National staffing and recruiting company Corporate Resource Services Inc. today reported results for its third quarter ended June 30, 2010.
The company’s quarterly results were materially impacted by its acquisition of certain assets of GT Systems on April 5, 2010, which is operated by CRRS’s wholly owned subsidiary Corporate Resource Development (CRD).
CRRS reported revenues for the third quarter at $32.5 million, up 150 percent from the $12.8 million in the third quarter of 2009. The company attributes the increase mainly to revenues generated as a result of the acquisition of certain assets of GT Systems.
Direct cost of services for the third quarter of 2010 increased 130 percent to $25.9 million, as compared to approximately $11.1 million in the comparable quarter of 2009.
Gross profit increased 310 percent to $6.6 million from $1.6 million in the third quarter of 2009. The company’s gross profit margin for the third quarter of fiscal 2010, as a percentage of revenues, was approximately 20 percent, as compared with a 13 percent gross margin for the third quarter of fiscal 2009. CRRS said the increase in gross profit and in margins are results of the gross profit generated from the higher margin CRD business following the acquisition of GT Systems.
The company reported a net loss for the quarter of $(736,000), or ($.03) per share, versus a net loss of $(75,000), or $.00 per share in the 2009 period. The company reported that the increase in net loss was due to increased marketing, selling and administrative expenses due to the acquisition, transaction costs associated with the acquisition and increases in interest expense due to acquisition financing incurred during the quarter.
Jay Schecter, CEO of the CRRS, emphasized GT systems’ affect on the quarterly results, and said the company feels that it is on track to become a key player in the staffing industry.
“We closed the acquisition of certain assets of GT Systems in early April, and this is the first quarter that our results include the operations of the acquired business. Our results are in line with our expectations, as we continue with the process of integrating the operations of this significant acquisition with our existing business. We believe the company is now, and in the near future will continue to be, positioned to be a significant player in the staffing marketplace, as we continue to seek out acquisitions on favorable terms that will expand our presence in existing markets, as well as give us a foothold in attractive new markets throughout the country. We are also making investments in our sales organization which are critical and believe will show significant returns in future periods,” Schecter stated.
For more information visit www.aabilities.com