-- Revenue Growth Driven by Gains in
-- On Track to Resolve Outstanding First Quarter Form 10-Q Filing:
Plans to Provide Update on Filing of Second Quarter Form 10-Q in the Coming Weeks --
First Quarter 2023 Overview
- Revenue increased by 26.5% (23.5% in constant currency) to
$63.1 million , compared with revenue of$49.9 million for the prior year period, driven by an almost five-fold increase inU.S. professional staffing. - Gross profit rose to
$9.6 million , compared with$8.5 million for the prior year period, or an increase of 12.6% (6.9% in constant currency). - Operating loss was approximately
$1.4 million , compared with an operating loss of approximately$1.1 million for the prior year period. - Net loss was
$2.9 million , compared with a net loss of$2.3 million for the prior year period. - Diluted loss per share loss was
$0.90 , compared with a diluted loss per share loss of$1.33 in the prior year period. - EBITDA loss narrowed to
$600,000 , compared with an EBITDA loss of$900,000 for the prior year period. - Adjusted EBITDA, a non-GAAP measure, rose 65% to
$1.3 million , compared with Adjusted EBITDA of$800,000 in the prior year period.
Non-GAAP financial measures are meant to supplement, and be viewed in conjunction with, GAAP financial results. The presentation of these non-GAAP financial measures should not be considered in isolation or as a substitute for comparable GAAP financial measures and should be read only in conjunction with the Company’s financial statements prepared in accordance with GAAP. Reconciliations of the Company’s non-GAAP measures are included in the tables below.
“Our buy-integrate-build strategy is beginning to pay off, and we anticipate continued revenue growth and margin improvements as we move toward our long-term goals. As we expect is the case with other staffing companies, we continue to closely monitor the marketplace and our clients’ needs for any recessionary, or other macro-economic impacts, and are ready to take necessary actions to mitigate any such impact. Our primary focus is on providing meaningful staffing solutions to our clients, while driving future growth and shareholder value,” concluded Flood.
Outlook
Although industry conditions remain uncertain and are subject to change, the Company currently estimates revenues for the 2023 fiscal year in the range of
About
For more information, visit http://www.staffing360solutions.com. Follow
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, our ability to retain our listing on the Nasdaq Capital Market and to regain and maintain compliance with the rules of the Nasdaq Capital Market; market and other conditions; the geographic, social and economic impact of COVID-19 endemic and its ongoing effects 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
Investor Relations Contact:
310-279-5980
pwinvestor@pondel.com
(financial tables follow)
CONDENSED CONSOLIDATED BALANCE SHEETS (All amounts in thousands, except share, per share and par values) | ||||||||
As of | As of | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash | $ | 1,402 | $ | 1,992 | ||||
Accounts receivable, net | 24,427 | 23,628 | ||||||
Prepaid expenses and other current assets | 2,195 | 1,762 | ||||||
Total Current Assets | 28,024 | 27,382 | ||||||
Property and equipment, net | 1,172 | 1,230 | ||||||
19,891 | 19,891 | |||||||
Intangible assets, net | 16,639 | 17,385 | ||||||
Other assets | 7,404 | 6,701 | ||||||
Right of use asset | 8,728 | 9,070 | ||||||
Total Assets | $ | 81,858 | $ | 81,659 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current Liabilities: | ||||||||
Accounts payable and accrued expenses | $ | 17,177 | $ | 16,526 | ||||
Accrued expenses – related party | 218 | 218 | ||||||
Current portion of debt | 125 | 249 | ||||||
Accounts receivable financing | 16,525 | 18,268 | ||||||
Leases – current liabilities | 1,245 | 1,188 | ||||||
Earnout liabilities | 8,344 | 8,344 | ||||||
Other current liabilities | 2,219 | 2,639 | ||||||
Total Current Liabilities | 45,853 | 47,432 | ||||||
Long-term debt – related party | 8,705 | 8,661 | ||||||
Redeemable Series H preferred stock, net | 8,448 | 8,393 | ||||||
Leases – noncurrent | 8,298 | 8,640 | ||||||
Other long-term liabilities | 200 | 180 | ||||||
Total Liabilities | 71,504 | 73,306 | ||||||
Commitments and contingencies | — | — | ||||||
Stockholders’ Equity: | ||||||||
Preferred stock, | ||||||||
Series J Preferred Stock, 40,000 shares designated, | — | — | ||||||
Common stock, | 1 | 1 | ||||||
Additional paid in capital | 116,419 | 111,586 | ||||||
Accumulated other comprehensive loss | (2,196 | ) | (2,219 | ) | ||||
Accumulated deficit | (103,870 | ) | (101,015 | ) | ||||
Total Stockholders’ Equity | 10,354 | 8,353 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 81,858 | $ | 81,659 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (All amounts in thousands, except share, per share and per share values) (UNAUDITED) | ||||||||
Quarter Ended | ||||||||
Revenue | $ | 63,105 | $ | 49,893 | ||||
Cost of Revenue, excluding depreciation and amortization stated below | 53,517 | 41,380 | ||||||
Gross Profit | 9,588 | 8,513 | ||||||
Operating Expenses: | ||||||||
Selling, general and administrative expenses | 10,167 | 8,909 | ||||||
Depreciation and amortization | 775 | 655 | ||||||
Total Operating Expenses | 10,942 | 9,564 | ||||||
Loss From Operations | (1,354 | ) | (1,051 | ) | ||||
Other Expenses: | ||||||||
Interest expense | (1,349 | ) | (670 | ) | ||||
Amortization of debt discount and deferred financing costs | (98 | ) | (96 | ) | ||||
Re-measurement loss on intercompany note | — | (443 | ) | |||||
Other loss, net | (14 | ) | (58 | ) | ||||
Total Other Expenses, net | (1,461 | ) | (1,267 | ) | ||||
Loss Before Benefit from Income Tax | (2,815 | ) | (2,318 | ) | ||||
Provision from Income taxes | (40 | ) | (6 | ) | ||||
Net Loss | (2,855 | ) | (2,324 | ) | ||||
Net Loss – Basic and Diluted | $ | (0.90 | ) | $ | (1.33 | ) | ||
Weighted Average Shares Outstanding – Basic and Diluted | 3,177,517 | 1,752,949 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (All amounts in thousands) (UNAUDITED) | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net Loss | $ | (2,855 | ) | $ | (2,324 | ) | ||
Adjustments to reconcile net loss income to net cash used in operating activities: | ||||||||
Depreciation and amortization | 775 | 655 | ||||||
Amortization of debt discount and deferred financing costs | 98 | 96 | ||||||
Accounts receivable allowance | 18 | (1 | ) | |||||
Right of use assets depreciation | 355 | 324 | ||||||
Stock based compensation | 720 | 42 | ||||||
Re-measurement loss on intercompany note | — | 443 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (2,519 | ) | (5,621 | ) | ||||
Prepaid expenses and other current assets | (437 | ) | (526 | ) | ||||
Other assets | (1,015 | ) | 812 | |||||
Accounts payable and accrued expenses | 717 | 3,999 | ||||||
Accounts payable, related party | — | 122 | ||||||
Other current liabilities | (363 | ) | (128 | ) | ||||
Other long-term liabilities and other | 77 | (749 | ) | |||||
(4,429 | ) | (2,856 | ) | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchase of property and equipment | (28 | ) | (42 | ) | ||||
Collection of | 1,626 | 1,877 | ||||||
NET CASH PROVIDED BY INVESTING ACTIVITIES | 1,598 | 1,835 | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Third party financing costs | (319 | ) | — | |||||
Repayment of term loan | (124 | ) | — | |||||
Proceeds from term loan | — | (117 | ) | |||||
Repayments on accounts receivable financing, net | (1,743 | ) | — | |||||
Dividends paid to related parties | — | (2,036 | ) | |||||
Proceeds from sale of common stock and warrants, net of third-party financing costs | 4,433 | — | ||||||
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 2,247 | (2,153 | ) | |||||
(584 | ) | (3,174 | ) | |||||
Effect of exchange rates on cash | (6 | ) | (29 | ) | ||||
Cash – Beginning of period | 1,992 | 4,558 | ||||||
Cash – End of period | $ | 1,402 | $ | 1,355 |
Use of Non-GAAP Financial Measures
Three Months Ended | Trailing Twelve Months | |||||||||||||||
Net (loss) income | $ | (2,855 | ) | $ | (2,324 | ) | $ | (17,525 | ) | $ | 7,522 | |||||
Interest expense | 1,349 | 670 | 4,560 | 3,370 | ||||||||||||
Expense (benefit) from income taxes | 40 | 6 | (188 | ) | (388 | ) | ||||||||||
Depreciation and amortization | 873 | 751 | 3,714 | 3,055 | ||||||||||||
EBITDA | $ | (593 | ) | $ | (897 | ) | $ | (9,439 | ) | $ | 13,559 | |||||
Acquisition, capital raising and other non-recurring expenses (1) | 1,872 | 1,188 | 8,638 | 3,872 | ||||||||||||
Other non-cash charges (2) | 35 | 16 | 19 | 158 | ||||||||||||
Impairment of | — | — | 10,000 | 3,104 | ||||||||||||
Re-measurement gain on intercompany note | — | 443 | (443 | ) | 831 | |||||||||||
Gain on sale of business | — | — | (726 | ) | — | |||||||||||
Other loss (income) | 16 | 58 | (42 | ) | (19,412 | ) | ||||||||||
Adjusted EBITDA | $ | 1,330 | $ | 808 | $ | 8,007 | $ | 2,112 | ||||||||
Adjusted Gross Profit | $ | 43,843 | $ | 35,938 | ||||||||||||
Adjusted EBITDA as percentage of Adjusted Gross Profit | 18.3 | % | 5.9 | % |
(1 | ) | Acquisition, capital raising, and other non-recurring expenses primarily relate to capital raising expenses, acquisition and integration expenses, and legal expenses incurred in relation to matters outside the ordinary course of business. | |
(2 | ) | Other non-cash charges primarily relate to staff option and share compensation expense, expense for shares issued to directors for board services, and consideration paid for consulting services. |
Source:
2023 GlobeNewswire, Inc., source