Staffing 360 Solutions Pre-Announces Third Quarter 2017 Results
October 19 2017 - 2:38AM
Forecasted Highlights:
Staffing 360 Solutions, Inc. (Nasdaq:STAF), a public company
executing an international buy-and-build strategy through the
acquisition of staffing organizations in the United States and in
the United Kingdom, today pre-announced its unaudited financial
results for the fiscal third quarter ended September 30, 2017.
Subject to the completion of the review of
Staffing 360 Solutions’ full financial statements and filing with
the Securities and Exchange Commission, the results for its fiscal
third quarter 2017 are expected to be as follows:
- Revenue of $50 million, an approximately 9% increase from $46
million in the 2016 third quarter, including $6 million from
acquisitions. On a sequential quarterly basis, revenue is expected
to improve by $8 million, or over 18% compared to the fiscal second
quarter of 2017. For the nine months ended September 2017, revenue
is expected to decrease by $2.2 million, including $1.8 million
attributable to unfavorable foreign currency translation and the
acquisition revenue discussed above, to $133 million from $135
million for the comparable period in fiscal 2016;
- Gross profit of over $9 million, an 11% increase over $8.4
million in the fiscal third quarter of 2016. On a sequential basis,
gross profit is expected to improve by $1 million, or 18% compared
to the fiscal second quarter of 2017. For the nine months
ended September 2017, gross profit is expected to increase by over
3% from $23.6 million to $24.5 million for the comparable period in
fiscal 2016;
- Gross margins continued to remain strong, increasing from 18.3%
in the prior year third quarter to 18.5% in the third quarter of
fiscal 2017. For the nine months ended September 2017, the gross
margin is expected to be 18.5%, an improvement from 17.4% for the
comparable period in fiscal 2016;
- The two acquisitions completed in September, CBS Butler
Holdings Limited in the U.K. and firstPRO Georgia in the U.S. are
included in these results for only a few weeks. The full impact of
these acquisitions will be reflected in the fiscal fourth quarter
of 2017;
- Including $5.6 million of non-cash charges, (relating to the
refinancing of the balance sheet as well as depreciation and
amortization of intangible assets, and approximately $0.9 million
of acquisition-related and other non-recurring expenses) the net
loss attributable to common stock is expected to be approximately
$5.3 million for the fiscal third quarter of 2017 compared to $0.9
million for the comparable period in fiscal 2016. For the nine
months the net loss attributable to common stock is expected to be
approximately $9.4 million, including $10.8 million of non-cash
charges (relating to the refinancing, depreciation and amortization
of intangible assets, and $1.2 million of acquisition-related and
other non-recurring expenses) against approximately $6.3 million
for the comparable period in fiscal 2016;
- Adjusted EBITDA is expected to be $2 million, a 25% increase
over $1.7 million in the fiscal third quarter of 2016. For the nine
months Adjusted EBITDA, is expected to be $5.8 million, an increase
of 7% over $5.4 million for the comparable period in fiscal
2016.
“The third quarter was a transformational period
in the history of Staffing 360 Solutions,” stated Brendan Flood,
Executive Chairman of Staffing 360 Solutions. “We completed two
acquisitions bringing our annualized revenues to $265 million and
materially refinanced our balance sheet, improving our working
capital position and ability to generate positive operating cash
flow. More importantly, our trailing twelve months’ pro-forma
Adjusted EBITDA is now $11 million, up from $5.4 million in the
comparable trailing twelve months of 2016.”
Mr. Flood continued, “Looking forward, we are
now positioned to see further growth as we utilize operating cash
flow for investment in people and services in 2018 and beyond.”
The Company expects to file its full results for
the fiscal first quarter ended September 30, 2017 on Form 10-Q
before the SEC filing deadline in mid-November and will host an
earnings conference call around the same time to discuss the
results.
For more information about Staffing 360 Solutions and complete
investor materials such as investor presentations, white papers and
webcasts of past earnings calls, please visit:
www.staffing360solutions.com/res.html.
About Staffing 360 Solutions, Inc.
Staffing 360 Solutions, Inc. (Nasdaq:STAF) is a
public company in the staffing sector engaged in the execution of
an international buy-and-build strategy through the acquisition of
domestic and international staffing organizations in the United
States and in the United Kingdom. The Company believes that
the staffing industry offers opportunities for accretive
acquisitions that will drive its 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.
Non-GAAP Financial Measures
The Company uses financial measures which are
not calculated and presented in accordance with US 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.
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.
Corporate Investor Contact:
Staffing 360 Solutions, Inc.Brendan Flood, Executive
Chairman+1.646.507.5715brendan.flood@staffing360solutions.com
Financial Contact:
Staffing 360 Solutions, Inc.David Faiman, Chief
Financial Officer+1.646.507.5711info@staffing360solutions.com
Staffing 360 Solutions, Inc. and
Subsidiaries |
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Reconciliation of Net Loss Attributable to
Common Stockto Adjusted EBITDA |
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(All Amounts in Millions) |
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|
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|
|
|
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For the Period |
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For the Period |
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For the Period |
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For the Period |
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July 2, 2017
to |
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July 3, 2016
to |
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January 1, 2017
to |
|
January 3, 2016 to |
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|
|
September 30, 2017 |
|
October 1, 2016 |
|
September 30, 2017 |
|
October 1, 2016 |
|
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss
Attributable to Common Stock |
$ |
(5.3) |
|
$ |
(0.9) |
|
$ |
(9.4) |
|
$ |
(6.3) |
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|
|
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
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|
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|
Interest
Expense |
$ |
0.7 |
|
$ |
0.6 |
|
$ |
1.8 |
|
$ |
2.0 |
|
|
Provision
for Income Taxes |
|
0.1 |
|
|
(0.5) |
|
|
0.1 |
|
|
0.1 |
|
|
Depreciation and Amortization |
|
2.0 |
|
|
1.3 |
|
|
4.8 |
|
|
3.9 |
|
|
EBITDA |
|
(2.5) |
|
|
0.5 |
|
|
(2.7) |
|
|
(0.3) |
|
|
|
|
|
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|
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|
Acquisition, Capital Raising and Other Non-Recurring
Expenses |
|
0.9 |
|
|
0.9 |
|
|
1.2 |
|
|
3.6 |
|
|
Other
Non-Cash Charges |
|
0.7 |
|
|
0.2 |
|
|
1.7 |
|
|
0.8 |
|
|
Debt
Extinguishment Costs |
|
2.8 |
|
|
- |
|
|
4.2 |
|
|
- |
|
|
Dividends
– Series A Preferred Stock |
|
0.1 |
|
|
0.1 |
|
|
0.2 |
|
|
0.2 |
|
|
Other
Income / (Expense) |
|
- |
|
|
- |
|
|
- |
|
|
(0.5) |
|
|
Adjusted
EBITDA |
$ |
2.0 |
|
$ |
1.7 |
|
$ |
4.6 |
|
$ |
3.8 |
|
|
|
|
|
|
|
|
|
|
|
|
Trailing Twelve
Months (TTM) Adjusted EBITDA |
$ |
5.8 |
|
$ |
5.4 |
|
$ |
5.8 |
|
$ |
5.4 |
|
|
|
|
|
|
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|
Pro Forma
Trailing TTM Adjusted EBITDA |
$ |
11.0 |
|
$ |
5.4 |
|
$ |
11.0 |
|
$ |
5.4 |
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