NEW YORK, NY--(Marketwired - October 15, 2015) - Staffing 360 Solutions, Inc. (
"We are pleased to report several significant milestones this quarter," stated Brendan Flood, Executive Chairman and Interim CFO of Staffing 360 Solutions. "First and foremost, our growth strategy has fueled our expansion to approximately $35.9 million in revenues during Q1 2016. In addition, we have now achieved positive Adjusted EBITDA for four quarters in a row, which has been a strategic objective within our Pathway to Profitability. Lastly, we successfully uplisted to the NASDAQ Capital Market and began trading on September 29, 2015. With all of these developments at Staffing 360, it is clear our growth story is just beginning."
Summary of Fiscal Q1 2016 (Three Months Ended August 31, 2015)
- Revenues increased to $35.9 million, compared to $32.6 million in the quarter ended August 31, 2014.
- Gross profit increased to $6.3 million, compared to approximately $5.7 million in the quarter ended August 31, 2014.
- Net loss decreased to approximately $1.7 million*, compared to a net loss of $4.8 million in the quarter ended August 31, 2014.
- Positive adjusted EBITDA was approximately $460,000*, compared to negative adjusted EBITDA of $364,000 in the quarter ended August 31, 2014.
- Cash Flow from Operating Activities was a positive $576,000, compared to a negative $2.0 million in the quarter ended August 31, 2014.
* A table has been included in this press release with Non-GAAP adjustments to the Company's net loss, resulting in positive Adjusted EBITDA of approximately $460,000.
"Across the board we are showing improvements in Staffing 360's financial metrics," stated Mr. Flood. "Although our bottom line still shows a net loss, similar to our past financials, these results include expenses that are either non-cash in nature, acquisition-related or are non-recurring. Despite this, we still posted year-over-year growth, as well as positive Adjusted EBITDA of approximately $460,000 for the quarter ended August 31, 2015, our strongest quarterly Adjusted EBITDA results yet. Not only did we have positive Adjusted EBITDA, we have achieved positive Non-Adjusted EBITDA of $78,000, and more importantly, we become operating cash flow positive for the first time this quarter, which is a major milestone for any growth company."
Analysis of Financial Results
As a result of the Company's M&A activity and organic growth, revenues increased to $35.9 million in the quarter ended August 31, 2015, compared to approximately $32.6 million for the same period in 2014. Gross profit increased to over $6.3 million, compared to approximately $5.7 million for the same period in 2014.
The Company's net loss for the quarter ended August 31, 2015 was approximately $1.7 million (or positive Adjusted EBITDA of approximately $460,000 on a Non-GAAP basis*), compared to a net loss of approximately $4.8 million for the same period in 2014. The improvement in net loss was primarily attributable to the Company's increased gross profit, as well as its Pathway to Profitability, which has helped streamline expenses and decrease consulting and professional fees.
"After announcing our Pathway to Profitability last year, we have successfully reduced Company debt, while increasing stockholder's equity by converting a significant portion of debt to equity," stated Mr. Flood. "Total Assets improved from $42 million to $49 million, with total stockholder's equity increasing from $8.4 million to $10.5 million across the first three months of the fiscal year. We have also streamlined operations. This quarter, our operating expenses were reduced to 19% of revenue, compared to 22% of revenue in the same period last year. As Staffing 360 continues to grow revenue and further leverage our existing support functions, we expect operating expenses compared to revenue to continue to trend lower."
Highlights of Fiscal Q1 2016 and Subsequent Events
- Realized Adjusted EBITDA of $460,000, representing positive Adjusted EBITDA for the last four quarters in a row. First achieved this objective for the fiscal quarter ended November 30, 2014 and then repeated it every quarter since.
- Reduced operating expenses, including a continued reduction in professional and consulting fees by 46% as part of our Pathway to Profitability. Management believes overall costs of corporate activities are now in line with industry levels and will continue to drive efficiencies.
- Achieved the designation of positive Cash Flow from Operating Activities in fiscal Q1 2016, the first quarter the Company has achieved this major operational milestone. Cash Flow from Operating Activities was a positive $576,000 against a negative $2.0 million in the same quarter one year ago.
- Completed the Company's latest acquisition of Lighthouse Placement Services, LLC on July 8, 2015. Lighthouse specializes in providing engineering workforce solutions to a diverse set of clients, ranging from local firms to international enterprises and defense contractors. Founded in 2001, Lighthouse generated approximately $15 million in revenue over the past year.
- After receiving the green-light from NASDAQ, the Company effected a one-for-ten reverse stock split on September 17, 2015 to achieve the national exchange's $4.00 threshold. Following the reverse split, the Company's issued and outstanding shares of common stock decreased from 45.7 million to 4.57 million.
- Upon trading for 5 days above the $4.00 bid price, the Company completed its uplisting to NASDAQ on September 29, 2015. Staffing 360 Solutions common stock is now trading under the ticker symbol STAF on the NASDAQ Capital Market.
"This quarter we continued to grow our revenue, made further reductions to our expenses and continued to embark on our M&A program with another acquisition under our belt," said Matt Briand, President and CEO. "Now that we have successfully completed our NASDAQ listing, we believe our path to achieving our stated goal of $300 million in revenue has been streamlined and our ability to raise capital has improved. With many exciting developments on the horizon, we encourage investors to join us during our earnings conference call for more details on how we plan to achieve our objectives and continue to expand our operations."
Earnings Conference Call
Staffing 360 Solutions will host a conference call on Friday, October 16, 2015 at 9:00 am Eastern Time to discuss its financial results for the fiscal first quarter ended August 31, 2015. The conference call will include a Q&A session where investors will have the opportunity to ask questions of management.
The teleconference can be accessed by dialing 877.407.0778 within the United States, 800.756.3429 within the UK, or 201.689.8565 internationally. Please dial in 10 minutes prior to the beginning of the call. There will be a playback of the teleconference available until October 30, 2015. To listen to the playback dial 877.660.6853 within the United States or 201.612.7415 internationally and use replay ID number: 13622735.
The conference call will be simultaneously webcast and available at:
http://www.investorcalendar.com/event/174434
About Staffing 360 Solutions, Inc.
Staffing 360 Solutions, Inc. (
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Non-GAAP Financial Measures
The Company uses financial measures which are not calculated and presented in accordance with U.S. 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 Non-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.
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 the goodwill impairment charges. The Company excludes stock-based compensation because it is non-cash in nature.
Forward-Looking Statements
Certain matters discussed within this press release are forward-looking statements including, but not limited to the timing and ability to enter into any additional acquisitions, as well as the size of future revenue. Although Staffing 360 Solutions, Inc. believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Specifically, in order for the Company to achieve annualized revenues of $300 million, the Company will need to successfully raise sufficient capital, to consummate additional target acquisitions, successfully integrate any newly acquired companies, organically grow its business, successfully defend current and any potential future litigation, as well as various additional contingencies, many of which are unknown at this time and generally out of the Company's control. The Company can give no assurance that it will be able to achieve these objectives. Staffing 360 Solutions does not undertake any duty to update any statements contained herein (including any forward-looking statements), except as required by law. Factors that could cause actual results to differ materially from expectations include general industry considerations, regulatory changes, changes in local or national economic conditions and other risks detailed from time to time in Staffing 360 Solutions' reports filed 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, Inc. and Subsidiaries | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| August 31, | May 31, | |||||||
| 2015 | 2015 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Assets | ||||||||
| Current Assets | $ | 22,132,525 | $ | 20,953,697 | ||||
| Other Assets | 27,075,155 | 21,378,558 | ||||||
| Total Assets | $ | 49,207,680 | $ | 42,332,255 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Liabilities | ||||||||
| Current Liabilities | $ | 29,669,274 | $ | 27,548,579 | ||||
| Other Liabilities | 7,953,266 | 5,281,616 | ||||||
| Total Liabilities | 37,622,540 | 32,830,195 | ||||||
| Stockholders' Equity | ||||||||
| Stockholders' Equity | 10,546,351 | 8,448,715 | ||||||
| Non-Controlling Interest | 1,038,789 | 1,053,345 | ||||||
| Total Stockholders' Equity | 11,585,140 | 9,502,060 | ||||||
| Total Liabilities and Stockholders' Equity | $ | 49,207,680 | $ | 42,332,255 | ||||
| Staffing 360 Solutions, Inc. and Subsidiaries | |||||||||
| Condensed Consolidated Statements of Operations | |||||||||
| For the Three Months Ended August 31, | |||||||||
| 2015 | 2014 * | ||||||||
| Revenue | $ | 35,883,518 | $ | 32,575,001 | |||||
| Cost of Revenue | 29,563,065 | 26,910,906 | |||||||
| Gross Profit | 6,320,453 | 5,664,095 | |||||||
| Operating Expenses | 6,979,131 | 7,063,503 | |||||||
| Loss from Operations | (658,678 | ) | (1,399,408 | ) | |||||
| Other Income (Expenses) | (997,756 | ) | (3,289,012 | ) | |||||
| Loss Before Provision for Income Tax | (1,656,434 | ) | (4,688,420 | ) | |||||
| Income Tax Benefit / (Expense) | (34,799 | ) | 62,614 | ||||||
| Net Loss from Continued Operations | (1,691,233 | ) | (4,625,806 | ) | |||||
| Net Loss from Discontinued Operations | - | (37,592 | ) | ||||||
| Net Loss | $ | (1,691,233 | ) | $ | (4,663,398 | ) | |||
| Net Income / (Loss) Attributable to Non-Controlling Interest | (14,556 | ) | 104,663 | ||||||
| Net Loss Attributable to STAF | $ | (1,676,677 | ) | $ | (4,768,061 | ) | |||
* Pursuant to US GAAP requirements, the Company has revised the historical results to exclude Cyber 360, Inc. as a discontinued operation.
| Staffing 360 Solutions, Inc. and Subsidiaries | |||||||||
| Condensed Consolidated Non-GAAP Adjusted EBITDA Calculations | |||||||||
| Comparing the Three Months Ended August 31, 2015 and 2014 | |||||||||
| (Unaudited) | |||||||||
| Fiscal Q1 2016 | Fiscal Q1 2015 | ||||||||
| For the Three Months Ended August 31, 2015 | For the Three Months Ended August 31, 2014 * |
||||||||
| Revenue | $ | 35,883,518 | $ | 32,575,001 | |||||
| Gross Profit | $ | 6,320,453 | $ | 5,664,095 | |||||
| Loss from Operations | $ | (658,678 | ) | $ | (1,399,408 | ) | |||
| Net Loss Attributable to STAF | $ | (1,676,677 | ) | $ | (4,768,061 | ) | |||
| Adjustments: | |||||||||
| Interest | $ | 441,619 | $ | 450,852 | |||||
| Restructuring Expenses - Non-Cash | 5,214 | - | |||||||
| Other Income | (35,450 | ) | (52,021 | ) | |||||
| Depreciation and Amortization | 1,323,489 | 3,584,992 | |||||||
| Tax | 34,799 | (62,614 | ) | ||||||
| Non-Controlling Interest | (14,556 | ) | 104,663 | ||||||
| Sub-Total | 1,755,115 | 4,025,872 | |||||||
| Non-Adjusted EBITDA | $ | 78,438 | $ | (742,189 | ) | ||||
| Acquisition, Capital Raising, Non-Cash and Other Expenses | 381,506 | 378,000 | |||||||
| Total Adjustments | 2,136,621 | 4,403,872 | |||||||
| Adjusted EBITDA | $ | 459,944 | $ | (364,189 | ) | ||||
* Pursuant to US GAAP requirements, the Company has revised the historical results to exclude Cyber 360, Inc. as a discontinued operation.
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Stephanie Prince
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646.762.4518
