Interview with Ryan Schaedel, CEO of Labor SMART

It is a very unique company that has revenues more than twice its market capitalization. To head up such an entity takes a unique individual. That person has to virtually live the company to achieve such numbers.

Benzinga readers, meet Ryan Schadel, Chief Executive Officer of Labor SMART, INC. LTNC, a firm in the demand labor segment of the staffing industry.

At in interview in his office, Schadel laid out the plan of success for Labor SMART, Inc to expand across the country. It is working. In February 2014, Labor SMART, Inc, reported record revenue of almost $1 million. Last year, revenue for February was under $800,000, a 23 percent increase. While some businesses complained about the bad weather, Schadel noted that, "We were extremely pleased with this revenue growth in February as weather-related events negatively impacted many businesses in the US, particularly in our primary areas of operations during the month. Without these weather-related issues, we believe our revenue would have been much higher than what was achieved. This marks the fifteenth straight month we have recorded a year-over-year increase in revenue at branches that were open at least one year."

Labor Smart, Inc. now has a market cap of around $7 million with revenues of over $14 million that are increasing at a quarterly rate of 148.40 percent, according to Yahoo! Finance.

Those stunning numbers can be attributed to the philosophy of Labor SMART, which Schaedel states as being, "Focus heavily on the sales process. We are psychologically behind every sale."

That is a huge market as Schadel declared that 70 percent of companies use temporary help.

For Labor SMART, Schadel describes the "secret sauce as getting them to order from us." And what does that average order look like? According to Schadel, it is 2 workers for 4 days. That is hardly the typical order as some jobs last for much larger periods involving many more workers. But there are some assignments, such as roofing work, that Schadel shrewdly avoids due to the liability risks.

What is ambitious is the overall goals that Schadel outlined for the company.

"We want to be at 100 offices nationwide with $100 million in revenue," he declared. "At present, we are on target for 2017. We are also looking to be self-insured by 2015, which will greatly reduce costs workers compensation costs by 60 percent, or $1.5 million."

Nothing like generating a double digit revenue growth by cutting costs from making the company more efficient in its operations!

After meeting Schadel, you realize this is to be expected. He came up the ranks in the staffing industry. Not only that, he is very hand on in all operations, which should delight the investor community. Even more bullish is the compensation system of the company that awards the top producers with stock options.

The competitive advantage of Labor SMART, Inc is the revenue breakdown.

It is distributed across the nine states of operations with construction and hospitality as the two biggest components. Workers are tested and pre-screened to insure that Labor SMART, Inc. can meet the needs of its clients. "I am very satisfied with the quality of our workforce," Schadel forcefully declared. There is never any problem attracting employees for, as Schadel remarked, "If we build it, they will come."

There are many misconceptions about those who work in the staffing industry, it was also brought up in the interview.

Schadel pointed out that about one-fifth prefer project work. The flexibility is very appealing. They also like working for Labor SMART due to how well they treat their workers and make the job simple. As Schadel counseled, '"We keep it very simple. If you overspecialize, you over complicate."

This allows for Labor SMART to "..focus on broad targets," according to Schaedel. "We avoid niches as we need stable revenue," he furthered.

This increasing stream of stable revenue has not gone unnoticed by Wall Street.

Zacks Small Cap Research recently compared Labor SMART, Inc to True Blue, Inc., TBI, which has a market cap of $1.16 billion and is up more than 35 percent for the last year of market action. This bullish assessment is based on, "...continued same-store sales gains, a growing footprint, increasing scale and margin improvement." After meeting with Ryan Schadel, there is little doubt that those goals will be achieved!