UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

ý Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2004.

or

o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to__

Commission File No. 0-22701

GEVITY HR, INC.
(Exact Name of Registrant as Specified in Its Charter)

Florida (State or other jurisdiction of incorporation or organization)		65-0735612 (I.R.S. Employer Identification No.)

600 301 Blvd West, Suite 202 Bradenton, FL (Address of principal executive offices)		34205 (Zip Code)

(Registrant’s Telephone Number, Including Area Code): (941) 741-4300

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

Yes ý No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes ý No o

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the last practicable date.

Class of common stock		Outstanding as of August 2, 2004
Par value $0.01 per share		26,929,988

PART I.	FINANCIAL INFORMATION	Page
	ITEM 1. Financial Statements	3
	Condensed Consolidated Statements of Operations for the three and six months ended
	June 30, 2004 and 2003 (unaudited)	3
	Condensed Consolidated Balance Sheets as of June 30, 2004
	and December 31, 2003 (unaudited)	4
	Condensed Consolidated Statements of Cash Flows
	for the six months ended June 30, 2004 and 2003 (unaudited)	6
	Notes to Condensed Consolidated Financial Statements (unaudited)	7
	ITEM 2. Management's Discussion and Analysis of Financial Condition
	and Results of Operations	19
	ITEM 3. Quantitative and Qualitative Disclosures About Market Risk	36
	ITEM 4. Controls and Procedures	36
PART II	OTHER INFORMATION
	ITEM 1. Legal Proceedings	38
	ITEM 2. Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities	38
	ITEM 4. Submission of Matters to a Vote of Security Holders	38
	ITEM 6. Exhibits and Reports on Form 8-K	39
	SIGNATURE	41

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

GEVITY HR, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED
(in $000‘s except share and per share data)

	FOR THE THREE MONTHS ENDED JUNE 30,					FOR THE SIX MONTHS ENDED JUNE 30,
	2004			2003		2004			2003

Revenues	$	158,067		$	102,142	$	283,979		$	204,912
Cost of services		112,398			74,281		202,520			152,273


Gross profit		45,669			27,861		81,459			52,639

Operating expenses:
Salaries, wages and commissions		18,881			12,989		35,159			25,517
Other general and administrative		11,228			8,104		19,356			15,030
Depreciation and amortization		4,230			1,792		6,410			3,616

Total operating expenses		34,339			22,885		60,925			44,163

Operating income		11,330			4,976		20,534			8,476
Interest income, net		157			415		443			815
Other non-operating (expense) income, net		(98	)		7		(88	)		(12	)

Income before income taxes		11,389			5,398		20,889			9,279
Income tax provision		3,758			1,781		6,893			3,062

Net income		7,631			3,617		13,996			6,217

Non-recurring, non-cash charge attributable to the
acceleration of the unamortized discount associated
with the conversion into common stock of all shares
of the convertible, redeemable preferred stock		29,317			--		29,317			--

Non-cash charges attributable to beneficial conversion
feature and accretion of redemption value of
convertible, redeemable preferred stock		35			17		129			17

Preferred stock dividends		113			276		434			276


Net (loss) income attributable to common shareholders	$	(21,834	)	$	3,324	$	(15,884	)	$	5,924



Net (loss) income per common share:

- Basic	$	(0.95	)	$	0.16	$	(0.75	)	$	0.29



- Diluted (Reported earnings per common share
includes adjustments per share of ($1.22) and
($1.26) for the three and six
months ended June 30, 2004, respectively,
substantially all attributable to the
non-recurring, non-cash charge related
to the acceleration of the unamortized discount
associated with the conversion into common stock
of all shares of the convertible, redeemable
preferred stock, see Note 1.)	$	(0.95	)	$	0.15	$	(0.75	)	$	0.27

Weighted average common shares outstanding
- Basic		22,960,596			20,267,369		21,140,134			20,545,058
- Diluted		22,960,596			23,524,392		21,140,134			22,803,290

See notes to condensed consolidated financial statements.

GEVITY HR, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
UNAUDITED
(in $000‘s, except share and per share data)

ASSETS	June 30, 2004		December 31, 2003
Current assets:
Cash and cash equivalents	$	54,540	$	44,682
Certificates of deposit - restricted		6,032		6,032

Marketable securities - restricted		82,881		84,271
Accounts receivable, net		129,914		100,829
Short-term workers' compensation receivable, net		11,734		11,734

Deferred tax asset, net		449		2,410

Other current assets		12,417		8,281

Total current assets		297,967		258,239
Property and equipment, net		11,363		12,253
Long-term marketable securities - restricted		21,889		17,023

Long-term workers' compensation receivable, net		42,153		12,621

Intangible assets, net		44,391		7,128
Goodwill		8,692		8,692
Other assets		5,924		5,608


Total assets	$	432,379	$	321,564

See notes to condensed consolidated financial statements.

GEVITY HR, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (continued)
UNAUDITED
(in $000‘s, except share and per share data)

	June 30, 2004			December 31, 2003


LIABILITIES, CONVERTIBLE REDEEMABLE PREFERRED
STOCK AND SHAREHOLDERS' EQUITY
Current liabilities:
Accrued payroll and payroll taxes	$	142,455		$	119,432
Accrued insurance premiums, health and
workers' compensation insurance reserves		45,430			32,071
Customer deposits and prepayments		24,949			9,336
Accounts payable and other accrued liabilities		4,707			4,307

Income taxes payable		2,768			1,833

Dividends payable		1,615			1,161

Total current liabilities		221,924			168,140
Long-term accrued workers' compensation
insurance reserves		59,280			59,280

Deferred tax liability		715			296

Other long-term liabilities		6,737			914

Total liabilities		288,656			228,630


Commitments and contingencies
Series A convertible, redeemable preferred stock, $0.01 par value,
($30,000 liquidation preference) 0 and 30,000 shares authorized, issued
and outstanding as of June 30, 2004 and December 31, 2003,
respectively, net		--			554



Shareholders' equity:
Common stock, $.01 par value
Shares authorized: 100,000,000
Shares issued:
June 30, 2004 - 29,964,837
December 31, 2003 - 22,251,477		300			223

Additional paid in capital		148,490			78,715

Retained earnings (Period ended June 30, 2004 includes a non-recurring,
non-cash charge of $29,317 attributable to the acceleration of the
unamortized discount associated with the conversion into common stock
of all shares of the convertible, redeemable preferred stock)		11,061			29,734
Treasury stock (3,044,372 and 3,062,751 shares at cost, respectively)		(16,128	)		(16,292	)

Total shareholders' equity		143,723			92,380


Total liabilities, convertible redeemable preferred
stock and shareholders' equity

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

FORM 10-Q

For the quarterly period ended June 30, 2004.

or

For the transition period from ________________ to__________________

Commission File No. 0-22701

GEVITY HR, INC. (Exact Name of Registrant as Specified in Its Charter)

(Registrant’s Telephone Number, Including Area Code): (941) 741-4300

TABLE OF CONTENTS

GEVITY HR, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS UNAUDITED (in $000‘s except share and per share data)