Command Center reports Q3 results
The company reported net income of $1.2 million for the third quarter, after deduction of non-cash charges of approximately $951,000 for warrant liability and depreciation. The net income represents an increase of 70.1% over the comparable period in 2012 and constitutes earnings for the quarter of $.02 per share, based upon 59.6 million basic and 61.5 million diluted weighted average shares outstanding. Ending cash balance for the quarter was $3.1 million, an increase of $1.7 million from the end of the third quarter 2012.
Revenue for the thirteen-week period ended September 27, 2013, totaled $25.9 million versus revenue of $28.4 million for the comparable period of 2012, a decrease of 8.8%. The anticipated decline in revenue was based primarily upon the company’s continued emphasis on conducting business in a manner maximizing profitability and servicing quality accounts. This necessarily includes reducing cost of staffing services and operating expenses and increasing gross margins by significantly limiting lower-margin work. Lower quarterly revenue can also be attributed, in part, to reduced revenue coming from disaster recovery projects for the quarter, as the company is shifting away from large-scale disaster projects generally notwithstanding there have been no major disasters nationwide in 2013.
Also consistent with the company’s cost reduction strategy, SG&A expenses were down nearly $1.9 million for the thirteen weeks ended September 27, 2013, in comparison to the similar period of 2012, representing an overall decrease of 29.7%. This decrease is primarily attributable to large recoveries of accounts receivable previously written off. The balance of the SG&A expense reduction resulted from cost containment efforts intended to trim expenses while maintaining superior customer service, which included changes in the company’s organizational structure and other operational cost-saving measures.
For the thirty-nine weeks ended September 27, 2013, the company’s continued focus on maximizing income from operations resulted in increased gross margins as a percentage of revenue to 25.7%, as opposed to 25.1% the same period a year ago. Concentration on profitability for the period also resulted in lower revenue of $69.1 million, representing a decrease of approximately $2.6 million, or 3.6%, when compared to 2012 revenue of $71.7 million for the similar period. However, even with lessened total revenue, net income over the same period increased 70.0% to $1.7 million or $.03 per share.
Regarding the quarterly results, Command Center’s President and CEO Bubba Sandford stated, “We fully anticipated revenue for the period to be less than a year ago, but the focus throughout nearly all of 2013 has been maximization of profitability. Our balance sheet is stronger than at any time in the company’s history. We realized a seventy percent increase in net income and strengthened our liquidity. This clearly demonstrates that the steps we have taken this year are working to achieve our goals and enhance the value to our shareholders.”