Spherion Announces Third Quarter 2008 Financial Results

FORT LAUDERDALE, Fla., Oct. 30 // PRNewswire-FirstCall // -- Spherion Corporation (NYSE: SFN) today announced financial results for the third quarter ended September 28, 2008.

Spherion President and Chief Executive Officer Roy Krause commented, "We continue to focus on executing our strategy, emphasizing higher margin businesses such as Professional Services and Recruitment Outsourcing, while also adjusting our cost structure to reflect anticipated business levels. Based on current economic conditions, we will remain disciplined in our strategy execution, focused on cash flow, and cautious with our cost structure."

FINANCIAL HIGHLIGHTS

  • Third quarter 2008 revenues increased 9.5% year over year, $542 million compared with $495 million last year.
  • Earnings from continuing operations in the third quarter were $4.1 million, or $0.08 per share, compared with $9.0 million, or $0.16 per share, in the prior year.
  • Earnings before interest, taxes, depreciation and amortization (EBITDA) in the third quarter was $15.4 million compared with $19.6 million in the third quarter last year.
  • Revenues for the first nine months of 2008 were $1,682 million compared with $1,436 million for the same period in 2007. Adjusted earnings from continuing operations for the first nine months of 2008 were $11.8 million or $0.22 per share compared with $21.5 million or $0.38 per share for the same period in 2007. EBITDA for the first nine months was $43.7 million compared with $48.2 million for the same period last year.


Krause continued, "We reduced SG&A about $10 million in the third quarter compared with the second quarter, reflecting the final reductions related to the Technisource integration, reduced revenue levels, and other adjustments made in response to economic conditions. We will carefully watch gross profit trends and will continue to adjust our cost structure to maintain appropriate cash flow levels while keeping Spherion positioned to respond positively as the economy improves."

OPERATING PERFORMANCE

Within Professional Services, third quarter revenues were up 36.9% due to the 2007 acquisition of Technisource. On an acquisition adjusted comparable basis (i.e., including the acquisitions in the prior year on a pro forma basis) revenues were down 14.9% in the quarter. Professional Services now represent 34% of total revenues, up from 27% in the third quarter of last year. Gross profit margins in the third quarter of 2008 were 29.3% compared with 34.0% in the prior year reflecting the change in mix resulting from the acquisition of Technisource and a greater relative decline of permanent placement revenue. Permanent placement revenue made up 6.4% of total Professional Services revenue in the third quarter compared with 10.4% in the third quarter of 2007. Selling, general and administrative expenses decreased to 24.8% of revenue in the third quarter of 2008 compared with 29.3% of revenue in the third quarter last year. Segment operating profit was $8.3 million or 4.5% of revenue compared with $6.2 million last year or 4.7% of revenue.

Within Staffing Services, year over year revenues in the quarter were down 0.6%. On an acquisition adjusted comparable basis, adjusting for the acquisition of Todays Office Professionals and several franchise buybacks, revenues were down 9.5% in the quarter compared with last year. Gross profit margins were 18.1% in the third quarter of 2008 compared with 20.4% in the third quarter of 2007. Selling, general and administrative expenses decreased to 16.4% of revenue in the third quarter of 2008 compared with 17.1% of revenue last year. Segment operating profit was $6.1 million or 1.7% of revenue compared with $11.9 million or 3.3% in the third quarter of 2007.

OTHER ITEMS

The tax rate for the quarter was 37.7%. The Company had net debt of $71.3 million and availability on its credit facilities of $94 million at the end of the quarter. Net debt at the end of 2007 was $92.9 million. Capital expenditures during the third quarter were $2.4 million.

The Company purchased 1,762,955 shares of its common stock during the third quarter of 2008 at an average price of $5.11 per share. The Company has now completed all purchases under the Board of Directors' January, 2008, $25 million repurchase authorization.

OUTLOOK

Spherion's average daily revenue during the first 3 weeks of October was consistent with the average daily revenue in the third quarter. However, the recent economic volatility makes it difficult to predict with any certainty the amount of demand that will be seen in the market, and therefore management has elected not to provide revenue and earnings guidance for the fourth quarter of 2008. The Company believes that a combination of existing cash balances, operating cash flows and existing revolving lines of credit, taken together, provide adequate resources to fund ongoing operations and that operating cash flows in future quarters should allow for debt reductions.

ABOUT SPHERION

Spherion Corporation (NYSE: SFN) is a leading recruiting and staffing company that provides integrated solutions and breakout specialties to meet the evolving needs of companies and job candidates. As an industry pioneer for more than 60 years, Spherion has sourced, screened and placed millions of individuals in temporary, temp-to-hire and full-time jobs.

With approximately 700 locations in the United States and Canada, Spherion delivers innovative workforce solutions that improve business performance. Spherion provides its services to more than 8,000 customers, from Fortune 500 companies to a wide range of small and mid-size organizations. Employing more than 300,000 people annually through its network, Spherion is one of North America's largest employers. Spherion operates under the following brands: Spherion Staffing Services Group for administrative, clerical and light industrial workers; Technisource for technology professionals and solutions; The Mergis Group for accounting and finance and other professional positions; Todays Office Professionals for specialty administrative personnel; and Spherion Recruitment Process Outsourcing. To learn more, visit http://www.spherion.com

This release contains statements that are forward looking in nature and, accordingly, are subject to risks and uncertainties. Factors that could cause future results to differ from current expectations include risks associated with: Competition - our business operates in highly competitive markets with low barriers to entry; Economic conditions - any significant economic downturn could result in lower revenues or a significant reduction in demand from our customers may result in a material impact on the results of our operations; Corporate strategy - we may not achieve the intended effects of our business strategy; Termination provisions - certain contracts contain termination provisions and pricing risks; Failure to perform - our failure or inability to perform under customer contracts could result in damage to our reputation and give rise to legal claims; Disposition of businesses - the disposition of businesses previously sold may create contractual liabilities associated with indemnifications provided; Business interruptions - natural disasters or failures with hardware, software or utilities could adversely affect our ability to complete normal business processes; Tax filings - regulatory challenges to our tax filing positions could result in additional taxes; Personnel - our business is dependent upon the availability of qualified personnel and we may lose key personnel which could cause our business to suffer; Litigation - we may be exposed to employment-related claims and costs and we are a defendant in a variety of litigation and other actions from time to time; Common stock - the price of our common stock may fluctuate significantly, which may result in losses for our investors; Government Regulation - government regulation may increase our costs; International operations - we are subject to business risks associated with our operations in Canada which could make those operations more costly; Integrating acquisitions - managing or integrating any future acquisitions may strain our resources; and Debt compliance - failure to meet certain covenant requirements under our credit facility could impact part or all of our availability to borrow, and could impact our ability to continue purchasing Company stock under any authorized program. These and additional factors discussed in this release and in Spherion's filings with the Securities and Exchange Commission could cause the Company's actual results to differ materially from any projections contained in this release.

Spherion Corporation prepares its financial statements in accordance with generally accepted accounting principles (GAAP). Organic revenue growth is a non-GAAP financial measure, which includes pro-forma revenues of acquired companies. Adjusted earnings from continuing operations is a non-GAAP financial measure, which excludes certain non-operating related charges. Items excluded from the calculation of adjusted earnings from continuing operations include interest expense related to adjustment of the Canadian purchase liability, restructuring and other charges related to acquisitions, and a tax valuation allowance adjustment. EBITDA from continuing operations is a non-GAAP financial measure which excludes interest, taxes, depreciation and amortization from earnings from continuing operations. Organic growth, adjusted earnings and EBITDA from continuing operations are key measures used by management to evaluate its operations. Management includes revenues prior to acquisition date for acquired companies in the organic revenue growth calculation in order to evaluate the Company's operating performance. Organic growth, adjusted earnings and EBITDA from continuing operations should not be considered measures of financial performance in isolation or as an alternative to revenue growth or earnings from continuing operations or net earnings (loss) as determined in the Statement of Earnings in accordance with GAAP, and, as presented, may not be comparable to similarly titled measures of other companies, and therefore this measure has material limitations. Items excluded from adjusted earnings from continuing operations are significant components in understanding and assessing financial performance.

               SPHERION CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited, in thousands, except per share amounts)

Three Months Ended
September 28, September 30,
2008 2007
Revenues(1) $542,175 $495,168
Cost of services(2) 423,628 376,164
Gross profit 118,547 119,004
Selling, general and administrative
expenses 108,412 104,767
Amortization of intangibles 2,037 290
Interest expense 1,573 259
Interest income (69) (1,285)
111,953 104,031

Earnings from continuing operations
before income taxes 6,594 14,973
Income tax expense (2,486) (5,989)

Earnings from continuing operations 4,108 8,984
Earnings from discontinued
operations, net of tax 56 497
Net earnings $4,164 $9,481


Earnings per share, Basic and
Diluted:
Earnings from continuing
operations $0.08 $0.16
Earnings from discontinued
operations - 0.01
$0.08 $0.17

Weighted-average shares used in
computation of earnings per share:
Basic 52,336 56,072
Diluted 52,873 56,749

(1) Includes sales of all company-owned and franchised offices and
royalties on sales of area-based franchised offices.

(2) Gross profit is revenues less temporary employee wages, employment
related taxes such as FICA, federal and state unemployment taxes, medical
and other insurance for temporary employees, workers' compensation,
benefits, billable expenses and other direct costs.





SPHERION CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited, in thousands, except per share amounts)

Nine Months Ended
September 28, September 30,
2008 2007
Revenues(1) $1,681,615 $1,435,514
Cost of services(2) 1,304,713 1,092,129
Gross profit 376,902 343,385
Selling, general and administrative
expenses 347,190 311,829
Amortization of intangibles 6,124 538
Interest expense 4,897 2,591
Interest income (320) (3,762)
Restructuring and other charges 1,940 -
359,831 311,196

Earnings from continuing operations
before income taxes 17,071 32,189
Income tax expense (5,421) (13,069)

Earnings from continuing operations 11,650 19,120
Loss from discontinued
operations, net of tax (3,898) (3,621)
Net earnings $7,752 $15,499


Earnings per share, Basic:
Earnings from continuing
operations $0.22 $0.34
Loss from discontinued
operations (0.07) (0.06)
$0.14 $0.28

Earnings per share, Diluted:(3)
Earnings from continuing
operations $0.21 $0.34
Loss from discontinued operations (0.07) (0.06)
$0.14 $0.27

Weighted-average shares used in
computation of earnings per share:
Basic 54,143 56,321
Diluted 54,668 56,978

(1) Includes sales of all company-owned and franchised offices and
royalties on sales of area-based franchised offices.

(2) Gross profit is revenues less temporary employee wages, employment
related taxes such as FICA, federal and state unemployment taxes, medical
and other insurance for temporary employees, workers' compensation,
benefits, billable expenses and other direct costs.

(3) Earnings per share amounts are calculated independently for each
component and may not add due to rounding.





SPHERION CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except share data)

September 28, December 30,
Assets 2008 2007
Current Assets:
Cash and cash equivalents $14,002 $15,324
Receivables, less allowance
for doubtful accounts of
$3,866 and $6,523, respectively 310,766 347,908
Deferred tax asset 10,164 13,413
Insurance deposit 524 6,986
Other current assets 22,667 22,606
Total current assets 358,123 406,237
Goodwill 145,706 146,584
Property and equipment, net of
accumulated depreciation of
$124,001 and $109,229 respectively 69,718 78,077
Deferred tax asset 103,022 102,024
Trade names and
other intangibles, net 70,670 76,776
Insurance deposit - 11,259
Other assets 21,871 23,861
$769,110 $844,818

Liabilities and Stockholders' Equity
Current Liabilities:
Current portion of long-term
debt and revolving lines of credit $83,176 $86,035
Accounts payable and
other accrued expenses 69,966 79,779
Accrued salaries, wages and
payroll taxes 65,682 78,850
Accrued insurance reserves 20,173 19,174
Accrued income tax payable 662 1,042
Other current liabilities 5,366 16,419
Total current liabilities 245,025 281,299
Long-term debt, net of current portion 2,126 22,148
Accrued insurance reserves 16,379 20,501
Deferred compensation 16,278 17,287
Other long-term liabilities 4,059 2,923
Total liabilities 283,867 344,158
Stockholders' Equity:
Preferred stock, par value $0.01
per share; authorized, 2,500,000
shares; none issued or outstanding - -
Common stock, par value $0.01 per
share; authorized, 200,000,000;
issued 65,341,609 shares 653 653
Treasury stock, at cost,
13,872,796 and 9,443,034
shares, respectively (106,909) (83,681)
Additional paid-in capital 849,928 848,628
Accumulated deficit (265,641) (273,393)
Accumulated other comprehensive income 7,212 8,453
Total stockholders' equity 485,243 500,660
$769,110 $844,818



SPHERION CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION
(unaudited, in thousands, except per share amounts)


Three Months Ended Nine Months Ended
September 28, September 30, September 28, September 30,
2008 2007 2008 2007

Adjusted earnings
from continuing
operations $4,108 $9,019 $11,767 $21,466

Adjustment of tax
valuation allowance - - 1,064 -

Adjustment of
Canadian Acquisition - (35) - (2,346)

Restructuring and
other charges, net
of tax benefit - - (1,181) -

Earnings from
continuing operations 4,108 8,984 11,650 19,120

Loss from discontinued
operations, net
of tax 56 497 (3,898) (3,621)

Net earnings $4,164 $9,481 $7,752 $15,499


Per share-Diluted
amounts:(1)
Adjusted earnings from
continuing operations $0.08 $0.16 $0.22 $0.38

Adjustment of tax
valuation allowance - - 0.02 -

Adjustment of Canadian
Acquisition - - - (0.04)

Restructuring and other
charges, net of tax
benefit - - (0.02) -

Earnings from continuing
operations 0.08 0.16 0.21 0.34

Earnings (loss) from
discontinued operations,
net of tax - 0.01 (0.07) (0.06)

Net earnings $0.08 $0.17 $0.14 $0.27



Diluted weighted-average
shares used in
computation of
earnings per share 52,873 56,749 54,668 56,978

(1) Earnings per share amounts are calculated independently for each
component and may not add due to rounding.





RECONCILIATION OF EBITDA TO EARNINGS FROM CONTINUING OPERATIONS

Three Months Ended Nine Months Ended
September 28, September 30, September 28, September 30,
2008 2007 2008 2007

EBITDA from
continuing
operations $15,426 $19,584 $43,718 $48,202

Interest income 69 1,285 320 3,762

Interest expense (1,573) (259) (4,897) (2,591)

Depreciation and
amortization(2) (7,328) (5,637) (22,070) (17,184)

Earnings from continuing
operations before
income taxes 6,594 14,973 17,071 32,189

Income tax expense (2,486) (5,989) (5,421) (13,069)

Earnings from
continuing
operations $4,108 $8,984 $11,650 $19,120


EBITDA as a
percentage of
revenue 2.8% 4.0% 2.6% 3.4%

(2) Includes depreciation and amortization from continuing operations
only.



SPHERION CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION
(unaudited)


RECONCILIATION OF YEAR-OVER-YEAR ORGANIC(1) REVENUE GROWTH

Three Months Ended Nine Months Ended
September 28, 2008 September 28, 2008
Total Professional Staffing Total Professional Staffing
Company Services Services Company Services Services

Organic revenue
growth (11.4%) (14.9%) (9.5%) (5.6%) (6.7%) (5.1%)
Impact of
acquisitions and
business
reclassifications 20.9% 51.8% 8.9% 22.7% 56.2% 10.1%
GAAP revenue
growth 9.5% 36.9% (0.6%) 17.1% 49.5% 5.0%



Three Months Ended September 28, 2008
Revenue Growth Rate by Skill
Total Information Finance &
Professional Services Professional Technology Accounting Other
Organic revenue growth (14.9%) (16.4%) (10.5%) (8.1%)
Impact of acquisitions
and business reclassifications 51.8% 76.8% 6.0% (4.3%)
GAAP revenue growth 36.9% 60.4% (4.5%) (12.4%)


Three Months Ended September 28, 2008
Revenue Growth Rate by Service
Total Permanent Temporary
Professional Services Professional Placement Staffing (2)
Organic revenue growth (14.9%) (22.6%) (14.3%)
Impact of acquisitions
and business reclassifications 51.8% 7.1% 57.3%
GAAP revenue growth 36.9% (15.5%) 43.0%



Nine Months Ended September 28, 2008
Revenue Growth Rate by Skill
Total Information Finance &
Professional Services Professional Technology Accounting Other
Organic revenue growth (6.7%) (8.4%) (4.5%) 6.0%
Impact of acquisitions
and business reclassifications 56.2% 83.1% 6.9% (3.8%)
GAAP revenue growth 49.5% 74.7% 2.4% 2.2%



Nine Months Ended September 28, 2008
Revenue Growth Rate by Service
Total Permanent Temporary
Professional Services Professional Placement Staffing (2)
Organic revenue growth (6.7%) (13.2%) (6.2%)
Impact of acquisitions
and business reclassifications 56.2% 7.7% 62.5%
GAAP revenue growth 49.5% (5.5%) 56.3%



Three Months Ended September 28, 2008
Revenue Growth Rate by Skill
Total Light Total
Staffing Services Staffing Clerical Industrial Staffing
Organic revenue growth (9.5%) (4.9%) (17.0%) (9.5%)
Impact of acquisitions
and business reclassifications 8.9% 11.2% 5.9% 8.9%
GAAP revenue growth (0.6%) 6.3% (11.1%) (0.6%)



Three Months Ended September 28, 2008
Revenue Growth Rate by Service
Permanent Temporary Managed
Staffing Services Placement Staffing(2) Services(2)
Organic revenue growth (45.5%) (9.0%) (8.4%)
Impact of acquisitions
and business reclassifications 7.4% 13.1% (18.3%)
GAAP revenue growth (38.1%) 4.1% (26.7%)



Nine Months Ended September 28, 2008
Revenue Growth Rate by Skill
Total Light Total
Staffing Services Staffing Clerical Industrial Staffing
Organic revenue growth (5.1%) (3.3%) (8.2%) (5.1%)
Impact of acquisitions
and business reclassifications 10.1% 12.3% 6.6% 10.1%
GAAP revenue growth 5.0% 9.0% (1.6%) 5.0%



Nine Months Ended September 28, 2008
Revenue Growth Rate by Service
Permanent Temporary Managed
Staffing Services Placement Staffing(2) Services(2)
Organic revenue growth (34.2%) (4.9%) (1.2%)
Impact of acquisitions
and business reclassifications 8.8% 14.8% (20.6%)
GAAP revenue growth (25.4%) 9.9% (21.8%)

(1) Organic revenue growth is calculated assuming that all acquisitions
were consummated on January 1, 2007. This calculation has the effect of
adding revenues for the acquired businesses prior to their acquisition
dates to Spherion Corporation's reported revenues.

In addition, organic revenue growth is calculated assuming that
business reclassifications were effective on January 1, 2007, so that
revenues for this business are included in the same segment, skill and
service in the current and prior period for purposes of calculating year
over year growth.

(2) Effective with the first quarter of 2008, the management of certain
customer contracts was transferred between operating segments, primarily to
Professional Services from Staffing Services, and has been adjusted for
purposes of calculating organic growth.





SPHERION CORPORATION AND SUBSIDIARIES
SEGMENT INFORMATION
(unaudited, dollar amounts in thousands)

Three Months Ended
September 28, September 30, June 29,
2008 2007 2008
Revenues:
Professional Services $181,908 $132,906 $197,356
Staffing Services 360,267 362,262 365,621
Segment revenue $542,175 $495,168 $562,977

Gross profit:
Professional Services $53,314 $45,149 $60,884
Staffing Services 65,233 73,855 69,303
Segment gross profit $118,547 $119,004 $130,187

Segment SG&A expenses:
Professional Services $(45,064) $(38,958) $(49,009)
Staffing Services (59,099) (61,933) (65,802)
Segment SG&A $(104,163) $(100,891) $(114,811)

Segment operating profit:
Professional Services $8,250 $6,191 $11,875
Staffing Services 6,134 11,922 3,501
Segment operating profit 14,384 18,113 15,376

Unallocated corporate costs (4,249) (3,876) (4,064)
Amortization of intangibles (2,037) (290) (2,043)
Interest expense (1,573) (259) (1,575)
Interest income 69 1,285 72
Restructuring and other charges - - (944)

Earnings from continuing
operations before income taxes $6,594 $14,973 $6,822

MEMO:

Gross profit margin:
Professional Services 29.3% 34.0% 30.8%
Staffing Services 18.1% 20.4% 19.0%
Total Spherion 21.9% 24.0% 23.1%


Segment SG&A:
Professional Services 24.8% 29.3% 24.8%
Staffing Services 16.4% 17.1% 18.0%
Total Spherion 19.2% 20.4% 20.4%


Segment operating profit margin:
Professional Services 4.5% 4.7% 6.0%
Staffing Services 1.7% 3.3% 1.0%
Total Spherion 2.7% 3.7% 2.7%


Segment revenue per billing day:
Professional Services $2,887 $2,110 $3,084
Staffing Services $5,719 $5,750 $5,713
Total Spherion $8,606 $7,860 $8,797


Supplemental Cash Flow and Other
Information:
Operating cash flow $6,754 $11,232 $28,377
Capital expenditures $2,418 $2,051 $2,256
Depreciation and amortization $7,328 $5,637 $7,303
DSO 53 53 52
Billing Days 63 63 64



SPHERION CORPORATION AND SUBSIDIARIES
SEGMENT INFORMATION
(unaudited, dollar amounts in thousands)

Nine Months Ended
September 28, September 30,
2008 2007
Revenues:
Professional Services $583,717 $390,369
Staffing Services 1,097,898 1,045,145
Segment revenue $1,681,615 $1,435,514

Gross profit:
Professional Services $173,650 $132,284
Staffing Services 203,252 211,101
Segment gross profit $376,902 $343,385

Segment SG&A expenses:
Professional Services $(142,837) $(112,128)
Staffing Services (191,824) (187,724)
Segment SG&A $(334,661) $(299,852)

Segment operating profit:
Professional Services $30,813 $20,156
Staffing Services 11,428 23,377
Segment operating profit 42,241 43,533

Unallocated corporate costs (12,529) (11,977)
Amortization of intangibles (6,124) (538)
Interest expense (4,897) (2,591)
Interest income 320 3,762
Restructuring and other charges (1,940) -

Earnings from continuing
operations before income taxes $17,071 $32,189

MEMO:

Gross profit margin:
Professional Services 29.7% 33.9%
Staffing Services 18.5% 20.2%
Total Spherion 22.4% 23.9%


Segment SG&A:
Professional Services 24.5% 28.7%
Staffing Services 17.5% 18.0%
Total Spherion 19.9% 20.9%


Segment operating profit margin:
Professional Services 5.3% 5.2%
Staffing Services 1.0% 2.2%
Total Spherion 2.5% 3.0%


Segment revenue per billing day:
Professional Services $3,072 $2,044
Staffing Services $5,778 $5,472
Total Spherion $8,851 $7,516


Supplemental Cash Flow and Other
Information:
Operating cash flow $43,706 $36,262
Capital expenditures $7,281 $6,006
Depreciation and amortization $22,070 $17,184
DSO 53 53
Billing Days 190 191



SPHERION CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL INFORMATION
(unaudited, dollar amounts in thousands)

Three Months Ended
September 28, September 30, June 29,
2008 2007 2008
Professional Services
Revenue by Skill:
Information Technology $139,614 $87,053 $148,925
Finance & Accounting 25,758 26,980 29,584
Other 16,536 18,873 18,847
Segment Revenue $181,908 $132,906 $197,356

Revenue by Service:
Temporary Staffing (1) $170,216 $119,071 $181,913
Permanent Placement 11,692 13,835 15,443
Segment Revenue $181,908 $132,906 $197,356

Gross Profit Margin by Service:
(As % of Applicable Revenue)
Temporary Staffing 24.5% 26.3% 25.0%
Permanent Placement 100.0% 100.0% 100.0%
Total Professional Services 29.3% 34.0% 30.8%

Revenue per billing day by Skill:
Information Technology $2,216 $1,382 $2,327
Finance & Accounting $409 $428 $462
Other $262 $300 $294

Revenue per billing day by Service:
Temporary Staffing $2,702 $1,890 $2,842
Permanent Placement $186 $220 $241

Staffing Services
Revenue by Skill:
Clerical $233,393 $219,546 $239,743
Light Industrial 126,874 142,716 125,878
Segment Revenue $360,267 $362,262 $365,621

Revenue by Service:
Temporary Staffing $322,455 $309,739 $325,683
Managed Services (1) 34,074 46,480 35,775
Permanent Placement 3,738 6,043 4,163
Segment Revenue $360,267 $362,262 $365,621

Gross Profit Margin by Service:
(As % of Applicable Revenue)
Temporary Staffing 16.1% 17.3% 16.9%
Managed Services 28.4% 30.4% 28.5%
Permanent Placement 100.0% 100.0% 100.0%
Total Staffing Services 18.1% 20.4% 19.0%

Revenue per billing day by Skill:
Clerical $3,705 $3,485 $3,746
Light Industrial $2,014 $2,265 $1,967

Revenue per billing day by Service:
Temporary Staffing $5,118 $4,916 $5,089
Managed Services $541 $738 $559
Permanent Placement $59 $96 $65

(1) Effective with the first quarter of 2008, the management of certain
customer contracts was transferred to Professional Services from Staffing
Services. This change is being reported on a prospective basis.





SPHERION CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL INFORMATION
(unaudited, dollar amounts in thousands)

Nine Months Ended
September 28, 2008 September 30, 2007
Professional Services
Revenue by Skill:
Information Technology $444,946 $254,722
Finance & Accounting 84,170 82,209
Other 54,601 53,438
Segment Revenue $583,717 $390,369

Revenue by Service:
Temporary Staffing (1) $543,432 $347,747
Permanent Placement 40,285 42,622
Segment Revenue $583,717 $390,369

Gross Profit Margin by Service:
(As % of Applicable Revenue)
Temporary Staffing 24.5% 25.8%
Permanent Placement 100.0% 100.0%
Total Professional Services 29.7% 33.9%

Revenue per billing day by Skill:
Information Technology $2,342 $1,334
Finance & Accounting $443 $430
Other $287 $280

Revenue per billing day by Service:
Temporary Staffing $2,860 $1,821
Permanent Placement $212 $223

Staffing Services
Revenue by Skill:
Clerical $714,817 $655,890
Light Industrial 383,081 389,255
Segment Revenue $1,097,898 $1,045,145

Revenue by Service:
Temporary Staffing $975,999 $888,399
Managed Services (1) 108,904 139,320
Permanent Placement 12,995 17,426
Segment Revenue $1,097,898 $1,045,145

Gross Profit Margin by Service:
(As % of Applicable Revenue)
Temporary Staffing 16.2% 17.0%
Managed Services 29.7% 30.5%
Permanent Placement 100.0% 100.0%
Total Staffing Services 18.5% 20.2%

Revenue per billing day by Skill:
Clerical $3,762 $3,434
Light Industrial $2,016 $2,038

Revenue per billing day by Service:
Temporary Staffing $5,137 $4,651
Managed Services $573 $729
Permanent Placement $68 $91

(1) Effective with the first quarter of 2008, the management of certain
customer contracts was transferred to Professional Services from Staffing
Services. This change is being reported on a prospective basis.


SOURCE Spherion Corporation

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