BGSF, Inc. (NYSE: BGSF), a leading national provider of
workforce solutions, today reported financial results for its
fourth quarter and fiscal year ended December 27, 2020.
Q4 2020 Highlights:
- Revenues were $69.7 million, down 3.6% from 2019
- Gross profit was $19.3 million, an increase of 0.6% from 2019,
while gross margin increased 1.1% to 27.7% in 2020
- Selling, general and administrative expenses increased $1.3
million, or 9.7% from 2019, due to the addition of our acquisitions
in late 2019 and early 2020, offset by reductions in our legacy
divisions
- Net income was $2.2 million, or $0.21 per diluted share, down
from $2.7 million, or $0.26 per diluted share in 2019
- Adjusted EPS1 was $0.28, down from $0.37 in 2019
- Adjusted EBITDA1 was $4.6 million (6.7% of quarterly revenues),
down from $6.3 million (8.7% of quarterly revenues) in 2019
- Availability of $28.9 million under the senior secured
revolving credit facility at December 27, 2020
- Days sales outstanding of 58 days vs. 53 days at the end of Q3
2020 and 55 days at the end of 2019
Year-End 2020 Highlights:
- Revenues were $277.9 million, down 5.6% from 2019
- Gross profit was $76.2 million, down 5.5% from 2019, while
gross margin remained flat at 27.4% in 2020
- Selling, general and administrative expenses increased $4.4
million, or 7.8% over 2019, due to the addition of our acquisitions
in late 2019 and early 2020, offset by reductions in our legacy
divisions
- Net income was $1.4 million, or $0.14 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 $13.2 million, or
$1.28 per diluted share in 2019
- Adjusted EPS1 was $1.34, down from $1.68 in 2019
- Adjusted EBITDA1 was $18.7 million (6.7% of annual revenues),
down from $26.6 million (9.0% of annual revenues) in 2019
Sequential Q4 vs. Q3:
- 2020 Q4 revenues decreased $1.8 million, or 2.5%, and gross
profit decreased $0.4 million or 2.0% vs. 2020 Q3
- 2019 Q4 revenues decreased $7.0 million, or 8.9%, and gross
profit decreased $3.0 million or 13.4% vs. 2019 Q3
“During a challenging year on several fronts, we leveraged our
strategic diversification across client partners, brand solutions
and markets to help stabilize the impact on our results. We also
accomplished several initiatives to strengthen our business
processes, drive operational efficiencies and align our teams to
optimize cross-selling opportunities. The recent internal
reorganizations are principally finished and should drive better
alignment and synergies across our brands. Additionally, we
benefited greatly from progress made against our IT roadmap to
elevate our digital infrastructure,” said Beth A. Garvey, President
and CEO. “Operationally, the Real Estate segment continues to show
weakness due to the extended relief on evictions; however, we are
well positioned to service what we believe is a growing pent up
demand. Our Professional segment showed solid progress early in the
quarter but experienced a slowdown due to an extended holiday break
and a large project completion. Lastly, the Light Industrial
segment continues to impress us with a strong finish to the year,
primarily driven by the large move to online shopping across the
country. Overall, we took an offensive posture during this
unprecedented year, and we have emerged stronger to support our
future growth and value creation.”
Conference Call
Interested participants may dial 833-316-0561 (U.S. callers),
412-317-5735 (international callers) or 866-605-3852 (Canada
callers) and ask for the BGSF call at 4:30 p.m. ET on March 11,
2021. A replay of the call will be available one hour after the
call ends through March 18, 2021. 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 10152379.
The live webcast and archived replay are accessible at the investor
relations section of the Company’s website at www.bgsf.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 and the 50th
largest IT staffing firm in the 2020 updates. 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.
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.
BGSF, Inc. 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 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 27, 2020
December 29, 2019
December 27, 2020
December 29, 2019
(dollars in thousands)
Net income
$
2,206
$
2,742
$
1,441
$
13,247
Interest expense, net
338
324
1,584
1,569
Income tax expense
773
1,111
513
4,305
Depreciation and amortization
830
1,188
4,960
4,820
Loss on extinguishment of debt
—
—
—
541
Contingent consideration adjustment
—
—
(76
)
—
Impairment losses
—
—
7,240
—
Share-based compensation
219
202
849
953
Transaction fees
9
340
615
434
IT roadmap
272
351
1,563
721
Adjusted EBITDA
$
4,647
$
6,258
$
18,689
$
26,590
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
Fifty-two Weeks Ended
December 27, 2020
December 29, 2019
December 27, 2020
December 29, 2019
Net income per diluted share
$
0.21
$
0.26
$
0.14
$
1.28
Acquisition amortization
0.06
0.09
0.37
0.36
Loss on extinguishment of debt
—
—
—
0.05
Gain on contingent consideration
—
—
(0.01
)
—
Impairment losses
—
—
0.70
—
Transaction fees
—
0.03
0.06
0.04
IT roadmap
0.03
0.03
0.15
0.07
Income tax (benefit) expense
adjustment
(0.02
)
(0.04
)
(0.07
)
(0.12
)
Adjusted EPS
$
0.28
$
0.37
$
1.34
$
1.68
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210311005154/en/
Hala Elsherbini or Steven Hooser Three Part Advisors
ir@bgstaffing.com 214.442.0016
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