SOMERSET, N.J., Aug. 12 /PRNewswire-FirstCall/ -- TeamStaff, Inc. , a national provider of healthcare staffing and specialty payroll services, today announced its financial results for the quarter ended June 30, 2005. As a result of TeamStaff’s sale of its Professional Employer Organization (PEO) segment, which was completed in November 2003, all results reported in this release have been reclassified to show PEO and certain related corporate expenses as discontinued operations.
TeamStaff’s revenues from continuing operations for the three months ended June 30, 2005 were $13.5 million, which was comprised of $12.4 million from staffing services and $1.1 million from payroll services. This is compared to $9.6 million in the comparable quarter last year which was comprised of $8.5 million from staffing services and $1.1 million from payroll services. Revenues for the third quarter of fiscal 2005 include $3.6 million resulting from the acquisition of Nursing Innovations, which occurred on November 14, 2004 and $3.0 million resulting from the acquisition of RS Staffing completed on June 4, 2005. All Nursing Innovations and TeamStaff Rx revenues, and approximately 70 percent of RS Staffing revenues, are derived from medical staffing.
Commenting on third quarter performance, TeamStaff’s President and CEO, T. Kent Smith, stated, “After three years of soft demand for traveling nurses and allied technicians, we saw increases in demand as well as increases in applicants entering the field during our third fiscal quarter. This translated into a 10 percent sequential quarterly increase in the average number of travelers in our Nursing Innovations division. Recovery in our allied segment continued to be slower than expected, as hospitals seek to contain costs by limiting temporary staff in higher cost areas. We did however, experience an upturn in demand in June and believe that since the business fundamentals are similar between nursing and allied that the allied sector will rebound as well. Key drivers in both segments include an aging population, an improving employment environment and growth in hospital admissions.” Mr. Smith added, “Our acquisition of RS Staffing completed in early June gives us a strong presence in the government sector and provides us with an opportunity to cross sell to our nursing and allied divisions. We believe this opportunity will prove to be a key factor in driving our return to profitability. We continue to project that TeamStaff will be operating EBITDA profitable in our fourth fiscal quarter ending September 30, 2005.”
Gross profit was $2.8 million, or 20.4% of revenues, in the third quarter of fiscal 2005 as compared to $2.3 million, or 23.9% of revenues, in the third quarter of fiscal 2004. The decrease in gross profit percentage relates predominantly to the inclusion of RS Staffing and related costs paid to staffing teaming partners which are included as a cost of sale.
Operating expenses were $3.8 million in the third quarter of fiscal 2005 and include $0.5 million of workers’ compensation receivable write-offs related to adverse claims development for the period April 1, 2002 through November 17, 2003 (the date the company sold its PEO division). This write- down was predominantly driven by one claim that caused the Company to increase its maximum exposure to equal the policy deductible. Operating expenses in the third quarter of fiscal 2004 were $3.0 million. After adjusting for operating expenses relating to Nursing Innovations and RS Staffing as well as the workers’ compensation write-off, expenses for the quarter decreased 13%. This decrease is attributable to reductions in corporate overhead.
Loss from continuing operations was $0.7 million, or ($0.04) per share, compared to a loss of $0.4 million, or ($0.03) per share, in the same quarter of last year. Net loss, including discontinued operations, was $1.2 million, or ($0.07) per share, compared to a net loss of $0.9 million, or ($0.05) per share, in the third quarter of last year. The net loss was affected by a $0.5 million, or ($0.03) per share loss from discontinued operations in the third quarter of fiscal 2005 as compared to a loss of $0.4 million or ($0.02) per share in fiscal 2004. The loss from discontinued operations in the third quarter of fiscal 2005 is principally comprised of additional reserves posted for a potential settlement with CNA related to PEO workers’ compensation for periods prior to March 31, 2002.
Nine Months Results
TeamStaff’s revenues from continuing operations for the nine months ended June 30, 2005 were $34.6 million compared to $28.2 million in the same period last year. Fiscal 2005 revenues include $8.8 million related to the acquisition of Nursing Innovations and $3.0 million related to RS Staffing. Operating expenses for the nine months ended June 30, 2005 were $10.4 million and include $1.3 million related to Nursing Innovations, $0.2 related to RS Staffing, $0.5 million related to the previously stated workers compensation write-down and $0.2 related to non-recurring write-offs related to TeamStaff’s acquisition of Brightlane in 2001. This compares to operating expenses of $8.9 million for the nine months ended June 30, 2004. After adjusting for the acquisitions of Nursing Innovations and RS Staffing as well as the previously stated write-downs, operating expenses decreased 8%. This decrease is attributable to reductions in corporate overhead. Loss from continuing operations was $1.7 million or ($0.10) per share compared to a loss of $1.6 million or ($0.10) per share in the comparable nine months of last year. Net loss, including discontinued operations, was $2.5 million or ($0.14) per share compared to $3.7 million or ($0.23) per share in the first nine months of fiscal 2004. The net loss includes $0.8 million or ($0.04) per share from discontinued operations for the nine months ended June 30, 2005 compared to $2.1 million or ($0.13) per share from discontinued operations for the first nine months of last year.
Cash and cash equivalents were $2.0 million at June 30, 2005. Average availability for the month of June under the Company’s revolving credit facility was approximately $1.9 million. Management believes its cash on hand, liquidity provided by its revolving credit facility and funds generated by operations will be sufficient to support cash needs for at least the next twelve months.
About TeamStaff, Inc.
Headquartered in Somerset, New Jersey, TeamStaff serves clients and their employees throughout the United States as a full-service provider of medical staffing and payroll solutions. TeamStaff is a leading provider of nursing and allied healthcare professionals and operates through three medical staffing units. TeamStaff’s RS Staffing subsidiary specializes in providing medical and office administration/technical professionals through nationwide schedule contracts with both the General Services Administration and Veterans Affairs. The TeamStaff Rx subsidiary operates throughout the US and specializes in the supply of allied medical employees and nurses, especially “travel” staff (typically 13 week assignments). TeamStaff’s Nursing Innovations unit provides travel nursing, per diem nursing, temporary-to-permanent nursing and permanent nursing placement services. Through its DSi payroll services division, TeamStaff provides customized payroll management and tax services, primarily to the construction industry. DSi’s service offerings include payroll check processing via web, phone or fax, federal and state quarterly and year-end tax compliance reports, W-2 processing and financial management reports, including certified payroll reports and custom software interfaces. DSi processes payrolls for approximately 700 clients that have more than 30,000 employees. For more information, visit the TeamStaff web site at http://www.teamstaff.com.
This press release contains “forward-looking statements” as defined by the Federal Securities Laws. TeamStaff’s actual results could differ materially from those described in such forward-looking statements as a result of certain risk factors and uncertainties, including but not limited to: (i) regulatory and tax developments; (ii) changes in direct costs and operating expenses; (iii) ability to effectively implement business strategies and operating efficiency initiatives, including, but not limited to, business, acquisition and growth strategies; (iv) ability to complete potential acquisitions and integrate them effectively; (v) the effectiveness of sales and marketing efforts, including TeamStaff’s marketing arrangements with other companies; (vi) ability to retain qualified management personnel; (vii) changes in the competitive environment in the temporary staffing and payroll processing industry, including competition for qualified temporary medical staffing personnel; (viii) the favorable or unfavorable development of workers’ compensation claims covered under TeamStaff’s workers’ compensation programs; and (ix) other one-time events and other important factors disclosed previously and from time to time in TeamStaff’s filings with the U.S. Securities and Exchange Commission. These factors are described in further detail in TeamStaff’s filings with the U.S. Securities and Exchange Commission. The information in this release should be considered accurate only as of the date of the release. TeamStaff expressly disclaims any current intention to update any forecasts, estimates or other forward-looking statements contained in this press release.
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding TeamStaff, Inc.'s business which are not historical facts are “forward-looking statements” that involve risks and uncertainties. For a discussion of such risks and uncertainties which could cause actual results to differ from those contained in the forward-looking statements, see “Risk Factors” in the Company’s Annual Report or Form 10-K for the most recently ended fiscal year.
TEAMSTAFF, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (Unaudited) For the Three Months Ended June 30, 2005 2004 REVENUES $13,516 $9,642 DIRECT EXPENSES 10,753 7,333 Gross profit 2,763 2,309 OPERATING EXPENSES 3,825 2,956 DEPRECIATION AND AMORTIZATION 103 112 Loss from operations (1,165) (759) OTHER INCOME (EXPENSE) Interest income 9 22 Interest expense (45) (13) Other income 43 53 7 62 Loss before tax (1,158) (697) INCOME TAX BENEFIT 440 266 Loss from continuing operations (718) (431) Loss from operations, net of tax benefit of $330 and $177 for the quarters ended June 30, 2005 and 2004, respectively (532) (287) Loss from disposal, net of tax benefit of $0 and $86 for the quarters ended June 30, 2005 and 2004, respectively -- (138) Loss from discontinued operations (532) (425) Net loss (1,250) (856) LOSS PER SHARE - BASIC & DILUTED Loss from continuing operations $(0.04) $(0.03) Loss from discontinued operations $(0.03) $(0.02) Net loss $(0.07) $(0.05) WEIGHTED AVERAGE BASIC SHARES OUTSTANDING 18,398 15,714 WEIGHTED AVERAGE DILUTED SHARES OUTSTANDING 18,398 15,714 TEAMSTAFF, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (Unaudited) For the Nine Months Ended June 30, 2005 2004 REVENUES $34,616 $28,179 DIRECT EXPENSES 26,638 21,717 Gross profit 7,978 6,462 OPERATING EXPENSES 10,388 8,915 DEPRECIATION AND AMORTIZATION 435 300 Loss from operations (2,845) (2,753) OTHER INCOME (EXPENSE) Interest income 44 34 Interest expense (77) (71) Other income 140 173 107 136 Loss before tax (2,738) (2,617) INCOME TAX BENEFIT 1,041 996 Loss from continuing operations (1,697) (1,621) Loss from operations, net of tax benefit of $468 and $706 for the quarters ended June 30, 2005 and 2004, respectively (754) (1,145) Income (loss) from disposal, net of tax benefit of $0 and $571 for the quarters ended June 30, 2005 and 2004, respectively 1 (921) Loss from discontinued operations (753) (2,066) Net loss (2,450) (3,687) LOSS PER SHARE - BASIC & DILUTED Loss from continuing operations $(0.10) $(0.10) Loss from discontinued operations $(0.04) $(0.13) Net loss $(0.14) $(0.23) WEIGHTED AVERAGE BASIC SHARES OUTSTANDING 17,844 15,714 WEIGHTED AVERAGE DILUTED SHARES OUTSTANDING 17,844 15,714 TEAMSTAFF, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (AMOUNTS IN THOUSANDS) June 30, September 30, ASSETS 2005 2004 (unaudited) CURRENT ASSETS: Cash and cash equivalents $1,994 $3,060 Restricted cash -- 1,800 Accounts receivable, net of allowance for doubtful accounts of $64 and $39 as of June 30, 2005 and September 30, 2004, respectively 9,381 3,013 Deferred tax asset 570 90 Prepaid workers’ compensation 1,071 1,000 Other current assets 998 1,267 Total current assets 14,014 10,230 EQUIPMENT AND IMPROVEMENTS: Furniture & equipment 3,421 2,795 Computer equipment 507 367 Computer software 1,226 1,134 Leasehold improvements 238 210 5,392 4,506 Less accumulated depreciation and amortization (4,023) (3,589) Equipment and improvements, net 1,369 917 DEFERRED TAX ASSET, net of current portion 17,902 16,723 TRADENAME 4,199 4,199 GOODWILL 10,129 1,710 OTHER ASSETS: Prepaid workers’ compensation, net of current portion 2,600 3,341 Other assets 449 309 Total other assets 3,049 3,650 TOTAL ASSETS $50,662 $37,429
Certain reclassifications have been made to prior years amounts to conform to the current year presentation
TEAMSTAFF, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (AMOUNTS IN THOUSANDS) June 30, September 30, LIABILITIES AND SHAREHOLDERS’ EQUITY 2005 2004 (unaudited) CURRENT LIABILITIES: Bank line of credit $4,240 $-- Current portion of capital lease obligations 172 112 Notes payable 1,665 -- Accrued workers’ compensation 2,050 1,626 Accrued payroll 1,948 782 Accrued pension liability 389 588 Accounts payable 1,445 731 Accrued expenses and other current liabilities 1,457 770 Total current liabilities 13,366 4,609 CAPITAL LEASE OBLIGATIONS, net of current portion 257 24 NOTES PAYABLE, net of current portion 1,500 -- ACCRUED PENSION LIABILITY, net of current portion 642 840 LIABILITIES FROM DISCONTINUED OPERATIONS 532 963 Total liabilities 16,297 6,436 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS’ EQUITY: Preferred stock, $.10 par value; authorized 5,000 shares; 0 issued and outstanding -- -- Common Stock, $.001 par value; authorized 40,000 shares; issued 19,320 and 15,721 respectively; outstanding 19,313 and 15,714 respectively 19 16 Additional paid-in capital 68,665 62,963 Retained (deficit) earnings (34,100) (31,651) Accumulated comprehensive losses (195) (311) Treasury stock, 7 shares at cost at June 30, 2005 and September 20, 2004, respectively (24) (24) Total shareholders’ equity 34,365 30,993 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $50,662 $37,429
Certain reclassifications have been made to prior years amounts to conform to the current year presentation
TeamStaff, Inc.
CONTACT: T. Kent Smith, President & CEO, TeamStaff, Inc., +1-732-748-1700;or Donald C. Weinberger, don@wolfeaxelrod.com; or Andria Pilo-Arena(Media), andria@wolfeaxelrod.com, both of Wolfe Axelrod WeinbergerAssociates, LLC, +1-212-370-4500
Web site: http://www.teamstaff.com/
