What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2024-12-19 compared with 2023-12-18 · 54 added, 36 removed, 157 unchanged (36% of the section changed)

2 unchanged sentences

We are a provider of human resources solutions which primarily include the provision of temporary and permanent personnel in the professional and industrial services sectors to customers located in the United Sates.

We, through our operating subsidiaries, deliver our services from a network of four virtual locations and 26 branch office locations located in or near several major U.S.

We, through our operating subsidiaries, deliver our services from a network of three virtual locations and 23 branch office locations located in or near several major U.S.

cities, including, but not limited to:

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Access Data Consulting provides hard-to-find IT talent to customers on a direct hire or contract basis and human resources consulting services and solutions in the higher-end IT vertical including project management support to businesses regionally (Western and Southwestern U.S.) and, to a lesser extent, throughout the rest of the U.S.

Agile Resources delivers unique CIO advisory services, IT project support and human resources solutions regionally (Southeastern U.S.) and, to a lesser extent, nationally in the areas of application architecture and delivery, enterprise operations, digital, information lifecycle management and project management all with flexible delivery options including contract staffing and direct hire.

Agile Resources specializes in providing technical staffing services for AI-focused consulting, IT project support, and talent solutions across the Southeastern U.S.

and, to a lesser extent, throughout out the rest of the U.S.

Services include talent delivery for cutting-edge AI-driven application architecture and delivery, enterprise operations optimization, digital transformation, information lifecycle management, and project management.

With flexible engagement options, Agile Resources offer both contract staffing and direct hire to meet the diverse needs of our clients in deploying advanced AI and technology solutions.

Ashley Ellis works with C-suite and senior executives to offer full cycle engineering and IT contract staffing services, with a focus on business intelligence, application development and network infrastructure, to clients in the Southeastern U.S.

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SNI Companies provides human resource solutions, including direct hire and contract staffing, project support and retained search services specializing primarily in the accounting, finance, banking, IT and office support verticals to customers located in major U.S.

metropolitan markets, such as Dallas/Fort Worth, Chicago, Denver, Miami, Minneapolis, Princeton, Tampa, Jacksonville, Hartford, Andover and surrounding areas.

metropolitan markets, such as Dallas/Fort Worth, Austin, Houston, Chicago, Denver, Miami, Princeton, Tampa, Jacksonville, Hartford, Andover and surrounding areas.

SNI Companies’ brands include Accounting Now, Staffing Now®, SNI Banking, SNI Certes®, SNI Energy®, SNI Financial®, and SNI Technology®.

Industrial Division

Triad Staffing provides light industrial contract labor services for all phases of manufacturing and electronic assembly, warehousing, picking, packing and shipping and custodial and general labor operations throughout Ohio .

Triad Staffing provides traditional, on-demand and on-site staffing services in metropolitan business markets throughout Ohio.

Triad Staffing's services are comprised of staffing and human resource solutions for clients and candidates within the Office Services, Commercial, Skilled Labor, Technical and Manufacturing Trades, and On-Site Management Services of the Light Industrial sector.

Triad Staffing has been successful in providing staffing solutions to its clients because of its tenured team of highly skilled and dedicated staff, human resource expertise, training, and operating philosophy of providing single-source staffing solutions with the Triad Staffing Advantage .

The percentage of revenues derived from each of the Company’s direct hire and contract services lines are as follows:

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Our acquisition strategy includes, but is not limited to, targeting companies or transactions that we believe may have one or more of the following characteristics:

A focus on IT specialties and other verticals, including cyber security, government and targets in the professional services sectors;

A well-managed business with experienced operators and with high gross profit and EBITDA margins, as well as consistent revenue growth;

A focus on IT specialties and other verticals, including healthcare, cyber security, government and other targets in the professional services sectors;

A well-managed business with experienced operators and with high gross profit and earnings before interest, taxes, depreciation, and amortization (“EBITDA”) margins, as well as consistent revenue growth;

Limited enterprise risk and successful due diligence;

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We market our staffing services using our corporate and trade names in our respective vertical markets.

As of September 30, 2023, we operated from locations in eleven (11) states, including twenty-six (26) branch offices in downtown or suburban areas of major U.S.

cities and four (4) additional U.S.

As of September 30, 2024, we operated from locations in eleven (11) states, including twenty-three (23) branch offices in downtown or suburban areas of major U.S.

cities and three (3) additional U.S.

locations utilizing local staff members working remotely.

We have offices or serve markets remotely, as follows;

(i) one office in each of Connecticut, Illinois, Minnesota, and New Jersey, and one remote local market presence in Virginia;

(ii) two offices each in Georgia and Massachusetts;

(iii) three offices in Colorado;

(iv) two offices and two additional local market presences in Texas;

(i) one office in each of Connecticut, Georgia, Illinois, and New Jersey, and one remote local market presence in Virginia;

(ii) two offices each in Massachusetts and Colorado;

(iv) two offices and one additional local market presences in Texas;

(v) six offices and one additional local market presence in Florida;

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Our sales consultants and business development managers also engage in telephone marketing using our CRM tools to identify prospects, and through the mailing of tailored employment bulletins which list highly-skilled candidates available for placement and contract employees available for assignment.

There was no customer that represented more than 10% of the Company’s consolidated revenue in fiscal 2023 or fiscal 2022.

There was no customer that represented 10% or more of the Company’s consolidated revenue in fiscal 2024 or 2023.

There are two customers that, in aggregate, made up approximately 25% of the Company’s consolidated accounts receivable as of both September 30, 2024 and 2023.

These two customers are offered extended payment terms due to the frequency and volume of our services they utilize.

Each maintains excellent creditworthiness and the Company has not experienced any losses related to these two customers historically.

The staffing industry is highly fragmented with a multitude of competitors.

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Our competitors include sole-proprietorship operations, local and regional firms as well as national organizations.

In the U.S., large national firms have annual revenue of approximately $100 million and up to $10 billion.

In the U.S., large national firms with annual revenue of at least $100 million or more, represent a relatively small portion of all U.S.

staffing firms.

Local and regional firms’ yearly revenue can range from one to several million dollars or more.

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With low barriers to entry, sole proprietorships and smaller entities routinely enter the staffing industry.

Many competitors are larger corporations with substantially greater resources than ours;

Many of our competitors are larger corporations with substantially greater resources than ours;

however, as described below, we believe we are able to compete successfully in the verticals and end markets in which we operate.

Our professional and industrial staffing services compete effectively by providing highly qualified candidates who are well matched for the position, by developing and maintaining outstanding client relationships on a local level, by responding quickly to client requests, and by establishing offices and presences in convenient locations.

As part of our services, we provide professional reference checking, scrutiny of candidates’ work experience and optional custom background checks.

As part of our services, we provide professional reference checking, scrutiny of candidates’ work experiences and optional custom background checks.

In general, we believe that a positive client experience is most important, and pricing often is secondary to quality of service as a competitive factor.

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Deep experience and vertical specialization and expertise in niche markets;

Invested in robust sales programs and marketing tools and technology and CRM software to successfully target and reach out to potential new customers;

Invested in robust sales programs and marketing tools and technology and CRM software to successfully identify, target and reach out to potential new customers;

Long-tenured division leaders, business development managers and vertical specialists (e.g., certified public accountants for accounting, tax and financial placements) with deep and relevant staffing industry experience;

Strong and proven capability to deliver outstanding results for our clients under significant time constraints on large-scale projects leveraging our wide office network and experienced project team leaders, including experience with MSP and VMS programs;

Well established strategies and procedures for both temporary and permanent virtual working supported by technology to facilitate communication, recruiting, onboarding and management of the business virtually;

Well established strategies and procedures for both temporary and permanent virtual working environments supported by technology to facilitate communication, recruiting, onboarding and management of the business virtually;

Specialized state-of-the-art databases, applicant tracking systems (“ATS”) and other technology tools that facilitate swift, expert matching of candidates to job requirements providing highly qualified multiple choices to clients;

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We also maintain database records of applicants’ skills through our ATS to assist in matching applicant skills with job openings and contract assignments.

We generally screen, interview and, in many cases background check, all applicants who are presented to our clients.

We generally screen, interview and, in many cases, background check applicants who are presented to our clients.

Industry Overview

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temporary staffing services, professional employer organizations (“PEOs”) and placement agencies.

Temporary staffing services provide workers for limited periods, often to substitute for absent permanent workers or to help during periods of peak demand.

These workers, who are often employees of the temporary staffing agency, will generally fill clerical, technical, or industrial positions.

Temporary staffing services provide workers for limited periods, often to substitute for absent permanent workers or to staff discreet projects, or to help during periods of peak demand.

These workers, who are often employees of the temporary staffing agency, will generally fill administrative, clerical, accounting, and other professional technical positions, or industrial positions.

In some cases, temporary staffing services may be provided to clients over prolonged periods in longer-term HR outsourcing type scenarios.

PEOs, sometimes referred to as employee leasing agencies, contract to provide workers to customers for specific functions, often related to human resource management.

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In addition to assisting our clients in managing peaks and valleys in their staffing needs, the temporary workers we place come in the form of a broader human resources management solution.

That is, our clients do not bear the usual employment risks and compliance burdens associated with our temporary workers;

That is, our clients do not bear the usual employment risks and compliance costs and burdens associated with our temporary workers;

instead, we retain these costs and risks as the employer of record.

We believe this is a significant value add for our temporary staffing clients.

We believe this is a significant value add for many of our temporary staffing clients.

Staffing companies identify potential candidates through online advertising and referrals, and interview, test and counsel workers before sending them to the customer for approval.

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The revenue of staffing companies depends on the number of jobs they fill, which in turn can depend upon the economic environment.

During economic slowdowns, many client companies may slow down or stop hiring altogether.

During the recent COVID-19 pandemic, many client companies closed their businesses and stopped hiring or contracting employees.

Internet employment sites expand a Company’s ability to find workers without the help of traditional agencies.

During economic slowdowns, many client companies may also slow down or stop hiring altogether.

During the recent COVID-19 pandemic, many client companies closed their businesses and/or stopped hiring or contracting employees.

Internet employment sites expand a Company’s ability to find and source potential workers without the help of traditional agencies.

Staffing companies often work as intermediaries, helping employers accurately describe job openings and screen candidates.

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Free social networking sites such as LinkedIn and Facebook are also becoming a common way for recruiters and employees to connect without the assistance of a staffing agency.

To avoid large placement agency fees, big companies may use in-house personnel staff, current employee referrals, or human resources consulting companies to find and hire new personnel.

Because placement agencies typically charge a fee based on a percentage of the first year’s salary of a new worker, companies with many jobs to fill have a financial incentive to avoid use of agencies.

To avoid large placement agency fees, big companies may use in-house personnel recruiting staff, current employee referrals, or human resources consulting companies to find and hire new personnel.

Because placement agencies typically charge a fee based on a percentage of the first year’s salary of a new worker, companies with many jobs to fill may have a financial incentive to avoid use of agencies where it is less costly to invest in in-house resources.

Many staffing companies are small and may depend heavily on a big customer for a large portion of revenue.

Large customer concentration may lead to increased revenue, but also expose agencies to higher risks.

Large customer concentration may lead to increased revenue, but also expose agencies to concentration risks.

When major accounts experience financial hardships, and have less need for temporary employment services, agencies stand to lose large portions of revenue.

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Therefore, we expect that even as the threat of COVID-19 has substantially lessened, these workplace trends are likely to continue on and occupy a permanent place going forward.

Most recently, the staffing industry overall has experienced a material decline in business during 2023, following record or near record performance in 2022.

Staffing Industry Analysts (“SIA”), a leading industry trade organization, recently published in its September 2023 Industry Forecast update, that the U.S.

Staffing Industry is expected to decline by 10% in 2023.

The SIA report cites forecasted declines in virtually all professional and industrial or commercial verticals.

The identified causes vary within different verticals and scenarios, with the overall level of uncertainties that persist in the U.S.

and global economies and labor markets receiving significant mention.

Other cited causes of the decline particularly in light industrial and administrative and clerical markets are the rise of new B2C trends, such as Uber and DoorDash, and, in other markets, “side gigs” that offer potential candidates alternative opportunities and increased competition for recruiters.

Staffing Industry Cyclicality

staffing industry has experienced three distinct material cyclical downturns in this century.

The first was in approximately 2000-2001, associated with the burst of the Dot-com bubble following unprecedented growth and expansion of technology and the internet in the 1990s.

The second was in 2008-2009, corresponding with the “Great Recession” as it became known in the U.S.

and abroad at the time.

The most recent downturn began in 2023 following a robust post-COVID-19 pandemic recovery in 2021 and 2022.

Unfortunately, that recovery (often referred to as the “post-COVID bounce”) was short-lived and was immediately followed by another staffing industry downturn that emerged amidst record high inflation and interest rates.

This latest economic downturn is widely attributed to record amounts of stimulus money being pumped into the economy and increased government spending during and after the pandemic.

The staffing industry’s most recent cyclical downturn that began in 2023, also is being fueled by lingering volatility in employment that began during the pandemic, including mainly the significant rise in remote working arrangements, and a continuing reconciliation between the needs of workers and their employers since.

Staffing Industry Analysts (“SIA”), a leading industry trade organization, recently published in its September 2024 U.S.

Staffing Industry Forecast Update, that the U.S.

Staffing Industry is expected to decline overall by 10% in 2024.

This follows a 10% decline already experienced in 2023.

The SIA report cites that the decline has been driven by widespread client caution and project delays, a depressed manufacturing sector, falling bill rates in sectors such as healthcare, and employer and worker heightened preferences for permanent positions over temporary positions.

The SIA report also forecasts that the staffing industry will grow 5% in 2025 to reach a market size of $198.3 billion.

In terms of segments, SIA forecasts 6% growth in healthcare, 5% growth in IT, and 3% expansion in industrial staffing.

As of September 30, 2024, the Company had approximately 210 regular employees and the number of contract service employees varied week to week during fiscal 2024, from a minimum of approximately 1,245 to a maximum of 1,601.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business