Staffing 360 Solutions Reports Fiscal Full Year 2021 Financial Results
June 27 2022 - 8:36AM
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 2021 full year financial
results.
Fiscal 2021 Overview
- Revenue declined by 3.3% to $197.8 million from $204.5 million
in Fiscal 2020
- Gross profit was $33.9 million, down from $34.8 million in
Fiscal 2020, a decrease of 2.7%
- Gross margin increased to 17.1% compared with 17.0% in Fiscal
2020
- Income from operations was a loss of $7.3 million compared with
a loss of $8.8 million in Fiscal 2020
- Net income of $8.2 million improved against a net loss of $15.6
million in Fiscal 2020
- EBITDA was a profit of $14.8 million compared with a loss of
$4.9 million in Fiscal 2020
- Adjusted EBITDA for Fiscal 2021 was $2.4 million compared to
$4.7 million Fiscal 2020
Brendan Flood, Chairman, CEO and President said,
“We have emerged stronger and more resilient from a challenging
2021 and now stand ready to capitalize on the opportunities before
us. 2021 was consolidation year spent strengthening the balance
sheet in the midst of on-going pandemic restrictions, particularly
in the UK. We had EBITDA of $14.8 million, due in large part to
obtaining full forgiveness of $19.6 million in PPP loans. We
continued to pay down debt, going from a balance of $71.2 million
in June 2020 to $9.0 million at the end of the 2021 fiscal year.
Our gross profit for the year was $33.9 million, with an increasing
share coming from permanent placements. Although we continued to
face the challenges of the COVID-19 pandemic in 2021, a growing
number of geographies in which we operate are returning to business
as usual.
“We have re-signed agreements with many of our
major clients, and we have expanded our services to them in new
geographies. Our teams continue to fill challenging roles in a
tight labor market, which is evidenced by improvements in
headcounts in both the US and the UK,” continued Flood.
“We are continuing our focus on increasing gross
profit and gross margin, which is part of our ongoing trend towards
a higher margin business model. We have also invested considerable
effort towards the strengthening of our balance sheet. I look
forward to discussing this in our upcoming conference call…along
with the burgeoning opportunities before us since our acquisition
in May of Headway Workforce Solutions. We believe that this is a 1
+ 1 = 3 equation. The ongoing integration is proceeding smoothly
and has already begun to yield results,” Flood concluded.
Conference Call The Company
will host a conference call on Thursday, June 30, 2022 at 9:00am ET
to discuss financial results and business developments, including
the recently completed acquisition of Headway Workforce Solutions.
STAF invites participants to submit questions via email to our
Investor Relations representative terri@bibimac.com by 2:00pm PT on
Wednesday, June 29th.
Participants should dial in to the call at least
five minutes before 9:00am ET June 30, 2022. The call can also be
accessed "live" online at:
https://viavid.webcasts.com/starthere.jsp?ei=1557203&tp_key=b46188cbd6.
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 June 30,
2022, at 12:00pm ET through July 3, 2022 at 11:59pm ET. Please use
PIN Number 2965666.
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 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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Q4 2021 |
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Q4 2020 |
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Fiscal 2021 |
|
Fiscal 2020 |
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|
|
(Unaudited) |
|
(Unaudited) |
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Revenue |
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|
$ |
50,788 |
|
|
$ |
53,834 |
|
|
|
|
$ |
197,770 |
|
|
$ |
204,527 |
|
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Gross Profit |
|
|
$ |
7,209 |
|
|
$ |
8,288 |
|
|
|
|
$ |
33,867 |
|
|
$ |
34,813 |
|
|
|
Gross Margin |
|
|
|
14.2 |
% |
|
|
15.4 |
% |
|
|
|
|
17.1 |
% |
|
|
17.0 |
% |
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Net Income (loss) |
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|
$ |
(6,715 |
) |
|
$ |
(2,241 |
) |
|
|
|
$ |
8,158 |
|
|
$ |
(15,642 |
) |
|
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Adjustments: |
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Interest expense |
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|
$ |
788 |
|
|
$ |
1,439 |
|
|
|
|
$ |
3,856 |
|
|
$ |
7,195 |
|
|
|
Benefit from income taxes income taxes |
|
|
|
(459 |
) |
|
|
147 |
|
|
|
|
|
(357 |
) |
|
|
(100 |
) |
|
|
Depreciation and amortization |
|
|
|
632 |
|
|
|
844 |
|
|
|
|
|
3,118 |
|
|
|
3,677 |
|
|
|
EBITDA |
|
|
|
(5,754 |
) |
|
|
189 |
|
|
|
|
|
14,775 |
|
|
|
(4,870 |
) |
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Acquisition, capital raising and other non-recurring expenses
(1) |
|
|
|
708 |
|
|
|
2,241 |
|
|
|
|
|
3,510 |
|
|
|
6,714 |
|
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|
Other non-cash charges (2) |
|
|
|
17 |
|
|
|
107 |
|
|
|
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|
361 |
|
|
|
662 |
|
|
|
Impairment of Goodwill |
|
|
|
3,104 |
|
|
|
- |
|
|
|
|
|
3,104 |
|
|
|
2,969 |
|
|
|
Re-measurement (income) loss on intercompany note |
|
|
|
41 |
|
|
|
(932 |
) |
|
|
|
|
260 |
|
|
|
(584 |
) |
|
|
Restructuring Charges |
|
|
|
- |
|
|
|
21 |
|
|
|
|
|
- |
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|
21 |
|
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|
Gain on business sale |
|
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- |
|
|
|
96 |
|
|
|
|
|
- |
|
|
|
(124 |
) |
|
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PPP Forgiveness Gain |
|
|
|
- |
|
|
|
|
|
|
|
|
|
(19,609 |
) |
|
|
|
|
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Other income and expense |
|
|
|
325 |
|
|
|
(3 |
) |
|
|
|
|
33 |
|
|
|
(125 |
) |
|
|
Adjusted EBITDA |
|
|
$ |
(1,559 |
) |
|
$ |
1,719 |
|
|
|
|
$ |
2,434 |
|
|
$ |
4,663 |
|
|
|
Adjusted EBITDA Margin |
|
|
|
-3.1 |
% |
|
|
3.2 |
% |
|
|
|
|
1.2 |
% |
|
|
2.3 |
% |
|
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Adjusted EBITDA of Divested Business (3) |
|
|
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|
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|
$ |
0 |
|
|
$ |
(507 |
) |
|
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Pro Forma TTM Adjusted EBITDA (4) |
|
|
|
|
|
|
|
|
|
|
|
$ |
2,434 |
|
|
$ |
4,156 |
|
|
|
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Adjusted Gross Profit TTM (5) |
|
|
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|
|
|
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|
|
$ |
33,867 |
|
|
$ |
31,199 |
|
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TTM Adjusted EBITDA as percentage of adjusted gross profit TTM |
|
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|
|
|
|
|
|
|
7.2 |
% |
|
|
14.9 |
% |
|
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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. In addition, the
Company included non-recurring expenses related to salaries, rent
and bad debts which were a direct result of the Covid-19 pandemic.
In addition, ongoing organizational restructuring lead to numerous
headcount reductions. These positions are no longer included in the
current cost structure. Salary adjustments are standard treatment
for adjustment to EBITDA for management reporting purposes.(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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|
Staffing 360 Solutions, Inc. and
Subsidiaries |
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Loss to Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
(All Amounts in Thousands) |
|
|
|
|
|
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|
Q4 2021 |
|
Q3 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
$ |
50,788 |
|
|
$ |
47,501 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
|
$ |
7,209 |
|
|
$ |
9,623 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Margin |
|
|
|
0 |
|
|
|
20.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
$ |
(6,715 |
) |
|
$ |
8,713 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
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|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
$ |
788 |
|
|
$ |
814 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefit from income taxes income taxes |
|
|
|
(459 |
) |
|
|
131 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
632 |
|
|
|
880 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
|
|
(5,754 |
) |
|
|
10,538 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition, capital raising and other non-recurring expenses
(1) |
|
|
|
708 |
|
|
|
321 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other non-cash charges (2) |
|
|
|
17 |
|
|
|
8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of Goodwill |
|
|
|
3,104 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Re-measurement (income) loss on intercompany note |
|
|
|
41 |
|
|
|
315 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring Charges |
|
|
|
- |
|
|
|
(9,504 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on business sale |
|
|
|
- |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PPP Forgiveness Gain |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other loss |
|
|
|
325 |
|
|
|
(188 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
|
$ |
(1,559 |
) |
|
$ |
1,490 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin |
|
|
|
-3.1 |
% |
|
|
3.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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. In addition, the
Company included non-recurring expenses related to salaries, rent
and bad debts which were a direct result of the Covid-19 pandemic.
In addition, ongoing organizational restructuring lead to numerous
headcount reductions. These positions are no longer included in the
current cost structure. Salary adjustments are standard treatment
for adjustment to EBITDA for management reporting purposes.(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. |
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