BGSF, Inc. Q4 FY2025 earnings call

Fiscal 2025 was transformational with sale of professional division, retiring debt, returning capital to shareholders. Fourth quarter focused on top-line revenue initiatives, resizing G&A expenses, reducing selling and G&A costs. Changed go-to-market strategy with website transition to bgstaffing.com. Executing 2026 top line initiative with expansion into prop tech support market, partnering with Yardi. Optimizing AI investments for client and candidate experience. Participating in industry conferences. Team executing strategic priorities and managing transitional work related to sale of professional division.

Fourth quarter revenues were $22 million, a 9.4% decline compared to the prior year, driven by lower billed hours and weak demand. Gross profit in the fourth quarter was $7.7 million compared to $8.7 million in the prior year quarter. Gross profit as a percentage of revenue was 35% and was negatively affected by $147,000 in out-of-period workers' comp costs. Adjusted for those costs, gross profit as a percentage of revenue was 35.6% in the quarter. SG&A expenses for the fourth quarter were $9.3 million compared to $10.5 million in the prior year's quarter. Fourth quarter adjusted EBITDA was a loss of $947,000. We reported a fourth quarter gap net loss from continuing operations of 11 cents per diluted share compared to a non-gap adjusted EPS loss from continuing operations of 9 cents per share. Consolidated adjusted non-gap EPS for the quarter was 9 cents per share. For the full year of 2025, net cash provided by continuing operating activities was $117,000, which included a $5.2 million escrow receivable from the sale of the professional division. Our capital expenditures were minimal at $138,000. During 2025, we purchased 351,200 shares of stock, totaling approximately $1.5 million. Our purchases to date total 522,000 shares at a total of $2.4 million.

Expect to finalize settlement of cash escrow amount from sale of professional division during Q2. Full-year sales in 2026 expected to be over 2025 and in mid-single digits. Top line sales through first two months slightly ahead of 2025, indicating solid start to 2026.

Q: Walk us through the Yardi relationship and potential implications.

A: Yardi has an independent consultant network and we pair our expertise with technology-enabled talent solutions. Potential large across customer base.

Q: Walk through SG&A comments.

A: Estimated ongoing G&A costs around $12 million with public company costs around $2 million, Q4 number higher due to sale support.

Q: Characterize market environment.

A: More optimistic sentiment than last year, customers willing to spend on services.

Q: Clarify PropTech segment.

A: Different from regular staffing, starting with 8 - 12 consultants, revenue projection for 2026, not geographically driven.

Q: Explain fourth quarter decline and start to year.

A: Fourth quarter down 9.4% year over year, December had positive comp, part of improvement due to execution and market factors.