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NASDAQ: STAF
Rapidly growing international staffing company
Investor PresentationJanuary 2020
NASDAQ: 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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NASDAQ: STAF
EXECUTIVE MANAGEMENT TEAM
• Extensive financial, M&A and turn-around experience over a 30-year career.
• More than 20 Years in the Staffing Industry
• Built own business before selling to Staffing 360 Solutions
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Brendan FloodChairman & ChiefExecutive Officer
• More than 20 Years of experience in a variety of fast-paced, competitive industries
• Extensive background in Human Resources, Communication and Executive Development
• Staffing experience is now over 15 years
Alicia BarkerChief Operating Officer
• More than 20 years of operational management, sales, and recruiting experience in the staffing and customer service industries.
• In addition to creating solutions for clients, Paul oversees the professional development, Corporate Safety, and employee-directed giving programs.
Paul PolitoPresident, Commercial Staffing
NASDAQ: STAF
• Staffing solution company executing an international buy-integrate-build strategy in the US and UK
o 10 acquisitions completed since 2013
• Primary focus:
o Temporary staffing - ~ 90% of total revenue
o Permanent placements - ~ 10% of total revenue
COMPANY & INDUSTRY OVERVIEW
$466B*
global market growing 6% annually**
~100,000 staffing companies globally
~15,000 US companies <$20M in revenue
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NASDAQ:
Headquarters:
Employees:
Customers:
STAF
New York, US
~ 5,500 temporary < 300 internal
~1,700
• Consolidation model: three business streams
o Commercial Staffing (US): commercial / light industrial staffing solutions
o Professional Staffing (US): accounting / finance, information technology, engineering, and administration staffing solutions
o Professional Staffing (UK): accounting / finance, information technology, engineering, and administration staffing solutions
* Source – Staffing Industry Analysts
** Source – Staffing Industry Analysts
NASDAQ: STAF
• International footprint and disciplined M&A strategyo Highly fragmented market provides acquisition opportunities and
ability to scaleo High client retention and strong recurring revenue
• Impressive revenue growth:
INVESTMENT HIGHLIGHTS
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US: 19 offices in 8 States
2013 2018 2019 goal
Nearly $0 $ 260M $275-285M
• 2018 business realignment designed to drive focus, organic growth and profitability
• Recent strengthening of financial position o Converted $13M of Term Debt to Preference Stock in Nov ‘18o Raised $5M in equity in Q1’19o 7th consecutive quarter of positive EBITDA
UK: 2 London offices
• Management team with significant operational and M&A experience
NASDAQ: STAF
BUSINESS UNITS
Focused on United States and United Kingdom: • Well developed temporary staffing markets
• Flexible labor laws
• Culturally aligned
• Allows management time to be optimized - leading to better performance
and returns
• Expects to focus principally on US targets going forward
ACQUISITIONS: Verticals / Location / Year
Commercial
Engineering
Administration
Accounting & Finance
Information Technology
Accounting & Finance
Information Technology
Engineering Engineering
Administration
Accounting & Finance
Information Technology
Accounting & Finance
Information Technology
Information Technology
Commercial
US UK UK US UK US UK US
2014 * 2014** 2015 2015 2017 2017 2018 2018
Geographic Revenue Split
60%
40%
US UK
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*Includes acquisition of CSI
**Includes acquisition of Poolia
NASDAQ: STAF
REALIGNMENT OF ORGANIZATIONAL STRUCTURE
United States
Commercial Staffing Professional Staffing
United Kingdom
Professional Staffing
New corporate structure to enhance customer focus, drive revenue growth, maximize efficiencies, and support
accountability and ownership
44%56%
Commercial
Professional
Revenue Split
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NASDAQ: STAF
Focused on five strategic verticals that representsub-segments of the staffing industry
FIVE STRATEGIC PILLARS
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Acc
ou
nti
ng
&
Fin
ance
Info
rmat
ion
Te
chn
olo
gy
Engi
ne
eri
ng
Ad
min
istr
atio
n
Co
mm
erc
ial
PROFESSIONAL & COMMERCIAL
BUSINESS MODEL
Corporate & Regional Specialists
NASDAQ: STAF
• Build a growing, profitable, international staffing firm
• Execute disciplined acquisition strategy, supplemented by strong organic growth and cross-selling
• Highly fragmented market provides acquisition opportunities and ability to scale
• M&A criteria – fit into five existing verticals
• Use “Intelligent Integration” approach to maximize value, mitigate attrition and increase support of sales teams
• Capitalize on highly experienced executive management team
• Drive shareholder value and profitability
STRATEGIC GOALS
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NASDAQ: STAF
• Robust pipeline of highly selective targets
• Fit within at least one of five strategic pillars
• Accretive to adjusted EBITDA, no turn-arounds
o Sustainable margins
o Recurring revenues
o Quality customers
o Reliable employees
• Objective: 95% temporary / 5% permanent revenue mix (80% / 20% gross profit mix)
• Past sellers have received cash, stock, notes plus performance-based incentives
DISCIPLINED ACQUISITION CRITERIA
Acc
ou
nti
ng
&
Fin
ance
Info
rmat
ion
Te
chn
olo
gy
Engi
ne
eri
ng
Ad
min
istr
atio
n
Co
mm
erc
ial
… positioned to take advantage of market opportunities
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Corporate & Regional Specialists
NASDAQ: STAF
• Shift toward more temporary workers is expected to
be a permanent change to jobs market
• Structural change largely driven by demand for IT
• US staffing market grew 5% CAGR during 2013-2016
vs. GDP CAGR of 2.2%*
• US staffing market expected to grow to $153 billion
by 2019*
Commercial vs. Professional Staffing Trend
* Source: Global Staffing Industry Market Estimates and Forecast, November 2018 Update (Staffing Industry Analysts)
STAFFING EMPLOYMENT TRENDS: UNITED STATES
Professional & Temporary Staffing: Shift Toward Higher Margin & Scalable Verticals
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64%
36%
1995: Industry Revenue$55 Billion
Commercial Professional
44% 56%
2017: Industry Revenue$143 Billion
Commercial Professional
NASDAQ: STAF
In 2017, the Company changed its fiscal year end to December. All periods shown are for 12 months.
HISTORICAL FINANCIAL PERFORMANCE
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Revenue, Gross Profit & Gross Margin($ Millions)
Adjusted EBITDA & EBITDA Margin($ Millions)
$128.8
$165.6$144.4
$181.5$192.7
$260.9
$288.7
$22.5
$29.0$25.3
$31.5
$36.7
$48.3 $49.0
$0
$10
$20
$30
$40
$50
$60
$70
$80
$0
$50
$100
$150
$200
$250
$300
$350
May2015
May2016
Dec2015
Dec2016
Dec2017
Dec2018
TTMSep 2019
Revenue Gross Profit
17.5%
17.4%
19.1%18.5%
$0.8
$4.1
$2.7
$5.1
$7.4
$9.0 $10.1
1.9%
2.8%
3.8%
3.1%3.5
-2
-1
0
1
2
3
4
5
$(3.0)
$(1.0)
$1.0
$3.0
$5.0
$7.0
$9.0
$11.0
$13.0
May2015
May2016
Dec2015
Dec2016
Dec2017
Dec2018
TTMSep
2019
Adjusted EBITDA EBITDA Margin
%
%
%
%
%
%
%
%
17.0%
* See Appendix for EBITDA and Adjusted EBITDA Reconciliation
NASDAQ: STAF
Year to Date Q3 2019 Highlights
• Revenue grew by 14.9% to $214.6 million, from $186.8 million YTD ’18, including unfavorable foreign currency translation impact of $5.6 million
• Gross profit grew by 2% to $36.7 million, from $36.0 million YTD ’18
• Gross margin declined to 17.1% compared with 19.2% YTD ’18
• Income from operations grew significantly to $1.5 million compared with $0.4 million YTD ’18
• Net loss of $2.3 million improved against a net loss of $5.1 million YTD ’18
• EBITDA grew by over 62.8% to $6 million, from $3.7 million YTD ‘18
• Adjusted EBITDA grew 21.3% to $7.3 million, from $6.0 million YTD ’18
Fiscal 2018 Highlights
• Revenue grew by $68.3 million, or 35.4%, to $260.9 million
• Gross profit grew by $11.6 million, or 31.5%, to $48.3 million
• Gross margin was to 18.5% compared with 19.1%
• Net loss was $6.5 million compared with $18.5 million in Fiscal 2017
• EBITDA* was $5.6 million compared with Fiscal 2017 loss of ($7.5) million
• Adjusted EBITDA* was $9 million as compared with $7.4 million the same period last year
HISTORICAL FINANCIAL PERFORMANCE
* See Appendix for EBITDA and Adjusted EBITDA Reconciliation 13
NASDAQ: STAF
Re-signed Largest Client, British American Tobacco, to Multi-year Contract• Contract signed by Clement May Limited, one of our UK businesses acquired in 2018
• Successfully extended our delivery from Information Technology contractors to include Engineering, Legal and Accounting & Finance in collaboration with our other UK business units
• Demonstrates the impact that the business realignment at the beginning of the year has had on how our management and brands work together for the benefit of our clients and our profitability
• Testimony to how client-focused we are as an organization
Dividend Program• Our fourth consecutive quarterly dividend of $0.01 per share was paid on December 27, 2019 to
shareholders of record on December 14, 2019.
Settled deferred consideration from acquisition of firstPro at 50% discount to its face value
The Company recorded a net settlement gain of approx. $1.25mm in Q3 ’19 as a result of a CBSbutler warranty claim
RECENT DEVELOPMENTS
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NASDAQ: STAF
US and UK Operations Recognized for Exceptional Client Service
US-based Monroe Staffing Services, a leading staffing agency in the CommercialStaffing and Professional Staffing Services segments, has won Clearly Rated’s 2019 Best
of Staffing® Client Award for providing superior service to its clients.
Presented in partnership with CareerBuilder, Clearly Rated’s 2019 Best of Staffing® ClientAward winners have proven to be industry leaders in service quality based entirely on ratingsprovided by their clients. This is the fourth year in a row, and eighth time in nine years, thatMonroe Staffing Services has been recognized for delivering superior client service.
UK-based CBSbutler, a market-leading technical and engineering recruitment firm, haswon the 2019 Feefo® Gold Trusted Service Award.
Feefo is a reviews and customer insights technology company providing businesses with thetools to collect real, purchase-verified reviews and insights. Working with over 3,500 clients,Feefo ensures that all feedback is authentic, by matching it to a legitimate transaction, toincrease consumer confidence and enable businesses to make smarter decisions.
RECENT AWARDS
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NASDAQ: STAF
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CONDENSED BALANCE SHEET
$ in 000s September 28, December 29,
2019 2018
ASSETS
Current Assets $ 34,687 $ 37,124
Long-term Assets 62,753 59,313
Total Assets $ 97,440 $ 96,437
LIABILITIES AND STOCKHOLDERS' EQUITY
Total Current Liabilities $ 86,214 $ 52,018
Long-term liabilities 5,760 40,224
Total Liabilities 91,974 92,242
Total Stockholders’ Equity 5,466 4,195
Total Liabilities and Stockholders' Equity $ 97,440 $ 96,437
NASDAQ: STAF
For additional information and transactions that may have occurred subsequent to the balance sheet date, please see Staffing 360 Solutions’ filing with the SEC.
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CAPITALIZATION TABLE
September 28,
2019
($000s)
Accounts Receivable Based Facilities $ 18,011
Term Loans 39,409
Total Debt $ 57,420
Series A Convertible Preferred Stock $ 1,663,008
Series E Convertible Preferred Stock $ 13,000,000
Series E-1 Convertible Preferred Stock 351
Stock Options (Wtd Avg Strike Price = $35.43) 79,560
Warrants (Wtd Ave Strike Price of $1.76) 925,934
Restricted Shares 495,690
Common Stock 8,680,148
NASDAQ: STAF
Committed to driving growth, profits, and shareholder value
• Highly focused M&A STRATEGY – 10 acquisitions completed to date
• Initiated a quarterly cash dividend in Feb ’19 offering a yield to common stockholders. But more significantly, made a strong statement regarding management’s confidence in operational positive cash flow
• Grew from nearly zero revenue in 2013 to $260M in 2018
• Recent business segment REALIGNMENT DRIVING CROSS SELLING, PROFITABILITY and organic growth
• Led by a MANAGEMENT TEAM with significant operational and M&A experience
KEY TAKEAWAYS
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NASDAQ: STAF
Staffing 360 Solutions, Inc.
Brendan FloodChairman and Chief Executive [email protected]
Alicia BarkerChief Operating [email protected]
Investor Relations:Bibicoff + MacInnis, Inc.Harvey Bibicoff, [email protected] / (818) 379-8500
CONTACT US
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Headquarters:641 Lexington Ave, Suite 2701New York, NY 10022646-507-5710
UK Office:3rd floor3 London Wall BuildingsLondon Wall, London EC2M 5SY+44 (0) 207 464 1550
NASDAQ: STAF
APPENDIX
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Q3 2019 Q3 2018 Q3 2019 YTD Q3 2018 YTD
Trailing Twelve
Months
Q3 2019
Trailing Twelve
Months
Q3 2018
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenue 67,320$ 71,317$ 214,644$ 186,835$ 288,735$ 246,311$
Gross Profit 12,485$ 12,496$ 36,695$ 35,959$ 49,040$ 47,873$
Gross Margin 18.5% 17.5% 17.1% 19.2% 17.0% 19.4%
Net loss (1,108)$ (1,980)$ (2,350)$ (5,095)$ (3,756)$ (12,419)$
Adjustments:
Interest expense and amortization of debt discount and deferred
financing costs 2,059$ 2,435$ 5,977$ 6,578$ 8,365$ 8,615$
Benefit (Provision) from income taxes 28 3 (296) (78) (196) 641
Depreciation and Amortization 867 741 2,621 2,251 3,494 3,507
EBITDA 1,846 1,199 5,952 3,656 7,907 344
Acquisition, capital raising and other non-recurring expenses (1) 1,558 797 2,511 2,642 2,993 3,587
Other non-cash charges (2) 205 288 627 951 834 1,319
Gain in fair value of warrant liability - - - (879) - (1,755)
Re-measurement loss on intercompany note 467 186 484 332 838 332
Impairment of goodwill - - - - - 4,790
Deferred consideration settlement (1,138) - (1,985) - (1,985) -
Restructuring charges - - - - (57) 780
Gain from sale of business - - - (238) - (238)
Operational (income) of divested business - - - (237) - (357)
Other loss (income) (51) 14 (308) (227) (479) (152)
Adjusted EBITDA 2,887$ 2,484$ 7,281$ 6,000$ 10,051$ 8,650$
Adjusted EBITDA Margin 4.3% 3.5% 3.4% 3.2% 3.5% 3.5%
Pre-Acquisition Adjusted EBITDA (3) -$ 3,323$
Pro Forma TTM Adjusted EBITDA (4) 10,051$ 11,973$
Adjusted Gross Profit TTM (5) 49,040$ 46,649$
TTM Adjusted EBITDA as percentage of adjusted gross profit TTM 20.5% 18.5%
(4) Pro Forma TTM Adjusted EBITDA includes the Adjusted EBITDA of acquisitions for the period prior to the acquisition date.
(5) Adjusted Gross Profit excludes gross profit of business divested in June 2018, for the period prior to divestiture date.
(3) Pre-Acquisition Adjusted EBITDA excludes the Adjusted EBITDA of acquisitions for the period prior to the acquisition date.
(1) Acquisition, capital raising and other non-recurring expenses primarily relate to capital raising expenses, acquisition and integration expenses and legal expenses incurred in relation to
matters outside the ordinary course of business.
(2) Other non-cash charges primarily relate to staff option and share compensation expense, expense for shares issued to directors for board services, and consideration paid for consulting
services.
NASDAQ: STAF
Rapidly growing international staffing company
Investor PresentationJanuary 2020