BGSF(BGSF)

Search documents
BGSF(BGSF) - 2022 Q2 - Quarterly Report
2021-08-05 13:15
Revenue Performance - Revenues for the thirteen weeks ended June 27, 2021, were $74.392 million, an increase of approximately $11.786 million (18.8%) compared to $62.606 million for the same period in 2020[141]. - Total revenues increased to $142.1 million, a 3.3% increase from $136.7 million in the previous year[158]. - Real Estate segment revenues increased by approximately $9.4 million (80.1%), driven by a 63.5% increase in billed hours and a 10.2% increase in average bill rate[144]. - Professional segment revenues decreased by approximately $0.4 million (1.3%), primarily due to a 4.1% decrease in billed hours and a 1.1% decrease in average bill rate[145]. - Light Industrial segment revenues increased by approximately $2.8 million (19.9%), attributed to an 11.2% increase in billed hours and a 7.8% increase in average bill rate[146]. - Real Estate revenues increased approximately $8.0 million (25.2%) primarily due to recovery effects from the COVID-19 pandemic, with a 14.4% increase in billed and a 9.8% increase in average bill rate[159]. - Professional revenues decreased approximately $5.7 million (7.8%) due to a 11.7% decrease in billed hours, partially offset by contributions from acquisitions[160]. - Light Industrial revenues increased approximately $3.1 million (9.7%) primarily due to increased demand in the logistics market, with an 8.3% increase in average bill rate[161]. Profitability - Gross profit for the thirteen weeks ended June 27, 2021, was $21.783 million, representing a 28.9% increase compared to $16.905 million for the same period in 2020[149]. - The overall gross profit margin improved to 29.3% from 27.0%, primarily due to higher gross profits in the Professional segment and increased contributions from the Real Estate segment[149]. - Operating income for the thirteen weeks ended June 27, 2021, was $4.318 million, compared to a loss of $6.085 million for the same period in 2020[141]. - Net income for the thirteen weeks ended June 27, 2021, was $3.443 million, compared to a net loss of $4.829 million for the same period in 2020[141]. - Real Estate gross profit increased approximately $3.4 million (76.6%) due to increased revenue and an 8.8% increase in average spread[150]. - Professional gross profit increased approximately $1.0 million (9.3%) primarily from an increase in permanent placements and the 2021 Momentum acquisition, despite a 1.3% decrease in average spread[151]. - Light Industrial gross profit increased approximately $0.5 million (24.4%) in line with increased revenue and an 11.5% increase in average spread[152]. - Adjusted EBITDA for the thirteen weeks ended June 27, 2021, was $4.8 million, compared to $3.3 million for the same period in 2020, representing a 45.5% increase[177]. - Net income for the thirteen weeks ended June 27, 2021, was $3.4 million, a significant improvement from a net loss of $4.8 million in the same period of 2020[177]. - Operating income for the trailing twelve months ended June 27, 2021, was $12.5 million, compared to a loss of $3.4 million for the trailing twelve months ended June 28, 2020[177]. Expenses and Financial Management - Selling, general and administrative expenses increased approximately $3.5 million (24.2%) primarily due to additional compensation from increased revenues[153]. - Depreciation and amortization charges decreased approximately $0.6 million (38.3%) primarily due to changes in the Professional segment[155]. - Interest expense, net decreased approximately $0.3 million (32.8%) primarily due to lower average balance on the Revolving Facility and increased interest income[170]. Cash Flow and Capital Management - Cash provided by operating activities for Fiscal 2021 was $1.7 million, a decrease of $13.4 million compared to $15.1 million in Fiscal 2020[185]. - Cash used in investing activities in Fiscal 2021 included $3.8 million for the Momentum acquisition and $1.1 million for capital expenditures[187]. - The company borrowed $6.1 million on its Revolving Facility in Fiscal 2021 to meet increased working capital needs and fund the Momentum acquisition[189]. - Working capital as of June 27, 2021, was $23.3 million, a decrease from $25.4 million as of December 27, 2020[183]. - The company has a Revolving Facility with a maximum borrowing capacity of $35 million, maturing on July 16, 2024[191]. - The company is subject to a maximum Leverage Ratio and a minimum Fixed Charge Coverage Ratio as per its Credit Agreement[192]. - The company is monitoring liquidity closely, particularly payments from client partners, amid ongoing uncertainty related to COVID-19[181]. Operational Impact of COVID-19 - The company continues to monitor the impact of COVID-19 on its operations and has implemented cost containment measures to mitigate financial impacts[135]. - The company operates across 42 states and D.C., with a focus on expanding its workforce solutions in the Real Estate, Professional, and Light Industrial segments[130].
BGSF(BGSF) - 2022 Q1 - Quarterly Report
2021-05-06 12:58
Revenue Performance - Total revenues for the thirteen weeks ended March 28, 2021, were $67.712 million, a decrease of approximately $6.355 million (8.6%) compared to $74.067 million for the same period in 2020[130]. - Real Estate segment revenues decreased by approximately $1.4 million (7.1%) due to a 14.3% decrease in billed hours, partially offset by an 8.9% increase in average bill rate[134]. - Professional segment revenues decreased by approximately $5.2 million (14.3%), primarily due to a 19.7% decrease in billed hours, despite a contribution of $3.7 million from the EdgeRock acquisition[135]. - Light Industrial segment revenues increased by approximately $0.3 million (1.5%) due to increased demand in the logistics market, with an 8.5% increase in average bill rate[136]. - Total revenue for the period was $16,723,000, representing a 3.2% increase from $16,202,000 in the previous year[145]. Profitability - Gross profit for the thirteen weeks ended March 28, 2021, was $18.815 million, a decrease of approximately $1.460 million (7.2%) compared to $20.275 million in the same period in 2020[139]. - The gross profit margin increased to 27.8% from 27.4%, primarily due to higher gross profits in the Professional segment[139]. - Adjusted EBITDA for the period was $2,886,000, a decrease of 45.2% compared to $5,266,000 in the prior year[151]. - Net income for the period was $712,000, down from $1,499,000, reflecting a 52.5% decrease[151]. Expenses and Financial Management - Selling, general and administrative expenses increased by approximately $0.5 million (3.2%), primarily due to the EdgeRock and Momentum acquisitions[143]. - Interest expense decreased by approximately $0.1 million (17.4%) due to lower average balance on the Revolving Facility and lower rates[146]. - Income tax expense decreased by approximately $0.6 million (79.7%) primarily due to lower pre-tax income and non-deductible transaction fees[146]. - Cash provided by operating activities was $1,911,000, a decrease of $4.7 million compared to $6,640,000 in the previous year[159]. - Cash used in investing activities was $4,328,000, primarily for the Momentum acquisition and capital expenditures[157]. Capital Structure and Financing - The company borrowed $3.8 million on the Revolving Facility to fund the Momentum acquisition[163]. - Working capital as of March 28, 2021, was $19,189,000, down from $25,380,000 in the previous year[157]. - The company plans to open new branches throughout the next year, which may require additional debt or equity financing[156]. - The company entered into a standby letter of credit arrangement in March 2020, with a maximum financial exposure of $0.1 million as of March 28, 2021[168]. Operational Context - The company continues to monitor the impact of COVID-19 on its operations and may take further actions as required by authorities[129]. - The company operates across 42 states and D.C., with a focus on three segments: Real Estate, Professional, and Light Industrial[120]. - The company has completed multiple acquisitions to expand its workforce solutions capabilities, including EdgeRock in February 2020 and Momentum in February 2021[120]. Accounting and Risk Management - The consolidated financial statements are prepared in accordance with GAAP, with significant accounting policies reviewed regularly to ensure fair presentation[169]. - The company is exposed to interest rate risk due to a portion of its Revolving Facility and Term Loan being priced at variable interest rates[170].
BGSF(BGSF) - 2021 Q3 - Quarterly Report
2020-11-05 14:10
PART I FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for BG Staffing, Inc. as of September 27, 2020, highlighting a year-to-date net loss of $764,840, a significant decrease from a net income of $10.5 million in the prior year, primarily driven by a $7.2 million impairment loss, with total assets growing to $129.1 million and operating cash flow increasing to $18.3 million [Unaudited Consolidated Balance Sheets](index=4&type=section&id=Unaudited%20Consolidated%20Balance%20Sheets) As of September 27, 2020, total assets increased to $129.1 million from $115.6 million at year-end 2019, driven by goodwill and intangible assets from acquisitions, while total liabilities rose to $65.1 million from $47.1 million due to increased long-term debt, and total stockholders' equity decreased to $64.0 million from $68.5 million Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 27, 2020 | Dec 29, 2019 | | :--- | :--- | :--- | | **Total Assets** | **$129,102** | **$115,586** | | Total current assets | $42,780 | $40,737 | | Goodwill | $31,350 | $25,195 | | Intangible assets, net | $35,437 | $33,808 | | **Total Liabilities** | **$65,067** | **$47,129** | | Total current liabilities | $17,840 | $13,707 | | Long-term debt, less current portion | $26,863 | $7,125 | | **Total Stockholders' Equity** | **$64,035** | **$68,457** | [Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss)](index=5&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20%28Loss%29) For the third quarter of 2020, revenues decreased to $71.5 million from $79.4 million year-over-year, resulting in a net income of $2.6 million, down from $4.2 million, while for the thirty-nine weeks ended September 27, 2020, revenues fell to $208.2 million from $222.0 million, leading to a net loss of $764,840, a sharp contrast to the $10.5 million net income in the prior year, largely due to a $7.2 million impairment loss Statement of Operations Highlights (in thousands, except per share data) | Metric | Q3 2020 | Q3 2019 | YTD 2020 | YTD 2019 | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | **$71,519** | **$79,364** | **$208,192** | **$221,998** | | Gross Profit | $19,712 | $22,177 | $56,893 | $61,478 | | Operating Income | $3,648 | $6,477 | $221 | $15,485 | | Impairment Losses | $0 | $0 | $7,240 | $0 | | **Net Income (Loss)** | **$2,566** | **$4,207** | **($765)** | **$10,505** | | Diluted EPS | $0.25 | $0.41 | ($0.07) | $1.01 | - Cash dividends declared per common share were **$0.05** for Q3 2020 and **$0.40** for YTD 2020, compared to **$0.30** and **$0.90** for the respective periods in 2019[14](index=14&type=chunk) [Unaudited Consolidated Statement of Changes in Stockholders' Equity](index=6&type=section&id=Unaudited%20Consolidated%20Statement%20of%20Changes%20in%20Stockholders'%20Equity) Stockholders' equity decreased from $68.5 million at the end of 2019 to $64.0 million as of September 27, 2020, primarily driven by $4.1 million in cash dividends declared and a net loss, partially offset by share-based compensation - For the thirty-nine weeks ended September 27, 2020, total stockholders' equity decreased by approximately **$4.4 million**, with key activities including a net loss of **$765 thousand**, cash dividends declared of **$4.1 million**, and share-based compensation of **$0.6 million**[19](index=19&type=chunk) [Unaudited Consolidated Statements of Cash Flows](index=8&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) For the thirty-nine weeks ended September 27, 2020, net cash provided by operating activities increased to $18.3 million from $14.0 million in the prior year, while net cash used in investing activities was $23.6 million, primarily for the EdgeRock acquisition, and net cash provided by financing activities was $5.3 million, reflecting debt proceeds offset by repayments and dividends Cash Flow Summary (YTD, in thousands) | Activity | Sep 27, 2020 | Sep 29, 2019 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | **$18,288** | **$13,965** | | Net cash used in investing activities | ($23,618) | ($1,534) | | Net cash provided by (used in) financing activities | $5,330 | ($12,431) | - Investing activities in 2020 were dominated by **$21.7 million** used for a business acquisition (EdgeRock), compared to none in the 2019 period[21](index=21&type=chunk) - Financing activities in 2020 included **$22.5 million** in proceeds from long-term debt, while net payments on the line of credit were **$12.3 million**, contrasting with 2019 which saw net borrowings of **$9.9 million** on the line of credit and principal payments of **$10.1 million** on long-term debt[23](index=23&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) The notes detail the company's operations across three segments: Real Estate, Professional, and Light Industrial, highlighting the acquisition of EdgeRock Technology for $21.7 million, a $7.2 million impairment loss on intangible assets in the Professional segment, the deferral of $5.0 million in employer FICA taxes under the CARES Act, and a subsequent $0.10 per share dividend declaration in November 2020 - The company operates in three segments: Real Estate, Professional, and Light Industrial, with business being seasonal, typically increasing in Q2/Q3 for Real Estate and Q3/Q4 for Light Industrial, though COVID-19 has significantly affected normal seasonal demand[25](index=25&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk) - On February 3, 2020, the company acquired **100%** of EdgeRock Technology for **$21.7 million** in cash, funded by its credit facility, as part of the Professional segment[76](index=76&type=chunk)[77](index=77&type=chunk) - During the second quarter of 2020, the company recognized a **$3.7 million** trade name impairment loss and a **$3.5 million** client partner list impairment loss within the Professional segment due to changes in long-term projections[87](index=87&type=chunk) - The company deferred **$5.0 million** of employer FICA taxes under the CARES Act, with payments due in 2021 and 2022[88](index=88&type=chunk) YTD 2020 Revenue and Operating Income by Segment (in thousands) | Segment | Revenue YTD 2020 | Revenue YTD 2019 | Operating Income (Loss) YTD 2020 | Operating Income YTD 2019 | | :--- | :--- | :--- | :--- | :--- | | Real Estate | $50,965 | $73,043 | $7,159 | $12,465 | | Professional | $107,035 | $93,421 | ($2,007) | $6,190 | | Light Industrial | $50,193 | $55,534 | $3,240 | $3,515 | - On November 4, 2020, the board declared a cash dividend of **$0.10 per share**, payable on November 23, 2020[116](index=116&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the significant impact of the COVID-19 pandemic, which has caused revenue declines across most business lines, partially offset by acquisitions in the Professional segment, leading to a 9.9% YoY revenue fall in Q3 2020 to $71.5 million and a 6.2% decrease for the first nine months to $208.2 million, resulting in a net loss of $0.8 million primarily due to a $7.2 million intangible asset impairment, while Adjusted EBITDA for the trailing twelve months was $20.3 million and liquidity remains sufficient [Impact of COVID-19](index=26&type=section&id=Impact%20of%20COVID-19) The COVID-19 pandemic has materially and adversely impacted the business, leading to reduced demand, project terminations, and hiring freezes, prompting the company to implement cost containment and liquidity actions, with management expecting continued negative effects on revenue and financial results due to ongoing uncertainty - The company's business, operations, and financial condition have been and may continue to be materially and adversely impacted by COVID-19[126](index=126&type=chunk)[195](index=195&type=chunk) - Impacts include reduced demand for services, early project terminations, hiring freezes, and a shift to remote work, all contributing to a decline in revenues[126](index=126&type=chunk)[196](index=196&type=chunk) - The company took cost containment and liquidity actions starting in March 2020 to mitigate the financial impact[125](index=125&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) For Q3 2020, revenues decreased 9.9% year-over-year, driven by a 35.0% decline in the Real Estate segment due to COVID-19, partially offset by an 8.0% increase in the Professional segment from acquisitions, while for the nine months ended September 2020, revenues decreased 6.2% year-over-year, with the YTD period including a $7.2 million impairment loss in the Professional segment, leading to an operating income of only $0.2 million compared to $15.5 million in the prior year period Q3 2020 vs Q3 2019 Revenue by Segment (in thousands) | Segment | Q3 2020 Revenue | Q3 2019 Revenue | % Change | | :--- | :--- | :--- | :--- | | Real Estate | $19,156 | $29,470 | (35.0%) | | Professional | $34,042 | $31,506 | 8.0% | | Light Industrial | $18,321 | $18,388 | (0.4%) | | **Total** | **$71,519** | **$79,364** | **(9.9%)** | - The Professional segment's Q3 revenue increase was primarily driven by **$9.5 million** from the LJK and EdgeRock acquisitions[134](index=134&type=chunk) YTD 2020 vs YTD 2019 Revenue by Segment (in thousands) | Segment | YTD 2020 Revenue | YTD 2019 Revenue | % Change | | :--- | :--- | :--- | :--- | | Real Estate | $50,965 | $73,043 | (30.2%) | | Professional | $107,035 | $93,421 | 14.6% | | Light Industrial | $50,192 | $55,534 | (9.6%) | | **Total** | **$208,192** | **$221,998** | **(6.2%)** | - The Professional segment's YTD revenue increase was primarily driven by **$26.2 million** from the LJK and EdgeRock acquisitions[146](index=146&type=chunk) - A **$7.2 million** impairment loss was recognized in the Professional segment during the thirty-nine week period ended Sep 27, 2020, related to a trade name (**$3.7 million**) and a client partner list (**$3.5 million**)[156](index=156&type=chunk) [Use of Non-GAAP Financial Measures](index=32&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) The company uses Adjusted EBITDA, a non-GAAP measure, to evaluate operating performance, reporting $5.5 million for Q3 2020 (down from $8.3 million in Q3 2019), $14.0 million for the thirty-nine weeks ended September 27, 2020 (compared to $20.3 million in the prior-year period), and a trailing twelve-month Adjusted EBITDA of $20.3 million Reconciliation of Net Income (Loss) to Adjusted EBITDA (in thousands) | Metric | Q3 2020 | Q3 2019 | YTD 2020 | YTD 2019 | TTM Ended Sep 27, 2020 | | :--- | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $2,566 | $4,207 | ($765) | $10,505 | $1,977 | | Interest expense, net | $360 | $395 | $1,245 | $1,245 | $1,569 | | Income tax expense (benefit) | $723 | $1,334 | ($260) | $3,194 | $851 | | Depreciation & amortization | $1,271 | $1,197 | $4,130 | $3,633 | $5,318 | | Impairment losses | $0 | $0 | $7,240 | $0 | $7,240 | | Other adjustments* | $585 | $622 | $2,452 | $1,204 | $3,345 | | **Adjusted EBITDA** | **$5,505** | **$8,296** | **$14,042** | **$20,332** | **$20,300** | - *Other adjustments include contingent consideration, share-based compensation, transaction fees, and IT roadmap expenses[164](index=164&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) The company's primary liquidity sources are cash from operations and its revolving credit facility with BMO, with cash from operations strong at $18.3 million for the first nine months of 2020, and $21.7 million used for the EdgeRock acquisition funded by its Term Loan, leading management to believe liquidity is sufficient for at least the next twelve months while continuing to monitor the impact of COVID-19 - Primary liquidity sources are cash from operations and the BMO revolving credit facility, which matures in July 2024[167](index=167&type=chunk) - Net cash from operating activities increased to **$18.3 million** in YTD 2020 from **$14.0 million** in YTD 2019[172](index=172&type=chunk) - In February 2020, the company borrowed **$18.5 million** on its Term Loan to fund the EdgeRock acquisition and borrowed the remaining **$4.0 million** in April 2020[92](index=92&type=chunk) - In April 2020, the company entered into a **$25.0 million** notional interest rate swap to hedge against floating interest rate risk on its Term Loan[179](index=179&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk exposure is to interest rate fluctuations, as a portion of its Revolving Facility and Term Loan carry variable interest rates, meaning an increase in interest rates could adversely affect future earnings and cash flows - The company's main market risk is interest rate risk due to variable-rate debt under its Revolving Facility and Term Loan[183](index=183&type=chunk) [Item 4. Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that as of September 27, 2020, the company's disclosure controls and procedures were not effective due to a previously identified material weakness in internal control over financial reporting related to the quantitative assessment of impairment for goodwill and intangible assets, with remediation steps underway including retaining external experts and enhancing management review controls - The CEO and CFO concluded that disclosure controls and procedures were not effective as of September 27, 2020[185](index=185&type=chunk) - The ineffectiveness is due to a material weakness in internal control related to the technical aspects of GAAP for testing goodwill and other intangible assets for impairment[186](index=186&type=chunk) - Remediation steps include retaining external experts, enhancing management review controls, and providing training, though the timeline for completion is not yet estimated[189](index=189&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) There have been no changes from the information provided in the company's Annual Report on Form 10-K for the fiscal year ended December 29, 2019 - No change from the information provided in the Annual Report on Form 10-K for the fiscal year ended December 29, 2019[193](index=193&type=chunk) [Item 1A. Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) The primary risk factor highlighted is the ongoing and unpredictable material adverse impact of the COVID-19 pandemic on the company's business, operations, and financial results, which has led to reduced demand, project reductions, and hiring freezes, contributing to a decline in revenues - The company's business, results of operations, and financial condition have been and may continue to be adversely impacted in material respects by the COVID-19 pandemic[195](index=195&type=chunk)[196](index=196&type=chunk) - Specific impacts include reduced demand for workforce solutions, early terminations or reductions in projects, hiring freezes, and potential client inability to pay for services, all of which have contributed to a decline in revenues[196](index=196&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) None - None[197](index=197&type=chunk) [Item 6. Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the quarterly report, including acquisition agreements, corporate governance documents, and CEO/CFO certifications as required by the Sarbanes-Oxley Act - Key exhibits filed include the Asset Purchase Agreement for L.J. Kushner & Associates and the Securities Purchase Agreement for EdgeRock Technology Holdings[201](index=201&type=chunk) - Certifications by the CEO and CFO pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act are included as exhibits[201](index=201&type=chunk)
BGSF(BGSF) - 2021 Q2 - Quarterly Report
2020-08-07 01:38
Part I - Financial Information [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The company reported a $3.3 million net loss for the 26 weeks ended June 28, 2020, driven by a $7.2 million impairment and COVID-19 impacts, despite growth from the $21.7 million EdgeRock acquisition [Consolidated Balance Sheets](index=4&type=section&id=Unaudited%20Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Highlights (Unaudited) | Account | June 28, 2020 ($) | December 29, 2019 ($) | | :--- | :--- | :--- | | **Total Assets** | **$126,955,730** | **$115,586,044** | | Goodwill | $31,372,990 | $25,194,639 | | Intangible assets, net | $36,441,098 | $33,807,973 | | **Total Liabilities** | **$65,232,996** | **$47,129,054** | | Long-term debt | $29,675,000 | $7,500,000 | | **Total Stockholders' Equity** | **$61,722,734** | **$68,456,990** | - The increase in assets and liabilities is primarily due to the acquisition of **EdgeRock**, which added **goodwill**, **intangible assets**, and was financed through increased **long-term debt**[12](index=12&type=chunk)[13](index=13&type=chunk)[75](index=75&type=chunk) [Consolidated Statements of Operations](index=7&type=section&id=UNAUDITED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) Statement of Operations Highlights (Unaudited, in thousands) | Metric | Q2 2020 ($ thousands) | Q2 2019 ($ thousands) | 26 Weeks 2020 ($ thousands) | 26 Weeks 2019 ($ thousands) | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | **$62,606** | **$73,858** | **$136,674** | **$142,634** | | Gross Profit | $16,905 | $20,863 | $37,181 | $39,301 | | Impairment Losses | $7,240 | $0 | $7,240 | $0 | | Operating (Loss) Income | $(6,085) | $5,421 | $(3,427) | $9,007 | | **Net (Loss) Income** | **$(4,829)** | **$3,802** | **$(3,330)** | **$6,298** | | Diluted EPS | $(0.47) | $0.37 | $(0.32) | $0.61 | - A significant **$7.2 million impairment loss** was recognized in Q2 2020, leading to a substantial **net loss** for both the quarter and the half-year, compared to profits in the prior year[15](index=15&type=chunk)[53](index=53&type=chunk) - Cash dividends declared per common share were reduced to **$0.05** in Q2 2020 from **$0.30** in Q2 2019[15](index=15&type=chunk) [Consolidated Statements of Cash Flows](index=10&type=section&id=UNAUDITED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Cash Flow Summary (Unaudited, for the 26 weeks ended, in thousands) | Activity | June 28, 2020 ($ thousands) | June 30, 2019 ($ thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $15,102 | $9,162 | | Net cash used in investing activities | $(23,577) | $(674) | | Net cash provided by (used in) financing activities | $8,476 | $(8,489) | - Cash used in investing activities surged to **$23.6 million** due to the **$21.7 million** cash payment for the **EdgeRock acquisition**[23](index=23&type=chunk)[75](index=75&type=chunk) - Financing activities provided **$8.5 million** in cash, primarily from **$22.5 million** in new **long-term debt**, which was used for the acquisition and to pay down the line of credit[24](index=24&type=chunk)[92](index=92&type=chunk) [Notes to Financial Statements](index=12&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Notes detail the company's three segments, the significant impact of COVID-19, the $21.7 million EdgeRock acquisition, a $7.2 million impairment charge, and subsequent debt and dividend actions - The company operates in three segments: **Real Estate**, **Professional**, and **Light Industrial**. The **Professional** segment was expanded through the acquisitions of **L.J. Kushner** and **EdgeRock Technology**[26](index=26&type=chunk)[28](index=28&type=chunk)[114](index=114&type=chunk) - On February 3, 2020, the company acquired **EdgeRock** for **$21.7 million** in cash, funded by its credit facility. The acquisition contributed approximately **$16.3 million** in revenue and **$0.6 million** in operating income in the first twenty-six weeks of 2020[75](index=75&type=chunk)[77](index=77&type=chunk) - Due to revised long-term projections impacted by market conditions, the company recognized a **$7.2 million impairment loss** in the Professional segment during Q2 2020, comprising a **$3.7 million trade name impairment** and a **$3.5 million client partner list impairment**[53](index=53&type=chunk)[87](index=87&type=chunk) - Subsequent to the quarter end, on August 4, 2020, the board declared a cash dividend of **$0.05 per share**[117](index=117&type=chunk) [Management's Discussion and Analysis (MD&A)](index=31&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the Q2 revenue decline to COVID-19 impacts on Real Estate and Light Industrial segments, offset by Professional segment growth from acquisitions, while a $7.2 million impairment charge led to an operating loss and Adjusted EBITDA decline [Overview and COVID-19 Impact](index=31&type=section&id=Overview%20and%20COVID-19%20Impact) - The company operates **89 branch offices** and **12 on-site locations** across **44 states and D.C.**, providing workforce solutions in **Real Estate**, **Professional**, and **Light Industrial** segments[120](index=120&type=chunk) - The COVID-19 pandemic has had a **negative impact** on operating results, including **reduced demand** for services, **hiring freezes**, and **early project terminations**. The company has implemented **cost containment** and **liquidity actions** in response[125](index=125&type=chunk)[126](index=126&type=chunk)[127](index=127&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Q2 2020 revenues declined 15.2% to $62.6 million, resulting in a $4.8 million net loss due to a $7.2 million impairment and segment declines, despite Professional segment growth Q2 2020 vs Q2 2019 Revenue by Segment (in thousands) | Segment | Q2 2020 Revenue ($ thousands) | Q2 2019 Revenue ($ thousands) | % Change | | :--- | :--- | :--- | :--- | | Real Estate | $11,780 | $24,397 | (51.7)% | | Professional | $36,649 | $31,321 | 17.0% | | Light Industrial | $14,177 | $18,140 | (21.8)% | | **Total** | **$62,606** | **$73,858** | **(15.2)%** | - The increase in **Professional segment revenue** was primarily driven by the **LJK** and **EdgeRock acquisitions**, which contributed **$9.8 million** of new revenue in Q2 2020[133](index=133&type=chunk) 26 Weeks 2020 vs 26 Weeks 2019 Revenue by Segment (in thousands) | Segment | 26 Weeks 2020 Revenue ($ thousands) | 26 Weeks 2019 Revenue ($ thousands) | % Change | | :--- | :--- | :--- | :--- | | Real Estate | $31,808 | $43,573 | (27.0)% | | Professional | $72,994 | $61,915 | 17.9% | | Light Industrial | $31,872 | $37,146 | (14.2)% | | **Total** | **$136,674** | **$142,634** | **(4.2)%** | - A **$7.2 million impairment loss** was recognized in the **Professional segment** due to changes in long-term projections, significantly impacting profitability[142](index=142&type=chunk)[154](index=154&type=chunk) [Non-GAAP Measures: Adjusted EBITDA](index=41&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) - The company uses **Adjusted EBITDA**, a **non-GAAP measure**, to evaluate operating performance. It is defined as earnings before interest, taxes, depreciation, amortization, impairment losses, transaction fees, IT roadmap costs, and share-based compensation[156](index=156&type=chunk)[157](index=157&type=chunk) Adjusted EBITDA Reconciliation (in thousands) | Metric | Q2 2020 ($ thousands) | Q2 2019 ($ thousands) | 26 Weeks 2020 ($ thousands) | 26 Weeks 2019 ($ thousands) | | :--- | :--- | :--- | :--- | :--- | | Net (Loss) Income | $(4,830) | $3,802 | $(3,331) | $6,298 | | Adjustments | $8,102 | $3,074 | $11,869 | $5,738 | | **Adjusted EBITDA** | **$3,272** | **$6,876** | **$8,538** | **$12,036** | [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) - Primary liquidity sources are **cash from operations** and borrowings under the **BMO credit facility**. The company believes these sources are **sufficient for working capital needs** for the next twelve months[163](index=163&type=chunk) - In H1 2020, the company borrowed **$22.5 million** on its **Term Loan** to fund the **EdgeRock acquisition**, reduced its **Revolving Facility** by **$10.1 million**, and paid **$3.6 million in dividends**[171](index=171&type=chunk) - In April 2020, the company entered into a **$25.0 million interest rate swap agreement** to **hedge the floating interest rate** on its Term Loan, effective June 3, 2020[175](index=175&type=chunk) [Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate fluctuations on variable-rate debt, mitigated by an interest rate swap agreement - The company is exposed to **interest rate risk** because portions of its debt are priced at **variable rates**. Future rate increases could **adversely impact earnings and cash flows**[178](index=178&type=chunk) [Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective as of June 28, 2020, due to a material weakness in goodwill and intangible asset impairment assessment, with remediation efforts underway - Management identified a **material weakness** in **internal control over financial reporting** related to the **quantitative assessment of impairment** for **goodwill and intangible assets**[181](index=181&type=chunk) - The CEO and CFO concluded that due to this material weakness, the company's **disclosure controls and procedures** were **not effective** as of June 28, 2020[180](index=180&type=chunk) - **Remediation steps** are underway, including **recruiting additional personnel**, **retaining external experts**, and **enhancing management review controls**[183](index=183&type=chunk) Part II - Other Information [Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) The company highlights significant and ongoing risks from the COVID-19 pandemic, including reduced demand, client payment issues, and economic disruptions, which adversely impact operations - The company's business and financial results have been, and may continue to be, **materially and adversely impacted** by the **COVID-19 pandemic**[189](index=189&type=chunk) - Specific impacts include **reduced demand** for services, **early project terminations**, **hiring freezes**, and potential **client payment defaults or deferrals**, which could **materially impact liquidity**[190](index=190&type=chunk) [Other Part II Items](index=48&type=section&id=Other%20Part%20II%20Items) No material changes were reported for Legal Proceedings, Unregistered Sales of Equity Securities, Defaults Upon Senior Securities, or Other Information - Item 1, Legal Proceedings: **No change** from the Annual Report on Form 10-K for the fiscal year ended December 29, 2019[187](index=187&type=chunk) - Items 2, 3, 5: The company reported **'None'** for Unregistered Sales of Equity Securities, Defaults Upon Senior Securities, and Other Information[191](index=191&type=chunk)
BGSF(BGSF) - 2021 Q1 - Quarterly Report
2020-05-07 13:20
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 29, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File Number: 001-36704 BG STAFFING, INC. (exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation ...
BGSF(BGSF) - 2019 Q4 - Annual Report
2020-03-12 13:18
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 _______________ FORM 10-K _______________ (Mark One) ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 29, 2019 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-36704 BG STAFFING, INC. (Exact Name of Registrant as Specified in Its Charter) _______________ 5850 Grani ...
BGSF(BGSF) - 2020 Q3 - Quarterly Report
2019-11-05 13:56
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 29, 2019 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File Number: 001-36704 BG STAFFING, INC. (exact name of registrant as specified in its charter) Delaware 26-0656684 (State or other jurisd ...
BGSF(BGSF) - 2020 Q2 - Quarterly Report
2019-08-07 13:03
[PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Unaudited consolidated financial statements for BG Staffing, Inc. as of June 30, 2019, show asset growth and reduced net income [Unaudited Consolidated Balance Sheets](index=4&type=section&id=Unaudited%20Consolidated%20Balance%20Sheets) As of June 30, 2019, total assets increased to **$104.0 million**, liabilities rose, and stockholders' equity slightly increased Consolidated Balance Sheet Highlights (as of June 30, 2019 vs. Dec 30, 2018) | Metric | June 30, 2019 (USD) | Dec 30, 2018 (USD) | | :--- | :--- | :--- | | **Total Current Assets** | $40,146,764 | $38,613,673 | | **Total Assets** | $104,039,160 | $100,268,803 | | **Total Current Liabilities** | $16,308,398 | $18,059,091 | | **Total Liabilities** | $37,871,009 | $34,566,790 | | **Total Stockholders' Equity** | $66,168,151 | $65,702,013 | - The company adopted a new lease accounting standard, resulting in the recognition of a **Right-of-use asset** of **$4.0 million** and corresponding **lease liabilities** (current and long-term) totaling **$5.0 million** as of June 30, 2019[11](index=11&type=chunk)[12](index=12&type=chunk) [Unaudited Consolidated Statements of Income](index=5&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Income) Revenues increased for both periods, but net income decreased, reflecting lower profitability Income Statement Summary (Thirteen Weeks Ended) | Metric | Q2 2019 (USD) | Q2 2018 (USD) | | :--- | :--- | :--- | | **Revenues** | $73,857,890 | $70,945,438 | | **Gross Profit** | $20,862,834 | $19,192,279 | | **Operating Income** | $5,420,758 | $6,577,171 | | **Net Income** | $3,801,829 | $5,169,884 | | **Diluted EPS** | $0.37 | $0.54 | Income Statement Summary (Twenty-six Weeks Ended) | Metric | H1 2019 (USD) | H1 2018 (USD) | | :--- | :--- | :--- | | **Revenues** | $142,633,957 | $137,800,908 | | **Gross Profit** | $39,301,475 | $36,502,210 | | **Operating Income** | $9,007,467 | $10,612,475 | | **Net Income** | $6,297,854 | $7,635,455 | | **Diluted EPS** | $0.61 | $0.82 | [Unaudited Consolidated Statement of Changes in Stockholders' Equity](index=6&type=section&id=Unaudited%20Consolidated%20Statement%20of%20Changes%20in%20Stockholders%27%20Equity) Stockholders' equity increased to **$66.2 million** by June 30, 2019, driven by net income, offset by dividends - For the twenty-six weeks ended June 30, 2019, total **cash dividends** declared amounted to **$6,137,821** (**$0.60 per share**)[16](index=16&type=chunk)[14](index=14&type=chunk) [Unaudited Consolidated Statements of Cash Flows](index=8&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities significantly increased to **$9.2 million** in H1 2019, primarily funding dividends and debt Cash Flow Summary (Twenty-six Weeks Ended) | Cash Flow Activity | H1 2019 (USD) | H1 2018 (USD) | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | $9,162,315 | $4,097,641 | | **Net Cash used in Investing Activities** | ($673,752) | ($452,519) | | **Net Cash used in Financing Activities** | ($8,488,563) | ($3,645,122) | - **Financing activities** in H1 2019 included **$7.8 million** in **net borrowings** under the line of credit, **$10.1 million** in **principal payments** on long-term debt, and **$6.1 million** in **dividend payments**[19](index=19&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Notes detail operations, accounting policies, segments, a new credit agreement, and share-based compensation - The company operates in three segments: **Real Estate** (staffing for apartment communities), **Professional** (IT, finance, and accounting staffing), and **Light Industrial** (logistics and distribution staffing)[21](index=21&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk) - Subsequent to the quarter end, on **July 16, 2019**, the company entered into a new five-year **Credit Agreement** with BMO Harris Bank, providing for a **$35 million** **revolving credit facility** and a **$30 million** **term loan**[69](index=69&type=chunk)[100](index=100&type=chunk) - On **July 31, 2019**, the board of directors declared a **quarterly cash dividend** of **$0.30 per share**[101](index=101&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, revenue growth, expenses, liquidity, capital resources, and Adjusted EBITDA [Overview](index=25&type=section&id=Overview) The company is a national temporary staffing provider across three segments, experiencing seasonality in Q3 and Q4 - The company operates in **79 branch offices** and **15 on-site locations**, providing services across **42 states**[104](index=104&type=chunk) - Business is seasonal: **Real Estate demand** is highest in **Q3** due to summer apartment turnover, while **Light Industrial demand** peaks in **Q4** for holiday help[107](index=107&type=chunk)[24](index=24&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) Q2 2019 revenues grew **4.1%** to **$73.9 million**, led by Real Estate, with gross profit margin improving despite higher SG&A expenses Q2 2019 vs Q2 2018 Revenue by Segment (in thousands) | Segment | Q2 2019 (USD Thousands) | Q2 2018 (USD Thousands) | % Change | | :--- | :--- | :--- | :--- | | Real Estate | $24,397 | $21,298 | 14.6% | | Professional | $31,321 | $30,132 | 3.9% | | Light Industrial | $18,140 | $19,515 | (7.0)% | | **Total Revenues** | **$73,858** | **$70,945** | **4.1%** | H1 2019 vs H1 2018 Revenue by Segment (in thousands) | Segment | H1 2019 (USD Thousands) | H1 2018 (USD Thousands) | % Change | | :--- | :--- | :--- | :--- | | Real Estate | $43,573 | $39,333 | 10.8% | | Professional | $61,915 | $61,222 | 1.1% | | Light Industrial | $37,146 | $37,246 | (0.3)% | | **Total Revenues** | **$142,634** | **$137,801** | **3.5%** | - **Selling, general and administrative (SG&A) expenses** increased **13.6%** in Q2 2019 and **13.7%** in H1 2019, primarily due to costs associated with revenue growth and geographic expansion, including increased headcount, commissions, and bonuses[120](index=120&type=chunk)[132](index=132&type=chunk) Adjusted EBITDA Reconciliation (in thousands) | Metric | Q2 2019 (USD Thousands) | Q2 2018 (USD Thousands) | H1 2019 (USD Thousands) | H1 2018 (USD Thousands) | | :--- | :--- | :--- | :--- | :--- | | **Net Income** | $3,802 | $5,170 | $6,298 | $7,635 | | **Adjusted EBITDA** | $6,848 | $6,979 | $12,008 | $12,446 | [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) Primary liquidity sources are operations and a new credit facility, deemed sufficient for working capital needs for the next year - Primary sources of liquidity are **cash from operations** and a new **revolving credit facility** with BMO Harris Bank that matures in **July 2024**[142](index=142&type=chunk) - The new **credit agreement** provides for a **$35 million** **revolving facility** and a **$30 million** **term loan**, with an option to increase the **term loan** by an additional **$40 million**[150](index=150&type=chunk) - Net cash from operating activities increased to **$9.2 million** in H1 2019, up from **$4.1 million** in H1 2018, mainly due to favorable changes in accounts receivable and accrued payroll[146](index=146&type=chunk) [Critical Accounting Policies and Estimates](index=34&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Significant accounting policies are detailed in the financial statement notes and the 2018 Annual Report on Form 10-K - The company's **critical accounting policies** have not changed and are discussed in its **Annual Report on Form 10-K** for the fiscal year ended December 30, 2018[155](index=155&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate fluctuations on variable-rate debt, potentially impacting future earnings and cash flows - The company is exposed to **market risk** primarily from **interest rate changes**, as its **Revolving Facility** and **Term Loan** have **variable interest rates**[157](index=157&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of June 30, 2019, with no material changes to internal controls - Based on an evaluation as of June 30, 2019, the **CEO** and **CFO** concluded that the company's **disclosure controls and procedures** are effective[158](index=158&type=chunk)[159](index=159&type=chunk) - There were no changes in **internal control over financial reporting** during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[160](index=160&type=chunk) [PART II - OTHER INFORMATION](index=36&type=section&id=PART%20II%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) No changes to legal proceedings information since the 2018 Annual Report on Form 10-K - No change from the information provided in the **Annual Report on Form 10-K** for the fiscal year ended December 30, 2018[164](index=164&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors previously disclosed in the 2018 Annual Report on Form 10-K - There have been no material changes from the **risk factors** as previously disclosed in the **2018 Form 10-K**[165](index=165&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no unregistered sales of equity securities during the period - None[166](index=166&type=chunk) [Item 6. Exhibits](index=37&type=section&id=Item%206.%20Exhibits) Exhibits filed with the Quarterly Report on Form 10-Q include CEO/CFO certifications and XBRL data files - Exhibits filed with the report include **CEO/CFO certifications** (**31.1**, **31.2**, **32.1**) and **XBRL interactive data files**[168](index=168&type=chunk)
BGSF(BGSF) - 2020 Q1 - Quarterly Report
2019-05-09 13:03
PART I FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Presents BG Staffing, Inc.'s unaudited consolidated financial statements for Q1 2019, including balance sheets, income statements, equity changes, cash flows, and detailed notes [Unaudited Consolidated Balance Sheets](index=4&type=section&id=Unaudited%20Consolidated%20Balance%20Sheets) Total assets increased to **$102.7 million** from **$100.3 million** at year-end 2018, driven by new right-of-use assets, with total liabilities rising to **$37.4 million** Consolidated Balance Sheet Summary (in thousands) | Account | March 31, 2019 | December 30, 2018 | | :--- | :--- | :--- | | **Total current assets** | $38,191 | $38,614 | | **Total assets** | **$102,657** | **$100,269** | | **Total current liabilities** | $19,210 | $18,059 | | **Total liabilities** | **$37,408** | **$34,567** | | **Total stockholders' equity** | $65,249 | $65,702 | [Unaudited Consolidated Statements of Income](index=5&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Income) Q1 2019 revenues increased **2.9%** to **$68.8 million**, while operating income decreased to **$3.6 million** and diluted EPS was **$0.24** Consolidated Statement of Income (in thousands, except per share data) | Metric | Q1 2019 | Q1 2018 | | :--- | :--- | :--- | | **Revenues** | $68,776 | $66,855 | | **Gross Profit** | $18,439 | $17,310 | | **Operating Income** | $3,587 | $4,035 | | **Net Income** | $2,496 | $2,466 | | **Diluted EPS** | $0.24 | $0.27 | - Cash dividends declared per common share increased to **$0.30** in Q1 2019 from **$0.25** in Q1 2018[14](index=14&type=chunk) [Unaudited Consolidated Statement of Changes in Stockholders' Equity](index=6&type=section&id=Unaudited%20Consolidated%20Statement%20of%20Changes%20in%20Stockholders'%20Equity) Stockholders' equity decreased from **$65.7 million** to **$65.2 million** in Q1 2019, primarily due to **$3.1 million** in cash dividends, partially offset by **$2.5 million** net income - Key activities affecting stockholders' equity in Q1 2019 included **$2.5 million** net income, **$3.1 million** cash dividends, and a **$0.2 million** reduction in retained earnings due to lease accounting changes[17](index=17&type=chunk) [Unaudited Consolidated Statements of Cash Flows](index=8&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities significantly increased to **$5.4 million** in Q1 2019, while financing activities used **$5.0 million**, mainly for dividends and debt payments Summary of Cash Flows (in thousands) | Activity | Q1 2019 | Q1 2018 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $5,382 | $3,596 | | **Net cash used in investing activities** | ($341) | ($154) | | **Net cash used in financing activities** | ($5,040) | ($3,442) | [Notes to Unaudited Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Notes detail operations, accounting policies, and financial items, including three operating segments, adoption of ASU 2016-02, debt facilities, and segment performance - The company operates in three industry segments: Real Estate, Professional (IT, finance, accounting), and Light Industrial (logistics, distribution, call centers)[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk) - Adoption of ASU 2016-02 on December 31, 2018, led to recognition of **$4.1 million** right-of-use assets and **$4.3 million** lease liabilities[59](index=59&type=chunk) Revenue by Segment (in thousands) | Segment | Q1 2019 | Q1 2018 | | :--- | :--- | :--- | | Real Estate | $19,176 | $18,034 | | Professional | $30,594 | $31,090 | | Light Industrial | $19,007 | $17,731 | | **Total** | **$68,776** | **$66,855** | - On April 25, 2019, the board declared a cash dividend of **$0.30** per share, paid on May 13, 2019[91](index=91&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2019 financial results, including a **2.9%** revenue increase to **$68.8 million**, improved gross profit margin, liquidity, capital resources, and **$5.2 million** Adjusted EBITDA [Results of Operations](index=22&type=section&id=Results%20of%20Operations) Total revenues increased **2.9%** to **$68.8 million**, driven by Real Estate and Light Industrial growth, while gross profit margin expanded from **25.9%** to **26.8%** Segment Revenue Performance (Q1 2019 vs Q1 2018) | Segment | Q1 2019 Revenue (M) | Q1 2018 Revenue (M) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Real Estate | $19.2 | $18.0 | +6.3% | | Professional | $30.6 | $31.1 | -1.6% | | Light Industrial | $19.0 | $17.7 | +7.2% | | **Total** | **$68.8** | **$66.9** | **+2.9%** | - Revenue growth in Real Estate was driven by geographic expansion and a **5.7%** increase in average bill rate, while Professional declined by **$0.5 million** in IT, and Light Industrial grew from increased billed hours and average bill rate[101](index=101&type=chunk)[102](index=102&type=chunk)[103](index=103&type=chunk) Gross Profit Percentage by Segment | Segment | Q1 2019 | Q1 2018 | | :--- | :--- | :--- | | Real Estate | 38.5% | 38.2% | | Professional | 27.1% | 25.3% | | Light Industrial | 14.6% | 14.4% | | **Company Total** | **26.8%** | **25.9%** | - SG&A expenses increased by **$1.6 million (13.7%)** due to growth-related costs, increased headcount, commissions, and **$0.3 million** in share-based compensation[109](index=109&type=chunk) [Use of Non-GAAP Financial Measures](index=26&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) The company uses Adjusted EBITDA, a non-GAAP measure, to evaluate operating performance, reporting **$5.2 million** for Q1 2019, a decrease from **$5.5 million** in Q1 2018 Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Line Item | Q1 2019 | Q1 2018 | | :--- | :--- | :--- | | **Net income** | $2,496 | $2,466 | | Interest expense, net | $353 | $871 | | Income tax expense | $737 | $699 | | Depreciation and amortization | $1,232 | $1,296 | | Share-based compensation | $320 | $67 | | Transaction fees | $21 | $69 | | **Adjusted EBITDA** | **$5,159** | **$5,468** | [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) Primary liquidity sources are cash from operations and the revolving credit facility, deemed sufficient for future working capital needs, with **$3.1 million** in dividends and **$1.8 million** in debt payments in Q1 2019 - Primary sources of liquidity are cash from operations and borrowings under the Revolving Facility with Texas Capital Bank (TCB)[119](index=119&type=chunk) - During Q1 2019, the company used cash for **$3.1 million** in dividend payments and **$1.8 million** in principal payments on its Term Loan[127](index=127&type=chunk) - The credit agreement with TCB includes a **$35.0 million** revolving credit facility and a term loan, both maturing in April 2022[128](index=128&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk due to variable-rate debt, which could adversely impact future earnings and cash flows - The company's main market risk is interest rate risk due to its variable-rate debt, including the Revolving Facility and Term Loan[135](index=135&type=chunk) [Item 4. Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2019, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures are effective based on an evaluation as of the end of the reporting period[136](index=136&type=chunk) - No material changes in internal control over financial reporting occurred during the fiscal quarter[137](index=137&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=30&type=section&id=Item%201.%20Legal%20Proceedings) No changes in legal proceedings from the information reported in the 2018 Annual Report on Form 10-K - No change from the information provided in the Annual Report on Form 10-K for the fiscal year ended December 30, 2018[141](index=141&type=chunk) [Item 1A. Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the 2018 Annual Report on Form 10-K - No material changes from the risk factors as previously disclosed in the 2018 Form 10-K[142](index=142&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=30&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q1 2019, the company issued **423** common shares via cashless exercise of **1,020** warrants, exempt from registration under Section 4(a)(2) - In Q1 2019, the company issued **423** shares of common stock upon the cashless exercise of **1,020** warrants, with the issuance exempt from registration[143](index=143&type=chunk) [Item 6. Exhibits](index=31&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Quarterly Report on Form 10-Q, including CEO and CFO certifications and XBRL data files - The report includes standard exhibits such as CEO and CFO certifications pursuant to Sarbanes-Oxley Act Sections 302 and 906, and XBRL interactive data files[146](index=146&type=chunk)
BGSF(BGSF) - 2018 Q4 - Annual Report
2019-03-12 13:20
Revenue Growth - Revenues increased from $35 million in 2009 to $286.9 million in 2018, reflecting a growth strategy reliant on both acquisitions and organic growth[41] - Revenues for the company increased from $35 million in 2009 to $286.9 million in 2018, indicating a significant growth strategy reliant on acquisitions and organic growth[41] Market Demand - The U.S. temporary staffing market is estimated to reach $152 billion in 2019, up from $145 billion in 2018, indicating a growing demand for flexible workforce solutions[29] - The U.S. temporary staffing market is projected to grow from an estimated $145 billion in 2018 to $152 billion in 2019, reflecting a 4.8% increase[29] - The staffing industry is experiencing increased demand in relation to total job growth, as client partners prioritize maintaining a more flexible workforce[28] - The demand for Real Estate staffing services peaks in Q3, while Light Industrial staffing services see increased demand in Q3 and peak in Q4 due to holiday help[46] Company Operations - The company operates through 75 branch offices and 19 on-site locations across 27 states, with no current foreign operations[26] - The company currently operates 51 branch offices in the Real Estate segment across 24 states, utilizing a centralized recruiting model[33] - The Light Industrial segment operates 13 branch offices and 19 on-site locations across 6 states, providing flexible workforce solutions[35] - As of February 4, 2019, the company had 349 team members and assigned approximately 30,000 field talent during the fiscal year ended 2018, with an average of 5,000 field talent working in Q4 2018[48] - As of February 4, 2019, the company had 349 team members at corporate and branch offices, with no labor union representation among team members or field talent[48] Acquisitions and Integration - The company has acquired and successfully integrated nine businesses since 2010, enhancing its operational capabilities and market presence[17] - The company has acquired nine businesses since 2010, enhancing its operational capabilities in various segments[17] - The company plans to continue evaluating acquisition opportunities and expanding into new markets within its current segments[42] Competitive Landscape - The staffing services market is highly competitive, with many companies competing for market share, which could limit the company's ability to maintain or increase profitability[44] - The staffing industry is highly competitive, with approximately 20,000 competing companies, leading to intense price competition[44] - The company’s competitive factors include pay rates, assignment availability, and client partner satisfaction monitoring[45] Workforce Management - The company provides temporary staffing services that help clients convert fixed labor costs to variable costs, addressing the need for flexibility in workforce management[12] - The company focuses on recruiting and maintaining a pool of qualified field talent to meet the needs of its client partners[38] Regulatory Environment - The company is subject to various federal, state, and local regulations, which impose additional financial risks but have not materially affected its business to date[52] Economic Cycles - The staffing industry is cyclical, with revenues increasing quickly during economic growth and decreasing rapidly during downturns[47] Cost Factors - The company’s cost of services typically increases in Q1 due to payroll tax resets, which can affect overall demand[46] Labor Relations - The company does not currently have any team members or field talent represented by a labor union, and has not experienced material labor disruptions[49] Intellectual Property - The company’s intellectual property includes various trademarks and domain names that reinforce brand distinctiveness[51]