EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

 

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Contact: Tyra Tutor

Senior Vice President – Corporate Development

(904) 360-2500

tyra.tutor@mpsgroup.com

 

NEWS RELEASE     For Immediate Release

MPS Group Announces Third Quarter 2009 Results

JACKSONVILLE, Fla. (October 29, 2009) — MPS Group, Inc. (NYSE:MPS), a leading provider of specialty staffing, consulting and business solutions, today announced financial results for the third quarter and nine months ended September 30, 2009. Third quarter revenue of $408 million was within the range of guidance previously provided by management, and diluted net income per common share of $0.06 was above the range of guidance previously provided by management, due primarily to lower general and administrative expenses and the benefit of a lower income tax rate.

MPS Group revenue decreased 29% versus last year’s third quarter. Excluding the impact of changes in foreign currency exchange rates, revenue was down 25% versus the third quarter of 2008. On a sequential basis, revenue declined 2% versus the second quarter of 2009. Excluding the impact of changes in foreign currency exchange rates, revenue decreased 5% sequentially versus the second quarter of 2009.

Third quarter gross margin of 26.8% was adversely affected by fewer permanent placement fees, which represented 2.9% of total revenue in the third quarter of 2009 versus 5.3% of total revenue in the prior year’s third quarter. In the third quarter, operating income was $8 million, or 2.1% of third quarter revenue, compared with $7 million, or 1.6% of revenue, in the second quarter of 2009.

A detailed analysis of revenue, gross profit and operating income by segment is provided below. A summary balance sheet is provided below as well.

Timothy Payne, MPS Group Chief Executive Officer, stated, “We were pleased with our financial performance for the quarter despite the current weakness in the employment market.”

“During the quarter, general and administrative expenses declined $6 million sequentially versus the second quarter of 2009, which produced a higher level of taxable income resulting in a lower-than-expected effective income tax rate,” added MPS Group Chief Financial Officer Robert Crouch. “The combination of these two items resulted in earnings per share being above the range of guidance previously provided.”

 

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MPS Group Announces Third Quarter 2009 Results

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October 29, 2009

As previously announced, MPS Group has signed a definitive agreement to be acquired by Adecco Group for $13.80 per common share in a cash transaction valued at approximately $1.3 billion. The Adecco Group (SIX:ADEN-VX) (Euronext:ADE), based in Zurich, Switzerland, is a Fortune Global 500 Company and the world’s leading provider of human resource solutions with operations in over 60 countries. The transaction is expected to close in the first quarter of 2010 and is subject to MPS Group shareholder approval, antitrust clearance and certain other regulatory approvals and closing conditions.

About MPS Group

MPS Group is a leading provider of staffing, consulting, and solutions in the disciplines of information technology, finance and accounting, law, engineering, marketing and creative, property, and healthcare. MPS Group delivers its services to businesses and government entities in the United States, Europe, Canada, Australia, and Asia. A Fortune 1000 company with headquarters in Jacksonville, Florida, MPS Group trades on the New York Stock Exchange. For more information about MPS Group, please visit www.mpsgroup.com.

Additional Information and Where To Find It

In connection with the proposed merger, MPS Group will file a proxy statement with the Securities and Exchange Commission (“SEC”). Investors are urged to read the proxy statement when it becomes available because it will contain important information about the merger as well as other documents filed by MPS Group at the SEC’s Internet site, www.sec.gov. These documents can also be obtained for free from MPS Group’s Investor Relations web site (www.mpsgroup.com) or by calling 904-360-2500.

MPS Group and its directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from its stockholders in connection with the proposed merger. Information regarding MPS Group’s directors and executive officers is available in MPS Group’s proxy statement dated April 20, 2009, filed with the SEC. Additional information regarding the interests of participants of MPS Group will be included in the proxy statement to be filed with the SEC in connection with the merger.

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MPS Group Announces Third Quarter 2009 Results

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October 29, 2009

Forward-Looking Statements

This press release contains forward-looking statements that are subject to certain risks, uncertainties or assumptions described above and may be affected by other factors, including, but not limited to: fluctuations in the economies and financial markets in the U.S. and foreign countries where we do business and in the Company’s industry segments in particular; the market price of the Company’s common stock has been, and may continue to be, materially affected by the anticipated commencement and completion of the proposed acquisition of the Company, or the failure of the acquisition of the Company to be completed; uncertainties associated with the proposed acquisition may cause a loss of employees and may otherwise adversely affect the Company’s business operations; the proposed acquisition agreement contains restrictive covenants that may limit the Company’s ability to respond to changes in market conditions or pursue business opportunities; industry trends toward consolidating vendor lists; the demand for the Company’s services, including the impact of changes in utilization rates; consolidation or bankruptcy of major customers; the effect of competition, including the Company’s ability to expand into new markets and to remain profitable or maintain profit margins in the face of pricing pressures; the Company’s ability to retain significant existing customers or obtain new customers; the Company’s ability to recruit, place and retain consultants and professional employees; the Company’s ability to identify and complete acquisition targets and to successfully integrate acquired operations into the Company; possible changes in governmental laws and regulations affecting the Company’s operations, including possible changes to laws and regulations relating to benefits for consultants and temporary personnel, and possible increased regulation of the employer-employee relationship; employment-related claims, costs, and other litigation matters; adjustments during periodic tax audits; litigation relating to prior and current transactions and activities; claims and liabilities asserted for the acts or omissions of our temporary employees; fluctuations in interest rates or foreign currency exchange rates; loss of key employees; fluctuations in the price of the Company’s common stock due to actual or anticipated changes in quarterly operating results, financial estimates, statements by securities analysts, and other events; and other factors discussed in the Company’s filings with the Securities and Exchange Commission. In some cases, you can identify forward-looking statements by terminology such as: “will,” “may,” “should,” “could,” “expects,” “intends,” “plans,” “hopes,” “indicates,” “projects,” “can,” “anticipates,” “perhaps,” “probably,” “believes,” “estimates,” “appears,” “predicts,” “potential,” “continues,” “would,” or “become,” or other comparable terminology or the negative of these terms or other comparable terminology. Readers are urged to review and consider the matters discussed in “Item 1A. Risk Factors” of the Company’s Form 10-K for the year ended December 31, 2008 and discussion of risks or uncertainties in subsequent filings with the Securities and Exchange Commission.

Should one or more of these risks, uncertainties or other factors materialize, or should underlying assumptions prove incorrect, actual results, performance or achievements of the Company may vary materially from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements are based on beliefs and assumptions of the Company’s management and on information then currently available to management. Undue reliance should not be placed on such forward-looking statements. Forward-looking statements are not guarantees of performance. Such forward-looking statements were prepared by the Company based upon information available at the time of such statements. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update publicly any of them in light of new information or future events.

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MPS Group Announces Third Quarter 2009 Results

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October 29, 2009

MPS Group, Inc.

Unaudited Operating Highlights

(in thousands, except per share amounts)

 

     Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
Operating Highlights:    2009    2008     2009    2008  

Revenue:

          

North American Professional Services

   $    128,257    $   192,185      $ 421,893    $ 557,453   

International Professional Services

     107,616      142,033        309,347      443,383   

North American Information Technology Services

     124,793      154,765        376,343      471,854   

International Information Technology Services

     47,105      88,501        147,474      262,065   
                              

Total revenue

     407,771      577,484        1,255,057      1,734,755   
                              

Gross profit:

          

North American Professional Services

     37,101      58,380        120,344      171,296   

International Professional Services

     23,826      41,597        71,293      135,046   

North American Information Technology Services

     38,966      47,797        117,902      145,525   

International Information Technology Services

     9,522      16,320        29,073      45,631   
                              

Total gross profit

     109,415      164,094        338,612      497,498   
                              

Operating income:

          

North American Professional Services

     6,145      17,104        20,588      51,645   

International Professional Services

     2,811      5,213        6,629      23,839   

North American Information Technology Services

     6,613      10,367        14,663      33,326   

International Information Technology Services

     743      4,009        3,477      9,879   
                              

Operating income before unallocated corporate expenses

     16,312      36,693        45,357      118,689   

Unallocated corporate expenses

     7,865      7,513        24,032      22,721   
                              

Total operating income

     8,447      29,180        21,325      95,968   

Other income (expense), net

     1,573      (2,715     601      (4,259
                              

Income before provision for income taxes

     10,020      26,465        21,926      91,709   

Provision for income taxes

     4,568      9,257        11,950      34,702   
                              

Net income

   $ 5,452    $ 17,208      $ 9,976    $ 57,007   
                              

Diluted net income per common share

   $ 0.06    $ 0.19      $ 0.11    $ 0.62   
                              

Diluted common shares outstanding

     89,199      90,315        88,161      91,738   
                              
                As of  
                September 30,
2009
   December 31,
2008
 

Cash and cash equivalents

        $ 152,848    $ 90,566   

Accounts receivable, net of allowance

          259,220      282,093   

Other

          32,111      24,198   
                    

Current assets

          444,179      396,857   

Long-term assets

          384,422      399,035   
                    

Total assets

        $ 828,601    $ 795,892   
                    

Current liabilities

        $ 178,795    $ 173,147   

Other

          28,568      31,275   

Stockholders’ equity

          621,238      591,470   
                    

Total liabilities and stockholders’ equity

        $ 828,601    $ 795,892   
                    

Working capital

        $ 265,384    $ 223,710   
                    
     Three Months Ended             
     September 30, 2009             

Net cash provided by operating activities

     $29,773        
             

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MPS Group Announces Third Quarter 2009 Results

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October 29, 2009

MPS Group, Inc.

Unaudited Reconciliation of Non-GAAP Financial Measures to Most Comparable GAAP Financial Measures

Reconciliation of EBITDA to Net Income

(in thousands)

 

     Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
               2009                      2008                     2009                    2008          

EBITDA

   $ 12,529    $ 34,857      $ 34,428    $ 112,740   

Depreciation and intangibles amortization

     4,082      5,677        13,103      16,772   
                              

Operating income

     8,447      29,180        21,325      95,968   

Other income (expense), net

     1,573      (2,715     601      (4,259
                              

Income before provision for income taxes

     10,020      26,465        21,926      91,709   

Provision for income taxes

     4,568      9,257        11,950      34,702   
                              

Net income

   $ 5,452    $ 17,208      $ 9,976    $ 57,007   
                              

Reconciliation of Year-Over-Year Quarterly Revenue Growth Rate, Excluding

the Effects of Changes in Foreign Currency Exchange Rates

 

     MPS
      Group      
    N. American
Businesses
    International
Businesses
 

Revenue growth rate 3Q2008 to 3Q2009, excluding the effects of changes in foreign currency exchange rates

   -25.4   -26.9   -23.2

Revenue growth rate contributed from effects of changes in currency

   -4.0   -0.2   -9.7
                  

GAAP revenue growth rate 3Q2008 to 3Q2009

   -29.4   -27.1   -32.9
                  

Reconciliation of Year-Over-Year Quarterly Revenue Growth Rate, Excluding

the Effects of Changes in Foreign Currency Exchange Rates

 

     Professional
N. American
    IT
N. American
    IT
International
    Professional
International
 

Revenue growth rate 3Q2008 to 3Q2009, excluding the effects of changes in foreign currency exchange rates

   -33.3   -19.0   -39.3   -13.2

Revenue growth rate contributed from effects of changes in currency

   —        -0.4   -7.5   -11.0
                        

GAAP revenue growth rate 3Q2008 to 3Q2009

   -33.3   -19.4   -46.8   -24.2
                        

Reconciliation of Sequential Quarterly Revenue Growth Rate, Excluding

the Effects of Changes in Foreign Currency Exchange Rates

  

  

     MPS
Group
    International
Businesses
    IT
International
    Professional
International
 

Revenue growth rate 2Q2009 to 3Q2009, excluding the effects of changes in foreign currency exchange rates

   -4.9   -4.5   -11.2   -1.3

Revenue growth rate contributed from effects of changes in currency

   2.5   6.4   5.7   6.9
                        

GAAP revenue growth rate 2Q2009 to 3Q2009

   -2.4   1.9   -5.5   5.6
                        

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