Command Center, Inc. (OTCQB: CCNI), a national provider of on-demand and
temporary staffing solutions, reported financial results for the fourth
quarter and full year ended December 27, 2013.
Fourth Quarter 2013 Financial Highlights vs. Year-Ago Quarter
-
Revenues decreased 8% to $24.6 million, with net income up 121% to
$1.2 million or $0.02 per diluted share
-
Operating income up 231% to $1.4 million
-
Adjusted EBITDA up 189% to $1.5 million
Fourth Quarter 2013 Financial Results
Revenues in the fourth quarter of 2013 decreased 8% to $24.6 million
compared to $26.7 million in the fourth quarter of 2012. The decrease in
revenue is attributable to no large scale disaster relief projects
occurring in Q4 2013, as compared to 2012 with the impact of Hurricane
Sandy recovery work. Excluding revenue from disaster recovery work,
revenue increased 8% in the fourth quarter of 2013 as compared to the
year-ago quarter.
Net income in the fourth quarter increased 121% to $1.2 million compared
to $556,000 in the year-ago quarter, resulting in diluted earnings per
share in the fourth quarter of 2013 at $0.02 compared to $0.00 in the
year-ago quarter.
Operating income was up 231% to $1.4 million versus $435,000 in the
year-ago quarter.
Adjusted EBITDA (earnings before interest, taxes, depreciation and
amortization, and the change in fair value of derivative liabilities)
was up 189% to $1.5 million from $521,000 in the year-ago quarter (see
discussion about the presentation of adjusted EBITDA, a non-GAAP term,
below).
Full Year 2013 Financial Results
Revenue totaled $93.7 million, declining 5% from $98.4 million in 2012.
Excluding revenue from disaster recovery work, revenue increased 8% in
2013.
This revenue decrease was offset by the company’s greater focus on
higher margin business while lowering its cost structure, which resulted
in net income increasing 89% to $2.9 million compared to $1.6 million in
2012.
Diluted earnings per share increased to $0.05 per diluted share from
$0.02 in 2012.
Operating income was up 76% to $4.4 million versus $2.5 million in 2012.
Same store revenues increased approximately 8% to $92.9 million in 2013
compared to $86.0 million in 2012. The increase in same store sales is
primarily attributable to attracting new, high quality clients,
strengthening existing client relationships, and encouraging existing
client growth. Same store revenues are measured by taking revenue from
locations that were operational during the majority of both operating
periods. In 2013, the company closed four stores and opened one, ending
the year with 56 stores operating in 23 states, and serving more than
3,600 customers with more than 33,000 temporary employees.
Cost of staffing services decreased to 74.1% of revenue in 2013 compared
to 74.7% of revenue in 2012 yielding gross margins of 25.9% and 25.3%,
respectively. The decrease in staffing cost is primarily due to
decreased per diem cost and efforts to increase margins.
Cash at December 27, 2013 totaled $5.8 million, up more than $4.0
million compared to $1.6 million at December 28, 2012. The increase in
cash is due to improved cash generation from operations.
Further details about the company’s results in 2013 are available in its
Annual Report Form 10-K, accessible in the investor relations section of
the company’s website at www.commandonline.com.
Management Commentary
“2013 represented a year of restructuring and refocusing of Command
Center, which delivered almost immediate positive results,” said
president and CEO, Bubba Sandford. “Changes we implemented in the first
half of 2013 shortly after I joined the company are reflected in our
third and fourth quarter numbers. Profitability is up while SG&A is down
significantly. These results reflect our ongoing efforts to realign our
corporate culture with our branch offices and focus more on
higher-margin business.
“The decline in revenues reflects the absence of large disaster relief
projects in 2013, which has historically been a low-margin, high-risk
business and one which we expect to limit in the future. In fact, as our
fourth quarter results demonstrate, we operate more profitably without
participating in the recovery efforts for major national disasters, and
we expect this trend to continue.
“In all, we’ve achieved the goals we set out in the beginning of 2013,
which included solidifying our base in terms of the company and our
customers. As we begin the new fiscal year, we’ve never been in a
stronger financial position or enjoyed a more cohesive team of people
working towards commons goals. This has set the stage for growth in 2014
and beyond. We see the potential for solid growth across all of our
business units, based upon continued increases in same store sales, new
offices at selected locations and favorable opportunities for
acquisitions. As we expand our business, we expect to continue the
positive trends we established in 2013, while remaining focused on
improving shareholder value.”
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 53 field offices,
the company provides employment for nearly 33,000 field team members
working for 3,600 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 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 20, 2014 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
adjusted EBITDA, a non-GAAP term defined as earnings before interest,
taxes, depreciation and amortization, and the change in fair value of
derivative liabilities. (Please note, the company previously referred to
this metric as “EBITDA-D.”)
The company uses adjusted EBITDA as a financial measure since management
believes investors find it a useful tool 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 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.
The following tables present a reconciliation of adjusted EBITDA to net
income for the periods presented:
(in thousands)
|
|
|
|
|
Fifty-two Weeks Ended
|
|
|
|
|
|
December 27, 2013
|
|
|
|
|
December 28, 2012
|
Total Operating Revenue
|
|
|
|
|
$
|
93,748
|
|
|
|
|
|
|
|
|
$
|
98,432
|
|
|
|
|
Cost of Staffing Services
|
|
|
|
|
|
69,501
|
|
|
|
74.1
|
%
|
|
|
|
|
|
73,539
|
|
|
|
74.7
|
%
|
Gross profit
|
|
|
|
|
|
24,247
|
|
|
|
25.9
|
%
|
|
|
|
|
|
24,893
|
|
|
|
25.3
|
%
|
Selling, general and administrative expenses
|
|
|
|
|
|
19,528
|
|
|
|
20.8
|
%
|
|
|
|
|
|
22,043
|
|
|
|
22.4
|
%
|
Depreciation and amortization
|
|
|
|
|
|
351
|
|
|
|
0.4
|
%
|
|
|
|
|
|
371
|
|
|
|
0.4
|
%
|
Income from operations
|
|
|
|
|
|
4,368
|
|
|
|
4.7
|
%
|
|
|
|
|
|
2,479
|
|
|
|
2.5
|
%
|
Interest expense and other financing expense
|
|
|
|
|
|
(504
|
)
|
|
|
-0.5
|
%
|
|
|
|
|
|
(804
|
)
|
|
|
-0.8
|
%
|
Change in fair value of warrant liability
|
|
|
|
|
|
(786
|
)
|
|
|
-0.8
|
%
|
|
|
|
|
|
842
|
|
|
|
0.9
|
%
|
Net income before income taxes
|
|
|
|
|
|
3,078
|
|
|
|
3.3
|
%
|
|
|
|
|
|
2,517
|
|
|
|
2.6
|
%
|
Provision for income taxes
|
|
|
|
|
|
(137
|
)
|
|
|
0.1
|
%
|
|
|
|
|
|
(958
|
)
|
|
|
-1.0
|
%
|
Net income
|
|
|
|
|
$
|
2,941
|
|
|
|
3.2
|
%
|
|
|
|
|
$
|
1,559
|
|
|
|
1.6
|
%
|
Non-GAAP Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
|
|
|
$
|
4,719
|
|
|
|
5.0
|
%
|
|
|
|
|
$
|
2,850
|
|
|
|
2.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands)
|
|
|
|
|
Fifty-two Weeks Ended
|
|
|
|
|
|
December 27, 2013
|
|
|
|
|
December 28, 2012
|
Adjusted EBITDA
|
|
|
|
|
$
|
4,719
|
|
|
|
|
|
$
|
2,850
|
|
Interest expense and other financing expense
|
|
|
|
|
|
(504
|
)
|
|
|
|
|
|
(804
|
)
|
Depreciation and amortization
|
|
|
|
|
|
(351
|
)
|
|
|
|
|
|
(371
|
)
|
Change in fair value of warrant liability
|
|
|
|
|
|
(786
|
)
|
|
|
|
|
|
842
|
|
Provision for income taxes
|
|
|
|
|
|
(137
|
)
|
|
|
|
|
|
(958
|
)
|
Net income (loss)
|
|
|
|
|
$
|
2,941
|
|
|
|
|
|
$
|
1,559
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Command Center, Inc.
|
Consolidated Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 27, 2013
|
|
|
|
|
December 28, 2012
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
|
|
|
$
|
5,820,309
|
|
|
|
|
|
$
|
1,632,993
|
|
Restricted cash
|
|
|
|
|
|
25,619
|
|
|
|
|
|
|
21,295
|
|
Accounts receivable, net of allowance for doubtful accounts
|
|
|
|
|
|
10,577,250
|
|
|
|
|
|
|
13,701,396
|
|
Prepaid expenses, deposits and other
|
|
|
|
|
|
328,920
|
|
|
|
|
|
|
409,547
|
|
Prepaid workers' compensation
|
|
|
|
|
|
28,044
|
|
|
|
|
|
|
22,852
|
|
Other receivables
|
|
|
|
|
|
27,933
|
|
|
|
|
|
|
17,618
|
|
Current portion of workers' compensation deposits
|
|
|
|
|
|
1,113,000
|
|
|
|
|
|
|
1,200,000
|
|
Total Current Assets
|
|
|
|
|
|
17,921,075
|
|
|
|
|
|
|
17,005,701
|
|
Property and equipment – net
|
|
|
|
|
|
350,767
|
|
|
|
|
|
|
609,772
|
|
Workers' compensation risk pool deposit, less current portion
|
|
|
|
|
|
1,783,112
|
|
|
|
|
|
|
506,196
|
|
Goodwill
|
|
|
|
|
|
3,306,786
|
|
|
|
|
|
|
3,306,786
|
|
Intangible assets – net
|
|
|
|
|
|
386,956
|
|
|
|
|
|
|
522,535
|
|
Total Assets
|
|
|
|
|
$
|
23,748,696
|
|
|
|
|
|
$
|
21,950,990
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
|
$
|
402,672
|
|
|
|
|
|
$
|
722,150
|
|
Checks issued and payable
|
|
|
|
|
|
189,830
|
|
|
|
|
|
|
511,105
|
|
Account purchase agreement facility
|
|
|
|
|
|
8,050,633
|
|
|
|
|
|
|
9,051,999
|
|
Other current liabilities
|
|
|
|
|
|
326,319
|
|
|
|
|
|
|
507,122
|
|
Contingent liability
|
|
|
|
|
|
-
|
|
|
|
|
|
|
322,874
|
|
Accrued wages and benefits
|
|
|
|
|
|
1,717,235
|
|
|
|
|
|
|
1,713,480
|
|
Current portion of workers' compensation premiums and claims
liability
|
|
|
|
|
|
1,648,058
|
|
|
|
|
|
|
2,005,579
|
|
Total Current Liabilities
|
|
|
|
|
|
12,334,747
|
|
|
|
|
|
|
14,834,309
|
|
Long-Term Liabilities
|
|
|
|
|
|
|
|
|
|
|
Warrant liabilities
|
|
|
|
|
|
1,386,088
|
|
|
|
|
|
|
599,473
|
|
Workers' compensation claims liability, less current portion
|
|
|
|
|
|
2,613,871
|
|
|
|
|
|
|
2,510,687
|
|
Total Liabilities
|
|
|
|
|
|
16,334,706
|
|
|
|
|
|
|
17,944,469
|
|
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;
59,711,242 and 59,611,242 shares issued and outstanding, respectively
|
|
|
|
|
|
59,711
|
|
|
|
|
|
|
59,611
|
|
Additional paid-in capital
|
|
|
|
|
|
56,099,875
|
|
|
|
|
|
|
55,633,377
|
|
Accumulated deficit
|
|
|
|
|
|
(48,745,596
|
)
|
|
|
|
|
|
(51,686,467
|
)
|
Total Stockholders' Equity
|
|
|
|
|
|
7,413,990
|
|
|
|
|
|
|
4,006,521
|
|
Total Liabilities and Stockholders' Equity
|
|
|
|
|
$
|
23,748,696
|
|
|
|
|
|
$
|
21,950,990
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Command Center, Inc.
|
Consolidated Statements of Income
|
|
|
|
|
|
|
|
|
|
|
|
Fifty-two Weeks Ended
|
|
|
|
|
|
December 27, 2013
|
|
|
|
|
December 28, 2012
|
Revenue
|
|
|
|
|
$
|
93,748,261
|
|
|
|
|
|
$
|
98,432,059
|
|
Cost of staffing services
|
|
|
|
|
|
69,500,997
|
|
|
|
|
|
|
73,538,819
|
|
Gross profit
|
|
|
|
|
|
24,247,264
|
|
|
|
|
|
|
24,893,240
|
|
Selling, general and administrative expenses
|
|
|
|
|
|
19,527,784
|
|
|
|
|
|
|
22,043,268
|
|
Depreciation and amortization
|
|
|
|
|
|
351,240
|
|
|
|
|
|
|
370,768
|
|
Income from operations
|
|
|
|
|
|
4,368,240
|
|
|
|
|
|
|
2,479,204
|
|
Interest expense and other financing expense
|
|
|
|
|
|
(503,626
|
)
|
|
|
|
|
|
(804,036
|
)
|
Change in fair value of derivative liabilities
|
|
|
|
|
|
(786,615
|
)
|
|
|
|
|
|
842,256
|
|
Net income before income taxes
|
|
|
|
|
|
3,077,999
|
|
|
|
|
|
|
2,517,424
|
|
Provision for income taxes
|
|
|
|
|
|
(137,128
|
)
|
|
|
|
|
|
(958,147
|
)
|
Net income
|
|
|
|
|
$
|
2,940,871
|
|
|
|
|
|
$
|
1,559,277
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings' per share:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
$
|
0.05
|
|
|
|
|
|
$
|
0.03
|
|
Diluted
|
|
|
|
|
$
|
0.05
|
|
|
|
|
|
$
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
59,613,989
|
|
|
|
|
|
|
59,235,990
|
|
Diluted
|
|
|
|
|
|
61,307,455
|
|
|
|
|
|
|
63,124,705
|
|
Copyright Business Wire 2014