Command Center, Inc. (OTCQB: CCNI), a national provider of on-demand and temporary staffing solutions, reported financial results for the first quarter ended March 28, 2014.

First Quarter 2014 Financial Highlights vs. Year-Ago Quarter

• Same store sales up 6% to $18.4 million
• Net income of $511,000 or $0.01 per diluted share
• Operating income up 237% to $596,000
• Adjusted EBITDA up 148% to $661,000

First Quarter 2014 Financial Results

“Since I came to Command Center, we have been working to build a team focused on delivering high-quality service to our customers while controlling costs,” said Command Center’s president and CEO, Bubba Sandford. “We have evaluated every phase of our operations to drive customer service and improve efficiency. I believe we now have a strong platform in place to maintain a high level of customer service while we pursue quality growth and continue to control our costs.”

Revenues in the first quarter of 2014 decreased 7% to $18.5 million compared to $19.9 million in the first quarter of 2013. The decrease in revenue is primarily attributable to an overall reduction in the number of on-demand labor stores from 58 a year ago to 53 stores at the end of this period. This reduction in operating locations was targeted to eliminate lower-performing stores in order to focus on areas of greater potential quality growth for the company.

Same store revenues increased approximately 6% to $18.4 million in Q1 2014 compared to $17.4 million in Q1 2013. Cost of staffing services decreased to 73.6% of revenue in Q1 2014 compared to 73.8% of revenue in Q1 2013, yielding gross margins of 26.4% and 26.2%, respectively. The increase in same store sales and improved margins resulted, in large part, from the company’s continued focus on attracting new quality accounts and maximizing revenue with existing clients.

Net income in the first quarter increased to $511,000 compared to $12,000 in the year-ago quarter, resulting in diluted earnings per share in the first quarter of 2014 at $0.01 compared to $0.00 in the year-ago quarter. Operating income was up 237% to $596,000 versus $177,000 in the year-ago quarter.

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, and the change in fair value of derivative liabilities) was up 148% to $661,000 from $266,000 in the year-ago quarter (see discussion about the presentation of adjusted EBITDA, a non-GAAP term, below).

SG&A expenses were $4.2 million for the current period versus $5.0 million in the comparable year-ago period, representing 22.8% and 24.9% of revenue, respectively, reflecting the company’s focus on improving operating efficiency.

Cash at March 31, 2014 totaled $5.8 million, up 583% compared to $849,000 at March 29, 2013. The increase in cash is due to improved cash generation from operations.

Further details about the company’s Q1 results in 2014 are available in its Annual Report Form 10-Q, accessible in the investor relations section of the company’s website at www.commandonline.com.

Additional Management Commentary

“In the first quarter of 2014, we maintained our positive earnings trajectory and recorded our highest profitable first quarter in company history,” said Bubba Sandford. “Changes we implemented in 2013 shortly after I joined the company are now establishing a clear path to increased profitability and we believe the company has a solid foundation for growth in 2014. Our ability to generate $0.01 in EPS during a seasonally weak quarter industry wide clearly demonstrates the leverage in our operating model and commitment to focus more on higher-margin business.

“We continue driving profitability within our 53 field offices and delivering higher quality services to our customers. As we enter the second quarter, we’ve never been in a stronger financial position to invest in the growth of our company. We are working on a daily basis to implement strategies designed to increase revenue in our existing locations, including development of our high-caliber national sales team and increased specialized sales training for our local branch personnel, in addition to evaluating select locations where we can expand into new offices.”

About Command Center

Command Center provides flexible on-demand employment solutions to businesses in the United States, primarily in the areas of light industrial, hospitality and event services. Through 53 field offices, the company provides employment for nearly 33,000 field team members working for 3,600 clients.

For more information about Command Center, go to www.commandonline.com.

Important Cautions Regarding Forward Looking Statements

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 10-K filed with the Securities and Exchange Commission on March 20, 2014 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.

Reconciliation of Non-GAAP Financial Measures

In addition to the results prepared in accordance with generally accepted accounting principles (“GAAP”), the company also presents adjusted EBITDA, a non-GAAP term defined as earnings before interest, taxes, depreciation and amortization, and the change in fair value of derivative liabilities. (Please note, the company previously referred to this metric as “EBITDA-D.”)

The company uses adjusted EBITDA as a financial measure since management believes investors find it a useful tool to perform more meaningful comparisons of past, present and future operating results, and as a complement to net income and other financial performance measures. Adjusted EBITDA is not intended to represent net income as defined by GAAP, and such information should not be considered as an alternative to net income or any other measure of performance prescribed by GAAP.

The following tables present a reconciliation of adjusted EBITDA to net income for the periods presented: