Preferred Share Offering Investor Deck · Management team with significant ... President of...

19
Preferred Share Offering Investor Deck Ticker: STAF

Transcript of Preferred Share Offering Investor Deck · Management team with significant ... President of...

Preferred Share Offering – Investor DeckTicker: STAF

Forward-Looking Statements

Forward-Looking Statements

This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of

1933 and Section 21E of the Securities Exchange Act of 1934, including statements regarding the business of

the Company and its industry generally, business strategy and prospects. These statements are based on the

Company’s estimates, projections, beliefs and assumptions and are not guarantees of future performance.

These forward-looking statements are subject to various risks and uncertainties, which may cause actual results

to differ materially from the forward-looking statements. The Company disclaims any obligation to update these

forward-looking statements except as required by law.

Non-GAAP Financial Measures

The Company uses financial measures which are not calculated and presented in accordance with US generally

accepted accounting principles (“GAAP”) in evaluating its financial and operational decision making regarding

potential acquisitions and presenting the operating and financial performance of the Company, as well as a

means to evaluate period-to period comparison. The Company presents these non-GAAP financial measures

because it believes them to be an important supplemental measure of performance that is commonly used by

securities analysts, investors and other interested parties in the evaluation of companies in our industry. We

refer you to the reconciliations in this presentation and applicable earnings releases issued by the Company for

those respective periods. The Company defines Adjusted EBITDA as earnings (or loss) from continuing

operations before interest expense, income taxes, depreciation and amortization, and amortization of non-cash

stock-based compensation, non-recurring acquisition and restructuring expenses and goodwill impairment

charges.

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Mission Statement

3

“Staffing 360 Solutions is a high growth public company in the global

staffing sector engaged in the aggregation of international staffing

organizations with operations in the United States and the United

Kingdom. The Company is executing a focused buy-and-build strategy

with a stated objective of reaching $300 million in annualized revenue.”

Brendan Flood, Executive Chairman

Nasdaq: STAF

Executive Overview

Staffing 360 Solutions, Inc. (Nasdaq: STAF) is a publicly

listed staffing company with a highly focused M&A strategy.

Achieved significant growth, from nearly zero revenue in

2013 to over $190 million in annualized revenue today.

TTM Adjusted EBITDA of $5.25 million as of August 31,

2016 versus $1.7 million in comparable period.

Highly fragmented market provides numerous acquisition

opportunities and scale.

Completed 6 acquisitions, with high client retention and

strong recurring revenue.

Management team with significant operational and M&A

experience.

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Executive Management Team

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Brendan Flood – Executive Chairman

• Extensive financial, M&A and turn-around experience over his 30 year career.

• Former CFO of the Americas for Monster Worldwide Inc., (Nasdaq: MWW), in addition to

leading the IPO of Hudson Global Inc. (Nasdaq: HSON).

• Graduated from Dublin City University (Ireland) with a BA in Accounting and Finance.

Nasdaq: STAF

Matt Briand – President and Chief Executive Officer

• Over 19 years of staffing industry experience driving organic growth.

• Led Monroe Staffing Services’ growth from $34 million to over $100 million in revenue in 2015.

• Monroe has received numerous honors: Best in Staffing in 2010, 2012, 2013, 2014 and 2016.

Darren Minton – Executive Vice President

• Extensive experience in the capital markets, assisting numerous public companies.

• Particular focus on private-to-public transactions, M&A, corporate messaging & branding.

• Graduated with a BA in Economics from Stanford University.

David Faiman – Chief Financial Officer

• Over 20 years of financial experience at both private and public companies, including Vice

President of Financial Planning and Chief Accounting Officer of Novitex Enterprise Solutions.

• Acting CFO at Cengage Learning, Inc. (formerly Thomson Learning of Thomson Reuters).

• Certified Public Accountant who began his career at PricewaterhouseCoopers LLP.

$172

$41,198

$128,829

$165,552

$191,036

$300,000

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

FY 2013 FY 2014 FY 2015 FY 2016 CurrentAnnualized

Run Rate

FY 2017Target

Revenue

All

Nu

mb

ers

in T

ho

usa

nd

s

Revenue Growth

Revenue is Quickly Approaching Target

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185Internal

Employees

4,000Temp.

Employees

1000+Customers

Billed

US & UKFocused on 2

Core Markets

$41,198

$128,829

$165,552

$177,418

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

$180,000

$200,000

2014 2015 2016 TTM Q1 2017

Historical ResultsRevenue

(Numbers in Thousands)

-$2,673

$752

$4,111

$5,250

-$4,000

-$3,000

-$2,000

-$1,000

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

2014 2015 2016 TTM Q1 2017

Historical ResultsAdjusted EBITDA

(Numbers in Thousands)

Financial Performance

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* Fiscal year end is May 31.

(1) Revenue CAGR is calculated over the period from Fiscal 2014 to TTM August 2016.

(2) Adjusted EBITDA CAGR is calculated over the period from Fiscal 2015 to TTM August 2016,

since Fiscal 2014 is negative.

Nasdaq: STAF

• Over 90% CAGR Revenue Growth (1)

• Annualized Revenue of $190 million

• Over 160% CAGR Adjusted EBITDA

Growth (2)

Fiscal Q1 2017 Fiscal Q1 20163 Months Ended 3 Months Ended

$000's August 31, 2016 August 31, 2015*

Revenue 47,750$ 35,884$

Gross Profit 8,489$ 6,321$

Income (Loss) from Operations 46$ (574)$

Net Loss Attributable to Common Stock (1,344)$ (1,727)$

Adjustments

Interest Expense 643$ 526$

Provision for (Benefit from) Income Taxes 69 35

Depreciation and Amortization 1,352 1,324

EBITDA 720 158

Acquisition, Capital Raising & Other Non-Recurring Expenses 789 231

Other Non-Cash Charges 165 225

Dividends – Series A Preferred Stock 50 50

Other Income/ (Expense) 34 (30)

Net Income Attributable to Non-Controlling Interest - (15)

Adjusted EBITDA 1,758$ 619$

Trailing Twelve Months Adjusted EBITDA 5,250$ 1,735$

Financial Summary

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• During the fourth quarter of fiscal 2016, the Company reclassified certain banking fees, previously reported within Loss from

Operations, to Interest Expense for all quarters during the fiscal 2016 year. Adjusted EBITDA has changed as a result, based

on these historical adjustments.

Non-GAAP Adjusted EBITDA Calculations

August 31, 2016 May 31, 2016

$000's

ASSETS

Assets

Current Assets $ 26,236 $ 23,359

Other Assets 30,755 30,400

Total Assets $ 56,991 $ 53,759

LIABILITIES AND STOCKHOLDERS’ EQUITY

Liabilities

Current Liabilities $ 42,261 $ 39,918

Other Liabilities 5,730 6,329

Total Liabilities 47,991 46,247

Series D Preferred Stock 774 -

Total Stockholders’ Equity 8,226 7,512

Total Liabilities and Stockholders’ Equity $ 56,991 $ 53,759

Balance Sheet Highlights

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Fiscal Period Ended

• Staffing 360 Solutions Represents Significant Valuation Opportunity:

– Compared to Other Public Staffing Companies.

– Based on Revenue and Gross Profit Multiples.

Valuation Opportunity

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• Source: Yahoo Finance as of November 2016

• Revenue Multiples are calculated by dividing Market Cap by Revenue. Gross Profit Multiples are

calculated by dividing Market Cap by Gross Profit.

Nasdaq: STAF

-

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

Robert Half ResourcesConnection

Korn Ferry OnAssignment

Staffing 360Solutions

Revenue Multiples

-

0.50

1.00

1.50

2.00

2.50

3.00

Robert Half ResourcesConnection

Korn Ferry OnAssignment

Staffing 360Solutions

Gross Profit Multiples

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Focused on Five Strategic Pillars

Accountin

g &

Fin

ance

Info

rmatio

n

Technolo

gy

Engin

eerin

g

Adm

inis

tratio

n

Lig

ht In

dustria

l

Corporate & Regional Specialists

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The Staffing Industry Is Growing +7%

$421 billion in revenue, growing +7% per year *

• One of the fastest growing industries worldwide.

~100,000 staffing companies globally

• Dozens of niche sectors.

High Market Fragmentation

• 15,000 U.S. staffing companies with < $20MM in revenue.

High Demand

• “…the total U.S. staffing industry will grow 7% in 2015 and 6% in 2016, to reach a size of $142.4 billion, an all-time high.” *

* Source: Global Forecasts 2016, Staffing Industry Analysts, December 2015

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Staffing Employment Growth

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64%

36%

1995: Industry Revenue $55 billion

Commericial Professional

45%55%

2015: Industry Revenue $136 billion

Commericial Professional

14

Industry Shift to Professional Staffing

Shift toward more temporary

workers is expected to be a

permanent change to jobs market.

Structural change largely driven

by demand for IT.

Rapid and constant technology changes

driving companies to flexible workforces.

Dec 2014 - Percentage of U.S.

workforce in temporary jobs reached

new all-time high of 2.13%.*

• Compares to ~1.5% over past 20 years.

• April 2016 – U.S. market expected

to grow to $150 billion by 2017 *

U.S. Professional Staffing Industry Revenue

Commercial vs. Professional Staffing Trend

* Source: Staffing Industry Analysts

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Disciplined Acquisition Criteria

Robust pipeline of highly selective targets with

over $500 million in revenue.

Must fit within one of five strategic pillars.

Must be accretive, no turn-arounds:

Sustainable Margins

Recurring Revenues

Quality Customers

Reliable Employees

Existing management must be retained.

Objective: 90% temp / 10% perm mix.

Deploy “intelligent integration” approach, in

order to maximize value and mitigate attrition.

Sellers receive cash, stock, notes plus

performance-based incentives.

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Intelligent Integration

Integrate Where it Makes Sense -

Maximize Success

• Focus on Back Office, Keep Sales Intact.

• Mitigate Risk by Deploying Gradual Integration.

Retain Best of Existing Practices

Existing Management Retained / Incentivized.

Increase Support of Sales Teams.

Migrate to Corporate Platform

• Branding, Insurance, Bank Accounts.

• Operating and Accounting Procedures.

Nasdaq: STAF

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Branding Philosophy

• Business unit branding is standardized post-acquisition:

– Addition of “360” at end of acquisition name.

– Retains elements of existing logos to maintain established goodwill while also being

a part of the Staffing 360 family.

Nasdaq: STAF

Key Takeaways

Committed to driving growth, profits and

shareholder value.

Goal to reach $300 million in revenue.

Currently $190M annualized revenue run rate.

Continued growth, both organically and through

selective acquisitions.

Fragmented market which is prime for consolidation.

Six acquisitions completed to date.

Management team has strong industry, M&A and

financial experience.

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Company Contacts

Staffing 360 Solutions, Inc.

Investor Contact:

Darren Minton, Executive Vice President

[email protected]

Financial Contact:

David Faiman, Chief Financial Officer

[email protected]

Headquarters:

641 Lexington Ave, 27th Floor

New York, NY 10022

646-507-5710

UK Office:

3a London Wall Buildings

London Wall

London EC2M 5SY

+44 (0) 207 464 1550

Nasdaq: STAF