BGSF(US:BGSF)2023-03-09 18:05Financial Data and Key Metrics Changes - The company reported record revenues of $298 million for 2022, a 24.8% increase over 2021, with adjusted EBITDA and adjusted EPS up 45% and 47% respectively compared to the prior year [13][19] - Fourth quarter revenues increased by 14.2% to $77.3 million, with property management growing by 16.6% and professional services increasing by 8.9% on an organic basis [18][19] - The effective tax rate for Q4 was 33% for 2022, compared to 24.3% in the previous year [19][51] Business Line Data and Key Metrics Changes - Property management revenues grew by 31.6% year-over-year, while professional services increased by 19.7% organically [19] - Professional wage rates increased by 17%, and property management wage rates increased by 10% quarter-over-quarter [18] - Permanent placement revenues were up 13.5% year-over-year [19] Market Data and Key Metrics Changes - The company operates in 64 active markets in real estate and is targeting six new markets for the upcoming year [38] - The managed services division, bolstered by the acquisition of Horn Solutions, doubled in size, contributing $1.4 million in revenue for December [19][24] Company Strategy and Development Direction - The company plans to rebrand all businesses under the BGSF name by the end of Q2 2023 to enhance market presence and cross-selling opportunities [52][47] - A focus on IT modernization and strategic acquisitions is expected to drive growth and improve margins, with a specific emphasis on high-value consulting and managed services [15][36] - The company aims to leverage technology for territory mapping and market expansion in the real estate segment [34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth prospects in both real estate and professional consulting, citing pent-up demand in multifamily and a return to work in commercial sectors [57][58] - The company anticipates a strong year in 2023, supported by low unemployment rates and a focus on finding and training talent [58] - Management acknowledged challenges in Q4 due to increased SG&A expenses but remains confident in the long-term benefits of recent investments [50][91] Other Important Information - The company is transitioning to a new CFO, John Barnett, with Dan Hollenbach assisting in the transition [14][17] - The acquisition of Horn Solutions is seen as a strategic fit that enhances the company's consulting capabilities and market reach [24][70] Q&A Session Summary Question: How many offices did you end the year in, and what is the pace of openings anticipated? - The company has 64 active markets in real estate and is targeting six new markets next year [38] Question: Is the $4 million increase in SG&A going to be the new baseline going forward? - The $23 million figure may serve as a new baseline, but it includes some one-time transaction fees and catch-up expenses [39] Question: What are the cross-sell opportunities with Horn? - The teams are excited about the Horn acquisition, with immediate cross-selling initiatives already underway [42] Question: Is there still pent-up demand in the market? - There is still pent-up demand, particularly as companies return to the office [71][103] Question: How should we think about EBITDA margins in 2023? - Management expects to leverage investments made in 2022 to improve EBITDA margins moving forward [72]