Staffing 360 Solutions Inc., a staffing provider with operations in the UK and US, announced preliminary unaudited financial results for the fourth quarter of 2017 with  expected revenue of $59.5 million, up 29% from the $46.1 million reported in the same period of 2016.

The group announced that in Q4 2017, gross profit is expected to be $11.9 million, a 50% increase from gross profit of $7.9 million reported in the same period of 2016. Q4 2017 gross margin improved to 20% from 17.2% for the same period of 2016.

Revenue growth was attributed to revenue generated from acquisitions. According to Staffing 360 Solutions, gross margin improvement was due to the group’s strategy to exit a low margin business, the acquisition of two higher margin businesses, the strengthening of its permanent placement business, and the continued improvements made in Monroe Staffing Services operation over workers compensation insurance costs.

Q4 2017 net loss is expected to be $9.1 million, after $7.9 million of non-cash costs, $0.9 million of acquisition-related and non-recurring charges and $0.8 million associated with the company’s reorganisation, as compared to a net loss of $1.6 million in the same period of 2016. Q4 2017 adjusted EBITDA is expected to be $2.8 million, an increase of over 130% as compared to $1.2 million in the same period of 2016.

Figures for Q4 2017

The group also expects a full year 2017 revenue increase of 6%, to $192.7 million from $181.5 million reported in 2016.  The increase was mainly due to $24 million of revenue generated from the acquisitions of CBS Butler Holdings Limited and firstPRO Georgia in September, offset by $1.5 million attributable to unfavourable foreign currency translation and the $4.5 million impact of a low margin business that the group exited during the year. Full year gross profit and gross margin is also expected to rise. Net loss for FY 2017 is expected to be $18.4 million as compared to a net loss of $7.8 million in the previous year. FY 2017 adjusted EBITDA is expected to be $7.4 million, an increase of 46% from $5.1 million in 2016.

Brendan Flood, Chairman and Chief Executive Officer, commented on the results, “Fiscal 2017 was a transformative year for us.  We completed two acquisitions which, on a pro forma annual basis, added approximately $85 million to the top line, and more than doubled adjusted EBITDA of our overall business to $11 million.  Additionally, we reorganised our business into three distinct segments (Commercial Staffing – U.S., Professional Staffing – U.S. and Professional Staffing – U.K.), a strategic move which allows us to further leverage our international presence, drive growth, increase operating efficiencies, and generate sustainable profitability.  We look forward to reporting our progress in the coming months.”

David Faiman, Chief Financial Officer, also commented, “During 2017, we completed a number of capital and M&A transactions. Although these activities resulted in a significant amount of one-time non-cash accounting charges, they expanded our international presence and placed the group’s business on a stronger financial footing, as we cleaned up our balance sheet and significantly improved our capital structure.”