Income from operations during the quarter rose 14% to $4.1 million over $3.6 million a year ago. Net income for the second quarter of 2001 rose 32% to $2.9 million, or $0.07 per share, over income reported in the second quarter of 2000 of $2.2 million, or $0.05 per share. Included in net income for the second quarter of 2001 is a gain on the sale of real estate of $0.5 million, net of tax, or $0.01 per share.
Dick King, President and Chief Executive Officer, said: While the slowing economy has impacted our sales growth, we are pleased with our ability to manage the business and increase profits during the quarter, the first year over year increase since the third quarter of 1999. The Company said its higher income from operations was attributable to fewer dispatch office openings during the quarter, a consolidation of unprofitable offices in 2000, and good expense management during the quarter.
The Company stated that its second quarter sales decline was brought on in part by continued weak demand among manufacturing and retail service customers. While partially offset by strong growth among construction accounts, the uncertainty regarding the future direction of the economy prompted downward guidance in revenue forecasts for the second half of 2001. Based on current business trends and the continued limited visibility in the economy, we anticipate sales declines of approximately five percent for the remainder of 2001. However, we anticipate increased profits and estimate earnings per share in the range of $0.19 to $0.22 for the third quarter of 2001 and $0.26 to $0.29 for fiscal 2001, said Steve Cooper, Labor Ready’s Chief Financial Officer.
King said: We remain focused on profitability while we work through the current economic slowdown. However, we are also committed to making investments that will boost our future growth: hiring the best people, providing the best training, expanding customer service programs and marketing our services to new customers. We will be well positioned as the economy rebounds to meet the needs of our customers for additional workforce as they expand their own businesses.
During the second quarter, Labor Ready opened 8 new offices and closed 20 offices. At the end of the quarter, the Company operated 812 offices throughout the United States, Canada, Puerto Rico and the United Kingdom, making Labor Ready the nation’s leading provider of temporary manual labor to the light industrial and small business markets. In 2000, Labor Ready provided work for more than 700,000 people.
I am excited about the future for Labor Ready: we’re in a great industry, we serve a highly diversified customer base, and have an extremely talented and motivated group of employees. The service we provide of putting people to work is more important than ever in these tough economic times, King concluded.
