of anti-hemophilia factor
products to patients covered by certain federal health care programs.
The investigation and the resulting settlement relate predominantly to
matters that predated Olsten's ownership of Quantum.
Olsten continues to cooperate with various state and federal agencies,
including the U.S. Department of Justice, the Office of the Attorney
General of New Mexico and the New Mexico Health Care Anti-Fraud Task
Force ("Task Force"), in connection with their investigations into
certain health care practices of Quantum. Among the matters into which
those agencies are inquiring are allegations of improper billing and
fraud against various federally-funded medical assistance programs on
the part of Quantum and its post-acquisition successor, the Infusion
Therapy Services division of Olsten Health Services. Most of the time
period that the Company understands to be at issue in the Task Force
investigation predates Olsten's June 1996 acquisition of Quantum.
The Company believes that certain of the Healthcare Investigations may
have been triggered by or given rise to lawsuits under federal and/or
state whistleblower statutes against Olsten and/or Quantum.
Notwithstanding the Company's continuing cooperation with the
Healthcare Investigations, Olsten has been notified that it is a
target of a federal grand jury investigation by the U.S. Attorney's
Office for the Southern District of Florida, which investigation
Olsten believes focuses upon the Company's above-referenced
relationship with Columbia/HCA in connection with the purchase, sale
and operation of certain home health agencies. In addition to the U.S.
Attorney's Office for the Southern District of Florida, other agencies
of the federal and/or state governments may regard the Company and/or
certain of its employees as subjects or targets of one or more of the
other Healthcare Investigations. An indictment of Olsten in connection
with any one of the Healthcare Investigations could result in the
suspension of payments to Olsten under the Medicare, Medicaid and/or
CHAMPUS programs. If Olsten were to be found to have violated any of
the laws and regulations at issue in the Healthcare Investigations,
the Company could be subjected to a variety of sanctions, including
substantial monetary fines, civil and/or criminal penalties and
exclusion from participation in the Medicare, Medicaid and/or CHAMPUS
programs. While the Company is unable at this time to predict the
ultimate outcome of the Healthcare Investigations, the
above-referenced suspension of payments or the imposition of any one
of the foregoing sanctions could have a material adverse effect upon
the Company's financial position and results of operations.
11
Item 6. Exhibits and Reports on Form 8-K.
---------------------------------
(a) The following exhibit is filed herewith:
Exhibit 27 - Financial Data Schedule.
(b) Reports on Form 8-K.
The Company filed a report on Form 8-K, dated June
29, 1998, reporting in Item 5, Other Events, that
the Company had released a press release dated June
29, 1998, which was filed as an Exhibit.
12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
OLSTEN CORPORATION
(REGISTRANT)
Date: November 11, 1998 /s/Frank N. Liguori
-------------------
Frank N. Liguori
Chairman and Chief
Executive Officer
Date: November 11, 1998 /s/Anthony J. Puglisi
---------------------
Anthony J. Puglisi
Executive Vice President and
Chief Financial Officer
13
EXHIBIT INDEX
Exhibit 27 - Financial Data Schedule