BGSF, Inc. (NYSE: BGSF), a leading
national provider of workforce solutions, today reported financial
results for its fourth quarter and fiscal year ended December 26,
2021.
Net income for the fourth quarter 2021 was $5.3 million, or
$0.50 per diluted share, vs. $2.2 million, or $0.21 per diluted
share in 2020. Adjusted EPS1 was $0.38 for the fourth quarter 2021,
which is up from $0.28 in 2020.
Net income for the year-ended 2021 was $14.1 million, or $1.35
per diluted share, vs. a net income of $1.4 million, or 0.14 per
diluted share in 2020. Adjusted EPS1 was $1.33 for the year-ended
2021, up from $1.08 in 2020.
On February 28, 2022, BGSF, Inc. signed an agreement to sell
substantially all our Light Industrial segment (“InStaff”) assets
to Jobandtalent (“J&T”), through their wholly-owned subsidiary,
Sentech Engineering Services, Inc. The Company anticipates that the
transaction will close during the first fiscal quarter of 2022, the
operations of which are reported as discontinued operations in the
consolidated financial statements in the Annual Report on Form
10-K.
Q4 2021 Highlights from Continuing Operations:
- Revenues were $67.7 million, a growth of 37.8% from 2020
- Gross profit was $23.4 million, up 43.6% from 2020, while gross
margin increased 1.4% to 34.6% in 2021
- Selling, general and administrative expenses increased $2.8
million, or 20.2% from 2020, primarily due to additional
compensation generated from increased overall gross profit
- Net income was $4.3 million, or $0.41 per diluted share, vs.
$1.1 million, or $0.10 per diluted share in 2020.
- Adjusted EPS1 was $0.29, up from $0.17 in 2020.
- Adjusted EBITDA1 was $5.5 million (8.1% of quarterly revenues),
vs. $3.1 million (6.3% of quarterly revenues) in 2020
Year-End 2021 Highlights from Continuing Operations:
- Revenues were $239 million, a growth of 15.4% from 2020
- Gross profit was $80.9 million, up 22.6% from 2020, while gross
margin increased 2.0% to 33.9% in 2021
- Selling, general and administrative expenses increased $9.9
million, or 17.9% over 2020, primarily due to additional
compensation generated from increased overall gross profit
- Net income was $10.5 million, or $1.00 per diluted share, vs. a
net loss of $2.1 million, or negative $0.20 per diluted share in
2020
- Adjusted EPS1 was $0.98, up from $0.74 in 2020
- Adjusted EBITDA1 was $16.7 million (7.0% of annual revenues),
vs. $13.8 million (6.6% of annual revenues) in 2020
1Non-GAAP financial measure. See reconciliation below for
details.
“We are pleased with our fourth quarter results, which reflect a
strong finish to the year. Our ability to adeptly address industry
and macro headwinds while executing internal realignment and
restructuring initiatives, enabled us to report progressive
improvement throughout 2021,” said Beth A. Garvey, President and
CEO.
“Both the Real Estate and Professional segments made great
strides back to pre-pandemic levels. During the fourth quarter Real
Estate reported the highest revenue and gross profit of 2021,
benefitting from pent-up demand, successful market relaunches and
much improved recruiting efforts. The Professional segment
delivered significant top and bottom line gains led by our IT
consulting brands through key customer wins and collaborative
cross-selling success across our groups.”
“Overall, we closed 2021 in a position of strength and entered
2022 on a high note with the sale of our InStaff segment. This
transaction allows us to reduce debt, deploy additional capital
into higher-end IT consulting solutions with high-margin managed
services and drive continued geographic expansion in Real Estate.
Additionally, we employ a balanced capital allocation strategy to
enhance shareholder return, and we are pleased the Board of
Directors approved and increased our 29th consecutive quarterly
dividend payment to $0.15 per share. Looking ahead, we are
enthusiastic about our near and long-term growth prospects as we
capitalize on our enhanced IT infrastructure, momentum in our
business segments and strong market position.”
Conference Call
BGSF call at 9:00 a.m. ET on March 10, 2022. Interested
participants may dial 844-200-6205 (U.S. callers) or 929-526-1599
(all other locations) and provide access code 954101. A replay of
the call will be available one hour after the call ends through
March 17, 2022. To access the replay, please dial 929-458-6194
(U.S. Callers), 866-813-9403 (US Toll Free callers), or +44
204-525-0658 (all other locations) and enter access code 696451.
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 79th largest U.S. staffing
company and the 48th largest IT staffing firm in the 2021. 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 and the expectations and objectives of our
board or management. The Company’s actual results could differ
materially from those indicated by the forward-looking statements
because of the failure to satisfy all of the conditions to the
closing of the proposed InStaff transaction described above, the
risk that the proposed transaction will not be consummated within
the expected time period or at all, the impact of the proposed
transaction on the Company’s business, and the various other 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 “allows,”
“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 impairment
losses, the gain on contingent consideration, and 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 26, 2021
December 27, 2020
December 26, 2021
December 27, 2020
(dollars in thousands)
Income (loss) from continuing
operations
$
4,321
$
1,081
$
10,458
$
(2,072
)
Income tax expense (benefit) from
continuing operations
1,388
372
2,640
(741
)
Interest expense, net
406
338
1,433
1,584
CARES Act credit
(2,084
)
—
(2,084
)
—
Depreciation and amortization
827
806
3,698
4,861
Contingent consideration adjustment
—
—
(2,403
)
(76
)
Impairment losses
—
—
—
7,240
Share-based compensation
217
205
1,058
786
Transaction fees
15
9
170
615
IT roadmap
383
272
1,689
1,563
Adjusted EBITDA from continuing
operations
5,473
3,083
16,659
13,760
Adjusted EBITDA from discontinued
operations
1,270
1,565
4,715
4,930
Adjusted EBITDA
$
6,743
$
4,648
$
21,374
$
18,690
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 26, 2021
December 27, 2020
December 26, 2021
December 27, 2020
Net income (loss) from continuing
operations per diluted share
$
0.41
$
0.10
$
1.00
$
(0.20
)
CARES Act credit
(0.20
)
—
(0.20
)
—
Acquisition amortization
0.06
0.06
0.23
0.37
Loss on extinguishment of debt
—
—
—
—
Gain on contingent consideration
—
—
(0.23
)
(0.01
)
Impairment losses
—
—
—
0.70
Transaction fees
—
—
0.02
0.06
IT roadmap
0.04
0.03
0.16
0.15
Income tax expense adjustment
(0.02
)
(0.02
)
—
(0.33
)
Adjusted EPS from continuing
operations
0.29
0.17
0.98
0.74
Adjusted EPS from discontinued
operations
0.09
0.11
0.35
0.34
Adjusted EPS
$
0.38
$
0.28
$
1.33
$
1.08
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220309006040/en/
Hala Elsherbini or Steven Hooser Three Part Advisors
ir@bgstaffing.com 214.442.0016
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