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What changed in BGSF, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of BGSF, INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+194 added−215 removedSource: 10-K (2026-03-30) vs 10-K (2025-03-17)

Top changes in BGSF, INC.'s 2025 10-K

194 paragraphs added · 215 removed · 139 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThese workforce solutions also enable the client partner to rapidly respond to changes in business conditions, and in some cases to convert fixed labor costs to variable costs. Workforce solution companies act as intermediaries in matching available field talent to client partner assignments. 6 The workforce solution market is subject to volatility based on overall economic conditions.
Biggest changeOur Industry The property management workforce solution industry supplies field talent to client partners, helping them minimize the cost and effort of workforce planning. These workforce solutions also enable the client partner to rapidly respond to changes in business conditions, and in some cases to convert fixed labor costs to variable costs.
In 2023, the Board of Directors approved, and we completed, management’s plan to rebrand as BGSF, eliminating various current trade names. Regulation We are subject to regulation by numerous foreign, federal, state and local regulatory agencies, including but not limited to the U.S. Department of Labor, which sets employment practice standards for workers, and similar state and local agencies.
In 2023, the Board of Directors (“Board”) approved, and we completed, management’s plan to rebrand as BGSF, eliminating various current trade names. Regulation We are subject to regulation by numerous foreign, federal, state and local regulatory agencies, including but not limited to the U.S. Department of Labor, which sets employment practice standards for workers, and similar state and local agencies.
Diversity, Equity, and Inclusion We are committed to fostering an inclusive and diverse workforce. Our responsibility commitment is overseen by executive leadership, along with board-level oversight led by our Nominating and Governance Committee. In September 2020, we formed a diversity, equity and inclusion council called Voices Inspiring Inclusion, Belonging, and Equity (“VIIBE”), which represents broad perspectives across our organization.
Diversity, Equity, and Inclusion and Belonging We are committed to fostering an inclusive workforce. Our responsibility commitment is overseen by executive leadership, along with board-level oversight led by our Nominating and Governance Committee. In September 2020, we formed a diversity, equity and inclusion council called Voices Inspiring Inclusion, Belonging, and Equity (“VIIBE”), which represents broad perspectives across our organization.
We will make available free of charge through our website 11 our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we have filed or furnished such material to the SEC.
We will make available free of charge through our website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we have filed or furnished such material to the SEC.
Also, working with us gives our talent access to competitive health and benefit programs. Eligible talent can participate in a defined contribution plan and the 2020 Employee Stock Purchase Plan (“2020 ESPP”). 9 Compensation and Benefits BGSF is committed to providing competitive, equitable and fiscally responsible total rewards programs to our team members.
Also, working with us gives our talent access to competitive health and benefit programs. Eligible talent can participate in a defined contribution plan and the 2020 Employee Stock Purchase Plan (“2020 ESPP”). Compensation and Benefits BGSF is committed to providing competitive, equitable and fiscally responsible total rewards programs to our team members.
We expect that the level of competition will remain high, which could limit our ability to maintain or increase our market share or profitability. 8 The principal competitive factors in attracting qualified candidates for assignments are pay rates, availability of assignments, duration of assignments and responsiveness to requests for placement.
We expect that the level of competition will remain high, which could limit our ability to maintain or increase our market share or profitability. The principal competitive factors in attracting qualified candidates for assignments are pay rates, availability of assignments, duration of assignments and responsiveness to requests for placement.
This structure also allows managers and team members to focus on market development while relying on centralized services for support in back-office operations, such as risk management programs and unemployment insurance, credit, collections, accounting, advice on legal and regulatory matters, and quality standards.
This also allows managers and team members to focus on market development while relying on centralized services for support in back-office operations, such as risk management programs and unemployment insurance, credit, collections, accounting, advice on legal and regulatory matters, and quality standards.
Historically, demand for permanent placement workforce solutions is even more sensitive to economic and labor market conditions than demand for workforce and consultant solutions and this is expected to continue. Human Capital We are a workforce solutions company dedicated to connecting people to work in ways that enrich their lives.
Historically, demand for permanent placement workforce solutions is even more sensitive to economic and labor market conditions than demand for workforce and consultant solutions and this is expected to continue. 7 Human Capital We are a workforce solutions company dedicated to connecting people to work in ways that enrich their lives.
This focus will extend to our collaboration with client partners, selection of vendor partners, engagement in our communities and prioritization of overall work-life harmony. Our commitment to diversity, equity and inclusion does not sit with a singular individual, but with every BGSF team member.
This focus will extend to our collaboration with client partners, selection of vendor partners, engagement in our communities and prioritization of overall work-life harmony. Our commitment to diversity, equity and inclusion does not sit with a singular 8 individual, but with every BGSF team member.
Our global investment in professional development initiatives delivered over 10,000 educational hours to 2,200 individuals. During 2025, we will remain dedicated to sustainability, employee development, and community impact. 10 Team Engagement As part of BGSF’s continued initiative to provide its team members with feedback opportunities, in 2024, we conducted several pulse surveys to understand team member needs and provide support.
Our global investment in professional development initiatives delivered over 10,000 educational hours to 2,200 individuals. During 2026, we will remain dedicated to sustainability, employee development, and community impact. Team Engagement As part of BGSF’s continued initiative to provide its team members with feedback opportunities, in 2025, we conducted several pulse surveys to understand team member needs and provide support.
Demand for our Property Management workforce solutions typically increase 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.
Demand for our Property Management workforce solutions typically increases 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 2024, team members recognized our BGSF values through our “BIG Deal” platform by sending over 3,300 awards to their fellow team members. Learning and Development We emphasize team member development and learning as a priority for the organization. We believe learning and development are key elements to overall retention, engagement, and team member experience strategy.
In 2025, team members recognized our BGSF values through our “BIG Deal” platform by sending over 3,300 awards to their fellow team members. Learning and Development We emphasize team member development and learning as a priority for the organization. We believe learning and development are key elements to overall retention, engagement, and team member experience strategy.
Our focus is to ensure BGSF is cultivating equality and equity, while recognizing and celebrating our differences at work, in our homes, and out in the communities. Community Involvement In 2024, we were committed to sustainability initiatives which guided our interactions with our workforce, vendor partners, and client partners.
Our focus is to ensure BGSF is cultivating equality and equity, while recognizing and celebrating our differences at work, in our homes, and out in the communities. Community Involvement In 2025, we were committed to sustainability initiatives which guided our interactions with our workforce, vendor partners, and client partners.
We provide field talent to a variety of client partners that are seeking to match their workforce requirements to their business needs. Our client partners operate across a diverse set of industries. We employ a diverse operating model, both from a skill set and a geographic standpoint, which we believe mitigates downside revenue risk.
We provide field talent to a variety of client partners that are seeking to match their workforce requirements to their business needs. We employ a diverse operating model, both from a skill set and a geographic standpoint, which we believe mitigates downside revenue risk.
Competition With about 25,000 staffing and recruiting companies, the workforce solutions market is highly competitive with limited barriers to entry. We compete in national, regional and local markets with full-service and specialized workforce solution companies. Some of our competitors have significantly more marketing and financial resources than we do. Price competition in the industry is intense.
The workforce solutions market is highly competitive with limited barriers to entry. We compete in national, regional and local markets with full-service and specialized workforce solution companies. Some of our competitors have significantly more marketing and financial resources than we do. Price competition in the industry is intense.
In 2011, we began doing business as BG Staffing. LTN Staffing, LLC converted into a Delaware corporation, BG Staffing, Inc., following the merger of LTN Acquisition, LLC (the former parent of LTN Staffing, LLC) with and into LTN Staffing, LLC. The conversion was completed on November 3, 2013. In 2021, we changed our name to BGSF, Inc.
LTN Staffing, LLC converted into a Delaware corporation, BG Staffing, Inc., following the merger of LTN Acquisition, LLC (the former parent of LTN Staffing, LLC) with and into LTN Staffing, LLC. The conversion was completed on November 3, 2013. In 2021, we changed our name to BGSF, Inc.
As of August 1, 2024, we employed approximately 3,456 people, of which 13% were internal team members and 87% were field talent supporting our client partners across the country. • Women represented 36% of all team members, and underrepresented minorities (“URMs”, defined as those who identify as Black/African American, Hispanic/Latinx, Native American/Alaska Native, Asian, Native Hawaiian/Pacific Islander and/or two or more races) represented 71% of our all of our reporting team members (8% of team members in contingent roles chose not to disclose this information); • Women represented 61% of our internal team members and 50% of internal team members in managerial and leadership roles; and • URMs represent 39% of our internal team members and 20% of internal team members in managerial and leadership roles identified as URMs.
As of December 5, 2025, we employed approximately 2,243 people, of which 8% were internal team members and 92% were field talent supporting our client partners across the country. • Women represented 36% of all team members, and underrepresented minorities (“URMs”, defined as those who identify as Black/African American, Hispanic/Latinx, Native American/Alaska Native, Asian, Native Hawaiian/Pacific Islander and/or two or more races) represented 71% of our all of our reporting team members (8% of team members in contingent roles chose not to disclose this information); • Women represented 77% of our internal team members and 74% of internal team members in managerial and leadership roles; and • URMs represent 52% of our internal team members and 30% of internal team members in managerial and leadership roles identified as URMs.
Team Members As of February 5, 2025, we employed approximately 405 team members working remotely or in our various market locations in the United States. Field Talent In addition to our team members, BGSF matches talent with our client partners. In 2024, we placed approximately 13,300 individuals in positions with our client partners.
Team Members As of January 29, 2026, we employed approximately 189 team members working remotely or in our various market locations in the United States. Field Talent In addition to our team members, BGSF matches talent with our client partners. In 2025, we placed approximately 9,600 individuals in positions with our client partners.
No client partner accounted for more than 10% of our revenues in fiscal 2024, 2023, or 2022. Marketing and Recruiting We believe a key component of our success is the ability to recruit and maintain a pool of qualified field talent and regularly place them into desirable and appropriate positions.
Marketing and Recruiting We believe a key component of our success is the ability to recruit and maintain a pool of qualified field talent and regularly place them into desirable and appropriate positions.
We are organized to handle many of the administrative functions at our home office location so that our segment operations can focus on business development and the effective recruiting and assignment of field talent. We continue to invest in technology and process improvements, as necessary, to ensure that we are operating at optimal productivity and performance.
We are organized to handle many of the administrative functions at our home office location so that our Property Management segment operations can focus on business development and the effective development of job placements and recruiting and assignment of field talent.
We are committed to the organization’s overall health and providing career progression by providing individual development, readiness, and transition plans as a part of our talent review and succession planning process. In 2024, we had over 10,000 hours spent in upskilling the workforce, with over 3,200 going through our training programs.
We are committed to the organization’s overall health and providing career progression by providing individual development, readiness, and transition plans as a part of our talent review and succession planning process.
Our Client Partners We currently provide workforce solutions to small and medium-sized companies as well as divisions of Fortune 500 companies. As is common in the industry, our engagements to provide workforce solutions to our client partners are generally of a non-exclusive, short-term nature and subject to termination by the client partner with little or no notice.
As is common in the industry, our engagements to provide workforce solutions to our client partners are generally of a non-exclusive, short-term nature and subject to termination by the client partner with little or no notice. No client partner accounted for more than 10% of our revenues in fiscal years 2025, 2024, or 2023.
We will continue to evaluate acquisition opportunities utilizing our proven approach to the assessment, valuation, and integration of acquisitions. Additionally, we are committed to continue to grow our operations in our current markets, as well as expand into new markets within the segments and industries that we currently serve.
While we have not used acquisitions in the past to grow the Property Management segment, we will evaluate acquisition opportunities as they present themselves. Additionally, we are committed to continue to grow our operations in our current markets, as well as expand into new markets within the industries that we currently serve.
Financial Information about Segments Refer to Note 19 in the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K, which is incorporated by reference. 7 Financial Information about Geographic Areas Refer to Notes 1 and 2 in the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K, which is incorporated by reference.
Financial Information about Geographic Areas Refer to Notes 1 and 2 in the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K, which is incorporated by reference. Our Client Partners We currently provide property management workforce solutions to small and medium-sized property management companies and property owners in the multi-family and commercial markets..
Instaff’s financial results have been reflected in our Consolidated Statements of Operations and Comprehensive (Loss) Income and Consolidated Statements of Cash Flows as discontinued operations. See “Note 4 - Discontinued Operations” in our Consolidated Financial Statements included elsewhere in this report for additional information.
See “Note 4 - Discontinued Operations” in our Consolidated Financial Statements included elsewhere in this report for additional information.
Our workforce services consist of on-demand or short-term assignments, consulting services, managed services and on-site management administration.
Our workforce services consist of on-demand or short-term assignments and direct hire placements in the Property Management industry.
We actively seek endorsements and affiliations with professional organizations in the accounting and finance, technology, apartment community, commercial building, creative and marketing fields. To enhance public recognition of us and our workforce solutions, we conduct public relations activities and team members and field talent are encouraged to be active in civic organizations and industry trade groups in their local communities.
To enhance public recognition of us and our workforce solutions, we conduct public relations activities and team members are encouraged to be active in civic organizations and industry trade groups in their local communities. 6 Growth Strategy We are committed to growing our operations.
Client partners tend to use contingent workforce solutions to supplement their existing workforce and generally hire direct workers when long-term demand is expected to increase. As a consequence, our revenues tend to increase quickly when the economy begins to grow and, conversely, our revenues can also decrease quickly when the economy begins to weaken.
As a consequence, our revenues tend to increase quickly when the economy begins to grow and, conversely, our revenues can also decrease quickly when the economy begins to weaken.
ITEM 1. BUSINESS. Overview and History BGSF, Inc. (“BGSF,” “we,” or the “Company”) is a leading national provider of consulting, managed services, and professional workforce solutions with continuing operations that, along with its wholly owned subsidiaries, operate primarily within the U.S. in two industry segments: Property Management and Professional.
ITEM 1. BUSINESS. Overview and History BGSF, Inc. (“BGSF,” “we,” or the “Company”) is a leading national provider of staffing and workforce solutions for the Property Management industry.
The field talent we assign to our Property Management client partners are our employees, although our client partners generally provide on-the-job direction, control and supervision.
The field talent we assign to our Property Management client partners are our employees, although our client partners generally provide on-the-job direction, control and supervision. Management believes that our workforce solutions and the field talent performing these workforce solutions are, and will remain, an integral part of the labor market in local, regional and national economies in which we operate.
Intellectual Property We own or have rights to various copyrights, trademarks, service marks, trade names and domain names used in our business, including, but not limited to, BGSF, BG Staffing, BG Staffing Group, BG Personnel Services, Extrinsic, American Partners, InStaff, BG Temporary Staffing, BG Multifamily, BG Talent, Triance, Donovan & Watkins, D&W Talent, Vision Technology Services, Zycron, Smart Resources, Accountable Search, L.J.
In 2025, we had over 10,000 hours spent in upskilling the workforce, with over 3,200 going through our training programs. 9 Intellectual Property We own or have rights to various copyrights, trademarks, service marks, trade names and domain names used in our business, including, but not limited to, BGSF, BG Staffing, BG Staffing Group, BG Personnel Services, BG Temporary Staffing, BG Multifamily, BG Talent, bgsf.com, and bgstaffing.com.
We commenced operations on October 17, 2007 and since 2009 have began an on-going growth and diversification initiative. Since 2010, we have acquired fourteen businesses: • In June 2010, we purchased the interests of BG Personnel Services, LP and BG Personnel, LP, and purchased the common stock of B G Staff Services, Inc.
We commenced operations on October 17, 2007, primarily focused on the light industrial staffing industry. In June 2010, we purchased the interests of BG Personnel Services, LP and BG Personnel, LP and purchased the common stock of B G Staff Services, Inc. This acquisition laid the foundation for our entrance into the Property Management (“PM”) staffing industry.
Management believes that these solutions and the field talent performing these workforce solutions are, and will remain, an integral part of the labor market in local, regional and national economies in which we operate. BGSF, Inc. is the successor by conversion to LTN Staffing, LLC, a Delaware limited liability company that was formed on August 27, 2007.
BGSF, Inc. is the successor by conversion to LTN Staffing, LLC, a Delaware limited liability company that was formed on August 27, 2007. In 2011, we began doing business as BG Staffing.
Historically, in periods of economic growth, the number of companies providing workforce solutions has increased due to low barriers to entry. During recessionary periods, the number of companies has decreased through consolidation, bankruptcies, or other events.
Workforce solution companies act as intermediaries in matching available field talent to client partner assignments. 5 The property management workforce solution market is subject to volatility based on overall economic conditions. Historically, in periods of economic growth, the number of companies providing workforce solutions has increased due to low barriers to entry.
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Our consulting workforce solutions place field talent with client partners for extended time-periods or for an indefinite time period. This type of arrangement may involve outsourcing an entire department in a large corporation or providing the workforce for a large project. Managed Solutions are a combination of both workforce solutions and fixed fee arrangements.
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We operate primarily within the U.S. through our Property Management segment, which provides maintenance and office field talent across 44 of the states and D.C. to property management companies responsible for the apartment communities and commercial buildings day to day operations.
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Field talent is placed with the client partner and services are performed over a given period of time as determined with the client partner. Generally services are provided under a contractual agreement. In an on-site management arrangement, we place an experienced manager on-site at a client partner’s place of business.
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The PM business revenue at time of acquisition was $23.0 million and grew over time to $93.3 million in 2025 strictly through organic growth.
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The manager is responsible for conducting all recruiting, candidate screening, interviewing, drug testing, hiring and placement for field talent at the client partner’s facility for a long-term or indefinite period.
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During the same time period through, a series of acquisitions, we diversified into the professional services markets, which included consulting and staffing solutions for both information technology and finance and accounting as well as managed solutions services, which included both workforce solutions and fixed fee arrangements.
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Shortly after the purchase, we relocated our home office to Dallas, Texas. • In December 2010, we purchased substantially all of the assets and assumed certain liabilities of JNA Staffing Inc., which specialized in providing light industrial workforce solutions within the State of Wisconsin.
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In 2024, we engaged with an advisory firm to develop a long-term strategy for the business. This effort resulted in the sale of the Professional segment in September 2025 to INSPYR Solutions. The Professional segment’s financial results have been reflected in our Consolidated Statements of Operations and Consolidated Statements of Cash Flows as discontinued operations.
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These operations were rolled into our existing operations in Milwaukee, Wisconsin. • In December 2011, we purchased substantially all of the assets and assumed certain liabilities of Extrinsic, LLC, which specialized in providing information technology (“IT”) workforce solutions to client partners within the U.S.
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During recessionary periods, the number of companies has decreased through consolidation, bankruptcies, or other events. The property management workforce solution industry is large and highly fragmented having only 3 firms with national scale.
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We continue to operate under the Extrinsic trade name. • In December 2012, we acquired substantially all of the assets and assumed certain liabilities of American Partners, Inc., which specialized in providing IT workforce solutions to client partners within the U.S. 5 • In June 2013, we acquired substantially all of the assets and assumed certain liabilities of InStaff Holding Corporation and InStaff Personnel, LLC, a wholly owned subsidiary of InStaff Holding Corporation (collectively, “InStaff”). • In March 2015, we acquired substantially all of the assets and assumed certain liabilities of D&W Talent, LLC (“D&W”), which specialized in providing part-time and full-time workforce solutions of accounting and finance personnel and secretarial and administrative personnel to client partners in Texas and Louisiana. • In October 2015, we acquired substantially all of the assets and assumed certain liabilities of Vision Technology Services, Inc., Vision Technology Services, LLC, and VTS-VM, LLC (collectively, “VTS”), which provided IT workforce solutions and project management workforce solutions. • In April 2017, we acquired substantially all of the assets and assumed certain liabilities of Zycron, Inc.
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While the size of the temporary staffing market is not defined in industry data, a recent market study commission by the Company estimated that our core market and near term adjacency market to be approximately $1.5 billion.
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(“Zycron”), which provided IT workforce solutions and project management workforce solutions. • In September 2017, we acquired substantially all of the assets and assumed certain liabilities of Smart Resources Inc. and Accountable Search, LLC (collectively, “Smart”), which specialized in providing part-time and full-time workforce solutions of accounting and finance personnel and secretarial and administrative personnel to client partners in Chicago market. • In December 2019, we acquired substantially all of the assets and assumed certain liabilities of L.J.
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Our Operations With the sale of the Professional segment in September 2025, we have focused our operations on the Property Management segment. We also review the Company’s performance on a regional and strategic account level as well. Managers are held accountable for the performance within the respective areas of responsibility.
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Kushner & Associates, L.L.C. (“LJK”), which provided cybersecurity retained search workforce solutions specializing in recruiting high and mid-level IT security professionals. • In February 2020, we acquired 100% of the equity of EdgeRock Technology Holdings, Inc.
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We believe this level of review provides managers the appropriate information on how the performance of their areas of responsibility compares to other areas within the company.
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(“EdgeRock”), which provides specialized IT consultants and focuses on the sourcing and placement of technology professionals specialized in leading software and data ecosystems. • In February 2021, we acquired substantially all of the assets and assumed certain liabilities of Momentum Solutionz LLC (the “Momentum Solutionz”), which provided IT consulting and managed workforce solutions for organizations utilizing ERP systems. • In December 2022, we acquired substantially all of the assets and assumed certain liabilities of Horn Solutions, Inc. and Horn Solutions, Dallas, LLC (collectively, “Horn Solutions”).
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We actively seek endorsements and affiliations with professional organizations in the , apartment community and commercial buildings..
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Horn Solutions provides services to clients in a variety of industries including, but not limited to energy, financial services, healthcare, real estate and construction, service, manufacturing, and software industries. • In April 2023, we acquired substantially all of the assets and assumed certain liabilities, of Arroyo Consulting LLC (“Arroyo Consulting”), which provides nearshore and offshore workforce solutions specializing in IT and software development with operations in the United States, Colombia, and India.
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Our continuing operations has grown from $23.0 million in 2010 when we purchased BG Personnel Services and BG Staff Services, which provided entrance into the Property Management industry, to $93.3 million in 2025 strictly through organic growth.
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The Company currently operates primarily within the United States of America (“U.S.”) through the Property Management and Professional segments. Our Industry The workforce solution industry supplies field talent to client partners helping them minimize the cost and effort of workforce planning.
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We continue to invest in technology and process improvements, as necessary, to ensure that we are operating at optimal productivity and performance. In 2025, we began to invest in AI tools to aid our efforts in recruiting and onboarding field talent.
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The workforce solution industry is large and highly fragmented with approximately 25,000 competing companies, while only 241 firms exceeded $100 million in annual revenues during 2023, which is down from 251 in 2022 according to Staffing Industry Analysts (“SIA”). SIA stated the 2023 U.S. temporary service market reported $145.2 billion, which is down from $168.8 billion in 2022.
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This investment will deepen our engagement with clients and elevate the experience of working with us as an innovative workforce. We believe these investments will help differentiate BGSF from our competitors. In 2022, the Company completed the three-year information technology improvement project authorized by the Board to enhance its processes.
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The workforce solution industry includes a number of markets focusing on business needs that vary widely in duration of assignment and level of technical specialization. Our Operations We have diversified our operations to provide field talent within distinct segments of the industry.
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These workstreams included improvements to applications in front office, middle office, back office, modern workplace, IT infrastructure, and project management. Competition There are about 27,000 total staffing and recruiting companies, however data on the number of companies that participate in the property management market is not available because many companies operate across a wide spectrum of staffing markets.
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We refer to our continuing operations as the Property Management and Professional segments, and discontinuing operations as the Light Industrial segment. We operate separate profit centers within each segment and provide managers considerable operational autonomy and financial incentives. Managers focus on business opportunities within their markets and are provided centralized support to achieve success in those markets.
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The industry has historically been cyclical, often acting as an indicator of both economic downturns and upswings. Client partners tend to use contingent workforce solutions to supplement their existing workforce and generally hire direct workers when long-term demand is expected to increase.
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We believe this structure allows us to recruit and retain highly motivated managers who have demonstrated the ability to succeed in a competitive environment.
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In the first quarter of 2025, our 2020 ESPP expended all of the available shares approved by shareholders and the plan was suspended. We subsequently received approval for additional shares to allocate to the plan at BGSF’s annual shareholder meeting. BGSF is currently evaluating the restarting of this plan.
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Our Segments Our continuing operations are organized into the Property Management and Professional segments, and our discontinued operations is the Light Industrial segment. Property Management Segment Our Property Management segment is a leading provider of office and maintenance talent. We currently operate in 40 states and D.C.
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Professional Segment Our Professional segment provides highly skilled IT professionals with expertise in SAP, Workday, Peoplesoft, Hyperion, Oracle, One Stream, cyber, project management, managed services, and other IT workforce solutions to client partners on a national basis. Additionally, we provide finance, accounting, legal, human resource and related support personnel.
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Our client partners include large Fortune 500 companies, medium and small companies, as well as consulting firms engaged in systems integration projects. We operate our professional segment remotely and from our offices in Florida, Illinois, Maryland, Massachusetts, New Jersey, North Carolina, Rhode Island, Tennessee, and Texas. The IT division provides additional nearshore/offshore field talent solutions in Colombia and India.
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Light Industrial Segment The Light Industrial segment is reported in our financial statements as discontinued operations. See “Note 4 - Discontinued Operations” in our Consolidated Financial Statements for additional information.
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Growth Strategy We are committed to growing our operations and have grown from $35 million of Light Industrial revenue in 2009 to $272 million of revenue from continuing operations in 2024, by using a growth strategy reliant upon both acquisitions and organic growth.
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In 2022, we completed the board of directors authorized three year plan to enhance our processes through the information technology improvement project. These workstreams included improvements to applications in front office, middle office, back office, modern workplace, IT infrastructure, and project management.
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In addition, our cost of services typically increases in the first quarter primarily due to the reset of payroll taxes. The industry has historically been cyclical, often acting as an indicator of both economic downturns and upswings.
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Kushner & Associates, EdgeRock, EdgeRock Technology Partners, EdgeRock Technology Partners & Design, Momentum Solutionz, Creative Data Solutions, Horn Solutions, Arroyo Consulting, Arroyo IT Solutions, AC, bgsf.com, bgstaffing.com, bgstaffinggroup.com, bgpersonnel.com, bgpersonnel.net, bgstaffing.net, bgcompanies.net, bgmail.com, ltnstaffing.com, milwaukeetemps.com, milwaukeetmepsinc.com, extrinsicllc.com, extrinsicgroup.com, extrinsicresources.com, jnastaffing.com, therightpeoplerightnow.com, rightpeoplerightnow.com, americanpartnersinc.com, instaff.com, donwat.com, vistechs.com, zycron.com, smartstaffing.com, accountablesearch.com, executiveassistantsearch.com, ljkushner.com, edgerock.com, edgerock.net, edgerockblue.com, edgerockcares.com, edgerockcares.net, edgerockconsultants.com, edgerockit.com, edgerockpartners.com, edgerockperm.com, edgerockred.com, edgerocksearch.com, edgerocksolutions.com, edgerockstaffing.com, edgerocktech.com, edgerocktech.net, edgerocktechnologies.com, etphome.com, joinedgerock.com, myedgerock.com, momentumsolutionz.com, hornsolutions.net, arroyoconsulting.net, and micro-talent.net.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

47 edited+15 added−12 removed80 unchanged
Biggest changeOur certificate of incorporation contains provisions that have the same effect as Section 203, except that they generally provide that Taglich Private Equity LLC, Taglich Brothers, Inc. or any of their respective affiliates or associates, including any investment funds or portfolio companies managed by any of the foregoing, or any other person with whom any of the foregoing act as a group for the purpose of acquiring, voting or disposing of our shares, or any person that becomes an interested stockholder as a result of a transfer of 5% or more of our voting stock by the forgoing persons to such person, will be excluded from the “interested stockholder” definition in our certificate of incorporation and will therefore not be subject to the restrictions set forth therein that have the same effect as Section 203.
Biggest changeOur certificate of incorporation contains provisions that have the same effect as Section 203, except that they generally provide that Taglich Private Equity LLC, Taglich Brothers, Inc. or any of their respective affiliates or associates, including any investment funds or portfolio companies managed by any of the foregoing, or any other person with whom any of the foregoing act as a group for the purpose of acquiring, voting or disposing of our shares, or any person that becomes an interested stockholder as a result of a transfer of 5% or more of our voting stock by the forgoing persons to such person, will be excluded from the “interested stockholder” definition in our certificate of incorporation and will therefore not be subject to the restrictions set forth therein that have the same effect as Section 203 of the DGCL. 18 While these provisions have the effect of encouraging persons seeking to acquire control of our company to negotiate with our Board, they could enable the Board to hinder or frustrate a transaction that some, or a majority, of the stockholders might believe to be in their best interests and, in that case, may prevent or discourage attempts to remove and replace incumbent directors.
We depend on our ability to attract and retain qualified field talent. We depend on our ability to attract qualified field talent who possess the skills and experience necessary to meet the workforce solution requirements of our client partners. We must continually evaluate our base of available qualified personnel to keep pace with changing client partner needs.
We depend on our ability to attract and retain qualified field talent who possess the skills and experience necessary to meet the workforce solution requirements of our client partners. We must continually evaluate our base of available qualified personnel to keep pace with changing client partner needs.
The provisions in such certificate of incorporation and bylaws include, among other things, the following: • a classified board of directors with three-year staggered terms; • the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms, including preferences and voting rights, of those shares without stockholder approval; • stockholder action can only be taken at a special or regular meeting and not by written consent except in limited circumstances; • advance notice procedures for nominating candidates to our board of directors or presenting matters at stockholder meetings; • removal of directors only for cause; • allowing only our board of directors to fill vacancies on our board of directors or increase the size of our board of directors; and • super-majority voting requirements to amend certain provisions of our certificate of incorporation.
The provisions in such certificate of incorporation and bylaws include, among other things, the following: • a classified Board with three-year staggered terms; • the ability of our Board to issue shares of preferred stock and to determine the price and other terms, including preferences and voting rights, of those shares without stockholder approval; • stockholder action can only be taken at a special or regular meeting and not by written consent except in limited circumstances; • advance notice procedures for nominating candidates to our Board or presenting matters at stockholder meetings; • removal of directors only for cause; • allowing only our Board to fill vacancies on our Board or increase the size of our Board; and • super-majority voting requirements to amend certain provisions of our certificate of incorporation.
Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.
Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent 17 limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.
Any future determination with respect to the payment of dividends will be at the discretion of our board of directors and will be dependent upon, among other things, our financial condition, results of operations, capital requirements, the terms of our then existing indebtedness, contractual restrictions, future prospects, general economic conditions and other factors considered relevant by our board of directors.
Any future determination with respect to the payment of dividends will be at the discretion of our Board and will be dependent upon, among other things, our financial condition, results of operations, capital requirements, the terms of our then existing indebtedness, contractual restrictions, future prospects, general economic conditions and other factors considered relevant by our Board.
If we are unable to execute these tasks effectively, we may not be able to attract a significant number of new client partners and our existing client partners base could decrease, either or both of which could have a materially adverse impact on our revenues. 13 Acquisitions and new business initiatives may not be successful.
If we are unable to execute these tasks effectively, we may not be able to attract a significant number of new client partners and our existing client partners base could decrease, either or both of which could have a materially adverse impact on our revenues. Acquisitions and new business initiatives may not be successful.
As a result of any of the foregoing, our relationships with our client partners may be impaired, we may lose client partners, our ability to attract new client partners may be adversely affected and we could be exposed to contractual liability. Precautions in place to protect us from, or minimize the effect of, such events may not be adequate.
As a result of any of the foregoing, our relationships with our client partners may be impaired, we may lose client partners, our ability to attract new client partners may be adversely affected and we could be exposed to contractual liability. Precautions in place to protect us from, or minimize the effect of, such 15 events may not be adequate.
Competition for individuals with proven professional skills is intense, and demand for these individuals is expected to remain strong for the foreseeable future. There can be no assurance that qualified personnel will continue to be available. Our success is substantially dependent on our ability to recruit and retain qualified field talent.
Competition for individuals with proven relevant professional skills is intense, and demand for these individuals is expected to remain strong for the foreseeable future. There can be no assurance that qualified personnel will continue to be available. Our success is substantially dependent on our ability to recruit and retain qualified field talent.
Our level of debt and the limitations imposed on us by our lenders could have a material impact on investors, including the requirement to use a portion of our cash flow from operations for debt service rather than for our operations and the need to comply with the various covenants associated with such debt.
Our level of debt and any limitations imposed on us by our lenders could have a material impact on investors, including the requirement to use a portion of our cash flow from operations for debt service rather than for our operations and the need to comply with the various covenants associated with any such debt.
Additionally, we may not be able to obtain additional debt financing for future working capital, capital expenditures or other home office purposes or may have to pay more for such financing.
Additionally, we may not be able to obtain debt financing for future working capital, capital expenditures or other home office purposes or may have to pay more for such financing.
These acquisitions and new business initiatives involve significant challenges and risks, including that they may not advance our business strategy, that we may not realize a satisfactory return on our investment, that we may experience difficulty in integrating operations, or diversion of management’s attention from our other business. We may be unable to identify suitable acquisition candidates in the future.
These acquisitions and new business initiatives may involve significant challenges and risks, including that they may not advance our business strategy, that we may not realize a satisfactory return on our investment, that we may experience difficulty in integrating operations, or diversion of management’s attention. We may be unable to identify suitable acquisition candidates in the future.
When demand drops, our operating profit is typically impacted unfavorably as we experience a deleveraging of our selling, general, and administrative expense base as expenses may not decline as quickly as revenues. In periods of decline, we can only reduce selling, general, and administrative expenses to a certain level without negatively impacting the long-term potential of our brands.
When demand drops, our operating profit is typically impacted unfavorably as we experience a deleveraging of our selling, general, and administrative expense base as expenses may not decline as quickly as revenues. In periods of decline, we can only reduce selling, general, and administrative expenses to a certain level without negatively impacting the long-term potential of our brand.
We typically experience significant seasonal and other fluctuations in our borrowings and borrowing availability, and we aggressively manage our cash flow to ensure adequate funds to meet working capital needs. Such management steps include working to improve collections, adjusting the timing of cash expenditures and managing operating expenses. However, such steps may not always be successful.
We typically experience significant seasonal and other fluctuations, and we aggressively manage our cash flow to ensure adequate funds to meet working capital needs. Such management steps include working to improve collections, adjusting the timing of cash expenditures and managing operating expenses. However, such steps may not always be successful.
Failure of our control systems to prevent and detect errors or fraud could materially adversely impact us. We cannot be sure we will pay dividends in the future, and consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock.
Failure of our control systems to prevent and detect errors or fraud could materially adversely impact us. We may not pay dividends in the future, and consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock.
Moreover, use of our copyrights, trademarks, service marks, trade names, domain names, or other intellectual property by third parties, including but not limited to unauthorized use by third parties for criminal purposes or otherwise, even if such use is outside our reasonable control, may significantly harm our reputation or the value of our copyrights, trademarks, service marks, trade names, domain names, or other intellectual property, or subject us to legal proceedings, and therefore have a material adverse effect on our business, results of operations, or financial condition.
Moreover, use of our copyrights, trademarks, service marks, trade names, domain names, or other intellectual property by third parties, including but not limited to unauthorized use by third parties for criminal purposes or otherwise, even if such use is outside our reasonable control, may significantly harm our reputation or the value of our copyrights, trademarks, service marks, trade names, domain names, or other intellectual property, or subject us to legal proceedings, and therefore have a material adverse effect on our business, results of operations, or financial condition. 11 We would be adversely affected by the loss of key personnel.
Several of our existing or potential competitors have substantially greater financial, technical and marketing resources than we do, which may enable them to: • Develop and expand their infrastructure and service offerings more quickly and achieve greater cost savings; • Invest in new technologies; • Expand operations into new markets more rapidly; • Devote greater resources to marketing; • Compete for acquisitions more effectively and complete acquisitions more easily; and • Aggressively price products and services and increase benefits in ways that we may not be able to match.
The number of firms involved in property management services is very large. 10 Several of our existing or potential competitors have substantially greater financial, technical and marketing resources than we do, which may enable them to: • Develop and expand their infrastructure and service offerings more quickly and achieve greater cost savings; • Invest in new technologies; • Expand operations into new markets more rapidly; • Devote greater resources to marketing; • Compete for acquisitions more effectively and complete acquisitions more easily; and • Aggressively price products and services and increase benefits in ways that we may not be able to match.
Even if an active market for our common stock continues, of which no assurances can be given, the market price for our common stock may be volatile and subject to wide fluctuations in response to factors including the following: • actual or anticipated fluctuations in our quarterly or annual operating results; • changes in financial or operational estimates or projections; • changes in the economic performance or market valuations of companies similar to ours; • conditions in markets generally; • sales of significant amounts of our common stock; and • general economic or political conditions in the United States or elsewhere.
Even if an active market for our common stock continues, of which no assurances can be given, the market price for our common stock may be volatile and subject to wide fluctuations in response to factors including the following: • actual or anticipated fluctuations in our quarterly or annual operating results; • changes in financial or operational estimates or projections; • changes in the economic performance or market valuations of companies similar to ours; • conditions in markets generally; • sales of significant amounts of our common stock; and • general economic or political conditions in the United States or elsewhere. 16 The securities market has from time to time experienced significant price and volume fluctuations that are not related to the operating performance of particular companies.
Geographic revenue in excess of 10% of our consolidated revenue from continuing operations in fiscal year 2024 and the related percentage for fiscal years 2023 and 2022 was generated in the following areas: 2024 2023 2022 Tennessee 17 % 13 % 10 % Texas 23 % 25 % 23 % 12 Consequently, weakness in economic conditions in these regions could have a material adverse effect on our financial position and results of future operations.
Geographic revenue in excess of 10% of our consolidated revenue from continuing operations in fiscal year 2025 and the related percentage for fiscal years 2024 and 2023 was generated in the following areas: 2025 2024 2023 Texas 28 % 25 % 26 % Consequently, weakness in economic conditions in these regions could have a material adverse effect on our financial position and results of future operations.
The risks of these activities include possible claims relating to: • discrimination and harassment; • wrongful termination or denial of employment; • violations of employment rights related to employment screening or privacy issues; • classification of field talent; • assignment of illegal aliens; • violations of wage and hour requirements; • retroactive entitlement to field talent benefits; • errors and omissions by our field talent; • misuse of client partners proprietary information; • misappropriation of funds; • damage to client partners facilities due to negligence of field talent; and • criminal activity.
The risks of these activities include possible claims relating to: • discrimination and harassment; • wrongful termination or denial of employment; • violations of employment rights related to employment screening or privacy issues; • classification of field talent; • assignment of illegal aliens; • violations of wage and hour requirements; • retroactive entitlement to field talent benefits; • errors and omissions by our field talent; • misuse of client partners proprietary information; • misappropriation of funds; • damage to client partners facilities due to negligence of field talent; and • criminal activity. 14 We may incur fines and other losses or negative publicity with respect to these claims.
We may incur fines and other losses or negative publicity with respect to these claims. In addition, these claims may give rise to litigation, which could be time-consuming and expensive. New employment and labor laws and regulations may be proposed or adopted that may increase the potential exposure of employers to employment-related claims and litigation.
In addition, these claims may give rise to litigation, which could be time-consuming and expensive. New employment and labor laws and regulations may be proposed or adopted that may increase the potential exposure of employers to employment-related claims and litigation.
These events could cause material harm to our operating results or financial condition. We have debt that could adversely affect our financial health and prevent us from fulfilling our obligations or put us at a competitive disadvantage. While we believe our current debt level is reasonable, we have utilized, and expect to continue to utilize, debt for acquisitions.
These events could cause material harm to our operating results or financial condition. We may incur debt that could adversely affect our financial health and prevent us from fulfilling our obligations or put us at a competitive disadvantage. We have utilized and may utilize, debt for acquisitions.
We expect to continue making acquisitions and entering into new business initiatives, including, but not limited to, dispositions, joint ventures, and strategic investments, as part of our long-term business strategy.
We may make acquisitions and enter into new business initiatives, including, but not limited to, dispositions, joint ventures, and strategic investments, as part of our long-term business strategy.
We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for our common stock in connection with hiring or retaining personnel, option exercises, restricted stock awards, 2020 ESPP purchases, future acquisitions or future placements of our securities for capital-raising or 18 other business purposes.
We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for our common stock in connection with hiring or retaining personnel, option exercises, restricted stock awards, purchases under our 2020 Employee Stock Repurchase Plan, grants under our 2013 Long-Term Incentive Plan, future acquisitions or future placements of our securities for capital-raising or other business purposes.
Even if we successfully consummate a transaction from our review of strategic alternatives, we may fail to realize all of the anticipated benefits of any transaction, those benefits may take longer to realize than expected, or we may encounter integration or other difficulties. 20 Cost restructuring plans may be costly, time-consuming, and complex, and may not yield the desired results.
Even if any transaction is ultimately completed, we may fail to realize all of the anticipated benefits of any transaction, those benefits may take longer to realize than expected, or we may encounter integration or other significant difficulties. Cost restructuring plans may be costly, time-consuming, and complex, and may not yield the desired results.
There can also be no assurance that the insurance policies we have purchased to insure against certain risks will be adequate or that insurance coverage will remain available on commercially reasonable terms or be sufficient in amount or scope of coverage. 16 U.S. federal tax regulations and interpretations could adversely affect us.
There can also be no assurance that the insurance policies we have purchased to insure against certain risks will be adequate or that insurance coverage will remain available on commercially reasonable terms or be sufficient in amount or scope of coverage.
The potential risk of security breaches and cyber-attacks may increase as we introduce new workforce solution offerings. 17 We maintain insurance with respect to many of such claims; however, there can be no assurance that we will continue to be able to obtain insurance at a cost that does not have a material adverse effect upon us or that such claims (whether by reason of us not having sufficient insurance or by reason of such claims being outside the scope of our insurance) will not have a material adverse effect upon us.
We maintain insurance with respect to many of such claims; however, there can be no assurance that we will continue to be able to obtain insurance at a cost that does not have a material adverse effect upon us or that such claims (whether by reason of us not having sufficient insurance or by reason of such claims being outside the scope of our insurance) will not have a material adverse effect upon us.
We implemented a cost restructuring plan during the fourth fiscal quarter of 2024 designed to reduce costs, improve operating performance, and position the Company for profitable growth, and we may implement or modify cost restructuring plans in the future. Any such cost restructuring plans may be costly, time-consuming, and complex.
We implement or modify cost restructuring plans designed to reduce costs, improve operating performance, and position the Company for profitable growth. Any such cost restructuring plans may be costly, time-consuming, and complex.
If an actual or perceived breach of our security occurs, we could be liable and the market perception of our workforce solutions could be harmed or result in increased costs or loss of revenue.
If an actual or perceived breach of our security occurs, we could be liable and the market perception of our workforce solutions could be harmed or result in increased costs or loss of revenue. The potential risk of security breaches and cyber-attacks may increase as we introduce new workforce solution offerings.
We would be adversely affected by the loss of key personnel. Our operations and financial success depend significantly on our leadership management team and team members. The loss of any key members of this group could have a material adverse effect on our business, financial condition and results of operations.
Our operations and financial success depend significantly on our leadership management team and team members. The loss of any key members of this group could have a material adverse effect on our business, financial condition and results of operations. We depend on our ability to attract and retain qualified field talent.
Department of Labor, which sets employment practice standards for workers, and similar state and local agencies. We are subject to the laws and regulations of the jurisdictions within which we operate.
We are subject to regulation by numerous foreign, federal, state and local regulatory agencies, including but not limited to the U.S. Department of Labor, which sets employment practice standards for workers, and similar state and local agencies. We are subject to the laws and regulations of the jurisdictions within which we operate.
These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management.
These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our Board, which is responsible for appointing the members of our management. We have continuing operations through one segment, Property Management, and have substantially eliminated our debt obligations.
Speculation regarding any developments related to the review of strategic alternatives and perceived uncertainties related to the future of the Company could cause our stock price to fluctuate significantly or otherwise materially impact our stockholder, employee, customer, supplier, and other business relationships.
Speculation regarding any developments related to any potential transaction and perceived uncertainties related to the future of the Company could cause our stock price to significantly fluctuate or otherwise materially affect our stockholders, employees, customers, and other business relationships.
In accordance with generally accepted accounting principles, we are required to review our goodwill and intangible assets for impairment at least annually. Our goodwill and intangibles assets were $59.2 million and $24.5 million, respectively, at the end of fiscal year 2024. An unfavorable evaluation could cause us to write-off these assets in future periods.
We could be required to write-off goodwill or intangible assets in future periods if our future operating results suffer. In accordance with generally accepted accounting principles, we are required to review our goodwill and intangible assets for impairment at least annually. Our goodwill and intangibles assets were $1.1 million and $3.0 million, respectively, at the end of fiscal year 2025.
We could also be less able to take advantage of significant business opportunities, such as acquisition opportunities, and to react to changes in market or industry conditions, or we may be disadvantaged compared to competitors with less leverage.
We could also be less able to take advantage of significant business opportunities, such as acquisition opportunities, and to react to changes in market or industry conditions, or we may be disadvantaged compared to competitors with less leverage. 12 We have significant working capital needs and if we are unable to satisfy those needs from cash generated from our operations, we may not be able to meet payroll requirements.
Certain provisions of our organizational documents may make it difficult for stockholders to change the composition of our board of directors and may discourage hostile takeover attempts that some of our stockholders may consider to be beneficial. 19 Certain provisions of our certificate of incorporation and bylaws may have the effect of delaying or preventing changes in control if our board of directors determines that such changes in control are not in the best interests of us and our stockholders.
Certain provisions of our certificate of incorporation and bylaws may have the effect of delaying or preventing changes in control if our Board determines that such changes in control are not in the best interests of us and our stockholders.
Increased government regulation of the workplace or of the employer-employee relationship, or judicial or administrative proceedings related to such regulation, could also materially harm our business. 15 The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (collectively, the “Health Care Reform Laws”) include various health-related provisions that took effect during 2014 and established new regulations on health plans.
The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (collectively, the “Health Care Reform Laws”) include various health-related provisions that took effect during 2014 and established new regulations on health plans.
If we experience a significant and sustained drop in operating profits, or if there are unanticipated reductions in cash inflows or increases in cash outlays, we may be subject to cash shortfalls. If such a shortfall were to occur for even a brief period of time, it may have a significant adverse effect on our business.
We require significant amounts of working capital to operate our business. If we experience a significant and sustained drop in operating profits, or if there are unanticipated reductions in cash inflows or increases in cash outlays, we may be subject to cash shortfalls.
Our strategic alternatives review process may not be successful, may be costly, time-consuming, and complex, and may not yield the desired results. On May 8, 2024, we announced that our Board of Directors had initiated a process to evaluate potential strategic alternatives and had engaged Houlihan Lokey as its financial advisors.
On May 8, 2024, we announced that our Board had initiated a process to evaluate potential strategic alternatives and had engaged Houlihan Lokey as its financial advisors. On September 8, 2025, we completed the closing of the sale of our Professional segment.
We have not set a timetable for completion of this strategic alternatives review process, and our Board of Directors has not approved a definitive course of action. There can be no assurance that this strategic alternatives review process will result in us pursuing any transaction or that any transaction, if pursued, will be completed on attractive terms, or at all.
There is no assurance any potential interest or process may result in us pursuing any transaction or that any transaction, if pursued, will be completed on attractive terms, or at all. No timetable or definitive course of action has been set.
We also carefully monitor the timeliness of our client partners’ payments and impose strict credit standards on our client partners. If we fail to successfully manage our credit risk, we may suffer significant losses which would decrease our profitability.
We also carefully monitor the timeliness of our client partners’ payments and impose strict credit standards on our client partners.
Any future write-offs could have a material adverse impact on our results of operations. For example, in 2023, the Board of Director approved management’s plan to rebrand as BGSF, eliminating various current trade names. See “Note 2 - Summary of Significant Accounting Policies” in our Consolidated Financial Statements included elsewhere in this report for additional information.
An unfavorable evaluation could cause us to write-off these assets in future periods. Any future write-offs could have a material adverse impact on our results of operations. For example, in 2023, the Board approved management’s plan to rebrand as BGSF, eliminating various current trade names.
We will likely issue additional common stock in the future, which would dilute the holdings of our existing stockholders.
For these reasons and others, delisting could adversely affect the price of our common stock and our business, financial condition, and results of operations. We will likely issue additional common stock in the future, which would dilute the holdings of our existing stockholders.
In particular, we use working capital to pay expenses relating to our team members and field talent and to satisfy our workers’ compensation and tax liabilities. Generally, we pay our field talent on a weekly basis while we receive payments from our client partners 30 to 90 days after billing.
Generally, we pay our field talent on a weekly basis while we receive payments from our client partners 30 to 90 days after billing. As a result, we must maintain sufficient cash availability to pay team members and field talent and fund related payroll liabilities prior to receiving payment from client partners.
The securities market has from time to time experienced significant price and volume fluctuations that are not related to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of shares of our common stock.
These market fluctuations may also materially and adversely affect the market price of shares of our common stock.
We believe that our current sources of capital are adequate to meet our working capital needs. However, our available sources of capital are limited. If our working capital needs increase in the future, we may be forced to seek additional sources of capital, which may not be available on commercially reasonable terms, or at all.
We derive working capital for our operations through cash generated by our operating activities. Our available sources of capital are limited and we do not currently have access to a revolving credit facility. We may be forced to seek additional sources of capital, which may not be available on commercially reasonable terms, or at all.
Our business is subject to foreign, federal, state and local labor and employment laws and a failure to comply could materially harm our business. We are subject to regulation by numerous foreign, federal, state and local regulatory agencies, including but not limited to the U.S.
If we fail to successfully manage our credit risk, we may suffer significant losses which would decrease our profitability. 13 Our business is subject to foreign, federal, state and local labor and employment laws and a failure to comply could materially harm our business.
We are limited in our ability to pay dividends by our credit agreement, and therefore, we cannot be certain if we will pay any cash dividends to holders of our common stock in the future.
We do not currently pay a regular dividend and have no plans to do so in the future. We may not pay any cash dividends to holders of our common stock in the future.
Removed
We compete in national, regional and local markets with approximately 25,000 full-service and specialized workforce solution companies. We expect that the level of competition will remain high, which could limit our ability to maintain or increase our market share or profitability.
Added
We compete in national, regional and local markets with approximately 27,000 full service and specialized workforce solution companies. Market data is not available on the number of firms involved in property management because many companies operate across a wide spectrum of staffing markets.
Removed
We have significant working capital needs and if we are unable to satisfy those needs from cash generated from our operations or borrowings under our revolving credit facility, we may not be able to meet payroll requirements. We require significant amounts of working capital to operate our business.
Added
If such a shortfall were to occur for even a brief period of time, it may have a significant adverse effect on our business. In particular, we use working capital to pay expenses relating to our team members and field talent and to satisfy our workers’ compensation and tax liabilities.
Removed
As a result, we must maintain sufficient cash availability to pay team members and field talent and fund related payroll liabilities prior to receiving payment from client partners. We derive working capital for our operations through cash generated by our operating activities and borrowings under our revolving credit facility.
Added
Increased government regulation of the workplace or of the employer-employee relationship, or judicial or administrative proceedings related to such regulation, could also materially harm our business.
Removed
At the end of fiscal 2024, the maximum amount we were entitled to borrow under our revolving credit facility was $20 million and the availability of unused funds was affected by financial, business, economic and other factors, as well as by the daily timing of cash collections and cash outflows.
Added
We are subject to changes in tax rates, the adoption of new tax legislation, and exposure to additional tax liabilities. We are subject to taxes in numerous jurisdictions. Due to economic and political conditions, tax laws and tax rates for income taxes and other non-income taxes in various jurisdictions may be subject to significant change.
Removed
Failure to comply with restrictive covenants under our credit agreement could trigger prepayment obligations or additional costs.
Added
The application of tax laws may be uncertain, require significant judgment, and be subject to differing interpretations. We are also subject to the examination of its tax returns and other tax matters by tax authorities and governmental bodies. We regularly assess the likelihood of an adverse outcome resulting from these examinations to determine the adequacy of its provision for taxes.
Removed
Our credit agreement includes various financial and other covenants with which we have to comply in order to maintain borrowing availability and avoid default interest, including minimum fixed charge coverage ratio and maximum leverage ratio. 14 Any future failure to comply with our covenants which may occur under our credit agreement could result in an event of default which, if not cured or waived, could trigger prepayment obligations.
Added
The outcome of such examinations is inherently uncertain. If our effective tax rates were to increase, or if the ultimate determination of our taxes owed is for an amount in excess of amounts previously accrued, our business, results of operations, financial condition, and stock price may be materially adversely affected.
Removed
There can be no assurances that any lender will waive defaults that may occur in the future. If we are forced to refinance our credit agreement, there can be no assurance that such refinancing would be available or that such refinancing would not have a material adverse effect on our business and financial condition.
Added
Because we have fewer revenues and assets following the sale of the Professional segment, there is a possibility that such reduced revenues and assets may affect our ability to satisfy NYSE’s continued listing standards, which could result in the delisting of our common stock.
Removed
Even if such refinancing were available, the terms could be less favorable and our results of operations and financial condition could be materially adversely affected by increased costs and interest rates. We could be required to write-off goodwill or intangible assets in future periods if our future operating results suffer.
Added
The continued listing standards of NYSE include, among other things, requirements that we maintain certain levels of stockholders’ equity, total assets, total revenue, market capitalization, and/or minimum trading price. Even though we currently satisfy these requirements, following the sale of the Professional segment, our business is currently smaller, which may cause us to fail to satisfy NYSE’s continued listing standards.
Removed
On December 22, 2017, the Tax Cuts and Jobs Act (the “TCJA”) was signed into law. Notwithstanding the reduction in the corporate income tax rate, the overall impact of these changes on our results of operations will likely evolve as new regulations and interpretations relating to the TCJA are implemented.
Added
In the event that we are unable to satisfy such continued listing standards, our common stock may be delisted from NYSE.
Removed
In addition, various political figures have pledged their support to overturning or modifying key aspects of the TCJA which could further increase the uncertainty relating to the impact of this or any future tax legislation on our results of operations.
Added
Any delisting of our common stock from such market could adversely affect our ability to attract new investors, decrease the liquidity of our outstanding shares of common stock, reduce our flexibility to raise additional capital, reduce the price at which our common stock trades and increase the transaction costs inherent in trading such shares with overall negative effects for our stockholders.
Removed
While these provisions have the effect of encouraging persons seeking to acquire control of our company to negotiate with our board of directors, they could enable the board of directors to hinder or frustrate a transaction that some, or a majority, of the stockholders might believe to be in their best interests and, in that case, may prevent or discourage attempts to remove and replace incumbent directors.
Added
In addition, delisting of our common stock could deter broker-dealers from making a market in or otherwise seeking or generating interest in our common stock, and might deter certain institutions and persons from investing in our securities at all.
Removed
Any potential transaction would be dependent on a number of factors that may be beyond our control, including, among other things, market conditions, industry trends, the interest of third parties, and stockholder support. The process of evaluating strategic alternatives may be costly, time-consuming, and complex.
Added
Certain provisions of our organizational documents may make it difficult for stockholders to change the composition of our Board and may discourage hostile takeover attempts that some of our stockholders may consider to be beneficial.
Added
Any potential transaction or strategic alternatives review process may not be successful, may be costly, may be timing consuming, may be complex, and may be distracting to management’s ability to focus on the Company’s operations.
Added
As a result of the sale, we paid off substantially all of our outstanding debt obligations, our company size (by revenue) was reduced by over 50%, and we became a staffing solutions company solely focused on the property management market.
Added
If potential buyers, investors, or other counterparties demonstrate interest in engaging in a material transaction with us, we may decide to initiate a more fulsome strategic alternatives review process to evaluate any potential interest. Any such process may be costly, time-consuming, and complex, and may distract management’s attention from the operation of our business.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeManagement Oversight Key members of senior management, including our Chief Information Officer (“CIO”), are accountable for our cybersecurity and data privacy programs and is supported by the Board of the Directors (the “Board”).
Biggest changeManagement Oversight Key members of senior management, including our Chief Information Officer (“CIO”), are accountable for our cybersecurity and data privacy programs and is supported by the Board.
The senior management, including our CIO, and the Board meet frequently to discuss cyber and data operations, privacy programs and risks. Our CIO has extensive information technology and program management experience and has served many years in our corporate information security organization. Our IT department monitors and manages system infrastructure in an effort to protect us against threats.
The senior management, including our CIO, and the Board meet frequently to discuss cyber and data operations, privacy programs and risks. Our CIO has 19 extensive information technology and program management experience and has served many years in our corporate information security organization. Our IT department monitors and manages system infrastructure in an effort to protect us against threats.
See “Risks Related to Our Information Technology, Cybersecurity and Data Protection” in Part 1, Item 1A. Risk Factors of this report for a discussion of these risks. With respect to our cybersecurity process, we are not aware of any material breach to date. 21
See “Risks Related to Our Information Technology, Cybersecurity and Data Protection” in Part 1, Item 1A. Risk Factors of this report for a discussion of these risks. With respect to our cybersecurity process, we are not aware of any material breach to date.
Removed
Our security team responds as appropriate to risks identified. Board Oversight The Board is actively engaged in the oversight of cybersecurity and data privacy.
Added
Our security team responds as appropriate to risks identified. We maintain an Incident Response Playbook that outlines clear and flexible processes for analyzing and responding to security incidents, including predefined procedures for response and escalation.
Added
To ensure preparedness and effectiveness, we conduct periodic tabletop exercises to test incident response capabilities, evaluate the Incident Response Playbook, and maintain coordination among relevant teams. Board Oversight The Board is actively engaged in the oversight of cybersecurity and data privacy.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed1 unchanged
Biggest changeITEM 2. PROPERTIES. Our home office is located at 5850 Granite Parkway, Suite 730, Plano, Texas 75024, and our telephone number is 972-692-2400. We lease our home office, which is approximately 6,200 square feet of space. In the U.S., we operate across 46 states and D.C.
Biggest changeITEM 2. PROPERTIES. Our home office is located at 14901 Quorum Drive, Suite 800, Dallas, Texas 75254, and our telephone number is 972-692-2400. We lease our home office, which is approximately 14,124 square feet of space. In the U.S., we operate across 44 states and D.C.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+6 added−3 removed2 unchanged
Biggest changeDividends The board of directors has declared and we have paid the following cash dividends during the fiscal years ended 2024, 2023, and 2022: Declared Date Record Date Distribution Date Dividend per Share Amount Paid February 3, 2022 February 14, 2022 February 22, 2022 $0.15 $ 1,564,649 April 27, 2022 May 17, 2022 May 24, 2022 $0.15 1,572,332 August 3, 2022 August 15, 2022 August 22, 2022 $0.15 1,574,992 November 2, 2022 November 14, 2022 November 21, 2022 $0.15 1,577,709 Total $ 6,289,682 February 13, 2023 February 23, 2023 March 2, 2023 $0.15 $ 1,618,485 May 4, 2023 May 15, 2023 May 22, 2023 $0.15 1,625,816 August 9, 2023 August 21, 2023 August 28, 2023 $0.15 1,629,676 November 8, 2023 November 20, 2023 November 28, 2023 $0.15 1,633,272 Total $ 6,507,249 February 8, 2024 February 20, 2024 February 27, 2024 $0.15 $ 1,639,315 Total $ 1,639,315 Our ability to pay dividends is restricted under the terms of our credit agreement and may be restricted under other agreements governing our outstanding indebtedness from time to time.
Biggest changeDividends The board of directors (“Board”) has declared and we have paid the following cash dividends during the fiscal years ended 2025, 2024, and 2023: Declared Date Record Date Distribution Date Dividend per Share Amount Paid September 11, 2025 September 23, 2025 September 30, 2025 $2.00 $ 22,399,574 Total $ 22,399,574 February 8, 2024 February 20, 2024 February 27, 2024 $0.15 $ 1,639,315 Total $ 1,639,315 February 13, 2023 February 23, 2023 March 2, 2023 $0.15 $ 1,618,485 May 4, 2023 May 15, 2023 May 22, 2023 $0.15 1,625,816 August 9, 2023 August 21, 2023 August 28, 2023 $0.15 1,629,676 November 8, 2023 November 20, 2023 November 28, 2023 $0.15 1,633,272 Total $ 6,507,249 We do not currently pay a regular dividend and have no plans to do so in the future.
Periodically, we review companies within our peer group and decide if we need to make any changes. The peer group index represents the cumulative total return of BGSF and similar corporations providing field talent or permanent employment workforce solutions. Our peer group includes: GEE Group, Mastech Digital, Resources Connection, Inc., and Staffing 360 Solutions.
Periodically, we review companies within our peer group and decide if we need to make any changes. The peer group index represents the cumulative total return of BGSF and similar corporations providing field talent or permanent employment workforce solutions. Our peer group includes: GEE Group, Mastech Digital, and Resources Connection, Inc.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Stock Performance Graph The following graph compares, through December 29, 2024, the cumulative total return of the Company’s common stock, a peer group index of certain publicly traded workforce solutions companies, and the Russell 3000.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Stock Performance Graph The following graph compares, through December 28, 2025, the cumulative total return of the Company’s common stock, a peer group index of certain publicly traded workforce solutions companies, and the Russell 3000.
Recent Sales of Unregistered Securities In December 2022, we issued 254,455 shares of common stock in a private placement for a value of $3.3 million, and a convertible two-year promissory note of $4.4 million with an annual interest rate of 6% that is convertible into common shares at any time after one year at a conversion price of $17.12 per share at the closing of the Horn Solutions acquisition.
Recent Sales of Unregistered Securities In December 2022, we issued 254,455 shares of common stock in a private placement for a value of $3.3 million, and a convertible two-year promissory note of $4.4 million with an annual interest rate of 6% that was convertible into common shares at any time after one year at a conversion price of $17.12 per share at the closing of an acquisition related to BGSF Professional.
Any future determination with respect to the payment of dividends, including whether to declare a dividend, and, if so, the amount thereof, will be at the discretion of our board of directors and will be dependent upon, among other things, our financial condition, results of operations, capital requirements, the terms of our then existing indebtedness, contractual restrictions, future prospects, general economic conditions and other factors considered relevant by our board of directors. 24 Equity Compensation Plans The following equity compensation plan information is provided as of December 29, 2024: Plan Category Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights (a) Weighted-average Exercise Price of Outstanding Options, Warrants and Rights Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) Equity Compensation Plans Approved by Security Holders 2013 Long-Term Incentive Plan 976,432 $15.00 149,058 2020 Employee Stock Purchase Plan — $0.00 31,719 Total 976,432 $15.00 180,777 A description of the equity compensation plan is incorporated by reference to Note 16 in the Notes to Consolidated Financial Statements included in Item 8 in this Annual Report on Form 10-K.
Any future determination with respect to the payment of dividends, including whether to declare a dividend, and, if so, the amount thereof, will be at the discretion of our Board and will be dependent upon, among other things, our financial condition, results of operations, capital requirements, the terms of our then existing indebtedness, contractual restrictions, future prospects, general economic conditions and other factors considered relevant by our Board. 22 Equity Compensation Plans The following equity compensation plan information is provided as of December 28, 2025: Plan Category Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights (a) Weighted-average Exercise Price of Outstanding Options, Warrants and Rights Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) Equity Compensation Plans Approved by Security Holders 2013 Long-Term Incentive Plan 797,731 $12.30 475,284 2020 Employee Stock Purchase Plan — — 250,032 Total 797,731 12.3 725,316 A description of the equity compensation plan is incorporated by reference to Note 15 in the Notes to Consolidated Financial Statements included in Item 8 in this Annual Report on Form 10-K.
The table below contains the market range of high and low prices for our common stock. 23 Quarter Ended: High Low December 29, 2024 $ 6.18 $ 6.07 September 27, 2024 $ 7.25 $ 7.06 June 28, 2024 $ 8.67 $ 8.35 March 28, 2024 $ 10.50 $ 10.18 December 31, 2023 $ 9.49 $ 9.37 October 1, 2023 $ 9.62 $ 9.45 July 2, 2023 $ 9.59 $ 9.50 April 2, 2023 $ 11.06 $ 10.44 As of February 5, 2025, our common stock closing price was $5.19 per share.
Quarter Ended: High Low December 28, 2025 $ 4.79 $ 4.68 September 28, 2025 $ 7.06 $ 6.83 June 29, 2025 $ 6.75 $ 5.80 March 30, 2025 $ 3.76 $ 3.59 December 29, 2024 $ 6.18 $ 6.07 September 27, 2024 $ 7.25 $ 7.06 June 28, 2024 $ 8.67 $ 8.35 March 28, 2024 $ 10.50 $ 10.18 As of January 29, 2026, our common stock closing price was $5.66 per share. 21 As of January 29, 2026, there were approximately 2,381 holders of record of our common stock.
On January 30, 2025, the convertible note was amended to increase the interest rate to 7% and extend the maturity date to December 12, 2025. The foregoing issuance of securities was exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended. Share Repurchases During 2024, there were no stock repurchases.
The foregoing issuance of securities was exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended. Share Repurchases On November 5, 2025, the Company's Board approved a stock repurchase program under which the Company may repurchase up to $5.0 million of its common stock.
During 2023, we repurchased 2,085 shares of the Company’s common stock at a cost of $19,019 and a weighted average price of $9.69 upon the vesting of restricted stock to satisfy statutory minimum tax withholding requirements.
During 2025, we repurchased 351,200 shares of the Company's common stock at a cost of $1,520,863 and a weighted average price of $4.33 per share.
Removed
Market Information and Holders Our common stock commenced listing on the NYSE on November 14, 2019 under the symbol “BGSF,” was listed on the NYSE American from October 27, 2014 to November 13, 2019 under the symbol “BGSF” and was quoted on the OTC Bulletin Board, or OTCBB, under the symbol “BGSF” from April 30, 2014 to October 27, 2014.
Added
Market Information and Holders Our common stock is listed on the NYSE under the symbol “BGSF.” The table below contains the market range of high and low prices for our common stock for the fiscal quarters indicated.
Removed
Prior to the quotation of our common stock on the OTCBB, there was no public market for our common stock.
Added
On January 30, 2025, the convertible note was amended to increase the interest rate to 7% and extended the maturity date to December 12, 2025. The security was subsequently paid off in conjunction with the sale of BGSF Professional and is no longer outstanding.
Removed
As of February 5, 2025, there were approximately 2,386 holders of record of our common stock.
Added
The repurchases may take place in the open market, in private transactions, or otherwise, and pursuant to any trading plan that may be adopted in accordance with applicable securities laws and regulations, including Rule 10b5-1 under the Exchange Act.
Added
The timing and amount of common stock purchased will depend on a variety of factors, including the availability of common stock, general market conditions, the trading price of the common stock, alternative uses for capital, and the Company’s financial performance. Open market purchases will be conducted in accordance with Rule 10b-18 under the Exchange Act and applicable legal requirements.
Added
The repurchase program does not have an expiration date and may be suspended, terminated, or modified at any time for any reason. The repurchase program does not obligate the Company to purchase any particular number of shares.
Added
A summary of the repurchase activity during 2025, is as follows: Stock Class Period Total number of shares repurchased Average price paid per share Maximum value of common stock that may yet be repurchased under current authorization Common Stock November 5 through November 30 161,804 $4.12 $4,337,341 Common Stock December 1 through December 28 189,396 $4.53 $3,479,137 351,200 23

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

6 edited+0 added−3 removed15 unchanged
Biggest changeThe statement of operations data for the fiscal years ended 2021 and 2020 and the balance sheet data as of January 1, 2023, December 26, 2021, and December 27, 2020 set forth below were derived from our audited financial statements not included in this Annual Report on Form 10-K. 25 Fiscal Years Ended December 29, 2024 December 31, 2023 January 1, 2023 December 26, 2021 December 27, 2020 (dollars in thousands, except per share data) Statement of Operations Data: Revenues $ 272,499 $ 313,167 $ 298,422 $ 239,027 $ 207,125 Gross profit $ 92,863 $ 111,784 $ 103,548 $ 80,941 $ 66,040 Selling, general, and administrative expenses $ 85,333 $ 88,650 $ 83,211 $ 65,116 $ 55,244 Gain on contingent consideration $ (1,452) $ — $ — $ (2,403) $ (76) Impairment losses $ — $ 22,545 $ — $ — $ 7,240 Depreciation and amortization $ 7,769 $ 7,774 $ 4,054 $ 3,698 $ 4,861 Operating income (loss) $ 1,213 $ (7,185) $ 16,283 $ 14,530 $ (1,229) Interest expense, net $ (4,921) $ (5,976) $ (1,363) $ (1,433) $ (1,584) (Loss) income before income taxes from continuing operations $ (3,708) $ (13,161) $ 14,920 $ 13,097 $ (2,813) Income tax benefit (expense) from continuing operations $ 370 $ 2,938 $ (3,659) $ (2,639) $ 741 (Loss) income from continuing operations $ (3,338) $ (10,223) $ 11,261 $ 10,458 $ (2,072) Income from discontinued operations, net of tax $ — $ — $ 14,100 $ 3,651 $ 3,513 Net (loss) income $ (3,338) $ (10,223) $ 25,361 $ 14,109 $ 1,441 Net (loss) income per share - basic: Continuing operations $ (0.31) $ (0.95) $ 1.08 $ 1.01 $ (0.20) Income from discontinued operations: Income — — 0.12 0.44 0.46 Gain on Sale — — 1.69 — — Income tax expense — — (0.46) (0.09) (0.12) Net (loss) income per share – basic $ (0.31) $ (0.95) $ 2.43 $ 1.36 $ 0.14 Net (loss) income per share - diluted: Continuing operations $ (0.31) $ (0.95) $ 1.07 $ 1.00 $ (0.20) Income from discontinued operations: Income — — 0.12 0.44 0.46 Gain on Sale — — 1.69 — — Income tax expense — — (0.46) (0.09) (0.12) Net (loss) income per share – diluted $ (0.31) $ (0.95) $ 2.42 $ 1.35 $ 0.14 Weighted average shares outstanding – basic 10,896 10,766 10,427 10,367 10,312 Weighted average shares outstanding – diluted 10,896 10,766 10,473 10,417 10,338 26 Fiscal Years Ended December 29, 2024 December 31, 2023 January 1, 2023 December 26, 2021 December 27, 2020 (dollars in thousands, except per share data) Other Financial Data: Adjusted EBITDA from continuing operations (1) $ 10,475 $ 25,858 $ 22,353 $ 15,288 $ 12,350 Same Day EBITDA from continuing operations (1) $ 10,475 $ 25,858 $ 21,943 $ 15,288 $ 12,350 Cash dividends declared per common share $ 0.15 $ 0.60 $ 0.60 $ 0.44 $ 0.50 Balance Sheet Data from Continuing Operations: Working capital (2) $ 19,427 $ (18,144) $ 47,955 $ 25,851 $ 17,960 Total assets $ 150,111 $ 178,517 $ 194,673 $ 148,294 $ 130,278 Total outstanding borrowings, net $ 46,321 $ 63,114 $ 66,671 $ 39,450 $ 34,634 Total other long-term liabilities $ 3,770 $ 7,926 $ 3,059 $ 7,240 $ 14,224 Stockholders’ equity $ 82,269 $ 85,536 $ 100,736 $ 76,592 $ 65,458 (1) We present Adjusted EBITDA and Same Day EBITDA (defined below), measure that are not in accordance with accounting principles generally accepted in the United States of America (“non-GAAP”), in this Annual Report on Form 10-K to provide investors with a supplemental measure of our operating performance.
Biggest changeThe statement of operations data for the fiscal years ended 2022 and 2021 and the balance sheet data as of December 31, 2023, January 1, 2023, and December 26, 2021 set forth below were derived from our audited financial statements not included in this Annual Report on Form 10-K. 24 Fiscal Years Ended December 28, 2025 December 29, 2024 December 31, 2023 January 1, 2023 December 26, 2021 (dollars in thousands, except per share data) Statement of Operations Data: Revenues $ 93,310 $ 104,402 $ 125,077 $ 121,093 $ 92,018 Gross profit $ 33,333 $ 38,369 $ 49,785 $ 47,695 $ 34,969 Selling, general, and administrative expenses $ 41,136 $ 42,902 $ 45,402 $ 45,660 $ 33,226 Contingent consideration adjustment $ (450) $ — $ — $ — $ — Depreciation and amortization $ 1,550 $ 1,334 $ 1,313 $ 1,361 $ 878 Operating (loss) income $ (8,903) $ (5,867) $ 3,070 $ 674 $ 865 Interest expense, net $ (4,511) $ (4,921) $ (5,976) $ (1,363) $ (1,433) Loss before income taxes from continuing operations $ (13,414) $ (10,788) $ (2,906) $ (689) $ (568) Income tax benefit (expense) from continuing operations $ 1,881 $ 2,084 $ 831 $ (4,261) $ (460) Loss from continuing operations $ (11,533) $ (8,704) $ (2,075) $ (4,950) $ (1,028) Income (loss) from discontinued operations, net of tax $ 3,826 $ 5,366 $ (8,148) $ 12,636 $ 15,137 (Loss) gain on sale $ (3,723) $ — $ — $ 17,675 $ — Net (loss) income $ (11,430) $ (3,338) $ (10,223) $ 25,361 $ 14,109 Net (loss) income per share - basic: Continuing operations $ (1.05) $ (0.80) $ (0.20) $ (0.47) $ (0.10) Income (loss) from discontinued operations: Income (loss) 0.40 0.65 (0.95) 1.21 1.46 (Loss) gain on sale (0.34) — — 1.69 — Income tax (expense) benefit (0.05) (0.16) 0.20 (0.41) (0.04) Net (loss) income per share – basic $ (1.04) $ (0.31) $ (0.95) $ 2.02 $ 1.32 Net (loss) income per share - diluted: Continuing operations $ (1.05) $ (0.80) $ (0.20) $ (0.47) $ (0.10) Income (loss) from discontinued operations: Income (loss) 0.40 0.65 (0.95) 1.21 1.45 (Loss) gain on sale (0.34) — — 1.69 — Income tax (expense) benefit (0.05) (0.16) 0.20 (0.41) (0.04) Net (loss) income per share – diluted $ (1.04) $ (0.31) $ (0.95) $ 2.02 $ 1.31 Weighted average shares outstanding – basic 11,025 10,896 10,766 10,427 10,367 Weighted average shares outstanding – diluted 11,025 10,896 10,766 10,473 10,417 25 Non-GAAP Measures Fiscal Years Ended December 28, 2025 December 29, 2024 December 31, 2023 January 1, 2023 December 26, 2021 (dollars in thousands, except per share data) Other Financial Data: Adjusted EBITDA from continuing operations (1) $ (2,135) $ (1,545) $ 6,508 $ 3,955 $ 3,208 Cash dividends declared per common share $ 2.00 $ 0.15 $ 0.60 $ 0.60 $ 0.44 Balance Sheet Data from Continuing Operations: Working capital (2) $ 29,116 $ 6,897 $ (38,156) $ 22,162 $ 22,815 Total assets $ 57,837 $ 42,063 $ 55,766 $ 53,655 $ 40,939 Total outstanding borrowings, net $ — $ 46,321 $ 63,114 $ 66,671 $ 39,450 Total other long-term liabilities $ 398 $ 698 $ 866 $ 586 $ 2,529 Stockholders’ equity $ 48,105 $ 82,269 $ 85,536 $ 100,736 $ 76,592 (1) We present Adjusted EBITDA and Same Day EBITDA (defined below), measure that are not in accordance with accounting principles generally accepted in the United States of America (“non-GAAP”), in this Annual Report on Form 10-K to provide investors with a supplemental measure of our operating performance.
We define “Adjusted EBITDA” as earnings before interest expense, income taxes, depreciation and amortization expense, impairment losses, costs associated with the evaluation of potential strategic alternatives (“Strategic alternatives review”), transaction fees, software as a service costs, and certain non-cash expenses such as share-based compensation expense.
We define “Adjusted EBITDA” as earnings before interest expense, income taxes, depreciation and amortization expense, costs associated with the evaluation of potential strategic alternatives (“Strategic alternatives review”), transaction fees, software as a service costs, and certain non-cash expenses such as share-based compensation expense.
The statement of operations data for the fiscal years ended 2024, 2023, and 2022 and the balance sheet data as of December 29, 2024 and December 31, 2023 set forth below are derived from our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
The statement of operations data for the fiscal years ended 2025, 2024, and 2023 and the balance sheet data as of December 28, 2025 and December 29, 2024 set forth below are derived from our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
In addition, the financial covenants in our credit agreement are based on EBITDA as defined in the credit agreement. (2) The 2023 working capital amount includes the movement of the balances from long-term to current liabilities related to the amended credit agreement with BMO Harris Bank, N.A. (“BMO”), which had a maturity date of July 16, 2024.
(2) The 2023 working capital amount includes the movement of the balances from long-term to current liabilities related to the amended credit agreement with BMO Harris Bank, N.A. (“BMO”), which had a maturity date of July 16, 2024.
The limitations of Adjusted EBITDA and Same Day EBITDA include: (i) they do not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments; (ii) they do not reflect changes in, or 27 cash requirements for, our working capital needs; (iii) they do not reflect income tax payments we may be required to make; and (iv) they do not reflect the cash requirements necessary to service interest or principal payments associated with indebtedness.
The limitations of Adjusted EBITDA and Same Day EBITDA include: (i) they do not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments; (ii) they do not reflect changes in, or cash requirements for, our working capital needs; (iii) they do not reflect income tax payments we may be required to make; and (iv) they do not reflect the cash requirements necessary to service interest or principal payments associated with indebtedness. 26 To properly and prudently evaluate our business, we encourage you to review our consolidated financial statements included elsewhere in this Annual Report on Form 10-K and the reconciliation to Adjusted EBITDA from continuing operations and Same Day EBITDA from continuing operations loss, the most directly comparable financial measure presented in accordance with GAAP, set forth in the following table.
Fiscal Years Ended December 29, 2024 December 31, 2023 January 1, 2023 December 26, 2021 December 27, 2020 (dollars in thousands) (Loss) income from continuing operations $ (3,338) $ (10,223) $ 11,261 $ 10,458 $ (2,072) Income tax (benefit) expense from continuing operations (1) (370) (2,938) 3,659 2,639 (741) Interest expense, net 4,921 5,976 1,363 1,433 1,584 Operating income (loss) 1,213 (7,185) 16,283 14,530 (1,229) Depreciation and amortization 7,769 7,774 4,054 3,698 4,861 Gain on contingent consideration (1,452) — — (2,403) (76) Impairment losses (2) — 22,545 — — 7,240 CARES Act credit — — — (2,084) — Share-based compensation 989 1,029 1,085 1,058 786 Strategic alternatives review 962 — — — — Cost restructuring plan 230 — — — — Software as a service (3) 716 720 660 319 153 Transaction fees 48 975 271 170 615 Adjusted EBITDA from continuing operations 10,475 25,858 22,353 15,288 12,350 Same day adjustment — — (410) — — Same day EBITDA from continuing operations $ 10,475 $ 25,858 $ 21,943 $ 15,288 $ 12,350 (1) 2020 Included a $3.3 million re-measurement of the net deferred tax assets as a result of the TCJA.
Non-GAAP Measures Fiscal Years Ended December 28, 2025 December 29, 2024 December 31, 2023 January 1, 2023 December 26, 2021 (dollars in thousands) Loss from continuing operations $ (11,533) $ (8,704) $ (2,075) $ (4,950) $ (1,028) Income tax (benefit) expense from continuing operations (1,881) (2,084) (831) 4,261 460 Interest expense, net 4,511 4,921 5,976 1,363 1,433 Operating (loss) income (8,903) (5,867) 3,070 674 865 Depreciation and amortization 1,550 1,334 1,313 1,361 878 Contingent consideration adjustment (450) — — — — Share-based compensation 1,006 908 957 989 976 Strategic alternatives review 2,519 962 — — — Software as a service (1) 1,073 669 193 660 319 Transaction fees — 48 975 271 170 Adjusted receivable adjustment 1,070 401 — — — Adjusted EBITDA from continuing operations (2,135) (1,545) 6,508 3,955 3,208 Same day adjustment — — — (169) — Same day EBITDA from continuing operations $ (2,135) $ (1,545) $ 6,508 $ 3,786 $ 3,208 (1) We capitalize direct costs incurred in cloud computing implementation costs from hosting arrangements, which are reported as a Software as a service and are expensed as incurred in selling, general and administrative expenses. 27
Removed
To properly and prudently evaluate our business, we encourage you to review our consolidated financial statements included elsewhere in this Annual Report on Form 10-K and the reconciliation to Adjusted EBITDA and Same Day EBITDA from net (loss) income, the most directly comparable financial measure presented in accordance with GAAP, set forth in the following table.
Removed
(2) In the Professional segment, we recognized a $3.7 million trade name impairment loss and a $3.5 million client partner list impairment loss during the thirteen week period ended June 28, 2020. We recognized a $22.5 million trade name impairment loss during the thirteen week period ended April 2, 2023.
Removed
(3) We capitalizes direct costs incurred in cloud computing implementation costs from hosting arrangements, which are reported as a Software as a service and are expensed as incurred in selling, general and administrative expenses. 28

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

39 edited+16 added−34 removed9 unchanged
Biggest changeFiscal Year Ended December 29, 2024 December 31, 2023 January 1, 2023 (dollars in thousands) Revenues $ 272,499 $ 313,167 $ 298,422 Cost of services 179,636 201,383 194,874 Gross Profit 92,863 111,784 103,548 Selling, general, and administrative expenses 85,333 88,650 83,211 Gain on contingent consideration (1,452) — — Impairment losses — 22,545 — Depreciation and amortization 7,769 7,774 4,054 Operating income (loss) 1,213 (7,185) 16,283 Interest expense, net (4,921) (5,976) (1,363) (Loss) income before income taxes from continuing operations (3,708) (13,161) 14,920 Income tax benefit (expense) from continuing operations 370 2,938 (3,659) (Loss) income from continuing operations (3,338) (10,223) 11,261 Income from discontinued operations: Income — — 1,235 Gain on sale — — 17,675 Income tax expense — — (4,810) Net (loss) income $ (3,338) $ (10,223) $ 25,361 Fiscal Year Ended December 29, 2024 December 31, 2023 January 1, 2023 Revenues 100.0 % 100.0 % 100.0 % Cost of services 65.9 64.3 65.3 Gross Profit 34.1 35.7 34.7 Selling, general, and administrative expenses 31.3 28.3 27.8 Gain on contingent consideration (0.5) — — Impairment losses — 7.2 — Depreciation and amortization 2.9 2.5 1.4 Operating income (loss) 0.4 (2.3) 5.5 Interest expense, net (1.8) (1.9) (0.5) (Loss) income before income taxes from continuing operations (1.4) (4.2) 5.0 Income tax benefit (expense) from continuing operations 0.2 0.9 (1.2) (Loss) income from continuing operations (1.2) % (3.3) % 3.8 % 30 Fifty-two Week Fiscal Year Ended December 29, 2024 (Fiscal 2024) Compared with Fifty-two Week Fiscal Year Ended December 31, 2023 (Fiscal 2023) Revenues: Fiscal Year Ended December 29, 2024 December 31, 2023 (dollars in thousands) Revenues by Segment: Property Management $ 104,402 38.3 % $ 125,077 39.9 % Professional 168,098 61.7 % 188,090 60.1 % Total Revenues $ 272,500 100.0 % $ 313,167 100.0 % Property Management Revenues : Property Management revenues decreased approximately $20.7 million (16.5%).
Biggest changeFiscal Years Ended December 28, 2025 December 29, 2024 December 31, 2023 (dollars in thousands) Revenues $ 93,310 $ 104,402 $ 125,077 Cost of services 59,977 66,033 75,292 Gross profit 33,333 38,369 49,785 Selling, general, and administrative expenses 41,136 42,902 45,402 Contingent consideration adjustment (450) — — Depreciation and amortization 1,550 1,334 1,313 Operating (loss) income (8,903) (5,867) 3,070 Interest expense, net (4,511) (4,921) (5,976) Loss before income taxes from continuing operations (13,414) (10,788) (2,906) Income tax benefit from continuing operations 1,881 2,084 831 Net loss from continuing operations $ (11,533) $ (8,704) $ (2,075) Fiscal Years Ended December 28, 2025 December 29, 2024 December 31, 2023 Revenues 100.0 % 100.0 % 100.0 % Cost of services 64.3 63.2 60.2 Gross profit 35.7 36.8 39.8 Selling, general, and administrative expenses 44.1 41.1 36.3 Contingent consideration adjustment (0.5) — — Depreciation and amortization 1.7 1.3 1.0 Operating (loss) income (9.6) (5.6) 2.5 Interest expense, net (4.8) (4.7) (4.8) Loss before income taxes from continuing operations (14.4) (10.3) (2.3) Income tax benefit from continuing operations 2.1 2.0 0.7 Net loss from continuing operations (12.3) % (8.3) % (1.6) % 29 Fifty-two Week Fiscal Year Ended December 28, 2025 (Fiscal 2025) Compared with Fifty-two Week Fiscal Year Ended December 29, 2024 (Fiscal 2024) Revenues: Fiscal Years Ended December 28, 2025 December 29, 2024 (dollars in thousands) Revenues $ 93,310 $ 104,402 Gross profit $ 33,333 $ 38,369 Gross profit percentage 35.7 % 36.8 % Revenues : Revenues decreased approximately $11.1 million (10.6%).
Minor upgrades and enhancements to software systems are are expensed in the period incurred as software maintenance and training costs. Goodwill Goodwill represents the difference between the enterprise value or consideration exchanged less the fair value of all recognized net asset fair values including identifiable intangible asset values in a business combination.
Minor upgrades and enhancements to software systems are are expensed in the period incurred as software maintenance and training costs. 34 Goodwill Goodwill represents the difference between the enterprise value or consideration exchanged less the fair value of all recognized net asset fair values including identifiable intangible asset values in a business combination.
Interest Expense, net: Interest expense, net decreased $1.1 million (17.7%) primarily due to reduced accretion in 2024 on contingent consideration associated with Arroyo Consulting and the lower average balance on the Revolving Facility, which was partially offset by the increase in debt issuance costs.
Interest Expense, net: Interest expense, net decreased $1.1 million (17.7%) primarily due to reduced accretion in Fiscal 2024 on contingent consideration associated with Arroyo Consulting and the lower average balance on the Revolving Facility, which was partially offset by the increase in debt issuance costs.
While we believe we have sufficient liquidity and capital resources to meet our current operating requirements and expansion plans, we may elect to pursue additional growth opportunities within the next year that could require additional debt or equity financing.
While we believe we have sufficient liquidity and capital resources to meet our current operating requirements and expansion plans, we may elect to pursue additional growth opportunities within the next year that could require new debt or equity financing.
We entered into four amendments from August 18, 2022 through May 19, 2023, which changed the interest rate component from LIBOR to the Secured Overnight Financing Rate (“SOFR”), exercised the option to borrow $40 million, required 2.5% of the original principal balance of the new term loan, permitted a foreign entity acquisition, modified the distributions terms, and increased a revolving credit facility (the "Revolving Facility") by $6.0 million.
We entered into four amendments from August 18, 2022 through May 19, 2023, which changed the interest rate component from LIBOR (“London Interbank Offered Rate”) to the Secured Overnight Financing Rate (“SOFR”), exercised the option to borrow $40 million, required 2.5% of the original principal balance of the new term loan, permitted a foreign entity acquisition, modified the distributions terms, and increased a revolving credit facility by $6.0 million.
If we are unable to secure additional financing at favorable terms in order to pursue such additional growth opportunities, our ability to pursue such opportunities could be materially adversely affected.
If we are unable to secure new financing at favorable terms in order to pursue such additional growth opportunities, our ability to pursue such opportunities could be materially and adversely affected.
We believe that the cash generated from operations, together with the borrowing availability under our Revolving Facility, will be sufficient to meet our normal working capital needs for at least the next twelve months, including investments made, and expenses incurred, in connection with opening new markets throughout the next year.
We believe that the cash generated from operations will be sufficient to meet our normal working capital needs for at least the next twelve months, including investments made, and expenses incurred, in connection with opening new markets throughout the next year.
Since receipts from client partners lag payments to field talent, working capital requirements increase substantially in periods of growth. Our primary sources of liquidity are cash generated from operations and borrowings under our first amendment under our amended and restated credit agreement with BMO, that provides for a revolving credit facility maturing December 31, 2026 (the “Revolving Facility”).
Since receipts from client partners lag payments to field talent, working capital requirements increase substantially in periods of growth. Our primary sources of liquidity were cash generated from operations and borrowings under our amended and restated credit agreement with BMO, that provided for a revolving credit facility (the “Revolving Facility”).
The decrease was primarily due to to a reduction in revenue, which was driven by a combination of increased competition in 31 certain markets, lower demand from cost pressures at the property management companies and lower permanent placement business, which has no cost of service. Professional Gross Profit: Professional gross profit decreased approximately $7.5 million (12.1%).
The decrease was primarily due to to a reduction in revenue, which was driven by a combination of increased competition in certain markets, lower demand from cost pressures at the property management companies and lower permanent placement business, which has no cost of service.
The decrease was primarily due to a reduction in billed hours, which was driven by a combination of increased competition in certain markets and lower demand from cost pressures at the property management companies. Professional Revenues : Professional revenues decreased approximately $20.0 million (10.6%).
The decrease was primarily due to a reduction in billed hours, which was driven by a combination of increased competition in certain markets and lower demand from cost pressures at the property management companies. Gross Profit: Gross profit decreased approximately $11.4 million (22.9%).
The Restated Agreement provided for a Revolving Facility which permitted 36 us to borrow funds in an aggregate amount up to $40 million. The Restated Agreement also provided for a term loan commitment, which permitted us to borrow funds from time to time (the “Term Loan”).
On March 12, 2024, the Credit Agreement was amended and restated (the “Restated Agreement”), which provided for a Revolving Facility which permitted us to borrow funds in an aggregate amount up to $40 million. The Restated Agreement also provided for a term loan commitment, which permitted us to borrow funds from time to time (the “Term Loan”).
This increase is primarily attributable to payments on accounts receivable, payments on accrued payroll and expenses, and payments of deferred employer FICA for the CARES Act in other current liabilities in Fiscal 2022.
This increase is primarily attributable to receipts on accounts receivable, payments on accrued payroll and expenses, and payments of deferred employer FICA for the CARES Act in other current liabilities in Fiscal 2022. Investing Activities Cash provided by investing activities consists primarily of cash received for business sold and capital expenditures.
Selling, General, and Administrative Expenses: Selling, general and administrative (“SGA”) expenses decreased $3.3 million (3.7%) primarily due to expense reduction and cost control efforts in response to the decline in revenues.
Selling, General, and Administrative Expenses: SGA expenses decreased $2.5 million (5.5%) versus prior year, primarily due to expense reduction and cost control efforts in response to the decline in revenues.
During Fiscal 2022, net cash used in continuing operating activities was $3.3 million, a decrease of $4.7 million compared with $1.4 million net cash provided by continuing operating activities for Fiscal 2021.
During Fiscal 2025, net cash provided by continuing operating activities was $0.1 million, a decrease of $19.3 million compared with $19.4 million net cash provided by continuing operating activities for Fiscal 2024.
Revenues are recognized when promised workforce solutions are delivered to client partners, in an amount that reflects the consideration we expect to be entitled to in exchange for those services. We recognize revenue through the following types of services: workforce solutions, contingent placements, and managed services. Intangible Assets We hold intangible assets with finite lives.
Revenue Recognition We derive our revenues from continuing operations by providing workforce solutions and placement services. Revenues are recognized when promised solutions are delivered to client partners, in an amount that reflects the consideration we expect to be entitled to in exchange for those services. We recognize revenue through the following types of services: workforce solutions and contingent placements.
Intangible assets with finite useful lives are amortized over their respective estimated useful lives, ranging from three to ten years, based on a pattern in which the economic benefit of the respective intangible asset is realized. We develop and implement software modifications to our IT infrastructure with direct internal payroll costs and external costs capitalized.
Intangible Assets We hold intangible assets with finite lives. Intangible assets with finite useful lives are amortized over their respective estimated useful lives, ranging from three to ten years, based on a pattern in which the economic benefit of the respective intangible asset is realized.
On March 13, 2025, we entered into a Waiver and Second Amendment to Amended and Restated Credit Agreement (the “Second Amendment”) pursuant to which, among other things, the lenders unanimously waived noncompliance with the foregoing covenants as of December 29, 2024 and March 31, 2025, and certain amendments were made to the Amended and Restated Credit Agreement including, but not limited to, a new definition of Applicable Margin, a reduction of the swing line sublimit to zero, and limiting the aggregate revolving credit borrowings to $8 million.
On March 13, 2025, we entered into a Waiver and Second Amendment to Restated Agreement in which the lenders unanimously waived noncompliance with the covenants as of December 29, 2024 and March 30, 2025 and a new definition of 33 Applicable Margin, a reduction of the swing line sublimit to zero, and limiting the aggregate revolving credit borrowings to $8.0 million.
See “Note 4 — Discontinued Operations” of our audited consolidated financial statements for information regarding our discontinued operations. The Property Management segment provides office and maintenance talent in 40 states and D.C., to property management companies responsible for the apartment communities’ and commercial buildings’ day-to-day operations.
The BGSF Professional financial results for periods prior to the sale have been reflected as discontinued operations in the Unaudited Consolidated Financial Statements, see “Note 4 - Discontinued Operations.” The Property Management segment provides office and maintenance talent in 44 states and D.C., to property management companies responsible for the apartment communities’ and commercial buildings’ day-to-day operations.
In Fiscal 2023, we paid $6.8 million in connection with the Arroyo Consulting acquisition, funded a working capital payment of $0.1 million in connection with the Horn Solutions acquisition, and made capital expenditures of $2.6 million mainly related to continued IT improvements and for software and computer equipment purchased in the ordinary course of business.
In Fiscal 2023, we made capital expenditures of $2.1 million from continuing operations mainly related to continued IT improvements and for software and computer equipment purchased in the ordinary course of business.
Please refer to “Note 4 — Discontinued Operations” of our audited consolidated financial statements for information regarding our discontinued operations. Our historical financial information may not be indicative of our future performance.
Please refer to “Note 4 — Discontinued Operations” in the Notes to the Consolidated Financial Statements of this Annual Report on Form 10-K. Our historical financial information may not be indicative of our future performance.
(“BMO”) which would have matured on July 16, 2024. Operating Activities Cash provided by operating activities consists of net (loss) income adjusted for non-cash items, including depreciation and amortization, share-based compensation expense, interest expense, provision for credit losses, impairment losses, contingent consideration adjustment, and the effect of working capital changes.
(“BMO”) which would have matured on July 16, 2024. Operating Activities Cash provided by operating activities consists of net loss adjusted for non-cash items, including depreciation and amortization, share-based compensation expense, interest expense, and provision for credit losses. The primary drivers of cash inflows and outflows are accounts receivable, transition services payable, other current assets, and accrued payroll and expenses.
If our future cash flow from operations and other capital resources are insufficient to fund our liquidity needs, we may be forced to obtain additional debt or equity capital or refinance all or a portion of our debt.
Our ability to continue to fund these items may be affected by general economic, competitive and other factors, many of which are outside of our control. If our future cash flow from operations and other capital resources are insufficient to fund our liquidity needs, we may be forced to obtain new debt or equity capital.
Same Day Gross Profit increased $10.3 million (10.2%) to $111.8 million in Fiscal 2023. Same Day Gross Profit and GAAP gross profit were equal for Fiscal 2023. 34 Liquidity and Capital Resources Our working capital requirements are primarily driven by field talent payments, tax payments, and client partner accounts receivable receipts.
Income Tax Benefit: Income tax benefit increased $1.3 million (150.8%) primarily due to a lower taxable loss in Fiscal 2023. 31 Liquidity and Capital Resources Our working capital requirements are primarily driven by field talent payments, tax payments, and client partner accounts receivable receipts.
A summary of our working capital, operating, investing, and financing activities are shown in the following table: Fiscal Year Ended December 29, 2024 December 31, 2023 January 1, 2023 (dollars in thousands) Working capital from continuing operations (1) $ 19,427 $ (18,144) $ 47,955 Net cash provided by (used in) continuing operations: Operating activities $ 24,379 $ 20,386 $ (3,300) Investing activities (1,640) (9,514) (8,898) Financing activities (22,386) (10,872) 15,934 Net change in cash and cash equivalents discontinued operations — — (3,848) Net change in cash and cash equivalents $ 353 $ — $ (112) (1) The 2023 working capital amount includes the movement of the balances from long-term to current liabilities related to the amended credit agreement with BMO Harris Bank, N.A.
A summary of our working capital, operating, investing, and financing activities are shown in the following table: Fiscal Years Ended December 28, 2025 December 29, 2024 December 31, 2023 (dollars in thousands) Working capital from continuing operations (1) $ 29,116 $ 6,897 $ (38,156) Net cash (used in) provided by continuing operations: Operating activities $ 117 $ 19,385 $ 12,922 Investing activities 91,390 (1,217) (2,152) Financing activities (72,521) (18,136) (10,770) Cash and cash equivalents, beginning of year 32 — — Net change in cash and cash equivalents, continuing operations $ 19,018 $ 32 $ — (1) The 2023 working capital amount includes the movement of the balances from long-term to current liabilities related to the amended credit agreement with BMO Harris Bank, N.A.
This increase is primarily attributable to increased payments on accounts receivable, decreased payments on accrued payroll and expenses, and within prepaid expenses and other current assets there were payments made in 2024 related to the 2023 Arroyo Consulting acquisition which were partially offset by payments received in 2023 related to sale of the Light Industrial segment. 35 During Fiscal 2023, net cash provided by continuing operating activities was $20.4 million, an increase of $23.7 million compared with $3.3 million net cash used in continuing operating activities for Fiscal 2022.
This increase is primarily attributable to increased receipts on accounts receivable and decreased payments on accrued payroll and expenses. During Fiscal 2023, net cash provided by continuing operating activities was $12.9 million, an increase of $16.2 million compared with $3.3 million net cash used in continuing operating activities for Fiscal 2022.
For a detailed discussion of the application of these and other accounting policies, see Note 2 in the Notes to the Consolidated Financial Statements of this Annual Report on Form 10-K. 37 Revenue Recognition We derive our revenues from continuing operations in our Property Management and Professional segments. We provide workforce solutions, placement services, and managed services.
Critical Accounting Policies and Estimates We have identified the policies listed below as critical to our business and the understanding of our results of operations. For a detailed discussion of the application of these and other accounting policies, see Note 2 in the Notes to the Consolidated Financial Statements of this Annual Report on Form 10-K.
Payments due by period Total Less than 1 year 1–3 years 3–5 years More than 5 years (dollars in thousands) Long-term debt obligations $ 42,945 $ 3,825 $ 39,120 $ — $ — Contingent consideration 2,750 2,750 — — — Convertible note 4,368 4,368 — — — Operating lease obligations 6,165 1,880 2,849 1,317 119 Contractual cash obligations $ 56,228 $ 12,823 $ 41,969 $ 1,317 $ 119 Off-Balance Sheet Arrangements Letter of Credit In March 2020, in conjunction with the 2020 EdgeRock acquisition, we entered into a standby letter of credit arrangement, which expires December 31, 2024, for purposes of protecting a lessor against default on lease payments.
Payments due by period Total Less than 1 year 1–3 years 3–5 years (dollars in thousands) Note payable $ 449 $ 449 $ — $ — Operating lease obligations 786 450 216 120 Contractual cash obligations $ 1,235 $ 899 $ 216 $ 120 Off-Balance Sheet Arrangements Letter of Credit In conjunction with a previous acquisition, we entered into a standby letter of credit arrangement, which expired, for purposes of protecting a lessor against default on lease payments.
For Fiscal 2024, we reduced our Revolving Facility by $18.5 million, we made a payment of $4.3 million of contingent consideration related to the Arroyo Consulting Acquisition using the funds borrowed on our Term Loan, we paid down $1.7 million on the Term Loan, we disbursed $1.6 million in cash dividends on our common stock, and we paid $1.3 million in debt issuance costs.
For Fiscal 2024, we reduced our credit agreement by $15.9 million, we disbursed $1.6 million in cash dividends on our common stock, and we paid $1.3 million in debt issuance costs. For Fiscal 2023, we disbursed $6.5 million in cash dividends on our common stock and we reduced our Credit Agreement by $4.7 million.
As of December 29, 2024, we had a maximum financial exposure from this standby letter of credit totaling $0.1 million, all of which is considered usage against our Revolving Facility. Critical Accounting Policies and Estimates We have identified the policies listed below as critical to our business and the understanding of our results of operations.
As of December 29, 2024, we had a maximum financial exposure from this standby letter of credit totaling $0.1 million and no liability had been recorded, all of which was considered usage against our Revolving Facility. On September 8, 2025, we assigned the related lease in the sale of BGSF Professional.
On May 8, 2024, we announced that our Board of Directors has initiated a process to evaluate potential strategic alternatives and engaged financial advisors in an endeavor to maximize shareholder value (“Strategic alternatives review”). On March 21, 2022, we sold substantially all of the assets and certain liabilities of InStaff to Sentech Engineering Services, Inc.
We have continuing operations in one industry segment, Property Management, and have discontinued operations the Light Industrial and Professional segments. On May 8, 2024, the Company announced that our Board had initiated a process to evaluate potential strategic alternatives and engaged financial advisors in an endeavor to maximize shareholder value (“Strategic alternatives review”).
The primary drivers of cash inflows and outflows are accounts receivable, accrued payroll and expenses, prepaid expenses and other current assets. During Fiscal 2024, net cash provided by continuing operating activities was $24.4 million, an increase of $4.0 million compared with $20.4 million net cash provided by continuing operating activities for Fiscal 2023.
This decrease is primarily attributable to decreased receipts on accounts receivable, increased payments on accrued payroll and expenses, increased payments on transition services payable, the recording of an escrow receivable related to the sale of BGSF Professional, and decreased payments on other current assets. 32 During Fiscal 2024, net cash provided by continuing operating activities was $19.4 million, an increase of $6.5 million compared with $12.9 million net cash provided by continuing operating activities for Fiscal 2023.
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. 29 Results of Operations The following tables summarize key components of our results from continuing operations for the periods indicated, both in dollars and as a percentage of revenues, and have been derived from our consolidated financial statements.
Overall first quarter demand can be affected by adverse weather conditions in the winter months. 28 Results of Operations The following tables summarize key components of our results from continuing operations for the periods indicated, both in dollars and as a percentage of revenues, and have been derived from our consolidated financial statements.
Investing Activities Cash used in investing activities consists primarily of cash paid for businesses acquired net of cash required, cash received for businesses sold, and capital expenditures. In Fiscal 2024, we made capital expenditures of $1.6 million mainly related to continued IT improvements.
In Fiscal 2025, cash provided by investing activities from continuing operations consists primarily of net proceeds from the sale of BGSF Professional of approximately for $91.4 million, which was partially offset by minimal capital expenditures. In Fiscal 2024, we made capital expenditures of $1.2 million from continuing operations mainly related to continued IT improvements.
Financing Activities Cash flows from financing activities consisted principally of borrowings and payments under our credit agreement, payment of dividends, payment of issuance costs, and contingent consideration paid.
Financing Activities Cash flows from financing activities consisted principally of borrowings and repayments under our credit agreement, special cash dividends, repurchases of our common stock, and contingent consideration paid. For Fiscal 2025, we paid off our credit agreement of $42.9 million and the convertible unsecured promissory note of $4.4 million.
For Fiscal 2023, we disbursed $6.5 million in cash dividends on our common stock, we paid down $6.0 million on the Term Loan, we paid $1.1 million of contingent consideration related to the Momentum acquisition, and borrowed $2.3 million on our Revolving Facility for increased working capital needs.
We paid $1.4 million of contingent consideration related to Arroyo Consulting, we paid $22.4 million in cash dividends on our common stock, and repurchased $1.5 million of our common stock.
We were not in compliance with the foregoing financial covenants as of the fiscal quarter ended December 29, 2024. We were also not in compliance with certain affirmative covenants, and we anticipated that we would not be in compliance with the foregoing financial covenants as of the fiscal quarter ended March 31, 2025.
We obtained the waivers described above for the non compliance with the foregoing financial covenants and certain affirmative covenants as of the quarters ended December 29, 2024, March 30, 2025, and June 29, 2025. Contractual Obligations The following table summarizes our cash contractual obligations as of December 28, 2025.
The availability on the Revolving Facility, which permits us to borrow funds from time to time, was reduced in an aggregate amount up to $20 million. We are required to repay the Term Loan in quarterly principal installments equal to 2.5% of the aggregate principal balance.
We were required to repay the Term Loan in quarterly principal installments equal to 2.5% of the aggregate principal balance. We paid an unused commitment fee on the daily average unused amount of Revolving Facility. Our obligations were secured by a first priority security interest in substantially all our tangible and intangible property.
Property Management Gross Profit: Property Management gross profit increased approximately $2.1 million (4.4%), consistent with a 3.3% increase in revenues, partially offset by lower permanent placement revenue, which has no cost of services. 33 Professional Gross Profit: Professional gross profit increased approximately $6.1 million (11.0%). The Arroyo Consulting acquisition contributed $5.1 million in gross profit.
Gross Profit: Gross profit decreased approximately $5.1 million (13.1%) which is in line with revenues with a partial offset by higher permanent placement business that have no cost of service.
Fiscal Year Ended December 29, 2024 December 31, 2023 (dollars in thousands) Gross Profit by Segment: Property Management $ 38,369 41.3 % $ 49,785 44.5 % Professional 54,494 58.7 % 61,999 55.5 % Total Gross Profit $ 92,863 100.0 % $ 111,784 100.0 % Fiscal Year Ended December 29, 2024 December 31, 2023 Gross Profit Percentage by Segment: Property Management 36.8 % 39.8 % Professional 32.4 % 33.0 % Company Gross Profit Percentage 34.1 % 35.7 % Total Company gross profit decreased approximately $18.9 million (16.9%) due to reduced customer demand in both segments.
Fifty-two Week Fiscal Year Ended December 29, 2024 (Fiscal 2024) Compared with Fifty-three Week Fiscal Year Ended December 31, 2023 (Fiscal 2023) Revenues: Fiscal Years Ended December 29, 2024 December 31, 2023 (dollars in thousands) Revenues $ 104,402 $ 125,077 Gross profit $ 38,369 $ 49,785 Gross profit percentage 36.8 % 39.8 % Revenues : Revenues decreased approximately $20.7 million (16.5%).
Removed
Company Overview We provide workforce solutions to our client partners in a variety of industries through our various divisions in IT, Finance & Accounting, Managed Solutions, and Property Management (apartment communities and commercial buildings) and have completed a series of acquisitions including the acquisition of BG Personnel, LP and B G Staff Services Inc. in June 2010, substantially all of the assets of JNA Staffing, Inc. in December 2010, Extrinsic, LLC in December 2011, American Partners, Inc. in December 2012, InStaff in June 2013, D&W in March 2015, VTS in October 2015, Zycron in April 2017, Smart in September 2017, and LJK in December 2019, 100% of the equity of EdgeRock in February 2020, Momentum Solutionz in February 2021, Horn Solutions in 2022, and Arroyo Consulting in 2023.
Added
Company Overview We provide workforce solutions through the Property Management (apartment communities and commercial buildings) segment that operates primarily within the United States of America (“U.S.”). With the acquisitions of BG Personnel, LP and B G Staff Services Inc., we laid the foundation for our entrance into the Property Management (“PM”) staffing industry.
Removed
We have continuing operations in two industry segments Property Management and Professional, and had discontinued operations in the Light Industrial segment. We primarily operate within the United States of America.
Added
Through a series of acquisitions, we diversified into the professional services markets, which included consulting and staffing solutions for both information technology and finance and accounting as well as managed solutions services, which included both workforce solutions and fixed fee arrangements.
Removed
The Light Industrial segment provided field talent primarily to manufacturing, distribution, logistics, and call center client partners needing a flexible workforce. The InStaff financial results for periods prior to the sale have been reflected in our Consolidated Statements of Operations and Comprehensive (Loss) Income and Consolidated Statements of Cash Flows as discontinued operations.
Added
During December 2024, the Company announced a cost restructuring plan as part of the strategic review process. On June 14, 2025, the Company entered into an Equity Purchase Agreement with INSPYR Solutions Intermediate, LLC, pursuant to which the Company sold substantially all of the outstanding equity and net assets pertaining to the Professional segment (“BGSF Professional”) on September 8, 2025.
Removed
The Professional segment provides specialized talent and business consultants for information technology (“IT”), managed services, finance, accounting, legal and human resource.
Added
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.
Removed
The April 2023 Arroyo Consulting acquisition contributed $5.6 million of incremental revenues with thirty-six weeks in prior period compared to fifty-two weeks in current period.
Added
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.
Removed
The remaining Professional segment decrease of $25.6 million (13.6%) is primarily due to a decline in billed hours in the Finance and Accounting division, as clients continued to delay projects or expand project timelines using less field talent in the IT division. The Professional segment decrease was partially offset by growth in the Managed Solutions division.
Added
The decrease was primarily due to a 12.1% reduction in billed hours, which was driven by a combination of lower demand from cost pressures on property owners and property management companies and increased competition in certain markets with partial offsets by higher permanent placement business, average bill rate, and multi-family property owners.
Removed
Gross Profit: Gross profit represents revenues from workforce solutions less cost of services expenses, which consist of payroll, payroll taxes, payroll-related insurance, field talent costs, and reimbursable costs.
Added
Selling, General, and Administrative Expenses: Selling, general and administrative (“SGA”) expenses decreased $1.8 million (4.1%) primarily due to reduced compensation costs on less headcount offset by an increase in strategic alternatives review.
Removed
As a percentage of revenue, gross profit has decreased to 34.1% from 35.7%, primarily due to the margin decline in Property Management. Property Management Gross Profit: Property Management gross profit decreased approximately $11.4 million (22.9%).
Added
The components of SGA expense are detailed in the following table: Fiscal Years Ended December 28, 2025 December 29, 2024 Amount % of Revenue Amount % of Revenue $ Change % Change (dollars in thousands) Selling $ 22,961 24.6 % $ 24,631 23.6 % $ (1,670) (6.8) % General and administrative: Compensation and related 8,290 8.9 9,394 9.0 (1,104) (11.8) % Software 2,875 3.1 2,862 2.7 13 0.5 % Liability insurance 1,149 1.2 999 1.0 150 15.0 % Professional fees 1,938 2.1 1,899 1.8 39 2.1 % Share-based compensation 1,006 1.1 908 0.9 98 10.8 % Strategic alternatives review 2,519 2.7 962 0.9 1,557 161.9 % Other 398 0.4 1,247 1.2 (849) (68.1) % Total $ 41,136 44.1 % $ 42,902 41.1 % $ (1,766) (4.1) % Contingent consideration adjustment: As a result of the certain business developments in Fiscal 2025, the Company recognized a $0.5 million contingent consideration adjustment related to the sale of BGSF Professional, see “Note 4 - Discontinued Operations.” Depreciation and Amortization: Depreciation and amortization charges increased approximately $0.2 million (16.2%) primarily due to higher amortization of intangible assets for computer software depreciation.
Removed
The April 2023 Arroyo Consulting acquisition contributed $1.8 million of incremental gross profit with thirty-six weeks in prior period compared to fifty-two weeks in current period. The remaining Professional segment declined $9.3 million (15.0%) primarily due to lower revenue, which was partially offset by growth in the Managed Solutions division.
Added
Interest Expense, net: Interest expense, net decreased $0.4 million (8.3%) primarily from paying the balance on the amended and restated credit agreement with BMO, using the proceeds from the sale of BGSF Professional, which was partially offset by the write off of amortization of debt issuance costs from the BMO May 2025 Waiver and Amendment. 30 Income Tax Benefit: Income tax benefit decreased $0.2 million (9.7%) primarily due to an increased net loss before taxes and a lower effective tax rate in Fiscal 2025, which was partially offset by a $1.5 million valuation allowance recorded during Fiscal 2025 against certain net deferred tax assets generated in the sale of BGSF Professional and lower state tax expense.
Removed
The components of SGA expense are detailed in the following table: Fiscal Year Ended December 29, 2024 December 31, 2023 Amount % of Revenue Amount % of Revenue $ Change % Change (dollars in thousands) Compensation and related $ 62,954 23 % $ 68,536 22 % $ (5,582) (8) % Advertising and recruitment 2,099 1 2,111 1 (12) (1) Occupancy and office operations 3,200 1 3,310 1 (110) (3) Travel, meals and entertainment 1,215 — 1,349 — (134) (10) Software 5,445 2 5,339 2 106 2 Liability insurance 1,136 — 1,140 — (4) — Professional fees 2,113 1 1,413 — 700 50 Public company related costs 1,056 — 851 — 205 24 Bad debt 2,066 1 798 — 1,268 159 Share-based compensation 989 — 1,029 — (40) (4) Strategic alternatives review 962 — — — 962 100 Cost restructuring plan 230 — — — 230 100 Transaction fees 48 — 974 — (926) (95) Workers’ compensation loss retention return (95) — (491) — 396 (81) Other 1,915 1 2,291 1 (376) (16) Total $ 85,333 31 % $ 88,650 28 % $ (3,317) (4) % Gain on contingent consideration: As a result of the certain business developments in Fiscal 2024, the Company recognized a $1.5 million gain on contingent consideration related to the 2023 Arroyo Consulting acquisition.
Added
The components of SGA expense are detailed in the following table: Fiscal Years Ended December 29, 2024 December 31, 2023 Amount % of Revenue Amount % of Revenue $ Change % Change (dollars in thousands) Selling $ 24,631 23.6 % $ 26,427 21.1 % $ (1,796) (6.8) % General and administrative: Compensation and related 9,394 9.0 10,215 8.2 (821) (8.0) % Software 2,862 2.7 2,720 2.2 142 5.2 % Liability insurance 999 1.0 980 0.8 19 1.9 % Professional fees 1,899 1.8 2,066 1.7 (167) (8.1) % Share-based compensation 908 0.9 957 0.8 (49) (5.1) % Strategic alternatives review 962 0.9 — — 962 — % Other 1,247 1.2 2,037 1.6 (790) (38.8) % Total $ 42,902 41.1 % $ 45,402 36.4 % $ (2,500) (5.5) % Depreciation and Amortization: Depreciation and amortization charges were flat due to the increase in software amortization that was partially offset by the decrease in computer equipment.
Removed
Depreciation and Amortization: Depreciation and amortization charges were flat due to the increase in software amortization that was partially offset by the decrease in client partner lists amortization.
Added
On September 8, 2025, we paid the balance on the existing Term Loan and Revolving Facility using the proceeds from the sale of BGSF Professional. We do not currently have access to a revolving credit facility. On September 30, 2025, we paid a $2.00 per share special cash dividend.
Removed
Income Taxes: Income tax benefit decreased $2.6 million (87.4%) primarily due to a higher taxable loss in 2023 related to the trade name impairment. 32 Fifty-two Week Fiscal Year Ended December 31, 2023 (Fiscal 2023) Compared with Fifty-three Week Fiscal Year Ended January 1, 2023 (Fiscal 2022) Revenues: Fiscal Year Ended December 31, 2023 January 1, 2023 (dollars in thousands) Revenues by Segment: Property Management $ 125,077 39.9 % $ 121,093 40.6 % Professional 188,090 60.1 % 177,329 59.4 % Total Revenues $ 313,167 100.0 % $ 298,422 100.0 % Property Management Revenues : Property Management revenues increased approximately $4.0 million (3.3%), primarily due to an 8.5% increase in average bill rate.
Added
Credit Agreements On September 8, 2025, we paid the balance on the existing Term Loan and Revolving Facility using the proceeds from the sale of BGSF Professional. On July 16, 2019, we entered into a Credit Agreement.
Removed
Professional Revenues : Professional revenues increased approximately $10.8 million (6.1%). The 2023 Arroyo Consulting acquisition contributed $14.8 million of new revenues. The Horn Solutions acquisition, which was integrated with the organic business, added revenue that was not enough to offset the decline in the existing professional business.
Added
On November 6, 2024, we entered into the First Amendment to Restated Agreement, which reduced the availability on the Revolving Facility an aggregate amount up to $20 million.
Removed
Horn Solutions and the existing professional business declined $4.1 million (2.3%), primarily due to fewer hours billed and lower permanent placement revenue. Gross Profit: Gross profit represents revenues from workforce solutions less cost of services expenses, which consist of payroll, payroll taxes, payroll-related insurance, field talent costs, and reimbursable costs.
Added
On May 7, 2025, we entered into a Waiver and Amendment in which the lenders unanimously waived noncompliance on the requirement of least $2.0 million in cash equity contributions by extending the deadline and adding the option of subordinated debt.
Removed
Fiscal Year Ended December 31, 2023 January 1, 2023 (dollars in thousands) Gross Profit by Segment: Property Management $ 49,785 44.5 % $ 47,695 46.1 % Professional 61,999 55.5 % 55,853 53.9 % Total Gross Profit $ 111,784 100.0 % $ 103,548 100.0 % Fiscal Year Ended December 31, 2023 January 1, 2023 Gross Profit Percentage by Segment: Property Management 39.8 % 39.4 % Professional 33.0 % 31.5 % Company Gross Profit Percentage 35.7 % 34.7 % Total gross profit increased approximately $8.2 million (8.0%).
Added
On August 4, 2025, we entered into a Waiver and Amendment in which the lenders unanimously waived noncompliance with the foregoing covenants as of June 29, 2025 and that provided that we would finalize and close the sale BGSF Professional no later than September 30, 2025.
Removed
As a percentage of revenue, gross profit has increased to 35.7% from 34.7%, with both segments contributing to the increase.
Added
We develop and implement software modifications to our information technology infrastructure with direct internal payroll costs and external costs capitalized.
Removed
The Horn Solutions acquisition, which was integrated with the organic business, added growth to offset the decline experienced in the existing professional business. Selling, General, and Administrative Expenses: SGA expenses increased $5.4 million (6.5%) versus prior year. The overall increase slightly outpaced revenue growth adding 40 bps to total SGA expense as a percent of revenue.
Removed
Acquisition transaction fees increased $0.7 million over the prior year.
Removed
Fiscal Year Ended December 31, 2023 January 1, 2023 Amount % of Revenue Amount % of Revenue $ Change % Change (dollars in thousands) Compensation and related $ 68,536 22 % $ 64,782 22 % $ 3,754 6 % Advertising and recruitment 2,111 1 1,987 1 124 6 Occupancy and office operations 3,310 1 2,773 1 537 19 Travel, meals and entertainment 1,349 — 1,044 — 305 29 Software 5,339 2 5,751 2 (412) (7) Liability insurance 1,140 — 991 — 149 15 Professional fees 1,413 — 1,647 1 (234) (14) Public company related costs 851 — 734 — 117 16 Bad debt 798 — 315 — 483 153 Share-based compensation 1,029 — 1,085 — (56) (5) Transaction fees 974 — 271 — 703 259 Workers’ compensation loss retention return (491) — (117) — (374) 320 Other 2,291 1 1,948 1 343 18 Total $ 88,650 28 % $ 83,211 28 % $ 5,439 7 % Impairment losses: In Fiscal 2023, managements’s plan to eliminate the use of various trade names was approved by the Board of Directors.
Removed
The decision to rebrand as BGSF created a $22.5 million write-off in trade names. Depreciation and Amortization: Depreciation and amortization charges increased $3.7 million (91.8%). The increase in deprecation and amortization is primarily due to the amortization of intangible assets related to the 2022 Horn Solutions acquisition and the 2023 Arroyo Consulting acquisition.
Removed
Interest Expense, net: Interest expense, net increased $4.6 million primarily due to the increased debt balances related to the 2022 Horn Solutions acquisition, the 2023 Arroyo Consulting acquisition, and higher interest rates.
Removed
Income Taxes: We recorded a tax benefit of approximately $2.9 million primarily due impairment losses on the trade names in the first quarter versus a tax expense of $3.7 million in 2022. Non-GAAP Same Day Revenues: Same Day Revenues are defined as a fifty-three week fiscal year ended January 1, 2023 (Fiscal 2022) revenues less five revenue days.
Removed
The Fiscal 2022 revenues of $298.4 million would be less $5.9 million for five revenue days resulting in Same Day Revenues of $292.5 million. Same Day Revenues increased $20.7 million (7.1%) to $313.2 million in Fiscal 2023. Same Day Revenues and GAAP revenues were equal for Fiscal 2023.
Removed
Non-GAAP Same Day Gross Profit: Same Day Gross Profit is defined as a fifty-three week fiscal year ended January 1, 2023 (Fiscal 2022) gross profit less five gross profit days. The Fiscal 2022 gross profit of $103.5 million would be less $2.1 million for five gross profit days resulting in Same Day Gross Profit of $101.5 million.
Removed
Our ability to continue to fund these items may be affected by general economic, competitive and other factors, many of which are outside of our control.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThrough the current period, we have been able to moderate the negative impacts of an inflationary market by adjusting our pricing model. Interest Rates Our Revolving Facility and Term Loan are priced at variable interest rates. Accordingly, future interest rate increases could potentially put us at risk for an adverse impact on future earnings and cash flows. 38
Biggest changeThrough the current period, we have been able to moderate the negative impacts of an inflationary market by adjusting our pricing model. Interest Rates At December 28, 2025, we had paid the balance on the existing credit agreement led by BMO using the proceeds from the sale of BGSF Professional.
Added
See “Note 11 - Debt” in the Notes to the Consolidated Financial Statements of this Annual Report on Form 10-K. An increase in interest rates would have no impact on our annual interest expense. 35

Other BGSF 10-K year-over-year comparisons