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Item 5. Market for Registrant’s Common Equity

2023-03-16 compared with 2022-03-10 · 44 added, 47 removed, 125 unchanged (42% of the section changed)

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Stock Performance Graph

The following graph compares, through December 26, 2021, the cumulative total return of the Company’s common stock, a peer group index of certain publicly traded workforce solutions companies, and the Russell 2000.

The following graph compares, through January 1, 2023, the cumulative total return of the Company’s common stock, a peer group index of certain publicly traded workforce solutions companies, and the Russell 3000.

The graph assumes the investment of $100 at the beginning of the period depicted in the chart and reinvestment of all dividends.

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Periodically, we review companies within our peer group and decide if we need to make any changes.

The new peer group index represents the cumulative total return of the Company and the following corporations providing field talent or permanent employment workforce solutions:

The peer group index represents the cumulative total return of BGSF and similar corporations providing field talent or permanent employment workforce solutions.

Our peer group includes:

GEE Group, Mastech Digital, Resources Connection, Inc., and Staffing 360 Solutions.

The old peer group index represents:

GEE Group, Mastech Digital, RCM Technologies, and Staffing 360 Solutions.

Market Information and Holders

Our common stock commenced listing on the NYSE on November 14, 2019 under the symbol “BGSF,” was listed on the NYSE American from to October 27, 2014 to November 13, 2019 under the symbol “BGSF” and was quoted on the OTC Bulletin Board, or OTCBB, under the symbol “BGSF” from April 30, 2014 to October 27, 2014.

Our common stock commenced listing on the NYSE on November 14, 2019 under the symbol “BGSF,” was listed on the NYSE American from October 27, 2014 to November 13, 2019 under the symbol “BGSF” and was quoted on the OTC Bulletin Board, or OTCBB, under the symbol “BGSF” from April 30, 2014 to October 27, 2014.

Prior to the quotation of our common stock on the OTCBB, there was no public market for our common stock.

The table below sets forth information on the range of high and low sales prices for our common stock.

The table below contains the market range of high and low prices for our common stock.

Quarter Ended:

December 26, 2021 $ 15.65 $ 11.61

January 1, 2023 $ 15.49 $ 10.30

September 25, 2022 $ 13.33 $ 11.88

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March 28, 2021 $ 16.91 $ 12.24

As of February 2, 2022, the last reported sales price for our common stock was $14.03 per share.

As of February 13, 2023, our common stock closing price was $15.69 per share.

As of February 13, 2023, there were approximately 3,402 holders of record of our common stock.

The board of directors has declared or paid the following cash dividends during the fiscal years ended 2021, 2020, and 2019:

The board of directors has declared and we have paid the following cash dividends during the fiscal years ended 2022, 2021, and 2020:

Declared Date Record Date Distribution Date Dividend per Share Amount Paid

February 6, 2019 February 19, 2019 February 26, 2019 $0.30 $ 3,068,847

April 25, 2019 May 6, 2019 May 13, 2019 $0.30 3,068,974

July 31, 2019 August 12, 2019 August 19, 2019 $0.30 3,071,862

October 29, 2019 November 11, 2019 November 18, 2019 $0.30 3,072,659

Total $ 12,282,342

January 30, 2020 February 10, 2020 February 18, 2020 $0.30 $ 3,092,771

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Total $ 4,567,139

On February 2, 2022, the Company's board of directors declared a cash dividend in the amount of $0.15 per share of common stock to be paid on February 22, 2022 to all shareholders of record as of the close of business on February 14, 2022.

February 3, 2022 February 14, 2022 February 22, 2022 $0.15 $ 1,564,649

April 27, 2022 May 17, 2022 May 24, 2022 $0.15 1,572,332

August 3, 2022 August 15, 2022 August 22, 2022 $0.15 1,574,992

November 2, 2022 November 14, 2022 November 21, 2022 $0.15 1,577,709

Total $ 6,289,682

On February 13, 2023, the Company's board of directors declared a cash dividend in the amount of $0.15 per share of common stock to be paid on March 2, 2023 to all shareholders of record as of the close of business on February 23, 2023.

Our ability to pay dividends is restricted under the terms of our credit agreement and may be restricted under other agreements governing our outstanding indebtedness from time to time.

Any future determination with respect to the payment of dividends, including whether to declare a dividend, and, if so, the amount thereof, will be at the discretion of our board of directors and will be dependent upon, among other things, our financial condition, results of operations, capital requirements, the terms of our then existing indebtedness, contractual restrictions, future prospects, general economic conditions and other factors considered relevant by our board of directors.

Management’s Discussion and Analysis of Financial Condition and Results of Operations–Liquidity and Capital Resources–Credit Agreements” for a description of the restrictions in our credit agreements on our ability to pay dividends.

Equity Compensation Plans

The following equity compensation plan information is provided as of December 26, 2021:

The following equity compensation plan information is provided as of January 1, 2023:

Plan Category Number of Securities to be

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Recent Sales of Unregistered Securities

There were no unregistered securities during the fiscal year ended 2021.

In December 2022, we issued 254,455 shares of common stock in a private placement for a value of $3.4 million, and a convertible two-year promissory note of $4.4 million with an annual interest rate of 6% that is convertible into common shares at any time after one year at a conversion price of $17.12 per share at the closing of the Horn Solutions acquisition.

The foregoing issuance of securities was exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.

Share Repurchases

During 2022, there were no stock repurchases.

During 2021, we repurchased 610 shares of the Company's common stock at a cost of $8,442 and a weighted average price of $13.84 upon the vesting of restricted stock to satisfy statutory minimum tax withholding requirements.

The following tables set forth our summary consolidated historical financial data for continuing operations.

Selected Financial Data

The following tables set forth our summary consolidated historical financial data from continuing operations.

You should read the information set forth below in conjunction with “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated historical financial statements and notes thereto included elsewhere in this Annual Report on Form 10-K.

The statement of operations data for the fiscal years ended 2021, 2020, and 2019 and the balance sheet data as of December 26, 2021 and December 27, 2020 set forth below are derived from our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

The statement of operations data for the fiscal years ended 2022, 2021, and 2020 and the balance sheet data as of January 1, 2023 and December 26, 2021 set forth below are derived from our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

The statement of operations data for the fiscal years ended 2019 and 2018 and the balance sheet data as of December 27, 2020, December 29, 2019, and December 31, 2018 set forth below were derived from our audited financial statements not included in this Annual Report on Form 10-K.

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Income tax expense (benefit) from continuing operations $ 3,659 $ 2,640 $ (741) $ 3,135 $ 2,855

$ 2,640 $ (741) $ 3,135 $ 2,855 $ 6,090

Income (loss) from continuing operations $ 11,261 $ 10,458 $ (2,072) $ 9,641 $ 12,970

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Continuing operations $ 1.08 $ 1.01 $ (0.20) $ 0.94 $ 1.35

Discontinued operations 0.35 0.34 0.35 0.48 0.20

Income from discontinued operations:

Income 0.12 0.44 0.46 0.46 0.58

Gain on Sale 1.69 — — — —

Income tax expense (0.46) (0.09) (0.12) (0.11) (0.10)

Net income per share – basic $ 2.43 $ 1.36 $ 0.14 $ 1.29 $ 1.83

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Continuing operations $ 1.07 $ 1.00 $ (0.20) $ 0.93 $ 1.32

Discontinued operations 0.35 0.34 0.35 0.47 0.19

Income from discontinued operations:

Income 0.12 0.44 0.46 0.46 0.57

Gain on Sale 1.69 — — — —

Income tax expense (0.46) (0.09) (0.12) (0.11) (0.10)

Net income per share – diluted $ 2.42 $ 1.35 $ 0.14 $ 1.28 $ 1.79

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$ 21,693 $ 14,970 $ 12,197 $ 21,609 $ 21,256

Same Day EBITDA from continuing operations (2)

$ 16,659 $ 13,760 $ 21,609 $ 21,256 $ 19,449

Cash dividends declared per common share $ 0.60 $ 0.44 $ 0.50 $ 1.20 $ 1.15

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Stockholders’ equity $ 100,737 $ 76,592 $ 65,458 $ 68,457 $ 65,702

(1) 2017 Include a $3.3 million re-measurement of the net deferred tax assets as a result of the TCJA.

(2) We present Adjusted EBITDA and Same Day EBITDA (defined below), measures that are not in accordance with accounting principles generally accepted in the United States of America (“non-GAAP”), in this Annual Report on Form 10-K to provide investors with a supplemental measure of our operating performance.

We believe that Adjusted EBITDA and Same Day EBITDA are useful performance measures and are used by us to facilitate comparisons of our operating performance on a consistent basis from period-to-period and to provide for a more complete understanding of factors and trends affecting our business than measures under accounting principles generally accepted in the United States of America (“GAAP”) can provide alone.

Our board and management also use Adjusted EBITDA and Same Day EBITDA as some of the primary methods for planning and forecasting overall expected performance and for evaluating on a quarterly and annual basis actual results against such expectations, and as a performance evaluation metric in determining achievement of certain compensation programs and plans for our management.

(1) We present Adjusted EBITDA (defined below), a measure that are not in accordance with accounting principles generally accepted in the United States of America (“non-GAAP”), in this Annual Report on Form 10-K to provide investors with a supplemental measure of our operating performance.

We believe that Adjusted EBITDA is a useful performance measures and is used by us to facilitate a comparison of our operating performance on a consistent basis from period-to-period and to provide for a more complete understanding of factors and trends affecting our business than measures under accounting principles generally accepted in the United States of America (“GAAP”) can provide alone.

Our board and management also use Adjusted EBITDA as one of the primary methods for planning and forecasting overall expected performance and for evaluating on a quarterly and annual basis actual results against such expectations, and as a performance evaluation metric in determining achievement of certain compensation programs and plans for our management.

In addition, the financial covenants in our credit agreement are based on EBITDA as defined in the credit agreement.

We define “Adjusted EBITDA” as earnings before interest expense, income taxes, depreciation and amortization expense, impairment losses, transaction fees and other non-capital information technology project (“IT roadmap”) and certain non-cash expenses such as share-based compensation expense.

We define “Adjusted EBITDA” as earnings before interest expense, income taxes, depreciation and amortization expense, impairment losses, transaction fees, and certain non-cash expenses such as share-based compensation expense.

Omitting interest, taxes and the other items provides a financial measure that facilitates comparisons of our results of operations with those of companies having different capital structures.

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Other companies in our industry may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

We define “Same Day EBITDA” as Adjusted EBITDA on a fifty-two week fiscal year basis.

Omitting the additional revenue days in a fifty-three week fiscal year ended provides a financial measure that facilitates comparisons of our results of operations with those of our fifty-two week fiscal year and comparisons of our results with those companies having same number of days.

Same Day EBITDA should not be considered as an alternative to net income for the periods indicated as a measure of our performance.

Other companies in our industry may calculate Adjusted EBITDA or Same Day EBITDA differently than we do, limiting their usefulness as comparative measures.

The use of Adjusted EBITDA and Same Day EBITDA have limitations as analytical tools, and you should not consider these performance measures in isolation from, or as an alternative to, GAAP measures such as net income.

Adjusted EBITDA and Same Day EBITDA are not measures of liquidity under GAAP or otherwise, and are not alternatives to cash flow from continuing operating activities.

Our presentation of Adjusted EBITDA and Same Day EBITDA should not be construed as an inference that our future results will be unaffected by the expenses that are excluded from that term or by unusual or non-recurring items.

The limitations of Adjusted EBITDA and Same Day EBITDA include:

(i) they do not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;

(ii) they do not reflect changes in, or cash requirements for, our working capital needs;

(iii) they do not reflect income tax payments we may be required to make;

and (iv) they do not reflect the cash requirements necessary to service interest or principal payments associated with indebtedness.

To properly and prudently evaluate our business, we encourage you to review our consolidated financial statements included elsewhere in this Annual Report on Form 10-K and the reconciliation to Adjusted EBITDA and Same Day EBITDA from net income, the most directly comparable financial measure presented in accordance with GAAP, set forth in the following table.

The use of Adjusted EBITDA has limitations as analytical tool, and you should not consider this performance measure in isolation from, or as an alternative to, GAAP measures such as net income.

Adjusted EBITDA is not a measure of liquidity under GAAP or otherwise, and is not an alternative to cash flow from continuing operating activities.

Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by the expenses that are excluded from that term or by unusual or non-recurring items.

The limitations of Adjusted EBITDA include:

(i) it does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;

(ii) it does not reflect changes in, or cash requirements for, our working capital needs;

(iii) it does not reflect income tax payments we may be required to make;

and (iv) it does not reflect the cash requirements necessary to service interest or principal payments associated with indebtedness.

To properly and prudently evaluate our business, we encourage you to review our consolidated financial statements included elsewhere in this Annual Report on Form 10-K and the reconciliation to Adjusted EBITDA from net income, the most directly comparable financial measure presented in accordance with GAAP, set forth in the following table.

All of the items included in the reconciliation from net income to Adjusted EBITDA are either (i) non-cash items or (ii) items that management does not consider in assessing our on-going operating performance.

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Income tax expense (benefit) from continuing operations (1)

3,659 2,640 (741) 3,135 2,855

Interest expense, net 1,363 1,433 1,584 1,569 2,850

Loss on extinguishment of debt — — — 541 —

CARES Act credit (2,084) — — — —

Operating income (loss) 16,283 14,531 (1,229) 14,886 18,675

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— — 7,240 — —

CARES Act credit — (2,084) — — —

Share-based compensation 1,085 1,058 786 850 1,015

Transaction fees 271 170 615 434 508

IT roadmap 1,689 1,563 721 — —

Adjusted EBITDA from continuing operations 21,693 14,970 12,197 20,888 21,256

Same day adjustment — — — — (521)

Same day EBITDA from continuing operations $ 16,659 $ 13,760 $ 21,609 $ 21,256 $ 19,449

(1) 2020 Included a $3.3 million re-measurement of the net deferred tax assets as a result of the TCJA.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity