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TEAMSTAFF, INC. REPORTS FOURTH QUARTER AND FISCAL 2011 RESULTS

Reports Fourth Quarter and Fiscal 2011 Results

 

TEAMSTAFF, INC. REPORTS FOURTH QUARTER AND FISCAL 2011 RESULTS

Total backlog increased to approximately $160 million at September 30, 2011

&middot Revenue growth achieved, despite extended government delay in major awards

&middot Gross profit continues positive trend with fifth consecutive quarter of increase

&middot Net loss lowered by 26% or $1.5 million to $4.3 million, which includes taking over $3 million in strategic write-downs and expenses in Q4

&middot Long-standing RS note payable lowered by $1.0 million to $0.7 million

&middot Management to conduct webcast conference call today, December 5, 2011 at 11:00 am ET

TeamStaff, Inc. (Nasdaq: TSTF), a leading healthcare and logistics services provider to the Federal Government, including the Departments of Defense and Veterans Affairs, announced today the financial results for its fourth quarter and fiscal year ended September 30, 2011.

Financial Highlights

 

 

For the three months ended

30 September

For the Year ended

30 September

($ in thousands, except per share amounts)

2011

2010

2011

2010

Operating revenues

$ 10,325

$ 10,207

$ 41,923

$ 40,874

Gross Profit

$ 1,559

$ 1,137

$ 5,898

$ 4,807

Gross Profit Percentage

15.1%

11.1%

14.1%

11.8%

Loss from operations

(3,592)

(2,338)

(4,223)

(4,337)

Loss from continuing operations

(3,660)

(2,388)

(4,590)

(4,598)

Gain/(Loss) from discontinued operation

-

(50)

270

(1,209)

Net Income/(Loss)

$ (3,660)

$ (2,438)

$ (4,320)

$ (5,807)

EPS (Loss) from continuing operations - basic

$ (0.62)

$ (0.47)

$ (0.84)

$ (0.91)

EPS (Loss) from discontinued operation - basic

$ -

$ (0.01)

$ 0.05

$ (0.24)

Loss earnings per share - basic and diluted

$ (0.62)

$ (0.48)

$ (0.79)

$ (1.15)

Other Data

EBITDA (1)

(983)

(966)

(1,527)

(2,878)

 

 

Commenting on the Company's results, TeamStaff's President and Chief Executive Officer Zachary Parker stated, "Fiscal 2011 saw a furthering of the major transformation within TeamStaff and I am pleased with our results and accomplishments. We set forth a strategic plan to transform TeamStaff into a pure play government services provider of healthcare, logistics and technical support services and today investors can see that we not only have successfully become that company, but also laid the foundation for a productive 2012 and beyond. We believe the proof of this production is in our backlog figures, as our total backlog of multi-year contracts increased to approximately $160 million at fiscal year end. While we had to deal with some government delays specifically with the new CMOPs contract, we did commence work on that major contract on November 1, 2011, and believe we are well on our way to delivering a favorable growth pattern in fiscal 2012."

Mr. Parker continued, "In addition to solidifying the Company's business foundation, we also managed to conclude some outstanding issues that should improve our infrastructure going forward. Specifically, we successfully consolidated some of our facilities to lower costs and increase our effectiveness. We also settled the RS note payable, another long-outstanding issue that not only side-tracked management and shareholders, but also impeded the Company's balance sheet. Lastly, we are also moving forward with our rebranding efforts, including a company name change and creating brand equity. Due to the decision of proceeding with the rebranding efforts, the Company took a non-cash expense of $2.6 million in the fourth quarter of fiscal 2011. We believe a new Company name will better reflect who we are, post-divestiture of TeamStaff Rx, and improve our profile in our strategic markets as well as enable us to create a strong brand identity within the Federal marketplace."

Mr. Parker concluded, "I believe we have made significant progress during the year. I am excited about our future and looking forward to reporting revenue growth in fiscal 2012 and beyond as we focus on achieving profitability."

Three Month Results Ended September 30, 2011

Revenues from TeamStaff's operations for the three months ended September 30, 2011 and 2010 were $10.3 million and $10.2 million, respectively, which represent an increase of $0.1 million or 1% over the prior fiscal year period. The increase in revenues is due in large part to the expansion of work on existing contracts.

Gross profit for the three months ended September 30, 2011 and 2010 was $1.6 million and $1.1 million, respectively which represents an increase of $0.4 million or 36% over the prior fiscal year period. Gross profit, as a percentage of revenue, was 15.1% and 11.1%, for the three months ended September 30, 2011 and 2010, respectively. The key drivers for the period over period increase in gross profit (as a percentage of revenue) are improved project management on major contracts and improved workplace safety measures resulting in lower expenses for workers compensation insurance. Gross profit has continued to grow with a fifth consecutive quarter of increase.

Selling, general and administrative ("SG&A") expenses for the three months ended September 30, 2011 and 2010 were $2.5 million and $2.1 million respectively. The increase was attributable to strategic business development expenditures and strategic legal fees of $0.5 million mostly in support of our DVA client.

Loss from operations for the three months ended September 30, 2011 was $3.6 million as compared to loss from operations for the three months ended September 30, 2010 of $2.3 million. This represents a decrease of $1.3 million in results from operations from the prior fiscal period but included a non-cash impairment charge of $2.6 million in the three months ended September 30, 2011 compared to a non-cash impairment charge in the three months ended September 30, 2010 of $1.3 million. There was no gain from discontinued operations for the three months ended September 30, 2011, as compared to a loss of $50,000 in the 2010 quarter, which arose in connection with the Company's former TeamStaff Rx operation. Net loss for the three months ended September 30, 2011 was $3.7 million, or $0.62 per basic and diluted share, as compared to net loss of $2.4 million, or $0.48 per basic and diluted share, for the three months ended September 30, 2010.

EBITDA for the three months ended September 30, 2011 was $(983) as compared to $(966) for the three months ended September 2010, representing almost no change despite strategic legal fees of $0.5 million being incurred in the three months ended September 30, 2011, compared to none in the three months ended September 30, 2010.

Results of Year Ended September 30, 2011

Revenues from TeamStaff's operations for the year ended September 30, 2011 and 2010 were $41.9 million and $40.9 million respectively, which represents an increase of $1.0 million or 2.6% over the prior fiscal period. The increase in revenues is due primarily to new business awards and increased business on existing contracts.

Gross profit for the year ended September 30, 2011 and 2010 was $5.9 million and $4.8 million, respectively, which represents an increase of $1.1 million or 23% over the prior fiscal year period. Gross profit, as a percentage of revenue, was 14.1% and 11.8% for the year ended September 30, 2011 and 2010, respectively. The key drivers for the increase in gross profit margin were improved project management on the Company's major contracts and improved workplace safety measures resulting in lower expenses for workers compensation insurance.

SG&A expenses for the year ended September 30, 2011 and 2010 were $7.4 million and $7.7 million, respectively, which represent a decrease of $0.3 million, or 3.4%. The decrease reflects management's cost reduction initiatives, which have included: elimination of duplicate or non-essential positions termination of non-strategic administrative subscriptions and licenses, indirect travel restrictions, temporary work furlough, and more. These savings were partially offset by increases in strategic business development expenditures and approximately $0.6 million in strategic legal fees mostly in support of our DVA client. The Company has also continued its cost savings and reallocation initiatives, which have resulted in refocused headcount in non-revenue generating departments and within G&A costs, with significantly increased emphasis on building a strong and sustainable pipeline of new business opportunities.

Loss from operations for the year ended September 30, 2011 was $4.2 million as compared to loss from operations for the year ended September 30, 2010 of $4.3 million. This represents an improvement of $0.1 million in results from the prior fiscal period. The improvements are attributed primarily to increased operating gross profits and reduction of SG&A expenses. Gain from discontinued operations for the year ended September 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 operations of, and the disposal of the business of, TeamStaff Rx. Net loss for the year ended September 30, 2011 was $4.3 million, or $0.79 per basic and diluted share, as compared to net loss of $5.8 million, or $1.15 per basic and diluted share, for the year ended September 30, 2010.

EBITDA for the year ended September 30, 2011 was $(1.5) million as compared to $(2.9) million for the year ended September 2010, representing an improvement of $1.4 million or 48% even after incurring strategic legal fees of $0.6 million in the year ended September 30, 2011, when none were incurred in the year ended September 30, 2010.

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