Staffing 360 Solutions, Inc.

Revenue for Q2 was $59.1 million, up 16.9% year over year and 20.3% on a constant-currency basis. Gross profit was $10.5 million, up 16.6% year over year and 19.9% on a constant-currency basis. Adjusted EBITDA was $1.438 million, up from $1.372 million a year ago; excluding PPP forgiveness in the prior-year quarter, net income loss of $2.264 million was flat year over year. For the first six months, revenue was $108.9 million, up 9.5%, gross profit was $19 million, up 11.7%, and adjusted EBITDA was $2.246 million versus $2.5 million last year. Headway contributed $11.5 million of revenue and $1.3 million of gross profit in Q2 and year to date. Management did not give formal next-quarter or full-year financial guidance, but said Q3 is seasonally the highest point of the year, expects Q3 gross profit run-rate growth to be replicated across the quarter, and said Q4 could be even higher still.

Brendan Flood emphasized that results were affected by Headway only being included for six weeks and by U.K. currency translation, which he said was largely noncash. He framed the company’s priorities around integration, strengthening the balance sheet, and continuing acquisitions, while reiterating the longer-term goal of building a profitable $500 million revenue business. His tone was constructive and optimistic, especially on the pipeline, seasonality, and the new investor-awareness push.

The CFO-style financial commentary focused on the size and quality of the quarter: revenue of $59.1 million, gross profit of $10.5 million, adjusted EBITDA of $1.438 million, and a $54,000 EBITDA impact from currency translation. She also noted $2.7 million of total cash usage for the first six months, including $0.7 million of cash picked up from the acquisition and $1.9 million of U.K. debt paydown, with adjusted cash movement of only $40,000 in Q2 and $1.475 million cash decrease excluding those items. On the balance-sheet side, management said debt facilities with White Oak, MidCap Financial, and HSBC were all being worked on, with progress expected soon as due diligence and filings were completed.

Analysts asked about weaker U.K. temp revenue, Headway’s margin outlook, debt maturities, potential buybacks, insider purchases, market-cap strategy, and the new Butler, Bridge & May brand. Management said about $1.7 million of the U.K. revenue decline was foreign-currency translation and about $1.3 million was operational, but said roughly GBP 500,000 of annualized cost had already been taken out and recovery should take a couple of quarters. For Headway margins, they expect a long-term average near 10%; on debt, they said they expect imminent progress with lenders; and on buybacks, they said the float is too low for a buyback to help liquidity. They also said Butler, Bridge & May was off to a better-than-expected start.