NEW YORK, Nov. 12, 2019 (GLOBE NEWSWIRE) -- Staffing 360 Solutions, Inc. ((STAF), a company executing an international buy-integrate-build strategy through the acquisition of staffing organizations in the United States and the United Kingdom, today announced its Fiscal 2019 third quarter and nine-month results.
Q3 2019 Highlights
- Revenue declined by 5.6% to $67.3 million, from $71.3 million in Q3 '18, driven primarily by the loss of a low margin client in the U.K. and unfavorable foreign currency translation impact of $1.5 million
- Gross profit of $12.5 million was flat compared with Q3 '18
- Gross margin improved to 18.5% compared with 17.5% in Q3 '18 driven by higher mix of permanent placement revenue
- Income from operations of $0.3 million as compared with $0.7 million in Q3 '18
- Net loss of $1.1 million improved against a net loss of $2.0 million in Q3 '18
- EBITDA grew 54% to $1.8 million, from $1.2 million in Q3 '18
- Adjusted EBITDA grew 16.2% to $2.9 million, from $2.5 million in Q3 '18
Year to Date Q3 2019 Highlights
- Revenue grew by 14.9% to $214.6 million, from $186.8 million YTD '18, including unfavorable foreign currency translation impact of $5.6 million
- Gross profit grew by 2% to $36.7 million, from $36.0 million YTD '18
- Gross margin declined to 17.1% compared with 19.2% YTD '18
- Income from operations grew significantly to $1.5 million compared with $0.4 million YTD '18
- Net loss of $2.3 million improved against a net loss of $5.1 million YTD '18
- EBITDA grew by over 62.8% to $6 million, from $3.7 million YTD '18
- Adjusted EBITDA grew 21.3% to $7.3 million, from $6.0 million YTD '18
Brendan Flood, Chairman and Chief Executive Officer said, "While revenue was down for the quarter, margins were up, overhead was strategically reduced and we remained operating income positive. We are confident that the dip in revenue is short-term and that we continue to be progressing in the right direction."
"Our acquisition pipeline remains full and active with several potential acquisitions having passed the initial due diligence step," continued Flood. "We remain focused on completing strategic acquisitions and also on pursuing related financing that could involve restructuring our existing debt. To help facilitate that endeavor, we've recently engaged the services of Robert W. Baird, Inc., a multinational independent investment bank and financial services company. I remain highly confident in our goal to build a profitable $500 million revenue company."
Conference Call
The Participant Dial-In Number for the conference call is 323-794-2551. Participants should dial in to the call at least five minutes before 9:00am ET November 13, 2019. The call can also be accessed "live" online at http://public.viavid.com/index.php?id=137022. A replay of the recorded call will be available for 90 days on the Company's website (http://www.staffing360solutions.com/res.html). You can also listen to a replay of the call by dialing 1-888-203-1112 (international participants dial 1-719-457-0820) starting November 13, 2019, at 7:30pm ET through November 20, 2019 at 11:59 pm ET. Please use PIN Number 3916896.
Use of Non-GAAP Financial Measures
EBITDA and Adjusted EBITDA are non-GAAP financial measures. Other companies may have different definitions of these non-GAAP financial measures, and as a result they may not be comparable with non-GAAP financial measures provided by other companies. EBITDA and Adjusted EBITDA are calculated in a manner consistent with that shown in the table at the end of this press release and should not be considered alternatives to measurements required by U.S. GAAP, such as net revenue, operating profit or net income, and should not be considered a measure of the Company's liquidity.
The Company uses these non-GAAP financial measures, among several other metrics, to assess and analyze its operational results and trends. The Company also believes these measures are useful to investors because they are common operating performance metrics as well as metrics routinely used to assess potential enterprise value.
About Staffing 360 Solutions, Inc.
Staffing 360 Solutions, Inc. is engaged in the execution of an international buy-integrate-build strategy through the acquisition of domestic and international staffing organizations in the United States and United Kingdom. The Company believes that the staffing industry offers opportunities for accretive acquisitions that can drive profitable annual revenues to $500 million. As part of its targeted consolidation model, the Company is pursuing acquisition targets in the finance and accounting, administrative, engineering, IT, and Light Industrial staffing space. For more information, please visit: www.staffing360solutions.com. Follow Staffing 360 Solutions on Facebook, LinkedIn and Twitter.
Forward-Looking Statements
This press release contains forward-looking statements, which may be identified by words such as "expect," "look forward to," "anticipate" "intend," "plan," "believe," "seek," "estimate," "will," "project" or words of similar meaning. Although Staffing 360 Solutions, Inc. believes such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Actual results may vary materially from those expressed or implied by the statements herein, including the goal of achieving annualized revenues of $500 million, due to the Company's ability to successfully raise sufficient capital on reasonable terms or at all, to consummate additional acquisitions, to successfully integrate newly acquired companies, to organically grow its business, to successfully defend potential future litigation, changes in local or national economic conditions, the ability to comply with contractual covenants, including in respect of its debt, as well as various additional risks, many of which are now unknown and generally out of the Company's control, and which are detailed from time to time in reports filed by the Company with the SEC, including quarterly reports on Form 10-Q, reports on Form 8-K and annual reports on Form 10-K. Staffing 360 Solutions does not undertake any duty to update any statements contained herein (including any forward-looking statements), except as required by law.
Investor Relations Contact:
Harvey Bibicoff, CEO
Bibicoff + MacInnis, Inc.
818.379.8500 harvey@bibimac.com
| Staffing 360 Solutions, Inc. and Subsidiaries | |||||||||||||||||||||||||||||||
| Reconciliation of Net Loss to Adjusted EBITDA | |||||||||||||||||||||||||||||||
| (All Amounts in Thousands) | |||||||||||||||||||||||||||||||
| Q3 2019 | Q3 2018 | Q3 2019 YTD | Q3 2018 YTD | Trailing Twelve Months Q3 2019 | Trailing Twelve Months Q3 2018 | ||||||||||||||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||||||||||||
| Revenue | $ | 67,320 | $ | 71,317 | $ | 214,644 | $ | 186,835 | $ | 288,735 | $ | 246,311 | |||||||||||||||||||
| Gross Profit | $ | 12,485 | $ | 12,496 | $ | 36,695 | $ | 35,959 | $ | 49,040 | $ | 47,873 | |||||||||||||||||||
| Gross Margin | 18.5 | % | 17.5 | % | 17.1 | % | 19.2 | % | 17.0 | % | 19.4 | % | |||||||||||||||||||
| Net loss | $ | (1,108 | ) | $ | (1,980 | ) | $ | (2,350 | ) | $ | (5,095 | ) | $ | (3,756 | ) | $ | (12,419 | ) | |||||||||||||
| Adjustments: | |||||||||||||||||||||||||||||||
| Interest expense and amortization of debt discount and deferred financing costs | $ | 2,059 | $ | 2,435 | $ | 5,977 | $ | 6,578 | $ | 8,365 | $ | 8,615 | |||||||||||||||||||
| Benefit (Provision) from income taxes | 28 | 3 | (296 | ) | (78 | ) | (196 | ) | 641 | ||||||||||||||||||||||
| Depreciation and Amortization | 867 | 741 | 2,621 | 2,251 | 3,494 | 3,507 | |||||||||||||||||||||||||
| EBITDA | 1,846 | 1,199 | 5,952 | 3,656 | 7,907 | 344 | |||||||||||||||||||||||||
| Acquisition, capital raising and other non-recurring expenses (1) | 1,558 | 797 | 2,511 | 2,642 | 2,993 | 3,587 | |||||||||||||||||||||||||
| Other non-cash charges (2) | 205 | 288 | 627 | 951 | 834 | 1,319 | |||||||||||||||||||||||||
| Gain in fair value of warrant liability | - | - | - | (879 | ) | - | (1,755 | ) | |||||||||||||||||||||||
| Re-measurement loss on intercompany note | 467 | 186 | 484 | 332 | 838 | 332 | |||||||||||||||||||||||||
| Impairment of goodwill | - | - | - | - | - | 4,790 | |||||||||||||||||||||||||
| Deferred consideration settlement | (1,138 | ) | - | (1,985 | ) | - | (1,985 | ) | - | ||||||||||||||||||||||
| Restructuring charges | - | - | - | - | (57 | ) | 780 | ||||||||||||||||||||||||
| Gain from sale of business | - | - | - | (238 | ) | - | (238 | ) | |||||||||||||||||||||||
| Operational (income) of divested business | - | - | - | (237 | ) | - | (357 | ) | |||||||||||||||||||||||
| Other loss (income) | (51 | ) | 14 | (308 | ) | (227 | ) | (479 | ) | (152 | ) | ||||||||||||||||||||
| Adjusted EBITDA | $ | 2,887 | $ | 2,484 | $ | 7,281 | $ | 6,000 | $ | 10,051 | $ | 8,650 | |||||||||||||||||||
| Adjusted EBITDA Margin | 4.3 | % | 3.5 | % | 3.4 | % | 3.2 | % | 3.5 | % | 3.5 | % | |||||||||||||||||||
| Pre-Acquisition Adjusted EBITDA (3) | $ | - | $ | 3,323 | |||||||||||||||||||||||||||
| Pro Forma TTM Adjusted EBITDA (4) | $ | 10,051 | $ | 11,973 | |||||||||||||||||||||||||||
| Adjusted Gross Profit TTM (5) | $ | 49,040 | $ | 46,649 | |||||||||||||||||||||||||||
| TTM Adjusted EBITDA as percentage of adjusted gross profit TTM | 20.5 | % | 18.5 | % | |||||||||||||||||||||||||||
| (1) Acquisition, capital raising and other non-recurring expenses primarily relate to capital raising expenses, acquisition and integration expenses and legal expenses incurred in relation to matters outside the ordinary course of business. | |||||||||||||||||||||||||||||||
| (2) Other non-cash charges primarily relate to staff option and share compensation expense, expense for shares issued to directors for board services, and consideration paid for consulting services. | |||||||||||||||||||||||||||||||
| (3) Pre-Acquisition Adjusted EBITDA excludes the Adjusted EBITDA of acquisitions for the period prior to the acquisition date. | |||||||||||||||||||||||||||||||
| (4) Pro Forma TTM Adjusted EBITDA includes the Adjusted EBITDA of acquisitions for the period prior to the acquisition date. | |||||||||||||||||||||||||||||||
| (5) Adjusted Gross Profit excludes gross profit of business divested in June 2018, for the period prior to divestiture date. | |||||||||||||||||||||||||||||||
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