NEW YORK, NY--(Marketwired - August 29, 2016) - Staffing 360 Solutions, Inc. (STAF), a public company executing a global buy-and-build strategy through the acquisition of staffing organizations in the US and UK, today released its financial results for its fiscal year ended May 31, 2016.
"We are pleased to report record financial results for the year," stated Brendan Flood, Executive Chairman of Staffing 360 Solutions. "Since we embarked on our buy-and-build strategy less than 36 months ago we have fueled our growth from nearly zero in revenue during fiscal 2013, to over $165 million of revenue in fiscal 2016. Not only are our financial results improving as a result, we are also proud of the six acquisitions we have completed and the more than 4,000 temporary workers that are now part of our journey at Staffing 360 Solutions."
Summary of the Fiscal Year Ended May 31, 2016
Revenue was $165.6 million, compared to $128.8 million in the fiscal year ended May 31, 2015, a 28.5% increase.
Gross profit was $29.0 million, compared to $22.5 million in the fiscal year ended May 31, 2015, a 28.8% increase.
Net loss decreased to $9.7 million* in fiscal 2016, compared to a net loss of $18.1 million in the fiscal year ended May 31, 2015.
Adjusted EBITDA was $4.1 million* in fiscal 2016, compared to Adjusted EBITDA of $752,000 in the fiscal year ended May 31, 2015.
Cash Flow from Operating Activities was $2.1 million for the year ended May 31, 2016, compared to a negative $3.1 million for the same period in the prior year.
The Company encourages investors to review its Form 10-K for the year ended May 31, 2016 for additional information regarding the Company's results of operations, liquidity, audited financial statements and other pertinent information.
Summary of the Unaudited Fiscal Fourth Quarter Ended May 31, 2016
Revenue was $44.4 million, compared to $32.2 million in the fourth quarter ended May 31, 2015, a 37.8% increase.
Gross profit was $7.7 million, compared to $5.5 million in the fourth quarter ended May 31, 2015, a 38.9% increase.
Net loss decreased to $2.8 million*, compared to a net loss of $4.3 million in the fourth quarter ended May 31, 2015.
Adjusted EBITDA was $1.1 million*, compared to Adjusted EBITDA of $404,000 in the fourth quarter ended May 31, 2015.
* A table has been included in this press release reconciling net loss to Adjusted EBITDA for the fiscal year and fiscal fourth quarter.
"This year we have made considerable strides on all fronts," Mr. Flood continued. "We were operating cash flow positive for the fiscal year and we posted our strongest Adjusted EBITDA result in our Company's history -- $4.1 million for the year ended May 31, 2016. Needless to say, we are extremely pleased with the progress we have made and the results we have achieved."
Analysis of Financial Results
As a result of the Company's numerous acquisitions and strong organic growth, revenues increased to $165.6 million in the fiscal year ended May 31, 2016, compared to $128.8 million for the same period in 2015. Gross profit increased to over $29.0 million in the 2016 fiscal year, compared to $22.5 million for the same period in 2015. This represents gross margin of 17.5% for both periods, which is in line with the Company's expectations for gross profit as a percentage of revenue.
The Company's net loss for the year ended May 31, 2016 was $9.7 million, compared to a net loss of $18.1 million for the same period in 2015. The net loss was primarily attributable to non-cash and non-recurring accounting charges associated with the Company's capital structure.
"Staffing 360 Solutions has grown considerably from where we were a year ago," stated David Faiman, Chief Financial Officer. "Our top line revenue of $165 million is more than 28% greater than the amount achieved last year, and we have made significant progress reducing corporate overheads through our Pathway to Profitability initiative. This year, our operating expenses were reduced to 20.3% of revenue, compared to 23.3% of revenue last year. As Staffing 360 continues to grow through additional acquisitions, we have been experiencing increased productivity among our revenue generators along with reduced corporate overheads, which is helping improve our financial metrics."
Highlights of the 2016 Fiscal Year and Subsequent Events
Record levels of revenue, including $165.6 million of revenue for the fiscal year ended May 31, 2016, the single largest revenue figure in the Company's history.
Experienced over 7% organic growth from the Company's existing staffing divisions in the UK and US.
Realized Adjusted EBITDA of $4.1 million for the year and $1.1 million in fiscal Q4 2016, representing positive Adjusted EBITDA for the seventh quarter in a row.
Reported operating cash flow of $2.1 million for fiscal 2016, the Company's first full fiscal year positive operating cash flow result.
Completed the acquisition of Lighthouse Placement Services, providing engineering workforce solutions to a diverse set of clients, ranging from local firms to international enterprises and defense contractors.
Completed the acquisition of The JM Group, one of the UK's leading recruitment firms, which for three decades has provided IT experts to a diverse set of clients across the financial services, professional services and corporate sectors in the United Kingdom.
Uplisted to Nasdaq in September 2015 under the symbol STAF and recently rang the opening bell on August 15, 2016. As a Nasdaq-listed company, Staffing 360's ability to communicate its progress with a broader audience is expected to increase, especially as trading volume continues to rise to all-time new levels.
Raised $5.3 million in equity through the Company's S-3 registration statement, since it became effective in March 2016. The Company is very pleased with the result and believes this represents a major step toward achieving Staffing 360's larger initiatives to tap the capital markets as it continues to grow the business.
"Staffing 360 Solutions has achieved some major milestones this year," said Matt Briand, President and CEO. "We posted record revenue and Adjusted EBITDA, streamlined our operations, uplisted to Nasdaq, all while completing two more acquisitions and achieving strong organic growth. With all of these exciting developments, we encourage investors to join us on our earnings conference call for more details on where we've been and where we're headed as we continue to expand our business in fiscal 2017 and beyond."
Earnings Conference Call
Staffing 360 Solutions will host its earnings conference call on Wednesday, September 7, 2016, at 9:00 am Eastern to discuss its financial results for the fiscal year and fiscal fourth quarter ended May 31, 2016. The conference call will include a Q&A session where investors will have the opportunity to ask questions of management.
The teleconference can be accessed by dialing 877.407.0778 within the United States, 800.756.3429 within the UK, or 201.689.8565 internationally. Please dial in 10 minutes prior to the beginning of the call. There will be a playback of the teleconference available until September 30, 2016. To listen to the playback, dial 877.481.4010 within the United States or 919.882.2331 internationally and use replay ID number: 10067.
