BGSF, INC.
For the period ended Mar 29, 2026. Filed May 6, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 29, 2026 · Filed May 6, 2026
BGSF$3.44-2.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-28; filed 2025-11-07.
0001474903-25-000142
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-29; filed 2026-05-06.
0001474903-26-000040
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 65 previous paragraphs and 53 current paragraphs.
33 unchanged; 10 reworded; 10 added; 18 removed; 4 previous and 0 current paragraphs rearranged.
Tables are not compared: 8 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
Revenues: Revenues were relatively unchanged compared to the prior year quarter end.
Current report
Income Tax Benefit: Income tax benefit decreased $0.4 million due to a lower net loss and a lower effective tax rate in Fiscal 2026.
Current report
1 We capitalize direct costs incurred in cloud computing implementation from hosting arrangements, which are reported as a Software as a service and are expensed as incurred in selling, general, and administrative expenses.
Current report
2 Adjusted EBITDA from discontinued operations includes $1.4 million of depreciation and amortization and $0.5 million of income tax expense.
Current report
Cash flows from investing activities related to continuing operations consisted of purchases for short-term marketable securities and proceeds from the sale of BGSF Professional.
Current report
For Fiscal 2026, we purchased $5.0 million of short-term investments partially offset by $0.9 million of additional funds received for the final settlement of working capital from the sale of BGSF Professional.
Current report
For Fiscal 2026, we repurchased $0.9 million of our common stock under the Company's stock buyback plan. For Fiscal 2025, we borrowed $1.6 million on our revolving credit facility for increased operating needs and we paid down $1.0 million on our term loan commitment.
Current report
None.
Current report
Short-Term Investments
Current report
We invest in marketable securities that are classified as trading securities based on the expected holding period and reported at fair value using observable market data. Realized and unrealized gains and losses, interest income, and dividends are recognized as earned into earnings within interest income (expense), net in the consolidated statements of operations in accordance with Accounting Standards Codification (“ASC”) Topic 320, Investments in Debt Securities.
Removed paragraphs (18)
Previous report
Revenues: Revenues decreased approximately $2.9 million (9.8%). The decrease was primarily due to a 12.0% 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.
Previous report
Income Tax (Expense) Benefit: Income tax (expense) benefit increased $1.0 million primarily due to a $1.5 million valuation allowance recorded in Fiscal 2025 against certain net deferred tax assets to offset future tax benefits that may not be realized.
Previous report
Revenues: Revenues decreased approximately $8.8 million (11.0%). The decrease was primarily due to a 12.3% reduction in billed hours, which was driven by a combination of lower demand from cost pressures at the property management companies and increased competition in certain markets with partial offsets by higher property owners and permanent placement business, average bill rate, and as well as multi-family property owners.
Previous report
Interest Expense, net: Interest expense increased $1.1 million (30.6%) primarily from the adjustment of amortization of debt issuance costs from the BMO May 2025 Waiver and Amendment and then paying the balance on the existing Term Loan and Revolving Facility using the proceeds from the sale of BGSF Professional.
Previous report
Income Tax Benefit: Income tax benefit increased $0.1 million primarily due to increased net loss before taxes and a higher effective tax rate in Fiscal 2025, which was partially offset by a $1.5 million valuation allowance recorded Fiscal 2025 against certain net deferred tax assets to offset future tax benefits and lower state tax expense.
Previous report
Cash provided by investing activities from continuing operations consists primarily of net proceeds from the sale of BGSF Professional of approximately for $91.5 million, which was partially offset by minimal capital expenditures.
Previous report
In Fiscal 2025, capital expenditure were minimal. In Fiscal 2024, we made capital expenditures of $1.1 million primarily related to the continued information technology improvements.
Previous report
For Fiscal 2025, we paid off our Term Loan, Revolving Facility, and Convertible Note of $32.7 million, $10.2 million, and $4.4 million, respectively. For Fiscal 2024, we reduced our Revolving Facility by $17.2 million, we borrowed on a delayed term loan and made a payment of $4.3 million of contingent consideration related to the Arroyo Consulting acquisition, we disbursed $1.6 million in cash dividends on our common stock, and we paid down $0.9 million on the Term Loan.
Previous report
Non-Cash Transaction
Previous report
We accrued $22.4 million for the disbursement of our September 30, 2025 cash dividends of our common stock.
Previous report
On July 16, 2019, we entered into a Credit Agreement, which would have matured on July 16, 2024, led by BMO, as lead administrative agent, lender, letters of credit issuer, and swing line lender. 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 $40.0 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.
Previous report
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”). In July 2024, we exercised the option to borrow on a delayed draw term loan of $4.3 million related to payments on the Arroyo Consulting Acquisition's working capital “true up”, hold backs, and year one contingent consideration. 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.
Previous report
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 Applicable Margin, a reduction of the swing line sublimit to zero, and limiting the aggregate revolving credit borrowings to $8.0 million. 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. 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.
Previous report
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. 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.
Previous report
Letter of Credit
Previous report
In conjunction with the EdgeRock acquisition, we entered into a standby letter of credit arrangement, which expired, for purposes of protecting a lessor against default on lease payments. 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.
Previous report
Goodwill
Previous report
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. We review goodwill for impairment annually during the fourth quarter or whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable.
Reworded paragraphs (10)
Previous wording
Gross Profit: Gross profit decreased approximately $1.0 million (9.7%), which is in line with revenues with a partial offset by higher permanent placement business that have no cost of service.
Current wording
Gross Profit: Gross profit decreased approximately $0.2 million (2.0%), which is in line with revenues with a partial offset by higher permanent placement business that have no cost of service.
Previous wording
Selling, General, and Administrative Expenses: Selling, general, and administrative expenses decreased $1.1 million (10.0%), primarily due to reduced compensation costs on less headcount. The components of selling, general, and administrative expense are detailed in the following table:
Current wording
Selling, General, and Administrative Expenses: Selling, general, and administrative expenses decreased $0.2 million (2.2%). The components of selling, general, and administrative expense are detailed in the following table:
Previous wording
Depreciation and Amortization: Depreciation and amortization charges increased $0.5 million (145.2%) primarily due to higher amortization of intangible assets for computer software.
Current wording
Depreciation and Amortization: Depreciation and amortization charges decreased $0.2 million (52.0%) primarily due to lower amortization of intangible assets for computer software.
Previous wording
Interest Expense, net: Interest expense, net increased $0.3 million (28.5%) primarily from the adjustment of amortization of debt issuance costs from paying the BMO Bank, N.A. (“BMO”) balance on the existing Term Loan and Revolving Facility using the proceeds from the sale of BGSF Professional.
Current wording
Interest Expense, net: Interest expense, net decreased $1.1 million (99.7%) due to the payoff of the BMO Bank, N.A. (“BMO”) balance on the existing term loan commitment, and revolving credit facility using the proceeds from the sale of BGSF Professional in September 2025.
Previous wording
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”). 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 declared a $2.00 per share special dividend which was paid on September 30, 2025, which means we currently hold approximately $20.0 million in available cash to fund the business. Our primary uses of cash are payments to field talent, team members, related payroll liabilities, operating expenses, capital expenditures, cash interest, cash taxes, contingent consideration, and debt payments. 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. 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.
Current wording
Our primary sources of liquidity were cash generated from operations and borrowings under an agreement with BMO that was paid on September 8, 2025. We paid a $2.00 per share special dividend on September 30, 2025, which means we currently hold approximately $19.0 million in available cash and short-term investments to fund the business. Our primary uses of cash are payments to field talent, team members, related payroll liabilities, operating expenses, capital expenditures, cash interest, cash taxes, contingent consideration, and note payments. We believe that cash on hand, short-term investments, and 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. 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.
Previous wording
Cash provided by operating activities from continuing operations consists of net loss adjusted for non-cash items, including depreciation and amortization, share-based compensation expense, interest expense, provision for credit losses, and the effect of working capital changes. The primary drivers of cash inflows and outflows are accounts receivable and accrued payroll and expenses.
Current wording
Cash provided by operating activities from continuing operations consists of net loss adjusted for non-cash items, including depreciation and amortization, share-based compensation expense, provision for credit losses, and the effect of working capital changes. The primary driver of cash inflows and outflows are accounts receivable, transition services payable, escrow receivable, and accounts payable.
Previous wording
During Fiscal 2025, net cash used in operating activities from continuing operations was $1.8 million, a decrease of $18.2 million compared with net cash provided by operating activities from continuing operations of $16.4 million for Fiscal 2024. The decrease is primarily due to decreased receipts on accounts receivable and partially offset by decreased payments on accrued payroll and expenses.
Current wording
During Fiscal 2026, net cash provided by operating activities from continuing operations decreased by $1.0 million compared to Fiscal 2025. The decrease is primarily due to decreased receipts on accounts receivable and decreased payments on accounts payable.
Previous wording
Cash flows from financing activities from continuing operations consisted principally of borrowings and payments under our credit agreement and payment of dividends.
Current wording
Cash flows from financing activities related to continuing operations consisted principally of borrowings and payments under our credit agreement and repurchases of our common stock.
Previous wording
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.
Current wording
On September 8, 2025, we paid the balance on the existing term loan commitment and revolving credit facility with BMO using the proceeds from the sale of BGSF Professional and concurrently closed the facility.
Previous wording
The current provision for income taxes represents estimated amounts payable or refundable on tax returns filed or to be filed for the year. We recognize any penalties when necessary as part of selling, general, and administrative expenses. Deferred tax assets and liabilities are recorded for the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and amounts are classified net as noncurrent in the consolidated balance sheets. Deferred tax assets are also recognized for net operating loss and tax credit carryovers. When appropriate, we will record a valuation allowance against net deferred tax assets to offset future tax benefits that may not be realized. We follow the guidance of Accounting Standards Codification (“ASC”) Topic 740, Accounting for Uncertainty in Income Taxes.
Current wording
The current provision for income taxes represents estimated amounts payable or refundable on tax returns filed or to be filed for the year. We recognize any penalties when necessary as part of selling, general, and administrative expenses. Deferred tax assets and liabilities are recorded for the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and amounts are classified net as noncurrent in the consolidated balance sheets. Deferred tax assets are also recognized for net operating loss and tax credit carryovers. As of March 29, 2026 and December 28, 2025, the Company carried a valuation allowance of $1.5 million. We follow the guidance of ASC Topic 740, Accounting for Uncertainty in Income Taxes.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
Thirty-nine Week Fiscal Period Ended September 28, 2025 (“Fiscal 2025”) Compared with Thirty-nine Week Fiscal Period Ended September 29, 2024 (“Fiscal 2024”)
Previous report — wording carried elsewhere
Gross Profit: Gross profit decreased approximately $4.0 million (13.5%) which is in line with revenues with a partial offset by higher permanent placement business that have no cost of service.
Previous report — wording carried elsewhere
Selling, General, and Administrative Expenses: Selling, general, and administrative expenses decreased $0.6 million (1.7%) primarily due to reduced compensation costs on less headcount. The components of selling, general, and administrative expense are detailed in the following table:
Previous report — wording carried elsewhere
Depreciation and Amortization: Depreciation and amortization charges increased approximately $0.4 million (40.1%) primarily due to higher amortization of intangible assets for computer software.