EX-99.1 2 exhibit1.htm EX-99.1 EX-99.1
     
Contact:
  David L. Kerr
Senior Vice President – Corporate Development
713.386.1420
dkerr@comsys.com

COMSYS IT PARTNERS, INC. UPDATES EARNINGS GUIDANCE
FOR THE FOURTH QUARTER OF 2007; POTENTIAL WRITE-OFFS RELATED TO
CHIMES BANKRUPTCY COULD IMPACT EARNINGS

HOUSTON, TX (January 24, 2008) – COMSYS IT Partners, Inc. (NASDAQ:CITP), a leading provider of information technology staffing and consulting services, today commented on the potential impact of the Chimes bankruptcy on its fourth quarter 2007 earnings. COMSYS confirmed that it has several accounts with customers who utilized the Chimes VMS prior to the bankruptcy, and that it has been actively monitoring the court proceedings.

The Company’s previously issued fourth quarter earnings guidance was for net income in the range of $8.4 million to $9.3 million (or $0.42 to $0.46 per diluted share). Exclusive of any charge related to Chimes, COMSYS believes that fourth quarter earnings per diluted share would have been in line with the previous range. All of these estimated net income amounts are based on an effective tax rate of 9%.

There have been favorable developments in the bankruptcy case over the last week. Given the uncertainties surrounding the Chimes bankruptcy proceeding, however, COMSYS is currently analyzing the collectibility of up to $1.0 million in Chimes’ customer funds. This sum includes certain COMSYS customer funds that Chimes was holding at the time of its bankruptcy, as well as a portion of its work in process at the time. COMSYS expects to pursue these funds vigorously, and will provide a detailed update when its fourth quarter financial results are released on February 14.

COMSYS’ reconfirmed its previous guidance for fourth quarter revenues of $180.0 million to $185.0 million.

During the fourth quarter last year, the Company generated revenues of $184.7 million and net income of $5.2 million (or $0.26 per diluted share). Net income last year included a loss on the early extinguishment of debt of $0.7 million (or $0.04 per diluted share).

“The Chimes bankruptcy was an unfortunate surprise to everyone in our industry and our first priority following the abruptness of the event was to ensure as orderly a transition as possible for our clients and consultants,” said Larry L. Enterline, Chief Executive Officer.  “At the same time, however, the situation could present a longer term opportunity for our own VMS team. While we have billable headcount at a handful of Chimes’ old accounts and intend to pursue our pre-petition accounts receivable as vigorously as we can, we also stand ready to assist customers who wish to consider a different solution in the future.”   

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About COMSYS IT Partners
COMSYS IT Partners, Inc. (NASDAQ: CITP) is a leading information technology services company with 47 offices across the U.S. and offices in Canada and the United Kingdom. Leveraging more than 30 years of experience, COMSYS has enhanced its core competency of IT staffing services by creating client-centric, cost-effective information system solutions. COMSYS’ service offerings include contingent staff augmentation of IT professionals, permanent recruiting and placement, vendor management and project solutions, including network design and management, offshore development, customized software development and maintenance, software globalization/ localization translation services and implementation and upgrade services for SAS, business intelligence and various ERP packages. COMSYS primarily serves clients in the financial services/insurance, telecommunications, energy, pharmaceutical and healthcare industries and government agencies.

Forward-looking Statements
Certain information contained in this press release may be deemed forward-looking statements regarding events and financial trends that could affect the Company’s plans, objectives, future operating results, financial condition, performance and business. These statements may be identified by words such as “estimate,” “forecast,” “plan,” “intend,” “believe,” “should,” “expect,” “anticipate,” or variations or negatives thereof, or by similar or comparable words or phrases. Forward-looking statements are based on the Company’s expectations and beliefs concerning future events affecting the Company, which reflect estimates and assumptions made by management. These estimates and assumptions reflect the Company’s best judgment based on currently known market conditions and other factors relating to the Company’s operations and business environment, all of which are difficult to predict and many of which are beyond its control, including:

  the Company’s success in attracting, training, retaining and motivating billable consultants and key officers and employees;  

  the Company’s ability to shift a larger percentage of its business mix into IT solutions and project management and, if successful, its ability to manage those types of business profitably;  

  changes in levels of unemployment and other economic conditions in the United States, or in particular regions or industries;  

  weakness or reductions in corporate information technology spending levels;

  the Company’s ability to maintain existing client relationships and attract new clients in the context of changing economic or competitive conditions;  

  the impact of competitive pressures on the Company’s ability to maintain or improve its operating margins, including any change in the demand for its services;  

  the entry of new competitors into the U.S. staffing services market due to the limited barriers to entry or the expansion of existing competitors in that market;  

  increases in employment-related costs such as healthcare and unemployment taxes;  

  the possibility of the Company’s incurring liability for the activities of its billable consultants or for events impacting its billable consultants on clients’ premises;  

  the risk that the Company may be subject to claims for indemnification under its customer contracts;  

  the risk in an uncertain economic environment of increased incidences of employment disputes, employment litigation and workers’ compensation claims;  

  the risk that cost cutting or restructuring activities could cause an adverse impact on certain of the Company’s operations;  

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  economic declines that affect the Company’s business, including its profitability, liquidity or the ability to comply with applicable loan covenants;  

  adverse changes in credit and capital markets conditions that may affect the Company’s ability to obtain financing or refinancing on favorable terms;  

  adverse changes to management’s periodic estimates of future cash flows that may affect the Company’s assessment of its ability to fully recover its goodwill;  

  whether governments will amend existing regulations or impose additional regulations or licensing requirements in such a manner as to increase the Company’s costs of doing business; and  

  other matters discussed in this press release and the Company’s most recent definitive proxy statement, Forms 10-K, 10-Q and 8-K, as well as matters discussed in its future SEC filings.  

Although the Company believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. They can be affected by inaccurate assumptions the Company might make or by known or unknown risks and uncertainties. The forward-looking statements included in this release are not guarantees of future performance, and the Company cannot assure the reader that those statements will be realized or that the forward-looking events or circumstances will occur. Actual future results may vary materially. Because of these factors, the Company cautions that investors should not place undue reliance on any of its forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made and, except as required by law, the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances, and is not responsible for any changes made to this release by wire or Internet services.

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