Staffing 360 Solutions releases quarterly letter to shareholders
Flood reiterated the company’s aim to generate $300 million in revenue, announcing that the company was pleased to announce the end of a strong fiscal 2015 year during its earnings conference call at the beginning of August. Flood also highlighted some of the milestones the company has achieved.
Financial Results and Organic Growth:
• We have grown our revenues by 213%, from $41 million in fiscal 2014 to over $128 million in fiscal 2015.
• Our run-rate is now in excess of $145 million, following the addition of our recent acquisition of Lighthouse Placement Services in July 2015.
• Although we reported a net loss of approximately $18 million, there were significant non-recurring, non-cash charges and M&A costs that resulted in positive Adjusted EBITDA.
• Our underlying operations are showing strong double digit 18% organic revenue growth, year-over-year.
• We achieved positive Adjusted EBITDA for the third quarter in a row, significantly ahead of schedule, when our plan at the beginning of this year was to get there by fiscal Q4 2015.
• We reported approximately $400,000 of Adjusted EBITDA for fiscal Q4 2015, and we are now positive Adjusted EBITDA of $750,000 for the entire fiscal year of 2015, which we believe is a major achievement.
Pathway to Profitability:
• Debt outside of our Accounts Receivable financing has been reduced by $4 million as part of our restructuring.
• We have achieved cash flow savings of over $9 million over the next few years.
• We raised a $25 million Revolver from Mid-Cap Financial in April and we believe it will help us continue to support our rapid growth.
• The 'going concern' audit opinion has been eliminated from our audited financials included in our Form 10K filings as of May 31, 2015, which is a major milestone and bodes well for our future outlook and capital raising opportunities.
Flood stated the following:
During the course of the past year our resolve to deliver on our strategy of building an international staffing firm with revenues in excess of $300 million has been strengthened and we now find ourselves at the halfway point on this deliverable with ever increasing levels of visibility as to how we will get there.
Over the past 24 months, we have grown from annualized revenues of zero to $145 million and delivered on the first phase of our growth plan. During the past few 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.
We expect the improvements to our top and bottom line will continue. Additionally, the industry is growing organically and represents a rising tide for all companies in the temporary staffing sector. 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.
As you may have heard on our earnings call, 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. With Lighthouse now closed, we have additional acquisitions prospects at the top of this pipeline that are under signed Letters of Intent.
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 four 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 allowing us to continue acquiring larger and increasingly more attractive companies with strong gross margins as we drive our profitability, cash flow, and shareholder value in fiscal 2016.
• Thirdly, we realize the importance of getting the message of our compelling growth story into the hands of a broader audience of institutions and individuals in the investment community. To this end, we just announced the engagement of PCG Advisory Group (PCG) as our corporate and investor awareness firm of record. The appointment of PCG underscores our commitment to broadening our reach through roadshows and corporate outreach while enhancing our digital footprint.
• Fourthly, Staffing 360 intends to uplist to a national exchange as soon as all listing requirements are met. We strongly believe a national exchange listing such as NASDAQ will attract additional investors and increase the liquidity of our stock. We expect an uplisting to improve our trading, reduce volatility and make Staffing 360 Solutions accessible to a broader segment of the investment community.
Please be assured, as the single largest shareholder of the Company, I am particularly focused on Staffing 360's execution, both operationally and 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, along with our stated awareness initiatives, we believe the public markets will appropriately begin to take notice.
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.