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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 1999 or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission file number: 0-26208
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BUSINESS RESOURCE GROUP
(Exact name of Registrant as specified in its charter)
CALIFORNIA 77-0150337
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
2150 NORTH FIRST STREET, SUITE 101
SAN JOSE, CA 95131
(Address of Principal Executive Offices)
(408) 325-3200
(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 (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
[X] Yes [ ] No
At April 30, 1999 there were 5,150,240 shares of the Registrant's Common Stock
outstanding.
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PART I. FINANCIAL INFORMATION PAGE
Item 1: Financial Statements
Condensed Consolidated Balance Sheets as of
April 30, 1999 and October 31, 1998 .....................
Condensed Consolidated Statements of Income for the
Three and Six Months ended April 30, 1999 and 1998 ......
Condensed Consolidated Statements of Cash Flows for the
Six Months ended April 30, 1999 and 1998 ................
Notes to Condensed Consolidated Financial
Statements...............................................
Item 2: Management's Discussion and Analysis of
Financial Condition and Results of Operations
Introduction ............................................
Results of Operations ...................................
Liquidity and Capital Resources..........................
Item 3: Quantitative and Qualitative Disclosures
about Market Risks ......................................
PART II. OTHER INFORMATION
Item 1: Legal Proceedings .......................................
Item 2: Changes in Securities and Use of Proceeds................
Item 3: Defaults Upon Senior Securities .........................
Item 4: Submission of Matters to a Vote of Security Holders .....
Item 5: Other Information .......................................
Item 6: Exhibits and Reports on Form 8-K ........................
SIGNATURES........................................................
PART I -- FINANCIAL INFORMATION
Item 1: Condensed Consolidated Financial Statements
BUSINESS RESOURCE GROUP
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
April 30, October 31,
1999 1998
------------ ------------
(unaudited)
ASSETS
Current assets:
Cash and equivalents............... $133 $412
Accounts receivable, net........... 16,032 10,662
Inventory.......................... 11,319 8,279
Prepaids and other current assets.. 3,782 2,411
------------ ------------
Total current assets........... 31,266 21,764
Property and equipment, net.............. 3,316 3,107
Other assets............................. 5,206 3,107
------------ ------------
$39,788 $27,978
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Line of credit..................... $13,104 $3,858
Accounts payable................... 2,010 3,369
Accrued liabilities................ 5,191 4,789
Income taxes payable............... 893 337
Current portion of long-term debt.. 883 336
------------ ------------
Total current liabilities...... 22,081 12,689
Long-term debt........................... 1,903 733
Deferred income tax liability............ 160 160
Shareholders' equity:
Common stock....................... 51 50
Additional paid in capital......... 11,660 11,337
Retained earnings.................. 3,933 3,009
------------ ------------
Total shareholders' equity..... 15,644 14,396
------------ ------------
$39,788 $27,978
============ ============
The balance sheet at October 31, 1998 has been derived from audited financial
statements at that date but does not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements.
See notes to condensed consolidated financial statements.
BUSINESS RESOURCE GROUP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Six Months Ended
April 30, April 30,
--------------------- ---------------------
1999 1998 1999 1998
---------- ---------- ---------- ----------
Net revenues:
Workspace products............... $23,813 $17,213 $45,161 $32,530
Workspace services............... 5,557 4,597 10,226 7,563
---------- ---------- ---------- ----------
Total net revenues 29,370 21,810 55,387 40,093
---------- ---------- ---------- ----------
Cost of net revenues:
Workspace products............... 18,301 13,723 35,474 25,939
Workspace services............... 4,218 3,358 7,689 5,626
---------- ---------- ---------- ----------
Total cost of net revenue... 22,519 17,081 43,163 31,565
---------- ---------- ---------- ----------
Gross profit....................... 6,851 4,729 12,224 8,528
Selling, general and
administrative expenses.......... 5,676 4,203 10,297 7,761
---------- ---------- ---------- ----------
Income from operations 1,175 526 1,927 767
Other income/expense:
Net interest income/expense...... (214) (42) (352) (51)
Gain on sale of assets........... -- 50 2 50
---------- ---------- ---------- ----------
Total other income/expense..... (214) 8 (350) (1)
---------- ---------- ---------- ----------
Income before income tax........... 961 534 1,577 766
Provision for income taxes......... 398 221 653 316
---------- ---------- ---------- ----------
Net income......................... $563 $313 $924 $450
========== ========== ========== ==========
Net earnings per share:
Basic........................ $0.11 $0.06 $0.18 $0.09
========== ========== ========== ==========
Diluted...................... $0.11 $0.06 $0.18 $0.09
========== ========== ========== ==========
Shares used in computation:
Basic........................ 5,138 4,914 5,084 4,913
========== ========== ========== ==========
Diluted...................... 5,147 4,930 5,129 4,951
========== ========== ========== ==========
See notes to condensed consolidated financial statements.
BUSINESS RESOURCE GROUP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
Six Months Ended
April 30,
----------------------
1999 1998
---------- ----------
OPERATING ACTIVITIES:
Net earnings....................................... $924 $450
Adjustments to reconcile to net cash used
by operating activities:
Depreciation and amortization................... 488 372
Gain on sale of property and equipment.......... (2) (50)
Warrants issued for services.................... -- 119
Changes in operating assets and liabilities:
Accounts receivable......................... (4,613) (1,102)
Inventory................................... (1,707) (6,813)
Prepaids and other current assets........... (1,369) (34)
Accounts payable............................ (2,030) 2,681
Accrued liabilities......................... (109) (330)
Income taxes payable........................ 556 316
---------- ----------
Net cash used by operating activities.... (7,862) (4,391)
---------- ----------
INVESTING ACTIVITIES:
Purchase of property and equipment................. (537) (287)
Proceeds from sale of property and equipment....... 2 50
Acquisition of business, net of cash received...... (1,940) --
Change in other assets............................. 105 --
---------- ----------
Net cash used by investing activities.... (2,370) (237)
---------- ----------
FINANCING ACTIVITIES:
Increase in debt................................... 1,717 --
Repayment of debt.................................. (1,010) --
Borrowings against line of credit.................. 9,246 4,990
---------- ----------
Net cash provided by financing activities.. 9,953 4,990
---------- ----------
Net increase (decrease) in cash and equivalents......... (279) 362
CASH AND EQUIVALENTS BALANCES:
Beginning of period................................ 412 274
---------- ----------
End of period...................................... $133 $636
========== ==========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest........................................ $327 $57
========== ==========
Income taxes.................................... $976 $ --
========== ==========
See notes to condensed consolidated financial statements
BUSINESS RESOURCE GROUP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 1. Basis of Presentation and Significant Accounting Policies
The financial information as of April 30 1999, and for the three and
six-month periods ended April 30, 1999 and 1998, respectively, is unaudited.
In the opinion of management, such information reflects all adjustments,
consisting only of normal recurring adjustments, considered necessary for a
fair presentation of the results of such periods. The accompanying condensed
consolidated financial statements should be read together with the audited
financial statements and notes thereto included in the Company's annual report
on Form 10-K for the year ended October 31, 1998. The financial statements
have been prepared in accordance with the regulations of the Securities and
Exchange Commission, but omit certain information and footnote disclosure
necessary to present the statements in accordance with generally accepted
accounting principles.
Note 2. Basic and Diluted Share Information
Basic Earnings Per Share ("EPS") excludes dilution and is computed by dividing
net income by the weighted average of common shares outstanding for the period.
Diluted EPS reflects the potential dilution that could occur if securities or
other contracts to issue common stock were exercised or converted into common
stock.
Three Months Ended Six Months Ended
April 30, April 30,
------------------- -------------------
1999 1998 1999 1998
--------- --------- --------- ---------
(in thousands)
Net income ........................ $563 $313 $924 $450
========= ========= ========= =========
Weighted average common shares
outstanding .................... 5,138 4,914 5,084 4,913
Common equivalent shares:
Stock options .............. 9 16 45 38
--------- --------- --------- ---------
Total common stock and common
stock equivalents .............. 5,147 4,930 5,129 4,951
========= ========= ========= =========
Options to purchase 1,233,144 and 172,381 shares of common stock were
outstanding during the second quarters of the Company's fiscal years 1999 and
1998, respectively, but were not included in the computation of diluted EPS for
such quarters because the exercise price of such outstanding options was
greater than the average fair market value of common shares for such period.
Note 3. Recently Issued Accounting Standards
In June 1997, the Financial Accounting Standards Board ("FASB") adopted
Statements of Financial Accounting Standards ("SFAS") 130, (Reporting
Comprehensive Income), which requires that an enterprise report, by major
components and as a single total, the change in its net assets during the
period from non-owner sources; and SFAS 131, (Disclosures about Segments of an
Enterprise and Related Information), which establishes annual and interim
reporting standards for an enterprise's operating segments and related
disclosures about its products, services, geographic areas and major customers.
Adoption of these statements will not impact the Company's financial position,
results of operations or cash flows, and any effect will be limited to the form
and content of its disclosures. Both statements are effective for the fiscal
year beginning November 1, 1998. The Company is currently conducting
evaluations to determine if it has reportable segments under SFAS 131. With
respect to SFAS 130, the Company had no items of comprehensive income other
than net income during either quarter ended April 30, 1999 or 1998.
In June 1998, Statement of Financial Accounting Standards No. 133 (SFAS 133),
"Accounting for Derivative Instruments and Hedging Activities," was issued
which defines derivatives, requires all derivatives be carried at fair value,
and provides for hedging accounting when certain conditions are met. This
statement is effective for all fiscal quarters of fiscal years beginning after
June 15, 1999. Although the Company has not fully assessed the implications of
this new statement, the Company does not believe adoption of this statement
will have a material impact on the Company's financial statements.
Note 4. Acquisition
On February 1, 1999, the Company, through its wholly owned subsidiary RN
Acquisition Corp, acquired substantially all of the assets of Re'Nu Office
Systems, Inc., a California Corporation, Re'Nu South, Inc., a California
Corporation and wholly owned subsidiary of Re'Nu Office Systems, and Re'Nu
Office Systems, Inc., a Nevada Corporation and wholly owned subsidiary of Re'Nu
Office Systems (collectively "Re'Nu"). The purchase price paid by the Company
was 100,000 shares of Common Stock of the Company, $2.0 million in cash and an
earn out of up to the aggregate amount of $2.0 million to be paid over three
years based upon annual operating income objectives of RN Acquisition Corp. In
connection with this purchase, the Company borrowed $2,000,000 against the
Company's $18.0 million credit facility. The Company also acquired $2,152,000
of goodwill in connection with the Re'Nu acquisition. The annual amortization
resulting from the recognition of goodwill will be approximately $108,000 and
is being amortized on a straight line basis over a useful life of 20 years.
Item 2: Management's Discussion and Analysis of Financial Condition and
Results of Operations
Introduction:
Except for the historical information contained in this Quarterly Report
on Form 10-Q, the matters discussed herein are forward-looking statements
within the meaning of Section 21E of the Securities Exchange Act of 1934, as
amended, and are subject to certain risks and uncertainties that could cause
the actual results to differ materially from those projected. Such
forward-looking statements include, without limitation, statements relating to
the Company's future revenue, gross margins, operating expenses, management's
plans and objectives for the Company's future operations and the sufficiency of
financial resources to support future operations and expenditures. Factors
that could cause actual results to differ materially include, but are not
limited to, the timely availability, delivery and acceptance of new products
and services, the continued strength of sales to Cisco Systems, Inc. (one of
the Company's principal customers), the impact of competitive products and
pricing, the management of growth and acquisitions, and other risks detailed
below and included from time to time in the Company's other reports filed with
the Securities and Exchange Commission ("SEC") and press releases, copies of
which are available from the Company upon request. Readers are cautioned not
to place undue reliance on these forward-looking statements, which speak only
as of the date hereof. The Company undertakes no obligation to publicly
release the results of any revisions to these forward-looking statements which
may be made to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.
References made in this Quarterly Report on Form 10-Q to "BRG," the
"Company" or the "Registrant" refer to Business Resource Group.
Results of Operations (three months ended April 30, 1999):
Net revenues were $29.4 million for the three months ended April 30, 1999
as compared to $21.8 million reported for the three months ended April 30,
1998, an increase of 35%. Product revenues for the second quarter of fiscal
1999 were $23.8 million, an increase of $6.2 million, or 38%, from product
revenues of $17.2 million reported for the second quarter of fiscal 1998. The
higher product revenues in the second quarter of fiscal 1999 were due to
increased revenues of $5.9 million from Cisco Systems, Inc. in addition to
increased revenues of $1.7 million from other new and existing customers.
Service revenues for the second quarter of fiscal 1999 were $5.6 million, an
increase of $1.0 million, or 22%, from service revenues of $4.6 million
reported in the same quarter of fiscal 1998. The higher service revenues
reflect increased product-related services on higher product revenues and
increased facilities services revenues.
Gross profit for the second quarter of fiscal 1999 was $6.9 million, or
23.5% of revenues, as compared to $4.7 million, or 21.6% of revenues, for the
comparable quarter of fiscal 1998. As a percentage of net revenues, gross
profits from product revenues were 23.1% for the quarter ended April 30, 1999
as compared to 20.4% for the second quarter ended April 30, 1998. The higher
product gross profit percentage was primarily due to a change in sales mix as a
result of a higher proportion of revenues in the second quarter of fiscal 1999
from higher margin revenues from refurbished products as compared to the second
quarter of fiscal 1998. Gross profits for the second quarter of fiscal 1999
from service revenues were 24.1% as compared to 26.1% for the second quarter of
fiscal 1998. Fiscal 1999 second quarter services gross profits were negatively
impacted by several large projects for new customers with lower initial
services gross profits.
Selling, general and administrative expenses were $5.7 million, or 19.4%,
of revenues, for the three months ended April 30, 1999 as compared to $4.2
million, or 19.3%, of revenues, for the three months ended April 30, 1998.
Selling, general and administrative expenses increased over the second quarter
of fiscal 1998 due to $0.9 million of incremental costs related to the OFN and
Re'Nu refurbishment operations, in addition to higher sales compensation costs
and support costs on increased revenues.
Interest and other expense, net was $214,000 for the three months ended
April 30, 1999 as compared to $8,000 for the same period of fiscal 1998. The
increased expense was primarily due to interest expense on the Company's
outstanding line of credit balance during the quarter.
Results of Operations (six months ended April 30, 1999):
Net revenues were $55.4 million for the six months ended April 30, 1999 as
compared to $40.1 million reported for the six months ended April 30, 1998, an
increase of 38%. Product revenues for the six months ended April 30, 1999 were
$45.1 million, an increase of $12.6 million, or 39%, from product revenues of
$32.5 million reported for the six months ended April 30, 1998. The higher
product revenues for the first six months of fiscal 1999 were due to increased
revenues of $10.0 million from Cisco Systems, Inc. in addition to increased
revenues of $5.3 million from other new and existing customers. Service
revenues for the six months ended April 30, 1999 were $10.2 million, an
increase of $2.6 million, or 34%, from service revenues of $7.6 million
reported in the same period of fiscal 1998. The higher service revenues
reflect increased product-related services on higher product revenues and
increased facilities services revenues.
Gross profit for the six months ended April 30, 1999 was $12.2 million, or
22.1%, of revenues, as compared to $8.5 million, or 21.3%, of revenues, for the
comparable period of fiscal 1998. As a percentage of net revenues, gross
profits from product revenues were 21.5% for the six months ended April 30,
1999 as compared to 20.3% for the six months ended April 30, 1998. The higher
product gross profit percentage was primarily due to a change in sales mix as a
result of a higher proportion of revenues during the first six months of fiscal
1999 from higher margin revenues from refurbished products as compared to the
first six months of fiscal 1998. Gross profits for the first six months of
fiscal 1999 from service revenues were 24.5% as compared to 26.3% for the first
six months of fiscal 1998. Fiscal 1999 services gross profits were negatively
impacted by several large projects for new customers with lower initial
services gross profits.
Selling, general and administrative expenses were $10.3 million, or 18.6%,
of revenues, for the first six months of fiscal 1999 as compared to $7.8
million, or 19.5%, of revenues, for the first six months of fiscal 1998.
Selling, general and administrative expenses increased over the first six
months of fiscal 1998 due to incremental costs of $1.2 million related to the
OFN and Re'Nu refurbishment operations, in addition to higher sales
compensation costs on increased revenues and increased support costs associated
with investments made in project management and customer service.
Interest and other expense, net was $350,000 for the six months ended April 30,
1999 as compared to $1,000 for the same period of fiscal 1998. The increased
expense was primarily due to interest expense on the Company's outstanding line
of credit balance during the first six months of fiscal 1999.
Liquidity and Capital Resources:
Working capital at April 30, 1999 was $9.2 million, up slightly from $9.1
million at October 31, 1998. At April 30, 1999, the Company had net borrowings
of $15.9 million as compared to $4.9 million reported October 31, 1998
primarily due to higher inventory and accounts receivable balances, a lower
accounts payable balance and the Re'Nu acquisition in early February.
Inventories at April 30, 1999 were $11.3 million, an increase of $3.0 million
from the $8.3 million reported at October 31, 1998. The increased inventories
were the result of an increase of $1.8 million in in- transit inventories at
April 30, 1999 representing payments made to vendors on product that is either
in-transit to customers or awaiting installation at the customer's facility, in
addition to $1.3 million of inventory acquired through the Re'Nu acquisition.
Accounts receivable at April 30, 1999 were $16.0 million, an increase of $5.3
million from the $10.7 million reported at October 31, 1998. The increased
accounts receivable balance reflects the timing differences of customer
delivery requirements within a particular quarter, in addition to accounts
receivable acquired through the Re'Nu acquisition. Accounts payable at April
30, 1999 were $2.0 million, a decrease of $1.4 million from the $3.4 million
reported at October 31, 1998. The decrease in payables was attributable to a
change in vendor mix due to the timing of payments made within the quarter.
Net cash used in investing activities in the six months ended April 30,
1999 was $2.4 million and resulted from its acquisition of Re'Nu and
investments in property and equipment which primarily related to the purchases
of showroom furniture for our new San Francisco and Phoenix locations. At
April 30, 1999, the Company had an outstanding capital expenditure commitment
of approximately $425,000 in connection with the implementation of its new
enterprise resource planning management information system.
In February 1999, the Company replaced its existing $15.0 million credit
facility with a new $18.0 million credit facility with a bank which expires on
February 15, 2001. The new credit facility is comprised of a $15.0 million
line of credit and a $3.0 million acquisition loan facility. The Company
maintains an irrevocable stand-by letter of credit in the amount of $3.0
million against the line of credit. As of April 30, 1999, the Company had bank
borrowings of $15.1 million under the existing credit facility.
The Company believes existing cash, together with cash generated from
operations and the Company's available borrowing capacity will provide
sufficient funds to meet the Company's anticipated working capital requirements
for the forseeable future.
Year 2000
The Company continues to monitor and assess the impact of the Year 2000 issue
on its critical systems, devices, applications or business relationships. The
Company's overall goal is to be prepared for the year 2000, meaning that
critical systems, devices, applications or business relationships have been
evaluated and are expected to be suitable for continued use into and beyond the
year 2000, or when contingency plans are put into place. In May 1998, after an
extensive review of systems, the Company selected an enterprise resource
planning system from SAP America, Inc. ("SAP"), a system capable of
accommodating the year 2000. This new enterprise resource planning system is
expected to be in production during the company's third quarter of fiscal 1999.
The Company is reviewing the readiness of third parties which provide goods or
services to the Company to determine whether a year 2000 related event will
impede the ability of such suppliers to continue to provide such goods and
services as the year 2000 is reached.
Costs: The Company does not expect the costs associated with its year 2000
efforts to be material. The Company estimates that the total cost of replacing
its information systems and achieving year 2000 readiness for its internal
systems and equipment will range from $1.5 to $2.0 million, of which $958,000
has been incurred by April 30, 1999. Based on its current estimates and
information currently available, the Company does not anticipate that the costs
associated with this project will have a material adverse affect on the
Company's consolidated financial position, results of operations or cash flows
in future periods. The Company's aggregate cost estimate does not include time
and costs that may be incurred by the Company as a result of the failure of any
third parties, including suppliers, to be prepared for the year 2000 or costs
to implement any contingency plans.
Risks/Contingency Plans: Based on assessment efforts to date, the Company does
not believe that the year 2000 issue will have a material adverse effect on its
financial condition or results of operations. The Company believes that the
distribution and service nature of the Company's operations and its large
supplier base should mitigate any adverse impact. The Company's beliefs and
expectations, however, are based on certain assumptions and expectations that
ultimately may prove to be inaccurate. Because the Company has not completed
systems integration testing with respect to its SAP implementation, it
accordingly has not fully assessed the risks from potential year 2000 failures
and therefore, has not yet developed year 2000 contingency plans. If, as a
result of systems implementation, a business function is determined to be at
risk, contingency plans will be developed no later than October 31, 1999.
As a normal course of business, potential sources of risk include the inability
of principal suppliers to be year 2000 ready, which could result in delays in
product deliveries, or the ability to provide services from such suppliers. The
Company's contingency plans will include, among other things, (1) manual
workarounds, (2) use of temporary replacement or alternative products,(3)
reliance on temporary or alternative sources of supply, and (4) engagement of
temporary, extra staffing to complete deliveries. In the event of year 2000
failures by common-carrier infrastructure suppliers such as utilities,
telecommunications, transportation and the like, the Company has significantly
less ability to pre-emptively assess and prepare for such failures. In such
scenarios the Company's response is uncertain.
The Company is not in a position to identify or to avoid all possible year 2000
scenarios. Based upon assessments to date the Company believes the most
reasonably likely worst case scenario would be the inability of suppliers to
deliver products and/or services in time frames required by the Company's
customers. In the event of such delays the Company would attempt to provide
temporary replacement products, alternative products or extra staffing to
complete deliveries in order to mitigate the impact upon our customers.
The preceding year 2000 discussion contains various forward-looking statements
which represent the Company's beliefs or expectations regarding future events.
When used in the year 2000 discussion, the words "believes," "expects,"
"estimates" and similar expressions are intended to identify forward-looking
statements. Forward- looking statements include, but are not limited to, the
Company's expectations as to when it will complete the implementation and
testing phases of its year 2000 program as well as its year 2000 contingency
plans; its estimated cost of achieving year 2000 readiness; the Company's
belief that its internal systems and equipment will be year 2000 compliant in a
timely manner; and the availability of replacement or alternative products in
sufficient quantities should the need arise. All forward-looking statements
involve a number of risks and uncertainties that could cause the actual results
to differ materially from the projected results. Factors that may cause these
differences include, but are not limited to, the availability of qualified
personnel and other information technology resources; the ability to identify
and remediate all date sensitive lines of computer code or to replace embedded
computer chips in affected systems or equipment; and the actions of
governmental agencies or other third parties with respect to year 2000
problems.
Item 3: Quantitative and Qualitative Disclosures about Market Risks
There have been no significant changes to the Company's market risks
since the end of the preceding fiscal year.
PART II. OTHER INFORMATION
Item 1: Legal Proceedings
The Company is not a party to any lawsuit or proceeding which, in the
opinion of management, is likely to have a material adverse affect on the
Company. The Company may from time to time become a party to various legal
proceedings arising in the normal course of its business.
Item 2: Changes in Securities and Use of Proceeds
Not applicable
Item 3: Defaults upon Senior Securities
Not applicable
Item 4: Submission of Matters to a Vote of Security Holders
Not applicable
Item 5: Other information
Not applicable
Item 6: Exhibits and Reports on Form 8-K
(a) Exhibit 10.42: Revolving Credit Loan and Security Agreement between
the Company and Comerica Bank dated February 15, 1999.
(b) Exhibit 27: Financial data schedule
(c) Reports on Form 8-K
The Company filed a report on From 8-K dated February 16, 1999
related to the acquisition of Re'Nu Office Systems, Inc., a
California Corporation, Re'Nu South, Inc., a California Corporation
and wholly owned subsidiary of Re'Nu Office Systems, and Re'Nu
Office Systems, Inc., a Nevada Corporation and wholly owned
subsidiary of Re'Nu Office Systems.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BUSINESS RESOURCE GROUP
Registrant
Date: June 14, 1999 /s/ John M. Palmer
John M. Palmer
Vice President and Chief
Financial Officer
(Principal Financial
and Accounting Officer)