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Staffing 360 revenue up 25% in Q4 with acquisitions

March 21, 2019

Staffing 360 Solutions Inc. (NASD: STAF), a staffing provider operating in the US and UK, reported fourth-quarter revenue rose 24.6% to $74.1 million. 

Fourth-quarter revenue includes $19.8 million from four acquisitions, the company said in a conference call with investors: Clement May and Key Resources Inc. last year, and CBS Butler and firstPRO in 2017. This was partially offset by a decline of $4.3 million from the divestiture of IT staffing firm PeopleServe in June 2018, and an organic decline of less than $1 million from the remaining core business.

Temporary contractor revenue rose by $14.9 million year over year to $71.9 million in the fourth quarter; however, permanent placement declined by $300,000 to a total of $2.2 million.

(US$ thousands) Q4 2018 Q4 2017 % change
Revenue $74,091 $59,476 24.6%
Gross profit $12,345 $11,914 3.6%
Gross margin  16.7% 20.0%  
Net loss ($1,406) ($7,324) nm

Gross margin narrowed to 16.7% from 20.0% in the prior-year period, which the company said was partially driven by the addition of the RPO business of Clement May and the acquisition of Key Resources Inc., which operates in the light industrial space; both have lower gross margins than Staffing 360’s professional staffing businesses.

In the conference call, Chairman and CEO Brendan Flood said the company entered a three-year contract extension with its largest client in the UK, British American Tobacco, which started in January 2019. The company also entered into a $10 million to $15 million contract with a light industrial commercial client in the Northeastern US in January, which is anticipated to be fully staffed by mid-summer.


“With all of these activities that have happened, we are at a point in our development where it makes sense to discuss guidance going forward,” Flood said. “Excluding the impact of any further acquisitions, for the 2019 fiscal calendar year, we are anticipating that our revenues will be a minimum $320 million, our nonadjusted EBITDA will be in the $12 million-plus range, and that we will be net income positive for the year as a whole.”

Full-year results

(US$ thousands) 2018 2017 % change
Revenue $260,926 $192,650 35.4%
Gross profit $48,304 $36,741 31.5%
Gross margin percentage 18.5% 19.1%  
Net loss ($6,501) ($18,491) nm

Share price and market cap

Staffing 360 shares were down 23.15% to $1.66 at midday Eastern time; the company had a market cap of $17.59 million, according to FT.com.


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