Administaff Announces Record Earnings Per Share.* Earnings per share increase 70% on 12% revenue growth * Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. increases 79% * EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become increases 44% to $24 million HOUSTON -- Administaff, Inc. (NYSE NYSE See: New York Stock Exchange :ASF See Windows Media formats. 1. (language) ASF - Algebraic Specification Language. 2. (body) ASF - Analytical Solutions Forum. ), a leading provider of human resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees. services for small and medium-sized businesses, today announced a 70.0% increase in diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of to $0.51 compared to $0.30 in the first quarter of 2007. Net income increased to $13.2 million from $8.4 million in the 2007 period. "Our record results, in the face of a slowing economy, confirm the strength and resiliency The ability to recover from a failure. The term may be applied to hardware, software or data. of our business model," said Paul J. Sarvadi, Administaff chairman and chief executive officer. "Although we are experiencing slightly slower unit growth, we are meeting our profitability targets due to effective pricing and direct cost management. As these trends continue for the balance of the year, we will make the investments necessary to accelerate growth and profitability in 2009." Revenues for the first quarter of 2008 increased 11.8% over the 2007 period to $456.1 million, due to an 8.3% increase in the average number of worksite employees paid per month and a 3.3% increase in revenues per worksite employee per month. Gross profit increased 27.2% over the first quarter of 2007 to $86.6 million on the growth in the average number of worksite employees paid and an increase in the average gross profit per worksite employee per month to $254 from $216 in the 2007 period. These results were at the high end of the company's forecasted range primarily due to a higher-than-expected surplus from payroll taxes Payroll Tax Tax an employer withholds and/or pays on behalf of their employees based on the wage or salary of the employee. In most countries, including the U.S., both state and federal authorities collect some form of payroll tax. . Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for the quarter increased 18.2% to $68.6 million, slightly below the low end of the company's expected range, and included expected costs associated with the company's sales expansion, middle-market and HRTools.com initiatives. Operating income for the first quarter of 2008 increased 79.4% to $18.0 million, with an average operating income per worksite employee per month of $53 compared to $32 in the 2007 period. EBITDA for the first quarter was $24.1 million. Cash outlays Outlays Payments on obligations in the form of cash, checks, the issuance of bonds or notes, or the maturing of interest coupons. included share repurchases Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. of $15.0 million, capital expenditures of $4.8 million and dividends of $2.9 million. "Our solid earnings and the strength of our balance sheet have allowed us to distribute over $100 million to shareholders since January 2007 through share repurchases and dividends, which is nearly 20% of our current enterprise value," said Douglas S Douglas, city, Isle of Man Douglas, city (1991 pop. 19,950), capital of the Isle of Man, Great Britain. It is a popular resort, connected by rail to Ramsey and Port Erin, on the Irish Sea. Tourism is the chief industry. . Sharp, vice-president of finance, chief financial officer and treasurer. "This not only demonstrates our commitment to maximizing shareholder return, but also our intent to take advantage of the company's attractive valuation." Administaff will be hosting a conference call today at 10 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT to discuss these results, give guidance for the second quarter and full year 2008, and answer questions from investment analysts. To listen in, call 866-831-6224 and use passcode 25151513. The call will also be webcast at http://www.administaff.com/investor_relations. The conference call script and company guidance will be available at the same Web site later today. A replay of the conference call will be available at 888-286-8010, passcode 21908131, for two weeks after the call. The webcast will be archived for one year. Administaff is the nation's leading professional employer organization A professional employer organization (PEO) provides outsourcing of payroll, workers' compensation, human resources and employee benefits administration. It does this by hiring a client company’s employees, thus becoming their employer of record. (PEO), serving as a full-service human resources department that provides small and medium-sized businesses with administrative relief, big-company benefits, reduced liabilities and a systematic way to improve productivity. The company operates 49 sales offices in 24 major markets. For additional information, visit Administaff's Web site at http://www.administaff.com. The statements contained herein that are not historical facts are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the federal securities laws (Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934). You can identify such forward-looking statements by the words "expects," "intends," "plans," "projects," "believes," "estimates," "likely," "possibly," "probably," "goal," "objective," "target," "assume," "outlook," "guidance," "predicts," "appears," "indicator" and similar expressions. Forward-looking statements involve a number of risks and uncertainties. In the normal course of business, Administaff, Inc., in an effort to help keep our stockholders and the public informed about our operations, may from time to time issue such forward-looking statements, either orally or in writing. Generally, these statements relate to business plans or strategies, projected or anticipated benefits or other consequences of such plans or strategies, or projections involving anticipated revenues, earnings, unit growth, profit per worksite employee, pricing, operating expenses or other aspects of operating results. We base the forward-looking statements on our current expectations, estimates and projections. These statements are not guarantees of future performance and involve risks and uncertainties that we cannot predict. In addition, we have based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. Therefore, the actual results of the future events described in such forward-looking statements could differ materially from those stated in such forward-looking statements. Among the factors that could cause actual results to differ materially are: (i) changes in general economic conditions; (ii) regulatory and tax developments and possible adverse application of various federal, state and local regulations; (iii) increases in health insurance costs and workers' compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. rates and underlying claims trends, financial solvency The ability of an individual to pay his or her debts as they mature in the normal and ordinary course of business, or the financial condition of owning property of sufficient value to discharge all of one's debts. solvency n. of workers' compensation carriers and other insurers, state unemployment tax rates, liabilities for employee and client actions or payroll-related claims, changes in the costs of expanding into new markets, and failure to manage growth of our operations; (iv) the effectiveness of our sales and marketing efforts; (v) changes in the competitive environment in the PEO industry, including the entrance of new competitors and our ability to renew or replace client companies; and (vi) our liability for worksite employee payroll and benefits costs; and (vii) an adverse final judgment or settlement of claims against Administaff. These factors are discussed in further detail in Administaff's filings with the U.S. Securities and Exchange Commission. Any of these factors, or a combination of such factors, could materially affect the results of our operations and whether forward-looking statements we make ultimately prove to be accurate. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] (1) Gross billings of $7,497 and $7,229 per worksite employee per month, less payroll cost of $6,158 and $5,933 per worksite employee per month, respectively. [TABLE OMITTED] Non-bonus payroll cost represents payroll cost excluding the impact of bonus payrolls paid to the company's worksite employees. Bonus payroll cost varies from period to period, but has no direct impact to the company's ultimate workers' compensation costs under the current program. As a result, Administaff management refers to non-bonus payroll cost in analyzing, reporting and forecasting the company's workers' compensation costs. [TABLE OMITTED] EBITDA represents net income computed in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ("GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). "), plus interest expense, income tax expense, depreciation and amortization expense. Administaff management believes EBITDA is often a useful measure of the company's operating performance, as it allows for additional analysis of the company's operating results separate from the impact of taxes and capital and financing transactions on earnings. Non-bonus payroll and EBITDA are not financial measures prepared in accordance with GAAP and may be different from similar measures used by other companies. Non-bonus payroll and EBITDA should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. Administaff includes non-bonus payroll and EBITDA in this press release because the company believes they are useful to investors in allowing for greater transparency (1) The quality of being able to see through a material. The terms transparency and translucency are often used synonymously; however, transparent would technically mean "seeing through clear glass," while translucent would mean "seeing through frosted glass." See alpha blending. related to the costs incurred under the company's workers' compensation program and the company's operating performance during the periods presented. Investors are encouraged to review the reconciliation of the non-GAAP financial measures used in this press release to their most directly comparable GAAP financial measures as provided in the tables above. |
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