Westaff, Inc., Reports Fiscal 2007 Fourth Quarter and Year End Results

WALNUT CREEK, Calif.--(Business Wire)--
Westaff, Inc. (NASDAQ:WSTF), a leading provider of staffing
services, today reported financial results for its fourth fiscal
quarter and fiscal year, both of which ended Nov. 3, 2007. Consistent
with historic financial reporting, the Company's first three fiscal
quarters comprise twelve weeks each, while the fourth quarter
comprises 16 or 17 weeks.

Michael T. Willis, president and chief executive officer,
commented, "Fiscal 2007 represented a year of managing change toward
improving the company's financial position and preparing for future
growth. We completed a field and corporate restructuring, effectively
flattening the organization, while simultaneously adding 80+ new sales
people. We strengthened our senior management team, realized
significant cost savings and added two new service lines in order to
balance out our service portfolio and increase margins. All of this
combined, I'm confident Westaff is poised for growth and improved
performance in 2008."

Gross revenues for fiscal 2007 were $588.7 million, down $26.2
million or 4.3% from fiscal 2006. Fiscal 2007 contained 53 weeks. The
estimated sales for the extra week in fiscal 2007 were $11.1 million.
The decrease for a comparable 52 week year would have been $37.3
million or 6.1%. Gross margin continued an upward trend, as it grew to
17.9%, from 17.7% in fiscal 2006 and 17.3% in fiscal 2005.

Gross revenues for the fourth quarter fiscal 2007 were $196.2
million, compared with $196.9 million in fiscal 2006. Sales for a
comparable 16 week period would have been $183.9 million. Our net
income for the quarter was $1.2 million or $0.08 per share, compared
with $0.16 cents per share in fiscal 2006. In the third quarter of
fiscal 2007 Westaff restructured its field operations, which included
consolidation of offices. The Company completed its restructuring in
the fourth quarter and its total expense incurred in the fourth
quarter was $1.0 million, or $0.06 per share on a pre-tax basis. The
total cost of restructuring was $3.3 million for fiscal 2007, or $0.20
per share on a pre-tax basis.

Net income for the fourth quarter of fiscal 2007 was $1.2 million
and included a tax benefit of $2.7 million. Our net loss for fiscal
2007 was $1.9 million (including the $3.3 million restructuring charge
discussed above) or $.12 per diluted share, as compared to net income
of $3.1 million or $.19 per diluted share in the fiscal 2006.

A discussion of financial results from Michael T. Willis,
president and chief executive officer, and Dawn Jaffray, chief
financial officer, will be available on Feb. 1, 2008, after 12 pm
Pacific Time by accessing the Company Web site at www.westaff.com. In
addition, the pre-recorded call may be accessed telephonically by
dialing the following numbers:

-0-
*T
Replay Number (Toll Free): 1-877-660-6853
Replay Number (International): 1-201-612-7415
Replay Passcodes (both required for playback):
Account No.: 286
Conference ID No.: 271810
*T

Teleconference replay available until 11:59 p.m., Feb. 29, 2008.

About Westaff

Westaff provides staffing services and employment opportunities
for businesses in global markets. Westaff annually employs in excess
of 125,000 people and services more than 20,000 client accounts from
204 offices located throughout the United States, the United Kingdom,
Australia and New Zealand. For more information, please visit our
website at www.westaff.com.

This press release contains forward-looking statements within the
meaning of U.S. securities laws. Forward-looking statements in this
release are generally identified by words such as "expects,"
"believes," "will," and similar expressions that are intended to
identify forward-looking statements. You are cautioned not to place
undue reliance on these forward-looking statements, which speak only
as of the date hereof. All forward-looking statements are qualified in
their entirety by this cautionary statement. Forward-looking
statements contained herein include, but are not limited to,
statements regarding expected delivery of improved performance during
fiscal 2008, domestic revenues in the first quarter of fiscal 2008,
continued gross margins, and first quarter net income for fiscal 2008.
The forward-looking statements contained herein involve a number of
assumptions, risks and uncertainties that could cause actual results
to differ materially from those expressed or implied by these
forward-looking statements. Many of these risk and uncertainties
cannot be controlled by the Company. These risks and uncertainties
include, but are not limited to: risks related to control by a
significant shareholder, an intensely priced competitive market, our
significant working capital needs and our ability to borrow to meet
those needs, our ability to borrow under our credit facilities and our
compliance with their debt covenants, variability of the amount of
collateral that we are required to maintain to support our workers'
compensation obligation, the sufficiency of our workers' compensation
claims reserve, variability of employee-related costs, including
workers' compensation liabilities, possible adverse effects of
fluctuations in the general economy, our ability to collect on our
accounts receivable, risks related to franchise agent operations,
risks related to international operations and fluctuating exchange
rates, reliance on executive management and key personnel, our ability
to attract and retain the services of qualified temporary personnel,
the ability of our customers to terminate our service agreement on
short notice, variability of the cost of unemployment insurance for
our temporary employees, any difficulty with our information
technology system, government regulation, potential exposure to
employment-related claims, the volatility of the Company's stock
price, increased regulatory compliance costs and litigation and other
claims. Additional information concerning the risks and uncertainties
listed above, and other factors you may wish to consider, is contained
in the Company's filings with the Securities and Exchange Commission,
including the Company's most recent Form 10-K for the year ended
November 3, 2007.

Forward-looking statements are based on the beliefs and
assumptions of the Company's management and on currently available
information. The Company undertakes no responsibility to publicly
update or revise any forward-looking statement except as required by
applicable laws and regulations.

Westaff, Inc.
Jill Kinney, 925-930-5300
Vice President, Marketing
jkinney@westaff.com

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