ADMINISTAFF ANNOUNCES THIRD QUARTER RESULTS, RAISES 2005 GUIDANCE AND INTRODUCES 2006 OUTLOOK

·    Unit growth accelerates to 15%

·    Revenue and gross profit up over 20%

·    EPS up 86% to $0.26

HOUSTON - Nov. 1, 2005 - Administaff, Inc. (NYSE: ASF), the nation’s leading Professional Employer Organization (PEO), today announced a 99% increase in third quarter net income to $7.2 million in the 2005 period from $3.6 million in the 2004 period. Diluted earnings per share increased to $0.26 from $0.14 over the same period.

“Our unit growth rate has increased ahead of schedule due to improved sales efficiency, strong client retention and some contribution from new hires within the existing client base,” said Paul J. Sarvadi, Administaff chairman and chief executive officer. “These trends have continued through the early stages of our fall sales campaign, giving us increased confidence in accelerating our unit growth in 2006.”

Revenues for the third quarter of 2005 increased 20.9% over the 2004 period to $285.2 million on a 14.8% increase in the average number of worksite employees paid per month and a 5.3% increase in revenues per worksite employee per month.

Gross profit increased 22.0% over the third quarter of 2004 to $58.2 million, due to a combination of accelerated unit growth, increased service fee markup, and a surplus from the company’s direct cost programs. This surplus was primarily the result of continued favorable trends in healthcare and workers’ compensation costs. The average gross profit per worksite employee per month increased to $214 in the 2005 period from $202 in the 2004 period.

Continued operating leverage was demonstrated by a decline in operating expense per worksite employee per month, to $175 in the 2005 period from $180 in the 2004 period. Investments to drive unit growth, including marketing efforts surrounding the fall sales campaign, and additional incentive compensation tied to improved operating results, contributed to an expected 11.7% increase in total operating expenses to $47.6 million.

Operating income for the third quarter of 2005 increased 108.3% to $10.6 million, with an average operating income per worksite employee per month of $39 compared to $22 in the 2004 period.

Year-to-Date Results

For the nine months ended September 30, 2005, the company reported net income and diluted earnings per share of $19.1 million and $0.72, versus $15.7 million and $0.58 for the same period in 2004. Diluted earnings per share increased 80.0% over the 2004 period, excluding the $0.18 per share impact of the Aetna lawsuit settlement in the 2004 period.

Year-to-date revenues were $864.1 million, a 19.9% increase over the 2004 period, which resulted from a 13.1% increase in the average number of worksite employees paid per month and a 6.0% increase in revenues per worksite employee per month. Gross profit for the nine months ended September 30, 2005 increased 15.2% to $168.5 million. The average gross profit per worksite employee per month was $215 compared to $211 in the 2004 period.

Year-to-date operating expenses increased 8.3% to $140.2 million, but declined 4.3% on a per worksite employee per month basis to $179 in the 2005 period from $187 in the 2004 period. The resulting operating income for the nine months ended September 30, 2005 was $28.3 million compared to $16.8 million in the 2004 period. Operating income per worksite employee per month increased 50.0% to $36 from $24 in the prior year.

Working capital has increased by $50 million since December 31, 2004, to $98 million.

“Year-to-date operating income is up 69% over 2004 on a 15% increase in gross profit, demonstrating the significant operating leverage in our business,” said Douglas S. Sharp, vice-president of finance, chief financial officer and treasurer. “As a result of this leverage and the current favorable trends in the core areas of our business, we are raising our 2005 guidance and have increased confidence for continued strong financial performance into 2006.”

2005 Outlook

Administaff also provided its outlook for the fourth quarter and full year 2005.

2006 Preliminary Outlook

Following is the company’s preliminary outlook for 2006. Due to the combination of the fall sales campaign and heavy year-end client renewal period, this outlook assumes a 15% year-end turnover in the worksite employee base and pricing consistent with the current base.

Conference Call

Administaff will be hosting a conference call today at 10 a.m. ET to discuss these results, update guidance for 2005, discuss the preliminary outlook for 2006, and answer questions from investment analysts. To listen in, call 800-591-6923 and use passcode 41435774. 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 888-286-8010, passcode 33806037, for two weeks after the call. The webcast will be archived for one year.

About Administaff

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 .

“Safe Harbor” Statement Under The Private Securities Litigation Reform Act of 1995

The statements contained herein that are not historical facts are forward-looking statements within the meaning of the federal securities laws (Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act