Form 10-Q

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GjZ6ukKMQqZXq0uRniYya51+HlDh+VvcRQF6lS99WwqYIslJwPnsEYFJkD4TVY7h mxfpJ75tozlFNgZmBKSPKQ== 0001193125-04-135721.txt : 20040809 0001193125-04-135721.hdr.sgml : 20040809 20040809144622 ACCESSION NUMBER: 0001193125-04-135721 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 20040630 FILED AS OF DATE: 20040809 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MPS GROUP INC CENTRAL INDEX KEY: 0000924646 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HELP SUPPLY SERVICES [7363] IRS NUMBER: 593116655 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-24484 FILM NUMBER: 04960862 BUSINESS ADDRESS: STREET 1: 1 INDEPENDENT DR CITY: JACKSONVILLE STATE: FL ZIP: 32202 BUSINESS PHONE: 9043602000 MAIL ADDRESS: STREET 1: 1 INDEPENDENT DR CITY: JACKSONVILLE STATE: FL ZIP: 32202 FORMER COMPANY: FORMER CONFORMED NAME: MODIS PROFESSIONAL SERVICES INC DATE OF NAME CHANGE: 19981001 FORMER COMPANY: FORMER CONFORMED NAME: ACCUSTAFF INC DATE OF NAME CHANGE: 19940606 10-Q 1 d10q.htm FORM 10-Q Form 10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

(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, 2004

¨	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: 0-24484

MPS GROUP, INC.

(Exact name of registrant as specified in its charter)

Florida

59-3116655

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)


1 Independent Drive, Jacksonville, FL		32202
(Address of principal executive offices)		(Zip Code)

(Registrant’s telephone number including area code): (904) 360-2000

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. Yes x No ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes x No ¨

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of July 29, 2004:

105,277,037 shares of $0.01 par value Common Stock

FORWARD-LOOKING STATEMENTS

This report on Form 10-Q contains forward-looking statements that are subject to certain risks, uncertainties or assumptions and may be affected by certain factors, including but not limited to the specific factors discussed in Part I, Item 2 of this report and under the heading ‘Factors Which May Impact Future Results and Financial Condition.’ In some cases, you can identify forward-looking statements by terminology such as ‘will,’ ‘may,’ ‘should,’ ‘could,’ ‘expects,’ ‘plans,’ ‘indicates,’ ‘projects,’ ‘anticipates,’ ‘believes,’ ‘estimates,’ ‘appears,’ ‘predicts,’ ‘potential,’ ‘continues,’ ‘can,’ ‘hopes,’ ‘perhaps,’ ‘would,’ or ‘become’ or the negative of these terms or other comparable terminology. In addition, except for historical facts, all information provided in Part I, Item 3, under ‘Quantitative and Qualitative Disclosures About Market Risk’ should be considered forward-looking statements. Should one or more of these risks, uncertainties or other factors materialize, or should underlying assumptions prove incorrect, actual results, performance or achievements of the Company may vary materially from any future results, performance or achievements expressed or implied by such forward-looking statements.

Forward-looking statements are based on beliefs and assumptions of the Company’s management and on information currently available to such management. Forward looking statements speak only as of the date they are made, and the Company undertakes no obligation to update publicly any of them in light of new information or future events. Undue reliance should not be placed on such forward-looking statements, which are based on current expectations. Forward-looking statements are not guarantees of performance.

MPS Group, Inc. and Subsidiaries

Index


Part I	Financial Information

Item 1	Consolidated Financial Statements
	Unaudited Condensed Consolidated Balance Sheets as of June 30, 2004 and December 31, 2003	3
	Unaudited Condensed Consolidated Statements of Income for the Three and Six Months ended June 30, 2004 and 2003	4
	Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months ended June 30, 2004 and 2003	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6

Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11

Item 3	Quantitative and Qualitative Disclosures About Market Risk	19

Item 4	Controls and Procedures	21

Part II	Other Information

Item 1	Legal Proceedings	22

Item 2	Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities	22

Item 3	Defaults Upon Senior Securities	22

Item 4	Submission of Matters to a Vote of Security Holders	22

Item 5	Other Information	23

Item 6	Exhibits and Reports on Form 8-K	23

	Signatures	24

	Exhibits

Part I. Financial Information

Item 1. Financial Statements

MPS Group, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets


(dollar amounts in thousands except share amounts)	June 30, 2004			December 31, 2003
	(unaudited)			(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	127,486		$	124,830
Accounts receivable, net of allowance of $11,847 and $12,899		180,775			159,359
Prepaid expenses		8,332			6,417
Deferred income taxes		1,910			2,200
Other		13,400			10,662

Total current assets		331,903			303,468
Furniture, equipment, and leasehold improvements, net		28,203			29,488
Goodwill, net		499,995			486,630
Deferred income taxes		54,879			62,464
Other assets, net		10,776			11,101

Total assets	$	925,756		$	893,151

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	40,689		$	32,601
Accrued payroll and related taxes		42,026			37,848
Income taxes payable		7,987			16,140

Total current liabilities		90,702			86,589
Other		13,587			13,100

Total liabilities		104,289			99,689

Commitments and contingencies

Stockholders’ equity:
Preferred stock, $.01 par value; 10,000,000 shares authorized; no shares issued		—			—
Common stock, $.01 par value; 400,000,000 shares authorized; 107,217,155 and 104,576,204 shares issued, respectively		1,072			1,046
Additional contributed capital		655,137			634,492
Retained earnings		177,323			162,546
Accumulated other comprehensive income		8,636			6,933
Deferred stock compensation		(7,881	)		(2,495	)
Treasury stock, at cost (1,976,937 shares in 2004 and 1,613,400 shares in 2003)		(12,820	)		(9,060	)

Total stockholders’ equity		821,467			793,462

Total liabilities and stockholders’ equity	$	925,756		$	893,151

See accompanying notes to condensed consolidated financial statements.

MPS Group, Inc. and Subsidiaries

Condensed Consolidated Statements of Income


	Three Months Ended					Six Months Ended
(dollar amounts in thousands except per share amounts)	June 30, 2004		June 30, 2003			June 30, 2004		June 30, 2003
	(unaudited)		(unaudited)			(unaudited)		(unaudited)
Revenue	$	333,245	$	273,167		$	643,726	$	537,430
Cost of revenue		248,089		199,586			480,335		396,844

Gross profit		85,156		73,581			163,391		140,586

Operating expenses:
General and administrative		68,089		58,475			134,383		116,050
Depreciation and intangibles amortization		3,794		4,245			7,716		8,672

Total operating expenses		71,883		62,720			142,099		124,722

Income from operations		13,273		10,861			21,292		15,864
Other income (expense), net		96		(9	)		731		(15	)

Income from continuing operations before provision for income taxes		13,369		10,852			22,023		15,849
Provision for income taxes		4,025		4,389			7,246		6,453

Income from continuing operations		9,344		6,463			14,777		9,396
Loss from discontinued operations (net of an income tax benefit of $347 and $344, respectively)		—		(644	)		—		(638	)

Net income	$	9,344	$	5,819		$	14,777	$	8,758

Basic net income per common share:
Income from continuing operations	$	0.09	$	0.06		$	0.14	$	0.09
Loss from discontinued operations, net of tax		—		(0.01	)		—		(0.01	)

Basic net income per common share	$	0.09	$	0.06		$	0.14	$	0.09

Average common shares outstanding, basic		103,655		101,242			103,158		101,623

Diluted net income per common share:
Income from continuing operations	$	0.09	$	0.06		$	0.14	$	0.09
Loss from discontinued operations, net of tax		—		(0.01	)		—		(0.01	)

Diluted net income per common share	$	0.09	$	0.06		$	0.14	$	0.09

Average common shares outstanding, diluted		107,527		103,002			106,955		102,840

See accompanying notes to condensed consolidated financial statements.

MPS Group, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows


	Six months ended June 30,
(dollar amounts in thousands)	2004			2003
	(unaudited)			(unaudited)
Cash flows from operating activities:
Income from continuing operations	$	14,777		$	9,396
Adjustments to income from continuing operations to net cash provided by operating activities:
Deferred income taxes		7,875			8,126
Deferred compensation		1,578			847
Depreciation and intangibles amortization		7,716			8,672
Changes in certain assets and liabilities, net of acquisitions:
Accounts receivable		(26,613	)		25,636
Prepaid expenses and other assets		(1,781	)		(2,080	)
Accounts payable and accrued expenses		7,653			(9,377	)
Accrued payroll and related taxes		4,502			3,072
Other, net		(2,496	)		2,532

Net cash provided by operating activities		13,211			46,824

Cash flows from investing activities:
Sale of assets		2,442			—
Purchase of furniture, equipment and leasehold improvements, net of disposals		(5,658	)		(3,357	)
Purchase of businesses, including additional consideration on acquisitions, net of cash acquired		(15,970	)		(848	)

Net cash used in investing activities		(19,186	)		(4,205	)

Cash flows from financing activities:
Repurchases of common stock		(3,760	)		(7,626	)
Discount realized on employee stock purchase plan		(204	)		(164	)
Proceeds from stock options exercised		10,900			457
Repayments on indebtedness		(400	)		(69	)

Net cash provided by (used in) financing activities		6,536			(7,402	)

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