MPS GROUP ANNOUNCES FIRST QUARTER RESULTS
IN LINE WITH MANAGEMENT GUIDANCE
JACKSONVILLE, FL (April 23, 2003) -- MPS Group, Inc. (NYSE:MPS), a leading
provider of specialty staffing and business solutions, today announced financial
results for the first quarter ended March 31, 2003. The Company reported revenue
of $272 million and diluted net income per common share of $0.03 for the quarter
ended March 31, 2003, compared with revenue of $296 million and diluted net
income per common share before cumulative effect of accounting change of $0.02
for the quarter ended March 31, 2002. The results for the quarter were within
the range of guidance previously provided by Company management.
First Quarter Summary
o Revenue of $272 million
o EBITDA of $10 million and operating income of $5 million
o Diluted net income per common share of $0.03
o Cash flow from operations of $16 million
o Cash balance of $76 million as of March 31, 2003
o Repurchased 783,000 shares of MPS common stock during quarter
o Professional services division records sequential increase in revenue
versus the fourth quarter of 2002
o IT solutions unit Idea Integration achieves third consecutive quarter of
EBITDA profitability despite difficult demand environment
o IT services unit Modis maintains continued profitability and increases
gross margin percentage by 130 basis points versus the first quarter of
2002
Business Unit Performance
During the first quarter, the Company continued to experience soft demand for
its services due to the poor economy and its effect on employment and technology
spending. Despite this, many of the Company's business units made progress. A
number of the Company's professional services units experienced a sequential
increase in revenue versus the fourth quarter of 2002, including the engineering
unit Entegee, United Kingdom accounting unit Badenoch & Clark, healthcare
staffing unit Soliant Health, and legal services unit Special Counsel. Special
Counsel in particular recorded strong performance, with 22% revenue growth
year-over-year versus the first quarter of 2002 and 6% sequential revenue growth
versus the fourth quarter of 2002.
Modis, the Company's IT services unit, achieved an increase in gross margin
percentage of 130 basis points versus the first quarter of 2002, maintained its
consistent profitability, and continued to win preferred provider bids by its
clients. Idea Integration, the Company's IT solutions unit, achieved its third
consecutive quarter of EBITDA profitability, representing standout performance
in a particularly challenging industry segment. Beeline, the Company's human
capital solutions unit, continued to achieve success in completing large,
enterprise-wide implementations for its clients and introduced a new solution -
Beeline for Performance Management.
Financial Position and Cash Flow
The Company generated $16 million of cash flow from operations during the first
quarter and increased its cash position to $76 million as of March 31, 2003. The
Company's cash position has increased by $9 million since December 31, 2002, and
the Company continues to have no debt outstanding under its $200 million credit
facility. The Company repurchased 783,000 shares of MPS common stock for $3.7
million during the quarter and has over $59 million of its previously announced
$65 million buyback authorization remaining. Additionally, the Company spent
$1.3 million on capital expenditures and $1.0 million, net of cash acquired, on
the acquisition of a legal services company.
Management Comments
Timothy Payne, MPS Chief Executive Officer, stated, "We believe we continue to
take market share from competitors through sound execution. While our clients'
spending levels are well below what we have experienced in years past, they seem
to have leveled off, and we feel confident that client spending will increase as
the economy improves. We are well positioned to take advantage when this
happens."
"The trends we experienced during the quarter and into early April appear to
indicate that demand for our services is stabilizing," stated Robert Crouch, MPS
Chief Financial Officer. "Therefore, we expect our revenue and diluted net
income per common share for the second quarter to be in the range of $270
million to $280 million and $0.04 to $0.06, respectively. This compares with
revenue and diluted net income per common share of $289 million and $0.04,
respectively, for the quarter ended June 30, 2002."
Conference Call Scheduled Today
The live broadcast of MPS Group's conference call will begin at 9:00 a.m.
Eastern Time today. The link to this event may be found at the Company's
website: www.mpsgroup.com. If you do not have Internet access, you may listen to
the call by dialing (913) 981-5558.
If you are unable to participate at that time, online and telephonic replays
will be available two hours after the call ends and will continue until 8:00
p.m. on April 30. To access the telephonic replay, please dial (719) 457-0820
and enter 407145 when prompted for the reservation code. The link for the online
replay may also be found on the Company's website.
About MPS Group
MPS Group is a leading provider of staffing, consulting, and solutions in the
disciplines of information technology, finance and accounting, law, engineering,
and healthcare. MPS Group delivers its services to government entities and
businesses in virtually all industries throughout the United States, Canada, the
United Kingdom, and Europe. A Fortune 1000 company with headquarters in
Jacksonville, Florida, MPS Group trades on the New York Stock Exchange. For more
information about MPS Group, please visit www.mpsgroup.com. Except for materials
described above, none of the information on our website should be considered
included in this release.
Forward-Looking Statements
The statements contained in this press release should be considered
forward-looking statements that are subject to risks, uncertainties or
assumptions described above and may be affected by other factors, including but
not limited to: fluctuations in the economy and financial markets in general and
in the Company's industry segments in particular; industry trends towards
consolidating vendor lists; the demand for the Company's services, including the
impact of changes in utilization rates; consolidation or bankruptcy of major
customers; the effect of competition, including the Company's ability to expand
into new markets and to maintain profit margins in the face of pricing
pressures; the Company's ability to retain significant existing customers or
obtain new customers; the Company's ability to recruit, place and retain
consultants and professional employees; the Company's ability to identify and
complete acquisition targets and to successfully integrate acquired operations
into the Company; possible changes in governmental regulations affecting the
Company's operations, including possible changes to regulations relating to
benefits for consultants and temporary personnel; unexpected fluctuations in
interest rates or foreign currency exchange rates; loss of key employees; and
other factors discussed in the Company's filings with the Securities and
Exchange Commission. In some cases, you can identify forward-looking statements
by terminology such as "will," "may," "should," "could," "expects," "plans,"
"hopes," "indicates," "projects," "anticipates," "believes," "estimates,"
"appears," "predicts," "potential," "continues," "would," or "become," or the
negative of these terms or other comparable terminology. Readers are urged to
review and consider the factors discussed in our Form 10-K for 2002 and in
subsequent filings with the Securities and Exchange Commission.
Should one or more of these risks, uncertainties or other factors materialize,
or should underlying assumptions prove incorrect, actual results, performance or
achievements of the Company may vary materially from any future results,
performance or achievements expressed or implied by the forward-looking
statements. Forward-looking statements are based on beliefs and assumptions of
the Company's management and on information then currently available to
management. Undue reliance should not be placed on such forward-looking
statements. Forward-looking statements are not guarantees of performance. Such
forward-looking statements were prepared by the Company based upon information
available at the time of such statements. Forward-looking statements speak only
as of the date they are made, and the Company undertakes no obligation to update
publicly any of them in light of new information or future events.
MPS Group, Inc.
Unaudited Operating Highlights
(in thousands, except per share amounts)
Three Months Ended March 31,
-------------------------------
2003 2002
Operating Highlights: -------------------------------
Revenue:
IT Services $ 126,620 $ 150,747
Professional Services 126,977 122,908
IT Solutions 18,202 22,798
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Total revenue 271,799 296,453
Gross profit:
IT Services 27,593 30,935
Professional Services 36,420 37,973
IT Solutions 6,220 7,350
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Total gross profit 70,233 76,258
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General and administrative expenses 60,602 66,547
Depreciation and intangibles amortization 4,620 4,998
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Total operating expenses 65,222 71,545
------------- -------------
Income from operations 5,011 4,713
Other expense, net (6) (1,574)
------------- -------------
Income before provision for income taxes 5,005 3,139
Tax provision 2,052 1,193
------------- -------------
Income before cumulative effect of accounting change 2,953 1,946
Cumulative effect of accounting change, net of income tax benefit - (553,712)
------------- -------------
Net income (loss) $ 2,953 $ (551,766)
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Diluted net income per common share before cumulative effect
of accounting change $ 0.03 $ 0.02
Cumulative effect of accounting change, net of tax benefit - (5.49)
------------- -------------
Diluted net income (loss) per common share $ 0.03 $ (5.47)
============= =============
Diluted common shares outstanding 102,677 100,799
============= =============
As of
-------------------------------
March 31, December 31,
2003 2002
Balance Sheet Highlights: -------------------------------
Cash and cash equivalents $ 76,421 $ 66,934
Working capital 172,959 171,931
Total assets 899,938 897,983
Long-term debt - -
Stockholders' equity 780,058 781,559
MPS Group, Inc.
Reconciliation of Non-GAAP Financial Measures to Most
Comparable GAAP Financial Measures
Three Months Ended March 31,
-------------------------------
2003 2002
-------------------------------
MPS Group, Inc.
EBITDA $ 9,631 $ 9,711
Depreciation and intangibles amortization (4,620) (4,998)
------------- -------------
Income from operations $ 5,011 $ 4,713
============= =============
Three Months Ended
-------------------------------------------------
March 31, December 31, September 30,
2003 2002 2002
--------------------------------------------------
Idea Integration
EBITDA $ 1,227 $ 1,316 $ 1,486
Depreciation and intangibles amortization (811) (1,036)) (1,115)
------------- -------------- -------------
Income from operations before charge 416 280 371
Fourth quarter 2002 charge for exit costs - (7,861) -
------------- -------------- -------------
Income from operations $ 416 $ (7,581) $ 371
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The term 'Cash flow from operations' is a GAAP financial measure titled
'Net cash provided by operating activities on our Consolidated Statement of Cash
Flows.