Staffing 360 Solutions (STAF) Q2 2024 earnings summary

Executive summary

• Revenue for Q2 2024 was $44.2M, down 9.1% year-over-year, with a net loss of $2.0M, a 31.6% improvement from the prior year period.

• Six-month revenue declined 11% to $85.6M, with a net loss of $4.5M, a 21.1% improvement year-over-year.

• Commercial Staffing revenue fell 16.5% in Q2, while Professional Staffing declined 1.7% year-over-year.

• Gross margin decreased to 13.2% in Q2, primarily due to a higher mix of lower-margin Employer of Record (EOR) business.

• The company completed a one-for-ten reverse stock split effective June 25, 2024.

Financial highlights

• Q2 2024 gross profit was $5.8M, down 17.2% year-over-year; six-month gross profit was $11.1M, down 23.3%.

• Operating expenses for the six months were $14.0M, a 14.4% decrease from the prior year, driven by workforce reductions.

• Adjusted EBITDA for Q2 was $0.6M, up from $25K in Q2 2023; trailing twelve-month Adjusted EBITDA was $2.9M.

• Net cash provided by operating activities including accounts receivable financing was $1.5M for the six months ended June 29, 2024.

• As of June 29, 2024, cash was $1.3M, with total assets of $63.4M and total liabilities of $75.4M.

Outlook and guidance

• The company is focused on organic growth and continued acquisition of mature, profitable U.S.-based staffing companies.

• Management is reviewing strategic options, including potential asset sales or restructuring, to address going concern risks.