Press Release Archive
FORT LAUDERDALE, Fla., Oct. 29, 2007 -- Spherion Corporation (NYSE: SFN) today announced financial results for the third quarter ended September 30, 2007.
Spherion President and Chief Executive Officer Roy Krause commented, "We are very pleased with our third quarter performance. Earnings were significantly higher than last year and revenue trends outpaced the US performance of our major diversified staffing competitors. Operating margins again increased in the quarter, with continued focus on operational discipline."
- Third quarter 2007 revenues were slightly higher year over year, $495 million compared with $492 million last year.
- Earnings from continuing operations in the third quarter were up 72% year over year to $9.0 million, or $0.16 per share, compared with $5.2 million, or $0.09 per share, in the prior year.
- Net earnings, including discontinued operations, for the third quarter of 2007 were $9.5 million, or $0.17 per share, compared with $8.4 million, or $0.15 per share, in the third quarter of 2006.
- Earnings before interest, taxes, depreciation and amortization (EBITDA) in the third quarter reached 4.0% of revenue compared with 2.8% of revenue in the third quarter last year.
- Revenues for the first nine months of 2007 were $1.4 billion, flat with revenues for the same period in 2006. Earnings from continuing operations for the first nine months of 2007 were up 59% to $19.1 million, or $0.34 per share, compared with $12.1 million, or $0.21 per share, for the same period in 2006. Net earnings were $15.5 million, or $0.27 per share, for the first nine months of 2007, compared with $14.9 million, or $0.26 per share, in 2006.
Krause continued, "On September 29, we acquired Todays Staffing, Inc., a recruiting and staffing company with a demonstrated record of success with small and mid-sized accounts concentrated in higher margin clerical services. Assuming performance consistent with the twelve months ended June 30, 2007 and realization of planned synergies, we expect that Todays Staffing will be accretive $0.06 - $0.08 per share in 2008. We are very pleased to confirm that the integration of this business is well underway, and should be completed by year end. We are looking forward to solid performance of this brand, and we are on target to realize in 2008 most anticipated cost synergies."
Within Staffing Services, targeted small and mid-sized accounts increased 10.5%. This was offset by a decline in large accounts, resulting in total revenues that were down 1.5% from the prior year. Gross profit margins increased to 20.4% in the third quarter of 2007 compared with 20.3% in the third quarter of 2006, primarily due to growth in the higher margin managed services, including recruitment process outsourcing services. Selling, general and administrative costs decreased significantly to $61.9 million or 17.1% of revenue in the third quarter of 2007, compared with $67.5 million or 18.4% of revenue last year. Segment operating profit was $11.9 million or 3.3% of revenue in the third quarter of 2007, compared with $7.2 million or 1.9% of revenue in the third quarter of 2006.
Professional Services revenue growth was 6.8% on a year over year basis in the third quarter of 2007. Both finance and accounting and information technology grew 6.4% year over year. Gross profit margins in the third quarter of 2007 were 34.0%, compared with 32.2% in the prior year, principally reflecting improvement in temporary staffing margins. Selling, general and administrative expenses were $39.0 million or 29.3% of revenue in the third quarter of 2007 compared with $35.1 million or 28.2% of revenue in the third quarter last year. Segment operating profit increased to $6.2 million or approximately 4.7% of revenue in the third quarter of 2007, compared with $5.0 million or approximately 4.0% of revenue in the same period last year.
During the third quarter, the Company generated EBITDA of $19.6 million. At the close of the third quarter, the Company had a cash balance of $32.1 million and total availability on its credit facilities of $167 million. Capital expenditures during the third quarter were $2.1 million, and full year capital expenditures are expected to be in the $8-10 million range.
The Company purchased 315,000 shares of its common stock during the third quarter of 2007 at an average price of $7.65 per share. During the first nine months of 2007, the Company purchased a total of 1,077,200 shares at an average price of $8.80 per share.
Krause commented, "Based on recent trends, the Company anticipates revenue for the fourth quarter will be between $535 and $550 million, reflecting overall modest organic growth as demand across the industry, especially in larger accounts, remains challenging. Adjusted earnings from continuing operations are expected to be between $0.16 and $0.19 per share, assuming a 40% effective tax rate, and excluding one time costs of $1.0 million related to the acquisition of Todays Staffing. Earnings from continuing operations inclusive of the one time costs are expected to be $0.15 to $0.18 per share."
Spherion Corporation (NYSE: SFN) is a leading recruiting and staffing company that provides integrated solutions to meet the evolving needs of companies and job candidates. As an industry pioneer for more than 60 years, Spherion has sourced, screened and placed millions of individuals in temporary, temp-to-hire and full-time jobs. Positions range from administrative and light industrial to a host of professions that include accounting/finance, information technology, engineering, manufacturing, legal, human resources and sales/marketing.
With approximately 700 locations in the United States and Canada, Spherion delivers innovative workforce solutions that improve business performance. Spherion provides its services to more than 8,000 customers, from Fortune 500 companies to a wide range of small and mid-size organizations. Employing more than 300,000 people annually through its network, Spherion is one of North America's largest employers. To learn more, visit http://www.spherion.com/. For up-to-date career tips and trends, visit Spherion's career blog, The Big TimeSM, at http://www.spherion.com/careerblog.
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 - any significant economic downturn could result in lower revenues or a significant reduction in demand from our customers may result in a material impact on the results of our operations; Corporate strategy - we may not achieve the intended effects of our business strategy; Termination provisions - certain contracts contain termination provisions and pricing risks; Failure to perform - our failure or inability to perform under customer contracts could result in damage to our reputation and give rise to legal claims; Disposition of businesses - the disposition of businesses previously sold may create contractual liabilities associated with indemnifications provided; Business interruptions - natural disasters or failures with hardware, software or utilities could adversely affect our ability to complete normal business processes; Tax filings - regulatory challenges to our tax filing positions could result in additional taxes; Personnel - our business is dependent upon the availability of qualified personnel and we may lose key personnel which could cause our business to suffer; Litigation - we may be exposed to employment-related claims and costs and we are a defendant in a variety of litigation and other actions from time to time; Common stock - the price of our common stock may fluctuate significantly, which may result in losses for our investors; Government Regulation - government regulation may increase our costs; International operations - we are subject to business risks associated with our operations in Canada which could make those operations more costly; Integrating acquisitions - managing or integrating any future acquisitions may strain our resources; and Debt compliance - failure to meet certain covenant requirements under our credit facility could impact part or all of our availability to borrow. 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). Organic revenue growth is a non-GAAP financial measure, which includes pro-forma revenues impacted by acquired companies. Adjusted earnings 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 from continuing operations include work opportunity tax credits, interest expense related to adjustment of the Canadian purchase liability, and integration costs related to acquisitions. EBITDA from continuing operations is a non- GAAP financial measure which excludes interest, taxes, depreciation and amortization from earnings from continuing operations. Organic growth, adjusted earnings and EBITDA from continuing operations are key measures used by management to evaluate its operations. Management includes revenues prior to acquisition date for acquired companies in the organic revenue growth calculation in order to evaluate the Company's operating performance. Organic growth, adjusted earnings and EBITDA from continuing operations should not be considered measures of financial performance in isolation or as an alternative to revenue growth or earnings from continuing operations or net earnings (loss) as determined in the Statement of Earnings in accordance with GAAP, and, as presented, may not be comparable to similarly titled measures of other companies, and therefore this measure has material limitations. Items excluded from adjusted earnings from continuing operations are significant components in understanding and assessing financial performance.
SOURCE: Spherion Corporation
CONTACT: Investor, Randy Atkinson, +1-954-308-7639,
firstname.lastname@example.org; Media, Kip Havel, +1-800-422-3819,
email@example.com, both of Spherion Corporation
Web site: http://www.spherion.com/