BGSF - Earnings call transcript Q2 2024

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Operator

Good morning, everyone. Welcome to the BGSF, Inc. Fiscal 2024 Second Quarter Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded.

to Advisors. call like Martin, to would Part Three I turn over the Sandy Now, ahead. go Please

Sandy Martin

Good morning. on session. a for Executive After XXXX Beth Thank our you Chair, Officer; earnings second for Garvey, there Chief conference quarter and BGSF prepared John call. With Financial and remarks, Q&A me President the Barnett, are joining call Chief us Officer. today be will

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

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

Beth Garvey

to review evaluate us. announced shareholder thank our value, Board to you to conference quarter I strategic ongoing part And and all the Thank you, as a alternatives. options. call. In process second continue that Welcome of May, and will for maximize earnings all joining we of Sandy,

in look today's process the the forward regarding While strategic so is our we you will not we take Thank and understanding. questions today, ongoing results for to in the I cannot Q&A. future. provide sharing the process or much an Also, alternatives update

we largest U.S., that we Before XXth well XXXX. firm Staffing to our have in IT the Industry XXXst pleased largest been improvement by from naming staffing as in am Analysts from us XXnd place staffing the I cover an recognized XXth an the firm, as improvement share results,

Moving an is value up important partners. delivering recognizing annual work in rankings our and teams to and dedication excellence our milestone, hard customers strategic to SIA's and

impacted entire last higher Over most the significantly our macro to pressures have industry that interest the have rates due and businesses XX pressures inflationary impacted months, challenging in U.S. negatively

measure quarter, this not million, revenues compared the were second down our incremental sequentially revenues may $XX Management comparisons, quarter. comprised the million $XX although first million sequential Year-over-year and Property year, of still year-over-year for to total meaningful, for were to compared the $XX Property segment. Professional up For approximately progress comparisons. and our Management

of direction, mainly declined and segment, project X.X% to first returned yet the project second were sequential sales quarter in the report quarter the because year-over-year seasonality, both to in ends periods, trending lift a not versus we right Professional we've the starts. in Although sequential exceeded the pleased over revenues second albeit normal the quarter. In

the the encouraging and outlook revenue projects is seen engagements. near half outpaced June. solutions, in workforce flow generate will I more about very was cash began a This of positive and year. contract indicators second speak and These offshore our solutions, and This approximately contract primarily sustained the ends will business in moment. acceleration quarter. in new through in wins IT However, the to Notably, shift by on momentum XX% managed

goals These actions while manage second operational supporting to lower for short-term profitability and quarter the to reduce financial quarter, walks detailed growth discuss fixed benefit initiatives John? in headcount return results I action and will strategic costs through outlook. the and to continue our significant plans. After costs. John We our took the prudent will our

John Barnett

Beth, good you, everyone. and Thank morning,

environment comparisons progress. our mentioned, more industry made impacting see the year-over-year our to financial has difficult As challenging Beth

focus comparisons few are I year-over-year sequential trends. highlight Although important, current plan to on to a comparisons

reflected the Second increase quarter versus quarter of with sequential $XX.X million million Property $XX.X revenues were flat Management an year a the basis, from first X.X% sequentially. of in quarter and prior On lift XXXX. revenues seasonal

first remained soft the second versus the and with our in in revenues year For the quarter down were compared quarter, segment competitors prior Professional to line period.

project revenue as in show Professional wins improvement contract and in the in Beth are quarter new mentioned, sequential begin second fourth third seeing the wins. will to However, we in up quarters.

in decrease by encouraged $XX.X million and and contract to uptick that and by the points. margins are and XX.X% demand wins nearing BGSF The period. margin lower quarter, in positive gross which by improving inflection. Gross year-over-year of XX were is placement are optimistic first Compared second cautiously Property driven the an compared the margins year profit permanent to attributed an and and perhaps lower a Management environment, competition profit no cost and $XX.X sales. market gross quarter profit prior margins million in in basis industry to has are the We XX.X% improved

gross expect first second $XX.X line to persisting, to actions $XX compared quarter for fixed manage prudent, reducing With top benefits. were to As balancing we million Professional structure, short-term prior sales where sequentially in we we discussed quarter it to the and margins quarter. and million improve year's costs continue $XX.X is gains the compression we cost expenses our were in long-term last million taking. SG&A quarter, due segment the

from $XX.X first the June per operating second half XXth to cash $X.XX activities generated expected share at diluted were compares of first end months million $XX adjusted in Second funded per EBITDA was end the us to quarter for the Capital in for quarter XX-month million, times. With X.X% second the million of $X.X I rate debt first The like sequentially expenditures of quarter. $X.X enabled X of reported $X.XX to X.X% back million revenue. XXXX in the the of X.X% from to $X to $XX adjusted even trailing EBITDA compared or the revenue of EBITDA million earnings at which $X.XX At or to debt adjusted was reflects first which reduce X.X funded the share adjusted million was million of XXXX would our our second that, to and quarter, XXXX forma with share spend. Beth. pro XXXX. We run turn call quarter We quarter. $X.X or per the

Beth Garvey

John. you, Thank

difficult, positive momentum late began of should that quarter. second As seeing expected, in but we we communicated the improve last in our half was starting quarter, the third first the XXXX quarter results

XXXX. quarter fourth We expect quarter revenues our increase compared to fourth to of

Although property early headwinds we to management. continue our projects traction and given our macro professional industry, cautiously are fears of in challenge developing and recession optimistic backlog

return have to operating actively system are strategically increased customers and a This our closing sales bolstered Driving deals. our and occupancy management by owners able been increasing operating felt touch target management property unit relationship well pressures for preparing points rate with teams, seasonal around elevated property the as year as more properties enablement to upgrades, a groups our and We expense. realities. teams. With with work leads campaigns to we sales robust process targeted

As list pool larger short rather suppliers a of than of preferred opting a dependable result, several property a management vendors. groups for are

industry as a lists property delivering management well win-win industry team capital reputation the delays backlog client sector M&A as talent, been in as this trusted of created rates secure leader second these property higher our the partners this companies, lowers which competitive as showcase and positions industry half which to believe teams higher As narrow with maintenance us experienced a the of of allows a capital our culture a levels. our in last a private exceptional able shift has people at management In for for XXXX, was advantage and to a BGSF. in provider; of especially sales Fed will list our to strategic a created suppliers and on on benefit as is interest expected. improvements decisions us. The the repairs as We multifamily deferred year, the

strategy measurable market territory increase traction For we as mapping to effort we an also property see in management, share. executed our

in Our we process and out XX% increase in saw revenue pilot the additional are year-over-year actively rolling markets. a market

our partnerships SVP seasoned gained a environment. teams strong as effectiveness traction, and of sales Andrew lead on Andrew's Hill of expertise, enhanced powerful sales building with track our June management improve brought and addition, and relationships competitive we teams. train the with local coupled In our strategic efforts those sales training aligned onboard in joined which we sales the and will to the and a development in speed around record sales to market. strengthen has us in teams

leading industry be we communities the with quarter, residential. conversions evolving proud of we and are luxury last to discussed As apartments, changing know edge this and expanding an is innovation commercial to and industry of on

the opportunity IT X quarter starts almost project IT and side, On exceeding the development in related X, Typical the engagements with X engagements. managed and last quotes declines pipelines we QX and software consulting XXXX. began expand, year of in first X spending of or to or tighten professional accelerated remainder in began XXXX. that for customer resources see to Despite ends trends, our these awards to project project quarter accelerating to partnerships strategic every starting services with with

the project ends second the last starting earlier, weeks mentioned exceeded As quarter. I few of project in wins

won financials will also international the which history, most a project IT client major contributing significant for to We begin in QX. company's our a in project large transformation our

actively professional encouraged we in than deploying year. the engagements many outlook have more are division the project more are We a revenue than teams for to about been

the division first the recent fully we with in revenue capture billable and anticipate in these wins, half quarter. ramp-up do continuing the quarter strong more results client a our and engagements professional work from the not fourth While in third business starting momentum

a an perm seeing for in accounting our are activity double-digit sequentially, positive increase we recent growth addition, we which services is businesses. and about hiring In finance the with for know U.S. signal placement

in long-term, over businesses benefit shift manner X we that IT services strategic a in years indicated ago. which with the aligns will versus into operate has industry Our the consultive staffing play more put that in

collective an the every clients part valuable Our tech to in as highly BGSF IT our cycle. of bring is approach unbiased expertise we to

offshore This delivering for AI an near-term and is area second delivery solutions SAP us partnerships valuable Workday, bolstered innovate with I recent the others pleased half development, teams, products. which and to our and solutions, ERP and excellence. initiatives and am exciting prospects. market, continue engineers onshore grow of will connector and the benefit Arroyo in important growth cloud continues us software XXXX reputation with beyond. Managed has product with to in delivers work, with Our technology BGSF's intelligence, which our

have for we work and continue and do, sales, are profitability continued will on on your optimizing all investors the at improve to to cash vision and clients, Operator? their want but higher you focus call in to belief we stakeholders, our to drive time focused and know We of profitability to flow and margins. structural support today. relentlessly our our thank growth. Thank open reducing questions. costs would We I BGSF. We like for now employees, partners for

Operator

Thank you.

will begin Roth Jeff first Instructions] [Operator from question-and-answer be session. We Capital. Our will from Martin the now question

Jeff Martin

by them. Beth, quarter estate you fourth fourth missed year-over-year, I but to be your apologize. missed catch expect that did those professional. could comments, I comments you quarter about if just and I repeat third up and the I real

Beth Garvey

In regards to property management?

Jeff Martin

property quarter? management and and third fourth Professional

Beth Garvey

both out half Start to of of that in first wins professional in believe than momentum between is June. the on We've year the August, in the got that segments. going better May a of the October. lot going positive we half kind in side won dates be starting stagger and to and regards We the September in of second year far

things we've normal that of we mapping think half So year. the building year then first seen in, is territory those out into And the is see goes coming of the better of property coupled we success management than end to seasonality uptick. be the and quarter this going in with the the their to going tool definitely

Jeff Martin

contract cloud And about quarter then SAP couple was Last talked a large contracts. I there of think and divestitures. you some an

running were those little if Just quarter those and the in off a in curious terms bit start? or second of are if delayed

Beth Garvey

one week. discovery that working Some teams of them on, doing big been have I think now actually but started the right we've this are our running,

start shall that of September, August revenue up. ramping in, late and into seeing so start And we in coming we some

Jeff Martin

that that And new started then end the does the you in dovetail quarter, but project respect mentioned higher the exceeding with XX% with win wins to ends, versus how late state?

Beth Garvey

is many October. going into the some wins start -- start we second in The basically, and they that so some of again, September, when August, have some we in, the start in of in signed them we've sprinkle customers, paper, year half Jeff, -- the

those just start of a when get implemented. matter it's So dates

We agreements initial haven't seen the push anything we that from have.

sign so right that's positive just they're So now, a up. getting ramped

John Barnett

we we haven't that haven't we consistency basis, a winning end, and contracts more weekly in are on Jeff, Yeah. quite a consistently while. seeing this than seen seen right we're that

what in the been through So quarter. this and quarter this we've encouraging of beginning seen has continued

Jeff Martin

on, of first a generated half bit in curious capital, collection cash due to you've quite just then receivables. And year, flow of terms of operating the mainly of working

up capital your again? that curious, and your availability back Just you start build comfort working things to with capital as ramp

John Barnett

are Yeah. we We feel comfortable with today. where

our worked accounts great we've hard think, team job. very and I a receivable done has

to implemented tool focused [indiscernible], automate our and for should then a be structure lot we've and we AR is a doing year, organization, really visibility also of into what functions we really AR daily just guide last the on a a and of the more helpful the which lot balances. also training Over provide then

that's us push allowed so but made which And to DSO. also strides to our -- the less down really is the a of revenue, in we combination decline less AR, is revenue, AR collections, great accelerate

Operator

next And Taglich from question from will be Howard Halpern the Brothers.

Howard Halpern

projects a little If could and the that type talk verticals the you that you'll pipeline have guess, the about, bit of in? engaging be I you

Beth Garvey

bringing managed technology so our in a Mostly Arroyo. solutions space, lot it's of and in

buying campaign, call means As that from to Since more I buying us, them we about XX, Plus we're One services have got Arroyo getting XX months had thing asking months, and are from now we we customers of more think started what it we've out us. from buy where and speed going we types XX other up customers services and were are us. which a to that XX that we and doing talked we're so that one deals launched we we ago, in multiple integrated, about

of kinds engagements. it's So those

Howard Halpern

Okay. And you talked the guess, in you release, about press but I terms ramp-up, also, costs. of, in the you're seeing right-sized

leveraged in you activity half? the now not are enough much have that's you're increase so ramp the to accomplish that And second in where going costs to to coming

John Barnett

cost of Obviously, expect the second to A contract. matter to is the activity lot to in that timing to start the add of our yes, It's we half the that. add expect and deliver near we cost half fast structure structure they how G&A But or projects expected actually have a ramp-up. second we continue of under to don't term results. would we our of sales

Howard Halpern

the Okay. does And least permanent potentially then near just upcoming like X, indicate What quarters? trends term or X that what does placements. to last for initial and you look in the at that

Beth Garvey

into they We're is confidence quarters. the the an in very when that is people that now, right bit not active, usually is placement more economy a usually Perm indicator move teams we year. pickup and last is have something our soft, saw and that as accounting finance seeing little which that

And so we're just following that.

in -- year, double-digit sequential first what months the this X months in of X the and growth we done X had year they I of months had first the and year. last think last growth of

to just with we So that positive industry. be usually the and find trends

So when things little it's to are of down, perm you perm's tough, when it's come kind and a hope. bit, back, glimmer of starts a

Operator

Tieton ahead. question is [Operator next The Bill from Please go Capital. from Dezellem Instructions]

William Dezellem

questions. of group I a have

seeing what all, the of of the you First in wins changed? why And up? spirit are so now ramping

Beth Garvey

up have a held outlook. actually systems, change saying, move forward. enough, and last people held hey, [indiscernible] their in there's at we've think year, long to some these point I we People cash onto in ERP end

of are we're people And year. that business. people's seeing their of And last systems held important part kind shift ERP so think an where I

where So since to seeing we of lot that pent-up we're demand a start that's play, release.

William Dezellem

in further so any of opposed seemed back specifically And the much to insight to demand as gradually maybe second at that why coming be quarter, released in?

Beth Garvey

in I in were we're have relationships just know what's nurturing that we they don't good making that I and in customers go, to were place. happening were these reaching our teams there And sure done could out regard. job our a and help. having thinking, when buyer is speculate ready, when what that partnerships we ready really think our the to

John Barnett

these side long business, Professional cycles, are the too, of On sales the right.

a It's that we've been the yeah, of been time. okay, had, let's on, for just our got working working wins with lot the we've So said, move some where point let's go, we on to this. forward customers

William Dezellem

why the said competition was? in did was history, win lay-out And it then deal, you who I versus you firm's that you large And largest the the the guess maybe competition? could the

Beth Garvey

figuring for biggest them. to done and deal, in did company, that he and present. happy international it were job talking and called, and so know ended not incumbent an long international with us it we was international good. beating tedious we've event team the the XXth coming to the about the amazing who and and an Board over very we needs which I so we winning too. Chairman got But very, in at the player process the I'm out sure were a we and their out an an an met of he against. up the we we're ever presenting our taking was it And and And very and at competing one and were player. need. capabilities him asked wasn't what our And was at come It's incumbent hour the to was

team very exciting. very for I'm the it's of proud So that.

William Dezellem

do then implementations how And for this And there if you opportunity you see U.S. countries be Beth, expectations you that in so business you with the for for the their meet customer? would additional do could do operations? are case, implementing that that other or

Beth Garvey

be helping XX going international countries. in company, an to so them It's we're already

We met will week, it team, they believe that with for So the open have was. customer doors we just We is the it when this the Chairman future. definitely the with I I in beginning. now the believe believe last the deal business more think

William Dezellem

to or that you maintenance. Are business, occupancy trying deferral to rate preserve that and that a maintenance with had continuation leading the that finding is on there? then pressure to the the as deferred referenced dynamic And they're you Property this M&A Management to led What's sensing relative year, cash? that additional you're the

Beth Garvey

and of their segment costs all higher, lot lot in is higher. cash a -- has think of insurance operational a the with to There property's is that held being I are do it

them we people can point, So But definitely time certain a amount before hold are at seeing with again, of for hold it. cash. maintenance some to they deal have only

of And lots so just there's demand completely we break there believe started do eventually that free. yet. will It's pent-up that not

Operator

this and ladies the Beth to concludes like turn gentlemen, back any conference to Garvey would session. for remarks. And I our closing over question-and-answer

Beth Garvey

look Thank we in your to and to you forward Thanks. your for We continued talking today time support. you appreciate November.

Operator

The attending conference Thank for today's now you concluded. has presentation.

may now disconnect. You

BGSF (BGSF) 8 Aug 242024 Q2 Earnings call transcript