Recent News

Command Center Reports Third Quarter 2017 Financial Results

Revenue of $26.7 Million with Gross Margin up 100 Basis Points to 26.9%
Board of Directors Approves 1-for-12 Reverse Stock Split
Plans Listing on a Major Stock Exchange


DENVER, Colorado – November 13 – Command Center, Inc. (OTCQB: CCNI), a national provider of on-demand and temporary staffing solutions, reported financial results for the third quarter ended September 29, 2017.

Third Quarter 2017 Financial Highlights (vs. Year-Ago Quarter Unless Specifically Noted)

  • Revenue increased to $26.7 million compared to $26.4 million.
  • Gross margin up 100 basis points to 26.9%.
  • Net income improved to $0.9 million or $0.01 per diluted share compared to $0.8 million or $0.01 per diluted share.
  • Adjusted EBITDA increased 53% to $1.8 million.
  • Cash and cash equivalents grew 101% to $6.1 million compared to $3.0 million at the end of 2016.
  • Repurchased 134,100 shares at an average price of $0.41 per share.

Management Commentary

“The third quarter marks our fifth consecutive quarter of organic revenue growth and fourth straight quarter of gross margin expansion,” said Bubba Sandford, president and CEO of Command Center. “The foundation of our overall performance as a company continues to lie with the people who are out there every day driving revenue and putting people to work. As we indicated numerous times, the training programs we implemented are designed to capture higher margin business, which results, in part, from providing superior service to our customers and our temporary workers.

“In addition to continued revenue and gross margin increases, our EBITDA and cash are strong. In fact, we doubled our cash since the end of 2016 and continue to carry minimal debt. We expect this improved liquidity to allow us to evaluate accretive uses of our capital, which includes share buybacks, acquisition opportunities, additional store openings or placing increased resources in certain verticals. Also, through the previously announced Strategic Alternatives Committee, the company’s board of directors continues its process of evaluating opportunities to create additional value for our shareholders, which includes a number of possibilities.

“Given our financial momentum and operational execution, which we expect to continue, our board agreed the time is right to implement a reverse stock split. We expect this will bring our share price to levels that may allow a larger pool of investors to invest in our company. The reverse split is also an important step in our plans to up-list to a major U.S. stock exchange. We believe these steps, along with our diligent focus on accretive capital allocation, constitute the right plan to drive maximum shareholder value.”

Third Quarter 2017 Financial Results

Revenue in the third quarter of 2017 increased to $26.7 million, compared to $26.4 million in the year-ago quarter. The increase was driven by a continued focus on selling good accounts at the branch level, but was offset by a reduction in revenue from some larger accounts.

Gross margin in the third quarter increased 100 basis points to 26.9%, compared to 25.9% in the year-ago quarter. The increase was the result of the company’s continued emphasis on coaching and training field personnel to produce increased margins based on the value of the services provided to customers.

Selling, general and administrative expenses in the third quarter declined to $5.5 million, compared to $5.6 million in the year-ago quarter. The decline was primarily due to lower professional services fees and bad debt expense. As a percentage of revenue, SG&A expenses declined 70 basis points to 20.5% compared to 21.2%.

Operating income in the third quarter increased 43% to $1.6 million, compared to $1.1 million in the third quarter of 2016. Net income increased to $0.9 million or $0.01 per diluted share, compared to $0.8 million or $0.01 per diluted share in the year-ago quarter.

Adjusted EBITDA (a non-GAAP term defined below) in the third quarter increased 53% to $1.8 million, compared to $1.2 million in the year-ago quarter.

Cash and cash equivalents at September 29, 2017, increased 101% to $6.1 million, compared to $3.0 million at December 30, 2016. The company carried a $0.6 million balance on its account purchase agreement at September 29, 2017, compared to no debt at the end of 2016.

During the third quarter, the company repurchased 134,100 shares at an average price of $0.41 per share. Approximately $4.9 million remains under the company’s new $5.0 million stock repurchase plan announced in August of this year.

Command Center ended the quarter with 66 stores operating in 22 states.

Reverse Stock Split Authorization

Command Center’s board of directors plans to undertake a reverse stock split of the company’s common stock at a ratio of 1-for-12, reducing the number of authorized shares proportionally. The reverse split is expected to be effective in early December 2017, provided that Command Center’s Articles of Amendment have been filed with the state of Washington and FINRA approval is obtained. Command Center does not anticipate issuing fractional shares as a result of the reverse stock split. Shareholders entitled to receive fractional shares because of the reverse stock split will receive cash payments in lieu of such shares.

Conference Call

Command Center will hold a conference call tomorrow, November 14, at 10:00 a.m. Eastern time (8:00 a.m. Mountain time) to discuss its third quarter 2017 results.

Date: Tuesday, November 14, 2017
Time: 10:00 a.m. Eastern time (8:00 a.m. Mountain time)
Toll-free dial-in number: 1-888-389-5986
International dial-in number: 1-323-701-0225
Conference ID: 8152176

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios at 1-949-574-3860.

The conference call will be broadcast live and available for replay here and via the investor relations section of Command Center’s website at www.commandonline.com.

A replay of the conference call will be available after 1:00 p.m. Eastern time on the same day through November 28, 2017.

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 8152176

About Command Center

Command Center provides flexible on-demand employment solutions to businesses in the United States, primarily in the areas of light industrial, hospitality and event services. Through 66 field offices, the company provides employment annually for approximately 34,000 field team members working for over 3,200 clients. For more information about Command Center, go to commandonline.com.

Important Cautions Regarding Forward-Looking Statements

This news release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. These statements are subject to uncertainties and risks, including, but not limited to, national, regional and local economic conditions, the availability of workers’ compensation insurance coverage, the availability of capital and suitable financing for the company's activities, the ability to attract, develop and retain qualified store managers and other personnel, product and service demand and acceptance, changes in technology, the impact of competition and pricing, government regulation, and other risks set forth in our most recent reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission, copies of which are available on our website at www.commandonline.com and the SEC website at www.sec.gov. All such forward-looking statements, whether written or oral, and whether made by or on behalf of the company, are expressly qualified by these cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, the company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.

Reconciliation of Non-GAAP Financial Measures

In addition to the results prepared in accordance with generally accepted accounting principles (“GAAP”), the company also presents the non-GAAP terms of EBITDA and Adjusted EBITDA. EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization, non-cash compensation and certain non-recurring expenses, including reserve for workers’ compensation deposits. The company uses EBITDA and Adjusted EBITDA as financial measures as management believes investors find them to be useful tools to perform more meaningful comparisons of past, present and future operating results, and as a means to evaluate our results of operations. The company believes these metrics are useful compliments to net income and other financial performance measures. EBITDA and Adjusted EBITDA are not intended to represent net income as defined by GAAP, and such information should not be considered as an alternative to net income or any other measure of performance prescribed by GAAP.

The following tables present a reconciliation of EBITDA and Adjusted EBITDA to net income for the periods presented (in thousands):

Thirteen Weeks Ended
September 29, 2017

Thirteen Weeks Ended
September 23, 2016

(Unaudited) (Unaudited)
EBITDA (in thousands)
Net income (loss) $ 851 $ 838
Adjustments:
Interest expense and other financing expense 6 1
Depreciation and amortization 96 110
Provision for income taxes 752 282
EBITDA 1,705 1,231
Non-cash compensation 104 (50 )
Reserve for workers compensation deposit - -
Adjusted EBITDA $ 1,809 $ 1,181
Command Center, Inc.
Consolidated Condensed Balance Sheets
September 29, 2017 December 30, 2016
(Unaudited)
Assets
Current Assets
Cash $ 6,061,099 $ 3,022,741
Restricted cash 19,879 24,676
Accounts receivable, net of allowance for doubtful accounts of $332,097 and $899,395, respectively 10,966,916 10,287,456
Prepaid expenses, deposits, and other 479,644 631,873
Prepaid workers’ compensation 302,743 745,697
Other receivables 65,271 115,519
Current portion of workers’ compensation risk pool deposits 397,424 404,327
Total Current Assets 18,292,976 15,232,289
Property and equipment, net 413,358 432,857
Deferred tax asset 1,308,685 2,316,774
Workers’ compensation risk pool deposit, less current portion, net 2,001,563 2,006,813
Goodwill and other intangible assets, net 4,141,085 4,307,611
Total Assets $ 26,157,667 $ 24,296,344
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable $ 407,593 $ 762,277
Account purchase agreement facility 569,185 -
Other current liabilities 650,661 395,926
Accrued wages and benefits 1,694,791 1,567,585
Current portion of workers’ compensation premiums and claims liability 1,118,179 1,101,966
Total Current Liabilities 4,440,409 3,827,754
Long-Term Liabilities
Workers’ compensation claims liability, less current portion 1,018,244 1,604,735
Total Liabilities 5,458,653 5,432,489
Commitments and Contingencies (See Note 10)
Stockholders’ Equity
Preferred stock - $0.001 par value, 5,000,000 shares authorized, none issued and outstanding - -
Common stock - $0.001 par value, 100,000,000 shares authorized; 60,605,549 and 60,634,650 shares

issued and outstanding, respectively

60,605 60,634
Additional paid-in-capital 56,441,667 56,374,625
Accumulated deficit (35,803,258 ) (37,571,404 )
Total Stockholders’ Equity 20,669,014 18,863,855
Total Liabilities and Stockholders’ Equity $ 26,157,667 $ 24,296,344

Command Center, Inc.

Consolidated Condensed Statements of Income

(Unaudited)

Thirteen Weeks Ended
September 29, 2017

Thirteen Weeks Ended
September 23, 2016

(Unaudited) (Unaudited)
Revenue $ 26,703,266 $ 26,433,646
Cost of staffing services 19,513,757 19,596,705
Gross profit 7,189,509 6,836,941
Selling, general, and administrative expenses 5,483,857 5,605,680
Depreciation and amortization 96,368 110,155
Income (loss) from operations 1,609,284 1,121,106
Interest expense and other financing expense 6,263 616
Net income (loss) before income taxes 1,603,021 1,120,490
Provision for income taxes 752,223 282,259
Net income (loss) $ 850,798 $ 838,231
Earnings per share: $ 0.01 $ 0.01
Basic $ 0.01 $ 0.01
Diluted
Weighted average shares outstanding:
Basic 60,623,514 62,009,514
Diluted 61,297,243 62,767,858



Contacts

Investor Relations
Liolios
Cody Slach, 949-574-3860
CCNI@liolios.com