Westaff (NASDAQ:WSTF)
Historical Stock Chart
From Jul 2019 to Jul 2024
![Click Here for more Westaff Charts. Click Here for more Westaff Charts.](/p.php?pid=staticchart&s=N%5EWSTF&p=8&t=15)
Westaff, Inc. (NASDAQ:WSTF) a leading provider of staffing
services, Tuesday reported financial results for its third fiscal
quarter, which ended July 12, 2008. Consistent with historic financial
reporting, the Company's first three fiscal quarters comprise twelve
weeks each while the fourth quarter comprises 16 or 17 weeks.
The Company reported a net loss for the third quarter of 2008 of $15.1
million and a before tax loss from continuing operations of $14.4
million as compared to a net loss of $2.9 million and a before tax loss
from continuing operations of $3.2 million in the same quarter of 2007.
The current quarter reported losses included a non-cash write down of
goodwill and other intangible assets totaling $11.5 million. This
non-cash charge does not affect the Company’s
liquidity, cash flow, or debt covenants, nor does it have any negative
impact on future operations.
Thus, the before tax loss from continuing operations before the write
down for the current quarter was $2.9 million. (1)
Selling and administrative expenses for the third quarter of 2008 were
reduced to $14.5 million from $16.9 million in the same quarter of 2007
yielding a $2.4 million or 14.3% year over year decline in expenses.
International revenues increased by $4.5 million or 19.6% to $27.5
million for the third quarter of 2008 compared to third quarter of 2007.
For the first three quarters of 2008, international revenues increased
by $13.8 million from $68.3 million to $82.1 million or 20.3%, from the
same period last year. These increases were the result of strong
performances across most geographic regions in Australia and New Zealand.
“We have assembled a high quality management
team and continue our turnaround by aggressively pursuing expense
management and focusing on top-line revenue growth. We are starting to
see progress in our results,” commented
Westaff CEO and Chairman Michael T. Willis.
The before tax loss from continuing operations in the third quarter of
2008, before the non-cash write down of goodwill and intangibles
represents a $2.4 million quarter over quarter improvement when compared
to the before tax loss from continuing operations of $5.3 million for
the second quarter of 2008. (1)
Revenue from the third quarter of 2008 of $99.4 million was slightly
lower than revenue from the second quarter of the 2008 of $102.8
million. Comparing the 2008 third quarter selling and administrative
expenses to the 2008 second quarter expenses of $15.5 million, the
Company realized a savings of $1.0 million or 6.5%.
The Company is in active discussions with U.S. Bank National Association
and Wells Fargo Bank, National Association (as agent for the bank group)
regarding the forbearance agreement, which expired Tuesday. The Company
is confident that a mutually acceptable agreement will be reached within
days.
“We continue to make progress in strengthening
our operations,” added Mr. Willis. “We
have adequate working capital to fund near-term operations and we are
working with our lenders and our partners to ensure access to capital to
support our long-term growth initiatives. We are excited about our
prospects and we look forward to sharing our operational objectives and
longer-term growth strategies in the near term.”
(1) The before tax loss from continuing
operations before the impairment for goodwill and intangibles represents
a non-GAAP financial measure. This non-GAAP financial measure is not
meant to be considered in isolation or as a substitute for comparable
GAAP measures, however is intended to provide additional insight into
our operations that, when viewed with our GAAP results and the
accompanying reconciliations to the corresponding GAAP financial
measures, offers a more complete understanding of the factors and trends
affecting our business.
12 weeks ended
July 12, 2008
(In thousands)
Loss from continuing operations before income taxes,
as reported in our 3rd quarter 10-Q
$
(14,400
)
Less impairment of goodwill and intangibles
(11,500
)
Loss from continuing operations
before income taxes and
before impairment of goodwill and intangibles
$
(2,900
)
12 weeks ended
April 19, 2008
(In thousands)
Loss from continuing operations before income taxes,
as reported in our 2nd quarter 10-Q
$
(5,300
)
About Westaff
Westaff provides staffing services and employment opportunities for
businesses in global markets. Westaff annually employs in excess of
125,000 people and services more than 20,000 client accounts from more
than 177 offices located throughout the United States, Australia and New
Zealand. For more information, please visit the Company’s
website at www.westaff.com.
This press release contains forward-looking statements within the
meaning of U.S. securities laws. Forward-looking statements in this
release are generally identified by words such as "expects," "believes,"
"will," and similar expressions that are intended to identify
forward-looking statements. You are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the
date hereof. All forward-looking statements are qualified in their
entirety by this cautionary statement. Forward-looking statements
contained herein include, but are not limited to, statements regarding
expected delivery of improved performance during fiscal 2008, domestic
revenues in the first quarter of fiscal 2008, continued gross margins,
and first quarter net income for fiscal 2008. The forward-looking
statements contained herein involve a number of assumptions, risks and
uncertainties that could cause actual results to differ materially from
those expressed or implied by these forward-looking statements. Many of
these risks and uncertainties cannot be controlled by the Company. These
risks and uncertainties include, but are not limited to: risks related
to control by a significant shareholder, an intensely priced competitive
market, our significant working capital needs and our ability to borrow
to meet those needs, our ability to borrow under our credit facilities
and our compliance with their debt covenants, variability of the amount
of collateral that we are required to maintain to support our workers'
compensation obligation, the sufficiency of our workers' compensation
claims reserve, variability of employee-related costs, including
workers' compensation liabilities, possible adverse effects of
fluctuations in the general economy, our ability to collect on our
accounts receivable, risks related to franchise agent operations, risks
related to international operations and fluctuating exchange rates,
reliance on executive management and key personnel, our ability to
attract and retain the services of qualified temporary personnel, the
ability of our customers to terminate our service agreement on short
notice, variability of the cost of unemployment insurance for our
temporary employees, any difficulty with our information technology
system, government regulation, potential exposure to employment-related
claims, the volatility of the Company's stock price, increased
regulatory compliance costs and litigation and other claims. Additional
information concerning the risks and uncertainties listed above, and
other factors you may wish to consider, is contained in the Company's
filings with the Securities and Exchange Commission, including the
Company's most recent Form 10-K for the year ended November 3, 2007.
Forward-looking statements are based on the beliefs and assumptions
of the Company's management and on currently available information. The
Company undertakes no responsibility to publicly update or revise any
forward-looking statement except as required by applicable laws and
regulations.