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TEAMSTAFF, INC. REPORTS THIRD QUARTER RESULTS

TEAMSTAFF, INC. REPORTS THIRD QUARTER RESULTS

Major contracts awarded in quarter, including award of up to $140 million from Department of Veterans Affairs

Quarterly revenues for Q3 are at highest level since refocusing as a pure play government contractor and increase 5% over comparable quarter of prior year

Gross profit continues positive trend with four consecutive quarters increase

Company maintains tight expense control, facilities consolidation progressed in quarter

Net loss diminished in Q3, smallest since Q1 of FY2009

Management to conduct webcast conference call today, August 16, 2011 at 11:00 am ET

TeamStaff, Inc. a leading logistics and healthcare services provider to the Federal Government, including the Departments of Defense and Veterans Affairs, has announced it’s financial results for its third quarter ended June 30, 2011.  For the period operating revenues were $10.5million and the company made a net loss of $140K.

Commenting on the Company's results, TeamStaff's President and Chief Executive Officer Zachary Parker stated, "I believe the third quarter financial results and operational activities announced during the quarter show we continue to turn the corner in our transformation and have solidified our path to obtaining growth. Specifically, our contract awards both with the Department of Veterans Affairs Consolidated Mail Outpatient Pharmacy (CMOP) contract and the Navy's SeaPort-e Prime Contract are great testaments to the value we have built in the last 18 months. While we await the commencement of these new contracts, specifically with the new CMOPs contract expected to begin by October 1, 2011, we continue to make significant progress in achieving continued revenue growth while at the same time maintaining tight cost controls."

Mr. Parker continued, "As we move towards improving our revenue growth, we continue to maintain our cost control focus. Recently, we successfully consolidated some of our facilities and are surrendering our New Jersey lease at no charge for a new lease in Atlanta, Georgia at a lower initial cost per square foot. This relocation will enable the Company's staff to be more centrally located and fully focus on the government services market."

Mr. Parker concluded, "While I am pleased with our accomplishments this past quarter, we have more tasks at hand in order to complete the Company's turnaround. In the near term, shareholders can expect us to continue to focus on keeping tight expense controls. That being noted, we believe we have built an excellent platform for future growth opportunities and are prepared to execute on our recent contract wins and use them as strong references to seek out additional business in the years to come."

Three Month Results

Revenues from TeamStaff's operations for the three months ended June 30, 2011 and 2010 were $10.6 million and $10.1 million, respectively, which represent an increase of $0.5 million or 5% over the prior fiscal year period. The increase in revenues are due in part to the approximately $1.5 million (annualized) in new business awarded during the second quarter in addition to expansion of work on existing contracts.

Gross profit for the three months ended June 30, 2011 and 2010 was $1.5 million and $1.3 million, respectively which represents an increase of $0.2 million or 15% over the prior fiscal year period. Gross profit, as a percentage of revenue, was 14.3% and 13.3%, for the three months ended June 30, 2011 and 2010, respectively. Gross profit has continued to grow with a fourth consecutive quarter of increase.

Selling, general and administrative ("SG&A") expenses for the three months ended June 30, 2011 and 2010 were $1.8 million, representing no change from the prior year.

Loss from operations for the three months ended June 30, 2011 was $0.3 million as compared to loss from operations for the three months ended June 30, 2010 of $0.5 million. This represents an improvement of $0.2 million in results from operations from the prior fiscal period, which was partially derived from higher revenues and an improved gross margin. Gain from discontinued operations for the three months ended June 30, 2011 was $0.3 million as compared to no activity in the prior year comparable period. The gain arose in connection with the Company's former PEO operations. Net loss for the three months ended June 30, 2011 was $0.1 million, or $0.02 per basic and diluted share, as compared to net loss of $0.6 million, or $0.11 per basic and diluted share, for the three months ended June 30, 2010.

Nine Month Results

Revenues from TeamStaff's operations for the nine months ended June 30, 2011 and 2010 were $31.6 million and $30.7 million respectively, which represents an increase of $0.9 million or 3% over the prior fiscal period. These increases in revenues are due in part to the approximately $1.5 million (annualized) in new business awarded during the second quarter in addition to expansion of work on existing contracts.

Gross profit for the nine months ended June 30, 2011 and 2010 were $4.3 million and $3.7 million, respectively which represents an increase of $0.6 million or 16% over the prior fiscal year period. Gross profit, as a percentage of revenue, was 13.7% and 12%, for the nine months ended June 30, 2011 and 2010, respectively.

SG&A expenses for the nine months ended June 30, 2011 and 2010 were $4.9 million and $5.3 million, respectively, which represent a decrease of $0.4 million, or 7.5%. The decrease reflects management's cost reduction initiatives, which have included: elimination of duplicate or non-essential positions indirect travel restrictions salary freezes a temporary furlough program for corporate workforce negotiating significant cost reductions with vendors, and other measures.

Loss from continuing operations for the nine months ended June 30, 2011 was $0.9 million as compared to loss from continuing operations for the nine months ended June 30, 2010 of $2.2 million. This represents an improvement of $1.3 million in results from the prior fiscal period. The improvements are attributed in part to an increase in gross profits, reduction in SG&A expenses and non-recurrence of officer severance in the nine months ended June 30, 2011 that was incurred in the nine months ended June 30, 2010. Gain from discontinued operations for the nine months ended June 30, 2011 was $0.3 million as compared to a loss of $1.2 million in the prior year comparable period. The gain arose in connection with the Company's former PEO operations while the prior year loss was incurred in connection with the disposal of the business of TeamStaff Rx. Net loss for the nine months ended June 30, 2011 was $0.7 million, or $0.12 per basic and diluted share, as compared to net loss of $3.4 million, or $0.67 per basic and diluted share, for the nine months ended June 30, 2010.

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