Wednesday July 28, 5:19 pm Eastern Time
Company Press Release
TeamStaff, Inc. Announces Third Quarter and Nine Months
Results
Third Quarter Sales Double
Pre-Tax Income Triples
141% Increase in EBITDA
SOMERSET, N.J.--(BUSINESS WIRE)--July 28, 1999--TeamStaff, Inc. (NASDAQ: TSTF - news; formerly, Digital Solutions, Inc.) announced
today record revenues and earnings from operations for the third quarter and nine months ended June 30, 1999.
For the third quarter ended June 30, 1999, revenue doubled to $70.7 million from $35.9 million reported for the third quarter ended June 30, 1998.
EBITDA (earnings before interest, taxes, depreciation, and amortization) for the quarter grew approximately two and one-half times to
$1,549,000, compared with EBITDA of $644,000 in the third quarter of 1998. Income from operations grew at the same rate as EBITDA to a record
$1,196,000 in the third quarter of 1999. Pre-tax income tripled for the quarter to $940,000, versus $322,000 in the third quarter of 1998. Net income
for the quarter was $489,000, or $0.02 per diluted share, compared with $1,792,000, or $0.09 per diluted share, reported for the third quarter of
1998. Included in the third quarter of fiscal 1998 was a $1,470,000 net tax benefit relating to a reduction in the Company's deferred tax valuation
allowance. Without this tax benefit, net income would have been $177,000 or $0.01 per diluted share. On that basis, the third quarter 1999's net
income almost tripled from the same period last year. In addition, as a result of the acquisition of the TeamStaff Companies, the average diluted
shares increased by 8.5 million shares in the quarter ended June 30, 1999, versus the same period last year.
The growth in revenue is primarily attributable to the acquisition of The TeamStaff Companies in Tampa, Florida, concluded January 25, 1999.
The growth in earnings reflects the continued growth in the PEO business, the realization of the synergies envisioned in the merger (especially
in the area of workers' compensation), and the continued growth in the Company's medical technical staffing group.
For the nine months ended June 30, 1999, revenues increased 62 percent to $165.7 million, compared with $102.1 million for the nine months
ended June 30, 1998. EBITDA for the nine months grew 69 percent to $3,135,000, compared to $1,857,000 for the nine months of fiscal 1998.
Income from operations grew 71 percent in the nine months of fiscal 1999 versus the same period last year. Pre-tax income grew 75 percent for
the nine months of 1999, versus the same period last year, to $1,797,000 from $1,026,000. Net income for the nine months of 1999 was $1,351,000,
or $0.06 per diluted share, compared with net income of $2,496,000, or $0.13 per diluted share in 1998. In the second quarter of fiscal 1999, the
Company recorded a $400,000 net tax benefit reflecting the elimination of the remaining deferred tax valuation allowance. Without this tax
benefit, the nine months' net income for 1999 would have been $951,000 or $0.04 per diluted share. Without the tax benefit reflected in the third
quarter of fiscal 1998, net income for the nine months ended June 30, 1998 would have been $564,000 or $0.03 per diluted share. On a revised
comparative basis, reflecting the elimination of the net tax benefit for both fiscal years, net income for 1999 increased 69 percent over 1998. In
addition, as a result of the acquisition, the average diluted shares increased by 4.6 million shares in the nine months ended June 30, 1999, versus
the same period last year. Revenue and net income growth is attributed to the same reasons previously discussed.
In announcing the results, Donald W. Kappauf, President and Chief Executive Officer, said, ''This is the first quarter we are reflecting the full
benefit of the TeamStaff acquisition. Pre-tax income through the first nine months of 1999 already exceeds, by 28 percent, the $1,407,000 in
pre-tax income earned in the full 1998 year. Earnings per diluted share, after adjusting for net tax benefits in both years, are $0.04 through the
first nine months of 1999 versus $0.04 per diluted share for all of 1998. The earnings to date are reflective of the Company's statement that the
acquisition of The TeamStaff Companies would be accretive.''
Mr. Kappauf added, ''We have doubled our sales force during the last six months at a substantial expense, to be sure we hit the year 2000
running, but still produced excellent results. The Company continues to generate strong positive cash flow as evidenced by the early retirement
on May 27, 1999 of a $750,000 bridge loan.''
''Looking forward to the rest of the year,'' Mr. Kappauf continued, ''the Company is projecting revenues for all of 1999 will approximate $240
million, which includes the impact of The TeamStaff Companies' acquisition for eight months, with earnings per diluted share between $0.08 and
$0.09. Eliminating the impact of the second quarter tax benefit, earnings per diluted share for 1999 are projected to be between $0.06 and $0.07.
On a preliminary basis, for the year 2000, the Company believes revenues will grow to between $350-400 million with earnings per diluted share
ranging between $0.11 to $0.14.''
TeamStaff, Inc. provides comprehensive human resources management to small and mid-sized companies in a variety of industries. TeamStaff's
services include professional employer services which provide the administration of the human resources function, workers' compensation,
employee benefits, a 401K plan, payroll and payroll tax service preparation. TeamStaff also provides temporary and permanent staffing and
payroll services.
This press release contains forward-looking statements. All such statements involve risks and uncertainties, including, without limitation, the
risks detailed in TeamStaff's filings and reports with the securities and Exchange Commission. Such statements are only predictions and actual
events or results may differ materially.
This release and prior releases are available on the KCSA Public Relations Worldwide website at www.kcsa.com.
Teamstaff, Inc. and Subsidiaries
Consolidated Statements of Income
(Unaudited)
For the Three Months Ended
June 30,
1999 1998
Revenues $70,747,000 $35,885,000
Direct Expenses 65,971,000 33,182,000
------------ ------------
Gross Profit 4,776,000 2,703,000
Selling, General and Administrative
Expenses 3,227,000 2,059,000
------------- ------------
EBITDA 1,549,000 644,000
Depreciation and Amortization 353,000 163,000
------------- ------------
Income from Operations 1,196,000 481,000
------------- ------------
Other Income (Expense):
Interest and other income 84,000 14,000
Interest expense (340,000) (173,000)
-------------- -------------
(256,000) (159,000)
-------------- -------------
Income before tax 940,000 322,000
Income Tax (Expense) Benefit (451,000) 1,470,000(1)
-------------- ------------
Net Income $ 489,000 $ 1,792,000(1)
============= ============
Basic Earnings Per Common Share $ 0.02 $ 0.09(1)
============= ============
Weighted Average Shares Outstanding 27,930,160 19,298,010
============ ============
Diluted Earnings Per Common Share $ 0.02 $ 0.09(1)
============= ============
Diluted Shares Outstanding 28,001,589 19,548,671
============= ============
(1) Net income for the fiscal third quarter of 1998 includes a net
tax benefit of $1.47 million relating to a reduction in the
Company's deferred tax valuation allowance. Without the tax
benefit, net income for the fiscal 1998 third quarter would have
been $177,000, or $0.01 per diluted share.
Teamstaff, Inc. and Subsidiaries
Consolidated Statements of Income
(Unaudited)
For the Nine Months Ended
June 30,
1999 1998
Revenues $165,694,000 $102,122,000
Direct Expenses 154,314,000 94,588,000
------------ -------------
Gross Profit 11,380,000 7,534,000
Selling, General and Administrative
Expenses 8,245,000 5,677,000
------------ --------------
EBITDA 3,135,000 1,857,000
Depreciation and Amortization 824,000 502,000
------------ --------------
Income from Operations 2,311,000 1,355,000
------------ --------------
Other Income (Expense):
Interest and other income 289,000 37,000
Interest expense (803,000) (366,000)
-------------- --------------
(514,000) (329,000)
-------------- --------------
Income before tax 1,797,000 1,026,000
Income Tax (Expense) Benefit (446,000)(1) 1,470,000(2)
-------------- --------------
Net Income $ 1,351,000(1) $ 2,496,000(2)
============= ==============
Basic Earnings Per Common Share $ 0.06(1) $ 0.13(2)
============= ==============
Weighted Average Shares Outstanding 23,949,375 19,263,097
============= ==============
Diluted Earnings Per Common Share $ 0.06(1) $ 0.13(2)
============= ==============
Diluted Shares Outstanding 24,113,631 19,504,058
============= ==============
(1) Net income for the fiscal 1999 nine months includes a $400,000,
or $0.02 per diluted share, net tax benefit reflecting the
elimination of the Company's remaining deferred tax valuation
allowance. Without the tax benefit, net income for the nine
months would have been $951,000, or $0.04 per diluted share.
(2) Net income for the fiscal 1998 nine months includes a net tax
benefit of $1.47 million relating to a reduction in the Company's
deferred tax valuation allowance. Without this tax benefit, net
income for the fiscal 1998 nine months would have been $564,000,
or $0.03 per diluted share.
-0-
Contact:
Teamstaff, Inc.
Donald Kappauf, President and CEO
732/748-1700
or
KCSA
Joseph A. Mansi
212/682-6300, ext. 205
jmansi@kcsa.com
www.kcsa.com |
