NovaCare Employee Services Announces Preliminary First Quarter Net Income of
$937,000
PR Newswire, Monday, November 03, 1997 at 08:14
NORRISTOWN, Pa., Nov. 3 /PRNewswire/ -- NovaCare Employee Services, Inc.
(NASDAQ:NCES), a leading national employee services company, or professional
employer organization (PEO), announced today preliminary net income for the
three months ended September 30, 1997 of $937,000. This compared with net
income of $411,000 for the previous quarter ended June 30, 1997.
Net revenues for the first quarter of $267 million represented a
15 percent increase from $232 million for the previous three months ended
June 30, 1997. The increase was primarily due to an increase in the number of
worksite employees, an increase in revenue per worksite employee, and the
acquisition of NovaPro, a temporary staffing business, from NovaCare, Inc.,
effective July 1, 1997. Gross profit for the first quarter was $8.3 million
compared with $6.7 million for the previous three months. The gross profit
margin for the first quarter was approximately three percent of total net
revenues, unchanged from the three months ended June 30, 1997. Operating
income for the first quarter was $2.1 million compared with $1.7 million for
the previous three months.
At period end, the company had 1,768 clients with approximately 38,000
worksite employees under contract located across 45 states.
NovaCare Employee Services, Inc. is one of the largest professional
employer organizations in the United States. The Company is an employee
services company that provides small to medium-sized businesses with
comprehensive, fully integrated outsourcing solutions to human resource
issues, including payroll management, risk management, benefits
administration, unemployment services and human resource consulting services.
The Company believes its services enable small and medium-sized businesses to
cost-effectively manage and enhance the employment relationship by:
(i) controlling the risks and costs associated with workers' compensation,
workplace safety and employee-related litigation; (ii) providing employees
with high quality health care coverage and related benefits; (iii) managing
the increasingly complex legal and regulatory environment affecting
employment; and (iv) achieving scale advantages typically available to larger
organizations.
Cautionary Statement
Except for historical information, matters discussed above including, but
not limited to, statements concerning future growth, are forward-looking
statements that are based on management's estimates, assumptions and
projections. Important factors that could cause results to differ materially
from those expected by management include management retention and
development, management's success in integrating acquired businesses, in
developing and introducing new products and lines of business and in entering
new geographic markets, adverse Internal Revenue Service rulings with respect
to the employer status of employee services businesses and the company's
ability to implement the employee services business model.
NOVACARE EMPLOYEE SERVICES, INC.
Consolidated Statements of Operations
(Dollars in thousands, except per share data)
(Unaudited)
Three months ended:
September 30, June 30,
1997 1997
Revenues $266,757 $232,223
Direct costs:
Salaries, wages and employment
taxes of worksite employees 242,500 211,425
Health care, workers' compensation,
state unemployment taxes and other 15,929 14,130
Gross profit 8,328 6,668
Selling, general and administrative expenses 5,630 4,397
Amortization of excess cost of net assets acquired 572 567
Income from operations 2,126 1,704
Interest expense, net (375) (405)
Income before income taxes 1,751 1,299
Income taxes 814 888
Net income $937 $411
Historical information:
Net income (loss) applicable to common stock $82 ($146)
Net income (loss) per share 0.00 ($0.01)
Weighted shares outstanding 20,574 20,574
Pro forma information:
Pro forma net income $937 $411
Pro forma net income per share $0.05 $0.02
Weighted shares outstanding 20,574 20,574
SOURCE NovaCare, Inc.
-0- 11/03/97
/CONTACT: Analysts, Susan J. Campbell, 610-992-7425, or Media, David
Fridling, 610-992-7426/ |
