Exhibit 99.1
News Release [_] [_] [_] [_]
FOR: REMEDYTEMP, INC.
CONTACT: Monty Houdeshell
Senior Vice President and
Chief Financial Officer
(949) 425-7600
Roger Pondel/Rob Whetstone
PondelWilkinson MS&L
(323) 866-6060
REMEDYTEMP REPORTS SECOND QUARTER FINANCIAL RESULTS
ALISO VIEJO, CA - April 30, 2003 - RemedyTemp, Inc. (NASDAQ:REMX),
which operates as Remedy Intelligent Staffing(R), RemX(R) Financial Staffing and
RemX(R) IT Staffing today reported results for its second fiscal quarter and six
months ended March 30, 2003.
For the second fiscal quarter, revenue increased 8.7% to $115.8 million
from $106.6 million in the prior year. The company incurred a net loss for the
second quarter of $2.8 million, or $0.31 per share, reflecting a $3.8 million
increase to the company's workers' compensation claims reserves upon completion
of its actuarial analysis in March 2003. Additionally, results were impacted by
significant increases in state unemployment insurance costs, coupled with
charges recorded in connection with planned cost reduction measures. The company
reported net income of $191,000, or $0.02 per share, for the second quarter of
the prior year.
Revenue for the first six months of fiscal 2003 rose 6.9% to $236.6
million from $221.3 million in the prior year. For the six months ended March
30, 2003, the company incurred a net loss of $2.4 million, equal to $0.26 per
share (before the cumulative effect of the adoption of a new accounting
standard) versus net income of $883,000, or $0.10 per share, in the prior year.
The company adopted Statement of Financial Accounting Standard No. 142,
"Goodwill and Other Intangible Assets" (SFAS 142), effective the first quarter
of fiscal 2003, which requires that goodwill be reviewed for impairment upon
adoption. As a result, RemedyTemp recorded a one-time, non-cash charge of $2.4
million, net of income taxes, or $0.26 per share, for the cumulative effect of
adopting SFAS 142. Including the impact of adoption, net losses were $4.8
million, or $0.52 per share, for the six months ended March 30, 2003.
Greg Palmer, president and chief executive officer, attributed the
revenue growth primarily to strength in the light industrial sector, which
represents approximately 68% of the company's total revenue year to date, and
typically is among the first areas to recover from an economic downturn. Palmer
said that management is taking swift and aggressive action implementing its
strategic plan geared toward cost reduction and enhanced operating margins. The
company already has reduced headcount by approximately 5% through the
elimination of specific non-revenue-producing positions and is in the process of
closing up to 10% of its company-owned offices, specifically those that are
under-performing or primarily dedicated to non-revenue generating recruiting
activities.
"The fundamentals of our business are solid, with revenue momentum
starting to build," Palmer said. "Combined with added efficiencies, a lower cost
structure, and a strong balance sheet, we believe that RemedyTemp is extremely
well positioned for growth as the economy improves."
During the second quarter, RemedyTemp completed the acquisition of its
largest franchisee, Staffing Services, N.A., giving the company a foothold in
the metropolitan regions of Nashville and Memphis. Additionally, RemedyTemp
opened RemX(R) Financial Staffing offices in New Jersey and Tennessee,
increasing the number of offices in this specialty division to 14. The company
launched the RemX(R) Financial Staffing division early in fiscal 2002.
Palmer said RemedyTemp's balance sheet remains strong, with no debt.
The company generated operating cash flows of $10.2 million for the six months
ended March 30, 2003. Cash and investments were $55.0 million versus $49.1
million at September 29, 2002.
RemedyTemp expects its third quarter revenues to increase 3% to 5% over
the second quarter, to approximately $121 to $124 million. The company said it
expects to sustain a loss of $0.08 to $0.12 per share for the third quarter,
including the costs associated with previously announced workforce reductions
and office closings.
About RemedyTemp, Inc.
RemedyTemp, Inc, with over 265 offices throughout North America, is a
professional staffing organization focused on delivering human capital workforce
solutions in various business sectors. For additional information about
RemedyTemp, Inc. visit www.remedytemp.com.
This news release contains forward-looking statements that involve
material risks and uncertainties and are subject to change based on factors
beyond the control of the company. (Certain of such statements are identified by
the use of words such as "anticipate," "believe," "estimate," "intend," "plan,"
"expect," "will," or "future"). Accordingly, the company's actual results may
differ materially from those expressed or implied in any such forward-looking
statements as a result of various factors, including, without limitation, the
success of certain cost reduction efforts, the performance of RemX(R) Financial
Staffing, changes in general or local economic conditions that could impact the
company's expected financial results, the availability of sufficient personnel,
various costs relating to temporary workers and personnel, the company's ability
to expand its sales capacity and channels, to open new points of distribution
and expand in core geographic markets, attract and retain clients and
franchisees/licensees, the outcome of litigation, and other factors described in
the company's filings with the Securities and Exchange Commission regarding
risks affecting the company's financial condition and results of operations. The
company does not undertake to publicly update or revise its forward-looking
statements even if experience or future changes make it clear that any projected
results expressed or implied therein will not be realized.
The following table sets forth a summary statement of
income and condensed balance sheet and should be read in conjunction
with this news release.
(table attached)
RemedyTemp, Inc.
(Amounts in '000s, except per share amounts)
Statements of Income
Three Months Ended Six Months Ended
----------------------------- ----------------------------
Mar 30, Mar 31, Mar 30, Mar 31,
2003 2002 2003 2002
------------- ------------- ------------- -------------
Total Revenue $115,835 $106,568 $236,629 $221,328
Cost of Sales 98,382 85,150 196,050 175,493
Licensees' Share of Gross Profit 5,640 5,975 12,361 13,984
Selling and Administrative Expenses 16,369 14,264 31,514 28,759
Depreciation and Amortization 1,299 1,308 2,508 2,715
------------- ------------- ------------- -------------
Operating (Loss) Income (5,855) (129) (5,804) 377
Other Income:
Interest Income, net 63 161 402 400
Other, net 228 212 377 485
------------- ------------- ------------- -------------
(Loss) Income Before Income Taxes (5,564) 244 (5,025) 1,262
(Benefit) Provision for Income Taxes (2,752) 53 (2,663) 379
------------- ------------- ------------- -------------
(Loss) Income Before Cumulative Chg in Acct Principle ($2,812) $ 191 ($2,362) $ 883
Cumulative Effect of Change in Accounting Principle,
Net of Tax Benefit of $1,634 - - (2,421) -
------------- ------------- ------------- -------------
Net (Loss) Income ($2,812) $ 191 ($4,783) $ 883
Net (Loss) Income Per Share, Diluted:
Before Cumulative Effect of Chg in Acct Principle ($0.31) $ 0.02 ($0.26) $ 0.10
Cumulative Effect of Chg in Acct Principle $0.00 $ 0.00 ($0.26) $ 0.00
------------- ------------- ------------- -------------
After Cumulative Effect of Chg in Acct Principle ($0.31) $ 0.02 ($0.52) $ 0.10
Diluted Weighted Average Shares 9,139 9,034 9,189 9,001
Condensed Balance Sheets
As of
Mar 30, Sep 29,
2003 2002
------------- -------------
Assets
Current Assets:
Cash and Investments $ 54,969 $ 49,122
Accounts Receivable, net 53,006 61,724
Other Current Assets 15,938 13,231
------------- -------------
Total Current Assets 123,913 124,077
Fixed Assets, net 15,058 16,268
Other Assets, net 5,811 6,328
------------- -------------
$144,782 $146,673
============= =============
Liabilities and Shareholders' Equity
Current Liabilities $ 45,764 $ 43,560
Long-term Liabilities 90 90
Shareholders' Equity 98,928 103,023
------------- -------------
$144,782 $146,673
============= =============