• Revenues up 38% compared to first quarter 1997
• Aggressive growth program continues on target
• Net loss in line with historical first quarter trend

HOUSTON, TX – April 28, 1998 – Administaff, Inc., a leading Professional Employer Organization (PEO), today announced results for the first quarter ended March 31, 1998. The company reported a net loss of $742,000, or $0.05 per share (diluted), versus a loss of $7,000, or $0.00 per share (diluted), for the first quarter of 1997. Revenues for the first quarter of 1998 increased to $362.4 million, up $100 million, or 38.2%, over the first quarter of 1997, due primarily to a 25.9% increase in the number of worksite employees paid.

``Our-year-over-year worksite employee growth rate for the first quarter of 1998 represented one of the strongest quarters in company history,'' commented Paul J. Sarvadi, president and chief executive officer. ``We continue to execute our organic growth plan and have opened a total of seven new sales offices since January 1, 1997, significantly increasing the size of our sales force.''

Gross profit for the first quarter of 1998 increased 27.1% to $11.2 million versus $8.8 million for the first quarter of 1997 with a gross profit margin of 3.1% in the first quarter of 1998 compared to 3.4% in the first quarter of 1997. The decline in gross profit margin is primarily due to an increase in the weighted average state unemployment tax rate as a percentage of payroll cost and an increase in gross payroll cost per worksite employee. Operating expenses were 3.6% of revenue in 1998 compared to 3.5% in the first quarter of 1997, primarily due to the substantial increase in corporate and sales staff as part of the company's ongoing national expansion plan. The resulting operating loss for the first quarter of 1998 was $2.0 million, compared to an operating loss of $278,000 in the first quarter of 1997.

Richard G. Rawson, executive vice president and chief financial officer, said, ``The first quarter operating results clearly met our expectations for accelerating revenue growth, consistent performance at the gross profit line, and increased operating expenses related to our rapid growth. These results also compare favorably to our historical first quarter trend.''

Historically, the company's earnings pattern includes losses in the first quarter, followed by improved profitability in subsequent quarters throughout the year. This pattern is due to the effects of employment-related taxes which are based on the individual employees' cumulative earnings up to specified wage levels, causing employment-related taxes to be largest in the first quarter and then decline over the course of the year. The results for the first quarter of 1998 reflects the effects of this pattern.

The company generated net interest income of $822,000 during the first quarter of 1998 versus $267,000 a year ago. The company had no interest expense during the 1998 period due to the repayment of all outstanding debt with a portion of the proceeds from the company's initial public offering (``IPO'') in the first quarter of 1997. Interest income increased due to the investment of the remaining proceeds from the IPO and the proceeds from the sale of common stock to American Express in March 1998.

Administaff will be hosting a conference call today at 11:00 a.m. EDT to discuss these first quarter results. To listen in , dial 800-781-0003.

Administaff is one of the nation's leading Professional Employer Organizations, providing a comprehensive Personnel Management System that encompasses a broad range of services including benefits and payroll administration, medical and workers' compensation insurance programs, personnel records management, liability management, employee recruiting and selection, performance management, and training and development services to small- and medium-sized businesses. The company has 21 offices in 13 major markets and serves clients and worksite employees throughout the United States.

                                                               1998             1997         Change
                                                                    (Unaudited)

    Operating Results:
    Revenues                                      $362,396         $262,200          38.2%
    Gross profit                                      11,173               8,790          27.1%
    Operating loss                                  (2,048)               (278)             NM
    Net loss                                              (742)                  (7)             NM
    Net loss per share:
      Basic                                              $(0.05)              $0.00             NM
      Diluted                                            $(0.05)              $0.00             NM
    Weighted average common
     shares outstanding:
      Basic                                              14,021             12,478             –
      Diluted                                            14,021             12,478             –

    Statistical data:
      Monthly revenue per
       worksite employee                        $3,639             $3,326           9.4%
      Monthly payroll cost
       per worksite employee                    2,982               2,710          10.0%
      Monthly gross markup per
       worksite employee                            657                   616            6.7%
      Average number of worksite
       employees paid per month
       during period                               31,512               25,026          25.9%

    NM – Not meaningful


                                                        March 31,            December 31,
                                                            1998                     1997
    Balance Sheet Data:

    Working capital                              $56,596                  $46,611
    Total assets                                   122,208                  109,455
    Total debt                                                –                           –
    Total stockholders' equity                  75,636                   63,763

NOTE: The statements contained in this press release which are not historical facts are forward-looking statements that involve a number of risks and uncertainties. Therefore, the actual results of future events described in such forward-looking statements could differ materially from those stated in such forward-looking statements. Among the factors that could cause actual results to differ materially include regulatory and tax developments, competitive activities and increases in direct costs and operating expenses, which are described in further detail in the Company's filings with the Securities and Exchange Commission.