Financial Data and Key Metrics Changes - Total revenues from continuing operations for the second quarter were $23.5 million, down 8.6% from the prior year, but up 12.6% sequentially from the first quarter [11][16] - Gross profit margins for the second quarter were $8.4 million, or 35.8%, compared to $9.6 million and 37.3% in the year-ago period [16] - Adjusted EBITDA for the second quarter was $1.1 million, or 4.9% of revenue, compared to $300,000, or 1%, in the year-ago quarter [19] Business Line Data and Key Metrics Changes - The property management group's contribution to overhead for 2025 is estimated to be in the range of $11 million to $12 million, down from over $20 million in 2022 and 2023 [7][8] - SG&A expenses for the second quarter were $12.6 million, including a $980,000 reserve for accounts receivable, compared to $10.7 million in the prior year's quarter [19] Market Data and Key Metrics Changes - The property management industry is experiencing pressure from higher interest rates and insurance premiums, leading to a cautious spending attitude among customers [12][28] - There is a noted seasonal lift in revenues due to higher apartment turnovers, which is expected to continue into the third quarter [11][16] Company Strategy and Development Direction - The company is focusing on strategic initiatives to improve top-line growth, including the implementation of AI-powered platforms for sales and recruiting [13][14] - The company plans to reduce head office G&A expenses to around $10 million annually post-sale of the professional division [7][19] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding revenue growth, noting that while there may be some pent-up demand, operators are primarily managing existing resources [28][46] - The company anticipates a gradual recovery in spending as economic conditions stabilize, particularly if interest rates decrease [30][62] Other Important Information - The company expects to have approximately $45 million in cash on hand post-transaction, which translates to about $4.4 per share [59][60] - The company is actively pursuing cost reductions, particularly in software expenses, to improve profitability [35] Q&A Session Summary Question: What is the target for adjusted EBITDA as a percentage of sales? - Management indicated that with a reduced overhead cost of $10 million, adjusted EBITDA could reach around 8% to 10% as top-line revenue increases [24] Question: Is there pent-up demand among current customers? - Management acknowledged some pent-up demand but emphasized that operators are primarily reallocating resources rather than increasing spending significantly [26][28] Question: What are the expectations for cash on hand post-transaction? - Management confirmed that approximately $45 million would be available post-transaction, allowing for strategic flexibility [59][60] Question: How is the company addressing G&A costs? - Management is reviewing software costs and other areas to identify further opportunities for cost reduction [35][86] Question: What is the expected revenue trend for the upcoming quarters? - Management noted a positive trend in revenue for June and anticipated a seasonal lift in Q3, although year-over-year comparisons may still show declines [62][66]

BGSF, Inc. Reports Second Quarter 2025 Financial Results Q2 2025 Highlights from Continuing Operations (results include sequential comparisons to Q1 2025): SUMMARY OF FINANCIAL RESULTS FROM CONTINUING OPERATIONS (dollars in thousands) (unaudited) | | | | | For the Thirteen Week Periods Ended | | | | --- | --- | --- | --- | --- | --- | --- | | | | June 29, | | June 30, | | March 30, | | | | 2025 | | 2024 | | 2025 | | Revenues | $ | 23,506 | $ | 25,726 | $ | 20,883 | | Gross profit | $ | 8,410 | $ | 9,596 | $ ...

PART I FINANCIAL INFORMATION [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) Financial statements reflect the sale of the Professional segment, with continuing operations showing lower revenue and a wider net loss [Unaudited Consolidated Balance Sheets](index=5&type=section&id=Unaudited%20Consolidated%20Balance%20Sheets) Total assets were $149.7 million, while stockholders' equity decreased to $78.3 million due to net losses Balance Sheet Summary | Balance Sheet Items (in thousands) | June 29, 2025 | December 29, 2024 | | :--- | :--- | :--- | | **Total current assets** | $47,603 | $45,347 | | *Current assets of discontinued operations* | *$27,473* | *$24,354* | | **Total assets** | **$149,692** | **$150,111** | | **Total current liabilities** | $29,001 | $25,921 | | *Current liabilities of discontinued operations* | *$11,093* | *$11,825* | | **Total liabilities** | **$71,406** | **$67,842** | | **Total stockholders' equity** | **$78,286** | **$82,269** | [Unaudited Consolidated Statements of Operations](index=7&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Operations) Revenues from continuing operations decreased 8.6% year-over-year, leading to a significantly wider operating and net loss Quarterly Operations Summary | Metric (in thousands) | Thirteen Weeks Ended June 29, 2025 | Thirteen Weeks Ended June 30, 2024 | | :--- | :--- | :--- | | Revenues | $23,506 | $25,726 | | Gross profit | $8,410 | $9,596 | | Operating loss | $(4,425) | $(1,475) | | Net loss from continuing operations | $(4,862) | $(2,082) | | Net Loss | $(3,736) | $(761) | | Net loss per share - basic | $(0.34) | $(0.07) | [Unaudited Consolidated Statements of Cash Flows](index=10&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from continuing operating activities decreased significantly from $14.6 million to $3.0 million year-over-year Cash Flow Summary | Cash Flow Activity (in thousands) | Twenty-six Weeks Ended June 29, 2025 | Twenty-six Weeks Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by continuing operating activities | $2,962 | $14,585 | | Net cash used in continuing investing activities | $(13) | $(863) | | Net cash used in continuing financing activities | $(204) | $(13,496) | | **Net change in cash (continuing ops)** | **$2,745** | **$226** | [Notes to Unaudited Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Notes detail the sale of the Professional segment, debt covenant non-compliance, and subsequent waivers from lenders - On June 14, 2025, the Company entered into an Equity Purchase Agreement to sell its Professional segment for **$99.0 million in cash**[28](index=28&type=chunk)[68](index=68&type=chunk) - The Company was **not in compliance with financial covenants** for its credit agreement for multiple quarters but received waivers contingent on the sale of the Professional segment[82](index=82&type=chunk)[86](index=86&type=chunk)[109](index=109&type=chunk) - Following the reclassification, continuing operations consist solely of the **Property Management segment**[26](index=26&type=chunk)[106](index=106&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the 8.6% revenue decline to reduced billed hours, while SG&A expenses rose due to strategic review costs Key Operating Metrics | Metric (in thousands) | Thirteen Weeks Ended June 29, 2025 | Thirteen Weeks Ended June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Revenues | $23,506 | $25,726 | (8.6)% | | Gross Profit | $8,410 | $9,596 | (12.4)% | | SG&A Expenses | $12,576 | $10,739 | 17.1% | - The decrease in revenue was primarily due to a **9.7% reduction in billed hours**, resulting from lower demand and increased competition[117](index=117&type=chunk) - The increase in SG&A expenses was primarily driven by **$1.6 million in costs** related to the strategic alternatives review process[119](index=119&type=chunk)[120](index=120&type=chunk) Adjusted EBITDA Reconciliation | Adjusted EBITDA (in thousands) | Thirteen Weeks Ended June 29, 2025 | Thirteen Weeks Ended June 30, 2024 | | :--- | :--- | :--- | | Net loss from continuing operations | $(4,862) | $(2,082) | | **Adjusted EBITDA from continuing operations** | **$(1,145)** | **$(264)** | [Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk exposure relates to variable interest rates on its debt facilities - The company is exposed to market risk from **variable interest rates** on its Revolving Facility and Term Loan, which could negatively impact future earnings[155](index=155&type=chunk)[156](index=156&type=chunk) [Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes in internal controls - Based on an evaluation as of June 29, 2025, the CEO and CFO concluded that the company's **disclosure controls and procedures are effective**[157](index=157&type=chunk) - No changes in internal control over financial reporting occurred during the fiscal quarter that have **materially affected** these controls[158](index=158&type=chunk) PART II OTHER INFORMATION [Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) No material changes have occurred in legal proceedings since the last annual report - There has been **no change** from the information provided in the Annual Report on Form 10-K for the fiscal year ended December 29, 2024[161](index=161&type=chunk) [Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) New risks arise from the pending sale of the Professional segment, including non-completion and potential NYSE delisting - The closing of the sale of the Professional segment is contingent upon receiving **stockholder approval** and satisfying other conditions[163](index=163&type=chunk) - The pending sale may adversely affect the retained business through **management distraction** and higher employee turnover[164](index=164&type=chunk) - Following the sale, the company's reduced size may affect its ability to satisfy NYSE's continued listing standards, which could result in **delisting**[165](index=165&type=chunk) - If the sale is not completed, the company may be required to pay a **termination fee of $2,970,000** or expense reimbursement up to $3,000,000[167](index=167&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None[170](index=170&type=chunk) [Exhibits](index=38&type=section&id=Item%206.%20Exhibits) Key exhibits include the Equity Purchase Agreement for the segment sale and an amendment to the credit agreement - Key exhibits filed include the **Equity Purchase Agreement** dated June 14, 2025, and the Waiver and Second Amendment to the Credit Agreement[174](index=174&type=chunk)

Company Performance - BGSF has returned approximately 40.1% since the beginning of the calendar year, significantly outperforming the average gain of 4.1% in the Business Services group [4] - The Zacks Consensus Estimate for BGSF's full-year earnings has increased by 366.7% over the past 90 days, indicating improved analyst sentiment and a stronger earnings outlook [3] Industry Context - BGSF is part of the Business Services sector, which includes 260 individual stocks and currently holds a Zacks Sector Rank of 1 [2] - Within the Business - Services industry, which consists of 26 companies, BGSF ranks 37 in the Zacks Industry Rank, with the industry averaging a gain of 19.1% this year [6] Comparison with Peers - Cintas (CTAS), another stock in the Business Services sector, has returned 20.1% year-to-date and has a Zacks Rank of 2 (Buy) [4][5] - Both BGSF and Cintas are noted for their strong performance within the Business Services sector, attracting investor attention [7]

Company Overview - BGSF shares increased by 12.9% to $6.31 in the last trading session, with a notable trading volume, and have gained 25.6% over the past four weeks [1] - The company has agreed to sell its Professional Division to INSPYR Solutions for $99 million in cash, which includes IT consulting, finance & accounting, managed solutions, and near/offshore software services [1] Earnings Expectations - BGSF is expected to report break-even quarterly earnings per share (EPS), reflecting a year-over-year change of +100%, with revenues projected at $66.5 million, a decrease of 2.4% from the previous year [2] - The consensus EPS estimate for BGSF has been revised 100% higher in the last 30 days, indicating a positive trend that typically correlates with stock price appreciation [3] Industry Comparison - BGSF is part of the Zacks Business - Services industry, where another company, Crawford & Company B, saw its stock rise by 2.2% to $10.19, but has returned -0.9% over the past month [3] - Crawford & Company B's consensus EPS estimate remains unchanged at $0.24, representing a -4% change compared to the previous year, and holds a Zacks Rank of 3 (Hold) [4]

Core Viewpoint - BGSF has been upgraded to a Zacks Rank 1 (Strong Buy) due to an upward trend in earnings estimates, indicating a positive earnings outlook that may lead to increased stock price [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system emphasizes the correlation between changes in earnings estimates and stock price movements, suggesting that revisions in earnings estimates are a powerful indicator of near-term stock performance [4][6]. - For BGSF, the recent increase in earnings estimates reflects an improvement in the company's underlying business, which is expected to drive the stock price higher [5]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - Only the top 5% of Zacks-covered stocks receive a "Strong Buy" rating, indicating superior earnings estimate revisions and potential for market-beating returns [10]. Earnings Estimate Revisions for BGSF - BGSF is projected to earn $0.08 per share for the fiscal year ending December 2025, with no year-over-year change expected [8]. - Over the past three months, the Zacks Consensus Estimate for BGSF has increased by 366.7%, highlighting significant upward revisions by analysts [8].

High-Value Workforce Solutions Provider of Consulting, Managed Services, Professional & IT Services and Property Management Investor Presentation November 2024 Forward-Looking Statements The forward-looking statements in this presentation are made under the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may include, but are not limited to, statements regarding our future financial performance and the expectations and objectives of our board or ma ...

The Business Services group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. BGSF (BGSF) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? A quick glance at the company's year-to-date performance in comparison to the rest of the Business Services sector should help us answer this question.BGSF is a member of our Business Services group, which includes 27 ...

Group 1 - BGSF, Inc. has sold its professional division to INSPYR Solutions, resulting in a significant stock price increase of 35%, closing at $5.37 [1] - The company operates in the professional workforce solutions and property management sector [1] Group 2 - The article highlights the potential for story-based trading opportunities in the context of BGSF's recent transaction [1]

Financial Data and Key Metrics Changes - Total revenues for Q1 2025 were $63.2 million, down 8% from the prior year, with professional services down 4.2% and property management down 14.9% year-over-year [7][15] - Adjusted EBITDA was $2.4 million with an EBITDA margin of 3.8%, showing improvement from $1.4 million or 2.2% in the previous quarter [17] - The company reported a GAAP loss of $0.07 per diluted share and adjusted EPS of $0.05 [17] Business Line Data and Key Metrics Changes - Professional segment revenues increased sequentially by 5.6% compared to the previous quarter, although organic sales declined 4.2% year-over-year [15][16] - Property management revenues declined over 14% on both a sequential and year-over-year basis, but there are signs of improvement with revenues per billing day increasing steadily [16][12] Market Data and Key Metrics Changes - The U.S. apartment rental rates are starting to elevate again, which is expected to improve the economics for property management companies [13] - The labor market remains solid with 177,000 jobs added in April and a steady jobless rate of 4.2%, indicating a positive development despite macroeconomic uncertainties [21] Company Strategy and Development Direction - The company is focused on strategic alternatives and restructuring initiatives to recalibrate costs, including headcount reductions [6] - There is a commitment to growth initiatives and managing controllable factors while remaining cautious about the ongoing business disruptions from trade policy changes [20] - The company aims to leverage prior investments in technology and processes to drive long-term shareholder value [21] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about consulting projects and business spending moving forward, despite uncertainties in trade policies [8][19] - The company is seeing measurable progress in revenue per billing and is optimistic about the business momentum in the professional segment [11][21] - Management acknowledged the mixed environment for clients, with some sectors showing pent-up demand while others remain in a wait-and-see mode [27][46] Other Important Information - The company generated $1.1 million in cash from operating activities, with minimal capital expenditures of $23,000 primarily for IT investments [18] - The company entered into waivers and amendments with lenders due to non-compliance with financial covenants at the end of 2024 [18] Q&A Session Summary Question: Could you provide context around the new logos and average deal size? - Management noted that several contracts were signed in March, and they would follow up with specific data [24][25] Question: Are there discussions regarding tariff uncertainties and potential pent-up demand? - Management believes there is pent-up demand, but clients are currently cautious and in a wait-and-see mode [26][27] Question: Update on the technology platform rollout? - The technology platform is fully rolled out, with ongoing improvements being made to enhance efficiency [28][29] Question: How much of the expense reductions are reflected in Q1 results? - Approximately 65% to 70% of the benefits from expense reductions were realized in Q1, with full benefits expected in Q2 [30] Question: Update on competitive dynamics within property management? - The competitive environment remains unchanged, and the team is effectively adjusting to it [31][32] Question: When might property management return to year-over-year stability? - Management is working towards regaining growth trajectory and is seeing positive signs [33] Question: How comfortable is management with street estimates? - Management beat estimates for Q1 but has not yet reviewed Q2 estimates [39] Question: How is the company tracking against its plan? - Management feels they are tracking positively and both divisions have momentum [40][41] Question: Clarification on the wait-and-see mindset versus new logos? - Management indicated that it varies by sector, with some areas moving forward while others remain cautious [46] Question: Insights on professional services revenue trends? - Professional segment revenues increased sequentially, indicating a positive shift [47][48] Question: Historical behavior in spending post-recession? - Management noted that the industry typically rebounds quickly, but current conditions are unusual [56][58]