NEW YORK, NY--(Marketwired - Apr 28, 2015) - Staffing 360 Solutions, Inc. (
Dear Shareholders:
As the Executive Chairman of Staffing 360 Solutions, it is my pleasure to provide this update as we highlight our corporate initiatives, as well as our plans for the future.
For those of you that have been part of our journey over the past two years, you will certainly be aware that since our inception as a business we have made no secret of our strategic aim. We are a high growth buy-and-build staffing company.
Over the past 24 months, we have grown from annualized revenues of zero to $130 million and delivered on the first phase of our growth plan. During the two most recent quarters, we have executed on what we call our "Pathway to Profitability."
This Pathway is designed to get the Company prepared for the second phase of this growth, which will take us to $300 million in annualized revenues through acquisitions as well as through growing the previously purchased businesses organically.
To this point, we are very pleased with our progress but we recognize that we have a long way to go to deliver on our stated aims and on the promises that we have made to our loyal investment base.
Here are just a few of the milestones that have been reached in fiscal Q3 2015, which were outlined on our most recent earnings conference call:
Financial Results and Organic Growth:
- Fiscal Q3 revenue has nearly doubled to $31.0 million, year-over-year, from $15.8 million.
- Net loss improved to $81,000, compared to a loss of $1.8 million last year.
- Our underlying operations are showing strong 17% organic growth, year-over-year.
EBITDA Milestones:
- We achieved Adjusted EBITDA profitability for the second quarter in a row and are now positive AEBITDA year-to-date.
- In addition, we achieved Non-Adjusted EBITDA profitability for the first time. This is a major achievement for us and several quarters ahead of schedule.
Pathway to Profitability:
- Notes payables have been reduced by $3 million as part of our restructuring.
- Total debt has been slashed by nearly $8 million.
- We have achieved cash flow savings of over $9 million over the next few years.
- We increased our shareholders' equity value to $11 million.
We are pleased to make such significant progress within our Pathway to Profitability. In addition, we also established a $25 million revolving credit facility and a $3 million term loan with MidCap Financial, which is managed by a subsidiary of Apollo Global Management, one of the world's leading alternative investment managers. We believe that this revolving credit facility, which has an accordion up to $50 million, will support the balance sheets of our current business and of those that are still to be acquired.
Although there has been some pressure on our stock price over the past several months our management team has stuck resolutely to our execution plan and we are absolutely thrilled by the market's recent reaction to our earnings release and to the announcement of our capital raise.
As the single largest shareholder of the Company, I am particularly focused on our execution in the public markets. As we mentioned on our earnings conference call, Staffing 360 Solutions is making progress on many fronts and by continuing to achieve and exceed our stated objectives, we believe the public markets are appropriately beginning to take notice.
We expect the improvements to our top and bottom line will continue as we focus on M&A. For an emerging public company like Staffing 360 Solutions, the staffing industry represents a fantastic opportunity because there are so many quality acquisition targets from which to choose. Not only that, the industry is growing organically and represents a rising tide for all companies in the temporary staffing sector.
In fact, the American Staffing Association (ASA) announced that the global employment and recruitment industry grew by 9.6% in 2013, the most recent data available. However, as discussed, these metrics are shadowed by our own organic growth at Staffing 360 Solutions of 17% year-over-year for our recent quarter.
As mentioned previously, we have a publicly-stated aim of getting to $300 million in annualized revenues. To achieve this objective, we have developed a detailed list of potential acquisition targets -- what we call our M&A Pipeline -- with combined revenues in excess of $500 million. Currently, we have four acquisitions prospects under signed Letters of Intent. These quality businesses would add $180 million in annualized revenues.
While we will not acquire all of the potential acquisition targets in the M&A Pipeline, what is clear to us is that there are many excellent staffing companies in the United States and the United Kingdom that are interested in joining our journey. We will continue to update the market as we make progress on this initiative.
Going forward, we have three primary objectives:
Firstly, continue to push forward with our Pathway to Profitability. We believe our business plan is working and our actions are delivering. That said, we recognize that there is still more work to be done and we will continue to do it.
Secondly, to drive the capital raising process to allow us to continue to acquire larger and increasingly more attractive companies with strong gross margins as we drive our profitability, cash flow, and shareholder value in 2015 and beyond.
Thirdly, Staffing 360 intends to uplist to a national exchange as soon as all listing requirements are met. We strongly believe a national exchange listing will attract additional investors and increase the liquidity of our stock. We also expect the uplisting to improve our trading, reduce volatility and make Staffing 360 Solutions accessible to a broader segment of the investment community.
Please stay tuned for any updates regarding our uplisting as well as additional improvements to our balance sheet in the coming weeks and months. We remain fully committed to our Pathway to Profitability and we look forward to sharing our progress with you.
In summary, we believe that Staffing 360 Solutions represents a tremendous opportunity for rapid growth in both the United States and the United Kingdom. As we continue to implement Staffing 360's high-growth acquisition model, we remain committed to growing revenues, earnings and shareholder value.
I thank you for your attention and continued support. We look forward to maintaining an open dialogue between management and our shareholders. For further information, please visit the "Investors" section of our website at: www.staffing360solutions.com/investors.html .
Respectfully,
Brendan Flood Executive Chairman Staffing 360 Solutions, Inc. Ticker: STAF
About Staffing 360 Solutions, Inc.
Staffing 360 Solutions, Inc. (
Follow Staffing 360 Solutions on Facebook , LinkedIn and Twitter .
Non-GAAP Financial Measures
The Company uses financial measures which are not calculated and presented in accordance with U.S. generally accepted accounting principles ("GAAP") in evaluating its financial and operational decision making regarding potential acquisitions, as well as a means to evaluate period-to period comparison. The Company presents these non-GAAP financial measures because it believes them to be an important supplemental measure of performance that is commonly used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. We refer you to the reconciliations above.
The Company defines Adjusted EBITDA as earnings (or loss) from continuing operations before interest expense, income taxes, depreciation and amortization, and amortization of non-cash stock-based compensation, non-recurring acquisition and restructuring expenses and the goodwill impairment charges. The Company excludes stock-based compensation because it is non-cash in nature.
Forward-Looking Statements
Certain matters discussed within this press release are forward-looking statements including, but not limited to the timing and ability to enter into any additional acquisitions, as well as the size of future revenue. Although Staffing 360 Solutions, Inc. believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Specifically, in order for the Company to achieve annualized revenues of $300 million, the Company will need to successfully raise sufficient capital, to consummate additional target acquisitions, successfully integrate any newly acquired companies, organically grow its business, successfully defend current and any potential future litigation, as well as various additional contingencies, many of which are unknown at this time and generally out of the Company's control. The Company can give no assurance that the Company will be able to achieve these objectives. Staffing 360 Solutions does not undertake any duty to update any statements contained herein (including any forward-looking statements), except as required by law. Factors that could cause actual results to differ materially from expectations include general industry considerations, regulatory changes, changes in local or national economic conditions and other risks detailed from time to time in Staffing 360 Solutions' reports filed with the SEC, including quarterly reports on Form 10-Q, reports on Form 8-K and annual reports on Form 10-K.
Investor Contact: Staffing 360 Solutions, Inc. Darren Minton Executive Vice President 212.634.6413 Email Contact Financial Contact: Staffing 360 Solutions, Inc. Jeff R. Mitchell Chief Financial Officer 212.634.6411 Email Contact
