Corporate Resource Services Reports Third Quarter Results
Corporate Resource Services, Inc. (OTCBB:CRRS), a national provider of diversified staffing, recruiting and consulting services, 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.
Revenues for the third quarter increased to $32.5 million from $12.8 million in the third quarter of fiscal 2009. The increase of approximately 150% is primarily attributable to revenues generated as a result of the acquisition by the Company of certain assets of GT Systems. Since the acquisition, the acquired business has been operated by the Company’s wholly owned subsidiary, Corporate Resource Development (CRD). The balance of the increase is attributable to additional demand from existing customers, which the Company attributes to improvements in the industry as well as the Company’s ordinary business cycle.
Direct cost of services increased for the quarter to $25.9 million from approximately $11.1 million in the 2009 comparable period, an increase of approximately 130%. The increase in direct cost of services is a direct result of the increase in business and revenue. Gross profit increased by approximately 310% to $6.6 million from $1.6 million. The Company’s gross profit margin for the third quarter of fiscal 2010, as a percentage of revenues, was approximately 20%, as compared with a 13% gross margin for the third quarter of fiscal 2009. The increase in gross profit and in margins was a result of the gross profit generated from the higher margin CRD business following the April acquisition, all of which was realized during the third fiscal quarter.
The Company reported a net loss for the three months ended June 30, 2010 of $736,000, or ($.03) per share, versus a net loss of $75,000, or $.00 per share in the 2009 period. The increase in net loss was due to increases in 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.
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