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WALNUT CREEK, CA, Thursday, August 19, 2004
Westaff,
Inc. (NASDAQ: WSTF), a leading provider of staffing
services, today reported financial results for its
third fiscal quarter, which ended July 10, 2004.
Revenue for the third quarter of fiscal 2004 was
$142.3 million, up $25.1 million or 21.4% from the
third quarter of fiscal 2003. Domestic revenue increased
20.3%, primarily reflecting an increase in billed
hours of 18.5%. International revenue increased 25.6%,
assisted by favorable currency exchange rates. On
a constant currency basis, international revenue increased
15.8%.
"The increasingly positive results have exceeded
our expectations," commented Westaff President
and CEO Dwight S. Pedersen. "The current quarter
revenue is the highest for a third quarter since fiscal
2000. Weekly domestic revenue has shown a steadily
increasing trend since March. These increases have
moderated in recent weeks, much like the economy as
a whole, and our domestic weekly revenue in the beginning
of the fourth fiscal quarter is running about 15%
ahead of last year. We currently expect year over
year sales increases for the fourth quarter of fiscal
2004 to be in the range of 11% to 14%. Our international
operations are continuing their solid sales performance."
Operating income was $2.4 million for the quarter
compared with a loss of $0.4 million in 2003. The
Company also reported net income of $1.8 million,
or $0.11 per share, for the third quarter of 2004
compared with a net loss of $0.8 million, or $(0.05)
per share in the 2003 quarter. Net income for the
third quarter of fiscal 2004 includes a gain from
discontinued operations of $150,000 or $0.01 per share.
"I am very pleased with our operating performance
for the quarter," continued Mr. Pedersen. "We
have remained very prudent in our spending for general
and administrative expenses in light of lower gross
margins and that has helped our revenue increases
flow through to the bottom line. We recently announced
improved terms for our credit facility, largely made
possible because of our strong operating results in
recent months. The new terms will allow us additional
working capital to invest in strategic sales and marketing
programs and management information system enhancements."
For the first 36 weeks of fiscal 2004, revenue increased
$44.5 million or 12.7% over the same period in fiscal
2003. The Company reported income from continuing
operations of $0.9 million as compared to a loss of
$4.2 million for the fiscal 2003 period.
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 client accounts 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, the statements of Mr. Pedersen
regarding revenue, the prospects for fiscal 2004 and
working capital availability. 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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