BG Staffing, Inc. ( NYSE: BGSF), a growing national provider of
workforce solutions, today reported financial results for its
fourth quarter and fiscal year-ended December 29, 2019.
Quarter Four 2019 Results
2019
2018
Change
%Change
(amounts in thousands, except
per-share amounts)
Revenues
$
72,315
$
72,000
$
315
0.4
%
Gross profit
$
19,203
$
18,720
$
483
2.6
%
Gross profit percentage
26.6
%
26.0
%
0.6
%
2.3
%
Net income
$
2,742
$
4,853
$
(2,111
)
(43.5
)%
Net income per diluted share
$
0.26
$
0.47
$
(0.21
)
(44.7
)%
Weighted average diluted
shares
10,371
10,365
6
0.1
%
Adjusted EPS (1)
$
0.37
$
0.41
$
(0.04
)
(9.8
)%
Adjusted EBITDA (1)
$
6,258
$
6,416
$
(158
)
(2.5
)%
Adjusted EBITDA percentage
(2)
8.7
%
8.9
%
(0.2
)%
(2.2
)%
Year-Months Ended 2019
Results
2019
2018
Change
% Change
(amounts in thousands, except
per-share amounts)
Revenues
$
294,314
$
286,863
$
7,451
2.6
%
Gross profit
$
80,681
$
76,595
$
4,086
5.3
%
Gross profit percentage
27.4
%
26.7
%
0.7
%
2.6
%
Net income
$
13,247
$
17,550
$
(4,303
)
(24.5
)%
Net income per diluted share
$
1.28
$
1.79
$
(0.51
)
(28.5
)%
Weighted average diluted
shares
10,351
9,808
543
5.5
%
Adjusted EPS (1)
$
1.67
$
1.79
$
(0.12
)
(6.7
)%
Adjusted EBITDA (1)
$
26,590
$
27,106
$
(516
)
(1.9
)%
Adjusted EBITDA percentage
(2)
9.0
%
9.4
%
(0.4
)%
(4.3
)%
Beth A. Garvey, President and CEO, stated, “We are very pleased
with our financial results for 2019. We ended 2019 with year over
year organic growth in revenue and gross profit, while focusing on
developing best practices to measure our future success. We
invested in our support team both in HR and IT during the year
resulting in advancements in technology, benefits and culture,
which further enables our effort to provide first-in-class support
to our team members, field talent, and client partners.”
(1) Non-GAAP financial measure. See
reconciliation at end for details.
(2) Adjusted EBITDA as a percentage of
revenue.
Garvey added, “We look for 2020 to be driven in part by the
successful integration of two strategic acquisitions, L.J. Kushner
in December 2019, followed by EdgeRock Technology Partners in
February 2020, which both fit with our longer-term strategy of
providing higher-end, specialized consulting services. These
acquisitions, along with the strength of our existing brands,
should set the foundation for next year and beyond.”
Dan Hollenbach, Chief Financial Officer, stated, “Net income for
the fourth quarter 2019 was affected by transaction fees and IT
roadmap expenses $685,000 greater than 2018 and a $1.6 million gain
on contingent consideration recorded in 2018. Net income for fiscal
2019 was affected by transaction fees and IT roadmap expenses
$647,000 greater than 2018 and $3.8 million in gains on contingent
consideration recorded in 2018, as well as an effective tax rate of
18% in 2018 vs. 24.5% for 2019.”
Conference Call
The Participant Dial-In Number for the conference call is
1-631-891-4304. Participants should dial in to the call at least
five minutes before 1:30pm PT (4:30pm ET) on March 12, 2020. The
call can also be accessed "live" online at
http://public.viavid.com/index.php?id=137618. A replay of the
recorded call will be available for 90 days on the Company's
website
(https://investor.bgstaffing.com/events-and-presentations/events-calendar/event-details/2020/Q4-and-Year-End-2019-Results-Conference-Call/default.aspx).
You can also listen to a replay of the call by dialing
1-844-512-2921 (international participants dial 1-412-317-6671)
starting March 12, 2020, at 7:30pm ET through March 19, 2020 at
11:59 pm ET. Please use PIN Number 10008363.
About BGSF
Headquartered in Plano, Texas, BGSF provides workforce solutions
to a variety of industries through its various divisions in IT,
Cyber, Finance & Accounting, Creative, Real Estate (apartment
communities and commercial buildings), and Light Industrial. BGSF
has integrated several regional and national brands achieving
scalable growth. The Company was ranked by Staffing Industry
Analysts as the 64th largest U.S. staffing company in the 2019
update and the 45th largest IT staffing firm in 2018. 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
https://www.bgstaffing.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. The Company’s actual results could
differ materially from those indicated by the forward-looking
statements because of various 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 “believes,” “plans,” “expects,” “will,” “intends,”
“continue,” “outlook,” “progressing,” 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.
BG Staffing, Inc. Non-GAAP Financial
Measures
The financial results of BG Staffing, 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 a measurement of financial
performance under GAAP and should not be considered as an
alternative to net income, net income per diluted share, operating
income, or any other performance measure derived in accordance with
GAAP, or as an alternative to cash flow from operating activities
or measure 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 other non-capital information technology project expenses
(“IT roadmap”) and certain non-cash expenses such as share-based
compensation expense that management does not consider in assessing
our on-going operating performance.
Reconciliation of Net Income
to Adjusted EBITDA
Thirteen Weeks Ended
Fifty-two Weeks Ended
December 29,
2019
December 30,
2018
December 29,
2019
December 30,
2018
(dollars in thousands)
Net income
$
2,742
$
4,853
$
13,247
$
17,550
Interest expense, net
324
576
1,569
2,850
Income tax expense
1,111
1,127
4,305
3,860
Depreciation and amortization
1,188
1,243
4,820
5,044
Loss on extinguishment of
debt
—
—
541
—
Gain on contingent
consideration
—
(1,615
)
—
(3,775
)
Share-based compensation
202
196
953
1,069
Transaction fees
340
36
434
508
IT roadmap
351
—
721
—
Adjusted EBITDA
$
6,258
$
6,416
$
26,590
$
27,106
We define “Adjusted EPS” as diluted earnings per eliminating
amortization expense of intangible assets from acquisitions,
contingent consideration gains or losses, and certain specific
events, such as transaction fees and the IT roadmap, and certain
non- cash expenses, 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
Fifty-two Weeks Ended
December 29,
2019
December 30,
2018
December 29,
2019
December 30,
2018
Net income per diluted share
$
0.26
$
0.47
$
1.28
$
1.79
Acquisition amortization
0.09
0.09
0.36
0.41
Loss on extinguishment of
debt
—
—
0.05
—
Gain on contingent
consideration
—
(0.16
)
—
(0.38
)
Transaction fees
0.03
—
0.04
0.05
IT roadmap
0.03
—
0.07
—
Option cancellation agreement,
tax effect
—
—
—
(0.07
)
Income tax expense adjustment
(0.04
)
0.01
(0.13
)
(0.01
)
Adjusted EPS
$
0.37
$
0.41
$
1.67
$
1.79
Source: BG Staffing, Inc.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200312005225/en/
Terri MacInnis, VP of Investor Relations Bibicoff + MacInnis,
Inc. 818.379.8500 terri@bibimac.com
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