PBHG PBS Holding Inc (CE)

PBS Holding, Inc. (OTC BB: PBHG), whose subsidiaries operate in the human resources outsourcing services sectors, today announced its year-end 2005 financial results. Net revenues for the year ended December 31, 2005 increased to $4.9 million compared to $3.3 million for December 31, 2004, a 47% increase, reflecting an increase in business and the Company's aggressive marketing efforts. This growth is also attributable to an increase in sales resulting from the Company's development of a strategic sales process implemented in 2004 and leadership of our experienced management team. Cost of revenues for all of 2005 was $3.2 million, or 64.09% of net revenue, compared to just under $2.1 million, or 61.6% of net revenue, for the full year 2004. This represents an increase of approximately $1.1 million, or 53.24% year-over-year, which is consistent with increases in the Company's net revenues. Cost of revenues are primarily affected by the workers' compensation costs, state unemployment cost and benefit expenses. Consequently, PBS Holding's gross profit for the year ended December 31, 2005 increased 37% to almost $1.8 million as compared to $1.3 million for the previous year. PBS Holdings had total operating expenses in 2005 of $1.8 million, or 36.66% of net revenues, compared to $1.2 million, or 37.34% of net revenues, in 2004. General and Administrative cost were 960,000 or 19.5% of net revenues, in 2005 compared to $722,000, or 21.63% of net revenues, for all of 2004. During 2005, the timing and cash requirements of the Company were such that short-term tax payment deficiencies existed resulting in penalties incurred by the Company in 2005. The penalties accrued totaled about $81,000 and were included in the General and Administrative costs of the Company. In addition, the Company settled two lawsuits revolving around contract disputes with a service provider and former customer; management believes these cases were settled at a cost lower than legal fees that would have accumulated defending the Company's position through a drawn-out trial process. The total cost associated to settling the lawsuits included in General and Administrative expenses was $100,000. Net loss for 2005 was approximately $205,000, or $0.02 per fully diluted share. In 2004, the net loss was approximately $69,000, or $0.01 per fully diluted share. Rick Matthews, President and CEO of PBS Holding, said, "We are very pleased with the financial results of 2005, and we believe that during the year, we have laid the ground work for significant growth in 2006. Our business model is to become an end-to-end business services company integrating HR, insurance and related business services. This frees our customers to focus on the business of their business. To further enhance our market position, we also have an aggressive acquisition strategy in place." He added, "When implementing our sales training program - PBS Action Selling -in the first quarter of 2005, our goal was to increase the quality of accounts as well as the number of employees at our accounts and the margins in the accounts. These goals have been and continue to be accomplished by training our staff to become Professional Human Resource Outsourcing Services Consultants, who effectively determine the customers' needs and provide effective solutions while conveying the value of the services." He concluded, "With the first quarter of 2006 just ending, it would be premature for me to comment on our results, but I can say that we have closed 12 new contracts in the first quarter of 2006. In the first quarter of 2005 we had 9 new contracts. Also, the revenue from the 12 new contracts is more than $250,000 compared to a value of $54,000 for the 9 contracts signed in the first three months of 2004. This year-over-year increase indicates the effectiveness of our Consultants. Our company has grown by this metric in each of the past 9 quarters, and our new contract signing rate of growth was 24% in 2004 and 47% in 2005. I believe, therefore, that there is good reason to be optimistic about the results for the first quarter of 2006." About PBS Holding, Inc. PBS Holding, Inc. operates in the Human Resources Outsourcing Services Sectors, specifically the Professional Employer Organization industry and the Temporary Staffing Services industry through its subsidiaries Primary Business Systems LLC, Primary HR Services LLC and Concord Staffing Services. The subsidiaries of PBS serve small to medium-sized businesses by outsourcing the human resource burden of reporting, regulations, legalities, screening and administration. PBS Holding helps clients compete more effectively by allowing them to focus their resources on serving customers and building their business. PBS is becoming an end-to-end business services company with a value proposition that integrates HR, insurance and related business services. Forward-looking Information and the Private Securities Litigation Reform Act of 1995 This press release contains statements, which may constitute "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Those statements include statements regarding the intent, belief or current expectations of PBS Holding, Inc., and members of its management as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. Important factors currently known to management that could cause actual results to differ materially from those in forward-looking statements include fluctuation of operating results, the ability to compete successfully and the ability to complete before-mentioned transactions, as well as risk factors contained in our periodic reports filed with the SEC. The company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results. -0- *T PBS Holding, Inc. and Subsidiaries Consolidated Statement of Operations For The Years Ended December 31, 2005 and 2004 2005 2004 ----------- ----------- Revenues $ 4,919,246 $ 3,338,891 Cost of Revenues 3,152,715 2,057,354 ----------- ----------- Gross Profit 1,766,532 1,281,537 ----------- ----------- Operating Expenses General and Administrative 959,751 722,235 Wages, commissions & salaries 528,231 312,976 Officers compensation 290,114 211,365 ----------- ----------- 1,778,096 1,246,576 ----------- ----------- Income (Loss) from Operations (11,564) 34,961 ----------- ----------- Other Income & Expense Other income 50,109 128 Consulting expenses (50,300) (7,500) Acquisition costs (7,315) - Employee services paid with stock warrants (22,205) - Non employee services paid with stock warrants (75,506) - Litigation costs (87,919) (96,699) ----------- ----------- Total Other Income & (Expenses) (193,134) (104,071) Income (Loss) Before Provision For Income Tax (204,698) (69,110) ----------- ----------- Provision For Income Taxes - - ----------- ----------- Net Income (Loss) $ (204,698) $ (69,110) =========== =========== Basic & Diluted Net (Loss) Per Share $ (0.02) $ (0.01) =========== =========== Basic and Diluted Weighted Average Shares Outstanding 10,839,367 10,784,753 =========== =========== PBS Holding, Inc. and Subsidiaries Consolidated Balance Sheet As of December 31, 2005 and 2004 (Restated) 2005 2004 (Restated) ------------ ------------ ASSETS ------ Current assets -------------- Cash $ 84,712 $ 185,484 Notes receivable 184,890 107,949 Client accounts receivable 158,877 64,435 Deposit - pending Heart acquisition 50,000 - Prepaid Expenses 3,014 1,051 Employee advances 857 - Worker compensation prepaid premiums 167,986 96,097 ----------- ----------- Total Current Assets 650,336 455,016 ----------- ----------- Property & Equipment -------------------- Furniture & Fixtures 55,472 54,454 Computer equipment 99,722 91,322 Vehicles 15,486 15,485 Payroll software 43,724 43,724 ----------- ----------- 214,404 204,986 (Less) accumulated depreciation (158,969) (149,213) ----------- ----------- Net Property & Equipment 55,435 55,773 ----------- ----------- Other assets ------------ Security deposits 1,560 1,054 Customer list, net of amortization 6,600 9,000 ----------- ----------- Total Other Assets 8,160 10,054 ----------- ----------- Total Assets $ 713,932 $ 520,843 =========== =========== LIABILITIES ----------- Current liabilities ------------------- Accounts payable $ 101,462 $ 109,812 Checks drawn on uncollected funds 120,027 177,532 Deferred revenue 7,121 - Client payroll tax payable 503,678 259,260 Workers comp payable 113,676 60,953 Client deposits 1,000 - Client payroll amount withheld 8,475 1,532 Current maturities of long-term debt 25,000 - Line of credit from banks 7,898 38,522 Due to shareholder/officer 117,501 124,146 ----------- ----------- Total Current Liabilities 1,005,838 771,757 Long term liabilities --------------------- Note payable, net of current portion 16,667 - ------------ ------------ Total Liabilities 1,022,505 771,757 ------------ ------------ Stockholders' Equity (Deficiency) --------------------------------- Common stock - $.001 par value authorized - 750,000,000, issued and outstanding - 10,922,253 and 10,784,753 shares 10,922 10,785 Additional paid-in capital 1,139,849 992,945 Accumulated (deficit) (1,459,344) (1,254,644) ------------ ------------ Total Stockholders' Equity (Deficiency) (308,573) (250,914) ------------ ------------ Total Liabilities and Stockholders' Equity (Deficiency) $713,932 $520,842 ============ ============ *T