Staff Leasing Reports First Quarter Results

Apr 26, 2001, 01:00 ET from Staff Leasing, Inc.

    BRADENTON, Fla., April 26 /PRNewswire/ --
 Staff Leasing, Inc. (Nasdaq:   STFF), a leading human resource solutions
 provider, announced today its financial results for the first quarter ended
 March 31, 2001.
     Revenues increased in the first quarter by 2.9% to $752.3 million from
 $731.3 million in the first quarter of 2000.  Revenue increased despite a
 decline in the average paid worksite employees from 115,046 to 106,821, or
 7.1%.
     Gross profit for the first quarter of 2001 increased 1.3% to $23.7 million
 from $23.4 million in the first quarter of 2000.  As a percentage of revenue,
 gross profit remained flat at 3.2% during the comparable quarter in 2000.  The
 average annualized gross profit per paid worksite employee increased 8.8% from
 $814 in the first quarter of 2000 to $886 in the first quarter of 2001.
     The Company reported net income for the first quarter of 2001 of $.4
 million or $.02 per share (diluted) excluding a one time after tax charge
 related to severance expenses of $.3 million.
     Michael K. Phippen, Chairman and Chief Executive Officer of Staff Leasing,
 remarked: "In the first quarter, we continued to strive towards our three
 major goals of targeting the white and gray collar businesses, investing in
 and developing new products and services, and improving the efficiencies and
 effectiveness of our operations."
     The company continued to make progress in moving its business towards more
 white and gray collar as evidenced by the 16.3% decline in workers'
 compensation billed mix from $5.70 for the first quarter of 2000 to $4.77 in
 the first quarter of 2001.  The workers' compensation claims frequency
 declined more than the decline in the billed mix.  Average wages per paid
 worksite employee were up 11.0% during this same period.
     Staff Leasing is preparing to go live in the second quarter of this year
 with its first clients using the small business unbundled products as a result
 of the Oracle Partnership.  The enterprise unbundled solutions for larger
 clients are tracking towards a third quarter of 2001 go-live date.
     The Company's total overall operating expense has declined from
 $25.0 million to $24.3 million excluding the severance charges during the
 quarter of $.5 million.  The annualized operating expense per paid worksite
 employee increased 5.2%, from $794 to $835 excluding the severance charges of
 $18 per paid worksite employee.  The Company continues to balance operating
 cost reductions with added expenses related to additional sales growth.  These
 growth initiatives include national expansion, increased marketing efforts,
 unbundled new products and services, and delivery of a higher level PEO
 service offering.
     The Company ended the quarter with $91.2 million of cash, cash equivalents
 and marketable securities, a decrease from December 31, 2000 of $5.8 million.
 The decrease in cash is primarily due to a reduction in workers' compensation
 reserves of  $3.7 million.  The reserve declined to $26.3 million at March 31,
 2001 compared to $30.0 million at December 31, 2000.  During the quarter the
 Company repurchased the remaining 38,000 shares of stock for $.1 million to
 finish the previously authorized share repurchase program. Staff Leasing also
 announced a planned regular quarterly dividend of $.05 per share payable on
 April 30, 2001 to shareholders of record as of April 16, 2001.
     "Our infrastructure is in place and ready to take on additional business
 volume as the Company and the sales force make the business model transition,"
 commented Chief Financial Officer, John E. Panning. "Significant incremental
 revenue can be added with very little operating infrastructure growth."
     As it relates to the PEO business the Company expects to see the number of
 worksite employees remain relatively flat from the first to the second
 quarter, with growth starting in the third quarter.  Staff Leasing anticipates
 revenues to be relatively flat for the remainder of 2001 as compared to last
 year.
     Staff Leasing is a leading human resource solutions provider in the United
 States, providing customers with a broad range of employee management
 services, including human resources consulting, recruiting, training, payroll
 administration, benefits administration, unemployment services and risk
 management.  Staff Leasing has 39 offices in Alabama, Arizona, Colorado,
 Florida, Georgia, Minnesota, North Carolina, Tennessee and Texas.  Staff
 Leasing ranks number 508 on the Fortune 1000 list based on total revenues of
 $3.1 billion in 2000.  The Company is also number 189 on the InformationWeek
 500 list of leading information technology innovators.  Staff Insurance, Inc.,
 a wholly owned subsidiary of Staff Leasing, provides a full range of corporate
 insurance products, including general liability and commercial auto.
     Staff Leasing's core services are complemented by an eCommerce strategy
 that includes STAFFweb, an eService platform that provides clients and
 worksite employees with information and resources to help maximize the benefit
 of their Staff Leasing services.
     The Company will discuss first quarter 2001 results during a live
 conference call at 10:30 a.m. ET on April 26, 2001.  To participate in the
 call, dial 888-328-2935 and ask for the Staff Leasing conference call. Allow
 five to ten minutes before 10:30 a.m. Eastern time to secure the line. To
 listen to the call via the Web, log on at
 http://www.videonewswire.com/STFF/042601/. Allow five to ten minutes before
 10:30 a.m. Eastern time to register.  Minimum requirements to listen to the
 broadcast include (1) RealPlayer software which is downloadable free at
 www.real.com/products/player/index.html, and (2) at least a 28.8Kbps
 connection to the Internet.  If you are unable to listen to the live call,
 audio will be archived on the Staff Leasing website at www.staff-leasing.com.
 To access the replay, click on http://www.videonewswire.com/STFF/042601/.
 Approximately one week after the call, a transcript of this conference will
 also be available on the Company's website.
 
     NOTE: Statements in this press release relating to matters that are not
 historical facts are forward-looking statements. Such forward-looking
 statements involve known and unknown risks, uncertainties and other factors
 which may cause the actual results or performance of Staff Leasing, Inc. to be
 materially different from any future results or performance expressed or
 implied by such forward-looking statements. Such known and unknown risks,
 uncertainties and other factors include, but are not limited to, the
 following: (i) the potential for additional subsidies of health benefit plans;
 (ii) volatility in workers' compensation rates and unemployment taxes; (iii)
 possible adverse application of certain federal and state laws and the
 possible enactment of unfavorable laws or regulation; (iv) impact of
 competition from existing and new professional employer organizations; (v)
 risks associated with expansion into additional states where the Company does
 not have a presence or significant market penetration; (vi) risks associated
 with the Company's dependence on key vendors; (vii) the possibility for client
 attrition; (viii) risks associated with geographic market concentration and
 concentration of clients in the construction industry; (ix) the financial
 condition of  clients; (x) the failure to properly manage growth and
 successfully integrate acquired companies and operations; and (xi) other
 factors which are described in further detail in the Company's filings with
 the Securities and Exchange Commission.
     A copy of this press release can be found on the Company's website at
 www.staff-leasing.com.
 
 
                      STAFF LEASING, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
 
                                                      For the three months
                                                         Ended March 31
                                                     2000            2001
                                                        (in thousands,
                                                    except per share data)
                                                          (unaudited)
 
     Revenues                                        $731,315       $752,298
 
     Cost of services:
      Salaries, wages and payroll taxes               663,710        684,179
 
     Benefits, workers' compensation,
      state unemployment taxes and other costs         44,199         44,463
 
       Total cost of services                         707,909        728,642
 
     Gross profit                                      23,406         23,656
 
 
     Operating expenses:
 
      Salaries, wages and commissions                  15,392         16,038
 
 
      Other general and administrative                  7,435          6,729
 
      Depreciation and amortization                     2,221          2,062
 
       Total operating expenses                        25,048         24,829
 
 
     Operating loss                                   (1,642)        (1,173)
 
 
     Interest income, net                                 956          1,090
 
 
     Other non-operating expense                        (127)            (4)
 
 
     Loss before income taxes                           (813)           (87)
 
 
     Income tax benefit                                 (305)          (181)
 
 
     Net income (loss)                                 $(508)           $ 94
 
     Net income (loss) per share
     - Basic                                           $(.02)          $ .00
     - Diluted                                         $(.02)          $ .00
 
     Weighted average shares outstanding
     - Basic                                           21,707         20,641
     - Diluted                                         21,708         20,644
 
 
                      STAFF LEASING, INC. AND SUBSIDIARIES
                          SELECTED BALANCE SHEET ITEMS
                                 (in thousands)
 
 
 
                                                      As of            As of
                                                 Dec. 31, 2000  March 31, 2001
                                                   (audited)       (unaudited)
 
     Cash and cash equivalents,
      certificates of deposit -
      restricted and marketable securities            $96,968        $91,152
 
     Accounts receivable from
      unbilled revenues                                62,776         59,802
     Accounts receivable
      (billed, net of allowance for
       doubtful accounts)                               8,567          4,134
     Property and equipment, net                       25,040         24,459
 
     Total assets                                     212,338        198,737
 
     Accrued workers' compensation
      insurance premium - Short - term                 10,488          6,787
 
     Accrued workers' compensation
      insurance premium - Long - term                  19,530         19,530
 
     Total liabilities                                134,878        121,307
 
     Debt                                                 ---            ---
 
     Shareholders' equity                              77,460         77,430
 
 
 
                      STAFF LEASING, INC. AND SUBSIDIARIES
                                STATISTICAL DATA
 
 
                             1st Quarter 2000  1st Quarter 2001    Percentage
                                                                      Change
 
     Active worksite
      employees at period end        132,916         114,769        -13.7%
 
     Clients at period end            10,395           8,515        -18.1%
 
     Worksite employees/
      clients at period end             12.8            13.5          5.5%
 
     Average number of
      employees paid by month        115,046         106,821         -7.1%
 
     Annualized average
      wage per paid employee         $21,337         $23,684         11.0%
 
     Workers' Compensation
      billing per hundred
      dollars of total wage            $5.70           $4.77        -16.3%
 
     Annualized total gross
      profit per paid employee          $814            $886          8.8%
 
     Annualized operating
      expense excluding
      depreciation and
      amortization per
      paid employee                     $794            $853          7.4%
 
     Annualized depreciation
      and amortization
      per paid employee                  $77             $77            0%
 
     Annualized operating loss
      per paid employee                ($57)           ($44)        -22.8%
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X31828501
 
 

SOURCE Staff Leasing, Inc.
    BRADENTON, Fla., April 26 /PRNewswire/ --
 Staff Leasing, Inc. (Nasdaq:   STFF), a leading human resource solutions
 provider, announced today its financial results for the first quarter ended
 March 31, 2001.
     Revenues increased in the first quarter by 2.9% to $752.3 million from
 $731.3 million in the first quarter of 2000.  Revenue increased despite a
 decline in the average paid worksite employees from 115,046 to 106,821, or
 7.1%.
     Gross profit for the first quarter of 2001 increased 1.3% to $23.7 million
 from $23.4 million in the first quarter of 2000.  As a percentage of revenue,
 gross profit remained flat at 3.2% during the comparable quarter in 2000.  The
 average annualized gross profit per paid worksite employee increased 8.8% from
 $814 in the first quarter of 2000 to $886 in the first quarter of 2001.
     The Company reported net income for the first quarter of 2001 of $.4
 million or $.02 per share (diluted) excluding a one time after tax charge
 related to severance expenses of $.3 million.
     Michael K. Phippen, Chairman and Chief Executive Officer of Staff Leasing,
 remarked: "In the first quarter, we continued to strive towards our three
 major goals of targeting the white and gray collar businesses, investing in
 and developing new products and services, and improving the efficiencies and
 effectiveness of our operations."
     The company continued to make progress in moving its business towards more
 white and gray collar as evidenced by the 16.3% decline in workers'
 compensation billed mix from $5.70 for the first quarter of 2000 to $4.77 in
 the first quarter of 2001.  The workers' compensation claims frequency
 declined more than the decline in the billed mix.  Average wages per paid
 worksite employee were up 11.0% during this same period.
     Staff Leasing is preparing to go live in the second quarter of this year
 with its first clients using the small business unbundled products as a result
 of the Oracle Partnership.  The enterprise unbundled solutions for larger
 clients are tracking towards a third quarter of 2001 go-live date.
     The Company's total overall operating expense has declined from
 $25.0 million to $24.3 million excluding the severance charges during the
 quarter of $.5 million.  The annualized operating expense per paid worksite
 employee increased 5.2%, from $794 to $835 excluding the severance charges of
 $18 per paid worksite employee.  The Company continues to balance operating
 cost reductions with added expenses related to additional sales growth.  These
 growth initiatives include national expansion, increased marketing efforts,
 unbundled new products and services, and delivery of a higher level PEO
 service offering.
     The Company ended the quarter with $91.2 million of cash, cash equivalents
 and marketable securities, a decrease from December 31, 2000 of $5.8 million.
 The decrease in cash is primarily due to a reduction in workers' compensation
 reserves of  $3.7 million.  The reserve declined to $26.3 million at March 31,
 2001 compared to $30.0 million at December 31, 2000.  During the quarter the
 Company repurchased the remaining 38,000 shares of stock for $.1 million to
 finish the previously authorized share repurchase program. Staff Leasing also
 announced a planned regular quarterly dividend of $.05 per share payable on
 April 30, 2001 to shareholders of record as of April 16, 2001.
     "Our infrastructure is in place and ready to take on additional business
 volume as the Company and the sales force make the business model transition,"
 commented Chief Financial Officer, John E. Panning. "Significant incremental
 revenue can be added with very little operating infrastructure growth."
     As it relates to the PEO business the Company expects to see the number of
 worksite employees remain relatively flat from the first to the second
 quarter, with growth starting in the third quarter.  Staff Leasing anticipates
 revenues to be relatively flat for the remainder of 2001 as compared to last
 year.
     Staff Leasing is a leading human resource solutions provider in the United
 States, providing customers with a broad range of employee management
 services, including human resources consulting, recruiting, training, payroll
 administration, benefits administration, unemployment services and risk
 management.  Staff Leasing has 39 offices in Alabama, Arizona, Colorado,
 Florida, Georgia, Minnesota, North Carolina, Tennessee and Texas.  Staff
 Leasing ranks number 508 on the Fortune 1000 list based on total revenues of
 $3.1 billion in 2000.  The Company is also number 189 on the InformationWeek
 500 list of leading information technology innovators.  Staff Insurance, Inc.,
 a wholly owned subsidiary of Staff Leasing, provides a full range of corporate
 insurance products, including general liability and commercial auto.
     Staff Leasing's core services are complemented by an eCommerce strategy
 that includes STAFFweb, an eService platform that provides clients and
 worksite employees with information and resources to help maximize the benefit
 of their Staff Leasing services.
     The Company will discuss first quarter 2001 results during a live
 conference call at 10:30 a.m. ET on April 26, 2001.  To participate in the
 call, dial 888-328-2935 and ask for the Staff Leasing conference call. Allow
 five to ten minutes before 10:30 a.m. Eastern time to secure the line. To
 listen to the call via the Web, log on at
 http://www.videonewswire.com/STFF/042601/. Allow five to ten minutes before
 10:30 a.m. Eastern time to register.  Minimum requirements to listen to the
 broadcast include (1) RealPlayer software which is downloadable free at
 www.real.com/products/player/index.html, and (2) at least a 28.8Kbps
 connection to the Internet.  If you are unable to listen to the live call,
 audio will be archived on the Staff Leasing website at www.staff-leasing.com.
 To access the replay, click on http://www.videonewswire.com/STFF/042601/.
 Approximately one week after the call, a transcript of this conference will
 also be available on the Company's website.
 
     NOTE: Statements in this press release relating to matters that are not
 historical facts are forward-looking statements. Such forward-looking
 statements involve known and unknown risks, uncertainties and other factors
 which may cause the actual results or performance of Staff Leasing, Inc. to be
 materially different from any future results or performance expressed or
 implied by such forward-looking statements. Such known and unknown risks,
 uncertainties and other factors include, but are not limited to, the
 following: (i) the potential for additional subsidies of health benefit plans;
 (ii) volatility in workers' compensation rates and unemployment taxes; (iii)
 possible adverse application of certain federal and state laws and the
 possible enactment of unfavorable laws or regulation; (iv) impact of
 competition from existing and new professional employer organizations; (v)
 risks associated with expansion into additional states where the Company does
 not have a presence or significant market penetration; (vi) risks associated
 with the Company's dependence on key vendors; (vii) the possibility for client
 attrition; (viii) risks associated with geographic market concentration and
 concentration of clients in the construction industry; (ix) the financial
 condition of  clients; (x) the failure to properly manage growth and
 successfully integrate acquired companies and operations; and (xi) other
 factors which are described in further detail in the Company's filings with
 the Securities and Exchange Commission.
     A copy of this press release can be found on the Company's website at
 www.staff-leasing.com.
 
 
                      STAFF LEASING, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
 
                                                      For the three months
                                                         Ended March 31
                                                     2000            2001
                                                        (in thousands,
                                                    except per share data)
                                                          (unaudited)
 
     Revenues                                        $731,315       $752,298
 
     Cost of services:
      Salaries, wages and payroll taxes               663,710        684,179
 
     Benefits, workers' compensation,
      state unemployment taxes and other costs         44,199         44,463
 
       Total cost of services                         707,909        728,642
 
     Gross profit                                      23,406         23,656
 
 
     Operating expenses:
 
      Salaries, wages and commissions                  15,392         16,038
 
 
      Other general and administrative                  7,435          6,729
 
      Depreciation and amortization                     2,221          2,062
 
       Total operating expenses                        25,048         24,829
 
 
     Operating loss                                   (1,642)        (1,173)
 
 
     Interest income, net                                 956          1,090
 
 
     Other non-operating expense                        (127)            (4)
 
 
     Loss before income taxes                           (813)           (87)
 
 
     Income tax benefit                                 (305)          (181)
 
 
     Net income (loss)                                 $(508)           $ 94
 
     Net income (loss) per share
     - Basic                                           $(.02)          $ .00
     - Diluted                                         $(.02)          $ .00
 
     Weighted average shares outstanding
     - Basic                                           21,707         20,641
     - Diluted                                         21,708         20,644
 
 
                      STAFF LEASING, INC. AND SUBSIDIARIES
                          SELECTED BALANCE SHEET ITEMS
                                 (in thousands)
 
 
 
                                                      As of            As of
                                                 Dec. 31, 2000  March 31, 2001
                                                   (audited)       (unaudited)
 
     Cash and cash equivalents,
      certificates of deposit -
      restricted and marketable securities            $96,968        $91,152
 
     Accounts receivable from
      unbilled revenues                                62,776         59,802
     Accounts receivable
      (billed, net of allowance for
       doubtful accounts)                               8,567          4,134
     Property and equipment, net                       25,040         24,459
 
     Total assets                                     212,338        198,737
 
     Accrued workers' compensation
      insurance premium - Short - term                 10,488          6,787
 
     Accrued workers' compensation
      insurance premium - Long - term                  19,530         19,530
 
     Total liabilities                                134,878        121,307
 
     Debt                                                 ---            ---
 
     Shareholders' equity                              77,460         77,430
 
 
 
                      STAFF LEASING, INC. AND SUBSIDIARIES
                                STATISTICAL DATA
 
 
                             1st Quarter 2000  1st Quarter 2001    Percentage
                                                                      Change
 
     Active worksite
      employees at period end        132,916         114,769        -13.7%
 
     Clients at period end            10,395           8,515        -18.1%
 
     Worksite employees/
      clients at period end             12.8            13.5          5.5%
 
     Average number of
      employees paid by month        115,046         106,821         -7.1%
 
     Annualized average
      wage per paid employee         $21,337         $23,684         11.0%
 
     Workers' Compensation
      billing per hundred
      dollars of total wage            $5.70           $4.77        -16.3%
 
     Annualized total gross
      profit per paid employee          $814            $886          8.8%
 
     Annualized operating
      expense excluding
      depreciation and
      amortization per
      paid employee                     $794            $853          7.4%
 
     Annualized depreciation
      and amortization
      per paid employee                  $77             $77            0%
 
     Annualized operating loss
      per paid employee                ($57)           ($44)        -22.8%
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X31828501
 
 SOURCE  Staff Leasing, Inc.