SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission file number
COMFORCE Corporation: 1-6081
COMFORCE Operating, Inc.: 333-43341
COMFORCE Corporation and
COMFORCE Operating, Inc.
(Exact name of registrant as specified in its charter)
COMFORCE Corporation: 36-23262248
Delaware COMFORCE Operating, Inc.: 11-3407855
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
415 Crossways Park Drive, P.O. Box 9006, Woodbury, New York 11797
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (516) 437-3300
Not Applicable
Former name, former address and former fiscal year, if changed since last report
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes __X__ No _____
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at April 30, 1999
- ------------------------------ ----------------------------------------------
COMFORCE Corporation:
Common stock, $.01 par value 16,202,112 shares
COMFORCE Operating, Inc.:
Common stock, $.01 par value 100 shares (all owned by COMFORCE Corporation)
COMFORCE Corporation and
COMFORCE Operating, Inc.
INDEX
Page
Number
------
PART I FINANCIAL INFORMATION
Item 1. Financial Statements.............................................. 1
Condensed Consolidated Balance Sheets
March 31, 1999 and December 31, 1998............................ 1
Condensed Consolidated Statements of Operations
For the three months ended March 31, 1999 and 1998.............. 2
Condensed Consolidated Statements of Cash Flows
for the three months ended March 31, 1999 and 1998.............. 3
Notes to Condensed Consolidated Financial Statements.............. 4
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations................... 6
Item 3. Quantitative and Qualitative Disclosure about Market Risk......... 9
PART II OTHER INFORMATION................................................. 10
Item 1. Legal Proceedings................................................. 10
Item 2. Changes in Securities and Use of Proceeds......................... 10
Item 5. Other Information................................................. 10
Item 6. Exhibits and Reports on Form 8-K.................................. 10
SIGNATURES................................................................. 11
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
COMFORCE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands except per share amounts) (unaudited)
March 31, December 31,
1999 1998
--------- ------------
ASSETS:
Current assets:
Cash and cash equivalents $ 2,261 $ 4,599
Accounts receivable, net 90,493 81,680
Prepaid expenses and other current assets 3,474 3,342
Deferred income taxes 2,307 2,306
--------- ---------
Total current assets 98,535 91,927
Property and equipment, net 9,968 9,256
Intangible assets, net 138,725 138,847
Deferred financing costs 5,844 6,052
--------- ---------
Total assets $ 253,072 $ 246,082
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Borrowings under revolving line of credit $ 4,000 $ 4,000
Accounts payable 9,614 4,296
Accrued expenses 20,541 18,068
--------- ---------
Total current liabilities 34,155 26,364
Long-term debt 174,899 174,579
Deferred income taxes 224 224
Other liabilities 386 581
--------- ---------
Total liabilities 209,664 201,748
--------- ---------
Commitments and contingencies -- --
Stockholders' Equity:
Series F convertible preferred stock, $0.01 par value,
10,000 shares authorized, no shares issued and outstanding -- --
Common stock, $.01 par value; 100,000,000 shares
authorized; 16,202,082 shares and 16,129,322 shares
issued and outstanding at March 31, 1999 and
December 31, 1998, respectively 162 161
Additional paid-in capital 47,726 47,463
Accumulated deficit since January 1, 1996 (4,480) (3,290)
--------- ---------
Total stockholders' equity 43,408 44,334
--------- ---------
Total liabilities and stockholders' equity $ 253,072 $ 246,082
========= =========
The accompanying notes are an integral part of the
condensed consolidated financial statements.
1
COMFORCE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share amounts) (unaudited)
Three Months Ended March 31,
----------------------------
1999 1998
--------- ---------
Revenue:
Net sales of services $ 107,075 $ 112,007
--------- ---------
Costs and expenses:
Cost of services 87,396 91,706
Selling, general and administrative 14,066 13,949
Depreciation and amortization 1,660 1,337
--------- ---------
Total costs and expenses 103,122 106,992
--------- ---------
Operating income 3,953 5,015
--------- ---------
Other income (expense):
Interest expense (5,293) (5,159)
Other income, net 2 16
--------- ---------
(5,291) (5,143)
--------- ---------
Loss before income taxes (1,338) (128)
Income tax benefit (expense) 148 (329)
--------- ---------
Net loss (1,190) (457)
Dividends on preferred stock -- 6
--------- ---------
Net loss applicable to common
stockholders $ (1,190) $ (463)
========= =========
Basic and diluted loss per common share $ (0.07) $ (0.03)
========= =========
Basic and diluted weighted average shares 16,173 15,544
========= =========
The accompanying notes are an integral part of the
condensed consolidated financial statements.
2
COMFORCE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) (unaudited)
Three Months Ended, March 31,
-----------------------------
1999 1998
-------- --------
Net cash flows provided by (used in) operating activities $ (636) $ 2,064
-------- --------
Cash flows from investing activities:
Acquisition, net of cash acquired -- (3,574)
Purchases of property and equipment (1,415) (1,693)
Payments of contingent consideration (571) --
Increase in other assets -- (871)
-------- --------
Net cash flows used in investing activities (1,986) (6,138)
-------- --------
Cash flows from financing activities:
Borrowings under long-term line of credit agreement 6,406 (11,170)
Repayments under long-term line of credit agreement (6,086) 10,526
Reduction of capital lease obligation (36) (50)
Proceeds from exercise of stock options -- 15
Proceeds from exercise of warrants -- 118
Payment of registration costs -- (11)
Dividends paid -- (13)
-------- --------
Net cash flows (used in) provided by financing activities 284 (585)
-------- --------
Decrease in cash and cash equivalents (2,338) (4,659)
Cash and cash equivalents, beginning of period 4,599 6,512
-------- --------
Cash and equivalents, end of period $ 2,261 $ 1,853
======== ========
Supplemental cash flow information: Cash paid during the period for:
Interest paid $ 1,189 $ 930
Income taxes paid 513 44
Supplemental schedule of noncash investing and financing activities:
Common stock issued in connection with acquisitions 264 1,900
Dividends accrued but not paid -- 6
The accompanying notes are an integral part of the
condensed consolidated financial statements.
3
COMFORCE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL
The accompanying unaudited interim condensed consolidated financial statements
of COMFORCE Corporation, COMFORCE Operating, Inc. ("COI") and their subsidiaries
(collectively, the "Company") have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information and
note disclosures normally included in annual financial statements have been
condensed or omitted pursuant to those rules and regulations. In the opinion of
management, all adjustments, consisting of normal, recurring adjustments
considered necessary for a fair presentation, have been included. Although
management believes that the disclosures made are adequate to ensure that the
information presented is not misleading, it is suggested that these financial
statements be read in conjunction with the financial statements and notes
thereto included in the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1998. The results for the three months ended March 31, 1999
and 1998 are not necessarily indicative of the results of operations for the
entire year.
2. NEWLY-ISSUED ACCOUNTING STANDARDS
On June 15, 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 133, Accounting for Derivative
Instruments and Hedging Activities ("SFAS 133"). SFAS 133 is effective for all
fiscal quarters of all fiscal years beginning after June 15, 1999 (January 1,
2000 for the Company). The Company does not expect the adoption of SFAS 133 to
have a significant effect on the Company's results of operations or its
financial position.
3. DEBT
Notes payable and long-term debt at March 31, 1999 and December 31, 1998
consisted of the following (in thousands):
March December 31,
1999 1998
-------- --------
12% Senior Notes, due 2007 $110,000 $110,000
15% Senior Secured PIK Debentures, due 2009 23,162 23,162
Revolving line of credit, due November 26, 2002,
with interest payable monthly at LIBOR plus up to 2.25%
At March 31, 1999, the rate was 7.2% 45,737 45,417
-------- --------
178,899 178,579
Less, current portion 4,000 4,000
-------- --------
Total long-term debt $174,899 $174,579
======== ========
4. EQUITY
The increase in shares issued during the three months ended March 31, 1999
relates principally to 55,554 shares issued at a price of $4.75 per share as a
contingent payment in connection with the Company's 1996 acquisition of Force
Five, Inc.
4
5. EARNINGS PER SHARE
Basic earnings (loss) per common share is computed by dividing net earnings
(loss) available for common stockholders by the weighted average number of
shares of common stock outstanding during each period. Diluted earnings (loss)
per share is computed assuming the conversion of stock options and warrants with
a market value greater than the exercise price to the extent such conversion
assumption is dilutive. The following represents a reconciliation of the
numerators and denominators for basic and diluted loss per share for the
three-month periods ended March 31, 1999 and 1998 (in thousands):
Three Months Ended March 31,
---------------------------
1999 1998
-------- --------
Numerator:
Net loss $ (1,190) $ (457)
Preferred stock dividends -- (6)
-------- --------
Numerator for basic and diluted loss per share--loss
available to common stockholders $ (1,190) $ (463)
======== ========
Denominator:
Weighted-average shares 16,173 15,544
======== ========
Outstanding options and warrants to purchase shares of common stock were not
included in the computation of diluted earnings (loss) per share because their
effect would be anti-dilutive.
6. INDUSTRY SEGMENT INFORMATION:
The Company has determined that its reportable segments can be distinguished
principally by the types of services offered to the Company's clients.
Revenues and profits in the Staff Augmentation segment are generated by
providing temporary employees to client companies generally on a
time-and-materials basis. Staff Augmentation services are offered through
several divisions. Telecom provides telecommunications workers, primarily to
telecommunications companies; Information Technologies provides programmers,
systems consultants, software engineers and other IT workers to a broad range of
companies which outsource portions of their IT requirements; and Staffing
Services provides primarily technical workers, including engineers, scientists
and laboratory workers, to a variety of corporations and laboratories.
Revenues and profits in the Financial Services segment are generated through
outsourcing and consulting services for client companies. Financial Services is
composed of two distinct activities: the Pro Unlimited division provides
confidential consulting and conversion services related to clients' employment
of independent contractors, and typically involves providing non-recruited
payrolling services to those clients. The Financial Services segment also
includes outsourcing services to independent consulting and staffing companies,
in which the Company provides payroll funding services and back office support
to those clients.
The accounting policies of the segments are the same as those described in the
notes to the consolidated financial statements contained in the Company's Annual
Report on Form 10-K for the year ended December 31, 1998. The Company evaluates
the performance of its segments and allocates resources to them based on
operating contribution, which represents segment revenues less direct costs of
operations, excluding the allocation of corporate general and administrative
expenses.
5
The table below presents information on the revenues and operating contribution
for each segment for the three months ended March 31, 1999 and 1998, and items
which reconcile segment operating contribution to the Company's reported pre-tax
loss.
Three Months Ended March 31,
----------------------------
1999 1998
--------- ---------
(in thousands)
Net sales of services:
Financial Services $ 24,185 $ 20,994
Staff Augmentation 82,890 91,013
--------- ---------
107,075 112,007
--------- ---------
Operating contribution:
Financial Services 2,784 3,035
Staff Augmentation 6,984 7,262
--------- ---------
9,768 10,297
--------- ---------
Consolidated expenses:
Interest 5,293 5,159
Depreciation and amortization 1,660 1,337
Corporate general and administrative 4,153 3,929
--------- ---------
11,106 10,425
--------- ---------
Loss before income taxes $ (1,338) $ (128)
========= =========
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The discussion set forth below supplements the information found in the
unaudited condensed consolidated financial statements and related notes of
COMFORCE Corporation, COMFORCE Operating, Inc. ("COI") and their subsidiaries
(collectively, the "Company").
Overview
The Company operates its Staff Augmentation business through three
divisions -- Information Technology, Telecom and Staffing Services. The
Company's outsourcing and consulting services are provided through its Financial
Services division.
Gross margins on staffing services can vary significantly depending on
factors such as the specific services being performed, the overall contract size
and the amount of recruiting required. Margins on the Company's sales in the
technical services sector are typically significantly lower than those in the
telecommunications, information technology and financial services sectors.
Consequently, changes in the Company's sales mix can be expected to impact the
overall gross margins generated by the Company.
Staffing personnel placed by the Company are employees of the Company. The
Company is responsible for employee related expenses for its employees,
including workers' compensation, unemployment compensation insurance, Medicare
and Social Security taxes and general payroll expenses. The Company offers
health, dental, disability and life insurance to its billable employees, and
offers retirement plans to eligible employees.
6
Results of Operations
Three Months Ended March 31, 1999 Compared to Three Months Ended March 31, 1998
Net sales of services for the three months ended March 31, 1999 were $107.1
million as compared to $112.0 million for the three months ended March 31, 1998.
This 4.4% decline in net sales of services is attributable principally to a
decrease in sales in the Staffing Services division due to substantially lower
sales with the Company's largest customer. The decrease was partially offset by
sales increases in the Company's Financial Services division and
Telecommunications division.
Cost of services for the three months ended March 31, 1999 was 81.6% of net
sales of services compared to cost of services of 81.9% for the three months
ended March 31, 1998. The cost of services decrease as a percentage of net sales
for the 1999 period is a result of the Company's business mix in such three
month period, which reflected growth in the Company's Telecommunications
division and Financial Services division. These divisions have historically
generated higher gross margins than the more mature Staffing Services division.
Selling general and administrative expenses increased by less than 1%
during the first quarter of 1999 as compared to the first quarter of 1998. Due
to the decline of net sales of services discussed above, selling general and
administrative expenses as a percentage of revenue increased to 13.1% for the
three months ended March 31, 1999 compared to 12.5% for the three months ended
March 31, 1998.
Operating income for the three months ended March 31, 1999 was $4.0
million, compared to operating income of $5.0 million for the three months ended
March 31, 1998. This decrease was principally attributable to the reduced net
sales of services discussed above.
The Company's interest expense for the three months ended March 31, 1999
and 1998 is attributable to the interest on the Company's credit facility with
Heller Financial, Inc. (the "Credit Facility"), COI's 12% Senior Notes due 2007
(the "COI Notes") and the Company's 15% Senior Secured PIK Debentures due 2009
(the "PIK Debentures"), which obligations were incurred in 1997, principally in
connection with the funding of business acquisitions.
The income tax benefit for the three months ended March 31, 1999 was
$148,000 on a loss before taxes of $1.3 million, compared to an income tax
expense of $329,000 on a loss before taxes of $128,000 for the three months
ended March 31, 1998. The difference between the Federal statutory income tax
rate and the Company's effective tax rate relates primarily to the
nondeductibility of amortization expense associated with certain intangible
assets and state income taxes.
Financial Condition, Liquidity and Capital Resources
The Company pays its billable employees weekly for their services before
receiving payment from its customers. Additionally, certain statutory payroll
and related taxes as well as other fringe benefits are generally paid by the
Company before the Company receives payment from its customers. Consequently, a
significant portion of the Company's cost of services is normally paid by the
Company prior to receiving payment from its customers. Increases in the
Company's net sales of services, resulting from expansion of existing offices or
establishment of new offices, will require additional cash resources.
The debt service costs associated with the borrowings under the COI Notes
and the Credit Facility have significantly reduced the Company's liquidity. The
debt service costs associated with the PIK Debentures may be satisfied through
the issuance of new notes. To date, the Company has chosen to issue new notes to
pay these costs.
Management of the Company believes that, based on the results of operations
and anticipated growth, including growth through acquisitions, cash flow from
operations and funds anticipated to be available under the Credit Facility will
7
be sufficient to service the Company's indebtedness, to fund growth at
anticipated levels and to meet anticipated working capital requirements for the
foreseeable future. However, various factors, including those described or
referenced under "Forward-Looking Statements" and "Year 2000" in this Item 2
could prevent the Company from realizing these objectives.
As of March 31, 1999, the Company had outstanding $23.2 million in
principal amount of PIK Debentures bearing interest at a rate of 15%, $110.0
million in principal amount of COI Notes bearing interest at a rate of 12% and
$45.7 million outstanding under the Credit Facility bearing interest at an
average rate of 7.2% per annum.
As of March 31, 1999, approximately $138.7 million, or 54.8%, of the
Company's total assets were intangible assets. These intangible assets
substantially represent amounts attributable to goodwill recorded in connection
with the Company's acquisitions and will be amortized over a five to 40 year
period, resulting in an annual charge of approximately $4.3 million. Various
factors could impact the Company's ability to generate the earnings necessary to
support this amortization schedule, including the factors described or
referenced under "Forward-Looking Statements" and "Year 2000" in this Item 2.
The Company is obligated under various acquisition agreements to make
earn-out payments to the sellers of acquired companies, subject to the acquired
companies' meeting certain contractual requirements. The maximum amount of the
remaining potential earn-out payments is $4.7 million in cash payable in the
three-year period from 1999 to 2001 and 193,000 shares of the Company's common
stock issuable in 1999. The Company cannot currently estimate whether it will be
obligated to pay the maximum amount; however, the Company anticipates that the
cash generated by the operations of the acquired companies will provide all or a
substantial part of the capital required to fund the cash portion of the
earn-out payments.
During the three months ended March 31, 1999, the Company's primary sources
of funds to meet working capital needs were from existing cash balances and
borrowings under the Credit Facility. Cash and cash equivalents decreased $2.3
million during the three months ended March 31, 1999. Cash flows used in
investing activities of $2.0 million and cash flows used in operating activities
of $636,000 were in excess of cash flows provided by financing activities of
$284,000. Cash flows used in investing activities were principally related to
additions to fixed assets. Cash flows provided by financing activities were
principally attributable to net borrowings under the Credit Facility.
Year 2000
The Company has completed a review of its potential Year 2000 issues by
examining all of its internal and third party applications, operating systems,
interfaces and hardware. Independent of its Year 2000 compliance program, the
Company initiated a major system conversion beginning in early 1998, based
principally on industry-leading PeopleSoft(R) software, in order to improve
access to business information through common, integrated computing systems
nationwide. The Company's conversion to these new systems, which are expected to
make the Company's IT systems fully Year 2000 compliant, is now approximately
90% complete and is expected to be completed during the second quarter of 1999.
In assessing potential Year 2000 issues, the Company has established a Year
2000 committee, a compliance program and a budget. The committee has divided the
Company's Year 2000 compliance program into four sections: (1) systems inventory
and assessment, (2) systems testing evaluation and monitoring, (3) third party
suppliers and (4) contingency planning. Systems inventory and assessment has
been completed, and the remaining sections are expected to be substantially
completed by mid-1999. The Company expects that all of its IT systems and non-IT
systems will be Year 2000 compliant prior to December 31, 1999. The Company
estimates the total Year 2000 expenditures which will be incurred in the future
will be less than $1.0 million. Not included in these costs are the costs of
conversion to the new integrated computing systems, which was undertaken
independently of its Year 2000 compliance initiative.
As a part of its Year 2000 compliance program, the Company is in
communication with its material third-party vendors and service providers in
order to assess their Year 2000 readiness and seek to ensure that they will be
Year 2000 compliant. The Company has advised its vendors that it expects them to
provide confirmation of their Year 2000 readiness
8
during the second quarter of 1999. In the event the Company does not believe it
has received reasonable assurance from its vendors as to Year 2000 compliance,
the Company will seek to establish relationships with vendors that are Year 2000
compliant. With respect to the purchases of computer systems, or upgrades for
existing computer systems, the Company's policy is to receive Year 2000
certification from the vendor prior to completing the purchase.
The statements above which express the Company's belief that Year 2000
problems will not have a material adverse effect on the Company may be
forward-looking statements. Although management believes that the Company has
acted with appropriate diligence to address potential Year 2000 issues, no
assurance can be given that Year 2000 issues will not materially affect its
business or operations. Factors which could potentially cause the Company to
suffer business interruptions or other losses include the failure of its Year
2000 project team to identify latent or other non-compliant codes or
technologies, the failure of any of the customers, vendors, service suppliers or
financial institutions with which the Company deals to address their own Year
2000 problems or the ineffectiveness of any contingency plans put in place by
the Company to mitigate the effects of interruptions in its businesses due to
Year 2000 problems.
Seasonality
The Company's quarterly operating results are affected primarily by the
number of billing days in the quarter and the seasonality of its customers'
businesses. Demand for services in the technical services sector has
historically been lower during the year-end holidays through January of the
following year, showing gradual improvement over the remainder of the year.
Although less pronounced than in technical services, the demand for services in
the telecommunications and IT sectors is typically lower during the first
quarter until customers' operating budgets are finalized.
Other Matters
On June 15, 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 133, Accounting for Derivative
Instruments and Hedging Activities ("SFAS 133"). SFAS 133 is effective for all
fiscal quarters of all fiscal years beginning after June 15, 1999 (January 1,
2000 for the Company). The Company does not expect the adoption of SFAS 133 to
have a significant effect on the Company's results of operations or its
financial position.
Forward Looking Statements
The matters discussed below and elsewhere in this Report contain forward
looking statements that involve risks and uncertainties, many of which may be
beyond the Company's control. See "Forward Looking Statements" in Item 1 of the
Company's Annual Report on Form 10-K for the Year ended December 31, 1998, "Year
2000" in this Item 2 and "Risk Factors" in the Company's S-3 filed with the SEC
on March 19, 1999 (Reg. No. 333-74689). This disclosure may be accessed through
the Website maintained by the SEC at "http://www.sec.gov" or, upon request made
to Linda Annicelli, Vice President of Administration at COMFORCE Corporation,
415 Crossways Park Drive, P.O. Box 9006, Woodbury, NY 11797, telephone
516-437-3300, the Company will provide a copy of this disclosure without charge.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
The preponderance of the Company's borrowings are fixed rate obligations.
During the quarter ended March 31, 1999, only approximately 15% of the Company's
interest expense was attributable to variable rate loans, all of which were
under the Credit Facility. Consequently, management does not believe that any
adjustments to the rate under the Credit Facility are likely to have a material
impact on its results of operations in the immediate future. The Company has not
entered into any swap agreements or other hedging transactions as a means of
limiting its exposure to interest rate fluctuations.
9
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Since the date of the filing of the Company's Annual Report on Form 10-K,
there have been no material new legal proceedings involving the Company or any
material developments to the proceedings described in such 10-K.
Item 2. Changes in Securities and Use of Proceeds.
On February 17, 1999, the Company issued 55,554 shares in the aggregate to
the two former shareholders of the Company's Force Five, Inc. subsidiary under
the terms of the earn-out provisions of the agreement pursuant to which Force
Five, Inc. was acquired by the Company. In issuing these shares, the Company
relied upon the exemption from registration under Section 4(2) of the Securities
Act of 1933. The Company subsequently registered these shares for resale under a
registration statement filed with the Securities and Exchange Commission.
Item 5. Other Information.
Effective April 7, 1999, Marc Werner resigned as director of the Company.
Six persons continue to serve on the Company's Board. The Company intends to
fill the vacancy created by Mr. Werner's resignation at the next annual meeting
of shareholders, presently scheduled to be held on June 9, 1999.
As previously reported by the Company, on May 5, 1999, the Company
dismissed PricewaterhouseCoopers LLP as its independent accountants. The Company
appointed KPMG LLP to serve as its independent accountants. The decision to
change independent accountants was approved by the Company's Board of Directors
upon the recommendation of the Audit Committee.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
27 Financial Data Schedule of COMFORCE Corporation.
(b) Reports on Form 8-K.
On January 7, 1999, the Company filed a Current Report on Form 8-K to
report under Item 5 the resignations of two directors from the Company's Board
and the decision of the founders of the Company's staffing business to terminate
their affiliation with the Company.
10
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, each
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunder duly authorized.
COMFORCE Corporation
By: /s/ Robert H.B. Baldwin, Jr.
-------------------------------------------------
Robert H.B. Baldwin, Jr.,
Senior Vice President and Chief Financial Officer
Date: May 14, 1999
COMFORCE Operating, Inc.
By: /s/ Robert H.B. Baldwin, Jr.
-------------------------------------------------
Robert H.B. Baldwin, Jr.,
Senior Vice President and Chief Financial Officer
Date: May 14, 1999
11