ADMINISTAFF ANNOUNCES STRONG
FIRST QUARTER RESULTS AND RAISES 2005 GUIDANCE
HOUSTON - May
2, 2005 - Administaff, Inc. (NYSE: ASF), the nation’s leading
Professional Employer Organization (PEO), today announced results
for the first quarter 2005. The company reported first quarter net
income and diluted earnings per share of $4.6 million and $0.18.
Diluted earnings per share increased 20.0% over the 2004 period,
excluding the impact of the Aetna lawsuit settlement in the 2004
period.
“Both
unit growth and gross profit for the quarter exceeded our
expectations,” said Paul J. Sarvadi, Administaff chairman and
chief executive officer. “Strong sales and client retention
are continuing to drive our unit growth, while effective pricing
and positive experience in our benefits and workers’
compensation plans are contributing to solid gross profit
margins.”
Revenues for
the first quarter of 2005 increased 18.6% over the 2004 period to
$298.9 million. This increase was due to an 11.9% increase in the
average number of worksite employees paid per month combined with a
6.0% increase in revenues per worksite employee per
month.
Gross profit
increased 8.0% to $54.0 million as a result of stable pricing and
favorable trends resulting from effective management of our
benefits and workers’ compensation programs. Gross profit per
worksite employee per month was $215 in the 2005 period as compared
to $223 in the 2004 period. The 2004 results included $5 per
worksite employee per month of insurance proceeds related to the
reimbursement of workers’ compensation claims.
Operating expenses for the quarter were $47.1 mi1lion, including
$1.0 million of stock-based compensation expense and $2.7 million
of expenses associated with the annual sales conference, incentive
sales trip and spring campaign marketing efforts which have
historically been incurred
in the second
quarter. On a per worksite employee per month basis, operating
expenses decreased from $191 in the 2004 period to $188 in the 2005
period, despite the inclusion of $4 related to stock-based
compensation expense and $11 related to the sales conference,
incentive trip and spring campaign in the 2005 period.
“Acceleration of unit growth over our
existing infrastructure has demonstrated our significant operating
expense leverage,” said Douglas S. Sharp, vice president of
finance and chief financial officer. “These factors, combined
with the positive trends we are seeing in gross profit per worksite
employee, have increased our expectations for the balance of the
year.”
Administaff
also provided its outlook for the second quarter and full year
2005.
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Second
Quarter
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Full
Year
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Average
worksite employees paid per month
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Gross profit
per worksite employee per month
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Operating
expenses (in millions) (1)
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Net interest
income (in millions)
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Effective
income tax rate
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Average
outstanding shares (in millions)
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Includes
$700,000 and $2.5 million in stock-based compensation expense, in
the second quarter and full year, respectively.
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The high end of
the full year operating expense range assumes a higher accrual for
incentive compensation based upon achieving higher unit growth and
gross profit goals.
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Administaff
will be hosting a conference call today at 10 a.m. ET to discuss
these results, give guidance for the second quarter and full year
2005, and answer questions from investment analysts. To listen in,
call 1-800-599-9795 and use passcode 64708872. The call will also
be webcast at http://www.administaff.com . To access the
webcast, click on the Investor Relations section of the website and
select “Live Webcast.” The conference call script will
be available at the same website later today. A replay of the
conference call will be available at 1-888-286-8010, passcode
33806037, for two weeks after the call. The webcast will be
archived for one year.
Administaff is
a leading personnel management company that serves as a
full-service human resources department for small and medium-sized
businesses throughout the United States. The company operates 38
sales offices in 21 major markets. For additional information,
visit Administaff’s Web site at
http://www.administaff.com .
(Note: The
statements contained in this press release that are not historical
facts, including those that are identified with the words
“outlook,” “plan,” “expect,”
“predict,” “appears,”
“indicator” and similar words, are forward-looking
statements that involve a number of risks and uncertainties.
Therefore, the actual results of future events described in such
forward-looking statements could differ materially from those
stated in such forward-looking statements. Among the factors that
could cause actual results to differ materially are the factors
cited above as challenges and concerns and: (i)
chang
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