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Exhibit 99.1
For Immediate Release
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OUTSOURCE INTERNATIONAL COMMENCES
CHAPTER 11 PROCEEDINGS TO RESTRUCTURE DEBT
COMPANY WILL CONTINUE TO CONDUCT BUSINESS AS USUAL,
PROVIDING SERVICE EMPLOYEES TO ALL CUSTOMERS WITHOUT INTERRUPTION
RESTRUCTURING DEBT IS POSITIVE STEP, BUILDING ON TURNAROUND EFFORTS
RECENT TURNAROUND SUCCESS HAS RESULTED IN INCREASED CUSTOMER SATISFACTION,
INCREASED CUSTOMER AND WORKER RETENTION, AND STRONG EBITDA PERFORMANCE
DELRAY BEACH, FL, JUNE 12, 2001 - Outsource International, Inc. [OTCBB: OSIX]
announced today that the Company has filed a voluntary petition under chapter 11
of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court for the Central
District of California to restructure the Company's debt as a next step in a
successful turnaround effort begun 19 months ago. Outsource is a leading
national provider of human resources services, with approximately 3,000 clients
in 24 states. Outsource places 20,000 service workers in jobs daily and provides
meaningful employment to 150,000 people annually.
All Operations to Continue as Usual with No Interruption in Services
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The Company will continue to conduct business as usual, supplying service and
industrial employees to commercial employers with labor-intensive needs.
Customers nationwide will continue to receive superior service without
interruption. The Company expects that all post-petition obligations to vendors,
employees and others will be satisfied in the normal course of business. The
Company does not anticipate any layoffs of employees in connection with the
restructuring.
Outsource intends to restructure its balance sheet to reduce the burden of the
Company's debts incurred in operating years prior to 1999. This would improve
the Company's liquidity and position Outsource for continued growth and
increased profitability.
Garry E. Meier, who became Chairman and CEO of Outsource in February 2000, said,
"This action builds further on the successes of the turnaround effort we began
just 19 months ago. Our efforts have already resulted in greatly improved
customer satisfaction, increased customer and worker retention and a strong
EBITDA performance. When we complete the proceedings with a new capital
structure and the commitment of our management team and employees to execute on
our strategy, we believe we will finally be able to unlock the tremendous
potential that Outsource has been unable to realize due to its excessive debt
burden and the related interest payments."
Mr. Meier continued, "This is an industry with remarkable growth opportunities
in a more robust economy. At the same time, the debt burden incurred in the past
has seriously limited Outsource's ability to move forward to capture the growing
opportunities in our industry. We have worked for almost two years to find a
solution to satisfy all of our debts. After careful consideration of the
strategic alternatives available to the Company, we have determined that the
decision to pursue a restructuring of our debt through the chapter 11 process is
the optimal solution, given current economic conditions and the current state of
equity and debt markets. Restructuring our debt burden will provide:
- The resources to continue to rapidly improve market share and customer
count;
- The means to further enhance our services to customers;
- The ability to add more temporary employees and more revenue; and
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- Access to the operating capital to complete all phases of the
turnaround."
Positioned to Take Advantage of Growth Opportunities in the Staffing Industry
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Mr. Meier noted that despite the current downturn in the industrial sector of
the staffing industry, the demand for workers is expected to exceed the supply
by nearly 10% in 2002, and temporary and contingent/variable workers have become
an integral part of the labor resource landscape. The human resources services
industry is poised for high growth as demand increases over the next few years.
"Outsource is operationally and strategically well positioned to take full
advantage of this business opportunity," Mr. Meier said, "with a solid, scalable
operating platform, knowledgeable and motivated employees, and a strong,
experienced management team committed to staying with the Company through this
process and executing the strategic plan. We believe our plan will provide for a
significantly better capitalized Company that will allow us to further improve
our customer service, franchise system and branch operations, while
systematically growing the business."
SENIOR MANAGEMENT COMMITTED TO BUILDING ON PROGRESS TO DATE
Senior management, including Mr. Meier, is committed to building on the progress
the Company has achieved thus far and will remain in place to lead Outsource
through the chapter 11 proceedings and beyond. Management will continue with its
efforts to: streamline operations, continue to institute strict financial
controls, improve the Company's revenue performance and provide the superior
customer service that has become a hallmark of the Company.
Mr. Meier concluded, "I look forward to the coming months, working closely with
the management team and our talented and dedicated employees to realize the
goals we have set for ourselves and complete the turnaround."
COMPANY IN NEGOTIATION WITH POTENTIAL INVESTORS INTERESTED IN BUILDING
THE BUSINESS
Outsource is currently in advanced stages of talks with a number of potential
investors in the Company, all of which are qualified and have expressed a high
interest in continuing to build the operating platform. There can be no
assurance that a transaction involving the Company will in fact be consummated.
If there were an investment in the Company, it would take place under the
supervision of the Court as part of the chapter 11 reorganization process.
Outsource's senior management is committed to obtaining the highest and best
value for the Company through the chapter 11 process.
The Company's corporate counsel is Donn Beloff of Akerman, Senterfitt & Eidson,
P.A. The Company is represented in its chapter 11 case by Michael Tuchin of
Klee, Tuchin, Bogdanoff & Stern LLP.
Background on Chapter 11
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Chapter 11 of the U.S. Bankruptcy Code allows a viable Company, like Outsource,
to continue operating its business and managing its assets in the ordinary
course of business. Congress enacted chapter 11 to enable a debtor business to
continue as a going concern to maintain jobs and maximize the recovery of
creditors. Outsource employs approximately 20,000 employees on a daily basis and
more than 150,000 on an annual basis.
ABOUT OUTSOURCE INTERNATIONAL
Outsource International is a national provider of human resources services
focusing on the flexible staffing market. The Company partners with its service
workers and industrial employers to provide flexible workforce solutions to
maximize client production and profitability. With 124 Company-owned and
franchise offices in 24 states nationwide, Outsource provides temporary
employees and human resources services to approximately 3,000 clients.
SAFE HARBOR LANGUAGE
STATEMENTS MADE IN THIS PRESS RELEASE RELATING TO MATTERS THAT ARE NOT
HISTORICAL FACTS ARE FORWARD-LOOKING STATEMENTS. SUCH FORWARD-LOOKING STATEMENTS
INVOLVE KNOWN AND UNKNOWN RISKS AND OTHER UNCERTAINTIES, WHICH MAY CAUSE ACTUAL
RESULTS TO DIFFER MATERIALLY FROM SUCH STATEMENTS. THESE RISKS AND UNCERTAINTIES
INCLUDE, BUT ARE NOT LIMITED TO, THE COMPANY'S ABILITY TO SUCCESSFULLY
REORGANIZE ITSELF AND THE EFFECTS OF THE CHAPTER 11 FILING ON THE OPERATIONS OF
THE COMPANY; THE COMPANY'S ABILITY TO RECRUIT, MOTIVATE AND RETAIN KEY
MANAGEMENT PERSONNEL; THE GENERAL LEVEL OF ECONOMIC ACTIVITY AND UNEMPLOYMENT IN
THE COMPANY'S MARKETS, SPECIFICALLY WITHIN THE CONSTRUCTION AND LIGHT INDUSTRIAL
TRADES; THE FINANCIAL CONDITION OF THE COMPANY'S CLIENTS AND COLLECTION OF
ACCOUNTS RECEIVABLE; THE ABILITY TO MAINTAIN EXISTING CUSTOMER RELATIONSHIPS AND
DEVELOP NEW CUSTOMERS, AS WELL AS OTHER RISKS DETAILED FROM TIME TO TIME BY THE
COMPANY IN DOCUMENTS FILED BY THE COMPANY WITH THE U.S. SECURITIES AND EXCHANGE
COMMISSION (THE "COMMISSION"), INCLUDING, BUT NOT LIMITED TO, THOSE SET FORTH IN
THE COMPANY'S REGISTRATION STATEMENT ON FORM S-1 (FILE NO. 333-48926) FILED WITH
THE COMMISSION ON OCTOBER 30, 2000, AND DECLARED EFFECTIVE JANUARY 31, 2001, THE
COMPANY'S FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1999, AND THE FORM 10-Q
REPORTS FOR THE TRANSITION PERIOD ENDED APRIL 2, 2000, AND THE QUARTERS ENDED
JULY 2, 2000, OCTOBER 1, 2000, AND DECEMBER 31, 2000.
MEDIA CONTACT: MARK BAKER
ROBINSON LERER & MONTGOMERY
(561) 454-3528