Command Center, Inc. (OTCQB: CCNI), a national provider of on-demand and temporary staffing solutions, reported financial results for the full year ended December 25, 2015.

Full Year 2015 Financial Overview vs. Full Year 2014

  • Revenue was $88.5 million compared to $91.8 million, a decrease of 3.6%
  • Revenue excluding branches in North Dakota increased 10.5%
  • Gross margins decreased 90 basis points to 26.9%
  • Operating income was $3.0 million compared to $6.5 million
  • Net income in 2015 was $1.7 million, or $0.03 per share, compared to $9.1 million, or $0.14 per share
  • Adjusted Net Income was $4.3 million, or $0.07 per diluted share, compared to $7.4 million, or $0.12 per share
  • EBITDA was $3.9 million compared to $7.4 million
  • Repurchased 2.3 million shares of the company’s outstanding common stock for an average cost of $0.60 per share

Full Year 2015 Financial Results

Revenue in 2015 was $88.5 million compared to $91.8 million in 2014. The decrease was due to the decline in demand for temporary staffing services in the Bakken region of North Dakota, a region that is generally economically dependent on the health of the oil industry. Revenue from the company’s North Dakota offices fell by $10.3 million in 2015, or 40% compared to the prior year, while revenue from the company’s remaining branches increased by $7.0 million, or 10.5% over 2014.

Gross margins in 2015 were 26.9% compared to 27.8% in 2014. The decrease was primarily due to the reduction in higher margin revenue from North Dakota. This was partially offset by a 40 basis point reduction in workers’ compensation expense as a company to 3.3% of revenue compared to 2014.

Operating income in 2015 was $3.0 million compared to $6.5 million in 2014. Net income in 2015 was $1.7 million, or $0.03 per diluted share, compared to $9.1 million, or $0.14 per diluted share in 2014. However, net income in 2014 included the recognition of a $3.7 million net benefit from the company’s net operating loss carryforward.

Adjusted Net Income (a non-GAAP term defined below) in 2015 was $4.3 million, or $0.07 per diluted share, compared to $7.4 million, or $0.12 per diluted share in 2014.

EBITDA (a non-GAAP term defined below) in 2015 was $3.9 million compared to $7.4 million 2014. Cash at December 25, 2015, was $7.7 million compared to $8.6 million at December 26, 2014.

Selling, general and administrative expenses in 2015 were $20.6 million compared to $18.5 million in 2014. The increase was primarily due to increased hiring and training of employees to support future growth, including additional office staff at the company’s new corporate headquarters in Colorado. The company also incurred costs opening five new branches during the year and moving the corporate office from Coeur d’Alene, Idaho, to Denver, Colorado.

In 2015, the company opened five new branch offices, ending the year with 57 stores operating in 20 states. The company serviced approximately 3,300 customers in 2015, utilizing more than 32,600 temporary employees.

During the year, the company repurchased approximately 2.3 million shares of its common stock, at a total cost of $1.4 million, or $0.60 per share.

More details about the company’s results in 2015 are available in its Annual Report Form 10-K, accessible via the investor relations section of the company’s website at www.commandonline.com.

Management Commentary

“In 2015, we executed on the fundamental values of our business, with the focus continuing to be good, profitable business that ultimately returns shareholder value from our operations,” said Command Center’s president and CEO, Bubba Sandford. “Excluding our branches in North Dakota, which were impacted by the oil-driven economy in that region, same-store sales were up 10.5% at industry-high gross margins, underscoring the collective strength of the majority of our locations outside of North Dakota.

“We used a portion of our cash flow to invest back into the business by opening five new offices during the year—all in areas where we leveraged our existing customer base to drive even greater profitability. During 2015, we continued to coach and train our branches in the tenets of our ‘Keys to Success,’ which improve customer satisfaction and instill better business decisions at the branch level, translating into higher revenue and profitability.

“We reduced the amount drawn on our line of credit balance by $2.4 million during 2015 and have minimal debt today. We also used cash from our continuingly profitable operations to repurchase 2.3 million shares—or roughly 3.5% of our company—for approximately $1.4 million during the year. There remains $3.6 million on the stock purchase plan, and we will continue to be opportunistic in our purchases during 2016. We do not believe the continuation of this plan will prevent us from opening new branches or pursuing acquisition opportunities in the current year.

“As we look towards the remainder of 2016, we are well-positioned to execute our strategy, and we remain optimistic that we will find acquisition opportunities that make sense for the company. We will continuously assess and adjust our existing stores and personnel within the company in order to maximize efficiency, profitability and consistency in service. We will also continue to evaluate additional new store locations to expand existing markets and capitalize on current customer relationships. We are confident this strategy is most optimal for driving long-term shareholder value.”

Conference Call

The company will hold a conference call on Tuesday, April 5, 2016, at 4:30 p.m. Eastern (2:30 p.m. Mountain) to discuss its full year 2015 results. Full details of the call will be announced via press release later this week.

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 59 field offices, the company provides employment annually for nearly 33,000 field team members working for 3,300 clients. For more information about Command Center, go to www.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, the severity and duration of the general economic downturn, 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 the Form 10-K filed with the Securities and Exchange Commission on March 24, 2016, and in other statements filed from time to time with the Securities and Exchange Commission. 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 non-GAAP terms Adjusted Net Income and EBITDA. Adjusted Net Income is defined as earnings before interest, taxes, depreciation and amortization and specifically identified one-time earnings or expenses. EBITDA is defined as earnings before interest, taxes, depreciation and amortization. The company uses Adjusted Net Income and EBITDA as financial measures since management believes investors find these to be useful tools to perform more meaningful comparisons of past, present and future operating results, and as a complement to net income and other financial performance measures. Adjusted Net Income and 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 Adjusted Net Income to net income and EBITDA to net income for the periods presented as well as per basic share information (in thousands except per share data):

      Fifty-Two Weeks Ended
December 25, 2015           December 26, 2014
Revenue (GAAP measure) $ 88,499 $ 91,840
Net (Loss) Income (GAAP measure) 1,713 9,126
Adjustments:
Non-cash compensation 742 420
Non-cash taxes 1,101 (3,694 )
Depreciation and amortization 172 1,348
Interest expense and other financing expense 177 248
Reserve for workers compensation deposit 250
Reserve for notes receivable   175    
Net Adjustments:   2,616     (1,677 )
Adjusted Net Income $ 4,329   $ 7,448  
Number of Shares (weighted average) 65,139 63,867
Adjusted EPS $ 0.07 $ 0.12
 
 
Fifty-Two Weeks Ended
December 25, 2015

 

December 26, 2014

EBITDA $ 3,904

 

$

7,448

Interest expense and other financing expense (177 )

 

(248

)

Depreciation and amortization (172 )

 

(1,348

)

Provision for income taxes (1,101 )

 

3,694

Non-cash compensation   (742 )

 

 

(420

)

Net income (loss) $ 1,713  

 

$

9,126

 
 
 
               
Command Center, Inc.
Consolidated Balance Sheets
 
December 25, 2015 December 26, 2014
ASSETS
Current Assets
Cash $ 7,629,423 $ 8,600,249
Accounts receivable, net of allowance for doubtful accounts 8,917,933 9,029,347
Notes Receivable - -
Prepaid expenses, deposits and other 292,352 260,242
Prepaid workers' compensation 756,005 581,355
Other receivables - 7,949
Current portion of deferred tax asset 878,085 1,760,000
Current portion of workers' compensation deposits   398,319     1,114,000  
Total Current Assets 18,872,117 21,353,142
Property and equipment - net 408,657 430,987
Deferred tax asset, less current portion 2,083,851 2,126,000
Workers' compensation risk pool deposit, less current portion 2,256,814 1,790,633
Goodwill   2,500,000     2,500,000  
Total Assets $ 26,121,439   $ 28,200,762  
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 304,009 $ 546,247
Checks issued and payable 487,087 255,532
Account purchase agreement facility 479,616 2,900,104
Other current liabilities 323,222 249,445
Accrued wages and benefits 1,452,558 1,665,697
Current portion of workers' compensation premiums and claims liability   1,201,703     1,305,248  
Total Current Liabilities 4,248,196 6,922,273
Long-Term Liabilities
Workers' compensation claims liability, less current portion   2,231,735     2,514,302  
Total Liabilities   6,479,931     9,436,575  
Commitments and contingencies - -
Stockholders' Equity
Preferred stock - $0.001 par value, 5,000,000 shares authorized; none issued - -

Common stock - 100,000,000 shares, $0.001 par value, authorized; 64,305,288 and 65,632,868 shares issued and outstanding, respectively

64,305 65,633
Additional paid-in capital 57,752,301 58,318,396
Accumulated deficit   (38,175,098 )   (39,619,842 )
Total Stockholders' Equity   19,641,508     18,764,187  
Total Liabilities and Stockholders' Equity $ 26,121,439   $ 28,200,762  
 
 
 

Command Center, Inc.

Consolidated Statements of Income
               
Fifty-Two Weeks Ended
December 25, 2015 December 26, 2014
Revenue $ 88,498,943 $ 91,839,846
Cost of staffing services   64,733,358     66,320,088  
Gross profit 23,765,585 25,519,758
Selling, general and administrative expenses 20,603,745 18,491,561
Depreciation and amortization   171,511     540,746  
Income from operations 2,990,329 6,487,451
Interest expense and other financing expense (176,537 ) (248,729 )
Impairment of goodwill - (806,786 )
Change in fair value of derivative liabilities   -     87  
Net income before income taxes 2,813,792 5,432,023
Provision for income taxes   (1,100,633 )   3,693,731  
Net income $ 1,713,159   $ 9,125,754  
 
Earnings per share:
Basic $ 0.03   $ 0.14  
Diluted $ 0.03   $ 0.14  
 
Weighted average shares outstanding:
Basic 65,139,449 63,866,729
Diluted 66,095,168 65,588,413
 


Contacts

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