Hall, Kinion & Associates (NASDAQ:HAKI)
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Hall Kinion Announces Third Quarter Financial Results
NOVATO, Calif., Oct. 29 /PRNewswire-FirstCall/ -- Hall, Kinion & Associates,
Inc. , The Talent Source(R), announced today financial results for the third
quarter ended September 28, 2003.
For the third quarter 2003, net revenues were $41.7 million, compared with
revenues of $31.9 million in the third quarter 2002. Gross profit for the
quarter was $12.1 million, or 29.0 percent of net revenues versus $10.8 million
or 33.7 percent of net revenues, for the same period a year ago. The third
quarter net income was $228,000, or $0.02 per diluted share, versus net income
of $244,000, or $0.02 per diluted share, for the third quarter of 2002. The 2003
third quarter net income includes net restructuring costs of $340,000 related to
FAS 146 adjustment for forecasted sublease income, offset by income of $696,000
due to a change in estimate for the executive bonus liability. In addition, the
Company did not book any taxes against the operating profits incurred in the
third quarter of 2003, since it will report a loss for the full year. The 2003
third quarter's operating results included the financial results of OnStaff(R),
which was acquired in August 2002.
For the nine-month period ended September 28, 2003, net revenues were $123.3
million versus $81.3 million, for the comparable nine-month period a year ago.
Gross profit for the nine-month period ended September 28, 2003 was $36.1
million, compared to $27.7 million, for the comparable nine-month period a year
ago. The net loss for the nine-month period ended September 28, 2003, was $3.5
million or a loss of $0.27 per diluted share, compared with a net loss of $3.0
million or a loss of $0.23 per diluted share, in the comparable nine-month
period a year ago.
"During the third quarter, the Company experienced two distinct trends from its
two operating divisions, Technology and OnStaff," stated Brenda Rhodes, Chairman
and CEO. "We saw an established trend in the gradual increases in our working
contractors during the quarter in our Technology division. In particular, our
Healthcare and Government verticals both recorded continual growth during the
quarter and are expected to hold solid during the fourth quarter. We are pleased
with the results of our sales and recruiting staffs in these areas."
"The 3rd quarter also saw the much anticipated bubble bursting of our mortgage
refinance boom. We were encouraged by the collapsible model of OnStaff as
management adjusted the model to fit the comedown in the refinance business in
order to remain profitable. We are further encouraged as we have seen the
stabilization of job orders and run rate in the past 4 weeks. We continue to see
demand in non-refinance areas utilizing similar processing skills," Ms. Rhodes
remarked.
Hall, Kinion & Associates will hold a conference call concerning this
announcement today, Wednesday, October 29, 2003. The conference call will begin
at 8:00 a.m. PST/ 11:00 a.m. EST and will last for approximately one hour. To
participate on the call, dial in 703-871-3085 or 888-747-3510 at least five
minutes prior to the start time. Investors have the opportunity to listen to the
conference call live on the Internet at the Company's Web site at
http://www.hallkinion.com/ . Investors should go to the Web site a few minutes
early, as it may be necessary to download audio software to hear the conference
call. A replay of the conference call will be available for 14 days via phone at
888-266-2081, passcode #288752 through November 12, 2003.
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. The Company finds, evaluates and places industry-specific
Technology and Corporate Professionals.
Founded in 1991, Hall Kinion(R) completed its initial public offering in 1997.
The Company 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. The Corporate
Professional Services Division (OnStaff) places specialists at all levels into
real estate, financial services and healthcare sectors. For the most current
corporate and financial information, visit the Company's Web site at
http://www.hallkinion.com/ .
About OnStaff
OnStaff is a premier national specialty Staffing firm placing temporary and
full-time professionals in the Title, Escrow, Mortgage, Financial Services and
Healthcare industries. The Company operates industry-specific recruiting and
placement Web sites including: http://www.titleboard.com/,
http://www.escrowboard.com/, http://www.bankingboard.com/ and MediCenter.com.
OnStaff's Web site address is http://www.onstaff.com/ . OnStaff is a wholly
owned subsidiary of Hall Kinion & Associates, Inc.
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 for the year ended December 29, 2002 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 Balance Sheets
(In thousands)
(Unaudited)
Sept. 28, Dec. 29
2003 2002
Assets
Current Assets:
Cash and cash equivalents $2,755 $8,571
Accounts receivable, net 20,908 17,804
Prepaid expenses and other current assets 2,240 1,554
Deferred income taxes 3,925 3,925
Total current assets 29,828 31,854
Property and equipment, net 5,710 7,511
Goodwill 11,806 11,849
Intangible assets, net 10,201 10,859
Deferred income taxes and other assets 12,929 12,833
Total assets $70,474 $74,906
Liabilities and Stockholders' Equity
Current Liabilities:
Line of credit $-- $10,000
Accounts payable and accrued expenses 10,865 11,108
Reserve for restructure costs 2,424 3,014
Income taxes payable 794 816
Total current liabilities 14,083 24,938
Line of credit 10,904 --
Accrued compensation and deferred rent 2,725 3,046
Reserve for non-current restructuring costs 2,466 3,155
Total liabilities 30,178 31,139
Stockholders' equity:
Common stock 84,713 85,036
Stockholder notes receivable (500) (800)
Accumulated other comprehensive loss (101) (103)
Accumulated deficit (43,816) (40,366)
Total stockholders' equity 40,296 43,767
Total liabilities and stockholders' equity $70,474 $74,906
Hall, Kinion & Associates, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
Sept. 28, Sept. 29 Sept. 28, Sept. 29
2003 2002 2003 2002
Net revenues:
Contract services $40,623 $30,630 $119,875 $77,267
Permanent placement 1,085 1,313 3,423 4,005
Total net revenues 41,708 31,943 123,298 81,272
Cost of contract services 29,606 21,168 87,213 53,554
Gross profit 12,102 10,775 36,085 27,718
29.02% 33.73% 29.27% 34.11%
Operating expenses:
Selling, general
and administrative 11,383 10,819 36,362 33,501
Restructuring costs, net 340 (876) 2,906 (876)
Total operating expenses 11,723 9,943 39,268 32,625
Income (loss) from operations 379 832 (3,183) (4,907)
Interest expense (163) (67) (404) (76)
Interest income 2 58 32 311
Other income/(expense) 10 9 105 43
Net income (loss)
before income taxes 228 832 (3,450) (4,629)
Income tax provision (benefit) -- (588) -- 1,634
Net income (loss) $228 $244 $(3,450) $(2,995)
Net income (loss) per share:
Basic $0.02 $0.02 $(0.27) $(0.23)
Diluted $0.02 $0.02 $(0.27) $(0.23)
Shares used in per share calculations:
Shares Outstanding - Basic 12,582 12,556 12,594 13,054
Shares Outstanding - Diluted 12,753 12,627 12,594 13,054
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/