Command Center, Inc. (CCNI-OTC: BB)
August 7, 2009 Issue
The Most Powerful Name In Corporate News and Information
With 53 Stores Under One Umbrella, Costs Locked Down And Sales On Their Way Up, Command Center, Inc. Is Positioned For Growth
The Company provides on-demand employment solutions to businesses in the United States, primarily in the areas of light industrial, hospitality and event services, as well as other assignments.
Born in North Dakota, Glenn Welstad graduated
from the University of North Dakota with a Bachelor’s Degree in Business
Administration. Following his graduation, for a period of 15 years, he was
active in the restaurant business. Beginning with one restaurant in 1969, he
formed Northwest Management Corporation with two partners and grew the
company into 22 restaurants located in five states. In 1984, he sold his
interest in Northwest Management
In 2003, Glenn founded Command Staffing, LLC, the predecessor of Command Center. He also was a founder of Harborview Software, Inc. and a number of staffing offices, all of which were later merged into Command Center. Glenn is President, CEO and Chairman of Command Center.
Interview conducted by: Lynn Fosse, Senior Editor, CEOCFOinterviews.com, Published - August 7, 2009
Mr. Welstad: “Command Center started out in 2002 to be a franchise company. As we grew to 50 or 60 franchise stores, we concluded that we could more effectively provide all the support needed to operate the business if they were all owned by one entity. Therefore, we acquired ownership of all of the franchises and brought them together under the common umbrella of Command Center. This has allowed us to take advantage of pricing for workers’ compensation coverage and funding of receivables and to provide sophisticated systems for office management and training needed to obtain consistent operational results for our customers. Since the acquisition of the franchises, our goal is to ultimately operate about 880 stores in the US. While the recession has slowed our plan, we still intend to get there. We have worked hard on cost containment and our sales and margins are improving. We have seen an increasing number of significant sales opportunities, so we’re pretty optimistic about everything.”
CEOCFO: What are the services that you provide?
Mr. Welstad: “We do business as Command Labor and Staffing. We provide daily and weekly labor, primarily manual labor in the light industrial sector, including warehousing, transportation, construction, event services, disaster recovery and hospitality. We are able to provide from one to literally hundreds of qualified workers on the jobsite on short notice.”
CEOCFO: What is the competitive landscape for you?
Mr. Welstad: “There is only one large national provider with offices in every state and locality. There are also a few regional companies and many small outfits. From the start, our goal has been to provide a secondary choice on a national scale and that is where we are headed. We have done a lot of work to differentiate our company from the rest of our industry. To attract and retain the very best workers, we provide better pay than most, provide health insurance, and use a rating system to incentivize our temporary employees, whom we call our field team members.”
CEOCFO: Who is typically using your services?
Mr. Welstad: “Our typical customer is a small business that has a warehouse, a construction company, some freight handling, or assembly work. We also have a number of large national accounts across the country. The real cornerstone of our company is the small and mid-sized business, but in the last year or so we have found that our large national accounts are less impacted by the economic downturn.”
CEOCFO: Would you address the effect of the current economy on your type of business and specifically Command Center?
Mr. Welstad: “Our business is a leading indicator of economic trends. So the temp workers that we provide are often the first to be cut and the first to be called back. We believe that we are now seeing the beginning of the upswing in the economy. I have been in this business for about 20 years, and what we found the last time, which was in the early 90s, was that when the recession first hits, layoffs are widespread. Then customers realize that they still have work to do, but have laid off too many of their employees. That is when we get the call and we send people back to them on an interim basis to match the amount of work they have. Many times we have the employees that they laid off on our roster, so we can send them the same people on an as-needed basis.”
CEOCFO: How do you attract employees that are going to be around for a while, working to the standards that you need?
Mr. Welstad: “Several ways. First, we advertise in the local media for workers. Then, word-of-mouth on the street is also very effective. We fully understand that the company that hires and retains the best workers gets and keeps the best customers. We devote a lot of attention to this and we provide benefits for our workers like no one else in the industry is able to do. We have health insurance that is available at a very nominal cost. We have the longevity bonus, which means workers get a week’s paid vacation after a 1500 man-hours. And the safety points program, which enables our workers to earn free merchandise, also differentiates us from the landscape. With no one else doing all of these things, we end up being the employer of choice. At the end of each workday, we ask our customers to rate the workers as exceeding expectations, meeting expectations, or failing expectations. That generates a numerical score of each worker. Our workers take a lot of pride in their performance score. Having a good score gives them priority for work assignments and shortens their workday. We also put their paychecks on electronic pay cards and that way they do not have to come back to office to get paid at night or look for a place to cash their check; and this process shortens their day. All of these benefits, we believe, offers our workers a better quality of life and makes Command Center a good place for them to work.”
CEOCFO: How are you able to provide health insurance at a reasonable price, when it seems so difficult for others to do that?
Mr. Welstad: “We brokered through a company on the east coast that has particular plans set up exactly for our type of workers and field team members. It is paid weekly and they have a very low deductible, but they have a limited amount of major medical. For the day-to-day medical issues, our workers can go in and see a doctor and receive treatment with a minimal co-payment.”
CEOCFO: Command has a wide geographic distribution, why are you in the particular areas that you are in and do you see new locations in the future?
Mr. Welstad: “The original franchisees established turf in various areas. If we had set this company up as all company-owned stores to start with, we would not have spread them out so far and would have come across the country in a more organized manner. However, most of the markets are strong and we are just making it work. Generally speaking, future expansion will proceed in a more organized way, for the most part from west to east. We will, however, open new offices in any location where existing customers have enough work waiting for us to make the office profitable from day one.”
CEOCFO: How do you make sure employees in various states are doing what you want and following the procedure you have established to be a high quality service on both ends?
Mr. Welstad: “There are several ways. Everything is driven by our proprietary software system and employees have to follow the processes in the system. We have people in the field that follow up to make sure that we are delivering the quality of service that our customers expect. In fact, we have a corporate policy of exceeding expectations every time. We follow up all the time with our clients, our workers and our quality control people to make sure that we do that. We have an extensive amount of web-based training material to train new people on what to do and how to do it. Training material focuses on office operation, customer service, and on sales and marketing. Consistency and excellence in our operations are critical to our success. There are 20 to 30 web-based projects that new employees have to sign on to and complete, and then pass a test to verify that they have competence and can perform at our level.”
CEOCFO: Are there different types of employment areas that you would like to be more involved in and how do you increase usage of your employee resource?
Mr. Welstad: “In many ways the recession has probably been a positive experience for us in the sense that it has caused us to go out and find other types of projects. We are becoming more active in disaster recovery work, more active in national accounts and auto auctions, and more active in the hospitality business. All of these result in favorable workers’ comp rates because the risks are much lower than some of the more industrial and construction-related work that we did two years ago.”
CEOCFO: What is the financial picture like for Command Center today?
Mr. Welstad: “With increasing sales and margins, low operating costs and improvements in the general economy, we have a very positive outlook for the future. While the recession has certainly slowed us down, it appears that we’ve turned the corner and things are starting look our way. We have dramatically cut the cost of the corporate office. We cut the supervision cost in the field. We have adopted a scorecard system by which we review performance every month of everyone in the company who has set goals and objectives. And we hold people accountable. If our employees are not performing, first we try to counsel them to get improvement and if we don’t, we replace them.”
CEOCFO: Addressing the investment community, why pay attention to Command Center?
Mr. Welstad: “We think that we are one of the innovators in this market segment. We believe there is a place in this market for a second large national player, and we intend for that to be Command Center. There is a tremendous upside opportunity for our stock right now, and we are well positioned for the upswing in the general economy.”
CEOCFO: What might people miss when they look at the company that they should understand?
Mr. Welstad: “People should understand the depth of the experience that we have at the executive level and in the field today. We have gone to great lengths to differentiate ourselves as the employer of choice for our pool of workers. We always strive to be the innovator and leader in our industry. We want to develop new and better approaches and trends, rather than follow others.”
CEOCFO: What should people reading about Command Center remember most?
“We have 53 stores today and we’ve identified 884 locations across the U.S.
As the market turns and the economy starts rolling, it will be an exciting
ride, and that’s what they should be looking at.”
“We think that we are one of the innovators in this market segment. We believe there is a place in this market for a second large national player, and we intend for that to be Command Center. There is a tremendous upside opportunity for our stock right now, and we are well positioned for the upswing in the general economy.” - Glenn Welstad
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