Westaff Announces Acquisition of Raleigh, North Carolina Franchise.

WALNUT CREEK, Calif. -- Westaff, Inc. (NASDAQ:WSTF), a leading provider of staffing services, today announced that it has acquired its Raleigh, North Carolina franchise operation.

"We are pleased to welcome the Raleigh office as a company-owned branch in our Southeast Region. With an estimated $350,000,000 market, Raleigh offers significant potential for Westaff," announced Trish Newman, President and CEO of Westaff.

"Whilst our long-term strategy includes significantly growing our franchise operations," Newman explained, "we decided that the buyback afforded an excellent opportunity when our affiliate owners expressed their desire to sell the franchise."

The affiliate office has been under the ownership and management of Tom and Jeanne Gunter since 1980. "Originally, the focus of the business was on the office and light industrial markets," said Mrs. Gunter. "Later, we branched into more technical fields." These three areas comprise the main focus of the business today.

After successfully operating the branch office as a husband and wife team for 26 years, the Gunters have decided to pursue other interests. "Retiring is bittersweet, especially leaving our staff," Mrs. Gunter added. "We've had a tremendous privilege to serve and help others."

For Westaff, the acquisition provides an opportunity to further develop a high growth, high potential market. Raleigh is consistently ranked among the top U.S. cities for its prosperous business climate, highly educated and diverse workforce and quality of life: the type of market environment that fits ideally into Westaff's growth plans.

"We applaud the Gunters for building the business for 26 years, and we have greatly enjoyed working with them," said Westaff Senior Vice President and Chief Financial Officer John Sanders. "We are now working closely with Jeanne and Tom to ensure a smooth transition, which will allow us to experience growth faster than if we simply opened a new office in Raleigh."

Sanders added, "Development within markets such as Raleigh is consistent with Westaff's strategic plan. We have high expectations for the office and believe it is a great market as evidenced by the favorable economic growth seen in the Raleigh metropolitan area. We intend to grow our presence there accordingly."

Robert Montoya, who has seven years of staffing industry experience in branch management and sales, most recently helping Westaff optimize performance in critical markets, will be leading Westaff's Raleigh team as its branch manager. "With a combined total of more than 25 years in the branch, the Raleigh staff is a great addition to the Westaff team," Montoya said. "Their local knowledge and expertise will help ensure that the transition is seamless to customers, and that we continue to provide superior service."

Montoya also plans to further enhance the services provided by the branch, including offering Westaff's recruiting and talent assessment programs, and to further develop Westaff's permanent placement business in the area. He commented, "Raleigh has a tremendous labor pool, and with a growing population and an influx of new companies and industries, the area has a lot of potential for Westaff. This is a great opportunity to make a stronger imprint in the community, and I'm very excited to be leading the effort."

About Westaff

Westaff provides staffing services and employment opportunities for businesses in global markets. Westaff annually employs approximately 125,000 people and services more than 15,000 client accounts from more than 230 offices located throughout the U.S., the United Kingdom, Australia and New Zealand. For more information, please visit our website at www.westaff.com.

While the specific financial terms of the agreement are not being disclosed, for financial reporting purposes this acquisition will not have an impact on reported sales or gross profits for Westaff as franchise agent sales and gross profits are already included in the Company's financial results. However, operating profits generated by the acquired offices will now be included within Westaff's consolidated operating results. Management currently estimates that the acquisition will be accretive to consolidated earnings.

This press release contains forward-looking statements as defined in the Securities Exchange Act of 1934, and is subject to the safe harbors created by law. Forward-looking statements contained herein include, but are not limited to, statements regarding the Company's future growth, profitability, expansion in key markets, and the significance of any change in managerial personnel to the Company's ability to achieve any of these goals.

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. 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, Form 10-Q, Form 8-K and other filings.