ITEM 1. BUSINESS
OVERVIEW
Alternative Resources Corporation-Registered Trademark- ("A.R.C" or the Company"), through its subsidiaries, is a leading provider of information technology (IT) management and staffing services. The Company's clients consist principally of Fortune 1000 companies and mid-sized companies with sizable and complex IT operations. The Company serves its clients through a network of offices located in the United States and Canada.
The Company was formed in March 1988 and began providing information technology staffing services in April 1988. The Company's initial public offering of securities was in May 1994.
MAJOR DEVELOPMENTS IN 1999
The Company's 1999 operating results were significantly impacted by several major items. First and foremost, the Company reorganized its field structure from a branch-based model to a model organized by the functional areas of sales, recruiting and service delivery. The new model is a natural extension of the changes announced in the 1998 restructuring and is designed to sell, recruit for and deliver the Company's services much more effectively and efficiently. As part of this process, administrative functions that were previously attended to in the branch structure have now been centralized where they can be processed in a more efficient manner. In addition, with this new model many of the field sales and delivery functions will require less office space than required under the old model. In connection with the new model, the Company incurred a restructuring and other charges of $5.2 million, most of which relates to lease costs associated with vacating offices as the Company downsizes its office space requirements, severance costs associated with the elimination of certain positions and a write-off of excess fixed assets which is also related to the downsizing of office space. These charges are more fully explained in the "Management Discussion and Analysis of Financial Condition and Results of Operations" and the "Notes to Consolidated Financial Statements", incorporated by reference to this form 10-K.
The primary objective of reorganizing the Company's field structure was to change from a decentralized model, with a branch focus to one managed by function. Under the former model, the sales, recruiting and delivery functions were managed to the needs and priorities of each particular metropolitan market with very little consideration given to business opportunities in other markets. Now, the sales, recruiting and delivery functions are managed functionally without regard to the geographic barriers.
The sales function is now managed on a regional basis and allows the Company to reach into markets that were previously ignored. In addition to greater penetration into more local markets, each account manager has been assigned to one of three business tiers which will allow them to gain expertise in selling focused services that are unique to their particular tier. The three business tiers are:
Business Partners - which includes the Company's large national accounts.
Select Accounts - which consists of accounts with the potential for more than $1 million in annual revenue.
General Market - which represents hundreds of companies outside the Fortune 1000.
The recruiting function is now managed out of three regional centers in Chicago, Philadelphia and Denver. These regional operations are supplemented by a large network of field recruiters operating in local markets. By centralizing and managing the recruiting function on a regional basis, the Company is able to achieve economies of scale that were not available in the previous branch model. These benefits include a greater level of recruiting specialization and stability and more effective coverage across all markets.
The reorganization has also benefited the Company's delivery function. Under the old model, the branch staff was responsible for various administrative functions like order processing, credit and invoice processing. These functions have been removed from the field responsibility and centralized at the Company's corporate headquarters. This has allowed the employees responsible for service delivery to focus on their primary responsibility which is assigning and managing the Company's technical consultants at client sites. The centralization of administrative functions has also provided the Company with more efficient and accurate processing that is associated with economies of scale.
While these changes are significant, it is important to note that the Company's services and its approach to selling, recruiting and service delivery have remained relatively intact. The primary change has been how the functions are managed. Instead of all three functions being managed at a local level under the direction of a branch manager, they are now managed regionally with greater focus on their functional objectives. The increased focus is made possible through the removal of administrative duties and through a management structure that now places a vice-president over each function.
In addition to the restructuring and other charges, the Company's 1999 operating results have been impacted by a $2.2 million adjustment to revenue in the fourth quarter as a result of a negotiated resolution of an audit by one of its major clients. The audit covered the three year period from calendar 1997 through 1999. The adjustment resulted from a difference in interpretation of pricing provisions in the master services contract for certain skill categories. In addition to the resolution of the issue, the companies have agreed on the pricing terms going forward and have implemented a business strategy to reduce the Company's overall costs to administer the account.
A.R.C SERVICES
During the past four years, A.R.C has evolved from a pure IT staffing company into a solutions-based provider of IT services. The Company's IT staffing and solutions services are now sold under the names A.R.C Staffing Management Services and A.R.C Technology Management Solutions, respectively. A.R.C's service offerings are designed to provide its clients with flexibility and expertise to address their IT execution needs whether for managed delivery of a help desk, data center or network administration; developing applications to support business processes; deploying technology across an enterprise; or providing qualified, motivated technical consultants for short or long term engagements.
A.R.C Staffing Management Services, enable clients to adapt their organizations to changing business or technology needs without adding to fixed costs or making long term commitments to staff. Client staffing needs are fulfilled in two major categories:
- - Operations - including help desk, desktop support, database administration, LAN/WAN/telecommunications, and data center operations.
- - Applications - including mainframe/midrange, client server desktop, Internet/Intranet, database/data warehousing and packaged applications.
A.R.C Staffing Management Services have been offered since the Company's inception in 1988.
A.R.C Technology Management Solutions provide management and delivery of infrastructure development and maintenance expertise, offering managed solutions and best practices methodologies. A.R.C Technology Management Services assist clients in integrating the resources, processes and systems for the design, deployment, operation and support of the clients key IT assets. Technology Management Services are delivered in three primary functional areas:
- User Support Services - Technology Deployment Services, and - Infrastructure Management Services.
The vast majority of the traditional staffing business is invoiced on an hourly basis. However, under A.R.C Technology Management Services arrangements, the Company typically utilizes alternative invoicing arrangements. Such arrangements may include fixed price arrangements or per unit billing. An example of a per unit billing arrangement would be a price per call on a help desk operation.
A.R.C APPROACH
The Company has developed a customized approach to the project assignment process that it believes results in a high degree of client and technical consultant satisfaction, repeat business from clients and a high level of technical consultant retention. The Company believes a superior project assignment entails developing a comprehensive understanding of clients' needs, matching clients' needs with requisite skills on a timely basis, and monitoring performance throughout the project. However, the Company believes that the professional and interpersonal skills required to interact with clients and interpret and communicate their needs differ greatly from those required to manage the recruitment and project assignment of technical consultants. Under the A.R.C approach, project responsibilities are shared between account managers, recruiters and client staffing managers.
Account managers focus principally on building and fostering relationships with clients, understanding the client's organization and assessing the client's needs, and proposing tailored staffing solutions. Recruiters focus principally on recruiting and establishing relationships with technical personnel, assessing their technical and interpersonal skills and selecting appropriate technical personnel for a project. Client staffing managers assist in the selection of appropriate technical personnel for a project as well as monitor and motivate technical consultants on a project. This separation of responsibilities allows account managers, recruiters and client staffing managers to meet the needs of their respective constituencies while working together to enhance the prospects of a superior project assignment.
As mentioned earlier, account managers are assigned to one of three business tiers. The business tiers are organized by company size. This allows each account manager to develop a degree of specialization and insight that is unique to the targeted companies within their tier. Account managers are responsible for selling all of the Company's services into their tier. The Company maintains a Technology Management support staff which is primarily located at its headquarters in Barrington, Illinois to assist account managers in selling and delivering ARC Technology Management Solutions. In many instances, the sale and delivery of Technology Management Solutions projects requires a greater level of technical knowledge than a prototypical account manager possesses.
RECRUITING OF TECHNICAL PERSONNEL
As the leading edge of technology continues to outpace the availability of leading edge skills, the recruitment and retention of technical personnel represents an expanding challenge. To recruit qualified technical personnel, the Company places newspaper advertisements, maintains a presence at local technical college(s) and obtains referrals from its technical employees and clients. The Company has also expanded its use of the internet as a recruiting tool. In addition to recruiting technical personnel through its web site (www.arcnow.com), ARC has entered into a partnership with techies.com, a leading internet job exchange. The partnership adds a new channel to the Company's online recruiting efforts by providing access to the most up-to-date databases of eligible, prospective technology professionals across the country.
Prospective technical consultants are required to complete an extensive questionnaire regarding skill levels, experience, education and availability, and to provide references. Recruiters maintain an active database of qualified technical personnel along with their related skill levels and availability. This database is the primary tool used to match qualified technical skills to client requests.
Client staffing managers oversee technical personnel once they are assigned to a client. The responsibilities include answering employment-related questions, addressing unique client requirements such as training, drug testing, etc. and handling any travel needs that are associated with the project. In order to retain a qualified workforce, the Company devotes considerable time and resources towards serving the needs of its technical consultants. All technical consultants receive a competitive hourly wage determined by the Company and are eligible to participate in the Company's 401(k) plan, employee stock purchase plan and earn bonuses based on referrals of technical personnel. The Company also provides technical consultants access to computer-based training programs. Technical consultants also receive a benefits package that allows them to select from a variety of benefit options, including comprehensive group medical insurance, vision and dental insurance, long-term disability insurance and group life insurance. The Company believes that its comprehensive benefits and training programs encourage technical consultants' loyalty and commitment.
OPERATIONS
The Company operates through a network of offices located in the United States and Canada. The Company's principal executive offices are located in Barrington, Illinois.
CLIENTS
The Company's clients consist principally of Fortune 1000 companies and mid-sized organizations with sizable and complex IT operations. The IT requirements of these organizations often provide opportunities for major projects that extend for multiple years or generate additional projects. During 1999, the Company provided technical staffing solutions to a wide variety of entities including computer services companies, systems integrators, telecommunications companies, banking and financial services entities, manufacturers, distributors, health care providers and utilities. The Company's computer services and systems integrator clients often subcontract A.R.C's services to their own customers. In 1999, the Company's largest clients, IBM and
Hewlett Packard accounted for approximately 15% and 14% of the Company's total revenue, respectively.
A.R.C will typically provide discounts on staffing services to its largest clients in exchange for the opportunity to sell more volume and the opportunity to sell its higher margin, value added services, such as its Technology Management Solutions.
COMPETITION
The IT services industry is highly competitive and fragmented and has low barriers to entry. The Company competes for potential clients with providers of outsourcing services, systems integrators, computer systems consultants, other providers of technical staffing services and, to a lesser extent, temporary personnel agencies. The Company competes for technical personnel with private and public companies, other providers of technical staffing services, systems integrators, providers of outsourcing services, computer systems consultants, clients and temporary personnel agencies.
The Company believes that the principal competitive factors in obtaining and retaining clients are accurate assessment of clients' requirements, timely assignment of technical consultants with appropriate skills and the price of services. The Company is dependent upon its ability to continue to attract and retain technical personnel who possess the technical skills and experience necessary to meet the IT servicing requirements of its clients. The principal competitive factors in attracting qualified technical personnel are schedule flexibility, the availability of training, competitive benefits and compensation, as well as the availability, quality and variety of projects. The Company believes that many of the technical personnel included in its databases may also be pursuing other employment opportunities. Therefore, the Company believes that responsiveness to the needs of technical personnel is an important factor in the Company's ability to fill projects.
SEASONALITY
The Company's quarterly results are affected by employment taxes. In general, the first two quarters of the year carry a significant portion of payroll tax expense. As employees reach annual payroll limits, usually in the third and fourth quarters, the Company's payroll tax expense is reduced.
EMPLOYEES
At December 31, 1999, the Company employed 550 staff employees and approximately 3,600 technical employees. During all of 1999, the Company employed more than 10,000 technical employees.
FORWARD-LOOKING STATEMENTS
The Company makes forward-looking statements from time to time and desires to take advantage of the "safe harbor," which is afforded such statements under the Private Securities Litigation Reform Act of 1995, when they are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those in the forward-looking statements. The statements contained in this Form 10-K, including those under "Management's Discussion and Analysis of Financial Condition and Results of Operations," statements contained in future filings with the Securities and Exchange Commission and publicly disseminated press releases, and statements which may be made from time to time in the future by management of the Company in presentations to shareholders, prospective investors, and others interested in the business and financial affairs of the Company, which are not historical facts, are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements. Any projections of financial performance or statements concerning expectations as to future developments should not be construed in any manner as a guarantee that such results or developments will, in fact, occur. There can be no assurance any forward-looking statement will be realized or that actual results will not be significantly different from that set forth in such forward-looking statement.
In addition to the risks and uncertainties of ordinary business operations, the forward-looking statements of the Company referred to above are also subject to the following risks and uncertainties:
- - The Company's ability to attract and retain qualified information technology professionals
- - The Company's ability to recruit, train, integrate and retain qualified
sales directors, account managers, recruiters and client staffing managers
- - Competition in the information technology services marketplace
- - The Company's continued ability to initiate and develop client relationships
- - The Company's ability to identify and respond to trends in information technology
- - Unforeseen business trends in the Company's national accounts or other large clients
- - Pricing pressures and/or wage inflation and the resulting impact on gross profit and net operating margins
- - The ability to successfully integrate acquisitions
- - The ability to successfully enter new geographic markets
- - The Company's overall ability to manage its growth
- - The effect of changes in general economic conditions
EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of the Company are as follows:
Mr. Raymond R. Hipp has been Chairman of the Board, President and Chief Executive Officer of the Company since July 1998. Previously he was Chief Executive Officer of ITI Marketing Services, a provider of telemarketing services, from August 1996 until May 1998 when the company was sold. He was a self-employed management consultant from September 1994 to August 1996. Mr. Hipp was President of Comdisco Disaster Recovery Services, a provider of business continuity services for the information technology industry, from 1980 through August 1994. Mr. Hipp previously held executive and management positions with International Business Machines Corporation. He currently serves on the Board of Directors of Gardner Denver Inc.
Mr. David Nolan joined the Company in July 1999. As President of Field Operations, Mr. Nolan has responsibility for all ARC staffing and technology management sales and operations. Prior to joining ARC, he held executive level sales, marketing, business development and product operations positions with IBM, Comdisco, and, most recently, Lucent Technologies. At Comdisco, Mr. Nolan held senior marketing and general management positions serving as president of Comdisco's Disaster Recovery Services Division and, later, executive vice president of marketing for Comdisco, Inc.
Mr. Steven Purcell joined the Company in August 1998 as Senior Vice President, Chief Financial Officer, Secretary and Treasurer. In May 1999, Mr. Purcell was elected to the Board of Directors. Prior to that he was chief financial officer for American Business Information a provider of business and consumer data and data processing services. From 1991 to 1996 he served as vice president - finance, chief financial officer and treasurer, of Micro Warehouse, a direct marketer of hardware, software and accessories. From 1985 to 1991, he worked for Electrocomponents, PLC a London-based distributor of electrical products, serving as chief executive officer for its Misco, Inc. subsidiary and, prior to that, as vice president - finance for Electrocomponents, Inc., the U.S. holding company. From 1978 to 1985, he held positions in finance and accounting with
Hubbell Incorporated, a manufacturer of electrical products, with the most recent being division controller at the Hubbell Lighting Division. From 1975 to 1978, he was a senior accountant for Price Waterhouse & Company.
Sharon A. McKinney was named Senior Vice President of Human Resources in January 1999. Ms. McKinney reports to ARC's chief executive officer and is responsible for the human resources function within corporate headquarters and across the entire 52-branch organization. She brings to this newly created position 18 years of domestic and international business and human resources management experience. Ms. McKinney joined ARC from GE Capital Fleet Services where she held the position of senior vice president, Global Human Resources. Previously, Ms. McKinney spent nearly 10 years with Square D Company, which today is known as Group Schneider, a French company. Following a series of increasingly responsible human resources positions, Ms. McKinney spent her last three years at Groupe Schneider as director of human resources based in Paris, France.
J. Lawrence Winkelman was named Vice President and Chief Information in January 1999. Mr. Winkelman is responsible for information technology planning, development and delivery within corporate headquarters and across the entire 52-branch organization. Mr. Winkelman joined ARC from Sanwa Business Credit Corporation, a subsidiary of Sanwa Bank, Ltd., where he had been senior vice president and chief information officer for seven years. Prior to 1992, Mr. Winkelman spent 17 years with GE Financial Services, a subsidiary of General Electric Company, progressing through a series of information technology positions with increasing management responsibility. From 1971 to 1975, Mr. Winkelman worked for General Electric Company. Recruited into GE's Manufacturing Management Training Program, he held engineering positions in four of GE's manufacturing businesses.
Mr. Bradley K. Lamers joined the Company in March 1995 as Director of Finance and Controller. He was promoted to Vice President in July 1995. From November 1988 to March 1995, Mr. Lamers served as a division controller for Rogers Foods, Inc., a wholly owned subsidiary of Universal Foods Corporation. During the three years prior to November 1988, Mr. Lamers held various financial management positions at the Corporate headquarters of Universal Foods Corporation. From 1979 to 1985, he was a manager at Ernst and Young.
ITEM 2.
ITEM 2. PROPERTIES
The Company's principal executive office is currently located in approximately 48,000 square feet of office space in Barrington, Illinois, pursuant to a lease agreement that expires in October 2009. The Company leases office space in major markets across the United States and Canada for all of its sales and recruiting facilities.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
In the normal course of business, the Company is a party to various legal proceedings. The Company does not expect that any currently pending proceedings will have a material adverse effect on its business, results of operations or financial condition.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The information required by this Item is included in the registrant's Annual Report to Stockholders for the fiscal year ended December 31, 1999, under the caption "Stockholder Information," which information is set forth in Exhibit 13 to this Form 10-K and is hereby incorporated herein by reference.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA.
The information required by this Item is included in the registrant's Annual Report to Stockholders for the fiscal year ended December 31, 1999, under the caption "Five Year Summary of Selected Financial Data," which information is set forth in Exhibit 13 to this Form 10-K and is hereby incorporated herein by reference.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The information required by this Item is included in the registrant's Annual Report to Stockholders for the fiscal year ended December 31, 1999, under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations," which information is set forth in Exhibit 13 to this Form 10-K and is hereby incorporated herein by reference.
ITEM 7A.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information required by this Item is included in the registrant's Annual Report to Stockholders for the fiscal year ended December 31, 1999, under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations - Quantitative and Qualitative Disclosures About Market Risk," which information is set forth in Exhibit 13 to this Form 10-K and is hereby incorporated herein by reference.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item is included in the registrant's Annual Report to Stockholders for the fiscal year ended December 31, 1999, under the captions "Consolidated Balance Sheets," "Consolidated Statements of Operations," "Consolidated Statements of Comprehensive Income," "Consolidated Statements of Changes in Stockholders' Equity," "Consolidated Statements of Cash Flows," "Notes to Consolidated Financial Statements" and "Independent Auditors' Report," which information is set forth in Exhibit 13 to this Form 10-K and is hereby incorporated herein by reference.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
a. Directors of the Company
The information required by this Item is set forth in the registrant's Proxy Statement for the Annual Meeting of Stockholders to be held on May 23, 2000, under the caption "Election of Directors," which information is hereby incorporated herein by reference.
b. Executive Officers of the Company
Reference is made to "Executive Officers of the Registrant" in Part I of this Form 10-K.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item is set forth in the registrant's Proxy Statement for the Annual Meeting of Stockholders to be held on May 23, 2000, under the captions "Executive Compensation," "Board of Directors," and "Compensation Committee Interlocks and Insider Participation," which information is hereby incorporated herein by reference.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The information required by this Item is set forth in the registrant's Proxy Statement for the Annual Meeting of Stockholders to be held on May 23, 2000, under the caption "Securities Beneficially Owned by Principal Stockholders and Management," which information is hereby incorporated herein by reference.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) (1) FINANCIAL STATEMENTS
The following financial statements of Alternative Resources Corporation, included in the registrant's Annual Report to Stockholders for the fiscal year ended December 31, 1999 are included in Part II, Item 8:
(i) Consolidated Balance Sheets - as of December 31, 1999 and 1998;
(ii) Consolidated Statements of Operations - years ended December 31, 1999, 1998, and 1997;
(iii) Consolidated Statements of Comprehensive Income - years ended December 31, 1999, 1998, and 1997;
(iv) Consolidated Statements of Changes in Stockholders' Equity years ended December 31, 1999, 1998, and 1997;
(v) Consolidated Statements of Cash Flows - years ended December 31, 1999, 1998, and 1997;
(vi) Notes to Consolidated Financial Statements; and
(vii) Independent Auditors' Report from KPMG LLP.
(2) FINANCIAL STATEMENT SCHEDULES
(i) Independent Auditors' Report from KPMG LLP.
(ii) Schedule II - Valuation and Qualifying Accounts.
(3) EXHIBITS
3.1 Amended and Restated Certificate of Incorporation, as amended. Incorporated herein by reference to Exhibit 3.1 to the Company's Form 10-K for the year ended December 31, 1998. (File No. 0-23940)
3.2 Amended and Restated By-Laws. Incorporated herein by reference to Exhibit 3.2 to the Company's Form 10-K for the year ended December 31, 1996. (File No. 0-23940)
4.1 Rights Agreement dated October 15, 1998 between the Company and Harris Trust and Savings Bank, incorporated herein by reference to Exhibit 1 to the Company's Form 8-A dated October 20, 1998.
4.2 Credit agreement dated November 7, 1997, incorporated by reference herein to Exhibit 4 to the Company's Form 8-K dated November 7, 1997. (File No. 0-23940)
Exhibits 10.1 through 10.9 are management contracts or compensatory plans or arrangements
10.1 Amended and Restated Stock Option Plan. Incorporated herein by reference to Exhibit 10 to the Company's form 10-Q for the period ended June 30, 1997. (File No. 0-23940)
10.2 Executive Employment Agreement between Alternative Resources Corporation and Bradley K. Lamers dated July 21, 1995. Incorporated herein by reference to Exhibit 10.9 to the Company's Form 10-K for the period ended December 31, 1995. (File No. 0-23940)
10.3 Form of Indemnity Agreement between Alternative Resources Corporation and its directors and officers. Incorporated herein by reference to Exhibit 10.10 to the Company's Registration Statement on Form S-1, as amended, Registration No. 33-76584.
10.4 Executive Employment Agreement between Alternative Resources Corporation and Raymond R. Hipp dated July 23, 1998. Incorporated herein by reference to the Exhibit 10.1 to the Company's Form 10-Q for the period ended September 30, 1998. (File No. 0-23940).
10.5 Executive Employment Agreement between Alternative Resources Corporation and Steven Purcell dated August 1, 1998. Incorporated herein by reference to the Exhibit 10.2 to the Company's Form 10-Q for the period ended September 30, 1998. (File No. 0-23940).
10.6 Stock Option Agreement between Alternative Resources Corporation and Raymond R. Hipp dated July 23, 1998. Incorporated herein by reference to the Exhibit 10.8 to the Company's Form 10-K for the period ended December 31, 1999. (File No. 0-23940).
10.7 Stock Option Agreement between Alternative Resources Corporation and Steven Purcell dated August 3, 1998. Incorporated herein by reference to the Exhibit 10.9 to the Company's Form 10-K for the period ended December 31, 1999. (File No. 0-23940).
10.8 Executive Employment Agreement between Alternative Resources Corporation and David Nolan dated July 1, 1999. Incorporated herein by reference to the Exhibit 10.1 to the Company's Form 10-Q for the period ended September 30, 1999. (File No. 0-23940).
10.9 Stock Option Agreement between Alternative Resources Corporation and David Nolan dated July 1, 1999. Incorporated herein by reference to the Exhibit 10.2 to the Company's Form 10-Q for the period ended September 30, 1999. (File No. 0-23940).
13 Certain portions of the 1999 Annual Report to Stockholders
21 Subsidiaries of Alternative Resources Corporation
23 Consent of KPMG LLP
27 Financial Data Schedule
(b) REPORTS ON FORM 8-K
There were no reports on Form 8-K filed for the three months ended December 31, 1999.
(c) EXHIBITS
The exhibits filed as part of this Annual Report on Form 10-K are as specified in Item 14(a)(3) herein.
(d) FINANCIAL STATEMENT SCHEDULES
The financial statement schedule filed as part of this Annual Report on Form 10-K is as specified in Item 14(a)(2) herein.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 March 30, 2000.
ALTERNATIVE RESOURCES CORPORATION
By /s/ Raymond R. Hipp ------------------------ Raymond R. Hipp, Chairman of the Board, President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on March 30, 2000.
ALTERNATIVE RESOURCES CORPORATION
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholders Alternative Resources Corporation:
Under date of March 24, 2000, we reported on the consolidated balance sheets of Alternative Resources Corporation and subsidiaries as of December 31, 1999 and 1998, and the related consolidated statements of operations, comprehensive income, changes in stockholders' equity and cash flows for each of the years in the three-year period ended December 31, 1999, as contained in the 1999 annual report to stockholders. These consolidated financial statements and our report thereon are incorporated by reference in the annual report on Form 10-K for the year ended December 31, 1999. In connection with our audits of the aforementioned consolidated financial statements, we also audited the related consolidated financial statement schedule listed in Item 14(a)(2)(ii). The consolidated financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion on the consolidated financial statement schedule based on our audits.
In our opinion, such consolidated financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
/s/ KPMG LLP
Chicago, Illinois March 24, 2000
EXHIBIT INDEX