BG Staffing Inc Aktie

Good day, and welcome to the BGSF, Inc. Second Quarter Fiscal 2026 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Sandy Martin of Three Part Advisors. Please go ahead.

Good morning. Thank you for joining us today for the company's second quarter 2026 conference call to discuss our results. On the call with me are Kelly Brown, Co-CEO and President; and Keith Schroeder, Co-CEO and CFO. 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 investors.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's 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 are available at the end of our earnings release.

I'll now turn the call over to Keith Schroeder.

Thank you, Sandy, and thank you all for joining us today in our call. The second quarter of 2026 represented our first reporting period as a stand-alone company following the conclusion of the TSA with INSPYR at the end of March. We use this transition as an opportunity to further streamline our front and back-office operations, realign our organization as needed and establish a cost structure better aligned with our stand-alone property staffing business.

During the second quarter, we incurred $385,000 in nonrecurring strategic restructuring costs, which were included in our quarterly results. We also completed our initiative to simplify our support structure during the quarter, strengthening our focus on operational discipline, efficiency and accountability. At the same time, we are executing initiatives designed to accelerate revenue growth and expand our long-term opportunities.

We continue to assess our general and administrative cost structure and identify opportunities to enhance operational efficiency. We continue to estimate ongoing G&A expenses of approximately $12 million, including approximately $2 million in public company costs. We will continue to identify and action cost reduction efforts in our administrative costs beyond those already identified. Building on recommendations from an external organizational and incentive compensation study, we began implementing targeted actions late in the first quarter and completed those actions during the second quarter. As a result, the full benefit of these initiatives will be reflected starting in our third quarter results.

With that, I'll turn the call over to Kelly to walk through the strategic initiatives currently underway.

Thank you, Keith, and good morning, everyone. Although we have seen optimism around rent growth and reduced concessions in pockets of the country, higher interest rates and elevated operating costs continue to pressure property owners' cash flow. As a result, many customers remain focused on cost control and reduced discretionary spending on temporary staffing. This cautious spending environment has led to lower-than-expected demand for BGSF workforce solutions, resulting in revenue being below expectations. Keith will discuss these market conditions and their financial impact in greater detail later in the call.

Operationally, we continued to make meaningful progress across several key performance initiatives during the quarter. Our focus on optimizing fill rates is producing encouraging results, supported by enhanced recruiting processes, expedited candidate matching and greater efficiency across our delivery teams. We also continue to strengthen our onboarding process, reducing friction for both clients and candidates while accelerating the time from offer acceptance to successful placement. These improvements are helping us deliver better overall experience and drive stronger workforce outcomes.

In addition, we remain focused on expanding our PropTech offering. After a successful 6-month ramp-up of the program over the first half of the year, we expect this business to successfully build its revenue stream and contribute approximately 1% to 2% of revenue in 2027. While still in the early stages of development, we are encouraged by client interest and ongoing execution efforts, and we believe PropTech represents an attractive long-term growth opportunity that complements our broader workforce solutions platform.

We executed very successful engagements at both the National Apartment Association and BOMA International Conferences during the quarter. These events provided valuable opportunities to strengthen customer relationships, engage with prospective clients and expand our sales pipeline. We are optimistic about the quality of the leads generated and believe these efforts position us well to support revenue growth in the second half of the year.

We are also excited to announce that Tara Gerberich, VP of our Strategic Account program, one of our own, was awarded the National Supplier of the Year at the National Apartment Association's Excellence Awards. This is the highest individual recognition that is awarded to a supplier by NAA on an annual basis, and we are proud and excited for Tara's well-earned recognition at this conference.

Now I will turn the call back to Keith to cover our second quarter financial results.

Thank you, Kelly. As a reminder, our comments today refer to continuing operations unless otherwise noted. Our second quarter revenue was $22.3 million, 5.1% down from the prior year, primarily due to lower billed hours driven by reduced customer demand as property owners and property management companies continue to manage cost pressures as well as increased competition in select markets.

Market conditions remained challenging during the quarter as higher interest rates, elevated operating expenses and continued pressure on property level cash flows contributed to cautious spending decisions across our customer base. While demand was soft during the quarter, recent staffing industry analyst commentary and brand stats results point to improving conditions across the staffing industry, which may support a gradual recovery over the remainder of the year.

Gross profit for the second quarter was $7.9 million, slightly down from the $8.4 million achieved in the prior year period. Our gross margin was 35.5%, slightly lower than prior year's 35.8% we believe our gross margin for the year will remain in the 36% range. SG&A expenses were $8.9 million for the quarter compared to $12.6 million a year ago, a 29% reduction. This quarter included $385,000 of strategic review costs compared to $1.6 million in the prior year period.

Adjusted EBITDA for the second quarter was a loss of $298,000, an improvement compared to the $1.2 million loss in the prior year period. As our revenue strengthened during the seasonally stronger Q3 time period, the additional gross profit will positively affect our EBITDA, along with the previously discussed cost reduction actions we implemented during the quarter. On a GAAP basis, for Q2, we reported net loss from continuing operations of $0.08 per diluted share compared to a net loss of $0.41 per diluted share in the prior year. Adjusted EPS loss was a loss of $0.02 per share from both continuing operations and on a consolidated basis.

We exited the quarter maintaining a strong cash and cash equivalents position of $18.2 million, which includes short-term investments. Our cash flow from operations was slightly negative $160,000, driven by working capital requirements, including a seasonal revenue uplift of $1.4 million. We also repurchased 56,256 shares of common stock at an average price of $5.20 per share, which totaled approximately $293,000 for the quarter. As of June 28, 2026, we have approximately $2.3 million available for repurchases.

We expect full year 2026 revenue to remain relatively consistent with 2025 levels. As Kelly outlined, we continue to execute against our strategic priorities, including driving operational excellence through recruiting and onboarding enhancements, expanding our PropTech offerings, strengthening customer relationship and sales pipeline development through industry engagement and reinforcing our leadership position within property management.

Kelly and I want to thank our employees for their dedication and resilience during this time. We look forward to updating investors on our progress each quarter. Please reach out after this call if you'd like to schedule a meeting.

With that, we would now like to open the call for questions. Operator?

[Operator Instructions] Your first question today will come from Bill Dezellem of Tieton Capital.

Let's start, if we could, please, with the strategies that you have to shorten the time line for placement of staff members. Would you walk through the initiatives that you have executed on? How strongly your customers are responding to that? And then what incremental initiatives you may still have ahead?

Sure. Bill, good to hear from you. A couple of things. First, in the second quarter, we were really focused on, I believe, as we previously commented on the upcoming initiative involving using the data that we have related to the candidate profile and using our technology to be able to quickly match that to the jobs that we have available. So the development around that continued in Q2 and that we'll really start seeing more of the benefit of that going into the third quarter.

The second quarter initiative that we really focused on is around our hiring volume. I believe we previously mentioned how leveraging AI and really reaching more candidates in the marketplace. And so in the second quarter, we were able to successfully ramp up the volume of hiring that we were able to execute, which clearly benefits the customers, more candidates available for the placements that they list with us. So hiring was the main initiative through Q2. And then going into Q3, we're looking at, again, leveraging technology in a couple of different ways to match those skill profiles of the candidates more quickly to the profile of the jobs that our customers are listing with us.

And how much -- how large of an impact do you anticipate that to have in the second half? I don't have a feeling on how meaningful that will be to your customers.

Yes. So the way that we plan to measure that is to look at our fulfillment rates on our placements. So we can measure for every, for example, 100 placement requests that come in, how many of those get filled in what amount of time. So the goal in Q3 is to be able to improve that fulfillment rate by 1 to 2 percentage points to start to ramp that up. So we'll measure that throughout Q3. I hate to put specific tie specific revenue numbers to that now for the third quarter, but the goal and how we measure that is going to be in the percentage of that fill rate that we achieve within that first day of the placement being listed with us.

That's really helpful. And then in the past, you have talked about using AI to interview candidates for positions. Is that ongoing? And are you finding any pushback to humans talking to nonhumans in an interview process?

That's a great question, Bill. I can take that one as well. About half of our candidates are engaging with our AI interviewer, and that's a good kind of benchmark that we've set is to say, hey, if half of the candidates will talk with the AI agent, we have the other half prepared to engage with obviously our human recruiters. We've actually -- with the seasonality of our business, we added to our human recruiter workforce over the higher volume months so that those that show signs that they don't want to engage with the AI recruiter can quickly get routed to a human that we cannot lose, we still capture those candidates that don't care to engage. But so far, our data shows it's been about half and half, those that want to engage versus those that show signs that, hey, this isn't what I prefer, can I get to a human?

And then with that split, have you found that placement rates are any different between the 2?

We have not found that placement rates are different between the 2. Now I will say that when candidates engage with the AI recruiter, that does expedite their onboarding process. They can more quickly possibly get to onboarding because it's automated and AI hiring agents can work 24/7 versus our human folks. We like to give a bit of a break after their workday. So we do see that whenever they're engaging with the AI agent that can get them a little bit more quickly to onboarding. However, the volume of candidates that get put to a placement, we haven't necessarily seen a big difference because keep in mind, we do still have our human recruiters that are kind of that end decision maker, so to speak, right? So the AI doesn't make decisions on who we hire and who we don't. That is absolutely still where our sort of human in the loop component comes into play.

Great. And then the final question for now is the PropTech initiative. Would you please discuss in more detail your -- kind of what you are seeing there in terms of, I guess, market size would be what we'd be interested in.

I think we're still learning what the true market size is going to be for us. And I say that because the first 6 months of launching that business was spent just doing a lot of listening to our customers to see. PropTech can be a widely used phrase that can mean a lot of different things. There's a lot of different ways that technology is leveraged clearly in the property management space. So the first 6 months has been a lot of business development and a lot of listening to what area of PropTech seems to be the biggest pain point for our customers that our contractors can assist with.

So in the early few months, definitely promising. A very strong pipeline has been built by that team. So now they're really just focused on, okay, we know in that business, it's not as fast paced of a close like staffing. Staffing moves very quickly whenever they need a person, it's a very quick, let's get the placement to the site. PropTech is a longer runway. You have the different phases of scoping out the project going through and finalizing what those terms are going to look like.

So now we're going through that cycle of, hey, let's get more of our contractors dispatch than we already have to start engaging in some of those projects. So I think as we continue to learn what the scope that we're hearing from our customers is, we'll be able to more clearly identify, hey, what is the real potential here. I think we'll be able to give a little bit more detail and guidance on that over the next couple of quarters as we really fine-tune hey, based on this feedback, what direction do we see this business really staying more narrowly focused on.

That is really helpful. And actually, I do have one additional question. Circling back to the staffing side, have you seen signs with rents improving and fewer incentives for move-ins? Essentially a healthier industry that your candidate -- not your candidate list, but your prospective customer list is growing and that there are more firms that maybe aren't quite ready to engage in hiring, but that are interested in conversations, essentially your prospect pipeline growing is really the way to ask that.

Sure. The great thing is, Bill, certainly, the usage of staffing is still there. Our communities out there still need people. What we're really working with our customer partners on is, hey, let's figure out how we can best have those needs fit into the limited budget that you have. So year-over-year, we're seeing the sheer volume of requests actually up whenever you compare year-over-year. However, how many hours of work that translates to is what we're really having to work very carefully on with our customers because of that limited budget piece that we mentioned earlier in the call.

So short answer to your question, we've already seen just the sheer volume of requests improving year-over-year. However, where we're having to really work is, okay, how many hours of work can that translate to? And that might be something that we need to see improve as we continue on in the industry seeing those glimpses of optimism with the rent improvement and with pockets where we're seeing concessions go down, et cetera, et cetera, and that will loosen up some of those operating dollars that the communities can put towards services such as ours.

Kelly, does that imply that there is a backlog of work that is that is taking -- that is building up. And maybe this is my ignorance to not understanding the business well. But if there's an air conditioner that's out, that needs to be replaced right now if it's summer. We understand that. But is there -- are there other activities that your candidates work on that can be deferred. And therefore, this idea that the volume of request is up indicates that there is a backlog of deferred work?

I'm hesitant to believe that there is a large backlog of work, Bill, because feedback from customers also indicate that, hey, let's be very careful in how we can leverage the team members that we have if they can maybe take a team member that would have typically worked at one community and have them work at maybe 2 or 3 others that are within a reasonable proximity. So as they sort of float that staff around their portfolio, that's a strategy that's been used to try to, again, be mindful of the dollars that are going out for help that we may fill in with.

So I think, frankly, our operators are making it work. They're making it happen maybe with more limited resources. So could there be maybe a small backlog of work out there? Possibly, but I don't want to necessarily assume that because I really think our operators are just doing what they can to -- with the resources they have, keep up as much as possible.

And the next question today will come from Michael Taglich of Aegis Capital.

Quick question. You broke out strategic alternatives review. Could you give me a little more detail on that spend?

Yes. That was restructuring costs, Mike, because there's things like when we finished the TSA in March, we had several people. And so those costs fell into Q2. There's some consulting type costs that were part of the studies that we had done early part of the year. There was a final bill came through there. So those were the types of costs that came through in the quarter.

Okay. And from a -- from a go-forward standpoint, do you have any thoughts about how that spend is going to work? So that's all restructuring costs basically?

Yes. Yes, it is. So going forward, that cost would be very small.

Okay. All right. And the -- does management discuss at all any additional opportunities to bring more of the gross margin down to the bottom line from a cost reduction standpoint?

Yes, that is something I think I mentioned in my remarks, we are always looking at ways to bring down costs, whether it be people-wise, whether it be software-wise, both in G&A and in selling. So yes, while we made a lot of steps so far in the last, call it, 6 to 9 months, we are constantly looking at ways to bring those costs down, and we act on them all the time.

At this time, we will conclude our question-and-answer session. I'd like to turn the conference back over to Kelly Brown for closing remarks.

Thank you for your time today. We appreciate your interest in BGSF and look forward to providing an update on our third quarter in a few months. Have a great day.

Thank you all.

The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect your lines.

Good morning, everyone. Welcome to BGSF, Inc. First Quarter Fiscal 2026 Earnings Conference Call. [Operator Instructions] 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.

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 Schroeder, 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 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's 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 Schroeder.

Thank you, Sandy, and thank you all for joining us in today's call. As expected, BGSF transition services agreement with INSPYR successfully concluded on March 31. Thus, beginning in the second quarter, we are now operating as a stand-alone 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 support structure and strengthens our ability to drive operational discipline, efficiency and accountability.

During the quarter, we made solid progress through 3 key directives that remain central to our strategy. First, we are 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 stand-alone 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 will limit 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 towards sustained profitability.

With that, I'll turn it over to Kelly to walk through the strategic initiatives currently underway.

Thank you, Keith, and good morning, everyone. To start, we're proud to share that BGSF was recognized as one of the 2026 Best Places for Working Parents awarded by the Staffing Industry Analysts organization or SIA. This recognition reflects our ongoing commitment to supporting working families through flexible people-first policies that strengthen engagement and retention across the communities that we serve.

We were also recognized by SIA as one of the top 100 largest staffing firms in the U.S. Operationally, we completed the BG Staffing rebrand in the first quarter, a pivotal step in sharpening our market positioning and building a more scalable technology-enabled digital lead generation platform. By clarifying our brand positioning and strengthening our digital marketing foundation, we are seeing improved SEO performance, a larger and more efficient funnel and deeper client engagement. We are also encouraged by the early results of our technology investments.

Today, we are operating in both recruiting and sales AI capabilities, and we believe we have established a balanced model that combines advanced technology with human expertise as the market continues to evolve. These capabilities are improving efficiency and accelerating speed to fill for our clients while enhancing the candidate's experience as well. Our AI-enabled recruiting tools have already streamlined interviews for more than 7,500 candidates, strengthening compliance and security while expediting critical steps such as identity verification. The result is a materially faster time to fill with higher qualified candidates.

On the sales side, our AI sales assistant platform has successfully converted inquiries into new clients, and our relationship teams then step into arrange and schedule delivery. Taken together, these initiatives reinforce our focus on delivering better outcomes for clients and candidates, and we believe this continued focus on the end user experience will continue to position BG Staffing as a differentiated workforce solutions partner.

As a part of our organic growth strategy, we launched our PropTech consulting services through our strategic partnership with Yardi. While still early, the ramp has been encouraging. We've begun building a consulting pipeline for PropTech services, secured initial engagements and expanded our Yardi consultant network. This opportunity is being driven by increasing complexity in implementation and integrations, the demand for our expertise in evaluation and simplification of existing tech stacks and continued consolidation of management portfolios within the property management industry.

PropTech presents a complementary adjacent market to our core staffing business and further strengthens our differentiated position across multifamily and commercial property management. If execution continues as planned, we believe PropTech could represent approximately 1% to 2% of our total revenue this year. Overall, we are making steady progress advancing our operating model and strengthening our competitive differentiation. As our AI capabilities continue to evolve, we expect further efficiency gains through recruiting sales and service delivery.

Our initiatives are beginning to gain momentum, positioning the business for top line growth and improved financial performance, which Keith will discuss shortly. As previously mentioned last quarter, we also look forward to participating in the 2 leading rental housing and commercial real estate industry events in June, hosted by the National Apartment Association as well as BOMA International, which will be valuable platforms for in-person customer engagement and lead generation.

With that, I will turn the call back to Keith to cover our first quarter financial results.

Thank you, Kelly. As a reminder, our comments today refer to continuing operations unless otherwise noted. First quarter revenue was $20.9 million. While revenue was flat year-over-year, this was a positive change compared to the prior 2 fiscal years. Further, we believe severe nationwide weather and widespread power outages in late January and February affected demand during the quarter. Our gross profit for the first quarter was $7.4 million, slightly down from the $7.6 million achieved in the prior year period.

Our gross margin was 35.5% down from 36.2% last year. We believe our gross margin for the full year will trend closer to 36%. SG&A expenses were $8.8 million for the quarter compared to $9 million a year ago. This quarter includes $483,000 of strategic review costs compared to $21,000 in the prior year period. In addition, income from discontinued operations included a $918,000 gain from the final settlement of net working capital from the sale of the Professional division, which is a cash inflow to our financial results.

Our adjusted EBITDA for the first quarter was a loss of $541,000, an improvement compared to the $1 million loss in the prior year period. As our revenue strengthened during seasonally stronger Q2 and Q3 time periods, the additional gross profit will positively affect our EBITDA as well as the previously discussed cost reduction actions we implemented during the quarter. On a GAAP basis, we reported a net loss from continuing operations of $0.13 per diluted share compared to an adjusted EPS loss from continuing operations of $0.07 per share. Consolidated adjusted EPS for the quarter was a positive $0.01 per share.

We exited the quarter with a strong debt-free balance sheet and remain committed to disciplined capital management and cost control. Our cash flows from operations in the first quarter were essentially flat in a seasonally low revenue quarter. We also repurchased 170,862 shares of common stock at an average price of $5.11 per share, which totaled approximately $873,000 for the quarter.

We do continue to expect full year 2026 revenue to grow in the low to mid-single-digit range compared to 2025. As Kelly outlined, our teams are focused on executing our property management staffing strategy, advancing our growth initiatives and building momentum across the business. Completing the divestiture of Professional required a significant effort across the organization, and Kelly and I want to thank our employees for their commitment and perseverance throughout the process.

From an investor engagement perspective, we will present at the East Coast IDEAS Conference on June 11, participating in a live presentation and one-on-one meetings. We look forward to updating investors on our progress each quarter. Please reach out after this call if you would like to schedule a follow-up meeting.

With that, we would now like to open the call for questions. Operator?

[Operator Instructions] The first question will come from Michael Taglich with Taglich Brothers.

Just a quick question on the stock buyback. Have you been able to buy any blocks of stock, especially recently or no?

We are in a 10b5-1 Plan. So we really don't know that. So it's the broker that is in charge of that. But I don't think so.

[Operator Instructions] The next question will come from George Melas with MKH Management.

Could you guys give us a little bit of sense of how you see the market? It seems like the market was a bit tight and in a downturn for a couple of years. How do you see that evolving? What did you see in so far in '26? And how -- what are your expectations for the rest of the year from a market perspective?

Certainly. It's been certainly an interesting couple of years. We've had to really work with our clients as they navigated a couple of different things, heightened insurance costs, kind of stubborn interest rates, that does impact how they operate for various reasons. And I think some of that pressure does continue. However, I also think that we've seen a lot of adjustment to just knowing what these costs are, and the impact they can have.

So while we've seen some loosening in certain pockets, I just think we need to expect it to kind of stay static for a little bit longer, frankly. But I also think that there's been a lot of adjusting to what impact does that have on their operational strategy and where does staffing fit into that. So while I certainly don't think that it's loosened up significantly, I do think a lot of adjusting has happened that does have a positive impact on our customers' ability to leverage services such as ours ongoing.

Okay. Great. And then maybe just a second question. From a tech perspective, the company has invested quite a bit of tech in tech in the last, let's say, 3, 4, 5 years. And of course, it's an evolving process. It's a never-ending process. But how comfortable are you right now with your current tech in particular, to recruit your staff and to meet the need of your customers?

It's a great question. We're really comfortable with the technology that we have with regards to our ability to recruit. We are able to leverage AI in various ways to get our candidates, the response time to our candidates. much quicker. That said, now that we are past the TSA, we continue to go through a review of every piece of technology that we are using. Is it the right technology for our business as a stand-alone business? And where are there any sort of cost optimization efforts that we can make.

So I would say that we're comfortable right now with the technology that we have with regards specifically to recruiting, but know that we will continue to evaluate now that we do operate as a stand-alone company.

This concludes our question-and-answer session. I would like to turn the conference back over to Kelly Brown for any closing remarks.

Thank you for your time today. We appreciate your interest in BGSF and look forward to providing an update on our second quarter in a few months. Have a great day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good morning, everyone. Welcome to the BGSF Inc. Fiscal 2025 Third (sic) [ Fourth ] Quarter Financial Results Conference Call. [Operator Instructions] 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 2025 fourth quarter and full year earnings conference call.

On the call with me are Keith Schroeder, Co-CEO and CFO; and Kelly Brown, President and Co-CEO. 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's 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 are available at the end of our earnings release.

I'll now turn the call over to Keith Schroeder. Keith?

Thank you, Sandy, and thank you all for joining us in today's call. Fiscal 2025 was a transformational year for the company. After the sale of the Professional division, we retired all outstanding debt, returned a meaningful amount of capital to shareholders via a $2 per share special dividend and announced a $5 million share buyback. As a result of those actions, today, we are a solely focused property management staffing organization, debt-free with a strong cash position.

The fourth quarter was a very busy quarter for our team. As discussed in our third quarter earnings call, there are 3 major directives where we have been strategically focused. First, we utilized the findings from an independent consulting firm to help shape our top line revenue initiatives as we finalize our budget for 2026 and beyond. Kelly will discuss those in more detail following my remarks.

Second, we continue to take aggressive actions to resize our general and administrative expenses to be more in line with our stand-alone property staffing business. We are now estimating ongoing G&A costs to be in the $12 million range, with public company costs estimated at approximately $2 million.

And third, we are utilizing results of an external organizational and incentive compensation study to take further actions to reduce selling and G&A costs, primarily in the selling cost area. Those actions have been identified, and we started taking action in late Q1 with the full effect benefiting us in Q3 of this year. The annualized cost savings are approximately $1 million.

Additionally, we continue to operate under the TSA agreement following the sale of the Professional division. That process is going very well and expect to wrap it up by the end of Q1.

With that, I will now turn it over to Kelly to cover the strategic initiatives that are underway.

Thank you, Keith, and good morning, everyone. Before we discuss our fourth quarter sales and 2026 initiatives, I'd like to highlight an important change to our go-to-market strategy with clients and candidates. At the completion of our TSA agreement in April, we will transition our website to bgstaffing.com. Our analysis of search trends and AI activity proved that including staffing in our name consistently ranks us in the top 3 results for both clients seeking talent and job seekers exploring opportunities.

We believe this change will significantly improve SEO performance, clarify our brand positioning and enhance the overall effectiveness of our marketing efforts. As Keith mentioned, we are executing on our 2026 top line strategic initiatives, leveraging insights from the market study completed late last year.

A key opportunity identified through that work and reinforced through internal discussions is our expansion into the PropTech support market. In February, we announced our first software partnership with Yardi, an industry-leading property management technology platform. Through the Yardi independent consultant network, we are pairing our industry expertise with technology-enabled talent solutions. PropTech is a sizable adjacent market to our core business and further enhances our differentiated positioning across multifamily and commercial property management staffing.

Turning to technology-enabled solutions. We continue to optimize our AI investments to further differentiate our platform and deepen engagement with our clients. Our focus is on elevating the overall client and candidate experience, which positions BG Staffing as an innovative workforce solutions partner. These technology and AI-driven enhancements have improved front and back-office efficiency, while reinforcing our people-first culture. We believe the right combination of talent and technology suite enables us to deliver quality candidates faster and more efficiently, driving better outcomes for our clients.

We continue to advance the operational performance initiatives discussed last quarter and early insights indicate progress in strengthening our competitive differentiation. These efforts and strategic partnerships are beginning to support incremental top line revenue growth and improve overall financial performance.

Finally, we are excited to participate as an exhibitor at the Apartmentalize Conference hosted by the National Apartment Association as well as the Building Owners and Managers Association International Conference, both of which are held in June. As 2 of the premier gatherings in the rental housing and commercial real estate industries, we expect the events to be a strong platform for customer engagement and lead generation.

With that, I will turn the call back to Keith to cover our fourth quarter financial results.

Thank you, Kelly. Our comments today mostly refer to continuing operations unless otherwise noted. Fourth quarter revenues were $22 million, a 9.4% decline compared to the prior year, driven by lower billed hours and weak demand due to overall cost pressures on property management companies and property owners.

Gross profit in the fourth quarter was $7.7 million compared to $8.7 million in the prior year quarter. Gross profit as a percentage of revenue was 35% and was negatively affected by $147,000 in out-of-period workers' comp costs. Adjusted for those costs, our gross profit as a percentage of revenue was 35.6% in the quarter, consistent with the prior year's quarter and the year of 2025 in total.

SG&A expenses for the fourth quarter were $9.3 million compared to $10.5 million in the prior year's quarter. SG&A this quarter included a strategic review costs of $403,000 compared to $88,000 in the prior year quarter. SG&A expenses in the fourth quarter of 2025 were negatively affected by approximately $460,000 of out-of-period expenses, mostly related to the medical expenses under our self-insurance plan and the process of finalizing our closing balance sheet for the sale of the Professional division.

Fourth quarter adjusted EBITDA was a loss of $947,000, inclusive of the medical insurance adjustment mentioned above, compared to an EBITDA loss of $1.6 million in the prior year. This reduction in EBITDA loss came in spite of $1 million of lower gross profit due to lower sales. Significant cost-cutting measures implemented in selling and in general and administrative expenses during 2025 were the main drivers behind the improved EBITDA loss.

We reported a fourth quarter GAAP net loss from continuing operations of $0.11 per diluted share compared to a non-GAAP adjusted EPS loss from continuing operations of $0.09 per share. Consolidated adjusted non-GAAP EPS for the quarter was $0.09 per share.

For the full year of 2025, net cash provided by continuing operating activities was $117,000, which included a $5.2 million escrow receivable from the sale of the Professional division. We expect to finalize the settlement of this cash escrow amount during Q2. Our capital expenditures were minimal at $138,000. During 2025, we purchased 351,200 shares of stock, totaling approximately $1.5 million. Our purchases to date totaled 522,000 shares at a total of $2.4 million.

Finally, the team remains focused on executing our strategic priorities and our new road map, while also managing the transitional work related to the sale of the Professional division. Kelly and I want to thank everyone across the organization for their continued dedication and hard work over the past year.

The execution of the TSA was a particularly heavy lift, and we are deeply grateful to the entire BG staffing team for their thoughtful planning, strong execution and sustained commitment. We look forward to updating investors each quarter on our progress and hope today's discussion has been valuable.

With that, now we would like to open the call for questions. Operator?

[Operator Instructions] Your first question for today is from Bill Dezellem with Tieton Capital.

A couple of questions. Let's just start, if we could, please, with the Yardi relationship and walk us through that relationship, what you are doing with it and what the potential implications are for the business longer term?

Yes. Bill, thank you for the question. I'll take that one. The Yardi partnership is an exciting one for our group because Yardi as a company has established an independent consultant network. And what that means is that Yardi as a company will obviously sell and implement software to our property management customers that they use for their day-to-day operations.

So when and if there's gaps between what Yardi provides as a company and the implementation or training that is needed to actually have the end user fully implemented into the software, they'll leverage independent consultants to do that work. And that's exactly where we'll come in with our consultant base to be able to fill those requests.

So Yardi essentially serves as a referral base when they know they have needs among their clients, so that we can then pick that up, and it's a really basic model of hiring the consultant, placing them and then billing accordingly.

And Kelly, what's the potential size of that business? Or is it just -- is it more important, the relationship enhancement that it leads with your customers?

Yes. We chose Yardi as our first partnership of this nature because they are the most widely used software in the property management space. So the potential is very large across all of our customer base. They're certainly not the only software used, but they are the most widely used. So when you look at potential, you think about all the properties that we bill with across the country, they all have software that they use. So every single one of them would have some type of support that they could need at any given point in time.

In addition to that, even at the corporate office level, when you think about their accounting needs and things like that, Yardi is also leveraged for those types of services. So there's potential at both the corporate office level as well as the on-site end user level.

All right. Great. I appreciate that. And then, Keith, would you please walk through the -- your comments about SG&A on an ongoing basis? And I didn't catch all the numbers, number one, but maybe related to the $9.3 million of SG&A that was reported in the fourth quarter.

Okay. So the G&A costs that we are estimating going forward once we're clear the TSA and all of that is around $12 million, okay? And then the number obviously continues to unfold as we continue to look for ways to cut costs and software costs and things like that. So that's kind of an ongoing work that we have. There's about $2.5 million or so of public company costs in that number, all right?

So the Q4 number, which was -- that you cited, which was selling and G&A, that number is higher than what we expect in 2026 because we were still supporting the sale and we weren't able to get out of all the software changes that we expect to change. So the Q4 number is not reflective of what we expect in 2026. Does that help?

That is helpful. And following up on that, the SG&A that includes -- is the $9.3 million, how much of that is the G&A number?

The G&A number for the quarter, it's actually in the press release. That's about $3.5 million, but there's about $460,000 that hit in Q4 that did not relate to Q4, and that was the thing that I cited that we -- as we broke apart the balance sheet for the sale. And we looked at our [ IB ] in our reserve, we ended up taking $460,000 of expense in Q4. So that is included in those numbers.

Great. That is helpful. And then one additional question, please, relative to the overall market environment, how would you characterize it today versus what you were seeing a year ago at this time?

Yes. What we're seeing today, based on customer feedback, there is definitely an interest and a budget to spend on our services. This year is much more optimistic of a sentiment as what we were experiencing last year. I think our customers have navigated a lot the last couple of years economically. And this year, the feedback is absolutely, look, we plan to leverage staffing as well as PropTech support services. And so we're finding from a willingness to spend perspective, there certainly is a lot more positive feedback this year than what we were navigating this time a year ago.

And Kelly, is it your sense that since we've had a couple of years of tight or conservative spending that there is some catch-up and delayed or deferred maintenance that could lead to a higher-than-average level of activity, maybe not in '26, but as we push further into 2027 and you just start to see some catch-up?

I think it's reasonable to assume that there could be a certain level of that. What we've heard from customers is that as much as possible during times when they have to be conservative on their spending, they'll do their best to just leverage the existing employee base that they have, even if that means one employee that may typically work at one property needing to float or visit several properties and try to help.

So to an extent, there may be a little bit of that, nothing like what we saw after COVID or anything like that. But there may be a small amount. But I think as much as possible, they really have tried to make it work with the existing employees that they have.

Great.

Absolutely.

Bill, one other thing just to kind of back that up, our top line sales through the first 2 months are slightly ahead of 2025. So it's been off to a solid start for this year.

So just to be clear, what you're saying is this will be -- if March continues the trend that you saw in January and February, the first quarter revenues would be up, which would be the first time in many quarters that that's the case, correct?

Yes, that is correct.

Great. Do you want to share a percentage change that you saw in January and February combined?

No, but I will say that we do expect full year sales in 2026 to be over 2025 kind of in the mid-single digits. So if that helps.

That is helpful. And I'm going to kind of take -- I'm going to take the bait and go one step further.

Thank you, Bill.

So -- you're welcome. So relative to the monthly trends, when you look at the fourth quarter, was November decline less than October and was December better than November and then January being better than December and then was February up more than March? Are we seeing that sort of trend each and every month improving?

You're going sequentially, right?

Yes. Basically, Keith, I'm essentially saying, let's just take, for example, if October was down 6% than November being down 4%, December being down 2%, January being up 2%. And I totally just made those numbers up for illustration.

Yes. So I think the best way to answer that is that as we ended 2025, the seasonality effects that we would expect, we were better than those in the last month of last year. And so we have started out where we are higher in sales than last year for January and February. So it's a positive trend.

That's helpful. Did that positive trend begin in -- late in the fourth quarter in December? Or is there really...

Yes, it did. And of course, we had really tough week in February because snowstorm basically shut down the entire country for a few days, but still we came out pretty strong.

That's very helpful. Appreciate that additional color. Anything else you'd like to add on that front before I turn it back to the operator.

No, I think that's it.

Your next question is from George Melas with MKH Management.

Maybe trying to clarify a little bit the answer that, that you guys gave -- that Kelly, you gave to Bill regarding the PropTech. It seems like it's a very different line of business, right? It's not your regular consultants or staffing that is more focused on maintenance and leasing. So is that sort of -- kind of a new segment of the business, could we say? And how many consultants you have? And what kind of revenue are you expecting in '26 from PropTech?

Yes. Thank you for the question. Yes, it is different from the type of staffing that we've delivered in the past. You're correct. And the reason why we selected PropTech as an adjacent market that we were interested in is because it's a need that the people that we place and our existing customers have on all of their properties. They're leveraging technology as all of us are in their day-to-day. So we saw an opportunity to explore the support of that technology.

And it really does 2 things. It helps solve customer problems that exist today, but it also helps lift up our candidate base as we know they're going to be when they're out to work, leveraging the same technology. And so learning about how Yardi structures their independent consultant network really became of interest to us because we're building that consultant base to answer your question, we're going to start with a pool of 8 to 12 consultants and get them out working, and it will just grow organically over the year.

So early projections for 2026, we expect to be able to organically grow the revenue and ramp up through the year. First year top line may be $1 million to $2 million, but we really just are launching it organically this quarter. So we're going to look at the next quarter -- couple of quarters very carefully as sales accelerate, and we'll be able to give much more accurate forecasting after that point.

Okay. That's exciting. And how many people do you have on staff now? How many consultants do you have that are -- and do you train them in the Yardi tech? Or are they pretty much already trained and ready to go?

Yes. They tend to come in with existing Yardi experience. If we're going to hire them, they have existing Yardi knowledge. We're not hiring folks to come in and then train on them. Now I will add that Yardi does provide really impressive resources to make sure their consultant base has access to training and knowledge and continuing education.

So Yardi does a really great job making sure that their consultant network is very well equipped to stay knowledgeable on their technology. So that's another reason why we selected Yardi as a partner is those resources that they have is just the knowledge base that they offer. Therefore, that's not really a lift that we have to take on internally that type of training. We will hire consultants that have existing knowledge and then leverage Yardi's resources to make sure that they stay fresh on that knowledge.

Great. And maybe I'm digging too much into Louise, but I'm really curious, do you -- are you starting in Texas, for example? Are you starting in one market? How do you see sort of the ramp of that business segment unfolding?

Unfortunately, this -- unfortunately, this service is not necessarily geographically driven because a lot of the work that these consultants can deliver is remote. So it won't be a geographically based expansion. It will really be more of a customer-by-customer based expansion. And so we'll grow that way between both our own internal sales initiatives and Yardi's referral base. It won't necessarily have a geographic component.

Okay. Great. That sounds like an exciting initiative. It's nice to see -- these growth initiatives.

Maybe just also trying to clarify a little bit what you said at the end regarding a solid start to the year. The fourth quarter year-over-year was down 9.4%, right, I think the top line.

Yes, that's correct.

So that -- if December -- if part of December was a positive comp, it sort of means that actually maybe October and November were down double digits. And then -- so that seems like a very dramatic change from down double digit in a few months to going up comp. And how do you explain this change? And to what extent is this change market driven? And to what extent is it your own execution and what you guys are doing internally that is driving that in your opinion?

Yes. I think this is -- well, there's some market improvement in there. But really from our perspective, it's more driven by execution. The things that we learned from one of the studies is the speed to fill, getting the right candidate in the right spot quickly. Those things all make a big difference, and we have changed some things up, and we are laser-focused on that stuff.

Okay. And let's see if we can try to extrapolate that to the year. So you expect mid- to single-digit growth. Does that mean that you expect growth pretty much in every quarter -- year-over-year growth, I mean, in every quarter of 2026?

Yes. That is correct.

Okay. Great. That's really good to know. And to what extent is that driven by -- I think, Kelly, you mentioned that you feel like customers have a slightly greater propensity to purchase and to spend. So you have that on the one hand. On the other hand, you have better execution on your side. Is that the way one would look at it?

Yes. It is definitely a mixture of both of those factors that would lead to the year-over-year performance being more favorable.

Okay. Great. Good. And then on the cost side, thank you very much for the -- what you have as the Property Management segment. It's super helpful. And it really helps us, I think, understand the model much better.

So if we look at the G&A, it's $3.9 million. But if we take out the medical and the cost of the review, it comes down to pretty much $3.1 million, let's say, $3 million to $3.1 million. And if we annualize that, it's roughly $12 million, which I think is what you said, Keith, as kind of the ongoing expenses of G&A. So does that mean that if we take out those 2 onetime things, we are pretty much at a steady state level for G&A?

Yes. But just to make clear that we are looking at ways ongoing to bring down those costs. So it's not a done deal that's kind of like where we are now, but we are constantly looking at ways to bring down those costs.

Okay. And with, of course, seasonality, your second and third quarter are your best quarters from a revenue perspective, that impacts somewhat selling expenses, but would that have an impact on G&A or is G&A basically flattish from quarter-to-quarter?

G&A is pretty flat. So selling would go up some, you have more sales, you have more bonus dollars, commission dollars, things like that. But -- with the G&A, it's basically pretty fixed across all 4 quarters.

We have reached the end of the question-and-answer session, and I will now turn the call over to Kelly for closing remarks.

Thank you for your time today. We appreciate your continued support and look forward to providing an update on our first quarter in a couple of months. Have a great day.

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

Good morning, everyone. Welcome to the BGSF, Inc. Fiscal 2025 Third Quarter Financial Results Conference Call. As a reminder, this conference call is being recorded. [Operator Instructions]

Now I will turn the call over to Sandy Martin from Three Part Advisors. Please go ahead.

Good morning. Thank you for joining us today for BGSF's Third Quarter 2025 Earnings Conference Call. With me on the call are Keith Schroeder, Interim Co-CEO and CFO; Kelly Brown, Interim Co-CEO and President of Property Management. 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's 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 are available at the end of our earnings release.

I'll now turn the call over to Keith Schroeder.

Thank you, Sandy, and thank you all for joining us on today's call. Kelly and I want to apologize for the delayed earnings release. It was due to the additional time required to finalize the accounting for the sale of the Professional division, including its treatment between discontinued and continuing operations. After our prepared remarks today, we will open the call up for analyst and investor questions.

In September, we closed on the divestiture of BGSF's Professional division to INSPYR Solutions, a portfolio company of A&M Capital Partners, for cash of $96.5 million plus a $2.5 million working capital adjustment. Subsequent to the closing, we paid off the company's outstanding debt of approximately $46 million. Then on September 16, the company's Board of Directors declared a special cash dividend of $2 per share on BGSF's common stock returning $22.4 million to shareholders.

After our September 30 dividend payments, the company's cash balances were approximately $20 million. As a part of the Board's continuing evaluation of the best use of BGSF's excess capital, today, we announced a stock buyback plan of up to $5 million. The Board believes that purchasing stock at current prices is a good investment for the company and reflects our confidence in BGSF's long-term strategy. Following the close of the sale of the Professional division, we've been focused on 3 big directives.

During the quarter, we engaged an independent consulting firm to conduct a comprehensive review of our business and the broader industry landscape, which Kelly will cover in detail in a few minutes. Next, as we touched on last quarter, we are taking aggressive actions to reduce head office G&A expenses when the TSA period ends and we can further reduce G&A costs with a target of approximately $11 million annually. The $11 million figure includes roughly $1.5 million of public company costs. We currently estimate the Property Management's 2025 overhead contribution to be in the $10.5 million to $11 million range.

Finally, as part of our commitment to building a high-performing and aligned organization, we engaged an external compensation and organizational consulting firm to review our structure and ensure our compensation programs effectively reinforce company goals and promote accountability across the organization. As noted, implementing these recommendations or portions of them will occur after we complete our transition services agreement with INSPYR  in early 2026.

As we covered last quarter, GAAP financial reporting requires that we include Professional Group as a discontinued operations thus leaving our Property Management Group as a single reportable segment. In the MD&A section of our Form 10-Q, we are breaking out SG&A expenses into 2 main sections: selling costs for the Property Management Group and G&A for the head office function. This will allow you to build a model to forecast the company's future successes. And as a reminder, we are operating under a TSA agreement for up to 6 months to help INSPYR  stand up the business in their operating environment.

This means we will be continuing certain expenses longer than we would without the TSA. However, we will be paid for those services, which will be reported as a reduction in our G&A expenses. As expected, our financial results will be somewhat noisy for the next couple of quarters as we transition.

And with that, Kelly will cover the Property Management results and our strategic initiatives that are underway.

Thank you, Keith, and good morning, everyone. Total revenues from Property Management in the third quarter were $26.9 million, down 9.8% due to cost pressures on property owners and property management companies as well as increased competition in certain markets. Sequentially, revenues improved by 14.4% over the second quarter benefiting from a seasonal lift due to end of summer turnovers in apartments. Referencing back to the market study Keith mentioned earlier, we received valuable insight into our competitive position, market dynamics and opportunities to strengthen performance going forward.

BGSF is one of only a few national scale firms that deliver reliable, vetted, high quality talent and this study is helping us identify the key levers that will drive our next phase of growth. With a fresh outside lens on the market size, the competition and white space opportunities; we refined our strategic road map and aligned the organization around clear priorities to drive sustainable growth. With the transaction behind us and a comprehensive review of our business complete, we are now leveraging the findings to shape the next phase of our growth strategy.

For competitive reasons, we can't share the details, but we've identified actionable operational performance improvements as well as near- and longer-term expansion opportunities to capture a meaningful share of a growing $1 billion-plus addressable market. In addition, we have also identified a range of actions to further differentiate our staff quality and offerings. Based on our strategic initiatives and internal forecasting, we believe that 2026 revenues will grow compared to 2025 and the teams are moving forward with enthusiasm on our strategic initiatives.

Last quarter, we also discussed tools and technologies to accelerate our sales and hiring processes. We're continuing to invest in AI not just as a technological initiative, but also as a way to deepen engagement with clients and elevate the experience of working with us as an innovative workforce partner. Even in a challenging industry environment, our priorities remain the same: to deliver talent faster and communicate more efficiently. We believe a disciplined execution of these capabilities will keep us at the forefront.

The solution is a suite of engagement tools that have begun implementation and will continue to roll out over the next 2 quarters. We're excited about the potential of these tools to enhance performance, drive incremental revenue and deliver strong returns on our investments. At the same time, we continue to evaluate our cost structure to ensure it remains appropriately aligned with our projected revenues.

With that, I will turn the call back to Keith.

Thank you, Kelly. Our comments today mostly refer to continuing operations unless otherwise noted. As Kelly mentioned, third quarter revenues were $26.9 million, a 9.8% decline driven by lower demand amid overall cost pressures on property management companies and property owners. Despite the increased competition in certain markets where we operate, we reported a seasonal lift of 14.4% compared to our second quarter revenues. We continue to see business normalization more in line with the expected seasonality.

Gross profit and margins in the third quarter were $9.7 million compared to $10.7 million and 35.9% as a percentage of sales in both periods. On a sequential quarter basis, gross profit dollars increased and margins rose slightly by 10 basis points. SG&A expenses for the third quarter were $10.2 million compared to $11.3 million in the prior year's quarter. SG&A this quarter included strategic restructuring costs of $482,000 and $526,000 in the prior year quarter. Third quarter adjusted EBITDA was $980,000 or 3.6% of revenue compared to $75,000 or 0.3% in the year-ago quarter.

We reported a third quarter GAAP net loss from continuing operations of $0.28 per diluted share compared to a positive non-GAAP adjusted EPS from continuing operations of $0.08 per share. Consolidated adjusted EPS for the quarter was a positive $0.08 per share. During the first 9 months of 2025, net cash used by continuing operating activities was $1.8 million. Our capital expenditures were at $122,000. Finally, the team remains focused on executing our strategic priorities and new road map while managing traditional work related to the Professional division.

Kelly and I want to thank everyone inside the organization for their continued dedication and effort. We look forward to updating investors each quarter on our progress and hope today's discussion has been valuable.

With that, now we'd like to open the call for questions. Operator?

[Operator Instructions] Your first question is coming from Bill Dezellem with Tieton Capital.

Would you please discuss the process with the consultant that you hired to assist you with an internal evaluation?

Certainly. Keith, I can take that one. We had a multipronged process really to the research. They did a combination of surveying current clients, prospective clients, a little bit of interviewing in the competitive environment. So we were able to look at their research based on the addressable market in multiple really avenues. So they were able to validate a lot of the addressable market that we believe is out there based on the growth of the multifamily sector as well as the commercial real estate sector. And so with that research, we were able to identify more firmly what the addressable market we would anticipate to be both right now and in the coming years.

And the conclusion or the outcomes of that research, would you please walk us through what you can?

Certainly, yes. Based on the findings of the research, it was helpful because we're able to have better lens on what the true addressable market is; how much of that is being captured by us, how much of that is being captured by competitors in the market and it would help us drive our future strategic planning both geographically and strategically within the addressable market, different areas that we service. Obviously, as you know, in the past we've always serviced leasing as well as maintenance in the commercial side, engineers as well as accounting and management in that area. So really what the research did was just help us really have a future lens on what areas of the business would have the most growth potential and that way we can strategize accordingly.

And Kelly, you have been in this market for a long time now. What were the learnings that came of this for you? And the spirit which I ask that question is you've got a lot of -- because of your history, you either know or have a pretty good gut feel on a lot of this. So what did you learn from that?

Yes. Great question. Couple of things. One, the last couple of years in the industry, I think we've mentioned this on a couple of prior calls, given the economic climate that our client partners are facing, we wanted to be cautious around assuming the impact that might have on their approach to talent acquisition. And so really what the study showed us and then helped us understand is how some of our client partners want to consume talent, what is their appetite for leaning on providers such as us, how can we better partner with their internal talent acquisition teams and I do think that that's evolving.

Right now we have different levers we can pull using technology to best attract the talent that they want and so I think that's where we're seeing some evolution in how our industry attracts and wants to acquire the talent. So that was probably one of the larger takeaways is helping us drive our future planning to make sure that we're aligning with our partners in how they want to go about acquiring the talent that they need for their operations.

There are no additional questions in queue at this time. I would now like to turn the floor back over to Kelly Brown for closing remarks.

Thank you for your time today. We appreciate your continued support and look forward to providing an update on our fourth quarter and full year results in a few months. Have a great day.

Thank you, everyone. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.