GVHR » Topics » 15. GEOGRAPHIC MARKET CONCENTRATION AND DEPENDENCE ON KEY VENDORS

These excerpts taken from the GVHR 10-K filed Mar 17, 2008.

15. GEOGRAPHIC MARKET CONCENTRATION AND DEPENDENCE ON KEY VENDORS

        Geographic Market Concentration—As of December 31, 2007, the Company had offices in 15 states and client employees in all 50 states and the District of Columbia. The Company's billings to Florida clients accounted for approximately 50%, 56% and 55% of the Company's total client billings in 2007, 2006 and 2005, respectively. As a result of the size of the Company's base of client employees in Florida, the Company's profitability over the next several years is expected to be largely dependent on economic and regulatory conditions in Florida. Any adverse change in either of these conditions could have a material adverse effect on the Company's future profitability and growth prospects.

        Dependence on Key Vendors—The maintenance of insurance plans including workers' compensation and health that cover client employees is a significant part of the Company's business. The current contracts are provided by vendors on terms that the Company believes to be favorable. While the Company believes that replacement contracts could be obtained on competitive terms with other carriers, such replacement could cause a significant disruption to the Company's business resulting in a decrease in client retention and general dissatisfaction with the Company's service offering. This, in turn, could have a material adverse effect on the Company's future results of operations, financial condition, and cash flows.

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GEVITY HR, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in $000's, except share and per share data)

15. GEOGRAPHIC MARKET CONCENTRATION AND DEPENDENCE ON KEY VENDORS



        Geographic Market Concentration—As of December 31, 2007, the Company had offices in 15 states
and client employees in all 50 states and the District of Columbia. The Company's billings to Florida clients accounted for approximately 50%, 56% and 55% of the Company's total client billings in
2007, 2006 and 2005, respectively. As a result of the size of the Company's base of client employees in Florida, the Company's profitability over the next several years is expected to be largely
dependent on economic and regulatory conditions in Florida. Any adverse change in either of these conditions could have a material adverse effect on the Company's future profitability and growth
prospects.



        SIZE=2>Dependence on Key Vendors—The maintenance of insurance plans including workers' compensation and health that cover client
employees is a significant part of the Company's business. The current contracts are provided by vendors on terms that the Company believes to be favorable. While the Company believes that replacement
contracts could be obtained on competitive terms with other carriers, such replacement could cause a significant disruption to the Company's business resulting in a decrease in client retention and
general dissatisfaction with the Company's service offering. This, in turn, could have a material adverse effect on the Company's future results of operations, financial condition, and cash flows.



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GEVITY HR, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(in $000's, except share and per share data)




EXCERPTS ON THIS PAGE:

10-K (2 sections)
Mar 17, 2008
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