DENVER–(BUSINESS WIRE)–Command Center, Inc. (OTCQB: CCNI), a national provider of on-demand and temporary staffing solutions, reported financial results for the fourth quarter ended December 25, 2015.
Today’s press release is supplemental to the company’s full year 2015 earnings release, which was disseminated yesterday and available here. Command Center has also scheduled a conference call for next week to review its 2015 results. Details of the call can be found below.
Fourth Quarter 2015 Financial Results
Revenue in the fourth quarter of 2015 was $21.9 million compared to $24.0 million in the fourth quarter 2014. The decrease was due to the decline in demand for temporary staffing services in the Bakken region of North Dakota, a region that is generally economically dependent on the health of the oil industry.
Gross margins in the fourth quarter of 2015 were 26.2% compared to 29.7% in the same year-ago quarter. The decrease was primarily due to the reduction in higher-margin revenue from North Dakota.
Selling, general and administrative expenses in the fourth quarter of 2015 were $5.2 million compared to $5.4 million in the fourth quarter of 2014. The decrease was primarily due to a decline in executive bonuses.
Operating income in the fourth quarter of 2015 was $0.5 million compared to $1.7 million in the same year-ago quarter.
Net income in the fourth quarter of 2015 was $0.3 million or $0.00 per diluted share, compared to $1.1 million or $0.02 per diluted share in the fourth quarter of 2014.
EBITDA (a non-GAAP term defined below) in the fourth quarter of 2015 was $843,000 compared to $2.0 million in the fourth quarter of 2014.
Adjusted Net Income (a non-GAAP term defined below) in the fourth quarter was $843,000 or $0.00 per diluted share, compared to $2.0 million or $0.03 per diluted share in the fourth quarter of 2014.
Management Commentary
“While our consolidated fourth quarter results were negatively affected by economic conditions in North Dakota related to the oil and gas industries, our remaining branches performed very well, with revenue up by 8.2% compared to the same quarter a year ago,” said Command Center’s president and CEO, Bubba Sandford. “During the fourth quarter, we repurchased approximately 440,000 shares of the company’s stock and have $3.6 million remaining on the plan.
“In 2016, we will continue to evaluate our existing stores in order to drive efficiencies and increase productivity and profitability. We will also consider new store openings to increase concentrations in our current markets. In addition, our strong balance sheet will allow us to remain opportunistic in seeking out acquisition opportunities. As we have stated, we are confident this strategy is the most optimal for driving long-term shareholder value.”
Conference Call
Command Center will hold a call on Tuesday, April 5, 2016, at 4:30 p.m. Eastern time (2:30 p.m. Mountain time) to discuss its fourth quarter and full year 2015 results.
President and CEO Bubba Sandford and CFO Jeff Wilson will host the call, followed by a question and answer session.
Date: Tuesday, April 5, 2016
Time: 4:30 p.m. Eastern time (2:30 p.m. Mountain time)
Toll-free dial-in number: 1-888-539-3612
International dial-in number: 1-719-457-2628
Conference ID: 9313451
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios at 1-949-574-3860.
The conference call will be broadcast live and available for replay at http://public.viavid.com/index.php?id=118853 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 through April 19, 2016.
Toll-free replay number: 1-877-870-5176
International replay number: 1-858-384-5517
Replay ID: 9313451
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 59 field offices, the company provides employment annually 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 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 the Form 10-K filed with the Securities and Exchange Commission on March 24, 2016, 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 non-GAAP terms Adjusted Net Income and EBITDA. Adjusted Net Income is defined as earnings before interest, taxes, depreciation and amortization and specifically identified one-time earnings or expenses. EBITDA is defined as earnings before interest, taxes, depreciation and amortization. The company uses Adjusted Net Income and EBITDA as financial measures since management believes investors find these to be useful tools 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 Net Income and EBITDA are 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 Net Income to net income and EBITDA to net income for the periods presented as well as per basic share information (in thousands except per share data):
| Thirteen Weeks Ended | ||||||
| December 25, 2015 | December 26, 2014 | |||||
| Revenue (GAAP measure) | $ | 21,860 | $ | 24,021 | ||
| Net (Loss) Income (GAAP measure) | 281 | 1,118 | ||||
| Adjustments: | ||||||
| Non-cash compensation | 322 | 298 | ||||
|
Non-cash taxes |
170 | 552 | ||||
| Depreciation and amortization | 43 | 42 | ||||
| Interest expense and other financing expense | 28 | 39 | ||||
| Net Adjustments: | 562 | 932 | ||||
| Adjusted Net Income | $ | 843 | $ | 2,049 | ||
| Number of Shares (weighted average) | 62,310 | 65,365 | ||||
| Adjusted EPS | $ | 0.01 | $ | 0.03 | ||
|
Thirteen Weeks Ended |
||||||||
| December 25, 2015 | December 26, 2014 | |||||||
| EBITDA | $ | 843 | $ | 2,049 | ||||
| Interest expense and other financing expense | (28 | ) | (39 | ) | ||||
| Depreciation and amortization | (43 | ) | (42 | ) | ||||
| Provision for income taxes | (170 | ) | (552 | ) | ||||
| Non-cash compensation | (322 | ) | (298 | ) | ||||
| Net income (loss) | $ | 281 | $ | 1,118 | ||||
| Command Center, Inc. | ||||||||
| Consolidated Balance Sheets | ||||||||
|
December 25, 2015 |
December 26, 2014 |
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|
ASSETS |
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|
Current Assets |
||||||||
| Cash | $ | 7,629,423 | $ | 8,600,249 | ||||
| Accounts receivable, net of allowance for doubtful accounts | 8,917,933 | 9,029,347 | ||||||
| Notes Receivable | – | – | ||||||
| Prepaid expenses, deposits and other | 292,352 | 260,242 | ||||||
| Prepaid workers’ compensation | 756,005 | 581,355 | ||||||
| Other receivables | – | 7,949 | ||||||
| Current portion of deferred tax asset | 878,085 | 1,760,000 | ||||||
| Current portion of workers’ compensation deposits | 398,319 | 1,114,000 | ||||||
| Total Current Assets | 18,872,117 | 21,353,142 | ||||||
| Property and equipment – net | 408,657 | 430,987 | ||||||
| Deferred tax asset, less current portion | 2,083,851 | 2,126,000 | ||||||
| Workers’ compensation risk pool deposit, less current portion | 2,256,814 | 1,790,633 | ||||||
| Goodwill | 2,500,000 | 2,500,000 | ||||||
| Total Assets | $ | 26,121,439 | $ | 28,200,762 | ||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
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|
Current Liabilities |
||||||||
| Accounts payable | $ | 304,009 | $ | 546,247 | ||||
| Checks issued and payable | 487,087 | 255,532 | ||||||
| Account purchase agreement facility | 479,616 | 2,900,104 | ||||||
| Other current liabilities | 323,222 | 249,445 | ||||||
| Accrued wages and benefits | 1,452,558 | 1,665,697 | ||||||
| Current portion of workers’ compensation premiums and claims liability | 1,201,703 | 1,305,248 | ||||||
| Total Current Liabilities | 4,248,196 | 6,922,273 | ||||||
| Long-Term Liabilities | ||||||||
| Workers’ compensation claims liability, less current portion | 2,231,735 | 2,514,302 | ||||||
| Total Liabilities | 6,479,931 | 9,436,575 | ||||||
| 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; | ||||||||
| 64,305,288 and 65,632,868 shares issued and outstanding, respectively | 64,305 | 65,633 | ||||||
| Additional paid-in capital | 57,752,301 | 58,318,396 | ||||||
| Accumulated deficit | (38,175,098 | ) | (39,619,842 | ) | ||||
| Total Stockholders’ Equity | 19,641,508 | 18,764,187 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 26,121,439 | $ | 28,200,762 | ||||
|
Command Center, Inc. |
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| Consolidated Condensed Statements of Income | ||||||||
| (unaudited) | ||||||||
| Thirteen Weeks Ended | ||||||||
|
December 25, 2015 |
December 26, 2014 | |||||||
| Revenue | $ | 21,859,883 | $ | 24,020,660 | ||||
| Cost of staffing services | 16,142,818 | 16,895,291 | ||||||
| Gross profit | 5,717,065 | 7,125,369 | ||||||
| Selling, general and administrative expenses | 5,195,641 | 5,373,727 | ||||||
| Depreciation and amortization | 42,607 | 42,132 | ||||||
| Income from operations | 478,816 | 1,709,510 | ||||||
| Interest expense and other financing expense | (27,519 | ) | (39,137 | ) | ||||
| Impairment of goodwill | – | – | ||||||
| Change in fair value of derivative liabilities | – | – | ||||||
| Net income before income taxes | 451,297 | 1,670,373 | ||||||
| Provision for income taxes | (170,084 | ) | (551,880 | ) | ||||
| Net income | $ | 281,213 | $ | 1,118,493 | ||||
| Earnings per share: | ||||||||
| Basic | $ | 0.00 | $ | 0.02 | ||||
| Diluted | $ | 0.00 | $ | 0.02 | ||||
| Weighted average shares outstanding: | ||||||||
| Basic | 62,309,928 | 65,365,148 | ||||||
| Diluted | 63,265,647 | 67,287,684 | ||||||
