Staffing 360 Solutions Reports Fiscal Full Year 2021 Financial Results

Schedules Conference Call for June 30, 2022

NEW YORK, June 27, 2022 (GLOBE NEWSWIRE) -- Staffing 360 Solutions, Inc. ((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 [email protected] 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 Statements

This 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 IR

Bibicoff + MacInnis, Inc.

818.379.8500 x 2 [email protected]

Staffing 360 Solutions, Inc. and Subsidiaries
Reconciliation of Net Loss to Adjusted EBITDA
(All Amounts in Thousands)
			Q4 2021				Q4 2020						Fiscal 2021				Fiscal 2020
			(Unaudited)				(Unaudited)
Revenue			$	50,788			$	53,834					$	197,770			$	204,527
Gross Profit			$	7,209			$	8,288					$	33,867			$	34,813
Gross Margin				14.2	%			15.4	%					17.1	%			17.0	%
Net Income (loss)			$	(6,715	)		$	(2,241	)				$	8,158			$	(15,642	)
Adjustments:
Interest expense			$	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	)
Acquisition, capital raising and other non-recurring expenses (1)				708				2,241						3,510				6,714
Other non-cash charges (2)				17				107						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						-				21
Gain on business sale				-				96						-				(124	)
PPP Forgiveness Gain				-										(19,609	)
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	%
Adjusted EBITDA of Divested Business (3)													$	0			$	(507	)
Pro Forma TTM Adjusted EBITDA (4)													$	2,434			$	4,156
Adjusted Gross Profit TTM (5)													$	33,867			$	31,199
TTM Adjusted EBITDA as percentage of adjusted gross profit TTM														7.2	%			14.9	%
(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.
Staffing 360 Solutions, Inc. and Subsidiaries
Reconciliation of Net Loss to Adjusted EBITDA
(All Amounts in Thousands)
			Q4 2021				Q3 2021
			(Unaudited)				(Unaudited)
Revenue			$	50,788			$	47,501
Gross Profit			$	7,209			$	9,623
Gross Margin				0				20.3	%
Net loss			$	(6,715	)		$	8,713
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.