First-quarter service revenue at Staffmark rose 13.5 percent, according to a filing today with the U.S. Securities and Exchange Commission made by its parent company, Compass Diversified Holdings (NYSE: CODI). Staffmark had revenue of $246.8 million in the first quarter ended March 31, compared with $217.4 million in the prior year.

“This increase in revenues primarily reflects increased demand for temporary staffing services,” the Cincinnati-based staffing provider reported in the filing.

Staffmark’s first-quarter gross margin fell to 12.9 percent from 13.3 percent in the year-ago quarter. The company attributed the decline to higher state unemployment tax rates, according to the filing.

Staffmark is part of Compass Diversified Holdings. Staffmark last month filed a registration statement with the Securities and Exchange Commission for a proposed initial public offering. Compass Diversified currently owns approximately 68.5 percent of Staffmark’s common stock, on a fully diluted basis, according to today’s filing.