HireQuest, Inc. - Quarter Report: 2018 September (Form 10-Q)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☑QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the
quarterly period ended: September 28, 2018
or
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission
file number: 000-53088
COMMAND CENTER, INC.
(Exact
name of registrant as specified in its charter)
|
Washington
|
|
91-2079472
|
|
(State
of incorporation)
|
|
(I.R.S.
Employer Identification No.)
|
|
3609 S. Wadsworth Blvd., Suite 250, Lakewood, CO
|
|
80235
|
|
(Address
of Principal Executive Offices)
|
|
(Zip
Code)
|
Registrant's telephone number, including area code: (866)
464-5844
Indicate
by check mark whether the Registrant (1) filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes
☑ No ☐
Indicate
by check mark whether the registrant has submitted every
Interactive Data File required to be submitted pursuant to Rule 405
of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant
was required to submit such files). Yes ☑ No ☐
Indicate
by check mark whether the Registrant is a large accelerated filer
☐ , an accelerated filer ☐ , a non-accelerated filer ☐ , a smaller reporting company ☑ , or an emerging growth company ☐ (as defined in Rule 12b-2 of the Exchange
Act).
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the Registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
Number
of shares of issuer's common stock outstanding at November 5, 2018:
4,714,924
Command Center, Inc.
Table of Contents
|
|
|||
|
|
3
|
||
|
|
4
|
||
|
|
5
|
||
|
|
6
|
||
|
15
|
|||
|
19
|
|||
|
19
|
|||
|
|
|
|
|
|
20
|
|||
|
20
|
|||
|
20
|
|||
|
20
|
|||
|
20
|
|||
|
20
|
|||
|
21
|
|||
|
22
|
|||
PART I. FINANCIAL INFORMATION
Command Center, Inc.
Consolidated Balance
Sheets
|
|
September
28,
2018
|
December
29,
2017
|
|
ASSETS
|
(unaudited)
|
|
|
Current
assets
|
|
|
|
Cash
|
$6,258,315
|
$7,768,631
|
|
Restricted
cash
|
44,400
|
12,853
|
|
Accounts
receivable, net of allowance for doubtful accounts
|
9,799,977
|
9,394,376
|
|
Prepaid expenses,
deposits and other assets
|
415,535
|
740,280
|
|
Prepaid workers'
compensation
|
299,665
|
167,597
|
|
Current portion of
workers' compensation deposits
|
-
|
99,624
|
|
Total current
assets
|
16,817,892
|
18,183,361
|
|
Property and
equipment, net
|
383,375
|
372,145
|
|
Deferred tax
asset
|
1,131,178
|
721,602
|
|
Workers'
compensation risk pool deposit, less current portion
|
178,084
|
201,563
|
|
Workers'
compensation risk pool deposit in receivership, net
|
260,000
|
1,800,000
|
|
Goodwill and other
intangible assets, net
|
3,957,836
|
4,085,576
|
|
Total
assets
|
$22,728,365
|
$25,364,247
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$490,823
|
$563,402
|
|
Account purchase
agreement facility
|
211,570
|
853,562
|
|
Other current
liabilities
|
562,309
|
898,809
|
|
Accrued wages and
benefits
|
1,566,522
|
1,503,688
|
|
Current portion of
workers' compensation claims liability
|
1,013,238
|
1,031,500
|
|
Total current
liabilities
|
3,844,462
|
4,850,961
|
|
Workers'
compensation claims liability, less current portion
|
1,001,208
|
917,497
|
|
Total
liabilities
|
4,845,670
|
5,768,458
|
|
Commitments and
contingencies (Note 9)
|
|
|
|
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; 4,714,924 and
4,993,672 shares issued and outstanding, respectively
|
4,715
|
4,994
|
|
Additional paid-in
capital
|
54,610,425
|
56,211,837
|
|
Accumulated
deficit
|
(36,732,445)
|
(36,621,042)
|
|
Total stockholders'
equity
|
17,882,695
|
19,595,789
|
|
Total liabilities
and stockholders' equity
|
$22,728,365
|
$25,364,247
|
Command Center, Inc.
Consolidated
Statements of Operations
(unaudited)
|
|
Thirteen
weeks ended
|
Thirty-nine
weeks ended
|
||
|
|
September
28,
2018
|
September
29,
2017
|
September
28,
2018
|
September
29,
2017
|
|
Revenue
|
$26,309,035
|
$26,703,266
|
$72,952,418
|
$73,555,175
|
|
Cost
of staffing services
|
19,855,146
|
19,513,757
|
54,627,143
|
54,134,575
|
|
Gross
profit
|
6,453,889
|
7,189,509
|
18,325,275
|
19,420,600
|
|
Selling,
general and administrative expenses
|
5,630,260
|
5,483,857
|
18,212,788
|
15,991,976
|
|
Depreciation
and amortization
|
72,548
|
96,368
|
253,065
|
288,195
|
|
Income
(loss) from operations
|
751,081
|
1,609,284
|
(140,578)
|
3,140,429
|
|
Interest
(income) expense and other financing expense
|
(553)
|
6,263
|
1,876
|
7,492
|
|
Net income (loss)
before income taxes
|
751,634
|
1,603,021
|
(142,454)
|
3,132,937
|
|
Provision (benefit)
for income taxes
|
205,284
|
752,223
|
(34,362)
|
1,364,791
|
|
Net income
(loss)
|
$546,350
|
$850,798
|
$(108,092)
|
$1,768,146
|
|
|
|
|
|
|
|
Earnings (loss) per share:
|
|
|
|
|
|
Basic
|
$0.11
|
$0.17
|
$(0.02)
|
$0.35
|
|
Diluted
|
$0.11
|
$0.17
|
$(0.02)
|
$0.35
|
|
|
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
Basic
|
4,808,698
|
5,051,960
|
4,905,367
|
5,051,745
|
|
Diluted
|
4,812,908
|
5,108,104
|
4,905,367
|
5,108,539
|
Command Center, Inc.
Consolidated Statements of
Cash Flows
(unaudited)
|
|
Thirty-nine
weeks ended
|
|
|
|
September
28,
2018
|
September
29,
2017
|
|
Cash flows from operating activities
|
|
|
|
Net
(loss) income
|
$(108,092)
|
$1,768,146
|
|
Adjustments
to reconcile net income to net cash used in
operations:
|
|
|
|
Depreciation
and amortization
|
253,065
|
288,195
|
|
Provision
for bad debt
|
53,395
|
161,008
|
|
Stock
based compensation
|
306,704
|
121,989
|
|
Reserve
on workers' compensation risk pool deposit in
receivership
|
1,540,000
|
-
|
|
Cumulative
effect of accounting change
|
(3,311)
|
-
|
|
Deferred
tax asset
|
(409,576)
|
1,008,089
|
|
Gain
on disposition of property and equipment
|
(6,709)
|
-
|
|
Changes
in operating assets and liabilities:
|
|
|
|
Accounts
receivable
|
(458,996)
|
(840,468)
|
|
Prepaid
expenses, deposits, and other assets
|
324,745
|
152,229
|
|
Prepaid
workers' compensation
|
(132,068)
|
442,954
|
|
Other
receivables
|
-
|
(63,529)
|
|
Accounts
payable
|
(72,579)
|
(354,684)
|
|
Other
current liabilities
|
(336,500)
|
254,735
|
|
Accrued
wages and benefits
|
(177,836)
|
127,206
|
|
Workers'
compensation risk pool deposits
|
123,103
|
12,153
|
|
Workers'
compensation claims liability
|
65,449
|
(570,278)
|
|
Net
cash provided by operating activities
|
960,794
|
2,507,745
|
|
Cash flows from investing activities
|
|
|
|
Purchase
of property and equipment
|
(150,371)
|
(102,170)
|
|
Proceeds
from the sale of property and equipment
|
20,525
|
-
|
|
Net
cash used in investing activities
|
(129,846)
|
(102,170)
|
|
Cash flows from financing activities
|
|
|
|
Net
change in account purchase agreement facility
|
(641,992)
|
682,962
|
|
Purchase
of treasury stock
|
(1,667,725)
|
(54,976)
|
|
Net
cash (used in) provided by financing activities
|
(2,309,717)
|
627,986
|
|
Net (decrease) increase in cash
|
(1,478,769)
|
3,033,561
|
|
Cash, beginning of period
|
7,781,484
|
3,047,417
|
|
Cash, end of period
|
$6,302,715
|
$6,080,978
|
|
Supplemental disclosure of non-cash activities
|
|
|
|
Purchase
of vested stock options
|
240,670
|
-
|
|
Supplemental disclosure of cash flow information
|
|
|
|
Interest
paid
|
2,615
|
7,492
|
|
Income
taxes paid
|
(32,654)
|
65,837
|
Command Center, Inc.
Notes to Consolidated
Financial Statements
NOTE 1 – BASIS OF
PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited consolidated financial statements have
been prepared by Command Center, Inc. ("Command Center,” the
“Company,” “we,” "us," or
“our”) in accordance with accounting principles
generally accepted in the United States of America, or U.S. GAAP,
for interim financial reporting and rules and regulations of the
Securities and Exchange Commission, or the SEC. Accordingly,
certain information and footnote disclosures normally included in
financial statements prepared in accordance with U.S. GAAP have
been condensed or omitted. In the opinion of our management, all
adjustments, consisting of only normal recurring accruals,
necessary for a fair presentation of the financial position,
results of operations, and cash flows for the fiscal periods
presented have been included.
These consolidated financial statements should be read in
conjunction with the audited consolidated financial statements and
related notes included in our Annual Report filed on Form 10-K for
the year ended December 29, 2017. The results of operations for the
thirty-nine weeks ended September 28, 2018 are not necessarily
indicative of the results expected for the full fiscal year, or for
any other fiscal period.
Consolidation: The
consolidated financial statements include the accounts of Command
Center and all of our wholly-owned subsidiaries. All significant
intercompany balances and transactions have been eliminated in
consolidation.
Use of estimates: The preparation of consolidated
financial statements in conformity with U.S. GAAP requires us to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the consolidated financial statements
and the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.
Significant estimates include the allowance for doubtful accounts,
workers’ compensation risk pool deposits and related
allowances, and workers’ compensation claims
liability.
Concentrations: At
September 28, 2018, 11.0% of accounts receivable were due from a
single client. For the period ended September 28, 2018, 8.4% of our
total revenue came from that same client. At December 29, 2017,
11.8% of accounts receivable were due from a single customer. For
the period ended December 29, 2017, 8.5% of our total revenue came
from that same client. At September 28, 2018, 33.9% of accounts
payable were due to two vendors.
Revenue recognition: Revenue is recognized at the time we satisfy
our performance obligation. Because our clients receive and consume
the benefits of our services simultaneously, our performance
obligations are typically satisfied when our services are provided.
Revenue is reported net of customer credits, discounts, and taxes
collected from customers that are remitted to taxing
authorities.
Below are summaries of our revenue disaggregated by industry (in
thousands, except percentages):
|
|
Thirteen
weeks ended
|
|||
|
|
September
28,
2018
|
September
29,
2017
|
||
|
Industrial,
manufacturing and warehousing
|
$8,724
|
33.2%
|
$9,234
|
34.6%
|
|
Construction
|
5,703
|
21.7%
|
5,811
|
21.8%
|
|
Hospitality
|
4,491
|
17.1%
|
4,899
|
18.3%
|
|
Transportation
|
3,805
|
14.5%
|
3,624
|
13.6%
|
|
Retail
and Other
|
3,586
|
13.5%
|
3,135
|
11.7%
|
|
Total
|
$26,309
|
100.0%
|
$26,703
|
100.0%
|
|
|
Thirty-nine
weeks ended
|
|||
|
|
September
28,
2018
|
September
29,
2017
|
||
|
Industrial,
manufacturing and warehousing
|
$25,924
|
35.5%
|
$24,525
|
33.3%
|
|
Construction
|
14,173
|
19.5%
|
15,307
|
20.9%
|
|
Hospitality
|
12,284
|
16.8%
|
13,997
|
19.0%
|
|
Transportation
|
11,058
|
15.2%
|
10,578
|
14.4%
|
|
Retail
and Other
|
9,514
|
13.0%
|
9,148
|
12.4%
|
|
Total
|
$72,952
|
100.0%
|
$73,555
|
100.0%
|
Recently adopted accounting pronouncements: In May 2014, the Financial Accounting
Standards Board, or FASB, issued new revenue recognition guidance
under Accounting Standards Update, or ASU, 2014-09 that supersedes
the existing revenue recognition guidance under U.S. GAAP. The new
standard focuses on creating a single source of revenue guidance
for revenue arising from contracts with customers for all
industries. The objective of the new standard is for companies to
recognize revenue when it transfers the promised goods or services
to its customers at an amount that represents what the company
expects to be entitled to in exchange for those goods or
services.
The new standard became effective for us beginning December 30,
2017. We implemented the standard using the modified retrospective
approach which recognized the cumulative effect of application on
that date. As a result of adopting this new standard, we made an
adjustment that increased Revenue on our Consolidated Statement of
Income and decreased Accumulated deficit on our Consolidated
Balance Sheet by approximately $3,000. We have applied the guidance
in this new standard to all contracts at the date of initial
application.
Recent accounting pronouncements: In February 2016, the FASB issued ASU
2016-02 amending the existing accounting standards for lease
accounting and requiring lessees to recognize a right-of-use asset
and a corresponding lease liability on its balance sheet. Both the
asset and liability will initially be measured at the present value
of the future minimum lease payments. Consistent with current U.S.
GAAP, the presentation of expenses and cash flows will depend
primarily on the classification of the lease as either a finance or
an operating lease. The new standard also requires additional
quantitative and qualitative disclosures regarding the amount,
timing and uncertainty of cash flows arising from leases in order
to provide additional information about the nature of an
organization’s leasing activities. This ASU is effective for
annual periods, and interim periods within those annual periods,
beginning after December 15, 2018, with early adoption permitted.
We plan to adopt the guidance on the effective date using the
prospective approach. We are currently evaluating the impact of the
new guidance on our consolidated financial statements and related
disclosures. We expect, upon adoption, nearly, if not all, of our
leases will be recognized on our Consolidated Balance Sheet as
operating lease liabilities and right-of-use assets. We do not
expect the adoption of this standard to have a material impact on
the pattern of lease related expenses currently recognized in our
Consolidated Statements of Operations.
In January 2017, the FASB issued ASU 2017-04, “Intangibles
– Goodwill and Other (Topic 350): Simplifying the Test for
Goodwill Impairment.” The new guidance simplifies the
subsequent measurement of goodwill by eliminating the requirement
to perform a Step 2 impairment test to compute the implied fair
value of goodwill. Instead, companies will only compare the fair
value of a reporting unit to its carrying value (Step 1) and
recognize an impairment charge for the amount by which the carrying
amount exceeds the reporting unit’s fair value; however, the
loss recognized may not exceed the total amount of goodwill
allocated to that reporting unit. Additionally, an entity should
consider income tax effects from any tax-deductible goodwill on the
carrying amount of the reporting unit when measuring the goodwill
impairment loss, if applicable. This amended guidance is effective
for fiscal years and interim periods beginning after December 15,
2019, with early adoption permitted for interim or annual goodwill
impairment tests performed on testing dates after January 1,
2017. We plan to adopt this guidance for our 2018 annual
impairment test and do not expect the adoption to have a material
impact on our financial statements.
In June 2016, the FASB issued ASU 2016-13, “Financial
Instruments – Credit Losses (Topic 326): Measurement of
Credit Losses on Financial Instruments.” The standard
significantly changes how entities will measure credit losses for
most financial assets and certain other instruments that are not
measured at fair value through net income. The standard will
replace today's “incurred loss” approach with an
“expected loss” model for instruments measured at
amortized cost. For available-for-sale securities, entities will be
required to record allowances rather than reduce the carrying
amount, as they do today under the other-than-temporary impairment
model. It also simplifies the accounting model for purchased
credit-impaired debt securities and loans. This guidance is
effective for annual periods beginning after December 15, 2019, and
interim periods therein. Early adoption is permitted for annual
periods beginning after December 15, 2018, and interim periods
therein. We are currently evaluating the impact of the new guidance
on our consolidated financial statements and related
disclosures.
Other accounting standards that have been issued by the FASB or
other standards-setting bodies are not expected to have a material
impact on our financial position, results of operations, and cash
flows. For the period ended September 28, 2018, the
adoption of other accounting standards had no material impact
on our financial positions, results of operations, or cash
flows.
NOTE 2 – EARNINGS PER SHARE
Basic earnings per share is calculated by dividing net income or
loss available to common stockholders by the weighted average
number of common shares outstanding, and does not include the
impact of any potentially dilutive common stock equivalents.
Diluted earnings per share reflect the potential dilution of
securities that could share in our earnings through the conversion
of common shares issuable via outstanding stock options, except
where their inclusion would be anti-dilutive. For the thirty-nine
weeks ended September 28, 2018, there were approximately 4,000
outstanding stock options that were excluded from the diluted
earnings per share calculation because their inclusion would have
been anti-dilutive. Total outstanding common stock equivalents
at September 28, 2018 and September 29, 2017, were approximately
175,000 and 255,000, respectively.
Diluted common shares outstanding were calculated using the
treasury stock method and are as follows:
|
|
Thirteen weeks
ended
|
Thirty-nine weeks
ended
|
||
|
|
September
28,
2018
|
September
29,
2017
|
September
28,
2018
|
September
29,
2017
|
|
Weighted
average number of common shares used in basic net income per common
share
|
4,808,698
|
5,051,960
|
4,905,367
|
5,051,745
|
|
Dilutive
effects of stock options
|
4,210
|
56,144
|
-
|
56,794
|
|
Weighted
average number of common shares used in diluted net income per
common share
|
4,812,908
|
5,108,104
|
4,905,367
|
5,108,539
|
NOTE 3 – ACCOUNT PURCHASE AGREEMENT & LINE OF CREDIT
FACILITY
In May 2016, we signed an account purchase agreement with our
lender, Wells Fargo Bank, N.A, which allows us to sell eligible
accounts receivable for 90% of the invoiced amount on a full
recourse basis up to the facility maximum of $14.0 million. When
the receivable is paid by our customers, the remaining 10% is paid
to us, less applicable fees and interest. Eligible accounts
receivable are generally defined to include accounts that are not
more than ninety days past due.
Pursuant to this agreement, we owed approximately $212,000 and
$854,000 at September 28, 2018 and December 29, 2017, respectively.
The current agreement bears interest at the Daily One Month London
Interbank Offered Rate plus 2.50% per annum. At September 28, 2018,
the effective interest rate was 4.76%. Interest is payable on the
actual amount advanced. Additional charges include an annual
facility fee equal to 0.50% of the facility threshold in place and
lockbox fees. As collateral for repayment of any and all
obligations, we granted Wells Fargo Bank, N.A. a security interest
in all of our property including, but not limited to, accounts
receivable, intangible assets, contract rights, deposit accounts,
and other similar assets. The agreement requires that the sum of
our unrestricted cash plus net accounts receivable must at all
times be greater than the sum of the amount outstanding under the
agreement plus accrued payroll and accrued payroll taxes. At
September 28, 2018 and December 29, 2017, we were in compliance
with this covenant. There was approximately $23,000 and $13,000
available to us under this agreement at September 28, 2018 and
December 29, 2017, respectively.
As of September 28, 2018, we have a letter of credit with Wells
Fargo for approximately $6.2 million that secures our obligations
to our workers’ compensation insurance carrier and reduces
the amount available to us under the account purchase
agreement. For additional information related to this letter
of credit, see Note 5 – Workers’
Compensation Insurance and Reserves.
NOTE 4 – GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill and other intangible assets are stated net of accumulated
amortization. The following table summarizes the goodwill and
intangible asset balances:
|
|
September
28,
2018
|
December
29,
2017
|
|
Goodwill
|
$3,777,568
|
$3,777,568
|
|
Intangible
assets
|
659,564
|
659,564
|
|
Accumulated
amortization
|
(479,296)
|
(351,556)
|
|
Goodwill
and other intangible assets, net
|
$3,957,836
|
$4,085,576
|
Amortization expense for the thirteen and thirty-nine weeks ended
September 28, 2018 was approximately $27,000 and $128,000,
respectively. Amortization expense for the thirteen and thirty-nine
weeks ended September 29, 2017 was approximately $56,000 and
$167,000, respectively.
NOTE 5 – WORKERS' COMPENSATION INSURANCE AND
RESERVES
In April 2014, we changed our workers’ compensation carrier
to ACE American Insurance Company, or ACE, in all states in which
we operate other than Washington and North Dakota. The ACE policy
is a high deductible policy where we have primary responsibility
for all claims. ACE provides insurance for covered losses and
expenses in excess of $500,000 per incident. Under this high
deductible program, we are largely self-insured. Per our
contractual agreements with ACE, we must provide a collateral
deposit of approximately $6.2 million, which is accomplished
through a letter of credit under our account purchase agreement
with Wells Fargo. For workers’ compensation claims
originating in Washington and North Dakota, we pay workers’
compensation insurance premiums and obtain full coverage under
mandatory state administered programs. Our liability associated
with claims in these jurisdictions is limited to the payment of
premiums, which are based upon the amount of payroll paid within
each particular state. Accordingly, our consolidated financial
statements reflect only the mandated workers’ compensation
insurance premium liability for workers’ compensation claims
in these jurisdictions.
As part of our high deductible workers’ compensation
programs, our carriers require that we collateralize a portion of
our future workers’ compensation obligations in order to
secure future payments made on our behalf. This collateral is
typically in the form of cash and cash equivalents. At September
28, 2018, our cash and non-cash collateral totaled approximately
$6.4 million and consisted of cash deposits of approximately
$178,000 and a letter of credit of approximately $6.2
million.
Workers’ compensation expense for our field team members is
recorded as a component of our cost of services and consists of the
following components: changes in our self-insurance reserves as
determined by our third-party actuary, actual claims paid,
insurance premiums and administrative fees paid to our
workers’ compensation carrier(s), and premiums paid to
mandatory state administered programs. Workers’ compensation
expense for the thirteen and thirty-nine weeks ended September 28,
2018 was approximately $1.4 million and $3.2 million, respectively.
Workers’ compensation expense for the thirteen and
thirty-nine weeks ended September 29, 2017 was approximately
$900,000 and $2.4 million, respectively.
NOTE 6 – STOCK BASED COMPENSATION
Employee Stock Incentive Plan: Our 2008 Stock Incentive Plan, which permitted the
grant of up to 533,333 equity awards, expired in January 2016.
Outstanding awards continue to remain in effect according to the
terms of the plan and the award documents. In November 2016, our
stockholders approved the Command Center, Inc. 2016
Stock Incentive Plan under
which our Compensation Committee is authorized to issue awards for
up to 500,000 shares of our common stock over the 10 year life of
the plan. Pursuant to awards under these plans, there were
approximately 72,000 and 191,000 stock options vested at September
28, 2018 and December 29, 2017, respectively.
The following table summarizes our stock options outstanding at
December 29, 2017, and changes during the period ended September
28, 2018. The majority of the expired options were issued to our
former CEO and subsequently cancelled pursuant to the severance
agreement with him.
|
|
Number
of
shares
underlying
options
|
Weighted
average
exercise
price
per
share
|
Weighted
average
grant
date
fair
value
|
|
Outstanding,
December 29, 2017
|
254,995
|
$4.49
|
$2.68
|
|
Granted
|
117,500
|
5.67
|
3.15
|
|
Forfeited
|
(42,187)
|
5.61
|
2.96
|
|
Expired
|
(155,728)
|
3.29
|
2.30
|
|
Outstanding,
September 28, 2018
|
174,580
|
6.08
|
3.27
|
The following table summarizes our non-vested stock options
outstanding at December 29, 2017, and changes during the period
ended September 28, 2018:
|
|
Number of
shares
underlying
options
|
Weighted
average
exercise price
per share
|
Weighted
average
grant
date
fair
value
|
|
Non-vested,
December 29, 2017
|
63,539
|
$5.47
|
$2.86
|
|
Granted
|
117,500
|
5.67
|
3.15
|
|
Forfeited
|
(42,186)
|
5.61
|
2.96
|
|
Vested
|
(36,145)
|
5.55
|
3.04
|
|
Non-vested,
September 28, 2018
|
102,708
|
5.61
|
3.09
|
The following table summarizes information about our stock options
outstanding, and reflects the intrinsic value recalculated based on
the closing price of our common stock of $5.67 at September 28,
2018:
|
|
Number
of
shares
underlying
options
|
Weighted
average
exercise
price
per
share
|
Weighted
average
remaining
contractual
life
(years)
|
Aggregate
intrinsic
value
|
|
Outstanding
|
174,580
|
$6.08
|
8.37
|
$591,751
|
|
Exercisable
|
71,872
|
6.76
|
6.88
|
9,400
|
The following table summarizes information about our stock options
outstanding, and reflects weighted average contractual life at
September 28, 2018:
|
|
Outstanding
options
|
Vested
options
|
||
|
Range
of
exercise
prices
|
Number
of
shares
underlying
options
|
Weighted
average
remaining
contractual life (years)
|
Number
of
shares
exercisable
|
Weighted
average
remaining
contractual
life
(years)
|
|
$4.80 - 7.00
|
144,582
|
9.44
|
42,916
|
9.37
|
|
7.01 - 8.76
|
29,998
|
3.19
|
28,957
|
3.19
|
|
|
174,580
|
8.70
|
71,872
|
7.13
|
In July 2018, our Board of Directors authorized a restricted stock
grant of approximately 48,000 shares, valued at $300,000, to our
six non-employee directors. These shares will vest in equal
installments at each grant date anniversary over the next two
years.
At September 28, 2018, there was unrecognized stock-based
compensation expense totaling approximately $513,000 relating to
non-vested options and restricted stock grants that will be
recognized over the next 2.8 years.
NOTE 7 – STOCKHOLDERS’ EQUITY
Stock Repurchase: In
September 2017, our Board of Directors authorized a $5.0 million
three-year repurchase plan of our common stock. This plan replaced
the previous plan, which was put in place in April 2015. During the
thirteen weeks ended September 28, 2018, we purchased approximately
164,000 shares of common stock at an aggregate cost of
approximately $949,000 resulting in an average price of $5.80 per
share. These shares were subsequently retired. We have
approximately $3.0 million remaining under the plan. The
following table summarizes in more detail our common stock
purchased during the thirteen weeks ended September 28,
2018.
|
|
Total
shares
purchased
|
Average
price
per
share
|
Total
number
of
shares
purchased
as part
of
publicly
announced
plan
|
Approximate
dollar value
of
shares that
may
be
purchased
under the
plan
|
|
Period 7 (June 30,
2018 to July 27, 2018)
|
36,275
|
$6.03
|
743,400
|
$3,688,744
|
|
Period 8 (July 28,
2018 to August 24, 2018)
|
57,400
|
5.69
|
800,800
|
3,361,906
|
|
Period 9 (August
25, 2018 to September 28, 2018)
|
69,993
|
5.77
|
870,793
|
2,958,257
|
|
Total
|
163,668
|
5.80
|
|
|
Subsequent to September 28, 2018, through November 2, 2018, we have
repurchased approximately 16,000 additional shares at an aggregate cost of
approximately $88,000.
NOTE 8 – INCOME TAX
Income tax expense during interim periods is based on applying an
estimated annual effective income tax rate to year-to-date income,
plus any significant unusual or infrequently occurring items which
are recorded in the interim period. The provision for
income taxes for the interim periods differs from the amount that
would be provided by applying the statutory U.S. federal income tax
rate to pre-tax income primarily because of state income
taxes. The computation of the annual estimated effective tax
rate at each interim period requires certain estimates and
significant judgment including, but not limited to, the expected
operating income for the year and changes in tax law and tax
rates. The accounting estimates used to compute the
provision for income taxes may change as new events occur, more
experience is obtained, additional information becomes known, or as
the tax environment changes.
On December 22, 2017, Congress signed Public Law No 115-97,
commonly referred to as the Tax Cut and Jobs Act of 2017. The
passage of this legislation resulted in the U.S. federal corporate
tax rate decreasing from 35% to 21% beginning in January 2018, the
elimination of the corporate alternative minimum tax, the
acceleration of depreciation for U.S. tax purposes, creating a new
limitations on deductible interest expense, and changing the rules
related to uses and limitations of net operating loss carryforwards
created in tax years beginning after December 31,
2017.
NOTE 9 – COMMITMENTS AND CONTINGENCIES
Freestone Insurance Company Liquidation: From July 2008 through April 2011, our
workers’ compensation coverage was provided under an
agreement with AMS Staff Leasing II, or AMS, through a master
policy with Freestone Insurance Company, or Freestone. During this
time period, we deposited approximately $500,000 with an affiliate
of Freestone for collateral related to the coverage through
AMS.
From April 2012 through March 2014, our workers’ compensation
insurance coverage was provided by Dallas National Insurance, who
changed its corporate name to Freestone Insurance Company. Under
the terms of the policies, we were required to provide cash
collateral of $900,000 per year, for a total of $1.8 million, as a
non-depleting deposit to secure our obligation up to the deductible
amount.
In April 2014, the Insurance Commissioner of the State of Delaware
placed Freestone in receivership due to concerns about its
financial condition. In August 2014, the receivership was converted
to a liquidation proceeding. In late 2015, we filed timely proofs
of claim with the receiver. One proof of claim is filed as a
priority claim seeking return of the full amount of our collateral
deposits. The other proof of claim is a general claim covering
non-collateral items. If it is ultimately determined that our claim
is not a priority claim, or if there are insufficient assets in the
liquidation to satisfy the priority claims, we may not receive any
or all of our collateral.
During the second quarter of 2015 and the first quarter of 2016, it
became apparent that there was significant uncertainty related to
the collectability of the $500,000 deposit with AMS related to our
insurance coverage from July 2008 through April 2011. Because of
this, we recorded a reserve of $250,000 in each of those quarters,
fully reserving this deposit.
In conjunction with recent management, board, and audit committee
changes, we have reviewed the estimated costs and potential
benefits of pursuing priority claimant status in the liquidation
proceeding and have altered our planned long-term strategy.
Given that Freestone has negative equity, the complexity of
this matter, our experience to date, and the amount of time this
matter has remained unresolved, we believe the
continuation of our efforts to achieve priority status will not
necessarily prove cost-effective. While we will continue to
seek priority status, we have determined that our stockholders will
be best served by a more measured investment in the recovery
effort. While we are hopeful for a more positive outcome, we
believe that without significant investment, it is more likely than
not that we will be treated in a similar manner as other creditors,
resulting in our priority claim having no value. Based on court
filings and other information made available to us, we estimate the
ratio between Freestone’s liquid assets and liabilities
to be approximately 20%. We now believe this
ratio applied to our deposit represents the best estimate
of the high end of the range of our ultimate recovery. Accordingly,
we increased the reserve on this asset by approximately $1.5
million in the first quarter of 2018 resulting in a net carrying
amount of $260,000.
We believe that our recovery, if any, of the deposits placed with
Freestone and its affiliates will be the greater of: (i) the amount
determined and allowed resulting from a tracing analysis of our
collateral deposits; or (ii) the amount we would receive in
distribution as a general unsecured claimant based on the amount of
our collateral deposit. The Company and its counsel, in
conjunction and coordination with counsel for other potentially
aggrieved collateral depositors, are working diligently in order
to maximize our recovery of collateral deposits previously
made to Freestone and achieve the best possible outcome for
our stockholders. Ultimately, the amount of the collateral deposit
to be returned will be determined by the Chancery Court in
Delaware, after hearing evidence and arguments from all engaged
parties.
Management reviews these deposits at each balance sheet date and
estimates the future range in loss related to this matter could be
as high as $260,000, the net balance of the
deposit.
Legal Proceedings: From
time to time, we are involved in various legal proceedings. We
believe the outcome of these matters, even if determined adversely,
will not have a material adverse effect on our business, financial
condition or results of operations. There have been no material
changes in our legal proceedings as of September 28,
2018.
Item 2. Management’s Discussion
and Analysis of Financial Condition and Results of
Operations
Forward Looking Statements: This Form 10-Q may contain forward-looking
statements. These statements relate to Command Center, Inc.’s
(“Command Center”, the “Company”,
“we”, “us” or “our”)
expectations for future events and future financial performance.
Generally, the words “intend,” “expect,”
“anticipate,” “estimate,” or
“continue” and similar expressions identify
forward-looking statements. Forward-looking statements involve
risks and uncertainties, and future events and circumstances could
differ significantly from those anticipated in the forward-looking
statements. These statements are only predictions. In addition to
other factors discussed in this report, some of the important
factors that could cause actual results to differ from those
discussed in the forward-looking statements include risk factors
described in Item 1A of our Annual Report on Form 10-K for the year
ended December 29, 2017. Readers are cautioned not to place undue
reliance on these forward-looking statements. Although we believe
that the expectations reflected in the forward-looking statements
are reasonable, we cannot guarantee future results, levels of
activity, performance, or achievements. Our expectations, beliefs,
or projections may not be achieved or accomplished. We do not, nor
have we authorized any other person to, assume responsibility for
the accuracy and completeness of the forward-looking statements. We
undertake no duty to update any of the forward-looking statements
after the date of this report, whether as a result of new
information, future events, or otherwise, except as required by
law. You are advised to consult further disclosures we may make on
related subjects in our filings with the Securities and Exchange
Commission, or the SEC.
Overview
We are a staffing company operating primarily in the manual
on-demand labor segment of the staffing industry. Our customers
range in size from small businesses to large corporations. All of
our temporary staff, which we refer to as field team members, are
employed by us. Most of our work assignments are short-term, and
many are filled with little notice from our customers. In addition
to short and longer term temporary work assignments, we sometimes
recruit and place workers into temp-to-hire positions.
As of November 5, 2018, we owned and operated 67 on-demand labor
branches across 22 states.
Results of Operations
The following tables reflect operating results for the thirteen and
thirty-nine week periods ended September 28, 2018, compared to the
thirteen and thirty-nine week periods ended September 29, 2017 (in
thousands except percentages). Percentages reflect line item
amounts as a percentage of revenue. The tables serve as the basis
for the narrative that follows.
|
|
Thirteen
weeks ended
|
|||
|
|
September
28,
2018
|
September
29,
2017
|
||
|
Revenue
|
$26,309
|
100.0%
|
$26,703
|
100.0%
|
|
Cost
of staffing services
|
19,855
|
75.5%
|
19,514
|
73.1%
|
|
Gross
profit
|
6,454
|
24.5%
|
7,189
|
26.9%
|
|
Selling,
general and administrative expenses
|
5,630
|
21.4%
|
5,484
|
20.5%
|
|
Depreciation
and amortization
|
73
|
0.2%
|
96
|
0.4%
|
|
Income
from operations
|
751
|
2.9%
|
1,609
|
6.0%
|
|
Interest
(income) expense and other financing expense
|
(0)
|
0.0%
|
6
|
0.0%
|
|
Net income before
income taxes
|
751
|
2.9%
|
1,603
|
6.0%
|
|
Provision for
income taxes
|
205
|
0.8%
|
752
|
2.8%
|
|
Net
income
|
$546
|
2.1%
|
$851
|
3.2%
|
|
Non-GAAP
data
|
|
|
|
|
|
EBITDA
|
$824
|
3.1%
|
$1,706
|
6.4%
|
|
Adjusted
EBITDA
|
912
|
3.5%
|
1,809
|
6.8%
|
|
|
Thirty-nine
weeks ended
|
|||
|
|
September
28,
2018
|
September
29,
2017
|
||
|
Revenue
|
$72,952
|
100.0%
|
$73,555
|
100.0%
|
|
Cost
of staffing services
|
54,627
|
74.9%
|
54,135
|
73.6%
|
|
Gross
profit
|
18,325
|
25.1%
|
19,420
|
26.4%
|
|
Selling,
general and administrative expenses
|
18,213
|
25.0%
|
15,992
|
21.7%
|
|
Depreciation
and amortization
|
253
|
0.3%
|
288
|
0.4%
|
|
Income
(loss) from operations
|
(141)
|
(0.2)%
|
3,140
|
4.3%
|
|
Interest
expense and other financing expense
|
1
|
0.0%
|
7
|
0.0%
|
|
Net income (loss)
before income taxes
|
(142)
|
(0.2)%
|
3,133
|
4.3%
|
|
Provision (benefit)
for income taxes
|
(34)
|
(0.1)%
|
1,365
|
1.9%
|
|
Net income
(loss)
|
$(108)
|
(0.1)%
|
$1,768
|
2.4%
|
|
Non-GAAP
data
|
|
|
|
|
|
EBITDA
|
$112
|
0.2%
|
$3,428
|
4.7%
|
|
Adjusted
EBITDA
|
2,625
|
3.6%
|
3,550
|
4.8%
|
Use of non-GAAP Financial Measures
Earnings before interest, taxes, depreciation and amortization,
non-cash compensation, and certain non-recurring charges, or
adjusted EBITDA, is a non-GAAP measure that represents our net
income before interest expense, income tax expense, depreciation
and amortization, non-cash compensation, and certain non-recurring
charges. We utilize adjusted EBITDA as a financial measure as
management believes investors find it a useful tool to perform more
meaningful comparisons and evaluations of past, present, and future
operating results. We believe it is a complement to net income and
other financial performance measures. Adjusted EBITDA is not
intended to represent net income as defined by generally accepted
accounting principles in the United States, or U.S. GAAP, and such
information should not be considered as an alternative to net
income or any other measure of performance prescribed by U.S.
GAAP.
We use adjusted EBITDA to measure our financial performance because
we believe interest, taxes, depreciation and amortization, non-cash
compensation, and certain non-recurring charges bear little or no
relationship to our operating performance. By excluding interest
expense, adjusted EBITDA measures our financial performance
irrespective of our capital structure or how we finance our
operations. By excluding taxes on income, we
believe adjusted EBITDA provides a basis for measuring
the financial performance of our operations excluding factors that
are beyond our control. By excluding depreciation and amortization
expense, adjusted EBITDA measures the financial performance of
our operations without regard to their historical cost. By
excluding non-cash compensation, adjusted EBITDA provides
a basis for measuring the financial performance of our operations
excluding the value of our stock and stock option awards. In
addition, by excluding certain non-recurring
charges, adjusted EBITDA provides a basis for measuring
financial performance without non-recurring charges. For all
of these reasons, we believe that adjusted EBITDA
provides us, and investors, with information that is relevant and
useful in evaluating our business.
However, because adjusted EBITDA excludes depreciation
and amortization, it does not measure the capital we require to
maintain or preserve our fixed assets. In addition,
because adjusted EBITDA does not reflect interest
expense, it does not take into account the total amount of interest
we pay on outstanding debt, nor does it show trends in interest
costs due to changes in our financing or changes in interest
rates. Adjusted EBITDA, as defined by us, may not be
comparable to adjusted EBITDA as reported by other
companies that do not define adjusted EBITDA exactly as
we define the term. Because we use adjusted EBITDA to
evaluate our financial performance, we reconcile it to net income,
which is the most comparable financial measure calculated and
presented in accordance with U.S. GAAP.
|
|
Thirteen
weeks ended
|
Thirty-nine
weeks ended
|
||
|
|
September
28,
2018
|
September
29,
2017
|
September
28,
2018
|
September
29,
2017
|
|
Net
income (loss)
|
$546
|
$851
|
$(108)
|
$1,768
|
|
Interest
(income) expense
|
(0)
|
6
|
1
|
7
|
|
Provision
(benefit) for income taxes
|
205
|
752
|
(34)
|
1,365
|
|
Depreciation
and amortization
|
73
|
96
|
253
|
288
|
|
EBITDA
|
824
|
1,705
|
112
|
3,428
|
|
Non-cash
compensation
|
88
|
104
|
307
|
122
|
|
Reserve
for workers' compensation deposit
|
-
|
-
|
1,540
|
-
|
|
Other
non-recurring expense
|
-
|
-
|
665
|
-
|
|
Adjusted
EBITDA
|
$912
|
$1,809
|
$2,624
|
$3,550
|
Thirteen Weeks Ended September 28, 2018
Summary of operations: Revenue for the thirteen weeks ended
September 28, 2018 was approximately $26.3 million, a decrease of
approximately $394,000, or 1.5%, from $26.7 million for the
thirteen weeks ended September 29, 2017. This decrease is due to
higher than normal turnover in sales positions due to increased
competition in the labor market.
Cost of staffing services: Cost of staffing services was 75.5% of
revenue in the thirteen weeks ended September 28, 2018 compared to
73.1% for the thirteen weeks ended September 29, 2017. This
increase was primarily due to an increase in workers’
compensation claims payments during the third quarter of 2018
compared to the third quarter 2017. The increase in 2018 was also
significantly impacted by changes in our workers’
compensation claims liability. Our third-party actuarial analysis
resulted in a significant decrease in this liability in the third
quarter of 2017, compared to a slight increase in 2018. Low
unemployment rates in the job market also led to a slight increase
in field team member wages and related payroll taxes. These
increases were partially offset by a relative decrease in state
unemployment expense.
Selling, general and administrative expenses, or
SG&A: SG&A for the
thirteen weeks ended September 28, 2018 was approximately $5.6
million, an increase of approximately $146,000 from $5.5 million
for the thirteen weeks ended September 29, 2017. Relative to
revenue, SG&A increased 0.9% to 21.4% for the thirteen weeks
ended September 28, 2018, from 20.5% for the thirteen weeks ended
September 29, 2017. This increase is primarily due to increased
recruiting costs due to higher field team member turnover,
increased internal salaries related to increases in pay rates to
our hourly employees, and increased benefits expense for our
internal employees. These increases were partially offset by a
decrease in bad debt expense due to improved credit management
practices, as well as lower contract labor
costs.
Thirty-nine Weeks Ended September 28, 2018
Summary of operations: Revenue for the thirty-nine weeks ended
September 28, 2018 was approximately $73.0 million, a decrease of
approximately $603,000, or 0.8%, from $73.6 million for the
thirty-nine weeks ended September 29, 2017. This decrease is due to
higher than normal turnover in sales positions due to increased
competition in the labor market.
Cost of staffing services: Cost of staffing services was 74.9% of
revenue in the thirty-nine weeks ended September 28, 2018 compared
to 73.6% for the thirty-nine weeks ended September 29, 2017. This
increase was due to relative increases in workers’
compensation costs, and field team member wages and related payroll
taxes. These increases were partially offset by relative decreases
in state unemployment expense, per diem, transportation, and other
materials costs.
Selling, general and administrative expenses, or
SG&A: SG&A for the
thirty-nine weeks ended September 28, 2018 was approximately $18.2
million, an increase of approximately $2.2 million from $16.0
million for the thirty-nine weeks ended September 29, 2017. This
increase is primarily due to the impairment of our workers’
compensation deposit in receivership of approximately $1.5 million.
Also included in SG&A are non-recurring executive severance
expenses of approximately $565,000, and a one-time $100,000 expense
related to the settlement of the recent proxy contest. These
non-recurring expenses combine to approximately $2.2 million, or
12.1% of total SG&A. Other increases in SG&A included an
increase in stock based compensation and an increase in payroll and
payroll related taxes. These increases were partially offset by
decreased bad debt expense and a refund of our workers’
compensation risk pool deposit in excess of what was recorded of
approximately $198,000.
Liquidity and Capital Resources
Our primary source of cash and liquidity to fund our ongoing
operations are derived from the revenue we generate from clients
utilizing our services. The primary use of our cash and liquidity
is the compensation paid to our field team members and internal
staff, the payroll taxes associated with that compensation, and
SG&A. At September 28, 2018, our current assets exceeded our
current liabilities by approximately $13.0 million. Included in
current assets is cash of approximately $6.3 million and net
accounts receivable of approximately $9.8 million. Included in
current liabilities are accrued wages and benefits of approximately
$1.6 million, and the current portion of our workers’
compensation claims liability of approximately $1
million.
Operating activities: Through the thirty-nine weeks ended September 28,
2018, net cash provided by operating activities totaled
approximately $961,000 compared to approximately $2.5 million
through the thirty-nine weeks ended September 29, 2017. Operating
activity through the third quarter of 2018 included a net loss of
approximately $108,000, a decrease of approximately $1.5 million in
our workers’ compensation risk pool deposit in receivership,
and a decrease in prepaid expense, deposits, and other assets of
approximately $325,000. These provisions were offset by an increase
in accounts receivable of approximately $459,000, an increase in
our deferred tax asset of approximately $410,000, a decrease in
other current liabilities of approximately $337,000, and a decrease
in accrued wages and benefits of approximately $178,000. Operating
activity through the third quarter of 2017 included net income of
$1.8 million, a decrease in our deferred tax asset of approximately
$1.0 million, and a decrease in prepaid workers compensation of
approximately $443,000. These provisions were partially offset by
an increase in accounts receivable of approximately $840,000, a
decrease in our workers’ compensation claims liability of
approximately $570,000, and a decrease in accounts payable of
approximately $355,000.
Investing activities: Through the thirty-nine weeks ended September 28,
2018, net cash used in investing activities totaled approximately
$130,000, compared to approximately $102,000 for the thirty-nine
weeks ended September 29, 2017. These decreases in cash primarily
related to the purchase of capital equipment in both years. In 2018
this use of cash was offset by cash receipts of approximately
$21,000, primarily related to the sale of a
vehicle.
Financing activities: Through the thirty-nine weeks ended September 28,
2018, net cash used in financing activities totaled approximately
$2.3 million, compared to cash provided by financing activities of
approximately $628,000 through the thirty-nine weeks ended
September 29, 2017. Financing activity through the third quarter of
2018 included a decrease in our account purchase agreement of
approximately $642,000, and the purchase of treasury stock of
approximately $1.7 million. Financing activity in 2017 related to
an increase in our account purchase agreement of approximately
$683,000, which was partially offset by the purchase of treasury
stock of approximately $55,000.
Item 3. Quantitative and Qualitative
Disclosures about Market Risk
Command Center is a “smaller reporting company” as
defined by Regulation S-K and, as such, is not required to provide
the information contained in this item pursuant to Regulation
S-K.
Item 4. Controls and
Procedures
(a) Evaluation of disclosure
controls and procedures. Our Chief Executive Officer and our Chief
Financial Officer evaluated our disclosure controls and procedures
(as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
and Exchange Act of 1934, as amended (the "Exchange Act")), prior
to the filing of this Form 10-Q. Based on that evaluation, our
Chief Executive Officer and Chief Financial Officer concluded that,
as of September 28, 2018, our disclosure controls and procedures
were effective.
(b) Changes in internal controls
over financial reporting. There
have not been any changes in our internal control over financial
reporting during the interim period ended September 28, 2018, which
have materially affected, or are reasonably likely to materially
affect, our internal control over financial
reporting.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
From time to time we are involved in various legal proceedings.
Except for the Freestone Insurance Company liquidation proceedings
as described in Note 9 to the Consolidated Financial Statements, we
believe the outcomes of these proceedings, even if determined
adversely, will not have a material adverse effect on our business,
financial condition or results of operations.
Item 1A. Risk Factors
There have been no material changes from the risk factors we
previously disclosed in our Annual Report on Form 10-K for the year
ended December 29, 2017 filed with the Securities and Exchange
Commission on March 29, 2018.
Item 2. Unregistered Sales of Equity
Securities and Use of Proceeds
Recent Sales of Unregistered Securities
We did not issue any unregistered securities during the thirteen
weeks ended September 28, 2018.
Purchase of Equity Securities by the Issuer and Affiliated
Purchasers:
In September 2017, our Board of Directors authorized a $5.0 million
three-year repurchase plan of our common stock. This plan replaced
the previous plan, which was put in place in April 2015. During the
thirteen weeks ended September 28, 2018, we purchased approximately
164,000 shares of common stock at an aggregate cost of
approximately $949,000 resulting in an average price of $5.80 per
share. These shares were subsequently retired. We have
approximately $3.0 million remaining under the plan. The
following table summarizes in more detail our common stock
purchased during the thirteen weeks ended September 28,
2018.
|
|
Total
shares
purchased
|
Average
price
per
share
|
Total
number
of
shares
purchased
as part
of
publicly
announced
plan
|
Approximate
dollar value
of
shares that
may
be
purchased
under the
plan
|
|
Period 7 (June 30,
2018 to July 27, 2018)
|
36,275
|
$6.03
|
743,400
|
$3,688,744
|
|
Period 8 (July 28,
2018 to August 24, 2018)
|
57,400
|
5.69
|
800,800
|
3,361,906
|
|
Period 9 (August
25, 2018 to September 28, 2018)
|
69,993
|
5.77
|
870,793
|
2,958,257
|
|
Total
|
163,668
|
5.80
|
|
|
Item 3. Defaults Upon Senior
Securities
None.
Item 4. Mine Safety
Disclosures
Not applicable.
Item 5. Other Information
None.
Item 6. Exhibits
|
Exhibit No.
|
|
Description
|
|
10.1
|
|
Employment Agreement between the Company and Brendan Simaytis,
effective June 1, 2018. Incorporated by reference to Exhibit 10.1
to Form 8-K as filed on July 6, 2018.
|
|
10.2
|
|
Employment Agreement between the Company and Cory Smith, effective
June 1, 2018. Incorporated by reference to Exhibit 10.2 to Form 8-K
as filed on July 6, 2018.
|
|
|
Certification of Richard K. Coleman, Jr., Chief Executive Officer
of Command Center, Inc. pursuant to Rule 13a-14(a) as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
|
|
|
|
Certification of Cory Smith, Chief Financial Officer of Command
Center, Inc. pursuant to Rule 13a-14(a) as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
Certification of Richard K. Coleman, Jr., Chief Executive Officer
of Command Center, Inc., and Cory Smith, Chief Financial Officer of
Command Center, Inc., pursuant to 18 U.S.C. Section 1350, as
adopted in Section 906 of the Sarbanes-Oxley Act of
2002.
|
|
101.INS
|
|
XBRL Instance Document
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
Signatures
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized
Command Center, Inc.
|
/s/Richard K.
Coleman,
Jr.
|
November 6, 2018 |
|
Richard K. Coleman, Jr.
|
Date
|
|
President
and Chief Executive Officer
|
|
|
|
|
|
|
|
|
/s/Cory
Smith
|
November 6,
2018
|
|
Cory
Smith
|
Date
|
|
Chief Financial
Officer
|
|
22