BGSF, Inc.

Good day, everyone. Welcome to the BGSF Inc. Fiscal 2025 First Quarter Financial Results Conference Call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions and comments after the presentation. As a reminder, this conference call is being recorded. Now I will turn the call over to Sandy Martin, three-part advisors. Please go ahead.

Good morning. Thank you for joining us today for BGSF's first quarter 2025 earnings conference call. With me on the call are Beth Garvey, Chair, President, and Chief Executive Officer, and Keith Schrader, Chief Financial Officer. After our prepared remarks, there will be a Q&A session. As noted, today's call is being webcast live. A replay will be available later today and archived on the company's investor relations page at investor.bgsf.com. Today's discussion will include forward-looking statements, which are based on certain assumptions made by the company under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by the forward-looking statements because of various risks and uncertainties, including those listed in the company's filings with the Securities and Exchange Commission. Management statements are made as of today, and the company assumes no obligation to update these statements publicly, even if new information becomes available in the future. Management will refer to non-GAAP measures, including adjusted EPS and adjusted EBITDA. Reconciliations to the nearest GAAP measures can be found at the end of our earnings release. I'll now turn the call over to Beth Garvey.

Thanks, Sandy, and thank you all for joining us today. We've continued our strategic alternative work in the first quarter and believe that the 12 to 18 month timeline we previously communicated remains realistic. This month marks the first 12 months since we communicated the launch of the strategic review. Our restructuring initiatives aimed to recalibrate costs by reducing direct and indirect expenses throughout headcount reductions as well as other measures were included in the strategic work. We will not be taking questions related to the strategic review today. Total revenues for the first quarter of 2025 were $63.2 million, down 8% for a prior year. Comprised professional down 4.2% and property management down 14.9% versus a year ago. Sequentially, professional segment revenues increased by 5.6% compared to the December quarter, while the property management division declined sequentially by 14.1%. During the quarter, business strengthened month over month, and this trend continued into April, which is higher than March's revenue. We generated adjusted EBITDA of $2.4 million with an EBITDA margin of 3.8%, and our adjusted EPS was $0.05 per share. For most U.S. businesses, tariffs did not impact first quarter results. However, uncertainties and concerns over the administration's trade policies created headwinds and project hiring and spendings. Although we expect clients to remain diligent, we are cautiously optimistic that consulting projects and business spending will continue to move forward. We are confident that we are well positioned in the markets we serve with a differentiated model that includes professional consulting and project resources, primarily in high-value IT and finance and accounting talent. We are also well equipped to meet the needs of property management companies, particularly as we approach the high season for apartment turnovers. In 2024, we restructured both divisions at streamlined costs to align management more closely with the producers, and we believe that this will benefit our results in 2025. Starting with the professional segment, we managed the consulting ends well in March and did not experience a typical first quarter drop-off that we have seen in prior years. We are focusing on team specializations in staffing and consulting, which support improved project efficiencies. Our build hours for the quarter were up approximately 5%, Margins in Q1 were about 32% in the professional division, down slightly on a sequential and on a year-over-year basis. Our permanent placement business got off to a strong start in the first few months of 2025, and we remain optimistic about the business momentum. Additionally, we were officially awarded the Workday Application Management Service Partnership. We expect this to expand our support sales in pre- and post-implementation projects. We also launched a newly developed product with Workday, focusing on compliance reporting support for colleges and universities. Finally, we signed 23 new logos in the first quarter of 2025, up over 60% from 14 in the 2024 first quarter. This business is moving in the right direction, and we are confident it is gaining tangible momentum. Shifting to property management, last year we eliminated direct and indirect operating costs in the segment to better align our expenses with projected revenues. We are entering our seasonally high sales period for property management, and the second quarter will serve as a barometer of the effectiveness of our strategic initiatives. We implemented key workflows and reorganization initiatives over the last nine months, including the completion of property management's Salesforce realignment last fall, as well as the expense reductions in the fourth quarter of 2024. Since rental and property management companies have faced challenges over the last 18 months due to the macroeconomic headwinds, our property management segment continues to operate under pressure. However, we believe the industry is finally shifting. U.S. apartment rental rates are starting to elevate again, which we expect will allow better economics for property management companies. Internally, our sales territory initiatives are expanding and our maintenance training platforms are industry specific. We continue to work on the exclusive and semi-exclusive property management service agreements that have resulted in 7% improvement over prior years. When property management companies need support, we want to be the preferred vendor and expand the number of service agreements is vital. We have strong relationships and a good reputation in the marketplace, and I'm optimistic yet cautious that our trained talent and high service levels will positively impact business trends in property management starting the second quarter of 2025. If macroeconomic uncertainties persist, we will continue to manage what we can control and prepare for this choppiness. After Keith walks through the detailed financial results for the quarter, I will return with closing remarks. Keith?