LTNC News Out
Labor SMART, Inc. Provides Update on Its Balance Sheet and Capital Initiatives
Nov 18, 2014 (ACCESSWIRE via COMTEX) -- Management Goal is to Minimize Equity Dilution
ATLANTA, GA / ACCESSWIRE / November 18, 2014 / Labor SMART, Inc. (LTNC) (the "Company"), a leader in providing on-demand blue collar staffing primarily in the southeastern United States, is pleased to provide its shareholders with an update on its balance sheet and capital initiatives.
"Over the past couple of years we have been able to grow our business from $7 million revenue in 2012 to $16 million revenue in 2013 to $18 million revenue in the first nine months of 2014," stated Ryan Schadel, Labor SMART Chairman and Chief Executive Officer. "In fact, we have doubled our branches to 30 locations in the past year and reached positive EBITDA. None of this would have been possible without the growth capital we raised along the way. Venture or seed capital was not available to us, so we went the route of convertible debentures. While they may not be ideal in structure, at the time there were no traditional financing opportunities available to us. Since we now have our business generating $2 million revenue per month and EBITDA positive, it is now a major focus of ours to minimize the equity dilution going forward."
Mr. Schadel, continued, "We are taking a 3-pronged approach to address the current capital structure. Due to the seasonality of our business, we expect approximately $1.2 million of operating cash flow over the next 4 months, which we will utilize to pay back a portion of the notes. We will also allow for certain note holders to convert into equity for a portion of the notes. Additionally, we are actively pursuing additional outside cash infusions to restructure a portion of the notes and for growth capital. Our dependence on convertible debentures for financing has been greatly reduced over the last 45 days as our business reached minimum scale. We believe a combination of these three alternatives will minimize the equity dilution and protect shareholder value without sacrificing our long term growth strategy. As an organization commited to transparency and communication to shareholders, we will update our investors of major changes to our outstanding share count via routine form 8K filings with the Securities and Exchange Commision."
As of November 4, 2014, Labor SMART had a balance of approximately $3.0 million of Convertible Notes Payable on its balance sheet. The shares outstanding as of November 4, 2014 stood at 55.5 million.
About Labor SMART, Inc.
Labor SMART, Inc. provides On-Demand temporary labor to a variety of industries. The Company's clients range from small businesses to Fortune 100 companies. Labor SMART was founded to provide reliable, dependable and flexible resources for on-demand personnel to small and large businesses in areas that include construction, manufacturing, hospitality, event-staffing, restoration, warehousing, retailing, disaster relief and cleanup, demolition and landscaping. Labor SMART believes it can make a positive contribution each and every day for the benefit of its clients and temporary employees. The Company's mission is to be the provider of choice to its growing portfolio of customers with a service-focused approach that enables Labor SMART to be seen as a resource and partner to its clients.
Safe Harbor Statement
This release contains statements that constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements appear in a number of places in this release and include all statements that are not statements of historical fact regarding the intent, belief or current expectations of Labor SMART, Inc., its directors or its officers with respect to, among other things: (i) financing plans; (ii) trends affecting its financial condition or results of operations; (iii) growth strategy and operating strategy. The words "may", "would", "will", "expect", "estimate", "can", "believe", "potential", and similar expressions and variations thereof are intended to identify forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond Labor SMART, Inc.'s ability to control, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. More information about the potential factors that could affect the business and financial results is and will be included in Labor SMART, Inc.'s filings with the U.S. Securities and Exchange Commission.
Contacts:
Hayden IR
917-658-7878
hart@haydenir.com
SOURCE: Labor SMART, Inc.
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