CLEVELAND, Ohio, Sept. 28, 2010 (GLOBE NEWSWIRE) -- SearchPath HCS Inc. (Pink Sheets:SRCP), a leading Human Capital Solutions provider, today announces the release of its 2010 fiscal year end financials in which the Company reported a 24% year-over-year (YoY) increase in Total Revenue while reducing Operating Expenses by 36% YoY. SearchPath's Total Revenue for Fiscal 2010 is $888,583 and primarily consists of Franchise Fees and Royalty & Advertising Revenue from the Company's wholly-owned subsidiary, SearchPath International as well as income from Corporate Placements.
For the period beginning July 1, 2009, through June 30, 2010, SearchPath HCS reported $434,475 in gross revenue generated by Franchise Fees, which represents an increase of 33% YoY, Royalty & Advertising Revenue of $314,355 which represents a 22% increase YoY, and revenue generated by the Company Office of $152,960 which represents a 23% increase YoY and consists almost entirely of income generated by Corporate Placements in this office. SearchPath reduced its Operating Expenses by 36% YoY to $762,465 in 2010 from $1,200,362 in 2009. While the Company did report a Net Loss of $66,019 for Fiscal 2010, this marks a 92% increase in Net Income over 2009 when the Company reported a Net Loss of $748,843. A major cause of this increase is SearchPath's Ordinary Income which is $228,964, for Fiscal 2010, compared to a loss of $421,152 for Ordinary Income in 2009, showing a tremendous increase of $650,116 YoY.
Management attributes SearchPath's ability to significantly increase revenues and gross profits during very unfavorable economic conditions to its unique business model which enables the Company to leverage several revenue streams within its umbrella of human capital solutions and services. Specifically, SearchPath HCS's strategy which was to focus on improving the performance of its existing SPI franchises over trying to acquire new franchisee in poor economic conditions and tight credit environment, led to a significant increase in royalty & advertising royalty fees collected from its existing franchises.
Commenting on the Company's Year-End Financials, Chief Executive Officer of SearchPath HCS, Inc., Thomas K. Johnston, stated, "We are very pleased to report that during fiscal 2010, the Company experienced significant increases in revenue, income and profit despite a depressed U.S. economy and labor market. Our decision to maximize the efficiency and profitability initiative of our existing operations is paying huge dividends because not only did it fuel our growth during a slowdown in franchise expansion, but it also provided a sustainable catalyst for our next phase of expansion. Now our existing franchisees are in a much more favorable position to experience rapid and sustainable growth in their individual offices because of their highly effective training and valuable experience in a down market."
Management anticipates continued revenue growth through 2011 and beyond as SearchPath HCS increases and diversifies its human capital solutions services and Search Path International continues to leverage the talent and experience of its franchisees as well as its franchise business model itself. Additionally, SearchPath will benefit from projected industry growth and increasing margins.
A recent IBIS Industry Outlook Report forecasts that revenue generated by the Employment and Recruiting industry will experience annualized growth of 6.5% over the next five years bringing the market to $17 billion in 2015. Furthermore, the report cites profit margins are projected to improve by 3.2% during this period, particularly for organizations that have reduced costs during the past recession, which SearchPath has done in 2010.
Johnston added, "Our financial performance in 2010 marks a dramatic turnaround from the previous fiscal year which saw the only decrease in Revenue and Gross Profit since SearchPath was established in 2005. We consider this an anomaly and attribute it to the difficult economic environment that produced the worst job market in recent history. With the human capital industry at the beginning of a long period of projected growth and our current success and experience as a leading human capital solutions provider, we expect to return to the type of aggressive annual growth we saw in 2006 when we nearly doubled our total revenue and more than doubled our gross profit."
"We believe that a SearchPath International franchise is an extremely attractive business opportunity, particularly for those in the baby boomer generation, because it offers a business model that allows franchisors to leverage their business experience, contacts and relationships while providing an extremely independent and flexible lifestyle. This is truly a very pivotal and exciting time for SearchPath and we are excited to implement new and innovative business initiatives that we believe will drive future growth while also focusing on creating, maintaining and increasing shareholder value," continued Johnston.
Search Path HCS, Inc.'s Financial Statements can be found at Pink Sheets SRCP under Filings.
About Search Path HCS, Inc.
SearchPath HCS, Inc. is a rapidly growing human capital solutions firm and the parent company of SearchPath International, Inc. (SPI) . SPI is a U.S.-based talent acquisition professional services firm, with 65 franchises nationwide. Founded in 2005, SPI's goal is to become the premier, vertically-integrated provider of talent acquisition professional services in the world. In addition to being a stand-alone talent and acquisition services firm, SPI is also a franchisor of its business that has redefined the way clients do business with recruiters by implementing a client-centric approach that combines proven industry best practices and revolutionary concepts.
Safe Harbor Statement
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of1934. All statements, other than statements of historical fact, including, without limitation, those with respect to the objectives, plans and strategies of the Company and SPI set forth herein and those preceded by or that include the words ``believes,'' ``expects,'' ``given,'' ``targets,'' ``intends,'' ``anticipates,'' ``plans,'' ``projects,'' ``forecasts'' or similar expressions, are "forward-looking statements". Although the Company's management believes that such forward-looking statements are reasonable, it cannot guarantee that such expectations are, or will be, correct. These forward-looking statements involve a number of risks and uncertainties, which could cause the Company's future results to differ materially from those anticipated. The Company assumes no obligation to update any of the information contained or referenced in this press release.
CONTACT: Seal Point Consulting, LLC Investor Contact 267-364-5407 PressReleases@sealpointconsulting.com