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Spherion profit falls, revenue up on buys

April 29 2008

First-quarter net income fell 50.8% at Spherion Corp. (NYSE: SFN) while revenue rose 24.8% in the wake of two large acquisitions.

The Fort Lauderdale FL-based staffing firm acquired Technisource, the 17th-largest information technology staffing firm, in the fourth quarter of 2007 and Todays Staffing from CDI Corp. (NYSE: CDI), in the third quarter. First-quarter revenue would have risen 0.2% if the acquired businesses had been part of Spherion since the start of the year, according to the company.

President and CEO Roy Krause said the U.S. economy impacted business as the first quarter progressed.

"Our permanent placement activity slowed and there was a greater seasonal pull back in commercial temporary staffing than we expected," Krause said. "While an economic downturn will have a negative impact on short-term profitability, we are encouraged that our business grew, that our segment operating profit margin improved and that Technisource, our most recent acquisition, grew about 11% year-over-year."

Spherion reported total first-quarter revenue of $576.5 million, compared with $461.9 million in the same period last year

First-quarter net income fell to $1.3 million from $2.6 million in the first quarter of 2007. Gross margin slipped to 22.2% from 22.9%.

The company estimated second-quarter revenue of between $570 million and $585 million, a decrease of 1% to 4% year-over-year taking acquisitions into account on a pro forma basis, according to the company.

Spherion Corp. (NYSE: SFN)
For the first quarter ended March 30, 2008, compared with the same period in 2007.
Revenue: $576.5 million, +24.8%
Net income: $1.3 million, -50.8%

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