STAF - Earnings call transcript Q1 2018 | Staffing 360 Solutions, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings, ladies and gentlemen, and welcome to the Staffing 360 Solutions' First Quarter 2018 Earnings Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded. This conference call will contain forward-looking statements within the meaning of the U.S. federal securities laws concerning Staffing 360 Solutions, Inc. subject our number materially. actual are and significant statements and uncertainties, results forward-looking to of a risks The may differ refer our and filings and company's results to cause to SEC, those actual Please contain contained from which in Staffing with XXX's identify statements. factors other the risks defer that forward-looking may important the date to forward-looking of statement XXX expressly Staffing statements XXXX, XX, and forward-looking call. are All conference any any this made revise obligations May after update as the of today or disclaims

comments, these Officer introduce to GAAP provided comparable to During Flood, Brendan Staffing Staffing EBITDA, may certain measures non-GAAP Staffing Chief directly to Mr. Solutions. XXX has prepared XXX where measure. may Chairman and make It measurements, Flood, reconciliation XXX of adjusted non-GAAP you most reference for is these such Executive begin. now as the pleasure applicable my

Brendan Flood

Call. replay this XXX's webcast David I available for bring Staffing Thank Quarter XXXX is you, joined has press your want operator, us Conference joined and in who thank Fiscal Financial XXX's attention announcing that Officer. www.staffingXXXsolutions.com. First the available and everyone to bottom our Chief and the be link a conference contained this by the call, this release will to of I'm today of Staffing also to you Earnings that following Faiman, by call website on

for discuss our statements financial hand and David first the Now with our to operational our of I'll forward. that said, the remarks before and going opening for over the Then overview I'll start XXXX financial to line quarter an business strategy questions. performance, my Faiman quarter call recent developments with

and quarter XXXX. business and XX% our during due to we the is revenues same weather respectively, our were first and to to of of the gross of weakest year quarter plan, growth profits the substantial in XX%, quarter of typically over due XXXX, factors, able achieve QX execution the While seasonality of

XX% our million. Gross and point. million were a profit gross $XX.X also for revenue Specifically, at $X.X last managed EBITDA under Adjusted us. is a showed alignment high U.S., which QX million business of our in margin was period these was of numbers XXXX Both XX.X% of and was the of increase year. quarter $XX.X Professional record first have the new Commercial the Professional new we U.S. over Staffing Staffing U.K. same Staffing QX

was For quarter, the breakdown each XX% Professional first across of U.S. XX% profit of Staffing streams the gross streams. two the other delivered and in business in the

weather, across management been off at our segment, U.K. Staffing we streams. has and this showing in year that Staffing and balanced northeastern are realignment profit poor beginning kicked by exercise of teams together. management year-over-year. and gross effectively all subsidiary well indications in of are decrease impacted U.S. and improvement the Commercial for embraced The and Professional our while of Early United three the a revenue XXX%, QX the levels same the very mostly The grew the respectively. teams, management working we for States, pretty revenue business, So noticed X% XX% Professional by Staffing

first and year, in quarter, new to few the the and of quarters. we forward will about to During look the on revenue-generating next clients. employees, further remainder additional sign have an former an I'll talking clients who reengage impact we the continue hired with XX to these

now maintain possible call high. to hand businesses to I and continued financials. have of will Chief over market the talk that targets our M&A is We David the the quality Faiman, in for our Financial to available very Officer view Dave?

David Faiman

everyone. morning, good and Brendan, you, Thank

first the revenue low-margin that acquisition first permanent revenue of $XX.X $X.X and of of year. prior X notes increase The and XXX we gross increase, versus with a extinguishment was loss note. $XX.X a the $XX.X to the million interest $XXX,XXX, the or expenses remeasuring Revenue closed of of this operations of were quarter. loss from the XXXX, higher fair of $X.X margin $X.X prior year. loss commissions XX% September factors. and commercial from in offset $XX.X million higher from $XX.X of million, in are exit acquisitions, million in per comprised offset attributable intercompany revenue and debt. an with acquisitions, included of continued placement our $X.X adjustments QX quarter cost, cash by QX was versus million from or million, the X QX $X,XXX or XXXX the QX to $X.X temporary year, company's and QX of million million XX% $X XXXX. is for operations first improvement. XXXX prior million decline $X.X that Revenue higher driving million. driven of adjusted of XXXX translation. million $X.X and a million currency approximately against back during in higher to revenue XXXX. by XXXX, now convertible XXXX permanent of quarter remainder, in from revenue versus XX% profit for up million is prior decrease This the firstPRO decrease driven higher EBITDA a the of The from loss million $X,XXX of over revenue warrants higher a $X.X translated $X.X is weather-related net the into first $XX Gross XX.X% prior basis week clients from -- Other quarter of the grew million performance million value Of margin on was impact partially placement to is XX% and nonrecurring per compensation in point the foreign is from improvement. partially XXXX $X.X prior increase temporary million placement mainly contract over over and in by of a a This expenses and comparable For profit. in were temporary year from million higher revenue, $X.X Stronger margins the the in while of the $X.X stem million in was and permanent has for workers' the by loss $XX in of year cost lower northeast XXXX $X.X XX% $X.X million coupled in gross of XX.X% and of contributing QX a prior increase This XXXX, the all respectively. of and million quarter QX of revenue of week, the a CBS over stoppages $X.X XXXX the first These year compared and of Butler our gains number compared million segment, year. higher in contract Adding the net million quarter, noncash Operating

on Finally, basis including owned trailing the been year, a acquisitions had if for EBITDA million. our entire pro they forma XX the as was adjusted two $XX.X months

Turning to balance the sheet.

is two U.K. we've remaining soul whereby collected XX% position. strengthened we are longer historical where previously the early completed of as first, on XXXX, them removed; sheet balance are an accounts treated on borrowing the secured has arrangement, the XXXX our is sold later. facilities, February impacts, accounting balance portion also XX% the borrowing financial accounting This factoring no carried cash deferred with the In XX% the and during second flow. instead receivable a to of As the statement, completed cash is restructuring into sheet, of of cash flow XXXX receivables the lines and operating the investing our refinancing have impact flow funded noted, transactions upfront

flow QX net our lines against for unusually the collections these back along $X.X investing of flows. XXXX we're this reported high was with with operating in secured compared and of we result, net of additional the quarter, million for use holding in $X.X cash at $XXX,XXX a reported The million. over session. call of Q&A point, million borrowing cash cash net Operator, the As an movements, an of $X.X

Operator

Instructions]. [Operator

William is Greenridge question Global. with first Our Gregozeski from

William Gregozeski

With of that was What acquired those assuming regards just revenue, businesses? acquired year? two to what growth was last growth that the -- you organic those owned the businesses

Brendan Flood

were businesses? QX-to-QX. flat two They the Just

William Gregozeski

press there to business. Okay. why from is still that partially for the low-margin getting that the says the the now offset was account last year? year, And this release gone that If was

Brendan Flood

remember raising we're not Well, that throughout the year.

this in QX to there impact So year, is year, QX versus QX relative year. last a QX cumulative of of of of sort this in

William Gregozeski

Okay.

out just year? you exiting of still last the were through the So because rest

Brendan Flood

Correct.

William Gregozeski

with, confirm forward? just going that's Well, to again, done

Brendan Flood

Correct.

William Gregozeski

was then go And -- ahead. sorry, plan any Okay. there

Brendan Flood

in business last we and I call, reiterate the I was -- this execution are allows is against lower-margin itself the not of to just business on add, EBITDA that to along Brendan, made as improve. just that margin cost is the as going of one comment Well,

number we was ever why business. So would business of a rid was there going reasons that a get specific contract. trend significantly that lower-margin low-margin to particular be And only a contract a to are of

William Gregozeski

get approved? then the requirements guys And you Okay. listing did for plan your NASDAQ

Brendan Flood

due XX. conversation And NASDAQ a expect detailed file on to fully it. the full working them. we're So have We and to fully on it. to then It over hand plan. ourselves the we'll is We with to expect continue

William Gregozeski

when will Okay. do the And is, you question then think XX-Q filed? last be

David Faiman

be to wanted a and filed today. will of couple get just done, We Later call the hours. in it

Operator

from is with Shaw Michael Wells question Fargo. Our next

Michael Shaw

just builds breakdown year wondering adjusted businesses flat see some with businesses, and EBITDA $X It I X a the revenue the is versus had for new ago, new off $X.X of question do because the question. how business for million old about that you existing I I curious regarding million So is? on about the what EBITDA has was the a the the broke is this I -- and stuff year. builds and was a down the was from business quick roughly between said to of it the how the it,

David Faiman

gets try things harder as the to merge So back we as you and gross -- together. and the we it below P&L don't down those split profit out go profitability offices to harder

comfortable a that and be I'd have acquired legacy basis. the really don't I on So the company out companies profitability between quoting a split

Operator

[Operator Instructions].

follow-up Shaw another Michael with from question have Fargo. We Wells

Michael Shaw

think Yes, I got off. I cut

last was about $X.X about million, So in right adjusted that EBITDA the year, thinking this I million? $X.X mean, year am it's I

Brendan Flood

$X.X million.

pro what, forma on a For basis?

Michael Shaw

Yes.

Brendan Flood

-- doing $X given the that's or were as it. we may probably that close, to about million pretty close I be think Yes,

to on were a to pretty for some but weather. winter doing if rough closer as if we U.S. in about plus us. that So $X it's probably it, owned the million have was basis we we It forma difficulty $XX we're saying did million pro $XX with the million,

closed. unfortunately that's So

Operator

question Investor. from Our next is [ph], Michael Private Strub

Unidentified Analyst

kind people sure simple, why really ask and I'm and usually question don't not relatively is My these not. of questions,

not be these times as And of just question. I'm don't just individual, lot And I if As an just don't I that strategy understand never sure sound can exit smart an opinion I you company. stock not this understand to me is price had with report the positive obviously, far I things if as a understand, my really changes. will or them. and a anybody ever didn't I'm that know that about sorry. why then,

Brendan Flood

that is the thanks smart This I [indiscernible] moment we that's very it's a and questions. basis. question, Michael, don't on a Brendan. question that get asked regular for for a a

to businesses. profit So it the of various a positive. And we do duplicate more is into that It a very gross that our message allows we remove agree I of things, greater to of opportunity acquire cost conversion generally that have us greater give the degree us EBITDA. we across drive gives as

-- We we've of business of our some away to amount we've the had different is effectively now from had as maybe and our of lender. historical that away charges moved XX in debt moved a restructured single terms some have lenders what issues having accounting

we and I peer what very staffing measured our stock in certain that do with we're a and at bring catch alignment the with up us doing. us back that market So we a And into will are say give with sector. will confident, point, to the group approach and continue credit

Operator

to management question-and-answer remarks. our session. to for we over turn Ladies would the back closing like have and I reached of the gentlemen, call end

Brendan Flood

Okay. Thank you, Operator.

our we continue will to we move opportunities to and acceptable the and level about performance, in as So an to start to and drive our will to our that stock improvements expectations drive our organic our messaging promises, and the normal peers. in to price deliver capital to performance operational expand our growth on relation markets industry

report you our management growth team, results. the again remain shareholder mid-August growth we in our revenue, a in half that end with we value. you XXXX call. we look forward second when of in to all, growth As and committed in speaking Thank first earnings and to quarter to to and is Operator,

Staffing 360 Solutions (STAF) 14 May 182018 Q1 Earnings call transcript