1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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 JUNE 30, 1998
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from NOT APPLICABLE to ______________
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Commission file number 0-25890
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CENTURY BUSINESS SERVICES, INC.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware 22-2769024
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(State or Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation or Organization)
6480 ROckside Woods Boulevard South, Suite 330, Cleveland, Ohio 44131
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(Address of Principal Executive Offices) (Zip Code)
(Registrant's Telephone Number, Including Area Code) 216-447-9000
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Former Name, Former Address and Former Fiscal Year, if Changed since Last Report
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 proceeding 12 months, and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No ____
---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
Outstanding At
Class Of Common Stock August 7, 1998
--------------------- -----------------
Par value $.01 per share 58,517,950
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Exhibit Index is on page 15 of this report.
Page 1 of 15 Pages
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CENTURY BUSINESS SERVICES, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION: Page
Item 1. Financial Statements
Condensed Consolidated Balance Sheets -
June 30, 1998 and December 31, 1997 3
Condensed Consolidated Statements of Income -
Three and Six Months Ended June 30, 1998 and 1997 4
Condensed Consolidated Statements of Cash Flows -
Six Months Ended June 30, 1998 and 1997 5
Notes to the Condensed Consolidated Financial Statements 6-8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9-11
Item 3. Quantitative and Qualitative Information about Market Risk 11
PART II . OTHER INFORMATION :
Item 2. Changes in Securities 11-12
Item 4. Submissions of Matters to a Vote of Security Holders 12
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
Exhibit Index 15
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CENTURY BUSINESS SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands)
JUNE 30, DECEMBER 31,
1998 1997
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ASSETS
Cash and cash equivalents $ 49,181 $ 23,371
Accounts receivable, less allowance for doubtful
accounts of $3,373 and $2,646, respectively 65,678 37,637
Premiums receivable, less allowance for doubtful
accounts of $156 and $281, respectively 12,418 7,812
Investments:
Fixed maturities held to maturity, at amortized cost 12,876 14,528
Securities available for sale, at fair value 65,781 59,138
Other investments 4,645 6,054
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Total investments 83,302 79,720
Deferred policy acquisition costs 5,244 4,478
Reinsurance recoverables 16,280 15,215
Excess of cost over net assets of businesses acquired,
net of accumulated amortization of $3,438 and $1,264 167,852 89,856
Notes receivable 18,346 16,661
Other assets 37,152 21,607
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TOTAL ASSETS $ 455,453 $ 296,357
============= ==============
LIABILITIES
Losses and loss expenses payable $ 55,477 $ 50,655
Unearned premiums 26,326 22,656
Notes payable, bank debt and capitalized leases 38,755 20,725
Income taxes 8,478 3,442
Accrued expenses 31,898 27,829
Other liabilities 29,967 20,744
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TOTAL LIABILITIES 190,901 146,051
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SHAREHOLDERS' EQUITY
Common stock 547 415
Additional paid-in capital 226,705 126,538
Retained earnings 36,286 21,606
Accumulated other comprehensive income 1,014 1,747
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TOTAL SHAREHOLDERS' EQUITY 264,552 150,306
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 455,453 $ 296,357
============= ==============
See the accompanying notes to the condensed consolidated financial statements.
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CENTURY BUSINESS SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands, except per share data)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------- -------------------------
1998 1997 1998 1997
-------- -------- -------- --------
Revenues:
Business service fees and commissions $ 56,307 $ 14,956 $108,099 $ 25,979
Specialty insurance services (regulated):
Premiums earned 11,310 8,355 21,779 16,421
Net investment income 1,233 1,100 2,609 2,277
Net realized gain on investments 651 1,071 1,421 2,034
Other income 211 497 212 454
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Total revenues 69,712 25,979 134,120 47,165
Expenses:
Operating expenses - business services 43,150 12,577 83,161 21,505
Losses and loss adjustment expenses 5,152 4,594 10,774 9,423
Policy acquisition and other expenses 5,554 3,491 10,537 6,813
Corporate general and administrative expenses 1,780 1,255 3,319 1,627
Depreciation and amortization expenses 1,815 677 3,484 1,031
------------- ------------- ----------- -----------
Total expenses 57,451 22,594 111,275 40,399
Income from continuing operations before net corporate
interest income and income tax expense 12,261 3,385 22,845 6,766
Net corporate interest income 230 269 604 573
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Income from continuing operations before
income tax expense 12,491 3,654 23,449 7,339
Income tax expense 4,622 1,007 8,544 2,168
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Income from continuing operations 7,869 2,647 14,905 5,171
Loss from discontinued operations -- (179) -- (713)
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Net income $ 7,869 $ 2,468 $ 14,905 $ 4,458
============= ============= =========== ==========
Earnings per share:
Basic:
Income from continuing operations $ .15 $ .07 $ .30 $ .14
Loss from discontinued operations -- .-- .-- (.02)
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Net income per share $ .15 $ .07 $ .30 $ .12
============= ============= =========== ==========
Diluted:
Income from continuing operations $ .12 $ .05 $ .23 $ .11
Loss from discontinued operations -- .-- .-- (.02)
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Net income per share $ .12 $ .05 $ .23 $ .09
============= ============= =========== ==========
Weighted average common shares 52,613 37,775 50,083 37,225
============= ============= =========== ==========
Weighted average common shares and dilutive
potential common shares 68,290 49,000 65,582 48,470
============= ============= =========== ==========
See the accompanying notes to the condensed consolidated financial statements.
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CENTURY BUSINESS SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
SIX MONTHS ENDED
JUNE 30,
1998 1997
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NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES $ (760) $ 10,899
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed maturities, held to maturity (111) (209)
Purchase of fixed maturities, available for sale (16,244) (9,501)
Purchase of equity securities (1,854) --
Redemption of fixed maturities, held to maturity 1,958 600
Sale of fixed maturities, available for sale 9,703 2,658
Sale of equity securities 792 663
Principal receipts on mortgage loans 151 1
Change in short-term investments 1,259 3,784
Business acquisitions, net of cash acquired (34,462) (23,958)
Acquisition of property and equipment (5,254) (914)
Proceeds from dispositions of property and equipment 395 --
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Net cash used in investing activities (43,667) (26,876)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from debt 59,979 1,822
Repayment of debt (46,010) (2,811)
Proceeds from stock issuances, net 47,695 5,487
Proceeds from exercise of stock options and warrants, net 8,798 --
Cash distribution by pooled company (225) --
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Net cash provided by financing activities 70,237 4,498
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Net increase (decrease) in cash and cash equivalents 25,810 (11,479)
Cash and cash equivalents at beginning of period 23,371 42,215
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Cash and cash equivalents at end of period:
Continuing operations 49,181 30,736
Discontinued operations -- 755
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Total cash and cash equivalents at end of period $ 49,181 $ 31,491
============= ==============
See the accompanying notes to the condensed consolidated financial statements.
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CENTURY BUSINESS SERVICES, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
In the opinion of management, the accompanying unaudited condensed
consolidated interim financial statements reflect all adjustments
necessary to present fairly the financial position of the Company as
of June 30, 1998 and December 31, 1997 and the results of its
operations and cash flows for the periods ended June 30, 1998 and
1997. The results of operations for such interim periods are not
necessarily indicative of the results for the full year. The 1997
condensed consolidated balance sheet was derived from the Company's
audited financial statements which have been restated to include the
results of acquisitions accounted for as poolings (see Note 3), but
does not include all disclosures required by generally accepted
accounting principles. For further information, refer to the
consolidated financial statements and footnotes thereto included in
the Company's annual report on Form 10-K for the year ended December
31, 1997.
The Company adopted Statement of Financial Accounting Standards No.
130, "Reporting Comprehensive Income", on January 1, 1998. As required
by the Statement, the Company displays the accumulated balance of other
comprehensive income separately from retained earnings and additional
paid-in capital in the equity section of the Balance Sheet. Items
considered to be other comprehensive income are the adjustments made
for unrealized holding gains and losses on available for sale
securities. Comprehensive income for the three months ended June 30,
1998 and 1997 was $7.7 million and $1.2 respectively. Comprehensive
income for the six months ended June 30, 1998 and 1997 was $14.2
million and $2.5 million, respectively.
2. EARNINGS PER SHARE
Earnings per share are based on the average number of shares of common
stock outstanding during each period and such shares issuable upon
assumed exercise of stock options and warrants, using the treasury
stock method. The following data show the amounts used in computing
earnings per share and the effect on the weighted average number of
shares of dilutive potential common stock (in thousands, except per
share data):
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1998 1997 1998 1997
---- ---- ---- ----
Numerator:
Income used in basic and diluted earnings per share $ 7,869 $ 2,468 $14,905 $ 4,458
Denominator:
Basic weighted average shares 52,613 37,775 50,083 37,225
Effect of dilutive stock options and warrants 15,677 11,225 15,499 11,245
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Diluted weighted average shares 68,290 49,000 65,582 48,470
======= ======= ======= =======
Basic earnings per share $ 0.15 $ 0.07 $ 0.30 $ 0.12
======= ======= ======= =======
Diluted earnings per share $ 0.12 $ 0.05 $ 0.23 $ 0.09
======= ======= ======= =======
3. ACQUISITIONS
During the second quarter 1998, the Company continued its strategic
acquisition program, acquiring the businesses of sixteen complementary
companies. These acquisitions comprised the following: five accounting,
consulting and tax advisory businesses, three benefits design,
consulting and administration firms, one business valuation firm, one
commercial insurance agency, one organizational consulting and training
firm, one employee benefits management and consulting firm, one
healthcare consulting firm, one managed healthcare marketing and
administration firm, one pension administration and investment services
firm and one information technology company.
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CENTURY BUSINESS SERVICES, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) -
(continued)
3. ACQUISITIONS (continued)
Eleven of the acquisitions were accounted for as purchases, and
accordingly, the operating results of the acquired companies have been
included in the accompanying condensed consolidated financial
statements since the dates of acquisition. The aggregate purchase price
of these acquisitions was approximately $45.070 million, and includes
future contingent consideration of up to $3.742 million in cash and
$9.750 million of restricted common stock of the Company (estimated
stock value at date of acquisition), based on the acquired companies'
ability to meet certain performance goals. The aggregate purchase
price, excluding future contingent consideration, has been allocated to
the net assets of the Company based upon their respective fair market
values.
The unaudited pro forma information for the periods set forth below
give effect to the acquisitions as if they had occurred on January 1,
1998 and January 1, 1997. The pro forma information is presented for
informational purposes only and is not necessarily indicative of the
results of operations that actually would have been achieved had these
transactions been consummated at the beginning of the periods presented
(in thousands, except per share data):
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1998 1997 1998 1997
---- ---- ---- ----
Net revenues - pro forma $ 72,240 $43,352 $149,131 $ 81,912
Net income - pro forma $ 8,170 $ 5,298 $ 16,729 $ 10,117
Earnings per share pro forma -
- Basic $ 0.15 $ 0.13 $ 0.32 $ 0.24
- Diluted $ 0.12 $ 0.10 $ 0.25 $ 0.19
The Company exchanged 1.975 million shares of its common stock for all
of the common stock of the five acquisitions accounted for under the
pooling-of-interests method of accounting for business combinations.
Accordingly, the Company's financial statements have been restated to
include the results of the pooled entities for all periods presented.
The combined and separate results of the Company and the pooled
entities during the periods preceding the combination were as follows
(in thousands):
THREE MONTHS ENDED SIX MONTHS ENDED
MARCH 31,1998 JUNE 30, 1997 JUNE 30, 1997
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Revenues:
Company $59,215 $21,088 $37,384
Pooled entities 5,193 4,891 9,781
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Combined $64,408 $25,979 $47,165
======== ======= =======
Net Income:
Company $ 6,367 $ 2,054 $ 3,629
Pooled entities 669 414 829
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Combined $ 7,036 $ 2,468 $ 4,458
======== ======= =======
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CENTURY BUSINESS SERVICES, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) -
(continued)
4. SUBSEQUENT EVENTS
Since June 30, 1998, the Company has closed the following four
acquisitions: one national franchisor of financial and tax services,
two accounting, consulting and tax advisory businesses and one
property tax management and consulting firm. In addition, the Company
has announced the acquisition of twelve additional companies which
include the following: ten accounting, consulting and tax advisory
businesses and two benefits design, consulting and administration
firms. The combined cost of these transactions is approximately
$36.584 million in cash, $44.160 million of restricted Company common
stock, and $6.321 million of unrestricted Company common stock.
On August 10, 1998, the Company amended and restated its revolving
credit facility dated October 3, 1997 which resulted in an increase in
the amount of available credit from $50 million to $100 million and a
change in the term from three to five years. Other than that noted
above, there were no other substantial changes in terms or conditions.
5. RECLASSIFICATIONS
Certain reclassifications have been made to the 1997 financial
statements to conform to the 1998 presentation.
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CENTURY BUSINESS SERVICES, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Century Business Services, Inc. ("the Company") is a leading provider of
outsourced business services to small and medium sized companies throughout the
United States. The Company provides integrated services in the following areas:
accounting systems, advisory and tax, employee benefits design and
administration, human resources, information technology systems, payroll
administration, specialty insurance, valuation, and workers' compensation.
RESULTS OF OPERATIONS
Revenues
Total revenues increased to $69.7 million and $134.1 million for the
three and six month periods ended June 30, 1998, respectively, from $26.0
million and $47.2 million for the comparable periods in 1997. The increase in
revenues was primarily attributable to the Company's acquisition activity in
outsourced business services.
Business service fees and commissions increased to $56.3 million and
$108.1 million for the three and six month periods ended June 30, 1998,
respectively, from $15.0 million and $26.0 million for the comparable periods in
1997. The increase was primarily attributable to the acquisitions completed in
1998. Due to the majority of recent acquisitions having been accounted for under
the purchase method, the Company's consolidated financial statements give effect
to such acquisitions only from their respective acquisition dates.
Premiums earned increased to $11.3 million and $21.8 million for the
three and six month periods ended June 30, 1998, respectively, from $8.4 million
and $16.4 million for the comparable periods in 1997. The increase in premiums
earned was primarily attributable to the growth in surety bonds and commercial
liability premiums over 1997 levels, the introduction of workers compensation
coverage emanating from an August 1997 business transaction and the assumption
of contract surety premiums under a certain reinsurance agreement entered into
in 1997.
Net investment income increased to $1.2 million and $2.6 million for
the three and six month periods ended June 30, 1998, respectively, from $1.1
million and $2.3 million for the comparable periods in 1997. This decrease was
primarily attributable to increased invested assets.
Net realized gain on investments decreased to $0.7 million and $1.4
million for the three and six month periods ended June 30, 1998, respectively,
from $1.1 million and $2.0 million for the comparable periods in 1997. This
decrease was primarily attributable to the composition of investments sold
during the three and six month periods ended June 30, 1998 versus the comparable
periods in 1997.
Expenses
Total expenses increased to $57.5 million and $111.3 million for the
three and six month periods ended June 30, 1998, respectively, from $22.6
million and $40.4 million for the comparable periods in 1997. Such increase was
primarily attributable to the increase in operating expenses, which reflects the
impact of the Company's acquisitions made in 1998 and the corresponding increase
of corporate staff and related integration costs. As a percentage of revenues,
total expenses decreased to 82.4% and 87.0% for the three-month periods ended
June 30, 1998 and 1997, respectively, and 83.0% and 85.7% for the six-month
periods ended June 30, 1998 and 1997, respectively.
Operating expenses for the business services operations increased to
$43.2 million and $83.2 million for the three and six month periods ended June
30, 1998, respectively, from $12.6 million and $21.5 million for the comparable
periods in 1997. Such increase was attributable to business services
acquisitions completed in 1998. As a percentage of fees and commissions,
operating expenses decreased to 76.6% and 84.1% for the three-month periods
ended June 30, 1998 and 1997, respectively, and 76.9% and 82.8% for the
six-month periods ended June 30, 1998 and 1997, respectively.
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Loss and loss adjustment expenses increased to $5.2 million and $10.8
million for the three and six month periods ended June 30, 1998, respectively,
from $4.6 million and $9.4 million for the comparable periods in 1997. Such
increase was attributable to increased premium volume for commercial liability
coverage and workers compensation. As a percentage of premiums earned, loss and
loss adjustment expenses decreased to 45.6% and 55.0% for the three-month
periods ended June 30, 1998 and 1997, respectively, and 49.5% and 57.4% for the
six-month periods ended June 30, 1998 and 1997, respectively. Such decreases
were the result of better than expected incurred loss results for certain lines
of business.
Policy acquisition and other expenses increased to $5.6 million and
$10.5 million for the three and six month periods ended June 30, 1998,
respectively, from $3.5 million and $6.8 million for the comparable periods in
1997. The increase corresponds primarily to the increase in premium volume and
regionalization of the property and casualty operation.
Corporate general and administrative expenses increased to $1.8 million
and $3.3 million for the three and six month periods ended June 30, 1998,
respectively, from $1.3 million and $1.6 million for the comparable periods in
1997. Such increase was attributable to the expanding of the corporate function
to accommodate the Company's acquisition strategy. Corporate general and
administrative expenses represented 2.6% and 4.8% of total revenues for the
three-month periods ended June 30, 1998 and 1997, respectively, and 2.5% and
3.4% for the six-month periods ended June 30, 1998 and 1997, respectively.
Depreciation and amortization expenses increased to $1.8 million and
$3.5 million for the three and six month periods ended June 30, 1998,
respectively, from $1.0 million for the comparable periods in 1997. The increase
is a result of the increase of goodwill amortization resulting from the
acquisitions completed by the Company in 1998 and 1997. As a percentage of total
revenues, depreciation and amortization expense was 2.6% for the three-month
periods ended June 30, 1998 and 1997, and was 2.6% and 2.2% for the six-month
periods ended June 30, 1998 and 1997, respectively. Such increase was
attributable to the implementation of the Company's acquisition strategy.
OTHER
The Company's 1998 condensed consolidated balance sheet includes net
increase in goodwill of $78.0 million since December 31, 1997 and relates to
goodwill recorded in accordance with APB Opinion No. 16 upon the consummation of
seventeen acquisitions which were accounted for as purchases during 1998.
LIQUIDITY AND CAPITAL RESOURCES
During the first six months of 1998, cash and cash equivalents
increased $25.8 million as cash generated from financing activities of $70.2
million exceeded cash used in operating activities of $0.8 million and
cash used in investing activities of $43.7 million. The normal seasonal changes
occurred between year-end and the end of the second quarter and resulted in
increased accounts receivable and premiums receivable. Cash used in investing
activities consisted primarily of investment activity, new business
acquisitions, and capital expenditures. Cash provided by financing activities
consisted primarily of proceeds received from a private placement of 3.8 million
shares during the first quarter 1998.
YEAR 2000 DISCLOSURE
The Company has begun to modify its information systems to enable
proper processing of transactions relating to the year 2000 and beyond. Project
completion is planned for the end of 1998. The Company is expensing as incurred
all costs associated with these system changes and such costs are not expected
to exceed $2.0 million. Most of such costs will be incurred in the latter part
of 1998 and will be funded from operations.
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FORWARD-LOOKING STATEMENTS
Statements included in the Form 10-Q, which are not historical in
nature, are forward-looking statements made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward looking statements are commonly identified by the use of such terms as
"intends", "estimates", "expects", "projects", anticipates", "seeks",
"believes", and "scheduled". Such statements are subject to certain risks,
uncertainties or assumptions. Should one or more of these risks or assumptions
materialize, or should underlying assumptions prove incorrect, actual results
may vary materially from those anticipated, estimated or projected. Although the
Company believes that the assumptions upon which such forward-looking statements
are based are reasonable, it can give no assurance that such assumptions will
prove to be correct. Important factors that could cause actual results to differ
materially from the Company's expectations ("Cautionary Statements") include:
(i) the Company's ability to grow through acquisitions of strategic and
complementary businesses; (ii) the Company's ability to finance such
acquisitions; (iii) the Company's ability to manage growth; (iv) the Company's
ability to integrate the operations of the acquired businesses; (v) the
Company's ability to share, retrieve, process and manage significant databases;
(vi) the Company's ability to attract and retain experienced personnel; (vii)
the Company's ability to manage pricing of its insurance products and adequately
reserve for losses; (viii) the impact of current and future laws and
governmental regulations affecting the Company's operations; and (ix) market
fluctuations in the values or returns on assets in the Company's investment
portfolios. All forward-looking statements in this Form 10-Q are expressly
qualified by the Cautionary Statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE INFORMATION ABOUT MARKET RISK
The Company does not engage in trading market risk sensitive
instruments and does not purchase hedging instruments or "other than trading"
instruments that are likely to expose the Company to market risk, whether
interest rate, foreign currency exchange, commodity price or equity price risk.
The Company has issued no debt instruments, entered into no forward or futures
contracts, purchased no options and entered into no swaps. The Company's primary
market risk exposure is that of interest rate risk. A change in the Federal
Funds Rate, or the Reference Rate set by the Bank of America (San Francisco),
would affect the rate at which the Company could borrow funds under its Credit
Facility.
PART II - OTHER INFORMATION
---------------------------
ITEM 2. CHANGES IN SECURITIES
(c) Issuance of unregistered shares during the three months ended June 30, 1998,
were as follows:
All transactions listed below involve the issuance of shares of Common Stock by
the Company in reliance upon Section 4(2) of the Securities Act of 1933, as
amended.
On April 4, 1998, in connection with the acquisition of Employers Select Plan
Agency of Ohio, Inc., the Company issued 400,000 shares of Common Stock in
exchange for all the outstanding shares of Employers Select Plan Agency of Ohio,
Inc.
On April 23, 1998, in connection with the acquisition of National Retirement
Planning, Inc., the Company issued 92,000 shares of Common Stock in exchange for
all the outstanding shares of National Retirement Planning, Inc.
On April 30, 1998, in connection with the acquisition of M.T. Donahoe &
Associates, Inc., the Company issued 375,104 shares of Common Stock in exchange
for all the outstanding shares of M.T. Donahoe & Associates, Inc.
On May 6, 1998, in connection with the acquisition of Business Valuation
Services, Inc., the Company paid $2.1 million in cash and issued 265,098 shares
of Common Stock in exchange for all the outstanding shares of Business Valuation
Services, Inc.
On May 15, 1998, in connection with the acquisition of Love Insurance Agency,
Inc., the Company issued 410,256 shares of Common Stock in exchange for
substantially all the outstanding shares of Love Insurance Agency, Inc.
On June 2, 1998, in connection with the acquisition of Blackman & Associates,
P.C., the Company paid $0.5 million in cash and issued 53,554 shares of Common
Stock in exchange for all the outstanding shares of Blackman & Associates, P.C.
On June 2, 1998, in connection with the acquisition of Harper Benefits, Inc.,
the Company paid $0.3 million in cash and issued 26,277 shares of Common Stock
in exchange for all the outstanding shares of Harper Benefits, Inc.
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On June 1, 1998, in connection with the acquisition of National Hospital and
Health Care Services, Inc., the Company issued 713,880 shares of Common Stock in
exchange for all the outstanding shares of National Hospital and Health Care
Services, Inc.
On June 12, 1998, in connection with the acquisition of Schweitzer, Rubin, Karon
& Bremer, the Company paid $2.4 million in cash and issued 223,901 shares of
Common Stock in exchange for all the outstanding shares of Schweitzer, Rubin,
Karon & Bremer.
On June 17, 1998, in connection with the acquisition of Varney & Associates,
P.A., the Company issued 245,760 shares of Common Stock in exchange for all the
outstanding shares of Varney & Associates, P.A.
On June 17, 1998, in connection with the acquisition of Ross Gordon &
Associates, Inc., the Company issued 213,235 shares of Common Stock in exchange
for all the outstanding shares of Ross Gordon & Associates, Inc.
On June 30, 1998, in connection with the acquisition of Organization/Performance
Group, Inc., the Company paid $1.7 million in cash and issued 151,899 shares of
Common Stock in exchange for all the outstanding shares of
Organization/Performance Group, Inc.
On June 30, 1998, in connection with the acquisition of S&S Business Services,
Inc., the Company issued 314,097 shares of Common Stock in exchange for all the
outstanding shares of S&S Business Services, Inc.
On June 30, 1998, in connection with the acquisition of Avatar Technology, Inc.,
the Company issued 169,245 shares of Common Stock in exchange for all the
outstanding shares of Avatar Technology, Inc.
On June 30, 1998, in connection with the acquisition of KA Consulting, Inc., the
Company paid $2.6 million in cash and issued 233,866 shares of Common Stock in
exchange for all the outstanding shares of KA Consulting, Inc.
On June 30, 1998, in connection with the acquisition of Moore, Tyler & Co., the
Company paid $1.8 million in cash and issued 140,422 shares of Common Stock
in exchange for all the outstanding shares of Moore, Tyler & Co.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Company's Annual Meeting of Shareholders held on April 30, 1998, the
following matters were submitted to a vote of stockholders:
1) The election of the following individuals to the Board of Directors to
serve until the 2001 Annual Meeting of Shareholders.
SHARES FOR SHARES WITHHELD
---------- ---------------
Rick L. Burdick 34,704,139 29,975
Hugh P. Lowenstein 34,708,279 25,835
2) The approval of the appointment of KPMG Peat Marwick LLP as independent
accountants for fiscal year 1998.
SHARES FOR SHARES AGAINST SHARES ABSTAINED
---------- -------------- ----------------
34,696,446 26,567 11,101
3) The approval of the sale of 500,000 shares of common stock to Westbury
(Bermuda) Ltd., a corporation controlled by Mr. Michael G. DeGroote.
SHARES FOR SHARES AGAINST SHARES ABSTAINED
---------- -------------- ----------------
34,457,031 201,628 75,455
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
1 Amended and Restated Credit Agreement dated
as of October 3, 1997 and as Amended and
Restated as of August 10, 1998.
27.1 Financial Data Schedule
(b) Reports on Form 8-K/A
(i) On June 10, 1998, the Company filed a Current
Report on Form 8-K/A, amending Item 7 of its
Current Report on Form 8-K dated March 31, 1998,
for the purpose of filing financial statements
for The Continuous Learning Group, Envision
Development Group, Inc., and Multi-Dimensional
International.
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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.
CENTURY BUSINESS SERVICES, INC.
-------------------------------
(Registrant)
Date: August 14, 1998 By: /s/ Charles D. Hamm, Jr.
------------------------------
Charles D. Hamm, Jr.
Chief Financial Officer
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15
CENTURY BUSINESS SERVICES, INC. AND SUBSIDIARIES
------------------------------------------------
EXHIBIT INDEX
-------------
EXHIBIT NUMBER:
1 Amended and Restated Credit Agreement............................................. 16-116
27.1 Financial Data Schedule (SEC only)................................................ 117
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