Command Center, Inc. (OTCQB: CCNI) (http://www.otcmarkets.com/stock/CCNI/quote), a national provider of on-demand and temporary staffing solutions, has announced its results for the third quarter ended September 27, 2013.
The company reported net income of $1.2 million for the third quarter, after deduction of non-cash charges of approximately $951,000 for warrant liability and depreciation. The net income represents an increase of 70.1% over the comparable period in 2012 and constitutes earnings for the quarter of $.02 per share, based upon 59.6 million basic and 61.5 million diluted weighted average shares outstanding. Ending cash balance for the quarter was $3.1 million, an increase of $1.7 million from the end of the third quarter 2012.
Revenue for the thirteen-week period ended September 27, 2013, totaled $25.9 million versus revenue of $28.4 million for the comparable period of 2012, a decrease of 8.8%. The anticipated decline in revenue was based primarily upon the company’s continued emphasis on conducting business in a manner maximizing profitability and servicing quality accounts. This necessarily includes reducing cost of staffing services and operating expenses and increasing gross margins by significantly limiting lower-margin work. Lower quarterly revenue can also be attributed, in part, to reduced revenue coming from disaster recovery projects for the quarter, as the company is shifting away from large-scale disaster projects generally; notwithstanding there have been no major disasters nationwide in 2013.
Also consistent with the company’s cost reduction strategy, SG&A expenses were down nearly $1.9 million for the thirteen weeks ended September 27, 2013, in comparison to the similar period of 2012, representing an overall decrease of 29.7%. This decrease is primarily attributable to large recoveries of accounts receivable previously written off. The balance of the SG&A expense reduction resulted from cost containment efforts intended to trim expenses while maintaining superior customer service, which included changes in the company’s organizational structure and other operational cost-saving measures.
For the thirty-nine weeks ended September 27, 2013, the company’s continued focus on maximizing income from operations resulted in increased gross margins as a percentage of revenue to 25.7%, as opposed to 25.1% the same period a year ago. Concentration on profitability for the period also resulted in lower revenue of $69.1 million, representing a decrease of approximately $2.6 million, or 3.6%, when compared to 2012 revenue of $71.7 million for the similar period. However, even with lessened total revenue, net income over the same period increased 70.0% to $1.7 million or $.03 per share.
Regarding the quarterly results, Command Center’s President and CEO Bubba Sandford stated, “We fully anticipated revenue for the period to be less than a year ago, but the focus throughout nearly all of 2013 has been maximization of profitability. Our balance sheet is stronger than at any time in the company’s history. We realized a seventy percent increase in net income and strengthened our liquidity. This clearly demonstrates that the steps we have taken this year are working to achieve our goals and enhance the value to our shareholders.”
About Command Center, Inc.
The company provides flexible on-demand employment solutions to businesses in the United States, primarily in the areas of light industrial, hospitality and event services, as well as other assignments such as emergency and disaster relief projects. In 2012, the company provided employment for 35,500 Field Team Members, who worked 5.5 million hours for over 3,400 clients. Additional information about Command Center, Inc., is available at www.commandonline.com.
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 worker's 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 22, 2013 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.
|Command Center, Inc.|
|Consolidated Condensed Balance Sheets|
|September 27, 2013||December 28, 2012|
|Accounts receivable, net of allowance for doubtful accounts||12,289,792||13,701,396|
|Prepaid expenses, deposits and other||425,827||409,547|
|Prepaid workers' compensation||105,803||22,852|
|Current portion of workers' compensation deposits||1,155,000||1,200,000|
|Total Current Assets||17,053,417||17,005,701|
|Property and equipment - net||364,464||609,772|
|Workers' compensation risk pool deposit, less current portion||1,722,002||506,196|
|Intangible assets - net||419,584||522,535|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Checks issued and payable||248,575||511,105|
|Account purchase agreement facility||8,168,500||9,051,999|
|Other current liabilities||587,152||507,122|
|Accrued wages and benefits||1,504,645||1,713,480|
|Current portion of workers' compensation premiums and claims liability||1,357,820||2,005,579|
|Total Current Liabilities||12,756,187||14,834,309|
|Workers' compensation claims liability, less current portion||2,569,517||2,510,687|
|Commitments and contingencies|
|Preferred stock - $0.001 par value, 5,000,000 shares authorized; none issued||-||-|
Common stock - 100,000,000 shares, $0.001 par value, authorized; 59,611,242 and 59,611,242 shares issued and outstanding, respectively
|Additional paid-in capital||56,068,515||55,633,377|
|Total Stockholders' Equity||6,154,381||4,006,521|
|Total Liabilities and Stockholders' Equity||$||22,866,253||$||21,950,990|
|Command Center, Inc.|
|Consolidated Condensed Statements of Income|
|Thirteen Weeks Ended||Thirty-nine Weeks Ended|
|September 27, 2013||September 28, 2012||September 27, 2013||September 28, 2012|
|Cost of staffing services||19,226,068||21,047,247||51,323,507||53,755,648|
|Selling, general and administrative expenses||4,415,906||6,277,242||14,573,936||15,663,556|
|Depreciation and amortization||66,812||81,871||283,861||285,271|
|Income from operations||2,201,409||978,571||2,928,170||2,043,667|
Interest expense and other financing expense
|Change in fair value of derivative liabilities||(884,099||)||372,188||(786,695||)||217,543|
|Net income before income taxes||1,227,943||1,129,539||1,712,722||1,701,125|
|Provision for income taxes||-||(407,695||)||-||(698,195||)|
Earnings per share:
|Weighted average shares outstanding:|
Command Center, Inc.
Ron Junck, 208-773-7450 ext. 4240