SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
[X]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the quarterly period ended March 31, 1998
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934 For the transition period from ________________________
Commission File Number: 0-29292
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HAGLER BAILLY, INC.
(Exact name of registrant as specified in its charter)
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Delaware 54-1759180
(State or other jurisdiction of incorporation or organization) I.R.S. Employer
Identification Number
1530 Wilson Boulevard, Suite 400, Arlington, VA 22209
(Address of principal executive offices) (Zip Code)
703-351-0300
(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 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
As of April 29, 1998, the Registrant had 8,884,291 shares of its common stock
outstanding.
TABLE OF CONTENTS
PART I
ITEM 1. FINANCIAL STATEMENTS...............................................1
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS...............................5
PART II
ITEM 1. LEGAL PROCEEDINGS..................................................8
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS..........................8
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K..................................10
SIGNATURES.................................................................13
PART I
Item 1. Financial Statements
Hagler Bailly, Inc.
Consolidated Balance Sheets
March 31, December 31,
1998 1997
---- ----
(unaudited) (note)
Assets
Current assets:
Cash and cash equivalents $ 2,995,236 $ 3,960,598
Investments 2,191,774 6,551,446
Accounts receivable, net 34,148,980 31,795,425
Note receivable 1,000,000 1,000,000
Prepaid expenses 2,418,685 719,914
Other current assets 1,907,375 1,867,444
---------------------------------------
Total current assets 44,662,050 45,894,827
Property and equipment, net 2,648,809 2,852,679
Software development costs, net 2,379,841 2,463,174
Intangible assets, net 7,182,177 6,925,960
Other assets 962,390 1,279,466
Deferred income taxes - 601,002
---------------------------------------
Total assets 57,835,267 60,017,108
=======================================
Liabilities and stockholders' equity Current liabilities:
Bank line of credit 2,640,000 -
Accounts payable and accrued expenses 3,128,257 4,166,123
Accrued compensation and benefits 1,223,671 5,096,818
Billings in excess of cost 1,325,769 1,757,208
Notes payable 485,838 800,417
Deferred income taxes 471,964 1,495,792
Income taxes payable 953,067 1,839,794
---------------------------------------
Total current liabilities 10,228,566 15,156,152
Deferred income taxes 1,125,083 -
Long-term debt, net of current portion
142,723 -
---------------------------------------
Total liabilities 11,496,372 15,156,152
Stockholders' equity:
Preferred stock, $.01 par value, 5,000,000 shares authorized,
none issued and outstanding
- -
Common stock, $0.01 par value, 20,000,000 shares authorized, 8,884,241 and
8,867,843 issued and outstanding in 1998 and 1997
88,842 88,677
Additional paid-in capital 41,418,649 41,396,385
Retained earnings (deficit) 4,973,909 3,375,894
Foreign currency fluctuation
(142,505) -
---------------------------------------
Total stockholders equity 46,338,895 44,860,956
---------------------------------------
Total liabilities and stockholders' equity $ 57,835,267 $ 60,017,108
=======================================
Note: The balance sheet at December 31, 1997 has been derived from the 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 accompanying notes.
Hagler Bailly, Inc.
Consolidated Statements of Operations
(Unaudited)
Three months ended
March 31,
1998 1997
---------------- ----------------
Revenues
Consulting revenues $22,327,078 $20,884,430
Other revenues 1,315,142 242,811
---------------- ----------------
Total revenues 23,642,220 21,127,241
Cost of services 18,754,380 16,310,494
---------------- ----------------
Gross profit 4,887,840 4,816,747
Merger related costs 367,258 -
Selling, general and administrative expenses 1,935,430 2,506,649
Stock and stock option compensation
- 64,869
---------------- ----------------
Income from operations 2,585,152 2,245,229
---------------- ----------------
Other (income) expense (34,289) 296,048
---------------- ----------------
Income before income tax expense 2,619,441 1,949,181
Income tax expense 1,021,426 761,049
---------------- ----------------
Net income $ 1,598,015 $ 1,188,132
================ ================
Other comprehensive income
Foreign currency translation adjustment, net
of $55,577 tax
(86,928) -
---------------- ----------------
Comprehensive income $ 1,511,087 $ 1,188,132
================ ================
Net income per share:
Basic $0.18 $0.20
================ ================
Diluted $0.17 $0.17
================ ================
Weighted average shares outstanding:
Basic 8,869,844 5,955,746
================ ================
Diluted 9,681,251 7,063,846
================ ================
See accompanying notes.
Hagler Bailly, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
Three months ended
March 31,
1998 1997
---- ----
Operating activities
Net income $1,598,015 $ 1,188,132
Adjustments to reconcile net income to net cash used in
operating activities:
Depreciation and amortization 568,168 815,866
Provision for deferred taxes 702,257 573,262
Provision for possible losses 39,929 184,665
Amortization of deferred stock compensation - 64,869
Changes in operating assets and liabilities
Accounts receivable (2,393,484) (3,742,029)
Prepaid expenses (1,698,771) (76,018)
Other current assets (39,931) (813,997)
Other assets 317,076 (715,366)
Accounts payable and accrued expenses (1,037,866) 2,018,020
Accrued compensation and benefits (3,873,147) (541,399)
Billings in excess (431,439) (249,644)
Income taxes payable (886,727) 153,183
----------- ----------
Net cash used in operating activities (7,135,920) (1,140,456)
Investing activities
Sale of investments 4,359,672 -
Purchase of investments - (169,397)
Investment in stock of subsidiaries (440,000) (149,515)
Acquisition of property and equipment (97,182) (596,941)
----------- ----------
Net cash provided by (used in) investing activities 3,822,490 (915,853)
Financing activities
Issuance of common stock 22,429 125,575
Net borrowings from bank line of credit 2,640,000 2,350,000
Proceeds from long-term debt 142,723 -
Principal payments on debt (314,579) (1,072,645)
--------- -----------
Net cash provided by financing activities 2,490,573 1,402,930
Net decrease in cash and cash equivalents (822,857) (653,379)
Foreign currency gain/loss (142,505) -
Cash and cash equivalents, beginning of period 3,960,598 2,009,343
----------------- -----------------
Cash and cash equivalents, end of period $2,995,236 $1,355,964
================== =================
See accompanying notes.
HAGLER BAILLY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Basis of Presentation
The accompanying unaudited interim consolidated financial statements of
Hagler Bailly, Inc. (the "Company") have been prepared pursuant to the rules of
the Securities and Exchange Commission ("SEC") for quarterly reports on Form
10-Q and do not include all of the information and note disclosures required by
generally accepted accounting principles. The information furnished herein
reflects all adjustments, of a normal recurring nature, which are, in the
opinion of management, necessary for a fair presentation of results for these
interim periods.
The interim results of operations are not necessarily indicative of the
results to be expected for the entire fiscal year ending December 31, 1998.
As a result of the pooling of interests transaction completed in the
first quarter, as described in Note 3 below, all consolidated financial
statements and related schedules presented for the three month period ended
March 31, 1998 and 1997 and as of December 31, 1997 have been restated to
include the results of operations and financial position of TB&A Group, Inc.
These financial statements should be read in conjunction with the Company's
audited consolidated financial statements and notes thereto for the year ended
December 31, 1997, included in the Form 10-K.
Note 2. Earnings per Share
Basic earnings per share is computed based on the weighted average
number of shares of common stock outstanding during the respective periods.
Diluted earnings per share is inclusive of the dilutive effect of unexercised
stock options using the treasury stock method.
Note 3. Pooling of Interests
On February 23, 1998, the Company completed the merger of one of its
wholly-owned subsidiaries with TB&A Group, Inc. and its wholly-owned subsidiary,
Theodore Barry & Associates (collectively "TB&A"). The Company issued 454,994
shares of its common stock in connection with the merger and the merger was
accounted for as a pooling of interests. Accordingly, the Company's financial
statements have been restated to include the results of TB&A for all periods
presented.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Overview
Statements included in Management's Discussion and Analysis of Financial
Condition and Results of Operations which are not historical in nature, are
intended to be, and are hereby identified as, "forward looking statements" for
purposes of the safe harbor provided by Section 21E of the Securities Exchange
Act of 1934, as amended by Public Law 104-67. Forward-looking statements may be
identified by words including "anticipate," "believe," "estimate," "expect" and
similar expressions. The Company cautions readers that forward-looking
statements, including without limitation, those relating to the Company's future
business prospects, revenues, working capital, liquidity, and income, are
subject to certain risks and uncertainties that would cause actual results to
differ materially from those indicated in the forward-looking statements, due to
several important factors such as concentration of the Company's revenues from a
relatively limited number of public and private clients involved in the energy
and network industries, the Company's ability to attract, retain and manage
professional and administrative staff, fluctuations in quarterly results, risks
related to acquisitions, and the fact that historical operations and performance
are not necessarily indicative of future operations and performance, among
others, and other risks and factors identified from time to time in the
Company's reports filed with the SEC, including the risk factors identified in
the Company's Registration Statement (No. 333-22207) on Form S-1 and the
Company's Annual Report on Form 10-K for the year ended December 31, 1997.
The Company, together with its wholly-owned subsidiaries Hagler Bailly
Services, Inc., Hagler Bailly Consulting, Inc., HB Capital, Inc., Apogee
Research, Inc. and as of February 23, 1998, TB&A, and several of its foreign
wholly-owned subsidiaries, is a worldwide provider of consulting, research and
other professional services to corporations and governments on energy,
telecommunications, transportation and the environment. The Company offers
corporate clients strategy and business operations consulting, economic counsel
and litigation support, market research and survey analysis, information
technology, and financial advisory services. It also advises governments on
energy, telecommunication, transportation, water and environmental public
policy.
In accordance with FASB Statement No. 131, "Disclosure about Segments of
an Enterprise", and in anticipation of the Company's "Other revenues" category
developing into a reportable operating segment, the Company has segregated
revenues into "Consulting revenues" and "Other revenues". Consulting revenues
represent revenues associated with professional staff, subcontractors and
independent consultants and client reimbursable expenses associated with the
Company's primary business. Other revenues include those derived from
information products and financial advisory services. Prior to this change, the
Company reported "Consulting revenues" and "Subcontractor and other revenues".
Results of Operations
Revenues. Revenues increased 11.9% to $23.6 million in the quarter
ended March 31, 1998 from $21.1 million in the quarter ended March 31, 1997.
Consulting revenues increased 6.9% to $22.3 million in the quarter ended March
31, 1998 compared to $20.9 million in the comparable period in 1997 primarily
due to increased client demand and increased capacity from the Company's recent
mergers. However, overall growth rate was constrained by management's focus on
merger and acquisition-related activities and the strategy of deploying
core-consulting staff to create and initiate sales of information-based products
and services.
Cost of Services. Cost of services increased 15.0% to $18.8 million for
the quarter ended March 31, 1998 from $16.3 million for the quarter ended March
31, 1997. Cost of services generally increased in proportion to the 11.9%
increase in revenue. This is also attributable to the increased costs associated
with the overall decrease in utilization rates due to management's focus on
mergers and acquisitions, the marketing of software products, and increased
staffing of high-level consultants in anticipation of business development in
the private sector.
Gross Profit. Gross profit increased 1.5% to $4.9 million for the
quarter ended March 31, 1998 from $4.8 million for the quarter ended March 31,
1997 due to the increased revenue. Gross profit as a percentage of revenues was
20.7% for the first quarter of 1998 as compared to 22.8% in the first quarter of
1997, which is the result of the relative increase in costs of services
mentioned above and the deployment of core consulting staff mentioned above.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses ("SG&A") decreased to $1.9 million for the quarter ended
March 31, 1998 compared to $2.5 million for the quarter ended March 31, 1997
period, due primarily to the preparation of and management focus on the Initial
Public Offering ("IPO") occurring in 1997 and the delay in 1998 planned
marketing efforts.
Income from Operations. Income from operations was $2.6 million for the
quarter ended March 31, 1998 compared to $2.2 million for the quarter ended
March 31, 1997. This increase in income from operations is primarily due to the
decrease in SG&A expenses detailed above.
Other (Income) Expense. Other (income) expense was $(0.03) million
income for the quarter ended March 31, 1998 and $0.3 million expense for the
quarter ended March 31, 1997. The net change is due to the interest income
earned from the investment of IPO funds and the reduction of the Company's debt.
Income Tax Expense. Income tax expense was $1.0 million for the quarter
ended March 31, 1998 compared to $0.8 million for the quarter ended March 31,
1997. For the quarters ended March 31, 1998 and 1997 income tax expense as a
percentage of income before income tax expense was 39.0%.
Net Income. Net income for the quarter ended March 31, 1998 was $1.6 million
compared to $1.2 million for the quarter ended March 31, 1997. Net income as a
percentage of revenues increased to 6.8% from 5.6% or 21.4% over the same period
in the prior year. Liquidity and Capital Resources
At March 31, 1998 and December 31, 1997, the Company had working
capital of $34.4 million and $30.7 million, respectively. Working capital at
March 31, 1998 represents an decrease of $3.7 million from December 31, 1997.
The decrease in 1998 is primarily due to the use of the net proceeds received
from the IPO of the Company's common stock, the internal financing of the
Company's continued growth, and increased internal investments in product
development and infrastructure.
Net cash used in operations consisted primarily of net income plus
elements of cash flows related to accounts receivable and related billings,
accounts payable and accrued compensation adjusted for non-cash items including
depreciation and provision for possible losses. The use of funds in operations
of $7.1 million for the quarter ended March 31, 1998 can primarily be attributed
to the payment of bonuses, the funding of the profit sharing and 401(K) matching
plans, and the growth in accounts receivable.
Investment activities provided the Company with $3.8 million and ($0.9)
million for the quarters ended March 31, 1998 and 1997, respectively. Investment
expenditures for the quarter ended 1998 have primarily been the use of the IPO
proceeds to fund the increase in working capital needs, merger and acquisition
related activities, software development, capital expenditures for information
technology and other resources necessary for the growth of the Company.
Financing activities provided $2.5 million and $1.4 million for the
quarters ended March 31, 1998 and 1997, respectively. The funds were provided
primarily through the use of the Company's credit facility.
Prior to the IPO, the Company's primary source of liquidity has been
cash flows from operations, periodically supplemented by borrowings under a bank
line of credit. During the year, ended December 31, 1997, the Company, through
two of its subsidiaries, established a new $15 million revolving credit facility
and began borrowing under the facility. The Company believes that current
projected levels of cash flows and the availability of financing, including
borrowings under the company's credit facility, will be adequate to fund its
operations throughout the next 12 months and in the foreseeable future.
The Company, depending on market conditions, may consider other sources
of financing, including equity financing. Pending such uses, the net proceeds
will be invested in short-term, interest-bearing investment grade securities.
The Company currently anticipates that it will retain all of its earnings for
development of the Company's business and does not anticipate paying any cash
dividends in the foreseeable future.
Year 2000
The Company relies on software technology to deliver its services and
has taken action to evaluate the nature and extent of the work required to make
its systems and infrastructure "Year 2000" compliant. The Company believes this
will not have a material impact on its financial position or results of
operations.
PART II
Item 1. Legal Proceedings
The Company's indirect subsidiary, Theodore Barry & Associates
("Theodore Barry"), is a defendant in a lawsuit brought in the United States
District Court for the Northern District of Illinois, Michael A. Laros v.
Theodore Barry & Associates, No. 95-C4175, by one of its former executives
seeking payment of a bonus and salary allegedly due him and payment of principal
and interest on a subordinated note of Theodore Barry prejudgment interest and
costs and fees. Theodore Barry is defending the suit. The Company does not
believe that this lawsuit will result in a material adverse effect on its
business, financial condition or results of operations.
The Company and its subsidiaries are from time to time parties to
litigation arising in the ordinary course of business. Neither the Company nor
any of its subsidiaries is a party to any pending material litigation nor are
any of them aware of any pending or threatened litigation that would have a
material adverse effect on the Company or its business.
Item 2. Changes in Securities and Use of Proceeds
On February 23, 1998, the Company completed the merger of its wholly
owned subsidiary, Hagler Bailly Acquisition Corp. 1998-1 with and into TB&A and
issued 454,994 shares of its common stock in connection therewith. The shares of
common stock issued in connection with this transaction were exempt from
registration pursuant to Rule 506 of the Securities and Exchange Commission's
Regulation D and Section 4(2) of the Securities Act of 1933.
The table below sets forth information about the exercise of options by
certain officers of the Company.
Number of Options Exercised Date of Exercise Exercise Price Title of Security
- --------------------------- ---------------- -------------- -----------------
15,000 03/27/98 $0.18 Common Stock
1,446 01/08/98 $0.18 Common Stock
3,350 12/31/97 $0.16 Common Stock
17,000 12/22/97 $0.18 Common Stock
The Shares of common stock issued in connection with these transactions
were exempt from registration pursuant to Section 4(2) of Securities Act of
1933.
Use of Proceeds of Initial Public Offering
Effective Date of Company's Registration Statement: July 2, 1997
Commission File Number: 333-22207
Date Initial Public Offering Commenced: July 2, 1997
Date Initial Public Offering Terminated: Not Applicable
Names of Managing Underwriters: Donaldson, Lufkin & Jenrette
Montgomery Securities
Title of Class of Securities Registered: Common Stock
The following table sets forth the Company use of the proceeds from its IPO for
the period from July 2, 1997 through March 31,1998.
Price to Public $44,100,000
Underwriting Discounts and Commission (3,087,000)
Proceeds to Selling Stockholders (8,463,000)
========================================================== =====================================
Initial Net Offering Proceeds to the Company $32,550,000
Internal Costs of IPO (2,215,000)
Repayment of Indebtedness (12,500,000)
Software Product Development (2,400,000)
Increase in Working Capital Needs (10,235,000)
Strategic Investments (1,000,000)
Mergers & Acquisitions (1,000,000)
Leasehold Improvements (300,000)
Investment in Technology Infrastructure (700,000)
Recapture of Cash Basis Deferred Taxes (2,200,000)
========================================================== =====================================
Balance $0
None of the expenses of the IPO consisted of direct or indirect
payments to (i) directors or officers of the Company or their associates, (ii)
persons owning ten (10%) percent or more of any class of equity securities of
the Company or (iii) affiliates of the Company.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit
No. Description
2 Sale Agreement between RCG International, Inc., and Hagler Bailly Consulting, Inc. (1)
2.1 Agreement and Plan of Merger by and among Hagler Bailly, Inc., Hagler Bailly Acquisition
Corp. 1997-1 and Apogee Research, Inc., dated as of November 18, 1997. (5)
3.1 Amended and Restated Certificate of Incorporation of the Company (1)
3.2 By-Laws of the Company (1)
4 Specimen Stock Certificates (2)
4.1 Escrow Agreement dated December 1, 1997 by and among Hagler Bailly, Inc., Hagler Bailly
Acquisition Corp. 1997-1, Richard R. Mudge as Stockholders' Representative and State Street
Bank and Trust Company, as Escrow Agent. (5)
4.2 Registration Rights Agreement dated November 18, 1997 by and between Hagler Bailly, Inc. and
Richard R. Mudge, acting as Stockholders' Representation. (5)
10.1 Hagler Bailly, Inc. Amended and Restated 1996 Employee Incentive and Non-Qualified Stock
Option and Restricted Stock Plan (including forms of option agreements). (1)
10.2 Form of Non-Compete, Confidentiality and Registration Rights Agreement between the Company
and each stockholder. (1)
10.3 Form of Amended and Restated Employment Agreement between the Company and Henri-Claude A.
Bailly. (2)
10.4 Lease by and between Wilson Boulevard Venture and RCG/Hagler Bailly, Inc. dated October 25,
1991. (1)
10.5 First Amendment to Lease by and between Wilson Boulevard Venture and RCG/Hagler Bailly,
Inc., dated February 26, 1993. (1)
10.6 Second Amendment to Lease by and between Wilson Boulevard Venture and RCG/Hagler Bailly,
Inc., dated December 12, 1994. (1)
10.7 Lease by and between Bresta Futura V.B.V. and Hagler Bailly Consulting, Inc. dated May 8,
1996. (1)
10.8 Lease by and between L.C. Fulenwider, Inc., and RCG/Hagler Bailly, Inc. dated December 14,
1994. (1)
10.9 Lease by and between University of Research Park Facilities Corp. and RCG/Hagler Bailly,
Inc., dated April 1, 1995. (2)
10.10 Credit Agreement by and between Hagler Bailly Consulting, Inc. and State Street Bank and
Trust Company, dated May 17, 1995. (1)
10.11 Amendment to Credit Agreement by and between Hagler Bailly Consulting, Inc. and State Street
Bank and Trust Company, dated as of June 20, 1996. (1)
10.12 Extension Agreement by and between Hagler Bailly Consulting, Inc. and State Street Bank and
Trust Company, dated as of August 1, 1996. (1)
10.13 Amendment to Credit Agreement by and between Hagler Bailly Consulting, Inc. and State Street
Bank and Trust Company, dated as of November 12, 1996. (1)
10.14 Term Note by and between Hagler Bailly Consulting, Inc., and State Street Bank and Trust
Company, dated May 26, 1995. (1)
10.15 Revolving Credit Note by and between Hagler Bailly Consulting, Inc. and State Street Bank
and Trust Company, dated May 26, 1995. (3)
10.16 Amendment to Credit Agreement by and between Hagler Bailly Consulting, Inc., and State
Street Bank and Trust Company, dated as of June 12, 1997. (3)
10.17 Credit Agreement by and among Hagler Bailly Consulting, Inc., Hagler Bailly Services, Inc.
and State Street Bank and Trust Company, dated as of September 30, 1997. (4)
10.18 Promissory Note by Hagler Bailly Consulting, Inc. and Hagler Bailly Services, Inc. to State
Street Bank and Trust Company, dated September 30, 1997. (4)
10.19 Security Agreement by and between Hagler Bailly Consulting, Inc. and State Street Bank and
Trust Company, dated as of September 30, 1997. (4)
10.20 Security Agreement by and between Hagler Bailly Services, Inc. and State Street Bank and
Trust Company, dated as of September 30, 1997. (4)
10.21 Guaranties by Hagler Bailly, Inc. to State Street Bank and Trust Company, dated September
30, 1997. (4)
10.22 Guaranties by HB Capital, Inc. to State Street Bank and Trust Company, dated September 30,
1997. (4)
10.23 Subordination Agreement and Negative Pledge/Sale Agreement by and between Hagler Bailly,
Inc. and State Street Bank and Trust Company for Hagler Bailly Consulting, Inc., dated
September 30, 1997. (4)
10.24 Subordination Agreement and Negative Pledge/Sale Agreement by and between Hagler Bailly,
Inc. and State Street Bank and Trust Company for Hagler Bailly Services, Inc., dated
September 30, 1997. (4)
10.25 Guaranty of Monetary Obligations to Bresta Futura V.B.V. by Hagler Bailly, Inc., dated July
23, 1997. (4)
21 Subsidiaries (6)
24 Powers of Attorney (included on Signature Pages) (1)
27.1 Financial Data Schedule - March 31, 1998
27.2 Restated Financial Data Schedule - December 31, 1997
27.3 Restated Financial Data Schedule - September 30, 1997
27.4 Restated Financial Data Schedule - March 31, 1997
27.5 Restated Financial Data Schedule - December 31, 1996
- -------------------------------------------------------------------------------------------------------------------
<FN>
(1) Included in Amendment No.1 to the Company's Registration
Statement as Form S-1 (No. 333-22207) filed with Securities
and Exchange Commission on May 21, 1997.
(2) Included in Amendment No.2 to the Company's Registration
Statement Form S-1 (No. 333-22207) filed with the
Securities and Exchange Commission on June 12, 1997.
(3) Included in Amendment No. 3 to the Company's Registration
Statement on Form S-1 (No. 333-22207) filed with the
Securities and Exchange Commission on July 1, 1997.
(4) Included in the Company's Quarterly Report on Form 10-Q
filed with the Securities and Exchange Commission for the
quarter ended September 30, 1997, on November 14, 1997.
(5) Included in the Company's Current Report on Form 8-K filed
with the Securities and Exchange Commission on December 16,
1998.
(6) Included in the Company's Annual Report on Form 10-K filed
with the Securities and Exchange Commission on March 31,
1998.
</FN>
(b) Reports on Form 8-K
On March 10, 1998, the Company filed a current report on Form 8-K,
concerning the merger of one of the Company's wholly-owned subsidiaries with and
into TB&A Group, Inc.
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.
/s/ Henri-Claude Bailly
-------------------------------------------
Date: May 15, 1998 Henri-Claude Bailly
President, Chief Executive Officer and
Chairman of the Board
/s/ Daniel M. Rouse
-------------------------------------------
Date: May 15, 1998 Daniel M. Rouse
Vice President, Chief Financial Officer
and Treasurer