Labor SMART (OTCBB: LTNC) announced it sold five branch offices for $1,025,000 in cash. The industrial staffing provider will also retain the open accounts receivable at the sold branches, totaling $811,081.

Labor SMART on July 31 received an unsolicited offer to sell the operating assets of five branch locations. According to a filling with the US Securities and Exchange Commission, it completed the sale of the branch offices to Harris Ventures Inc., a Georgia corporation, on Aug. 12.

According to the filing, Harris Ventures purchased branch offices in Denver; Augusta, Ga.; and Charleston, Columbia, and Greenville, S.C. The sale includes customer lists, leases and contracts, fixed assets and business records; the offices will be rebranded. Labor SMART’s remaining 21 offices are not party to a contemplated transaction.

Labor SMART agreed not to compete for three years within a 40-mile radius  of the South Carolina branch offices and for five years for the Denver and Georgia offices.

"This is a significant development for Labor SMART (LTNC),” said President and CEO Ryan Schadel. “The branches subject to this transaction operate in the two states where we have locations that are not covered under our large deductible workers compensation program. With exposure to the state sponsored insurance pool, these branches operate at gross margins that are 600 or more basis points lower than other branches.”

"The strategic sale of these locations puts Labor SMART in a much stronger position, both financially and competitively in our remaining and future markets." Schadel said.

Labor Smart last month reported it expects revenue of $6.37 million for the second quarter and that it closed underperforming branches in a move to focus on profitability.