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Security Corporation (NYSE MKT: MOC) announced today its financial results for its first fiscal quarter of 2014 ended June 30, 2013.
For the three months ended June 30, 2013, revenues increased 6.5% to $37,961,495, compared with revenues of $35,641,679 in the same period of the prior year. Operating income for the three months ended June 30, 2013 decreased to $238,843, compared with $513,782 in the same period of the prior year. Net income decreased to $33,233, or $0.00 per basic and diluted share, compared with $231,268, or $0.02 per basic and diluted share in the same period of the prior year.
The increase in revenues for the three months ended June 30, 2013, as compared with the corresponding period of the prior year was due primarily to the following events:
Increased revenues associated with an expansion of services provided under a contract with a major transportation company; and
Expansion of aviation related security services at LaGuardia Airport.
The decrease in operating and net income for the three months ended June 30, 2013 as compared to the corresponding period of the prior year was due primarily to approximately $450,000 in legal related costs. The legal issues include on-going litigation with a non-certified union in California seeking to be re-recognized by a work group that had previously voted to withdraw recognition and employment matters that occurred in 2010 and 2011. In addition, net income was adversely impacted by the tax consequences related to the expiration of stock options held by former employees and certain other permanent tax differences.
Craig P. Coy, Chief Executive Officer of Command Security, stated, “This was the first quarter for the new management and administrative team in Virginia which has resulted in improved coordination and reduced staff expenses. We continue to have several initiatives underway to further enhance our operating efficiencies, such as the deployment of new web-based employee management tools and a realignment of our operating offices. We are reenergizing our sales effort with new managers in our key markets. Importantly, sales growth is consistently challenged by strong competitive pricing pressures. Our operations were strong with improvements in delivering great service to our customers. In addition, our efforts to improve our working capital management have recently shown improvements. Overall, I continue to be pleased with the direction the Company is moving and progress we are making in building a solid platform for the future.”