Automator Loop Doesn't Work On "Loop Automatically"

Ok, so I can't figure this out. I've got an Automator loop that is stopping at the first iteration while set on "loop automatically" but if I set it on "ask to continue" it prompts me every time but continues to loop correctly if I have selected multiple items in Finder. Are there any things which might be causing this? Below is a snapshot:

Any help would be much appreciated.

-Glen