BGSF, Inc. Reports Second Quarter 2023 Financial Results
- Q2 revenues up 9% to $80.8 million
- Gross profit up 18% to $29.6 million
- None.
Announces 35th Consecutive Quarterly Dividend
Quarterly Revenues of
The Company further announced that its Board of Directors has declared a quarterly cash dividend of
Q2 2023 Highlights from Continuing Operations2:
-
Revenues were
$80.8 million 9.1% from 2022. -
Gross profit was
$29.6 million 18.0% from 2022. Gross profit margins increased to36.6% in 2023, from33.8% in 2022. -
Net income from continuing operations was
$2.6 million $0.24 -
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 $0.34
Six Month 2023 Highlights from Continuing Operations2:
-
Revenues were
$156.1 million 9.5% from 2022. -
Gross profit was
$56.4 million 16.2% from 2022. Gross profit margins increased to36.1% in 2023, from34.0% in 2022. -
Operating income (loss) in 2023 includes a non-cash charge of
$22.5 million $16.9 million $1.58 -
Net loss from continuing operations was
$(13.9) million $(1.29) -
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 of25.9% year over year. -
Adjusted EPS1 from continuing operations was
$0.55 $0.58
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
“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
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 (
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
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.
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 Ended |
|
Twenty-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 services |
|
|
51,226 |
|
|
|
49,030 |
|
|
|
99,758 |
|
|
|
94,141 |
|
Gross profit |
|
|
29,574 |
|
|
|
25,059 |
|
|
|
56,358 |
|
|
|
48,490 |
|
Selling, general and administrative expenses |
|
|
22,584 |
|
|
|
19,898 |
|
|
|
45,796 |
|
|
|
39,614 |
|
Impairment losses |
|
|
— |
|
|
|
— |
|
|
|
22,545 |
|
|
|
— |
|
Depreciation and amortization |
|
|
1,940 |
|
|
|
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 taxes |
|
|
3,548 |
|
|
|
4,170 |
|
|
|
(18,382 |
) |
|
|
6,712 |
|
Income tax (expense) benefit from continuing operations |
|
|
(944 |
) |
|
|
(986 |
) |
|
|
4,520 |
|
|
|
(1,521 |
) |
Income (loss) from continuing operations |
|
|
2,604 |
|
|
|
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: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
|
10,759 |
|
|
|
10,472 |
|
|
|
10,731 |
|
|
|
10,451 |
|
Diluted |
|
|
10,770 |
|
|
|
10,514 |
|
|
|
10,731 |
|
|
|
10,500 |
|
Business Segments
|
|
Thirteen Weeks Ended |
|
Twenty-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 |
% |
||||
Professional |
|
|
49,729 |
|
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 |
% |
||||
Professional |
|
|
16,922 |
|
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 losses |
|
|
3,786 |
|
|
|
|
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, net |
|
|
1,623 |
|
|
2,081 |
Intangible assets, net |
|
|
33,156 |
|
|
47,552 |
Goodwill |
|
|
58,453 |
|
|
55,193 |
Other |
|
|
19,773 |
|
|
13,685 |
Total assets |
|
$ |
182,438 |
|
$ |
194,673 |
Liabilities and stockholders' equity |
|
|
|
|
||
Long-term debt, current portion |
|
$ |
4,000 |
|
$ |
4,000 |
Other current |
|
|
24,680 |
|
|
24,207 |
Line of credit |
|
|
24,768 |
|
|
22,303 |
Long-term debt, less current portion |
|
|
38,368 |
|
|
40,368 |
Contingent consideration |
|
|
3,184 |
|
|
— |
Other long-term |
|
|
3,050 |
|
|
3,059 |
Total liabilities |
|
|
98,050 |
|
|
93,937 |
Total stockholders' equity |
|
|
84,388 |
|
|
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 ratio |
|
|
2.42 |
|
|
|
2.70 |
|
|
|
|
|
|
||||
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
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 Ended |
|
Twenty-six Weeks Ended |
Trailing 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 operations |
|
|
944 |
|
|
|
986 |
|
|
|
(4,520 |
) |
|
|
1,521 |
|
|
(2,286 |
) |
|
Interest expense, net |
|
|
1,502 |
|
|
|
69 |
|
|
|
2,703 |
|
|
|
343 |
|
|
3,772 |
|
|
Operating income (loss) |
|
|
5,050 |
|
|
|
4,239 |
|
|
|
(15,679 |
) |
|
|
7,055 |
|
|
(5,995 |
) |
|
Depreciation and amortization |
|
|
1,940 |
|
|
|
922 |
|
|
|
3,696 |
|
|
|
1,821 |
|
|
5,929 |
|
|
Impairment losses |
|
|
— |
|
|
|
— |
|
|
|
22,545 |
|
|
|
— |
|
|
22,545 |
|
|
Share-based compensation |
|
|
75 |
|
|
|
243 |
|
|
|
436 |
|
|
|
454 |
|
|
1,067 |
|
|
Transaction fees |
|
|
435 |
|
|
|
— |
|
|
|
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 Ended |
|
Twenty-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 amortization |
|
|
0.14 |
|
|
|
0.05 |
|
|
|
0.27 |
|
|
|
0.10 |
|
Impairment losses |
|
|
— |
|
|
|
— |
|
|
|
2.10 |
|
|
|
— |
|
Transaction fees |
|
|
0.04 |
|
|
|
— |
|
|
|
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 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20230809426435/en/
Steven Hooser or Sandy Martin
Three Part Advisors
ir@bgstaffing.com 214.872.2710 or 214.616.2207
Source: BGSF, Inc.
