Labor Ready Announces 2007 Second Quarter Results

  
    
  
  
    
      Labor Ready, Inc. (NYSE:LRW) reported revenue for the second quarter 
      ended June 29, 2007 of $351.1 million, an increase of 3.3 percent from 
      $339.8 million for the second quarter of 2006. Net income for the second 
      quarter was $18.8 million or $0.41 per diluted share, an increase in net 
      income of 0.8 percent as compared to $18.6 million or $0.35 per diluted 
      share for the second quarter of 2006.
    
    
      “During 2007, we have been experiencing 
      positive momentum in our same branch sales growth as a result of the 
      increased sales activity we started in the fourth quarter of 2006,” 
      said Labor Ready CEO Steve Cooper. “We are 
      pleased with the growth trends in same branch revenue since growing 
      average branch revenue and profitability is our main priority.”
    
    
      Revenue for the quarter from branches open 12 months or longer increased 
      0.7 percent over the same quarter a year ago, an improvement from the 
      decline of 3.1 percent reported in the first quarter of 2007.
    
    
      A recent acquisition provided 2.4 percent of additional revenue for the 
      company over the same quarter a year ago. As expected, the acquisition 
      only made a small contribution to net income due to related amortization 
      of intangible assets.
    
    
      “We intend to continue pursuing growth through 
      strategic acquisitions that expand our blue-collar staffing services,” 
      said Cooper. “Operating as one company with 
      multiple blue-collar brands in the temporary help industry is a key 
      component of our vision.”
    
    
      During the quarter the company purchased approximately 0.9 million 
      shares of its outstanding common stock for $18 million, which leaves $93 
      million available to purchase additional shares under the current share 
      purchase authorization. Since the beginning of 2006, the company has 
      purchased approximately 9.2 million shares of its common stock at the 
      cost of $184 million.
    
    
      Labor Ready opened eight new branches, acquired 17 branches and closed 
      six branches during the quarter resulting in 932 branches in operation 
      at the end of the quarter. Approximately five additional branch openings 
      are planned for 2007.
    
    
      Labor Ready also provided guidance for the third quarter and updated its 
      outlook for 2007. For the third quarter, the company estimates revenue 
      in the range of $390 million to $395 million and net income per diluted 
      share between $0.48 and $0.50. For the year, the company estimates 
      revenue in the range of $1.39 to $1.40 billion and net income per 
      diluted share between $1.45 and $1.48.
    
    
      Management will discuss the company's performance with analysts on a 
      conference call at 5 p.m. (ET) today, July 18, 2007. The conference call 
      will be broadcast on the internet at www.laborready.com 
      and archived later in the day for replay.
    
    
      This news release contains forward-looking statements, such as 
      statements about the ranges of revenues, gross margins and net income 
      anticipated for future periods, improvements in safety and workers’ 
      compensation claims and costs, strategies for increasing revenue and net 
      income, and other factors that may affect Labor Ready’s 
      financial results and operations in the future. Labor Ready’s 
      actual results are, however, subject to a number of risks, including 
      without limitation the following: 1) national and global economic 
      conditions; 2) Labor Ready’s ability to 
      continue to attract and retain customers and maintain profit margins in 
      the face of new and existing competition; 3) potential new laws and 
      regulations that could have a materially adverse effect on Labor Ready’s 
      operations and financial results; 4) significant labor disturbances 
      which could disrupt industries Labor Ready serves; 5) increased costs 
      and collateral requirements in connection with Labor Ready’s 
      insurance obligations, including workers’ 
      compensation insurance; 6) the adequacy of Labor Ready’s 
      financial reserves; 7) Labor Ready’s 
      continuing ability to comply with financial covenants in its lines of 
      credit and other financing agreements; 8) Labor Ready’s 
      ability to attract and retain competent employees in key positions or to 
      find temporary employees or skilled trade workers to fulfill the needs 
      of our customers; 9) Labor Ready’s ability to 
      successfully complete and integrate acquisitions that it may make from 
      time to time; 10) Labor Ready’s ability to 
      timely execute strategies for acquired companies; and 11) other risks 
      described in Labor Ready’s filings with the 
      Securities and Exchange Commission, including its most recent Form 10-K 
      and Form 10-Q filings.
    
    
      About Labor Ready
    
    
      Labor Ready is an international provider of blue-collar staffing with 
      three primary service lines including on-demand labor, light industrial 
      and skilled construction trades. The company operates under the brand 
      names of Labor Ready, Labour Ready and Workforce for its on-demand 
      service line; Spartan Staffing for its light industrial service line; 
      and CLP Resources and Skilled Services for its skilled construction 
      trades service line. Labor Ready’s customers 
      are primarily small to mid-sized businesses in the construction, 
      warehousing, hospitality, landscaping, transportation, light 
      manufacturing, retail, wholesale, facilities and sanitation industries. 
      Annually, Labor Ready serves more than 300,000 customers and puts 
      approximately 600,000 people to work through its more than 900 branch 
      offices in the United States, Canada, and the United Kingdom. For 
      additional information, visit Labor Ready’s 
      website at www.laborready.com.
    
    
    
    
      
        
          LABOR READY, INC.
        
      
      
        
          SUMMARY CONSOLIDATED STATEMENTS OF INCOME
        
      
      
        
          In Thousands, except per share data
        
      
      
        
          (Unaudited)
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
          Thirteen Weeks Ended
        
        
        
        
          Twenty Six Weeks Ended
        
      
      
        
        
        
          June 29,
        
        
        
        
          June 30,
        
        
        
        
          June 29,
        
        
        
        
          June 30,
        
      
      
        
        
        
        
        
          2007
        
        
        
        
        
        
          2006
        
        
        
        
        
        
          2007
        
        
        
        
        
        
          
            2006
          
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Revenue from services
        
        
          $
        
        
          351,131
        
        
        
        
          $
        
        
          339,777
        
        
        
        
          $
        
        
          641,368
        
        
        
        
          $
        
        
          636,844
        
      
      
        
          Cost of services
        
        
        
        
          239,244
        
        
        
        
        
        
          230,326
        
        
        
        
        
        
          436,690
        
        
        
        
        
        
          434,476
        
      
      
        
          Gross profit
        
        
        
        
          111,887
        
        
        
        
        
        
          109,451
        
        
        
        
        
        
          204,678
        
        
        
        
        
        
          202,368
        
      
      
        
          Selling, general and
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          administrative expenses
        
        
        
        
          81,902
        
        
        
        
        
        
          79,509
        
        
        
        
        
        
          159,278
        
        
        
        
        
        
          153,733
        
      
      
        
          Depreciation and amortization
        
        
        
        
          2,858
        
        
        
        
        
        
          2,672
        
        
        
        
        
        
          5,259
        
        
        
        
        
        
          5,468
        
      
      
        
          Income from operations
        
        
        
        
          27,127
        
        
        
        
        
        
          27,270
        
        
        
        
        
        
          40,141
        
        
        
        
        
        
          43,167
        
      
      
        
          Interest and other income, net
        
        
        
        
          2,438
        
        
        
        
        
        
          3,001
        
        
        
        
        
        
          5,719
        
        
        
        
        
        
          5,747
        
      
      
        
          Income before tax expense
        
        
        
        
          29,565
        
        
        
        
        
        
          30,271
        
        
        
        
        
        
          45,860
        
        
        
        
        
        
          48,914
        
      
      
        
          Income tax
        
        
        
        
          10,791
        
        
        
        
        
        
          11,655
        
        
        
        
        
        
          16,739
        
        
        
        
        
        
          18,832
        
      
      
        
          Net income
        
        
          $
        
        
          18,774
        
        
        
        
          $
        
        
          18,616
        
        
        
        
          $
        
        
          29,121
        
        
        
        
          $
        
        
          30,082
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net income per common share:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Basic
        
        
          $
        
        
          0.41
        
        
        
        
          $
        
        
          0.35
        
        
        
        
          $
        
        
          0.61
        
        
        
        
          $
        
        
          0.56
        
      
      
        
          Diluted
        
        
          $
        
        
          0.41
        
        
        
        
          $
        
        
          0.35
        
        
        
        
          $
        
        
          0.61
        
        
        
        
          $
        
        
          0.56
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Weighted average shares outstanding:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Basic
        
        
        
        
          45,888
        
        
        
        
        
        
          53,277
        
        
        
        
        
        
          47,482
        
        
        
        
        
        
          53,478
        
      
      
        
          Diluted
        
        
        
        
          46,201
        
        
        
        
        
        
          53,775
        
        
        
        
        
        
          47,771
        
        
        
        
        
        
          54,039
        
      
    
    
    
    
      
        
          LABOR READY, INC.
        
      
      
        
          SUMMARY CONSOLIDATED BALANCE SHEETS
        
      
      
        
          In Thousands
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
        
        
          June 29,
        
        
        
        
          
            Dec. 29,
          
        
      
      
        
        
        
          2007
        
        
        
        
        
        
          2006
        
      
      
        
        
        
          (unaudited)
        
        
        
        
        
      
      
        
          Assets
        
        
        
        
        
        
        
      
      
        
          Current assets
        
        
        
        
        
        
        
      
      
        
          Cash and cash equivalents
        
        
          $
        
        
          58,685
        
        
        
        
          $
        
        
          107,944
        
      
      
        
          Marketable securities
        
        
        
        
          50,397
        
        
        
        
        
        
          91,510
        
      
      
        
          Accounts receivable, net
        
        
        
        
          136,521
        
        
        
        
        
        
          120,173
        
      
      
        
          Other current assets
        
        
        
        
          21,904
        
        
        
        
        
        
          20,131
        
      
      
        
          Total current assets
        
        
        
        
          267,507
        
        
        
        
        
        
          339,758
        
      
      
        
          Property and equipment, net
        
        
        
        
          39,544
        
        
        
        
        
        
          31,949
        
      
      
        
          Other assets
        
        
        
        
          240,277
        
        
        
        
        
        
          220,599
        
      
      
        
          Total assets
        
        
          $
        
        
          547,328
        
        
        
        
          $
        
        
          592,306
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Liabilities and shareholders' equity
        
        
        
        
        
        
        
      
      
        
          Current liabilities
        
        
          $
        
        
          107,984
        
        
        
        
          $
        
        
          101,385
        
      
      
        
          Long-term liabilities
        
        
        
        
          143,767
        
        
        
        
        
        
          138,403
        
      
      
        
          Total liabilities
        
        
        
        
          251,751
        
        
        
        
        
        
          239,788
        
      
      
        
          Shareholders' equity
        
        
        
        
          295,577
        
        
        
        
        
        
          352,518
        
      
      
        
          Total liabilities and shareholders' equity
        
        
          $
        
        
          547,328
        
        
        
        
          $
        
        
          592,306
        
      
    
    
    
    
      
        
          LABOR READY, INC.
        
      
      
        
          CONSOLIDATED STATEMENTS OF CASH FLOWS
        
      
      
        
          In Thousands
        
      
      
        
          (Unaudited)
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
          Twenty Six Weeks Ended
        
      
      
        
        
        
        
        
        
        
        
        
          June 29,
        
        
        
        
          June 30,
        
      
      
        
        
        
        
        
        
        
        
        
        
        
          2007
        
        
        
        
        
        
        
        
          2006
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Cash Flows from Operating activities:
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Net income
        
        
        
        
        
        
        
        
          $
        
        
          29,121
        
        
        
        
        
        
          $
        
        
          30,082
        
        
        
      
      
        
          Adjustments to reconcile net income to
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          net cash provided by operating activities:
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Depreciation and amortization
        
        
        
        
        
        
        
        
        
        
          5,259
        
        
        
        
        
        
        
        
          5,468
        
        
        
      
      
        
          Provision for doubtful accounts
        
        
        
        
        
        
        
        
        
        
          4,184
        
        
        
        
        
        
        
        
          2,999
        
        
        
      
      
        
          Deferred income taxes
        
        
        
        
        
        
        
        
        
        
          (3,289
        
        
          )
        
        
        
        
        
        
          (6,144
        
        
          )
        
      
      
        
          Stock-based compensation
        
        
        
        
        
        
        
        
        
        
          3,960
        
        
        
        
        
        
        
        
          3,891
        
        
        
      
      
        
          Excess tax benefits from stock-based compensation
        
        
        
        
        
        
        
        
          (1,045
        
        
          )
        
        
        
        
        
        
          (3,505
        
        
          )
        
      
      
        
          Other operating activities
        
        
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          414
        
        
        
      
      
        
          Changes in operating assets and liabilities,
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          exclusive of business acquired:
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Accounts receivable
        
        
        
        
        
        
        
        
        
        
          (14,557
        
        
          )
        
        
        
        
        
        
          (9,025
        
        
          )
        
      
      
        
          Income taxes
        
        
        
        
        
        
        
        
        
        
          9,566
        
        
        
        
        
        
        
        
          4,001
        
        
        
      
      
        
          Other assets
        
        
        
        
        
        
        
        
        
        
          5,397
        
        
        
        
        
        
        
        
          1,225
        
        
        
      
      
        
          Accounts payable
        
        
        
        
        
        
        
        
        
        
          3,662
        
        
        
        
        
        
        
        
          (6,128
        
        
          )
        
      
      
        
          Accrued wages and benefits
        
        
        
        
        
        
        
        
        
        
          (1,792
        
        
          )
        
        
        
        
        
        
          495
        
        
        
      
      
        
          Workers' compensation claims reserve
        
        
        
        
        
        
        
        
        
        
          1,579
        
        
        
        
        
        
        
        
          10,460
        
        
        
      
      
        
          Other current liabilities
        
        
        
        
        
        
        
        
           
        
        
          -
        
        
           
        
        
        
        
           
        
        
          (38
        
        
          )
        
      
      
        
          Net cash provided by operating activities
        
        
        
        
        
        
           
        
        
          42,045
        
        
           
        
        
        
        
           
        
        
          34,195
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Cash Flows from Investing activities:
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Capital expenditures
        
        
        
        
        
        
        
        
        
        
          (11,077
        
        
          )
        
        
        
        
        
        
          (6,808
        
        
          )
        
      
      
        
          Maturities of marketable securities
        
        
        
        
        
        
        
        
        
        
          178,964
        
        
        
        
        
        
        
        
          34,916
        
        
        
      
      
        
          Purchases of marketable securities
        
        
        
        
        
        
        
        
        
        
          (137,864
        
        
          )
        
        
        
        
        
        
          (36,255
        
        
          )
        
      
      
        
          Purchase of Skilled Services Corporation, net of cash acquired
        
        
        
        
          (26,415
        
        
          )
        
        
        
        
        
        
          -
        
        
        
      
      
        
          Change in restricted cash and other assets
        
        
        
        
        
        
        
        
          (3,956
        
        
          )
        
        
        
        
        
        
          (2,087
        
        
          )
        
      
      
        
          Other
        
        
        
        
        
        
        
        
           
        
        
          -
        
        
           
        
        
        
        
           
        
        
          (167
        
        
          )
        
      
      
        
          Net cash used in investing activities
        
        
        
        
        
        
        
        
           
        
        
          (348
        
        
          )
        
        
        
        
           
        
        
          (10,401
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Cash Flows from Financing activities:
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Purchase and retirement of common stock
        
        
        
        
        
        
        
        
          (94,818
        
        
          )
        
        
        
        
        
        
          (51,833
        
        
          )
        
      
      
        
          
            Net proceeds from sale of stock through options and employee 
            benefit plans
          
        
        
        
        
        
        
        
        
        
        
          2,447
        
        
        
        
        
        
        
        
          2,869
        
        
        
      
      
        
          Excess tax benefits from stock-based compensation
        
        
        
        
        
        
          1,045
        
        
        
        
        
        
        
        
          3,505
        
        
        
      
      
        
          Payments on debt
        
        
        
        
        
        
        
        
           
        
        
          (745
        
        
          )
        
        
        
        
           
        
        
          (829
        
        
          )
        
      
      
        
          Net cash used in financing activities
        
        
        
        
        
        
        
        
           
        
        
          (92,071
        
        
          )
        
        
        
        
           
        
        
          (46,288
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Effect of exchange rates on cash
        
        
        
        
        
        
        
        
           
        
        
          1,115
        
        
           
        
        
        
        
           
        
        
          676
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net change in cash and cash equivalents
        
        
        
        
        
        
        
        
          (49,259
        
        
          )
        
        
        
        
        
        
          (21,818
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Cash and cash equivalents, beginning of period
        
        
        
        
        
        
           
        
        
          107,944
        
        
           
        
        
        
        
           
        
        
          82,155
        
        
           
        
      
      
        
          Cash and cash equivalents, end of period
        
        
        
        
        
        
          $
        
        
          58,685
        
        
           
        
        
        
        
          $
        
        
          60,337