EXHIBIT 99.1
FOR IMMEDIATE RELEASE:
LABOR READY ANNOUNCES SECOND QUARTER 2003 RESULTS
Net Income Increased 51%
TACOMA, WA, July 15, 2003—Labor Ready, Inc. (NYSE: LRW) reported today that revenue for the second quarter ended June 27, 2003 declined 1.6% to $215.7 million, compared to revenue of $219.1 million a year earlier. The Company reported net income increased 51% to $5.2 million or $0.12 per share in the second quarter, compared to $3.5 million or $0.08 per share for the second quarter of 2002.
“We are pleased to deliver positive income results despite a slight decline in revenue,” said Labor Ready President and CEO Joe Sambataro. “The modest top-line improvements we saw in the first quarter have slowed somewhat as demand for our services softened during the second quarter. However, we are excited about increased activity in certain markets in our operations.”
Sambataro continued, “We continue to focus on controlling operating costs and improving gross margins. Gross margins for the second quarter of 2003 were 30.1%, compared to 29.5% for the first quarter of 2003 and 28.7% for the second quarter of 2002. At the same time, Selling, General and Administrative expenses remained steady at 25.0% of revenue as compared to 24.8% a year ago, even though we opened a number of new branches this year.”
In the second quarter, Labor Ready opened 12 branches in the U.K. and nine in the U.S. and Canada, completing its expansion plans for the year. At the end of the quarter, the Company was operating 790 branch locations, 42 more branches than year-end 2002.
Labor Ready also updated its outlook for 2003 and provided guidance for the third quarter of 2003. The company currently estimates revenue for the year between $860 and $870 million, 3% lower than previously reported expectations. The Company estimates net income per share for the year at between $0.33 and $0.36, approximately 25% higher than 2002 and about 6% higher than previously reported expectations. For the third quarter of 2003, the company estimates revenue of $245 million to $255 million, and net income per share between $0.18 and $0.20.
Management will discuss second quarter 2003 results on a conference call at 2:00 p.m. (PT) Tuesday, July 15, 2003. The conference call may be accessed on Labor Ready’s web site at www.LaborReady.com and will be available for replay for 30 days following the call.
About Labor Ready
Labor Ready is the nation’s leading provider of temporary manual labor to the light industrial and small business markets. Labor Ready serves more than 275,000 customers
by providing a flexible, dependable workforce to such industries as freight handling, warehousing, landscaping, construction and light manufacturing. In 2002, the Company put nearly 600,000 people to work. Labor Ready currently operates 790 locations in 50 states, Canada, and the United Kingdom. For additional information, visit Labor Ready’s website at www.LaborReady.com.
This news release contains forward-looking statements, such as statements about the ranges of revenues and profits anticipated for future periods, expansion plans, the success of measures for controlling costs and maintaining gross margins, and other factors that may affect our financial results and operations in the future. Our actual results are, however, subject to a number of risks, including: 1) national and global economic conditions; 2) our 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 our operations and financial results; 4) significant labor disturbances which could disrupt industries we serve; 5) increased costs and collateral requirements in connection with our insurance obligations, including workers’ compensation insurance; 6) the adequacy of our financial reserves; 7) our continuing ability to comply with financial covenants in our lines of credit and other financing agreements; 8) our ability to attract and retain competent employees in key positions; and 9) other risks described in our filings with the Securities and Exchange Commission, including our Report on Form 10-Q filed May 5, 2003.
For more information, contact:
Steve Cooper, CFO
253-680-8213
Stacey Burke, Director of Public Relations
253-680-8291
2
LABOR READY, INC.
SUMMARY CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
|
|
|
Thirteen Weeks Ended |
|
Twenty-six Weeks Ended |
|
||||||||
|
|
|
June 27, |
|
June 28, |
|
June 27, |
|
June 28, |
|
||||
|
|
|
(unaudited) |
|
(unaudited) |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Revenue from services |
|
$ |
215,684 |
|
$ |
219,100 |
|
$ |
387,964 |
|
$ |
389,208 |
|
|
Cost of services |
|
150,710 |
|
156,141 |
|
272,093 |
|
277,487 |
|
||||
|
Gross profit |
|
64,974 |
|
62,959 |
|
115,871 |
|
111,721 |
|
||||
|
Selling, general and administrative expenses |
|
53,868 |
|
54,347 |
|
106,587 |
|
106,629 |
|
||||
|
Depreciation and amortization |
|
2,044 |
|
2,672 |
|
4,115 |
|
4,791 |
|
||||
|
Income from operations |
|
9,062 |
|
5,940 |
|
5,169 |
|
301 |
|
||||
|
Interest and other expense, net |
|
(1,020 |
) |
(330 |
) |
(2,082 |
) |
(541 |
) |
||||
|
Income (loss) before income taxes (benefit) |
|
8,042 |
|
5,610 |
|
3,087 |
|
(240 |
) |
||||
|
Income tax (benefit) |
|
2,821 |
|
2,160 |
|
1,081 |
|
(94 |
) |
||||
|
Net income (loss) |
|
$ |
5,221 |
|
$ |
3,450 |
|
$ |
2,006 |
|
$ |
(146 |
) |
|
|
|
|
|
|
|
|
|
|
|
||||
|
Basic net income per common share |
|
$ |
0.13 |
|
$ |
0.08 |
|
$ |
0.05 |
|
$ |
(0.00 |
) |
|
|
|
|
|
|
|
|
|
|
|
||||
|
Diluted net income per common share |
|
$ |
0.12 |
|
$ |
0.08 |
|
$ |
0.05 |
|
$ |
(0.00 |
) |
|
|
|
|
|
|
|
|
|
|
|
||||
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
||||
|
Basic |
|
40,055 |
|
41,133 |
|
40,227 |
|
40,927 |
|
||||
|
Diluted |
|
50,312 |
|
42,161 |
|
40,801 |
|
40,927 |
|
||||
3
LABOR READY, INC.
SUMMARY CONSOLIDATED BALANCE SHEETS
|
|
|
As of |
|
||||
|
|
|
June 27, |
|
December 31, |
|
||
|
Assets |
|
|
|
|
|
||
|
Current assets |
|
|
|
|
|
||
|
Cash, cash equivalents, and marketable securities |
|
$ |
110,731 |
|
$ |
90,577 |
|
|
Accounts receivable, net |
|
81,148 |
|
66,987 |
|
||
|
Other current assets |
|
21,471 |
|
19,726 |
|
||
|
Total current assets |
|
213,350 |
|
177,290 |
|
||
|
Property and equipment, net |
|
28,957 |
|
31,217 |
|
||
|
Other assets |
|
87,554 |
|
108,693 |
|
||
|
Total assets |
|
$ |
329,861 |
|
$ |
317,200 |
|
|
|
|
|
|
|
|
||
|
Liabilities and shareholders’ equity |
|
|
|
|
|
||
|
Current liabilities |
|
$ |
65,379 |
|
$ |
57,836 |
|
|
Long-term liabilities |
|
132,636 |
|
127,253 |
|
||
|
Total liabilities |
|
198,015 |
|
185,089 |
|
||
|
Shareholders’ equity |
|
131,846 |
|
132,111 |
|
||
|
Total liabilities and shareholders’ equity |
|
$ |
329,861 |
|
$ |
317,200 |
|
4