Labor SMART Narrows First Quarter Operating Loss
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Today : Thursday 15 May 2014
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Labor SMART Narrows First Quarter Operating Loss
Revenue Up 91% and Margins Improve by 65% Year Over Year
HIRAM, GA--(Marketwired - May 15, 2014) - Labor SMART, Inc. (OTCQB: LTNC) (the "Company"), an emerging provider of on-demand blue collar staffing primarily in the southeastern United States, today reported revenue of $4,792,941 for the quarter ending March 31, 2014. This represents a 91 percent increase over the $2,503,872 in revenue reported for the quarter ending March 31, 2013. For the March 31, 2014 quarter, the company's operating loss narrowed to $276,275 compared to an operating loss of $406,485 reported for the same period one year ago.
Ryan Schadel, Labor SMART's CEO, stated, "This quarter saw significant improvements over our results of a year ago and provides further confirmation that our expansion strategy and business model are working as expected. While I think most were expecting the stellar revenue growth, the tremendous improvement in gross margins is very exciting as it clearly demonstrates our ability to get higher margin business as we grow revenues and reach profitability. Very few startups can deliver 65% margin improvements in one year while also increasing revenue by 91%. I credit our operations team for this dramatic improvement and expect further growth in margins. We continue to see 2014 as a major year of growth for the company, with continued increases in revenue, gross margins, and cost-savings that will be brought to the bottom line as a result of scaling."
For the quarter ending March 31, 2014, cost of services represented 77 percent of revenue, compared to 86 percent of revenue for the like period one year ago. Cost of services consists mainly of payroll related and worker's compensation expense for laborers. Gross profit margins increased to 23.11% as a percentage of revenue compared to 14.03% for the same period one year ago. Much of the company's net loss is attributable to non-cash charges connected with servicing corporate debt.
"During the second quarter we will complete the majority of our organic expansion for 2014 and begin looking for more acquisition opportunities that fit our model and culture. During the upcoming quarters, our focus is to deliver higher operating income through continued execution of our business plan and improving our financing options to drive profitability," said Schadel.
Labor SMART's strategy of organic growth, new offices and acquisitions is reflected in its continuing revenue increases. At the end of the quarter the company had 19 branch offices, compared to 15 at the end of the December 2013 quarter.