NEW YORK, NY–(Marketwired – January 14, 2016) – Staffing 360 Solutions, Inc. (STAF), a public company executing a global buy-and-build strategy through the acquisition of staffing organizations with operations in the US and UK, today released its financial results for its second fiscal quarter ended November 30, 2015.
“We left fiscal 2015 with a bang and achieved many new milestones along the way,” stated Brendan Flood, Executive Chairman and Interim CFO of Staffing 360 Solutions. “We are continuing to build momentum by generating a record $41.3 million in revenues during Q2 2016, representing the single largest quarterly revenue figure in our corporate history. In addition, we have now achieved positive Adjusted EBITDA for the fifth quarter in a row. Importantly, we filed our S-3 registration statement this past week, which starts the clock on raising capital to grow our business as part of the Company’s first registered offering.”
Summary of Fiscal Q2 2016 (Three Months Ended November 30, 2015)
- Revenues increased to $41.3 million, from $33.1 million in the quarter ended November 30, 2014, a 25% increase.
- Gross profit reached $7.5 million, compared to approximately $5.8 million in the quarter ended November 30, 2014.
- Net loss decreased to approximately $3.4 million*, compared to a net loss of $8.8 million in the quarter ended November 30, 2014.
- Positive Adjusted EBITDA was approximately $1.1 million*, compared to Positive Adjusted EBITDA of $564,000 in the quarter ended November 30, 2014.
* A table has been included in this press release with Non-GAAP adjustments to the Company’s net loss, resulting in positive Adjusted EBITDA of approximately $1.1 million.
“Our key initiatives and metrics are gaining momentum,” continued Mr. Flood. “Although our bottom line still shows a net loss, similar to our past financials, these results include expenses that are either non-cash in nature, acquisition-related or are non-recurring. Despite this, we still posted year-over-year growth, as well as positive Adjusted EBITDA of approximately $1.1 million for the quarter ended November 30, 2015, our strongest quarterly Adjusted EBITDA results ever, breaking through the $1 million threshold.”
Analysis of Financial Results
As a result of the Company’s M&A activity and organic growth, revenues increased to a record $41.3 million in the quarter ended November 30, 2015, compared to approximately $33.1 million for the same period in 2014. Gross profit increased to nearly $7.5 million, compared to approximately $5.8 million for the same period in 2014. This represents gross margin of 18.1% and 17.6% respectively for both periods, which is approximately in line with expectations for gross profit as a percentage of revenue if the revenue mix remains as it is currently.
The Company’s net loss for the quarter ended November 30, 2015 was approximately $3.4 million (or positive Adjusted EBITDA of approximately $1.1 million on a Non-GAAP basis*), compared to a net loss of approximately $8.8 million for the same period in 2014. The improvement in net loss was primarily attributable to the Company’s Pathway to Profitability, which has helped streamline expenses, decrease consulting and professional fees and changed the structure of outstanding debt. The improvement was also helped by the two acquisitions of Lighthouse Placement Services and The JM Group completed during this time frame.
“We have made significant progress on our journey to $300 million in revenue from an operational and cost reduction perspective,” stated Mr. Flood. “Staffing 360’s total assets improved from $42.3 million to $56.5 million, with stockholder’s equity increasing from $8.4 million to $8.9 million across the second quarter of the fiscal year. The results for the quarter were in line with management’s expectations and we are very pleased with the progress and delivery that our teams have achieved.”
Highlights of Fiscal Q2 2016 and Subsequent Events
- Generated a record $41.3 million in revenue, an increase of 25% compared to $33.1 million of revenue reported in the same period last year. This revenue represents the largest single quarterly revenue figure in the company’s history.
- Realized Adjusted EBITDA of $1.1 million, representing positive Adjusted EBITDA for the fifth quarter in a row. Achieved this objective, for the first time, in the fiscal quarter ended November 30, 2014 and have repeated it in every quarter since.
- Completed the Company’s latest acquisition of The JM Group Limited on November 1, 2015. The JM Group has been one of the UK’s leading recruitment firms for over 3 decades, providing IT workforce solutions to a diverse set of clients across the financial services, professional services and corporate sectors in the United Kingdom. Founded in 1981, The JM Group generated approximately $25 million in revenue over the past year.
- Filed the Company’s S-3 Registration Statement on January 7, 2016 as part of a universal shelf offering, for which the Company’s management team plans to raise capital and fuel future growth upon its effectiveness with the SEC. Although there is no definitive timeframe for the SEC to finalize comments, the Company has now started the clock on achieving its effectiveness.
- As announced previously, the Company completed its uplisting to NASDAQ in the second fiscal quarter, specifically September 29, 2015. Staffing 360 Solutions common stock is now trading under the ticker symbol STAF on the NASDAQ Capital Market.
“We continue to make headway on executing our growth strategy, as exemplified by the significant number of milestones we achieved this quarter,” said Matt Briand, President and CEO. “In Q2 2016 we posted record revenue, made further reductions to our expenses, uplisted to NASDAQ, and continued to embark on our M&A program with the successful acquisition of The JM Group, a $25 million annualized revenue business. With all of our developments in this quarter, we encourage investors to join us during our earnings conference call for more details on where we’ve been and where we are headed as our strategic initiatives continue to take shape.”
Earnings Conference Call
Staffing 360 Solutions will host a conference call on Friday, January 15, 2016 at 9:00 am Eastern Time to discuss its financial results for the fiscal second quarter ended November 30, 2015. The conference call will include a Q&A session where investors will have the opportunity to ask questions of management.
The teleconference can be accessed by dialing 877.407.0778 within the United States, 800.756.3429 within the UK, or 201.689.8565 internationally. Please dial in 10 minutes prior to the beginning of the call. There will be a playback of the teleconference available until January 29, 2016. To listen to the playback dial 877.660.6853 within the United States or 201.612.7415 internationally and use replay ID number: 13628096.
The conference call will be simultaneously webcast and available at:
About Staffing 360 Solutions, Inc.
Staffing 360 Solutions, Inc. (STAF) is a public company in the staffing sector engaged in the execution of a global buy-and-build strategy through the acquisition of domestic and international staffing organizations with operations in the US and UK. The Company believes the staffing industry offers opportunities for accretive acquisitions that will drive its annual revenues to $300 million. As part of its targeted consolidation model, the Company is pursuing acquisition targets in the finance and accounting, administrative, engineering and IT staffing space. For more information, please visit: www.staffing360solutions.com.
Non-GAAP Financial Measures
The Company uses financial measures which are not calculated and presented in accordance with U.S. generally accepted accounting principles (“GAAP”) in evaluating its financial and operational decision making regarding potential acquisitions, as well as a means to evaluate period-to period comparison. The Company presents these non-GAAP financial measures because it believes them to be an important supplemental measure of performance that is commonly used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. We refer you to the reconciliations below.
The Company defines Adjusted EBITDA as earnings (or loss) from continuing operations before interest expense, income taxes, depreciation and amortization, and amortization of non-cash stock-based compensation, non-recurring acquisition and restructuring expenses and goodwill impairment charges.
Certain matters discussed within this press release are forward-looking statements including, but not limited to the timing and ability to enter into any additional acquisitions, as well as the size of future revenue. Although Staffing 360 Solutions, Inc. believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Specifically, in order for the Company to achieve annualized revenues of $300 million, the Company will need to successfully raise sufficient capital, to consummate additional target acquisitions, successfully integrate any newly acquired companies, organically grow its business, successfully defend current and any potential future litigation, as well as various additional contingencies, many of which are unknown at this time and generally out of the Company’s control. The Company can give no assurance that it will be able to achieve these objectives. Staffing 360 Solutions does not undertake any duty to update any statements contained herein (including any forward-looking statements), except as required by law. Factors that could cause actual results to differ materially from expectations include general industry considerations, regulatory changes, changes in local or national economic conditions and other risks detailed from time to time in Staffing 360 Solutions’ reports filed with the SEC, including quarterly reports on Form 10-Q, reports on Form 8-K and annual reports on Form 10-K.
PCG Advisory Group
Staffing 360 Solutions, Inc.
Executive Vice President
Staffing 360 Solutions, Inc.
Senior Vice President of Finance