40% revenue decrease YoY for Command Center’s North Dakota offices
Command Center, Inc. has reported financial results for the full year ended 25th December 2015.
Revenue in 2015 was $88.5m compared to $91.8m in 2014. The company says this 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. Revenue from the company’s North Dakota offices fell by $10.3m in 2015, or 40% compared to the prior year, while revenue from the company’s remaining branches increased by $7.0m, or 10.5% over 2014.
Gross margins in 2015 were 26.9% compared to 27.8% in 2014. The decrease was primarily due to the reduction in higher margin revenue from North Dakota, according to Command Center. This was partially offset by a 40 basis point reduction in workers’ compensation expense as a company to 3.3% of revenue compared to 2014.
Operating income in 2015 was $3.0m compared to $6.5m in 2014. Net income in 2015 was $1.7m, or $0.03 per diluted share, compared to $9.1m, or $0.14 per diluted share in 2014. Net income in 2014, however, included the recognition of a $3.7m net benefit from the company’s net operating loss carry forward.
Adjusted Net Income (a non-GAAP term defined below) in 2015 was $4.3m, or $0.07 per diluted share, compared to $7.4m, or $0.12 per diluted share in 2014.
EBITDA (a non-GAAP term defined below) in 2015 was $3.9m compared to $7.4m 2014. Cash at 25th December 2015, was $7.7m compared to $8.6m at 26th December 2014.
Selling, general and administrative expenses in 2015 were $20.6m compared to $18.5m in 2014. Command Center says the increase was primarily due to increased hiring and training of employees to support future growth, including additional office staff at the company’s new corporate headquarters in Colorado. The company also incurred costs opening five new branches during the year and moving the corporate office from Coeur d’Alene, Idaho, to Denver, Colorado.
In 2015, the company opened five new branch offices, ending the year with 57 stores operating in 20 states. The company serviced approximately 3,300 customers in 2015, utilising more than 32,600 temporary employees.
During the year, the company repurchased approximately 2.3m shares of its common stock, at a total cost of $1.4m, or $0.60 per share.
Command Center’s president and CEO, Bubba Sandford, commented, “In 2015, we executed on the fundamental values of our business, with the focus continuing to be good, profitable business that ultimately returns shareholder value from our operations.
“Excluding our branches in North Dakota, which were impacted by the oil-driven economy in that region, same-store sales were up 10.5% at industry-high gross margins, underscoring the collective strength of the majority of our locations outside of North Dakota.
“We used a portion of our cash flow to invest back into the business by opening five new offices during the year—all in areas where we leveraged our existing customer base to drive even greater profitability. During 2015, we continued to coach and train our branches in the tenets of our ‘Keys to Success,’ which improve customer satisfaction and instill better business decisions at the branch level, translating into higher revenue and profitability.
“We reduced the amount drawn on our line of credit balance by $2.4 million during 2015 and have minimal debt today. We also used cash from our continuingly profitable operations to repurchase 2.3 million shares—or roughly 3.5% of our company—for approximately $1.4 million during the year. There remains $3.6 million on the stock purchase plan, and we will continue to be opportunistic in our purchases during 2016. We do not believe the continuation of this plan will prevent us from opening new branches or pursuing acquisition opportunities in the current year.
“As we look towards the remainder of 2016, we are well-positioned to execute our strategy, and we remain optimistic that we will find acquisition opportunities that make sense for the company. We will continuously assess and adjust our existing stores and personnel within the company in order to maximize efficiency, profitability and consistency in service. We will also continue to evaluate additional new store locations to expand existing markets and capitalize on current customer relationships. We are confident this strategy is most optimal for driving long-term shareholder value.”