Press Release Archive
Investor Contact: Teri Miller
Media Contact: Kip Havel
FOR IMMEDIATE RELEASE
SPHERION ANNOUNCES RETIREMENT OF CEO CINDA A. HALLMAN
AND PLANNED DIVESTITURE OF NON-CORE OPERATIONS
Proposed Sale Allows Spherion to Focus on Growth of North American Business
Fort Lauderdale, Fla., March 10, 2004—Spherion Corporation (NYSE: SFN) announced that Cinda A. Hallman, its chief executive officer who has been on a medical leave of absence since July 2003, will not resume the office of chief executive officer and will retire effective April 10, 2004. Hallman will also resign her position as a member of the board of directors at that time.
Steven S. Elbaum, Spherion® chairman, stated, “The Company is appreciative of Cinda’s leadership since she assumed the position of chief executive officer in April 2001 and the work that has been accomplished to reposition the Company and improve its competitiveness during a challenging economic period. Cinda will continue to provide support and advice as the Company proceeds to fill the CEO position and completes the enterprise-wide information system implementation that was initiated under her leadership.
“The board expects to name a new CEO in the next several months through a search process that had been planned as a contingency in light of Cinda’s medical leave. We expect that our strong existing management team led by Roy Krause, president and chief operating officer, Byrne Mulrooney, president of the staffing services segment, Eric Archer, president of the professional services segment and Mark Smith, chief financial officer, will continue to effectively manage the business. The board has retained Korn/Ferry International to conduct the search.
“As has been the practice at Spherion, particularly since the inception of Cinda’s medical leave, the board will continue to provide oversight, support and governance.”
Hallman said, “I am proud of the Company’s accomplishments during my tenure as CEO, including repositioning the Company for profitable growth and strengthening the management team. I am pleased to offer my counsel to the board and the current management team as the Company makes the transition to a new CEO. Business is a significant part of my life and I look forward to pursuing new opportunities in this arena.”
In an unrelated matter, the Company determined in first quarter 2004 to exit substantially all of its international staffing operations and a court reporting business in the United States. These businesses are non-core and do not meet the Company’s growth and return requirements. During 2003, these operations had aggregate revenues of $302 million and a pre-tax loss of approximately ($8) million.
Spherion President Roy Krause said, “We will redeploy capital and shift senior management’s focus away from these discontinued businesses in order to profitably grow our business and be a premier provider of staffing and recruitment-based services in North America.”
The Company will incur a pre-tax charge in first quarter 2004 of approximately $6 million, of which approximately $1 million is non-cash, as a result of the termination of Hallman’s employment contract. The termination payments are payable to Hallman over a two-year period. Further, the Company will incur a pre-tax charge in first quarter 2004 of between $4 - $6 million for the estimated loss on disposal of its discontinued operations.
Before giving effect to either of these charges and the reclassification of certain businesses as discontinued operations, management anticipates that based on current trends, first quarter 2004 results will be at the high end of the guidance range offered in the Company’s February 2, 2004 press release. The Company does not currently anticipate any further restructuring or similar charges this year, other than those previously announced.
Spherion Corporation is a leader in the staffing industry in North America, providing value-added staffing, recruiting and workforce solutions. Spherion has helped companies improve their bottom line by efficiently planning, acquiring and optimizing talent since 1946. To learn more, visit www.spherion.com.
This release contains statements that are forward looking in nature and, accordingly, are subject to risks and uncertainties. Factors that could cause future results to differ from current expectations include risks associated with: Competition - our business operates in highly competitive markets with low barriers to entry; Economic conditions - a significant economic downturn could result in our clients using fewer temporary employees or the loss or bankruptcy of a significant client could materially adversely affect our business results; Changing market conditions - our business is dependent upon the availability of qualified personnel; Corporate strategy - we may not achieve the intended effect of our business strategy; Technology Investments – our investment in technology initiatives may not yield their intended results; Tax filings – regulatory challenges to our tax filing positions could result in additional taxes; Debt Compliance – Failure to meet certain covenant requirements under our credit facility could impact part or all of our availability to borrow; Litigation - we are a defendant in a variety of litigation and other actions from time to time and we may be exposed to employment–related claims and costs; Other - government regulation may increase our costs; business risks associated with international operations could make those operations more costly; failure or inability to perform under customer contracts could result in damage to our reputation and give rise to legal claims; managing or integrating any future acquisitions may strain our resources, and certain contracts contain termination provisions and pricing risks. These and additional factors discussed in this release and in Spherion’s filings with the Securities and Exchange Commission could cause the Company’s actual results to differ materially from any projections contained in this release.
Spherion Corporation prepares its financial statements in accordance with generally accepted accounting principles (GAAP). Adjusted earnings (loss) from continuing operations is a non-GAAP financial measure, which excludes certain non-operating related charges and gains. Items excluded from the calculation of adjusted earnings (loss) from continuing operations include, but are not limited to, restructuring charges, gains/losses on the sale of assets, and gains on the early retirement of debt, net of taxes. Adjusted earnings (loss) from continuing operations is a key measure used by management to evaluate its operations. Management does not consider the items excluded to be operating costs/gains and therefore, excludes them from the evaluation of the Company’s operating performance. Adjusted earnings (loss) from continuing operations should not be considered a measure of financial performance in isolation or as an alternative to earnings (loss) from continuing operations or net earnings (loss) as determined in the Statement of Operations in accordance with GAAP, and, as presented, may not be comparable to similarly titled measures of other companies. Items excluded from adjusted earnings (loss) from continuing operations are significant components in understanding and assessing financial performance.