Staffing 360 Solutions Reports Second Quarter 2020 Results
August 11 2020 - 4:10PM
Staffing 360 Solutions, Inc. (NASDAQ: 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 Fiscal 2020 second quarter and six-month
results, which were impacted by the economic downturn resulting
from the COVID-19 pandemic.
Brendan Flood, Chairman and Chief Executive
Officer said, “Our Q2 results are in line with expectations
provided on our previous call as the COVID-19 pandemic surged for
the first two-thirds of the quarter. While revenue, gross profit,
EBITDA and Adj. EBITDA declined when compared with both Q1 2020 and
Q2 2019 -- adjusted EBITDA remained positive and gross margin
increased modestly. The sequential comparisons of Q2 with Q1 2020
reflect a COVID-19 impact in the first three weeks in Q1 2020.
“We experienced modest weekly improvements
in business over the past six weeks and look forward to that
improvement continuing. I remain confident that we will be a
stronger company when we come out of this than when we went into
it.”
Q2 2020 Overview
- Revenue declined by 41% to $43.4 million from $73.5 million in
Q2 ’19
- Gross profit declined by 37.5% to $7.6 million from $12.1
million in Q2 ’19
- Gross margin increased to 17.4% compared with 16.5% in Q2
’19
- Loss from operations of ($1.5 million) compared with income
from operations of $0.5 million in Q2 ’19
- Net loss of ($3.8 million) compared with net loss of ($1.5
million) in Q2 ’19
- EBITDA declined to negative $0.8 million from $1 million in Q2
’19
- Adjusted EBITDA remained positive at $0.5 million down from
$2.4 million in Q2 ’19
Year to Date Q2 2020
Overview
- Revenue declined by 30.7% to $102.1 million from $147.3 million
YTD ’19
- Gross profit declined by 24.8% to $18.2 million from $24.2
million YTD ’19
- Gross margin increased to 17.8% compared with 16.4% YTD
’19
- Loss from operations of ($5.5 million) compared with income of
$1.3 million YTD ’19 was primarily driven by a goodwill impairment
charge of $3 million taken in Q1
- Net loss of ($10.8 million) compared with net loss of ($1.2
million) YTD ’19
- EBITDA declined to negative $4.8 million from $4.1 million YTD
’19
- Adjusted EBITDA remained positive at $1.7 million down from
$4.4 million YTD ’19
Flood continued, “As anticipated, our Q1 move to
cash flow breakeven (driven by aggressive overall cost controls)
flowed through into the second quarter. We took the opportunity to
clean up certain parts of the balance sheet and bring payments
current. I’m proud of our entire team who has successfully mastered
working in a hybrid style, continuing to effectively meet our
clients’ needs by providing our traditional best-in-class service.
We remain cautiously optimistic looking ahead into the end of
year.
“Government stimulus programs in both the US and
UK have allowed us to strengthen our balance sheet and we are
currently reviewing the role that the new US Main Street Lending
Program can provide as an additional financial boost.
Simultaneously, we continue to seek to refinance debt by the end of
this quarter,” concluded Flood.
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.
Conference CallThe Participant
Dial-In Number for the conference call is 646-828-8143.
Participants should dial in to the call at least five minutes
before 9:00am ET August 12, 2020. The call can also be accessed
"live" online at http://public.viavid.com/index.php?id=140969. 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 844-512-2921
(international participants dial 412-317-6671) starting August 12,
2020, at 7:30pm ET through August 19, 2020 at 11:59 pm ET. Please
use PIN Number 8769775.
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 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.
Forward-Looking StatementsThis 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, 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, to successfully refinance its debt, and to receive
loans under the US Main Street Lending Program, 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) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2 2020 |
|
Q2 2019 |
|
|
|
Q2 2020 YTD |
|
Q2 2019 YTD |
|
|
|
Trailing Twelve Months Q2 2020 |
|
Trailing Twelve Months Q2 2019 |
|
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(3,763 |
) |
|
$ |
(1,471 |
) |
|
|
|
$ |
(10,760 |
) |
|
$ |
(1,242 |
) |
|
|
|
$ |
(14,412 |
) |
|
$ |
(4,628 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense and amortization of debt discount and deferred
financing costs |
|
$ |
2,114 |
|
|
$ |
1,911 |
|
|
|
|
$ |
4,531 |
|
|
$ |
3,918 |
|
|
|
|
$ |
9,097 |
|
|
$ |
8,741 |
|
|
(Provision for) Benefit from income taxes |
|
|
47 |
|
|
|
(322 |
) |
|
|
|
|
(129 |
) |
|
|
(324 |
) |
|
|
|
|
(140 |
) |
|
|
(221 |
) |
|
Depreciation and Amortization |
|
|
759 |
|
|
|
877 |
|
|
|
|
|
1,544 |
|
|
|
1,754 |
|
|
|
|
|
3,160 |
|
|
|
3,368 |
|
|
EBITDA |
|
|
(843 |
) |
|
|
995 |
|
|
|
|
|
(4,814 |
) |
|
|
4,106 |
|
|
|
|
|
(2,295 |
) |
|
|
7,260 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition, capital raising, restructuring charges and other
non-recurring expenses (1) |
|
|
1,061 |
|
|
|
742 |
|
|
|
|
|
2,400 |
|
|
|
953 |
|
|
|
|
|
6,393 |
|
|
|
2,233 |
|
|
Other non-cash charges (2) |
|
|
163 |
|
|
|
225 |
|
|
|
|
|
346 |
|
|
|
422 |
|
|
|
|
|
764 |
|
|
|
860 |
|
|
Re-measurement (loss) income on intercompany note |
|
|
115 |
|
|
|
368 |
|
|
|
|
|
790 |
|
|
|
17 |
|
|
|
|
|
390 |
|
|
|
557 |
|
|
Impairment of goodwill |
|
|
|
|
|
|
|
|
2,969 |
|
|
|
- |
|
|
|
|
|
2,969 |
|
|
|
- |
|
|
Deferred consideration settlement |
|
|
- |
|
|
|
- |
|
|
|
|
|
- |
|
|
|
(847 |
) |
|
|
|
|
(1,077 |
) |
|
|
(847 |
) |
|
Other loss (income) |
|
|
25 |
|
|
|
29 |
|
|
|
|
|
39 |
|
|
|
(257 |
) |
|
|
|
|
(30 |
) |
|
|
(414 |
) |
|
Adjusted EBITDA |
|
$ |
521 |
|
|
$ |
2,359 |
|
|
|
|
$ |
1,730 |
|
|
$ |
4,394 |
|
|
|
|
$ |
7,114 |
|
|
$ |
9,649 |
|
|
Adjusted
EBITDA Margin |
|
|
1.2 |
% |
|
|
3.2 |
% |
|
|
|
|
1.7 |
% |
|
|
3.0 |
% |
|
|
|
|
3.1 |
% |
|
|
2.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-Acquisition Adjusted EBITDA (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
- |
|
|
$ |
324 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro
Forma TTM Adjusted EBITDA (4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
7,114 |
|
|
$ |
9,973 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
Gross Profit TTM (5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
42,301 |
|
|
$ |
49,051 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TTM Adjusted
EBITDA as percentage of adjusted gross profit TTM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16.8 |
% |
|
|
19.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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. |
Staffing 360 Solutions (NASDAQ:STAF)
Historical Stock Chart
From Aug 2024 to Sep 2024
Staffing 360 Solutions (NASDAQ:STAF)
Historical Stock Chart
From Sep 2023 to Sep 2024