UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: July 29, 2003
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Date of the Earliest Event Reported: July 28, 2003
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RIGHT MANAGEMENT CONSULTANTS, INC.
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(Exact name of registrant as specified in its charter)
Pennsylvania
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(State or other jurisdiction of incorporation)
0-15539 23-2153729
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(Commission (IRS Employer Identification
file number) Number)
1818 Market Street, Philadelphia, Pennsylvania 19103
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (215) 988-1588
Item 7: Exhibits
Exhibit
Number Description
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99.1 Press release announcing earnings results for the second quarter
ended June 30, 2003
Item 12: Disclosure of Results of Operations and Financial Condition
The information in this Current Report shall not be deemed "filed" for the
purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or
otherwise subjected to the liabilities of that Section. The information in this
Current Report shall not be incorporated by reference into any registration
statement or other document pursuant to the Securities Act of 1933, as amended,
except as shall be expressly set forth by specific reference in such a filing.
On July 28, 2003, Right Management Consultants, Inc. (the Company), issued an
earnings release announcing its financial results for the second quarter ended
June 30, 2003. A copy of the earnings release is attached as Exhibit 99.1.
A "non-GAAP" financial measure is a measure of the issuer's financial
performance, financial position or cash flows that excludes amounts or
adjustments that are included in the most directly comparable measure presented
in accordance with generally accepted accounting principles (GAAP). The earnings
release discloses cash flow as of June 30, 2003 and 2002, a non-GAAP financial
measure. Management believes that the measurement of cash flow assists investors
in understanding the Company's ability to fund its operations and growth, and
service its debt. The earnings release contains a reconciliation of cash flow to
GAAP.
The Company held a conference call at 9:00 a.m. EDT on July 28, 2003 to discuss
the earnings release. During the call, the following items were disclosed
concerning the impact on net income and earnings per share:
o The foreign currency exchange impact added $0.04 and $0.07 to earnings per
share for the second quarter and June YTD 2003, respectively.
o During the second quarter 2003 the Company incurred a one-time charge of
$0.03 to earnings per share for severance related to employee terminations.
On a year-to-date basis, the Company incurred a total charge of $0.05 to
earnings per share in one-time occurrences for the aforementioned severance
and the loss on the sale of its executive search business in Norway. The
anticipated cost savings from these reductions in workforce are expected to
approximate $3 million during the second half of the year.
o The Company's incentive compensation program for its employees ties their
bonuses to the financial performance of the Company and is an element of
the variable cost structure of the business helping to sustain operating
margins. In the second quarter 2003 the Company incurred approximately $4.5
million in incentive costs compared to $10.1 million for the same period in
the prior year. For June year-to-date 2003, the Company incurred $8.6
million in incentive costs compared to $21.3 million for the same period in
the prior year.
Also during this conference call, the following items were discussed:
o For the second quarter ended June 30, 2003, same office revenue growth on a
pro-forma basis, excluding the search and outsourcing businesses that were
sold by the Company subsequent to June 30, 2002, was -9.1% on a
consolidated basis, -10.3% for career transition services and -2.1% for
organizational consulting services. Pro-forma same office revenue growth by
line of business in the following geographic areas was as follows:
Career
Transition Consulting
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North America -19.1% -13.4%
Europe +12.7% -2.8%
Europe (no foreign exchange impact) -2.9% -26.3%
Asia-Pacific -10.6% +7.4%
Japan -21.1% -- %
o Deferred revenue on the balance sheets by geographic location as of June 30
and March 31, 2003 included the following:
Dollars in Thousands
June 30 March 31
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North America $29,958 $30,807
Europe 18,156 21,000
Asia-Pacific 1,725 2,383
Japan 8,657 11,261
Brazil 527 452
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$59,023 $65,903
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The information included above that is disclosed in the earnings conference call
is not necessarily indicative of future earnings results. Please refer to the
press release filed as Exhibit 99.1 for details of how to access a replay of
this earnings conference call while it is available.
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 hereunto duly authorized.
RIGHT MANAGEMENT CONSULTANTS, INC.
(Registrant)
Date: July 29, 2003 By: /S/ CHARLES J. MALLON
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Charles J. Mallon
Executive Vice President and
Chief Financial Officer