Bgsf, inc. reports strong second quarter 2022 financial results and declares 31st consecutive cash dividend quarterly revenues of $74 million, up 29%
Plano, texas--(business wire)--bgsf, inc. (nyse: bgsf), a leading national provider of workforce solutions, today reported financial results for its second quarter ended june 26, 2022. the company further announced that its board of directors has declared a quarterly cash dividend of $0.15 per share of common stock. the dividend is payable on august 22, 2022 to all shareholders of record as of the close of business on august 15, 2022. this marks the 31st consecutive quarterly dividend and based on yesterday’s closing price of the company’s common stock, the annualized yield is approximately 4.7%. q2 2022 highlights from continuing operations: revenues were $74.1 million, an increase of 29.1% from 2021 gross profit was $25.1 million, up 30.2% from 2021, while gross profit percent increased 0.3% to 33.8% in 2022 selling, general and administrative expenses increased $3.6 million, or 22.3%, over 2021, primarily due to additional compensation generated from increased overall gross profit net income from continuing operations was $3.2 million, or $0.30 per diluted share, vs. net income from continuing operations of $2.6 million, or $0.25 per diluted share in 2021 adjusted ebitda1 from continuing operations was $5.4 million (7.3% of revenues), vs. $3.2 million (5.6% of revenues) in 2021 adjusted eps1 from continuing operations was $0.34 in 2022, up from $0.21 in 2021 six month 2022 highlights from continuing operations: revenues were $142.6 million, an increase of 33.1% from 2021 gross profit was $48.5 million, up 36.7% from 2021, while gross profit percent increased 0.9% to 34.0% in 2022 selling, general and administrative expenses increased $8.0 million, or 25.5%, over 2021, primarily due to additional compensation generated from increased overall gross profit net income from continuing operations was $5.2 million, or $0.50 per diluted share, vs. net income from continuing operations of $2.3 million, or $0.23 per diluted share in 2021 adjusted ebitda1 from continuing operations was $9.3 million (6.5% of revenues), vs. $4.5 million (4.2% of revenues) in 2021 adjusted eps1 from continuing operations was $0.58 in 2022, up from $0.24 in 2021 1non-gaap financial measure. see reconciliation below for details. beth a. garvey, chair, president and ceo, said, “we are delighted to report continued momentum with second quarter results, which gives us confidence regarding the u.s. labor market and client demand. revenues meaningfully improved quarter over quarter, as well as sequentially. “our longer-term strategy of building and buying higher margin businesses, coupled with identifying additional revenue streams within our segments, are gaining traction this year. additionally, we remain focused on solving business challenges for our clients and growing our market share through our well-aligned teams. “due to our strong operational results, the board has declared our 31st consecutive quarterly dividend of $0.15 per share. this reinforces a continuing level of confidence in the strength of our business and cash flow prospects. looking ahead, we will continue to focus on our communities, training, culture, internal team, and clients, which we believe will further strengthen bgsf’s positioning as a best-in-class workforce solutions company.” conference call bgsf call at 9:00 a.m. et on august 4, 2022. interested participants may dial 844-200-6205 (u.s. callers) or 929-526-1599 (all other locations) and provide access code 464896. a replay of the call will be available until august 11, 2022. to access the replay, please dial 929-458-6194 (u.s. callers), 866-813-9403 (us toll free callers), or +44 204-525-0658 (all other locations) and enter access code 400404. the live webcast and archived replay are accessible at the investor relations section of the company’s website at www.bgsf.com. about bgsf with its home office in plano, texas, bgsf provides workforce solutions to a variety of industries through its various divisions in it, cyber, finance & accounting, creative, and real estate (apartment communities and commercial buildings). bgsf has integrated several regional and national brands achieving scalable growth. the company was ranked by staffing industry analysts as the 79th largest u.s. staffing company and the 48th largest it staffing firm in 2021. the company’s disciplined acquisition philosophy, which builds value through both financial growth and the retention of unique and dedicated talent within bgsf’s family of companies, has resulted in a seasoned management team with strong tenure and the ability to offer exceptional service to our field talent and client partners while building value for investors. for more information on the company and its services, please visit its website at www.bgsf.com. forward-looking statements the forward-looking statements in this press release are made under the “safe harbor” provisions of the private securities litigation reform act of 1995. forward-looking statements may include, but are not limited to, statements regarding our future financial performance and the expectations and objectives of our board or management. the company’s actual results could differ materially from those indicated by the forward-looking statements because of various other risks and uncertainties, including those listed in item 1a of the company’s annual report on form 10-k and in the company’s other filings and reports with the securities and exchange commission. all of the risks and uncertainties are beyond the ability of the company to control, and in many cases, the company cannot predict the risks and uncertainties that could cause its actual results to differ materially from those indicated by the forward-looking statements. when used in this press release, the words “allows,” “believes,” “plans,” “expects,” “estimates,” “should,” “would,” “may,” “might,” “forward,” “will,” “intends,” “continue,” “outlook,” “temporarily,” “progressing,” "prospects," and “anticipates” and similar expressions as they relate to the company or its management are intended to identify forward-looking statements. except as required by law, the company is not obligated to publicly release any revisions to these forward-looking statements to reflect the events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events. bgsf, inc. gaap financial measures the following tables have been derived from our unaudited consolidated financial statements and summarize key components of our statements of operations results from continuing operations for the periods indicated, as well as a reconciliation of revenue and income from continuing operations by reportable segment to consolidated results for the periods indicated. results of operations thirteen weeks ended twenty-six weeks ended june 26, 2022 june 27, 2021 june 26, 2022 june 27, 2021 (dollars in thousands) revenues $ 74,089 $ 57,398 $ 142,631 $ 107,148 cost of services 49,030 38,151 94,141 71,686 gross profit 25,059 19,247 48,490 35,462 selling, general and administrative expenses 19,898 16,269 39,614 31,572 gain on contingent consideration — (1,195 ) — (1,195 ) depreciation and amortization 922 866 1,821 1,702 operating income 4,239 3,307 7,055 3,383 interest expense, net (69 ) (218 ) (343 ) (595 ) income from continuing operations before income taxes 4,170 3,089 6,712 2,788 income tax expense from continuing operations (986 ) (493 ) (1,521 ) (451 ) income from continuing operations 3,184 2,596 5,191 2,337 income from discontinued operations: income — 1,011 1,235 2,167 gain (loss) on sale (8 ) — 17,266 — income tax expense — (164 ) (4,716 ) (349 ) net income $ 3,176 $ 3,443 $ 18,976 $ 4,155 net income per share - diluted net income from continuing operations $ 0.30 $ 0.25 $ 0.50 $ 0.23 net income from discontinued operations: income — 0.10 0.12 0.20 gain on sale — — 1.65 — income tax expense — (0.02 ) (0.45 ) (0.03 ) net income per share - diluted $ 0.30 $ 0.33 $ 1.82 $ 0.40 business segments thirteen weeks ended twenty-six weeks ended june 26, 2022 june 27, 2021 june 26, 2022 june 27, 2021 (dollars in thousands) revenue: real estate $ 29,980 40 % $ 21,212 37 % $ 55,896 39 % $ 39,825 37 % professional 44,109 60 % 36,186 63 % 86,735 61 % 67,323 63 % total $ 74,089 100 % $ 57,398 100 % $ 142,631 100 % $ 107,148 100 % gross profit: real estate $ 11,574 46 % $ 7,855 41 % $ 21,545 44 % $ 14,720 42 % professional 13,485 54 % 11,392 59 % 26,945 56 % 20,742 58 % total $ 25,059 100 % $ 19,247 100 % $ 48,490 100 % $ 35,462 100 % selling2: real estate $ 6,696 $ 4,817 $ 12,573 $ 9,165 professional 9,023 8,085 18,347 15,217 total $ 15,719 $ 12,902 $ 30,920 $ 24,382 operating income (expense): real estate $ 4,817 $ 2,973 $ 8,852 $ 5,426 professional 3,817 2,584 7,286 4,077 home office - selling, general and administrative (4,395 ) (3,445 ) (9,083 ) (7,315 ) home - gain on contingent consideration — 1,195 — 1,195 total $ 4,239 $ 3,307 $ 7,055 $ 3,383 2selling is a component of selling, general and administrative on the unaudited consolidated statement of operations and comprehensive income. the following tables have been derived from our unaudited consolidated financial statements and summarize key components of our balance sheet and statements of cash flows for the periods indicated. condensed balance sheets june 26, 2022 december 26, 2021 assets (dollars in thousands) current assets $ 56,718 $ 60,170 property and equipment, net 6,344 4,331 intangible assets, net 32,411 33,585 goodwill 29,142 29,142 other 11,351 6,655 assets of discontinued operations — 14,411 total assets $ 135,966 $ 148,294 liabilities and stockholders' equity long-term debt, current portion $ — $ 3,563 other current 23,139 24,821 line of credit 17,661 12,588 long-term debt, less current portion — 23,300 other long-term 1,882 5,978 liabilities of discontinued operations — 1,452 total liabilities 42,682 71,702 total stockholders' equity 93,284 76,592 total liabilities and stockholders' equity $ 135,966 $ 148,294 working capital june 26, 2022 december 26, 2021 (dollars in thousands) working capital from continuing operations $ 33,578 $ 25,851 working capital ratio 2.45 1.95 condensed statements of cash flows twenty-six weeks ended june 26, 2022 june 27, 2021 (dollars in thousands) net cash provided by (used in) continuing operations: operating activities $ 1,217 $ (2,366 ) investing activities 26,775 (4,856 ) financing activities (25,760 ) 3,145 net change in cash and cash equivalents discontinued operations (2,300 ) 4,077 net change in cash and cash equivalents $ (68 ) $ — bgsf, inc. non-gaap financial measures the financial results of bgsf, inc. are prepared in conformity with accounting principles generally accepted in the united states of america (“gaap”) and the rules of the u.s. securities and exchange commission. to help the readers understand the company's financial performance, the company supplements its gaap financial results with adjusted ebitda and adjusted eps. a non-gaap financial measure is a numerical measure of a company's financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with gaap in the statement of income, balance sheet or statement of cash flows of a company. adjusted ebitda and adjusted eps are not measurements of financial performance under gaap and should not be considered as alternatives to net income, net income per diluted share, operating income, or any other performance measure derived in accordance with gaap, or as alternatives to cash flow from operating activities or measures of our liquidity. we believe that adjusted ebitda and adjusted eps are useful performance measures and are used by us to facilitate a comparison of our operating performance on a consistent basis from period-to-period and to provide for a more complete understanding of factors and trends affecting our business than measures under gaap can provide alone. in addition, the financial covenants in our credit agreement are based on ebitda as defined in the credit agreement. we define “adjusted ebitda" as earnings before interest expense, income taxes, depreciation and amortization expense, transaction fees and certain non-cash expenses such as contingent consideration gains and share-based compensation expense, as well as certain specific events that management does not consider in assessing our on-going operating performance. reconciliation of income from continuing operations to adjusted ebitda thirteen weeks ended twenty-six weeks ended trailing twelve months ended june 26, 2022 june 27, 2021 june 26, 2022 june 27, 2021 june 26, 2022 (dollars in thousands) income from continuing operations $ 3,184 $ 2,596 $ 5,191 $ 2,337 $ 13,225 income tax expense from continuing operations 986 493 1,520 451 3,795 interest expense, net 69 218 344 595 1,181 operating income 4,239 3,307 7,055 3,383 18,201 cares act credit — — — — (2,084 ) depreciation and amortization 922 866 1,820 1,702 3,816 gain on contingent consideration — (1,195 ) — (1,195 ) (1,208 ) share-based compensation 242 215 454 435 1,077 transaction fees — 19 — 155 16 adjusted ebitda from continuing operations 5,403 3,212 9,329 4,480 19,818 adjusted ebitda from discontinued operations, net of gain on sale, net of tax — 1,046 986 2,241 3,459 adjusted ebitda, net of gain $ 5,403 $ 4,258 $ 10,315 $ 6,721 $ 23,277 we define “adjusted eps” as diluted earnings per share eliminating amortization expense of intangible assets from acquisitions, transaction fees, and certain non-cash expenses such as contingent consideration gains, as well as certain specific events that management does not consider in assessing our on-going operating performance, net of the respective income tax effect. reconciliation of adjusted eps thirteen weeks ended twenty-six weeks ended june 26, 2022 june 27, 2021 june 26, 2022 june 27, 2021 net income (loss) from continuing operations per diluted share, excluding gain on sale of discontinued operations $ 0.30 $ 0.25 $ 0.50 $ 0.23 acquisition amortization 0.05 0.06 0.10 0.12 gain on contingent consideration — (0.11 ) — (0.12 ) transaction fees — — — 0.01 income tax expense adjustment (0.01 ) 0.01 (0.02 ) — adjusted eps from continuing operations 0.34 0.21 0.58 0.24 adjusted eps from discontinued operations — 0.08 0.09 0.17 adjusted eps $ 0.34 $ 0.29 $ 0.67 $ 0.41
