BGSF, INC.

For the period ended Dec 29, 2024. Filed Mar 17, 2025.

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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.

FY2024 · Filed Mar 17, 2025

BGSF$4.07+3.6%Stored close · as of Nov 10, 2026

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Contents

Item 8. Report of Independent Registered Public Accounting Firm

To the Board of Directors and

Stockholders of BGSF, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of BGSF, Inc., and its subsidiaries (the “Company”) as of December 29, 2024 and December 31, 2023, and the related consolidated statements of operations and comprehensive (loss) income, changes in stockholders’ equity, and cash flows for each of the three years in the period ended December 29, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 29, 2024 and December 31, 2023, and the results of their operations and cash flows for each of the three years in the period ended December 29, 2024, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 29, 2024, based on criteria established in 2013 Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated March 14, 2025 expressed an unqualified opinion.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

/s/Whitley Penn LLP

We have served as the Company’s auditor since 2013.

Plano, Texas

March 14, 2025

(in thousands, except share amounts)

December 29, 2024 · December 31, 2023
ASSETS
Current assets
	Cash and cash equivalents		$353			$—
	Accounts receivable (net of allowance for credit losses of $1,133 and $554, respectively)		40,194			56,776
	Prepaid expenses		2,485			2,963
	Other current assets		2,315			7,172
		Total current assets		45,347			66,911
Property and equipment, net		1,137			1,217
Other assets
	Deposits		2,092			2,699
	Software as a service, net		4,438			5,026
	Deferred income taxes, net		8,456			7,271
	Right-of-use asset - operating leases		4,973			5,435
	Intangible assets, net		24,517			30,370
	Goodwill		59,151			59,588
		Total other assets		103,627			110,389
	Total assets		$150,111			$178,517
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
	Accounts payable		$80			$95
	Accrued payroll and expenses		13,001			14,902
	Line of credit (net of debt issuance costs of $128)		—			24,746
	Long-term debt, current portion (net of debt issuance costs of $24 and $0, respectively)		3,801			34,000
	Accrued interest		223			438
	Income taxes payable		212			282
	Contingent consideration, current portion		2,662			4,208
	Convertible note		4,368			4,368
	Lease liabilities, current portion		1,573			2,016
		Total current liabilities		25,920			85,055
Line of credit (net of debt issuance costs of $770)		5,625			—
Long-term debt, less current portion (net of debt issuance costs of $198)		32,527			—
Contingent consideration, less current portion		—			4,112
Lease liabilities, less current portion		3,770			3,814
		Total liabilities		67,842			92,981
Commitments and contingencies
Preferred stock, $0.01 par value per share, 500,000 shares authorized, -0- shares issued and outstanding		—			—
Common stock, $0.01 par value per share; 19,500,000 shares authorized, 11,038,623 and 10,887,509 shares issued and outstanding, respectively, net of treasury stock, at cost, of 3,930 shares		53			52
Additional paid in capital		70,260			68,551
Retained earnings		11,956			16,933
		Total stockholders’ equity		82,269			85,536
		Total liabilities and stockholders’ equity		$150,111			$178,517

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

(in thousands, except per share and dividend amounts)

2024 · 2023 · 2022
Revenues, net		$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
Change in unrealized losses on cash flow hedges		—		—		(58)
	Other comprehensive loss		—		—		(58)
	Net comprehensive (loss) income		$(3,338)		$(10,223)		$25,303
Net (loss) income per share - basic:
	Net (loss) income from continuing operations		$(0.31)		$(0.95)		$1.08
Net income from discontinued operations:
	Income		—		—		0.12
	Gain on sale		—		—		1.69
	Income tax expense		—		—		(0.46)
	Net (loss) income per share - basic		$(0.31)		$(0.95)		$2.43
Net (loss) income per share - diluted:
	Net (loss) income from continuing operations		$(0.31)		$(0.95)		$1.07
Net income from discontinued operations:
	Income		—		—		0.12
	Gain on sale		—		—		1.69
	Income tax expense		—		—		(0.46)
	Net (loss) income per share - diluted		$(0.31)		$(0.95)		$2.42
Weighted average shares outstanding:
	Basic		10,896		10,766		10,427
	Diluted		10,896		10,766		10,473
Cash dividends declared per common share		$0.15		$0.60		$0.60

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

	Common Stock
	PreferredStock	Shares	Par Value	Treasury Stock Amount	Additional Paid in Capital	RetainedEarnings	Accumulated Other Comprehensive (Loss)/Income	Total
Stockholders’ equity, December 26, 2021	—	10,425	$104	$(38)	$61,876	$14,592	$58	$76,592
Share-based compensation from continuing operations	—	—	—	—	1,085	—	—	1,085
Share-based compensation from discontinued operations	—	—	—	—	7	—	—	7
Transaction fees related to sale of discontinued operations	—	—	—	—	35	—	—	35
Issuance of shares	—	254	3	—	3,338	—	—	3,341
Issuance of restricted shares	—	32	1	—	(1)	—	—	—
Issuance of ESPP shares	—	60	—	—	653	—	—	653
Exercise of common stock options	—	1	—	—	10	—	—	10
Cash dividends declared	—	—	—	—	—	(6,290)	—	(6,290)
Net income	—	—	—	—	—	25,361	—	25,361
Other comprehensive loss	—	—	—	—	—	—	(58)	(58)
Stockholders’ equity, January 01, 2023	—	10,772	108	(38)	67,003	33,663	—	100,736
Share-based compensation	—	—	—	—	1,029	—	—	1,029
Issuance of restricted shares, net of 2,085 shares of treasury stock	—	57	1	(19)	(23)	—	—	(41)
Issuance of ESPP shares	—	54	—	—	512	—	—	512
Exercise of common stock options	—	5	—	—	30	—	—	30
Cash dividends declared	—	—	—	—	—	(6,507)	—	(6,507)
Net loss	—	—	—	—	—	(10,223)	—	(10,223)
Stockholders’ equity, December 31, 2023	—	10,888	$109	$(57)	$68,551	$16,933	$—	$85,536

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (CONTINUED)

	Common Stock
	PreferredStock	Shares	Par Value	Treasury Stock Amount	Additional Paid in Capital	RetainedEarnings	Accumulated Other Comprehensive (Loss)/Income	Total
Stockholders’ equity, December 31, 2023	—	10,888	$109	$(57)	$68,551	$16,933	$—	$85,536
Share-based compensation	—	—	—	—	989	—	—	989
Issuance of restricted shares	—	51	1	—	(1)	—	—	—
Issuance of ESPP shares	—	61	—	—	459	—	—	459
Exercise of common stock options	—	39	—	—	262	—	—	262
Cash dividends declared	—	—	—	—	—	(1,639)	—	(1,639)
Net loss	—	—	—	—	—	(3,338)	—	(3,338)
Stockholders’ equity, December 29, 2024	—	11,039	$110	$(57)	$70,260	$11,956	$—	$82,269

2024 · 2023 · 2022
Cash flows from operating activities
Net (loss) income		$(3,338)			$(10,223)			$25,361
	(Income) from discontinued operations		—			—			(1,235)
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
	Depreciation		345			446			597
	Amortization		7,424			7,328			3,457
	Gain on sale of discontinued operations		—			—			(17,675)
	Impairment losses		—			22,545			—
	Loss on disposal of property and equipment		14			17			6
	Gain on contingent consideration		(1,452)			—			—
	Amortization of debt issuance costs		425			199			172
	Interest expense on contingent consideration payable		44			740			128
	Provision for credit losses		2,066			798			315
	Share-based compensation		989			1,029			1,085
	Deferred income taxes, net of acquired deferred tax liability		(1,185)			(5,075)			2,353
Net changes in operating assets and liabilities, net of effects of acquisitions:
		Accounts receivable		14,516			12,163			(14,793)
		Prepaid expenses and other current assets		5,164			(2,159)			(866)
		Deposits		705			(83)			1,503
		Software as a service		716			720			660
		Accounts payable		(14)			(492)			(228)
		Accrued payroll and expenses		(1,902)			(7,426)			1,633
		Accrued interest		(215)			165			171
		Income taxes receivable and payable		103			729			(1,202)
		Other current liabilities		—			(1,000)			(4,551)
		Operating leases		(26)			(35)			(127)
		Other long-term liabilities		—			—			(64)
	Net cash provided by (used in) continuing operating activities		24,379			20,386			(3,300)
	Net cash used in discontinued operating activities		—			—			(3,822)
	Net cash provided by (used in) operating activities		24,379			20,386			(7,122)
Cash flows from investing activities
Businesses acquired, net of cash acquired		—			(6,917)			(33,940)
Businesses sold		—			—			30,722
Capital expenditures		(1,640)			(2,597)			(5,680)
	Net cash used in continuing investing activities		(1,640)			(9,514)			(8,898)
	Net cash used in discontinued investing activities		—			—			(26)
	Net cash used in investing activities		(1,640)			(9,514)			(8,924)

2024 · 2023 · 2022
Cash flows from financing activities
	Net (payments) borrowing line of credit		(18,479)			2,312			9,781
	Proceeds from issuance of long-term debt		4,250			—			40,000
	Principal payments on long-term debt		(1,700)			(6,000)			(26,863)
	Payments of dividends		(1,639)			(6,507)			(6,290)
	Issuance of ESPP shares		459			512			653
	Issuance of shares under the 2013 Long-Term Incentive Plan		262			(10)			(1)
	Contingent consideration paid		(4,250)			(1,110)			(1,110)
	Payments of debt issuance costs		(1,289)			(69)			(236)
		Net cash (used in) provided by continuing financing activities		(22,386)			(10,872)			15,934
Net change in cash and cash equivalents		353			—			(112)
Cash and cash equivalents, beginning of year		—			—			112
Cash and cash equivalents, end of year		$353			$—			$—
Supplemental cash flow information:
	Cash paid for interest, net		$4,475			$4,668			$641
	Cash paid for taxes, net of refunds		$685			$1,378			$7,562

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