Labor SMART, Inc. Provides Update on Its Balance Sheet and Capital Initiatives
November 18 2014 - 7:30AM
Access Wire
Management Goal is to
Minimize Equity Dilution
ATLANTA, GA / ACCESSWIRE / November 18, 2014 /
Labor SMART, Inc. (LTNC) (the "Company"), a leader in providing
on-demand blue collar staffing primarily in the southeastern United
States, is pleased to provide its shareholders with an update on
its balance sheet and capital initiatives.
"Over the past couple of years we have been able to grow our
business from $7 million revenue in 2012 to $16 million revenue in
2013 to $18 million revenue in the first nine months of 2014,"
stated Ryan Schadel, Labor SMART Chairman and Chief Executive
Officer. "In fact, we have doubled our branches to 30 locations in
the past year and reached positive EBITDA. None of this would have
been possible without the growth capital we raised along the way.
Venture or seed capital was not available to us, so we went the
route of convertible debentures. While they may not be ideal in
structure, at the time there were no traditional financing
opportunities available to us. Since we now have our business
generating $2 million revenue per month and EBITDA positive, it is
now a major focus of ours to minimize the equity dilution going
forward."
Mr. Schadel, continued, "We are taking a 3-pronged approach to
address the current capital structure. Due to the seasonality of
our business, we expect approximately $1.2 million of operating
cash flow over the next 4 months, which we will utilize to pay back
a portion of the notes. We will also allow for certain note holders
to convert into equity for a portion of the notes. Additionally, we
are actively pursuing additional outside cash infusions to
restructure a portion of the notes and for growth capital. Our
dependence on convertible debentures for financing has been greatly
reduced over the last 45 days as our business reached minimum
scale. We believe a combination of these three alternatives will
minimize the equity dilution and protect shareholder value without
sacrificing our long term growth strategy. As an organization
commited to transparency and communication to shareholders, we will
update our investors of major changes to our outstanding share
count via routine form 8K filings with the Securities and Exchange
Commision."
As of November 4, 2014, Labor SMART had a balance of
approximately $3.0 million of Convertible Notes Payable on its
balance sheet. The shares outstanding as of November 4, 2014 stood
at 55.5 million.
About Labor SMART, Inc.
Labor SMART, Inc. provides On-Demand temporary labor to a
variety of industries. The Company's clients range from small
businesses to Fortune 100 companies. Labor SMART was founded to
provide reliable, dependable and flexible resources for on-demand
personnel to small and large businesses in areas that include
construction, manufacturing, hospitality, event-staffing,
restoration, warehousing, retailing, disaster relief and cleanup,
demolition and landscaping. Labor SMART believes it can make a
positive contribution each and every day for the benefit of its
clients and temporary employees. The Company's mission is to be the
provider of choice to its growing portfolio of customers with a
service-focused approach that enables Labor SMART to be seen as a
resource and partner to its clients.
Safe Harbor Statement
This release contains statements that constitute forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. These statements appear in a number of places
in this release and include all statements that are not statements
of historical fact regarding the intent, belief or current
expectations of Labor SMART, Inc., its directors or its officers
with respect to, among other things: (i) financing plans; (ii)
trends affecting its financial condition or results of operations;
(iii) growth strategy and operating strategy. The words "may",
"would", "will", "expect", "estimate", "can", "believe",
"potential", and similar expressions and variations thereof are
intended to identify forward-looking statements. Investors are
cautioned that any such forward-looking statements are not
guarantees of future performance and involve risks and
uncertainties, many of which are beyond Labor SMART, Inc.'s ability
to control, and that actual results may differ materially from
those projected in the forward-looking statements as a result of
various factors. More information about the potential factors that
could affect the business and financial results is and will be
included in Labor SMART, Inc.'s filings with the U.S. Securities
and Exchange Commission.
Contacts:
Hayden IR
917-658-7878
hart@haydenir.com
SOURCE: Labor SMART, Inc.
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