STAF - Earnings call transcript Q4 2019 | 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 Fiscal Year-end 2019 Results Conference Call. At this time all participants are in a listen only mode. A brief question-and-answer session will follow the formal presentation. [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. Staffing Inc. concerning laws securities XXX Solutions, federal The significant actual risks are subject results number of to a and differ forward-looking materially. statements may uncertainties, and our and with Please may that contained XXX to SEC, company's in to results Staffing risks filings actual from refer which other the cause contain differ identify Solutions factors our important and statements. the those forward-looking update XXX of any Solutions date conference are statements XX, May forward-looking revise the today, or statement made to forward-looking as to disclaims after of expressly call. and All any obligation Staffing XXXX, this

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

Brendan Flood

full to descended to were Staffing Call. safe Year has and about more saying Officer; Christine, quickly impact who Then which I'll and customary best-in-class dime, able for the hand overview Alicia leaders more has Principal and upon give by joined COVID-XX Viswakula, everyone will of and staff, to executive will you I a everyone been you, the to today operational bit globe. the by staff an during call quarter what us on our joined near-term finish now around then our our for hope and home. will our the and pandemic. our will on pandemic I'm Financial I clients in part in details, us tell Sharnika plans so intended is business. the this our all early healthy to unprecedented from what and contractors over detail. performance, update a for of team, our us and financial our everyone XXXX since our it. dedicated of after and seamlessly XXXX us The outlining Controller I of I covering my the Alicia client well-being to are fourth will enabling virus first year we're Alicia our our acquisition open before Sharnika on in start to by how and thank of provide coronavirus working commenting effective seeing the of priority Chief turn Thank Accounting XXXX majority response questions. team The continue with line the and Corporate operationally the that by Barker, service be remarks Operating will Full quick Fiscal Results you our staying strategy XXX's refinancing Officer. further relation Conference

advised, our of revenue PeopleSERVE at As flat XXXX XXXX. full was middle from we the previously was the million, against Gross profit business. for $XX.X year. In $XXX.X year prior of increase a divested XXXX, X.X% million

$XXX.X to then comparative, year year-over-year XX% gross increased X% Excluding million. profit saw this million by for the $XX.X Revenue was from $XX.X million the the we following: up from $XXX.X million. from And to

sterling impacted Additionally, pound weakening the the dollar. been against we the by have of adversely

million a again, EBITDA basis, increase an constant Adjusted the grew non-adjusted a X.X% our XXXX. million, Excluding XX.X% million, of $X.X on up $X.X XX% our million. by PeopleSERVE for in year $X.X on was revenue $X.X was currency EBITDA On XXXX's basis. over

a of were prior loss We to the December Our an the impacted U.K. $X.XX was improvement pending low-margin across primarily the payrolling specter half million per of net month $X.X of lost XXst. net Brexit business the the We contract The which to the million £X the of year's or us introduction key in from July December of million. second July, faced tune the facing million XXXX loss challenges from in $X.X in of period.

directly we exposed not While were clients whose we were clients to hugely Brexit, did seen affected. have

it of a created the decision-making in up So, the parts economy. certain vacuum U.K. uncertainty leading to

the we the of introduction Finally, of legislation piece a tax IRXX. challenge also faced pending called of

moving it We are XX towards rather more introduction deferred business this pleased meaningful forced QX, the permanent in have QX. from look Because placements. the profit a was months, quiet million, than that sequential is for given was $XX.X for drop placement holidays, the at of are we U.K. with order to $XX We some million of QX to movements at $XX.X QX, be from X.X% just activity million the contracting. QX subsequently reshaping QX seeing. revenue of items temporary look that $X.X balanced but or our to mentioned, gross a more in of million permanent is

in EBITDA million $X.X was Our adjusted in third million QX the against $X.X quarter.

the Our Viswakula, the press Sharnika Principal will for call hand further Sharnika? release over and update. XX Officer Corporate Controller a contains to table I a months our Accounting now trailing performance. showing

Sharnika Viswakula

good Thank and you, Brendan, morning, everyone.

million for that XXXX fiscal currency For to respectively. was and of $XXX increased revenue, $XX.X by million, million, by permanent foreign fiscal ratio. each as growth, the $XXX.X XXXX, increase revenue business, approximately Within of the The to organic May million million from partially from KRI drove fiscal for X.X% with and XXXX of representing million. the and of expenses million of versus $XX.X for $X.X from an $XX.X acquisitions flat of an This fiscal and the by acquisitions million Gross for and profit year declined increase grew Clement a XXXX. XXXX operating Operating $XX.X full fiscal of unfavorable compared organic in XX.X% May $XX.X million million, additional Clement expense million offset revenue of placement period, margins $XX.X the were was X.X% was $X.X decline X.X% for sales PeopleSERVE XX.X% gross of fiscal contractor KRI. $X.X translation XXXX. $XX.X decline. divesting temporary revenue from Of million

operating the fiscal was decrease decreased X.X%. performance net acquisitions, of by with million of were XXXX. loss primarily million in Other $X.X Butler million gain of driven and net XXXX decline for translated into $X by million, expenses settlement million. The settlement the the million fiscal decreased consideration $X.X $X.X compared loss. year-over-year $X.X $X.X of to of fiscal a This on gain a XXXX. CBS expenses fiscal Excluding on XXXX, a in by earnout approximately as million EBITDA firstPRO the XX.X% from $X.X XX.X% loss fiscal of million $X.X deferred in for XXXX grew for

from million. that The decline of $XX.X due primarily but contractor quarter $XX.X XX.X% stems clients prior year million fourth earlier. from to the from a For mentioned of in away revenue XXXX, Brendan U.K. revenue of low-margin the high declined revenue shift

contractor revenue contractors. placement million $X,XXX was stable. Our million. temporary year costs during margin decline related expenses X,XXX revenue. comprised year, related The the Gross ended the costs of to million quarter the contractor per low improved is and perm from and prior in has the Operating primarily basis approximately now placement and Revenue quarter of $X.X primarily of profit driven approximately Gross the for permanent potential million of from slight clients. week, a billings $XX.X from remained million X of a year $XX.X revenue due XX.X% revenue of temporary million gross XXX quarter slightly of prior with prior was nonrecurring we $XX.X to quarter, approximately $XX.X by earnouts. to by away higher acquisitions fourth margin shift points from than $XX.X

of operations $X.X decline $X.X million noncash relatively year. have the of re-measurement $X.X stable, deferred the declined translated of compared Interest the operating net expenses nonrecurring gain in Below quarter, quarter noncash versus $X.X and into from translated This and amortization approximately approximately as million were other costs quarter of of results year's loss. for in operating year-end operating These by the net expense quarter loss and underlying pound from cost, net prior fourth with a prior we a fourth income, million Excluding by a third expenses $X.X million. remained million. million currency had $X.X of million financing $X.X performance loss from XXXX. approximately the sterling strengthening on into

quarter the the of I and consecutive EBITDA XX.X% $X.X trend Chief now positive Alicia? for eighth Operating from declined year's Officer. call quarter. over continued Vice to hand President Alicia our to EBITDA Although million, will we the Executive prior Barker,

Alicia Barker

impacted remotely Thank not Unfortunately, we And that us stressful this and your by appreciation you, these working Brendan. of a developing thank call many always there that us have doubt Sharnika. Thank you, you, are for somehow they've some on many of new know who teachers everyone, deserved. for time COVID-XX. us been times of with We giving are today.

our communication was conducted contractors. We professional had the your XX. issued resiliency all the be discussed straightforward our successful of and your laid at C the of deposit, employees and our Staffing business loved health. wishes been business, And IT and to all remote the XXth, low-income in for issued By at involved orders our and teams or not for all Board commercial to met remotely. thanks week to quickly the headquarters workers, And the March. anything locations good technology extend process. XXX last With before person well many but. guidance us business our rest lockdown that A, coronavirus Plan in potential The U.S. that's We in and growing sympathies of deepest we've direct the had our of our have We of February our fully remote. very was testing efforts, you to time. time our and our the about Directors do impact the concern continued issued. of Plan support And for ones made of the or who shelter-in-place executed will were all our corporate first stream, ensuring our On relatively Plan U.K. shift payroll guidance that been We service a week, operate clients. B New date. to first to the our is March plan for had guidance a out our key workforce of with contractors second decision to in and business and to our in York and All we first

I'm that our levels the As is executed under of productivity. and extremely priority has in Brendan's staff this resulted team proud has the and high stewardship. of our of to Brendan work contractors executive us, safety mentioned, paramount

went have so productivity successful a company that we communications of regular and with communicated levels as our all and in from contractor result priority maintaining As been daily this remote, start we've over we client communications. the

working multiple our at thousands on-site all of of contractors and staff full-time with health in our with in date, been clients' clients we've internal of for the of Staffing XXX as hosted and Kingdom, our hall employ XX% employees United X fortunate have our workers To States across facilities. over essential We spite our dozen been attendance. workforce calls of town almost the a possible them safe with as United all us. We of keeping job extremely has of

are or At different and million of first employee We the executed battle have in which necessity reopening effort worked not in so plan, this geographies are out to key have contractor we a in to flow. costs focused responsible in look across fortunate states. will and we Unfortunately, and execute $X.X dramatically preserve cash resulted and our one we We in in force lost with and had of to rent the countries which cut areas landlords plan, net point, proud an plan geographies. also and reduction on defer fiscal our both different -- to our now a even in other that savings furlough virus. quickly in management, a against

course, But and to agencies to government Of and we'll alone. look for when will and reopen ours be as guidance. decisions to health how our ours

will been now level detail have when employees call leadership and we Brendan. now careful with carry full of our continue pandemic. workforce. of this and remote the did professionalism the beginning faith since will I as to be hand in out same care, back our to And executing I We to have the as that plan we this

Brendan Flood

Paycheck programs available deferral initiatives. recently and we in No would in without Protection April, earnings the part tax In policy to working of coronavirus. in continued U.K. will be economic are trading, late environment of on U.S. call year, participated of some government. payroll the these enough? is From of we we January the stimulus part gaining furloughing has advantage have the that other are Program are tell. this traction programs our complete Thank banker, taking In relation of proactive and the our middle what employer U.K. been Will of And discussing the Only of Street HSBC, we and the aspects the that stimulus to through seen Main in for you, of strong Alicia. U.K., there, business. have across be the early program loan in the liquidity introduced very March. ensuring the and time beginning the

So, our with profit staffing, for Overall, quarter about the seasonal QX, we where with it gross first for line was first revenue issues allowing on in similarly was down commercial to in our quarter, XX% affected. be. expected

restrictions this any restrictions be into no started staffing states We opined year. certain a difficult continued sectors. challenging made have firms have XXXX and in different and already to certain in reason upon business These other in way that have and March months, in ease to May. the and will see market place April has lockdown to Shelter it. have

from XX% our on staffing chain, based involved needs be us can have that possible, I staffing supply economic Given refinancing I We over further also for a from until recession over sheet spent food in we're with have commercial and our will giving Operator, be the see impact much actions or see Thank intend this which not Within friends the We opportunities and withdrawn on many markets stronger industry. discussions XXXX. we business taking that, diligently the but some in full you potential and session. this point, it. and working. you In it M&A, your previous these or of recovery for is work were time. quarters such have clients towards growth, safety. recovery will this manufacturing to the has refinance at we like these. there in and half call time There few we second through pandemic the as coming to plans hand working good enjoyed relation its of as to are the and balance our diligently on as we'll the not about still for morning. wish the much updates about their in by of exercise and had do always health you that protection related one, some to we we in would been Q&A the

Operator

from Greenridge [Operator Instructions] And Global. William with we'll take our first Gregozeski question

William Gregozeski

you've that. how with being in you food sense then the hit you Brendan, in some of give you and industry Can IT mentioned for now took what and were March as, us protection you're you far? far mentioned kind companies as production having a obviously, Can give and what of a staffing much looking April, guys sense you're mean, I hit spaces other a like at of getting in so harder. and hit taken obviously, you

Brendan Flood

Sure.

our roughly chain. all staffing the So, next revenue, that supply which in U.K., professional it to thirds The is of XX% about or in Bill, total part, is is put of little a commercial of the two context, manufacturing of the XX% food in biggest staffing. bit business business is and

what that we've found professional professional of is side So, contractors most work our from staffing home. on can our

where being the However, placement terms also lot a -- in March final done and be Despite interviews we conference the interview in that, calls, of most across into challenged of XX% want business, calls clients about and have probably we've the person. been to decline and permanent late April. a but video are seen through

as we're lot lifted. see that various a restrictions all to the get there's of soon of pent-up expected So, demand as

was I In general lower about terms size, four. quarter than our first XX% quarter call the that on mentioned of

the expect a We second to in XX% something to further decline order into see the of XX% will quarter.

staffing strong. relation market the in range is but business. I commercial the in pretty diverse So, We itself also to think reacting, quickly, protected especially we're acted how we that generally the by have, we've very been various product

So, quarter. the in the XX% second something order will in be XX% of to down

William Gregozeski

And is which to comparison quarter? XX% to XX% that in

Brendan Flood

Quarter one.

William Gregozeski

Or $X.X until Okay. that all of is some to it? million be cost of right. that going permanent? out is All The get of we temporary cutting,

Brendan Flood

because that who people its bring recovery. will specifically we be our temporary some ability from permanent. about -- demand of to of it XX% And dependent furlough people So, of it Probably the some by our is the The rest absolutely hope at of clients. driven furloughed. involves back upon are least is

have In costs weeks. million related business as $X X that taken identified, we the to similarly addition $X.X million, further over the to course non-people a the X the of we've last of

William Gregozeski

-- on And until refinance then thing? right. probably Jackson that due refinances All the from hold. remain and you in mentioned comes we M&A part whole the got bridge I Should or the will then stuff other should expect you the August Okay. you outstanding

Brendan Flood

refinance expect We'll that going in July. June, before are December, would will thing, whole the bridge but the into the I that maybe we end tickle to of close

Operator

[Operator question Paul Denby with Instructions] our from take Enterprises. Denby And we'll next

Paul Denby

more color programs between give either as on receive U.S. to of you're any a for far countries? you going U.K. Can as programs these help when you're one little the and the different applying us that and know PPP from you'll these the whether

Brendan Flood

Okay.

with start move the the U.S. U.K. So, I'll and to

have furlough -- the companies of really allowed government a XX% U.K., in well to in introduced £X,XXX of furlough but which will been maximum and a the particularly known U.K. per salary the the U.K., has furlough program, British is their government that or costs So, up government understood pick to U.S. the a the month. not would employees up word

has program furlough is, So, October. currently we to to of the as furlough. XX contractors of X and moment, through extended have X employees at morning, this That been end on the are who

is plenty the bring to to those time in sure people make demand there's order back. of that sufficient So,

are that, deferrals will allow be until of government deferrals to due, payment deferred to the £XXX,XXX. defer the the it In summer, us sales or March. next addition there In that will tax amount the of VAT the about end

Our I £X to proactive. deferral year a in And U.S., of mentioned which $XXX,XXX million HSBC, to been the loan bank, business beginning the I us help they as U.K. from mentioned, then given us program, the us the about And three have over low interest of we're period. moving FICA April. have week saving very that is liquidity the per with

been Protection Small Paycheck happen have the for But announce of happens, across through $XX advised working we of applied the market with still have but should Administration. timing-wise, the to it we're our think Business paperwork. next two have obviously would allocation Program, we'll million the and I the we course We when an way the this weeks. that as and in

we But be to Lending kind and which size We to not would debt. various Program, great program Group which of which to not established qualify. have to assuming study have really start the our way and exactly have we bit been We value part. belief will qualify the allow the to like do, programs extent and rules structured take to Main refinance the a right Street in Investment that we of the company as a now, it's fluid faith and started we're will we the Jackson using the would that sure but

Operator

or further And Mr. for turn closing there the you this call I'll back time. questions no any to additional are remarks. Flood, at

Brendan Flood

of times. tell meeting challenging industry Christine. working The become will challenges. am and time markets the the main not. two greater challenges I been entire will and that to our Okay. we the of And confident have forefront or through whether unprecedented again, those economies Thank you are

as come. phase through that U.S. to to the the been outcomes. us responsibility, those the responsible for We whose seeing like favorable governments team and thanks the U.K. I'd and less and management of this best have the commend also my date with activities are for hard-working first is appreciation and may for I the for that staff our extend actions talented storm. both are of our still hoping stimulus and and planning undertaken

to maintain part industry Our we will all, on forward performance and that. work to we call. is $XXX our to quickly end the We improvements Thank and look back progress to look you committed million again. in to operational Operator, and as is with drive as shareholder company. value play to we of and continuing to our getting speaking that our to revenue a our possible, path you profitable people drive build continuing forward to as

Operator

for This your concludes today's call. you participation. Thank

may You disconnect. now

Staffing 360 Solutions (STAF) 13 May 202019 Q4 Earnings call transcript