BGSF, Inc. · NYSE:BGSF
BGSF — Investor Presentation (August 2023)
32 slides from BGSF's investor presentation, August 2023
Slide 1: Investor Presentation
A Workforce Solutions Provider Investor Presentation August 2023 Your Future. Our Purpose.
Slide 2: Forward Looking Statements
Forward Looking Statements The forward-looking statements in this presentation 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 an
Slide 3: Delivering an Attractive Investment Thesis
Delivering an Attractive Investment Thesis $339M* Revenues Organic and Acquisitive Growth Focusing on high-end, specialized consulting services Revenue Diversification $30.1M* Strong brand in both business segments ADJUSTED EBITDA Strategic Geographic Expansion BGSF Leveraging a global workforce NYS
Slide 4: Recent Strategic Acquisitions
Recent Strategic Acquisitions Horn Solutions Arroyo Consulting (Purchase price $42.7M) (Purchase price $16.5M at max earnout) Increased depth in high-value Nearshore & offshore IT and software Increased Scale in finance and accounting consulting development resources primarily in Attractive Market a
Slide 5: Four 2023 Initiatives
Four 2023 Initiatives Process Improvement M&A with Shared Organic Growth Services Brand Consolidation Investor Presentation Your Future. Our Purpose. | bgsf.com 5
Slide 6: Strong Client and Talent Engagement
Strong Client and Talent Engagement 89% ~ 14,500 ~ 9,000 Client Retention People Placed to Work Clients Served ~ 47,500 ~ 3,100 Assignments Paychecks Per Week * Fiscal 2022, excludes Horn Solutions Investor Presentation Your Future. Our Purpose. | bgsf.com 6
Slide 7: Fragmented Industry Ripe for Consolidation
Fragmented Industry Ripe for Consolidation ~25,000 2 3.5% 1 Staffing Firms Unemployment Rate 186 Firms Over $100M Revenue As of July 2023 TRENDS ~16 million 2 Remote Work & Technology 1.90% 2 Increase in Demand Temp Penetration Rate Temporary & Contract Skills Shortage Employees Hired Annually Great
Slide 8: 121st Largest Workforce Solutions Provider in Highly Fragmented Industry
121st** Largest Workforce Solutions Provider in Highly Fragmented Industry U.S. Market Size* $218.8 $211.8 $216.9 250 $186.9 $153.1 $140.7 200 52nd*** Growing Global 150 Largest IT Presence Expansion 100 Solutions U.S., Colombia Professional in 2023 and India 50 Firm Nearshore/Offshore 0 2019 2020 2
Slide 9: Reshaping Our Organization for Growth, Higher Margins and Elevated Cross-Selling Opportunities
Reshaping Our Organization for Growth, Higher Margins and Elevated Cross-Selling Opportunities Professional Property Professional Management Talent Acquisition Team Leadership Consolidation Focused on Focused on: Upskilling tomorrow workforce Specialized Verticals Onshoring & Nearshoring Territory e
Slide 10: Divestiture Supports Higher Margin Revenue to Align with Long-term Strategic Goals
Divestiture Supports Higher Margin Revenue to Align with Long-term Strategic Goals Percent of Total Revenue by Segment 100% 26% 38% 2007* 2017 2023 BGSF 47% Founded 27%* 62% Light Industrial* Professional Property Management * Discontinued operations 2023 reflects first quarter Investor Presentation
Slide 11: Two Strong Platforms Leveraging Higher Margin Mix
Two Strong Platforms Leveraging Higher Margin Mix Property Management Professional % of Revenues 38% 65% 38% 62% % of GP $'s 43% 43% 57% 57% 40.3% 40.3% 33.5% 33.5% Gross Margin % Note: Fiscal 2023 first half Investor Presentation Your Future. Our Purpose. | bgsf.com 12
Slide 12: Property Management
Property Management Optimizing Margins through Pricing Efficiencies Primary focus on serving residential property management operators. Best-in-class Placement 100% Organic Growth Solutions Offering Virtual High Industry Maintenance Engagement Upskilling Investor Presentation Your Future. Our Purpos
Slide 13: Property Management Revenue Mix Driving Niche in Maintenance and Leasing Solutions
Property Management Revenue Mix Driving Niche in Maintenance and Leasing Solutions Supporting our clients’ operational needs and filling gaps to help maintain operational excellence 40.3% labor market has Tightening spurred demand for these 70% 30% 30% services of Revenue of Revenue Maintenance Offi
Slide 14: Property Management - Strategic Geographic & Territorial Expansion
Property Management - Strategic Geographic & Territorial Expansion WA 36 States District of Columbia OR MN Toronto, ON & Canada WI NY MA MI 64 markets RI PA NV NJ IL IN OH UT MD CA CO KS VA DC MO KY ~ 8,600 NC Properties OK TN AZ Served AR SC GA MS AL 91% ~45,500 TX LA Client Unique FL FL Retention
Slide 15: Professional
Professional Building Leading International Practice IT Managed Finance & Consulting Solutions Accounting Implementation of Large Consultant Continued Education New Technology Pool Across Workday, Salesforce, AI, White Papers, CPE Events, Multiple Verticals Webinars Cyber Security, OneStream IT Fina
Slide 16: Professional – Building Cross-Selling Opportunities as a Single-Source Provider
Professional – Building Cross-Selling Opportunities as a Single-Source Provider Bringing expertise in Project Cyber Security Management and Organizational Change Management across a myriad of subject matter areas Supporting clients’ operational needs and filling gaps to help 59.7% clients maintain o
Slide 17: Professional Division – Growing Global Presence
Professional Division – Growing Global Presence North South Asia America America Colombia MA RI NJ IL India MD NC TN AZ TX FL Argentina Alaska Mexico Dominican Republic CONSULTANT ENGAGEMENTS Hawaii BGSF LOCATIONS 47 States, District of Columbia, ~400 ~1,700 88% Client Canada, Mexico, Dominican Cons
Slide 18: Strong Post-Covid Growth Profile
Strong Post-Covid Growth Profile Revenue* Adjusted EBITDA* ($ in millions) – Gross Margin % ($ in millions) – Adjusted EBITDA Margin % $338.5 $35 $350 $298.4 $30.1 $30 $300 $239.0 $25 $21.7 $250 $207.1 $20 $200 $15.0 $15 $12.2 $150 $100 $10 $50 $5 $0 $0 31.9% 33.9% 34.7% 36.3% 5.9% 6.3% 7.8% 8.9% Gr
Slide 19: Leveraging Growth and Margin Expansion ($ in Millions)
Leveraging Growth and Margin Expansion ($ in Millions) Revenue* Operating Income* $19.8 $185 $177.3 $20 $165 $14.7 $15.6 $147.0 $45.2 $6.1 $138.4 $145 $15 $121.1 $5.1 $39.4 $125 $10.3 $9.7 $4.3 $33.2 $105 $92.0 $3.4 $10 $7.5 $85 $3.4 $24.8 $68.8 $65 $5 $45 $25 $0 33.8% 31.6% 6.2% 20.6% % of Revenues
Slide 20: Q2 2023 Financial Highlights
Q2 2023 Financial Highlights 9.1% 36.6% 9.3% Y/Y Revenue Gross Profit Adjusted EBITDA Growth in Margin in Margin Q2 2023 Q2 2023 Up 200bps 6.0% 1 2.3x 2 Current Dividend Debt to Yield Proforma (Annualized) EBITDA 1 Last ten days average closing price as of August 1, 2023 2 Funded debt to Proforma EB
Slide 21: Margin Enhancement Levers
Margin Enhancement Levers Mix Shift Systems and Cross-selling Operational Improvements Acquisitions Investor Presentation Your Future. Our Purpose. | bgsf.com 20
Slide 22: Capital Allocation Priorities
Capital Allocation Priorities 35th consecutive quarterly dividend Sustainable Dividend announced in August Cloud migration and upgrade of enterprise Investments to Support apps complete; focused on system Organic Growth enhancements to drive growth and operating efficiencies Recent acquisitions enha
Slide 23: Empowered, Vibrant and Purpose-Driven Culture
Empowered, Vibrant and Purpose-Driven Culture Fostering Diversity, Equity and Inclusion VIIBE Council – Voices, Inspiring, Inclusion, Belonging, Equity Pillars of Excellence Focused on diversity education, training and engagement Enhanced Governance & Board Diversity Current 43% female representatio
Slide 24: Executive Leadership
Executive Leadership Kelly Brown – President, Property Management After opening the Nashville office as director of sales for BGSF in 2014, Kelly was promoted to regional sales manager in 2015 and assumed the role of Division President in May of 2021. Currently, with her regional sales head experien
Slide 25: Thank you.
Thank you. bgsf.com For More Information Please contact IR@bgsf.com.
Slide 26: Appendix
Appendix Your Future. Our Purpose. | bgsf.com 27
Slide 27: Presentation of Non-GAAP Measures
Presentation of Non-GAAP Measures The financial results of BGSF 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 perfo
Slide 28: Non-GAAP Reconciliation BGSF Trailing Four Quarter Proforma Results
Non-GAAP Reconciliation BGSF Trailing Four Quarter Proforma Results (Including Horn Solutions and Arroyo Consulting) Horn & ($ in Millions) BGSF (1) Arroyo (2) Proforma Revenue $ 311.9 $ 26.6 $ 338.5 Gross Profit $ 111.4 $ 11.5 $ 122.9 Gross Profit Margin 35.7% 43.2% 36.3% Adjusted EBITDA $ 24.1 $ 6
Slide 29: Reconciliation of Net Income (Loss) from continuing operations to Adjusted EBITDA
Reconciliation of Net Income (Loss) from continuing operations to Adjusted EBITDA Investor Presentation Your Future. Our Purpose. | bgsf.com 30
Slide 30: Reconciliation of Adjusted EPS from Continuing Operations
Reconciliation of Adjusted EPS from Continuing Operations Investor Presentation Your Future. Our Purpose. | bgsf.com 31
Slide 31: Awards
AWARDS 2023 AWARDS 2022 AWARDS 2023 Best Place for Working Parents 2022 Best Place for Working Parents SIA Best Staffing Firms to Work For 2022 DCEO Innovation in Talent Workforce Finalist SIA #121 Staffing Firms List 2023 Top 10 Staffing Companies to Work for in 2022, World Staffing Summit SIA #52
Slide 32: Historical Acquisitions/Divestitures
Historical Acquisitions/Divestitures ACQUISITIONS: April 2023 Arroyo Consulting December 2022 Horn Solutions February 2021 Momentum Solutionz February 2020 EdgeRock Technology Partners December 2019 L.J. Kushner & Associates September 2017 Smart Resources and Accountable Search April 2017 Zycron Oct