BGSF Inc (BGSF) 2024 Q3 法說會逐字稿

Good morning, everyone. Welcome to the BGSF Inc fiscal 2024 third quarter, financial results conference call. (Operator Instructions.)

大家早安。歡迎參加 BGSF Inc 2024 財年第三季財務業績電話會議。（操作員說明。）

I will now turn the conference over to Sandy Martin, Three-part advisors. Please go ahead.

我現在將會議交給三部分顧問桑迪馬丁。請繼續。

Good morning. Thank you for joining us today for BGSFs third quarter, 2024 Earnings Conference Call with me on the call are Beth Garvey, Chair, President and Chief Executive Officer and John Barnett, Chief Financial Officer. After our prepared remarks, there will be a Q&A session as noted today's call is being webcast live. A replay will be available later today and archived on the company's investor relations page at Investor.BGSF.com.

早安.感謝您今天參加BGSF 2024 年第三季財報電話會議，與我一起參加電話會議的是董事長、總裁兼執行長貝絲·加維(Beth Garvey) 和財務長約翰·巴尼特(John Barnett)。在我們準備好的演講之後，將會有一個問答環節，正如今天所指出的，電話會議正在網路直播。今天稍後將提供重播，並存檔在 Investor.BGSF.com 的公司投資者關係頁面上。

Today's discussion will include forward-looking statements which are based on certain assumptions made by the company under the safe harbour provisions of the Private Securities Litigation Reform Act of 1995.

今天的討論將包括前瞻性陳述，這些陳述是基於公司根據 1995 年《私人證券訴訟改革法案》的安全港條款所做的某些假設。

Actual results may differ materially from those indicated by the forward-looking statements because of various risks and uncertainties including those listed in the company's filings with the securities and exchange commission. Management statements are made as of today and the company assumes no obligation to update these statements publicly, even if new information becomes available in the future.

由於各種風險和不確定性，包括公司向證券交易委員會提交的文件中列出的風險和不確定性，實際結果可能與前瞻性陳述所示的結果有重大差異。管理階層聲明截至今日發布，本公司不承擔公開更新這些聲明的義務，即使將來出現新資訊。

Management will refer to non-GAAP measures including adjusted EPS and adjusted EBITDA reconciliations to the nearest GAAP measures can be found at the end of our earnings release. I'll turn the call over to Beth Garvey.

管理層將參考非 GAAP 衡量標準，包括調整後每股收益和調整後 EBITDA 與最接近 GAAP 衡量標準的對賬，可在我們的收益發布末尾找到。我會把電話轉給貝絲·加維。

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

感謝桑迪，感謝大家加入我們討論我們的第三季收益。首先我想說，我們今天的評論將很簡短，因為我們仍在評估與公司策略替代方案審查相關的選項。我期待著將來當我們有更多資訊可以分享時進一步討論這個問題。

We will be taking operational questions on today's call however, we will not take questions concerning the process. For the last 18 months have been a challenging operating environment for our industry and specifically for IT and professional services. We believe that our results are beginning to stabilize with more consistency and even recovery as evidenced by sequential sales improvements of IT consulting on the professional side.

我們將在今天的電話會議上回答操作問題，但我們不會回答有關流程的問題。過去 18 個月，我們的產業（尤其是 IT 和專業服務）面臨著充滿挑戰的營運環境。我們相信，我們的業績開始趨於穩定，並且更加一致，甚至有所恢復，專業 IT 諮詢銷售的連續成長就證明了這一點。

We also launched exciting lead generation technology in Q3 as part of an ongoing technology enhancement made possible by our investment into modernization of our tech stack, I'll discuss this more after we cover our results. In the third quarter, total revenues were $71 million, which includes almost $30 million in sales in property management and $41 million in sales for the professional segment. Broadly speaking, the property management sales increased due to typical seasonality, as well as for progression of a number of important strategic initiatives.

我們也在第三季推出了令人興奮的領先一代技術，作為我們對技術堆疊現代化的投資而實現的持續技術增強的一部分，我將在介紹我們的結果後對此進行更多討論。第三季總收入為 7,100 萬美元，其中包括近 3,000 萬美元的物業管理銷售額和 4,100 萬美元的專業部門銷售額。整體而言，物業管理銷售額的成長是由於典型的季節性因素以及一些重要策略措施的進展。

On the professional side revenues were under pressure during the third quarter, sequentially and versus a year ago, due to declines in the finance and accounting division, excluding perm placement BGSF IT consulting sales represent the largest revenue category at almost 70% of quarterly revenues. During the third quarter IT consulting sales were up slightly on a sequential basis compared to the second quarter. We are encouraged by the leveling off of revenues and we believe if macro and industry pressure subside, we are more optimistic today that stability could turn into growth in future quarters.

在專業方面，由於財務和會計部門（不包括永久安置）的下降，第三季的收入環比和去年同期都面臨壓力，BGSF IT 諮詢銷售代表了最大的收入類別，幾乎佔季度收入的 70%。與第二季相比，第三季 IT 諮詢銷售額較上季略有成長。我們對收入趨於平穩感到鼓舞，我們相信，如果宏觀和行業壓力消退，我們今天更加樂觀地認為，穩定可能會在未來幾季轉化為成長。

Although IT consulting stabilized and grew slightly in the quarter, the finance and accounting division was sequentially softer than the second quarter. Consistent with strength in previous periods our Managed Solutions business experienced double-digit growth over a year ago and 10% sequential lift compared to the second quarter.

儘管 IT 諮詢業務在本季保持穩定並略有成長，但財務和會計部門的表現仍較第二季疲軟。與前幾個時期的實力一致，我們的託管解決方案業務比一年前實現了兩位數的增長，與第二季度相比環比增長了 10%。

Managed Solutions continues to be strong growth business for BGSF based on our unique and differentiated services and solutions. After John walks through our detailed financial results for the quarter I'll return with closing remarks, John.

基於我們獨特且差異化的服務和解決方案，託管解決方案仍然是 BGSF 強勁成長的業務。在約翰詳細介紹了本季度的財務業績後，我將發表結束語，約翰。

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

謝謝你，貝絲，大家早安。正如貝絲所提到的，這種充滿挑戰的環境持續影響著我們的產業。今天我計劃重點介紹 BGSF 取得的一些進展。

Third quarter, revenues were $71.2 million versus $83.5 million in the year ago quarter. And up sequentially by 4.5%, on a sequential basis property management revenues reflect a seasonal lift with an increase of 15.9% from the second quarter of 2024. For the third quarter revenue in our professional segment remains soft compared to the second quarter and declined in line with competitors down 12.9% versus the prior year period.

第三季營收為 7,120 萬美元，而去年同期營收為 8,350 萬美元。物業管理收入較上季成長 4.5%，反映出季節性成長，較 2024 年第二季成長 15.9%。與第二季相比，我們的專業部門第三季營收仍然疲軟，與競爭對手相比下降了 12.9%。

As Beth mentioned, Managed Solutions continues to show strength due to new contract wins. More recently, we are seeing elevated perm placement activity at the start of this quarter. Gross profit and margins in the third quarter were $24.3 million and 34.2% compared to $30 million and 35.9% in the year ago period.

正如 Beth 所提到的，託管解決方案由於贏得新合約而繼續展現實力。最近，我們看到本季初的燙髮安置活動增加。第三季毛利和利潤率分別為 2,430 萬美元和 34.2%，而去年同期毛利和利潤率為 3,000 萬美元和 35.9%。

Much of this 170 basis point margin pressure was primarily attributed to cost pressures, impacting our clients and demand for our services and lower perm placement which carries a lower GP margin and to a lesser extent increased competition.

170 個基點的利潤壓力主要歸因於成本壓力，影響了我們的客戶和對我們服務的需求，以及較低的永久安置，這導致了GP 利潤率較低，並在較小程度上加劇了競爭。

Compared to the second quarter Gross Profit margins declined by 50 basis points again, mostly due to dynamics in the property management segment. SG&A expenses for the third quarter were $22 million compared to $21.6 million in the second quarter and $22.7 million in the prior year's quarter.

與第二季相比，毛利率再次下降 50 個基點，主要是由於物業管理業務的動態。第三季的銷售、管理及行政費用為 2,200 萬美元，而第二季為 2,160 萬美元，去年同期為 2,270 萬美元。

SG&A in the period included 526,000 and non-recurring fees associated with the strategic alternatives process. We continue to re-baseline costs and prudently manage spending in the quarter. Third quarter adjusted EBITDA was $3.2 million or 4.5% of revenue compared to $2.6 million or 3.8% in the second quarter. A nice sequential step up in both dollars and margins.

該期間的 SG&A 包括 526,000 美元以及與策略替代流程相關的非經常性費用。我們將繼續重新調整成本基準並審慎管理本季的支出。第三季調整後 EBITDA 為 320 萬美元，佔營收的 4.5%，而第二季為 260 萬美元，佔營收的 3.8%。美元和利潤率都取得了不錯的連續提升。

We reported adjusted earnings of $0.10 per diluted share, an improvement from $0.07 per share in the 2024 second quarter, which compared to $0.36 per share in the third quarter of 2023. We generated cash from operating activities for the first nine months of $21.2 million capital spend was $1.4 million for the nine months, which is primarily IT investments.

我們公佈的調整後每股攤薄收益為 0.10 美元，較 2024 年第二季的每股 0.07 美元有所改善，而 2023 年第三季的每股收益為 0.36 美元。前九個月的經營活動產生的現金為 2,120 萬美元，後九個月的資本支出為 140 萬美元，主要是 IT 投資。

Our debt to EBITDA leverage ratio was 3.8 times which is compliant with our new credit facility amendment terms included with our form 10-Q filing with that, I would like to turn the call back to Beth.

我們的債務與 EBITDA 槓桿比率為 3.8 倍，這符合我們 10-Q 表格文件中包含的新信貸便利修訂條款，我想將電話轉回 Beth。

Thank you, John. I'm pleased to share that we successfully launched our advanced lead generation engine in the third quarter. This technology now drives our sales funnels for both divisions. Although still in the early days, this targeted engine generated almost 400 marketing qualified leads and 171 sales qualified leads in the quarter which translated into more than $1 million in booked revenue.

謝謝你，約翰。我很高興與大家分享，我們在第三季成功推出了先進的潛在客戶生成引擎。這項技術現在推動了我們兩個部門的銷售管道。儘管仍處於早期階段，但該目標引擎在本季度產生了近 400 個行銷合格的潛在客戶和 171 個銷售合格的潛在客戶，轉化為超過 100 萬美元的預訂收入。

We know that by strategically harnessing data driven insights, generative AI and leveraging marketing automation, we are able to streamline lead acquisition and enhance conversion rates across both divisions. This is an important strategic initiative that we had envisioned with our IT roadmap investments made in 2022 and 2023. We know that this milestone demonstrates our commitment to BGSF digital transformation, client engagement and delivering value through cutting edge workforce solutions.

我們知道，透過策略性地利用數據驅動的洞察、生成式人工智慧和行銷自動化，我們能夠簡化兩個部門的潛在客戶獲取並提高轉換率。這是我們在 2022 年和 2023 年進行的 IT 路線圖投資中所設想的重要策略措施。我們知道，這一里程碑體現了我們對 BGSF 數位轉型、客戶參與以及透過尖端勞動力解決方案提供價值的承諾。

Both segments have seen pockets of strength and have demonstrated either stability or forward progress especially in managed services nearshore, offshore AI and software engineering solutions as well as perm placement in the professional segment this quarter. (inaudible) that we hired Hitesh Talati, a Deloitte veteran as BGSF of strategy and innovation on the professional side.

這兩個細分市場都表現出了一定的實力，並表現出穩定性或向前發展，特別是在近岸託管服務、離岸人工智慧和軟體工程解決方案以及本季度專業細分市場的永久安置方面。 （聽不清楚）我們聘請了德勤資深人士 Hitesh Talati 擔任專業方面的策略和創新 BGSF。

Hitesh's focus has been on large strategic customers and on bringing consolidated packages with wallet expansion initiatives to our solutions-based offering. Together, we have successfully secured several proof-of-concept engagements as well as platform design sessions by starting with clients tech stack and building a custom framework for solutions for their business.

Hitesh 的重點是大型策略客戶，並將帶有錢包擴展計劃的整合包引入我們基於解決方案的產品中。透過從客戶技術堆疊入手並為其業務解決方案建立自訂框架，我們共同成功完成了多次概念驗證活動以及平台設計會議。

These engagement discovery sessions facilitate a discussion of risk and pros and cons to properly scope technological innovations into the organization's ecosystem. This consultative approach to technology allows our team to whiteboard and properly scope for the best solutions which leads to comprehensive statement of work for our professional team.

這些參與發現會議促進了對風險和利弊的討論，以將技術創新適當地納入組織的生態系統中。這種技術諮詢方法使我們的團隊能夠在白板上正確地尋找最佳解決方案，從而為我們的專業團隊提供全面的工作說明。

Not surprisingly, September was the highest IT revenue and gross profit month for the year and the highest IT contribution to overhead since October of 2023. We know that our relentless work can and will be build momentum as supply will begin to turn. We also know that accessibility and responsiveness to our clients and prospects through continued improvements of our digital tools is empowering our sales teams across the company to capture and convert leads faster, and ensuring our clients have swift access to the right talent solutions is our number one priority.

毫不奇怪，9 月份是全年 IT 收入和毛利最高的月份，也是自 2023 年 10 月以來 IT 對管理費用的貢獻最高的月份。我們知道，隨著供應開始轉向，我們不懈的努力能夠而且將會積聚動力。我們也知道，透過不斷改進我們的數位工具，我們的客戶和潛在客戶的可訪問性和響應能力使我們整個公司的銷售團隊能夠更快地捕獲和轉換潛在客戶，並確保我們的客戶能夠快速獲得正確的人才解決方案是我們的首要任務優先事項。

Also, we know that getting party election with lower fed interest rates will eliminate some distractions and obstacles from key decision makers. Using our lead generation technology we are actively working to accelerate property management business. We also continue to target properties using the strategic territory mapping to drive sales team's performance and increase customer relationship touch points.

此外，我們知道，以較低的聯準會利率進行政黨選舉將消除關鍵決策者的一些幹擾和障礙。利用我們的潛在客戶開發技術，我們正在積極努力加速物業管理業務。我們也繼續使用策略性區域映射來瞄準物業，以提高銷售團隊的績效並增加客戶關係接觸點。

We continue to sign partnership agreements that place BGSF on a short list of preferred vendors for owners and property management companies. We will work hard to earn business based on premium services that deliver exceptional trained and skilled talent. We continue to believe that there is a backlog of repairs and capital improvements in most multifamily communities due to prolonged period of higher interest rates and cost of capital, as well as recessionary pressures.

我們繼續簽署合作夥伴協議，將 BGSF 列入業主和物業管理公司的首選供應商名單中。我們將努力透過優質服務贏得業務，提供訓練有素、技術精湛的人才。我們仍然認為，由於長期較高的利率和資本成本以及經濟衰退壓力，大多數多戶社區的維修和資本改善工作積壓。

As macroeconomic pressures ease and our business complete their budgeting cycles we expect to benefit from better project and business flow throughout 2025 and beyond. Also on property management side, our (inaudible) sales, Andrew Hill is leading sales teams and his experience coupled with our enhanced efforts around sales training and development are improving the speed and effectiveness of the sales teams onboarding and training efforts.

隨著宏觀經濟壓力緩解以及我們的業務完成預算週期，我們預計 2025 年及以後將受益於更好的專案和業務流程。同樣在物業管理方面，我們的（聽不清楚）銷售人員安德魯·希爾（Andrew Hill）領導著銷售團隊，他的經驗加上我們在銷售培訓和發展方面加大的努力，正在提高銷售團隊入職和訓練工作的速度和有效性。

Speaking of training, we continue to invest in talent by internally training property management candidates in all areas including leasing, maintenance and groundskeeping. We want clients to see, and experience differentiated skill sets and experience of our trained workforce. We know that this industry is a dynamic and we are staying in front of innovation and markets with expanding industry, apartments, luxury communities and commercial conversions to residential.

說到培訓，我們繼續對人才進行投資，對租賃、維護和場地維護等各個領域的物業管理候選人進行內部培訓。我們希望客戶看到並體驗我們訓練有素的員工隊伍的差異化技能和經驗。我們知道這個行業是一個充滿活力的行業，隨著工業、公寓、豪華社區和商業住宅改建的不斷擴大，我們始終走在創新和市場的前沿。

This is especially important given the notable shortage of housing today and shortages forecasted throughout North America. Our BGSF leaders and their teams continue to foster culture of adaptability and resilience. Our disciplined sales and marketing efforts are pursuing a robust process of defining target markets, enabling new technology understanding our audiences optimizing our sales process, therefore, gaining competitive advantage in the short term and the long term, we also continue to rebase line expenses and make careful spending decisions. We are relentlessly focused on sales, profitability and cash flow.

考慮到當今住房嚴重短缺以及預計整個北美地區都會出現住房短缺，這一點尤其重要。我們的 BGSF 領導者及其團隊繼續培養適應性和韌性的文化。我們嚴格的銷售和行銷工作正在追求一個穩健的過程來定義目標市場，使新技術能夠了解我們的受眾，優化我們的銷售流程，因此，為了在短期和長期內獲得競爭優勢，我們也繼續調整生產線費用並制定謹慎的支出決定。我們不懈地關注銷售、獲利能力和現金流。

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

感謝您今天抽出時間，我想再次感謝我們的員工、客戶、合作夥伴和投資者對 BGSF 未來願景的支持和信念。

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

現在我們想向分析師徵集有關我們業務的營運問題，營運商。

We will now begin the question and answer session to ask a question. (Operator Instructions.)

我們現在開始問答環節來提問。（操作員說明。）

The first question comes from Tyler Andin with Roth capital partners. Please go ahead.

第一個問題來自泰勒·安丁和羅斯資本合夥人。請繼續。

Morning. Hi, (inaudible) So my first question was the demand for property management has been impacted by budget constraints in the recent past. Has the past pent-up maintenance demand materialized. And can you provide an update on your territory, mapping initiatives and property management with respect to your ability to differentiate from the competitor?

早晨。您好，（聽不清楚）所以我的第一個問題是，物業管理的需求最近受到了預算限制的影響。過去被壓抑的維護需求是否已實現？您能否提供有關您的領域、規劃計劃和物業管理的最新信息，以了解您與競爭對手的差異化能力？

So, I'll take the first question. We don't think that pent-up demand has shown up yet. When we look sequentially at the business from Q1 to Q2, we think that's kind of the low point for the kind of demand depression related to all the expense that they're feeling. So our growth there that we would typically see was moderated we still saw an uplift, a typical seasonal uplift, but it wasn't what we expected.

那麼，我將回答第一個問題。我們認為被壓抑的需求尚未顯現。當我們按順序查看從第一季到第二季的業務時，我們認為這是與他們感受到的所有費用相關的需求抑制的最低點。因此，我們通常看到的成長有所放緩，但我們仍然看到了成長，這是典型的季節性成長，但這不是我們的預期。

And then really, while we were at a lower level, year over year, right, what we saw Q2 to Q3 was right in line with what we would historically see dollar wise from a lift from seasonality. And we didn't see any more than what you would normally expect. So that leads us to believe that there is quite a bit of pent-up demand out there that is going to come through at some time.

事實上，雖然我們每年都處於較低水平，但我們看到的第二季到第三季的情況與我們歷史上看到的季節性成長所帶來的美元情況是一致的。我們沒有看到比你通常期望的更多的東西。因此，這讓我們相信，有相當多被壓抑的需求將在某個時候出現。

Awesome, perfect. That was very helpful. And my second question was last quarter, you were cautiously optimistic about a potential lift in the professional segment. So with project wins exceeding project ends, did that momentum carry through in the third quarter? And were there any timing issues that may suggest fourth quarter maybe see a nice sequential improvement?

太棒了，完美。這非常有幫助。我的第二個問題是上個季度，您對專業領域的潛在提升持謹慎樂觀態度。那麼，隨著專案獲勝超過專案結束，這種勢頭在第三季度延續嗎？是否有任何時間問題可能表明第四季可能會出現良好的連續改善？

We did see, uptick in the third quarter, especially late in September for the professional group. Again we had a great uptick in wins, outpacing our ends. So there were many new things that may have gotten pushed a few weeks that kind of made them go into October. But so far, we've had a pretty good traction in the right direction from what we expected.

我們確實看到了第三季的上升，尤其是在 9 月底，專業組的情況有所改善。我們的勝利再次大幅上升，超過了我們的目標。因此，有很多新的事情可能被推遲了幾週，這使得它們進入了十月。但到目前為止，我們已經朝著我們預期的正確方向取得了很好的進展。

Very nice, nice. And then my last question was, do you have a timeline on when the strategic alternative review is going to end.

非常好，不錯。我的最後一個問題是，您是否有關於策略替代審查何時結束的時間表。

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

我們目前還沒有，我們將繼續努力向前推進，但目前還沒有時間表。

Perfect. Thank you, guys.

完美的。謝謝你們，夥計們。

Thank you.

謝謝。

Again.(Operator Instructions.) at this time there are no further questions. I will turn the call back over to management for any closing remarks.

再次。我會將電話轉回管理層以供結束語。

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

謝謝你，黛比。感謝您今天抽出時間。感謝您持續的支持，我們期待在三月向您通報我們第四季的最新業績。祝你有美好的一天。

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

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。