BGSF (BGSF) 7 Nov 242024 Q3 Earnings call transcript

Good morning, everyone. Welcome to the BGSF, Inc. Fiscal 2024 Third Quarter Financial Results Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I will now turn the conference over to Sandy Martin, Three Part Advisors. ahead. go Please

Officer; you a Quarter Thank the us for remarks, Chief today are Officer. Chief Good our session. After Earnings for Conference Third prepared Executive and President XXXX Garvey, will on John Call. BGSF's Barnett, Beth Financial be morning. there Chair, joining and Q&A With call me

at on A available later be noted, call the Investor As company's will today's is replay being investor.bgsf.com. Relations page and webcast archived live. today

which Private are materially the XXXX. Securities the in statements, uncertainties, on Reform Today's certain safe forward-looking by with discussion forward-looking filings may from company's will of made based company the and by including harbor statements assumptions include those Exchange differ Act indicated results and the Commission. Actual provisions Securities because listed the those risks under of of the Litigation various

are Management's Management obligation statements update these made today, Garvey. assumes available measures, company adjusted the turn of if becomes can of EBITDA. measures the GAAP no statements non-GAAP the nearest and to refer at information to to in even as found be earnings and publicly adjusted the new will over Beth call release. I'll our EPS the Reconciliations now to including end future.

share. future thank I evaluating process additional quarter of more look review will all be a as we to Thanks, earnings. Sandy, brief alternatives. by the under and to our to related discussing third us of today comments forward you are the this I for strategic information start have discuss our joining in saying want to options we to company's when still

today's on We will operational be taking call. questions

questions process. will concerning not take However, we the

side. that consulting XX recovery challenging sales specifically consistency results improvements IT for even have on more and of Professional our months industry believe are as professional and operating last sequential evidenced and environment services, to beginning with the a we the stabilize While for IT our been by

We an into launched more as made exciting part of stack. our also in of our we after investment I'll this technology results. modernization tech enhancements QX technology by ongoing our lead cover generation possible discuss

third million of Management $XX for segment. Property total important sales in a includes the of which Property $XX well Broadly due progression and sales as million revenues Management quarter, In number in in speaking, to the Professional million, increased almost as sales typical seasonality strategic initiatives. were forward the $XX

quarter to the the ago On side, pressure sequentially revenues year in Professional during third versus declines were division. Accounting and due a under the and Finance

revenue IT represent at BGSF's almost largest placement, quarterly revenues. XX% sales consulting category the of perm Excluding

the sequential were During to third compared slightly a up quarter, the IT sales second consulting quarter. on basis

in industry encouraged growth off could leveling that optimistic turn by revenues, subside, into if we believe more and quarters. pressures We the macro stability we are of today and are future

in grew IT second Although the the quarter, than the softer division Finance stabilized and quarter. consulting and sequentially Accounting slightly was

BGSF based Consistent Solutions Managed business with unique to growth be and solutions. business strength quarter. services on continues compared growth and differentiated a our sequential to a double-digit for second the lift in ago previous year our over Solutions Managed XX% strong experienced and periods,

John remarks. John? walks I'll After detailed the for financial through quarter, return with our results closing

everyone. and morning, Beth, you, Thank good

to this our And BGSF. at to mentioned, areas environment industry. today, of plan Beth challenging continues the As progress impact I some of highlight

second On ago quarter million XXXX. $XX.X basis, were an quarter lift by up from revenues of of the increase sequential a seasonal quarter Property Management million year versus a $XX.X with revenues XX.X% X.X%. Third sequentially in reflect and the

the down year Professional the line prior revenue in For quarter, third period. in remained compared competitors, XX.X% and to soft segment the quarter declined our second versus with

point our in lower demand and and ago Property start margin due XX.X% to the $XX lower our Much to recently, again, perm which GP attributed and we placement, the margins Compared Gross year by activity carries More segment. are third services seeing at to in margins and continues Solutions to to the profit quarter, a gross cost lesser the mostly basis Managed were to mentioned, in placement compared $XX.X pressure second clients increased perm new to million for XX.X% pressures period. Management margin primarily elevated and a this the impacting declined was wins. and this Beth competition. show profit million basis of As points strength due contract extent, quarter quarter. XX of XXX dynamics

and year's in expenses $XXX,XXX SG&A million associated million quarter SG&A third nonrecurring alternatives prior second in in the compared quarter $XX.X $XX.X strategic to included fees in with the quarter. for the process. the million the were $XX period

costs rebaseline quarter. manage We the in prudently and to continue spending

adjusted the of or in an compared $X.X per improvement EBITDA nice $X.XX quarter, revenue quarter which share margins. both $X.X share, from or reported per third to to compared quarter, X.X% million dollars million share the quarter X.X% XXXX Third in sequential in $X.XX the and XXXX. adjusted $X.XX earnings was of of diluted a second per step-up second in We

for generated spend for months, which X million of investments. first operating the primarily is activities months $X.X cash the X was We from IT Capital $XX.X million.

terms turn X.Xx, debt-to-EBITDA XX-Q Beth. filing. back would Our I the that, ratio with to our call included to like is new with leverage our was credit compliant With amendment which facility Form

lead to This both for pleased our launched engine divisions. I'm drives generation sales share third now that technology John. advanced funnels we the successfully in our you, quarter. Thank

revenue. marketing automation, leads cutting-edge that This through in this and workforce value milestone is data-driven sales in AI and qualified digital transformation, harnessing streamline We an We and commitment targeted $X leveraging envisioned road know XXXX both had that we insights, in in still acquisition important and into rates divisions. our generated solutions. made our across quarter, this enhance initiative strategically we leads XXX engagement marketing investments engine map conversion generative that strategic qualified Although to lead demonstrates almost XXX days, IT the by with to client are able million translated early know than which and booked more XXXX. delivering BGSF's

nearshore/offshore Both as a framework on SVP and and segment successfully clients' AI side. design expansion have on spring for for large segments solutions-based the the as Professional demonstrated Hitesh's sessions in quarter. several offering. with been have to packages their of Together, by as proof-of-concept solutions have hired has engineering strategic as and starting wallet and customers our custom Strategy managed this Professional tech and Recall pockets building platform solutions that Deloitte on forward focus consolidated a we placement veteran, as in software Hitesh stability the bringing business. stack engagements BGSF's seen with well or perm we secured initiatives services, progress, strength in either of Talati, well especially Innovation

of the properly These facilitate work consultative and properly scope leads for scope the which to statement and Not innovations engagement profit organization's of month ecosystem. and IT This cons technological highest overhead September comprehensive pros to risk team. our for sessions surprisingly, to highest since and year the best discovery to for solutions, into to was October professional XXXX. contribution approach the and technology allows revenue the a IT gross of our whiteboard discussion team

turn. build that our the begins work as will and can momentum to know We flywheel relentless

clients and that improvements ensuring priority. solutions to our our prospects know across leads have accessibility through is our of swift empowering talent tools the also digital to convert and continued teams faster. to the We right clients And our is our access capture sales responsiveness and company #X

to eliminate working Also, the our interest accelerate lower with will actively and we lead key property getting Fed generation that we from know business. technology, past are obstacles election distractions management rates some Using decision-makers.

team's sales We using to also relationship and the points. customer continue target to territory drive touch performance properties mapping increase strategic

We property companies. agreements that vendors continue to BGSF sign list on preferred a partnership of owners for place and management short

hard services exceptional, that earn talent. skilled premium on business We based deliver trained to will and work

period We continue there of that communities improvements of to rates due most backlog recessionary cost and and to is capital a pressures. higher as of as interest in multifamily believe well repairs capital prolonged

ease macroeconomic and to As business from pressures their and budgeting business better benefit project complete throughout our flow we cycles, XXXX beyond. and expect

and Sales, our Property on our effectiveness and onboarding are and his and of enhanced speed Also team's leading the training improving around efforts. with sales side, coupled efforts experience development sales of SVP Andrew sales is teams Hill, training Management the

continue we especially areas, including and Property to important sets maintenance shortage this We America. experience and innovation candidates given leasing, and industry want shortages our is commercial is all that differentiated notable We front dynamic, to industry forecasted groundskeeping. and we training and by are of internally in markets in clients training, North workforce. Management trained conversions invest with the staying today of luxury Speaking This throughout know talent skill see residential. to and communities and housing of apartments, in of expanding experience

and foster to continue teams their and leaders culture resilience. adaptability BGSF of Our

therefore, our the term. process of robust our are Our enabling gaining disciplined in and technology, optimizing short target marketing long the sales process, new competitive audiences, and term understanding pursuing a advantage efforts defining markets, sales

We also spending continue and expenses make decisions. to rebaseline careful

We are focused cash sales, relentlessly and on profitability flow.

your appreciate time employees, in and vision BGSF's for thank for to and partners clients, future. and again the belief today I our want their support investors

Now questions call analysts we'd like to for our Operator? business. the operational the open for about

Instructions] [Operator question Partners. The first with [indiscernible] comes Tyler ROTH from Capital

John. and for Jeff, in filling I'm Beth

differentiate Management you my respect for initiatives on pent-up territory past. recent Property with maintenance mapping from demand competitor? provide the the by materialized? update Management And been the first an your Property constraints the was Has to ability can has in question demand impacted past to So your budget in

So of low to business they're the of think think I'll the yet. depression from take sequentially the the we We feeling. demand that's at don't related up When look that pent-up kind QX. We pressures to the shown all has question. first for expense demand that point kind QX

wasn't was uplift, saw we what expected. there growth typical our that but it still So see an We uplift, a moderated. we typically seasonal would

while didn't would a historically to lower would level was dollar-wise we we really, than you And QX QX from in then line year-over-year, from seasonality. with see normally right, more And what expect. any saw a were see lift what we what we right at

out to of is come through at So that leads believe there time. that going pent-up bit us is there that demand quite some a to

last were second you helpful. about Awesome. Perfect. question That potential very optimistic in lift quarter, the cautiously And Professional was a my segment. was,

So wins may momentum fourth ends, And quarter that see there nice carry issues sequential any that exceeding quarter? suggest timing the project did in project are with through a improvement? maybe third

the a late Professional in uptick especially outpacing did have Again, uptick quarter, September for had We see in great group. our ends. third wins in we the

gotten weeks that So had right from we good go But them October. what traction there that things few expected. a many a made of the we've into so far, may direction new were in have kind pushed pretty

my to on have strategic review alternatives nice. end? Very do you going was, a the last And when time line then question is

point. this at don't We

work that, time a forward to to continue line have diligently move right don't on We now. we but

will I turn call questions. At back further to there the this time, closing any for over remarks. are no management

day. Thank in fourth your you Have We your for and forward to today. you, quarter Thank we with March. Debbie. a updating results great time look appreciate continued our you support,

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

now may You disconnect.