0001474903false00014749032023-08-092023-08-09

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
 
 Date of Report (Date of earliest event reported):
August 9, 2023

bgicon2019a02.jpg 
BGSF, INC.
(Exact Name of Registrant as Specified in its Charter)
 
Delaware001-3670426-0656684
(State or Other Jurisdiction of
Incorporation)		(Commission File Number)(I.R.S. Employer Identification
Number)
5850 Granite Parkway, Suite 730
Plano, Texas 75024
(Address of principal executive offices, including zip code)
 
(972) 692-2400
(Registrant’s telephone number, including area code)
 
Not applicable
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:
¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Securities registered pursuant to section 12(b) of the Act.
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common StockBGSFNYSE


Item 2.02Results of Operations and Financial Condition.
 
On August 9, 2023, BGSF, Inc. (the "Company") issued a press release regarding its financial results for the second fiscal quarter ended July 2, 2023. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The Company is making reference to non-GAAP financial information in the press release and the related conference call, and a reconciliation of GAAP to non-GAAP results is provided in the press release.

Item 9.01Financial Statements and Exhibits.
 
(d)Exhibits
Exhibit No.Description
99.1August 9, 2023
104.0Cover Page Interactive Data File (embedded within the Inline XBRL document)


SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
  
  BGSF, INC.
   
   
Date:August 9, 2023 /s/ John Barnett
 Name:
Title:		John Barnett
Chief Financial Officer and Secretary
(Principal Financial Officer)
 
 


image2.jpg
BGSF, Inc. Reports Second Quarter 2023 Financial Results
Announces 35th Consecutive Quarterly Dividend
Quarterly Revenues of $80.8 million, up 9%


PLANO, Texas – (August 9, 2023) – BGSF, Inc. (NYSE: BGSF), a growing provider of consulting, managed services, and professional workforce solutions, today reported financial results for the second quarter ended July 2, 2023.

The Company further announced that its Board of Directors has declared a quarterly cash dividend of $0.15 per share of common stock. The dividend is payable on August 28, 2023 to all shareholders of record as of the close of business on August 21, 2023. This marks the 35st consecutive quarterly dividend and based on yesterday’s closing price of the Company’s common stock, the annualized yield is approximately 6.4%.

Q2 2023 Highlights from Continuing Operations2:
•Revenues were $80.8 million, up 9.1% from 2022.
•Gross profit was $29.6 million, up 18.0% from 2022. Gross profit margins increased to 36.6% in 2023, from 33.8% in 2022.
•Net income from continuing operations was $2.6 million, or $0.24 per diluted share.

•Adjusted EBITDA1 from continuing operations was $7.5 million (9.3% of revenues), compared to $5.4 million (7.3% of revenues) in 2022.
•Adjusted EPS1 from continuing operations was $0.37 per diluted share compared to $0.34 per diluted share in 2022.

Six Month 2023 Highlights from Continuing Operations2:
•Revenues were $156.1 million, up 9.5% from 2022.
•Gross profit was $56.4 million, up 16.2% from 2022. Gross profit margins increased to 36.1% in 2023, from 34.0% in 2022.
•Operating income (loss) in 2023 includes a non-cash charge of $22.5 million (using year-to-date tax rate, the impact was $16.9 million after-tax or $1.58 per diluted share) related to the impairment of trade name intangible assets from the rebranding to BGSF for all entities.
•Net loss from continuing operations was $(13.9) million, or $(1.29) per diluted share.
•Adjusted EBITDA1 from continuing operations was $11.8 million (7.5% of revenues), compared to $9.3 million (6.5% of revenues) in 2022, an increase of 25.9% year over year.
•Adjusted EPS1 from continuing operations was $0.55 per diluted share in 2023, compared to $0.58 per diluted share in 2022.
1Non-GAAP financial measure. See reconciliation below for details.
22023 operation results includes ten weeks of Arroyo Consulting and six months of Horn Solutions.


Beth A. Garvey, Chair, President and CEO, stated, “Second quarter total revenues increased 9.1%, and we were pleased with improvements in gross margins and profitability, as well as stronger cash flow from operations in the first half of 2023. Revenues for the Professional segment included a sales lift from Horn Solutions for the full quarter and Arroyo Consulting for a portion of the quarter. In addition, we experienced strong momentum in managed services that was somewhat pressured by softness on the contract side. Our strategic acquisitions provided greater cross-selling and go-to-market opportunities this quarter, as well as valuable nearshore and offshore IT demand. Revenue for the Real Estate segment continued to grow with new markets and the expansion of existing markets. We are seeing a return to more normal seasonality in Real Estate, and believe that our innovations and technology, as well as our diverse geographic footprint, position us well for changing dynamics in the apartment and multi-family industries.”

“Although we remain cautiously optimistic given market challenges, we are enthusiastic about our strategic growth plans to deliver professional and IT consulting, managed solutions and unique capabilities with high value, innovative solutions to solve our client’s needs. We continue to maintain a relentless focus on execution to grow revenues, improve profitability and generate cash flow. Our strategy growth plans in 2023 and beyond give the Board, including myself, the confidence to declare our 35th consecutive quarterly cash dividend of $0.15 per share,” Garvey concluded.

Conference Call
BGSF will discuss its second fiscal quarter and six month 2023 financial results during a conference call and webcast at 9:00 a.m. ET on August 10, 2023. Interested participants may dial 877-344-2015 (U.S. Toll Free) or 646-307-1967 (Toll Callers) and provide access code 7003778. A replay of the call will be available until August 17, 2023. To access the replay, please dial 800-770-2030 (U.S. Toll Free callers), or 647-362-9199 (Toll Callers) and enter access code 7003778. The live webcast and archived replay are accessible from the investor relations section of the Company’s website at www.bgsf.com.

About BGSF
BGSF provides consulting, managed services and professional workforce solutions to a variety of industries through its various divisions in IT, Cyber, Finance & Accounting, Managed Services, and Real Estate (apartment communities and commercial buildings). BGSF has integrated several regional and national brands achieving scalable growth. The Company was ranked by Staffing Industry Analysts as the 121st largest U.S. staffing company and the 52nd largest IT staffing firm in 2023. 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.

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 those 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,” “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.


BGSF, Inc.
GAAP Financial Measures

The following tables have been derived from our unaudited consolidated financial statements and summarize key components of our statements of operations for the periods indicated, as well as a reconciliation of revenue and operating income (loss) from continuing operations by reportable segment to consolidated results for the periods indicated.

Results of Operations

 Thirteen Weeks EndedTwenty-six Weeks Ended
 July 2,
2023		June 26,
2022		July 2,
2023		June 26,
2022
 (dollars in thousands)
Revenues$80,800 $74,089 $156,116 $142,631 
Cost of services51,226 49,030 99,758 94,141 
Gross profit29,574 25,059 56,358 48,490 
Selling, general and administrative expenses22,584 19,898 45,796 39,614 
Impairment losses— — 22,545 — 
Depreciation and amortization1,940 922 3,696 1,821 
Operating income (loss)5,050 4,239 (15,679)7,055 
Interest expense, net(1,502)(69)(2,703)(343)
Income (loss) from continuing operations before income taxes3,548 4,170 (18,382)6,712 
Income tax (expense) benefit from continuing operations(944)(986)4,520 (1,521)
Income (loss) from continuing operations2,604 3,184 (13,862)5,191 
Income from discontinued operations:
Income— — — 1,235 
(Loss) gain on sale— (8)— 17,266 
Income tax expense— — — (4,716)
Net income (loss)$2,604 $3,176 $(13,862)$18,976 
Net income (loss) per share - diluted
Net income (loss) from continuing operations$0.24 $0.30 $(1.29)$0.50 
Net income from discontinued operations:
   Income— — — 0.12 
   Gain on sale— — — 1.65 
   Income tax expense— — — (0.45)
Net income (loss) per share - diluted$0.24 $0.30 $(1.29)$1.82 
Weighted-average shares outstanding:
   Basic10,759 10,472 10,731 10,451 
   Diluted10,770 10,514 10,731 10,500 



Business Segments

 Thirteen Weeks EndedTwenty-six Weeks Ended
 July 2,
2023		June 26,
2022		July 2,
2023		June 26,
2022
(dollars in thousands)
Revenue:    
Real Estate$31,071 38 %$29,980 40 %$59,477 38 %$55,896 39 %
Professional49,729 62 %44,109 60 %96,639 62 %86,735 61 %
Total$80,800 100 %$74,089 100 %$156,116 100 %$142,631 100 %
Gross profit:
Real Estate$12,652 43 %$11,574 46 %$23,999 43 %$21,545 44 %
Professional16,922 57 %13,485 54 %32,359 57 %26,945 56 %
Total$29,574 100 %$25,059 100 %$56,358 100 %$48,490 100 %
Operating income (loss):
Real Estate$5,774 $4,817 $10,464 $8,852 
Professional - without impairment losses3,786 3,817 6,413 7,286 
Professional - impairment losses— — (22,545)— 
Home office - Selling, general and administrative(4,510)(4,395)(10,011)(9,083)
Total$5,050 $4,239 $(15,679)$7,055 




The following tables have been derived from our unaudited consolidated financial statements and summarize key components of our balance sheet and statements of cash flows for the periods indicated.

Condensed Balance Sheets
July 2,
2023		January 1, 2023
Assets (dollars in thousands)
Current assets$69,433 $76,162 
Property and equipment, net1,623 2,081 
Intangible assets, net33,156 47,552 
Goodwill58,453 55,193 
Other19,773 13,685 
Total assets$182,438 $194,673 
Liabilities and stockholders' equity
Long-term debt, current portion$4,000 $4,000 
Other current24,680 24,207 
Line of credit 24,768 22,303 
Long-term debt, less current portion38,368 40,368 
Contingent consideration3,184 — 
Other long-term3,050 3,059 
Total liabilities98,050 93,937 
Total stockholders' equity84,388 100,736 
Total liabilities and stockholders' equity$182,438 $194,673 

Working Capital
 July 2,
2023		January 1,
2023
 (dollars in thousands)
Working capital from continuing operations$40,753 $47,955 
Working capital ratio2.422.70
Condensed Statements of Cash Flows
Twenty-six Weeks Ended
July 2,
2023		June 26,
2022
(dollars in thousands)
Net cash provided by (used in) continuing operations:
Operating activities$12,549 $1,217 
Investing activities(8,230)26,775 
Financing activities(3,659)(25,760)
Net change in cash used in discontinued operations— (2,299)
Net change in cash and cash equivalents$660 $(67)



BGSF, Inc.
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, transaction fees and certain non-cash expenses such as contingent consideration gains and share-based compensation expense, as well as certain specific events that management does not consider in assessing our on-going operating performance.


Reconciliation of Income (Loss) from Continuing Operations to Adjusted EBITDA

 Thirteen Weeks EndedTwenty-six Weeks EndedTrailing Twelve Months Ended
 July 2,
2023		June 26,
2022		July 2,
2023		June 26,
2022		July 2,
2023
 (dollars in thousands)
Income (loss) from continuing operations$2,604 $3,184 $(13,862)$5,191 $(7,481)
Income tax expense (benefit) from continuing operations944 986 (4,520)1,521 (2,286)
Interest expense, net1,502 69 2,703 343 3,772 
Operating income (loss)5,050 4,239 (15,679)7,055 (5,995)
Depreciation and amortization1,940 922 3,696 1,821 5,929 
Impairment losses— — 22,545 — 22,545 
Share-based compensation75 243 436 454 1,067 
Transaction fees435 — 753 — 1,025 
Adjusted EBITDA from continuing operations$7,500 $5,404 $11,751 $9,330 $24,571 
Adjusted EBITDA Margin (% of revenue)9.3 %7.3 %7.5 %6.5 %7.9 %



We define “Adjusted EPS” as diluted earnings per share eliminating amortization expense of intangible assets from acquisitions, transaction fees, and certain non-cash expenses such as contingent consideration gains, 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 Adjusted EPS
 Thirteen Weeks EndedTwenty-six Weeks Ended
 July 2,
2023		June 26,
2022		July 2,
2023		June 26,
2022
 
Net income (loss) from continuing operations per diluted share$0.24 $0.30 $(1.29)$0.50 
Acquisition amortization0.14 0.05 0.27 0.10 
Impairment losses— — 2.10 — 
Transaction fees0.04 — 0.07 — 
Income tax expense adjustment(0.05)(0.01)(0.60)(0.02)
Adjusted EPS from continuing operations$0.37 $0.34 $0.55 $0.58 

v3.23.2
Cover
Aug. 09, 2023
Cover [Abstract]  
Document Type 8-K
Document Period End Date Aug. 09, 2023
Entity Registrant Name BGSF, INC.
Entity Incorporation, State or Country Code DE
Entity File Number 001-36704
Entity Tax Identification Number 26-0656684
Entity Address, Address Line One 5850 Granite Parkway, Suite 730
Entity Address, City or Town Plano
Entity Address, State or Province TX
Entity Address, Postal Zip Code 75024
City Area Code 972
Local Phone Number 692-2400
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Title of 12(b) Security Common Stock
Trading Symbol BGSF
Security Exchange Name NYSE
Entity Central Index Key 0001474903
Amendment Flag false
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