NEW YORK, NY--(Marketwired - Apr 23, 2014) - Staffing 360 Solutions, Inc. (OTCQB: STAF), a public company engaged in the provision of international staffing services with a primary focus on the finance and accounting, administrative, engineering, IT and cybersecurity verticals, today released its financial results for its fiscal third quarter ended February 28, 2014.
Summary of the Fiscal Third Quarter Ended February 28, 2014
- Net revenues increased to $16.9 million, compared to $70,000 in the third quarter ended February 28, 2013.
- Gross profit increased to $3.5 million, compared to $31,000 in the third quarter ended February 28, 2013.
- The net loss increased to $1.8 million, compared to $786,000 in the third quarter ended February 28, 2013.
Analysis of Financial Results
Net revenues increased to $16.9 million in the fiscal third quarter ended February 28, 2014, compared to approximately $70,000 for the same period in 2013. Gross profit increased to over $3.5 million in the fiscal third quarter, compared to approximately $31,000 for the same period in 2013. This significant increase in revenue and gross profit was principally a result of the Company's accretive acquisition strategy, including a total of four acquisitions since the fiscal third quarter last year.
The Company's net loss increased to $1.8 million in the fiscal third quarter ended February 28, 2014, compared to approximately $786,000 for the same period in 2013. The net loss was primarily attributable to increased operating expenses, including an increased workforce due to the acquisitions made throughout the year, as well as office expenses related to the Company's subsidiaries, four of which did not exist in 2013. In addition, the Company incurred substantial one-time costs attributable to the acquisitions.
"This has been a significant quarter for our company in nearly every respect," stated Brendan Flood, Executive Chairman of Staffing 360 Solutions. "Although our bottom line still shows a net loss, these consolidated results only include a portion of Initio's numbers due to the timing of the acquisition. We believe consolidated results will continue to improve in future quarters as these acquisitions are more fully reflected. Our success to-date has been driven in large part by our accretive acquisition strategy, which has fueled our growth from less than $100,000 in revenue in the fiscal third quarter of 2013, to having completed four acquisitions and achieved an estimated current run rate over $100 million in revenues."
During the recent fiscal year, Staffing 360 Solutions completed the acquisitions of Cyber 360 Solutions (f/k/a The Revolution Group Ltd.), Control Solutions International Inc., Initio International Holdings Limited (renamed Staffing 360 Solutions Limited), as well as Poolia UK. It is important to note, however, that these consolidated quarterly results only include two months -- or approximately 2/3 -- of Initio's financial results since it closed on January 3, 2014. Also, these results do not fully reflect the Company's most recent Poolia UK acquisition, which closed on the last day of the third fiscal quarter ended February 28, 2014. The Company's fourth quarter numbers will more fully reflect the Company's accretive acquisitions.
"Our consolidation strategy is ideally suited for the highly fragmented temporary staffing industry, especially considering our team's capital markets expertise," added Alfonso J. Cervantes, Vice Chairman and President. "The pure size of the acquisitions we have completed to-date, combined with our existing operations, currently places us in the top 30 public staffing companies in the United States. As we continue to extend our reach in countries throughout the world, we look forward to relaying our exciting developments and important milestones with our loyal shareholders."
Highlights of the Fiscal Third Quarter and Subsequent Events
- Completed the acquisition of Initio International Holdings Limited (renamed Staffing 360 Solutions Limited) on January 3, 2014, which included the Monroe Staffing division in the US and Longbridge Recruitment division in the UK. Initio generated approximately $80 million in revenues during 2013.
- Appointed staffing industry veterans Brendan Flood as Executive Chairman and Matt Briand as Chief Executive Officer. Included in Mr. Flood's significant industry experience was his role as the former CFO of the Americas for Monster Worldwide, Inc., which generated $1.8 billion of annualized revenue in 2002.
- Completed the acquisition of Poolia UK Ltd. on February 28, 2014, a subsidiary of Poolia AB, a publicly listed company on NASDAQ OMX Stockholm.
- Moved the Company's UK operations to new corporate offices in London, combining the Company's Longbridge Recruitment and Poolia UK divisions into one location. Rebranded the combined UK division Longbridge 360.
- Completed a $1.7 million convertible note financing and $10 million equity private placement to continue to fund the Company's accretive acquisition strategy.
- Expanded the senior management team to include: Darren Minton as the Company's new Executive Vice President; Wade Pearson, as the Company's new Senior Vice President of Finance; and Nick Koutsivitis, as Controller.
- Hired seasoned accounting executive Jeff R. Mitchell as the Company's new Chief Financial Officer. Mr. Mitchell was the former CFO of Select Staffing, where he led 40 acquisitions in the staffing industry, which generated $1.3 billion in revenue.
Mr. Flood concluded, "Staffing 360 Solutions has accomplished quite a lot in the past quarter. As we continue to explore and evaluate further acquisitions, we will be moving ever closer towards our publicly stated mission of being a $300 million revenue business within the next 18 to 24 months. This growth will certainly result in more game changing announcements throughout 2014 as we leverage our existing expansion initiatives and operational expertise, all while maintaining a steadfast commitment to growth in revenues, growth in earnings and growth in long term shareholder value."
About Staffing 360 Solutions, Inc.
Staffing 360 Solutions, Inc. (OTCQB: STAF) is a public company in the global staffing sector engaged in the acquisition of international staffing organizations with operations in the US, Europe and India. As part of its targeted consolidation model, Staffing 360 Solutions is pursuing broad spectrum staffing companies in the IT, financial, accounting, healthcare and cybersecurity industries. The Company believes the staffing industry offers opportunities to create a successful public company with a longer term objective of accretive acquisitions that will drive annual revenues to $300 million. For more information, please visit: www.staffing360solutions.com
Certain matters discussed within this press release are forward-looking statements including, but not limited to, new agreements, the ability to enter into any additional acquisitions, or 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. 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.