UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
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[X] Annual Report Pursuant to Section 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 2001
[ ] Transition Report Pursuant to Section 15(d)
of the Securities Exchange Act of 1934
For the transition period from _______________ to __________
Commission File Number: 0-26094
A. Full name of the plan and the address of the plan, if different from that of
the issuer named below:
SOS Staffing Services, Inc. 401 (k) Plan
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B. Name of the issuer of the securities held pursuant to the plan and the
address of its principle executive office:
SOS Staffing Services, Inc.
1415 South Main Street
Salt Lake City, UT 84115
SOS STAFFING SERVICES, INC. 401(K) PLAN
FINANCIAL STATEMENTS
December 31, 2001 and 2000
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C O N T E N T S
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Page
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INDEPENDENT AUDITORS' REPORT.............................................. 3
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS........................... 4
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE
FOR BENEFITS............................................................. 5
NOTES TO FINANCIAL STATEMENTS............................................. 6
SCHEDULE 1 - SCHEDULE H, LINE 4i -
SCHEDULE OF ASSETS (HELD AT END OF YEAR)................................ 9
2
INDEPENDENT AUDITORS' REPORT
To the Administrators of the
SOS Staffing Services, Inc. 401(k) Plan
We have audited the accompanying statement of net assets available for benefits
of SOS Staffing Services, Inc. 401(k) Plan as of December 31, 2001, and the
related statement of changes in net assets available for benefits for the year
then ended. These financial statements and the schedule referred to below are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements and schedule based on our audit. The
financial statements of SOS Staffing Services, Inc. 401(k) Plan as of December
31, 2000, were audited by other auditors whose report dated June 25, 2001,
expressed an unqualified opinion on those statements.
We conducted our audit in accordance with U.S. generally accepted auditing
standards. Those standards 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. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the 2001 financial statements referred to above present fairly,
in all material respects, the net assets available for benefits of SOS Staffing
Services, Inc. 401(k) Plan as of December 31, 2001, and the changes in its net
assets available for benefits for the year then ended in conformity with U.S.
generally accepted accounting principles
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information included in
Schedule H, Line 4i - Schedule of Assets (Held at End of Year) is presented for
the purpose of additional analysis and is not a required part of the basic
financial statements but is supplementary information required by the Department
of Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/ Wisan, Smith, Racker & Prescott, LLP
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Wisan, Smith, Racker & Prescott, LLP
Salt Lake City, Utah
May 30, 2002
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SOS STAFFING SERVICES, INC. 401(K) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2001 and 2000
2001 2000
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ASSETS
INVESTMENTS
Mutual funds:
Spartan U.S. Treasury Money Market Fund $ 852,540 $ 600,055
Fidelity U.S. Bond Index Fund 219,054 229,207
Loomis Sayles Bond Fund 157,665 180,606
Fidelity Puritan Fund 263,691 300,752
Fidelity Equity Income Fund 431,660 550,114
Spartan U.S. Equity Index Fund 510,762 865,996
Dreyfus Appreciation Fund 407,882 827,182
Neuberger Berman Genesis Trust 166,918 271,946
Manager's Special Equity Fund 335,917 539,993
Mercury HW International Fund 47,282 94,870
Cohen & Steers Realty Shares Fund 73,533 93,610
Gabelli Growth Fund 86,287 296,215
Janus Overseas Fund 86,812 73,075
Invesco Technology Fund 111,628 171,417
Fidelity Freedom 2010 Fund 49,439 56,982
Fidelity Freedom 2020 Fund 72,170 83,035
Fidelity Freedom 2030 Fund 52,739 75,877
Other investments:
SOS Staffing Services, Inc. common stock 71,797 83,401
Participant loans 1,046 43,536
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TOTAL INVESTMENTS 3,998,822 5,437,869
CASH 1,470 150,241
RECEIVABLES:
Participant contributions 22,522 64,055
Employer contributions -- 185,528
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TOTAL RECEIVABLES 22,522 249,583
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TOTAL ASSETS 4,022,814 5,837,693
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LIABILITIES
REFUND OF EXCESS CONTRIBUTIONS 393 --
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TOTAL LIABILITIES 393 --
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NET ASSETS AVAILABLE FOR BENEFITS $4,022,421 $5,837,693
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The accompanying notes are an integral part of the financial statements.
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SOS STAFFING SERVICES, INC. 401(K) PLAN
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
Year ended December 31, 2001
ADDITIONS TO NET ASSETS
Participant contributions $ 892,081
Investment income (loss):
Net depreciation in
fair value of securities $ (545,303)
Interest and dividends 118,470 (426,833)
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TOTAL ADDITIONS 465,248
DEDUCTIONS FROM NET ASSETS
Benefits paid to participants 2,280,520
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NET DECREASE (1,815,272)
NET ASSETS AVAILABLE FOR BENEFITS
AT BEGINNING OF YEAR 5,837,693
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NET ASSETS AVAILABLE FOR BENEFITS
AT END OF YEAR $4,022,421
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The accompanying notes are an integral part of the financial statements.
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SOS STAFFING SERVICES, INC. 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2001 and 2000
NOTE 1 - DESCRIPTION OF PLAN
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The following description of the SOS Staffing Services, Inc.
(sponsor) 401(k) Plan (the Plan) provides only general
information. Participants should refer to the Plan agreement for
a more complete description of the Plan's provisions.
A. General - The Plan is a defined contribution plan subject to
the provisions of the Employee Retirement Income Security
Act of 1974 (ERISA). Employees of the sponsor who complete
1,000 hours of service during a 12-month period and who have
reached the age of 21 are eligible to participate in the
Plan. Employees of Inteliant Corporation ("Inteliant"), a
subsidiary of the sponsor, who have reached the age of 21
are eligible to participate in the Plan as of the
ninety-first day following the day on which the employee
first performs an hour of service. The Plan treats employees
of Inteliant as a separate line of business for purposes of
operational testing. The Plan excludes all employees of the
sponsor and all of its subsidiaries except Inteliant who are
highly compensated as defined by the Internal Revenue
Service. Inteliant employees who are highly compensated are
allowed to participate in the plan.
B. Contributions - Each year participants may contribute up to
15 percent of pre-tax annual compensation, as defined in the
Plan. Participants may also contribute amounts representing
distributions from other qualified defined benefit or
contribution plans. The sponsor can elect to make
discretionary matching contributions to the Plan. As
described below in forfeited accounts, for the year ended
December 31, 2001, the sponsor made matching contributions
of approximately $150,000 to the Plan through re-allocation
of forfeited accounts. Participants direct the investment of
all contributions into various investment options offered by
the Plan. The Plan currently offers 17 mutual funds and the
sponsor's outstanding common stock as investment options.
C. Participants' Accounts - Each participant's account is
credited with the participant's contributions and related
employer matching contributions, as well as the
participant's share of the Plan's income. Allocations are
based on participant account balances.
D. Vesting - Participants are immediately vested in their
voluntary contributions plus actual earnings thereon.
Vesting in employer matching contributions plus actual
earnings thereon is as follows:
Years of Vested
Service Percentage
--------------------- ----------
Less than three years 0%
Three years 50%
Four years 75%
Five years or more 100%
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SOS STAFFING SERVICES, INC. 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2001 and 2000
NOTE 1 - DESCRIPTION OF PLAN (CONTINUED)
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E. Loans to Participants - The Plan does not allow for
participant loans. However, a retirement plan of one of the
sponsor's subsidiaries allowed for participant loans prior
to merging with the Plan. All loans outstanding from the
subsidiary's plan at the time of the merger remained
outstanding subsequent to the merger. As of December 31,
2001, only one loan remained outstanding, bearing interest
at 8.5%.
F. Payment of Benefits - On termination of service due to
death, disability or retirement, a participant may elect to
receive either a lump-sum amount equal to the value of the
participant's vested interest in his or her account or an
annuity.
G. Forfeited Accounts - At December 31, 2001, forfeited
nonvested accounts totaled approximately $127,451. These
amounts will be used to reduce future employer
contributions. During 2001, approximately $149,952 from
forfeited accounts was allocated to participants' accounts
as employer contributions.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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The Plan's accounting policies conform to U.S. generally accepted
accounting principles. The following policies are considered to
be significant:
Use of Estimates in the Preparation of Financial Statements
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The preparation of financial statements in conformity with U.S.
generally accepted accounting principles requires the Plan
administrator to make estimates and assumptions that affect
certain reported amounts and disclosures. Accordingly, actual
results may differ from those estimates.
Investment Valuation and Income Recognition
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Mutual funds and common stock are reflected at fair value as
determined by quoted market price and gain or loss is recognized
in the current period on the difference between current and prior
period market values. Participant loans are reported at book
value, which approximates fair value.
Interest income is recorded as earned on the accrual basis.
Dividend income is recorded on the ex-dividend date.
Administrative Expenses
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The sponsor pays all administrative expenses of the Plan.
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SOS STAFFING SERVICES, INC. 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2001 and 2000
NOTE 3 - NET DEPRECIATION IN FAIR VALUE OF INVESTMENTS
---------------------------------------------
During 2001, the Plan's investments (including gains and losses
on investments bought and sold, as well as held during the year)
depreciated in value by $545,303 as follows:
Mutual funds $ 500,554
Common stock 44,749
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$ 545,303
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NOTE 4 - INCOME TAX STATUS
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The Internal Revenue Service has determined and informed the
Company by a letter dated March 9, 2000, that the Plan is
qualified and the trust established under the Plan is tax-exempt,
under the applicable sections of the Internal Revenue Code (IRC).
The Plan has been amended since receiving the determination
letter. The Plan has made application to the Internal Revenue
Service to receive a new determination letter on the amended
Plan, but has yet to receive such notification. However, the Plan
administrator and the Plan's tax counsel believe that the Plan is
currently designed and being operated in compliance with the
applicable requirements of the IRC. Therefore, they believe that
the Plan was qualified and the related trust was tax-exempt as of
the financial statement date.
NOTE 5 - PLAN TERMINATION
----------------
Although it has not expressed any intent to do so, the sponsor
has the right under the Plan to discontinue its contributions at
any time and to terminate the Plan subject to the provisions of
ERISA. In the event of Plan termination, participants will become
fully vested in their account balances.
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Schedule 1
SOS STAFFING SERVICES, INC. 401(K) PLAN
EIN #87-0295503-PLAN #002
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT YEAR END)
December 31, 2001
(b) Identity of Issuer
Borrower, Lessor, (d) Current
(a) or Similar Party (c) Description of Investment Value
* Spartan U.S. Treasury Money Market 852,540 shares of money market
Fund fund $ 852,540
* Fidelity U.S. Bond Index Fund 20,283 shares of mutual fund 219,054
Loomis Sayles Bond Fund 15,102 shares of mutual fund 157,665
* Fidelity Puritan Fund 14,923 shares of mutual fund 263,691
* Fidelity Equity Income Fund 8,851 shares of mutual fund 431,660
* Spartan U.S. Equity Index Fund 12,568 shares of mutual fund 510,762
Dreyfus Appreciation Fund 10,728 shares of mutual fund 407,882
Neuberger Berman Genesis Trust 5,734 shares of mutual fund 166,918
Manager's Special Equity Fund 4,758 shares of mutual fund 335,917
Mercury HW International Fund 2,428 shares of mutual fund 47,282
Cohen & Steers Realty Shares Fund 1,656 shares of mutual fund 73,533
Gabelli Growth Fund 3,009 shares of mutual fund 86,287
Janus Overseas Fund 4,277 shares of mutual fund 86,812
Invesco Technology Fund 3,427 shares of mutual fund 111,628
* Fidelity Freedom 2010 Fund 3,920 shares of mutual fund 49,439
* Fidelity Freedom 2020 Fund 5,737 shares of mutual fund 72,170
* Fidelity Freedom 2030 Fund 4,199 shares of mutual fund 52,739
* SOS Staffing Services, Inc. 64,624 shares of common stock 71,797
* Participant loan 8.5% interest rate, secured by
participant's account balance 1,046
* Denotes party-in-interest
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CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
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As independent public accountants, we hereby consent to the incorporation of our
report included in the Form 11-K into the Company's previously filed
Registration Statements on Form S-8, File Nos. 33-96362 and 333-1422.
Wisan, Smith, Racker & Prescott, LLP
Salt Lake City, Utah
June 28, 2001
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