BGSF - BGSF Inc. Reports Strong Second Quarter 2022 Financial Results and Declares 31st Consecutive Cash Dividend Quarterly Revenues of $74 million up 29%

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 31 ^st 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 EBITDA ¹ from continuing operations was $5.4 million (7.3% of revenues), vs. $3.2 million (5.6% of revenues) in 2021
• Adjusted EPS ¹ 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 EBITDA ¹ from continuing operations was $9.3 million (6.5% of revenues), vs. $4.5 million (4.2% of revenues) in 2021
• Adjusted EPS ¹ from continuing operations was $0.58 in 2022, up from $0.24 in 2021

¹ Non-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.

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.

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.

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.

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Steven Hooser or Sandy Martin
Three Part Advisors
ir@bgstaffing.com 214.442.0016