WALNUT CREEK, CA, February 4, 2002
Westaff, Inc. (Nasdaq:WSTF), a leading provider of temporary office and light industrial staff, today announced that it has delayed filing its annual report on Form 10-K. Westaff has filed a notification of late filing under Rule 12b-25 to extend the filing deadline because it is in the process of finalizing negotiations regarding its credit facility, the outcome of which is expected to affect the financial statement presentations and related financial disclosures.
As previously reported by Westaff, at November 3, 2001, the ending date of fiscal 2001, the Company was out of compliance with one of its senior secured note financial covenants and one of its revolving credit agreement covenants. Westaff requires additional time to complete the negotiations and determine the appropriate financial statement presentations and related financial disclosures.
``We are working closely with our bank group and our private placement noteholders as we move toward finalizing an amended and restated credit agreement,'' said Westaff Chief Executive Officer Dwight S. Pedersen. ``We may also explore other financing alternatives during the next few quarters, including increasing the equity base of the Company through a possible subscription rights offering or other financing arrangements.''
Westaff also announced today that it anticipates taking an after-tax estimated charge of approximately $2.4 million or $0.15 per share due to an adverse interim arbitration award which will affect its previously announced financial results for the fourth quarter and fiscal year ended November 3, 2001. The award was issued after the Company's previous financial results announcement. While the ultimate amount of the award has not been fully determined, pending a request by Westaff to modify the principal amount of the award and determination of the amount of attorneys' fees and costs which the claimant is entitled to recover, Westaff already has paid the undisputed principal portion of the award in the amount of approximately $975,000. The Company believes that the estimated charge is appropriate at this time and that the charge is properly allocable to the 2001 fiscal year.
Westaff provides staffing services to and employment opportunities at competitive businesses in global markets. Westaff annually employs approximately 175,000 people worldwide and services approximately 20,000 clients from more than 330 offices located throughout the U.S. and also in the United Kingdom, Australia, New Zealand, Norway, Denmark and Mexico, and achieved fiscal 2001 system revenues of over $580 million. For more information, please visit our website at www.westaff.com.
This press release contains forward-looking statements regarding future events and future performance of the Company that involve risks and uncertainties that could cause actual results to differ materially. We refer you to documents that the Company files from time to time with the Securities and Exchange Commission, such as Form 10-K, Form 10-Q and Form 8-K reports, which contain a description of certain factors that could cause actual results to differ from current expectations and the forward-looking statements in this press release.
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