Staffing 360 Solutions (STAF) Reports Prelim. 1Q Revenues Below Estimates

Staffing 360 Solutions, Inc. (Nasdaq: STAF), (“STAF 360” or “the Company”), a staffing solutions company executing an international buy-and-build strategy in the U.S. and the U.K., today announced it preliminary results for the three months period ended March 31, 2018 (“Q1 2018”).

Subject to the completion of the review of STAF 360’s interim financial statements for Q1 2018, and filing of its Form 10-Q with the Securities and Exchange Commission (“SEC”), the results for Q1 2018 are expected to be as follows1:

• Q1 2018 revenue of approximately $55.8 million, an increase of approximately 37% from the $40.7 million reported for the three months ended April 1, 2017 (“Q1 2017”). Included in the Q1 2018 revenue is $17.9 million from acquisitions completed in September 2017, approximately $0.6 million from favorable foreign currency translation, partially offset by the impact of low margin business that we exited in Fiscal 2017. In addition, in Q1 2018 we were impacted by weather-related stoppages primarily for our Northeast clients.
• Q1 2018 gross profit of approximately $11.6 million, a 58% increase from the $7.3 million reported for Q1 2017.
• Q1 2018 gross margin improved to approximately 20.8% from 18.0% for Q1 2017. The gross margin improvement, reflects the acquisition of two higher margin businesses, the strengthening of our permanent placement business, and the continued improvements in our workers compensation insurance costs.
• Q1 2018 net loss of approximately $1.3 million, a substantial improvement as compared to a net loss of $3.1 million reported for Q1 2017.
• Q1 2018 adjusted EBITDA of approximately $1.6 million, an increase of over 55% as compared to $1.0 million for Q1 2017.
• Pro Forma trailing twelve-month adjusted EBITDA of approximately $10.3 million; this includes adjusted EBITDA of the two acquired companies prior to September 2017.

Brendan Flood, Chairman and Chief Executive Officer stated, “Q1 2018 was another quarter of improved operational and financial performance for STAF 360. As expected, due to the internal growth initiatives which we put in place at the beginning of the year, in Q1 2018 we grew our revenues, improved our gross profit and substantially decreased our net loss. We expect all metrics to continue to improve in the upcoming quarters and 2018 to be a year of sustainable, profitable, enterprise-wide growth.”

The Company expects to file its interim results for Q1 2018 on Form 10-Q before the SEC filing deadline of May 15, 2018 and will host an earnings conference call around the same time to discuss the results.

Staffing 360 Solutions, Inc. and SubsidiariesReconciliation of Net Loss to Adjusted EBITDA(All Amounts in Thousands)

1 Actual results may differ materially from the estimates described above due to developments or other information that may arise between now and the time the financial results for Q1 2018 are finalized. These preliminary results should not be viewed as a substitute for our interim consolidated financial statements prepared in accordance with GAAP.

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