Command Security Corp. has a market cap of $16.75 million; its shares were traded at around $1.54 with a P/E ratio of 12.83 and P/S ratio of 0.11.
Highlight of Business Operations:Our revenues decreased by $1,450,565 or 4.0%, to $34,785,603 for three months ended June 30, 2011, from $36,236,168 in the corresponding period of the prior year. The decrease in revenues for the three months ended June 30, 2011 was mainly due to: (i) the previously reported loss of a major domestic carrier s aviation services business at six domestic airport locations during the latter half of fiscal 2011 of approximately $2,300,000; (ii) the loss of a security services contract for a large Silicon Valley technology company of approximately $260,000 and (iii) reductions in security services hours associated with a large banking and financial services organization of approximately $550,000. The decrease in our revenues was partially offset by: (i) increased revenues of approximately $1,100,000 associated with an expansion of services provided under a contract with a major transportation company; (ii) a new aviation services contract with a municipal airport authority of approximately $340,000 and (iii) expansion of services to new and existing security customers that resulted in additional aggregate revenues of approximately $240,000.
Our gross profit decreased $371,429, or 7.4%, to $4,650,404 (13.4% of revenue) for the three months ended June 30, 2011 from $5,021,833 (13.9% of revenue) in the corresponding period of the prior year. The decrease was due mainly to: (i) the loss of a major domestic carrier s aviation services business as noted above; (ii) the loss of a security services contract for a large technology company as described above and (iii) reductions in security services hours associated with a large bank and financial services organization. The decrease in gross profit was partially offset by: (i) expansion of security services to a major transportation company as noted above; (ii) expansion of services provided to new and existing security and aviation customers as discussed above and (iii) lower costs associated with our workers compensation insurance program.
Our general and administrative expenses decreased by $28,073 or 0.7%, to $4,099,301 (11.8% of revenues) for the three months ended June 30, 2011, from $4,127,374 (11.4% of revenues) in the corresponding period of the prior year. The decrease in general and administrative expenses for the three months ended June 30, 2011 resulted primarily from lower executive salaries resulting mainly from reorganizing our regional and local branch management, which was partially offset by payment of $174,200 related to the resignation of our former Chief Executive Officer.
Interest expense decreased by $21,077, or 22.5%, to $72,662 for the three months ended June 30, 2011, from $93,739 in the corresponding period of the prior year. The decrease in interest expense for the three months ended June 30, 2011 was due primarily to lower average outstanding borrowings under our credit agreement with Wells Fargo, described below. The decrease was partially offset by increased interest expense associated with our short-term insurance financing.
Our working capital increased by $467,188, or 3.9%, to $12,432,334 as of June 30, 2011, from $11,965,146 as of March 31, 2011.
As described above on February 12, 2009, we entered into a $20,000,000 Credit Agreement with Wells Fargo. As of the close of business on August 5, 2011, our cash availability was approximately $10,250,000, which we believe is sufficient to meet our needs for the foreseeable future barring any increase in reserves imposed by Wells Fargo. We believe that existing funds, cash generated from operations, and existing sources of and access to financing are adequate to satisfy our working capital, planned capital expenditures and debt service requirements for the foreseeable future, barring any increase in reserves imposed by Wells Fargo, and subject either to renewal of our Credit Agreement or replacement of the Credit Agreement with a commercially acceptable credit facility. However, we cannot assure you that this will be the case, and we may be required to obtain alternative or additional financing to maintain and expand our existing operations through the sale of our securities, an increase in the amount of available borrowings under our Credit Agreement, obtaining additional financing from other financial institutions or otherwise. The financial markets generally, and the credit markets in particular, continue to be volatile, both in the United States and in other markets worldwide. The current market situation has resulted generally in substantial reductions in available loans to a broad spectrum of businesses, increased scrutiny by lenders of the credit-worthiness of borrowers, more restrictive covenants imposed by lenders upon borrowers under credit and similar agreements and, in some cases, increased interest rates under commercial and other loans. If we require alternative or additional financing at this or any other time, we cannot assure you that such financing will be available upon commercially acceptable terms or at all. We are currently evaluating preliminary terms and conditions of a proposed extension of our existing Credit Agreement. If we fail to obtain additional financing when and if required by us, our business, financial condition and results of operations would be materially adversely affected.
Read the The complete Report