FORT LAUDERDALE, Fla.,
July 27, 2011 /PRNewswire-FirstCall/
-- SFN Group Inc. (NYSE: SFN) today announced financial results for
the second quarter ended June 26,
2011.
SFN Group president and CEO Roy
Krause commented, "We continue to focus on executing our
strategy to drive growth among our targeted customer segments.
Expansion in our higher margin services and operating discipline in
the second quarter contributed to a 70 basis point improvement year
over year in Adjusted EBITDA to 3.6%."
FINANCIAL HIGHLIGHTS
- Second quarter 2011 revenues were $512
million, compared with $514
million in the second quarter of last year.
- Earnings from continuing operations in the second quarter 2011
were $8.6 million, or $0.16 per diluted share, compared with
$2.7 million, or $0.05 per share, in the prior year.
- Adjusted EBITDA (defined below) in the second quarter was
$18.2 million, or 3.6% of revenues,
compared with $14.7 million, or 2.9%
of revenues, in the prior year.
- Operating cash flow in the second quarter was $16.5 million and total debt was $6.8 million at the end of the period.
Availability under the credit facility was $155 million as of the end of the quarter.
Krause continued, "We are very pleased with our continued
ability to expand EBITDA margins and generate strong cash flow.
During the second quarter, our small and mid-sized customers grew
approximately 12% year over year, while our large customer account
base experienced slowing trends through the quarter. As a
result, across all of our services, we are accelerating our
investments in sales and recruiting staff and expect to see
improving growth trends through the second half of 2011 and
beyond."
SECOND QUARTER OPERATING PERFORMANCE
In the second quarter, Professional Services revenues
represented 48% of total Company revenues and decreased 2.4%
compared with the same prior year period. Revenues were lower
on a year over year basis primarily related to the completion of
several professional contingent workforce solutions projects.
Excluding the impact of professional contingent workforce
solutions, Professional Services had revenue growth of 3.5% year
over year in the second quarter, primarily due to growth among
small and mid-sized customers. Gross profit margin of 28.1% was up
250 basis points from the same period last year, primarily a result
of increased pay/bill spreads and growth in higher margin services,
including permanent placement and Recruitment Process Outsourcing.
Segment operating profit was $14.5
million in the second quarter, or 6.0% of revenues, compared
with $8.6 million, or 3.5% of
revenues in the prior year.
Staffing Services revenues increased 1.7% year over year in the
second quarter compared with the same period last year, primarily
due to growth in small and mid-sized customers. Gross profit
margin decreased 40 basis points compared with last year primarily
as a result increased payroll taxes. Payroll tax expense
increased due to rising state unemployment taxes in 2011 combined
with the impact of a payroll tax credit in the second quarter of
2010, which more than offset improvements in pay/bill spreads.
SG&A was 13.9% of revenues in the second quarter of both
2011 and 2010. Segment operating profit decreased to
$3.9 million or 1.4% of revenues,
compared with $4.7 million or 1.8% of
revenues in the second quarter of last year.
SHARE REPURCHASES
During the second quarter, the Company purchased approximately
1,932,000 of its common shares at an average price of $10.56 per share, under its existing
authorization. Additionally, on May
27, 2011, the Company's Board of Directors approved an
additional authorization to purchase up to $75 million of common stock. There were no
purchases during the quarter related to this authorization.
OTHER INFORMATION
As previously announced, the Company has entered into a
definitive agreement to be acquired by Randstad Holding nv
(Euronext Amsterdam: RAND.AS) for $14.00 per common share through a cash tender
offer, which values the Company's equity at approximately
$770 million. Randstad, based
in The Netherlands, is a leading
global provider of HR Services. The transaction, which is
subject to customary closing conditions, including regulatory
approvals and the tender of greater than 50% of SFN Group's
outstanding shares, is expected to close late in the third quarter.
EARNINGS CONFERENCE CALL
The earnings conference call scheduled for Thursday, July 28, 2011 has been cancelled, due
to the recently announced pending acquisition of SFN Group,
Inc.
ABOUT SFN GROUP, Inc.
SFN Group (NYSE: SFN) is a strategic workforce
solutions company that provides professional services and general
staffing to help businesses more effectively source, deploy and
manage people and the work they do. As an industry pioneer,
SFN Group has sourced, screened and placed millions of individuals
in temporary, temp-to-hire and full-time jobs for more than 65
years.
With approximately 560 locations in the United States and Canada, SFN delivers strategic workforce
solutions that improve business performance. From outsourcing
to technology to professional services to staffing, SFN delivers
the best combination of people, performance and service to improve
the way work gets done. It provides its services to
approximately 8,000 customers, from Fortune 500 companies to a wide
range of small and mid-size organizations. The company
employs more than 170,000 people annually through its network and
is one of North America's largest
employers. SFN provides its solutions through a family of
specialized businesses: Technisource, Tatum, The Mergis
Group, Todays Office Professionals, SourceRight Solutions and
Spherion Staffing Services. To learn more, visit
www.sfngroup.com.
IMPORTANT INFORMATION
This release is neither an offer to purchase nor the
solicitation of an offer to sell any securities. SFN Group
will file a solicitation/recommendation statement on
Schedule 14D-9 with the SEC as soon as reasonably practicable
following the commencement of the offer to purchase.
Investors and security holders of SFN Group are urged to read the
solicitation/recommendation statement and any other relevant
documents filed with the SEC (when available), because they will
contain important information.
Investors and security holders may obtain a free copy of the
solicitation/recommendation statement and other documents that SFN
Group files with the SEC (when available) through the website
maintained by the SEC at www.sec.gov and through the website
maintained by SFN Group at www.sfngroup.com. In addition, the
solicitation/recommendation statement and other documents filed by
SFN Group with the SEC (when available) may be obtained from SFN
Group free of charge by directing a request to SFN
Group, Inc., Attn: Corporate Secretary, 2050 Spectrum
Boulevard, Fort Lauderdale,
Florida 33309, (954) 308-7600.
This release contains statements that are forward looking in
nature and, accordingly, are subject to risks and uncertainties.
Factors that could cause future results to differ from current
expectations include risks associated with: Competition – our
business operates in highly competitive markets with low barriers
to entry and we may be unable to compete successfully against
existing or new competitors; Economic conditions –our business is
cyclical, as a result of a significant downturn in the economy, we
could experience lower demand from customers and lower revenues;
Government Regulation - government regulation may significantly
increase our costs, including payroll-related costs and
unemployment taxes; Third-Party Vendor Managers – providing our
services through third-party vendor managers may expose us to
financial losses; Customers – a loss of customers may result in a
material impact on our results of operations; Debt and debt
compliance – market conditions and failure to meet certain covenant
requirements could impact the amount of availability we may borrow
under our revolving lines of credit and the cost of our borrowings;
Business strategy – we may not achieve the intended effects of our
business strategy; Termination provisions - certain customer
contracts contain termination provisions and pricing risks that
could decrease revenues, profitability and cash flow; Failure to
perform – our failure or inability to perform under customer
contracts could result in damage to our reputation and give rise to
legal claims; Acquisitions – acquisitions could have a material
adverse effect on our financial condition, results of operation and
cash flows; Business interruptions – business interruptions could
have an adverse effect on our operations; Personnel - our business
is dependent upon the availability of qualified personnel and we
may lose key personnel which could cause our business to suffer;
Tax filings – regulatory challenges to our tax filing positions
could result in additional taxes; Litigation – we may be exposed to
employment–related claims and costs and we are a defendant in a
variety of litigation and other actions from time to time;
Self-Insurance programs-unexpected changes in claim trend in our
self-insured workers' compensation and benefit plans may negatively
impact our financial condition and International operations – we
are subject to business risks associated with our operations in
Canada, which could make those
operations significantly more costly. These and additional
factors discussed in this release and in SFN's filings with the
Securities and Exchange Commission could cause the Company's actual
results to differ materially from any projections contained in this
release.
SFN Group Inc. prepares its financial statements in
accordance with generally accepted accounting principles (GAAP).
Adjusted earnings from continuing operations is a non-GAAP
financial measure, which excludes certain non-operating related
items. Items excluded from the calculation of adjusted
earnings from continuing operations include restructuring and other
charges related to acquisition transaction and integration expenses
and cost reduction initiatives and an employment tax credit.
Adjusted EBITDA from continuing operations is a non-GAAP
financial measure which excludes interest, restructuring and other
charges, taxes, depreciation and amortization from earnings (loss)
from continuing operations. Adjusted revenue growth rate is a
non-GAAP financial measure, which excludes the impact of changes in
revenue levels of contingent workforce services from revenue growth
rates calculated on a GAAP basis. Adjusted earnings, adjusted
EBITDA from continuing operations and adjusted revenue growth rate
are key measures used by management to evaluate its operations.
Adjusted earnings, adjusted EBITDA from continuing operations
and adjusted revenue growth rate should not be considered measures
of financial performance in isolation or as an alternative to net
earnings (loss) from continuing operations or net earnings (loss)
as determined in the Statement of Operations in accordance with
GAAP, and, as presented, may not be comparable to similarly titled
measures of other companies.
SFN GROUP,
INC. AND SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(unaudited,
in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
June
26,
|
|
June
27
|
|
|
2011
|
|
2010
|
|
Revenues(1)
|
$
|
512,227
|
|
$
|
513,963
|
|
Cost of services
|
|
402,527
|
|
|
408,571
|
|
Gross
profit(2)
|
|
109,700
|
|
|
105,392
|
|
Selling, general and
administrative expenses
|
|
94,555
|
|
|
95,610
|
|
Amortization expense
|
|
1,549
|
|
|
2,116
|
|
Interest expense
|
|
910
|
|
|
1,688
|
|
Interest income
|
|
(31)
|
|
|
(27)
|
|
Restructuring and other
charges
|
|
-
|
|
|
974
|
|
|
|
96,983
|
|
|
100,361
|
|
|
|
|
|
|
|
|
Earnings from continuing
operations before income taxes
|
|
12,717
|
|
|
5,031
|
|
Income tax expense
|
|
(4,147)
|
|
|
(2,151)
|
|
|
|
|
|
|
|
|
Earnings from continuing
operations
|
|
8,570
|
|
|
2,880
|
|
Loss from
discontinued operations, net of tax
|
|
-
|
|
|
(160)
|
|
Net earnings
|
$
|
8,570
|
|
$
|
2,720
|
|
|
|
|
|
|
|
|
Earnings per share,
Basic:
|
|
|
|
|
|
|
Earnings from
continuing operations
|
$
|
0.17
|
|
$
|
0.05
|
|
Loss from
discontinued operations
|
|
-
|
|
|
-
|
|
|
$
|
0.17
|
|
$
|
0.05
|
|
|
|
|
|
|
|
|
Earnings per share,
Diluted:
|
|
|
|
|
|
|
Earnings from
continuing operations
|
$
|
0.16
|
|
$
|
0.05
|
|
Loss from discontinued
operations
|
|
-
|
|
|
-
|
|
|
$
|
0.16
|
|
$
|
0.05
|
|
|
|
|
|
|
|
|
Weighted-average shares used in
computation of earnings per share:
|
|
|
|
|
|
|
Basic
|
|
51,844
|
|
|
52,600
|
|
Diluted
|
|
54,311
|
|
|
54,833
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes sales of all
company-owned and franchised offices and royalties on sales of
area-based franchised offices.
(2) Gross profit is revenues
less temporary employee wages, employment related taxes such as
FICA, federal and state unemployment taxes, medical and other
insurance for temporary employees, workers' compensation, benefits,
billable expenses and other direct costs.
|
|
|
|
|
|
|
|
SFN GROUP,
INC. AND SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(unaudited,
in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
June
26
|
|
June
27
|
|
|
2011
|
|
2010
|
|
Revenues(1)
|
$
|
1,012,663
|
|
$
|
977,090
|
|
Cost of services
|
|
804,208
|
|
|
787,438
|
|
Gross
profit(2)
|
|
208,455
|
|
|
189,652
|
|
Selling, general and
administrative expenses
|
|
186,637
|
|
|
180,303
|
|
Amortization expense
|
|
3,097
|
|
|
4,023
|
|
Interest expense
|
|
1,822
|
|
|
3,149
|
|
Interest income
|
|
(76)
|
|
|
(58)
|
|
Restructuring and other
charges
|
|
-
|
|
|
3,302
|
|
|
|
191,480
|
|
|
190,719
|
|
|
|
|
|
|
|
|
Earnings (loss) from continuing
operations before income taxes
|
|
16,975
|
|
|
(1,067)
|
|
Income tax (expense)
benefit
|
|
(5,713)
|
|
|
771
|
|
|
|
|
|
|
|
|
Earnings (loss) from continuing
operations
|
|
11,262
|
|
|
(296)
|
|
Loss from
discontinued operations, net of tax
|
|
-
|
|
|
(160)
|
|
Net earnings (loss)
|
$
|
11,262
|
|
$
|
(456)
|
|
|
|
|
|
|
|
|
Earnings (loss) per share,
Basic:
|
|
|
|
|
|
|
Earnings (loss)
from continuing operations
|
$
|
0.22
|
|
$
|
(0.01)
|
|
Loss from
discontinued operations
|
|
-
|
|
|
-
|
|
|
$
|
0.22
|
|
$
|
(0.01)
|
|
|
|
|
|
|
|
|
Earnings (loss) per share,
Diluted:
|
|
|
|
|
|
|
Earnings (loss)
from continuing operations
|
$
|
0.21
|
|
$
|
(0.01)
|
|
Loss from discontinued
operations
|
|
-
|
|
|
-
|
|
|
$
|
0.21
|
|
$
|
(0.01)
|
|
|
|
|
|
|
|
|
Weighted-average shares used in
computation of earnings (loss) per share:
|
|
|
|
|
|
|
Basic
|
|
52,284
|
|
|
52,182
|
|
Diluted
|
|
54,852
|
|
|
52,182
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes sales of all
company-owned and franchised offices and royalties on sales of
area-based franchised offices.
(2) Gross profit is revenues
less temporary employee wages, employment related taxes such as
FICA, federal and state unemployment taxes, medical and other
insurance for temporary employees, workers' compensation, benefits,
billable expenses and other direct costs.
|
|
|
|
|
|
|
|
SFN GROUP,
INC. AND SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
(in
thousands, except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
June
26
|
|
December
26,
|
|
Assets
|
2011
|
|
2010
|
|
Current Assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
10,687
|
|
$
|
18,478
|
|
Receivables, less
allowance for doubtful accounts of $2,963 and $3,382,
respectively
|
|
282,965
|
|
|
291,691
|
|
Deferred tax
asset
|
|
25,571
|
|
|
26,974
|
|
Other current
assets
|
|
9,787
|
|
|
9,930
|
|
Total current assets
|
|
329,010
|
|
|
347,073
|
|
Property and equipment, net of
accumulated depreciation of $156,022
|
|
|
|
|
|
|
and $154,465
respectively
|
|
37,425
|
|
|
40,179
|
|
Deferred tax asset
|
|
108,462
|
|
|
110,000
|
|
Goodwill
|
|
31,073
|
|
|
31,073
|
|
Trade names and other
intangibles, net
|
|
57,719
|
|
|
60,810
|
|
Other assets
|
|
23,120
|
|
|
23,073
|
|
|
$
|
586,809
|
|
$
|
612,208
|
|
|
|
|
|
|
|
|
Liabilities
and Stockholders' Equity
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
Current portion of
long-term debt and revolving line of credit
|
$
|
3,757
|
|
$
|
2,592
|
|
Accounts payable
and other accrued expenses
|
|
85,568
|
|
|
100,129
|
|
Accrued salaries,
wages and payroll taxes
|
|
68,598
|
|
|
68,157
|
|
Accrued insurance
reserves
|
|
22,591
|
|
|
21,501
|
|
Accrued income tax
payable
|
|
430
|
|
|
1,016
|
|
Other current
liabilities
|
|
5,604
|
|
|
7,832
|
|
Total current liabilities
|
|
186,548
|
|
|
201,227
|
|
Long-term debt, net of current
portion
|
|
3,013
|
|
|
2,422
|
|
Accrued insurance reserves
|
|
15,140
|
|
|
18,214
|
|
Deferred compensation
|
|
18,615
|
|
|
17,559
|
|
Other long-term
liabilities
|
|
2,601
|
|
|
2,910
|
|
Total liabilities
|
|
225,917
|
|
|
242,332
|
|
Stockholders' Equity:
|
|
|
|
|
|
|
Preferred stock,
par value $0.01 per share; authorized, 2,500,000 shares;
|
|
|
|
|
|
|
none
issued or outstanding
|
|
-
|
|
|
-
|
|
Common stock, par
value $0.01 per share; authorized, 200,000,000; issued
|
|
|
|
|
|
|
65,341,609 shares
|
|
653
|
|
|
653
|
|
Additional paid-in
capital
|
|
852,784
|
|
|
851,023
|
|
Treasury stock, at
cost, 16,340,976 and 14,683,747 shares, respectively
|
|
(124,664)
|
|
|
(102,006)
|
|
Accumulated
deficit
|
|
(372,055)
|
|
|
(383,317)
|
|
Accumulated other
comprehensive income
|
|
4,174
|
|
|
3,523
|
|
Total stockholders' equity
|
|
360,892
|
|
|
369,876
|
|
|
$
|
586,809
|
|
$
|
612,208
|
|
|
|
|
|
|
|
SFN GROUP,
INC. AND SUBSIDIARIES
|
|
RECONCILIATION OF NON-GAAP
FINANCIAL INFORMATION
|
|
(unaudited,
in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
|
June
26,
|
|
|
June
27,
|
|
|
June
26,
|
|
|
June
27,
|
|
|
|
2011
|
|
|
2010
|
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings from
continuing operations
|
$
|
7,410
|
|
$
|
3,473
|
|
$
|
10,102
|
|
$
|
1,715
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employment tax credit
|
|
1,160
|
|
|
-
|
|
|
1,160
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and other charges,
net of tax benefit (1)
|
|
-
|
|
|
(593)
|
|
|
-
|
|
|
(2,011)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from continuing
operations
|
|
8,570
|
|
|
2,880
|
|
|
11,262
|
|
|
(296)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from discontinued
operations, net of tax
|
|
-
|
|
|
(160)
|
|
|
-
|
|
|
(160)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
|
$
|
8,570
|
|
$
|
2,720
|
|
$
|
11,262
|
|
$
|
(456)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share-Diluted amounts:
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings from
continuing operations
|
$
|
0.14
|
|
$
|
0.06
|
|
$
|
0.18
|
|
$
|
0.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employment tax credit
|
|
0.02
|
|
|
-
|
|
|
0.02
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and other charges,
net of tax benefit (1)
|
|
-
|
|
|
(0.01)
|
|
|
-
|
|
|
(0.04)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from
continuing operations
|
|
0.16
|
|
|
0.05
|
|
|
0.21
|
|
|
(0.01)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from discontinued
operations, net of tax
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
|
$
|
0.16
|
|
$
|
0.05
|
|
$
|
0.21
|
|
$
|
(0.01)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares used in
computation of earnings (loss) per share
|
|
54,311
|
|
|
54,833
|
|
|
54,852
|
|
|
52,182
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The tax benefit was
calculated using the Company's marginal tax rate of
39.1%
(2) Earnings (loss) per
share amounts are calculated independently for each component and
may not add due to rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF ADJUSTED
EBITDA TO EARNINGS (LOSS) FROM CONTINUING OPERATIONS
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
|
|
June
26,
|
|
|
June
27,
|
|
|
June
26
|
|
|
June
27,
|
|
|
|
|
2011
|
|
|
2010
|
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA from continuing
operations
|
|
$
|
18,221
|
|
$
|
14,722
|
|
$
|
27,958
|
|
$
|
19,274
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
31
|
|
|
27
|
|
|
76
|
|
|
58
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(910)
|
|
|
(1,688)
|
|
|
(1,822)
|
|
|
(3,149)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and other
charges
|
|
|
-
|
|
|
(974)
|
|
|
-
|
|
|
(3,302)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
(4,625)
|
|
|
(7,056)
|
|
|
(9,237)
|
|
|
(13,948)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from continuing
operations before income taxes
|
|
|
12,717
|
|
|
5,031
|
|
|
16,975
|
|
|
(1,067)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax (expense)
benefit
|
|
|
(4,147)
|
|
|
(2,151)
|
|
|
(5,713)
|
|
|
771
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from continuing
operations
|
|
$
|
8,570
|
|
$
|
2,880
|
|
$
|
11,262
|
|
$
|
(296)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA as a
percentage of revenue
|
|
|
3.6%
|
|
|
2.9%
|
|
|
2.8%
|
|
|
2.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF YEAR OVER YEAR
REVENUE GROWTH
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
|
|
June
26,
|
|
|
June
27,
|
|
|
June
26
|
|
|
June
27,
|
|
|
|
|
2011
|
|
|
2010
|
|
|
2011
|
|
|
2010
|
|
Professional
Services:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Professional Services
revenue growth rate
|
|
$
|
3.5%
|
|
$
|
28.3%
|
|
$
|
8.6%
|
|
$
|
16.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue growth rate contributed
from contingent workforce services
|
|
|
(5.9%)
|
|
|
8.4%
|
|
|
(5.8%)
|
|
|
8.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Professional Services segment
GAAP revenue growth rate
|
|
$
|
(2.4%)
|
|
$
|
36.7%
|
|
$
|
2.8%
|
|
$
|
24.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
|
|
June
26,
|
|
|
June
27,
|
|
|
June
26
|
|
|
June
27,
|
|
|
|
|
2011
|
|
|
2010
|
|
|
2011
|
|
|
2010
|
|
Total Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Total Company revenue
growth rate
|
|
$
|
2.5%
|
|
$
|
21.5%
|
|
$
|
6.3%
|
|
$
|
13.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue growth rate contributed
from contingent workforce services
|
|
|
(2.8%)
|
|
|
4.1%
|
|
|
(2.7%)
|
|
|
3.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Company GAAP revenue
growth rate
|
|
$
|
(0.3%)
|
|
$
|
25.6%
|
|
$
|
3.6%
|
|
$
|
17.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SFN GROUP,
INC. AND SUBSIDIARIES
|
|
SEGMENT
INFORMATION
|
|
(unaudited,
dollar amounts in thousands)
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
|
June
26,
|
|
March
27,
|
|
June
27,
|
|
|
June
26,
|
|
June
27,
|
|
|
|
|
2011
|
|
2011
|
|
2010
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Professional Services
|
$
|
243,987
|
|
$
|
238,805
|
|
$
|
250,087
|
|
$
|
482,792
|
|
$
|
469,662
|
|
|
Staffing Services
|
|
268,240
|
|
|
261,631
|
|
|
263,876
|
|
|
529,871
|
|
|
507,428
|
|
|
Segment
revenues
|
$
|
512,227
|
|
$
|
500,436
|
|
$
|
513,963
|
|
$
|
1,012,663
|
|
$
|
977,090
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Professional Services
|
$
|
68,570
|
|
$
|
60,472
|
|
$
|
63,949
|
|
$
|
129,042
|
|
$
|
113,896
|
|
|
Staffing Services
|
|
41,130
|
|
|
38,283
|
|
|
41,443
|
|
|
79,413
|
|
|
75,756
|
|
|
Segment gross
profit
|
$
|
109,700
|
|
$
|
98,755
|
|
$
|
105,392
|
|
$
|
208,455
|
|
$
|
189,652
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment SG&A:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Professional Services
|
$
|
(54,029)
|
|
$
|
(53,389)
|
|
$
|
(55,318)
|
|
$
|
(107,418)
|
|
$
|
(101,458)
|
|
|
Staffing Services
|
|
(37,268)
|
|
|
(35,256)
|
|
|
(36,774)
|
|
|
(72,524)
|
|
|
(72,177)
|
|
|
Segment
SG&A
|
$
|
(91,297)
|
|
$
|
(88,645)
|
|
$
|
(92,092)
|
|
$
|
(179,942)
|
|
$
|
(173,635)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment operating
profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Professional Services
|
$
|
14,541
|
|
$
|
7,083
|
|
$
|
8,631
|
|
$
|
21,624
|
|
$
|
12,438
|
|
|
Staffing Services
|
|
3,862
|
|
|
3,027
|
|
|
4,669
|
|
|
6,889
|
|
|
3,579
|
|
|
Segment operating
profit
|
|
18,403
|
|
|
10,110
|
|
|
13,300
|
|
|
28,513
|
|
|
16,017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unallocated corporate
costs
|
|
(3,258)
|
|
|
(3,437)
|
|
|
(3,518)
|
|
|
(6,695)
|
|
|
(6,668)
|
|
|
Amortization of
intangibles
|
|
(1,549)
|
|
|
(1,548)
|
|
|
(2,116)
|
|
|
(3,097)
|
|
|
(4,023)
|
|
|
Interest expense
|
|
(910)
|
|
|
(912)
|
|
|
(1,688)
|
|
|
(1,822)
|
|
|
(3,149)
|
|
|
Interest income
|
|
31
|
|
|
45
|
|
|
27
|
|
|
76
|
|
|
58
|
|
|
Restructuring and other
charges
|
|
-
|
|
|
-
|
|
|
(974)
|
|
|
-
|
|
|
(3,302)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from continuing
operations before income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
taxes
|
|
$
|
12,717
|
|
$
|
4,258
|
|
$
|
5,031
|
|
$
|
16,975
|
|
$
|
(1,067)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MEMO:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Professional Services
|
|
28.1%
|
|
|
25.3%
|
|
|
25.6%
|
|
|
26.7%
|
|
|
24.3%
|
|
|
Staffing Services
|
|
15.3%
|
|
|
14.6%
|
|
|
15.7%
|
|
|
15.0%
|
|
|
14.9%
|
|
|
Total SFN Group,
Inc.
|
|
21.4%
|
|
|
19.7%
|
|
|
20.5%
|
|
|
20.6%
|
|
|
19.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment SG&A:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Professional Services
|
|
22.1%
|
|
|
22.4%
|
|
|
22.1%
|
|
|
22.2%
|
|
|
21.6%
|
|
|
Staffing Services
|
|
13.9%
|
|
|
13.5%
|
|
|
13.9%
|
|
|
13.7%
|
|
|
14.2%
|
|
|
Total SFN Group,
Inc.
|
|
17.8%
|
|
|
17.7%
|
|
|
17.9%
|
|
|
17.8%
|
|
|
17.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment operating profit
(loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Professional Services
|
|
6.0%
|
|
|
3.0%
|
|
|
3.5%
|
|
|
4.5%
|
|
|
2.6%
|
|
|
Staffing Services
|
|
1.4%
|
|
|
1.2%
|
|
|
1.8%
|
|
|
1.3%
|
|
|
0.7%
|
|
|
Total SFN Group,
Inc.
|
|
3.6%
|
|
|
2.0%
|
|
|
2.6%
|
|
|
2.8%
|
|
|
1.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment revenue per billing
day:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Professional Services
|
$
|
3,842
|
|
$
|
3,731
|
|
$
|
3,938
|
|
$
|
3,787
|
|
$
|
3,698
|
|
|
Staffing Services
|
$
|
4,224
|
|
$
|
4,088
|
|
$
|
4,156
|
|
$
|
4,156
|
|
$
|
3,995
|
|
|
Total SFN Group, Inc.
(1)
|
$
|
8,067
|
|
$
|
7,819
|
|
$
|
8,094
|
|
$
|
7,942
|
|
$
|
7,694
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Cash Flow and Other
Information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating cash flow
|
$
|
16,463
|
|
$
|
6,039
|
|
$
|
(91)
|
|
$
|
22,502
|
|
$
|
3,624
|
|
|
Capital expenditures
|
$
|
943
|
|
$
|
1,241
|
|
$
|
1,231
|
|
$
|
2,184
|
|
$
|
1,741
|
|
|
Depreciation and
amortization
|
$
|
4,625
|
|
$
|
4,612
|
|
$
|
7,056
|
|
$
|
9,237
|
|
$
|
13,948
|
|
|
DSO
|
|
|
44
|
|
|
45
|
|
|
45
|
|
|
44
|
|
|
45
|
|
|
Billing Days
|
|
|
63.5
|
|
|
64.0
|
|
|
63.5
|
|
|
127.5
|
|
|
127.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Segment
Revenue per billing day is calculated independently for each
segment and may not add due to rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SFN GROUP,
INC. AND SUBSIDIARIES
|
|
SUPPLEMENTAL
FINANCIAL INFORMATION
|
|
(unaudited,
dollar amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
|
|
June 26,
2011
|
|
March 27,
2011
|
|
June 27,
2010
|
|
June 26,
2011
|
|
June 27,
2010
|
|
Professional
Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues by
Skill:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Information
Technology
|
$
|
128,602
|
|
$
|
124,622
|
|
$
|
126,972
|
|
$
|
253,224
|
|
$
|
244,966
|
|
|
Finance &
Accounting
|
|
45,709
|
|
|
44,870
|
|
|
43,076
|
|
|
90,579
|
|
|
78,112
|
|
|
Administration
|
|
14,399
|
|
|
14,851
|
|
|
14,985
|
|
|
29,250
|
|
|
28,946
|
|
|
Other
|
|
|
55,277
|
|
|
54,462
|
|
|
65,054
|
|
|
109,739
|
|
|
117,638
|
|
|
Segment
Revenues
|
$
|
243,987
|
|
$
|
238,805
|
|
$
|
250,087
|
|
$
|
482,792
|
|
$
|
469,662
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues by
Service:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Temporary Staffing
|
$
|
191,145
|
|
$
|
188,714
|
|
$
|
190,464
|
|
$
|
379,859
|
|
$
|
363,204
|
|
|
Outsourcing &
Other
|
|
43,468
|
|
|
42,206
|
|
|
53,584
|
|
|
85,674
|
|
|
95,979
|
|
|
Permanent Placement
|
|
9,374
|
|
|
7,885
|
|
|
6,039
|
|
|
17,259
|
|
|
10,479
|
|
|
Segment
Revenues
|
$
|
243,987
|
|
$
|
238,805
|
|
$
|
250,087
|
|
$
|
482,792
|
|
$
|
469,662
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit Margin by
Service:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(As % of Applicable
Revenues)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Temporary Staffing
|
|
24.8%
|
|
|
22.8%
|
|
|
23.9%
|
|
|
23.8%
|
|
|
23.1%
|
|
|
Outsourcing &
Other
|
|
27.0%
|
|
|
22.6%
|
|
|
23.2%
|
|
|
24.8%
|
|
|
20.2%
|
|
|
Permanent Placement
|
|
100.0%
|
|
|
100.0%
|
|
|
100.0%
|
|
|
100.0%
|
|
|
100.0%
|
|
|
Total Professional
Services
|
|
28.1%
|
|
|
25.3%
|
|
|
25.6%
|
|
|
26.7%
|
|
|
24.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues per billing day by
Skill: (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Information
Technology
|
$
|
2,025
|
|
$
|
1,947
|
|
$
|
2,000
|
|
$
|
1,986
|
|
$
|
1,929
|
|
|
Finance &
Accounting
|
$
|
720
|
|
$
|
701
|
|
$
|
678
|
|
$
|
710
|
|
$
|
615
|
|
|
Administration
|
$
|
227
|
|
$
|
232
|
|
$
|
236
|
|
$
|
229
|
|
$
|
228
|
|
|
Other
|
|
$
|
871
|
|
$
|
851
|
|
$
|
1,024
|
|
$
|
861
|
|
$
|
926
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues per billing day by
Service: (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Temporary Staffing
|
$
|
3,010
|
|
$
|
2,949
|
|
$
|
2,999
|
|
$
|
2,979
|
|
$
|
2,860
|
|
|
Outsourcing &
Other
|
$
|
685
|
|
$
|
659
|
|
$
|
844
|
|
|
672
|
|
|
756
|
|
|
Permanent Placement
|
$
|
148
|
|
$
|
123
|
|
$
|
95
|
|
$
|
135
|
|
$
|
83
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Staffing
Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues by
Skill:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Clerical
|
|
$
|
143,677
|
|
$
|
146,596
|
|
$
|
141,808
|
|
$
|
290,273
|
|
$
|
280,701
|
|
|
Light Industrial
|
|
124,563
|
|
|
115,035
|
|
|
122,068
|
|
|
239,598
|
|
|
226,727
|
|
|
Segment
Revenues
|
$
|
268,240
|
|
$
|
261,631
|
|
$
|
263,876
|
|
$
|
529,871
|
|
$
|
507,428
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues by
Service:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Temporary Staffing
|
$
|
265,824
|
|
$
|
259,548
|
|
$
|
261,904
|
|
$
|
525,372
|
|
$
|
503,598
|
|
|
Permanent Placement
|
|
2,416
|
|
|
2,083
|
|
|
1,972
|
|
|
4,499
|
|
|
3,830
|
|
|
Segment
Revenues
|
$
|
268,240
|
|
$
|
261,631
|
|
$
|
263,876
|
|
$
|
529,871
|
|
$
|
507,428
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit Margin by
Service:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(As % of Applicable
Revenues)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Temporary Staffing
|
|
14.6%
|
|
|
13.9%
|
|
|
15.1%
|
|
|
14.3%
|
|
|
14.3%
|
|
|
Permanent Placement
|
|
100.0%
|
|
|
100.0%
|
|
|
100.0%
|
|
|
100.0%
|
|
|
100.0%
|
|
|
Total Staffing
Services
|
|
15.3%
|
|
|
14.6%
|
|
|
15.7%
|
|
|
15.0%
|
|
|
14.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues per billing day by
Skill: (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Clerical
|
|
$
|
2,263
|
|
$
|
2,291
|
|
$
|
2,233
|
|
$
|
2,277
|
|
$
|
2,210
|
|
|
Light Industrial
|
$
|
1,962
|
|
$
|
1,797
|
|
$
|
1,922
|
|
$
|
1,879
|
|
$
|
1,785
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues per billing day by
Service: (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Temporary Staffing
|
$
|
4,186
|
|
$
|
4,055
|
|
$
|
4,124
|
|
$
|
4,121
|
|
$
|
3,965
|
|
|
Permanent Placement
|
$
|
38
|
|
$
|
33
|
|
$
|
31
|
|
$
|
35
|
|
$
|
30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Segment
Revenue per billing day is calculated independently for each
segment and may not add due to rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE SFN Group, Inc.