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Gevity profit falls 74.3%

November 05 2007

Third-quarter net income fell 74.3% at Gevity HR Inc. (NASD: GVHR). The Bradenton FL-based professional employer organization reported profit of $2.5 million in the quarter, down from $9.6 million in the same period last year.

Gevity said its sales efforts weren't enough to overcome client attrition and workforce reductions that were made worse by Florida's economy. The company had 135,500 worksite employees at the end of the third quarter, compared with 138,300 a year ago and 141,000 at the end of the second quarter.

Third-quarter revenue fell 8.8% to $146.5 million from $160.6 million in the third quarter of 2006. Gross margin slipped to 30.8% from 31.5%.

"Although challenging economic factors impacted parts of our portfolio during the quarter, we have identified a number of areas where we can enhance our competitive position," said Chairman and CEO Michael Lavington. "While sales levels were disappointing, we anticipate improvement under Jim Hardee's leadership. Moreover, we expect to create momentum with an intensified focus on strengthening and growing our core PEO offering."

Gevity said its results include a $1.9 million severance-related charge.

The company announced last month that former Chairman and CEO Erik Vonk resigned.

Gevity HR Inc. (NASD: GVHR)

For the third quarter ended Sept. 30, 2007, compared with the same period in 2006.

Revenue: $146.5 million, -8.8%

Net income: $2.5 million, -74.3%

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