Exhibit 99.3
TEAMSTAFF AND BRIGHTLANE UNAUDITED
PRO FORMA CONSOLIDATED FINANCIAL DATA
On August 31, 2001, TeamStaff acquired BrightLane in a transaction
accounted for as a purchase. Under the merger agreement with BrightLane,
TeamStaff acquired BrightLane in exchange for 8,066,631 shares of TeamStaff
common stock, valued at approximately $44.6 million including transaction costs,
based upon a per share price of $5.73. The following sets forth summary
unaudited pro forma combined financial data to give effect to the issuance of
the 8,066,631 shares (prior to reduction for fractional shares) of TeamStaff
common stock in the acquisition as if the transaction had been completed on
October 1, 1999 for statement of operations purposes and June 30, 2001 for
balance sheet purposes.
The pro forma combined financial data does not give effect to TeamStaff's
repayment in full of TeamStaff's remaining obligations to FINOVA Capital
Corporation, which occurred promptly following completion of the acquisition.
This summary unaudited pro forma combined financial data should be read in
conjunction with the unaudited pro forma combined condensed financial
information and accompanying notes which are included in this filing, the
separate historical financial statements and accompanying notes of BrightLane
which are either included or incorporated by reference in this filing, and
TeamStaff's previously filed Annual Report on Form 10-K for the year ended
September 30, 2000 and previously filed Form 10-Q for the quarter ended June 30,
2001.
The pro forma condensed combined financial data are intended for
information purposes, and do not purport to represent what the combined entity's
results of continuing operations or financial position would actually have been
had the transaction in fact occurred at an earlier date, or project the results
for any future date or period.
TEAMSTAFF, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2000
Historical Pro Forma
------------------------------------- -----------------------------------
TeamStaff, Inc. BrightLane.com, Inc. Adjustments Combined
--------------- -------------------- ------------- -------------
REVENUES $ 447,743,000 $ 199,000 $ -- $ 447,942,000
DIRECT EXPENSES 426,987,000 174,000 -- 427,161,000
------------- ------------- ------------- -------------
Gross profit 20,756,000 25,000 -- 20,781,000
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 17,005,000 15,067,000 32,072,000
DEPRECIATION AND AMORTIZATION 1,333,000 907,000 3,889,000(11) 6,129,000
------------- ------------- ------------- -------------
Income/(Loss) from operations 2,418,000 (15,949,000) (3,889,000) (17,420,000)
------------- ------------- ------------- -------------
OTHER INCOME (EXPENSE)
Interest and other income 584,000 1,303,000 1,887,000
Interest and other expense (1,623,000) -- (1,623,000)
------------- ------------- ------------- -------------
(1,039,000) 1,303,000 -- 264,000
------------- ------------- ------------- -------------
Income/(Loss) before tax 1,379,000 (14,646,000) (3,889,000) (17,156,000)
INCOME TAX (EXPENSE)/BENEFIT (428,000) -- 428,000(10) --
------------- ------------- ------------- -------------
NET INCOME/(LOSS) $ 951,000 $ (14,646,000) $ (3,461,000) $ (17,156,000)
============= ============= ============= =============
BASIC EARNINGS/(LOSS) PER COMMON SHARE $ 0.12 $ (1.07)
============= =============
BASIC SHARES OUTSTANDING 7,954,176 8,066,631(9) 16,020,807
============= ============= =============
DILUTED EARNINGS/(LOSS) PER COMMON SHARE $ 0.12 $ (1.07)
============= =============
(36,736)(9)
DILUTED SHARES OUTSTANDING 7,990,912 8,066,631(9) 16,020,807
============= ============= =============
The accompanying notes to unaudited pro forma condensed consolidated financial
statements are an integral part of this statement of operations.
TEAMSTAFF, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED JUNE 30, 2001
Historical Pro Forma
------------------------------------- -----------------------------------
TeamStaff, Inc. BrightLane.com, Inc. Adjustments Combined
--------------- -------------------- ------------- -------------
REVENUES $ 487,497,000 $ 239,000 $ -- $ 487,736,000
DIRECT EXPENSES 466,891,000 205,000 -- 467,096,000
------------- ------------- ------------- -------------
Gross profit 20,606,000 34,000 -- 20,640,000
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 16,435,000 5,066,000 21,501,000
DEPRECIATION AND AMORTIZATION 1,078,000 792,000 2,917,000(11) 4,787,000
------------- ------------- ------------- -------------
Income/(Loss) from operations 3,093,000 (5,824,000) (2,917,000) (5,648,000)
------------- ------------- ------------- -------------
OTHER INCOME (EXPENSE)
Interest and other income 621,000 1,080,000 1,701,000
Interest expense (1,373,000) -- (1,373,000)
------------- ------------- ------------- -------------
(752,000) 1,080,000 -- 328,000
------------- ------------- ------------- -------------
Income/(Loss) before tax 2,341,000 (4,744,000) (2,917,000) (5,320,000)
INCOME TAX (EXPENSE)/BENEFIT (981,000) -- 981,000(10) --
------------- ------------- ------------- -------------
NET INCOME /(LOSS) $ 1,360,000 $ (4,744,000) $ (1,936,000) $ (5,320,000)
LOSS RELATED TO CONTINGENT WARRANTS $ -- $ (1,876,000) $ -- $ (1,876,000)
------------- ------------- ------------- -------------
NET INCOME/(LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS $ 1,360,000 $ (6,620,000) $ (1,936,000) $ (7,196,000)
============= ============= ============= =============
BASIC EARNINGS/(LOSS) PER COMMON SHARE $ 0.17 $ (0.45)
============= =============
BASIC SHARES OUTSTANDING 8,011,474 8,066,631(9) 16,078,105
============= ============= =============
DILUTED EARNINGS/(LOSS) PER COMMON SHARE $ 0.17 $ (0.45)
============= =============
(159,551)
DILUTED SHARES OUTSTANDING 8,171,025 8,066,631(9) 16,078,105
============= ============= =============
The accompanying notes to unaudited pro forma condensed consolidated financial
statements are an integral part of this statement of operations.
TEAMSTAFF, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF JUNE 30, 2001
Historical Pro Forma
------------------------------------- ----------------------------------
TeamStaff, Inc. BrightLane.com, Inc. Adjustments Combined
--------------- -------------------- ------------- -------------
ASSETS
CURRENT ASSETS
Cash $ 7,239,000 $ 12,857,000 $ (1,025,000)(7) $ 19,071,000
Accounts receivable, net of allowance 24,059,000 66,000 -- 24,125,000
Deferred tax asset 1,386,000 -- 1,386,000
Other current assets 507,000 115,000 622,000
------------ ------------ ------------ ------------
Total current assets 33,191,000 13,038,000 (1,025,000) 45,204,000
RESTRICTED CASH -- 551,000 -- 551,000
EQUIPMENT AND IMPROVEMENTS, NET 1,195,000 1,059,000 -- 2,254,000
INTANGIBLES, net of amortization 19,412,000 82,000 19,445,000(1) 38,857,000
(82,000)(8)
DEFERRED TAX ASSET, LONG TERM -- -- 6,998,000(6) 6,998,000
INVESTMENT IN TEAMSTAFF PREFERRED STOCK -- 3,500,000 (3,500,000)(5) --
OTHER ASSETS 939,000 521,000 1,025,000(7) 2,485,000
------------ ------------ ------------ ------------
TOTAL ASSETS $ 54,737,000 $ 18,751,000 $ 22,861,000 $ 96,349,000
============ ============ ============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $ 1,147,000 $ 17,000 $ -- $ 1,164,000
Accounts payable 6,950,000 366,000 -- 7,316,000
Accrued expenses and other current liabilities 20,056,000 98,000 2,710,000(3) 22,864,000
------------ ------------ ------------ ------------
Total current liabilities 28,153,000 481,000 2,710,000 31,344,000
LONG-TERM LIABILITIES
Long-term debt 3,487,000 21,000 -- 3,508,000
------------ ------------ ------------ ------------
Total Liabilities 31,640,000 502,000 2,710,000 34,852,000
SHAREHOLDERS' EQUITY
Common stock 8,000 1,439,000 (1,439,000)(4) 16,000
8,000(2)
Preferred stock 350,000 40,157,000 (40,157,000)(4) --
(350,000)(5)
Additional paid-in capital 24,625,000 -- 41,892,000(2) 63,367,000
(3,150,000)(5)
Accumulated deficit (1,750,000) (23,347,000) 23,347,000(4) (1,750,000)
Treasury stock (136,000) -- (136,000)
------------ ------------ ------------ ------------
Total shareholders' equity 23,097,000 18,249,000 20,151,000 61,497,000
------------ ------------ ------------ ------------
TOTAL LIABILITIES AND EQUITY $ 54,737,000 $ 18,751,000 $ 22,861,000 $ 96,349,000
============ ============ ============ ============
The accompanying notes to unaudited pro forma condensed consolidated financial
statements are an integral part of this balance sheet
TEAMSTAFF, INC.
NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The unaudited pro forma condensed consolidated statements of operations have
been prepared to reflect the acquisition of BrightLane as if the acquisition
occurred on October 1, 1999 utilizing the purchase method of accounting.
TeamStaff's fiscal year ends on September 30. The unaudited pro forma condensed
consolidated balance sheet was prepared to reflect the acquisition as of June
30, 2001. BrightLane.com, Inc.'s historical financial statements were derived
from its books and records and reflect:
- The unaudited statement of operations of BrightLane for the nine month
period ended June 30, 2001;
- The statement of operations of BrightLane for the twelve month period
ended December 31, 2000 derived from BrightLane's audited financial
statements; and
- The unaudited balance sheet of BrightLane as of June 30, 2001.
TeamStaff historical financial statements were derived from its books and
records and reflect:
- The unaudited statement of operations of TeamStaff for the nine month
period ended June 30, 2001;
- The statement of operations of TeamStaff for the twelve month period ended
September 30, 2000 derived from TeamStaff's audited financial statements;
and
- The unaudited balance sheet of TeamStaff as of June 30, 2001.
The following is a summary of the adjustments reflected in the unaudited pro
forma condensed consolidated balance sheet:
(1) Represents the preliminary estimates of the excess purchase price
over the net tangible assets acquired as follows:
<Table>
Purchase price (including $2,710,000 of
transaction expenses) $44,610,000
Net tangible assets acquired (18,167,000)
Deferred tax asset of BrightLane previously
unrecorded (6,998,000)
Excess of purchase price over net tangible -----------
assets acquired $19,445,000
-----------
</Table>
The total estimated purchase price of the acquisition has been allocated
on a preliminary basis to assets and liabilities based on management's best
estimates of fair value, with the excess over the net tangible assets acquired
allocated to intangible assets. These allocations are subject to change pending
a final analysis of the total purchase price and the fair value of the assets
acquired and liabilities assumed. As the Company's Valuation Consultants have
not yet completed their analysis of the purchase price allocation the impact of
any of these changes could be material. And therefore the audited financial
statements for the fiscal year ended September 30, 2001 could contain material
changes from the pro-forma statements contained herein.
On January 22, 2001, the date of announcement of the principal terms of
the acquisition, the closing price of TeamStaff's stock was $5.75. Based on the
closing prices of TeamStaff's common stock for the period consisting of (i) two
days prior to announcement of the principal terms, (ii) the day of the
announcement and (iii) the two days following the announcement, the average
closing price of the Company's common stock for such 5 day period was $5.73,
which has been utilized by management as the accounting basis of evaluating the
cost of the transaction.
(2) Includes the issuance of 8,066,631 shares of TeamStaff common stock
to the former BrightLane shareholders at an estimated fair market
value of $5.73 per share, discounted for the restrictions of trading
placed on the common stock of 15% for stock restricted for two years
and 10% for stock restricted for one year or total fair value of
$41,900,000 ($8,000 par value common stock and $41,892,000
additional paid in capital).
TeamStaff issued, to the shareholders of BrightLane, shares representing
approximately 49.9% of TeamStaff shares outstanding at the time of closing. The
pre-transaction shareholders of TeamStaff retained the majority holding in the
combined entity.
(3) Represents the accrual of $2,710,000 for certain legal, accounting,
investment banking and other miscellaneous expenses associated with
the acquisition.
(4) Represents the elimination of BrightLane's historical equity
accounts ($1,439,000 common stock, $40,157,000 preferred stock, and
($23,347,000) accumulated deficit).
(5) Represents the elimination of Brightlane's investment in TeamStaff
of $3,500,000.
(6) Represents the establishment of a deferred tax asset for the net
operating loss carryforwards of $6,998,000. Brightlane's net
operating loss carryforwards previously had a full valuation
allowance. However, Teamstaff management believes it is more likely
than not that such carryforwards will be realized considering
Teamstaff's prior results and future planned results including
Brightlane.
(7) Represents $1,025,000 principal amount of loans given to
Brightlane shareholders for taxes due on the exercise of BrightLane
options under the terms of the merger agreement.
(8) Represents the elimination of acquired goodwill on Brightlane's
books of $82,000.
The following is a summary of the adjustments reflected in the unaudited pro
forma condensed consolidated statement of operations:
(9) Represents the issuance of 8,066,631 shares of TeamStaff, Inc.
common stock to BrightLane shareholders and the removal of
incremental shares for assumed conversion of options as those
incremental shares would be antidilutive for pro forma purposes.
(10) Represents a reduction to income tax expense as a result of
BrightLane's loss.
(11) Represents the amortization of the excess of purchase price over net
tangible assets acquired of $19,445,000. Pending the final analysis
of the total purchase price and the fair value of the assets
acquired and the liabilities assumed, the excess purchase price over
assets acquired will be amortized over five years. However, if any
of the purchase price is ultimately assigned to goodwill, there will
be no amortization of goodwill under the new accounting
pronouncement, Statement of Accounting Standards No. 142.
Accordingly, the pro forma amortization expense, net loss and net
loss per share would be reduced.