5/7/2026

speaker
Operator
Conference Operator

Good morning, everyone. Welcome to BGSF Inc. First Quarter Fiscal 2026 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, please press star and then one on a touchtone phone. To withdraw your question, please press star and then two. 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, ma'am.

speaker
Sandy Martin
Moderator, Three-Part Advisors

Good morning. Thank you for joining us today for the company's first quarter 2026 conference call to discuss our results. On the call with me are Kelly Brown, president and co-CEO, and Keith Schrader, co-CEO and CFO. After our prepared remarks, there will be a question and answer 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 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. Reconciliation to the nearest GAAP measures are available at the end of our earnings release. I'll now turn the call over to Keith Schrader.

speaker
Keith Schrader
Co-CEO and CFO, BGSF Inc.

Thank you, Sandy, and thank you all for joining us in today's call. As expected, BGSF's transition services agreement with Inspire successfully concluded on March 31st. Thus, beginning in the second quarter, we are now operating as a standalone company. This represents a meaningful inflection point for the business, enabling our leadership team and employees to dedicate their full attention to managing a best-in-class property staffing company and executing our 2026 strategic growth initiatives. Operating independently simplifies the organization's support structure and strengthens our ability to drive operational discipline, efficiency, and accountability. During the quarter, we made solid progress through three key directives that remain central to our strategy. First, we're leveraging insights from an independent consulting firm to support incremental top-line revenue. Kelly will provide an update on several encouraging developments following my remarks. Second, we have resized our general and administrative cost structure to align with our standalone property staffing business, and we'll continue to look for opportunities to optimize our cost structure. We continue to estimate ongoing G&A costs at approximately $12 million annually, including roughly $2 million in public company costs, reflecting a more appropriate and sustainable cost base. Third, informed by an external organizational and incentive compensation study, we took targeted actions late in the first quarter to reduce selling costs. While the timing limited the near-term impact, we expect the full benefit of these actions to be realized beginning in the third quarter of this year. On an annualized basis, these initiatives are anticipated to generate approximately $1 million in cash cost savings. These actions reinforce our focus on execution, margin improvement, and progress toward sustained profitability. With that, I'll turn it over to Kelly to walk through the strategic initiatives currently underway.

Disclaimer

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