CBIZ
CBZ
#5248
Rank
$1.47 B
Marketcap
$26.85
Share price
-0.59%
Change (1 day)
-64.61%
Change (1 year)

CBIZ - 10-Q quarterly report FY


Text size:
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 March 31, 1998
---------------------------------

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
---------------------------------- ------------

Commission file number 0-25890
---------------------------------------------------------

Century Business Services, Inc.
- - --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)


Delaware 22-2769024
--------------------------------- ------------------------------------
(State or Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation or Organization)


6480 Rockside Woods Boulevard South, Suite 330, Cleveland, Ohio 44131
- - --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)


(Registrant's Telephone Number, Including Area Code) 216-447-9000
----------------------------

10055 Sweet Valley Drive, Valley View, Ohio 44125
- - --------------------------------------------------------------------------------
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 April 30, 1998
--------------------- ---------------
Par value $.01 per share 50,143,253
---------------

Exhibit Index is on page 13 of this report.

Page 1 of 13 Pages
2
<TABLE>
<CAPTION>

CENTURY BUSINESS SERVICES, INC.

TABLE OF CONTENTS



PART I. FINANCIAL INFORMATION: Page
<S> <C>
Item 1 - Financial Statements

Condensed Consolidated Balance Sheets -
March 31, 1998 and December 31, 1997 3

Condensed Consolidated Statements of Income -
Three Months Ended March 31, 1998 and 1997 4

Condensed Consolidated Statements of Cash Flows -
Three Months Ended March 31, 1998 and 1997 5

Notes to the Condensed Consolidated Financial Statements 6-7

Item 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations 8-9


PART II. OTHER INFORMATION:

Item 2 - Changes in Securities 10

Item 6 - Exhibits and Reports on Form 8-K 11

Signatures 12

Exhibit Index 13

</TABLE>



-2-
3



PART I - FINANCIAL INFORMATION
------------------------------

ITEM 1. FINANCIAL STATEMENTS

CENTURY BUSINESS SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>

March 31, December 31,
1998 1997
----------- -----------
ASSETS (unaudited) (audited)
<S> <C> <C>
Cash and cash equivalents $ 46,488 $ 21,148
Accounts receivable, less allowance for doubtful
accounts of $1,525 and $1,472, respectively 46,726 32,235
Premiums receivable, less allowance for doubtful
accounts of $361 and $281, respectively 14,947 7,812

Investments:
Fixed maturities held to maturity, at amortized cost 13,917 14,528
Securities available for sale, at fair value 64,042 59,138
Other investments 1,849 6,054
----------- -----------
Total investments 79,808 79,720

Deferred policy acquisition costs 4,501 4,478
Reinsurance recoverables 17,909 15,215
Excess of cost over net assets of businesses
acquired, net of accumulated amortization of $2,292 and $1,264 132,739 89,856
Notes receivable 17,878 16,579
Other assets 30,716 20,524
----------- -----------

TOTAL ASSETS $ 391,712 $ 287,567
=========== ===========

LIABILITIES
Losses and loss expenses payable $ 54,940 $ 50,655
Unearned premiums 22,443 22,656
Notes payable, bank debt and capitalized leases 23,153 20,312
Income taxes 10,856 2,958
Accrued expenses 37,582 27,167
Other liabilities 21,482 15,909
----------- -----------

TOTAL LIABILITIES 170,456 139,657
----------- -----------

SHAREHOLDERS' EQUITY
Common stock 492 415
Additional paid-in capital 194,666 127,517
Retained earnings 24,933 18,372
Accumulated other comprehensive income 1,165 1,606
----------- -----------

TOTAL SHAREHOLDERS' EQUITY 221,256 147,910
----------- -----------


TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 391,712 $ 287,567
=========== ===========

</TABLE>
See the accompanying notes to the condensed consolidated financial statements.





-3-
4



CENTURY BUSINESS SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands, except per share data)

<TABLE>
<CAPTION>
Three Months Ended
March 31,
1998 1997
---------- ----------
<S> <C> <C>
Revenues:
Business services fees and commissions $ 46,599 $ 6,133
Specialty insurance services (regulated):
Premiums earned 10,469 8,066
Net investment income 1,376 1,121
Net realized gain on investments 770 963
Other income 1 13
---------- ----------
Total revenues 59,215 16,296
---------- ----------

Expenses:
Operating expenses - business services 35,868 4,681
Losses and loss adjustment expenses 5,622 4,829
Policy acquisition and other expenses 4,983 3,324
Corporate general and administrative expenses 1,539 370
Depreciation and amortization expenses 1,634 316
---------- ----------
Total expenses 49,646 13,520
---------- ----------

Income from continuing operations before net corporate interest
income and income tax expense 9,569 2,776
Net corporate interest income 326 285
---------- ----------

Income from continuing operations before
income tax expense 9,895 3,061

Income tax expense 3,528 952
---------- ----------

Income from continuing operations 6,367 2,109
Loss from discontinued operations -- 534
---------- ----------

Net income $ 6,367 $ 1,575
---------- ----------

Earnings per share
Basic:
Income from continuing operations $ 0.14 $ 0.06
Loss from discontinued operations -- (0.01)
---------- ----------
Net income per share $ 0.14 $ 0.05
========== ==========

Diluted:
Income from continuing operations $ 0.11 $ 0.04
Loss from discontinued operations -- (0.01)
---------- ----------

Net income per share $ 0.11 $ 0.03
========== ==========
Weighted average common shares 45,528 34,507
========== ==========
Weighted average common and dilutive
potential common shares 59,876 48,059
========== ==========
</TABLE>

See the accompanying notes to the condensed consolidated financial statements.




-4-
5



CENTURY BUSINESS SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
<TABLE>
<CAPTION>

Three Months Ended
March 31,
1998 1997
-------- --------
<S> <C> <C>
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES $(10,159) $ 4,950

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed maturities, held to maturity -- (209)
Purchase of fixed maturities, available for sale (9,937) (5,869)
Purchase of equity securities (1,854) (2,133)
Redemption of fixed maturities, held to maturity 551 500
Sale of fixed maturities, available for sale 5,709 743
Sale of equity securities 681 229
Change in short-term investments 4,205 2,878
Business acquisitions, net of cash acquired (8,113) (7,403)
Acquisition of property and equipment (2,754) (236)
Proceeds from dispositions of property and equipment 109 --
-------- --------
Net cash used in investing activities (11,403) (11,500)
-------- --------

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from debt 42,038 405
Repayment of debt (41,682) (589)
Proceeds from stock issuances, net 41,506 156
Proceeds from exercise of stock options and warrants, net 5,040 --
-------- --------
Net cash provided by (used in) financing activities 46,902 (28)
-------- --------

Net increase (decrease) in cash and cash equivalents 25,340 (6,578)
Cash and cash equivalents at beginning of period 21,148 39,874
-------- --------

Cash and cash equivalents at end of period:
Continuing operations 46,488 33,296
Discontinued operations -- 527
-------- --------
Total cash and cash equivalents at end of period $ 46,488 $ 33,823
======== ========

</TABLE>

See the accompanying notes to the condensed consolidated financial statements.


-5-
6



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
March 31, 1998 and December 31, 1997 and the results of its operations
and cash flows for the periods ended March 31, 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, 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 March 31,
1998 and 1997 was $5.9 million and $905,000, 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):

<TABLE>
<CAPTION>
Three Months Ended
March 31,
1998 1997
------ ------
<S> <C> <C>
Numerator:
Income used in basic and diluted earnings per share $6,367 $1,575

Denominator:
Basic weighted average shares 45,528 34,507
Effect of dilutive stock options and warrants 14,348 13,552
------ ------
Diluted weighted average shares 59,876 48,059
====== ======

Basic earnings per share $0.14 $0.05
----- -----
Diluted earnings per share $0.11 $0.03
----- -----
</TABLE>

3. ACQUISITIONS

During the first quarter 1998, the Company continued its strategic
acquisition program, purchasing the businesses of seven complimentary
companies. These acquisitions comprised the following: four accounting
systems and tax advisory businesses, one benefits design and
administration firm, and two organizational consulting and training
firms.

These acquisitions, with the exception of Bass Consultants, Inc.
("BASS") were accounted for as a purchase, 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 Company's prior period financial statements
have not been restated for the BASS acquisition, as the transaction was
considered immaterial.



-6-
7



CENTURY BUSINESS SERVICES, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)-(continued)


3. ACQUISITIONS (continued)

The aggregate purchase price of the aforementioned acquisitions was
approximately $52.792 million, and includes future contingent
consideration of up to $5.518 million in cash and restricted common
stock of the Company with an estimated stock value at date of
acquisition of $5.919 million, based on the acquired companies' ability
to meet certain performance goals. The aggregate purchase price,
comprised of cash payments, issuance of promissory notes, and issuance
of Common Stock, 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):
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1998 1997
------- --------
<S> <C> <C>
Net revenues - pro forma $62,636 $27,499
Net income - pro forma $7,251 $4,557
Earnings per common share pro forma
- Basic $0.15 $0.12
- Diluted $0.12 $0.09
</TABLE>

3. SUBSEQUENT EVENTS

Since March 31, 1998, the Company has closed four acquisitions and has
announced the acquisition of nine additional companies. The new
acquisitions include the following: five accounting, consulting and tax
advisory businesses, two benefits design, consulting and administration
firms, one employee benefits brokerage firm, one business valuation
firm, one pension administration and investment services firm, one
information technology company, one managed healthcare marketing and
administration firm, and a national franchisor of financial and tax
services. The combined cost of these transactions is approximately
$11.241 million in cash and $42.086 million of restricted Company
common stock.

4. RECLASSIFICATIONS

Certain reclassifications have been made to the 1997 financial
statements to conform to the 1998 presentation.


-7-
8



CENTURY BUSINESS SERVICES, INC.

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 $59.2 million for the three-month period
ended March 31, 1998 from $16.3 million for the comparable period in 1997,
representing an increase of $42.9 million, or 263%. The increase was primarily
attributable to the Company's acquisition activity in outsourced business
services.

Business service fees and commissions increased to $46.6 million for
the three-month period ended March 31, 1998 from $6.1 million for the comparable
period in 1997, representing an increase of $40.5 million or 664%. 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 $10.5 million for the three-month period
ended March 31, 1998 from $8.1 million for the comparable period in 1997,
representing an increase of $2.4 million, or 29.8%. Gross written premiums
increased to $20.2 million for the three-month period ended March 31, 1998 from
$11.3 million for the comparable period in 1997, representing an increase of
$8.9 million, or 78.2%. Net written premiums increased to $10.7 million for the
three-month period ended March 31, 1998 compared to $8.3 million for the
comparable period in 1997, representing an increase of $2.4 million, or 28.0%.
These increases were primarily attributable to the growth in 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 $1.4 million for the three-month
period ended March 31, 1998 from $1.1 million for the comparable period in 1997,
representing an increase of approximately $255,000, or 22.7%. This increase was
attributable to an increase in the average investments outstanding of $79.8
million for the three-month period ended March 31, 1998 from $70.1 million for
the comparable period in 1997.

Net realized gain on investments decreased to $770,000 for the
three-month period ended March 31, 1998 from $963,000 for the comparable period
in 1997. This decrease was primarily due to the composition of investments sold
during the three months ended March 31, 1998 versus the comparable period in
1997.

Expenses

Total expenses increased to $49.6 million for the three-month period
ended March 31, 1998 from $13.5 million for the comparable period in 1997,
representing an increase of $36.1 million, or 267%. 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 increased to 83.8% for the three-month period ended March 31,
1998 from 83.0% for the comparable period in 1997.

Operating expenses for the business services operations increased to
$35.9 million for the three-month period ended March 31, 1998 from $4.7 million
for the comparable period in 1997, representing an increase of $31.2 million, or
664%. Such increase was attributable to business services acquisitions completed
in 1998. As a percentage of fees and commissions, operating expenses increased
to 77.0% for the three-month period ended March 31, 1998 from 76.3% for the
comparable period in 1997.




-8-
9



Loss and loss adjustment expenses increased to $5.6 million for the
three-month period ended March 31, 1998 from $4.8 million for the comparable
period in 1997, representing an increase of approximately $800,000, or 16.4%.
Such increase was attributable to the increased premium volume for liability
coverages. As a percentage of premiums earned, loss and loss adjustment expenses
decreased to 53.7% for the three-month period ended March 31, 1998 from 59.9%
for the comparable period in 1997. Such decrease was the result of claims from
prior years that were settled and paid in 1998 for lower than reserved amounts,
as well as a reduction in average claims paid.

Policy acquisition and other expenses increased to $5.0 for the
three-month period ended March 31, 1998 from $3.3 million for the comparable
period in 1997, representing an increase of $1.7 million, or 49.9%. The increase
corresponds directly to the increase in premium volume. As a percentage of net
written premiums, policy acquisition expenses were 46.7% and 39.9% for the
three-month periods ended 1998 and 1997, respectively.

Corporate general and administrative expenses increased to $1.5 million
for the three-month period ended March 31, 1998 from $370,000 for the comparable
period 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 2.3% of total revenues for the
three-month periods ended March 31, 1998 and 1997, respectively.

Depreciation and amortization expenses increased to $1.6 million for
the three-month period ended March 31, 1998 from $316,000 for the comparable
period in 1997, representing an increase of $1.3 million or 417%. 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 increased to 2.8% for the
three-month period ended March 31, 1998 from 1.9% for the comparable period in
1997. Such increase was attributable to the implementation of the Company's
acquisition strategy.

Net Corporate Interest Income

Net corporate interest income increased to $326,000 for the three-month
period ended March 31, 1998 from $285,000 for the comparable period in 1997,
representing an increase of $41,000, or 14.4%. Such increase was attributable to
the increase in cash and cash equivalent balances for the Company, excluding
specialty insurance and outsourced business services.

OTHER
- - -----

The Company's 1998 condensed consolidated balance sheet includes an
increase in goodwill of $42.9 million since December 31, 1997 relates to
goodwill recorded in accordance with APB Opinion No. 16 upon the purchase of six
acquisitions completed during the three months ended March 31, 1998.

LIQUIDITY AND CAPITAL RESOURCES
- - -------------------------------

During the first three months of 1998, cash and cash equivalents increased $25.3
million as cash generated from financing activities of $46.9 million exceeded
cash used in operating activities of $10.2 million and cash used in investing
activities of $11.4 million. The normal seasonal changes occurred between
year-end and the end of the first quarter and resulted in increased accounts
receivable and premiums receivable. Cash used in investing activities consisted
primarily of purchases of investments, 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, which together
with warrants exercised, raised approximately $46.5 million.

ITEM 3. QUANTITATIVE AND QUALITATIVE INFORMATION ABOUT MARKET RISK

The Company does not engage in trading market risk sensitive instruments.
Neither does the Company purchase as investments, hedges or for purposes "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.




-9-
10




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. The amount of the charges to
discontinued operation with respect to the Company's environmental services
business will depend on a number of factors, including the outcome of any
related negotiations and final determination of the net realizable values of
assets to be sold or transferred. In addition, the Company's Annual Report on
Form 10-K contains certain other detailed factors that could cause the Company's
actual results to differ materially from forward-looking statements made by the
Company.

PART II - OTHER INFORMATION


ITEM 2. CHANGES IN SECURITIES

(c) Issuance of unregistered shares during the three months ended
March 31, 1998:

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 January 2, 1998, in connection with the acquisition of Bass Consultants,
Inc., the Company issued 626,966 shares of Common Stock in exchange for all the
outstanding shares of Bass Consultants, Inc.

On January 6, 1998, in connection with the acquisition of Philip Rootberg & Co.,
LLP, the Company paid $5.1 million in cash and issued 482,353 shares of Common
Stock in exchange for all the outstanding shares Philip Rootberg & Co., LLP.

On January 30, 1998, in connection with the acquisition of Seitz, Kate, Medve,
Inc., the Company paid $362,000 in cash and issued 32,492 shares of Common Stock
in exchange for all the outstanding shares of Seitz, Kate, Medve, Inc.

On January 30, 1998, in connection with the acquisition of Braunsdorf, Carlson &
Clinkinbeard, CPA's P.A. and Bushman & Associates, CPA's P.A. ("BCC Group"), the
Company paid $1.6 million in cash and issued 159,352 shares of Common Stock in
exchange for all the outstanding shares of the BCC Group.

On March 23, 1998, in connection with the acquisition of Kaufman Davis LLP, the
Company paid $2.2 million in cash and issued 160,863 shares of Common Stock in
exchange for substantially all of the assets of Kaufman Davis LLP.

On March 31, 1998, in connection with the acquisition of The Continuous Learning
Group, Inc. and Envision Development Group, Inc., the Company paid $10.4 million
in cash and issued 916,805 shares of Common Stock in exchange for all the
outstanding shares of The Continuous Learning Group, Inc. and Envision
Development Group, Inc.

On March 31, 1998, in connection with the acquisition of Multi-Dimensional
International, Inc., the Company paid $5.2 million in cash and issued 459,662
shares of Common Stock in exchange for all the outstanding shares of
Multi-Dimensional International, Inc.



-10-
11




ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

1 Amended and Restated 1996 Employee Stock Option Plan

2 First Amendment, Consent and Waiver to Credit Facility

27.1 Financial Data Schedule

(b) Reports on Form 8-K

(i) The Company filed a Current Report on Form 8-K dated
February 20, 1998, reporting in Item 7 the following
financial statements:

(1) Audited Balance Sheet of Comprehensive Business
Services, Inc. as of December 31, 1996, and Audited
Statements of Operations, Stockholder's Equity, and
Cash Flows for the year ended December 31, 1996.

(2) Unaudited Statements of Operations and Cash Flows of
Comprehensive Business Services, Inc. for the period
January 1, 1997 to September 30, 1997.

(3) Audited Consolidated Balance Sheets of Valuation
Counselors Group, Inc. and Subsidiary as of December
31, 1996 and 1995, and Audited Consolidated Statements
of Operations, Stockholder's Equity, and Cash Flows for
the years then ended.

(4) Unaudited Consolidated Statements of Operations and
Cash Flows of Valuation Counselors Group, Inc. and
Subsidiary for the period January 1, 1997 to September
30, 1997.

(5) Audited Balance Sheet of Zelenkofske, Axelrod & Co.,
Ltd. as of June 30, 1997, and Audited Statements of
Operations and Retained Earnings, and Cash Flows for
the three months ended June 30, 1997.

(6) Audited Balance Sheet of Health Administration
Services, Inc. as of December 18, 1997, and Audited
Statements of Income, Changes in Stockholder's Equity,
and Cash Flows for the period January 1, 1997 to
December 18, 1997.

(7) Audited Consolidated Balance Sheet of Shenkin Kurtz
Baker & Co., P.C. and Subsidiary as of December 7,
1997, and Audited Consolidated Statements of Income,
Stockholder's Equity, and Cash Flows for the period
January 1, 1997 to December 7, 1997.

(8) Audited Combined Balance Sheet of Robert D. O'Byrne and
Associates, Inc. and The Grant Nelson Group, Inc. as of
December 31, 1997, and Audited Combined Statements of
Operations, Stockholder's Equity, and Cash Flows for
the year ended December 31, 1997.

(9) Audited Consolidated Balance Sheets of Environmental
Systems, Inc. and Subsidiaries as of December 31, 1996,
1995 and 1994, and Audited Consolidated Statements of
Operations, Stockholder's Equity, and Cash Flows for
the years then ended.

(10) Audited Balance Sheet of Smith & Radigan, P.C. as of
December 3, 1997, and Audited Statements of Operations
and Cash Flows for the period January 1, 1997 through
December 3, 1997.

(ii) The Company filed a Current Report on Form 8-K dated March
31, 1998, reporting in Item 2 that the Company completed
the acquisitions of The Continuous Learning Group, Inc.,
Envision Development Group, Inc. and Multi-Dimensional
International Consultants, Ltd. The Company noted in Item 7
that financial statements and pro forma information related
to the aforementioned acquisitions would be filed by
amendment.


-11-
12






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: May 15, 1998 By: /s/ Charles D. Hamm, Jr.
------------ ------------------------
Charles D. Hamm, Jr.
Chief Financial Officer








-12-
13





CENTURY BUSINESS SERVICES, INC.
-------------------------------
EXHIBIT INDEX
-------------





Exhibit Number: Page No.
- - ---------------

1 Amended and Restated 1996 Employee Stock Option Plan . . . . . . 14-18

2 First Amendment, Consent and Waiver to Credit Facility . . . . . 19-29

27.1 Financial Data Schedule (SEC only) . . . . . . . . . . . . . . . 30




-13-