SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
AMENDMENT NO. 1
TO
FORM 8-KA
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report: June 13, 1996
GLOBE BUSINESS RESOURCES, INC.
Incorporated under the laws of Ohio
0-27682 31-1256641
__________________ ________________________________
Commission File No. IRS Employer Identification No.
1925 Greenwood Avenue , Cincinnati, Ohio 45246
_______________________________________________________
(Address of Principal Executive Offices) (Zip Code)
(513) 771-8221
_______________________________________________________
(Registrant s Telephone Number, Including Area Code)
Item 2. Acquisition or Disposition of Assets
____________________________________
(a) On June 13, 1996 Globe Business Resources, Inc.
( Globe or the Company ) acquired the assets of privately owned
Interim Quarters, Inc. ( Interim Quarters ), pursuant to an Asset
Purchase Agreement dated as of May 31, 1996 among Globe and the
owners of Interim Quarters, Kenneth L. Hixon and Ramona A. Hixon
( the seller ).
The purchase price for the assets, plus or minus up to a
$500,000 adjustment at the conclusion of an audit ( the audit )
by Price Waterhouse LLP., consists of $5,700,000 in cash, 86,700
shares of Globe's common stock, no par value and Globe's
assumption of certain liabilities. At the closing, June 13,
1996, Globe assumed the liabilities (including bonuses payable to
current Interim Quarters employees amounting to 13,300 shares of
Globe common stock), paid $5,700,000 and delivered to the seller
36,700 shares of Globe's common stock. The other 50,000 shares
shall constitute the remainder of the purchase price and shall be
delivered to the seller, plus or minus the adjustment amount,
after review by both parties of the audit which concluded July
26, 1996.
The funds required for the purchase price were derived from
borrowings under The Company's 1996 Credit Agreement.
(b) Interim Quarters, base in Dallas, Texas, provides
short-term housing to transferring or temporarily assigned
corporate personnel, new hires, trainees and consultants.
Customers of Interim Quarters are housed in spacious,
comfortable, well appointed apartments or town homes, usually
offering extensive recreational amenities. Interim Quarters has
an inventory of over 800 housing units in the Dallas/Ft. Worth
metropolitan area and had annual revenues of approximately $11
million for the year ended December 31, 1995.
Item 7. Financial Statements and Exhibits
_________________________________
As of the date of filing, June 13, 1996, of current report
on Form 8-K, it was impractical for the Registrant to provide the
financial statements and proforma financial information required
by items 7(a) and 7(b). Such financial statements and proforma
financial information are now being filed by this amendment to
Form 8-K.
(a) Financial Statements
1. Financial statements of Interim Quarters, Inc., as
of December 31, 1995 (audited).
2. Financial statements of Interim Quarters, Inc., as
of May 31, 1996 (unaudited).
(b) Proforma Financial Information
1. Globe Business Resources, Inc. consolidated
balance sheet as of May 31, 1996 (unaudited).
2. Globe Business Resources, Inc. consolidated
statement of income for the year ended February
29, 1996 (unaudited).
3. Globe Business Resources, Inc. consolidated
statement of income for the three month period
ended May 31, 1996 (unaudited).
(c) Exhibits: No.10 - Asset Purchase Agreement dated as
of May 31, 1996. (previously
filed)
No.23 - Consent of Price Waterhouse LLP.
(previously filed in Form 8-KA)
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of
Interim Quarters, Inc.
In our opinion, the accompanying balance sheet and the related
statements of income and retained earnings and of cash flows
present fairly, in all material respects, the financial position
of Interim Quarters, Inc. at December 31, 1995, and the results
of its operations and its cash flows for the year in conformity
with generally accepted accounting principles. These financial
statements are the responsibility of the Company s management;
our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit of these
statements in accordance with generally accepted auditing
standards which 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 audit provides a reasonable basis for the
opinion expressed above.
PRICE WATERHOUSE LLP
Dallas, Texas
July 26, 1996
INTERIM QUARTERS, INC.
BALANCE SHEET
December 31, May 31,
1995 1996
______________ ____________
(Unaudited)
ASSETS:
Cash $ 14,804 $ 494,441
Accounts receivable, less allowance
for doubtful accounts of $75,856
and $59,910, respectively 1,011,396 563,162
Prepaid rent 558,567 627,887
Security deposits receivable 28,003 28,445
Receivables from related parties 28,435 125,936
Receivables from employees 2,300 1,034
Property and equipment, net 1,338,955 1,272,373
Other assets 2,170 4,130
__________ __________
Total assets $2,984,630 $3,117,408
__________ __________
__________ __________
LIABILITIES AND SHAREHOLDERS EQUITY:
Accounts payable $ 104,398 $ 112,792
Payroll taxes payable 289,220 842
Advances and deposits from tenants 172,476 263,215
Other accrued liabilities 35,227 112,994
Borrowings 290,996 31,562
Notes payable to related parties 746,630 1,306,208
__________ __________
Total liabilities 1,638,947 1,827,613
__________ __________
Commitments and contingencies (Note 7)
Stockholders equity:
Common stock, $.01 par value;
10,000 shares authorized, 8,500 shares
issued and outstanding 85 85
Paid-in capital 231,553 221,303
Retained earnings 1,114,045 1,068,407
__________ __________
Total stockholders equity 1,345,683 1,289,795
__________ __________
Total liabilities and stockholders
equity $2,984,630 $3,117,408
__________ __________
__________ __________
The accompanying notes are an integral part of these financial statements.
INTERIM QUARTERS, INC.
STATEMENT OF INCOME AND RETAINED EARNINGS
For the twelve For the five
months ended months ended
December 31, May 31,
1995 1996
_____________ ____________
(Unaudited)
Revenues $ 11,036,689 $ 5,487,918
Costs and expenses:
Cost of apartment rentals and
related items 7,144,996 3,653,249
Warehouse and delivery 154,995 65,357
Selling and advertising 293,044 111,638
General and administration 1,749,869 892,230
Compensation expense to stockholders 749,896 636,458
Depreciation and amortization 392,211 169,436
__________ __________
10,485,011 5,528,368
__________ __________
Operating income 551,678 (40,450)
Other income 4,707 11,400
Interest income 4,666 366
Interest expense (49,151) (16,954)
__________ __________
Net income 511,900 (45,638)
Retained earnings, beginning of period 602,145 1,114,045
__________ __________
Retained earnings, end of period $ 1,114,045 $ 1,068,407
__________ __________
__________ __________
The accompanying notes are an integral part of these financial statements.
INTERIM QUARTERS, INC.
STATEMENT OF CASH FLOWS
For the twelve For the five
months ended months ended
December 31, May 31,
1995 1996
_____________ ____________
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 511,900 $ (45,638)
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 392,211 169,436
Salaries and interest converted to notes
payable to related parties 306,843 -
Provision for losses on accounts
receivable 27,978 59,910
Changes in assets and liabilities:
Accounts receivable (433,089) 291,647
Prepaid rent (172,774) (69,320)
Other (3,781) 226,492
Accounts payable 62,682 8,394
Payroll taxes payable 289,220 (288,378)
__________ __________
Net cash provided by operating
activities 981,190 352,543
__________ __________
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (855,732) (173,050)
__________ __________
Net cash used in investing
activities (855,732) (173,050)
__________ __________
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 250,000 -
Repayments of borrowings (105,861) (259,434)
(Repayments) proceeds of notes
payable to related parties (284,127) 559,578
__________ __________
Net cash (used in) provided by
financing activities (139,988) 300,144
__________ __________
Net (decrease) increase in cash (14,530) 479,637
Cash at beginning of period 29,334 14,804
__________ __________
Cash at end of period $ 14,804 $ 494,441
__________ __________
__________ __________
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest $ 38,901
__________
__________
The accompanying notes are an integral part of these financial statements.
INTERIM QUARTERS, INC.
NOTES TO THE AUDITED FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
__________________
Interim Quarters, Inc. (the Company) generally provides
short-term housing to transferring or temporarily assigned
corporate personnel, new hires, trainees and consultants. The
Company had an inventory of over 800 leased housing units in the
Dallas/Ft. Worth metropolitan area at December 31, 1995.
See Note 6 regarding the acquisition of the Company s assets
by Globe Business Resources, Inc. on June 13, 1996.
Use of Estimates
________________
The financial statements, which are prepared in conformity
with generally accepted accounting principles, require management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reported
period. Actual results could differ from these estimates.
Revenue Recognition
___________________
Rental revenue is recognized ratably over the period of the
tenant rental agreements.
Property and Equipment
______________________
Property and equipment is stated at cost. Depreciation
expense is provided on an accelerated basis over estimated useful
lives of five to seven years. Leasehold improvements are
amortized on an accelerated basis over seven to thirty-nine
years. Expenditures that enhance or extend the useful lives of
the assets involved are capitalized. Maintenance and repair
expenditures are expensed as incurred. When property and
equipment are retired or otherwise disposed of, the related cost
and accumulated depreciation are removed from the accounts, and
any resulting gain or loss is included in income.
Fair Value of Financial Instruments
___________________________________
The carrying amounts of cash, accounts receivable, prepaid
rent, security deposits receivable, receivables from related
parties and employees, accounts payable, payroll taxes payable,
advances and deposits from tenants, other accrued liabilities,
borrowings and notes payable to related parties approximate fair
value.
2. PROPERTY AND EQUIPMENT
Property and equipment consists of the following:
December 31,
1995
____________
Furniture for apartments $2,187,924
Accessories for apartments 446,753
Office furniture and other equipment 172,300
Vehicles 135,541
Leasehold improvements 40,863
__________
2,983,381
Accumulated depreciation and amortization 1,644,426
__________
$1,338,955
__________
__________
The Company leases certain real property and equipment under
operating leases. Remaining lease terms range from one month to
three years. Rental expense was $5,814,318 for 1995.
Minimum future rentals under noncancelable operating leases
(principally apartments) at December 31, 1995 are approximately
as follows:
1996 $1,652,966
1997 50,907
1998 3,080
Thereafter -
___________
Total minimum lease payments $1,706,953
__________
__________
3. BORROWINGS
The Company has various credit facilities and promissory
notes with two banks aggregating $290,996. The instruments are
payable on demand or are for terms shorter than one year, and
bear interest at various rates ranging from 8.25% to 10.50%.
These borrowings are collateralized by the Company s accounts
receivable and property and equipment and are guaranteed by the
Company s stockholders.
4. INCOME TAXES
No provision has been made for federal income taxes at
December 31, 1995, as the Company is an S-Corporation for federal
income tax purposes. Under this election, no federal income tax
is paid by the Company inasmuch as all income is reported by the
stockholders on their individual income tax returns. The
recorded amounts of assets and liabilities for financial
reporting purposes may differ significantly from the tax bases of
these same assets and liabilities because of differences between
the application of federal income tax laws and generally accepted
accounting principles.
5. RELATED PARTY TRANSACTIONS
At December 31, 1995, the Company had accounts receivable
from certain business ventures of its stockholders and other
related parties aggregating $28,435. Transactions with these
parties during 1995 were not significant.
At December 31, 1995, the Company had an aggregate $746,630
in notes payable to stockholders. The notes payable accrue
interest at rates ranging from 8% to 10% per annum and are
payable on demand. The Company paid and accrued interest
aggregating $41,000 related to the notes during 1995. The
Company also paid $45,000 in rental fees to its stockholders
during 1995 for the rental of certain properties owned by the
stockholders and used by tenants.
6. SUBSEQUENT EVENT
On June 13, 1996, the majority of the Company s assets were
purchased by Globe Business Resources, Inc. (Globe). The
purchase price comprised $5,700,000 cash, 86,700 shares of Globe
common stock (no par value) and Globe s assumption of a majority
of the Company s liabilities.
7. COMMITMENTS AND CONTINGENCIES
The Company is party to certain legal proceedings incidental
to its business. Certain claims arising in the ordinary course
of business have been filed or are pending against the Company.
Management believes that the claims are without merit and that
the ultimate resolution of such contingencies will not have a
material adverse effect on the financial position or results of
operations of the Company.
GLOBE BUSINESS RESOURCES, INC.
PROFORMA CONSOLIDATED BALANCE SHEET
(Unaudited)
May 31, 1996
(Dollars in thousands)
Interim
Globe Quarters Proforma Proforma
historical historical adjustments as adjusted
__________ __________ __________ __________
ASSETS:
Cash $ 146 $ 494 - $ 640
Accounts receivable, less
allowance for doubtful
accounts 3,666 563 - 4,229
Prepaid expenses 736 628 - 1,364
Security deposits receivable - 28 - 28
Receivables from related
parties - 126 (126) (1) -
Receivables from employees - 1 - 1
Rental furniture, net 40,432 - 1,819 (1) 42,957
706 (1)
Property and equipment, net 2,782 1,272 (955)(1) 3,099
Goodwill and other intangibles - - 3,836 (1) 3,836
Other, net 210 5 - 215
______ _______ ______ _______
Total assets $47,972 $3,117 $5,280 $56,369
______ _______ ______ _______
______ _______ ______ _______
LIABILITIES AND SHAREHOLDERS'
EQUITY:
Accounts payable $ 4,363 $ 113 $ - $ 4,476
Payroll taxes payable - 1 - 1
Customer deposits 1,231 263 - 1,494
Accrued compensation 908 - - 908
Accrued taxes 769 - - 769
Deferred income taxes 2,015 - - 2,015
Accrued interest payable 140 - - 140
Other accrued expenses 565 113 - 678
Notes payable to
related parties - 1,306 (744)(1) 562
Debt 12,493 32 (32)(1) 19,037
6,544 (1)
______ _______ ______ _______
Total liabilities 22,484 1,828 5,768 30,080
Common stock and other
shareholders equity:
Common stock, no par 18,549 221 (221)(1) 19,350
801 (1)
Retained earnings 11,023 1,068 (1,068)(1) 11,023
Fair market value in excess of
historical cost of acquired
net assets (4,084) - - (4,084)
______ _______ _____ ______
Total shareholders'
equity 25,488 1,289 (488) 26,289
______ _______ ______ _______
Total liabilities and
shareholders' equity $47,972 $3,117 $5,280 $56,369
______ _______ ______ _______
______ _______ ______ _______
The accompanying notes are an integral part of these financial statements.
GLOBE BUSINESS RESOURCES, INC.
PROFORMA CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
Year ended February 29, 1996
(In thousands except per share data)
Interim
Globe Quarters Proforma Proforma
historical historical adjustments as adjusted
__________ __________ __________ __________
Revenues:
Furniture rentals $36,580 $11,037 $ 726(2) $48,343
Furniture sales 13,717 - 505(2) 14,222
______ _______ ______ _______
50,297 11,037 1,231 62,565
______ _______ ______ _______
Costs and expenses:
Cost of furniture rentals 8,613 - 88 (2) 8,701
Cost of furniture sales 7,818 - 166 (2) 7,984
Cost of apartment rentals and
related items - 7,145 - 7,145
Warehouse and delivery 6,675 155 228 (2) 7.058
Occupancy 5,549 - 89 (2) 5,638
Selling and advertising 7,332 293 78 (2) 7,703
General and administration 6,484 1,750 347 (2) 8,581
Compensation expense to
stockholders - 750 (550)(3) 200
Depreciation and amortization - 392 91 (4) 483
______ _______ ______ _______
42,471 10,485 537 53,493
______ _______ ______ _______
Operating income 7,826 552 694 9,072
Other expense (income):
Interest expense 2,338 49 420 (5) 2,807
Interest income - (4) 4 (6) -
Other 123 (5) - 118
______ _______ ______ _______
2,461 40 424 2,925
Income before income taxes 5,365 512 270 6,147
Provision for income taxes 2,136 - 315 (7) 2,451
______ _______ ______ _______
Net income 3,229 512 (45) 3,696
______ _______ ______ _______
Preferred stock dividends 505 - - 505
______ _______ ______ _______
Net income applicable to
common stock $ 2,724 $ 512 $ (45) $ 3,191
______ _______ ______ _______
______ _______ ______ _______
Share data:
Primary:
Net income $1.03 $1.16
Average common shares 2,650 2,750
The accompanying notes are an integral part of these financial statements.
GLOBE BUSINESS RESOURCES, INC.
PROFORMA CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
Three months ended May 31, 1996
(In thousands except per share data)
Interim
Globe Quarters Proforma Proforma
historical historical adjustments as adjusted
__________ __________ __________ __________
Revenues:
Furniture rentals $ 9,430 $3,293 $152 (2) $12,875
Furniture sales 3,683 - 96 (2) 3,779
______ _______ ______ _______
13,113 3,293 248 16,654
______ _______ ______ _______
Costs and expenses:
Cost of furniture rentals 2,467 - 22 (2) 2,489
Cost of furniture sales 2,203 - 31 (2) 2,234
Cost of apartment rentals and
related items - 2,192 - 2,192
Warehouse and delivery 1,785 39 49 (2) 1,873
Occupancy 1,389 - 21 (2) 1,410
Selling and advertising 1,868 67 18 (2) 1,953
General and administration 1,846 535 79 (2) 2,460
Compensation expense to
stockholders - 382 (333)(3) 49
Depreciation and amortization - 102 19 (4) 121
______ _______ ______ _______
11,558 3,317 (94) 14,781
______ _______ ______ _______
Operating income 1,555 (24) 342 1,873
Other (income) expense:
Interest expense 224 10 117 (5) 351
Interest income - - - -
Other (25) (7) - (32)
______ _______ ______ _______
199 3 117 319
Income before income taxes 1,356 (27) 225 1,554
Provision for income taxes 532 - 79 (7) 611
______ _______ ______ _______
Net income $ 824 $ (27) $146 $ 943
______ _______ ______ _______
______ _______ ______ _______
Share data:
Primary
Net income $0.19 $0.22
Average common shares 4,254 4,354
The accompanying notes are an integral part of these financial statements.
GLOBE BUSINESS RESOURCES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE A -- On June 19, 1996 Globe acquired the assets of privately
owned Instant Office Furniture, Inc. for approximately $700,000
in cash. Instant Office rents and sells office furniture to a
variety of customers in Southern California. The Instant Office
acquisition does not meet the significant subsidiary test and did
not require separate financial statements. Due to the timing of
the acquisition of Instant Office, their results are included in
the proforma financial information along with Interim Quarters.
The historical numbers for Interim Quarters and the proforma
adjustments for Instant Office reflect the twelve month period
ended December 31, 1995, representing their fiscal year prior to
Globe ownership, and the three month period ended May 31, 1996.
NOTE B -- The proforma adjustments to the consolidated balance
sheet are as follows:
(1) To reflect the acquisition of Interim Quarters and
Instant Office Furniture and the allocation of the purchase price
on the basis of the fair market values of the assets acquired and
liabilities assumed. The Components of the purchase price and
its allocation to the assets and liabilities of Interim Quarters
are as follows (in thousands):
Cash from borrowings under Globe s credit
facility to complete the Interim Quarters
and Instant Office acquisitions and to pay
acquisition related expenses $ 6,544
Globe common stock issued in the Interim
Quarters acquisition 801
______
Total purchase price 7,345
Eliminate the retained earnings of Interim Quarters (1,068)
Eliminate the common stock of Interim Quarters (221)
Estimated fair market value of furniture, property
and equipment for the Interim Quarters
acquisition (1,819)
Furniture included in Interim Quarters property and
equipment 955
Estimated fair market value of furniture, property
and equipment from the Instant Office acquisition (706)
Eliminate Interim Quarters assets not purchased 126
Eliminate Interim quarters liabilities not assumed (32)
Eliminate Interim Quarters notes payable to related
parties not assumed (744)
_______
Cost in excess of net assets acquired $ 3,836
_______
_______
NOTE C -- The proforma adjustments to the condensed consolidated
statements of income are as follows:
(2) The historical results of Instant Office, adjusted to
conform to Globe s income statement presentation for the twelve
month period ended December 31, 1995 and the three month period
ending May 31, 1996.
(3) Eliminate the distribution of excess earnings to the
former owners as Interim Quarters no longer operates as an S-
Corporation. It is assumed that the residual compensation to
stockholders represents the ongoing salary necessary to operate
Interim Quarters.
(4) Net reduction in Interim Quarters historical depreciation
using the new basis of rental furniture and property and
equipment acquired over estimated useful lives used by Globe and
the amortization of Interim Quarters goodwill on a straight-line
basis over 20 years. The property and equipment is depreciated
on a straight line basis over 5 years and the rental furniture is
depreciated using Globe s policy of 1% per month.
(5) Interest expense on $6.5 million borrowed under Globe s
existing credit facility to fund the acquisitions and eliminate
historical interest expense of Interim Quarters.
(6) Eliminate historical interest income of Interim Quarters.
(7) Adjust (2)-(6) and the historical earnings of Interim
Quarters using an effective tax rate of 40%.
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.
Globe Business Resources, Inc.
By: David D. Hoguet
___________________________
David D. Hoguet
Chief Executive Officer
Signed: September 11, 1996