Declares 24th Consecutive Quarterly
Dividend
BG Staffing, Inc. (NYSE: BGSF), a leading national provider of
workforce solutions, today announced that its Board of Directors
declared a quarterly cash dividend of $0.10 per share of common
stock and the Company reported financial results for its third
quarter and nine months ended September 27, 2020.
The dividend is payable on November 23, 2020 to all shareholders
of record as of the close of business on November 16, 2020. This
marks the 24th consecutive quarterly dividend and based on
yesterday’s closing price of the Company’s common stock, the
annualized yield is approximately 4.8%.
Third Quarter 2020 Highlights:
- Revenues were $71.5 million, down 9.9% from 2019
- Gross profit was $19.7 million, down 11.1% from 2019, while
gross margin decreased 0.3% to 27.6% in 2020
- Selling expenses remained flat with 2019, due to the addition
of acquisitions in late 2019 and early 2020, offset by reductions
in our legacy division.
- Net income was $2.6 million ($0.25 per diluted share), down
from $4.2 million ($0.41 per diluted share) in 2019.
- Adjusted EPS1 was $0.35, down from $0.54 in 2019
- Adjusted EBITDA1 was $5.5 million (7.7% of revenues), down from
$8.3 million (10.5% of revenues) in 2019
- Availability of $26.9 million under the senior secured
revolving credit facility at September 27, 2020
- Days Sales Outstanding of 53 days vs. 51 days at the end of Q2
2020
Nine Month 2020 Highlights:
- Revenues were $208.2 million, down 6.2% from 2019
- Gross profit was $56.9 million, down 7.5% from 2019, while
gross margin decreased 0.4% to 27.3% in 2020
- Selling expenses increased 4.6% over 2019, due to the addition
of acquisitions in late 2019 and early 2020, offset by reductions
in our legacy divisions
- Net loss was $0.8 million ($(0.07) per diluted share), which
included the impact of an impairment loss on intangible assets of
$5.4 million, net of tax, down from net income of $10.5 million
($1.01 per diluted share) in 2019
- Adjusted EPS1 was $0.82, down from $1.29 in 2019
- Adjusted EBITDA1 was $14.0 million (6.7% of revenues), down
from $20.3 million (9.2% of revenues) in 2019
1Non-GAAP financial measure. See reconciliation at end for
details.
“Although the Covid-19 pandemic continues to impact our lives
and our operating environment, our diversification across client
partners, brand solutions and markets helped to mitigate the impact
on our results. Strategically, we are spending more time working on
the business by reinvesting in our people and technologies while
managing expenses and paying down debt to strengthen our position
moving forward,” said Beth A. Garvey, President and CEO. “As we
evaluate the rapidly changing new normal, we launched internal
reorganizations, primarily in Real Estate, to equip our highly
talented professionals with better processes, training, tracking
and improved audit policies designed to ultimately drive sales
growth and continued first class client service. We further
strategically integrated our Professional segment post recent
acquisitions, aligning the teams in verticals to allow for more
synergies between our recognized brands. The overall industry
outlook remains positive for each of our segments, and we believe
we remain well capitalized and well positioned to take advantage of
opportunities for sustained long-term growth.”
Dan Hollenbach, Chief Financial Officer, added, “While third
quarter consolidated results declined as the Real Estate segment
continues to be impacted by Covid-19 related macroeconomic
uncertainty, our Light Industrial segment performed better than
expected and our Professional segment saw a resurgence in activity.
Additionally, we continue to prudently control operating expenses
while prioritizing our IT Roadmap toward business process
improvements. At the same time, we endeavored to fortify our
balance sheet and liquidity position through cash generation and
reducing our debt during the quarter, and we declared our 24th
consecutive quarterly dividend.”
Conference Call
BG Staffing will hold its fiscal 2020 third quarter investor
conference call today at 4:30 p.m. EST. Interested participants may
dial 877-317-6789 (U.S. callers), 412-317-6789 (international
callers) or 866-605-3852 (Canada callers) and ask for the BG
Staffing call. A replay of the call will be available one hour
after the call ends through November 12, 2020. To access the
replay, please dial 877-344-7529 (U.S. callers), 412-317-0088
(international callers), or 855-669-9658 (Canada callers) and
reference PIN Number 10148424. The live webcast and archived replay
are accessible at the investor relations section of the Company's
website at www.bgstaffing.com.
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 70th largest U.S. staffing company in the 2020
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.
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 (Loss)
Income to Adjusted EBITDA
Thirteen Weeks Ended
Thirty-nine Weeks Ended
September 27, 2020
September 29, 2019
September 27, 2020
September 29, 2019
(dollars in thousands)
Net (loss) income
$
2,566
$
4,207
$
(765)
$
10,505
Interest expense, net
360
395
1,245
1,245
Income tax (benefit) expense
723
1,334
(260)
3,194
Depreciation and amortization
1,271
1,197
4,130
3,633
Loss on extinguishment of debt
—
541
—
541
Contingent consideration adjustment
(76)
—
(76)
—
Impairment losses
—
—
7,240
—
Share-based compensation
245
244
631
751
Transaction fees
15
37
605
94
IT roadmap
401
341
1,292
369
Adjusted EBITDA
$
5,505
$
8,296
$
14,042
$
20,332
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
Thirty-nine Weeks Ended
September 27, 2020
September 29, 2019
September 27, 2020
September 29, 2019
Net (loss) income per diluted share
$
0.25
$
0.41
$
(0.07)
$
1.01
Acquisition amortization
0.10
0.09
0.31
0.27
Loss on extinguishment of debt
—
0.05
—
0.05
Gain on contingent consideration
(0.01)
—
(0.01)
—
Impairment losses
—
—
0.70
—
Transaction fees
—
—
0.06
0.01
IT roadmap
0.04
0.03
0.13
0.04
Income tax (benefit) expense
adjustment
(0.03)
(0.04)
(0.30)
(0.09)
Adjusted EPS
$
0.35
$
0.54
$
0.82
$
1.29
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201105005216/en/
Hala Elsherbini or Steven Hooser Three Part Advisors
ir@bgstaffing.com 214.442.0016
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