(Source: Business Wire)
Administaff, Inc. (NYSE: ASF), a leading provider of human resources
services for small and medium-sized businesses, today reported results
for the third quarter and nine months ended September 30, 2009. For the
third quarter 2009, the company reported net income of $5.8 million, or
$0.23 earnings per diluted share. For the nine months ended September
30, 2009, the company reported net income of $19.4 million and earnings
per diluted share of $0.77.
"We are pleased with our financial results and the stabilization of our
worksite employee base during the third quarter," said Paul J. Sarvadi,
chairman of the board and chief executive officer. "We are continuing to
be diligent in our support of our small business and mid market clients
as they manage through the uncertainty of the economic and political
climate."
Third Quarter
Revenues for the third quarter of 2009 decreased 7.3% compared to the
2008 period to $390.9 million, due to an expected 9.9% decrease in the
average number of worksite employees paid per month, partially offset by
a 2.8% increase in revenues per worksite employee per month.
Gross profit for the third quarter 2009 decreased 16.8% to $71.1
million. The average gross profit per worksite employee per month
decreased 7.9% to $220 in the 2009 period from $239 in the third quarter
of 2008. This decline was primarily the result of higher benefits costs
in the 2009 period due to higher utilization of health benefits by
worksite employees, including large claim activity and increased COBRA
participation.
Operating expenses for the quarter decreased 10.3% to $61.5 million, and
remained flat on a per worksite employee per month basis. The resulting
operating income for the third quarter of 2009 was $9.6 million,
compared to $16.9 million in the same period last year.
"Our business continues to produce positive cash flow and increase
working capital through this unprecedented economic climate," said
Douglas S. Sharp, senior vice-president of finance, chief financial
officer and treasurer. "EBITDA plus stock-based compensation exceeded
$16 million during the quarter with a $4 million increase in working
capital. Our strong balance sheet allows us to pursue strategic
opportunities as they arise."
Year-to-Date
Year-to-date revenues were $1.3 billion, a 3.2% decrease compared to the
2008 period, due to a 6.1% decrease in the average number of worksite
employees paid per month, partially offset by a 3.1% increase in
revenues per worksite employee per month. Gross profit for the nine
months ended September 30, 2009 decreased 11.5% to $226.6 million. The
average gross profit per worksite employee per month decreased 6.1%
compared to the 2008 period to $230.
Year-to-date operating expenses decreased 4.9% to $195.6 million. On a
per worksite employee per month basis, operating expenses increased 1.5%
compared to the 2008 period. As a result, operating income for the nine
months ended September 30, 2009, was $31.1 million compared to $50.5
million in the 2008 period.
Working capital increased by $31.2 million during the first nine months
of the year to $129.6 million at September 30, 2009. During this period,
EBITDA totaled $45.1 million and the company returned $12.0 million to
shareholders, including share repurchases of $2.0 million and dividends
of $10.0 million. Additionally, the company received a scheduled return
of $14.6 million in excess funding from its workers' compensation
program during 2009.
Administaff will be hosting a conference call today at 10 a.m. EST to
discuss these results, give guidance for the fourth quarter and full
year 2009 and answer questions from investment analysts. To listen in,
call 888-481-7939 and use passcode 91751151. The call will also be
webcast at http://www.administaff.com.
To access the webcast, click on the Investor Relations section of the
Web site and select "Live Webcast." The conference call script and
company guidance will be available at the same Web site later today. A
replay of the conference call will be available at 888-286-8010,
passcode 75939555, for two weeks after the call. The webcast will be
archived for one year.
Administaff is the nation's leading professional employer organization
(PEO), serving as a full-service human resources department that
provides small and medium-sized businesses with administrative relief,
big-company benefits, reduced liabilities and a systematic way to
improve productivity. The company operates 50 sales offices in 23 major
markets. For additional information, visit Administaff's Web site at http://www.administaff.com.
The statements contained herein that are not historical facts are
forward-looking statements within the meaning of the federal securities
laws (Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934). You can identify such
forward-looking statements by the words "expects," "intends," "plans,"
"projects," "believes," "estimates," "likely," "possibly," "probably,"
"goal," "objective," "target," "assume," "outlook," "guidance,"
"predicts," "appears," "indicator" and similar expressions. Forward-looking
statements involve a number of risks and uncertainties. In the
normal course of business, Administaff, Inc., in an effort to help keep
our stockholders and the public informed about our operations, may from
time to time issue such forward-looking statements, either orally or in
writing. Generally, these statements relate to business plans or
strategies, projected or anticipated benefits or other consequences of
such plans or strategies, or projections involving anticipated revenues,
earnings, unit growth, profit per worksite employee, pricing, operating
expenses or other aspects of operating results. We base the
forward-looking statements on our current expectations, estimates and
projections. These statements are not guarantees of future
performance and involve risks and uncertainties that we cannot predict.
In addition, we have based many of these forward-looking statements
on assumptions about future events that may prove to be inaccurate. Therefore,
the actual results of the future events described in such
forward-looking statements could differ materially from those stated in
such forward-looking statements. Among the factors that could
cause actual results to differ materially are: (i) changes in general
economic conditions; (ii) regulatory and tax developments and possible
adverse application of various federal, state and local regulations;
(iii) the ability to secure competitive replacement contracts for health
insurance and workers' compensation contracts at expiration of current
contracts; (iv) increases in health insurance costs and workers'
compensation rates and underlying claims trends, financial solvency of
workers' compensation carriers and other insurers, state unemployment
tax rates, liabilities for employee and client actions or
payroll-related claims, changes in the costs of expanding into new
markets, and failure to manage growth of our operations; (v) the
effectiveness of our sales and marketing efforts; (vi) changes in the
competitive environment in the PEO industry, including the entrance of
new competitors and our ability to renew or replace client companies;
(vii) our liability for worksite employee payroll and benefits costs;
(viii) our liability for disclosure of sensitive or private information;
and (ix) an adverse final judgment or settlement of claims against
Administaff. These factors are discussed in further detail in
Administaff's filings with the U.S. Securities and Exchange Commission.
Any of these factors, or a combination of such factors, could
materially affect the results of our operations and whether
forward-looking statements we make ultimately prove to be accurate.
Administaff, Inc.