09.11.2017 14:00:00

Command Security Corporation Reports Financial Results for the Second Fiscal Quarter Ended September 30, 2017

HERNDON, Va., Nov. 09, 2017 (GLOBE NEWSWIRE) -- Command Security Corporation (NYSE:MOC) today reported its financial results for its second fiscal quarter ended September 30, 2017.Revenues for the three months ended September 30, 2017 increased by $7.3 million or 17.3% to $49.7 million as compared with $42.4 million for the three months ended September 30, 2016.  Gross profit for the three months ended September 30, 2017 was $5.5 million (11.0% of revenues) compared with $5.2 million (12.2% of revenues) for the three months ended September 30, 2016.  Operating income for the three months ended September 30, 2017 was $0.8 million (1.6% of revenues) compared with operating income of $0.8 million (1.9% of revenues) for the three months ended September 30, 2016.  Revenues for the six months ended September 30, 2017 increased by $14.8 million or 18.8% to $93.5 million as compared with $78.7 million for the six months ended September 30, 2016.  Gross profit for the six months ended September 30, 2017 was $10.5 million (11.2% of revenues) compared with $9.7 million (12.3% of revenues) for the six months ended September 30, 2016.  Operating income for the six months ended September 30, 2017 was $1.1 million (1.1% of revenues) compared with operating income of $1.3 million (1.7% of revenues) for the six months ended September 30, 2016.  Operating income for the six months ended September 30, 2017 includes approximately $0.4 million of start-up costs related to the revenue growth described below.The increases in revenues for the three and six months ended September 30, 2017, as compared with the same period of the prior year, were primarily driven by the commencement of work under new contracts with a large on-line retailer and its web services division. These increases were partly offset by reductions in revenues from a major transportation company and various other residential and retail customers. The increases in gross profits for the three and six months ended September 30, 2017, as compared with the same periods of the prior year, were primarily driven by the above-mentioned increases in revenues and a decrease in workers compensation expense.  These increases were partly offset by increased labor costs including training, overtime, subcontractor costs and other start-up costs in connection with the commencement of work under the contracts with the large online retailer, and an increase in aviation services labor costs combined with a reduction in the scope of services with a large international airline.  Start-up costs incurred in connection with new revenue growth included in cost of sales during the six months ended September 30, 2017 was approximately $90,000.General and administrative expenses for the three months ended September 30, 2017 increased by 9.7% or $0.4 million, to $4.8 million (9.7% of revenues) as compared to $4.4 million (10.3% of revenues) in the corresponding period of the prior year. The increase in general and administrative expenses was driven primarily by increased non-cash stock compensation costs, severance costs, increased general and administrative salaries directly related to increases in revenues, partly offset by lower amortization and legal costs.General and administrative expenses for the six months ended September 30, 2017 increased by 13.0% or $1.1 million, to $9.6 million (10.2% of revenues) as compared to $8.5 million (10.8% of revenues) in the corresponding period of the prior year. The increase in general and administrative expenses consisted primarily of employee compensation and contract start-up costs in support of increasing revenues,  non-cash stock compensation costs and severance costs, partly offset by lower legal and labor settlement costs and amortization.  Start-up costs incurred in connection with new revenue growth and included in general and administrative costs in the six months ended September 30, 2017, were approximately $0.3 million.  Excluding non-cash stock compensation costs, severance costs and start-up costs, general and administrative costs in the quarter ended September 30, 2017 increased by 5.3% and as a percentage of revenues decreased to 9.6% of revenues.The decrease in net income for the three and six months ended September 30, 2017, as compared with the corresponding period of the prior year was due mainly to the above-mentioned increase in general and administrative costs, including the above-mentioned start-up costs incurred in connection with new revenue growth, non-cash stock compensation costs, and increased interest expense partly offset by the increase in gross profits attributable to the increased revenues, a reduction in the loss from our minority investment in Ocean Protection Services and a lower overall effective income tax rate. Craig P. Coy, Chief Executive Officer of Command Security, said, "We realized another quarter of positive revenue growth and we are continuing our efforts to identify significant new business opportunities and markets.  Recently we announced a new contract with the U.S. Department of State in Honduras and we believe this is the first of several other similar opportunities that may follow.  The combination of new business growth with significant start-up costs and the continued tightening of the labor market have necessitated the need to increase our efforts and resources dedicated to recruiting and ...Full story available on Benzinga.com
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