Westaff doubles loss in Q2
Shares of Walnut Creek, Calif.-based Westaff, Inc. (Nasdaq: WSTF) are slumping on news the staffing company more than doubled its quarterly net loss.
The net loss for the second quarter of fiscal 2007 ended April 14 was $0.67 million, or $0.04 per share, a decrease of 148% compared with a net loss of $0.27 million, or $0.02 per share, for the comparable 2006 quarter, the company said after Thursday’s close. Analyst estimates were unavailable.
“We are acutely aware the company’s operating results are below expectations and also below that of its competition,” said CEO Micheal T. Willis, who was appointed in early May. “Going forward, we will be implementing multiple initiatives to improve its operating results, including departure from unprofitable markets, enhancements to profitable markets and various cost reductions.”
Total quarterly revenue came to $129.8 million, a decline of 6.4%, or $8.8 million, compared with $121 million a year earlier. Domestic revenue decreased $10.6 million or 9.7%, largely due to a decline in temporary help sales and a decrease in billable hours.
Westaff attributed the drop in domestic revenue to an overall softness in the domestic marketplace.
“Clearly, I am concerned with the domestic revenue decrease, but I’m even more concerned [Westaff] demonstrates future improvements in gross margin,” Willis said.
Looking ahead, the company head warned that same-store sales could decline in the coming quarters as Westaff eliminates low margin business.
At 1:34 p.m. ET shares were down $0.29, or 5%, to $5.31. The 52-week high is $5.97, achieved on March 20. The 52-week low of $3.47 was set on Aug. 15, 2006.
