EX-99.1 2 ex991q42024earnings.htm EX-99.1

BGSF, Inc. Reports Fourth Quarter and Fiscal Year 2024 Financial Results

Re-baselined Costs to Align with Revenues, Generated Record Operating Cash Flow of $24 million

PLANO, Texas – (March 12, 2025) – BGSF, Inc. (NYSE: BGSF), a leading provider of consulting, managed services, and professional workforce solutions, today reported financial results for the fourth fiscal quarter and fiscal year ended December 29, 2024.

Q4 2024 Highlights (results include sequential comparisons to Q3 2024):

•Revenues were $64.4 million for Q4, compared to $71.2 million for Q3.

◦Property Management segment revenues decreased 18.5% from Q3, primarily driven by seasonal demand.

◦Professional segment revenues declined 3.0% from Q3, primarily due to a decline in billing days of approximately 5%.

•Gross profit was $21.5 million, down from $24.3 million in Q3, primarily due to lower sales in Property Management.

•Net loss was $1.0 million, or $0.10 per diluted share for Q4, compared to a net loss of $0.8 million in Q3 or $0.07 per diluted share.

•Adjusted EBITDA1 was $1.4 million (2.2% of revenues) in Q4 compared to $3.4 million (4.8% of revenues) in Q3.

•Adjusted EPS1 was a loss of $0.06 for Q4, compared with Adjusted EPS1 $0.14 for Q3.

SUMMARY OF FINANCIAL RESULTS

(dollars in thousands) (unaudited)

									For the Thirteen Week Periods Ended
									December 29, 2024									December 31, 2023									September 29, 2024
Revenue:
			Property Management						$	24,306								$	29,624								$	29,824
			Professional						40,105									43,943									41,362
			Total						$	64,411								$	73,567								$	71,186
Gross profit / Gross profit percentage:
			Property Management						$	8,734		35.9		%				$	11,589		39.1		%				$	10,696		35.9		%
			Professional						12,732			31.7		%				13,858			31.5		%				13,633			33.0		%
			Total						$	21,466		33.3		%				$	25,447		34.6		%				$	24,329		34.2		%
Operating income									$	246								$	3,227								$	470
Net (loss) income									$	(981)								$	999								$	(804)
Net (loss) income per diluted share									$	(0.10)								$	0.11								$	(0.07)
Non-GAAP Financial Measures:
			Adjusted EBITDA1						$	1,387								$	5,705								$	3,387
			Adjusted EBITDA Margin (% of revenue)1						2.2		%							7.8		%							4.8		%
			Adjusted EPS1						$	(0.06)								$	0.40								$	0.14

1 Adjusted EBITDA and Adjusted EPS are non-GAAP financial measures as defined and reconciled below.

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Beth A. Garvey, Chair, President, and CEO, said, “Late in 2024, we implemented a significant cost restructuring plan to streamline operations and lower overhead with expense savings estimated to be between $7 to $9 million on an annual basis. We saw revenues stabilize as the year progressed and have seen similar trends in early 2025.”

“While we have progressed with the Company’s strategic review process, uncertainties in the demand environment persist, and we continue to expect this to be a 12- to 18-month process from our original May 2024 announcement.”

Conference Call

BGSF will discuss its fourth quarter and full fiscal year 2024 financial results during a conference call and webcast at 9:00 a.m. ET on March 13, 2025. Interested participants may dial 1-844-481-3017 (Toll Free) or 1-412-317-1882 (International). A replay of the call will be available until March 20, 2025. To access the replay, please dial 1-877-344-7529 (Toll Free), or 1-412-317-0088 (International) and enter access code 3405111. The live webcast and archived replay are accessible from the investor relations section of the Company’s website at https://investor.bgsf.com/events-and-presentations/default.aspx

About BGSF

BGSF provides consulting, managed services and professional workforce solutions to a variety of industries through its various divisions in IT, Finance & Accounting, Managed Solutions, and Property Management. BGSF has integrated several regional and national brands achieving scalable growth. The Company was ranked by Staffing Industry Analysts as the 97th largest U.S. staffing company and the 49th largest IT staffing firm in 2024. The Company’s disciplined acquisition philosophy, which builds value through both financial growth and the retention of unique and dedicated talent within BGSF’s family of companies, has resulted in a seasoned management team with strong tenure and the ability to offer exceptional service to our field talent and client partners while building value for investors. For more information on the Company and its services, please visit its website at www.bgsf.com.

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Forward-Looking Statements

The forward-looking statements in this press release are made under the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may include, but are not limited to, statements regarding our future financial performance and the expectations and objectives of our board or management. The Company’s actual results could differ materially from those indicated by the forward-looking statements because of various other risks and uncertainties, including, among other things, risks relating to volatility and uncertainty in the capital markets, availability of suitable third parties with which to conduct any strategic transaction, whether the Company will be able to pursue a strategic transaction, or whether any such transaction, if pursued, will be completed successfully and on attractive terms, or at all, the risks associated with undertaking a review of strategic alternatives, including in respect of relationships with stockholders, employees, customers, and suppliers, the risks associated with and the ultimate effects of the Company's cost restructuring plan, as well as risks and uncertainties listed in Item 1A of the Company’s Annual Report on Form 10-K and in the Company’s other filings and reports with the Securities and Exchange Commission. All of the risks and uncertainties are beyond the ability of the Company to control, and in many cases, the Company cannot predict the risks and uncertainties that could cause its actual results to differ materially from those indicated by the forward-looking statements. When used in this press release, the words “allows,” “anticipates,” “believes,” “plans,” “expects,” “estimates,” “should,” “would,” “may,” “might,” “forward,” “will,” “intends,” “continue,” “outlook,” “temporarily,” “progressing,” "prospects," and “anticipates” and similar expressions as they relate to the Company or its management are intended to identify forward-looking statements. Except as required by law, the Company is not obligated to publicly release any revisions to these forward-looking statements to reflect the events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events.

CONTACT:

Steven Hooser or Sandy Martin

Three Part Advisors

ir@bgstaffing.com 214.872.2710 or 214.616.2207

Source: BGSF, Inc.

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CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

												December 29, 2024						December 31, 2023
ASSETS
Current assets
			Cash and cash equivalents									$	353					$	—
			Accounts receivable (net of allowance for credit losses of $1,133 and $554, respectively)									40,194						56,776
			Prepaid expenses									2,485						2,963
			Other current assets									2,315						7,172
						Total current assets						45,347						66,911
Property and equipment, net												1,137						1,217
Other assets
			Deposits									2,092						2,699
			Software as a service, net									4,438						5,026
			Deferred income taxes, net									8,456						7,271
			Right-of-use asset - operating leases									4,973						5,435
			Intangible assets, net									24,517						30,370
			Goodwill									59,151						59,588
						Total other assets						103,627						110,389
			Total assets									$	150,111					$	178,517
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
			Accounts payable									$	80					$	95
			Accrued payroll and expenses									13,001						14,902
			Line of credit (net of debt issuance costs of $128)									—						24,746
			Long-term debt, current portion (net of debt issuance costs of $24 and $0, respectively)									3,801						34,000
			Accrued interest									223						438
			Income taxes payable									212						282
			Contingent consideration, current portion									2,662						4,208
			Convertible note									4,368						4,368
			Lease liabilities, current portion									1,573						2,016
						Total current liabilities						25,920						85,055
Line of credit (net of debt issuance costs of $770)												5,625						—
Long-term debt, less current portion (net of debt issuance costs of $198)												32,527						—
Contingent consideration, less current portion												—						4,112
Lease liabilities, less current portion												3,770						3,814
						Total liabilities						67,842						92,981
Commitments and contingencies
Preferred stock, $0.01 par value per share, 500,000 shares authorized, -0- shares issued and outstanding												—						—
Common stock, $0.01 par value per share; 19,500,000 shares authorized, 11,038,623 and 10,887,509 shares issued and outstanding, respectively, net of treasury stock, at cost, of 3,930												53						52
Additional paid in capital												70,260						68,551
Retained earnings												11,956						16,933
						Total stockholders’ equity						82,269						85,536
						Total liabilities and stockholders’ equity						$	150,111					$	178,517

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CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share and dividend amounts)

 

For the Thirteen and Fifty-two Week Periods Ended December 29, 2024 and December 31, 2023

 

									Thirteen Weeks Ended												Fifty-two Weeks Ended
									2024						2023						2024						2023
Revenues									$	64,411					$	73,567					$	272,499					$	313,167
Cost of services									42,945						48,120						179,636						201,383
			Gross profit						21,466						25,447						92,863						111,784
Selling, general, and administrative expenses									20,784						20,175						85,333						88,650
Gain on contingent consideration									(1,452)						—						(1,452)						—
Impairment losses									—						—						—						22,545
Depreciation and amortization									1,888						2,045						7,769						7,774
			Operating income (loss)						246						3,227						1,213						(7,185)
Interest expense, net									(1,403)						(1,601)						(4,921)						(5,976)
			(Loss) income before income taxes						(1,157)						1,626						(3,708)						(13,161)
Income tax benefit (expense)									176						(627)						370						2,938
			Net (loss) income						$	(981)					$	999					$	(3,338)					$	(10,223)
Net (loss) income per share:
			Basic						$	(0.10)					$	0.11					$	(0.31)					$	(0.95)
			Diluted						$	(0.10)					$	0.11					$	(0.31)					$	(0.95)
Weighted-average shares outstanding:
			Basic						10,943						10,812						10,896						10,766
			Diluted						10,943						10,823						10,896						10,766
Cash dividends declared per common share									$	—					$	0.15					$	0.15					$	0.60

 

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BUSINESS SEGMENTS

(dollars in thousands)

									December 29, 2024
									Thirteen Weeks Ended																								Fifty-two Weeks Ended
									Property Mgmt						Profes-sional						Home Office						Total						Property Mgmt						Profes-sional						Home Office						Total
Contract field talent									$	23,907					$	38,923					$	—					$	62,830					$	102,618					$	162,759					$	—					$	265,377
Contingent placements									399						1,182						—						1,581						1,784						5,338						—						7,122
			Revenue						24,306						40,105						—						64,411						104,402						168,097						—						272,499
Cost of services									15,572						27,373						—						42,945						66,033						113,603						—						179,636
			Gross profit						8,734						12,732						—						21,466						38,369						54,494						—						92,863
Selling, general, and administrative expenses									5,929						10,248						4,607						20,784						24,693						42,432						18,208						85,333
Gain on contingent consideration									—						—						(1,452)						(1,452)						—						—						(1,452)						(1,452)
Depreciation and amortization									21						1,560						307						1,888						112						6,434						1,223						7,769
			Operating income (loss)						2,784						924						(3,462)						246						13,564						5,628						(17,979)						1,213
Interest expense, net									—						—						(1,403)						(1,403)						—						—						(4,921)						(4,921)
Income tax benefit from continuing operations									—						—						176						176						—						—						370						370
			Net income (loss)						$	2,784					$	924					$	(4,689)					$	(981)					$	13,564					$	5,628					$	(22,530)					$	(3,338)

									December 31, 2023
									Thirteen Weeks Ended																								Fifty-two Weeks Ended
									Property Mgmt						Profes-sional						Home Office						Total						Property Mgmt						Profes-sional						Home Office						Total
Contract field talent									$	28,968					$	42,914					$	—					$	71,882					$	121,827					$	182,120					$	—					$	303,947
Contingent placements									656						1,029						—						1,685						3,250						5,970						—						9,220
			Revenue						29,624						43,943						—						73,567						125,077						188,090						—						313,167
Cost of services									18,035						30,085						—						48,120						75,292						126,091						—						201,383
			Gross profit						11,589						13,858						—						25,447						49,785						61,999						—						111,784
Selling, general, and administrative expenses									6,077						9,526						4,572						20,175						26,497						43,245						18,908						88,650
Impairment loss									—						—						—						—						—						22,545						—						22,545
Depreciation and amortization									33						1,706						306						2,045						133						6,461						1,180						7,774
			Operating income (loss)						5,479						2,626						(4,878)						3,227						23,155						(10,252)						(20,088)						(7,185)
Interest expense, net									—						—						(1,601)						(1,601)						—						—						(5,976)						(5,976)
Income tax (expense) benefit from continuing operations									—						—						(627)						(627)						—						—						2,938						2,938
			Net income (loss)						$	5,479					$	2,626					$	(7,106)					$	999					$	23,155					$	(10,252)					$	(23,126)					$	(10,223)

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CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Years ended December 29, 2024 and December 31, 2023

															2024						2023
Cash flows from operating activities
			Net loss												$	(3,338)					$	(10,223)
						Adjustments to reconcile net loss to net cash provided by operating activities:
						Depreciation									345						446
						Amortization									7,424						7,328
						Impairment losses									—						22,545
						Loss on disposal of property and equipment									14						17
						Gain on contingent consideration									(1,452)						—
						Amortization of debt issuance costs									425						199
						Interest expense on contingent consideration payable									44						740
						Provision for credit losses									2,066						798
						Share-based compensation									989						1,029
						Deferred income taxes, net of acquired deferred tax liability									(1,185)						(5,075)
						Net changes in operating assets and liabilities, net of effects of acquisitions:
									Accounts receivable						14,516						12,163
									Prepaid expenses and other current assets						5,164						(2,159)
									Deposits						705						(83)
									Software as a service						716						720
									Accounts payable						(14)						(492)
									Accrued payroll and expenses						(1,902)						(7,426)
									Accrued interest						(215)						165
									Income taxes receivable and payable						103						729
									Other current liabilities						—						(1,000)
									Operating leases						(26)						(35)
						Net cash provided by operating activities									24,379						20,386
Cash flows from investing activities
			Businesses acquired, net of cash acquired												—						(6,917)
			Capital expenditures												(1,640)						(2,597)
						Net cash used in investing activities									(1,640)						(9,514)

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CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(in thousands)

Years ended December 29, 2024 and December 31, 2023

															2024						2023
Cash flows from financing activities
			Net (payments) borrowing line of credit												(18,479)						2,312
			Proceeds from issuance of long-term debt												4,250						—
			Principal payments on long-term debt												(1,700)						(6,000)
			Payments of dividends												(1,639)						(6,507)
			Issuance of ESPP shares												459						512
			Issuance of shares under the 2013 Long-Term Incentive Plan												262						(10)
			Contingent consideration paid												(4,250)						(1,110)
			Payments of debt issuance costs												(1,289)						(69)
						Net cash used in continuing financing activities									(22,386)						(10,872)
Net change in cash and cash equivalents															353						—
Cash and cash equivalents, beginning of year															—						—
Cash and cash equivalents, end of year															$	353					$	—
Supplemental cash flow information:
			Cash paid for interest, net												$	4,475					$	4,668
			Cash paid for taxes, net of refunds												$	685					$	1,378

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NON-GAAP FINANCIAL MEASURES

The financial results of BGSF, Inc. are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and the rules of the U.S. Securities and Exchange Commission. To help the readers understand the Company's financial performance, the Company supplements its GAAP financial results with Adjusted EBITDA and Adjusted EPS.

A non-GAAP financial measure is a numerical measure of a company's financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows of a company. Adjusted EBITDA and Adjusted EPS are not measurements of financial performance under GAAP and should not be considered as alternatives to net income, net income per diluted share, operating income, or any other performance measure derived in accordance with GAAP, or as alternatives to cash flow from operating activities or measures of our liquidity. We believe that Adjusted EBITDA and Adjusted EPS are useful performance measures and are used by us to facilitate a comparison of our operating performance on a consistent basis from period-to-period and to provide for a more complete understanding of factors and trends affecting our business than measures under GAAP can provide alone. In addition, the financial covenants in our credit agreement are based on EBITDA as defined in the credit agreement.

We define “Adjusted EBITDA" as earnings before interest expense, income taxes, depreciation and amortization expense, costs associated with the evaluation of potential strategic alternatives (“Strategic alternatives review”), transaction fees, software as a service costs, restructuring plan costs, and certain non-cash expenses such as impairment losses and share-based compensation expense, as well as certain specific events that management does not consider in assessing our on-going operating performance.

We define “Adjusted EPS” as diluted earnings per share eliminating amortization expense of intangible assets from acquisitions, the Strategic Alternatives Review, transaction fees, software as a service costs, restructuring plan costs, and certain non-cash expenses such as impairment losses, as well as certain specific events that management does not consider in assessing our on-going operating performance, net of the respective income tax effect.

Reconciliation of Net (Loss) Income to Adjusted EBITDA

(dollars in thousands)

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						Thirteen Weeks Ended												Fifty-two Weeks Ended												Thirteen Weeks Ended
						December 29, 2024						December 31, 2023						December 29, 2024						December 31, 2023						September 29, 2024
Net (loss) income						$	(981)					$	999					$	(3,338)					$	(10,223)					$	(804)
Income tax expense (benefit)						(176)						627						(370)						(2,938)						52
Interest expense, net						1,403						1,601						4,921						5,976						1,222
Operating income (loss)						246						3,227						1,213						(7,185)						470
Depreciation and amortization						1,888						2,045						7,769						7,774						1,893
Gain on contingent consideration						(1,452)						—						(1,452)						—						—
Impairment losses						—						—						—						22,545						—
Share-based compensation						201						184						989						1,029						317
Strategic alternatives review						88						—						962						—						526
Cost restructuring plan						230						—						230						—						—
Software as a service2						179						177						716						720						179
Transaction fees						7						72						48						975						2
Adjusted EBITDA						$	1,387					$	5,705					$	10,475					$	25,858					$	3,387
Adjusted EBITDA Margin  (% of revenue)						2.2		%				7.8		%				3.8		%				8.3		%				4.8		%

2 The Company capitalizes direct costs incurred in cloud computing implementation costs from hosting arrangements, which are reported as a Software as a service and are expensed as incurred in selling, general and administrative expenses.

Reconciliation of Net (Loss) Income EPS to Adjusted EPS

						Thirteen Weeks Ended												Fifty-two Weeks Ended												Thirteen Weeks Ended
						December 29, 2024						December 31, 2023						December 29, 2024						December 31, 2023						September 29, 2024
Net (loss) income per diluted share						$	(0.10)					$	0.11					$	(0.31)					$	(0.95)					$	(0.07)
Acquisition amortization						0.13						0.15						0.56						0.57						0.13
Gain on contingent consideration						(0.13)						—						(0.13)						—						—
Impairment losses (pre-tax)						—						—						—						2.09						—
Strategic alternatives review						0.01						—						0.09						—						0.05
Cost restructuring plan						0.02						—						0.02						—						—
Software as a service2						0.02						0.02						0.07						0.07						0.02
Transaction fees						—						0.01						—						0.09						—
Income tax (benefit) expense adjustment						(0.01)						0.11						0.03						0.42						0.01
Adjusted EPS						$	(0.06)					$	0.40					$	0.33					$	2.29					$	0.14

2 The Company capitalizes direct costs incurred in cloud computing implementation costs from hosting arrangements, which are reported as a Software as a service and are expensed as incurred in selling, general and administrative expenses.