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US – Corporate Resource Revenue Rises 20%

January 17 2013

Corporate Resource Services Inc. (OTCBB: CRRS) reported revenue rose 19.6 percent to $179.7 million in its fiscal fourth quarter ended Sept. 28 when including the impact of acquisitions. The New York-based staffing firm reported fourth-quarter net income of $1.0 million, the company’s first profitable quarter since December 2011.

“Our integration efforts have helped us return to profitability and are beginning to lay the foundation for expected financial results at profit margins that are more in line with our peers,” CFO Mike Golde said in a press release.

Full-year revenue rose 18.7 percent to $639.8 million including acquisition. Full-year gross margin narrowed to 11.7 percent from 13.5 percent.

Corporate Resource Services posted a net loss for the year of almost $3.4 million compared to net income of $114,000 for the previous year.

“While we reported a net loss of $3.4 million for the full fiscal year, many expenses that contributed to that loss will not be part of our cost structure going forward,” Golde said. “We are also seeing significant growth in the higher margin sectors of our industry including healthcare, IT, and insurance services and we are continuing to lay the groundwork for higher margin offerings to our current clients. Additionally, we have begun looking at our options towards listing on an exchange such as the Nasdaq stock market or the New York Stock Exchange.”

Corporate Resources Services is also changing its fiscal year to the end of December from the end of September. As a result, the company will be reporting its quarter ending Dec. 28, 2012, as a transition period.

The company expects revenue for the quarter ending Dec. 28 to be between $189 million and $192 million.

“We expect that the first quarter of fiscal 2013 will drop back into a loss of approximately $1.5 million to $1.8 million on revenues of approximately $165 million to $170 million, due mainly to the seasonal reset of payroll tax wage limits at a time when we are incurring the last of our integration expenditures,” Golde said. “Despite this, we expect to achieve full-year 2013 net income of between $6.5 million and $7.8 million on revenues of approximately $730 million to $780 million.”


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