Corporate Resource Services Announces 1st Quarter Results

Document Sample
Corporate Resource Services Announces 1st Quarter Results Powered By Docstoc
					Corporate Resource Services Announces 1st
Quarter Results
February 17, 2011 05:32 PM Eastern Time 

NEW YORK--(EON: Enhanced Online News)--Corporate Resource Services, Inc. (OTCBB: CRRS), a national
provider of temporary and permanent staffing services (the “Company”), today announced results for its first fiscal
quarter of 2011.

Our revenue for the first fiscal quarter of 2011 totaled $44.9 million, an increase of $22.7 million, or 116.8%, as
compared to the corresponding quarter in fiscal year 2010. The revenue increase was primarily attributable to the
acquisition of the businesses of Insurance Overload Services, Inc. (“Insurance Overload”), Corporate Resource
Development, Inc. (“CRD”) and Integrated Consulting Group, Inc. (“ICG”) during the last year. These three
businesses increased revenues by $1.5 million, $18.6 million and $1.6 million, respectively. ICG’s business was
acquired on December 14, 2010, and therefore, ICG’s results are only included during the last two and one-half
weeks of the quarter. Additionally, the business of Accountabilities, Inc. (“Accountabilities”) experienced increased
revenues in the first fiscal quarter of 2011 of $2.5 million, or 18%, as compared to the comparable period in fiscal
2010.

On August 27, 2010, Insurance Overload acquired Tri-Overload Staffing, Inc (“Tri-Overload”) from a common
owner of the Company. Accordingly, this acquisition has been accounted for as a pooling of interest. As a result, all
previously reported financial information with respect to the Company has been restated to include the operating
results of Tri-Overload. The Company’s revenue for the first quarter of fiscal 2010 was restated to include $6.6
million, which amount is attributable to revenue earned by Tri-Overload during this period.

Our income from operations increased $983,000 to $941,000 during the first fiscal quarter of 2011, from a loss of
($42,000) in the corresponding period of fiscal 2010 (which amount was restated to include income of $476,000 at
Insurance Overload). Accountabilities’ income from operations improved $585,000 during our first fiscal quarter of
2011. Income from operations improved at Insurance Overload as well, growing to $1.5 million in the comparable
2011 period. These improvements were offset by losses from operations at CRD and ICG.

Our diluted earnings per share for the first fiscal quarter of 2011 was $0.01, compared to a loss of ($0.02) per share
in the first fiscal quarter of 2010.

Commenting on the first quarter results, Jay Schecter, Chief Executive Officer of the Company stated: “We are
beginning to see the benefits of the acquisitions we made during the past year, and we continue to realize economies
of scale while, at the same time, strengthening our sales programs and team. We are looking forward to our future
performance, which will include the results of Diamond Staffing Services, Inc., our wholly-owned subsidiary, which
acquired its business in January 2011.” 

Mr. Schecter continued, “As we look to the rest of 2011 and into the future, we will continue to focus on building
shareholder value by increasing our market share at each operating subsidiary, making opportunistic acquisitions, and
continuing to build an appropriate infrastructure to support our business.” 

About Corporate Resource Services

Through its five wholly-owned subsidiaries, Accountabilities, Corporate Resource Development, Insurance
Overload Services, Integrated Consulting Group and recently acquired Diamond Staffing Services, Corporate
Resource Services is a national provider of diversified staffing, recruiting and consulting services, including temporary
staffing services, with a focus on light industrial services, the insurance industry and clerical and administrative
support. The Company provides its services across a variety of industries and to a diverse range of clients ranging
from sole proprietorships to Fortune 1000 companies. The Company conducts all of its business in the United States
through the operation of over approximately 53 staffing and recruiting offices.

Safe Harbor Disclaimer: This press release contains “forward -looking statements”. These statements relate
to expectations concerning matters that are not historical facts. Such forward-looking statements may be
identified by words such as “anticipates,” “believes,” “can," “continue,” “could,” “estimates,” “expects,” 
“intends,” “may,” “plans, ” “potential, ” “predicts, ” “should,” or “will” or the negative of these terms or
other comparable terminology. These statements, and all phases of our operations, are subject to known and
unknown risks, uncertainties and other factors, including, but not limited to, our ability to satisfy our
working capital requirements; our ability to identify suitable acquisition candidates or investment
opportunities; our ability to integrate any acquisitions made and fully realize the anticipated benefits of these
acquisitions; successor liabilities that we may be subject to as a result of acquisitions; material employment
related claims and costs as a result of the nature of our business; our ability to retain key management
personnel; the financial difficulty of our clients, which may result in nonpayment of amounts owed to us;
significant economic downturns resulting in reduced demand for our services; our ability to attract and
retain qualified temporary personnel, who possess the skills and experience necessary to satisfy our clients
and other risk factors as identified in our annual report on Form 10-K for the fiscal year ended September
30, 2010, and our other reports filed with the Securities and Exchange Commission, or SEC. Readers are
cautioned not to place undue reliance on these forward-looking statements. Our actual results, levels of
activity, performance or achievements and those of our industry may be materially different from any future
results, levels of activity, performance or achievements expressed or implied by these forward-looking
statements. Except as required by law, we undertake no obligation to update the forward-looking
statements. We refer to our Quarterly Report on Form 10Q for the quarter ended December 31, 2010 for
additional information regarding the Company’s results of operations, balance sheet, liquidity and working
capital and strategy.

(Tables follow)

CORPORATE RESOURCE SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
                                                              December 31,             September 30,
                                                              2010                     2010
                                                              (unaudited)
ASSETS
Current assets:
Cash                                                          $ 395,000                $ 254,000
Accounts receivable – less allowance for
                                                                4,838,000               269,000
  doubtful accounts of $1,669,000 and $473,000, respectively 
Due from financial institution, net of allowance for
                                                                1,342,000               1,556,000
  chargebacks of $730,000 and $468,000, respectively 
Unbilled receivables                                            2,507,000                2,767,000
Prepaid expenses                                                179,000                  169,000
Total current assets                                            9,261,000                5,015,000
Property and equipment, net                                     1,091,000                1,078,000
Other assets                                                    719,000                  567,000
Intangible assets, net                                          6,354,000                2,946,000
Goodwill                                                        4,939,000                3,623,000
Total assets                                                  $ 22,364,000             $ 13,229,000
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities                      $ 6,121,000              $ 3,968,000
Accrued wages and related obligations–due to related party      2,754,000                3,340,000
Borrowings under revolving credit facility                      3,059,000                –   
Current portion of long-term debt                               2,298,000                1,478,000
Current portion of related party long-term debt                 1,009,000                1,009,000
Due to related party                                            2,382,000                1,994,000
Total current liabilities                                       17,623,000               11,789,000
Long term debt, net of current portion                                 3,990,000       1,000,000
Deferred Rent                                                          108,000         97,000
Total liabilities                                                      21,721,000      12,886,000
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value, 5,000,000
                                                                       –               –   
  shares authorized; zero shares issued and outstanding 
Common stock, $0.0001 par value, 95,000,000 shares authorized;
  42,286,000 and 42,186,000 shares issued and 38,029,000 and
                                                                       4,000           4,000
  37,929,000 outstanding as of December 31, 2010 and September 30,
  2010, respectively 
Additional paid-in capital                                             6,202,000       6,134,000
Accumulated deficit                                                    (5,563,000 ) (5,795,000 )
Total stockholders’ equity                                             643,000         343,000
Total liabilities and stockholders’ equity                           $ 22,364,000 $ 13,229,000
CORPORATE RESOURCE SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
                                                                 Three Months Ended
                                                                 December 31, December 31,
                                                                 2010            2009
Revenues                                                         $ 44,864,000 $ 20,696,000
Direct cost of producing revenues                                  365,000         77,000
Direct cost of producing revenues purchased from related parties   35,362,000      17,633,000
Gross profit                                                       9,137,000       2,986,000
Selling, general and administrative expenses (including
                                                                   2,041,000       2,192,000
  stock-based compensation of $28,000 and $40,000, respectively)
Selling, general and administrative expenses - related parties     5,939,000       694,000
Depreciation and amortization                                      256,000         142,000
Other (income)                                                     (40,000      ) –
Income (loss) from operations                                      941,000         (42,000      )
Interest expense                                                   334,000         136,000
Acquisition expenses                                               375,000         –
Loss on debt extinguishments                                       –               501,000
Net income (loss) available to common stockholders               $ 232,000       $ (679,000     )
Net income (loss) per common share:
Basic                                                            $ 0.01          $ (0.02        )
Diluted                                                          $ 0.01          $ (0.02        )
Weighted average shares outstanding:
Basic                                                              37,971,000      31,357,000
Diluted                                                            38,274,000      31,357,000

Contacts
Corporate Resource Services, Inc.
Jay Schecter, 212-346-7960
jschecter@aabilities.com

Permalink: http://eon.businesswire.com/news/eon/20110217007054/en

				
DOCUMENT INFO
Shared By:
Tags:
Stats:
views:7
posted:2/17/2011
language:English
pages:3
Description: NEW YORK--(EON: Enhanced Online News)--Corporate Resource Services, Inc. (OTCBB: CRRS), a national provider of temporary and permanent staffing services (the “Company”), today announced results for its first fiscal quarter of 2011. Our revenue for the first fiscal quarter of 2011 totaled $44.9 million, an increase of $22.7 million, or 116.8%, as compared to the corresponding quarter in fiscal year 2010. The revenue increase was primarily attributable to the acquisition of the businesses of Insur a
EON: Enhanced Online News EON: Enhanced Online News http://eon.businesswire.com
About At EON: Enhanced Online News, we show you how to make your online press release thrive. If you want to drive traffic to your website, generate sales leads, make an announcement, or promote a new product, EON: Enhanced Online News delivers the online visibility that you need. EON: Enhanced Online News powered by Business Wire.