BGSF, Inc. Q1 FY2026 earnings call

BGSF's transition services agreement with Inspire concluded on March 31st, beginning to operate as a standalone company. Leveraging insights from an independent consulting firm to support incremental top-line revenue. Resized general and administrative cost structure, estimating ongoing G&A costs at approximately $12 million annually. Took targeted actions to reduce selling costs, expecting full benefit to be realized beginning in the third quarter, anticipated to generate approximately $1 million in cash cost savings annually. Recognized as one of the 2026 Best Places for Working Parents and one of the top 100 largest staffing firms in the U.S. Completed BG Staffing Rebrand, seeing improved SEO performance, larger and more efficient funnel, and deeper client engagement. Technology investments showing early results, AI-enabled recruiting tools streamlining interviews for over 7,500 candidates, AI sales assistant platform converting inquiries into new clients. Launched PropTech consulting services through strategic partnership with Yardi, with ramp being encouraging, expecting PropTech to represent approximately 1% to 2% of total revenue this year.

First quarter revenue was $20.9 million, flat year over year. Gross profit was $7.4 million, slightly down from $7.6 million in the prior year period. Gross margin was 35.5%, down from 36.2% last year. SG&A expenses were $8.8 million for the quarter, compared to $9 million a year ago. Adjusted EBITDA for the first quarter was a loss of $541,000, an improvement compared to the $1 million loss in the prior year period. On a gap basis, net loss from continuing operations was $0.13 per diluted share compared to an adjusted EPS loss from continuing operations of $0.07 per share. Consolidated adjusted EPS for the quarter was a positive $0.01 per share. Full-year 2026 revenue is expected to grow in the low to mid-single-digit range compared to 2025.

Full-year 2026 revenue is expected to grow in the low to mid-single-digit range compared to 2025. Adjusted EBITDA is improving as revenues strengthen in seasonally stronger Q2 and Q3 periods, and cost reduction actions implemented will positively affect EBITDA. Committed to disciplined capital management and cost control.

Q: Hi, guys. Thanks for taking the call. Just a quick question on the stock buyback. Have you been able to buy any blocks of stock, especially recently, or no?

A: We are in a 10B51 plan, so we really don't know that. So it's the broker that is in charge of that. But I don't think so.

Q: Thank you. Thanks for taking my question. Could you guys give us a little bit of sense of how you see the market? It seems like the market was a bit tight and in a downturn for a couple of years. How do you see that evolving? What did you see so far in 26? And what are your expectations for the rest of the year from a market perspective?

A: Good morning. You know, it's been certainly an interesting couple of years. We've had to really work with our clients as they've navigated a couple different things, heightened insurance costs, kind of stubborn interest rates. That does impact how they operate for various reasons. And I think some of that pressure does continue. However, I also think that we've seen a lot of adjustment to just knowing, you know, what these costs are and the impact they can have. So, you know, while we've seen some loosening in certain pockets, I just think we need to expect it to kind of stay there, static for a little bit longer, frankly. But I also think that there's been a lot of adjusting to what impact does that have on their operational strategy and where does staffing fit into that. So while I certainly don't think that it's loosened up significantly, I do think a lot of adjusting has happened that does have a positive impact on our customers' ability to leverage services such as ours ongoing.

Q: From a tech perspective, the company has invested quite a bit of tech in tech in the last, let's say, three, four, five years. And of course, it's an evolving process. It's a never-ending process. But how comfortable are you right now with your current tech in particular to recruit your your staff, and to meet the need of your customers?

A: Great question. You know, we're really comfortable with the technology that we have with regards to our ability to recruit. We are able to leverage AI in various ways to get our candidates, you know, the response time to our candidates much quicker. That said, now that we are past the TSA, we continue to go through a review of every piece of technology that we are using and Is it the right technology for our business as a standalone business? And where are there any sort of cost optimization efforts that we can make? So I would say that we're comfortable right now with the technology that we have with regards specifically to recruiting, but know that we will continue to evaluate now that we do operate as a standalone company.