BGSF(BGSF)2025-03-14 21:35Financial Performance - BGSF, Inc. reported revenue from continuing operations of 35 million in 2009, indicating significant growth through acquisitions and organic strategies[39]. - Revenues for the fiscal year ended December 29, 2024, were 313,167,000 in 2023[138]. - Gross profit for the same period was 111,784,000, reflecting a gross margin decline[138]. - Adjusted EBITDA from continuing operations was 25,858,000 in the previous year[139]. - The company reported a net loss of 10,223,000 in 2023[138]. - Basic net loss per share from continuing operations was (0.95) in the prior year[138]. - Total assets decreased to 178,517,000, indicating a reduction in the company's asset base[139]. - Working capital improved to 18,144,000 in 2023, reflecting better liquidity[139]. - Total outstanding borrowings, net, decreased to 63,114,000, indicating a reduction in debt levels[139]. - Cash dividends declared per common share were 0.60 in the previous year[139]. Market Overview - The U.S. temporary service market was valued at 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 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 5.19 per share as of February 5, 2025, with approximately 2,386 holders of record[129]. - The company declared cash dividends totaling 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].