Published:
Command Center Reports First Quarter 2008 Results
Command Center Reports First Quarter 2008 Results
POST FALLS, Idaho, May 13 /PRNewswire-FirstCall/ -- Command Center, Inc.
(OTC Bulletin Board: CCNI), a leading provider of on-demand labor personnel in
the United States, announced its results for the thirteen week period ended
March 28, 2008.
For the thirteen weeks ended March 28, 2008, total revenue was $19.9
million, compared to $22.9 million for the thirteen weeks ended March 29,
2007. For the period, the Company reported a net loss of ($2.6) million or
($0.07) per share, based on 35,729,774 weighted average common shares
outstanding, compared to a loss of ($3.1) million or ($0.13) per share, based
on 23,596,415 weighted average common shares outstanding, for the comparable
period in 2007.
The company used $.9 million cash in operations in the quarter. The net
loss included a non-cash charge of $1.7 million for current and expected
future liabilities from workers' compensation claims. The Company previously
deposited amounts with its insurer to meet the expected future worker's
compensation claims and the application of the deposits was recorded as a use
of cash in prior periods. The Company expects additional cash requirements in
the second quarter 2008 relating to workers' compensation deposits for prior
policy years totaling approximately $1.7 million.
Commenting on the period, Command Center CEO Glenn Welstad noted, "Similar
to other staffing companies, we encountered a very difficult operating
environment during the quarter, driven primarily by a slowing of the U.S.
economy. Although the first quarter is typically the slowest period of the
year, it was particularly pronounced this year as many of our clients reduced
their cost structures to offset the effects of a general economic downturn. In
response to these challenging conditions, we took definitive actions to
counteract the slowdown, such as instituting more effective sales training,
increasing the focus of our branch managers on sales activities, and
instituting new systems for tracking the individual performance of our sales
team, while continuing our work on improving client service and retention. We
are confident that these activities will enable Command Center to experience
improved results even if the present economic climate persists."
Mr. Welstad continued, "We recognize the importance of remaining agile and
responsive to economic conditions. As part of our efforts to enhance sales,
we take into account the changes in the business mix of our customers. For
example, to help offset the decline in the manufacturing and construction
sectors, we have increased our sales activities on transportation services,
hospitality and event services."
For the thirteen weeks ended March 28, 2008, the Company reported cost of
sales of $15.1 million and gross profit margin of 24.2%, compared to cost of
sales of $17.3 million and gross profit margin of 24.5%, for the comparable
period last year. SG&A expenses for the period were $7.3 million or 36.7% of
revenue, compared to $8.5 million or 37.2% of revenue, for the same period
last year.
Mr. Welstad concluded, "In light of the challenging market conditions, I
am pleased with our ability to reduce our SG&A by 14.2% year-over-year,
including major reductions in administrative and sales and marketing expenses.
We continue to work diligently to align our cost and operating structures to
position the Company to achieve improved profit margins. We have cut a number
of staffing positions in order to right-size our staffing levels to the
current economic climate and we have closed a few marginal offices. Both our
sales activity and cost control initiatives are showing positive results,
leading us to believe that our performance in the second quarter will be well
improved over our first quarter results."
Branch Office Update
In the first quarter, Command Center opened five new stores (Laurel,
Maryland; N.Houston, Texas;Thornton, Colorado;Crawfordsville, Indiana; and
Long Beach, California) and closed one existing store (Waco, Texas). In the
second quarter, the Company closed seven branch offices and opened offices at
two new locations. The actions were dictated by the findings of a formal
review completed during the quarter to identify ways in which Command Center
could operate more effectively. Consistent with its business model, the
Company will continue to close stores in areas that are heavily impacted by
the economic slowdown and will open new stores in areas that are less affected
and offer opportunities for growth. Command Center is also working with its
existing customer base to pre-sell a breakeven level of business in new areas.
Over the course of the year, management expects this will result in a
shortening of its new store ramp-up time to breakeven.
As of March 28, 2008, Command Center operated 82 branch offices in 21
states.
Sales and Marketing Update
During the first quarter, Command Center instituted a number of programs
to generate new accounts at a lower cost per customer. In the last half of
2007, the Company focused efforts on building a selling branch manager model
to reinforce the direct link between branch staff and our current and
prospective customers. Consistent with that model, in the first quarter, the
Company improved its sales metrics and monitoring programs to assure that
branch sales activities meet expectations. The improved sales key performance
indicators (KPIs) allow the teams to more effectively track prospects
throughout the sales cycle. Management is confident that these changes will
produce more effective sales generation in future periods. Additional sales
resources will be added to stores as they reach milestone performance levels.
As of March 28, 2008, Command Center had total current assets of $12.2
million and total assets of $32.2 million, including $1.4 million of cash. It
also had availability of $0.5 million under its credit facility.
About Command Center, Inc.
The Company provides on-demand employment solutions to businesses inthe
United States, primarily in the areas of light industrial, hospitality and
event services, as well as other assignments. Additional information on
Command Center 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 availability of
worker's compensation insurance coverage, the availability of 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, economic conditions, the impact
of competition and pricing, government regulation, and other risks set forth
in the Form 10KSB filed with the Securities and Exchange Commission on March
28, 2008 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.
(Tables to Follow)
Command Center, Inc.
Statements of Operations (Unaudited)
Thirteen Weeks Ended
March 28, March 30,
REVENUE: 2008 2007
Revenue from services $19,835,399 $22,854,400
Other income 101,690 65,452
19,937,089 22,919,852
COST OF SERVICES:
Temporary worker costs 13,023,601 15,579,641
Workers' compensation costs 1,753,694 1,580,284
Other direct costs of services 291,241 128,585
15,068,536 17,288,510
GROSS PROFIT 4,868,553 5,631,342
SELLING, GENERAL, AND ADMINISTRATIVE
EXPENSES:
Personnel costs 4,013,935 4,581,518
Selling and marketing expenses 306,025 490,678
Transportation and travel 408,212 543,805
Office expenses 259,672 296,194
Legal, professional and consulting 411,765 535,288
Depreciation and amortization 213,796 196,273
Rents and leases 601,917 586,407
Other expenses 1,095,123 1,290,538
7,310,445 8,520,701
LOSS FROM OPERATIONS (2,441,892) (2,889,359)
OTHER INCOME (EXPENSE):
Interest expense (150,815) (198,758)
Interest and other income 5,933 7,351
(144,882) (191,407)
BASIC AND DILUTED NET LOSS $(2,586,774) $(3,080,766)
BASIC AND DILUTED LOSS PER SHARE $(0.07) $(0.13)
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 35,729,137 23,596,415
Command Center, Inc.
Balance Sheet
Assets March 28, 2008 December 28, 2007
CURRENT ASSETS: Unaudited
Cash $1,390,903 $580,918
Accounts receivable - trade, net of
allowance for bad debts of
$500,000 at March 28, 2008 and
December 28, 2007 8,338,928 9,079,222
Notes and subscriptions receivable
- current - 1,953,882
Prepaid expenses, deposits, and
other 1,119,429 1,610,913
Current portion of workers'
compensation risk pool deposits 1,331,950 1,150,375
Total current assets 12,181,210 14,375,310
PROPERTY AND EQUIPMENT, NET 3,114,450 3,245,506
OTHER ASSETS:
Note receivable - non-current 17,155 17,155
Workers' compensation risk pool
deposits 2,012,143 2,833,127
Goodwill 14,257,929 14,257,929
Intangible assets - net 638,358 683,275
Total other assets 16,925,585 17,791,486
$32,221,245 $35,412,302
Liabilities and Stockholders' Equity
CURRENT LIABILITIES:
Accounts payable $809,968 $863,373
Line of credit facility 4,533,261 4,686,156
Accrued wages and benefits 1,183,298 1,553,536
Advances payable 100,000 100,000
Current portion of note payable 92,430 8,967
Other current liabilities 296,664 817,368
Current portion of workers'
compensation claims liability 1,331,950 1,150,375
Total current liabilities 8,347,571 9,179,775
LONG-TERM LIABILITIES:
Note payable, less current portion - 85,655
Finance obligation 1,125,000 1,125,000
Workers' compensation claims
liability, less current portion 2,526,793 2,219,642
Total long-term liabilities 3,651,793 3,430,297
STOCKHOLDERS' EQUITY:
Preferred stock - 5,000,000 shares,
$0.001 par value, authorized;
no shares issued and outstanding -
Common stock - 100,000,000 shares,
$0.001 par value, authorized;
36,096,720 and 35,725,050 shares
issued and outstanding,
respectively 36,097 35,725
Additional paid-in capital 51,011,211 51,005,159
Accumulated deficit (30,825,427) (28,238,654)
Total stockholders' equity 20,221,881 22,802,230
$32,221,245 $35,412,302
SOURCE Command Center, Inc.
Copyright © 2008, PRNewswire
Copyright © 2008, NewsBlaze,
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