HOUSTON – May 1, 2000 – Administaff, Inc. (NYSE: ASF), a leading Professional Employer Organization (PEO), today announced results for the first quarter ended March 31, 2000. The company’s results reflect significant growth acceleration, pricing strength and continued operating expense management.

During the period, revenues increased 58.8% over the 1999 period to $756 million and gross profit increased 52.7% to $20.7 million. The revenue increase was the result of a 40.4% increase in the average number of worksite employees paid per month and a 12.0% increase in fee payroll cost per worksite employee per month. The average gross profit per worksite employee per month increased 8.5% to $128 in the first quarter of 2000 versus $118 in the 1999 period, due to effective pricing and direct cost management.

The company also reported a first quarter net loss and diluted net loss per share of $2.5 million and $0.18, versus a loss of $2.1 million and $0.14 for the first quarter of 1999. However, on a per worksite employee basis, the net loss improved to $15 per worksite employee per month in the 2000 period versus $18 in the 1999 period. Historically, the company’s earnings pattern has included 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 combination of strong sales and rapid enrollment of new clients, solid client retention and significant employee growth within our existing client base produced a 14% sequential unit growth rate, the highest since 1995," commented Richard G. Rawson, executive vice president of administration and chief financial officer. "With over 56,000 paid worksite employees at the end of the first quarter and significant sales momentum, we are confident about our near-term growth and profitability."

Operating expenses increased 44.2% over the 1999 period, and increased approximately $4 per worksite employee per month. The increase on a per worksite employee basis was primarily the result of increased depreciation, consulting costs and commissions related to the company’s technology initiatives and rapid growth. The resulting operating loss for the first quarter of 2000 was $4.7 million, compared to an operating loss of $4.1 million in the first quarter of 1999. However, the operating loss per worksite employee per month improved to $29 in the 2000 period versus $35 in the 1999 period.

"During the quarter, we accelerated the growth of our core PEO business by continuing to attract fast-growing small and medium-sized businesses throughout the nation that link high-performance human resource management with their financial success," said Paul J. Sarvadi, president and chief executive officer. "The increasing functionality of our web-based services platform, Administaff Assistant, the launch of our eCommerce portal, bizzport^SM, and the rapid growth of our quality client base will continue to contribute to our long-term success."

Administaff will be hosting a conference call today at 11:00 a.m. EDT to discuss these results. To listen in, call 1-888-287-2552. You may also access the conference call via the Internet at www.administaff.com or www.streetfusion.com.

bizzport, Administaff’s new business-to-business eCommerce portal, represents a major element in the company’s comprehensive eBusiness strategy. Designed for exclusive use by Administaff’s clients and worksite employees, bizzport leverages Administaff’s buying power and business relationships to bring a broad range of value-added products and services from best-of-class providers to the premium small business community represented by Administaff’s client base. Additionally, bizzport is designed to enhance the company’s attractiveness to prospective clients, further strengthen client retention rates, and produce incremental revenue streams. Administaff unveiled bizzport in April 2000, and currently has strategic alliances with leading companies including American Express, Aon Enterprise Insurance Services, Bank One, Dell, Forrester Research, IBM, MobShop, Inc. and Works.com.

Administaff is a leading provider of personnel management services for small and medium-sized businesses throughout the United States. The company’s comprehensive Personnel Management System includes employment administration, benefits management, government compliance, recruiting and selection, employer liability management, training and development, performance management and owner support. Administaff ranks number 615 on the Fortune 1000 list and is included for the second consecutive year on Fortune’s list of "America’s Most Admired Companies." The company also ranks number 83 on the Information Week 500 list of leading information technology innovators. Administaff currently has 26 sales offices in 15 major markets. For additional information, visit the company’s web site at www.administaff.com.

(Note: The statements contained in this press release that 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 are: (i) regulatory and tax developments; (ii) changes in Administaff’s direct costs and operating expenses; (iii) the effectiveness of Administaff’s sales and marketing efforts, including its marketing agreement with American Express, American Express’ ability to set qualified appointments and Administaff’s ability to convert those appointments into sales; (iv) the estimated costs and effectiveness of capital projects and investments in technology and infrastructure; (v) Administaff’s ability to effectively implement its eBusiness strategy, including identifying and reaching agreements with strategic alliance partners, timely rollout of and attraction of clients and worksite employees to its eCommerce portal, effective generation of revenues from eBusiness initiatives and unanticipated development costs of eBusiness initiatives; and (vi) changes in the competitive environments in the PEO industry. These factors are described in further detail in Administaff’s filings with the Securities and Exchange Commission.)

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