EX-99.1 2 ex991q12025earnings.htm EX-99.1

BGSF, Inc. Reports First Quarter 2025 Financial Results

PLANO, Texas – (May 7, 2025) – BGSF, Inc. (NYSE: BGSF), a leading provider of consulting, managed services, and professional workforce solutions, today reported financial results for the first fiscal quarter ended March 30, 2025.

Q1 2025 Highlights (results include sequential comparisons to Q4 2024):

•Revenues were $63.2 million for Q1, compared to $64.4 million for Q4.

◦Property Management segment revenues decreased 14.1% from Q4, primarily driven by seasonal demand.

◦Professional segment revenues increased 5.6% from Q4, primarily due to an increase in billed hours of approximately 5%.

•Gross profit was $20.9 million for Q1, down from $21.5 million in Q4, primarily due to lower sales in Property Management.

•Net loss was $0.7 million, or $0.07 per diluted share for Q1, compared to a net loss of $1.0 million in Q4 or $0.10 per diluted share.

•Adjusted EBITDA1 was $2.4 million (3.8% of revenues) in Q1 compared to $1.4 million (2.2% of revenues) in Q4.

•Adjusted EPS1 was $0.05 for Q1, compared with Adjusted EPS1 loss of $0.06 for Q4.

Beth A. Garvey, Chair, President, and CEO, said, “During the first quarter, business results strengthened as we moved through the quarter. We are also seeing month-over-month improvements in the second quarter. We continue advancing the Company’s restructuring plan to streamline operations based on strategic initiatives we announced in late 2024. Performance improved in the Professional segment, with revenues sequentially up 5.6% in the first quarter compared to the fourth quarter. As we signaled last quarter, the Property Management revenues were seasonally soft; however, gross margins sequentially improved.”

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SUMMARY OF FINANCIAL RESULTS

(dollars in thousands) (unaudited)

									For the Thirteen Week Periods Ended
									March 30, 2025									March 31, 2024									December 29, 2024
Revenue:
			Property Management						$	20,883								$	24,547								$	24,306
			Professional						42,351									44,218									40,105
			Total						$	63,234								$	68,765								$	64,411
Gross profit / Gross profit percentage:
			Property Management						$	7,560		36.2		%				$	9,344		38.1		%				$	8,734		35.9		%
			Professional						13,361			31.5		%				14,094			31.9		%				12,732			31.7		%
			Total						$	20,921		33.1		%				$	23,438		34.1		%				$	21,466		33.3		%
Operating income									$	339								$	415								$	246
Net loss									$	(722)								$	(792)								$	(981)
Net loss per diluted share									$	(0.07)								$	(0.07)								$	(0.10)
Non-GAAP Financial Measures:
			Adjusted EBITDA1						$	2,372								$	2,919								$	1,387
			Adjusted EBITDA Margin (% of revenue)1						3.8		%							4.2		%							2.2		%
			Adjusted EPS1						$	0.05								$	0.10								$	(0.06)

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

Conference Call

BGSF will discuss its first quarter 2025 financial results during a conference call and webcast at 9:00 a.m. ET on May 8, 2025. Interested participants may dial 1-888-506-0062 (Toll Free) or 1-973-528-0011 (International). A replay of the call will be available until May 22, 2025. To access the replay, please dial 1-877-481-4010 (Toll Free), or 1-919-882-2331 (International) and enter access code 52350. 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@BGSF.com 214.872.2710 or 214.616.2207

Source: BGSF, Inc.

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CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

												March 30, 2025						December 29, 2024
												(unaudited)						(audited)
ASSETS
Current assets
			Cash and cash equivalents									$	2,050					$	353
			Accounts receivable (net of allowance for credit losses of $1,223 and $1,133, respectively)									42,553						40,194
			Prepaid expenses									2,447						2,485
			Other current assets									2,492						2,315
						Total current assets						49,542						45,347
Property and equipment, net												947						1,137
Other assets
			Deposits									2,087						2,092
			Software as a service, net									4,269						4,438
			Deferred income taxes, net									8,611						8,456
			Right-of-use asset - operating leases, net									4,613						4,973
			Intangible assets, net									23,040						24,517
			Goodwill									59,151						59,151
						Total other assets						101,771						103,627
			Total assets									$	152,260					$	150,111
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
			Accounts payable									$	1,605					$	80
			Accrued payroll and expenses									13,539						13,001
			Long-term debt, current portion (net of debt issuance costs of $77 and $24, respectively)									3,748						3,801
			Accrued interest									286						223
			Income taxes payable									250						212
			Contingent consideration, current portion									2,706						2,662
			Convertible note									4,368						4,368
			Lease liabilities, current portion									1,591						1,573
						Total current liabilities						28,093						25,920
Line of credit (net of debt issuance costs of $696 and $770, respectively)												7,304						5,625
Long-term debt, less current portion (net of debt issuance costs of $174 and $198, respectively)												31,595						32,527
Lease liabilities, less current portion												3,448						3,770
			Total liabilities									70,440						67,842

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 11,108,693 and 11,038,623 shares issued and outstanding, respectively, net of 3,930 shares of treasury stock, at cost, respectively.												54						53
Additional paid in capital												70,532						70,260
Retained earnings												11,234						11,956
			Total stockholders’ equity									81,820						82,269
			Total liabilities and stockholders’ equity									$	152,260					$	150,111

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UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share and dividend amounts)

 

For the Thirteen Week Periods Ended March 30, 2025 and March 31, 2024

 

									Thirteen Weeks Ended
									2025						2024
Revenues									$	63,234					$	68,765
Cost of services									42,313						45,327
			Gross profit						20,921						23,438
Selling, general, and administrative expenses									18,911						21,016
Depreciation and amortization									1,671						2,007
			Operating income						339						415
Interest expense, net									(1,146)						(1,235)
			Loss before income taxes						(807)						(820)
Income tax benefit									85						28
			Net loss						$	(722)					$	(792)
Net loss per share:
			Basic						$	(0.07)					$	(0.07)
			Diluted						$	(0.07)					$	(0.07)
Weighted-average shares outstanding:
			Basic						10,954						10,831
			Diluted						10,954						10,831
Cash dividends declared per common share									$	—					$	0.15

 

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BUSINESS SEGMENTS

(dollars in thousands)

									Thirteen Weeks Ended
									March 30, 2025																								March 31, 2024
									Property Mgmt						Profes-sional						Home Office						Total						Property Mgmt						Profes-sional						Home Office						Total
Contract field talent									$	20,279					$	41,285					$	—					$	61,564					$	24,060					$	42,778					$	—					$	66,838
Contingent placements									604						1,066						—						1,670						487						1,440						—						1,927
			Revenue						20,883						42,351						—						63,234						24,547						44,218						—						68,765
Cost of services									13,323						28,990						—						42,313						15,203						30,124						—						45,327
			Gross profit						7,560						13,361						—						20,921						9,344						14,094						—						23,438
Selling, general, and administrative expenses									5,064						9,908						3,939						18,911						5,908						10,753						4,355						21,016
Depreciation and amortization									20						1,342						309						1,671						32						1,669						306						2,007
			Operating income (loss)						2,476						2,111						(4,248)						339						3,404						1,672						(4,661)						415
Interest expense, net									—						—						(1,146)						(1,146)						—						—						(1,235)						(1,235)
Income tax benefit									—						—						85						85						—						—						28						28
			Net income (loss)						$	2,476					$	2,111					$	(5,309)					$	(722)					$	3,404					$	1,672					$	(5,868)					$	(792)

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UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

For the Thirteen Week Periods Ended March 30, 2025 and March 31, 2024

															2025						2024
Cash flows from operating activities
			Net loss												$	(722)					$	(792)
						Adjustments to reconcile net loss to net cash provided by activities:
						Depreciation									98						94
						Amortization									1,573						1,913
						Software as a service									176						180
						Loss on disposal of property and equipment									11						8
						Amortization of debt issuance costs									124						49
						Interest expense (income) on contingent consideration payable									44						(45)
						Provision for credit losses									260						625
						Share-based compensation									186						235
						Deferred income taxes, net of acquired deferred tax liability									(155)						(127)
						Net changes in operating assets and liabilities:
									Accounts receivable						(2,620)						3,733
									Prepaid expenses						38						462
									Other current assets						(192)						513
									Deposits						6						593
									Accounts payable						1,525						129
									Accrued payroll and expenses						537						(24)
									Accrued interest						63						(218)
									Income taxes receivable and payable						54						52
									Operating leases						58						1
						Net cash provided by operating activities									1,064						7,381
Cash flows from investing activities
			Capital expenditures												(23)						(494)
						Net cash used in investing activities									(23)						(494)

Cash flows from financing activities
			Net borrowings (payments) under line of credit												1,604						(4,874)
			Principal payments on long-term debt												(956)						—
			Payments of dividends												—						(1,639)
			Issuance of ESPP shares												87						112
			Issuance of shares under the 2013 Long-Term Incentive Plan												—						102
			Payments of debt issuance costs												(79)						(538)
						Net cash provided by (used in) financing activities									656						(6,837)
Net change in cash and cash equivalents															1,697						50
Cash and cash equivalents, beginning of period															353						—
Cash and cash equivalents, end of period															$	2,050					$	50
Supplemental cash flow information:
			Cash paid for interest, net												$	868					$	1,400
			Cash paid for taxes, net of refunds												$	14					$	40

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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 to Adjusted EBITDA

(dollars in thousands)

												Thirteen Weeks Ended												Thirteen Weeks Ended
																		March 30, 2025						March 31, 2024						December 29, 2024
Net loss																		$	(722)					$	(792)					$	(981)
Income tax benefit																		(85)						(28)						(176)
Interest expense, net																		1,146						1,235						1,403
Operating income																		339						415						246
Depreciation and amortization																		1,671						2,007						1,888
Gain on contingent consideration																		—						—						(1,452)
Share-based compensation																		186						235						201
Strategic alternatives review																		—						67						88
Cost restructuring plan																		—						—						230
Software as a service2																		176						180						179
Transaction fees																		—						15						7
Adjusted EBITDA																		$	2,372					$	2,919					$	1,387
Adjusted EBITDA Margin (% of revenue)																		3.8		%				4.2		%				2.2		%

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.

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Reconciliation of Net Loss EPS to Adjusted EPS

												Thirteen Weeks Ended												Thirteen Weeks Ended
																		March 30, 2025						March 31, 2024						December 29, 2024
Net loss per diluted share																		$	(0.07)					$	(0.07)					$	(0.10)
Acquisition amortization																		0.11						0.15						0.13
Gain on contingent consideration																		—						—						(0.13)
Strategic alternatives review																		—						0.01						0.01
Cost restructuring plan																		—						—						0.02
Software as a service2																		0.02						0.02						0.02
Income tax benefit adjustment																		(0.01)						(0.01)						(0.01)
Adjusted EPS																		$	0.05					$	0.10					$	(0.06)

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.