SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of
the Securities Exchange Act of 1934
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Date of Report (Date of Earliest Event Reported):
October 1, 1998
Modis Professional Services, Inc.
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(Exact name of registrant as specified in its charter)
Florida 0-24484 59-3116655
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(State of Incorporation) (Commission file number) (IRS Employer
Identification No.)
1 Independent Drive, Jacksonville, FL 32202
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(Address of principal executive office including zip code)
(904) 360-2000
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(Registrant's telephone number)
Item 2. Acquisition or Disposition of Assets
On October 1, 1998, Modis Professional Services, Inc., formerly AccuStaff
Incorporated (the "Company"), completed the sale of its commercial staffing
business for $850 million in cash to Randstad US, L.P., the U.S. operating
company of Randstad Holding nv, an international staffing company based in The
Netherlands.
The after-tax cash proceeds will be used to pay-off borrowings, for future
acquisitions and for other general corporate purposes.
The foregoing description of the sale to Randstad U.S., L.P., is not
intended to be complete and is qualified in its entirety by reference to the
acquisition agreement among Randstad Holding nv, Randstad US, L.P., and the
Company, which is filed as Exhibit 2 hereto and is hereby incorporated by
reference herein.
Reference is made to the press release filed as Exhibit 99.1 hereto. The
information set forth in Exhibit 99.1 is hereby incorporated by reference
herein.
Item 5. Other Events
The Company changed its name to Modis Professional Services, Inc. on
October 1, 1998. In addition, on October 1, 1998, the Company changed its
trading symbol on the New York Stock Exchange from "ASI" to "MPS".
The Company also announced on October 1, 1998 that it will issue a Notice
of Redemption to the holders of the Company's 7% Convertible Senior Notes due
2002 (the "Notes"). The Company will redeem the Notes at a redemption price
equal to 104% of their principal amount (the "Redemption Price"). The Redemption
Price will become due and payable on November 1, 1998, and interest on the Notes
will cease to accrue on and after November 1, 1998. The Notes' November 1, 1998
interest payment will be made in the usual manner.
The Notes are convertible into shares of the Company's common stock. The right
to convert Notes called for Redemption will terminate at the close of business
on October 30, 1998. If the Conversion Privilege is exercised, the holder of a
Note will receive the number of shares of the Company's common stock that
results from dividing the principal amount of the Notes to be converted by the
current conversion price of $11.35 per share. The Company may, at its
discretion, from time to time, buy the convertible senior notes in the open
market or privately negotiated transactions through November 1, 1998.
As of September 30, 1998, the Company had $86,250,000 in principal amount
of Notes outstanding. The Notes were originally issued by Career Horizons, Inc.,
before such Company was acquired and became a subsidiary of the Company.
Reference is made to the press release filed as Exhibit 99.2 hereto. The
information set forth in Exhibit 99.2 is hereby incorporated by reference
herein.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of businesses acquired.
Not applicable
(b) Pro Forma financial information.
Introduction.
Unaudited Pro Forma Condensed Consolidated Balance Sheet as of
June 30, 1998.
Unaudited Pro Forma Condensed Consolidated Statement of Income for
the Year ended December 31, 1997.
Unaudited Pro Forma Condensed Consolidated Statement of Income for
the Six Months ended June 30, 1998.
Notes to Unaudited Pro Forma Condensed Consolidated Financial
Statements.
Introduction
The following unaudited pro forma condensed consolidated financial statements as
of June 30, 1998 and for the year ended December 31, 1997 and the six months
ended June 30, 1998 give effect to: (i) the sale of the Company's commercial
businesses; (ii) the planned disposal of the Company's remaining health care
businesses; and (iii) the repayment of the Company's outstanding revolving
credit facility balance as if those events had occurred on January 1, 1997 with
respect to the year ended December 31, 1997 unaudited pro forma condensed
consolidated statements of income and January 1, 1998 for the unaudited pro
forma balance sheet as of June 30, 1998 and the unaudited pro form condensed
consolidated statement of income for the six months ended June 30, 1998. The
unaudited pro forma condensed consolidated financial statements presented herein
do not purport to represent what the Company's actual results of operations
would have been had the transactions described above occurred on those dates or
to project the Company's results of operations for any future period.
This information has previously been files on form 8-K/A dated October 16, 1998
which is amended herein to reflect the changes made in the Company's historical
June 30, 1998 form 10-Q as a result of these events.
Modis Professional Services Incorporated and Subsidiaries
Unaudited Pro Forma Condensed Consolidated Balance Sheet
(dollar amounts in thousands except per share amounts)
(1)
Historical
June 30, (2) Pro
1998 Adjustments Forma
---------------- --------------- ----------------
Assets
Current assets:
Cash and cash equivalents 29,247 401,000 430,247
Accounts receivable, net 297,275 - 297,275
Prepaid expenses 23,082 - 23,082
Deferred income taxes 5,937 - 5,937
Other 17,216 - 17,216
Net Assets of Discontinued
operations 362,024 (362,024)(9) -
---------------- ---------------- ---------------
Total current assets 734,781 38,976 773,757
Furniture, equipment and leasehold
improvements, net 35,962 - 35,962
Goodwill, net 902,515 - 902,515
Other assets 23,124 - 23,124
---------------- ---------------- ---------------
Total assets 1,696,382 38,976 1,735,358
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Liabilities and Stockholders' Equity
Current liabilities:
Notes payable 19,079 - 19,079
Accounts payable and accrued
expenses 76,172 265,000 341,172
Accrued payroll and related taxes 41,911 - 41,911
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Total current liabilities 137,162 265,000 402,162
Convertible debt 86,250 - 86,250
Notes payable and revolviing credit
facility 411,680 (409,000) 2,680
Other 9,465 - 9,465
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Total liabilities 644,557 (144,000) 500,557
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---------------- ---------------- ---------------
Stockholders' equity 1,051,825 182,976 1,234,801
Total liabilities and ---------------- ---------------- ---------------
stockholders' equity 1,696,382 38,976 1,735,358
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Modis Professional Services Incorporated and Subsidiaries
Unaudited Pro Forma Condensed Consolidated Statements of Income
(dollar amounts in thousands except per share amounts)
(3) (6)
Historical (4) (5) Other
December 31, Commercial Health Pro Forma Pro
1997 Businesses Care Adjustments Forma
--------------- --------------- -------------- -------------- ---------------
Revenue $ 2,424,826 $ (1,131,241) $ (129,461) $ - $ 1,164,124
Cost of revenue 1,811,098 (884,593) (90,896) - 835,609
--------------- --------------- -------------- -------------- ---------------
Gross Profit 613,728 (246,648 (38,565) - 328,515
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Operating expenses:
General and administrative 362,010 (156,239) (16,500) - 189,271
Depreciation and amortization 36,059 (12,301) (1,302) - 22,456
Remittance to franchisees 24,095 (7,820) (16,275) - -
Merger related costs 5,000 (5,000) - - -
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Total operating expenses 427,164 (181,360) (34,077) - 211,727
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Income from operations 186,564 (65,288) (4,488) - 116,788
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Interest expense, net (18,989) 3,661 713 18,820 4,205
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Income from continuing operations
before provision for income taxes 167,575 (61,627) (3,775) 18,820 120,933
Provision for income taxes 65,542 (25,304) (1,435) 7,058 45,861
=============== =============== ============== ============== ===============
Income from continuing operations $ 102,033 $ (36,323) $ (2,340) $ 11,762 $ 75,132
=============== =============== ============== ============== ===============
Basic Income per common share
from continuing operations $ 1.00 $ 0.74
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Average common shares outstanding,
basic 101,914 101,914
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Diluted income from continuing
operations $ 0.93 $ 0.70
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Average common shares outstanding.
dilutive 113,109 113,109
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(7)
Historical
Six months (8)
Ended Other
June 30, Pro Forma Pro
1998 Adjustments Forma
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Revenue $ 799,875 $ $ 799,875
Cost of revenue 577,622 - 577,622
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Gross Profit 222,253 - 222,253
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Operating expenses:
General and administrative 120,398 - 120,398
Depreciation and amortization 16,872 - 16,872
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Total operating expenses 137,270 - 137,270
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Income from operations 84,983 - 84,983
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Interest expense, net (10,540) 10,081 (459)
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Income from continuing operations
before provision for income taxes 74,443 10,081 84,524
Provision for income taxes 28,222 3,840 32,062
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Income from continuing operations $ 46,221 $ 6,241 $ 52,462
=============== =============== ==============
Basic income per common share
from continuing operations $ 0.43 $ 0.49
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Average common shares outstanding,
basic 107,922 107,922
Diluted income per common share from
continuing operations $ 0.40 $ 0.45
=============== ===============
Average common shares outstanding,
dilutive 119,444 119,444
=============== ===============
See accompanying notes to unaudited pro forma condensed consolidated financial
statements.
Modis Professional Services Incorporated and Subsidiaries
Notes To Unaudited Pro Forma Condensed Consolidated Financial Statements
(dollar amounts in thousands except per share amounts)
(1) Represents the Company's historical balance sheet contained in the Company's
Quarterly Report on Form 10 Q/A for the period ended June 30, 1998.
(2) Represents the sale of the Company's commercial businesses, including: (i)
the estimated gross gain on the sale of approximately $450,000, net of taxes of
approximately $210,000; (ii) the complete repayment of the Company's outstanding
revolving credit facility of $409,000; (iii) the recording of the tax liability
related to the gain on the sale of approximately $210,000; (iv) the accrual of
transaction related expenses and other commercial division related assets which
are not being transferred as part of the sale of $55,000; and (v) the recording
of the pre-tax net cash proceeds, net of the tangible net worth deficit
estimated to be $40,000, of approximately $401,000.
(3) Represents the Company's historical income statement contained in the
Company's Annual Report on Form 10-K for the year ended December 31, 1997.
(4) Represents the elimination of the results of operations of the Company's
commercial businesses as if such operations had been sold as of January 1, 1998.
(5) Represents the elimination of the results of operations of the Company's
health care businesses as if such operations had been sold as of January 1,
1998.
(6) Reflects pro forma interest income on the net cash received of approximately
$195,000, resulting from the proceeds of the sale, less the paydown of the
Company's credit facility, less the payment of the resulting tax liability and
related cash transaction costs after the elimination of previously recorded
interest expense related to the paydown of the Company's credit facility of
$409,000 net of income taxes at a 38.0% effective tax rate, as if the sale of
the Company's commercial businesses had occurred on January 1, 1997, assuming
the Company's current investment rate of 5.25%.
(7) Represents the Company's historical results of operations for the related
period as reported in the Company's Quarterly Report on Form 10-Q/A for the
period ended June 30, 1998.
(8) Reflects interest income on the net cash received of $195,000, resulting
from the proceeds of the sale, less the paydown of the Company's credit
facility, less the payment of the resulting tax liability and related cash
transaction costs after the elimination of previously recorded interest expense
related to the paydown of the Company's credit facility of $409,000 net of
income taxes at a 37.5% effective tax rate, as if the sale of the Company's
commercial businesses had occurred on January 1, 1998, assuming the Company's
current investment rate of 5.25%.
(9) As of June 30, 1998, the Components of Net assets of discontinued operations
were as follows:
Receivables $ 183,827
Other current assets 55,936
Total current assets 239,763
Furniture, Equipment and Leasehold Improvements 22,202
Goodwill 215,285
Other Assets 10,371
Total Assets 487,621
Current Liabilities 113,241
Non-current liabilities 12,356
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Total Net assets of discontinued operations $ 362,024
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(c) Exhibits
(2) Acquisition Agreement dated as of August 27, 1998 among Randstad
Holding nv, Randstad US, L.P. and AccuStaff Incorporated and as amended as of
September 3, 1998 and September 11, 1998.
(99.1) Modis Professional Services, Inc. Press Release issued October 1,
1998.
(99.2) Modis Professional Services, Inc. Press Release issued October 1,
1998.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, Modis
Professional Services, Inc. has duly caused this report to be signed on its
behalf by the undersigned, hereunto duly authorized.
Date: October 15, 1998
MODIS PROFESSIONAL SERVICES, INC.
By: /s/ Robert P. Crouch
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Name: Robert P. Crouch
Title: Vice President and Cheif
Accounting Officer