MPS Group Announces Third Quarter 2009 Results

http://www.businesswire.com/news/home/20091029005187/en

JACKSONVILLE, Fla.--(Business Wire)--
MPS Group, Inc. (NYSE:MPS), a leading provider of specialty staffing, consulting
and business solutions, today announced financial results for the third quarter
and nine months ended September 30, 2009. Third quarter revenue of $408 million
was within the range of guidance previously provided by management, and diluted
net income per common share of $0.06 was above the range of guidance previously
provided by management, due primarily to lower general and administrative
expenses and the benefit of a lower income tax rate.

MPS Group revenue decreased 29% versus last year's third quarter. Excluding the
impact of changes in foreign currency exchange rates, revenue was down 25%
versus the third quarter of 2008. On a sequential basis, revenue declined 2%
versus the second quarter of 2009. Excluding the impact of changes in foreign
currency exchange rates, revenue decreased 5% sequentially versus the second
quarter of 2009.

Third quarter gross margin of 26.8% was adversely affected by fewer permanent
placement fees, which represented 2.9% of total revenue in the third quarter of
2009 versus 5.3% of total revenue in the prior year`s third quarter. In the
third quarter, operating income was $8 million, or 2.1% of third quarter
revenue, compared with $7 million, or 1.6% of revenue, in the second quarter of
2009.

A detailed analysis of revenue, gross profit and operating income by segment is
provided below. A summary balance sheet is provided below as well.

Timothy Payne, MPS Group Chief Executive Officer, stated, "We were pleased with
our financial performance for the quarter despite the current weakness in the
employment market."

"During the quarter, general and administrative expenses declined $6 million
sequentially versus the second quarter of 2009, which produced a higher level of
taxable income resulting in a lower-than-expected effective income tax rate,"
added MPS Group Chief Financial Officer Robert Crouch. "The combination of these
two items resulted in earnings per share being above the range of guidance
previously provided."

As previously announced, MPS Group has signed a definitive agreement to be
acquired by Adecco Group for $13.80 per common share in a cash transaction
valued at approximately $1.3 billion. The Adecco Group (SIX:ADEN-VX)
(Euronext:ADE), based in Zurich, Switzerland, is a Fortune Global 500 Company
and the world`s leading provider of human resource solutions with operations in
over 60 countries. The transaction is expected to close in the first quarter of
2010 and is subject to MPS Group shareholder approval, antitrust clearance and
certain other regulatory approvals and closing conditions.

About MPS Group

MPS Group is a leading provider of staffing, consulting, and solutions in the
disciplines of information technology, finance and accounting, law, engineering,
marketing and creative, property, and healthcare. MPS Group delivers its
services to businesses and government entities in the United States, Europe,
Canada, Australia, and Asia. A Fortune 1000 company with headquarters in
Jacksonville, Florida, MPS Group trades on the New York Stock Exchange. For more
information about MPS Group, please visit www.mpsgroup.com.

Additional Information and Where To Find It

In connection with the proposed merger, MPS Group will file a proxy statement
with the Securities and Exchange Commission ("SEC"). Investors are urged to read
the proxy statement when it becomes available because it will contain important
information about the merger as well as other documents filed by MPS Group at
the SEC's Internet site, www.sec.gov. These documents can also be obtained for
free from MPS Group's Investor Relations web site (www.mpsgroup.com) or by
calling 904-360-2500.

MPS Group and its directors, executive officers and other members of management
and employees may be deemed to be participants in the solicitation of proxies
from its stockholders in connection with the proposed merger. Information
regarding MPS Group's directors and executive officers is available in MPS
Group's proxy statement dated April 20, 2009, filed with the SEC. Additional
information regarding the interests of participants of MPS Group will be
included in the proxy statement to be filed with the SEC in connection with the
merger.

Forward-Looking Statements

This press release contains forward-looking statements that are subject to
certain risks, uncertainties or assumptions described above and may be affected
by other factors, including, but not limited to: fluctuations in the economies
and financial markets in the U.S. and foreign countries where we do business and
in the Company's industry segments in particular; the market price of the
Company`s common stock has been, and may continue to be, materially affected by
the anticipated commencement and completion of the proposed acquisition of the
Company, or the failure of the acquisition of the Company to be completed;
uncertainties associated with the proposed acquisition may cause a loss of
employees and may otherwise adversely affect the Company`s business operations;
the proposed acquisition agreement contains restrictive covenants that may limit
the Company`s ability to respond to changes in market conditions or pursue
business opportunities; industry trends toward consolidating vendor lists; the
demand for the Company's services, including the impact of changes in
utilization rates; consolidation or bankruptcy of major customers; the effect of
competition, including the Company's ability to expand into new markets and to
remain profitable or maintain profit margins in the face of pricing pressures;
the Company's ability to retain significant existing customers or obtain new
customers; the Company's ability to recruit, place and retain consultants and
professional employees; the Company's ability to identify and complete
acquisition targets and to successfully integrate acquired operations into the
Company; possible changes in governmental laws and regulations affecting the
Company's operations, including possible changes to laws and regulations
relating to benefits for consultants and temporary personnel, and possible
increased regulation of the employer-employee relationship; employment-related
claims, costs, and other litigation matters; adjustments during periodic tax
audits; litigation relating to prior and current transactions and activities;
claims and liabilities asserted for the acts or omissions of our temporary
employees; fluctuations in interest rates or foreign currency exchange rates;
loss of key employees; fluctuations in the price of the Company's common stock
due to actual or anticipated changes in quarterly operating results, financial
estimates, statements by securities analysts, and other events; and other
factors discussed in the Company's filings with the Securities and Exchange
Commission. In some cases, you can identify forward-looking statements by
terminology such as: "will," "may," "should," "could," "expects," "intends,"
"plans," "hopes," "indicates," "projects," "can," "anticipates," "perhaps,"
"probably," "believes," "estimates," "appears," "predicts," "potential,"
"continues," "would," or "become," or other comparable terminology or the
negative of these terms or other comparable terminology. Readers are urged to
review and consider the matters discussed in "Item 1A. Risk Factors" of the
Company's Form 10-K for the year ended December 31, 2008 and discussion of risks
or uncertainties in subsequent filings with the Securities and Exchange
Commission.

Should one or more of these risks, uncertainties or other factors materialize,
or should underlying assumptions prove incorrect, actual results, performance or
achievements of the Company may vary materially from any future results,
performance or achievements expressed or implied by the forward-looking
statements. Forward-looking statements are based on beliefs and assumptions of
the Company's management and on information then currently available to
management. Undue reliance should not be placed on such forward-looking
statements. Forward-looking statements are not guarantees of performance. Such
forward-looking statements were prepared by the Company based upon information
available at the time of such statements. Forward-looking statements speak only
as of the date they are made, and the Company undertakes no obligation to update
publicly any of them in light of new information or future events.

MPS Group, Inc.
Unaudited Operating Highlights
(in thousands, except per share amounts)

Three Months Ended Nine Months Ended
September 30, September 30,
Operating Highlights: 2009 2008 2009 2008
Revenue:
North American Professional Services $ 128,257 $ 192,185 $ 421,893 $ 557,453
International Professional Services 107,616 142,033 309,347 443,383
North American Information Technology Services 124,793 154,765 376,343 471,854
International Information Technology Services 47,105 88,501 147,474 262,065
Total revenue 407,771 577,484 1,255,057 1,734,755

Gross profit:
North American Professional Services 37,101 58,380 120,344 171,296
International Professional Services 23,826 41,597 71,293 135,046
North American Information Technology Services 38,966 47,797 117,902 145,525
International Information Technology Services 9,522 16,320 29,073 45,631
Total gross profit 109,415 164,094 338,612 497,498

Operating income:
North American Professional Services 6,145 17,104 20,588 51,645
International Professional Services 2,811 5,213 6,629 23,839
North American Information Technology Services 6,613 10,367 14,663 33,326
International Information Technology Services 743 4,009 3,477 9,879
Operating income before unallocated corporate expenses 16,312 36,693 45,357 118,689
Unallocated corporate expenses 7,865 7,513 24,032 22,721
Total operating income 8,447 29,180 21,325 95,968
Other income (expense), net 1,573 (2,715 ) 601 (4,259 )
Income before provision for income taxes 10,020 26,465 21,926 91,709
Provision for income taxes 4,568 9,257 11,950 34,702
Net income $ 5,452 $ 17,208 $ 9,976 $ 57,007

Diluted net income per common share $ 0.06 $ 0.19 $ 0.11 $ 0.62
Diluted common shares outstanding 89,199 90,315 88,161 91,738

As of
September 30, December 31,
2009 2008
Cash and cash equivalents $ 152,848 $ 90,566
Accounts receivable, net of allowance 259,220 282,093
Other 32,111 24,198
Current assets 444,179 396,857
Long-term assets 384,422 399,035
Total assets $ 828,601 $ 795,892

Current liabilities $ 178,795 $ 173,147
Other 28,568 31,275
Stockholders' equity 621,238 591,470
Total liabilities and stockholders' equity $ 828,601 $ 795,892

Working capital $ 265,384 $ 223,710

Three Months Ended
September 30, 2009

Net cash provided by operating activities $ 29,773

MPS Group, Inc.
Unaudited Reconciliation of Non-GAAP Financial Measures to Most Comparable GAAP Financial Measures

Reconciliation of EBITDA to Net Income
(in thousands)

Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
EBITDA $ 12,529 $ 34,857 $ 34,428 $ 112,740
Depreciation and intangibles amortization 4,082 5,677 13,103 16,772
Operating income 8,447 29,180 21,325 95,968
Other income (expense), net 1,573 (2,715 ) 601 (4,259 )
Income before provision for income taxes 10,020 26,465 21,926 91,709
Provision for income taxes 4,568 9,257 11,950 34,702
Net income $ 5,452 $ 17,208 $ 9,976 $ 57,007

Reconciliation of Year-Over-Year Quarterly Revenue Growth Rate, Excluding
the Effects of Changes in Foreign Currency Exchange Rates

MPS N. American International
Group Businesses Businesses
Revenue growth rate 3Q2008 to 3Q2009, excluding the effects of changes in foreign currency exchange rates -25.4 % -26.9 % -23.2 %
Revenue growth rate contributed from effects of changes in currency -4.0 % -0.2 % -9.7 %
GAAP revenue growth rate 3Q2008 to 3Q2009 -29.4 % -27.1 % -32.9 %

Reconciliation of Year-Over-Year Quarterly Revenue Growth Rate, Excluding
the Effects of Changes in Foreign Currency Exchange Rates

Professional IT IT Professional
N. American N. American International International
Revenue growth rate 3Q2008 to 3Q2009, excluding the effects of changes in foreign currency exchange rates -33.3 % -19.0 % -39.3 % -13.2 %
Revenue growth rate contributed from effects of changes in currency - -0.4 % -7.5 % -11.0 %
GAAP revenue growth rate 3Q2008 to 3Q2009 -33.3 % -19.4 % -46.8 % -24.2 %

Reconciliation of Sequential Quarterly Revenue Growth Rate, Excluding
the Effects of Changes in Foreign Currency Exchange Rates

MPS International IT Professional
Group Businesses International International
Revenue growth rate 2Q2009 to 3Q2009, excluding the effects of changes in foreign currency exchange rates -4.9 % -4.5 % -11.2 % -1.3 %
Revenue growth rate contributed from effects of changes in currency 2.5 % 6.4 % 5.7 % 6.9 %
GAAP revenue growth rate 2Q2009 to 3Q2009 -2.4 % 1.9 % -5.5 % 5.6 %

MPS Group, Inc.
Tyra Tutor, 904-360-2500
Senior Vice President - Corporate Development
tyra.tutor@mpsgroup.com

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