Escrow Funds and
$1.7 Million Reduction in Workers' Compensation Security Requirements
SOMERSET, N.J., April 26 /PRNewswire-FirstCall/ -- TeamStaff, Inc.
(Nasdaq: TSTF), one of the nation's leading providers of healthcare staffing
and specialty payroll services, today announced that $2.25 million of the $2.5
million held in escrow as part of TeamStaff's sale of the assets of its
professional employer organization (PEO) division to Gevity HR, Inc. has been
released for TeamStaff's benefit. Additionally, TeamStaff announced that
Zurich American Insurance Company has approved a reduction in the letter of
credit that provides security as part of TeamStaff's PEO workers' compensation
program, from $3.5 million to $1.8 million.
"As part of the sale of our PEO division to Gevity, $2.5 million of the
purchase price was placed in escrow," stated T. Kent Smith, TeamStaff's
President & CEO. "The amount was subject to adjustment based on Gevity's
retention of the former TeamStaff business. We are pleased to report that, as
a result of Gevity's retention of 90% of the PEO business, $2.25 million is
being released from escrow for TeamStaff's benefit. When added to the $7
million already paid by Gevity, this results in a total purchase price of
$9.25 million. We appreciate the hard work of many of our former TeamStaff
colleagues who were instrumental in facilitating the successful transition of
our PEO client portfolio to the Gevity human resources outsourcing system,"
continued Mr. Smith. "The release of these funds provides additional
financial resources for the continued development of our medical staffing
division, TeamStaff Rx."
TeamStaff also had been working with Zurich, the provider of TeamStaff's
PEO workers' compensation program from March 22, 2002 through November 16,
2003, to reduce the security requirements associated with the program.
TeamStaff had provided a fully collateralized, $3.5 million letter of credit
as partial security for the program. As a result of the sale of the PEO
division, Zurich consented to a $1.7 million reduction in the amount of the
letter of credit, to $1.8 million, effective March 31, 2004.
Commenting on the reduction, Mr. Smith stated, "We are delighted that
Zurich recognized the substantial change in our risk profile that resulted
from our determination to exit the PEO business. This reduction in collateral
frees up additional assets to assist us in our restructuring and growth
strategy. We also are looking forward to the potential return of as much as
$5 million in premium as well as further relief on the letter of credit
requirement as the Zurich PEO workers' compensation program winds down. We
are proud of the partnership we have forged with Zurich, and Zurich continues
to be our workers' compensation provider for our temporary staffing and
Mr. Smith concluded, "These developments represent two significant
milestones in our overall strategy of repositioning the Company for a return
to growth and profitability."
About TeamStaff, Inc.
Headquartered in Somerset, New Jersey, TeamStaff serves clients and their
employees throughout the United States as a full-service provider of payroll
and medical staffing solutions.
TeamStaff Rx provides medical allied health professionals and nurses to
doctors' offices and medical facilities throughout the United States on a
temporary or permanent basis and offers programs and services designed to
assist medical facilities in managing their temporary staffing costs. DSi
Payroll Services, TeamStaff's payroll processing division, provides customized
payroll management and tax filing services to select industries, such as
construction and general contracting.
For more information, visit the TeamStaff web site at www.teamstaff.com.
This press release contains "forward-looking statements" as defined by the
Federal Securities Laws. TeamStaff's actual results could differ materially
from those described in such forward-looking statements as a result of certain
risk factors, including but not limited to: (i) regulatory and tax
developments; (ii) changes in direct costs and operating expenses; (iii) the
estimated costs and effectiveness of capital projects and investments in
technology infrastructure; (iv) ability to effectively implement its business
strategies and operating efficiency initiatives, including, but not limited
to, its new business strategy for TeamStaff Rx; (v) the effectiveness of sales
and marketing efforts, including TeamStaff's marketing arrangements with other
companies; (vi) changes in the competitive environment in the temporary
staffing and payroll processing industry; (vii) the favorable or unfavorable
development of workers' compensation claims covered under TeamStaff's workers'
compensation programs; and (viii) other one-time events and other important
factors disclosed previously and from time to time in TeamStaff's filings with
the U.S. Securities and Exchange Commission. These factors are described in
further detail in TeamStaff's filings with the U.S. Securities and Exchange
For further information please contact: T. Kent Smith, President & CEO of
TeamStaff, Inc., +1-732-748-1700; or Christi Mottola, Managing Partner, CCG
Investor Relations, +1-949-851-1109, firstname.lastname@example.org, for TeamStaff, Inc.
SOURCE TeamStaff, Inc.
/CONTACT: T. Kent Smith, President & CEO of TeamStaff, Inc.,
+1-732-748-1700; or Christi Mottola, Managing Partner, CCG Investor Relations,
+1-949-851-1109, email@example.com, for TeamStaff, Inc./
/Web site: http://www.teamstaff.com/
CO: TeamStaff, Inc.; Gevity HR, Inc.; Zurich American Insurance Company
ST: New Jersey
IN: FIN HEA
-0- Apr/26/2004 11:02 GMT
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