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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Command Center Inc | NASDAQ:CCNI | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 6.90 | 4.51 | 7.20 | 0 | 01:00:00 |
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
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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