Temporarily Reduces Dividend
BG Staffing, Inc. (NYSE: BGSF), a growing national provider of
workforce solutions, today announced that its Board of Directors
has declared a quarterly cash dividend of $0.05 per share of common
stock and reported financial results for its first quarter ended
March 29, 2020.
The dividend is payable on May 27, 2020 to all shareholders of
record as of the close of business on May 20, 2020. This is the
22nd consecutive quarterly dividend BGSF has paid to holders of
common stock. Based on yesterday’s closing price of the Company’s
common stock, the annualized yield is approximately 2.0%.
First Quarter Ended 2020 Results
2020
2019
Change
% Change
(amounts in thousands, except
per-share amounts)
Revenues
$
74,067
$
68,776
$
5,291
7.7
%
Gross profit
$
20,275
$
18,439
$
1,836
10.0
%
Gross profit percentage
27.4
%
26.8
%
0.6
%
2.2
%
Net income
$
1,499
$
2,496
$
(997
)
(39.9
)%
Net income per diluted share
$
0.14
$
0.24
$
(0.10
)
(41.7
)%
Weighted average diluted shares
10,383
10,404
(21
)
(0.2
)%
Adjusted EPS (1)
$
0.28
$
0.31
$
(0.03
)
(9.7
)%
Adjusted EBITDA (1)
$
5,266
$
5,159
$
107
2.1
%
Adjusted EBITDA percentage (2)
7.1
%
7.5
%
(0.4
)%
(5.3
)%
Beth A. Garvey, President and CEO, stated, “Our results through
the first half of March were in line with expectations. We began
seeing an impact from COVID-19 mid-March and reacted swiftly with
our top priority of minimizing risk to our team members and
lowering the probability of spread of the virus to our families and
communities. We immediately activated a COVID-19 Task Force Team
who continue to act quickly and efficiently with communication to
the team on the changes and our responses in the business.
“We were able to leverage our technology platforms, many of
which were part of our recent tech upgrades over the past 12
months, to successfully transition (where possible) to
work-from-home or working onsite within the new guidelines for
social distancing and safety protocols issued by the CDC. In
addition, our team has worked in strong partnership with our client
partners to establish protocols for remote work, as well as safety
guidelines for the those that have been deemed essential.
“I am grateful and proud of our team, as our response has
definitely been a team effort as we have pivoted to operate in the
evolving new normal. We remain vigilant and responsive as we
navigate through the challenges of these unprecedented times,”
Garvey concluded.
Dan Hollenbach, Chief Financial Officer, said, “We have made
significant efforts to adjust our operations in response to
COVID-19 in all of the segment and home office operations. The
extent of the impact from the outbreak on our operational and
financial performance moving forward will depend on certain
developments, including the duration and spread of the outbreak,
its impact on the Company's client partners and the range of
governmental and community reactions to the pandemic (including
phased reopenings). These events are uncertain and cannot be fully
predicted at this time.
“Net income for the first quarter 2020 was affected by
transaction fees and IT roadmap expenses (which were $979,000
greater than 2019), as well as an effective tax rate of 31.9% in
2020 vs. 22.8% for 2019,” Hollenbach continued.
“The Company has also recently taken several steps to strengthen
its liquidity. We borrowed $4 million on our term loan to reduce
our revolver balance, elected to defer the employer portion of FICA
for the remainder of the year, and our Board of Directors
temporarily reduced our regular quarterly cash dividend to $0.05
from $0.30 per share. While returning capital to shareholders
remains an important part of our capital allocation framework,
maintaining a strong balance sheet is primary,” concluded
Hollenbach.
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 May 7, 2020. The call
can also be accessed "live" online at
http://public.viavid.com/index.php?id=138749. 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/default.aspx).
A replay of the call is available by dialing 1-844-512-2921
(international participants dial 1-412-317-6671) starting May 7,
2020, at 7:30pm ET through May 14, 2020 at 11:59 pm ET. Please use
PIN Number 10009011.
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
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. Forward-looking statements may
include, but are not limited to, statements regarding our future
financial performance (including any general or specific numerical
guidance with respect thereto), the expectations and objectives of
our board or management, the impact of the COVID-19 pandemic,
including but not limited to the impact of the COVID-19 pandemic on
our business, prospects, results of operations, or financial
condition or on our vendors or client partners, and our intention
or ability to pay future cash dividends. 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,” “estimates,” “should,” “would,” “may,” “might,”
“forward,” “will,” “intends,” “continue,” “outlook,” “temporarily,”
“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.
Source: BG Staffing, Inc
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.
BG Staffing
Non-GAAP Financial Measures
Reconciliation of Net Income
to Adjusted EBITDA
Thirteen Weeks Ended
March 29, 2020
March 31, 2019
(dollars in thousands)
Net income
$
1,499
$
2,496
Interest expense, net
456
353
Income tax expense
703
737
Depreciation and amortization
1,415
1,232
Share-based compensation
193
320
Transaction fees
541
21
IT roadmap
459
—
Adjusted EBITDA
$
5,266
$
5,159
We define “Adjusted EPS” as diluted earnings per share
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
March 29, 2020
March 31, 2019
Net income per diluted share
$
0.14
$
0.24
Acquisition amortization
0.11
0.09
Transaction fees
0.05
—
IT roadmap
0.04
—
Income tax expense adjustment
(0.06
)
(0.02
)
Adjusted EPS
$
0.28
$
0.31
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200507005441/en/
Terri MacInnis, VP of Investor Relations Bibicoff + MacInnis,
Inc. 818.379.8500 terri@bibimac.com
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