What changed in this filing

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Item 1. Business

2024-03-15 compared with 2023-03-16 · 42 added, 63 removed, 175 unchanged (38% of the section changed)

1 unchanged sentence

(“BGSF,” “we,” or the “Company”) is a leading national provider of consulting, managed services, and professional workforce solutions with continuing operations that, along with its wholly owned subsidiaries, operate primarily within the U.S.

in two industry segments Real Estate and Professional, with discontinued operations in the Light Industrial segment.

in two industry segments:

Property Management and Professional.

We provide field talent to a variety of client partners that are seeking to match their workforce requirements to their business needs.

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We employ a diverse operating model, both from a skill set and a geographic standpoint, which we believe mitigates downside revenue risk.

Our workforce solutions consist of on-demand or short-term assignments, consulting services, managed services, and on-site management administration.

Our workforce services consist of on-demand or short-term assignments, consulting services, managed services and on-site management administration.

Short-term workforce solutions assist employers in dealing with field talent demands caused by such factors as seasonality, fluctuations in client partner demand, vacations, illnesses, parental leave, and special projects without incurring the ongoing expense and administrative responsibilities associated with recruiting, hiring and retaining permanent field talent.

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This type of arrangement may involve outsourcing an entire department in a large corporation or providing the workforce for a large project.

Managed services are a combination of both workforce solutions and fixed fee arrangements.

Managed Solutions are a combination of both workforce solutions and fixed fee arrangements.

Field talent is placed with the client partner and services are performed over a given period of time as determined with the client partner.

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We commenced operations on October 17, 2007 and since 2009 have began an on-going growth and diversification initiative.

Since 2010, we have acquired thirteen businesses:

Since 2010, we have acquired fourteen businesses:

• In June 2010, we purchased the interests of BG Personnel Services, LP and BG Personnel, LP, and purchased the common stock of B G Staff Services, Inc.

Shortly after the purchase, we relocated our home office to Dallas, Texas.

We operate under the BG Multifamily and BG Talent trade names.

• In December 2010, we purchased substantially all of the assets and assumed certain liabilities of JNA Staffing Inc., which specialized in providing light industrial workforce solutions within the State of Wisconsin.

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• In December 2012, we acquired substantially all of the assets and assumed certain liabilities of American Partners, Inc., which specialized in providing IT workforce solutions to client partners within the U.S.

We continue to operate under the American Partners trade name.

• In June 2013, we acquired substantially all of the assets and assumed certain liabilities of InStaff Holding Corporation and InStaff Personnel, LLC, a wholly owned subsidiary of InStaff Holding Corporation (collectively, “InStaff”).

• In March 2015, we acquired substantially all of the assets and assumed certain liabilities of D&W Talent, LLC (“D&W”), which specialized in providing part-time and full-time workforce solutions of accounting and finance personnel and secretarial and administrative personnel to client partners in Texas and Louisiana.

We continue to operate under the Donovan & Watkins trade name.

• In October 2015, we acquired substantially all of the assets and assumed certain liabilities of Vision Technology Services, Inc., Vision Technology Services, LLC, and VTS-VM, LLC (collectively, “VTS”), which provided IT workforce solutions and project management workforce solutions.

We continue to operate under the Vision Technology Services trade name.

• In April 2017, we acquired substantially all of the assets and assumed certain liabilities of Zycron, Inc.

(“Zycron”), which provided IT workforce solutions and project management workforce solutions.

We continue to operate under the Zycron trade name.

• In September 2017, we acquired substantially all of the assets and assumed certain liabilities of Smart Resources Inc.

and Accountable Search, LLC (collectively, “Smart”), which specialized in providing part-time and full-time workforce solutions of accounting and finance personnel and secretarial and administrative personnel to client partners in Chicago market.

We continue to operate under the Accountable Search and Smart Resources trade names.

• In December 2019, we acquired substantially all of the assets and assumed certain liabilities of L.J.

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(“LJK”), which provided cybersecurity retained search workforce solutions specializing in recruiting high and mid-level IT security professionals.

We continue to operate under the L.J.

Kushner & Associates trade name.

• In February 2020, we acquired 100% of the equity of EdgeRock Technology Holdings, Inc.

(“EdgeRock”), which provides specialized IT consultants and focuses on the sourcing and placement of technology professionals specialized in leading software and data ecosystems.

We continue to operate under the EdgeRock Technology Partners trade name.

• In February 2021, we acquired substantially all of the assets and assumed certain liabilities of Momentum Solutionz LLC (the “Momentum Solutionz”), which provided IT consulting and managed workforce solutions for organizations utilizing ERP systems.

We continue to operate under the Momentum Solutionz trade name.

• In December 2022, we acquired substantially all of the assets and assumed certain liabilities of Horn Solutions, Inc.

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Horn Solutions provides services to clients in a variety of industries including, but not limited to energy, financial services, healthcare, real estate and construction, service, manufacturing, and software industries.

We continue to operate under the Horn Solutions trade names.

• In April 2023, we acquired substantially all of the assets and assumed certain liabilities, of Arroyo Consulting LLC (“Arroyo Consulting”), which provides nearshore and offshore workforce solutions specializing in IT and software development with operations in the United States, Colombia, and India.

On March 21, 2022, we completed the sale to Sentech Engineering Services, Inc.

of substantially all of the assets pertaining to our Light Industrial segment.

The Light Industrial segment provided field talent primarily to manufacturing, distribution, logistics, and call center client partners needing a flexible workforce and operated under the “InStaff” trade name.

Instaff's financial results for periods prior to the sale have been reflected in our Consolidated Statements of Operations and Comprehensive Income and Consolidated Statements of Cash Flows as discontinued operations.

Additionally, the related assets and liabilities associated with the discontinued operations in the prior periods are classified as discontinued operations in our Consolidated Balance Sheets.

of substantially all of the assets pertaining to our Light Industrial segment providing field talent primarily to manufacturing, distribution, logistics, and call center client partners which operated under the “InStaff” trade name.

Instaff’s financial results have been reflected in our Consolidated Statements of Operations and Comprehensive (Loss) Income and Consolidated Statements of Cash Flows as discontinued operations.

See “Note 4 - Discontinued Operations” in our Consolidated Financial Statements included elsewhere in this report for additional information.

We now operate across 46 states and D.C.

We do not currently have any significant foreign operations.

The Company currently operates primarily within the United States of America (“U.S.”) through the Property Management and Professional segments.

The workforce solution industry supplies field talent to client partners helping them minimize the cost and effort of workforce planning.

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Workforce solution companies act as intermediaries in matching available field talent to client partner assignments.

The demand for a flexible workforce continues to grow with competitive and economic pressures to reduce costs and respond to changing market conditions.

The workforce solution market is subject to volatility based on overall economic conditions.

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During recessionary periods, the number of companies has decreased through consolidation, bankruptcies, or other events.

The workforce solution industry is experiencing increased demand in relation to total job growth as client partners have placed a greater priority on maintaining a more flexible workforce.

The workforce solution industry is large and highly fragmented with approximately 25,000 competing companies, while only 251 firms exceeded $100 million in annual revenues during 2022 according to Staffing Industry Analysts (“SIA”).

As of September 2023, SIA estimated the 2023 U.S.

temporary service market will be an estimated $216.8 billion, which is up from an estimated $212.2 billion in 2022.

temporary service market will be an estimated $201.7 billion, which is down from an estimated $224.7 billion in 2022.

Workforce solution providers compete both to recruit and retain a supply of field talent and to attract and retain client partners to use these workers.

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We have diversified our operations to provide field talent within distinct segments of the industry.

We refer to our continuing operations as the Real Estate and Professional segments, and discontinuing operations as the Light Industrial segment.

We refer to our continuing operations as the Property Management and Professional segments, and discontinuing operations as the Light Industrial segment.

We operate separate profit centers within each segment and provide managers considerable operational autonomy and financial incentives.

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This structure also allows managers and team members to focus on market development while relying on centralized services for support in back-office operations, such as risk management programs and unemployment insurance, credit, collections, accounting, advice on legal and regulatory matters, and quality standards.

Our continuing operations are organized into the Real Estate and Professional segments, and our discontinued operations is the Light Industrial segment.

Real Estate Segment

Our Real Estate segment is a leading provider of office and maintenance field talent to various apartment communities and commercial buildings.

Our continuing operations are organized into the Property Management and Professional segments, and our discontinued operations is the Light Industrial segment.

Property Management Segment

Our Property Management segment is a leading provider of office and maintenance talent.

We currently operate in 38 states and D.C.

The Real Estate segment utilizes Virtual Talent Acquisition Center (“TAC”) with team members located in various locations throughout the United States.

All open field talent positions nationally are recruited from this TAC.

The field talent we assign to our Real Estate client partners are our employees, although our client partners provide on-the-job direction, control and supervision.

The field talent we assign to our Property Management client partners are our employees, although our client partners generally provide on-the-job direction, control and supervision.

Professional Segment

Our Professional segment provides highly skilled IT professionals with expertise in SAP, Workday, Peoplesoft, Hyperion, Oracle, One Stream, cyber, project management and other IT workforce solutions to client partners on a national basis.

Our Professional segment provides highly skilled IT professionals with expertise in SAP, Workday, Peoplesoft, Hyperion, Oracle, One Stream, cyber, project management, managed services, and other IT workforce solutions to client partners on a national basis.

Additionally, we provide finance, accounting, legal, human resource and related support personnel.

Our client partners include large Fortune 500 companies, medium and small companies, as well as consulting firms engaged in systems integration projects.

We operate our professional segment remotely and from our offices in Arizona, Florida, Illinois, Maryland,

Massachusetts, New Jersey, North Carolina, Rhode Island, Tennessee, and Texas.

We operate our professional segment remotely and from our offices in Florida, Illinois, Maryland, Massachusetts, New Jersey, North Carolina, Rhode Island, Tennessee, and Texas.

The IT division provides additional nearshore/offshore field talent solutions in Colombia and India.

Light Industrial Segment

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As is common in the industry, our engagements to provide workforce solutions to our client partners are generally of a non-exclusive, short-term nature and subject to termination by the client partner with little or no notice.

No client partner accounted for more than 10% of our revenues in 2022, 2021, or 2020.

No client partner accounted for more than 10% of our revenues in fiscal 2023, 2022, or 2021.

Marketing and Recruiting

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We market our workforce solutions to client partners and field talent candidates via both national and local advertising activities.

A significant portion of our total marketing efforts comes from direct marketing via telephone solicitation.

Promotions consists of digital display, search engine marketing, social media, trade publications, job boards and events.

A significant portion of our total marketing efforts comes from direct marketing via email and telephone solicitation.

Promotions consists of pay per click advertising, search engine marketing, social media, trade publications, job boards and events.

As well, reputation management is a promotional utility that serves as the first impression;

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Growth Strategy

We are committed to growing our operations.

We have grown from $35 million of Light Industrial revenue in 2009 to $298 million of revenue from continuing operations in 2022, by using a growth strategy reliant upon both acquisitions and organic growth.

We are committed to growing our operations and have grown from $35 million of Light Industrial revenue in 2009 to $313 million of revenue from continuing operations in 2023, by using a growth strategy reliant upon both acquisitions and organic growth.

We will continue to evaluate acquisition opportunities utilizing our proven approach to the assessment, valuation, and integration of acquisitions.

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We continue to invest in technology and process improvements, as necessary, to ensure that we are operating at optimal productivity and performance.

In second quarter 2022, we completed the board of directors authorized three year plan to enhance our processes through the information technology improvement project.

In 2022, we completed the board of directors authorized three year plan to enhance our processes through the information technology improvement project.

These workstreams included improvements to applications in front office, middle office, back office, modern workplace, IT infrastructure, and project management.

The workforce solutions market is highly competitive with limited barriers to entry.

With about 25,000 staffing and recruiting companies, the workforce solutions market is highly competitive with limited barriers to entry.

We compete in national, regional and local markets with full-service and specialized workforce solution companies.

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Our quarterly operating results are affected by the number of billing days in a quarter, as well as the seasonality of our client partners’ business.

Demand for our Real Estate workforce solutions typically increase in the second quarter and is highest during the third quarter of the year due to the increased turns in multifamily units during the summer months when schools are not in session.

Demand for our Property Management workforce solutions typically increase in the second quarter and is highest during the third quarter of the year due to the increased turns in multifamily units during the summer months when schools are not in session.

Overall first quarter demand can be affected by adverse weather conditions in the winter months.

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This means that we retain responsibility for all assignments, wages, benefits, workers’ compensation insurance, and the employers’ share of applicable payroll taxes as well as the administration of the team members’ share of these taxes.

We also offer our talent access to competitive health and benefit programs while they are working with us.

Also, working with us gives our talent access to competitive health and benefit programs.

Eligible talent can participate in a defined contribution plan and the 2020 Employee Stock Purchase Plan (“2020 ESPP”).

Compensation and Benefits

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We believe that our programs provide fair and competitive opportunities that align team member and shareholder interests.

In addition to cash and equity compensation, we also offer team members competitive benefits such as life and health (medical, dental and vision) insurance, paid time off including volunteer time off, wellness benefits, education/tuition reimbursement, a defined contribution retirement plan with BGSF matching contributions, and an Employee Stock Purchase Plan.

Diversity, Equity, and Inclusion

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African American/Black Employees & Allies and Working Parents and Allies.

Later in 2023, we expect to launch our third team member resource group, with the name to be determined.

Our team member resource groups are designed to create a strong sense of belonging within our work culture, to provide awareness and gain collaborative support from allies, and to help drive equitable opportunities throughout our organization for all.

The essential work of VIIBE has continued to align it's work with the development of foundational pillars of excellence that promote this philosophy.

Later in 2023, we launched our third team member resource group, Pride and Allies.

Our team member resource groups focus on creating a strong sense of belonging within our work culture, raising awareness about obstacles standing in the way of team member success, gaining collaborative support from allies, and driving equitable opportunities throughout the organization for all.

The essential work of VIIBE has continued to align its work with the development of foundational pillars of excellence that promote this philosophy.

We are focused on how we source, recruit, develop, appreciate, and leverage perspectives and experiences of underrepresented talent.

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Community Involvement

We consider sustainability to be a guiding principle in strengthening the relationship with our workforce, vendor partners and client partners.

Through our programs and initiatives, we seek to contribute to improving the quality of life of our team

members, their families, as well as the communities in which they operate.

Designed on the concept of social investment, our approach ensures the creation of future development capacities instead of aiding on isolated occasions.

Supporting our communities has always been an important part of how we uphold our company values.

To this end, we support volunteerism through two paid days so team members can serve their charity, cause or not-for-profit organization of choice.

Our 2021 launch of Philanthropy Cloud, powered by Salesforce.org, improves the giving experience by connecting employees with their charity of choice.

The platform also greatly enhances our transparency in impact reporting, tracking, and engagement.

In 2022, “BG'ers” donated more than $38,500 to charity and served over 1,375 volunteer hours to support to support causes that are close to their hearts, as well as BGSF-organized volunteer projects.

In 2022, BGSF served as the Presenting Sponsor of the State Fair of Texas’s Youth Agricultural Job Interview Contest, bringing together BG volunteers to facilitate the contest for high school students from across Texas competing for scholarship awards BGSF.

The team also continued to support the Junior Achievement charity, furthering the organization’s mission to prepare students for successful futures by providing work-readiness, entrepreneurship, and financial literacy learning programs.

In early 2023, BGSF created the Darrell Freeman Fellowship program which will educate and support students at Nashville State Community College who want to successfully enter the Information Technology field after graduation.

In 2023, we were committed to sustainability initiatives which guided our interactions with our workforce, vendor partners, and client partners.

Through our volunteering time off program, we had 189 individuals volunteer over 2,200 hours and donated of over $40,000 for philanthropic purposes, which emphasized our ongoing dedication to community service.

Focusing on impactful community events, we continued sponsorship of the State Fair of Texas’s Youth Agricultural Job Interview Contest, the Heart Walk with the American Heart Association and the Steps of Success 5K for the Transformation Life Center.

We were involved with student development through the Junior Achievement organization and in 2023, we created the Darrell Freeman Fellowship program for graduated students in Information Technology.

Our global investment in professional development initiatives delivered over 20,000 educational hours to 1,600 individuals, resulting in 1,000 certificates awarded and locally we supported the Blacks in Technology Foundation.

Additionally, our Colombia team hosted The NASA International Space Apps Challenge, which engaged over 200 individuals to innovate with NASA’s open data program.

During 2024, we will remain dedicated to sustainability, employee development, and community impact.

Team Engagement

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We are committed to the organization’s overall health and providing career progression by providing individual development, readiness, and transition plans as a part of our talent review and succession planning process.

In 2023, we had over 20,000 hours spent in upskilling the workforce, with over 1,600 going through our training programs and 1,000 certification achieved.

Intellectual Property

We own or have rights to various copyrights, trademarks, service marks, trade names and domain names used in our business, including, but not limited to, BGSF, BG Staffing, BG Staffing Group, BG Personnel Services, Extrinsic, American Partners, InStaff, BG Temporary Staffing, BG Multifamily, BG Talent, Triance, Donovan & Watkins, D&W Talent, Vision Technology Services, Zycron, Smart Resources, Accountable Search, L.J.

Kushner & Associates, EdgeRock, EdgeRock Technology Partners, EdgeRock Technology Partners & Design, Momentum Solutionz, Creative Data Solutions, Horn Solutions, bgsf.com, bgstaffing.com, bgstaffinggroup.com, bgpersonnel.com, bgpersonnel.net, bgstaffing.net, bgcompanies.net, bgmail.com, ltnstaffing.com, milwaukeetemps.com, milwaukeetmepsinc.com, extrinsicllc.com, extrinsicgroup.com, extrinsicresources.com, jnastaffing.com, therightpeoplerightnow.com, rightpeoplerightnow.com, americanpartnersinc.com, instaff.com, donwat.com, vistechs.com, zycron.com, smartstaffing.com, accountablesearch.com, executiveassistantsearch.com, ljkushner.com, edgerock.com, edgerock.net, edgerockblue.com, edgerockcares.com, edgerockcares.net, edgerockconsultants.com, edgerockit.com, edgerockpartners.com, edgerockperm.com, edgerockred.com, edgerocksearch.com, edgerocksolutions.com, edgerockstaffing.com, edgerocktech.com, edgerocktech.net, edgerocktechnologies.com, etphome.com, joinedgerock.com, myedgerock.com, momentumsolutionz.com, and hornsolutions.net.

In early 2023, the Board of Directors approved management's plan to rebrand as BGSF, eliminating various current trade names.

We intend to complete this rebranding by the end of the second quarter of 2023.

We are subject to regulation by numerous federal, state and local regulatory agencies, including but not limited to the U.S.

Kushner & Associates, EdgeRock, EdgeRock Technology Partners, EdgeRock Technology Partners & Design, Momentum Solutionz, Creative Data Solutions, Horn Solutions, Arroyo Consulting, Arroyo IT Solutions, AC, bgsf.com, bgstaffing.com, bgstaffinggroup.com, bgpersonnel.com, bgpersonnel.net, bgstaffing.net, bgcompanies.net, bgmail.com, ltnstaffing.com, milwaukeetemps.com, milwaukeetmepsinc.com, extrinsicllc.com, extrinsicgroup.com, extrinsicresources.com, jnastaffing.com, therightpeoplerightnow.com, rightpeoplerightnow.com, americanpartnersinc.com, instaff.com, donwat.com, vistechs.com, zycron.com, smartstaffing.com, accountablesearch.com, executiveassistantsearch.com, ljkushner.com, edgerock.com, edgerock.net, edgerockblue.com, edgerockcares.com, edgerockcares.net, edgerockconsultants.com, edgerockit.com, edgerockpartners.com, edgerockperm.com, edgerockred.com, edgerocksearch.com, edgerocksolutions.com, edgerockstaffing.com, edgerocktech.com, edgerocktech.net, edgerocktechnologies.com, etphome.com, joinedgerock.com, myedgerock.com, momentumsolutionz.com, hornsolutions.net, arroyoconsulting.net, and micro-talent.net.

In 2023, the Board of Directors approved, and we completed, management’s plan to rebrand as BGSF, eliminating various current trade names.

We are subject to regulation by numerous foreign, federal, state and local regulatory agencies, including but not limited to the U.S.

Department of Labor, which sets employment practice standards for workers, and similar state and local agencies.

11 unchanged sentences

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 1. Business