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Westaff revenue falls 33.5%

February 17 2009

Revenue fell 33.5% at Westaff Inc. (NASD: WSTF) during the fiscal fourth quarter ended Nov. 1, 2008, to $96.3 million, according to a filing last week with the U.S. Securities and Exchange Commission.

The Walnut Creek CA-based commercial staffing firm had recently announced it struck a deal to be acquired by Koosharem Corp., which does business as Santa Barbara CA-based Select Staffing. The acquisition is set to be complete by the end of March.

Westaff also sold its Australia and New Zealand operations to Humanis Blue Pty. Ltd. on Nov. 10 and it sold its United Kingdom operations on March 31, 2008, to Fortis Recruitment Group Ltd.

In the SEC filing, Westaff reported that fourth-quarter gross margin increased to 19.4% from 18.2%.

However, Westaff posted a net loss of $4.1 million for the fourth quarter compared with net income of $1.2 million in the same period in the previous year. The quarter also included a $999,000 restructuring expense.

For the full fiscal year, revenue fell 26.6% to $324.5 million. Gross margin was unchanged at 18.1%.

The company said the previous fiscal year contained an extra week, and revenue fell 24.8% in 2008 excluding that week. In addition, total billings from its top 20 customers fell 12.2% in the fiscal year and permanent placement and transition fees fell by 52.1%.

The full-year net loss was $46.3 million, compared with a net loss of $1.9 million in the previous year. Westaff recorded an expense for impairment of goodwill and intangibles in the amount of $11.5 million during the year.

Westaff also announced Friday that it is back in compliance with Nasdaq listing requirements.

Westaff Inc. (NASD: WSTF)
For the fiscal fourth quarter ended Nov. 1, 2008, compared with the same period in the previous year.
Revenue: $96.3 million, -33.5%
Net loss: $4.1 million vs. net income of $1.2 million

For the full fiscal year ended Nov. 1, 2008, compared with the previous year.
Revenue: $324.5 million, -26.6%
Net loss: $46.3 million vs. net loss of $1.9 million

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