CINCINNATI, Feb. 24, 2006 (PRIMEZONE) -- Resolve Staffing, Inc. (OTCBB:RSFF) is providing financial guidance and a future outlook, in which the Company is on its way to another major year of growth.
With the pending merger with Employee Leasing Solutions, Inc. (ELS), management has set a new course for success. When combined, ELS (www.elshr.com) and Resolve (www.resolvestaffing.com) will instantly become one of the premier national turnkey providers of Human Resource Services. As previously stated, the consolidated entity will be on track for annualized net revenues of approximately $125 million. Resolve also expects to experience additional growth from the locations it has acquired and opened over the past year. Moreover, Resolve will continue to seek additional growth through acquisitions as well as internal organic growth. Given the annualized run rate of the consolidated entities, Resolve estimates its annualized Net Income will be approximately $5 million, or $.24 per fully diluted share, once the two companies are merged and the synergies are realized. We will be in a position to release additional guidance once we close the ELS merger and have the opportunity to realize all of the benefits and synergies of the transaction.
From increasing revenue generation, to the closing of a number of acquisitions and increasing shareholder value, Resolve Staffing laid the foundation for building a national human resource outsourcing company in 2005. Over the past year, Resolve has made numerous strides to progress the Company in a positive direction that management believes will rectify certain issues and build a foundation for the shareholders to see the benefits of in the future. In 2005, The Company grew from a one location staffing firm to a national company with 52 offices reaching from New York to California.
Resolve made numerous acquisitions in 2005. There has been a great deal of time and expense integrating these new locations. There will also be both time and expense in integrating ELS and Resolve. While we continue to integrate these acquisitions, we will also be focused on revenue and cash generation as a major initiative for 2006. Our historic losses are in main part attributable to the extraordinary costs related to acquisitions and the accompanying legal, accounting, and various other closing costs normally associated with those activities. These costs were expected and moderate losses were anticipated. As we integrate these acquisitions and increase profitability among them, and as operational efficiencies are increased, we expect both revenues and profitability to increase. We expect revenues and profits to be even stronger once we fully integrate these acquisitions and close the ELS transaction.
Additionally, many of the acquisitions not only diversified our service offerings and our geographic reach, they also added revenue in niche markets in which we expect to experience improvements in our gross margins. These include specialty vertical markets such as healthcare and truck driver staffing. Both of these markets are experiencing strong growth and high demand, thus increasing profitability within these market niches.
Pursuant to our business plan and corporate vision, we are achieving our goals for revenue growth. We are also reducing operational redundancies, consolidating business functions, and exploiting new revenue producing opportunities. Our synergy-based approach to operations and our model of continuous growth have resulted in significant progress in the areas of building new revenues and overall operational cost reductions. We have accomplished our stated goals and continue to move forward. After the closing of the ELS acquisition, we will focus on profits and efficiencies. We have obtained the 'critical mass' we targeted since the beginning and we expect the coming years to be exciting for Resolve. We will continue to work on new acquisitions and organic growth and have set bold, but achievable, goals. We release this guidance to inform current and potential stockholders that we are aware of the lack of historic information and we hope to provide a clearer outlook in the near future.
Don Quarterman, Director, stated, "Over the past year, Resolve has successfully executed on a plan to position the Company for growth. We have focused on operations and execution. We further strengthened our business and broadened our Company through disciplined organic and acquisitive growth initiatives. With the acquisition of ELS, we will establish Resolve as a premier provider in the HRO marketplace. The Company is committed to its strategy and will endeavor to successfully execute its business plans over time. The Company thanks its shareholders, both new and old, for their commitment, and we look forward to the years ahead."
About Resolve Staffing, Inc.
Resolve Staffing is a national provider of outsourced human resource services. With 52 offices reaching from New York to California, the Company provides a full range of supplemental staffing and outsourced solutions, including solutions for temporary, temporary-to-hire, or direct hire staffing in the medical, trucking, garment, clerical, office administration, customer service, professional and light industrial categories. For additional information on Resolve Staffing visit our website www.resolvestaffing.com.
This press release contains forward-looking statements covered within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to, among other things, plans and timing for the introduction or enhancement of our services and products, statements about future market conditions, supply and demand conditions, and other expectations, intentions and plans contained in this press release that are not historical fact and involve risks and uncertainties. Our expectations regarding future revenues depend upon our ability to develop and supply products and services that we may not produce today and that meet defined specifications. When used in this press release, the words "plan," "expect," "believe," and similar expressions generally identify forward-looking statements. These statements reflect our current expectations. They are subject to a number of risks and uncertainties, including, but not limited to, changes in technology and changes in pervasive markets. These risks and uncertainties may cause the actual results of the Company to be materially different from any future results expressed or implied. Factors that could affect future results include economic conditions in the Company's service areas, the effect of changes in the Company's mix of services on gross margin, the Company's ability to successfully integrate acquired businesses with its existing operations, future workers' compensation claims experience, the effect of changes in the workers' compensation regulatory environment in one or more of our primary markets, and collectibility of accounts receivable among others. Other important factors that may affect the Company's future prospects are described in the Company's 2004 Annual Report on Form 10-K. Although forward-looking statements help to provide complete information about the Company, readers should keep in mind that forward-looking statements may be less reliable than historical information. The Company undertakes no obligation to update or revise forward-looking statements in this release to reflect events or changes in circumstances that occur after the date of this release.