Record Full Year Revenues of $298 million,
Organic Revenue Growth of 24%
Net Income From Continuing Operations was
$11.3 million
Full Year Adjusted EBITDA $22 million, up
45%
BGSF, Inc. (NYSE: BGSF), a leading
national provider of consulting, managed services, and workforce
solutions, today reported financial results for its fiscal year and
fourth fiscal quarter ended January 1, 2023.
Beth A. Garvey, Chair, President and CEO, said, “Fiscal 2022 was
a transformational year for our Company. We are very pleased with
the results and believe that our stated goals of fully aligning
BGSF’s core strategy around building higher margin businesses in
consulting, managed services and in workforce solutions
demonstrated significant progress in 2022. We still have much to
do; however, I want to acknowledge and thank our BGSF teams for
their hard work and dedication during a great year.”
Q4 2022 Highlights from Continuing Operations2:
- Revenues were $77.3 million, up 14.2% from 2021, including
organic growth of 12.0%.
- Gross profit was $27.1 million, up 15.5% from 2021, including
organic growth of 12.1%. Gross profit percent increased 40 basis
points to 35.0% in 2022.
- Net income from continuing operations was $1.4 million, or
$0.14 per diluted share, vs. net income from continuing operations
of $4.3 million, or $0.41 per diluted share in 2021, which included
a CARES Act credit with an impact on net income of $1.6 million, or
$0.15 per diluted share.
- Adjusted EPS1 from continuing operations was $0.19 for the
fourth fiscal quarter of 2022 compared to $0.30 per share in
2021.
- Adjusted EBITDA1 from continuing operations was $4.3 million
(5.6% of revenues), vs. $5.1 million (7.5% of revenues) in
2021.
Full Year 2022 Highlights from Continuing
Operations2:
- Revenues were $298.4 million, up 24.8% from 2021, including
organic growth of 24.2%.
- Gross profit was $103.5 million, up 27.9% from 2021, including
organic growth of 26.9%. Gross profit margins increased 80 basis
points to 34.7% in 2022.
- Net income from continuing operations was $11.3 million, or
$1.07 per diluted share, vs. net income from continuing operations
of $10.5 million, or $1.00 per diluted share in 2021, net income
was impacted by a CARES Act credit of $1.7 million, or $0.16 per
diluted share, and a gain on contingent consideration of $1.9
million, or 0.18 per diluted share.
- Adjusted EPS1 from continuing operations was $1.26 in 2022, up
from $0.86, a 46.5% increase from 2021.
- Adjusted EBITDA1 from continuing operations was $21.7 million
(7.3% of revenues), vs. $15.0 million (6.3% of revenues) in 2021,
an increase of 45% year over year.
1Non-GAAP financial measure. See
reconciliation below for details.
22022 includes three weeks of operation
results from the Horn Solutions acquisition
The fiscal year financial results are for the 53 weeks ended
January 1, 2023, and the 52 weeks ended December 26, 2021; the
fourth fiscal quarter financial results are for the 14 weeks ended
January 1, 2023, and the 13 weeks ended December 26, 2021. We
believe that the fourth fiscal quarter and year-to-date 2022
results were not materially impacted by the additional week.
Conference Call
BGSF will discuss its fourth fiscal quarter and full year 2022
financial results during a conference call and webcast at 9:00 a.m.
ET on March 9, 2023. Interested participants may dial 844-200-6205
(U.S. callers) or 929-526-1599 (all other locations) and provide
access code 986816. A replay of the call will be available until
March 16, 2023. 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 193636.
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 consulting, managed services, and workforce
solutions to a variety of industries through its various divisions
in IT, Cyber, Finance & Accounting, Managed Services, 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
Fiscal Quarter Ended
Fiscal Year Ended
January 1, 2023
December 26, 2021
January 1, 2023
December 26, 2021
(dollars in thousands)
Revenues
$
77,283
$
67,694
$
298,422
$
239,027
Cost of services
50,226
44,262
194,874
158,086
Gross profit
27,057
23,432
103,548
80,941
Selling, general and administrative
expenses
23,210
16,490
83,211
65,115
Gain on contingent consideration
—
—
—
(2,403
)
Depreciation and amortization
1,087
827
4,054
3,698
Operating income
2,760
6,115
16,283
14,531
Interest expense, net
(644
)
(406
)
(1,363
)
(1,433
)
Income from continuing operations before
income taxes
2,116
5,709
14,920
13,098
Income tax expense from continuing
operations
(699
)
(1,388
)
(3,659
)
(2,640
)
Income from continuing operations
1,417
4,321
11,261
10,458
Income from discontinued operations:
Income
—
1,240
1,235
4,570
Gain on sale
409
—
17,675
—
Income tax expense
(95
)
(249
)
(4,810
)
(919
)
Net income
$
1,732
$
5,311
$
25,361
$
14,109
Net income per share - diluted
Net income from continuing operations
$
0.14
$
0.41
$
1.07
$
1.00
Net income from discontinued
operations:
Income
—
0.12
0.12
0.44
Gain on sale
0.03
—
1.69
—
Income tax expense
(0.01
)
(0.03
)
(0.46
)
(0.09
)
Net income per share - diluted
$
0.16
$
0.50
$
2.42
$
1.35
Business Segments
Fiscal Quarter Ended
Fiscal Year Ended
January 1, 2023
December 26, 2021
January 1, 2023
December 26, 2021
(dollars in thousands)
Revenue:
Real Estate
$
31,956
41
%
$
27,404
40
%
$
121,093
41
%
$
92,018
38
%
Professional
45,326
59
%
40,290
60
%
177,329
59
%
147,009
62
%
Total
$
77,282
100
%
$
67,694
100
%
$
298,422
100
%
$
239,027
100
%
Gross profit:
Real Estate
$
12,602
47
%
$
10,734
46
%
$
47,695
46
%
$
34,969
43
%
Professional
14,455
53
%
12,698
54
%
55,853
54
%
45,972
57
%
Total
$
27,057
100
%
$
23,432
100
%
$
103,548
100
%
$
80,941
100
%
Operating income (expense):
Real Estate
$
4,803
$
4,867
$
19,803
$
14,663
Professional
3,146
3,785
1
15,604
10,340
1
Home office - Selling, general and
administrative
(5,189
)
(2,537
)
2
(19,124
)
(12,875
)
2
Home - gain on contingent
consideration
—
—
—
2,403
Total
$
2,760
$
6,115
$
16,283
$
14,531
1Includes CARES Act credit of $0.9
million
2Includes CARES Act credit of $1.1
million
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
January 1, 2023
December 26, 2021
Assets
(dollars in thousands)
Current assets
$
76,162
$
52,972
Property and equipment, net
2,081
4,331
Intangible assets, net
47,552
33,585
Goodwill
55,193
29,142
Other
13,685
13,853
Assets of discontinued operations
—
14,411
Total assets
$
194,673
$
148,294
Liabilities and stockholders'
equity
Long-term debt, current portion
$
4,000
$
3,563
Other current
24,207
23,559
Line of credit
22,302
12,588
Long-term debt, less current portion
40,368
23,300
Other long-term
3,059
7,240
Liabilities of discontinued operations
—
1,452
Total liabilities
93,936
71,702
Total stockholders' equity
100,737
76,592
Total liabilities and stockholders'
equity
$
194,673
$
148,294
Working Capital
January 1, 2023
December 26, 2021
(dollars in thousands)
Working capital from continuing
operations
$
47,955
$
25,851
Working capital ratio
2.70
1.95
Condensed Statements of Cash
Flows
Fiscal Year Ended
January 1, 2023
December 26, 2021
(dollars in thousands)
Net cash provided by (used in) continuing
operations:
Operating activities
$
(3,300
)
$
1,358
Investing activities
(8,898
)
(6,990
)
Financing activities
15,934
473
Net change in cash (used in) provided by
discontinued operations
(3,848
)
5,271
Net change in cash and cash
equivalents
$
(112
)
$
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
Fiscal Quarter Ended
Fiscal Year Ended
January 1, 2023
December 26, 2021
January 1, 2023
December 26, 2021
(dollars in thousands)
Income from continuing operations
$
1,417
$
4,321
$
11,261
$
10,458
Income tax expense from continuing
operations
699
1,388
3,659
2,640
Interest expense, net
644
406
1,363
1,433
Operating income
2,760
6,115
16,283
14,531
Depreciation and amortization
1,087
827
4,054
3,698
Gain on contingent consideration
—
—
—
(2,403
)
CARES Act credit
—
(2,084
)
—
(2,084
)
Share-based compensation
220
217
1,085
1,058
Transaction fees
265
15
271
170
Adjusted EBITDA from continuing
operations
$
4,332
$
5,090
$
21,693
$
14,970
Adjusted EBITDA Margin (% of revenue)
5.6
%
7.5
%
7.3
%
6.3
%
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
Fiscal Quarter Ended
Fiscal Year Ended
January 1, 2023
December 26, 2021
January 1, 2023
December 26, 2021
Net income from continuing operations per
diluted share
$
0.14
$
0.41
$
1.07
$
1.00
Acquisition amortization
0.05
0.06
0.22
0.23
Gain on contingent consideration
—
—
—
(0.23
)
CARES Act
—
(0.20
)
—
(0.20
)
Transaction fees
0.03
—
0.03
0.02
Income tax expense adjustment
(0.03
)
0.03
(0.06
)
0.04
Adjusted EPS from continuing
operations
$
0.19
$
0.30
$
1.26
$
0.86
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230308005833/en/
Steven Hooser or Sandy Martin Three Part Advisors
ir@bgstaffing.com 214.872.2710 or 214.616.2207
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