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WALNUT CREEK, CA, Monday, August 2, 2004
Westaff,
Inc. (Nasdaq: WSTF), a leading provider of staffing
services, is pleased to announce that it has taken
another step in the Company's continuing strengthening
of its financial position and operating performance.
The Company has signed an amendment to its Multicurrency
Credit Agreement to reduce its cost of funds and increase
the amount of available working capital under the agreement.
Under the terms of the amendment, interest rates
on bank borrowings and letters of credit have decreased.
Furthermore, the amendment eliminates certain borrowing
reserves and increases the eligible collateral that
may be used for the Company's borrowing base.
The net effect of the amendment is to increase the
amount of available working capital in the U. S. by
an estimated $7 to $8 million effective immediately.
The Company was able to negotiate improved terms
for the credit facility largely because of its strong
operating performance in recent months and its improved
financial outlook. The Company currently expects to
report earnings per share from continuing operations
of an estimated $0.10 for the third quarter of fiscal
2004, which ended July 10, 2004, as compared to a loss
of $0.05 for the third quarter of fiscal 2003. The
Company also expects to report a revenue increase of
over 20 percent for the quarter (and over 19% on a
constant currency basis).
While the Company is continuing to evaluate other
opportunities to further strengthen its financial position,
including a potential restructuring of its workers' compensation
collateral arrangements, the Company believes that
the additional borrowing capacity provided under the
amended credit agreement will be sufficient to meet
the Company's working capital needs for the foreseeable
future.
"I am very pleased with the Company's
recent operating performance as well as the improvements
in the terms of our credit agreement," commented
Dwight S. Pedersen, Westaff President and Chief Executive
Officer. "With the strengthening of our financial
position, the Company is poised to take full advantage
of our momentum and the improving economic environment."
Westaff provides staffing services and employment
opportunities for businesses in global markets. Westaff
annually employs approximately 150,000 people and services
more than 14,000 clients from more than 250 offices
located throughout the U.S., the United Kingdom, Australia,
New Zealand, Norway and Denmark. For more information,
please visit our Web site at www.westaff.com.
This press release contains forward-looking statements
as defined in the Securities Exchange Act of 1934,
and is subject to the safe harbors created by law.
Forward-looking statements contained herein include,
but are not limited to, statements regarding the Company's
third fiscal quarter financial guidance, working capital
availability and collateral arrangements. The forward-looking
statements contained herein involve a number of assumptions,
risks and uncertainties. Actual results of future events
could differ materially from estimates. Among the factors
affecting future operating results are: credit facilities
and compliance with debt covenants, liquidity, workers' compensation
collateral requirements, possible adverse effects of
fluctuations in the general economy, variability of
employee-related costs including workers' compensation
liabilities, a highly competitive market, control by
a significant shareholder, the volatility of the Company's
stock price, reliance on management information systems,
risks related to customers, variability of operating
results and the seasonality of the business cycle,
reliance on executive management, risks related to
international operations, risks related to franchise
agent and licensed operations, uncertain ability to
continue and manage growth, reliance on field management,
employer liability risks and ability to attract and
retain the services of qualified temporary personnel
and regulatory mandates, including potential mandated
health insurance.
Forward-looking statements are based on the beliefs
and assumptions of the Company's management
and on currently available information. The Company
undertakes no responsibility to publicly update or
revise any forward-looking statement. Additional
information concerning the risks and uncertainties
listed above, and other factors you may wish to consider,
is contained in the Company's filings with
the Securities and Exchange Commission, including
the Company's most recent Form 10-K, Form 10-Q, Form
8-K and other filings.
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