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Gevity HR Inc. (NASD: GVHR) reported a first-quarter loss of $1.6 million as it worked to discontinue its Gevity Edge Select offering. The Bradenton FL-based professional employer organization previously announced it would end Gevity Edge Select, which offered services without co-employment.
The Gevity Edge Select segment had an operating loss of $2.1 million, including a $500,000 noncash impairment charge, according to the company. Gevity also said it had a $600,000 charge for cost alignment in its PEO segment.
The company's first-quarter loss compares with net income of $2.5 million in the same period in 2007.
Gevity's first-quarter revenue fell 11.5% to $142.6 million compared with $161.1 million in the same period last year. Gross margin fell to 24.7% from 28.2%.
Chairman and CEO Michael Lavington called the results encouraging given the focus on transferring Gevity Edge Select clients to other providers and dropping, or changing the pricing on, more than 350 unprofitable PEO clients.
Gevity HR Inc. (NASD: GVHR)
For the first quarter ended March 31, 2008, compared with the same period in 2007.
Revenue: $142.6 million, -11.5%
Net loss: $1.6 million vs. net income of $2.5 million