Staffing 360 Solutions Reports Second Quarter 2019 Results
14 Agosto 2019 - 5:30PM
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 2019 second quarter and
six-month results.
Q2 2019 Highlights
- Revenue grew by 23.1% to $73.5
million, from $59.7 million in Q2 ’18, including unfavorable
foreign currency translation impact of $1.8 million
- Gross profit grew by 1.8% to $12.1
million, from $11.9 million in Q2 ’18
- Gross margin was 16.5% compared
with 19.9% in Q2 ’18
- Income from operations grew to $0.5
million compared with $0.1 million in Q2 ’18
- Net loss of $1.5 million compared
with a net loss of $1.8 million in Q2 ’18. Weakening of Pound
Sterling negatively impacted results with $0.4 million non-cash
foreign currency loss.
- EBITDA grew 41.9% to $1.0 million,
from $0.7 million in Q2 ’18
- Adjusted EBITDA grew 10.2% to $2.4
million, from $2.1 million in Q2 ’18
Results exclude a net gain on settlement of the
CBSbutler warranty claim of approximately $1.25 million that will
be recorded as income in Q3 ’19.
Year to Date Q2 2019
Highlights
- Revenue grew by 27.5% to $147.3
million, from $115.5 million YTD ’18, including unfavorable foreign
currency translation impact of $4.2 million
- Gross profit grew by 3.2% to $24.2
million, from $23.5 million YTD ’18
- Gross margin was 16.4% compared
with 20.3% YTD ’18
- Income from operations of $1.3
million compared with a loss from operations of $0.3 million YTD
’18
- Net loss of $1.2 million compared
with net loss of $3.1 million YTD ’18
- EBITDA grew by over 67.1% to $4.1
million, from $2.5 million YTD ‘18
- Adjusted EBITDA grew 17.1% to $4.4
million, from $3.8 million YTD ’18
Brendan Flood, Chairman and Chief Executive
Officer, said, “We continue to make great progress toward our
stated goal of growing into a profitable $500 million revenue
business by 2020. While we had hoped to be able to accomplish the
net gain on a settlement in the second quarter just ended,
reporting it in the third quarter gives us a significant head
start.”
Conference CallThe 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 August 15, 2019. The call can also be accessed
"live" online at http://public.viavid.com/index.php?id=135877. 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 August 15, 2019, at 7:30pm ET through August 22, 2019 at
11:59 pm ET. Please use PIN Number 7512077.
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 will 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 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, 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.
818.379.8500harvey@bibimac.com
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Staffing 360 Solutions, Inc. and Subsidiaries |
Reconciliation of Net Loss to Adjusted EBITDA |
(All Amounts in Thousands) |
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Q2 2019 |
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Q2 2018 |
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Q2 2019 YTD |
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Q2 2018 YTD |
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Trailing TwelveMonthsQ2 2019 |
|
Trailing TwelveMonthsQ2 2018 |
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|
|
(Unaudited) |
|
(Unaudited) |
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(Unaudited) |
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(Unaudited) |
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|
(Unaudited) |
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(Unaudited) |
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Revenue |
|
$ |
73,495 |
|
|
$ |
59,727 |
|
|
|
|
$ |
147,324 |
|
|
$ |
115,518 |
|
|
|
|
$ |
292,732 |
|
|
$ |
225,339 |
|
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Gross
Profit |
|
$ |
12,092 |
|
|
$ |
11,882 |
|
|
|
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$ |
24,210 |
|
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$ |
23,463 |
|
|
|
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$ |
49,051 |
|
|
$ |
44,954 |
|
|
Gross Margin |
|
|
16.5 |
% |
|
|
19.9 |
% |
|
|
|
|
16.4 |
% |
|
|
20.3 |
% |
|
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|
16.8 |
% |
|
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19.9 |
% |
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Net loss |
|
$ |
(1,471 |
) |
|
$ |
(1,844 |
) |
|
|
|
$ |
(1,242 |
) |
|
$ |
(3,115 |
) |
|
|
|
$ |
(4,628 |
) |
|
$ |
(18,095 |
) |
|
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Adjustments: |
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Interest expense and amortization of debt discount and deferred
financing costs |
|
$ |
1,911 |
|
|
$ |
2,066 |
|
|
|
|
$ |
3,918 |
|
|
$ |
4,143 |
|
|
|
|
$ |
8,741 |
|
|
$ |
8,153 |
|
|
(Benefit from) provision for income taxes |
|
|
(322 |
) |
|
|
(233 |
) |
|
|
|
|
(324 |
) |
|
|
(81 |
) |
|
|
|
|
(221 |
) |
|
|
844 |
|
|
Depreciation and Amortization |
|
|
877 |
|
|
|
712 |
|
|
|
|
|
1,754 |
|
|
|
1,510 |
|
|
|
|
|
3,368 |
|
|
|
3,556 |
|
|
EBITDA |
|
|
995 |
|
|
|
701 |
|
|
|
|
|
4,106 |
|
|
|
2,457 |
|
|
|
|
|
7,260 |
|
|
|
(5,542 |
) |
|
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|
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Acquisition, capital raising and other non-recurring expenses
(1) |
|
|
742 |
|
|
|
997 |
|
|
|
|
|
953 |
|
|
|
1,844 |
|
|
|
|
|
2,233 |
|
|
|
3,723 |
|
|
Other non-cash charges (2) |
|
|
225 |
|
|
|
291 |
|
|
|
|
|
422 |
|
|
|
663 |
|
|
|
|
|
917 |
|
|
|
1,375 |
|
|
Gain in fair value of warrant liability |
|
|
- |
|
|
|
(341 |
) |
|
|
|
|
- |
|
|
|
(879 |
) |
|
|
|
|
- |
|
|
|
(1,067 |
) |
|
Re-measurement loss on intercompany note |
|
|
368 |
|
|
|
721 |
|
|
|
|
|
17 |
|
|
|
146 |
|
|
|
|
|
557 |
|
|
|
146 |
|
|
Impairment of goodwill |
|
|
- |
|
|
|
- |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
- |
|
|
|
4,790 |
|
|
Loss on extinguishment of debt, net |
|
|
- |
|
|
|
- |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
- |
|
|
|
4,764 |
|
|
Deferred consideration settlement |
|
|
- |
|
|
|
- |
|
|
|
|
|
(847 |
) |
|
|
- |
|
|
|
|
|
(847 |
) |
|
|
- |
|
|
Restructuring charges |
|
|
- |
|
|
|
- |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
(57 |
) |
|
|
780 |
|
|
Gain from sale of business |
|
|
- |
|
|
|
(238 |
) |
|
|
|
|
- |
|
|
|
(238 |
) |
|
|
|
|
- |
|
|
|
(238 |
) |
|
Other loss (income) |
|
|
29 |
|
|
|
9 |
|
|
|
|
|
(257 |
) |
|
|
(241 |
) |
|
|
|
|
(414 |
) |
|
|
(154 |
) |
|
Adjusted
EBITDA |
|
$ |
2,359 |
|
|
$ |
2,140 |
|
|
|
|
$ |
4,394 |
|
|
$ |
3,752 |
|
|
|
|
$ |
9,649 |
|
|
$ |
8,577 |
|
|
Adjusted EBITDA Margin |
|
|
3.2 |
% |
|
|
3.6 |
% |
|
|
|
|
3.0 |
% |
|
|
3.2 |
% |
|
|
|
|
3.3 |
% |
|
|
3.8 |
% |
|
|
|
|
|
|
|
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|
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|
|
|
|
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|
Pre-Acquisition Adjusted EBITDA (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
324 |
|
|
$ |
2,217 |
|
|
|
|
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|
Pro Forma TTM Adjusted EBITDA (4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
9,973 |
|
|
$ |
10,794 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit TTM |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
49,051 |
|
|
$ |
44,954 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TTM Adjusted EBITDA as
percentage of gross profit TTM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19.7 |
% |
|
|
19.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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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. |
(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. |
|
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