BGSF (NYSE:BGSF) Q3 2025 Earnings Call November 07, 2025 09:00 AM ET Speaker0Good morning, everyone. Welcome to the BGSF Fiscal 2025 Third Quarter Financial Results Conference Call. As a reminder, this conference call is being recorded. Please note all lines are on listen-only mode, and there will be a question-and-answer session after the presentation. Now, I will turn the call over to Sandy Martin from Three Part Advisors. Please go ahead.Speaker2Good morning. Thank you for joining us today for BGSF Third ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-36704 ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 28, 2025 For the transition period from to . BGSF, INC. (exact name of registrant as specified in its charter) Delaware 26-0656684 (State or other jurisdiction ...

Financial Performance - Revenues for Q3 2025 were $26.9 million, a 14.4% increase from $23.5 million in Q2 2025, driven by increased billed hours from seasonal demand[6] - Gross profit for Q3 2025 was $9.7 million, up from $8.4 million in Q2 2025, primarily due to higher sales[6] - Net loss for Q3 2025 was $3.1 million, or $0.28 per diluted share, compared to a net loss of $4.9 million, or $0.44 per diluted share in Q2 2025[6] - Adjusted EBITDA for Q3 2025 was $980,000, representing 3.6% of revenues, compared to a loss of $1.1 million, or (4.9%) of revenues in Q2 2025[6] - Revenues for the thirteen weeks ended September 28, 2025, were $26,895,000, a decrease of 10.0% compared to $29,824,000 for the same period in 2024[15] - Gross profit for the thirty-nine weeks ended September 28, 2025, was $25,630,000, down 13.5% from $29,635,000 in 2024[15] - Net loss from continuing operations for the thirteen weeks ended September 28, 2025, was $3,078,000, compared to a loss of $1,812,000 in 2024, representing a 70% increase in losses[15] - Operating loss for the thirty-nine weeks ended September 28, 2025, was $7,135,000, significantly higher than the $3,737,000 loss in 2024[15] - Adjusted EPS from continuing operations was $0.08 for the thirteen weeks ended September 28, 2025, compared to $0.01 for the same period in 2024[28] - The operating loss for the thirteen weeks ended September 28, 2025, was $937 million, slightly improved from a loss of $1,003 million in the same period of 2024[26] Cash Flow and Assets - Cash flows from operating activities resulted in a net cash used of $1,544,000 for the thirty-nine weeks ended September 28, 2025[18] - Total current assets as of September 28, 2025, were $63.99 million, an increase from $45.35 million as of December 29, 2024[14] - Total assets as of September 28, 2025, were $41,881,000, down from $50,241,000 in 2024[17] - The company reported a net cash provided by investing activities of $91,213,000 for the thirty-nine weeks ended September 28, 2025[19] Liabilities and Expenses - Total liabilities as of September 28, 2025, were $32.89 million, down from $67.84 million as of December 29, 2024[14] - Interest expense for the thirty-nine weeks ended September 28, 2025, was $4,595,000, compared to $3,518,000 in 2024, indicating a 30.6% increase[15] - Interest expense, net, increased to $1,570 million for the thirteen weeks ended September 28, 2025, from $1,222 million in the same period of 2024[26] - Share-based compensation expenses were $545 million for the thirteen weeks ended September 28, 2025, compared to $286 million in the same period of 2024[26] Dividends and Stock Repurchase - A special dividend of $2 per share was paid on September 30, 2025, following the sale of BGSF's Professional division[7] - The company declared cash dividends of $2.00 per common share for the thirty-nine weeks ended September 28, 2025[15] - The Board approved a stock repurchase program allowing for the repurchase of up to $5 million of common stock[2] Future Outlook and Investments - The company is investing in AI-powered sales and recruiting technologies, expected to enhance efficiency in the upcoming quarters[7] - BGSF anticipates revenue growth in 2026 compared to 2025, supported by the execution of strategic initiatives[7] Tax and Contingent Considerations - The company reported an income tax benefit of $571 million for the thirteen weeks ended September 28, 2025, compared to an expense of $(413) million in the same period of 2024[26] - The company incurred a gain on contingent consideration of $450 million for the thirty-nine weeks ended September 28, 2025[26]

PLANO, TX / ACCESS Newswire / November 7, 2025 / BGSF, Inc. (NYSE:BGSF), a leading provider of workforce solutions for the specialized Property Management industry, today reported financial results for the third fiscal quarter ended September 28, 2025 and announced a stock buyback plan. The Board of Directors of BGSF continues to evaluate the best use of excess capital and today the Board approved a stock repurchase program under which BGSF may repurchase up to $5 million of its common stock. ...

Core Points - BGSF, Inc. has announced a delay in the release of its fiscal 2025 third quarter results, now scheduled for November 7, 2025, pre-market [1] - The delay is attributed to the additional time needed to finalize the accounting for the sale of the Professional division, specifically regarding its classification within discontinued and continuing operations [1] Company Summary - BGSF, Inc. is a provider of workforce solutions specifically for the specialized property management industry [1] - The company is taking necessary steps to ensure accurate financial reporting following the sale of a significant division [1]

Core Points - BGSF, Inc. announced a special cash dividend of $2.00 per share, payable on September 30, 2025 [1] - The dividend payment represents more than 25% of the trading price of the common stock [1] - NYSE has informed the company that its common shares will trade with "due bills" from the record date of September 23, 2025, through the payment date [1] Company Information - BGSF, Inc. is a leading provider of workforce solutions for the specialized property management industry [1] - The company’s common stock has a par value of $0.01 per share [1] Dividend Details - The record date for the dividend is September 23, 2025, and the last day of trading before the ex-dividend date is September 30, 2025 [1] - The period during which the right to receive the special cash dividend is assigned is referred to as the "Dividend Right Period" [1]

Group 1 - BGSF Inc. announced a special cash dividend of $2.00 per share, payable on September 30 to shareholders of record as of September 23, following the sale of its Professional Division [1][2] - The company completed the $99 million sale of its Professional Division to INSPYR Solutions, with proceeds primarily aimed at paying down debt and funding investments in its property management business [2][3] - Interim Co-CEOs emphasized that the dividend is a prudent step to enhance shareholder value while ensuring liquidity for future opportunities [1][3] Group 2 - BGSF plans to geographically expand and strengthen its specialized property management services to maintain financial stability [3] - The divestiture allows the company to focus on its core strengths and create long-term value [3] - BGSF shares increased by 14.37% to $7.320 following the announcement [4]

Core Viewpoint - BGSF, Inc. has announced a special cash dividend of $2.00 per share, reflecting a strategic move to enhance shareholder value following the sale of its Professional Division [1] Group 1: Dividend Announcement - The Board of Directors of BGSF has authorized a special cash dividend of $2.00 per share of common stock [1] - The dividend is payable on September 30, 2025, to shareholders of record as of September 23, 2025 [1] - This decision is seen as a prudent step in capital allocation to increase shareholder value [1] Group 2: Leadership Commentary - Interim Co-CEOs Kelly Brown and Keith Schroeder emphasized the importance of this dividend as an initial step in capital allocation [1] - The statement reflects the company's commitment to enhancing shareholder value following the recent sale of its Professional Division [1]

Core Viewpoint - BGSF, Inc. has successfully completed the divestiture of its Professional Division to INSPYR Solutions for $99 million, marking a strategic shift towards focusing on geographical expansion and differentiation in the property management solutions sector [1]. Company Summary - The divestiture was finalized for a cash amount of $99 million, indicating a significant financial transaction for BGSF [1]. - Interim Co-CEOs Kelly Brown and Keith Schroeder expressed optimism about the company's future, emphasizing a disciplined focus on expanding property management solutions geographically [1]. - The company aims to develop strategic initiatives that will help differentiate itself from competitors in the industry [1].

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]