1 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 SEPTEMBER 30, 1996 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: 0-20540 ON ASSIGNMENT, INC. (Exact name of registrant as specified in its charter) DELAWARE 95-4023433 (State of Incorporation) (IRS Employer Identification No.) 26651 WEST AGOURA ROAD, CALABASAS, CA 91302 (Address of principal executive offices) (Zip Code) (818) 878-7900 (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. Yes X No ----- ----- At September 30, 1996, the total number of outstanding shares of the Company's Common Stock ($0.01 par value) was 5,147,199. Page 1 of 18 pages Exhibit index on page 17
2 ON ASSIGNMENT, INC. INDEX <TABLE> <CAPTION> PART 1 - FINANCIAL INFORMATION PAGE NUMBER <S> <C> Item 1 - Consolidated Financial Statements Consolidated Balance Sheets at September 30, 1996 and December 31, 1995 (Unaudited) 3 Consolidated Statements of Income for the three months ended September 30, 1996 and September 30, 1995 (Unaudited) 4 Consolidated Statements of Income for the nine months ended September 30, 1996 and September 30, 1995 (Unaudited) 5 Consolidated Statements of Cash Flows for the nine months ended September 30, 1996 and September 30, 1995 (Unaudited) 6, 7 Notes to Consolidated Financial Statements (Unaudited) 8, 9 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 10, 11, 12, 13, 14 PART II - OTHER INFORMATION Item 4 - Submission of Matters to a Vote of Security-Holders 15 Item 5 - Other Information 15 Item 6 - Exhibits and Reports on Form 8-K 15 Signatures 16 Index to Exhibits 17 </TABLE> 2
3 PART I - FINANCIAL INFORMATION ITEM 1 - CONSOLIDATED FINANCIAL STATEMENTS ON ASSIGNMENT, INC. CONSOLIDATED BALANCE SHEETS (UNAUDITED) - -------------------------------------------------------------------------------- <TABLE> <CAPTION> SEPTEMBER 30, DECEMBER 31, 1996 1995 ------------- ------------- <S> <C> <C> ASSETS CURRENT ASSETS: Cash and cash equivalents $ 7,940,000 $ 3,327,000 Marketable securities, current 4,990,000 3,565,000 Accounts receivable, net (note 4) 11,869,000 10,144,000 Advances and deposits 157,000 111,000 Prepaid expenses 622,000 799,000 Deferred income taxes 873,000 600,000 ------------- ------------- Total current assets 26,451,000 18,546,000 ------------- ------------- Office Furniture, Equipment and Leasehold Improvements, net (note 5) 2,269,000 1,730,000 Marketable securities, non-current 0 2,000,000 Workers' compensation deposits 760,000 860,000 Goodwill, net (note 6) 593,000 628,000 Other assets 147,000 158,000 ------------- ------------- TOTAL ASSETS $ 30,220,000 $ 23,922,000 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Note payable - bank $ 0 $ 475,000 Accrued payroll 2,756,000 1,647,000 Accounts payable 468,000 495,000 Accrued expenses 1,263,000 853,000 Income taxes payable 546,000 304,000 ------------- ------------- Total current liabilities 5,033,000 3,774,000 ------------- ------------- STOCKHOLDERS' EQUITY: Preferred stock (note 7) 0 0 Common stock (note 8) 51,000 50,000 Paid-in capital 8,135,000 6,898,000 Retained earnings 17,001,000 13,200,000 ------------- ------------- Total stockholders' equity 25,187,000 20,148,000 ------------- ------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 30,220,000 $ 23,922,000 ============= ============= </TABLE> 3
4 PART I - FINANCIAL INFORMATION ITEM 1 - CONSOLIDATED FINANCIAL STATEMENTS ON ASSIGNMENT, INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - -------------------------------------------------------------------------------- <TABLE> <CAPTION> Three Months Ended September 30, -------------------------------- 1996 1995 ------------- ------------- <S> <C> <C> REVENUES $ 23,303,000 $ 19,201,000 COST OF SERVICES 16,244,000 13,486,000 ------------- ------------- GROSS PROFIT 7,059,000 5,715,000 OPERATING EXPENSES 4,554,000 3,923,000 ------------- ------------- OPERATING INCOME 2,505,000 1,792,000 INTEREST INCOME, NET 130,000 97,000 ------------- ------------- INCOME BEFORE INCOME TAXES 2,635,000 1,889,000 PROVISION FOR INCOME TAXES 1,062,000 746,000 ------------- ------------- NET INCOME $ 1,573,000 $ 1,143,000 ============= ============= PRIMARY AND FULLY DILUTED EARNINGS PER SHARE $ 0.29 $ 0.21 ============= ============= WEIGHTED AVERAGE NUMBER OF COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING 5,449,000 5,328,000 ============= ============= </TABLE> 4
5 PART I - FINANCIAL INFORMATION ITEM 1 - CONSOLIDATED FINANCIAL STATEMENTS ON ASSIGNMENT, INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - -------------------------------------------------------------------------------- <TABLE> <CAPTION> Nine Months Ended September 30, ------------- ------------- 1996 1995 ------------- ------------- <S> <C> <C> REVENUES $ 63,643,000 $ 52,530,000 COST OF SERVICES 44,292,000 36,784,000 ------------- ------------- GROSS PROFIT 19,351,000 15,746,000 OPERATING EXPENSES 12,956,000 11,014,000 ------------- ------------- OPERATING INCOME 6,395,000 4,732,000 NON-RECURRING ACQUISITION COSTS (Note 2) 401,000 0 ------------- ------------- INCOME BEFORE INTEREST AND INCOME TAXES 5,994,000 4,732,000 INTEREST INCOME, NET 370,000 285,000 ------------- ------------- INCOME BEFORE INCOME TAXES 6,364,000 5,017,000 PROVISION FOR INCOME TAXES 2,563,000 1,997,000 ------------- ------------- NET INCOME $ 3,801,000 $ 3,020,000 ============= ============= PRIMARY AND FULLY DILUTED EARNINGS PER SHARE $ 0.70 $ 0.57 ============= ============= WEIGHTED AVERAGE NUMBER OF COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING 5,445,000 5,244,000 ============= ============= </TABLE> 5
6 PART I - FINANCIAL INFORMATION ITEM 1 - CONSOLIDATED FINANCIAL STATEMENTS ON ASSIGNMENT, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - -------------------------------------------------------------------------------- <TABLE> <CAPTION> Nine Months Ended September 30, ------------------------------- 1996 1995 ------------ ------------ <S> <C> <C> CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 3,801,000 $ 3,020,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 499,000 430,000 Increase in allowance for doubtful accounts 63,000 203,000 Increase in deferred income taxes (273,000) (147,000) Increase in accounts receivable (1,788,000) (2,834,000) Increase in accounts payable and accrued expenses 1,492,000 469,000 Increase in income taxes payable 392,000 252,000 Decrease (increase) in workers' compensation deposits 100,000 (144,000) Decrease (increase) in prepaid expenses 177,000 (82,000) Increase in other assets (5,000) (48,000) ------------ ------------ Net cash provided by operating activities 4,458,000 1,119,000 ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of marketable securities (1,000,000) (2,800,000) Proceeds from the maturity of marketable securities 1,575,000 2,580,000 Acquisition of office furniture, equipment and leasehold improvements (987,000) (560,000) Decrease (increase) in advances and deposits (46,000) 78,000 ------------ ------------ Net cash used for investing activities (458,000) (702,000) ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from exercise of common stock options 939,000 476,000 Proceeds from issuance of common stock - Employee Stock Purchase Plan 149,000 121,000 Proceeds from collection of officer loans receivable 0 300,000 Borrowings on line of credit 450,000 1,347,000 Repayments of line of credit borrowings (925,000) (687,000) ------------ ------------ Net cash provided by financing activities 613,000 1,557,000 ------------ ------------ NET INCREASE IN CASH AND CASH EQUIVALENTS 4,613,000 1,974,000 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 3,327,000 1,833,000 ------------ ------------ CASH AND CASH EQUIVALENTS, END OF PERIOD $ 7,940,000 $ 3,807,000 ============ ============ </TABLE> 6
7 PART I - FINANCIAL INFORMATION ITEM 1 - CONSOLIDATED FINANCIAL STATEMENTS ON ASSIGNMENT, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: <TABLE> <CAPTION> Nine Months Ended September 30, ------------------------------- 1996 1995 ----------- ----------- <S> <C> <C> Cash paid during the period for income taxes, net of refunds $ 2,429,000 $ 1,892,000 =========== =========== </TABLE> SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS: <TABLE> <CAPTION> Nine Months Ended September 30, ------------------------------- 1996 1995 ----------- ----------- <S> <C> <C> Tax benefit of disqualifying dispositions $ 150,000 $ 110,000 =========== =========== Officer loans receivable $ 0 $ 109,000 =========== =========== </TABLE> 7
8 PART I - FINANCIAL INFORMATION ITEM 1 - CONSOLIDATED FINANCIAL STATEMENTS ON ASSIGNMENT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 - -------------------------------------------------------------------------------- 1. The accompanying consolidated financial statements have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). This Report on Form 10-Q should be read in conjunction with the Company's annual report on Form 10-K for the year ended December 31, 1995, and Current Reports on Form 8-K and 8-K/A-1, filed with the Securities and Exchange Commission on April 10, 1996 and May 3, 1996, respectively. Certain information and footnote disclosures which are normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to SEC rules and regulations. The information reflects all normal and recurring adjustments which, in the opinion of Management, are necessary for a fair presentation of the financial position of the Company and its results of operations for the interim periods set forth herein. The results for the three months ended September 30, 1996 or the nine months ended September 30, 1996 are not necessarily indicative of the results to be expected for the full year or any other period. 2. On March 27, 1996, the Company issued 171,579 shares of its common stock for all of the outstanding common stock of EnviroStaff, Inc. ("EnviroStaff"), a Minnesota corporation, which specializes in providing employees on temporary assignments to the environmental services industry. The acquisition has been accounted for as a pooling-of-interests and, accordingly, the Company's consolidated financial statements have been restated for all periods prior to the acquisition to include the results of operations, financial positions, and cash flows of EnviroStaff. Non-recurring acquisition costs of approximately $401,000 related to the acquisition of EnviroStaff were charged to expense during the nine-month period ended September 30, 1996. The after-tax impact of these expenses on primary and fully diluted earnings per share was $0.04 for the nine-month period ended September 30, 1996. Acquisition costs include legal, accounting, financial advisory services, and other costs of the acquisition. 3. The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. 4. Accounts receivable are stated net of an allowance for doubtful accounts of $498,000 and $435,000 at September 30, 1996 and December 31, 1995, respectively. 5. Office furniture, equipment and leasehold improvements are stated net of accumulated depreciation and amortization of $1,846,000 and $1,403,000 at September 30, 1996 and December 31, 1995, respectively. 6. Goodwill represents the excess of the purchase price over the fair value of the net assets acquired. It is being amortized on a straight-line basis over 15 years. Goodwill is stated net of accumulated amortization of $116,000 and $81,000 at September 30, 1996 and December 31, 1995, respectively. 8
9 PART I - FINANCIAL INFORMATION ITEM 1 - CONSOLIDATED FINANCIAL STATEMENTS ON ASSIGNMENT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 - -------------------------------------------------------------------------------- 7. At September 30, 1996 and December 31, 1995, Preferred Stock at a par value of $0.01 per share consisted of 1,000,000 shares authorized and 0 shares issued and outstanding. 8. At September 30, 1996 and December 31, 1995, Common Stock at a par value of $0.01 per share consisted of 25,000,000 shares authorized and 5,147,199 and 5,024,461 shares issued and outstanding, respectively. 9. In October 1995, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation." The Company has elected to adopt the disclosure portion of the statement and therefore will provide the required disclosures in its financial statements for the year ending December 31, 1996. 10. Certain reclassifications have been made to the 1995 consolidated financial statements to conform with the 1996 consolidated financial statement presentation. 9
10 PART I - FINANCIAL INFORMATION ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The discussion in this Report contains forward-looking statements that involve risks and uncertainties. The Company's actual results could differ materially from those discussed herein. Factors that could cause or contribute to such differences include, but are not limited to, the integration of acquired operations, management of growth and other risks discussed in "Risk Factors That May Affect Future Results" in the Business Section of the Company's Annual Report on Form 10-K for the year ended December 31, 1995, as well as those discussed elsewhere in this Report and from time to time in the Company's other reports filed with the Securities and Exchange Commission. CHANGES IN RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995: - -------------------------------------------------------------------------------- REVENUES - Revenues increased by 21.4% from $19,201,000 for the three months ended September 30, 1995, to $23,303,000 for the three months ended September 30, 1996, primarily as a result of the increase in the number of temporary employees on assignment in the Lab Support division and to a lesser extent from the increase in revenues generated by EnviroStaff and the Finance Support division. Lab Support's revenue growth was primarily attributable to the strong performance in most of the markets in which the Lab Support division has older, better established branches and to a lesser extent the contribution of new Lab Support offices opened in the past year. Average hourly billing rates of the Lab Support division did not vary significantly between the two periods. The growth of EnviroStaff's revenues were primarily attributable to the contribution of new EnviroStaff offices opened in the past year, as well as the growth of most existing offices. Average hourly billing rates of EnviroStaff did not vary significantly between the two periods. The growth of the Finance Support division's revenues were primarily attributable to higher average hourly billing rates, which were principally attributable to a concentration on new business with a higher price structure, and to a lesser extent from the contribution of new offices opened in the past year. COST OF SERVICES - Cost of services consists solely of compensation for temporary employees and payroll taxes and benefits paid by the Company in connection with such compensation. Cost of services increased 20.5% from $13,486,000 for the three months ended September 30, 1995 to $16,244,000 for the three months ended September 30, 1996. Cost of services as a percentage of revenues decreased from 70.2% in the 1995 period to 69.7% in the 1996 period. This decrease was primarily attributable to an increase in conversion fee revenue of the Lab Support division in the 1996 period. In addition, an increase in average gross margins of the Finance Support division as a result of a shift to higher margin business in the 1996 period, and an increase in average gross margins of EnviroStaff as a result of a decrease in average pay rates in the 1996 period, was offset by an increase in employer payroll taxes and employer paid benefits. 10
11 PART I - FINANCIAL INFORMATION ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS CHANGES IN RESULTS OF OPERATIONS (CONTINUED) FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995: - -------------------------------------------------------------------------------- OPERATING EXPENSES - Operating expenses include the costs associated with the Company's network of Account Managers and branch offices, including Account Manager compensation, rent, other office expenses and advertising for temporary employees, and corporate office expenses, including corporate operations and support personnel, management compensation, Account Manager recruiting and training expenses, corporate advertising and promotion, rent and other general and administrative expenses. Operating expenses increased 16.1% from $3,923,000 for the three months ended September 30, 1995 to $4,554,000 for the three months ended September 30, 1996. Operating expenses as a percentage of revenues decreased from 20.4% in the 1995 period to 19.5% in the 1996 period. This result was primarily attributable to the increased productivity of the Account Managers in all three divisions. INTEREST - Interest income, net increased 34.0% from $97,000 for the three months ended September 30, 1995 to $130,000 for the three months ended September 30, 1996, primarily as a result of interest earned on higher interest-bearing cash, cash equivalent and marketable security account balances in the 1996 period. PROVISION FOR INCOME TAXES - Income taxes increased 42.4% from $746,000 for the three months ended September 30, 1995 to $1,062,000 for the three months ended September 30, 1996. The effective tax rate increased from 39.5% in the 1995 period to 40.3% in the 1996 period. 11
12 PART I - FINANCIAL INFORMATION ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS CHANGES IN RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995: - -------------------------------------------------------------------------------- REVENUES - Revenues increased by 21.2% from $52,530,000 for the nine months ended September 30, 1995, to $63,643,000 for the nine months ended September 30, 1996, primarily as a result of the increase in the number of temporary employees on assignment in the Lab Support division and to a lesser extent from the increase in revenues generated by EnviroStaff and the Finance Support division. Lab Support's revenue growth was primarily attributable to the strong performance in most of the markets in which the Lab Support division has older, better established branches and to a lesser extent the contribution of new Lab Support offices opened in the past year. However, Lab Support's revenue growth was tempered by an unusually high number of conversions of temporary employees to permanent status and the impact of severe winter weather in several key markets during the first quarter. Average hourly billing rates of the Lab Support division decreased slightly during the 1996 period. The growth of EnviroStaff's revenues were primarily attributable to the contribution of new EnviroStaff offices opened in the past year, as well as the growth of most existing offices. Average hourly billing rates of EnviroStaff did not vary significantly between the two periods. The growth of the Finance Support division's revenues were primarily attributable to higher average hourly billing rates, which were principally attributable to a concentration on new business with a higher price structure, and to a lesser extent from the contribution of new offices opened in the past year. COST OF SERVICES - Cost of services increased 20.4% from $36,784,000 for the nine months ended September 30, 1995 to $44,292,000 for the nine months ended September 30, 1996. Cost of services as a percentage of revenues decreased from 70.0% in the 1995 period to 69.6% in the 1996 period. This decrease was primarily attributable to an increase in conversion fee revenue of the Lab Support division in the 1996 period. In addition, an increase in average gross margins of the Finance Support division as a result of a shift to higher margin business in the 1996 period, and an increase in average gross margins of EnviroStaff as a result of a decrease in average pay rates in the 1996 period, was offset by an increase in employer payroll taxes and employer paid benefits. OPERATING EXPENSES - Operating expenses increased 17.6% from $11,014,000 for the nine months ended September 30, 1995 to $12,956,000 for the nine months ended September 30, 1996. Operating expenses as a percentage of revenues decreased from 21.0% in the 1995 period to 20.4% in the 1996 period. This result was primarily attributable to the increased productivity of the Account Managers in all three divisions. 12
13 PART I - FINANCIAL INFORMATION ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS CHANGES IN RESULTS OF OPERATIONS (CONTINUED) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995: - -------------------------------------------------------------------------------- NON-RECURRING ACQUISITION COSTS - Non-recurring acquisition costs consisted principally of legal, accounting, financial advisory services and other expenses related to the initial combination of EnviroStaff and the Company. The combined companies incurred approximately $401,000 in non-recurring acquisition costs during the quarter ended March 31, 1996. INTEREST - Interest income, net increased 29.8% from $285,000 for the nine months ended September 30, 1995 to $370,000 for the nine months ended September 30, 1996, primarily as a result of interest earned on higher interest-bearing cash, cash equivalent and marketable security account balances, partially offset by interest expense charged on EnviroStaff's line of credit borrowings in the 1996 period. PROVISION FOR INCOME TAXES - Income taxes increased 28.3% from $1,997,000 for the nine months ended September 30, 1995 to $2,563,000 for the nine months ended September 30, 1996. The effective tax rate increased from 39.8% in the 1995 period to 40.3% in the 1996 period. 13
14 PART I - FINANCIAL INFORMATION ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES: - -------------------------------------------------------------------------------- The Company's primary sources of cash for the nine months ended September 30, 1996 were funds provided by operating activities. For the nine months ended September 30, 1995, operating activities provided $1,119,000 of cash compared to $4,458,000 for the nine months ended September 30, 1996. This increase was primarily attributable to higher net income and a smaller increase in accounts receivable in the 1996 period compared to the 1995 period, which was principally due to an expected temporary reduction in billing activity as a result of the conversion to a new payroll processing and billing system in June, 1995. In addition, an increase in accounts payable and accrued expenses and a decrease in workers' compensation deposits and prepaid expenses in the 1996 period, contributed to net cash provided by operating activities. Cash used for investing activities totaled $702,000 for the nine months ended September 30, 1995, compared to $458,000 for the nine months ended September 30, 1996. This was primarily attributable to cash used to purchase marketable securities exceeding cash proceeds from the maturity of marketable securities in the 1995 period, partially offset by higher purchases of fixed assets in the 1996 period. Cash provided by financing activities was $1,557,000 for the nine months ended September 30, 1995, compared to $613,000 for the nine months ended September 30, 1996. The decrease was primarily attributable to repayments of EnviroStaff's line of credit borrowings exceeding the related borrowings during the 1996 period compared to the 1995 period, and the proceeds from the collection of officer loans receivable in the 1995 period. The decrease was partially offset by higher proceeds from the sale of common stock in connection with the exercise of stock options and the Employee Stock Purchase Plan during the 1996 period. Effective September 30, 1996, the Company renewed its unsecured bank line of credit. The maximum borrowings allowable under this agreement are $7,000,000 and bear interest at the bank's reference rate (8.25% at September 30, 1996). The agreement expires on July 1, 1998. No borrowings were outstanding under this credit line at September 30, 1996. In addition, the Company's EnviroStaff subsidiary had a $1,000,000 line of credit with a bank. Borrowings accrued interest at prime plus 1.25%. Advances were secured by all of the assets of EnviroStaff and the agreement included requirements for minimum operating ratios and tangible net worth and restricted the payment of dividends. On April 19, 1996, the Company paid the outstanding balance in full and the line of credit agreement was terminated. The Company believes that its cash balances, together with funds from operations and its borrowing capacity, will be sufficient to meet its cash requirements through at least the next twelve months. 14
15 PART II - OTHER INFORMATION ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS None ITEM 5 - OTHER INFORMATION None ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits - 11.1 Statement regarding computation of earnings per share (b) Reports on Form 8-K - None 15
16 PART II - OTHER INFORMATION 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. ON ASSIGNMENT, INC. Date: November 13, 1996 By: /s/ H. Tom Buelter ------------------------ --------------------------------- H. Tom Buelter Chairman of the Board, President and Chief Executive Officer (Principal Executive Officer) Date: November 13, 1996 By: /s/ Ronald W. Rudolph ------------------------ --------------------------------- Ronald W. Rudolph Sr. Vice President, Finance & Administration and Chief Financial Officer (Principal Financial and Accounting Officer) 16
17 INDEX TO EXHIBITS <TABLE> <CAPTION> Exhibit Sequentially Number Description Numbered Page - ------------------------------------------------------------------------------ <S> <C> <C> Statement regarding computation 11.1 of earnings per share 18 </TABLE> 17