Strong Quarterly Revenues Up 22% and
Adjusted EBITDA Margin of 10.2%
Board Declares Cash Dividend of $0.15 Per
Share, 32nd Consecutive Quarterly Dividend
BGSF, Inc. (NYSE: BGSF), a leading
national provider of workforce solutions, today reported financial
results for its third quarter ended September 25, 2022.
The Company further announced that its Board of Directors has
declared a quarterly cash dividend of $0.15 per share of common
stock. The dividend is payable on November 21, 2022 to all
shareholders of record as of the close of business on November 14,
2022. This marks the 32nd consecutive quarterly dividend and based
on yesterday’s closing price of the Company’s common stock, the
annualized yield is approximately 4.8%.
Q3 2022 Highlights from Continuing Operations:
- Revenues were $78.5 million, an increase of 22.3% from
2021
- Gross profit was $28.0 million, up 27.0% from 2021, while gross
profit percent increased 140 basis points to 35.7% in 2022
- Selling, general and administrative expenses of $20.4 million,
improved 60 basis points as a percentage of revenue over 2021
- Net income from continuing operations was $4.7 million, or
$0.44 per diluted share, vs. net income from continuing operations
of $3.7 million, or $0.36 per diluted share in 2021, which included
a net gain on contingent consideration of $1.0 million
- Adjusted EBITDA1 from continuing operations was $8.0 million
(10.2% of revenues), vs. $5.4 million (8.4% of revenues) in
2021
- Adjusted EPS1 from continuing operations was $0.48 in 2022, up
from $0.31 in 2021
Nine Month 2022 Highlights from Continuing
Operations:
- Revenues were $221.1 million, an increase of 29.1% from
2021
- Gross profit was $76.5 million, up 33.0% from 2021, while gross
profit percent increased 100 basis points to 34.6% in 2022
- Selling, general and administrative expenses of $60.0 million
improved 130 basis points as a percentage of revenue over 2021
- Net income from continuing operations was $9.8 million, or
$0.93 per diluted share, vs. net income from continuing operations
of $6.0 million, or $0.59 per diluted share in 2021, which includes
a net gain on consideration of $2.0 million
- Adjusted EBITDA1 from continuing operations was $17.4 million
(7.9% of revenues), vs. $9.9 million (5.8% of revenues) in
2021
- Adjusted EPS1 from continuing operations was $1.05 in 2022, up
from $0.55 in 2021
1Non-GAAP financial measure. See reconciliation below for
details.
Beth A. Garvey, Chair, President and CEO, said, “I am
pleased to report that momentum from the first half of 2022
continued into our fiscal third quarter, which resulted in record
high revenue and gross profit from continuing operations. We
believe our continued strong performance is supported by BGSF’s
unique business model that empowers people and creates long-term
relationships, both with clients and our workforce. We are
strategically focused on solving business challenges for our
clients, while building a higher margin business, growing market
share and gaining further traction as we close out this year and
move into ‘23.
"Our continued strong operating results support the Board’s
declaration of a quarterly cash dividend of $0.15 per share which
is our 32nd consecutive quarterly cash dividend.” Garvey
continues.
“We are enthusiastic about planned growth initiatives and
prospects as we approach 2023. We see strong tailwinds in both
segments as we work to build leadership positions in both the
Professional and Real Estate segments. Our teams are energized
around our vision and strategic direction, and this alignment has
contributed to more creative solutions for our clients. The
business will continue to be driven by strength in our people,
technology, reputation, business model, and client partnerships as
we continue our journey as a best-in-class workforce solutions
company,” Garvey concluded.
Conference Call
BGSF call at 9:00 a.m. ET on November 3, 2022. Interested
participants may dial 844-200-6205 (U.S. callers) or 929-526-1599
(all other locations) and provide access code 250313. A replay of
the call will be available until November 10, 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 840249. The live webcast and archived replay are
accessible at the investor relations section of the Company’s
website at www.bgsf.com.
About BGSF
BGSF provides workforce solutions to a variety of industries
through its various divisions in IT, Cyber, Finance &
Accounting, and Real Estate (apartment communities and commercial
buildings). BGSF has integrated several regional and national
brands achieving scalable growth. The Company was ranked by
Staffing Industry Analysts as the 94th largest U.S. staffing
company and the 49th largest IT staffing firm in 2022. 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 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,” "prospects,"
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.
GAAP Financial Measures
The following tables have been derived
from our unaudited consolidated financial statements and summarize
key components of our statements of operations for the periods
indicated, as well as a reconciliation of revenue and operating
income from continuing operations by reportable segment to
consolidated results for the periods indicated.
Results of Operations
Thirteen Weeks Ended
Thirty-nine Weeks Ended
September 25, 2022
September 26, 2021
September 25, 2022
September 26, 2021
(dollars in thousands)
Revenues
$
78,508
$
64,185
$
221,139
$
171,333
Cost of services
50,508
42,138
144,649
113,824
Gross profit
28,000
22,047
76,490
57,509
Selling, general and administrative
expenses
20,386
17,054
60,001
48,626
Gain on contingent consideration
—
(1,208
)
—
(2,403
)
Depreciation and amortization
1,146
1,169
2,966
2,871
Operating income
6,468
5,032
13,523
8,415
Interest expense, net
(376
)
(432
)
(718
)
(1,026
)
Income from continuing operations before
income taxes
6,092
4,600
12,805
7,389
Income tax expense from continuing
operations
(1,440
)
(893
)
(2,961
)
(1,344
)
Income from continuing operations
4,652
3,707
9,844
6,045
Income from discontinued operations:
Income
—
1,164
1,235
3,331
Gain on sale
—
—
17,266
—
Income tax expense
—
(227
)
(4,716
)
(578
)
Net income
$
4,652
$
4,644
$
23,629
$
8,798
Net income per share - diluted
Net income from continuing operations
$
0.44
$
0.36
$
0.93
$
0.59
Net income from discontinued
operations:
Income
—
0.11
0.12
0.32
Gain on sale
—
—
1.65
—
Income tax expense
—
(0.02
)
(0.45
)
(0.06
)
Net income per share - diluted
$
0.44
$
0.45
$
2.25
$
0.85
Business Segments
Thirteen Weeks Ended
Thirty-nine Weeks Ended
September 25, 2022
September 26, 2021
September 25, 2022
September 26, 2021
(dollars in thousands)
Revenue:
Real Estate
$
33,241
42
%
$
24,789
39
%
$
89,137
40
%
$
64,614
38
%
Professional
45,267
58
%
39,396
61
%
132,002
60
%
106,719
62
%
Total
$
78,508
100
%
$
64,185
100
%
$
221,139
100
%
$
171,333
100
%
Gross profit:
Real Estate
$
13,548
48
%
$
9,515
43
%
$
35,093
46
%
$
24,235
42
%
Professional
14,452
52
%
12,532
57
%
41,397
54
%
33,274
58
%
Total
$
28,000
100
%
$
22,047
100
%
$
76,490
100
%
$
57,509
100
%
Selling2:
Real Estate
$
7,301
$
5,057
$
19,874
$
14,222
Professional
8,601
8,385
26,948
23,602
Total
$
15,902
$
13,442
$
46,822
$
37,824
Operating income (expense):
Real Estate
$
6,148
$
4,370
$
15,000
$
9,796
Professional
5,172
3,399
12,458
7,477
Home office - Selling, general and
administrative
(4,852
)
(3,945
)
(13,935
)
(11,261
)
Home - gain on contingent
consideration
—
1,208
—
2,403
Total
$
6,468
$
5,032
$
13,523
$
8,415
2Selling is a component of Selling,
general and administrative on the Unaudited Consolidated Statement
of Operations and Comprehensive Income.
The following tables have been derived from our unaudited
consolidated financial statements and summarize key components of
our balance sheet and statements of cash flows for the periods
indicated.
Condensed Balance
Sheets
September 25, 2022
December 26, 2021
Assets
(dollars in thousands)
Current assets
$
70,813
$
52,972
Property and equipment, net
1,599
4,331
Intangible assets, net
34,142
33,585
Goodwill
29,142
29,142
Other
13,568
13,853
Assets of discontinued operations
—
14,411
Total assets
$
149,264
$
148,294
Liabilities and stockholders'
equity
Long-term debt, current portion
$
—
$
3,563
Other current
23,786
23,559
Line of credit
27,004
12,588
Long-term debt, less current portion
—
23,300
Other long-term
1,580
7,240
Liabilities of discontinued operations
—
1,452
Total liabilities
52,370
71,702
Total stockholders' equity
96,894
76,592
Total liabilities and stockholders'
equity
$
149,264
$
148,294
Working Capital
September 25, 2022
December 26, 2021
(dollars in thousands)
Working capital from continuing
operations
$
47,027
$
25,850
Working capital ratio
2.98
1.95
Condensed Statements of Cash
Flows
Thirty-nine Weeks Ended
September 25, 2022
September 26, 2021
(dollars in thousands)
Net cash provided by (used in) continuing
operations:
Operating activities
$
(5,557
)
$
(2,720
)
Investing activities
25,633
(5,307
)
Financing activities
(17,888
)
2,986
Net change in cash and cash equivalents
discontinued operations
(2,300
)
5,041
Net change in cash and cash
equivalents
$
(112
)
$
—
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 measurements of financial
performance under GAAP and should not be considered as alternatives
to net income, net income per diluted share, operating income, or
any other performance measure derived in accordance with GAAP, or
as alternatives to cash flow from operating activities or measures
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 certain non-cash expenses such as contingent consideration
gains and share-based compensation expense, as well as certain
specific events that management does not consider in assessing our
on-going operating performance.
Reconciliation of Income from Continuing
Operations to Adjusted EBITDA
Thirteen Weeks Ended
Thirty-nine Weeks Ended
Trailing Twelve Months Ended
September 25, 2022
September 26, 2021
September 25, 2022
September 26, 2021
September 25, 2022
(dollars in thousands)
Income from continuing operations
$
4,652
$
3,707
$
9,844
$
6,045
$
14,165
Income tax expense from continuing
operations
1,440
893
2,961
1,344
4,349
Interest expense, net
376
432
718
1,026
1,125
Operating income
6,468
5,032
13,523
8,415
19,639
CARES Act credit
—
—
—
—
(2,084
)
Depreciation and amortization
1,146
1,169
2,966
2,871
3,792
Gain on contingent consideration
—
(1,208
)
—
(2,403
)
—
Share-based compensation
411
406
865
842
1,082
Transaction fees
6
1
6
155
21
Adjusted EBITDA from continuing
operations
8,031
5,400
17,360
9,880
22,450
Adjusted EBITDA Margin (% of revenue)
10.2
%
8.4
%
7.9
%
5.8
%
7.8
%
Income from discontinued operations
—
1,164
1,235
3,331
2,475
Income adjustments to discontinued
operations
—
39
(249
)
114
(220
)
Adjusted EBITDA from discontinued
operations, net of gain on sale, net of tax
—
1,203
986
3,445
2,255
Adjusted EBITDA, net of gain
$
8,031
$
6,603
$
18,346
$
13,325
$
24,705
We define “Adjusted EPS” as diluted earnings per share
eliminating amortization expense of intangible assets from
acquisitions, transaction fees, and certain non-cash expenses such
as contingent consideration gains, as well as certain specific
events 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 25, 2022
September 26, 2021
September 25, 2022
September 26, 2021
Net income from continuing operations per
diluted share, excluding gain on sale of discontinued
operations
$
0.44
$
0.36
$
0.93
$
0.59
Acquisition amortization
0.05
0.06
0.16
0.17
Gain on contingent consideration
—
(0.12
)
—
(0.23
)
Transaction fees
—
—
—
0.01
Income tax expense adjustment
(0.01
)
0.01
(0.04
)
0.01
Adjusted EPS from continuing
operations
0.48
0.31
1.05
0.55
Adjusted EPS from discontinued
operations
—
0.09
0.09
0.26
Adjusted EPS
$
0.48
$
0.40
$
1.14
$
0.81
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221102006147/en/
Steven Hooser or Sandy Martin Three Part Advisors
ir@bgstaffing.com 214.872.2710 or 214.616.2207
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