BGSF - Earnings call transcript Q4 2023

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Operator

Good morning, everyone. Welcome to the BGSF Inc. Fiscal 2023 Fourth Quarter and Full Year Financial Results Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded.

Now I'd like to turn the call over to Sandy Martin, Three Part Advisors. ahead. go please Ma'am,

Sandra Martin

and morning, there Full to With Year today After Chair, the Good Barnett, and Fourth Financial be Chief me BGSF a Quarter call Officer. President Garvey, Beth and Earnings prepared are Executive and you. Officer; the John remarks, welcome our XXXX on Chief will Thank Conference session. Call. Q&A

at statements later may in webcast differ investor.bgsf.com. Today's the today obligation statements, Commission. Management today, based call if available safe because today's in these those company uncertainties, company the company's Private replay XXXX. risks A Reform the the noted, Investor forward-looking statements information live. of Relations statements will Securities under no becomes of is publicly company's materially discussions Act Securities being of page archived listed results including and are include from which and various those and on forward-looking and Actual be made with future. As assumes the on certain of the the filings as the available Exchange new update made indicated by Litigation provisions will to even by are harbor assumptions the

should call reconciled and be as GAAP over considered information Garvey. financial not certain non-GAAP useful During the management related measures earnings now intended to measures, Beth condition Beth? today's in are non-GAAP are will GAAP also press evaluating turn and which can financial call, non-GAAP be the to supplement measures a the financial reference substitute. in release. I'll to operations company's and results. These the

Beth Garvey

characterized execution significant pivotal today's strategic call. transformative of year plans. achievements everyone and you, Thank for XXXX Fiscal on successful to marked greetings our and the Sandy, a by BGSF and

Property quarter nearly On calendar to report total fourth basis, revenues increase a in worth XXXX we a estimate week of to $XXX X% revenue over operating in X% In grew experienced a XXXX. basis. while included intentionally XXXX second shift shift. away X% same-day adjusted on We almost due by Professional revenues from in operations compared Management basis specific lower noting by extra are increase million. $XX revenue that due an It's of of Professional X% the growth an a flow, to in accompanied same-day cash million to a pleased an same-day segments, was XXXX to a half Notably, for the IT revenues year, lower-margin on placements. strategic

with successfully solutions XXXX. new fostering of technology development hitting various amplified These been well. I'm ServiceNow, involved nearshore proud rebranding business and further The in Our pole businesses. continued strength initiatives with growth gives integrating Index March team's trade XXXX. the of names Confidence acquiring has recognition in Consulting in Microsoft, vision. The our and a including which of since have enhanced companies, acquisitions acquired from XXXX provide us to our brand BGSF the acquired XXXX highest CEO It brand dedication as high-end XXXX clients Royal of and Furthermore, Salesforce Solutions and finance in SAP, Oracle leading accounting partnerships December in capabilities. April offshore workforce robust Workday, immensely Horn BGSF hard opportunities. its our work, level and U.S. advancing instrumental and our in confidence

XXXX are beyond. and Our in strategic positioned growth offerings decisions regarding service for well

John. to Now turn I'll the call over

John Barnett

and Beth, everyone. morning, you, Thank good

XXXX same-day basis. quarter X%. year-over-year extra XX-week fiscal total total On an X.X% up extra was for was making the As in adjusting basis, and year. year on the revenue a was comparison was revenue million, a in X as-reported fiscal week fourth XXXX fourth the XX-week $XXX.X XXXX difficult. was Beth up mentioned, XXXX days, quarter, The as-reported a XXXX

basis as-reported the for revenue on Solutions. Royal was an a same-day Horn X% driven and and by For Professional the our acquisition The segments Consulting the reported, was of on year increase basis. X.X% up

we Solutions lost to Horn Horn in separate cleanly integrated the we business. the As existing our ability Solutions XXXX, business organic from or

a organic mid-teens in same-day and and basis, an Professional we on X% For Management in on basis X.X% the was the declined our that estimated year business Property increased for profit as-reported and same-day percentage year, Gross basis. on a million brand terms. the our the $XXX rebranding the impairment X% up XX.X%, project. XXXX charge name Recall a from related that operating from up $XX.X XXX were results million, year, XXXX. pretax prior noncash gross points basis included to margins onetime

from per fees share loss share continuing and to our operations XX.X% $X.XX compared acquisition compared the by operations adjusted amortization, per impairment million million. to adjusted transaction EBITDA in $X.XX $XX is increased earnings to from to XXXX. We Excluding $XX.X of reported share continuing charge, nonrecurring earnings $X.XX per

margin X.X% to in EBITDA adjusted grew Our revenue in from XXXX of XXXX. X%

for Revenues $XX.X million in basis, was fourth quarter in quarter. revenue days, XXXX $XX.X million the were versus year prior basis quarter. XXXX. the same-day to up X extra revenue same-day Turning $XX.X adjusting compared X% On the a of fourth to million

Property at a included by on an benefit acquired of the same-day X.X% and increased which segments, basis, Management X%, revenues. the revenue increased estimated For Professional

existing mid during As We the basis became in a organic contracted stated quarter. teens fourth revenue Solutions Horn high the it on integration the same-day earlier, organic as difficult estimated to the out or Professional separate business. our progressed, that

in permanent the to and continue fourth pressure placement. quarter see on staff augmentation, starts We project

slight quarter. and moved were in the the margins quarter, the optimistic opportunity in grown were XXXX. Gross about through has and earnings of X.X% $X.X adjusted million XX% X.X% million in prior million to $X.XX or of by as $X.X $XX.X revenue the profit was million increased compared million year share first year XX.X% and fourth we diluted reported $X.X quarter share $XX.X we the the decline for of However, pipeline per to per fourth year of fourth EBITDA quarter. million million XX.X% margin Fourth improvement expenses XX% from $X.X to SG&A and The $X.XX or expenses. quarter compared were quarter $XX.X placement versus the was adjusted gross which $XX.X compared prior and lower XXX%. a year permanent prior an carries for revenue. Operating We in business, quarter, prior of of lower million quarter in which the XXXX to income revenue, of driven attributed margin is quarter. the revenue SG&A

we happy our announce the credit I'm refinancing this to Tuesday. of that closed past facility

X% their a great capital our pro on manage We sheet, of leverage banks efficiencies We disciplined and forma debt syndicate, allocation ratio. working growth, capital trailing prudently months with adjusted in down investments and X.XXx capital balance which quarterly strategic strategy, yield EBITDA we dividend of our cash was carefully organic approach maintain appreciative expenditures, at year-end. have includes to annualized to focusing acquisitions. a Funded group pay in this cash to a XX of and approximately are an our partnership. We evaluating debt,

no like in I to would that, acquisitions turn Beth. have plans for call XXXX. With the We to back immediate

Beth Garvey

you, Thank John.

reflect beyond. with supporting operations on we uncertainty. . As in streamlining commitment double-digit posed challenges, economic Despite XXXX, our success tough comps we has us long-term our XXXX, challenges the coupled by teams to and these sales from initiatives strategic XXXX for and positioned and recognized short-term

proprietary territory and property to ahead leverage training and mapping upscaling tool management sales partnerships. through continue to force plan talent virtual Looking deployment XXXX, our for better our we

partner technologies direct On Workday our recent partnerships appointment us as and elevates leading a the Professional service new side, our heights. to with

growing nearshore seeing Managed services. and also and in IT the are momentum offshore cross-selling We Solutions of our

the and proud Our a shareholder of success long-term higher value value and on platform blocks including extremely and management consulting, strategic solutions profitability. us creation. I'm repositioning growth execution for building sets progress future management property unique up our for and

team's future. nimble Our approach position we BGSF dedication what lie opportunities to look the us well that I for forward at in ahead. achieve can and the

said, for at open there. With that the to of to wanted we the Investor you I many operator questions, questions. over the ROTH next to be line week I will mention see it and for we turn Before Conference that hope will

Operator

[Operator question ROTH MKM. Instructions] Jeff Our from comes today first from Martin

Jeff Martin

Beth, segment. more insight Professional a the give us in little I you hoping was could

level. or trickle you the pipeline to you've first in in mentioned Are the in that years seeing You uptick of X that through survey seen CEO so Professional? that time business the

Beth Garvey

We definitely are.

group going right the buzzing on So good. lot right Professional a they're now all -- of there's It's optimism is a now. at BGSF,

Jeff Martin

then probably on coming a towards maybe here. acquisition flow off-shoring and near-shoring And very Royal you is that seen? -- through so, now with How on towards progress with I was the initial some can seeing anecdotes reaction the what you've positive, you year Great. the if give and know

Beth Garvey

there. really out things. work figure do took capabilities what down have robust, while their products that Well, they such us many different call can so a They they to it a

can they mostly build us took many could And the excited tools. the We're way different about they to that do. a so different pick while out it some all things

to also AI Not to that like we're that's all systems our down a of some pricing have with you that that working actually a ERP connect help systems. the We products of do time, connect a for tools those build have working we're in connector tool We've So other start lot there got things. some that products some AI group ERP right? able connect team customers. to tool, building a

what's to that that to they in an pain point your to talk job would could we customers talking and recognize group we do Luis runs able our done And the more they Sanchez, has what help they customers what do -- so we who the them. what more regards about need. what amazing and to our

out. it's been all to really play see fun that And so

Jeff Martin

And that maybe what BGSF? on then elaborate could partnership, means you the Workday for

Beth Garvey

be do some like -- to we we the In direct. past, third were not to were more, able party, we proved but a were

us direct. So our a gives to second of able us we This would be could to ability the walk -- go one party customers. have into

So they implementer. preferred their now have website on as us a

allows not really wait the to else on lot of so us having us for shoulder. it tag to a visibility and somebody And

Jeff Martin

made solutions. BGSF then the strides acquisitions enhance towards I And about of over technologically Great. years since in maybe And layered progression more technology X.X aspect know you've talk to past advanced the the some you've has that year, strategically, the offering? made

Beth Garvey

lot a I Jeff. think there's It's question, of a things. great

as there's acquisitions, and things business you're a through about that we going to to as to realized to it, with? So customers they software, our that our at started then needing they customers we What to piece. then customize think and and the Well, looking then a lot I look of have have puzzle at our it. do have implement their business first, they pick start talking

sure that figured way who I we could out. we in able figure had do the do make to that how into an done And player those things we goes business doing that the so, we that And really in people job and move so out great of are around amazing being circle. we've the higher all teams And margin. think things

idea project customers us type and just other these closing gap that it of work seeing of to to higher-margin And X that volume, us do margin had lower And to was higher their do that us strategically actually were benefit our keep a people took the customers of or good some for be business X really see to we we asking able business, decided going. to where were needs. we that the on shift it

year. And last shifted so that was kind of we how

One that really of shifted needed we're we from our year lower on really, the and reasons double away last that the main really at. to finding things margin to we that down were business good get customers

John Barnett

I'd had I some transformation, finance that more Horn accounting on right? these X go big pretty redundancies redundancies. expertise did would higher we that think necessarily, we on through acquisitions also Bringing offshore. really with had working end, to because a brought finance Not needed I was right? Solutions board but the so and our a then board, to business say, around, IT, similar Managed And accounting, did organize and great the the organize and we nearshore, Arroyo, kind we Peters of our job, Eric professional and business team groups, say

lifting and in -- So about to spend our and an set result spent of -- a feel which the as more good spent and of how we lot up some higher in especially of expect to get flog we we organization we economic optimism, we're really he this customers. face that time spent And alignment. by

Jeff Martin

And Great. could. if one I then me, more for

And attractive kind and what On a very are you in say, the Management out double-digit Do now, side? Management it foresee if currently? not getting the Property you're rate. traditionally a environment Property segment seeing side, that's growth back there of seeing rapid you at grown to,

Beth Garvey

some some those adjusting do lines. things than more before. I had think got out to We've at we've had that had We've there of ways segment. we've along we to in the look competition different change

going really to going targeted the mentioned earlier, us Management, that Property to our our territory going sales think And we've more think forward. help that's approach. us beneficial be to be I is able I for tool be in

but it's what about where X there So ago. out now we're we optimistic different it's than -- that there's environment also a headed, was understand years it

Operator

Our Halpern Brothers. Taglich next Howard comes from from question

Howard Halpern

and Congratulations to on XXXX. forward the solid looking results

In locations the are terms end the splitting did of locations of the for number XXXX? prospects you Property increasing year how And many what Management, in with? locations or

Beth Garvey

are we're there. mapping the -- have tools, way we up out we XX% at end now, And people an out this Atlanta as may then but I X believe where we to territory now, right there I'm force may doing going use example, X sales Howard. having

how our that's so we're kind of And perspective. that from expanding growth

as one won't have person many -- many So hit. they as have they properties to need won't

looked being as we've And markets in out to targeted. more the able always U.S. different of at opening in kind be will it then So opportunistic be always,

that got really that's the to we right because this closest But going And to we're now, identified. focus couple territory so think we've on are side dollar. a that,

Howard Halpern

Okay. set to in terms the you've And place business? What technology in are the own on grow XXXX. in of terms you your based that of how productivity all up internal for seeing put you're

John Barnett

Yes.

efficient we we to to addition to the I you also addition our continue in work did if align to last of the on went we becoming we in rightsizing what evolve year, at process systems. the and And the think organization look organization side, through Professional -- the there. more did

the our and the cost through through SG&A our cost quarters. we of percent went So went you as revenue in as a as year we that see would

on we So we And on system. efficiencies continue there are today. believe add shape as feel get still Obviously, out. gained our are good like efficiencies we to system continue of And that work be our we grow, to our we'll in to to we organization. to those evolving out

Beth Garvey

I to add will And that.

with that that we've I of the to team. some good economic of kind job really the think a done pressures last had rightsize through the on really year players we

position we on So when lot G&A right now a expense. can we and look at have to to revenue not more bring a any it, we're bring more on where

ourselves that really about and And we restructured this for think so feel year. we've I confident position how and

Howard Halpern

And one. Okay. one last

talent You the request outlook to side about talked to customer the bringing How the on people side seeing a and those little bit fill there. customers? and you -- fill are the of

Beth Garvey

of just in about consultants such field talked loyal past, We've have great that and are group the us. talent we a to

And seeing now us, they so in we job very us. for we people aren't once for sure really continue right work a because do work making problem to in recruiting good a they

to people able back we're So out. redeploy

not the So to team. a now, and that in that's of right lot pressure we're a testament area feeling

Operator

next Our from comes Tieton from question Capital. Bill Dezellem

William Dezellem

itself, Property on dive into you're Great. bit it's that how Would more please And that additional detail manifesting on you seeing the a competition please? side? Management

Beth Garvey

niche to And an interesting that there's decided is we've in. more always be who've had competition, people more but this and

around. And so we get followed

that we actually and market, some follow we in a competitors go So of have our us. will when open

team changes. it benefit bit above Apartment us a we a to directions. Association double it's are our things That forward has last if with down National those Supplier testament help the that pack. the to go moving the kinds being how and But segment business. year, deep and Year of and It those got think the and I It relationships. on and relationship again, you little a still, in we structuring to And is so wide. able us And move is recall us and of sell, changes in sales

William Dezellem

you're on there opportunities. Could first be what appeared interesting you to some growth please? now, purchased organic Royal, expand you seeing when And

Beth Garvey

lot and with the capabilities mentioned is Royal opportunity that cross-sell earlier. they I that things as their of There a that many uncovered, teams have we've

things out talking Just way and very we going help. do to are knowing they a if points figuring can the what get good a listening customers, customers they're of capable in through the of to they great continue think customers us careful a where in then growth we understand talk to opportunity area. [ and And Luis job there's direction. that they sure that that I are and as continue move our front people right we doing I and to But to they think what we can pain there's in team his in ] of making do, in our really that for and our

John Barnett

offshore reputation current existing from right? a few have may And we've with Bill, is a working. our relationships, this what people, with nearshore, start resources these our is and have getting proving of companies and this them. had customer our more the goal do capabilities areas they one right? to with build where through of process base And work

William Dezellem

And do helpful. want point is remarks. I your one of opening clarification from That

the talked You that capabilities tie business that correct? and what pricing learning I part an you that to to about the just the were was had ability Is another system, missed ERP and of saying? Or was Arroyo.

Beth Garvey

-- Tried sorry, I'm to business with segment. I'm struggling tie that

William Dezellem

referenced So the have from learned you one the acquisitions was of that that capabilities have one ERP pricing our system? you to that you ability of to had the tie

Beth Garvey

I'm Okay. sorry.

lacking. a to tool, companies feeding are right? ERP team built manufacturing system system with That there do there -- right? Royal that now ERP the a has or into connections manufacturing ability an pricing connecting product, the like that pricing And been it to So of do and capability to that price tools how have we take tie this pricing tools out has

build job really done able being that of we've out. good to so And a

Operator

Our from Partners. Kinstlinger Alliance comes Brian Global from next question

Brian Kinstlinger

talk and speak then you about trends? I valuation was solid last and quarters? so for And flow can companies private if for sure transactions how you to have recent with current late, the they expectations M&A joined may your your changed over cash maybe Can few Sorry, I'm appetite this asked. not

John Barnett

Yes.

our I think exceptional as believe driving we X from was where execution. unless focused pull fit are something We now our a of leverage focus are some on large looking come except we're alignment. we the doubt up, across acquisition realignment at behind making they process where from -- adoption very something in anything, that that some going I price through to really that opportunities But business good and economy we this low us, right we acquired we're tailwinds a would This full at came -- on year. was trigger acquisitions really at We up. We've have standpoint. we finally and on platform. the and done have selling need year, the we have what final a highly sales

Operator

question next from Our Taglich Mike comes from Taglich Brothers.

Michael Taglich

that. didn't and Management on then Is Property range a growth on I business the question. the there hope I tech this miss the One coming business for high year? low

Beth Garvey

for asking how think about percentages you -- In high Mike? guidance, we are

Michael Taglich

you real but beat inflation to Yes, Are are or not going tech? beat going not estate? to you inflation or in in

Beth Garvey

I good feel about very XXXX.

Michael Taglich

All right.

You feel okay... don't little more give you want specific It's like a or -- to it?

Beth Garvey

we group. Professional I our in feel have like going momentum great

with lot from traveling on. that have team of they numerous coming who customers. had the what a our last customers We with overwhelmed free was conversations wildly I positivity to going with was and are the with week with have Professional starting break

these move conversations Management out So I know the the there's coming properties of some what to mortgage that good continue concerns up. are group, think in with I we I the rates of very, that. that is for feel forward, I some some very Property there leases in from interest owners area. about happening been know about as And

just that. So going watch to we're

with but very our the that I couple growth. I very, about of And restructure last XXXX and potential going through the of teams, feel with realignment made all, that we the all have into systems good our years so -- in the think the of

Operator

turn remarks. Ladies and we'll today's any Beth over ending I'd be that, Garvey gentlemen, with back closing like to floor question-and-answer session. to for the

Beth Garvey

and our everyone, with great updating we continued you in day. your appreciate support. quarter for a time early today, May. forward results We your you, look first Have Thank to

Operator

concluding you we'll that, for and Ladies joining. be call do thank and with presentation. conference today's gentlemen, We

You may disconnect lines. now your

BGSF (BGSF) 14 Mar 242023 Q4 Earnings call transcript