NEWPORT BEACH, Calif., May 17 /PRNewswire-FirstCall/ -- Led by its Smart-Tek Automated Services subsidiary, Smart-Tek Solutions, Inc. (OTC Bulletin Board: STTN) reported a revenue increase of 240.2% in its most recently filed Form 10-Q for the nine-month ended March 31, 2010. During that same period Smart-Tek's gross profits were $2,610,359—more than quadruple the $614,348 gross profits during the comparative period in 2009. Smart-Tek Automated Services, Inc., which generated $568,959 net income in for the Quarter ending March 31, 2010 alone, accounted for 51.2% of the company's gross profit and 53.6% of its total revenues during the most recent three quarters.
Smart-Tek Automated Services is capitalizing on rising demand in the Professional Employer Organization (PEO) business, which it officially entered in August 2009. PEOs enable companies to outsource back-office operations such as payroll processing, human resources support, workers' compensation insurance, safety programs, employee benefits, and other administrative tasks. The company also offers a variety of staff leasing, temporary staffing and co-employment solutions.
The past few months have included numerous significant achievements in the company's growth strategy. In April, the Company announced that it had completed business licensing and registration requirement in 33 new states, with the goal of doing so throughout the continental U.S. to handle multistate clients. (The Company already has the ability to sell workers' compensation insurance in the Lower 48.) Other recent positive news included signing an agreement to provide PEO services to a national staffing firm, representing approximately $30 million in annual gross billings, as well as announcement of plans to capitalize on the booming China market with dedicated operations located in Hong Kong. The new office exposes the company to the influx of multinationals with a presence in Asia as well as the 800 million Chinese work force.
"Our increase in sales activity is due, in part, to the demand for better human resource (HR) outsourcing solutions from small to medium sized business owners," said Brian Bonar, Smart-Tek Solutions CEO. "I expect continued growth in our business segment and believe we are poised to establish ourselves as an industry leader in the human resource outsourcing industry in 2010."
The reported financial results exceeded the Company's forecasts released for the comparative reporting period. "While I am optimistic about the future, we are continuing to evaluate our growth potential in the near and long-term future and expect to release additional forecasts this summer," Bonar said.
Complete financial statements (unaudited) with notes thereto are provided with the Company's Form 10Q filed with the Securities and Exchange Commission.
About Smart-Tek Solutions, Inc:
Smart-Tek Solutions, Inc. generates revenue from the installation of security systems in construction projects. Its board is currently in negotiations to sell its original business and focus entirely on the PEO business of its wholly owned Smart-Tek Automated subsidiary, in order to achieve the best value for its shareholders. The original business generated $3.3 million and $3.8 million of revenue in 2009 and 2008 respectively, and $0 and ($3.1) loss of earnings in 2009 and 2008 respectively.
About Smart-Tek Automated Services, Inc.:
Smart-Tek Automated Services, Inc., provides financial services to small and medium-size businesses, relieving its clients from many of the day-to-day tasks that negatively impact their core business operations, such as payroll processing, human resources support, workers' compensation insurance, safety programs, employee benefits, and other administrative and aftermarket services predominantly related to staffing: staff leasing, temporary staffing and co-employment. It not only provides core services, but a wide selection of employee and employer benefits and aftermarket products.
Statements in this press release that are not historical facts are forward-looking statements, including statements regarding future revenues and sales projections, plans for future financing, the ability to meet operational milestones and marketing arrangements and plans. Estimated revenues from its Smart-Tek Solutions, Inc. subsidiary are somewhat subjective and based on information available to the Company at the time of the determination. Also, such statements reflect management's current views, are based on certain assumptions and involve risks and uncertainties. Actual results, events, or performance may differ materially from the above forward-looking statements due to a number of important factors, and will be dependent upon a variety of factors, including, but not limited to, the continued growth of business as planned including the fruition of new agreements in hand, existing business staying intact, and our ability to obtain additional financing that will allow us to continue our current and future operations and whether demand for our products and services in domestic and potential international markets will continue to expand. The Company undertakes no obligation to publicly update these forward-looking statements to reflect events or circumstances that occur after the date hereof or to reflect any change in the Company's expectations with regard to these forward-looking statements or the occurrence of unanticipated events. Factors that may impact the Company's success are more fully disclosed in the Company's most recent public filings with the U.S. Securities and Exchange Commission, including its annual report on Form 10-K for the year ended, and its subsequent filings with the SEC.
SOURCE Smart-Tek Solutions, Inc.