8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

May 14, 2018

Date of Report (Date of earliest event reported)

STAFFING 360 SOLUTIONS, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-37575	68-0680859
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)

641 Lexington Avenue

27th Floor

New York, NY 10022

(Address of principal executive offices)

(646) 507-5710

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b–2 of the Securities Exchange Act of 1934 (§ 240.12b–2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ 

Item 2.02Results of Operations and Financial Condition.

On May 14, 2018, Staffing 360 Solutions, Inc. (the “Company”) issued the press release attached hereto as Exhibit 99.1 and incorporated by reference herein.

In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, is being furnished pursuant to Item 2.02 and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Exchange Act or the Securities Act of 1933, as amended, except as shall be expressly set forth by reference in such a filing.

Forward-Looking Statements

Certain matters discussed within this press release are forward-looking statements. These statements may be identified by words such as "expect," "look forward to," "anticipate" "intend," "plan," "believe," "seek," "estimate," "will," "project" or words of similar meaning.  Although Staffing 360 Solutions, Inc. believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained.  Actual results may vary materially from those expressed or implied by the statements herein, including the goal of achieving annualized revenues of $500 million, due to  the Company’s ability to successfully raise sufficient capital on reasonable terms or at all, to consummate additional acquisitions, to successfully integrate newly acquired companies, to organically grow its business, to successfully defend potential future litigation, changes in local or national economic conditions, the ability to comply with contractual covenants, including in respect of its debt, as well as various additional risks, many of which are now unknown and generally out of the Company’s control, and which are detailed from time to time in reports filed with the SEC, including quarterly reports on Form 10-Q, reports on Form 8-K and annual reports on Form 10-K.  Staffing 360 Solutions, Inc. does not undertake any duty to update any statements contained herein (including any forward-looking statements), except as required by law.  

Item 8.01Other Events.

On May 14, 2018, the Company issued the press release attached hereto as Exhibit 99.1 and incorporated by reference herein, and published the investor slides attached hereto as Exhibit 99.2 and incorporated by reference herein.

Item 9.01Financial Statements and Exhibits.

(d) Exhibits (furnished only).

Exhibit No.	Description
99.1	Press Release of Staffing 360 Solutions, Inc. dated May 14, 2018.
99.2	Investor Slides

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:  May 14, 2018	STAFFING 360 SOLUTIONS, INC.
	By:	/s/ Brendan Flood
		Brendan Flood
		Chairman, President and CEO

EX-99.1

Staffing 360 Solutions Announces 2018 First Quarter Financial Results

New York, NY – May 14, 2018 – 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 its financial results for the three-month period ended March 31, 2018 (Q1 2018):

Q1 2018 Highlights:

• Revenue grew by 37% to $55.8 million

• Gross profit grew by 58% to $11.6 million

• Gross margin strengthened to 20.8%

• Net loss decreased to $1.3 million

• Adjusted EBITDA grew by 57% to $1.6 million

Brendan Flood, Chairman and Chief Executive Officer stated, “Q1 2018 was another record revenue quarter for STAF 360.  During the quarter, not only did we significantly increase our revenue, we also improved efficiency, removed duplicative overhead costs across businesses, expanded our higher margin (temporary-hire) business segment sales team by 15 professionals, and improved cross-segment / cross-border cooperation between business segments, which resulted in 58% gross profits improvement and a substantial decrease in our net loss.  This was achieved despite the first quarter historically being the weakest quarter of the year, due to seasonality and weather issues.  Additionally, following the refinancing of our borrowing we improved our financial position and cash flow.”

Mr. Flood added, “As we continue to execute on our business plan, we expect to see similar growth in the second quarter and we are confident that 2018, will be a year of profitable enterprise-wide growth.

Results for Q1 2018 are as follows:

• Q1 2018 revenue of $55.8 million, an increase of 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, $0.8 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 $11.6 million, a 58% increase from the $7.3 million reported for Q1 2017.

• Q1 2018 gross margin improved to 20.8% from 18.0% for Q1 2017.  The gross margin improvement, reflects our continued strategy to exit low margin business, 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 $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 $1.6 million, an increase of 57% as compared to $1.0 million for Q1 2017.

• Pro Forma trailing twelve-month adjusted EBITDA of $10.3 million; this includes adjusted EBITDA of the two acquired companies prior to September 2017.

In addition, Brendan Flood, Chairman and Chief Executive Officer, and David Faiman, Chief Financial Officer, of STAF 360, will host a conference call focusing on financial results, recent business developments and growth initiatives, today at 9:00am Eastern Time. A Q&A session will follow the prepared remarks.

Interested parties may participate in the call by dialing 877.407.0778 (U.S), 800.756.3429 (U.K.) or 201.689.8565 (other international locations).  Please dial in 10 minutes prior to the beginning of the call.

The conference call will be simultaneously webcast and available at: http://www.investorcalendar.com/event/29626. To listen to the live webcast, go to the web site at least 15 minutes early to register, download and install any necessary audio software.  If you are unable to listen live, the conference call will be archived on STAF 360’s web site.

About Staffing 360 Solutions, Inc.

Staffing 360 Solutions, Inc. (Nasdaq: STAF) is a public company in the staffing sector engaged in the execution of an international buy-and-build strategy through the acquisition of domestic and international staffing organizations in the United States and United Kingdom.  The Company believes that the staffing industry offers opportunities for accretive acquisitions that will drive its annual revenues to $500 million.  As part of its targeted consolidation model, the Company is pursuing acquisition targets in the finance and accounting, administrative, engineering, IT, and Light Industrial staffing space.  For more information, please visit: www.staffing360solutions.com.

Follow Staffing 360 Solutions on Facebook, LinkedIn and Twitter.

Forward-Looking Statements

This press release contains forward-looking statements, which may be identified by words such as "expect," "look forward to," "anticipate" "intend," "plan," "believe," "seek," "estimate," "will," "project" or words of similar meaning.  Although Staffing 360 Solutions, Inc. believes such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained.  Actual results may vary materially from those expressed or implied by the statements herein, including the goal of achieving annualized revenues of $500 million, due to the Company’s ability to successfully raise sufficient capital on reasonable terms or at all, to consummate additional acquisitions, to successfully integrate newly acquired companies, to organically grow its business, to successfully

defend potential future litigation, changes in local or national economic conditions, the ability to comply with contractual covenants, including in respect of its debt, as well as various additional risks, many of which are now unknown and generally out of the Company’s control, and which are detailed from time to time in reports filed by the Company with the SEC, including quarterly reports on Form 10-Q, reports on Form 8-K and annual reports on Form 10-K.  Staffing 360 Solutions does not undertake any duty to update any statements contained herein (including any forward-looking statements), except as required by law.  

Corporate Investor Contact:

Investor Relations:

The Equity Group, Inc.

Lena Cati

lcati@equityny.com / +1 (212) 836-9611

Devin Sullivan

dsullivan@equityny.com / +1 (212) 836-9608

Staffing 360 Solutions, Inc.

Brendan Flood, Chairman and CEO

brendan.flood@staffing360solutions.com / +1 (646) 507-5715

David Faiman, Chief Financial Officer

info@staffing360solutions.com / +1 (646) 507-5711

Staffing 360 Solutions, Inc. and Subsidiaries
Reconciliation of Net Loss to Adjusted EBITDA
(All Amounts in Thousands)
	December 31, 2017 to	January 1, 2017 to
	March 31, 2018	April 1, 2017
	(Unaudited)	(Unaudited)
Revenue	$55,791	$40,712
Gross Profit	$11,581	$7,326
Gross Margin	20.8%	18.0%
Loss from Operations	(405)	(557)
Net Loss	(1,271)	(3,081)
Adjustments:
Interest Expense	$1,955	$502
Provision for Income Taxes	152	5
Depreciation and Amortization	920	1,319
EBITDA	1,756	(1,255)
Acquisition, Capital Raising and Other
Non-Recurring Expenses	847	531
Other Non-Cash Charges	373	294
Debt Extinguishment Costs	-	1,368
Change in fair value of warrant liability	(538)	92
Gain on intercompany note	(575)	-
Other (Income)	(250)	(2)
Adjusted EBITDA	$1,613	$1,028
Adjusted EBITDA Margin	2.9%	2.5%
TTM Adjusted EBITDA	$7,976	$5,390
Pro Forma TTM Adjusted EBITDA	$10,340	N/A

EX-99.2

Ticker: STAF Q1 2018 Investor Call – May 14, 2018

Investor Call Agenda Introduction and Safe-Harbor Brendan Flood, Chairman & Chief Executive Officer Opening Remarks Brendan Flood, Chairman & Chief Executive Officer Financial Results David Faiman, Chief Financial Officer Q&A Brendan Flood, Chairman & Chief Executive Officer Closing Remarks Brendan Flood, Chairman & Chief Executive Officer

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.

Remarks from the Chairman and Chief Executive Officer Record quarterly revenue Record gross profit and margin Improved efficiency and cash flow First Quarter 2018 Financial Highlights: Revenue growth of 37% to $55.8 million (~$240 million annualized) Gross profit growth of 58% to $11.6 million Gross margin strengthened to 20.8% Net loss decreased to approximately $1.3 million Adjusted EBITDA of $1.6 million TTM Pro Forma Adjusted EBITDA of $10.3 million

Q1 2018 Financial Performance

Balance Sheet

Cash Flow

Questions & Answers

Closing Remarks

Appendices

Adjusted EBITDA Reconciliation

Capital Structure and Leverage TTM Pro Forma Leverage Ratio: Calculated as Total Long-Term Debt, Net, gross of Debt Discount and Deferred Financing costs, divided by Pro Forma Adjusted EBITDA for the trailing twelve-months (“TTM”).

Company Contact Information Investor Relations: The Equity Group, Inc. Lena Cati lcati@equityny.com / +1 (212) 836-9611 Devin Sullivan dsullivan@equityny.com / +1 (212) 836-9608 Staffing 360 Solutions, Inc.: Brendan Flood, Chairman and Chief Executive Officer brendan.flood@swtaffing360solutions.com / +1 (646) 507-5715 David Faiman, Chief Financial Officer david.faiman@staffing360solutions.com / +1 (646) 507-5711 Headquarters: 641 Lexington Ave, Suite 2701 New York, NY 10022 646-507-5710 UK Office: 3A London Wall Buildings London Wall London EC2M 5SY +44 (0) 207 464 1550