By Adam Irving (MF Adam)

ALTERNATIVE RESOURCES CORPORATION
Lincolnshire, IL
(847)-317-1000

ALEXANDRIA, Va., July 18, 1996/FOOLWIRE/ --- ALTERNATIVE RESOURCES CORPORATION <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: ALRC)") else Response.Write("(NASDAQ: ALRC)") end if %> today reported net income of $0.21 per share for the just-completed fiscal second quarter, beating First Call consensus estimates of $0.20 per share. These results were $0.06 better than the year-ago period and up $0.04 sequentially.

Sales in the second quarter were $48.7 million, up 33% over the same period last year, $36.7 million. Gross margins as a percentage of sales for the second quarter were 38.3%, up 1.3% over the same period last year. Year to date gross margins are 37.4%, up 0.6% from last year's six month gross margin Gross margin improvements were due in part to relief from payroll tax liabilities. Gross margins are expected to level off and possibly decrease slightly throughout the rest of the fiscal year.

Net Income for the second quarter rose 43% to $3.4 million over $2.4 million last year. For the six months, net income was up 41% at 6.1 million versus $4.3 million last year. This is in the face of costs incurred in Q2 associated with their Smartsourcing and Smartsourcing Plus programs whose benefits will be felt in the near term as their pipelines into Q3 were described as "very full."

EXPANSION

Larry Kane, chairman and president, noted that Alternative Resources recently opened its 47th branch in Pittsburgh. There are plans for 50 branches by the end of 1996. Store for store sale increases are as follows:

Class of 1988 was up 38%

Class of 1989 was up 14%

Class of 1990 was up 6%

Class of 1991 was up 40%

Class of 1992 was up 50%

Class of 1993 was up 42%

The classes of 1989 and 1990 both were subjected to the "law of large numbers" in that they had exceptional revenues to anniversary making the denominator in the equation quite large.

Larry Kane saw the demand for Alternative Resources services across all market segments as strong. He commented,"We are especially optimistic about the growth prospects related to long term projects. Even though there is a longer sales cycle associated with the larger project size, we believe that the market potential is even greater than that of of our historical shorter term staffing segments."

ARC is also expanding its Middle Market Initiative, geared towards mid sized corporations, which should bring on new clients and better utilize their resource base. The goal is to have this initiative available in all branches by the first quarter of 1997, it is currently in 23 branches.

The resource base of technical employees was emphasized as a crucial asset to future business growth. In fact, there were purges of technical employees to ensure the quality of those working for ARC. When asked about a tight resource pool of skilled technical professionals, ARC described this as a "more emotional than real" concern since it has had no material impact on revenue or profit. The need to increase the database, for 1997 and beyond, in line with new business is a strong focus.

Larry Kane also discussed the evolving upper management structure as they are seeking a President/COO. Kane currently sees the company at $200 million, with $400 million being a realistic goal for the future. ARC noted that they are debt free and have $57 million in assets of which $22 million is in cash and short term investments.

Alternative Resources Corporation provides technical staffing solutions specializing in information services operations primarily to organizations with sizable and complex information services facilities. The company's technical database of employees are skilled in the areas of mainframe and mid-range computer operations, personal computer and client server support, voice and data communications (including local and wide area networks), and help desk support.

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