Staffing 360 Solutions Improves Balance Sheet, Reduces Debt by 55%, Anticipates Reporting Increased Fourth Quarter Revenue
17 February 2021 - 12:36AM
Staffing 360 Solutions, Inc. (NASDAQ: STAF), a staffing company
executing an international buy-integrate-build strategy through the
acquisition of staffing organizations in the United States and the
United Kingdom, today discussed its improved balance sheet and
previewed fourth quarter revenue for the year ended December 31,
2020.
Improved Balance SheetAs
previously announced on February 12, 2021, the Company raised
approx. $19.7 million (approx. $18 million net) in a public
offering of 21,855,280 shares of its common stock at a price of
$0.90 per share.
Staffing 360 Solutions used 75% of the net
proceeds (approx. $13.5 million) to pay down a portion of its
outstanding note due September 30, 2022, and 25% of the net
proceeds (approx. $4.5 million) to redeem a portion of its Series E
Preferred Stock. 55% Debt
ReductionSince June 2020, the Company has reduced $55
million of debt to $26.8 million, a reduction of $28.3 million, or
55%.
The Company has paid down $16.6 million of the
note (leaving a balance of $19.1 million) and redeemed $8.6 million
in stated value of Series E Preferred Stock (leaving a balance of
$6.1 million). It carries a remaining balance of $1.4 million of
stated value of the Series E-1 Preferred.
Brendan Flood, CEO and President, said,
“Completing this raise of $19.7 million gross proceeds is the
latest step forward toward improving our balance sheet, setting the
stage for further growth and progress in 2021, and enhancing our
ability to achieve our long-term goals. Since June, we’ve not only
significantly reduced debt, but eliminated approx. $5 million per
year in interest and dividends.
“We are now in a much better position to
refinance our total debt prior to maturity next year. A more
attractive refinancing in 2021 should allow us improved flexibility
to both build organic growth and seek future M&A-driven
expansion. We’ve taken $6.2 million of annualized overhead out of
the business in 2020 which allowed us to manage through the worst
of the pandemic and emerge into what we see as a recovery
phase.”
Flood continued, “Staffing 360 Solutions is in a
significantly healthier position now than before the pandemic. Our
Company exited 2020 with 10% higher number of temp workers than the
previous December. The Company expects unaudited Q4 Revenue to be
$53.8 million, an increase of 11 percent, over Q3. Gross profits
are up and demand is growing.
“While we are experiencing increasing recovery
in both the US and UK, the overall staffing industry is poised to
have what could be one of its best years as the recovery continues
in 2021. The journey ahead is exciting and we are ready for
it.”
Actual results may differ materially from the
foregoing estimates due to developments or other information that
may arise between now and the time the financial results for the
fourth quarter of 2020 are finalized. These preliminary results
should not be viewed as a substitute for the company’s fourth
quarter reviewed consolidated financial statements prepared in
accordance with GAAP.
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, 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; the
Company’s ability to achieve loan forgiveness under Paycheck
Protection Program; 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:Terri MacInnis, VP of IRBibicoff + MacInnis,
Inc.(818) 379-8500 x2terri@bibimac.com
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