Preferred Share Offering Investor Deck Ticker: STAF

Transcription

1 Preferred Share Offering Investor Deck Ticker: STAF

2 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. 2

3 Mission Statement 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 3

4 Executive Overview Staffing 360 Solutions, Inc. () 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. 4

5 Executive Management Team 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. 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 Monroe has received numerous honors: Best in Staffing in 2010, 2012, 2013, 2014 and 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. 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. 5

6 All Numbers in Thousands Revenue Growth $350,000 Revenue is Quickly Approaching Target $300,000 $300,000 $250,000 $200,000 $165,552 $191,036 $150,000 $128,829 $100,000 $50,000 $0 $172 $41,198 FY 2013 FY 2014 FY 2015 FY 2016 Current Annualized Run Rate FY 2017 Target Revenue 4,000 Temp. Employees Customers Billed 185 Internal Employees US & UK Focused on 2 Core Markets 6

7 Financial Performance Over 90% CAGR Revenue Growth (1) Annualized Revenue of $190 million Over 160% CAGR Adjusted EBITDA Growth (2) $200,000 $180,000 $160,000 Revenue Historical (Numbers in Results Thousands) $165,552 $177,418 $6,000 $5,000 $4,000 Adjusted EBITDA Historical (Numbers in Thousands) Results $4,111 $5,250 $140,000 $128,829 $3,000 $120,000 $2,000 $100,000 $1,000 $752 $80,000 $60,000 $40,000 $41,198 $0 -$1,000 -$2, TTM Q $20,000 -$3,000 -$2,673 $ TTM Q $4,000 * Fiscal year end is May 31. (1) Revenue CAGR is calculated over the period from Fiscal 2014 to TTM August (2) Adjusted EBITDA CAGR is calculated over the period from Fiscal 2015 to TTM August 2016, since Fiscal 2014 is negative. 7

8 Financial Summary Non-GAAP Adjusted EBITDA Calculations Fiscal Q Fiscal Q 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 Depreciation and Amortization 1,352 1,324 EBITDA Acquisition, Capital Raising & Other Non-Recurring Expenses Other Non-Cash Charges Dividends Series A Preferred Stock 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 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. 8

9 Balance Sheet Highlights Fiscal Period Ended 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 LIABILITIES AND STOCKHOLDERS EQUITY Current Liabilities $ 42,261 $ 39,918 Other Liabilities 5,730 6,329 Total Liabilities 47,991 46,247 Series D Preferred Stock Total Stockholders Equity 8,226 7,512 Total Liabilities and Stockholders Equity $ 56,991 $ 53,759 9

10 Valuation Opportunity Staffing 360 Solutions Represents Significant Valuation Opportunity: Compared to Other Public Staffing Companies. Based on Revenue and Gross Profit Multiples. Revenue Multiples Gross Profit Multiples Robert Half Resources Connection Korn Ferry On Staffing 360 Assignment Solutions - Robert Half Resources Connection Korn Ferry On Staffing 360 Assignment Solutions 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. 10

11 Focused on Five Strategic Pillars Light Industrial Administration Engineering Information Technology Accounting & Finance Corporate & Regional Specialists 11

12 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

13 Staffing Employment Growth 13

14 Industry Shift to Professional Staffing U.S. Professional Staffing Industry Revenue 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. Commercial vs. Professional Staffing Trend 1995: Industry Revenue $55 billion 2015: Industry Revenue $136 billion Dec Percentage of U.S. workforce in temporary jobs reached new all-time high of 2.13%.* 36% Commericial 64% Professional 55% Commericial 45% Professional Compares to ~1.5% over past 20 years. April 2016 U.S. market expected to grow to $150 billion by 2017 * * Source: Staffing Industry Analysts 14

15 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. 15

16 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. 16

17 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. 17

18 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. 18

19 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 UK Office: 3a London Wall Buildings London Wall London EC2M 5SY +44 (0)