Financial Performance - BGSF, Inc. reported revenue from continuing operations of $272 million in 2024, up from $35 million in 2009, indicating significant growth through acquisitions and organic strategies[39]. - Revenues for the fiscal year ended December 29, 2024, were $272,499,000, a decrease of 13% compared to $313,167,000 in 2023[138]. - Gross profit for the same period was $92,863,000, down from $111,784,000, reflecting a gross margin decline[138]. - Adjusted EBITDA from continuing operations was $10,475,000, a significant drop from $25,858,000 in the previous year[139]. - The company reported a net loss of $3,338,000 for the fiscal year, compared to a net loss of $10,223,000 in 2023[138]. - Basic net loss per share from continuing operations was $(0.31), an improvement from $(0.95) in the prior year[138]. - Total assets decreased to $150,111,000 from $178,517,000, indicating a reduction in the company's asset base[139]. - Working capital improved to $19,427,000 from a negative $18,144,000 in 2023, reflecting better liquidity[139]. - Total outstanding borrowings, net, decreased to $46,321,000 from $63,114,000, indicating a reduction in debt levels[139]. - Cash dividends declared per common share were $0.15, down from $0.60 in the previous year[139]. Market Overview - The U.S. temporary service market was valued at $145.2 billion in 2023, down from $168.8 billion in 2022, reflecting a contraction in the workforce solution industry[27]. - The workforce solution industry is highly fragmented, with approximately 25,000 competing companies, of which only 241 exceeded $100 million in annual revenues in 2023[27]. - The workforce solution market is expected to remain competitive, with price competition and the ability to attract qualified candidates being key factors for success[43][44]. Company Strategy and Growth - The company has acquired fourteen businesses since 2010, enhancing its service offerings and market presence across various sectors[22]. - The company aims to expand into new markets while continuing to grow operations in existing markets, leveraging a proven approach to acquisitions[40]. - The company initiated a strategic alternatives review process on May 8, 2024, to evaluate potential options for maximizing shareholder value[151]. - The company has completed several acquisitions, including Arroyo Consulting in 2023, which contributed $5.6 million in incremental revenues[159]. Operational Insights - BGSF operates primarily in two segments: Property Management and Professional, with the Property Management segment providing office and maintenance talent across 40 states and D.C.[31][32]. - Seasonal fluctuations affect demand, with the highest demand for Property Management solutions typically occurring in the third quarter due to increased activity in multifamily units[45]. - In 2024, BGSF placed approximately 13,300 individuals in positions with client partners, retaining responsibility for wages, benefits, and payroll taxes[49]. - In 2024, BGSF conducted over 10,000 hours of upskilling for the workforce, with more than 3,200 individuals participating in training programs[56]. Workforce and Diversity - As of August 1, 2024, BGSF employed approximately 3,456 people, with 13% being internal team members and 87% field talent supporting client partners[52]. - Women represented 36% of all team members, while underrepresented minorities accounted for 71% of reporting team members[54]. - BGSF's diversity, equity, and inclusion initiatives include the formation of resource groups and a council to promote belonging and equitable opportunities[51]. Financial Risks and Compliance - The company is subject to various regulations, which may impose financial risks but have not materially affected its business to date[58]. - The company faces significant working capital needs, requiring sufficient cash availability to meet payroll obligations, with payments to field talent made weekly while client partner payments are received 30 to 90 days after billing[75]. - The company is exposed to credit risks due to assuming payroll obligations for team members and field talent, which are fixed regardless of client partner payments[84]. - The company’s workforce solution agreements can be terminated on short notice, posing a risk of significant revenue loss[71]. - The company is contractually obligated to collateralize its workers' compensation obligations, which could pressure liquidity and working capital capacity[82]. - The company was not in compliance with certain financial covenants as of December 29, 2024, and anticipated continued noncompliance for the quarter ending March 31, 2025[199]. Technology and Cybersecurity - The company continues to invest in technology and process improvements, completing a three-year IT enhancement project in 2022 to optimize productivity[42]. - The company has implemented a cybersecurity framework based on NIST standards, with oversight from the Board and senior management[114]. - Cybersecurity risks, including potential breaches and data loss, could harm client relationships and expose the company to significant liability[93]. - The company has performed significant vendor due diligence to mitigate risks associated with third-party vendors accessing sensitive data[118]. Community Engagement - BGSF's commitment to community service included over 1,400 volunteer hours and more than $60,000 donated for philanthropic purposes in 2024[54]. - In 2024, BGSF's team members recognized company values through over 3,300 awards sent to fellow team members[55]. Stock and Shareholder Information - The company's common stock closed at $5.19 per share as of February 5, 2025, with approximately 2,386 holders of record[129]. - The company declared cash dividends totaling $6,507,249 for the fiscal year 2023, with a consistent dividend of $0.15 per share[130]. - The company has 976,432 securities available for issuance under the 2013 Long-Term Incentive Plan, with a weighted-average exercise price of $15.00[132]. - The company may issue additional common stock in the future, which could dilute existing stockholders' ownership interests[98].

Financial Data and Key Metrics Changes - Fourth quarter revenue was $64.4 million, down from $73.6 million in Q4 2023, reflecting a decline in both segments [17] - Professional segment revenue declined 8.7% year-over-year and 3% sequentially, but grew 2% sequentially on a billing day adjusted basis [17] - Gross profit was $21.5 million in Q4 with a margin of 33.3%, compared to 34.6% in the prior year, attributed to increased competition and economic pressures [19] - Adjusted EBITDA was $1.4 million or 2.2% of revenue, down from $3.4 million or 4.8% in Q3 [20] Business Line Data and Key Metrics Changes - In the Professional segment, monthly IT contract revenue normalized for billing days reached its lowest point in June 2024, but has since stabilized or grown sequentially [12] - The Property Management segment saw a significant restructuring, with revenue trends expected to improve starting mid-2025, despite current challenges in the multifamily housing sector [14][15] - A 23% increase in revenue was driven by territory mapping initiatives in key markets [15] Market Data and Key Metrics Changes - The broader multifamily housing sector is facing challenges due to rising operating expenses and credit issues, impacting the Property Management segment [14] - Increased customer engagement and a 30% rise in signed master service agreements compared to Q4 2023 indicate a growing opportunity pipeline [13] Company Strategy and Development Direction - The company announced a restructuring plan aimed at reducing costs and improving operational performance, expecting cash savings of approximately $7 million to $9 million in 2025 [9] - Investments in technology, partnerships, and people are expected to drive long-term value creation, with a focus on enhancing profitability in 2025 [24] - The company is leveraging AI capabilities through the Arroyo team to address client needs and improve service delivery [40][41] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the second half of 2025, with expectations for improvement in property management revenue trends [32] - The economic and political uncertainties have created a more cautious environment, but management remains committed to providing updates on strategic alternatives [11][25] Other Important Information - The company has been recognized as one of the best places for working parents for five consecutive years [8] - A new lead generation engine launched in Q3 generated $2 million in revenue for the property management team [22] Q&A Session Summary Question: What type of cadence could be expected in terms of seeing restructuring on the SG&A line? - Management indicated that the majority of cuts took place in December and will start showing up in Q1 results, with further reductions throughout the year [28] Question: How is the process going with relocating operations to Arroyo? - Management expressed pride in the Arroyo team's capabilities and ongoing efforts to streamline costs [30] Question: What improvements are expected in the second half of the year for property management? - Management noted hopeful conversations within the National Apartment Association regarding potential improvements [32] Question: How is client feedback on professional services and new logos? - Management reported increased activity in the pipeline and optimism following recent elections, with more scope meetings occurring [35] Question: How will the $7 million to $9 million annual savings be realized? - The majority of cost savings were personnel-related and will be reflected in Q1, with further changes in commission plans expected in Q2 [48] Question: What percentage of the footprint is utilizing territory mapping? - Management confirmed that territory mapping has been launched in key markets like Houston and Atlanta, with plans for further expansion [54]

Financial Performance - Revenues for Q4 2024 were $64.4 million, a decrease of 9.9% from $71.2 million in Q3 2024[6] - Gross profit for Q4 was $21.5 million, down from $24.3 million in Q3, primarily due to lower sales in the Property Management segment[6] - The net loss for Q4 was $1.0 million, or $0.10 per diluted share, compared to a net loss of $0.8 million, or $0.07 per diluted share in Q3[6] - Adjusted EBITDA for Q4 was $1.4 million, representing 2.2% of revenues, down from $3.4 million, or 4.8% of revenues in Q3[6] - For the thirteen weeks ended December 29, 2024, total revenue was $64,411 thousand, a decrease of 6.5% compared to $73,567 thousand for the same period in 2023[16] - Gross profit for the fifty-two weeks ended December 29, 2024, was $54,494 thousand, down from $61,999 thousand in 2023, reflecting a decline of 12.1%[16] - The net loss for the year ended December 29, 2024, was $3,338 thousand, an improvement from a net loss of $10,223 thousand in 2023[18] - Adjusted EBITDA for the fifty-two weeks ended December 29, 2024, was $10,475 million, down from $25,858 million in the previous year, reflecting a significant decline[27] - The adjusted EBITDA margin for the thirteen weeks ended December 29, 2024, was 2.2%, compared to 7.8% for the same period in 2023[27] - The net loss per diluted share for the thirteen weeks ended December 29, 2024, was $(0.10), while the adjusted EPS was $(0.06) compared to $0.40 in the same period of 2023[29] Cost Management - The company implemented a cost restructuring plan in late 2024, with estimated annual savings between $7 million to $9 million[7] - The strategic alternatives review cost the company $88 million in the most recent quarter, while the cost restructuring plan accounted for $230 million[27] Assets and Liabilities - Total assets decreased to $150.1 million as of December 29, 2024, from $178.5 million as of December 31, 2023[13] - Total liabilities were $67.8 million as of December 29, 2024, down from $92.9 million as of December 31, 2023[13] Cash Flow and Expenditures - Cash provided by operating activities increased to $24,379 thousand in 2024, compared to $20,386 thousand in 2023, marking a growth of 14.7%[18] - The company reported a decrease in capital expenditures to $1,640 thousand in 2024 from $2,597 thousand in 2023, a reduction of 37%[20] - The total cash and cash equivalents at the end of 2024 were $353 thousand, compared to none at the end of 2023[20] - The company made net payments of $18,479 thousand on its line of credit in 2024, contrasting with a net borrowing of $2,312 thousand in 2023[20] Impairment and Expenses - The company experienced a significant impairment loss of $22,545 thousand in 2023, which was not present in 2024[18] - The company reported impairment losses of $22,545 million for the fifty-two weeks ended December 31, 2023[27] - Interest expense for the year was $4,475 thousand, slightly down from $4,668 thousand in the previous year[20] - The company incurred interest expense of $1,403 million for the thirteen weeks ended December 29, 2024, compared to $1,601 million in the same period last year[27] - Share-based compensation expenses increased to $201 million for the thirteen weeks ended December 29, 2024, from $184 million in the same period last year[27] Strategic Positioning - The company anticipates that the strategic review process will take 12 to 18 months from the original announcement in May 2024[7] - BGSF was ranked as the 97th largest U.S. staffing company and the 49th largest IT staffing firm in 2024[9] - The company generated $716 million in revenue from Software as a Service for the fifty-two weeks ended December 29, 2024, slightly down from $720 million in the previous year[27] - Transaction fees for the thirteen weeks ended December 29, 2024, were $7 million, a significant decrease from $72 million in the same period of 2023[27]

J.J. Woronoff is a New York-based investor. He currently works in corporate development at a world-class live entertainment company on a wide variety of deals, ranging from large M&A transactions to seed stage minority venture investments. Prior to this, he spent over two years at a leading global investment bank, where he worked across a broad range of sectors, including Media & Entertainment, Business Services, Consumer & Retail, Healthcare, Industrials, Real Estate, and Technology. J.J. focuses on identi ...

Financial Data and Key Metrics Changes - Total revenues for Q3 2024 were $71.2 million, down from $83.5 million in the same quarter last year, but up 4.5% sequentially from Q2 2024 [11] - Gross profit for Q3 was $24.3 million with a margin of 34.2%, compared to $30 million and 35.9% in the prior year [12] - Adjusted EBITDA for Q3 was $3.2 million, or 4.5% of revenue, an increase from $2.6 million or 3.8% in Q2 2024 [15] Business Line Data and Key Metrics Changes - Property Management sales were approximately $30 million, reflecting a seasonal increase of 15.9% from Q2 2024 [11] - Professional segment revenues were under pressure, declining 12.9% year-over-year, with IT consulting sales representing almost 70% of quarterly revenues and showing slight sequential growth [8][9] - Managed Solutions business experienced double-digit growth year-over-year and a 10% sequential lift compared to Q2 2024 [10] Market Data and Key Metrics Changes - The demand for Property Management has not yet shown signs of pent-up demand materializing, with growth moderated due to expense pressures [31][32] - The Professional segment saw an uptick in project wins, particularly in late September, indicating potential for sequential improvement in Q4 [33] Company Strategy and Development Direction - The company is evaluating strategic alternatives and has launched advanced lead generation technology to enhance sales funnels across divisions [6][18] - Focus on digital transformation and client engagement through technology investments made in previous years [19] - Continued emphasis on training and developing talent in Property Management to differentiate from competitors [27] Management's Comments on Operating Environment and Future Outlook - Management acknowledges a challenging operating environment but sees signs of stabilization and potential growth if macroeconomic pressures ease [7][9] - Anticipation of improved project and business flow in 2025 as macroeconomic pressures subside [25] - The company is focused on maintaining a disciplined approach to sales, profitability, and cash flow management [29] Other Important Information - SG&A expenses for Q3 were $22 million, including nonrecurring fees related to the strategic alternatives process [14] - The company generated $21.2 million in cash from operating activities for the first nine months of the year [16] Q&A Session Summary Question: Has pent-up maintenance demand materialized in Property Management? - Management believes pent-up demand has not yet shown up, with growth moderated due to expense pressures [31][32] Question: Did the momentum in the Professional segment carry through in Q3? - There was an uptick in the Professional group, especially late in September, with project wins exceeding project ends [33] Question: Is there a timeline for the strategic alternatives review? - Management does not have a timeline at this point but is working diligently on the process [34]

Revenue Performance - Total revenues for the thirteen weeks ended September 29, 2024, were $71.2 million, a decrease of approximately $12.3 million (14.7%) compared to $83.5 million for the same period in 2023[103]. - For the thirty-nine weeks ended September 29, 2024, total revenues were $208.1 million, a decrease of approximately $31.5 million (13.1%) compared to $239.6 million in the prior year[114]. - Property Management segment revenues decreased by approximately $6.2 million (17.1%) to $29.8 million, primarily due to reduced billed hours and increased competition[105]. - Professional segment revenues decreased by $6.1 million (12.9%) to $41.4 million, mainly due to a decline in billed hours in the Finance & Accounting division[106]. - Property Management revenues for the thirty-nine weeks decreased by approximately $15.4 million (16.1%) due to reduced billed hours and cost pressures[114]. - Professional revenues decreased by approximately $16.1 million (11.2%), with the Arroyo Consulting acquisition contributing $6.8 million of incremental revenues[115]. Profitability - Gross profit for the thirteen weeks ended September 29, 2024, was $24.3 million, down $5.7 million (18.8%) from $30.0 million in the prior year[109]. - Total company gross profit decreased by approximately $14.9 million (17.3%), with gross profit margin declining to 34.3% from 36.0%[118]. - Gross profit margin decreased to 34.2% from 35.9%, primarily due to margin decline in the Property Management segment[109]. - Property Management gross profit decreased by approximately $8.6 million (22.4%) due to increased competition and lower demand[119]. - Professional gross profit decreased by approximately $6.4 million (13.3%), with a $2.3 million contribution from Arroyo Consulting[120]. Expenses and Cost Management - Selling, general and administrative expenses decreased by $0.7 million (3.1%) to $22.0 million, reflecting cost control efforts in response to revenue decline[112]. - Selling, general and administrative expenses decreased by $3.9 million (5.7%) due to cost control efforts[121]. - Interest expense, net decreased by $0.5 million (26.9%) primarily due to lower average balance on the Revolving Facility[113]. - Interest expense decreased by $0.9 million (19.6%) due to reduced accretion on contingent consideration[122]. Cash Flow and Working Capital - Net cash provided by operating activities was $21.2 million for the thirty-nine weeks ended September 29, 2024[133]. - For Fiscal 2024, net cash provided by operating activities was $21.2 million, an increase of $6.2 million compared to $15.1 million in Fiscal 2023[135]. - Working capital increased to $22.0 million from a negative $18.1 million as of December 31, 2023[133]. Strategic Initiatives - The company has initiated a strategic alternatives review to maximize shareholder value, engaging financial advisors for this process[99]. Capital Expenditures and Financing - Capital expenditures in Fiscal 2024 amounted to $1.4 million, primarily for IT improvements, compared to $2.0 million in Fiscal 2023[136]. - The company reduced its Revolving Facility by $17.2 million and paid $4.3 million in contingent consideration related to the Arroyo Consulting acquisition in Fiscal 2024[138]. - The Amended and Restated Credit Agreement allows the company to borrow up to $40 million and includes a term loan commitment[140]. - As of September 29, 2024, the company was in compliance with all affirmative and negative covenants under the First Credit Amendment[141]. - The company has a maximum financial exposure of $0.1 million from a standby letter of credit arrangement related to the EdgeRock acquisition[142]. Economic Environment - The current inflationary environment may negatively impact labor markets and increase borrowing costs for the company[146]. Accounting Policies - Revenue is recognized when workforce solutions are delivered, with various service types contributing to total revenue[147]. - Intangible assets are amortized over estimated useful lives ranging from three to ten years, with purchased software capitalized[148]. - Goodwill is reviewed for impairment annually, with the company assessing the recoverability of its carrying value[149].

Core Viewpoint - BGSF reported a quarterly loss of $0.07 per share, missing the Zacks Consensus Estimate of $0.11, and showing a significant decline from earnings of $0.36 per share a year ago, indicating an earnings surprise of -163.64% [1] Financial Performance - BGSF's revenues for the quarter ended September 2024 were $71.19 million, which missed the Zacks Consensus Estimate by 5.09% and decreased from $83.48 million year-over-year [2] - The company has not surpassed consensus revenue estimates over the last four quarters [2] Stock Performance - BGSF shares have declined approximately 19.2% since the beginning of the year, contrasting with the S&P 500's gain of 21.2% [3] Future Outlook - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the next quarter is $0.09 on revenues of $75.5 million, and for the current fiscal year, it is $0.06 on revenues of $287.4 million [7] Industry Context - The Business - Services industry, to which BGSF belongs, is currently ranked in the top 23% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Financial Performance - Revenues for Q3 2024 were $71.2 million, a 4.5% increase from Q2 2024's $68.1 million, driven by a 15.9% increase in the Property Management segment[3][6] - Gross profit rose to $24.3 million in Q3 2024, up from $23.6 million in Q2 2024, primarily due to higher sales in Property Management[4] - Adjusted EBITDA for Q3 2024 was $3.2 million, representing 4.5% of revenues, compared to $2.6 million (3.8% of revenues) in Q2 2024[4][5] - Adjusted EPS increased to $0.10 in Q3 2024 from $0.07 in Q2 2024[4][5] - Revenues for the thirteen weeks ended September 29, 2024, were $71,186, a decrease of 14.7% compared to $83,484 for the same period in 2023[14] - Gross profit for the thirty-nine weeks ended September 29, 2024, was $71,397, down 17.3% from $86,337 in the prior year[14] - Operating income for the thirteen weeks ended September 29, 2024, was $470, a significant decline from $5,267 in the same period last year[14] - Net loss for the thirty-nine weeks ended September 29, 2024, was $(2,357), compared to a net loss of $(11,222) for the same period in 2023[14] - Adjusted EBITDA for the thirteen weeks ended September 29, 2024, was $3,208, representing a margin of 4.5% of revenue[22] - Adjusted EPS for the thirteen weeks ended September 29, 2024, is $0.10, compared to $0.36 for the same period last year[23] - Net (loss) income per diluted share for the thirteen weeks ended September 29, 2024, is $(0.07), a decrease from $0.24 in the prior year[23] - The adjusted EPS for the thirty-nine weeks ended September 29, 2024, is $0.24, down from $0.93 in the previous year[23] - The company reported a net (loss) income per diluted share of $(0.22) for the thirty-nine weeks ended September 29, 2024[23] Segment Performance - The Professional segment experienced a 2.5% revenue decline from Q2 2024, attributed to a decrease in billed hours in the Finance & Accounting division[4][6] - Property Management segment revenue for the thirteen weeks ended September 29, 2024, was $29,824, accounting for 42% of total revenue[15] - Professional segment revenue for the same period was $41,362, making up 58% of total revenue[15] Expenses and Liabilities - Total current assets decreased to $51.5 million in Q3 2024 from $66.9 million in Q2 2024[12] - Total liabilities were reported at $74.4 million, down from $92.9 million in the previous quarter[12] - Selling, general and administrative expenses for the thirty-nine weeks ended September 29, 2024, were $64,549, down from $68,475 in the previous year[14] - The company reported interest expense, net, of $(1,222) for the thirteen weeks ended September 29, 2024, compared to $(1,672) in the same period last year[14] Strategic Initiatives - The company launched an advanced lead generation technology in Q3 2024, improving lead acquisition and conversion rates[4][7] - The company is focused on expanding consulting efforts and has plans for further technology enhancements in Q4 2024[6][7] Company Rankings - BGSF was ranked as the 97th largest U.S. staffing company and the 49th largest IT staffing firm in 2024[9] Other Financial Metrics - Cash dividends declared per common share were $0.15 for the thirty-nine weeks ended October 1, 2023, unchanged from the previous year[14] - Acquisition amortization for the thirteen weeks ended September 29, 2024, is $0.13, compared to $0.15 for the same period last year[23] - Impairment losses (pre-tax) for the thirty-nine weeks ended September 29, 2024, are $0, while the previous year recorded $2.10[23] - Strategic alternatives review contributed $0.05 to adjusted EPS for the thirteen weeks ended September 29, 2024[23] - Transaction fees for the thirteen weeks ended October 1, 2023, were $0.01, compared to $0.08 in the previous year[23] - Income tax expense adjustment for the thirteen weeks ended September 29, 2024, is $(0.01), compared to $(0.04) in the prior year[23]

BGSF, Inc. (NYSE:BGSF) Q2 2024 Earnings Conference Call August 8, 2024 9:00 AM ET Company Participants Sandy Martin – Managing Director-Three Part Advisors Beth Garvey – Chair, President and Chief Executive Officer John Barnett – Chief Financial Officer Conference Call Participants Jeff Martin – Roth Capital Howard Halpern – Taglich Brothers Operator Good morning, everyone. Welcome to the BGSF, Inc. Fiscal 2024 Second Quarter Financial Results Conference Call. All participants will be in listen-only mode. [ ...

Company Performance - BGSF reported a quarterly loss of $0.07 per share, missing the Zacks Consensus Estimate of $0.08, and down from earnings of $0.24 per share a year ago, representing an earnings surprise of -187.50% [1] - The company posted revenues of $68.14 million for the quarter ended June 2024, missing the Zacks Consensus Estimate by 7.92%, and down from $80.8 million in the same quarter last year [2] - Over the last four quarters, BGSF has surpassed consensus EPS estimates three times but has not beaten consensus revenue estimates [2] Stock Performance - BGSF shares have lost about 10.6% since the beginning of the year, while the S&P 500 has gained 9.9% [3] - The current Zacks Rank for BGSF is 3 (Hold), indicating that shares are expected to perform in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the coming quarter is $0.30 on $83 million in revenues, and $0.40 on $300.77 million in revenues for the current fiscal year [7] - The outlook for the industry can significantly impact the stock's performance, with the Business - Services industry currently in the top 34% of Zacks industries [8]