Staffing 360 Solutions Reports Year End 2022 Financial Results
05/22/2023 - 08:00 AM
NEW YORK, May 22, 2023 (GLOBE NEWSWIRE) -- 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 Year End 2022 financial results.
YE 2022 Overview
Revenue increased by 23.8% (26.7% in constant currency) to $244.9M compared with $197.7M in the prior year period Gross profit was $42.8M from $33.8M in the prior year period, or an increase of 26.3% (or 29.1% in constant currency) An impairment to Goodwill of $10M was booked at the year-end to recognize the performance of the stock price Operating loss was ($13.46M), after the impairment, compared with operating loss of ($7.3M) in the prior year, which contained a $3.1M impairment Net loss was ($17.0M), including the impairment, compared with net income of $8.2M in the prior year period. The prior year included forgiveness of PPP loans and interest of $19.6M EBITDA for the fiscal year was a loss of ($9.7M), including the impairment, compared to income of $14.8M in the prior year period, which included the one-time gain of $19.6M for the forgiveness of PPP loans and interest. Adjusted EBITDA was $7.4M as compared with $2.4M in the prior year period, an increase of 205% Diluted EPS was a loss of ($8.04) as compared to $3.70 in the same period last year Quarter 4 2022 Overview
Revenue increased by 37.5% (39.2% in constant currency) to $69.9M compared with $50.8M in the prior year period Gross profit was $11.4M from $7.2M in the prior year period, or an increase of 58.3% (or 60.6% in constant currency) An impairment to Goodwill of $10M was booked at the year-end to recognize the performance of the stock price Adjusted EBITDA was $2.1M as compared to a loss of ($1.6M) in the prior year period A table showing a reconciliation of the financial statements to Adjusted EBITDA is provided with this Press Release.
Brendan Flood, Chairman, CEO and President, said, “Our paradigm changing service delivery approach continues to make advances in very challenging markets, with our year-over-year revenue growth well into double digits with strong gross profit for the year.
“It is important to note that the impairment charge, while disappointing, is a non-cash charge and is a reflection of the current condition of the micro-cap stock market and is not related to the performance of any individual part of the company.
“Following our acquisition of Headway Workforce Solutions, we have continued to execute our stated strategy, and believe that Headway’s unique service delivery model complements, and enhances, our overall business model. The integration of Headway into the Staffing 360 Solutions’ businesses has successfully increased the combined profitability by $2M as of year-end and we expect continued improvements to profitability in 2023.
“Our buy-integrate-build strategy is beginning to pay dividends, and we anticipate continued revenue growth and margin improvements as we move towards our long-term goals. As with all staffing companies we continue to monitor the marketplace and our client needs for any recessionary impacts, or other macro-economic issues, and will take any necessary actions to mitigate its impact.” concluded Mr. Flood.
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: Matt Blazei CoreIR 516-386-0430 mattb@coreir.com
STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (All amounts in thousands, except share and per share values) Quarters Ended Fiscal Years Ended December 31, 2022 January 1, 2022 December 31, 2022 January 1, 2022 Revenue $ 69,851 $ 50,788 $ 244,917 $ 197,770 Cost of Revenue 58,439 43,579 202,148 163,903 Gross Profit 11,412 7,209 42,769 33,867 Operating Expenses: Selling, general and administrative expenses 12,820 9,494 43,236 35,305 Impairment of Goodwill 10,000 3,104 10,000 3,104 Depreciation and amortization 850 636 2,990 2,758 Total Operating Expenses 23,670 13,234 56,226 41,167 Loss From Operations (12,258 ) (6,025 ) (13,457 ) (7,300 ) Other (Expenses) Income: Interest expense (1,369 ) (789 ) (3,881 ) (3,856 ) Amortization of debt discount and deferred financing costs (86 ) 6 (604 ) (359 ) Re-measurement loss on intercompany note - (41 ) - (260 ) PPP forgiveness gain - - 19,609 Other income (loss), net (12 ) (325 ) 726 (33 ) Total Other (Expenses) Income, net (1,467 ) (1,149 ) (3,759 ) 15,101 (Loss) Income Before Benefit from Income Tax (13,725 ) (7,174 ) (17,216 ) 7,801 Benefit from Income taxes 287 459 222 357 Net (Loss) Income $ (13,438 ) $ (6,715 ) $ (16,994 ) $ 8,158
STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (All amounts in thousands, except share and par values) As of As of December 31, 2022 January 1, 2022 ASSETS Current Assets: Cash $ 1,992 $ 4,558 Accounts receivable, net 23,628 20,718 Prepaid expenses and other current assets 1,762 988 Total Current Assets 27,382 26,264 Property and equipment, net 1,230 865 Goodwill 19,891 23,828 Intangible assets, net 17,385 13,649 Other assets 6,701 3,506 Right of use asset 9,070 5,578 Total Assets $ 81,659 $ 73,690 LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY Current Liabilities: Accounts payable and accrued expenses $ 16,526 $ 12,532 Accrued expenses - related party 218 216 Current portion of debt 249 9,223 Accounts receivable financing 18,268 15,199 Leases - current liabilities 1,188 1,006 Earnout liabilites 8,344 4,054 Other current liabilities 2,639 2,503 Total Current Liabilities 47,432 44,733 Long-term debt - Related party 8,661 279 Redeemable Series H preferred stock, net 8,393 - Leases - non current 8,640 4,568 Other long-term liabilities 180 785 Total Liabilities 73,306 50,365 Commitments and contingencies - - Stockholders' Equity: Preferred stock, $0.00001 par value, 20,000,000 shares authorized; Series J Preferred Stock, 40,000 designated, $0.00001 par value, 0 and 0 shares issued and outstanding as of December 31, 2022 and January 1, 2022, respectively Common stock, $0.00001 par value, 200,000,000 shares authorized; 2,629,199 and 1,758,835 shares issued and outstanding, as of December 31, 2022 and January 1, 2022, respectively 1 1 Additional paid in capital 111,586 107,183 Accumulated other comprehensive (loss) income (2,219 ) 162 Accumulated deficit (101,015 ) (84,021 ) Total Stockholders' Equity 8,353 23,324 Total Liabilities and Stockholders' Equity $ 81,659 $ 73,690
Adjusted EBITDA This measure is defined as net income (loss) attributable to common stock before: interest expense, benefit from income taxes; depreciation and amortization; acquisition, capital raising and other non-recurring expenses; other non-cash charges; impairment of goodwill; re-measurement gain on intercompany note; restructuring charges; gain from sale of business; PPP Forgiveness Gain; other income; and charges we consider to be non-recurring in nature such as legal expenses associated with litigation, professional fees associated potential and completed acquisitions. We use this measure because we believe it provides a more meaningful understanding of our profit and cash flow generation.
Quarter Ended Twelve Months Ended December 31, 2022 January 1, 2022 December 31, 2022 January 1, 2022 Net (loss) income $ (13,438 ) $ (6,715 ) $ (16,994 ) $ 8,158 Interest expense 1,369 788 3,881 3,856 Benefit from income taxes (287 ) (459 ) (222 ) (357 ) Depreciation and amortization 936 632 3,594 3,118 EBITDA $ (11,420 ) $ (5,754 ) $ (9,741 ) $ 14,775 Acquisition, capital raising and other non-recurring expenses (1) 2,671 708 7,046 3,510 Other non-cash charges (2) 816 17 848 361 Impairment of Goodwill 10,000 3,104 10,000 3,104 Re-measurement gain on intercompany note - 41 - 260 PPP Forgiveness Gain - - - (19,609 ) Other (income) loss 12 325 (726 ) 33 Adjusted EBITDA $ 2,079 $ (1,559 ) $ 7,427 $ 2,434 Adjusted EBITDA as percentage of Gross Profit 16.9 % -16.2 % 17.4 % 7.2 % (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.