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NEW YORK, NY–(Marketwired – November 02, 2016) – Staffing 360 Solutions, Inc. (NASDAQ: STAF), a public company executing a global buy-and-build strategy through the acquisition of staffing organizations in the US and UK, today released a letter from Brendan Flood, Executive Chairman, that reiterates the Company’s commitment to growth and provides shareholders with an update on current market activity and insight into management’s expectations.

Dear Shareholders:

As the Executive Chairman of Staffing 360 Solutions, I wanted to take this time to discuss the Company’s recent market activity, as well as how this may relate to our listing on the Nasdaq Capital Market and our future growth initiatives.

As I’m sure all of you are aware, Staffing 360 Solutions dipped below $1.00 per share for the first time this past week and has traded below 70 cents per share since then. We recognize that $1.00 per share is a major threshold, not only for investors, but also for the Nasdaq exchange itself, as companies can eventually be delisted for trading below this threshold after an extended period of time, as discussed in more detail below.

However, before we get into the details, let me be perfectly clear — we have absolutely no expectation for our share price to remain at these levels in the long term. We are committed to improving our balance sheet and growing the company both organically and through acquisitions until we reach our publicly stated goals of surpassing $300 million in revenue. I have 100% confidence in our management team and the hundreds of employees at Staffing 360 Solutions that are tirelessly driving our business forward and enhancing our growth potential.

Let us not forget that over the past three years we have acquired 6 companies, including Lighthouse Placement Services and The JM Group in fiscal 2016, and our goal is to continue to acquire businesses until we reach our strategic target of $300 million in annualized revenues. At this stage we are already at a current revenue run rate of $190 million, with strong double digit organic growth and Adjusted EBITDA of $5.3 million over the trailing twelve months. As mentioned on our recent quarterly conference calls, we are reviewing and working on some acquisitions of considerable size, including some that could help us surpass our $300 million revenue goal in one fell swoop.

I know that dilution is a topic at the top of any investor’s mind and our shares outstanding have increased over the last few months from capital raises, as well as debt conversions as part of our balance sheet improvements. For example, we raised $5.3 million in equity through our S-3 Registration Statement since April of this year, and a large part of the proceeds was used to improve our balance sheet. We also recently converted $980,000 of debt into shares of common stock at a price of $1.10 per share.

Although we would prefer to avoid any dilution wherever possible, please rest assured that I am particularly focused on Staffing 360’s execution, both operationally as well as its capital structure, and issuances of shares are strategically evaluated to be in the best interests of the Company and our shareholders. This is especially true for me, as I am one of the largest shareholders of the Company, and have a vested interest in seeing the company succeed with as little dilution as possible.

With regard to Nasdaq, first, let’s understand the process and the timeline we are dealing with, as there is significant cushion built into the process. First, we would need to see the consolidated closing bid price remain below $1.00 per a share for at least 30 consecutive trading days before a deficiency letter is sent by Nasdaq, and at that point an additional 180 calendar days are provided to regain compliance. If at any time during this 180-day period the closing bid price is at least $1.00 for a minimum of 10 consecutive trading days, Nasdaq will typically provide written confirmation of compliance and matter will be closed. However, Nasdaq may require the closing bid price to be equal to or exceed the $1.00 minimum bid price requirement for more than 10 consecutive business days before determining that a company complies. In addition, other remedies, such as an appeal for additional time, or a reverse split, may also be available.

Needless to say, this is a significant timeframe, and one in which we strongly believe additional progress on our balance sheet and additional announcements regarding future acquisitions will take place.

Despite our currently low share price, we are very pleased with where we are on our development plan from an operational perspective, as we continue to grow organically, month after month, and quarter after quarter. We commend each and every one of our employees for the positive improvements that they deliver on a daily basis.

We experienced over 14% organic growth from the Company’s existing staffing divisions in fiscal Q1 2017. We have achieved our largest quarterly revenue and gross profit figures in the history of Staffing 360 Solutions in the same time frame. In addition, our employees have done an incredible job supporting the growth of the business. We now have over 4,000 temporary workers across all subsidiaries at any given time.

Some of our milestones bear repeating, so here are just a few of the ones that have been achieved over the last 12 months:

Financial Results and Organic Growth:

  • We grew revenues to $47.8 million in Q1 2017, the single largest quarterly revenue in the Company’s history;
  • Our run-rate is now in excess of $190 million, close to two-thirds of our stated mission of reaching $300 million in revenue;
  • Our underlying operations demonstrated strong 14% organic revenue growth in Q1 2017, year-over-year;
  • Our net loss decreased to $1.3 million in Q1 2017, compared to a net loss of $1.7 million in the same period of last year;
  • Realized Adjusted EBITDA of $1.8 million in Q1 2017, and $5.3 million on a TTM basis, which is the highest level ever and 200% greater than last year.

At these levels, we have conviction that Staffing 360 Solutions represents a tremendous value, not only today, but across a long term horizon. As we continue to implement Staffing 360’s M&A strategy, we remain committed to our vision, committed to our employees, and committed to our loyal shareholders.

I thank you for your attention and continued support. For further information, please visit the “Investors” section of our website at: www.staffing360solutions.com/investors.html.


Brendan Flood Executive Chairman Staffing 360 Solutions, Inc. Ticker: STAF