SOMERSET, N.J., Feb. 16 /PRNewswire-FirstCall/ -- TeamStaff, Inc.,
a leading healthcare and logistical staffing provider serving the
Federal Government, today announced its financial results for the
fiscal quarter ended December 31, 2009. As a result of the
previously disclosed sale of TeamStaff Rx, which was completed on
January 4, 2010, all results reported in this release have been
reclassified to show TeamStaff Rx as a discontinued operation.
TeamStaff's revenues from continuing operations for the three
months ended December 31, 2009 were $10.8 million as compared to
$12.0 million in the comparable quarter last year. The decrease in
revenues from the prior year is due primarily to government
in-sourcing of selected positions under our existing contracts and
overtime restrictions at certain Government facilities. Loss from
continuing operations was $0.7 million or ($0.13) per basic share
compared to income from continuing operations of $0.6 million or
$0.12 per basic share in the comparable quarter last year. The loss
this quarter includes $0.4 million in costs associated with the
development and implementation of the Company's revised government
services business strategic plan. Commenting on the Company's
results, TeamStaff's Chairman of the Board Rick Wasserman stated,
"The first quarter of fiscal 2010 was a time of change and
transition for TeamStaff. We divested the TeamStaff Rx
non-government healthcare staffing business and increased our focus
on the development of a new government services initiative for
TeamStaff Government Solutions. As announced last week, the Company
named Zachary C. Parker as its new Chief Executive Officer to
implement a new strategic plan for the government services
business. Zach's combination of experience in the government
services sector and his strong background in new business
development will be integral to our future growth." Further
commenting, TeamStaff's Acting President and Chief Financial
Officer Cheryl Presuto stated, "Despite the costs associated with
the recent changes at the Company, TeamStaff GS posted EBITDA of
$0.4 million on a stand-alone, fully allocated basis for the first
quarter of fiscal 2010. While this represents a decrease as
compared to EBITDA of $1.1 million for the first quarter of fiscal
2009, we are encouraged by this subsidiary's results in the current
economic climate. As previously mentioned, our gross margins have
been adversely impacted as the government continues its restriction
on overtime and we incur increases in various costs of sales such
as vacation, health insurance and workers' compensation."
TeamStaff's gross profit was $1.4 million, or 12.6% of revenues for
the first quarter of fiscal 2010 as compared to $2.1 million, or
17.7% of revenues, for the first quarter of fiscal 2009. Several
factors are impacting the decline in gross margin. As a result of
current economic conditions, the Company is experiencing lower
employee turnover rates than last year, resulting in increased
vacation accruals for over 750 contract employees at certain
government facilities. The previously mentioned overtime
restrictions imposed by these facilities affects gross profit as
overtime earns a higher profit percentage than regular hours. The
Company also experienced adverse workers' compensation experience
in the current quarter and continues to work with a risk control
consultant in an effort to mitigate claims in the future. SG&A
expenses and officer severance for the three months ended December
31, 2009 and 2008 were $2.0 million and $1.5 million, respectively.
The Company incurred $0.4 million in costs associated with the
development of its government services business strategic plan,
including severance for the Company's former Chief Executive
Officer, management consulting fees related to the strategic
business review and fees related to the search for a new CEO. The
Company continues to invest in new business development at
TeamStaff GS, incurring $0.1 million in increased new business
expense over the comparable period last year for additional sales
related headcount and marketing expense at TeamStaff GS. To offset
this spending, the Company continues with its cost saving
initiatives, which have resulted in reduced headcount in
non-revenue generating departments and G&A costs. The Company
seeks continued elimination of overhead costs deemed to be
non-essential to growth or infrastructure. The Company recorded a
loss from discontinued operations related to the sale of TeamStaff
Rx for the three months ended December 31, 2009 of $1.1 million or
($0.23) per basic share. Included with the operating loss of the
discontinued business for the quarter is accrued severance of $0.1
million, $0.3 million from recognition of the remaining unfunded
operating lease payments, and $0.3 million in various accruals for
expenses related to the sale and shut down of the business. At
December 31, 2009, the Company had $1.7 million in cash and $1.6
million in availability under its credit facility. The initial
proceeds of $375,000 from the sale of TeamStaff Rx were received on
January 4, 2010. The Company believes that it has adequate
liquidity resources to fund operations over the next twelve months.
Non-GAAP Measures This earnings release contains certain non-GAAP
financial information. These measures are not in accordance with,
or an alternative to, generally accepted accounting principles in
the United States ("GAAP"), and may be different from non-GAAP
measure reported by other companies. See table below for
reconciliation of non-GAAP items. TeamStaff's management does not
suggest that investors consider such non-GAAP financial measures in
isolation from, or as a substitute for, GAAP financial measures,
such as net income, cash flow data or other financial information
presented in the consolidated financial statements. About
TeamStaff, Inc. Headquartered in Somerset, New Jersey, TeamStaff
through its subsidiary, TeamStaff Government Solutions, specializes
in providing medical, logistics, supply chain management,
information technology and office administration professionals
through nationwide Federal Supply Schedule contracts with both the
United States General Services Administration and the United States
Department of Veterans Affairs. For more information, visit the
TeamStaff web site at http://www.teamstaff.com/. "Safe Harbor"
Statement under the Private Securities Litigation Reform Act of
1995: This press release contains "forward-looking statements" as
defined by the Federal Securities Laws. Statements in this press
release regarding TeamStaff, Inc.'s business, which are not
historical facts are "forward-looking statements" that involve
risks and uncertainties. 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: our ability to continue to recruit and retain
qualified temporary and permanent healthcare professionals and
administrative staff on acceptable terms; our ability to enter into
contracts with hospitals, healthcare facility clients, affiliated
healthcare networks, physician practice groups, government agencies
and other customers on terms attractive to us and to secure orders
related to those contracts; changes in the timing of customer
orders for placement of temporary and permanent healthcare
professionals and administrative staff; the overall level of demand
for our services; our ability to successfully implement our
strategic growth, acquisition and integration strategies; the
effect of existing or future government legislation and regulation;
the loss of key officers and management personnel that could
adversely affect our ability to remain competitive; other
regulatory and tax developments; and the effect of other events and
important factors disclosed previously and from time-to-time in
TeamStaff's filings with the U.S. Securities Exchange Commission.
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
periodic reports filed with the SEC. 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. (financial tables follow)
TEAMSTAFF, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS) December 31, September 30, ASSETS 2009 2009
------ ---- ---- (unaudited) CURRENT ASSETS: Cash and cash
equivalents $1,661 $2,992 Accounts receivable, net of allowance for
doubtful accounts of $0 as of December 31, 2009 and September 30,
2009 11,646 11,427 Prepaid workers' compensation 497 517 Other
current assets 277 257 Assets from discontinued operations 939
1,418 --- ----- Total current assets 15,020 16,611 ------ ------
EQUIPMENT AND IMPROVEMENTS: Furniture and equipment 2,262 2,262
Computer equipment 255 255 Computer software 906 788 Leasehold
improvements 9 9 - - 3,432 3,314 Less accumulated depreciation and
amortization (3,080) (3,054) ------ ------ Equipment and
improvements, net 352 260 --- --- TRADENAME 3,924 3,924 GOODWILL
8,595 8,595 OTHER ASSETS 253 267 --- --- TOTAL ASSETS $28,144
$29,657 ======= ======= TEAMSTAFF, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (AMOUNTS IN THOUSANDS EXCEPT PAR VALUE
OF SHARES) December 31, September 30, LIABILITIES AND SHAREHOLDERS'
EQUITY 2009 2009 ------------------------------------ ---- ----
(unaudited) CURRENT LIABILITIES: Bank line of credit $40 $- Notes
payable 1,500 1,500 Current portion of capital lease obligations 19
20 Accrued payroll 10,256 10,694 Accounts payable 2,022 1,890
Accrued expenses and other current liabilities 1,151 1,241
Liabilities from discontinued operations 826 392 --- --- Total
current liabilities 15,814 15,737 CAPITAL LEASE OBLIGATIONS, net of
current portion 21 27 OTHER LONG TERM LIABILITY, net of current
portion 48 13 LONG TERM LIABILITIES FROM DISCONTINUED OPERATION 105
64 --- -- Total Liabilities 15,988 15,841 ------ ------ COMMITMENTS
AND CONTINGENCIES SHAREHOLDERS' EQUITY: Preferred stock, $.10 par
value; authorized 5,000 shares; none issued and outstanding - -
Common Stock, $.001 par value; authorized 40,000 shares; issued
4,943 at December 31, 2009 and 4,900 at September 30, 2009,
respectively; outstanding 4,941 at December 31, 2009 and 4,898 at
September 30, 2009, respectively 5 5 Additional paid-in capital
69,249 69,124 Accumulated deficit (57,074) (55,289) Treasury stock,
2 shares at cost at December 31, 2009 and September 30, 2009 (24)
(24) --- --- Total shareholders' equity 12,156 13,816 ------ ------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $28,144 $29,657 =======
======= TEAMSTAFF, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF
OPERATIONS (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(Unaudited) For the Three Months Ended December 31, December 31,
2009 2008 ---- ---- REVENUES $10,793 $12,013 DIRECT EXPENSES 9,431
9,891 ----- ----- GROSS PROFIT 1,362 2,122 SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 1,657 1,507 OFFICER SEVERANCE 310 -
DEPRECIATION AND AMORTIZATION 26 28 -- -- (Loss) income from
operations (631) 587 OTHER INCOME (EXPENSE) Interest income 3 14
Interest expense (23) (25) Other income, net 1 4 Legal expense
related to pre-acquisition activity of acquired company (1) (7) --
-- (20) (14) --- --- (Loss) income from continuing operations
before taxes (651) 573 INCOME TAX BENEFIT - (4) ---- --- (Loss)
income from continuing operations (651) 569 ---- --- LOSS FROM
DISCONTINUED OPERATIONS Loss from operations (785) (521) Loss from
disposal (349) - ------ ---- Loss from discontinued operations
(1,134) (521) ------ ---- NET (LOSS) INCOME $(1,785) $48 =======
=== (LOSS) EARNINGS PER SHARE - BASIC (Loss) income from continuing
operations $(0.13) $0.12 Loss from discontinued operations (0.23)
(0.11) ----- ----- Net (loss) earnings per share $(0.36) $0.01
====== ===== (LOSS) EARNINGS PER SHARE - DILUTED (Loss) income from
continuing operations $(0.13) $0.12 Loss from discontinued
operations (0.23) (0.11) ----- ----- Net (loss) earnings per share
$(0.36) $0.01 ====== ===== WEIGHTED AVERAGE BASIC SHARES
OUTSTANDING 4,931 4,914 ===== ===== WEIGHTED AVERAGE DILUTED SHARES
OUTSTANDING 4,931 4,920 ===== ===== TEAMSTAFF, INC. AND
SUBSIDIARIES SUPPLEMENTAL FINANCIAL AND OPERATING DATA (AMOUNTS IN
THOUSANDS, EXCEPT PER SHARE AMOUNTS) (Unaudited) RECONCILIATION OF
NON-GAAP ITEMS: Stand alone Stand alone TeamStaff Inc. As reported
TeamStaff GS (1) Corporate (1) (2) Consolidated ----------------
------------------- -------------- For the three months ended
December 31, 2009 Income (loss) from operations $451 $(1,082)
$(631) Depreciation and amortization 18 8 26 Allocation of direct
expenses (88) 88 - --- -- - EBITDA (3) $381 $(986) $(605) ====
===== ===== Stand alone Stand alone TeamStaff Inc. As reported
TeamStaff GS (1) Corporate (1) (2) Consolidated ----------------
------------------- -------------- For the three months ended
December 31, 2008 Income (loss) from operations $1,201 $(614) $587
Depreciation and amortization 18 10 28 Allocation of direct
expenses (89) 89 - --- -- - EBITDA (3) $1,130 $(515) $615 ======
===== ==== (1) The Company reports financial results on a
consolidated basis but has elected to present separately the data
relating to the performance of each of its reporting units on a
stand-alone basis to allow for a better understanding of the
overall performance of the Company's business. Management believes
that this information provides greater insight into our Company's
underlying operating performance that facilitates a more meaningful
comparison of its financial results in different reporting periods.
(2) Expenses related to TeamStaff Inc. on a stand alone basis
include the costs associated with being a publicly traded company,
general corporate expenses and certain direct expenses of the
TeamStaff GS business. (3) EBITDA, a non-GAAP financial measure, is
defined as earnings before interest, income taxes, depreciation and
amortization. Items excluded from EBITDA are significant components
in understanding and assessing financial performance. Management
presents EBITDA because it believes that EBITDA is a useful
supplement to net (loss) income as an indicator of operating
performance. The Company believes it is useful for management to
review both GAAP information and non-GAAP financial measures to
have a better understanding of the overall performance of the
Company's business and trends relating to its financial condition
and results of operations. Management believes that this
information provides greater insight into our Company's underlying
operating performance that facilitates a more meaningful comparison
of its financial results in different reporting periods. CONTACTS:
Cheryl Presuto, Acting President and Chief Financial Officer
TeamStaff, Inc. 1 Executive Drive Somerset, NJ 08873 866-352-5304
Donald C. Weinberger/Diana Bittner (media) Wolfe Axelrod Weinberger
Associates, LLC 212-370-4500 don@wolfeaxelrod.com
diana@wolfeaxelrod.com DATASOURCE: TeamStaff, Inc. CONTACT: Cheryl
Presuto, Acting President and Chief Financial Officer ofTeamStaff,
Inc., 1-866-352-5304; or Media: Donald C.
Weinberger,don@wolfeaxelrod.com, or Diana Bittner,
diana@wolfeaxelrod.com, both of WolfeAxelrod Weinberger Associates,
LLC, +1-212-370-4500, for TeamStaff, Inc. Web Site:
http://www.teamstaff.com/
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