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SFN Group Announce Q2 Financials

SFN Group Announce Q2 Financials
SFN Group president and CEO Roy Krause commented, "I am pleased with our performance in the second quarter. The Company experienced increased demand across all skills and services. Adjusted EBITDA improved again this quarter to 2.9% of revenues as volume increases, margin improvements and effective cost management all contributed to the improved operating leverage."
FINANCIAL HIGHLIGHTS
Second quarter 2010 revenues were $514 million compared with $409 million last year.
Earnings from continuing operations in the second quarter were $2.9 million, or $0.05 per share, compared with earnings of $0.4 million, or $0.01 per share, in the prior year.
Adjusted earnings from continuing operations (defined below) in the second quarter were $3.5 million, or $0.06 per share, compared with adjusted earnings from continuing operations in the same prior year period of $0.6 million, or $0.01 per share.
Adjusted EBITDA (defined below) in the second quarter was $14.7 million, or 2.9% of revenues, compared with $9.4 million, or 2.3% of revenues, in the prior year.
Total debt was $45.2 million at the end of the second quarter. Availability under the credit facility was $104.8 million as of the end of the quarter.
Krause continued, "Industry trends continue to be positive and we are optimistic about the second half of 2010 as clients increasingly recognize the value of our services in this uneven economic recovery. The market opportunity for our business is strong and our strategy is aligned with capitalizing on those opportunities. We are executing our strategy and continued economic improvement coupled with our operating effectiveness is allowing us to deliver improving financial results, including expanded adjusted EBITDA margins."
SECOND QUARTER OPERATING PERFORMANCE
In the second quarter, Professional Services revenues were up 36.7% compared with the same prior year period. Professional Services represented 48.7% of total Company revenues and experienced increases due to the first quarter Tatum LLC acquisition and growth in all skills and services. Gross profit margin of 25.6% is down 50 basis points from the same period last year, but up significantly from the first quarter 2010. Segment operating profit was $8.6 million in the second quarter or 3.5% of revenues, compared with $7.6 million or 4.2% in the prior year.
Staffing Services revenues increased 16.6% year over year in the second quarter compared with the same period last year. Gross profit increased 17.3% and gross profit margins were about flat compared with last year at 15.7% of revenues. SG&A increased modestly compared with the prior year, allowing segment operating profit to increase to $4.7 million or 1.8% of revenues , compared with a loss of $0.3 million, or (0.1%) of revenues, last year.

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