SOURCE: First Rate Staffing Corporation

First Rate Staffing Corporation

May 16, 2016 08:31 ET

First Rate Staffing Reports First Quarter 2016 Results

SANTA FE SPRINGS, CA--(Marketwired - May 16, 2016) - First Rate Staffing Corporation (OTCQB: FRSI), a full service staffing company providing human resources, reported results for the first quarter ended March 31, 2016.

Q1 2016 Highlights vs. Year-ago Quarter

  • Revenues increased 42% to $7.0 million, a record first quarter
  • Gross profit was $0.8 million, up 118% and gross margin was 12.0%, up 416 basis points
  • Net income was $8,308 as compared to a net loss of $137,000

Q1 2016 Operational Highlights

  • Added six clients in the quarter, bringing total to over 110
  • Up-listed to OTCQB® under the same symbol, "FRSI"

Q1 2016 Financial Summary
Revenues in the first quarter of 2016 increased 42% to $7.0 million, compared to $4.9 million in the same year-ago quarter. The increase in revenues was due to new clients added and organic growth.

Gross profit in first quarter of 2016 increased 118% to $0.8 million, versus $0.4 million in the same year-ago quarter. Gross margin in the first quarter of 2015 increased 416 basis points to 12.0%, compared to 7.8% in the same year-ago quarter. The increase in gross margin was due to lower state and federal unemployment tax rates for the company's staffing employees and increased revenues in the first quarter of 2016, as compared to the same year-ago quarter.

General and administrative (G&A) expenses in the first quarter of 2016 increased 59% to $0.7 million versus $0.5 million in the same year-ago quarter. The increase in G&A expenses was primarily due to increased payroll costs associated with additional headcount added to manage the increase in the company's volume.

Net income in the first quarter of 2016 was $8,308 or $0.00 per share, as compared to a loss of $137,000 or $(0.02) per share in the same year-ago quarter.

Cash at March 31, 2016 totaled $0.5 million compared to $0.6 million at December 31, 2015. The decrease in cash was due to cash used by financing activities.

Management Commentary
"The first quarter of 2016 was our strongest start yet to a calendar year," said First Rate Staffing CEO, Cliff Blake. "While it's traditionally the slowest quarter of the year, we experienced strong year-over-year topline growth driven by the addition of new clients and increased billings. The quarter was highlighted by our profitability primarily due to strong growth in California and Nevada while controlling our spending.

"California recently signed into law a bill to phase in a statewide $15-per-hour minimum wage by 2022, which will provide us a strong tailwind for growth. Looking ahead, we plan to support current clients who requested our services in additional locations by opening additional offices in two new states. We remain on track to generate revenues between $45 million to $50 million in 2016, which would represent profitable growth of 37% to 52%."

About First Rate Staffing
First Rate Staffing provides recruiting and staffing services for temporary positions in light industrial, distribution center, assembly, and clerical businesses. The company is headquartered in Santa Fe Springs, California, with offices in Arizona and Nevada. For more information about the company, visit www.first-ratestaffing.com.

Important Cautions Regarding Forward-Looking Statements
This press release may from time to time make, certain estimates and other forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, including, among others, statements with respect to the Company's future revenues, earnings, strategies, prospects, consequences and all other statements that are not purely historical and that may constitute statements of future expectation. While we believe these statements are accurate, forward-looking statements are not historical facts and are inherently uncertain. We cannot assure you that these expectations will occur, and our actual results may be significantly different. Factors that may cause actual results to differ materially from those contemplated in any forward-looking statements made by us are sometimes presented within the forward-looking statements themselves or are otherwise discussed in filings we make with the United States Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K and subsequent reports on Form 10-Q and Form 8-K and available on our website: http://www.first-ratestaffing.com/. Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. The Company disclaims any obligation to update or revise any forward-looking statement, whether written or oral, that may be made from time to time, based on the occurrence of future events, the receipt of new information, or otherwise.

 
 
FIRST RATE STAFFING CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)  
 
    Three Months Ended  
    March 31,     March 31,  
    2016     2015  
             
Revenues   $ 6,957,448     $ 4,906,244  
Cost of revenues     6,125,618       4,523,813  
Gross profit     831,830       382,431  
General and administrative expenses     749,176       469,836  
Income (loss) from operations     82,654       (87,405 )
Interest and other expense, net     (74,346 )     (49,513 )
Income (loss) before income tax     8,308       (136,918 )
Income tax expense     -       -  
Net income (loss)   $ 8,308     $ (136,918 )
                 
Net income (loss) per share:                
Basic and diluted   $ -     $ (0.02 )
                 
Weighted average shares outstanding:                
Basic and diluted     7,500,000       7,500,000  
                 
                 
FIRST RATE STAFFING CORPORATION
BALANCE SHEETS
 
    March 31,     December 31,  
    2016     2015  
    (Unaudited)        
Assets  
                 
Current assets                
  Cash   $ 534,705     $ 565,040  
  Accounts receivable, net     454,351       733,009  
    Total current assets     989,056       1,298,049  
                 
Property and equipment, net     49,864       53,309  
Intangible assets, net     249,812       272,522  
Notes receivable - related party     98,918       98,918  
Deposit and other assets     7,640       7,640  
    Total assets   $ 1,395,290     $ 1,730,438  
                 
Liabilities and Stockholders' Equity  
                 
Current liabilities                
  Accounts payable   $ 77,056     $ 355,452  
  Accrued expenses     745,355       780,863  
  Car loan payable, current portion     4,832       4,623  
  Notes payable - current portion, net of discount     109,272       107,786  
  Total current liabilities     936,515       1,248,724  
  Car loan payable, net of current portion     30,358       31,605  
  Notes payable, net of current portion     100,000       130,000  
  Total liabilities     1,066,873       1,410,329  
                 
  Commitments and contingencies                
                 
Stockholders' equity                
  Preferred stock, $0.0001 par value, 20,000,000 shares authorized, zero shares issued and outstanding     -       -  
  Common stock, $0.0001 par value, 100,000,000 shares authorized, 7,500,000 shares issued and authorized at March 31, 2016 (unaudited) and December 31, 2015     750       750  
  Additional paid-in capital     1,089,802       1,089,802  
  Accumulated deficit     (762,135 )     (770,443 )
    Total stockholders' equity     328,417       320,109  
    Total liabilities and stockholders' equity   $ 1,395,290     $ 1,730,438  
                 
                 

Contact Information

  • Company Contact:
    First Rate Staffing
    Cliff Blake
    CEO
    888-212-FRSI
    Email Contact

    Investor Relations Contact:
    Liolios Group
    Ron Both
    Senior Managing Director
    949-574-3860
    Email Contact