SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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, 1996
COMMISSION FILE NUMBER 0-23198
INTERIM SERVICES INC.
(Exact name of registrant in its charter)
DELAWARE 36-3536544
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
2050 SPECTRUM BOULEVARD
FORT LAUDERDALE, FLORIDA 33309
(Address of principal executive offices, including zip code)
(954) 938-7600
(Registrant's telephone number, including area code)
_______________________
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, and (2) has been subject to such filing requirements
for the past 90 days.
Yes ( X ) No ( )
The number of shares outstanding of the registrant's Common Stock, $.0l par
value, at October 25, 1996 was 19,466,899 shares.
TABLE OF CONTENTS
PAGE
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Consolidated Statements of Earnings (Unaudited)
Quarters Ended September 27, 1996 and September 29, 1995
Nine Months Ended September 27, 1996 and September 29, 1995..... 1
Consolidated Balance Sheets (Unaudited)
September 27, 1996 and December 29, 1995........................ 2
Consolidated Statements of Cash Flows (Unaudited)
Nine Months Ended September 27, 1996 and September 29, 1995..... 3
Notes to Consolidated Financial Statements (Unaudited)........... 4
ITEM 2.
Management's Discussion and Analysis of Results of Operations
and Financial Condition......................................... 6
PART II OTHER INFORMATION
ITEM 4. -
Matters Submitted to a Vote of Security Holders................ 9
ITEM 6. -
Exhibits........................................................ 10
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INTERIM SERVICES INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED, AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED NINE MONTHS ENDED
----------------------------- -----------------------------
SEPTEMBER 27, SEPTEMBER 29, SEPTEMBER 27, SEPTEMBER 29,
1996 1995 1996 1995
------------- ------------- ------------- --------------
Revenues $ 294,711 $ 221,948 $ 840,624 $ 619,044
Cost of services 203,551 155,439 583,783 430,574
------------- ------------- ------------- --------------
Gross profit 91,160 66,509 256,841 188,470
------------- ------------- ------------- --------------
Selling, general and
administrative expenses 62,773 43,719 179,514 126,181
Licensee commissions 10,485 9,442 29,142 27,599
Amortization of intangibles 2,235 1,795 6,572 5,086
Interest expense 1,697 249 5,138 207
Merger expense - - 8,600 -
------------- ------------- ------------- --------------
77,190 55,205 228,966 159,073
------------- ------------- ------------- --------------
EARNINGS BEFORE TAXES 13,970 11,304 27,875 29,397
Income taxes 6,143 4,927 14,905 12,859
------------- ------------- ------------- --------------
NET EARNINGS $ 7,827 $ 6,377 $ 12,970 $ 16,538
------------- ------------- ------------- --------------
------------- ------------- ------------- --------------
NET EARNINGS PER COMMON AND
COMMON EQUIVALENT SHARES $ 0.49 $ 0.41 $ 0.81 $ 1.06
------------- ------------- ------------- --------------
------------- ------------- ------------- --------------
WEIGHTED AVERAGE SHARES
OUTSTANDING 15,958 15,639 15,930 15,652
------------- ------------- ------------- --------------
------------- ------------- ------------- --------------
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
1
INTERIM SERVICES INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED, AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
SEPTEMBER 27, DECEMBER 29,
1996 1995
------------- ------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 737 $ 4,025
Marketable securities - 15,675
Receivables, less allowance for doubtful
accounts of $2,650 and $2,176 180,764 143,209
Insurance deposits 53,279 50,686
Other current assets 13,614 9,270
------------- ------------
TOTAL CURRENT ASSETS 248,394 222,865
INTANGIBLE ASSETS, NET 173,233 171,529
PROPERTY AND EQUIPMENT, NET 41,330 27,128
OTHER ASSETS 22,230 20,106
------------- ------------
$ 485,187 $ 441,628
------------- ------------
------------- ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable to banks $ 63,400 $ 54,727
Accounts payable and other accrued expenses 33,825 25,829
Accrued salaries, wages and payroll taxes 40,340 30,005
Accrued insurance 46,418 43,319
Dividend payable - 372
Accrued income taxes - 1,087
------------- ------------
TOTAL CURRENT LIABILITIES 183,983 155,339
LONG-TERM OBLIGATIONS 60,000 60,000
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, par value $.01 per share;
authorized-- 2,500,000 shares; none issued
or outstanding - -
Common stock, par value $.01 per share;
authorized-- 50,000,000 and 25,000,000 shares
issued and outstanding-- 15,500,295 and
15,376,248 shares respectively 155 154
Additional paid-in capital 87,449 85,121
Unrealized gain on marketable securities - 26
Retained earnings 153,600 140,988
------------- ------------
TOTAL STOCKHOLDERS' EQUITY 241,204 226,289
------------- ------------
$ 485,187 $ 441,628
------------- ------------
------------- ------------
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
2
INTERIM SERVICES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED, AMOUNTS IN THOUSANDS)
FOR THE NINE MONTHS ENDED
---------------------------------
SEPTEMBER 27, SEPTEMBER 29,
1996 1995
------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 12,970 $ 16,538
Adjustments to reconcile net earnings to net cash
from operating activities:
Depreciation and amortization 14,016 10,725
Provision for deferred taxes on income (2,366) (135)
Changes in assets and liabilities, net of effects of
acquisitions:
Receivables (37,798) (27,251)
Insurance deposits (2,593) (5,511)
Other current assets (2,224) (1,873)
Other assets (2,828) 903
Accounts payable and accrued expenses 6,610 267
Accrued salaries, wages and payroll taxes 10,299 6,821
Accrued insurance 3,099 1,924
Accrued income taxes (1,087) 557
Other 810 (111)
------------- -------------
NET CASH (USED IN)/PROVIDED BY
OPERATING ACTIVITIES (1,092) 2,854
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (22,145) (9,281)
Purchases of marketable securities - (15,129)
Proceeds from sale of marketable securities 15,686 11,276
Decreases in deposits - (11)
Acquisitions, net of cash acquired (6,365) (19,648)
------------- -------------
NET CASH USED IN INVESTING ACTIVITIES (12,824) (32,793)
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments/Issuances of notes payable 8,673 28,427
Transactions of pooled company (267) (793)
Proceeds from exercise of employee stock options 2,222 364
------------- -------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 10,628 27,998
------------- -------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (3,288) (1,941)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 4,025 6,872
------------- -------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 737 $ 4,931
------------- -------------
------------- -------------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Income taxes paid $ 12,360 $ 12,469
------------- -------------
------------- -------------
Interest paid $ 5,616 $ 787
------------- -------------
------------- -------------
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
3
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The Consolidated Statements of Earnings for the quarter and nine months
ended September 27, 1996 and September 29, 1995, and the Consolidated
Balance Sheet as of September 27, 1996, and the Consolidated Statements of
Cash Flows for the nine months ended September 27, 1996 and September 29,
1995 have been prepared by the Company, without audit. The Consolidated
Balance Sheet as of December 29, 1995 was derived from audited financial
statements. In the opinion of management, all adjustments (which include
only normal recurring adjustments) necessary to present fairly the
financial position, results of operations and cash flows as of September
27, 1996 and for all periods presented have been made.
These financial statements should be read in conjunction with the Company's
consolidated financial statements and notes thereto included in the
Company's Form S-3 filing on July 29, 1996. These financial statements
give retroactive effect to the merger of Brandon Systems Corporation with
Interim Services Inc. on May 23, 1996 and have become Interim's historical
consolidated financial statements (see footnote 2).
2. The Company completed a merger with Brandon Systems Corporation ("Brandon")
on May 23, 1996, whereby 4,401,146 outstanding shares of Brandon and
235,900 Brandon stock options were exchanged for 3,872,690 shares of
Interim common stock and 207,592 vested Interim stock options (the "Brandon
Merger"). This transaction was accounted for as a pooling-of-interests and
accordingly the historical financial information has been restated for all
periods prior to the Brandon Merger. Certain reclassifications have been
made to Brandon's accounts to conform to the Company's presentation.
Operating results previously reported for the separate companies for
periods prior to the merger are as follows:
Quarters Ended
----------------------------
March 29, March 31,
----------- -----------
1996 1995
----------- -----------
Revenues:
Interim $ 242,414 $ 173,517
Brandon 22,311 20,135
----------- -----------
$ 264,725 $ 193,652
----------- -----------
----------- -----------
Net earnings:
Interim $ 4,245 $ 3,241
Brandon 1,244 1,451
----------- -----------
$ 5,489 $ 4,692
----------- -----------
----------- -----------
Net earnings per share:
Interim $ 0.27 $ 0.21
Brandon 0.08 0.09
----------- -----------
$ 0.35 $ 0.30
----------- -----------
----------- -----------
4
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
All fees and expenses related to the merger and the consolidation of the
combined companies have been expensed as required under the pooling-of-
interests accounting method in the Company's Consolidated Statement of
Earnings for the period ended June 28, 1996. Such fees and expenses are
approximately $8.6 million and consist of investment banking, legal and
accounting fees, severance and benefit related costs and other costs of
consolidating operations.
3. Net earnings per share is based on the weighted average number of shares of
common stock and common stock equivalents outstanding during each period.
As of September 27, 1996, the Company has 15,500,295 shares of common stock
outstanding.
4. On October 18, 1996 the Company completed a public offering of 4,250,000
shares of its $0.01 par value Common Stock (300,000 shares were sold by
certain selling shareholders and 3,950,000 shares were sold by the Company)
at $43.25 per share. Net proceeds to the Company were approximately $163.6
million, of which $131.7 million was used to repay borrowings under the
Company's credit facilities. The balance of the proceeds are being held in
short-term investments and are available for continued growth both
internally and through acquisitions.
5
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
BASIS OF PRESENTATION
The consolidated financial statements include the accounts of Interim and
Brandon Systems Corporation ("Brandon") (a wholly-owned subsidiary of Interim),
collectively referred to as the Company. On May 23, 1996, Brandon became a
wholly-owned subsidiary of Interim. These consolidated financial statements have
been prepared under the pooling-of-interests method of accounting and
accordingly reflect the combined financial position and operating results of
Interim and Brandon for all periods presented. There were no significant
intercompany transactions during the periods covered by these consolidated
financial statements (see footnote 2).
RESULTS OF OPERATIONS
The following analysis of operations for the quarter and nine months ended
September 27, 1996 compared to the quarter and nine months ended September 29,
1995 should be read in conjunction with the Consolidated Statement of Earnings
found on page 1.
QUARTER ENDED SEPTEMBER 27, 1996 COMPARED TO QUARTER ENDED SEPTEMBER 29, 1995
Revenues increased 32.8% to $294.7 million from $221.9 million last year.
Revenues are generated primarily through two operating divisions, Commercial
Services and HealthCare. Commercial Services revenues increased 39.8% reflecting
significant acquisition activity in the Information Technology (IT) service
line, expansion of the On-Premise program and an increase in the number of
offices. HealthCare Division revenues increased 9.1% due to increases in the
number of company-owned offices and expansion of Occupational Health services.
Gross profit increased 37.1% to $91.2 million compared to $66.5 million a year
ago. Increases in cost of services and gross profit are associated with
increase in revenues. Gross profit margin increased to 30.9% from 30.0% last
year principally due to growth in the percentage of revenues being derived from
professional services, a higher margin service, and a lesser percentage of
revenues from commercial staffing services, which have lower gross margins.
Selling, general and administrative expenses increased 43.6% to $62.8 million
from $43.7 million last year. Selling, general and administrative expenses as a
percentage of revenues were 21.3% compared to 19.7% a year ago. Operating
expenses increased due to the higher costs associated with our professional
services group, IT, accounting, legal and search which have higher gross margins
and higher operating expenses.
6
RESULTS OF OPERATIONS (Cont'd)
Licensee commissions increased 11.0% to $10.5 million from $9.4 million last
year. Licensee commissions as a percent of revenues decreased to 3.6% from 4.3%
due to branch revenues growing at a faster rate than licensee revenue, caused in
part by a large licensee converting to a franchise in the first quarter of 1996.
Amortization expense increased from $1.8 million to $2.2 million reflecting an
increase in intangible assets arising from acquisitions.
The effective tax rate for the third quarter of 1996 was 44.0% compared to 43.6%
last year. The increase in the effective tax rate is due primarily to growth in
high tax states predominantly associated with Brandon operations.
Net earnings for the quarter were up 22.7% to $7.8 million, or $0.49 per share,
compared to $6.4 million, or $0.41 per share last year, representing a 20.3%
increase in per share earnings. The weighted average number of shares
outstanding was 15,958,000 compared to 15,639,000 last year.
NINE MONTHS ENDED SEPTEMBER 27, 1996 COMPARED TO NINE MONTHS ENDED SEPTEMBER 29,
1995
Revenues increased 35.8% to $840.6 million from $619.0 million last year.
Revenues are generated primarily through two operating divisions, Commercial
Services and HealthCare. Commercial Services revenues increased 43.3% reflecting
significant acquisition activity and growth in the Information Technology (IT)
service line, expansion of the On-Premise program and an increase in the number
of offices. HealthCare Division revenues increased 12.5% due to increases in the
number of offices and expansion of Occupational Health services.
Gross profit increased 36.3% to $256.8 million compared to $188.5 million a
year ago. The increases in cost of services and gross profit are associated
with increases in revenues. Gross profit margin increased to 30.6% from 30.4%
last year principally due to a greater percentage of revenues being derived from
higher margin professional services and a lesser percentage of commercial
staffing revenues which are lower gross margin services.
Selling, general and administrative expenses increased 42.3% to $179.5 million
from $126.1 million last year. Selling, general and administrative expenses as a
percentage of revenues were 21.4% compared to 20.4% a year ago. Operating
expenses increased due to the higher costs associated with our professional
services group, IT, accounting, legal and search which have higher gross margins
and higher operating expenses.
7
RESULTS OF OPERATIONS (Cont'd)
Licensee commissions increased to $29.1 million from $27.6 million last year.
The increase in commissions is due to increased revenues by existing licensees.
Amortization expenses increased from $5.1 to $6.6 million, reflecting an
increase in intangible assets arising from acquisitions.
Interest expense increased due to increased borrowings during the period (see
Financial Condition).
The effective tax rate of 53.5% for the first nine months of 1996 results from a
large portion of merger costs being non-deductible. The effective tax rate,
excluding the effects of non recurring merger charges, was unchanged at 43.7%
versus last year.
The Company reported net earnings of $13.0 million, or $0.81 per share after
recognizing merger costs associated with the Brandon merger. The merger costs
of $8.6 million reduced net earnings by $7.6 million, net of tax, or $0.48 per
share. Excluding the effects of non recurring merger charges, net earnings for
the nine months were up 24.1% to $20.5 million, or $1.29 per share, compared to
$16.5 million, or $1.06 per share last year, representing a 20.8% increase in
per share earnings. The weighted average number of shares outstanding was
15,930,000 compared to 15,652,000 last year.
FINANCIAL CONDITION
These comments should be read in conjunction with the Consolidated Balance
Sheets and Consolidated Statements of Cash Flows found on pages 2 and 3,
respectively.
Working capital including effects of acquisitions decreased from $67.5 million
at December 29, 1995 to $64.4 million at September 27, 1996. The working
capital ratio was 1.4 at September 27, 1996 and at the end of 1995 After the
merger with Brandon, the Company sold marketable securities and utilized
proceeds to pay down debt, however, merger-related costs and increased
receivables related to strong revenue growth during the period resulted in a net
increase of $9.5 million in short-term debt in the nine months ended September
27, 1996. Additionally, the Company used $22.1 million primarily for capital
expenditures related to computer hardware and software for field and
corporate operations and construction in progress for the expansion of the
Corporate Service Center.
The Company believes that its internally generated funds and lines of credit are
sufficient to support anticipated levels of growth.
SUBSEQUENT EVENT
On October 18, 1996, the Company completed a secondary offering of 4.25 million
shares of its $0.01 par value Common Stock at $43.25 per share. Net proceeds to
the Company were approximately $163.6 million, of which $ 131.7 million was used
to repay borrowings under the Company's credit facilities. The balance of the
proceeds are being held in short-term investments and are available for
continued growth both internally and through acquisitions.
8
PART II - OTHER INFORMATION
ITEM 4. - MATTERS SUBMITTED TO A VOTE OF SECURITY HOLDERS
(a) A Special Meeting of stockholders of the Company was held on September
9, 1996.
(c) (1) At the Special Meeting held on September 9, 1996, stockholders voted
upon a proposal to amend the Company's Restated Certificate of Incorporation
to increase the number of authorized shares of Common Stock from 25,000,000
to 50,000,000.
Votes For Votes Against Abstentions
--------- ------------- -----------
13,691,902 574,748 18,554
(c) (2) At the Special Meeting held on September 9, 1996, stockholders voted
upon a proposal to amend the Restated Certificate of Incorporation of the
Company to effectively reduce the vote required to amend the number and type
of authorized shares of stock of the Company from a 2/3 vote to a majority
vote of the outstanding shares of stock of the company entitled to vote.
Votes For Votes Against Abstentions
---------- ------------- -----------
11,204,727 597,010 446,543
9
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
EXHIBIT
NUMBER EXHIBIT NAME NOTE
2.1 Agreement and Plan of Merger (1)
3.1 Restated Certificate of Incorporation of Registrant,
as amended *
3.2 By-Laws of Registrant, as amended *
4.1 Rights Agreement dated as of April 1, 1994, between
Interim Services and Boatmen's Trust Company (3)
4.1A Amendment No. 1 to Rights Agreement dated as of April 1,
1994 *
4.2 Form of Certificate of Designations, Preferences and
Rights of Participating Preferred Stock of Interim
Services (3)
4.3 Form of Stock Certificate(4)
4.4 Articles Fourth, Fifth, Seventh, Eighth and Tenth of the
Restated Certificate of Incorporation of the Company (10)
4.5 Sections Four through Twelve and Thirty-Five through
Forty-One of the Bylaws of the Company (10)
10.1 Interim Services' 1993 Long-Term Executive Compensation
Plan, as amended (5)
10.2 Interim Services' 1993 Stock Option Plan for Outside
Directors, as amended (5)
10.3 Revolving Credit Agreement of Interim Services dated as
of April 6, 1994, as replaced by the Amended and Restated
Revolving Credit Agreement of Interim Services dated as
of June 2, 1995 (6)
10.4 Tax Sharing Agreement dated October 1993, by and between
H&R Block, Inc. and Interim Services (2)
10.5 Amendment No. 2 dated November 28, 1995 to Amended and
Restated Revolving Credit Agreement of Interim Services
dated as of June 2, 1995. (7)
10.6 Indemnification Agreement dated January 1, 1994, by and
between Interim Services and H&R Block, Inc. (2)
10.7 Franchise/License Agreement dated July 12, 1993, by and
between Interim Services and Keco Health Care, Inc. (2)
10.8 Interim Services' 1994 Stock Option Plan for Franchisees,
Licensees and Agents, as amended (8)
10.9 Employment Agreement dated as of May 1, 1994, by and
between Interim Services and Ray Marcy (6)
10.10 Employment, Confidentiality, and Noncompetition Agreement
by and between Interim Services and Allan Sorensen (6)
11 Statement re: Computation of Per Share Earnings Page 12
19 Form S-3 Registration Statement under the Securities Act
of 1933 (9)
22 Published report regarding matters submitted to vote of
security holders None
23.1 Consent of Bryan Cave LLP (10)
23.2 Consent of Deloitte & Touche LLP (9)
27 Financial Data Schedule
10
(1) This Exhibit is filed as an Exhibit to Interim Services' Proxy
Statement/Prospectus, dated April 24, 1996, and is incorporated herein by
reference.
(2) This Exhibit is filed as an Exhibit to Interim Services' Form S-1,
Amendment No. 2, dated January 12, 1994, SEC Registration No. 33-71338, and is
incorporated herein by reference.
(3) This Exhibit is filed as an Exhibit to Interim Services' Form 8-A, dated
April 11, 1994, SEC Registration No. 0-23198, and is incorporated herein by
reference.
(4) This Exhibit is filed as an Exhibit to Interim Services' Form 10-K for the
fiscal year ended March 25, 1994, and is incorporated herein by reference.
(5) This Exhibit is filed as an Exhibit to Interim Services' Proxy Statement
dated March 28, 1996 and filed in connection with Interim Services' 1996 Annual
Meeting, and is incorporated herein by reference.
(6) This Exhibit is filed as an Exhibit to Interim Services' Form 10-K for the
twelve month period ended December 30, 1994, and is incorporated herein by
reference.
(7) This Exhibit is filed as an Exhibit to Interim Services' Form 8-K dated
December 15, 1995, and is incorporated herein by reference.
(8) This Exhibit is filed as an Exhibit to Interim Services' Form S-3, as filed
with the SEC on July 12, 1995, and is incorporated herein by reference.
(9) This Exhibit is filed as an Exhibit to Interim Services' Form S-3 as
filed with the SEC on July 29, 1996, Registration No. 333-09109 and is
incorporated herein by reference.
(10) This Exhibit is filed as an Exhibit to Interim Services' Form S-3,
Amendment No. 1, dated September 16, 1996, and is incorporated herein
by reference.
* Filed herewith
11
EXHIBIT 11
CALCULATION OF PRIMARY NET EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE
Quarter Ended Nine Months Ended
---------------------------- ----------------------------
September 27, September 29, September 27, September 29,
1996 1995 1996 1995
------------- ------------- ------------- -------------
Net earnings per common and common
equivalent share $ 7,827,000 $ 6,377,000 $ 12,970,000 $ 16,538,000
------------ ------------ ------------- -------------
------------ ------------ ------------- -------------
Average number of shares outstanding -
primary:
Average number of common shares
outstanding 15,482,000 15,422,000 15,433,000 15,414,000
Dilutive effect of stock options after
application of treasury stock method 476,000 217,000 497,000 238,000
------------ ------------ ------------- -------------
Average number of shares outstanding 15,958,000 15,639,000 15,930,000 15,652,000
------------ ------------ ------------- -------------
------------ ------------ ------------- -------------
Earnings per share:
Primary $ 0.49 $ 0.41 $ 0.81 $ 1.06
------------ ------------ ------------- -------------
------------ ------------ ------------- -------------
CALCULATION OF FULLY DILUTED NET EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE
Quarter Ended Nine Months Ended
---------------------------- ----------------------------
September 27, September 29, September 27, September 29,
1996 1995 1996 1995
------------- ------------- ------------- -------------
Net earnings per common and common
equivalent share $ 7,827,000 $ 6,377,000 $ 12,970,000 $ 16,538,000
------------ ------------ ------------- -------------
------------ ------------ ------------- -------------
Shares used in calculating fully-diluted earnings
per share:
Average number of common shares
outstanding fully-diluted 15,482,000 15,422,000 15,433,000 15,414,000
Additional effect of stock options after
application of treasury stock method 521,000 259,000 523,000 262,000
------------ ------------ ------------- -------------
Average number of shares outstanding 16,003,000 15,681,000 15,956,000 15,676,000
------------ ------------ ------------- -------------
------------ ------------ ------------- -------------
Earnings per share:
Fully-diluted $ 0.49 $ 0.41 $ 0.81 $ 1.06
------------ ------------ ------------- -------------
------------ ------------ ------------- -------------
12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of l934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INTERIM SERVICES INC.
--------------------------
(Registrant)
DATE 11/ 11 / 96 BY /s/ Roy G. Krause
--------------------
Roy G. Krause
Executive Vice President
and Chief Financial Officer
DATE 11/ 11/ 96
BY /s/ Paul Haggard
-------------------
Paul Haggard
Financial Vice President/Treasurer
13