Staffing 360 Solutions Reports Second Quarter and Six-Month 2022 Results

NEW YORK, Aug. 23, 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 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 Access

The 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 [email protected] 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 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)
		Q2 2022				Q2 2021						Q2 2022 YTD				Q2 2021 YTD						Trailing Twelve Months Q2 2022				Trailing Twelve Months Q2 2021
		(Unaudited)				(Unaudited)																(Unaudited)				(Unaudited)
Net Income (Loss)		$	(2,264	)		$	7,848					$	(4,588	)		$	6,160					$	(2,590	)		$	1,278
Adjustments:
Interest expense		$	951			$	1,097					$	1,621			$	2,253					$	3,224			$	5,275
Provision (benefit) income taxes			(3	)			(67	)					3				(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
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			-				-						-				-						-				21
Gain on business sale			-				-						-				-						-				(124	)
PPP forgiveness gain			-				(10,105	)					-				(10,105	)					-				(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	%
Adjusted EBITDA of Divested Business (3)																						$	-			$	(20	)
Pro Forma TTM Adjusted EBITDA (4)																						$	2,180			$	5,412
Adjusted Gross Profit TTM (5)																						$	35,866			$	32,793
TTM Adjusted EBITDA as percentage of adjusted gross profit TTM																							6.1	%			16.6	%
(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.