Atlantic International Corp. Reports Over $107 Million in Q3 Revenue and Over 10% Revenue Growth Over the Prior Year

Rhea-AI Summary

Atlantic International Corp. (ATLN) reported Q3 2024 revenue of $107.8 million, a 10.2% increase from $97.8 million in the same period last year. Gross profit was $11.9 million (11.0% of revenue), compared to $11.6 million (11.9%) last year. The company announced a pending merger with Staffing 360 Solutions, expected to add $200 million in annual revenue, resulting in pro forma annual revenue of approximately $640 million with anticipated cost synergies of $10 million. The company expanded operations with a new logistics center in Temple, Texas, and introduced Site Selection Dashboards for location-based hiring decisions.

Positive

• Revenue growth of 10.2% year-over-year to $107.8 million
• Pending acquisition of Staffing 360 to add $200 million in annual revenue
• Expected cost synergies of $10 million from Staffing 360 integration
• Diversified customer base with no single customer generating more than 5% of revenue
• Planned uplisting to a National Securities Exchange

Negative

• Gross profit margin declined from 11.9% to 11.0% year-over-year

Atlantic to Add Approximately $200 Million in Annual Revenue from Pending Acquisition of Staffing 360 Solutions, Inc., Resulting in Pro Forma Annual Revenue of Approximately $640 Million

Growth Follows Atlantic’s Completed Merger with Lyneer Staffing Solutions

ENGLEWOOD CLIFFS, N.J., Nov. 14, 2024 (GLOBE NEWSWIRE) -- Atlantic International Corp. (“Atlantic”) (OTC: ATLN), a leading provider of strategic staffing outsourced services and workforce solutions, today announced its financial results for the second quarter ended June 30, 2024. “Atlantic achieved continued strength in sales growth in the third quarter, which was our second reporting period as a newly public company. Our expansion of large accounts, and new account wins, as well as continued on-site openings for existing clients, is a testament to the outstanding service and value we deliver to our customers,” said Jeffrey Jagid, Chief Executive Officer.

Key Q3 Financial Highlights:

- Revenue: Atlantic International Corp. reported revenue of $107.8 million, representing a 10.2% increase compared to $97.8 million for the same period last year. Growth is attributed to expansion within our existing customer base including large domestic shippers, packers and CPG companies, and new location openings in Texas and the Southeast.

- Gross Profit: Gross profit for the quarter was $11.9 million, representing 11.0% of revenue, compared to $11.6 million, or 11.9% of revenue, in the same period last year.

In the third quarter, we announced our Site Selection Dashboards, which are designed to transform how businesses make location-based hiring and expansion decisions. This technology leverages our in-place executive team, existing back-office operations and enables us to add higher margin business, including permanent staffing revenues, which we expect to result in higher margin revenue and further diversify our customer base as we broaden customer access and use of the dashboard technology.

Operational Highlights:

- Expansion Initiatives: Atlantic International Corp.’s subsidiary Lyneer continues to expand on-premise locations for customers where we manage warehouse operations -- including the hiring and firing of employees, executive management, scheduling and payroll, paying over 12,000 employees weekly.

- New Onsite Location: The company successfully opened a Temple, Texas logistics center on behalf of a large existing customer, bolstering our position in the fast-growing market and enhancing our service capabilities for one of the world’s largest global logistics providers.

- M&A Execution and Integration: We recently announced the definitive merger agreement with Staffing 360 Solutions Inc. (“Staffing 360”), which if completed, is expected to add nearly $200 million in annual revenue, resulting in a proforma annual revenue of approximately $640 million. We expect run-rate cost synergies of approximately $10 million from integration. The combined company would have over 1,500 customers, with no customer generating more than 5% of total revenue.

- Benefits to Shareholders from Staffing 360 Acquisition: Shareholders are expected to benefit from the scale, liquidity and capital alternatives of a larger combined company. Additionally, larger capitalized human capital management and workforce solutions companies have historically carried premium valuations. Further, our scale is expected to create cost efficiencies and decrease Atlantic’s operating expense ratio, improving profitability as we spread fixed costs across the larger revenue base.

We expect to close the merger transaction within the next 90 days, subject to customary approvals.

Management Commentary

“We are pleased to report another strong quarter, driven by strong revenue growth at our subsidiary, Lyneer Staffing Solutions,” said Jeffrey Jagid, CEO. “Senior management’s focus on M&A delivered – with the announcement of our definitive merger with Staffing 360, another large operator in the sector. Through a stock merger, we will be able to deliver significant value to both Atlantic and Staffing 360 shareholders, setting the precedent for continued M&A in our pipeline, which is now in excess of $1 billion. We also look forward to our pending uplisting to a National Securities Exchange.”

About Atlantic International Corp.

Atlantic International Corp. (“Atlantic”) is a leading strategic staffing, outsourced services, and workforce solutions company executing a high-growth strategy. Through its principal operating subsidiary, Lyneer Investments LLC (“Lyneer”), Atlantic’s approximately 300 employees generated over $400 million in revenue for the twelve months ended September 30, 2024. According to Staffing Industry Analysts, Atlantic is among the top 20 largest national staffing companies servicing the light industrial, commercial, professional, finance, direct placement, and managed service provider verticals. Atlantic provides its customers with complete HR solutions, operating 40 independent on-site and vendor-on-premises facilities and paying over 12,000 employees weekly.

For more information about Lyneer Staffing Solutions please visit www.lyneer.com.

For more information about Atlantic International Corp., please visit www.atlantic-international.com.

Forward-Looking Statements & Safe Harbor Statement

With the exception of the historical information contained in this press release, the matters described herein, may contain “forward-looking statements” relating to the business of Atlantic, and its subsidiary company Lyneer. These forward-looking statements are often identified by the use of forward-looking terminology such as “believes,” “expects,” or similar expressions, involving known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website at http://www.sec.gov. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors.

Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

Investor Relations Contact

Kale Fein
kfein@atlantic-international.com
+1 (213) 915-6414

FAQ

What was Atlantic International Corp's (ATLN) Q3 2024 revenue?

Atlantic International Corp. reported Q3 2024 revenue of $107.8 million, representing a 10.2% increase from $97.8 million in the same period last year.

How much additional revenue will the Staffing 360 acquisition bring to ATLN?

The acquisition of Staffing 360 Solutions is expected to add approximately $200 million in annual revenue, resulting in a pro forma annual revenue of approximately $640 million.

What was ATLN's gross profit margin in Q3 2024?

Atlantic International Corp.'s gross profit margin was 11.0% in Q3 2024, compared to 11.9% in the same period last year.

When is ATLN expected to complete the Staffing 360 merger?

The merger transaction is expected to close within 90 days from the announcement, subject to customary approvals.