bgsf-20250330

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 30, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number: 001-36704

BGSF, INC.

(exact name of registrant as specified in its charter)


Delaware			26-0656684
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

5850 Granite Parkway, Suite 730

Plano, Texas 75024

(972) 692-2400

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

Accelerated Filer

Non-accelerated filer

(Do not check if a smaller reporting company)

Smaller reporting company

☑

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	BGSF	NYSE

As of May 5, 2025 there were 11,108,693 shares of the registrant’s common stock outstanding.

TABLE OF CONTENTS


PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements	5
	Unaudited Consolidated Balance Sheets	5
	Unaudited Consolidated Statements of Operations	6
	Unaudited Consolidated Statements of Changes in Stockholders' Equity	7
	Unaudited Consolidated Statements of Cash Flows	9
	Notes to Unaudited Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	31

PART II	OTHER INFORMATION	33
Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3.	Defaults Upon Senior Securities	33
Item 4.	Mine Safety Disclosures	33
Item 5.	Other Information	33
Item 6.	Exhibits	33

Forward-Looking Statements

This Quarterly Report on Form-10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements relate to our expectations for future events and time periods. All statements other than statements of historical fact are statements that could be deemed to be forward-looking statements, including, but not limited to, statements regarding:

•future financial performance and growth targets or expectations;

•market and industry trends and developments; and

•the benefits of our completed and future merger, acquisition and disposition transactions.

You can identify these and other forward-looking statements by the use of words such as “aim,” “potential,” “may,” “could,” “can,” “would,” “might,” “likely,” “will,” “expect,” “intend,” “plan,” “predict,” “ongoing,” “project,” “budget,” “scheduled,” “estimate,” “anticipate,” “believe,” “forecast,” “committed,” “future” or “continue” or the negative thereof or similar variations.

These forward-looking statements are based on information available to us as of the date of this Quarterly Report on Form 10-Q and our current expectations, forecasts and assumptions and involve a number of risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date. Future performance cannot be ensured. Actual results may differ materially from those in the forward-looking statements. Some factors that could cause actual results to differ include:

•the availability of field talents’ workers' compensation insurance coverage at commercially reasonable terms;

•insurance coverage may not be adequate for our needs (including but not limited to general liability, crime, fiduciary, property, umbrella and excess, and cybersecurity);

•the availability of qualified field talent;

•compliance with federal, state, local labor and foreign labor and employment laws and regulations and changes in such laws and regulations;

•the ability to compete with new competitors and competitors with superior marketing and financial resources;

•management team changes;

•the favorable resolution of current or future litigation;

•the impact of outstanding indebtedness on the ability to fund operations or obtain additional financing;

•our ability to repay, refinance, extend or restructure existing indebtedness at or prior to its maturity date on favorable or comparable terms, or at all;

•the ability to leverage the benefits of recent acquisitions and successfully integrate newly acquired operations;

•the impact of, and the ability to mitigate or manage disruptions posed by pandemics;

•adverse changes in the economic conditions of the industries or markets that we serve;

•disturbances in world financial, credit, and stock markets;

•unanticipated changes in regulations affecting our business;

•a decline in consumer confidence and discretionary spending;

•inflationary pressures and our responses thereto;

•the general performance of the U.S. and global economies;

•continued or escalated conflict in the Middle East or elsewhere;

•the impact of our ongoing strategic alternatives review process;

•the impact of our cost restructuring plan;

•our ability to raise equity or debt financing;

•our ability to obtain waivers under or amendments with respect to our outstanding indebtedness; and

•other risks referenced from time to time in our past and future filings with the Securities and Exchange Commission (“SEC”), including in our Annual Report on Form 10-K for the fiscal year ended December 29, 2024.

You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by law, we do not undertake any obligation to update or release any revisions to these forward-looking statements to reflect any events or circumstances, whether as a result of new information, future events, changes in assumptions or otherwise, after the date hereof.

Where You Can Find Other Information

Our website is https://bgsf.com. Information contained on our website is not part of this Quarterly Report on Form 10-Q. Information that we file with or furnish to the SEC, including our Annual Reports on Form 10-K, Quarterly Reports on Form

10-Q, Current Reports on Form 8-K and any amendments to or exhibits included in these reports are available for download, free of charge, on our website soon after such reports are filed with or furnished to the SEC. These reports and other information, including exhibits filed or furnished therewith, are also available at the SEC’s website at www.sec.gov.

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

BGSF, Inc. and Subsidiaries

UNAUDITED CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)


			March 30, 2025		December 29, 2024
ASSETS
Current assets
	Cash and cash equivalents		$	2,050	$	353
	Accounts receivable (net of allowance for credit losses of $1,223 and $1,133, respectively)		42,553		40,194
	Prepaid expenses		2,447		2,485


	Other current assets		2,492		2,315

		Total current assets	49,542		45,347

Property and equipment, net			947		1,137

Other assets
	Deposits		2,087		2,092
	Software as a service, net		4,269		4,438
	Deferred income taxes, net		8,611		8,456
	Right-of-use asset - operating leases, net		4,613		4,973
	Intangible assets, net		23,040		24,517
	Goodwill		59,151		59,151

		Total other assets	101,771		103,627
	Total assets		$	152,260	$	150,111
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
	Accounts payable		$	1,605	$	80
	Accrued payroll and expenses		13,539		13,001

	Long-term debt, current portion (net of debt issuance costs of $77 and $24, respectively)		3,748		3,801
	Accrued interest		286		223
	Income taxes payable		250		212
	Contingent consideration, current portion		2,706		2,662
	Convertible note		4,368		4,368

	Lease liabilities, current portion		1,591		1,573
		Total current liabilities	28,093		25,920

Line of credit (net of debt issuance costs of $696 and $770, respectively)			7,304		5,625
Long-term debt, less current portion (net of debt issuance costs of $174 and $198, respectively)			31,595		32,527


Lease liabilities, less current portion			3,448		3,770


	Total liabilities		70,440		67,842


Commitments and contingencies


Preferred stock, $0.01 par value per share, 500,000 shares authorized, -0- shares issued and outstanding		—		—
Common stock, $0.01 par value per share; 19,500,000 shares authorized 11,108,693 and 11,038,623 shares issued and outstanding, respectively, net of 3,930 shares of treasury stock, at cost, respectively.		54		53
Additional paid in capital		70,532		70,260
Retained earnings		11,234		11,956

	Total stockholders’ equity	81,820		82,269
	Total liabilities and stockholders’ equity	$	152,260	$	150,111

The accompanying notes are an integral part of these unaudited consolidated financial statements.

BGSF, Inc. and Subsidiaries

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share and dividend amounts)

For the Thirteen Week Periods Ended March 30, 2025 and March 31, 2024


		Thirteen Weeks Ended
		2025		2024
Revenues		$	63,234	$	68,765
Cost of services		42,313		45,327
	Gross profit	20,921		23,438
Selling, general, and administrative expenses		18,911		21,016


Depreciation and amortization		1,671		2,007
	Operating income	339		415

Interest expense, net		(1,146)		(1,235)
	Loss before income taxes	(807)		(820)
Income tax benefit		85		28
	Net loss	$	(722)	$	(792)










Net loss per share:
	Basic	$	(0.07)	$	(0.07)
	Diluted	$	(0.07)	$	(0.07)













Weighted-average shares outstanding:
	Basic	10,954		10,831
	Diluted	10,954		10,831

Cash dividends declared per common share		$	—	$	0.15

The accompanying notes are an integral part of these unaudited consolidated financial statements.

BGSF, Inc. and Subsidiaries

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

(in thousands)

For the Thirteen Week Period Ended March 30, 2025


		Common Stock
	Preferred Stock	Shares	Par Value		Treasury Stock Amount		Additional Paid in Capital		Retained Earnings		Total
Stockholders’ equity, December 29, 2024	—	11,039	$	110	$	(57)	$	70,260	$	11,956	$	82,269
Share-based compensation	—	—	—		—		186		—		186
Issuance of restricted shares	—	53	1		—		(1)		—		—

Issuance of ESPP shares	—	17	—		—		87		—		87

Net loss	—	—	—		—		—		(722)		(722)













Stockholders’ equity, March 30, 2025	—	11,109	$	111	$	(57)	$	70,532	$	11,234	$	81,820

The accompanying notes are an integral part of these unaudited consolidated financial statements.

BGSF, Inc. and Subsidiaries

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

(in thousands)

For the Thirteen Week Period Ended March 31, 2024


		Common Stock
	Preferred Stock	Shares	Par Value		Treasury Stock Amount		Additional Paid in Capital		Retained Earnings		Total
Stockholders’ equity, December 31, 2023	—	10,888	$	109	$	(57)	$	68,551	$	16,933	$	85,536
Share-based compensation	—	—	—		—		235		—		235
Issuance of restricted shares	—	11	—		—		(1)		—		(1)
Exercise of common stock options	—	16	—		—		102		—		102
Issuance of ESPP shares	—	14	—		—		112		—		112
Cash dividend declared	—	—	—		—		—		(1,639)		(1,639)
Net loss	—	—	—		—		—		(792)		(792)
Stockholders’ equity, March 31, 2024	—	10,929	$	109	$	(57)	$	68,999	$	14,502	$	83,553

The accompanying notes are an integral part of these unaudited consolidated financial statements.

BGSF, Inc. and Subsidiaries

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

For the Thirteen Week Periods Ended March 30, 2025 and March 31, 2024


				2025		2024
Cash flows from operating activities
	Net loss			$	(722)	$	(792)

		Adjustments to reconcile net loss to net cash provided by activities:
		Depreciation		98		94
		Amortization		1,573		1,913
		Software as a service		176		180


		Loss on disposal of property and equipment		11		8


		Amortization of debt issuance costs		124		49

		Interest expense (income) on contingent consideration payable		44		(45)
		Provision for credit losses		260		625
		Share-based compensation		186		235
		Deferred income taxes, net of acquired deferred tax liability		(155)		(127)
		Net changes in operating assets and liabilities:
			Accounts receivable	(2,620)		3,733
			Prepaid expenses	38		462
			Other current assets	(192)		513
			Deposits	6		593

			Accounts payable	1,525		129
			Accrued payroll and expenses	537		(24)
			Accrued interest	63		(218)
			Income taxes receivable and payable	54		52

			Operating leases	58		1

		Net cash provided by operating activities		1,064		7,381



Cash flows from investing activities


	Capital expenditures			(23)		(494)



		Net cash used in investing activities		(23)		(494)




Cash flows from financing activities
	Net borrowings (payments) under line of credit		1,604		(4,874)

	Principal payments on long-term debt		(956)		—

	Payments of dividends		—		(1,639)
	Issuance of ESPP shares		87		112
	Issuance of shares under the 2013 Long-Term Incentive Plan		—		102


	Payments of debt issuance costs		(79)		(538)
		Net cash provided by (used in) financing activities	656		(6,837)


Net change in cash and cash equivalents			1,697		50
Cash and cash equivalents, beginning of period			353		—
Cash and cash equivalents, end of period			$	2,050	$	50

Supplemental cash flow information:
	Cash paid for interest, net		$	868	$	1,400
	Cash paid for taxes, net of refunds		$	14	$	40

The accompanying notes are an integral part of these unaudited consolidated financial statements.

BGSF, Inc. and Subsidiaries

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - NATURE OF OPERATIONS

BGSF, Inc. provides consulting, managed services, and professional workforce solutions to a variety of industries through its various divisions in information technology (“IT”), Finance & Accounting, Managed Solutions, and Property Management (collectively, with its consolidated subsidiaries, the “Company”).

The Company currently operates primarily within the United States of America (“U.S.”) through the Property Management and Professional segments.

The Property Management segment provides office and maintenance field talent in 38 states and D.C., to property management companies responsible for the apartment communities' and commercial buildings' day-to-day operations.

The Professional segment provides specialized talent and business consultants for IT, managed services, finance, accounting, legal, and human resources. The segment operates across the U.S. in three divisions, IT, Managed Solutions, and Finance & Accounting, with the IT division providing additional nearshore and offshore solutions in Colombia and India.

The Company normally experiences seasonal fluctuations. The quarterly operating results are affected by the number of billing days in a quarter, as well as the seasonality of client partners’ business in its Property Management business. Demand for the Property Management workforce solutions has typically increased in the second quarter and is highest during the third quarter of the year due to the increased turns in multifamily units during the summer months when schools are not in session. Overall first quarter demand can be affected by adverse weather conditions in the winter months. In addition, the Company's cost of services typically increases in the first quarter primarily due to the reset of payroll taxes.

The accompanying unaudited consolidated financial statements have been prepared by the Company in accordance with generally accepted accounting principles in the United States of America (“GAAP”), pursuant to the applicable rules and regulations of the SEC. The information furnished herein reflects all adjustments (consisting only of normal recurring adjustments) that are, in the opinion of management, necessary to present a fair statement of the financial position and operating results of the Company as of and for the respective periods. However, these operating results are not necessarily indicative of the results expected for a full fiscal year or any other future period. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations. However, management of the Company believes, to the best of its knowledge, that the disclosures herein are adequate to make the information presented not misleading. The accompanying unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the fiscal year ended December 29, 2024, included in its Annual Report on Form 10-K.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements include the accounts of the Company. All significant intercompany transactions and balances have been eliminated in consolidation.

Fiscal Periods

The Company has a 52/53 week fiscal year. Fiscal periods for the consolidated financial statements included herein are as of March 30, 2025 and December 29, 2024, and include the thirteen week periods ended March 30, 2025 and March 31, 2024, referred to herein as Fiscal 2025 and 2024, respectively.

Reclassifications

Certain reclassifications have been made to the 2024 financial statements to conform with the 2025 presentation.

BGSF, Inc. and Subsidiaries

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Management Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates affecting the consolidated financial statements include allowances for credit losses, goodwill, intangible assets, lease liabilities, contingent consideration obligations related to acquisitions, and income taxes. Additionally, the valuation of share-based compensation expense uses a model based upon interest rates, stock prices, maturity estimates, volatility and other factors. The Company believes these estimates and assumptions are reliable. However, these estimates and assumptions may change in the future based on actual experience as well as market conditions.

Financial Instruments

The Company uses fair value measurements in areas that include, but are not limited to, the allocation of purchase price consideration to tangible and identifiable intangible assets, convertible debt, and contingent consideration. The carrying values of accounts receivable, accounts payable, accrued payroll and expenses, and other current assets and liabilities approximate their fair values because of the short-term nature of these instruments. The carrying value of bank debt approximates fair value due to the variable nature of the interest rates under the credit agreement with BMO Bank, N.A. (“BMO”) that provides for a revolving credit facility, term loan and current rates available to the Company for debt with similar terms and risk.

Cash and Cash Equivalents

Cash and cash equivalents include all highly liquid investments with an original maturity of three months or less.

Concentration of Credit Risk

Concentration of credit risk is limited due to the Company’s diverse client partner base and their dispersion across many different industries and geographic locations nationwide. No single client partner accounted for more than 10% of the Company’s accounts receivable as of March 30, 2025 and December 29, 2024 or revenue for the thirteen week periods ended March 30, 2025 and March 31, 2024. Geographic revenue in excess of 10% of the Company's consolidated revenue in Fiscal 2025 and the related percentage for Fiscal 2024 was generated in the following areas at:


	Thirteen Weeks Ended
	March 30, 2025		March 31, 2024


Tennessee	16	%	18	%
Texas

SEC Form 10-Q filed by BGSF Inc.