OUTSOURCING SOLUTIONS INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(IN THOUSANDS OF DOLLARS EXCEPT RATIO DATA)
EXHIBIT 12.1
APLP OSI
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FROM FROM
JANUARY 1, SEPTEMBER 21,
YEAR ENDED DECEMBER 31, TO TO
------------------------------- SEPTEMBER 20, DECEMBER 31,
1992 1993 1994 1995 1995
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SELECTED HISTORICAL FINANCIAL DATA--OSI:
Earnings were calculated as follows:
Income (loss) before taxes.............................. $ 456 $ 10,107 $ 25,091 $ 8,984 $ (4,082)
Add: Fixed charges...................................... 1,232 1,421 2,981 1,022 1,415
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Earnings................................................ $ 1,688 $ 11,528 $ 28,072 $ 10,006 $ (2,667)
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Fixed charges were calculated as follows:
Interest expense(a)..................................... $ 1,229 $ 1,388 $ 2,941 $ 955 $ 1,365
Portion of rentals attributable to interest............. 3 33 40 67 50
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1,232 1,421 2,981 1,022 1,415
Preferred stock dividends(b)............................ -- -- -- -- 373
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Fixed charges........................................... $ 1,232 $ 1,421 $ 2,981 $ 1,022 $ 1,788
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Ratio of earnings to fixed charges...................... 1.4x 8.1x 9.4x 9.8x --
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Deficiency.............................................. $ (4,455)
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YEAR ENDED
DECEMBER 31,
1996
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SELECTED HISTORICAL FINANCIAL DATA--OSI:
Earnings were calculated as follows:
Income (loss) before taxes.............................. $ (33,154)
Add: Fixed charges...................................... 13,527
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Earnings................................................ $ (19,627)
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Fixed charges were calculated as follows:
Interest expense(a)..................................... $ 12,332
Portion of rentals attributable to interest............. 1,195
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13,527
Preferred stock dividends(b)............................ 1,383
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Fixed charges........................................... $ 14,910
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Ratio of earnings to fixed charges...................... --
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Deficiency.............................................. $ (34,537)
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YEAR ENDED DECEMBER 31,
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1992 1993 1994 1995
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SELECTED HISTORICAL FINANCIAL DATA--PAYCO:
Earnings were calculated as follows:
Income before taxes.......................................................... $ 5,782 $ 7,267 $ 8,385 $ 9,380
Add: Fixed charges........................................................... 1,796 2,289 1,948 2,692
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Earnings..................................................................... $ 7,578 $ 9,556 $ 10,333 $ 12,072
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Fixed charges were calculated as follows:
Interest expense............................................................. $ 94 $ 268 $ 148 $ 770
Portion of rentals attributable to interest.................................. 1,702 2,021 1,800 1,922
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Fixed charges................................................................ $ 1,796 $ 2,289 $ 1,948 $ 2,692
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Ratio of earnings to fixed charges........................................... 4.2x 4.2x 5.3x 4.5x
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FROM JANUARY 1,
TO NOVEMBER 5,
1996
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SELECTED HISTORICAL FINANCIAL DATA--PAYCO:
Earnings were calculated as follows:
Income before taxes.......................................................... $ 3,778
Add: Fixed charges........................................................... 2,274
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Earnings..................................................................... $ 6,052
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Fixed charges were calculated as follows:
Interest expense............................................................. $ 735
Portion of rentals attributable to interest.................................. 1,539
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Fixed charges................................................................ $ 2,274
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Ratio of earnings to fixed charges........................................... 2.7x
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PRO FORMA
YEAR ENDED
DECEMBER 31,
1996
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COMPANY PRO FORMA:
Earnings were calculated as follows:
Loss before taxes................................................................................................. $ (57,968)
Add: Fixed charges................................................................................................ 28,912
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Earnings.......................................................................................................... $ (29,056)
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Fixed charges were calculated as follows:
Interest expense(a)............................................................................................... $ 26,178
Portion of rentals attributable to interest....................................................................... 2,734
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28,912
Preferred stock dividends(b)...................................................................................... 1,383
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Fixed charges..................................................................................................... $ 30,295
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Ratio of earnings to fixed charges................................................................................ --
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Deficiency........................................................................................................ $ (59,351)
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(a) Interest expense includes amortization of debt issuance costs.
(b) Preferred stock dividends have been increased to reflect the pretax amounts
which would be required to meet dividend payments.