Staffing 360 Solutions Inc (NASDAQ:STAF) has released its 1Q2017 financial results, reporting revenues of $47.8 million and a gross profit of $8.5 million. The company noted that the revenues and gross profits surged by 33.1% and 34.3%, respectively. Unfortunately, the company failed to report a net profit, yet again, but was able to lower the net loss by 22.2% to $1.3 million.
Brendan Flood, the Executive Chairman of STAF, claimed that this was a great start to the FY2017. He pointed out that the company had experienced organic growth of over 14%, on a year-over-year basis. Mr. Flood attributed this growth to Staffing 360’s acquisitions of the Lighthouse Placement Services and The JM Group. He claimed that the management was now setting the stage for future growth. It should be noted here that during the 1Q2017, the company was listed on the NASDAQ exchange and raised $5.3 million in equity through an S-3 registration statement.
The CFO of Staffing 360, David Faiman, was quick to point out that this was the first time in their history that STAF had an operating profit and the management was working to improve its balance sheet. Mr. Faiman also revealed that the company was able to improve its working capital deficiency by $500,000, while also improving stockholder’s equity by $0.7 million. A statement issued by the CEO of the company, Matt Briand, claimed that the growth was a result of the acquisition of several new annual contracts. It also revealed that these contracts would have an impact on the coming quarters as well.
The financial results helped STAF attract investor interest, as revenues beat analyst estimates by $0.4 million. Analysts at TheStreet, however, remain pessimistic about the stock and rate it as a sell. They claim that STAF’s biggest weakness is its high debt management risk and a poor profit margin. It should be noted here that Staffing 360 is growing at a steady pace, having opened its third office in Concord, North Carolina, this quarter.
Staffing 360 Solutions Inc (NASDAQ:STAF) gained 6.45% in terms of its share value, on a trade volume of 4.47 million, to close at $1.32 per share, at the end of the October 11 trading session.