BGSF - Earnings call transcript Q3 2019

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Operator

Thank you for standing by. This is the conference operator. Welcome to the BG Staffing, Third Quarter 2019 Financial Results Conference Call.

As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation there will be an opportunity to ask questions. Instructions]. [Operator like of conference + Investor now MacInnis, to MacInnis. turn President Vice Relations to would over the Terri I at Bibicoff Please go ahead.

Terri MacInnis

Officer. the Hollenbach, company’s financial is and and question-and-answer It’s welcome follow results our and A to Areal. call pleasure report operating Chief With QX BG on CEO their me progress to on the discuss months you, President call strategy. will Staffing and Beth remarks. nine Thank and Financial Garvey, a Dan conference business my session you prepared to today

this company’s at Investor website of Form Relations well copy XX-Q morning’s results the BG’s on bgstaffing.com. A news release the as the section financial announcing are in available as

be remain today and available company’s website Our for the available the later and today call being will webcast on will is least live call. XX-days at following replay recorded. A

These today the of are made based BG include Staffing forward-looking discussions XXXX. safe Our provisions are the statements. assumptions certain Reform based Act by Securities Litigation under harbor and on on statements made Private of

XX-K company’s company’s The and Report differ with Exchange in those forward-looking the Item by those various materially of Securities uncertainties, because could other of XA filings the company’s and indicated statements, risks Form listed the from on and actual and the results in including Annual reports Commission.

uncertainties and All forward-looking materially risks and the and cause results many could cases in the control those company uncertainties ability the predict statements. from to the by to are risks that beyond its company indicated cannot the of differ actual

BG Staffing be the update or becomes or with and the expressed obligation as only by permission. is broadcast of of if available the this in written of These company’s of these new forward-looking call, even call conference all to portion U.S. covered date This made may any no any statements done and laws, information use copyright rebroadcast this assumes future. statements publicly, are

use of our will activities trends of and for which we operations. about as management, report operating investors some related internal evaluation and non-GAAP business discuss to we our Board the results Directors measures, of business and results to to financial condition the our During and our call information useful

Staffing Additionally, superior non-GAAP These credit financial should calculated are to not information measures EBITDA. are in on adjusted- BG with supplement based intended covenants the agreement financial measures substitute be a isolation, GAAP. in GAAP or for financial to in accordance and as considered

the the measures, For to earnings most release a see company’s website. these on GAAP please reconciliation of non-GAAP and today’s measures comparable XX-Q posted directly form

turn Officer. It’s the now call pleasure Chief Dan to to over Financial Hollenbach, my Dan.

Dan Hollenbach

Thanks Terri Staffing. your today, so. and had of everyone. good BG for you We us Thank joining day in support the and very afternoon a market for today

for at business like talented of members of we their our proud dedication Staffing important, taking job do vitally company’s Their us. continue to to continued start are for I’d acknowledge all team a of to BG work and the are our hard gross units and profit our contributions our call strong truly moment margin. our by they each their to success and

and our real reminder, BG via contingent commercial which our a Industrial segments: industry provides groups; in division, As Talent; operates creative services Light Staffing professional via our in buildings multifamily our IT estate BG which three and within & BG’s staffing apartments includes Accounting, and division. division Finance

we outlook the offices and to business are our for XX call complete states providing services I conditions. and on the strategy, will branch on-site the over turn results, the our of executing XX of my industry District in operates Staffing Columbia. Beth financial company’s XX I the plans in comments our BG on reporting her Today, After locations, period, current review how

or of $XXX,XXX gross the from increases X% QX results. continuous quarter string $XX.X revenues profit third This QX from QX ‘XX. the Consolidated XXXX were up increased of million, XX.X%, profit of quarterly with our XXXX. X.X%, gross for XX.X% in percentage up for percent. First, Gross profit

in $X.X versus adjusted income QX of earnings XXXX ‘XX, QX, million $X.XX XXXX. the Net versus million was versus of $X.XX share ‘XX share by XX.X% earnings earn-out XXXX. this gain year. recognition an in $X.XX $X.XX was XX.X% $X.X tax for positively impacted of per $X was and diluted on per million contingent rate Diluted versus in QX effective was while

the $X.X of loss year. revenues revenues a million on last gain of tax EPS normalized XXXX. for the in optional from quarter was EBITDA XX.X% Adjusted XXXX, debt, up million $X.X or was the and contingent extinguishment for impact amortization, of Adjusted cancellation XX.X% for or

XXXX for in XXXX. XXXX. now of our the first million from months profit from or up with million, percentage up were gross nine for X.X% year-to-date profit of And XX.X% results. Gross X.X% increased $XXX XX.X% revenues $X.X Consolidated

previously XXXX gains discussed million for XX.X%. million of rate effective $XX.X impacted income positively was was XXXX. an Net and versus Again, $XX.X in the tax by XXXX

Diluted penny earnings the per earnings versus is diluted was versus in described discussion. quarterly Adjusted in share $X.XX XXXX, XXXX. adjusted $X while normalized was a $X.XX $X.XX EPS the for in share was that and per impact

percentage increased and contributing business the at same increased total. Gross $X.X $XX.X for XX.X% $X.X XX.X% XXXX, increased operating million million to $XX.X million, up to results, from estate XXXX XX.X% million. $XX.X our our million profit XXXX income with Gross Looking million $X.X XX.X% segment revenues was QX profit of million. period to in $X real or or Talent the for

Professional million, million $X.X revenues XXXX. for compared X% up $XX.X were with the or quarter

$XXX,XXX decrease Gross professional was XX.X% from percentage decreased for to division in primarily due down the to IT million. profit while prior XX.X% profit year, on the F&A Our a segment revenue. produced the Gross group increased or X.X%. placement growth, $X.X

XX.X% Industrial $X to decreased XX.X% income versus gross Operating income percentage with decreased QX profit in compared XXXX. was million. XX.X%. or Light XXXX. $X.X to Light $XXX,XXX flat was year-over-year. million $XX.X or Gross million decreased XX.X% XX.X% Operating profit revenues Industrial

growth segment, up over or increased by expansion or expenses $XXX,XXX. segment approximately and XX%. our expenses Industrial estate segment Professional as $XXX,XXX, or X.X% up Selling X.X% $XXX,XXX decreased continued were in XXXX, led $XXX,XXX Light

and increased well as to which in the due HR G&A X% our were X.X% as IT or $XXX,XXX expenses X.X% third compares spend ‘XX, of quarter QX units, increased XXXX. to expenses in SEC-related costs. for support revenues of G&A

million the income percentage same XXXX. to from segment Professional year-to-date real $XX.X results; for or in $X or profit increased for XXXX. total. contributing were now estate Gross $X $X.X Operating the Gross of XX% XX%. revenues million, And Talent X.X% XXXX $XX compared XXXX revenues increased million with $X.X to profit increased was for with XX.X% million up period $XX.X or million, XX.X% million XX.X% million. up

gross to $XX.X with revenues was $X.X million growth, income IT Gross profit percentage Operating Gross $X.X or $X.X Professional Industrial or XX% in $XXX,XXX had income produced F&A million down a Light or was decreased Industrial to profit X.X% while Our X.X%. F&A IT million. Light was increased decreased versus XX.X% segment million. XX.X% the flat. gross year. decreased $X.X XX.X% Year-to-date X.X% division decreased profit while Operating in million. million to from XXXX. to prior compared XXXX. for percentage $X.X profit or growth the increased XX.X%. XX%

X.X% or discussed or XXXX, due over $X.X the in to segment $X.X turning XXXX, Professional which or revenues were X.X% $XXX,XXX or million XX.X% up XX%, selling to which increased real and to X.X% in expenses, Now segment XXXX. expenses million previously estate G&A Industrial the with million $X.X increased segment up spend G&A as X.X%. XX.X% increased expenses quarterly [inaudible]. in of compares decreased expenses Light

year. tax for compared income last with XX.X% XXXX was rate XX.X% effective Our

we forward approximate going with $XX.X million rate million the for or states changes of expected Our in the of will mix due EBITDA revenues XX% $XX.X X.X% in services. or revenues of months first XXXX nine provide the Adjusted business X.X% of XXXX. and to compared was

operations million increased to $XX from provided million. Cash $X.X

us cash reduce to capital time continue a as balance at paid approximate generate and earnings, returning strong for while a quarters. sheet, working We dividend debt invest our currently at robust regular, solid X%. the with allowing technology, form operating per consecutive dividend around BG result in of and same of share XX flow to in Staffing of quarterly capital to our $X.XX now has shareholders set effective the yield an

Our EBITDA adjusted trailing current very a X.X. is low XX-month debt to

to economy before Beth. the I share overall few turn over call to about I’d the like observations a

department commerce X.X% GDP QX at that in U.S. grew reported rate, X.X%. The district annualized expectations of the beating

on in confidence to saying hiring have “The continues be a spending business There advisers to strong in uncertainty, New slowing due we to talent have and drop recession”. there's quoted more last expansion been demand Times consumer and still seeing and macro-economic into not a fill. were economy than orders While week York we're is

smoothly. to BMO job report report was that to services very month’s for positive. is this I'm our Bank progressing treasury Harris transition Further, pleased our

I’ll now and Beth. review, over financial the my completes the This turn Beth? call

Beth Garvey

today. you Good and us Dan. everyone afternoon you, thank Thank joining for

As to be operating imagine, the with continue our results optimistic overall very us. and I'm front about you runaway of can in pleased solid performance, and

and my I months, When growth team’s over very I begin my QX look noting last at back expanded and year CEO. into accomplishment, resulting percentages, development internal in positive will on have in covers. launch the identified at our technology which and included planning, the by of I'm I’ll since marked increased stepped spec of our one as end a external early success that margin role comment President impact the roadmap our XX my initiates proud strategic in

as our professional well five efforts continued our new our in growth, Our overall expansion cross-sell our real-estate estate, as the organic success footprint in and year-over-year company. and in real markets division; in lastly, our California into across

quarter; into enhancement the XXXX culture a the I'd initiatives corporate like we're about QX in company talk to late supporting the entry first making California our citizenship efforts. our launched and we building market, in our progress technology

offices are BG’s with growth to with California we starts targeted in I plans I'm market have our that the in from come at recall sales start for us. in that one and And met this say opened first the into two and first new year typically multi-family the our late Since end and meaningful quarter, pleased represents very California carries three. opportunity office to to-date new I’ll that of we multifamily progress. years the satisfied

will and It's continue national XX%. same housing the state. new the interesting decision the We for XXXX San number time expansion in believe is that average In to for provide and Francisco, this permit into revenue the multi-family was California California permits for is XXXX of Diego, into supports San average expansion information our from opportunities of to to growth that Los cities; homes XX.X%. Angeles, period three note

am is I initiative enthusiastic our enhancement say ongoing To technology about an understatement.

nine those and of XX talent live early many client facing in projects QX, XXXX. production our initiatives in have going at with We

investment and to lowers reasons, proposition performance, value many Our make important is as for our decision increases this to our transforms cost it service.

loyalty. client In addition, will drive revenue, we will gain performance and and efficiencies increase talent biz the our

In where us environment continued a companies, platform market investment company now continue support expansion. share for innovate to will believe today to transform build technology this future, the to business and in continues a I positioning needed the

clear; our of we resource personal the However, us is are in in and interaction that remains that experience. evident talent our resulting business. the enhancement makes surface is process. most It from client vital teams, engaged Technology people fee to a enhanced certainly

start. focus. is being its culture the starts continue transforms in derived responsible citizen effect industry. that that a a ripple belief with a the the to to We job strive build organizations have a role in the lives, and to we This Company corporate best compass honor communicates focus the socially that centric culture a moral attracts and from also people remains

On the M&A and our very active. pipeline front, remains full

new are helps EBITDA to market As into well to and new that always as geographic are of or valuation, skillset provide a disciplined talent that our to for accretive complimentary looking opportunity as acquisitions expand complete fleet a our footprint buyer, an provide we both offering.

positive to the to this present our normal strong the for economy labor packaging always industry remain patterns, as remainder we is on market for outlook overall. remains year, which and of staffing seasonal both Moving subject

this consistently My its year GDP operating since and X.X%. our continued company and by we quarter Staffing American third growth next about our Association reminder in Great the growth reported year Depression recently that see our robust is confidence The for at The exceeded released has finding of vision XXXX and what for results up X.X% staffing industry beyond.

good team operation percentages gross with about and by excess we way our the very consolidated Fanny XX.X% I'm very profit for of is which quarter growth of proud at industry. the profit, I business. a consecutive our momentum that reported quarterly pleased in positive of consolidated XXth side our very XX%, Again, the feel in

new potential growth benefits technology We California selling to revenues, from pursue continue resolve grow in build partners the market, for cross we benefit and to many revenue our lucrative acquisition value new initiative. our our the as realize and

call question-and-answers. turn operator I’ll the now for back over And the

Operator

Thank you. Martin Partners. of from Jeff Instructions] Capital question comes ROTH Our [Operator first

Jeff Martin

Thanks. Dan. and Good you? afternoon How Beth are

Beth Garvey

Jeff. Hey

Jeff Martin

onboard, if Beth, wondering by give XX if an it. in was of your to wondering the contracts of months would – outlook or I or was hear could trying of I us If coming other the there's forward? those factors update glad seasonality next terms for if so? going in each there's out could to specific that growth you segments for segment model the be growth helpful of are you any kind for that perhaps shifts

Beth Garvey

that started had identified say to would Sure. you new operations have will those our that we would that on we get division for year the the growth prep months the know and to targets next I to historical already of and we've we've continue opened. kind work we've want in real-estate

are and strong say they have setting would I be always So to that going as been. they

Light Industrial year. best not their having is this year

year X% growth However, to what does X% what but kind we industry a is Light expects of which them them expect are kind line range, and they had overall. and in they the Industrial stellar that’s of kind the year, last of flat stay to so of

new the leading And is type then technology hot the so initiatives got many the, higher is with cross-sell business. professional They division, technology professional have really in end our going, of right and now. team expanding wonderful The side drives. just division

if then asking that work or FX you implementation a reporting with an they’re know once cross So people following SAP a a and going effects in in implementation Because know day do you usually sell. software, and you usually doing finance. which

sure and technology that growing I to now. see really anytime have get soon. are right continuing in They divisions they make having crops in a how really, of really out they but to gotten don’t amazing how So way, to see right is year their it on groove now the are is that our the great stopping

Jeff Martin

great. side, professional are then there or on the on still are at? Okay, And focused other M&A you're areas primarily that you with looking

Beth Garvey

focused still on are We professional.

we know California us something consider to we there. the sector, up for most markets in it. as sales that it's a the That’s was had open You in office to would for real-estate something drive maybe than part; in come those up is easier it

the in are a on all really activity. side, far of So industrial as professional focus as side and efforts M&A we our the don’t lot of

Jeff Martin

beyond on then your side, XXXX? and think your to on new above the done. what’s could before the offices come Okay, you’ve was target Are real-estate plan there five and I that the open and of year this year, which that, for any end

Beth Garvey

of be it any don’t five. know for now don’t year, I of think minimum the plans and I for the it and We on the to be but want a end have between quoted I but year, number, Jeff, next offices will

Jeff Martin

to or What Staffing? that its a should looking we worthwhile of the growth Okay, you're off maybe It last XXXX market. like enough. if start on fair to beyond out good it's in of California then expect And in overall terms the question the sounds contribution is BG there.

Dan Hollenbach

think early we Jeff. still too I are

we are looking again, to but We whenever when a in March, one some right only to you at patterns think we’ll you I yeah. better location, talk April; growth now, so answer talk we we're in have

Jeff Martin

question. my taking thanks great. Okay, for Well,

Dan Hollenbach

too Yeah, just we’re not so. early, yet, it’s

Jeff Martin

good Thanks. Sounds Dan.

Operator

with Taglich The Brothers. next comes from question Howard Halpern

Howard Halpern

guys! Congratulations

Beth Garvey

Howard. Thanks

Dan Hollenbach

Thanks Howard.

Howard Halpern

the talked In help going the forward? IT gross of is the to now. professional hot technology, that know service, going red about sort Is margin you I division mean you how drive

Beth Garvey

there right implemented pricing to are the of some big work business to is actually a technology professional now. higher a demand has we use these seen of very in shortage there, out new up of those It shortage as with the we the are you there's and driving in that continues technologies people of that a In and be lot called being as – talent that especially that, really division day know this margin point. the had resources are or such OneStream

they So nine – – price. like our on expecting pricing that the on tool, we've progressive nine side they know got year resources you year are just we’re now are

got are So want me, they great me, are doing for just you they and to you – so… pay like

Howard Halpern

and selling seem throughout more and done happy that Okay, company? the very cross you’ve come you opportunities whole

Beth Garvey

is I'm locations. only bigger that done in he very with have with going the but In month in U.S. customers manager we way one we're doing to the the businesses and hired basically happy across our we strategic August cross-sell now our of account right all is their potentially had efforts. who of targeting and

key sales we and out in professional should that. he’s of He good the go identify gate growth put already crop and some for we’re job, to our and activity entire right the and he's of up some able know about feeling strategic you opportunities him. so three accounts – people had out some be division His of and underneath pretty good had really meetings great it, across

Howard Halpern

one little last you be? want you it process Okay, you BG a are pretty early in Talent; seeing and guess still I cycles and know long where sales the about still one to to is to get in bit

Beth Garvey

national the each they we sales things city We it’s go in seeing not site one to, that is we a in that find. longer that we account and are cycle can that in have of find a that universal like

a like like in CVRE, have if you're in not their we going market open multi-family. their So and all door to for place go us can like its to one can we

give out they will Dan team making to understand sure and are are that moving on and to, finding they're bit. down as now negotiate looking to because redlined have at we been go market contracts each as it quickly that and those that are get slows go that coming, that, pushing that which and and we we those in really possible. quickly I they've kudos that having in those they a So things his tried

just still It between you very viable it's for us. know its different more professional type and is, are sale that but navigating it they style growth hype multi-family waters think a and is and really growth a through that, I of still a a hybrid the on and platform

Howard Halpern

Okay, keep work the good well guys. up

Beth Garvey

you. Thank

Operator

from Our Louis Investors. [ph] comes next of question [inaudible] Moulder

Unidentified Analyst

to job, the job. Yeah today and hi, a the join in report. company new good a having earnings until good I'm stock

Beth Garvey

you. Thank

Unidentified Analyst

you You’re to welcome. that where be? you're assets in I most division? Is was going as how dollars just Where other think the are being couple to the to successful mention money; do if you And outstanding. put in spend which wondering emphasis going going that area? your and is your where You you more can be in emphasis so, of versus technical divisions?

Dan Hollenbach

think so that. two I sides Yeah, there's of

its be I going our the M&A think dollars discussed previously accounting. and if be should in IT finance world, you best will, professional are who and focused to

Our our will expansion new division, in real dollars so… be to offices opening estate

Unidentified Analyst

because The company doesn't have volume every it day. that much the of low does visibility

I if I that out size your more seem your of people to you well over word follow doing the years you type gets attention as be, to because much are companies stocks. the noticed However, that get as you

various the enable you do So venues do of do company conferences your you adding you in analyst roster? to to and anything do terms and promote attend that

Dan Hollenbach

think; hundred of – with – XX do conferences we've probably you XX year do met a been this what investors? We Terri, couple and to or

Terri MacInnis

a busy been It’s year.

Dan Hollenbach

often. on just some we’re So as road working are We've investors, well done of couple to so introduce a we to know do. do new road non-deal it. did stock the you We our yes, on we shows that;

Unidentified Analyst

of seems interesting one obtain. in level difficult which learned of things to to be I’ve today's the the know very market the is dividend about payment, You company

with company. could of kind that that's you’re so the think it. many would that why you trying more I to for asked proper I So publicity, to as question, get shareholders, that's new you the what exposure promote And,

Dan Hollenbach

appreciate though. Thank you. input We the

Operator

back like Beth to Garvey turn would question-and-answer over the conference This concludes closing for the to any I session. remarks.

Beth Garvey

the the all am to you this the day and a to year and see We with today. Areal, and move year call – for become of forward respected for our returns leader year a I for national deliver enthusiastically progress in holds next thanks you, ready made joining next each to try Staffing. shareholders for what significant vision us. We've every to Thank our and outcome positive our

you quarter us. We thanks guys for joining forward and next look to to talking again

Operator

conference today's concludes This call.

disconnect You a day. for have lines. pleasant you Thank your and may participating

BGSF (BGSF) 10 Nov 192019 Q3 Earnings call transcript