UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
__X__ Annual Report Pursuant to Section 15(d) of the Securities Exchange Act
of 1934
For the fiscal year ended December 31, 1996
OR
______ 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
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
SOS Staffing Services, Inc.
1415 South Main Street
Salt Lake City, Utah 84115
EIN: 87-0295503
Plan Number: 002
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Administrative Committee of the
SOS Staffing Services, Inc. 401 (k) Plan:
We have audited the accompanying statements of net assets available for benefits
of the SOS Staffing Services, Inc. 401 (k) Plan as of December 31, 1996 and 1995
and the related statement of changes in net assets available for benefits for
the year ended December 31, 1996. These financial statements and the schedules
referred to below are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements and
schedules based on our audits.
We conducted our audits in accordance with 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 audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1996 and 1995, and the changes in its net assets available for
benefits for the year ended December 31, 1996 in conformity with generally
accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are 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 fund information in the
statements of net assets available for benefits and the statement of changes in
net assets available for benefits is presented for purposes of additional
analysis rather than to present the net assets available for plan benefits and
changes in net assets available for plan benefits of each fund. The supplemental
schedules and fund information have been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, are
fairly stated, in all material respects, in relation to the basic financial
statements taken as a whole.
ARTHUR ANDERSEN LLP
Salt Lake City, Utah
June 17, 1997
2
SOS STAFFING SERVICES, INC. 401(k) PLAN
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
Statements of Net Assets Available for Benefits
As of December 31, 1996 and 1995 4-5
Statement of Changes in Net Assets Available for Benefits
For the Year Ended December 31, 1996 6-8
Notes to Financial Statements 9-12
Schedule of Assets Held for Investment Purposes
As of December 31, 1996 13
Schedule of Reportable Transactions
For the Year Ended December 13, 1996 14
Signatures 15
Index to Exhibits 16
Exhibit 17
3
SOS STAFFING SERVICES, INC. 401(k) PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1996
1996 FUND INFORMATION
--------------------------------------
Fidelity
Fidelity Money Fidelity Equity Fidelity
Market Intermediate Fidelity Income II Blue Chip
Fund Bond Fund Puritan Fund Fund Growth Fund
--------- --------- --------- --------- -----------
INVESTMENTS:
Mutual fund $ - $ 30,360 $ 176,014 $ 70,229 $ 182,640
Money market 241,677 - 927 - 2,774
RECEIVABLES:
Participants'
contributions 5,701 1,452 2,973 5,008 6,041
Employer contributions 3,228 1,786 4,031 6,558 10,200
Interest and Dividends 1,115 161 3 3,524 566
EXCESS CONTRIBUTIONS
PAYABLE (10,980) (750) (5,687) (10,967) (23,607)
---------- ---------- ---------- ---------- ----------
NET ASSETS AVAILABLE
FOR BENEFITS $ 240,741 $ 33,009 $ 178,261 $ 74,352 $ 178,614
========== ========== ========== ========== ==========
1996 FUND INFORMATION
------------------------------------------
Fidelity Fidelity Kemper
Emerging Worldwide SOS Stock Advantage
Growth Fund Fund Fund III Total
----------- ---------- --------- --------- ----------
INVESTMENTS:
Mutual fund $ 200,460 $ 69,162 $ - $ - $ 728,865
Money market - - 8,474 - 253,852
Common stock - - 76,713 - 76,713
Pooled separate
account - - - 65,639 65,639
RECEIVABLES:
Participants'
contributions 6,402 1,555 5,178 1,643 35,953
Employer contributions 6,972 2,136 6,070 - 40,981
Interest and Dividends 7 3 27 - 5,406
EXCESS CONTRIBUTIONS
PAYABLE (35,130) (6,056) (11,314) - (104,491)
---------- ---------- ---------- ---------- ----------
NET ASSETS AVAILABLE
FOR BENEFITS $ 178,711 $ 66,800 $ 85,148 $ 67,282 $1,102,918
========== ========== ========== ========== ==========
The accompanying notes are an
integral part of these statements
4
SOS STAFFING SERVICES, INC. 401(k) PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1995
1995 FUND INFORMATION
-----------------------------
Eaton Vance Cash Reserve Alliance
Government and Money Bond Fund Growth and
Bond Fund Market Fund of America Income Fund
--------- ----------- ---------- -----------
INVESTMENTS:
Mutual fund $ 69,179 $ - $ 90,310 $ 98,337
Money market - 125,534 - -
RECEIVABLES:
Participants'
contributions - 25,689 - -
Employer contributions - 32,028 - -
EXCESS CONTRIBUTIONS
PAYABLE (79) (97,246) (3,162) (6,302)
---------- ---------- ---------- ----------
NET ASSETS AVAILABLE
FOR BENEFITS $ 69,100 $ 86,005 $ 87,148 $ 92,035
========== ========== ========== ==========
1995 FUND INFORMATION
---------------------------
Templeton Dreyfuss Kemper
Foreign Capital Advantage
Fund Value-A Fund III Total
--------- ---------- --------- --------
INVESTMENTS:
Mutual fund $107,134 $ 42,365 $ - $ 407,325
Money market - - - 125,534
Pooled separate
account - - 60,794 60,794
RECEIVABLES:
Participants'
contributions - 349 5,839 31,877
Employer contributions - - - 32,028
EXCESS CONTRIBUTIONS
PAYABLE (2,315) - - (109,104)
-------- -------- ---------- ----------
NET ASSETS AVAILABLE
FOR BENEFITS $104,819 $ 42,714 $ 66,633 $ 548,454
======== ======== ========== ==========
The accompanying notes are an
integral part of these statements
5
Page 1 of 3
SOS STAFFING SERVICES, INC. 401(k) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1996
FUND INFORMATION
---------------------------------------------------------
Fidelity
Fidelity Fidelity Fidelity Equity Fidelity
Money Intermediate Puritan Income II Blue Chip
Market Fund Bond Fund Fund Fund Growth Fund
----------- --------- ---------- --------- ----------
ADDITIONS:
Contributions:
Participants $ 71,624 $ 6,139 $ 13,115 $ 22,256 $ 29,290
Employer 3,228 1,786 4,031 6,558 10,200
Rollover 26,973 3,736 127,485 10,213 68,650
---------- ---------- ---------- ---------- ----------
Total contributions 101,825 11,661 144,631 39,027 108,140
---------- ---------- ---------- ---------- ----------
Investment income:
Net appreciation
(depreciation) in fair
value of investments - 423 (145) 1,144 4,309
Interest and dividends 11,626 1,042 14,940 3,949 11,764
---------- ---------- ---------- ---------- ----------
Total investment
income 11,626 1,465 14,795 5,093 16,073
---------- ---------- ---------- ---------- ----------
Total additions 113,451 13,126 159,426 44,120 124,213
---------- ---------- ---------- ---------- ----------
DEDUCTIONS:
Benefits paid to
participants (52,563) (1,270) (358) (799) (1,851)
Administrative fees (3,887) (111) (430) (211) (505)
---------- ---------- ---------- ---------- ----------
Total deductions (56,450) (1,381) (788) (1,010) (2,356)
---------- ---------- ---------- ---------- ----------
INTERFUND TRANSFERS 183,740 21,264 19,623 31,242 56,757
---------- ---------- -------- ---------- ----------
NET INCREASE (DECREASE) 240,741 33,009 178,261 74,352 178,614
NET ASSETS AVAILABLE FOR
BENEFITS:
Beginning of year - - - - -
---------- ---------- ---------- ---------- ---------
End of year $ 240,741 $ 33,009 $ 178,261 $ 74,352 $ 178,614
========== ========== ========== ========== ==========
The accompanying notes are an
integral part of these statements
6
Page 2 of 3
SOS STAFFING SERVICES, INC. 401(k) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1996
FUND INFORMATION
-------------------------------------------------------------
Fidelity Fidelity Kemper Eaton Vance
Emerging Worldwide SOS Stock Advantage Government
Growth Fund Fund Fund III Bond Fund
----------- --------- --------- ---------- -----------
ADDITIONS:
Contributions:
Participants $ 14,016 $ 6,069 $ 20,522 $ 6,696 $ -
Employer 6,972 2,136 6,070 - -
Rollover 70,264 31,549 28,374 - -
---------- ---------- ---------- ---------- ----------
Total contributions 91,252 39,754 54,966 6,696 -
---------- ---------- ---------- ---------- ----------
Investment income:
Net appreciation
(depreciation) in fair
value of investments (834) 3,175 (16,108) - (2,177)
Interest and dividends 2,764 1,723 432 6,150 1,359
---------- ---------- ---------- ---------- ----------
Total investment
income 1,930 4,898 (15,676) 6,150 (818)
---------- ---------- ---------- ---------- ----------
Total additions 93,182 44,652 39,290 12,846 (818)
---------- ---------- ---------- ---------- ----------
DEDUCTIONS:
Benefits paid to
participants (1,756) (290) (1,615) (11,746) (448)
Administrative fees (607) (201) (320) (451) -
---------- ---------- ---------- ---------- ----------
Total deductions (2,363) (491) (1,935) (12,197) (448)
---------- --------- ---------- ---------- ----------
INTERFUND TRANSFERS 87,892 22,639 47,793 - (67,834)
---------- --------- ---------- ---------- ----------
NET INCREASE (DECREASE) 178,711 66,800 85,148 649 (69,100)
NET ASSETS AVAILABLE FOR
BENEFITS:
Beginning of year - - - 66,633 69,100
---------- ---------- ---------- ---------- ----------
End of year $ 178,711 $ 66,800 $ 85,148 $ 67,282 $ -
========== ========== ========== ========== ==========
The accompanying notes are an
integral part of these statements
7
Page 3 of 3
SOS STAFFING SERVICES, INC. 401(k) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1996
FUND INFORMATION
----------------------------------------------------
Dreyfuss
Cash Reserve Bond Fund Alliance Templeton Capital
and Money of Growth and Foreign Value-A
Market Fund America Income Fund Fund Fund Total
----------- --------- ----------- ------- ------- --------
ADDITIONS:
Contributions:
Participants $ - $ - $ - $ - $ - $ 189,727
Employer - - - - - 40,981
Rollover - - - - - 367,244
---------- --------- ------- ------- -------- ----------
Total contributions - - - - - 597,952
---------- --------- ------- ------- -------- ----------
Investment income:
Net appreciation
(depreciation) in
fair value of
investments - (2,691) 4,439 (337) 800 (8,002)
Interest and dividends 1,935 1,363 496 839 - 60,382
---------- --------- ------- --------- ------- ----------
Total investment
income 1,935 (1,328) 4,935 502 800 52,380
---------- --------- ------- --------- ------- ----------
Total additions 1,935 (1,328) 4,935 502 800 650,332
---------- --------- ------- --------- ------- ----------
DEDUCTIONS:
Benefits paid to
participants (1,649) (9,893) (4,429) (478) - (89,145)
Administrative fees - - - - - (6,723)
---------- --------- ------- -------- ------- ----------
Total
deductions (1,649) (9,893) (4,429) (478) - (95,868)
---------- --------- ------- -------- ------- ----------
INTERFUND TRANSFERS (86,291) (75,927) (92,541) (104,843) (43,514) -
---------- --------- ------- -------- ------- ----------
NET INCREASE (DECREASE) (86,005) (87,148) (92,035) (104,819) (42,714) 554,464
NET ASSETS AVAILABLE FOR
BENEFITS:
Beginning of year 86,005 87,148 92,035 104,819 42,714 548,454
---------- --------- ------- -------- -------- ----------
End of year $ - $ - $ - $ - $ - $1,102,918
========== ========= ======= ======== ======== ==========
The accompanying notes are an
integral part of these statements
8
SOS STAFFING SERVICES, INC. 401(k) PLAN
NOTES TO THE FINANCIAL STATEMENTS
(1) PLAN DESCRIPTION
The following description of the SOS Staffing Services, Inc. 401(k) Plan (the
"Plan") is provided for general information purposes only. More complete
information regarding the Plan's provisions may be found in the plan document.
General
The Plan is a defined contribution plan established by SOS Staffing Services,
Inc. (the "Company") under the provisions of Section 401(a) of the Internal
Revenue Code ("IRC"), which includes a qualified cash or deferred arrangement as
described in Section 401(k) of the IRC, for the benefit of eligible employees of
the Company. Employees 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. The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA"), as amended.
The Plan was established to provide employees with an opportunity to accumulate
funds for retirement or disability and to provide death benefits for employees'
dependants and beneficiaries. The Plan's trustee is First Security Bank of Utah,
N.A.
Contributions
Eligible employees can elect to make contributions to the Plan and such
contribution amounts are subject to certain limitations under the IRC. The
Company can elect to make discretionary matching contributions to the Plan. For
the year ended December 31, 1996, the Company provided a matching contribution
equal to 33-1/3 percent of each non-highly compensated staff employee
participant's contribution up to a maximum matching contribution of $1,000 per
each such participant.
Vesting
Participants are fully vested in their contributions and the earnings thereon.
Vesting in employer matching contributions is based on years of continuous
service as defined by the Plan. A participant vests according to the following
schedule:
Less than three years 0%
Three years 50
Four years 75
Five years or more 100%
Forfeitures
At December 31, 1996, forfeited nonvested accounts totalled approximately
$4,028. These amounts will be used to reduce future employer contributions.
9
Benefits
Upon termination of service due to death, disability, or retirement, a
participant may elect to receive an amount equal to the value of the
participant's vested interest in his or her account. The form of payment is a
lump sum distribution or an annuity to be paid in monthly installments.
Participant Accounts
Individual accounts are maintained for each of the Plan's participants to
reflect the participant's contributions and related employer matching
contributions, as well as the participant's share of the Plan's income and any
related administrative expenses. Allocations are based on the proportion that
each participant's account balance has to the total of all participants' account
balances.
Investment Options
At December 31, 1995, the Plan provided for seven investment options. During
1996, the investment options were changed and the balances from all but the
Kemper Advantage III fund were transferred to the new investment options based
upon participant direction.
As of December 31, 1996, participants may direct their contributions, the
employer matching contributions and any related earnings into several investment
options. Participants may change their investment elections quarterly. A brief
description of each investment option is provided below:
Fidelity Money Market Fund
This fund's objective is to obtain a high level of current income while at
the same time preserving principal and providing liquidity. The fund
invests in a broad range of high-quality short-term obligations such as
certificates of deposit, U.S. government obligations and commercial paper.
Fidelity Intermediate Bond Fund
This fund's objective is to provide security, total return and high
current income. The fund invests in bonds with a maturity of three to ten
years with a rating of BBB or higher.
Fidelity Puritan Fund
This fund's objective is to seek income consistent with preservation of
capital. The fund invests in a broadly diversified portfolio of
high-yielding common stocks, preferred stocks and bonds of any quality.
Fidelity Equity-Income II Fund
This fund's objective is to seek income from equity investments with the
potential for future investment growth. The fund invests approximately 80%
of its assets in income-producing common or preferred stock.
Fidelity Blue Chip Growth Fund
This fund's objective is to seek growth of capital over the long-term by
investing primarily in a broadly-diversified portfolio of common stocks of
well-known and established companies.
10
Fidelity Emerging Growth Fund
This fund's objective is to seek long-term capital appreciation. The fund
normally invests at least 65% of its assets in equity securities of
emerging-growth companies. It may also invest in debt securities and
foreign securities.
Fidelity Worldwide Fund
This fund's objective is to seek capital growth by investing in securities
issued anywhere in the world. The fund invests primarily in common stocks
and other equity securities, generally focusing in the three major markets
of the world: North America, Europe, and the Pacific Basin.
SOS Staffing Services, Inc. Common Stock
This fund is a non-diversified investment in the outstanding public shares
of SOS Staffing Services, Inc.
Kemper Advantage III
This fund's objective is to offer both a guaranteed option under its fixed
accounts and 26 variable investment options through its separate account.
Advantage III is a variable annuity offered by Kemper Investor Life
Insurance Company.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of the financial statements in conformity with generally
accepted accounting principles requires the Plan's management to use estimates
and assumptions that affect the accompanying financial statements and
disclosures. Actual results could differ from these estimates.
Interest and Dividend Income
Interest income is recorded as earned on the accrual basis. Dividend income is
recorded on the ex-dividend date.
Investment Valuation
Securities traded on a national securities exchange are valued at the last
reported sales price on the last business day of the year. The Kemper Advantage
II investment option is reported at contract value which approximates fair
value.
Net Appreciation in Fair Value of Investments
Net realized and unrealized appreciation (depreciation) is recorded in the
accompanying statement of changes in net assets available for benefits as net
appreciation (depreciation) in fair value of investments.
Administrative Expenses
The Company pays all administrative expenses of the Plan, except for certain
trustee fees.
11
(3) TAX STATUS
The Internal Revenue Service has determined and informed the Company by a letter
dated September 23, 1996 that the Plan and related trust are designed in
accordance with applicable sections of the IRC. The Plan administrator believes
that the Plan is designed and is currently being operated in compliance with the
applicable requirements of the IRC.
(4) PLAN TERMINATION
Although it has not expressed any intent to do so, the Company 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 termination,
participants will become fully vested in their account balances.
12
SOS STAFFING SERVICES, INC. 401(k) PLAN
LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1996
(b) Identity of Issuer,
Borrower, Lessor (c) Description (e)Current
(a) or Similar Party of Investment (d) Cost Value
- --- ------------------------ ------------------ --------- -----------
Fidelity Institutional 253,852 shares of $253,852 $ 253,852
Money Market Fund money market fund
Fidelity Commonwealth 3,012 shares of 29,937 30,360
Intermediate Bond Fund mutual fund
Fidelity Puritan Fund 10,210 shares of 178,116 176,014
mutual fund
Fidelity Equity Income Fund 2,957 shares of 69,276 70,229
mutual fund
Fidelity Blue Chip Growth 5,587 shares of 178,332 182,640
Fund mutual fund
Fidelity Emerging Growth 7,958 shares of 201,298 200,460
Fund mutual fund
Fidelity Worldwide Fund 4,494 shares of 66,702 69,162
mutual fund
* SOS Staffing Services, Inc. 7,306 shares of 92,690 76,713
common stock
Kemper Investors Life Advantage III 65,639 65,639
Insurance Company investment option
* Denotes party-in-interest
13
SOS STAFFING SERVICES, INC. 401(k) PLAN
LINE 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(h) Current
Value of
(c) (d) (g) Asset on
(a) Identity of (b) Description Purchase Selling Cost of Transaction (i) Net
Party Involved of Asset Price Price Asset Date Gain
- ---------------------- --------------- ---------- --------- -------- ----------- -------
Fidelity Puritan Fund Mutual Fund $ 178,116 $ N/A $ 178,116 $ 178,116 --
Fidelity Intermediate Mutual Fund 29,937 N/A 29,937 29,937 --
Bond Fund
Fidelity Equity Mutual Fund 69,276 N/A 69,276 69,276 --
Income II Fund
Fidelity Blue Chip Mutual Fund 178,332 N/A 178,332 178,332 --
Growth Fund
Fidelity Emerging Mutual Fund 201,298 N/A 201,298 201,298 --
Growth Fund
Fidelity Worldwide Fund Mutual Fund 66,702 N/A 66,702 66,702 --
Fidelity Institutional Mutual Fund 1,445,605 N/A 1,445,605 1,445,605 --
Money Market Fund
Fidelity Institutional Mutual Fund -- 1,191,753 1,191,753 1,191,753 --
Money Market Fund
SOS Staffing Services, Inc. Common stock 93,422 N/A 93,422 93,422 --
Eaton Vance Gov't Bond Fund Mutual Fund -- 69,197 71,482 69,197 (2,285)
Bond Fund of America Mutual Fund -- 95,757 79,045 95,757 16,712
Alliance Growth & Mutual Fund -- 115,763 76,651 115,763 39,112
Income Fund
Templeton Foreign Fund Mutual Fund -- 120,772 120,450 120,772 322
Dreyfuss Capital Mutual Fund -- 49,632 53,679 49,632 (4,047)
Value-A
Paine Webber Gov't Money Fund -- 28,127 28,127 28,127 --
Paine Webber KP Cash Reserve -- 93,268 93,268 93,268 --
Paine Webber RMA Money Market 423,508 -- 423,508 423,508 --
Paine Webber RMA Money Market -- 423,508 423,508 423,508 --
14
Signatures
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons that administer the employee benefit plan) have
duly caused this annual report to be signed on behalf of the undersigned
hereunto duly authorized in the City of Salt Lake City, Utah on the 26th day of
June, 1997.
SOS STAFFING SERVICES, INC. 401(k)PLAN
By: /s/ John K.Morrison
John K. Morrison
General Counsel & Secretary
SOS Staffing Services, Inc.
15
EXHIBIT INDEX
The following exhibits are filed as part of this Annual Report on Form 11-K
Exhibit
Number Description
23.1 Consent of Arthur Anderson LLP
16
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
report included in this Form 11-K, into the Company's previously filed
Registration Statement on Form S-8 File No. 33-92268.
ARTHUR ANDERSEN LLP
Salt Lake City, Utah
June 26, 1997
17