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 September 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 November 2, 2004
Par value $0.01 per share		27,128,498

PART I.	FINANCIAL INFORMATION	Page
	ITEM 1. Financial Statements	3
	Condensed Consolidated Statements of Operations for the three and nine months ended
	September 30, 2004 and 2003 (unaudited)	3
	Condensed Consolidated Balance Sheets as of September 30, 2004
	and December 31, 2003 (unaudited)	4
	Condensed Consolidated Statements of Cash Flows
	for the nine months ended September 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	39
	ITEM 4. Controls and Procedures	40
PART II.	OTHER INFORMATION
	ITEM 1. Legal Proceedings	42
	ITEM 6. Exhibits	42
	SIGNATURE	44

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 SEPTEMBER 30,						FOR THE NINE MONTHS ENDED SEPTEMBER 30,
	2004			2003			2004			2003

Revenues	$	147,969		$	102,833		$	431,948		$	307,745
Cost of services		103,867			74,039			306,387			226,312


Gross profit		44,102			28,794			125,561			81,433

Operating expenses:
Salaries, wages and commissions		17,433			13,280			52,592			38,797
Other general and administrative		10,935			7,974			30,291			23,004
Depreciation and amortization		3,923			1,803			10,333			5,419

Total operating expenses		32,291			23,057			93,216			67,220

Operating income		11,811			5,737			32,345			14,213
Interest income, net		338			416			781			1,231
Other non-operating expense, net		(12	)		(7	)		(100	)		(19	)

Income before income taxes		12,137			6,146			33,026			15,425
Income tax provision		4,006			2,028			10,899			5,090

Net income		8,131			4,118			22,127			10,335
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			--
Non-cash charges attributable to beneficial conversion
feature and accretion of redemption value of
convertible, redeemable preferred stock		--			69			129			86
Preferred stock dividends		--			201			434			477
Assumed preferred stock dividend (assuming full
distribution of net income)		--			642			--			719


Net income (loss) attributable to common shareholders	$	8,131		$	3,206		$	(7,753	)	$	9,053


Net income (loss) per common share:

- Basic	$	0.30		$	0.17		$	(0.34	)	$	0.45


- Diluted (Reported earnings per common share
includes adjustments per share of ($1.14) for the
nine months ended September 30, 2004
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.)	$	0.29		$	0.16		$	(0.34	)	$	0.43

Weighted average common shares outstanding
- Basic		26,972,223			18,641,055			23,098,355			19,903,406
- Diluted		28,472,727			26,093,818			23,098,355			23,990,849

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)

	September 30, 2004		December 31, 2003


ASSETS
Current assets:
Cash and cash equivalents	$	85,090	$	44,682
Certificates of deposit - restricted		6,032		6,032
Marketable securities - restricted		80,471		84,271
Accounts receivable, net		114,740		100,829
Short-term workers' compensation receivable, net		27,910		11,734
Deferred tax asset, net		1,693		2,410
Other current assets		7,375		8,281


Total current assets		323,311		258,239
Property and equipment, net		10,265		12,253
Long-term marketable securities - restricted		8,168		17,023
Long-term workers' compensation receivable, net		40,571		12,621
Intangible assets, net		42,033		7,128
Goodwill		8,692		8,692
Other assets		5,941		5,608


Total assets	$	438,981	$	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)

	September 30, 2004			December 31, 2003


LIABILITIES, CONVERTIBLE REDEEMABLE
PREFERRED STOCK AND SHAREHOLDERS' EQUITY

Current liabilities:
Accrued payroll and payroll taxes	$	128,448		$	119,432
Accrued insurance premiums, health and
workers' compensation insurance reserves		52,448			32,071
Customer deposits and prepayments		35,288			9,336
Accounts payable and other accrued liabilities		6,070			4,307
Income taxes payable		7,429			1,833
Dividends payable		1,624			1,161

Total current liabilities		231,307			168,140

Long-term accrued workers' compensation
insurance reserves		49,110			59,280

Deferred tax liability		919			296

Other long-term liabilities		6,624			914

Total liabilities		287,960			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 September 30, 2004 and December 31, 2003,
respectively, net		--			554

Shareholders' equity:
Common stock, $.01 par value
Shares authorized: 100,000,000
Shares issued:
September 30, 2004 - 30,101,660
December 31, 2003 - 22,251,477		301			223
Additional paid in capital		149,369			78,715

Retained earnings (Period ended September 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.)		17,568			29,734
Treasury stock (3,034,974 and 3,062,751 shares at cost, respectively)		(16,217	)		(16,292

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

FORM 10-Q

For the quarterly period ended September 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

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