Sfn 8-K Spherion Announces First Quarter 2003 Financial Results

Exhibit 99.1

	Investor Contact:	Teri Miller (954) 308-8216 terilmiller@spherion.com
	Media Contact:	Patricia Johnson (800) 422-3819 patriciacjohnson@spherion.com

FOR IMMEDIATE RELEASE

SPHERION ANNOUNCES FIRST QUARTER 2003 FINANCIAL RESULTS

     FORT LAUDERDALE, Fla., April 29, 2003 — Spherion Corporation (NYSE: SFN) today announced revenues of $484.6 million and a loss from continuing operations of ($4.2) million or ($0.07) on a per share basis for the quarter ended March 28, 2003. This compares with revenues of $531.2 million in the first quarter 2002, a decline of 8.8% year over year, and a loss from continuing operations of ($2.1) million or ($0.03) per share. The Company’s net loss for the first quarter 2003 was ($4.8) million or ($0.08) per share. In 2002, the Company reported a net loss of ($619.3) million or ($10.46) per share, including ($615.6) million or ($10.39) per share for the cumulative effect of an accounting change for goodwill and intangible assets.

     Spherion President and CEO Cinda A. Hallman commented, “Our results for the first quarter were in-line with our expectations and reflect the seasonally lower first quarter revenues consistent with prior years. One bright spot in this difficult environment continues to be our professional recruiting business that generated growth on a sequential quarter and year over year basis. I am also pleased with our continued ability to manage costs, but place the highest priority on profitable growth throughout the Company.”

OTHER ITEMS

     The Company completed the sale of Saratoga Institute, Inc. in the first quarter and the sale of the technology consulting operation in The Netherlands in early April. These transactions represent the disposal of all businesses classified as discontinued operations.

     In connection with a three-year old agreement, the Company completed the purchase of an 85% interest in its Canadian franchise operation in early April. The Company paid $21.6 million, including the assumption of debt. The Canadian operations generated approximately $60 million in revenues in 2002 and will be reported as part of the Recruitment segment in future periods. This transaction is expected to be neutral to earnings for the balance of 2003.

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OUTLOOK

     Including the results of the Canadian operations, the Company currently anticipates revenue for the second quarter 2003 to be between $500-$520 million and results from continuing operations to be between ($0.02) and ($0.07) per share. This guidance assumes a 30% effective tax rate.

     Hallman added, “We continue to focus on improving our sales effectiveness in staffing and executing against our plans to improve the competitiveness of our field and corporate infrastructure. While near-term market conditions remain soft, we expect to maintain our discipline on cost containment and further productivity improvements.”

     Spherion Corporation provides recruitment, technology and outsourcing services. Founded in 1946, with operations in North America, Europe and Asia/Pacific, Spherion helps companies efficiently plan, acquire and optimize talent to improve their bottom line. Visit the Company’s Web site at www.spherion.com.

     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 — a significant economic downturn could result in our clients using fewer flexible employees or the loss or bankruptcy of a significant client could materially adversely affect our business results; Changing market conditions — our business is dependent upon the availability of qualified personnel; Corporate strategy — we may not achieve the intended effect of our Business Transformation Strategy; Technology demand – lack of client investments in new technology may result in reduced demand for our Technology services; Technology Investments – our investment in technology initiatives may not yield their intended results; Tax filings – regulatory challenges to our tax filing positions could result in additional taxes; Credit Rating – further reduction in the Company’s credit rating may affect our ability to borrow and increase future borrowing costs; Litigation - we are a defendant in a variety of litigation and other actions from time to time and we may be exposed to employment–related claims and costs; Other - government regulation may increase our costs; business risks associated with international operations could make those operations more costly; failure or inability to complete our outsourcing projects could result in damage to our reputation and give rise to legal claims; managing or integrating any future acquisitions may strain our resources, and certain contracts contain termination provisions and pricing risks. 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.

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SPHERION CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, amounts in thousands, except per share amounts)

			Three Months Ended
			March 28,			March 29,
			2003			2002
Revenues (1)			$	484,573		$	531,248
Cost of services				370,278			402,803
		Gross profit		114,295			128,445
Selling, general and administrative expenses				109,808			118,994
Licensee commissions				10,704			11,180
Amortization of intangibles				107			61
Interest expense				1,416			3,128
Interest and other income				(1,460	)		(1,411	)
				120,575			131,952
Loss from continuing operations before income taxes, discontinued operations and cumulative effect of change in accounting principle				(6,280	)		(3,507	)
Income tax benefit				(2,072	)		(1,435	)
Loss from continuing operations before discontinued operations and cumulative effect of change in accounting principle				(4,208	)		(2,072	)
Discontinued operations:
	Loss from discontinued operations (2)			(878	)		(2,431	)
	Income tax benefit			(303	)		(791	)
	Loss from discontinued operations			(575	)		(1,640	)
	Loss before cumulative effect of change in accounting principle			(4,783	)		(3,712	)
Cumulative effect of change in accounting principle, net of income tax benefit of $76,012 in 2002				—			(615,563	)
		Net loss	$	(4,783	)	$	(619,275	)
Loss per share-Basic and Diluted:
Loss from continuing operations before discontinued operations			$	(0.07	)	$	(0.03	)
Loss from discontinued operations				(0.01	)		(0.03	)
Cumulative effect of change in accounting principle				—			(10.39	)
			$	(0.08	)	$	(10.46	)
Weighted average shares used in computation of loss per share:
		Basic		59,698			59,226
		Diluted		59,698			59,226

(1)	Includes sales of all company-owned and licensed offices and royalties on sales of franchised offices.
(2)	Includes a pre-tax loss on disposal of $1,058 and operating earnings of $180 in 2003.

SPHERION CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited, amounts in thousands, except share data)

				March 28,			December 27,
				2003			2002
Assets
Current Assets:
	Cash and cash equivalents			$	133,336		$	65,456
	Receivables, less allowance for doubtful accounts of $6,841 and $6,760				271,326			284,675
	Deferred tax asset				18,413			19,897
	Income tax receivable				18,086			90,788
	Insurance deposit				23,359			26,808
	Other current assets				16,984			16,341
	Assets of discontinued operations				—			11,000
		Total current assets			481,504			514,965
Goodwill and other intangible assets, net					31,918			31,790
Property and equipment, net					106,416			94,520
Deferred tax asset					140,113			134,971
Insurance deposit					61,892			61,892
Other assets					26,279			25,557
				$	848,122		$	863,695
Liabilities and Stockholders’ Equity
Current Liabilities:
	Current portion of long-term debt			$	5,251		$	5,419
	Accrued restructuring				5,293			5,938
	Accounts payable and other accrued expenses				85,078			88,751
	Accrued salaries, wages and payroll taxes				70,883			72,820
	Accrued insurance and other current liabilities				38,764			40,738
	Liabilities of discontinued operations				—			8,316
		Total current liabilities			205,269			221,982
Long-term debt, net of current portion					8,417			8,535
Convertible subordinated notes			��		96,715			96,715
Accrued insurance					45,308			45,935
Accrued income tax payable					66,749			67,619
Deferred compensation and other long-term liabilities					18,034			18,896
		Total liabilities			440,492			459,682
Stockholders’ Equity:
	Preferred stock, par value $.01 per share; authorized, 2,500,000 shares; none issued or outstanding				—			—
	Common stock, par value $.01 per share; authorized, 200,000,000; issued 65,341,609 shares				653			653
	Treasury stock, at cost, 6,144,548 and 6,376,964 shares, respectively				(63,996	)		(66,860	)
	Additional paid-in capital				857,602			859,551
	Accumulated deficit				(393,470	)		(388,687	)
	Accumulated other comprehensive income (loss)				6,841			(644	)
		Total stockholders’ equity			407,630			404,013
				$	848,122		$	863,695

SPHERION CORPORATION AND SUBSIDIARIES
SEGMENT INFORMATION
(unaudited, dollar amounts in thousands)

			Three Months Ended
			March 28, 2003				March 29, 2002			December 27, 2002
Revenues:
	Recruitment			$	333,722		$	356,663		$	367,175
	Technology				72,922			90,107			77,893
	Outsourcing				77,929			84,478			81,447
		Segment revenue			484,573			531,248			526,515
Gross profit:
	Recruitment			$	75,812		$	81,670		$	86,952
	Technology				18,872			25,035			21,535
	Outsourcing				19,611			21,740			24,572
		Segment gross profit			114,295			128,445			133,059
Segment operating profit:
	Recruitment			$	(2,717	)	$	244		$	1,853
	Technology				(452	)		(139	)		1,110
	Outsourcing				4,287			3,836			8,065
		Segment operating profit			1,118			3,941			11,028
	Unallocated central costs				(7,335	)		(5,670	)		(8,152	)
	Amortization expense				(107	)		(61	)		(95	)
	Interest expense				(1,416	)		(3,128	)		(1,776	)
	Interest and other income				1,460			1,411			1,188
	Restructuring, asset impairments and other charges				—			—			(5,284	)
	Goodwill impairment				—			—			(291,497	)
	Other gains				—			—			6,510
	Loss from continuing operations before income taxes, discontinued operations and cumulative effect of change in accounting principle			$	(6,280	)	$	(3,507	)	$	(288,078	)
MEMO:
Gross profit margin:
	Recruitment				22.7	%		22.9	%		23.7	%
	Technology				25.9	%		27.8	%		27.6	%
	Outsourcing				25.2	%		25.7	%		30.2	%
		Total Spherion			23.6	%		24.2	%		25.3	%
Segment operating profit margin:
	Recruitment				-0.8	%		0.1	%		0.5	%
	Technology				-0.6	%		-0.2	%		1.4	%
	Outsourcing				5.5	%		4.5	%		9.9	%
		Total Spherion			0.2	%		0.7	%		2.1	%
Supplemental Cash Flow Information:
	Net cash provided by (used in) operating activities			$	81,143		$	34,263		$	(5,547	)
	Capital expenditures, net			$	17,665		$	11,558		$	8,204
	Depreciation and amortization			$	6,796		$	7,154		$	7,089
	Days sales outstanding				52			54			50