Hall, Kinion & Associates (NASDAQ:HAKI)
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Hall Kinion Announces 2004 First Quarter Financial Results
NOVATO, Calif., May 12 /PRNewswire-FirstCall/ -- Hall, Kinion & Associates,
Inc. , The Talent Source(R), announced today financial results for the first
quarter ended March 28, 2004.
For the first quarter 2004, net revenues were $31.3 million, compared with
revenues of $39.0 million in the first quarter 2003. Gross profit for the
quarter was $8.2 million, or 26.1 percent versus $11.4 million or 29.2 percent
for the same period a year ago. The first quarter net loss was $2.2 million,
or a loss of $0.18 per diluted share, versus a net loss of $4.1 million, or
$0.32 per diluted share, for the first quarter of 2003. The first quarter 2004
net loss includes merger-related costs of $0.5 million related to the
previously announced proposed merger with Kforce. In addition, the Company did
not book any tax benefit against the operating losses incurred in the first
quarter of 2004.
"During the latter part of the quarter and in recent weeks, we noted several
positive trends. The most significant one was the improvement in our revenue
run rates during the quarter. For our OnStaff(R) Division, the upward trend
started near the end of the first quarter. Its revenue bottomed-out and
started to recover and this trend has continued over the first half of the
second quarter," stated Brenda Rhodes, Chairman and CEO. "We saw a slight drop
in our Technology Division's revenue the first month of the quarter but that
has also started to recover. For both divisions, we saw an increase in the
average weekly run rate, since the lows of this past holiday season. We
believe this recent momentum bodes well for our pending merger with Kforce,"
added Ms. Rhodes.
About Hall, Kinion & Associates
Hall, Kinion & Associates, Inc., The Talent Source for specialized
professionals, delivers world-class talent on a contract and full-time basis to
high-demand sectors. Hall Kinion finds, evaluates and places industry-specific
Technology and Corporate Professionals. Founded in 1991, Hall Kinion completed
its initial public offering in 1997. Hall Kinion operates two divisions, both
of which provide consultants and direct-hire talent: the Technology
Professional Division places highly-skilled experts in positions ranging from
software engineering to CTO into technology, financial services, healthcare,
government and energy sectors; and the Corporate Professional Services Division
(OnStaff(R)) places specialists at all levels into real estate, financial
services and healthcare sectors. For the most current corporate and financial
information, visit Hall Kinion's Web site at http://www.hallkinion.com/.
The statements contained in this release that are not purely historical are
forward-looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934, including statements regarding Hall Kinion's
expectations, beliefs, hopes, intentions, models or strategies regarding the
future. All forward-looking statements included in this release are based upon
information available to Hall Kinion as of the date thereof, and Hall Kinion
assumes no obligation to update any such forward-looking statement. Actual
results could differ materially from Hall Kinion's current expectations.
Factors that could cause or contribute to such differences include, but are not
limited to the rate of hiring and productivity of sales and sales support
personnel; the availability of qualified professionals; changes in the relative
mix between contract and permanent placement services; changes in the pricing
of Hall Kinion's services; the timing and rate of entrance into or exit from
new geographic markets and the addition and closing of offices; the structure
and timing of acquisitions, changes in demand for professionals; changes in the
economic outlook for the high technology industry and general economic factors.
Please refer to the discussion of risk factors and other factors included in
Hall Kinion's Report on Form 10-K/A for the year ended December 28, 2003 and
other filings made with the Securities & Exchange Commission ("SEC").
This press release speaks only as of the date it was issued and readers are
cautioned that changes in general economic, business or other conditions or in
the business condition, financial results or operations of Hall Kinion may have
occurred since such date. Hall Kinion undertakes no duty to update the
information appearing in the press release. Also, subsequent press releases
may have been issued, subsequent public conference calls may have been held or
documents containing later or additional information may have been filed with
the SEC or Nasdaq or otherwise become available or come into existence.
Hall, Kinion & Associates, Inc.
Condensed Consolidated Statements of
Operations
(in thousands, except per share
amounts)
(unaudited)
Three Months Ended
March 28, March 30,
2004 2003
Net revenues:
Contract services $30,367 $37,858
Permanent placement 952 1,122
Total net revenues 31,319 38,980
Cost of contract services 23,150 27,604
Gross profit 8,169 11,376
Operating expenses:
Operating expenses 10,214 13,055
Restructuring costs 2,261
Total operating expenses 10,214 15,316
Loss from operations (2,045) (3,940)
Other expense, net (134) (118)
Loss before income taxes (2,179) (4,058)
Income taxes provision 37 --
Net loss $(2,216) $(4,058)
Net loss per share:
Basic $(0.18) $(0.32)
Diluted $(0.18) $(0.32)
Shares used in per share
calculations:
Shares Outstanding -- Basic 12,589 12,583
Shares Outstanding -- Diluted 12,589 12,583
Hall, Kinion & Associates, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
March 28, Dec. 28,
2004 2003
Current Assets:
Cash and cash equivalents $1,554 $4,517
Accounts receivable, net 17,667 15,787
Prepaid expenses and other
current assets 930 2,653
Property held for sale -- 1,593
Total current assets 20,151 24,550
Property and equipment, net 3,128 3,501
Goodwill 15,390 15,390
Intangible assets, net 9,763 9,982
Deferred income taxes and other
assets 1,586 1,620
Total assets $50,018 $55,043
Liabilities and stockholders' equity
Current Liabilities:
Line of credit $6,566 $8,528
Accounts payable and accrued expenses 17,421 16,844
Income taxes payable 117 150
Total current liabilities 24,104 25,522
Long-term debt and other non-current
obligations 2,728 4,228
Total liabilities 26,832 29,750
Commitments and contingencies
Stockholders' Equity:
Common stock 84,725 84,716
Stockholder notes receivable (300) (400)
Accumulated other comprehensive
loss (85) (85)
Accumulated deficit (61,154) (58,938)
Total stockholders' equity 23,186 25,293
Total liabilities and
stockholders' equity $50,018 $55,043
DATASOURCE: Hall, Kinion & Associates, Inc.
CONTACT: investors, Martin Kropelnicki, Vice President & CFO of Hall,
Kinion & Associates, Inc., +1-415-895-2200
Web site: http://www.hallkinion.com/