Command Center Announces Profitable Second Quarter

POST FALLS, Idaho--(BUSINESS WIRE)--Command Center, Inc. (OTCBB: CCNI), an emerging provider of on-demand, reliable labor solutions, today announced its results for the second quarter of 2010.

“Additionally, it has strengthened our relationships with several major environmental contractors with whom we expect to continue working not only along the Gulf Coast, but in other areas of the country as well.”

For the thirteen weeks ended June 25, 2010, total revenue was $19.04 million, an increase of 54% over the revenue of $12.39 million for the thirteen weeks ended June 26, 2009. For the period, the Company reported a net profit of $336,123, or $0.01 per share, based on 47,424,222 weighted average common shares outstanding, compared to a net loss of $1.48 million, or ($0.04) per share, based on 36,488,679 weighted average common shares outstanding in the like year-ago period.

The company reported second quarter income from operations of $1.51 million versus a loss from operations of $964,642 in the second quarter of 2009. A non-cash charge of $726,906 recorded in Q2 ’10 was attributable to a change in fair value of warrant liability.

For the twenty-six week period ended June 25, 2010, Command Center reported total revenue of $30.94 million, an increase of 23% over the revenue of $25.21 million in the comparable year-ago period. Net loss for the six months was $1.40 million, or ($0.03) per share, based on 42,447,440 weighted average common shares outstanding, compared to a net loss of $3.57 million, or ($0.10) per share, based on 36,398,337 in the same period last year.

The company reported income from operations of $959,612 in the first half of 2010 versus a loss from operations of $2,608,452 in the first half of 2009. Non-cash charges totaling $1,729,173 were recorded in the first half of 2010 and were attributable to loss on debt extinguishment and a change in fair value of warrant liability.

“Obviously, we are extremely pleased,” said Command Center Chairman and CEO, Glenn Welstad. “In this uncertain economy, our strict attention to cost management, growth of core business and expansion into new areas, particularly event services and disaster relief, has been critical to producing such strong quarterly results. Of course, attainment of these goals would not have been possible without the support and hard work of all our workers throughout the system, both in the office and out in the field.”

Mr. Welstad noted significant improvements in key operating areas. Core business revenue in the quarter was up 23.5% over last year. The company reported a gross profit margin of 26.7% in the second quarter of 2010 versus 23.3% in the second quarter of 2009. “Even with a 54% increase in sales, there was a reduction in SG&A expenses in Q2 ‘10 to $3.7 million, or 19.7% of revenue, from $3.8 million, or 31% of revenue, in Q2 of last year. Most importantly, this was accomplished without compromising our commitment and ability to deliver exceptional service to all of our customers, both local and national accounts.”

Mr. Welstad also said that clean-up activities in response to the Gulf Oil Spill had a “definite positive impact” on second quarter results. “Additionally, it has strengthened our relationships with several major environmental contractors with whom we expect to continue working not only along the Gulf Coast, but in other areas of the country as well.”

About Command Center, Inc.

The Company provides on-demand employment solutions to businesses in the United States, primarily in the areas of light industrial, disaster relief, hospitality and event services. Additional information on Command Center is available at www.commandonline.com.

This news release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, the severity and duration of the general economic downturn, the availability of worker's compensation insurance coverage, the availability of capital and suitable financing for the Company's activities, the ability to attract, develop and retain qualified store managers and other personnel, product and service demand and acceptance, changes in technology, the impact of competition and pricing, government regulation, and other risks set forth in the Form 10KSB filed with the Securities and Exchange Commission on April 9, 2010 and in other statements filed from time to time with the Securities and Exchange Commission. All such forward-looking statements, whether written or oral, and whether made by or on behalf of the Company, are expressly qualified by these cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, the Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.

Command Center, Inc.
Balance Sheets
	June 25, 2010			December 25, 2009
	(Unaudited)
Assets
Current Assets:
Cash	$	31,132		$	69,971
Restricted cash	150,000			—
Accounts receivable trade, net of allowance for bad debts of $370,000 at June 25, 2010 and $300,000 at December 25, 2009	3,012,837			5,025,113
Other receivables - current	37,438			37,059
Prepaid expenses, deposits, and other	490,681			213,409
Prepaid workers' compensation	912,246			224,074
Current portion of workers' compensation risk pool deposits	1,200,000			1,300,000
Total current assets	5,834,334			6,869,626

Property and Equipment, Net	535,775			877,827

Other Assets:
Workers' compensation risk pool deposits	1,760,477			2,318,805
Goodwill	2,500,000			2,500,000
Intangible assets - net	247,992			323,937
Total other assets	4,508,469			5,142,742
Total assets	$	10,878,578		$	12,890,195
Liabilities and Stockholders' Equity (Deficit)
Current Liabilities:
Accounts payable	$	1,637,314		$	2,174,504
Checks issued and payable	41,534			—
Line of credit facility	—			2,907,521
Accrued wages and benefits	1,080,490			694,079
Other current liabilities	224,491			224,491
Current portion of note payable	—			9,520
Short-term note payable, net of discount	824,677			1,025,000
Short-term note liquidity redemption payable	—			186,939
Stock warrant liability	1,458,231			413,026
Workers' compensation and risk pool deposits payable	1,032,627			501,423
Current portion of workers' compensation claims liability	1,200,000			1,300,000
Total current liabilities	7,499,364			9,436,503

Long-Term Liabilities
Note payable, less current portion	—			71,447
Common stock to be issued	—			922,000
Workers' compensation claims liability, less current portion	2,800,000			2,800,000
Total long-term liabilities	2,800,000			3,793,447
Total liabilities	10,299,364			13,229,950
Commitments and Contingencies (Notes 4, 6, 9 and 10)

Stockholders' Equity (Deficit)
Preferred stock - 5,000,000 shares, $0.001 par value, authorized; no shares issued and outstanding	—			—
Common stock - 100,000,000 shares, $0.001 par value, authorized; 51,444,368 and 37,212,922 shares issued and outstanding, respectively	51,444			37,213
Additional paid-in capital	53,728,130			51,446,437
Accumulated deficit	(53,200,360		)	(51,823,405		)
Total stockholders' equity (deficit)	579,214			(339,755		)
Total liabilities and stockholders' equity (deficit)	$	10,878,578		$	12,890,195

See notes to unaudited financial statements

Command Center, Inc.
Statements of Operations (Unaudited)
	Thirteen Weeks Ended						Twenty-six Weeks Ended
	June 25, 2010			June 26, 2009			June 25, 2010			June 26, 2009
Operating Revenue:
Operating Revenue:
Revenue from staffing services	$	18,989,787		$	12,365,592		$	30,868,672		$	25,158,658
Other income	49,413			25,781			70,284			56,019
Total operating revenue	19,039,200			12,391,373			30,938,956			25,214,677
Cost of Staffing Services:
Temporary worker costs	12,872,662			8,486,143			21,421,336			17,379,577
Workers' compensation costs	988,198			1,018,654			1,415,427			1,707,141
Other direct costs of services	102,353			4,409			152,722			29,131
Total cost of staffing services	13,963,213			9,509,206			22,989,485			19,115,849
Gross Profit	5,075,987			2,882,167			7,949,471			6,098,828

Selling, General, and Administrative Expenses:
Personnel costs	1,764,712			1,895,150			3,501,036			4,178,887
Selling and marketing expenses	46,502			9,527			129,217			69,811
Transportation and travel	430,579			289,317			538,135			569,341
Office expenses	251,698			205,433			367,264			512,764
Legal, professional and consulting	268,218			95,484			457,096			414,376
Depreciation and amortization	143,694			204,768			286,859			415,547
Rents and leases	375,617			396,153			785,540			1,224,980
Other expenses	283,373			625,768			924,712			1,321,574
Total selling, general, and administrative expenses	3,564,393			3,721,600			6,989,859			8,707,280

Income (Loss) from Operations	1,511,594			(839,433		)	959,612			(2,608,452		)

Other Income (Expense):
Interest expense and other financing expense	(448,565		)	(250,583		)	(607,394		)	(569,344		)
Loss on debt extinguishment	—			(518,251		)	(844,798		)	(518,251		)
Change in fair value of warrant liability	(726,906		)	126,000			(884,375		)	126,000
Interest and other income (expenses)	—			—			(19,156		)	—
	(1,175,471		)	(642,834		)	(2,355,723		)	(961,595		)

Net Income (Loss)	$	336,123		$	(1,482,267	)	$	(1,396,111	)	$	(3,570,047	)

Basic and Diluted Earning (Loss) per Share:	$	0.01		$	(0.04	)	$	(0.03	)	$	(0.10	)

Basic and Diluted Weighted Average Common Shares Outstanding:	47,424,222			36,488,679			42,447,440			36,398,337