Corporate Resource Services (CRRS) Rapid Growth; Increased Focus on Improving Profitability

Zacks Small Cap Research

By Marla Backer

Corporate Resource Services (CRRS) is a rapidly growing temporary staffing company that has launched an ambitious M&A strategy to augment organic growth. The company also has implemented initiatives to improve margins and profitability, including a diversification effort to complement the core staffing business. We are enthusiastic about the company’s growth prospects and believe the favorable outlook for the temporary staffing industry creates a positive tailwind.

CRS provides staffing services, primarily for administrative support and positions in light industrial services. The company’s 6,000 plus customer base ranges from mom and pops to Fortune 1000 companies in a broad array of sectors.

Heading into 2014 from Strength
Since 2006, through a combination of organic growth and an ambitious acquisition strategy, the company has expanded its footprint to 231 staffing offices. Its domestic network extends to 42 states and Washington, D.C. In addition, with the recent acquisition of FlexPlus in the U.K., the company now has an operating base from which to launch further expansion in the European staffing industry.

Revenue reached an estimated $816.5 million in 2013, up from $63.7 million in 2009. This equates to CAGR of nearly 80% and reflects a combination of organic growth and the merger of several smaller, regional staffing companies that were assembled together to form a larger organization with a national footprint. Following six major acquisitions in 2009-2013 that helped build CRS to its current scale, management’s focus has increasingly turned to improving CRS margins and profitability.

Last year was a transformative one for CRS. The company launched several initiatives to improve profitability, including rebranding to strengthen and better leverage the CRS brand, re-negotiating economics with key vendors and customers and diversifying into new complementary businesses. The company also acquired its first offshore staffing operation.

UK: Base For European Expansion
In November of 2013, CRS purchased U.K.-based Flex Recruitment Plus, its first offshore acquisition. The management team at FlexPlus will remain to help oversee CRS’ planned expansion within the European market, as the company has indicated that it is pursuing three additional U.K. recruitment firms. FlexPlus’ founder will oversee two of these anticipated deals and will also manage U.K. operations for CRS. The company expects FlexPlus to be immediately accretive to earnings.

In addition to a strategic presence in the U.K. and Europe, the acquisition also gave CRS FlexPlus’ iintegra software. CRS intends to launch iintegra, which is a job posting and applicant tracking system, across its U.S. operations, beginning with New York branches. Moreover, many of CRS’ corporate clients have U.K. operations and CRS intends to leverage these relationships in order to grow its overall revenues.

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 Corporate Resource Services Report

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