Staffing 360 Solutions Inc. (NASDAQ: STAF) came up with an initiative called Pathway to Profitability that is aimed at improving internal efficiency with the hope of boosting profitability. While reporting fiscal 2016 results (for the year ended May 2016), the management again made reference to the initiative.
How is Staffing 360 Solutions Inc (NASDAQ: STAF) progressing with its Pathway to Profitability initiative? The company’s F2016 provided clues that its efforts to improve bottom-line results are beginning to bear fruits.
How Staffing 360 fared in F4Q and F2016
Staffing 360 generated revenue of $44.4 million in F4Q2016, up from $32.2 million. That indicates an increase of 37.8% YoY. The spike in topline figure helped the company to lower its net loss by almost half to $2.8 million from $4.3 million a year ago. Adjusted EBITDA for the quarter came in at $1.1 million, marking a significant increase from $404,000 in the comparable quarter in 2015.
As for fiscal 2016, Staffing 360 reported revenue of $165.6 million, indicating a growth of more than 28% from the previous year. Gross margin for F2016 was flat at 17.5%, but an increase in revenue saw gross profit rise to $29 million from $22.5 million in the prior year. The gross margin figure met STAF’s internal expectations.
Staffing 360 Solutions Inc. (NASDAQ: STAF) suffered a net loss of $9.7 million in F2016, which nearly half from a net loss of $18.1 million in F2015. The management explained that the bulk of the net loss in F2016 was contributed to by one-time charges relating to changes in the company’s capital structure.
Benefits of acquisition
It turns out that acquisitions are helping Staffing 360 to move faster toward its Pathway to Profitability goal. Not only are acquisitions supporting topline growth, but also backing reduction in corporate overhead costs, thus lifting the bottom-line.
Staffing 360 completed the acquisition of Lighthouse Placement Services and The JM Group in F2016.
Excluding acquisitions, Staffing 360 Solutions Inc. (NASDAQ: STAF) said that it attained more than 7% in organic growth in F2016 from its operations in U.S. and the U.K.
Cash flow – Staffing 360 Solutions Inc. (NASDAQ: STAF)
Higher revenue and lower expenses helped Staffing 360 to book its first full-year positive operating cash flow, which came at $2.1 million.