EXHIBIT 99.1
[TEAMSTAFF LOGO]
CONTACT INFORMATION:
TEAMSTAFF, INC. CCG INVESTOR RELATIONS
300 Atrium Drive 19900 MacArthur Blvd. #110
Somerset, NJ 08873 Irvine, CA 92612
(732) 748-1700 (949) 851-1109
T. KENT SMITH, PRESIDENT & CEO CHRISTI MOTTOLA
MANAGING PARTNER
CMOTTOLA@AOL.COM
TEAMSTAFF ANNOUNCES SECOND QUARTER 2004 FINANCIAL RESULTS
AND PROVIDES PROGRESS REPORT ON POST-RESTRUCTURING GROWTH PLANS
o Medical staffing sales force doubles in size,
expanding sales coverage in the Southeast,
Southwest, and Mid-Atlantic regions
o Senior Vice President of Sales hired for TeamStaff
Rx
Somerset, NJ - May 5, 2004- TeamStaff, Inc. (NASDAQ: TSTF), one of the nation's
leading providers of healthcare staffing and specialty payroll services, today
announced that it has filed its Form 10-Q for the fiscal quarter ended March 31,
2004. Additionally, TeamStaff announced financial results for the quarter ended
March 31, 2004. As a result of TeamStaff's sale of its Professional Employer
Organization (PEO) segment, all results reported in this release have been
reclassified to show PEO and certain related corporate expenses as discontinued
operations.
TeamStaff's revenues from continuing operations for the three months ended March
31, 2004 were $8.8 million compared to $16.4 million in the comparable quarter
of last year. The decrease is primarily due to lower revenues in the medical
staffing division. Commenting on the decline in medical staffing revenues,
TeamStaff's President and CEO, T. Kent Smith stated, "The healthcare staffing
industry in general is still recovering from the declines of the past year and
experiencing a slower bounce-back than anticipated. At the same time, according
to preliminary data from the Bureau of Labor Statistics, healthcare industry
hiring was up for the eighth month in a row in March, albeit by only 0.2%. We
are anticipating a shift by hospitals from hiring predominantly permanent
employees to more flexible staffing alternatives to meet their patient care
requirements. We are encouraged by having seen a marked increase in our medical
staffing billable hours in the last week of the quarter compared to the first
week of the quarter, which we believe is due, in part, to coming off of a
seasonal decline in temporary staffing orders and our increased sales efforts."
Mr. Smith went on to state, "TeamStaff is taking initiatives to improve its
performance in advance of a full recovery in this market segment and we continue
to make solid progress in our restructuring efforts, which should pave the way
to our targeted return to profitability in the fourth fiscal quarter of 2004.
Significantly, we doubled the size of our medical staffing sales force this
quarter, giving us expanded coverage in the Southeast, Southwest, and
Mid-Atlantic regions. Additionally, we have hired a Senior Vice President of
Sales, Barry McDonald, who brings 21 years of industry experience to TeamStaff
Rx. Barry has held senior executive
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positions at Olsten, US Nursing and On Assignment. This was the last piece in
building our senior team for TeamStaff Rx. We remain encouraged that signs of an
improving economy and our focus on increasing the size of our sales force will
continue to support the recent increase in demand for our services."
Operating expenses decreased $1.4 million or 32% in the second quarter of fiscal
2004 as compared to fiscal 2003. The decrease was driven by lower severance and
retirement benefits for the former CEO and CFO, approximating a year-over-year
decrease of $0.9 million, as well as a lower employee headcount. Loss from
continuing operations was $0.7 million or ($0.04) per share, compared to a loss
of $0.8 million or ($0.05) per share in the same quarter of last year. Net loss,
including discontinued operations, was $1.0 million, or ($0.06) per share
compared to a net loss of $26.0 million or ($1.65) per share in the second
quarter of last year. The net loss was affected by $0.3 million or ($0.02) per
share loss and $25.2 million or ($1.60) per share loss from discontinued
operations in the second quarter of fiscal 2004 and 2003, respectively.
TeamStaff's revenues from continuing operations for the six months ended March
31, 2004 were $18.5 million compared to $34.8 million in the same period of last
year. The decrease is attributable to lower revenues in the medical staffing
division as noted above. Operating expenses for the six months ended March 31,
2004 decreased $1.4 million or 19% compared to the comparable period last year.
The decrease, as stated above, was primarily attributable to lower severance and
retirement benefits due the former CEO and CFO, approximating $0.9 million, as
well as the previously mentioned reduction in employee headcount. Loss from
continuing operations was $1.2 million or ($0.08) per share compared to $0.5
million or ($0.03) per share in the comparable six months of last year. Net
loss, including discontinued operations, was $2.8 million or ($0.18) per share
compared to a net loss of $25.9 million or ($1.64) per share in the first half
of last year. The net loss includes $1.6 million or ($0.10) per share loss in
the first six months of fiscal 2004 and $25.4 million or ($1.61) per share loss
from discontinued operations in the first six months of fiscal 2003.
Mr. Smith commented, "We recognize that restructuring and repositioning the
TeamStaff organization has taken and will continue to take time and effort. The
recently announced release of $2.25 million of escrow funds related to the sale
of the PEO division and the $1.7 million reduction in workers' compensation
letter of credit requirements represented two important steps in our
repositioning strategy. Additionally, as we restructure TeamStaff's operations,
we continue to examine and implement ways to reduce overhead expenses in our
post-PEO operating environment. As of March 31, 2004, for example, information
technology and other infrastructure support personnel totaled 19 employees. This
compares to a total of 40 such employees just six months ago. We have also
undertaken a complete review of our significant vendor relationships as we
attempt to reduce overhead expense and increase profit margin. While we
recognize that we have a good deal more work ahead of us, we have again this
quarter hit the internal profit and loss targets that we set for transforming
TeamStaff and returning it to profitability."
ABOUT TEAMSTAFF, INC.
Headquartered in Somerset, New Jersey, TeamStaff serves clients and their
employees throughout the United States as a full-service provider of payroll and
medical staffing solutions.
TeamStaff Rx provides medical allied health professionals and nurses to doctors'
offices and medical facilities throughout the United States on a temporary or
permanent basis and offers programs and services designed to assist medical
facilities in managing their temporary staffing costs. DSi Payroll Services,
TeamStaff's payroll processing division, provides customized payroll management
and tax filing services to select industries, such as construction and general
contracting.
For more information, visit the TeamStaff web site at www.teamstaff.com.
This press release contains "forward-looking statements" as defined by the
Federal Securities Laws. TeamStaff's actual results could differ materially from
those described in such forward-looking statements as a result of certain risk
factors, including but not limited to: (i) regulatory and tax developments; (ii)
changes in direct costs and operating expenses; (iii) the estimated costs and
effectiveness of capital projects and investments in technology infrastructure;
(iv) ability to effectively implement its business strategies and operating
efficiency initiatives, including, but not limited to, its business strategy for
TeamStaff Rx; (v) the effectiveness of sales and marketing efforts, including
TeamStaff's marketing arrangements with other companies; (vi) changes in the
competitive environment in the temporary staffing and payroll processing
industry; (vii) the favorable or unfavorable development of workers'
compensation claims covered under TeamStaff's workers' compensation
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programs; and (viii) other one-time events and other important factors disclosed
previously and from time to time in TeamStaff's filings with the U.S. Securities
and Exchange Commission. These factors are described in further detail in
TeamStaff's filings with the U.S. Securities and Exchange Commission.
FINANCIAL TABLE FOLLOWS
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TEAMSTAFF, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
----------------------------- ---------------------------
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
2004 2003 2004 2003
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
----------- ----------- ------------ -----------
REVENUES $ 8,798 $ 16,378 $ 18,537 $ 34,835
DIRECT EXPENSES 6,875 13,215 14,384 28,149
----------- ----------- ------------ -----------
Gross profit 1,923 3,163 4,153 6,686
OPERATING EXPENSES 2,884 4,266 5,960 7,343
DEPRECIATION AND AMORTIZATION 115 77 187 151
----------- ----------- ------------ -----------
Loss from operations (1,076) (1,180) (1,994) (808)
----------- ----------- ------------ -----------
OTHER INCOME (EXPENSE)
Interest income 7 22 12 46
Interest expense (31) (104) (58) (170)
Other Income 48 110 119 281
----------- ----------- ------------ -----------
24 28 73 157
----------- ----------- ------------ -----------
Loss before tax (1,052) (1,152) (1,921) (651)
INCOME TAX BENEFIT 401 388 731 186
----------- ----------- ------------ -----------
Loss from continuing operations (651) (764) (1,190) (465)
LOSS FROM DISCONTINUED OPERATIONS:
Loss from operations, net of tax benefit of
$204, $2,710, $529 and $2,910 for the quarters and
six months ended March 31, 2004 and 2003 respectively (329) (25,193) (858) (25,407)
Loss from disposal, net of tax benefit of
$2, $0, $485 and $0 for the quarters and
six months ended March 31, 2004 and 2003, respectively (4) - (783) -
----------- ----------- ------------ -----------
(333) (25,193) (1,641) (25,407)
----------- ----------- ------------ -----------
Net loss $ (984) $ (25,957) $ (2,831) $ (25,872)
=========== =========== ============ ===========
LOSS PER SHARE - BASIC & DILUTED
Loss from continuing operations $ (0.04) $ (0.05) $ (0.08) $ (0.03)
Lossfrom discontinued operations (0.02) (1.60) (0.10) (1.61)
----------- ----------- ------------ -----------
Net loss $ (0.06) $ (1.65) $ (0.18) $ (1.64)
=========== =========== ============ ===========
BASIC AVERAGE SHARES OUTSTANDING 15,714 15,756 15,714 15,773
=========== =========== ============ ===========
DILUTED AVERAGE SHARES OUTSTANDING 15,714 15,756 15,714 15,773
=========== =========== ============ ===========
TEAMSTAFF, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS)
MARCH 31, SEPTEMBER 30,
2004 2003
------------- -------------
(UNAUDITED)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 3,438 $ 4,329
Restricted cash 1,929 1,264
Accounts receivable, net of allowance for
doubtful accounts of $225 and $142 at
March 31, 2004 and September 30, 2003, respectively 3,184 4,926
Prepaid workers' compensation 5,046 3,645
Other current assets 3,459 1,447
------------- -------------
Total current assets 17,056 15,611
------------- -------------
EQUIPMENT AND IMPROVEMENTS
Furniture and equipment 2,795 2,628
Computer equipment 368 1,073
Computer software 1,120 1,060
Leasehold improvements 224 146
------------- -------------
4,507 4,907
Accumulated depreciation and amortization (3,368) (3,689)
------------- -------------
Equipment and Improvemnets, net 1,139 1,218
DEFERRED TAX ASSET 17,143 14,875
TRADENAME 4,199 4,199
GOODWILL 1,710 1,710
OTHER ASSETS 298 555
ASSETS HELD FOR SALE 1,091 22,449
------------- -------------
TOTAL ASSETS $ 42,636 $ 60,617
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TEAMSTAFF, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS)
MARCH 31, SEPTEMBER 30,
2004 2003
------------- -------------
(UNAUDITED)
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $ 78 $ 61
Accounts payable 649 669
Accrued payroll 2,252 2,856
Deferred tax liability 1,052 538
Accrued expenses and other current liabilities 2,400 3,181
------------- -------------
Total current liabilities 6,431 7,305
LONG-TERM DEBT, net of current portion 98 94
ACCRUED PENSION LIABILITY 1,348 1,724
LIABILITIES HELD FOR SALE 2,472 16,384
------------- -------------
Total liabilities 10,349 25,507
------------- -------------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Preferred stock, $.10 par value; authorized 5,000 shares; 0 issued
and outstanding - -
Common Stock, $.001 par value; authorized 40,000 shares;
issued 15,721 and 16,267 at March 31, 2004 and September 30, 2003
respectively; outstanding 15,714 and 15,714 at March 31, 2004 and
September 30, 2003, respectively 16 16
Additional paid-in capital 62,963 65,256
Retained (deficit) earnings (30,403) (27,572)
Accumulated comprehensive losses (265) (273)
Treasury Stock, 7 and 553 shares at cost at March 31, 2004 and
September 30, 2003, respectively (24) (2,317)
------------- -------------
Total shareholders' equity 32,287 35,110
------------- -------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 42,636 $ 60,617
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