TeamStaff Reports Fourth Quarter and Full Year Results

CONTACTS:

Rick Filippelli, President and CEO

TeamStaff, Inc.

1 Executive Drive

Somerset, NJ  08873

866-352-5304

Donald C. Weinberger/Diana Bittner (media)

Wolfe Axelrod Weinberger Associates, LLC

212-370-4500

[email protected]

[email protected]

TEAMSTAFF, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

(Unaudited)

For the Three Months Ended

September 30,

September 30,

2009

2008

REVENUES

Operating revenues

$            11,192 

$            12,506 

Non-recurring retroactive billings

- 

7,248 

Total revenue

11,192 

19,754 

DIRECT EXPENSES

Operating direct expense

9,746 

10,231 

Non-recurring retroactive billings

- 

7,122 

Total direct expense

9,746 

17,353 

GROSS PROFIT

Operating gross profit

1,446 

2,275 

Non-recurring retroactive billings

- 

126 

Total gross profit

1,446 

2,401 

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

1,649 

1,642 

DEPRECIATION AND AMORTIZATION

28 

28 

(Loss) income from operations

(231)

731 

OTHER INCOME (EXPENSE)

Interest income

4 

22 

Interest expense

(142)

(25)

Settlement of prior periods' payroll tax contingencies

- 

416 

Other income, net

2 

1 

Legal expense related to pre-acquisition activity of

acquired company

(5)

(62)

(141)

352 

(Loss) income from continuing operations before taxes

(372)

1,083 

INCOME TAX BENEFIT

- 

(60)

(Loss) income from continuing operations

(372)

1,023 

LOSS FROM DISCONTINUED OPERATIONS

Loss from operations

(2,939)

(517)

Loss from discontinued operations

(2,939)

(517)

NET (LOSS) INCOME

$            (3,311)

$                 506 

(LOSS) EARNINGS PER SHARE - BASIC & DILUTED

(Loss) income from continuing operations

$              (0.08)

$                0.21 

Loss from discontinued operations

(0.60)

(0.11)

Net (loss) earnings per share

$              (0.68)

$                0.10 

WEIGHTED AVERAGE BASIC SHARES OUTSTANDING

4,898 

4,897 

WEIGHTED AVERAGE DILUTED SHARES OUTSTANDING

4,898 

4,906 

TEAMSTAFF, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

For the Year Ended

September 30,

September 30,

2009

2008

REVENUES

Operating revenues

$            46,021 

$            47,747 

Non-recurring retroactive billings

- 

10,772 

Total revenue

46,021 

58,519 

DIRECT EXPENSES

Operating direct expense

39,019 

39,495 

Non-recurring retroactive billings

- 

10,080 

Total direct expense

39,019 

49,575 

GROSS PROFIT

Operating gross profit

7,002 

8,252 

Non-recurring retroactive billings

- 

692 

Total gross profit

7,002 

8,944 

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

6,505 

5,930 

DEPRECIATION AND AMORTIZATION

111 

150 

Income from operations

386 

2,864 

OTHER INCOME (EXPENSE)

Interest income

45 

40 

Interest expense

(222)

(147)

Settlement of prior periods' payroll tax contingencies

- 

716 

Other income, net

160 

- 

Legal expense related to pre-acquisition activity of

acquired company

(21)

(218)

(38)

391 

Income from continuing operations before taxes

348 

3,255 

INCOME TAX BENEFIT (EXPENSE)

28 

(60)

Income from continuing operations

376 

3,195 

LOSS FROM DISCONTINUED OPERATIONS

Loss from operations

(4,731)

(2,049)

Loss from discontinued operations

(4,731)

(2,049)

NET (LOSS) INCOME

$            (4,355)

$              1,146 

(LOSS) EARNINGS PER SHARE - BASIC

Income from continuing operations

$                0.08 

$                0.66 

Loss from discontinued operations

(0.97)

(0.42)

Net (loss) earnings per share

$              (0.89)

$                0.24 

(LOSS) EARNINGS PER SHARE - DILUTED

Income from continuing operations

$                0.07 

$                0.66 

Loss from discontinued operations

(0.93)

(0.42)

Net (loss) earnings per share

$              (0.86)

$                0.24 

WEIGHTED AVERAGE BASIC SHARES OUTSTANDING

4,900 

4,866 

WEIGHTED AVERAGE DILUTED SHARES OUTSTANDING

5,085 

4,875 

TEAMSTAFF, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(AMOUNTS IN THOUSANDS)

September 30,

September 30,

ASSETS

2009

2008

CURRENT ASSETS:

Cash and cash equivalents

$              2,992

$              5,213

Accounts receivable, net of allowance for doubtful

accounts of $0 as of September 30, 2009 and 2008

              11,427

              11,881

Prepaid workers' compensation

                   517

                   562

Other current assets

                   257

                   505

Assets from discontinued operations

                1,418

                3,878

    Total current assets

              16,611

              22,039

EQUIPMENT AND IMPROVEMENTS:

Furniture and equipment

                2,262

                2,262

Computer equipment

                   254

                   249

Computer software

                   788

                   725

Leasehold improvements

                       9

                       9

                3,314

                3,245

Less accumulated depreciation and amortization

              (3,054)

              (2,945)

   Equipment and improvements, net

                   260

                   300

TRADENAME

                3,924

                3,924

GOODWILL

                8,595

                8,595

OTHER ASSETS

                   267

                   136

TOTAL ASSETS

$            29,657

$            34,994

TEAMSTAFF, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(AMOUNTS IN THOUSANDS EXCEPT PAR VALUE OF SHARES)

September 30,

September 30,

LIABILITIES AND SHAREHOLDERS' EQUITY

2009

2008

CURRENT LIABILITIES:

Notes payable

$              1,500 

$              1,500 

Current portion of capital lease obligations

20 

29 

Accrued payroll

10,694 

10,408 

Accrued pension liability

- 

70 

Accounts payable

1,890 

2,578 

Accrued expenses and other current liabilities

1,241 

1,910 

Liabilities from discontinued operations

392 

381 

    Total current liabilities

15,737 

16,876 

CAPITAL LEASE OBLIGATIONS, net of current portion

27 

45 

OTHER LONG TERM LIABILITY, net of current portion

13 

14 

LONG TERM LIABILITIES FROM DISCONTINUED OPERATIONS

64 

173 

    Total Liabilities

15,841 

17,108 

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:

Preferred stock, $.10 par value; authorized 5,000 shares;

    none issued and outstanding

- 

- 

Common Stock, $.001 par value; authorized 40,000 shares;

issued 4,900 at September 30, 2009 and 4,874 at

September 30, 2008, respectively; outstanding 4,898 at

September 30, 2009 and 4,843 at September 30, 2008, respectively

5 

5 

Additional paid-in capital

69,124 

68,844 

Accumulated deficit

(55,289)

(50,934)

Accumulated comprehensive loss

- 

(5)

Treasury stock, 2 shares at cost at September 30, 2009 and

September 30, 2008

(24)

(24)

    Total shareholders' equity

13,816 

17,886 

TOTAL LIABILITIES AND  SHAREHOLDERS' EQUITY

$            29,657 

$            34,994 

TEAMSTAFF, INC. AND SUBSIDIARIES

SUPPLEMENTAL FINANCIAL AND OPERATING DATA

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

(Unaudited)

RECONCILIATION OF NON-GAAP ITEMS:

For the three months ended

For the year ended

September 30, 2009

September 30, 2008

September 30, 2009

September 30, 2008

(Loss) income from continuing operations

$                                (372)

$                               1,023 

$                                  376 

$                               3,195 

Gross profit from non-recurring retroactive billings

- 

(126)

- 

(692)

Settlement of prior periods' payroll tax contingencies

- 

(416)

- 

(716)

Insurance claims on previously divested business

- 

(133)

- 

(400)

Adjusted (loss) income from continuing operations (1)

$                                (372)

$                                  348 

$                                  376 

$                               1,387 

GAAP based (loss) income from continuing operations per basic share

$                               (0.08)

$                                 0.21 

$                                 0.08 

$                                 0.66 

Adjustments:

Gross profit from non-recurring retroactive billings

- 

(0.03)

- 

(0.14)

Settlement of prior periods' payroll tax contingencies

- 

(0.08)

- 

(0.15)

Insurance claims on previously divested business

- 

(0.03)

- 

(0.08)

Adjusted (loss) income from continuing operations per basic share (2)

$                               (0.08)

$                                 0.07 

$                                 0.08 

$                                 0.29 

Stand alone

TeamStaff Inc.

As reported

TeamStaff GS

Corporate (3)

Consolidated

For the year ended September 30, 2009

Income (loss) from operations

$                               3,324 

$                             (2,938)

$                                  386 

Depreciation and amortization

72 

39 

111 

Allocation of direct expenses

(674)

674 

- 

EBITDA (4)

$                               2,722 

$                             (2,225)

$                                  497 

(1)  Adjusted (loss) income from continuing operations  represents GAAP (loss) income from continuing operations minus gross profit from non-recurring retroactive billings and certain non-recurring payroll  tax and insurance adjustments.  Management presents adjusted (loss) income from continuing operations to show the three and twelve month comparative adjusted net (loss) income to show what results would have been in the three and twelve months of fiscal 2008 had the non-recurring items not occurred. Management believes that adjusted (loss) income from continuing operations is a useful supplement to (loss) income from continuing operations as an indicator of operating performance.  Management believes such a measure provides a picture of the Company's results that is more comparable among periods since it excludes the impact of items that are non-recurring, which could cause distorted comparisons between periods, thus providing a more meaningful comparison of its financial results. As defined, adjusted (loss) income from continuing operations is not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the method of calculation.  While management believes that the non-recurring items are not indicative of the Company's current operating performance, these items do impact the income statement, and management therefore utilizes adjusted (loss) income from continuing operations as an operating performance measure in conjunction with GAAP measures such as GAAP (loss) income from continuing operations.

(2)  Adjusted (loss) income from continuing operations per basic share represents GAAP (loss) earnings from continuing operations per basic share minus gross profit from non-recurring retroactive billings and certain non-recurring payroll tax and insurance adjustments.  Management presents adjusted (loss) earnings from continuing operations per basic share to show what results would have been in the three and twelve months of fiscal 2008 had the non-recurring items not occurred because it believes that adjusted  (loss) earnings from continuing operations per basic share  is a useful supplement to GAAP (loss) earnings from continuing operations per basic share  as an indicator of operating performance .  Management believes such a measure provides a picture of the company's results that is more comparable among periods since it excludes the impact of items that are non-recurring, which could cause distorted comparisons between periods, thus providing a more meaningful comparison of its financial results.  As defined, adjusted (loss) earnings from continuing operations per basic share is not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the method of calculation.  While management believes that the non-recurring items are not indicative of the company's current operating performance, these items do impact the income statement, and management therefore utilizes adjusted (loss) earnings from continuing operations per basic share as an operating performance measure in conjunction with GAAP measures such as GAAP (loss) earnings from continuing operations per share.  

(3)   Expenses related to TeamStaff Inc. on a stand alone basis include the costs associated with being a publicly traded company, general corporate expenses and certain direct expenses of the TeamStaff GS business.

(4)  EBITDA, a non-GAAP financial measure, is defined as earnings before interest, income taxes, depreciation and amortization. Items excluded from EBITDA are significant components in understanding and assessing financial performance.  Management presents EBITDA because it believes that  EBITDA is a useful supplement to net (loss) income as an indicator of operating performance.  The Company believes it is useful for management to review both GAAP information and non-GAAP financial measures to have a better understanding of the overall performance of the Company’s business and trends relating to its financial condition and results of operations.  Management believes that this information provides greater insight into our Company’s underlying operating performance that facilitates a more meaningful comparison of its financial results in different reporting periods.