BGSF, Inc. (NYSE: BGSF), a leading national provider of
workforce solutions, today reported financial results for its first
quarter ended March 28, 2021.
The Company further announced that its Board of Directors has
declared a quarterly cash dividend of $0.10 per share of common
stock. The dividend is payable on May 24, 2021 to all shareholders
of record as of the close of business on May 17, 2021. This marks
the 26th consecutive quarterly dividend and based on yesterday’s
closing price of the Company’s common stock, the annualized yield
is approximately 2.9%.
Q1 2021 Highlights:
- Revenues were $67.7 million, down 8.6% from 2020
- Gross profit was $18.8 million, down 7.2% from 2020, while
gross margin increased 0.4% to 27.8% in 2021
- Selling, general and administrative expenses increased $0.5
million, or 3.2% over 2020, due to the addition of our acquisitions
in early 2020 and early 2021, offset by reductions in our legacy
divisions and lower transaction fees
- Net income was $0.7 million ($0.07 per diluted share), vs. net
income of $1.5 million ($0.14 per diluted share) in 2020
- Adjusted EPS1 was $0.16, down from $0.28 in 2020
- Adjusted EBITDA1 was $2.9 million (4.3% of revenues), vs. $5.3
million (7.1% of revenues) in 2020
- Availability of $25.1 million under the senior secured
revolving credit facility at March 28, 2021
- Days sales outstanding of 53 days vs. 58 days at the end of
2020
“While first quarter results were once again impacted by ongoing
effects of the pandemic, we are excited about the solid progress we
continue to make in realizing the benefits of our aggressive
business process investments to strengthen our digital platform,
drive operational efficiencies and execute cross-selling
opportunities. These initiatives were largely completed in the
fourth quarter, and we are beginning to see the fruits of our labor
to drive future profitability and growth,” said Beth A. Garvey,
President and CEO.
“Operationally, the Real Estate segment is showing signs of
recovery with a sequential improvement from Q4 2020 to Q1 2021
despite the extension of the moratorium on rent to June 2021 and
the severe winter storm experienced in Texas in February, which
disrupted productivity due to extended power outages. Our teams are
progressing with market relaunches in anticipation of a recovery
and pent-up demand. Our Professional segment performed well in our
IT Consulting practice with a solid performance in cybersecurity
offset by expected completion of projects and long-term contracts
initiated during mid-2020. With our February 2021 acquisition of
Momentum Solutionz largely integrated, active new client
introductions are taking place, which will drive cross-sell and new
managed service opportunities going forward. Light Industrial
reported an increase year-over-year from high demand while managing
through the severe industry-wide labor shortages, primarily due to
the latest federal government relief package. Overall, orders are
up across all divisions, and we are actively pursuing new and
innovative ways to attract and retain talent. Lastly, we are taking
an intentional focus on exploring select acquisition opportunities
to augment our organic growth strategy.”
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. EDT on May 6, 2021.
A replay of the call will be available one hour after the call ends
through May 13, 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 10155096.
The live webcast and archived replay are accessible at the investor
relations section of the Company's website at www.bgsf.com.
About BGSF
With its home office 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
March 28, 2021
March 29, 2020
(dollars in thousands)
Net income
$
712
$
1,499
Interest expense, net
377
456
Income tax expense
143
703
Depreciation and amortization
860
1,415
Share-based compensation
236
193
Transaction fees
136
541
IT roadmap
422
459
Adjusted EBITDA
$
2,886
$
5,266
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 28, 2021
March 29, 2020
Net income per diluted share
$
0.07
$
0.14
Acquisition amortization
0.06
0.11
Transaction fees
0.01
0.05
IT roadmap
0.04
0.04
Income tax expense adjustment
(0.02
)
(0.06
)
Adjusted EPS
$
0.16
$
0.28
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210506005152/en/
Hala Elsherbini or Steven Hooser Three Part Advisors ir@bgsf.com
214.442.0016
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