Staffing 360 Solutions Reports Second Quarter and Six-Month 2022 Results
August 23 2022 - 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 its Fiscal 2022 second quarter and
six-month financial results.
Q2 2022 Overview
- Revenue increased 16.9% to $59.1
million from $50.5 million in Q2 ’21, or an increase of 20.3% on a
constant currency basis
- Gross profit increased 16.6% to
$10.5 million from $9.0 million in Q2 ’21 or an increase of 19.9%
on a constant currency
basis
- Loss from operations narrowed to
($643,000) as compared with a loss from operations of ($1.1
million) in Q2 ’21 - a result of strong execution in all of our
businesses benefitting from gradual strengthening in our underlying
markets
- Net loss of ($2.3 million) as
compared with net income of $7.8 million in Q2 ’21 – the previous
year included a forgiveness of a PPP loan and interest of $10.1
million. Excluding the forgiveness, we were flat
year-on-year
- EBITDA declined to ($432,000) from
$9.7 million in Q2 ’21. Excluding the $10.1 million PPP loan
forgiveness, we were flat year-on-year. The current year had
$530,000 adverse impact of non-cash translation of the loan between
the parent and the UK subsidiary
- Adjusted EBITDA was $1.4 million as
compared with $1.4 million in Q2 ’21
- Basic EPS was a loss of ($1.29) as
compared with $7.44 in the same period last year
Six Month 2022 Overview
- Revenue increased 9.5% to $108.9
million from $99.5 million in Q2 ’21. On a constant currency basis,
the increase was
11.8%
- Gross profit increased 11.7% to
$19.0 million from $17.0 million in Q2 ’21. The increase was 13.9%
on a constant currency
basis
- Loss from operations was ($1.7
million) as compared with ($1.7 million) in Q2
’21
- Net loss was ($4.6 million) as
compared with net income of $6.1 million in Q2
‘21
- EBITDA declined to ($1.3 million)
from $9.9 million in Q2 ’21 – The prior year included $10.1 million
of PPP loan and interest forgiveness. The current year had a
negative non cash impact of $1.1 million in translation of the
intercompany loan between the US parent and the UK subsidiary
- Adjusted EBITDA declined to $2.2
million from $2.5 million in Q2 ’21
- Basic EPS was ($2.61) as compared
with $6.05 in the same period last year
Brendan Flood, Chairman, CEO and President,
said, “Our focus to support growth strategies is yielding early
tangible results as evidenced by improved revenue and gross profit
with reduced loss from operations in both reporting periods.
“In May we completed the acquisition of Headway
Workforce Solutions and to date we have identified and are
executing on $1.8 million of wide-ranging integrations savings. We
believe the Headway acquisition is a game changer for us on several
important levels and look forward to reporting its full quarter’s
contribution in our improved Q3 results.
“In Q2, the Headway contribution reflected only
six weeks of operations - and the material impact of the movement
in the exchange rate between the US Dollar and the Pound Sterling
adversely impacted the translation of the results of our UK
business into the group consolidation.”
Flood continued, “The outlook in our brands and
our verticals continues to remain strong and we see a healthy,
steadily improving demand for business, with increasing
cross-selling opportunities and success.”
Conference Call AccessThe
Company will host a conference call on Wednesday, August 24, 2022
at 9:00am ET to discuss financial results and the May 2022
acquisition of Headway Workforce Solutions. STAF invites
participants to submit questions via email to our Investor
Relations representative terri@bibimac.com by 3:00 pm PT today,
Tuesday, August 23rd.
The Participant Dial-In Number for the
conference call is 323-701-0160. Participants should dial in to the
call at least five minutes before 9:00am ET August 24, 2022. The
call can also be accessed "live" online at
https://viavid.webcasts.com/starthere.jsp?ei=1565472&tp_key=ae91265d65.
A replay of the recorded call will be available for 90 days on the
Company's website
(https://www.staffing360solutions.com/investors/investors-material-1).
You can also listen to a replay by dialing 844-512-2921
(international participants dial 412-317-6671) starting August 24,
2022, at 12:00pm ET through August 27, 2022 at 11:59pm ET. Please
use PIN Number 1185753.
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 and as part of its targeted consolidation
model, is pursuing acquisition targets in the finance and
accounting, administrative, engineering, IT, and light industrial
staffing space. For more information, visit
http://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. Forward-looking
statements are not guarantees of future performance, are based on
certain assumptions and are subject to various known and unknown
risks and uncertainties, many of which are beyond the Company's
control, and cannot be predicted or quantified; consequently,
actual results may differ materially from those expressed or
implied by such forward-looking statements. Such risks and
uncertainties include, without limitation, our ability to retain
our listing on the Nasdaq Capital Market; market and other
conditions; the geographic, social and economic impact of COVID-19
on the Company’s ability to conduct its business and raise capital
in the future when needed; weakness in general economic conditions
and levels of capital spending by customers in the industries the
Company serves; weakness or volatility in the financial and capital
markets, which may result in the postponement or cancellation of
customer capital projects or the inability of the Company’s
customers to pay the Company’s fees; the termination of a major
customer contract or project; delays or reductions in U.S.
government spending; credit risks associated with the Company’s
customers; competitive market pressures; the availability and cost
of qualified labor; the Company’s level of success in attracting,
training and retaining qualified management personnel and other
staff employees; changes in tax laws and other government
regulations, including the impact of health care reform laws and
regulations; the possibility of incurring liability for the
Company’s business activities, including, but not limited to, the
activities of the Company’s temporary employees; the Company’s
performance on customer contracts; negative outcome of pending and
future claims and litigation; government policies, legislation or
judicial decisions adverse to the Company’s businesses; the
Company’s ability to access the capital markets by pursuing
additional debt and equity financing to fund its business plan and
expenses on terms acceptable to the Company or at all; and the
Company’s ability to comply with its contractual covenants,
including in respect of its debt agreements, 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:Terri MacInnis, VP
of IRBibicoff + MacInnis, Inc.818.379.8500 x 2
terri@bibimac.com
Staffing 360
Solutions, Inc. and Subsidiaries |
Reconciliation
of Net Loss to Adjusted EBITDA |
(All Amounts
in Thousands) |
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Q2 2022 |
|
Q2 2021 |
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Q2 2022 YTD |
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Q2 2021 YTD |
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|
Trailing Twelve Months Q2 2022 |
|
Trailing Twelve Months Q2 2021 |
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|
(Unaudited) |
|
(Unaudited) |
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(Unaudited) |
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(Unaudited) |
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Net Income (Loss) |
|
$ |
(2,264 |
) |
|
$ |
7,848 |
|
|
|
|
$ |
(4,588 |
) |
|
$ |
6,160 |
|
|
|
|
$ |
(2,590 |
) |
|
$ |
1,278 |
|
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Adjustments: |
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Interest expense |
|
$ |
951 |
|
|
$ |
1,097 |
|
|
|
|
$ |
1,621 |
|
|
$ |
2,253 |
|
|
|
|
$ |
3,224 |
|
|
$ |
5,275 |
|
|
Provision (benefit) income taxes |
|
|
(3 |
) |
|
|
(67 |
) |
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3 |
|
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|
(30 |
) |
|
|
|
|
(324 |
) |
|
|
(6 |
) |
|
Depreciation and amortization |
|
|
884 |
|
|
|
792 |
|
|
|
|
|
1,635 |
|
|
|
1,607 |
|
|
|
|
|
3,146 |
|
|
|
3,383 |
|
|
EBITDA |
|
|
(432 |
) |
|
|
9,670 |
|
|
|
|
|
(1,329 |
) |
|
|
9,990 |
|
|
|
|
|
3,456 |
|
|
|
9,930 |
|
|
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|
|
|
|
|
|
|
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|
Acquisition, capital raising and other non-recurring expenses
(1) |
|
|
1,399 |
|
|
|
1,655 |
|
|
|
|
|
2,587 |
|
|
|
2,481 |
|
|
|
|
|
3,591 |
|
|
|
6,795 |
|
|
Other non-cash charges (2) |
|
|
(16 |
) |
|
|
116 |
|
|
|
|
|
- |
|
|
|
335 |
|
|
|
|
|
51 |
|
|
|
650 |
|
|
Impairment of Goodwill |
|
|
- |
|
|
|
- |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
3,104 |
|
|
|
- |
|
|
Re-measurement (income) loss on intercompany note |
|
|
566 |
|
|
|
32 |
|
|
|
|
|
1,009 |
|
|
|
(96 |
) |
|
|
|
|
1,365 |
|
|
|
(1,470 |
) |
|
Restructuring Charges |
|
|
- |
|
|
|
- |
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|
|
|
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- |
|
|
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- |
|
|
|
|
|
- |
|
|
|
21 |
|
|
Gain on business sale |
|
|
- |
|
|
|
- |
|
|
|
|
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- |
|
|
|
- |
|
|
|
|
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- |
|
|
|
(124 |
) |
|
PPP forgiveness gain |
|
|
- |
|
|
|
(10,105 |
) |
|
|
|
|
- |
|
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|
(10,105 |
) |
|
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|
|
- |
|
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|
(10,105 |
) |
|
Other loss |
|
|
(79 |
) |
|
|
4 |
|
|
|
|
|
(21 |
) |
|
|
(103 |
) |
|
|
|
|
(9,387 |
) |
|
|
(265 |
) |
|
Adjusted EBITDA |
|
$ |
1,438 |
|
|
$ |
1,372 |
|
|
|
|
$ |
2,246 |
|
|
$ |
2,502 |
|
|
|
|
$ |
2,180 |
|
|
$ |
5,432 |
|
|
Adjusted
EBITDA Margin |
|
|
2.4 |
% |
|
|
2.7 |
% |
|
|
|
|
2.1 |
% |
|
|
2.5 |
% |
|
|
|
|
1.1 |
% |
|
|
2.7 |
% |
|
|
|
|
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Adjusted EBITDA of Divested Business (3) |
|
|
|
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|
|
|
|
|
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|
$ |
- |
|
|
$ |
(20 |
) |
|
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|
Pro
Forma TTM Adjusted EBITDA (4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2,180 |
|
|
$ |
5,412 |
|
|
|
|
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|
Adjusted
Gross Profit TTM (5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
35,866 |
|
|
$ |
32,793 |
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|
TTM Adjusted
EBITDA as percentage of adjusted gross profit TTM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6.1 |
% |
|
|
16.6 |
% |
|
|
|
|
|
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(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. Due to government mandated
restrictions, the Company had to temporarily close some of its
offices and, due to social distancing restrictions, could not make
full use of these facilities for significant periods of time during
the year. |
(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) Adjusted EBITDA of
Divested Business for the period prior to the divestment date. |
(4) Pro Forma Adjusted
EBITDA excludes the Adjusted EBITDA of Divested Business for the
period prior to the divestment date. |
(5) Adjusted Gross
Profit excludes gross profit of business divested in September
2020, for the period prior to divestment date. |
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