Updates Progress on Shift to Franchise
Model
Command Center, Inc. (Nasdaq: CCNI), a national provider of
on-demand and temporary staffing solutions, today reported
financial results for the second quarter ended June 28, 2019. On
July 15, subsequent to the end of the quarter, Command Center
closed its merger agreement (“Merger Agreement”) with Hire Quest
Holdings, LLC, operating as Trojan Labor and Acrux Staffing, a
privately held provider of blue collar, light industrial and
administrative staffing, in an all-stock transaction.
“We have made significant progress in the few short weeks since
the closing of the merger to convert branches to the franchise
model,” commented Rick Hermanns, Command Center’s President and
Chief Executive Officer. “Approximately half of the Command Center
branches have been converted, and the remaining are expected to be
converted once state regulatory approval is granted, which is
expected before the end of 2019. While good progress is being made
with the integration, investors should expect significant expenses
and non-recurring charges related to integrating the businesses and
rationalizing the footprint of the combined entity. The near-term
results will be choppy, but we remain steadfast in our goal to
create a stronger and more profitable long-term platform.”
Second Quarter 2019 Financial Summary
- Revenue of $24.8 million compared to $24.2 million in the
year-ago period.
- Gross margin of 26.4% compared to 26.0% in the year-ago
period.
- Transaction-related expenses of approximately $341,000 in the
quarter, primarily related to legal and professional fees, compared
to no such non-recurring expenses in the prior-year second
quarter.
- Net income of $412,000, or $0.09 per diluted share, compared to
net income of $563,000, or $0.11 per diluted share in the year-ago
period.
Second Quarter 2019 Financial Results
Revenue in the second quarter of 2019 was $24.8 million,
compared to $24.2 million in the year-ago quarter, an increase of
$662,000, or 2.7%. Gross margin in the second quarter was 26.4%,
compared to 26.0% in the year-ago quarter. This increase is
primarily related to a decrease in workers’ compensation costs as
well as lower unemployment costs. Continued low unemployment rates
resulted in upward pressure on wages and related payroll taxes for
field team members, which partially offset the increase in gross
margin for the quarter.
Selling, general and administrative (“SG&A”) expense in the
second quarter was $5.6 million, an increase of approximately
$240,000 from $5.4 million for the second quarter last year. This
increase is primarily due to recruiting costs and legal and
professional fees, including approximately $341,000 in
non-recurring transaction-related expenses. Excluding these
non-recurring expenses, SG&A decreased by approximately
$101,000.
Command Center reported income from operations of $878,000,
compared to income from operations of $820,000 in the second
quarter last year.
Net income in the second quarter of 2019 was $412,000, or $0.09
per diluted share, compared to net income of $563,000, or $0.11 per
diluted share, in the year-ago quarter.
Adjusted EBITDA in the second quarter was $1.4 million, compared
to $1.3 million in the year-ago quarter. Adjusted EBITDA in the
second quarter of 2019 included $357,000 in non-recurring charges,
and $67,000 in non-cash compensation compared to $195,000 in
non-recurring charges and $192,000 in non-cash compensation in the
year-ago quarter.
Balance Sheet and Capital Structure
Cash and cash equivalents at June 28, 2019, was $7.0 million,
compared to $8.0 million at December 28, 2018.
Conference Call
Command Center will hold a conference call tomorrow, Tuesday,
August 13, 2019, at 4:30 p.m. Eastern time (2:30 p.m. Mountain
time) to discuss its financial results for the second quarter ended
June 30, 2019.
Date:
Tuesday, August 13, 2019
Time:
4:30 p.m. Eastern time (2:30 p.m.
Mountain time)
Toll-free dial-in number:
1-877-705-6003
International dial-in number:
1-201-493-6725
Conference ID:
13693270
Please call the conference telephone number 5-10 minutes prior
to the start time. An operator will register your name and
organization.
The conference call will be broadcast live and available for
replay at http://public.viavid.com/index.php?id=135673 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 7:30
p.m. Eastern time on the same day and continuing through August 27,
2019.
Toll-free replay number:
1-844-512-2921
International replay number:
1-412-317-6671
Replay ID:
13693270
About Command Center
Command Center and its subsidiary Hire Quest, LLC (“Hire Quest”)
provide flexible on-demand employment solutions to businesses in
the United States, primarily in the areas of construction, light
industrial, manufacturing, hospitality and event services. Through
more than 150 franchised and corporately-owned field offices in 32
states and the District of Columbia, the Company, through Hire
Quest, provides employment annually for approximately 85,000 field
team members working for thousands of 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, 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 term Adjusted EBITDA. 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 Adjusted EBITDA as a financial measure as management believes
investors find it to be a useful tool 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
this metric is a useful compliment to net income and other
financial performance measures. Adjusted EBITDA is 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.
Command Center, Inc.
Consolidated Balance
Sheets
June 28, 2019
December 28, 2018
ASSETS
(unaudited)
Current assets
Cash
$ 6,909,551
$ 7,934,287
Restricted cash
105,700
69,423
Accounts receivable, net of allowance for
doubtful accounts
10,230,897
9,041,361
Prepaid expenses, deposits, and other
assets
175,361
380,930
Prepaid workers' compensation
538,063
212,197
Total current assets
17,959,572
17,638,198
Property and equipment, net
284,960
329,255
Right-of-use assets
1,580,546
-
Deferred tax asset
1,083,360
1,079,908
Workers' compensation risk pool deposit,
less current portion, net
-
193,984
Workers' compensation risk pool deposit in
receivership, net
260,000
260,000
Goodwill and other intangible assets,
net
3,877,027
3,930,900
Total assets
$ 25,045,465
$ 23,432,245
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities
Accounts payable
$ 528,949
$ 219,945
Account purchase agreement facility
526,142
398,894
Other current liabilities
448,266
821,142
Accrued wages and benefits
1,623,135
1,218,699
Current portion of lease liabilities
878,725
-
Current portion of workers' compensation
claims liability
939,081
1,003,643
Total current liabilities
4,944,298
3,662,323
Lease liabilities, less current
portion
745,736
-
Workers' compensation claims liability,
less current portion
854,372
878,455
Total liabilities
6,544,406
4,540,778
Commitments and contingencies
Stockholders' equity
Preferred stock - $0.001 par value,
416,666 shares authorized; none issued
-
-
Common stock - $0.001 par value, 8,333,333
shares authorized; 4,629,331 and 4,680,871 shares issued and
outstanding, respectively
4,629
4,681
Additional paid-in capital
54,479,010
54,536,852
Accumulated deficit
(35,982,580)
(35,650,066)
Total stockholders' equity
18,501,059
18,891,467
Total liabilities and stockholders'
equity
$ 25,045,465
$ 23,432,245
Command Center, Inc.
Consolidated Statements of
Operations
(unaudited)
Thirteen weeks ended
Twenty-six weeks ended
June 28, 2019
June 29, 2018
June 28, 2019
June 29, 2018
Revenue
$ 24,838,463
$ 24,175,985
$ 46,593,361
$ 46,643,383
Cost of staffing services
18,288,855
17,898,665
34,411,490
34,771,996
Gross profit
6,549,608
6,277,320
12,181,871
11,871,387
Selling, general and administrative
expenses
5,609,401
5,368,908
12,159,413
12,582,528
Depreciation and amortization
62,728
87,926
130,545
180,517
Income (loss) from operations
877,479
820,486
(108,087)
(891,658)
Interest expense (income) and other
financing expense
(33)
267
47
2,430
Net income (loss) before income taxes
877,512
820,219
(108,134)
(894,088)
Provision (benefit) for income taxes
466,004
256,972
224,380
(239,646)
Net income (loss)
$ 411,508
$ 563,247
$ (332,514)
$ (654,442)
Earnings (loss) per share:
Basic
$ 0.09
$ 0.11
$ (0.07)
$ (0.13)
Diluted
$ 0.09
$ 0.11
$ (0.07)
$ (0.13)
Weighted average shares
outstanding:
Basic
4,629,492
4,924,245
4,645,883
4,953,701
Diluted
4,631,299
4,931,201
4,645,883
4,953,701
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190812005523/en/
Company Contact: Command
Center, Inc. Cory Smith, CFO (866) 464-5844 Email:
cory.smith@commandonline.com Investor
Relations Contact: Hayden IR Brett Maas 646-536-7331
Email: brett@haydenir.com
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