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 ...

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 ...

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 ...

[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)

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)

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]