Preferred Share Offering Investor Deck · Management team with significant ... President of...
Transcript of Preferred Share Offering Investor Deck · Management team with significant ... President of...
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
Nasdaq: STAF
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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64%
36%
1995: Industry Revenue $55 billion
Commericial Professional
45%55%
2015: Industry Revenue $136 billion
Commericial Professional
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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
Financial Contact:
David Faiman, Chief Financial Officer
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