Command Security Corporation (NYSE AMEX:MOC)

MOC ($2.51; marked up ~40%) announced a $80 million contract award.   

“Total annual revenues associated with this award are estimated to be approximately $27.0 million or approximately $80.0 million over the three-year term. The work which is planned to begin in June 2017, will be performed at approximately 60 locations across the Northeast and Midwest regions of the United States.”

MOC has TTM revenues of ~$152 million, so the $27 per year represents ~17% of total annual sales. We highlighted MOC back in January as a Company that could benefit from the focus on increased airport security across the nation due to the fact that it provides uniformed security officers and aviation security services in the United States.

HERNDON, Va., March 19, 2014 (GLOBE NEWSWIRE) -- Command Security Corporation (NYSE:MOC) announced today that it has acquired a minority interest in Ocean Protection Services Ltd (OPS), a UK based company specializing in armed maritime security, risk management and risk analysis. Command also announced today that the Company has been notified that the Western Region security services contract with a major transportation company will not be renewed beyond May 31, 2014.

On March 14, 2014, Command Security Corporation invested $2.125 million for a 20% ownership interest in a limited liability company that recently acquired OPS. As part of the agreement to purchase this 20% ownership interest, the Company may acquire additional ownership interest.

For the year ended December 31, 2013, OPS reported unaudited revenues of $18.4 million. The Company expects to account for its investment using the equity method of accounting for investments.

Chief Executive Officer Craig P. Coy said, "This is a significant step in our strategic plan to expand Command Security's capabilities and customer base with higher value-added services. We look forward to working closely with Ocean Protection Services to assist in their continuing growth into new markets."

As previously announced, security services contracts with a major transportation company were originally scheduled to expire on May 31, 2013. Since that time both the Eastern and Western Region contracts were extended four times, most recently through May 31, 2014. As the Company announced on February 21, 2014, the Company was awarded a five-year follow-on contract for the Eastern Region and was awaiting an award announcement regarding the Western Region. The Company has been notified that it will not be awarded the follow-on contract for the Western Region of this major transportation company. Total revenues related to the Western Region contract for the year ended March 31, 2013, and for the nine months ended December 31, 2013, represented approximately 12.8% and 12.9% of total Company revenues, respectively.

Third Quarter Fiscal 2013 Results

• Revenues for the three months ended December 31, 2013, were $40,439,437, compared with $38,930,273 in the same period of the prior year, an increase of 3.9%.
• $0.06 per basic and diluted share, compared with $353,648, or $0.04 per basic and diluted share in the same period of the prior year.

The increase in revenues for three months ended December 31, 2013, compared with the corresponding period of the prior year was due primarily to the following:

• Increased revenues associated with an expansion of services provided under contracts with a major transportation company;
• Addition of new revenues from New York based medical care facilities; and,
• Continued expansion of aviation related security services at LaGuardia Airport.

Second Fiscal Quarter Fiscal 2013 Results

• Revenues for the three months ended September 30, 2013, were $40,147,092, compared with $38,164,921 in the same period of the prior year, an increase of 5.2%.
• The company reported EPS of $0.07, compared to $0.03 in the same period of the prior year.

Craig P. Coy, Chief Executive Officer of Command Security, stated, “The second quarter was an exciting and busy time for the company. The addition of Mark Sullivan, former Director of the United States Secret Service, has added tremendous value and experience to our Board. Our initiatives to update and improve our operating systems continue at full pace. The recent award of the General Services Administration (GSA) contract which enables the Company to respond to requests for proposals (RFP) and be awarded new business directly with U.S. Federal Government agencies was a major accomplishment toward achieving one of our strategic objectives. New business awards demonstrate the quality of our operations team and the importance of our invigorated sales team. We recognize the on-going market challenges and are working to meet them with continued process improvements and strengthened management.”

First Quarter of Fiscal 2014 Results

• For the three months ended June 30, 2013, revenues increased 6.5% to $37,961,495, compared with revenues of $35,641,679 in the same period of the prior year.
• The company reported $0.00 per basic and diluted share, compared with $0.02 per basic and diluted share in the same period of the prior year.

Craig P. Coy, Chief Executive Officer of Command Security, stated, “This was the first quarter for the new management and administrative team in Virginia which has resulted in improved coordination and reduced staff expenses. We continue to have several initiatives underway to further enhance our operating efficiencies, such as the deployment of new web-based employee management tools and a realignment of our operating offices. We are reenergizing our sales effort with new managers in our key markets. Importantly, sales growth is consistently challenged by strong competitive pricing pressures. Our operations were strong with improvements in delivering great service to our customers. In addition, our efforts to improve our working capital management have recently shown improvements. Overall, I continue to be pleased with the direction the Company is moving and progress we are making in building a solid platform for the future.”

Fourth Quarter 2013 Results

• Revenues for the three months ended March 31, 2013, were $37,482,094, compared with revenues of $34,879,445 in the same period of the prior fiscal year, an increase of 7.5%.
• Non GAAP EPS for the fourth quarter 2013 were $0.01 vs a loss of $0.08 in prior year quarter.

Craig P. Coy, Chief Executive Officer of Command Security, said, "This has been a very successful fiscal year for the company. We have transitioned our corporate offices under one roof in Herndon, VA and have a new, energetic team working to grow, serve our customers and to meet our shareholders expectations. Our operating and net income for the fiscal year ended March 31, 2013 reflect strong improvement over the prior year despite the $1.9 million of expenses incurred in connection with the relocation and consolidation of our corporate offices. In the coming fiscal year we will continue focusing on our strategic initiatives to streamline our operations in part through the improved deployment of on-line management systems and to drive growth in key vertical sectors."

HERNDON, Va.--(BUSINESS WIRE)--Command Security Corporation (NYSE MKT: MOC) announced today a three-month extension of an existing security services contract. As previously announced, a contract with one security services customer which represents approximately 24% of the Company’s total revenue, was scheduled to expire on May 31, 2013. Also as previously disclosed, this customer commenced and invited us to participate in a competitive bidding process for the continued performance of these as well as additional services. In order to complete that process, the company has agreed to a three-month extension to the existing contract, extending the period of performance to August 31, 2013. We cannot assure you that we will be able to retain all or a substantial portion of our services with this customer beyond the contract extension date. The loss of this customer or any material reduction in service would materially and adversely affect our business, financial condition and results of operations.