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[PGA LOGO]
PERSONNEL GROUP OF AMERICA, INC.
Contacts: Jim Hunt, President or Ken Bramlett, CFO
(704) 442-5105 (704) 442-5106
Media Contact: Gail Rosenberg
(704) 442-3727
FOR IMMEDIATE RELEASE
CAREERSHOP.COM ACQUIRED
BY PERSONNEL GROUP OF AMERICA
MARRIAGE OF PGA'S 80,000 STAFFING AND IT CONSULTANTS WITH AWARD-WINNING,
CAREER AND RECRUITMENT WEB PORTAL HERALDS THE BEGINNING OF A MAJOR E-COMMERCE
INITIATIVE FOR THE COMPANY
o ACQUISITION IS PART OF A MAJOR COMPANY BRANDING AND REPOSITIONING
INITIATIVE FOR 2000
o COMPANY EXPECTS THE ACQUISITION AND OTHER FACTORS, INCLUDING THE
CONTINUING SLOWER THAN EXPECTED RECOVERY IN IT DEMAND, TO RESULT IN
LOWER EARNINGS -- $0.60 TO $0.72 PER SHARE FOR 2000
CHARLOTTE, N.C. - JUNE 1, 2000 - As part of a major e-commerce and repositioning
initiative designed to leverage the Internet with its more than 144 offices
nationwide, Personnel Group of America (NYSE:PGA) has acquired CareerShop.com
(CareerShop).
With its purchase of CareerShop, PGA has acquired a Forbes Magazine "Best of the
Web" online career and recruitment Web portal (www.careershop.com) that has
rapidly become the Internet career site for the computer generation. The portal
currently receives more than 1.5 million page views and 330,000 user sessions
per month. It also currently includes more than 350,000 resumes and confidential
listings in its data bank and provides access to more than 1 million job
postings.
The acquisition provides PGA with ready Internet technology that the Company
will employ to "webify" its processes and to recruit the talent and job skills
the market is demanding. This significantly enhances PGA's recruiting
capabilities by combining CareerShop's e-cruiting experience and technology with
its e-procurement systems. The acquisition also provides the Company with
tremendous branding power across the Internet.
In addition to the CareerShop portal, PGA has acquired CareerShop's CareerTV, a
revenue-generating, Internet and TV-based initiative that includes a 30-minute
weekly television broadcast. CareerTV is targeted to the local market and
comprises career-focused content, such as career-related news, training and
instructional programs, and "Hot Company" profiles of companies in local
markets. The combination of information technology and the broadcast media
uniquely positions PGA to capitalize on the convergence of television and the
Internet.
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PGA Acquires CareerShop
June 1, 2000
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While CareerShop's revenue trends are positive, it has not yet shown a profit.
The CareerShop acquisition, completed for approximately $9.0 million in cash and
stock, will be accounted for as a purchase and the resulting intangibles are
expected to be amortized over five years. As a result, the acquisition of
CareerShop, the costs associated with the Company's strategic repositioning and
branding and other factors related to the continuing slower than expected
recovery of the Company's IT operations could result in lower earnings per share
-- $0.60 to $0.72 for the year; $0.14 to $0.18 for the second quarter and $0.15
to $0.19 for the third and fourth quarters respectively -- as compared to
current consensus estimates.
"PGA's investment in CareerShop is a strategic move designed to lay the
foundation for the Company's transition to integrate its successful local market
relationships with an e-commerce operation," said PGA President Jim Hunt. "The
CareerShop acquisition provides our operating companies with a platform to
maximize our expertise in human capital management with the capability of
employing innovative e-commerce recruitment and customer-based information
systems. This marriage, while significantly enhancing our recruiting abilities,
also provides efficient and economical ways to reposition our operations.
CareerTV provides PGA with a ready outlet to build brand recognition and drive
Internet recruitment without committing significant dollars to broadcast
advertising."
"While the short-term result is a dilution of our earnings, we believe this
acquisition is a catalyst that enables our operations to generate higher
revenues and higher profits through more efficient recruiting and service
delivery practices. We expect CareerShop to at least break even in 2001.
Therefore, our cash earnings are estimated to be positively impacted as our IT
and commercial staffing operations are enhanced," Hunt said.
Over the course of the next several months, PGA will be launching a number of
initiatives to position the Company in a more focused direction, provide strong
market identity and better address the demands of its customers by enhancing its
solutions-based services. "Though we are disappointed that our information
technology business has not rebounded as quickly as we had anticipated, many of
our IT companies are performing to expectation and we see customer demand
accelerating," Hunt said. "Our commercial staffing operations are squarely on
target, and the strategic direction of our Company has our management team
excited about our prospects for the future."
ABOUT CAREERSHOP.COM
Career Shop.com is based in Orlando, Florida and currently employs approximately
50 people. CareerShop goes well beyond traditional job boards. It has an
award-winning Web career site that boasts strong user attraction. It received a
top ranking and the only four-star rating in all categories by MyJobSearch.com.
CareerShop is also the largest employment-related site in the U.S. with a
television component. It manages CareerTV, which uses its own production
facilities to bring career-related content to broadcast channels, cable and the
Internet. In addition, CareerShop has facilities to develop its "Career
Channels" and resume management business, which PGA believes can be significant
revenue producers.
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PGA Acquires CareerShop
June 1, 2000
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CareerShop's management team will continue to manage the CareerShop operations
and will be integrally involved in integrating CareerShop with PGA's information
technology and commercial staffing businesses.
"PGA is well-positioned to provide CareerShop with ready markets through its 144
offices and, in turn, CareerShop is well-suited to help PGA increase its service
and product portfolio and help the Company build its business-to-business
identity," said CareerShop Chairman and CEO Jim McArdle. "CareerShop provides
PGA with the Internet technology it needs to bridge communications between its
operating companies, consultants and customers."
"By providing and employing recruitment technology, we believe this transaction
makes PGA a more valuable company, especially in this evolving market, and we
have great confidence in PGA that its outlook for the future is very positive,"
McArdle said.
ABOUT PGA
Personnel Group of America, Inc. is a nationwide provider of information
technology consulting and custom-software development services; high-end
clerical, accounting and other specialty professional staffing services; and
desktop publishing and computer graphics services. The Company is based in
Charlotte, N.C. and operates 144 offices in strategic markets throughout the
United States employing more than 80,000 temporary staffing associates and IT
consultants serving more than 18,000 customers.
FORWARD-LOOKING STATEMENTS
Information contained in this press release, other than historical information,
may be considered forward-looking in nature and is subject to various risks,
uncertainties and assumptions. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect
actual results may vary materially from those anticipated, estimated or
expected. Among the key factors that may have a direct bearing on PGA's
operating results, performance or financial condition are fluctuations in the
economy, the degree and nature of competition, the demand for PGA's services,
changes in laws and regulations affecting PGA's business, PGA's ability to
complete acquisitions and integrate the operations of acquired businesses, to
recruit, place and retain temporary professionals, to expand into new markets,
and to maintain profit margins in the face of pricing pressures and wage
inflation, and numerous other factors discussed in PGA's filings with the
Securities and Exchange Commission.
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