BGSF - Earnings call transcript Q4 2021

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Operator

Good morning, everyone, and welcome to the BGSF Inc. Fourth Quarter Fiscal Year 2021 Financial Results Conference Call.

As a reminder, this call is being recorded. [Operator Instructions] Now I will call to turn over to Hala Elsherbini, Investor Relations to provide instructions, introductions and read the Safe Harbor statement. Please Hala go ahead.

Hala Elsherbini

to results fourth conference welcome year and and earnings XXXX call. you, the quarter BGSF fiscal Thank With me today and Dan are Beth Garvey, Chief Officer. President Financial Hollenbach, and CEO; session. there After opening will be the remarks, a speakers' Q&A

noted, will available days replay on call live. for Investor company's and be being and later recorded As webcast today's Relations A the archived today XX is page.

and based statement. that from on rebroadcast indicated permission. Act a company's in moment statements. any this laws the may and be differ the listed is statements. statements, company and uncertainties the forward-looking you and the available actual Securities today in of control, ability by risks and copyright reports BGSF many today’s Now company's of differ statements done use could Item These made even beyond call materially written This call, BGSF the in and will or XA and take materially Commission. date to results assumes of company expressed which publicly, uncertainties of becomes XX-Q results assumptions new Form with this by the actual based for if predict provisions the Litigation quarterly The to to obligation forward-looking cases, are report the in certain to and future. those the of are the statements the indicated company are and that the conference including made the could other by covered its portion and XX-K made no Reform uncertainties, the information I like broadcast filings cannot All risks Private company's only and on the Securities on XXXX. Form these cause or Safe those to safe as U.S. from those forward-looking discussions Harbor with various by of of include risks on are all any annual of update remind forward-looking harbor Because under Exchange of reports

in also During non-GAAP which be the related and results be the activities to reference company’s and management financial the non-GAAP management call, release provided trends to I'll business directly of operating as believes non-GAAP isolation substitute evaluating Beth information in to to posted conditions accordance and earnings for measures CEO, the not of to most GAAP will supplement measures, a These useful operations. financial financial call calculated Garvey. Beth? intended in the are GAAP. and today's the considered company's in on should can to some or President are over measures GAAP measures Reconciliations turn superior website. measures with comparable now

Beth Garvey

joining fourth And today's for to Hala. results another you, year. eventful everyone quarter to you our discuss thank and Thank call

operational X. X.X we begin close is on revenues our in strategic represents in performance, made segment announcement sale to of strategic Light which Before our regular We like later last review disclosed expected Tuesday month. I'd and the the of segment, this to our regarding Industrial we XXX% EBITDA which times filed the the Industrial. were million, price purchase adjusted Light Form founded XXXX, From when $XX.X perspective, X-K March was company of multiple the rationale a highlight

sale for and client core high the creating initiatives InStaff to with several and into to logistics continued warehousing past growth, overall Having focus to higher margin our we our perfectly the sectors, maintained and retention. completed deep aligns future on support strategic two opportunities. As years and strategy over platform Estate engagements strategically long-term evolved diversified onsite in Real relationships, develop Professional client

position to fully project-based in opportunities to higher and managed our can With turn niche divestiture, our addition high-end services, real consulting, we professional attention the IT estate. in

results, quarter reflect fourth began pleased to which with strong are year with finish considerable a our that uncertainty. a We

initiatives address to quickly internal ability and and headwinds macro XXXX. restructuring realignment and to execute Our industry report and progressive us enabled to effectively improvement throughout

our year solid IT our early within the strategic drove Additionally, of consulting brands. acquisition in contributions Momentum timely Solutionz and

across Professional key greatly disruptions growth customer well which success IT and collaborations testing consulting finance is rebuild solidifies I&D a which making on digital Underscoring is upgrades, by progress second improved top- bottom-line and later elevated and and our and development for its pipeline pandemic technology strong quarter. quarter position, working forward manage in XXXX. wins System strong. our we footprint. have and enter market Performance teams. outlook and segment a brands, accounting We forward. we the cybersecurity through our live from in go to and service transformation a consulting end quite productive by going system improved Overall, broader led continuously will higher which to capture drove a on are look bolstered critical process gains infrastructure improving was cross-selling has and geographic and gone our is IT and and efficiencies pace. we efforts The the opportunities operating reported as

looking quarter and Now with a direct revenue ended at real gross the highest and of a profit placements. recruiting as of fourth estate, improved year result XXXX the

for financials. set closed and that team Association our success. ramping and several turn to accolades position, strength engagement. the talent from discuss roles key who in proud only also our programs, a alignments, like we commitment executed Dan field volunteer partner National leadership multiple I'd continued leadership With in Our and a community but members call industry advance forward over the restructuring, teams for advancing to I'm our received not our have across relaunches strategic of our Overall, and have position that, supporting course excelled initiatives. to the XXXX acknowledge to operational strategic and market Apartment

Dan Hollenbach

XX-K Beth. you, fiscal the good year Form And everyone. December last on annual our filed XXXX report morning, XX, Thank night. ended We for

this segment, shift our periods a model statements business Industrial sell As which segment the meets Light for sale. classification reflect and the definitive held as operates operations InStaff, that as our criteria represents determined of our the have discontinued presented. for historical as a in strategic result Therefore, for we consolidated to this financial agreement

As Light on growth Industrial the a today operation our segment. performance and discontinued rates discussions exclude

For X our on please to sale details March XXXX Form the filed and XX-K. the additional X-K refer our

Moving XX% financial Estate continued highlights market quarter from continuing division. The Professional X.X% XX.X%. benefited by Momentum to decline to relaunches from increasing delivered demand a XX.X% Real $X.X and was million $XX.X development and infrastructure from the XXXX Professional from recruiting. our operations. offset stellar improved Estate acquisition, in which Fourth the contribution a up Real climbed demand, segment Solutionz benefit million. and pent-up revenues performance surged a and

early I&D XXXX. Professional effects $XX.X While activity Gross to pandemic, we XX.X% benefiting improved XX.X% XX.X%. of to Real remain profit recover been slower and up has by are from Estate up from seeing encouraged we million, the growth in the

XXX on percent margin net offset to increased addition points SG&A for credit. gross tax and growth a of revenue XX.X%. As or of expenses XX% CARES Momentum quarter higher $X.X fourth due basis $X.X a by the Solutionz, to was the million, compensation by million increased which

XX.X% compared quarter $X.X net with diluted revenue. or increased expenses $X.X a year. same As revenue, for Adjusted was or of of credit SG&A income $X.XX the $X.X million share XX.X% Net of XX.X% versus SG&A a and last quarter of for $.XX ago. CARES was in the income diluted fourth XX.X% share per year million or the million percent per

share up revenues per net QX QX. to or the momentum was into We revenues noted X.X% Adjusted $X.X million a share ago. quarter As Act per segments million per Professional in both XX.X%. $X.X saw continues drive tax was profit XXXX. X.X% Professional Real cross-selling of climbed $X.XX And to Estate included segment compared was of credit now diluted same quarter of up This fourth gross XX X.X%. successful Gross share. and and is to XX.X% improved and XX.X% QX of profit X.X% revenues X.X% margin $X.XX X.X%. revenues with percent Gross profit versus Professional diluted increased CARES and X% wins for diluted year-end $X.X or operations revenues or in a progressive carried with improvement from in the from tax EPS of million XXXX. diluted revenues X.X% up Sequentially, Adjusted represented XXXX EBITDA million. and from $X.XX continuing Real year $XX.X up to results. XX.X% Estate XXXX. $XXX XX.X% up XX.X% was million. gross strong to across the up in of

compensation the or additional by share XXXX for increased primarily credit. to Our acquisition Fiscal net year. profit, to Momentum million last real share million $X.XX and million contingent and tax net a diluted growth of per $X.XX a to negative adjustment loss income goodwill net of assets locations a intangible XXXX $XX.X compared offset for deed to the included reopening or due XXXX on related SG&A Net net adjustment of million of a expenses the net tax. credit. $X.X $X.X was $X tax CARES the increased $XX.X XX.X% $X.X and impairment CARES of certain an estate million consideration included $X.X income million per year of Solutionz

share increased X.X% of Our in XXXX. income versus per available effective and for Adjusted quarter the $XX.X A XXXX. diluted amounts and compared of continuing for is and revenues EBITDA from per XXXX revenue in for operations $X.XX share in with breakout Adjusted million XXXX. $X.XX continuing year to our versus tax rate in XXXX Form $XX.X operations earnings XX-K. net fourth discontinued to was XX.X% or or X% million of XX.X%

CapEx of rebuild to $X.X early that in our to approved plan. roadmap reminder plan million Board the a included SG&A Fiscal three-year and XXXX, related IT infrastructure. As this XXXX IT

trend IT implementation expect project down. as XXXX in to We lower spend winds

grow will business. as as and our to spend address enhancements well as continue improve our IT forward, we systems scale technology Going

Moving our funded at to end? and X.XX On XX to solid we be to overall ratio leverage the under of trailing debt is forma basis our liquidity leverage our months ratio a EBITDA position X.X. year estimate pro improved balance sheet,

share of Board overall Directors of dividend $X.XX approved strategy long-term our payment, Lastly, support the consecutive increased to it quarterly and our in our business. of per the and increasing recovery XXth

XXXX. expect us a back for for and value. sheet flexibility call ample outlook sale over the invest will to to while now to I closing deleverage Beth growth as return shareholder general and gives to continuing a balance remarks, Our her result the in fund of turn operations, position our and future

Beth Garvey

in Dan. to challenges else Like see market shortages. everyone continued we given overall labor workforce Thanks the continue

the market year-over-year. X% Statistics is compared recovery Labor growth rate based broad However, industries resurgence Industry solutions, U.S. poised signs workforce a January which ahead. benefited continued Staffing Bureau in Within forecast X.XX% penetration for to all The is XXXX, is XXXX from staffing. an projected for to in XX% the high. time IT of reported report in of temporary a of grow our in labor with XXXX, Staffing growth X% temporary Industry focus September the XXXX, which Within of Analysts

As of we laser professional forward back move strides into and continuation cadence Both on return to have made we optimistic estate and growth. these we of businesses higher XXXX, focused real great we look as natural pre-pandemic extremely and to that levels remain to the segments.

we earlier strategic implementing mentioned over I segments the of year-and-a-half each that make these past lot As changes of spent even a stronger. will a time

debt will Services in to as end and geographic High for Turning allow real Manage and into as M&A, Margin high deploy capital Consulting expansion InStaff more IT to the estate. sale Solutions of well drive reduction

partner we our more strategic capital, synergistic to geographic as growth fit. new will and and margin to And culture well. and that strong are estate on have as seeking areas continuing organic we the or will segments our diversification EBITDA focus quickly provides high accretive right enhancement, real complimentary time a into brand build be look that deploy to growing professional the We

best. I've grateful to personally Operator? thank to over want and the be their will the operator very and publically them our our entire Industrial that team passion wish team call turn continue We to to diligence, the Light entire questions. for I for and With

Operator

is question Please you. And [Operator Instructions] Martin now from Partners. your Jeff, first Thank Capital line from the Jeff comes open. the Roth line of

Jeff Martin

and morning, Beth doing – well? Good Hope Beth you're Thanks. Dan.

Beth Garvey

morning. Good

Dan Hollenbach

Good.

Jeff Martin

Great. Can me, you hear Great. okay?

Dan Hollenbach

us? hear all you Can

Jeff Martin

estate? expansion to get real it into curious to hood more just progressing can, the good was I wanted thanks. in the get look under of growth well, with a like things – Wanted margin I that little there quarter are to looks estate, and are up give maybe markets and market of of those your real to back kind you respect of back still normal percentage re-openings reopened what can breakdown a opening us you within are where

Beth Garvey

tracking Well tracking way thing. we're we're at – which is where this ahead schedule of we a point, actually good

New schedule May to All this of weeks reopened to we New work ahead to be placement and I'm that the York happy openings just two there and the for year of in had had was supposed we're – year York schedule our we we for – report and we markets now. first six last expected that We reopen have ago.

progressing really very, are things well. So very

Jeff Martin

then and what to balance give the Maybe slower And that Great. little is over your why is XXXX? of mentioned us bit professional IND for segment that detail of part as of recover. you a the to expectation

Beth Garvey

you hit our recall lower customers, just from lot that's of kind business. got if really of IND margin a the

they so with And our that hit just clients got rebound quickly. some larger pretty didn't hard of

in and a heard We have our looking mean, and those within into expanded within that deep the the and wide job and business customers and of customers in has we good carried team had. going done you've we wins mean, talk have. I that business other clients the some really IND I new some typically going the for group, about us

the had some two recovery little should seeing in last we've have and them month a or into wins So nice start XXXX.

Jeff Martin

I well in then the could imagine for the And getting us for back maybe a are a ranges? growth maybe of a and little mid-single into higher great. professional to what's maybe sense XXXX, rates, growth assumption would not reasonable professional you the somewhere give estate, if real terms real level XX% historic from high Okay, a the range, in estate XXs, digit which and

Dan Hollenbach

we for the a next but think think us, has – no. Well, And reasonable I yes, digs, predicted the digits that's you Thank in growth yes, confidence professional Jeff, was year. high-single plan. the in low-single SII

the yes. range think we're so low-double bit a more digit side conservative estate very maybe in It's little I on of early. We're real now. that in sort right February, just

Jeff Martin

context. great. for my Thanks I the Okay. questions. That's taking appreciate

Operator

Thank you.

Our Howard, from next Halpern now question Taglich your Brothers. line comes Howard is Please open. from

Howard Halpern

the of all on the have beginning just and at the year since year. on that Congratulations gone the things

of technology So start operations activated expenses? by terms the in to operating and the half of to most be streamlining of it impact second improving is roadmap now going year this and

Beth Garvey

on what the is days. go live that s the Well XXst, goal. business actually We that seven so

So some got bugs prepared end-to-end sure do smooth to be that that we're hypercare need we've and anticipate months there'll for additional it's is over two much done we support still of whereas we've so what to the testing will because calling everybody out. a worked make will transition, months that as last that, two already try testing to be that

to of the all we and We little used the and system up gets everybody efficiencies and in the going of expected once So it. seeing gets we've the got kinks that later out some worked year. anticipate

Howard Halpern

And fiscal generate in based and year what of in last as cross-selling to growth, enter seeing are into opportunities what you you've going fiscal year on we Okay. terms this XXXX? seen revenue

Beth Garvey

been exceeded always and we sale's cross for goal year. around Our that XX% last

teams the So really done job. have good a

last manager, realignment we if was we did year year for getting produced manager last in restructure to one Workday SAP manager or alignment that Our with our beneficial reporting quarter. fourth how it's the and them teams an super

anticipate sell just efforts. off effort supports continue cross based that those that that really fact the the And so realignment will I

Howard Halpern

a Okay. of And you're estate in growth within talent – how but bit will I said real into XXXX? ahead proceed little how in you've know has things openings, figured schedule how

Beth Garvey

mean I'm regard shortage assuming of in to them. you the

Howard Halpern

part talent that real merge in – Well. I guess I mean, segment real estate? of the the you estate within operating is How Well, in no, it.

Beth Garvey

– the for And been success. of opportunities talent very talent a side. management hire us, two the together and real lot has But also it's teams the of a lot the well. doing comes been It's integration from we've a very those with good that that BG estate there's direct in in of discovered side

Howard Halpern

just terms lastly, normalizing maybe of are multiple terms things merger you're landscape the things acquisition what there, there, out out And multiples being in and in Okay. compared of year and last – are seeing? to –

Dan Hollenbach

million-ish on pre-pandemic, range. point plus think play to were turn are where that the half in a so, EBITDA they The in yes. X up multiple from I So we've that we market that terms or minus seen

Howard Halpern

Okay.

and Well work. good up keep Okay. the congratulations

Beth Garvey

Thank you.

Dan Hollenbach

Thank Great. you.

Operator

Brian the from Global. comes of question next line from The Kinstlinger open. your is Please, Alliance Brian you. now line Thank

Brian Kinstlinger

Yes. Industrial. work Light the and on sale Dan. Nice Hi Beth of

Beth Garvey

you. Thank

Brian Kinstlinger

up Just to say clear significantly point – that small to down on to be M&A coming last similar clear or from not they how – the valuations just similar that a are that's XX months be from to the pre-pandemic, are in trending half caps much? down

Dan Hollenbach

I'm not I understand Brian, sure that.

Brian Kinstlinger

now sorry, which pre curious I'm to year – pre-pandemic, compared just is ago. valuations – to how say You compare it compared they to almost a you

Dan Hollenbach

probably in lot of, that's year little because tax quarter. activity It's talking much we in about ago. on And pricing last went so the saw a we Yes, at of us we of rate. think a summer see a activity. sort Well the for that early least probably the didn't that's I anticipation I'm when saw cold fourth

was or couldn't entertaining everybody because We to flow. help started them. do think everybody they just get I to busy again in changed sort tax activity anybody so not or was the either seeing it, going and of

So we were busy InStaff, said, selling help that yes, you? does and that little – a

Brian Kinstlinger

Yes. in you recruiting a bringing addition of Yes. business resources that increased be both development going to in, And to you kind investments may then go-to-market to with strategy, investments you're need from that are maybe making capital make? what

Beth Garvey

efforts how that recruiting Well, and we're plays regards in more recruiters definitely looking to out. in at our bringing seeing

easy is in definitely The they're to So real that the expansion the that market. the of expand work. in estate group,

as year, live once need that in probably on it. additional those to things to bolt at to our goes later gets kind So then used be we're some of everybody things the lines to going and along we're looking IT there'll roadmap

CIO minimal to So IT say would our liable on is going what live a we're – our going product.

people and bells sure assignment on and build, we year. all to later pay put happening want just will start then the make can out whistles and we So the in

be So costs some there additional may that later on. with

Brian Kinstlinger

Great.

are versus about talk for salaries? you spreads billable can the staff Lastly, trending how

Dan Hollenbach

Spreads up are salaries. actually close to

Brian Kinstlinger

of How in terms salaries?

Dan Hollenbach

Yes.

certainly hanging are in mix working. in so. estate. model I up professional, in maybe spreads it more pricing say a it's want is They've QX business than of probably probably at very good their So real the but down hair keeping been to there, pricing,

Brian Kinstlinger

you so Thank much. Okay.

Operator

comes Daryl open. Please you. Thank private of next now the The line a investor. from line Davis, is who Daryl, your question is

Unidentified Analyst

Beth congrats Dan. Hey, on fronts, multiple and

Dan Hollenbach

you. Thank

Beth Garvey

you. Thank

Unidentified Analyst

going question data I'm are on numbers If a said or but to versus have if unaffected sort you was wondering real those do pre-pandemic. figures? pandemic, at fingertips, if we for have you is this focusing January Dan, revenues unless your which of estate, have January this XXXX you XXXX by

Dan Hollenbach

tell excess that third look XXXX don't. of in numbers. can the when revenue on and quarter you rate run numbers I they're I at you a fourth their

Unidentified Analyst

what Got moves? big are two or one question, one look two on XXXX, at then it. helpful. if of sort very a traditional looking BGSF's That's and or of BGSF's moves best Beth, of annual, And you back things; back worst

Beth Garvey

restructure I it out. Great that fourth those how and our solidify And Solutionz. results of would quarter, continues would we into we to evolve That game teams much was didn't was teams, we on just also And has was it to early really special. and going kind question. professional I saw and helped something be realize in. of acquisition in had those got brand. those until different Professional aligning of the Momentum the pop brands just group really best it's in aligning nine to we say game the And say a the changer them changer moves a

we that did are So I things those well. think really two

continue their as As of supporting start of estate to some the markets. real group brands or some well as they reopen their to

pandemic started the life doing of got on health go impact what we on think away. kind seeing stuff, could have things, started didn't that other better have the and underestimated we done back really that and lot COVID a whole we cited of – into excited when it, we I the and would mental

childcare still were of that the parent those there or a issues So things along dealing or with people lot issues were lines.

we getting pulse all were up we opening like and every were pushing more again checks good with as excited so doing out offices And group at they and the and initiatives stop really started quarter, enough. and

doing, aligning initiative were point it. in working the work it got executive executive what going so Professional what we and and and some we that back going as to silos the was didn't was attention pulled really started going and really then group was to doing to something And then we what were kind would projects And how in paid so strategic – were something. on. team we on and were initiative Because team in of realize we the push every we knew IT with an the where I everybody at that we do affecting out all stakeholders think

for So we that. had to adjust

Unidentified Analyst

you. Got

lot Specifically, I'm sales, – of on it’s the That's with industrial a that. move. congratulations very a really happy big

Beth Garvey

you. Thank you. Thank

Dan Hollenbach

you. Thank

Beth Garvey

I year's next that growth. will in put

Operator

Thank you. Taglich is Taglich from your The line open. next question Michael, comes Please now from the Brothers. line of Michael

Michael Taglich

and morning us, quarter Good okay? Dan. for Alright. great and Congratulations Beth

Dan Hollenbach

Thank you, sir.

Michael Taglich

should the have am I real estate is Or say I first guess a that? to wrong year this year, right? record blush

Dan Hollenbach

they're think a to banner yes. year, I off

Michael Taglich

math Well, at doing looking I'm you you last answered the just questions, what said. I'm previous How quarter. on the

So which is spectacular.

what we terrific. when start kind seeing absolutely IT of from The the of And questions, is quick that road should done? A couple map payoff okay. So it?

Beth Garvey

the And go right on the so XXst, we corner. around live

going the I team we what figured to adjusted that changes. some the, time mean, to that's take everything to get So

the invoicing system. So the I system, the mean, it's CRM, system, payroll applicant the tracking

to going up before take to it's everybody time on make sure it. XXX% that So some gets

range off anticipate we've gone of type who've from based people other on grades. we've year. the through we the to heard in indicated XX% looking later get what past same in that we're think the that So seeing some in I we'll to And efficiencies efficiency try of the start

Michael Taglich

what? XX% of

Dan Hollenbach

it the is Michael. on recruiting So a side, lot of

Beth Garvey

Yes.

Dan Hollenbach

that the that in and to them recruiting lot some we on fulfilling bring faster orders We system finding we easier think focus AI get on probably and stuff and recruiting that versus a the allow when new then we'll some will of people. on bolt in make of the will side. efficiencies the make provide So that enhancements

Beth Garvey

have Real And impact big And works. a CRM on. between they really Group several of then that and spreadsheets Excel to going that system Estate for systems all Temp real their gets another going group. And an they estate have It's scheduling the consolidated. on different into do brand, the

so that estate the to free in And real is going team recruiting up for significantly. –

we And so will biggest see – side were probably it with really we the them. of

Dan Hollenbach

Yes.

a So some think you orders efficiencies, and probably some it recruiting of growth. create of get efficiencies part I cost it's more is combination there. to But fill bigger the able faster they're

Michael Taglich

I'm much on spend Because Okay. it? how you lazy, money

Dan Hollenbach

In total, been million. north when we seven we have shut bit of in it days, $XX down would a

So created... Yes, $XX was million budget. that

Michael Taglich

– $XXX spent have quarter. $X.X road million on IT I'm about been year you last $XXX map. on your saying for – last Which it's

Dan Hollenbach

there's That's And another million $X the on P&L in then side. CapEx.

the of that's it. side So software

Michael Taglich

Okay.

So you spent $X.X million-ish.

Dan Hollenbach

our brand-new Last ran XXX That on new years system ATS payroll part really in new system, Dynamics of biggest year the that year, and we a correct. in was integrating implementing with two ago. Yes. worked the biggest that put

Michael Taglich

So from that behind is spending two weeks us? now,

Dan Hollenbach

efficient. away, goes some make to doing implementation add-ons start The we cost it then more

Michael Taglich

As our case. will it And start...

Beth Garvey

revenue of IT hover the that. around ahead us for us X% We for of kind to able be anticipate to will the spend stay of

Dan Hollenbach

Sustainable, yes.

Michael Taglich

Got you. All right.

a onetime which over is road that's I IT map, more what and you're but So, presenting? of expense, suppose, the above

Dan Hollenbach

portion CapEx and significant third-party lot the dramatically at that on, AI cost drops still QX, add of operating software will some add-ons, and But we'll the like in the drop of the beginning that CapEx some consultant side side So CapEx off off we the consultant a it of a whatever sort have QX. of of side, that side. – on will Most be of as end particularly the onetime add at we a was expense.

I that if numbers call helpful. certainly certainly, everybody and on So quarter's share would that can next with together be put those can we

Michael Taglich

Well, helpful. it be would really

you here. dollars, is old, get from straight. you certainly, I which in we're life big productivity. that me big to guys you want in Again, okay? a a point don't So like boost got going why productivity business said out, there's I'm up in four onetime And this there's how that So fact in But I carve you cost is IT big or in on much a forward you you when understand of CapEx XX% guys hopefully, – on spend, out. years in it spending as spend to okay? reduction pick onetime is the to what talk the this

Dan Hollenbach

I don't right And we put certainly the numbers have now, fingertips together. at them my can but

pulling and pardon we the yes. So some talked call. have would We literally decisions off I create the efficiencies share on about – Yes. can to recruiting. – and I creating yes, on yes, numbers it me. start spreadsheets I work some But,

Michael Taglich

All right.

of the $X in spend, thing? So pick $X Beth, $XX kind up million forward? do million you on that or million EBITDA going Or it is

Beth Garvey

mean, I $XXX,XXX now have but gross how Well, who gross recruiter a in because the of so we recruiter $XXX,XXX right more to a profit. produce. now able it produce in much produces depends they're can profit, on efficiencies

when systems would from all we how have look were that this on that are producer by now just and go have is to we'll now what we're really these produce more you we perspective. get and to to take We'll depends number. Mike. in it able So it that it and before to at you to see doing look down level it what at And going that's

Michael Taglich

right. All

to So, it. I'm to hold going you

if go basically, XXX now realty, XXX do recruiter and earnings XX% free. they So does grand,

Beth Garvey

[Indiscernible]

Michael Taglich

mean, that, an you have have do your pitched order board I must magnitude idea you on but right, some number. All

they the Okay. When greenlighted spend.

Dan Hollenbach

number a my right at talked now. XX% about have cost. efficiency fingertips We don't primarily on the I recruiting that

Sorry.

Michael Taglich

Yes. That right? would the the Estate be Real part business, of

Dan Hollenbach

Estate. Real Professional on going Both That'd the in are and software. the be of segments

Beth Garvey

Right.

Dan Hollenbach

more Real the much on probably efficient side. Estate It's

Beth Garvey

Correct.

Dan Hollenbach

creating more, fulfillment much there than we recruiters, an of by earlier, by there and a burdensome Because as sales creating more was again, efficient recruiting gross professional. is then profits. more process And burdensome chance is and there enhancement mentioned better increasing

the can more, that got fill two efficient more. sides or equation going you on, recruiters sell So, more of

some savings get profit have SG&A on gross side, So, you're they recruiters, and are to you you have more improvement. so or getting the don't sell side, as filling many

Beth Garvey

is we the kind management keep of other thing talked And Yes. mind did systems not of have in together by did any to because our spreadsheet. we that Excel

And on give the to their is prop help at, we dashboards, can systems, support. able and them will team up basis will daily have so that new where we so, a with manager be know new them every

ahead just better team. into of and So each be be able the be and the for members of will visibility the helpful to to us having activity team manage support

part us going that is as be a game-changer well. the to of visibility just So for

Michael Taglich

Okay.

So, the able expecting business from more you'll unmet a topline to a needs. you're running productivity growth because standpoint in need you're but better, significant improvement efficiency dramatic and fulfill be filling

Beth Garvey

Correct.

Michael Taglich

it mean, like I at you I should say. top I – made acquisition margins, like of ever get on it I pretty that. your improvement mean, the drives if best you And top or some profit dramatic should a it's line XX% in look gross sounds

Dan Hollenbach

XX%...

Michael Taglich

its an I be you its because carve good from of material would would the standpoint, mean, that, say really enough get material. it it expense understanding great on out to I a

to are guess, that I hopeful, drive You it's enough results. material

over letting what besides us it the going there right to next to P&L do it's out would the just four show be roll quarters. you're that obviously Now great

Beth Garvey

it Again, able will be the in better side the future. for to give beneficial of into information visibility the super reporting Correct. be you us to

Michael Taglich

question, speak. else switch I’ll more the On, tech one everybody I'll let sites

you that demand the have how what On the today and visibility IT kind pipeline? the sales of change does roadmap tech do side,

Beth Garvey

understand your sure I'm question, not Mike. I

Michael Taglich

IT sales have visibility now implemented? much you have – when do and is How pipeline do on how much Okay. the you roadmap the

Beth Garvey

able because move they'll things a now, again, Well, again, I right. able the I of And group think, to kind spreadsheets, to, management but have strong on is right it's quicker. IT we be such Excel team a lot it’s through think

think right I I on out go every got of has lot a week team good now. the a visibility and got there the call the the Division one-on-one President with they've we and pipeline. pipeline, activity have through

super sales that full the because the will think in So, already it will change be, I now. right that don't got or place they've increase roadmap their pipeline know efforts, what I is

us in out see does or be to the we help a lot And take better, time lot long sales figure from RFP, better. an with it close it'll to I put that the are a think we'll get the what it'll we do funnel it? how a funnel is sale, able

Michael Taglich

great Well, really to making on to hear real year. and forward I'm money Thank delighted quarter. we're terrific. and right, looking All that great track you. I'm back a

Beth Garvey

Thank you.

Dan Hollenbach

you, Thank sir.

Operator

Thank Geller Geller from line you. open. Ventures, is Bruce comes your Bruce next The now [Operator Instructions] from question please

Bruce Geller

It's good progress. nice Congratulations Hi, on morning. Geller. the Bruce

Beth Garvey

Thank you.

Bruce Geller

dollars or that a annual you you're caller, expecting this the I'm but in relative can the probably you asking question transition? margins either to last systems from quantify benefit redundant

Dan Hollenbach

efficiencies certainly Again, right I of combination work as orders, the profit now, just we drives to we'll we ability gross a which it's of Yes, it. them to front Bruce think, don't and that. that on do share we I side will for recruiting on answered in the fill mentioned, have numbers line. us as more and

on next So, the we share call. will with and put certainly some those everybody together numbers

Bruce Geller

back lot anticipation period three we payback need were there this a – $XX you to years, curious a decided was going we two pay what typically just your in million years, oh, there of in thought was for a years. without mind? spreadsheets, the Like spend payback And the of in I'm of, terms four But can period? your was what when

Dan Hollenbach

say is four years. three competitive in have had That spent I I swag, we this would payback three ago, not Bruce, been years point not money, any being wanted If to said, a that would we at a the were to we world. do

So, were our years archaic. three ago systems

Bruce Geller

Okay, enough. fair

Dan Hollenbach

much in We have not IT improvement spent years. on too

Bruce Geller

agree that That's is dilutive likely on to Okay. Industrial near-term that at you're a that Light to of than of accurate whatever sale? in higher pay that statement? is until received going sale an multiple to And you then seems is it Division have those reinvesting of going you you proceeds. those the the loss in least you EBITDA the your the you. on purchase multiple the like With proceeds terms reinvest it be respect Thank Would to fair.

Dan Hollenbach

Well, we business frankly. great a Light multiple got for Industrial

and IT discussions as looking the last been, we in were multiples on it's I was the six at since range. anybody. serious As what we been primarily side, But again, mentioned, seven with summer, we which talks probably eight to we're the have had months

then better price a LI headaches. up management could at much the gone that far those we comp less sold if we with dramatically, buy haven't So, same probably margin risk worker's business and

headaches, I So not intensity. won't headaches say

So, yes.

Bruce Geller

once those dilution looking EBIDA you here, to being… a the in some have months be earning period, much. few going prior But at you of Okay. interim to proceeds, they're not you are lose And do

Dan Hollenbach

are $X.X probably basis some we net a On about yes. looking at We per income share dilution. lost earnings on are million. We

was capital a long-term, and $X.XX gives side it we have the that on we the the buy expand share. Professional in us think So But the worth transaction.

Bruce Geller

very you Thank much. Okay.

Operator

Thank you.

Maxwell next your from open. comes now of Our James Tocqueville. the James lane question Please, is from line

James Maxwell

guys. good Hey, morning,

Beth Garvey

Good morning.

James Maxwell

I over of maybe you've about morning. million good the deployed into years couple $XX segment. guess capital last – the guess of I Professional

has to in EdgeRock, cetera. Have impacted just to of that understand I'm et we And by some recovered that of recovered segment? LJK, fully the been COVID, Momentum? Are pre-COVID trying they productivity of fully sort levels? the

Dan Hollenbach

doing is So, Momentum specifically, fantastic.

that a think ITC, is and higher we I better our now call well range we I $X very pre-COVID back IT yes, end than million-ish to doing is of well. we it forward. ITC, which What as EdgeRock our mean million sort very, levels. bought business consulting do of business will around the side move $X is

part suffered XXXX quarter As latter year, we mentioned, to and probably in the recover. as has the you of side slower of mentioned, this been dramatically every and IND

of and two two good retained restructuring the years other are very about that. has feel support bought that. that we of we're search into sort The all divisions principal So, business to that that we basis. left on LJK, a with we

James Maxwell

capital the is needs capital any Estate Okay. more accelerate by And then growth to of segment? deploying organic the way Real the And are there what there?

Dan Hollenbach

So, it's because a no really salesperson finding recruiter. and the whatever. the right really space office or cost There's location, people right a in it's

that is it's of the So, business. talent acquisition really expanding cost that

So…

James Maxwell

[indiscernible]. And Okay.

Dan Hollenbach

– have an sorry, pardon advantage me, I'm We

James Maxwell

lot make Professional to to to a acquisitions. more there's similar grow from the proceeds traditional not of so businesses, business So Professional your really organically. divestiture It's the not are

Dan Hollenbach

on for debt one to allows it the our new reduce think less again, number. I EBITDA I both. we're than to mean, going down Well,

requirements do interest. annual So, – debt requirement lower away in debt totally we with our

this we to do available team didn't share have budgeted, cash staff. So, When Estate cash with Real us, in additional year that clearly to the selling flow plan we we we when available we us. were considering

take sense, customers, not. know Beth our will markets whether So, makes go or and and that to that it accelerate I we growth our want and yes, whether a at back given and see look Kelly

So, to we the do had certainly it. availability

Beth Garvey

I division with of regards spoke last presidents both of for week amount to our recruiters in year. there increasing out our this

it? get right like, evaluating in looks we're we and how to So, that we of can now of what would do it what process quickly out the expect

James Maxwell

Okay. Do did you today have open estate pre-pandemic? you locations more than real

Beth Garvey

back in do But for we're have I think six openings additional also Canada. And this we're XXXX. into going to we we where scheduled from were, year.

that an interesting venture So, be for us. will

I down for got Ken think schedule May. we on the

So, plans we for do have big them. expansion

James Maxwell

demand? than not opinion, Was pent-up So, So, continue? the in each that that higher the your productivity office that much that the was sustainable results of pre-pandemic. QX possibly is it or is does based on location

Beth Garvey

I right. and mean bajillion demand. there think being you But left multifamily of are out I around, a was look if locations built cranes and some there's it pent-up

I was up, think, as the of there I opens being capital because that was think that held it side So, the construction of moratorium.

just strings, that saw people up their I some we So, it. open started I able to side of purse think being once additional in think, activity

was So it another in part money, can okay, everybody and but going, spending part of for stuff, always now it of good and we was start go that's just us. pent-up

James Maxwell

it. Okay, great. Thank appreciate you. I

Beth Garvey

are You welcome.

Operator

have Thank currently no We questions. you. further

over Beth back for hand Garvey will I any to remarks. So, final

Beth Garvey

your we to late support. today to results quarter with April. first you us on forward And taking We you. Thank appreciate look appreciate our join you sharing time in the continued call and

So, thank the everybody for joining and you stay healthy, call. and safe again

Operator

today's so concludes Thank call. much for This you joining.

now your may lines. You disconnect

BGSF (BGSF) 10 Mar 222021 Q4 Earnings call transcript