BGSF, INC. 10-K

ITEM 1. BUSINESS. Overview and History BGSF, Inc. (“BGSF,” “we,” or the “Company”) is a leading national provider of staffing and workforce solutions for the Property Management industry. We operate primarily within the U.S. through our Property Management segment, which provides maintenance and office field talent across 44 of the states and D.C. to property management companies responsible for the apartment communities and commercial buildings day to day operations. We provide field talent to a variety of client partners that are seeking to match their workforce requirements to their business needs. We employ a diverse operating model, both from a skill set and a geographic standpoint, which we believe mitigates downside revenue risk. Our workforce services consist of on-demand or short-term assignments and direct hire placements in the Property Management industry. 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. As more and more companies focus on effectively managing variable costs and reducing fixed overhead, the use of short-term workforce solutions allows companies to utilize a contingent approach for their personnel needs, thereby converting a portion of their fixed personnel costs to a variable expense. 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. Management believes that our workforce solutions and the field talent performing these workforce solutions are, and will remain, an integral part of the labor market in local, regional and national economies in which we operate. BGSF, Inc. is the successor by conversion to LTN Staffing, LLC, a Delaware limited liability company that was formed on August 27, 2007. In 2011, we began doing business as BG Staffing. LTN Staffing, LLC converted into a Delaware corporation, BG Staffing, Inc., following the merger of LTN Acquisition, LLC (the former parent of LTN Staffing, LLC) with and into LTN Staffing, LLC. The conversion was completed on November 3, 2013. In 2021, we changed our name to BGSF, Inc. We commenced operations on October 17, 2007, primarily focused on the light industrial staffing industry. 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. This acquisition laid the foundation for our entrance into the Property Management (“PM”) staffing industry. The PM business revenue at time of acquisition was $23.0 million and grew over time to $93.3 million in 2025 strictly through organic growth. During the same time period through, a series of acquisitions, we diversified into the professional services markets, which included consulting and staffing solutions for both information technology and finance and accounting as well as managed solutions services, which included both workforce solutions and fixed fee arrangements. In 2024, we engaged with an advisory firm to develop a long-term strategy for the business. This effort resulted in the sale of the Professional segment in September 2025 to INSPYR Solutions. The Professional segment’s financial results have been reflected in our Consolidated Statements of Operations 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. 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 providing field talent primarily to manufacturing, distribution, logistics, and call center client partners which operated under the “InStaff” trade name. Our Industry The property management workforce solution industry supplies field talent to client partners, helping them minimize the cost and effort of workforce planning. These workforce solutions also enable the client partner to rapidly respond to changes in business conditions, and in some cases to convert fixed labor costs to variable costs. Workforce solution companies act as intermediaries in matching available field talent to client partner assignments. 5 The property management workforce solution market is subject to volatility based on overall economic conditions. Historically, in periods of economic growth, the number of companies providing workforce solutions has increased due to low barriers to entry. During recessionary periods, the number of companies has decreased through consolidation, bankruptcies, or other events. The property management workforce solution industry is large and highly fragmented having only 3 firms with national scale. While the size of the temporary staffing market is not defined in industry data, a recent market study commission by the Company estimated that our core market and near term adjacency market to be approximately $1.5 billion. 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. Client partner demand for workforce solutions is dependent on the overall strength of the labor market and trends toward greater workforce flexibility. Our Operations With the sale of the Professional segment in September 2025, we have focused our operations on the Property Management segment. We also review the Company’s performance on a regional and strategic account level as well. Managers are held accountable for the performance within the respective areas of responsibility. We believe this level of review provides managers the appropriate information on how the performance of their areas of responsibility compares to other areas within the company. This 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. Financial Information about Geographic Areas Refer to Notes 1 and 2 in the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K, which is incorporated by reference. Our Client Partners We currently provide property management workforce solutions to small and medium-sized property management companies and property owners in the multi-family and commercial markets.. 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 fiscal years 2025, 2024, or 2023. Marketing and Recruiting We believe a key component of our success is the ability to recruit and maintain a pool of qualified field talent and regularly place them into desirable and appropriate positions. We use comprehensive methods to identify, assess, select and, when appropriate, measure the skills of our field talent and permanent placement candidates to meet the needs of our client partners. 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 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; interactions on reviews, comments, posts, direct messages, etc. give our followers a cursory notion of our values and business practices. We market our hiring and career management advice through all digital platforms (websites, social media, and blogs) and have expanded our use of job boards and aggregators in all aspects of sales and recruitment. Joint marketing arrangements have been entered into with major software partners. We actively seek endorsements and affiliations with professional organizations in the , apartment community and commercial buildings.. To enhance public recognition of us and our workforce solutions, we conduct public relations activities and team members are encouraged to be active in civic organizations and industry trade groups in their local communities. 6 Growth Strategy We are committed to growing our operations. Our continuing operations has grown from $23.0 million in 2010 when we purchased BG Personnel Services and BG Staff Services, which provided entrance into the Property Management industry, to $93.3 million in 2025 strictly through organic growth. While we have not used acquisitions in the past to grow the Property Management segment, we will evaluate acquisition opportunities as they present themselves. Additionally, we are committed to continue to grow our operations in our current markets, as well as expand into new markets within the industries that we currently serve. We are organized to handle many of the administrative functions at our home office location so that our Property Management segment operations can focus on business development and the effective development of job placements and recruiting and assignment of field talent. We continue to invest in technology and process improvements, as necessary, to ensure that we are operating at optimal productivity and performance. In 2025, we began to invest in AI tools to aid our efforts in recruiting and onboarding field talent. This investment will deepen our engagement with clients and elevate the experience of working with us as an innovative workforce. We believe these investments will help differentiate BGSF from our competitors. In 2022, the Company completed the three-year information technology improvement project authorized by the Board to enhance its processes. These workstreams included improvements to applications in front office, middle office, back office, modern workplace, IT infrastructure, and project management. Competition There are about 27,000 total staffing and recruiting companies, however data on the number of companies that participate in the property management market is not available because many companies operate across a wide spectrum of staffing markets. 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. Some of our competitors have significantly more marketing and financial resources than we do. Price competition in the industry is intense. We expect that the level of competition will remain high, which could limit our ability to maintain or increase our market share or profitability. The principal competitive factors in attracting qualified candidates for assignments are pay rates, availability of assignments, duration of assignments and responsiveness to requests for placement. We believe that many potential candidates seeking assignments through us may also be pursuing assignments through other means. Therefore, the speed at which we place prospective field talent and the availability of appropriate assignments are important factors in our ability to complete assignments of qualified field talent. In addition to having high quality field talent to assign in a timely manner, the principal competitive factors in obtaining and retaining client partners in the workforce solution industry are properly assessing the client partners’ specific job requirements, the appropriateness of the field talent assigned to the client partner, the price of services and the monitoring of client partner satisfaction. Although we believe we compete favorably with respect to these factors, we expect competition to continue to increase. Seasonality and Other Fluctuations Our business experiences seasonal fluctuations. 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 Property Management workforce solutions typically increases 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. The industry has historically been cyclical, often acting as an indicator of both economic downturns and upswings. Client partners tend to use contingent workforce solutions to supplement their existing workforce and generally hire direct workers when long-term demand is expected to increase. As a consequence, our revenues tend to increase quickly when the economy begins to grow and, conversely, our revenues can also decrease quickly when the economy begins to weaken. Historically, demand for permanent placement workforce solutions is even more sensitive to economic and labor market conditions than demand for workforce and consultant solutions and this is expected to continue. 7 Human Capital We are a workforce solutions company dedicated to connecting people to work in ways that enrich their lives. At BGSF, we define our purpose by championing the future of people, transforming lives, and positively impacting entire communities. We are more than a transactional business. Our focus is on the big picture. We believe we can be a powerful force for good by connecting people to opportunities that enrich their lives and support their personal and professional development. Embedded in our character is the positive energy we embrace that drives a happy work environment, that shapes a happy home, which cascades into happier communities. We believe small actions can turn into big impacts, creating a ripple that becomes a wave powerful enough to change the world around us. This is what we call The BG Ripple Effect. In order to compete and succeed in our highly competitive and rapidly evolving markets, it is crucial that we attract and retain experienced internal team members, as well as talent to work for our client partners. As part of these efforts, we strive to offer competitive total rewards programs, foster an inclusive and diverse environment, and give team members the opportunity to give back to their communities and make a social impact. Team Members As of January 29, 2026, we employed approximately 189 team members working remotely or in our various market locations in the United States. Field Talent In addition to our team members, BGSF matches talent with our client partners. In 2025, we placed approximately 9,600 individuals in positions with our client partners. In significantly all of these instances, we remain the employer of record for substantially all of our talent working at our client partner locations. 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. 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 BGSF is committed to providing competitive, equitable and fiscally responsible total rewards programs to our team members. Our compensation programs are designed to attract, retain and reward talented individuals who possess the skills necessary to achieve our strategic goals and create long-term value for our shareholders. We provide team members with competitive compensation opportunities, with pay for performance opportunities that include a mix of base salary, commissions, short-term incentives and, in the case of our more senior team members, long-term equity awards. 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 our 2020 ESPP. In the first quarter of 2025, our 2020 ESPP expended all of the available shares approved by shareholders and the plan was suspended. We subsequently received approval for additional shares to allocate to the plan at BGSF’s annual shareholder meeting. BGSF is currently evaluating the restarting of this plan. Diversity, Equity, and Inclusion and Belonging We are committed to fostering an inclusive workforce. Our responsibility commitment is overseen by executive leadership, along with board-level oversight led by our Nominating and Governance Committee. In September 2020, we formed a diversity, equity and inclusion council called Voices Inspiring Inclusion, Belonging, and Equity (“VIIBE”), which represents broad perspectives across our organization. In August 2022, we launched our first two team member resource groups: African American/Black Employees & Allies and Working Parents and Allies. During 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. This focus will extend to our collaboration with client partners, selection of vendor partners, engagement in our communities and prioritization of overall work-life harmony. Our commitment to diversity, equity and inclusion does not sit with a singular 8 individual, but with every BGSF team member. BGSF leaders will continue to be provided additional inclusive-leadership growth opportunities, understanding the importance of mitigating biases, as an ongoing effort to shape our future talent pool selections, onboard new talent, and support future career trajectories. As of December 5, 2025, we employed approximately 2,243 people, of which 8% were internal team members and 92% were field talent supporting our client partners across the country. • Women represented 36% of all team members, and underrepresented minorities (“URMs”, defined as those who identify as Black/African American, Hispanic/Latinx, Native American/Alaska Native, Asian, Native Hawaiian/Pacific Islander and/or two or more races) represented 71% of our all of our reporting team members (8% of team members in contingent roles chose not to disclose this information); • Women represented 77% of our internal team members and 74% of internal team members in managerial and leadership roles; and • URMs represent 52% of our internal team members and 30% of internal team members in managerial and leadership roles identified as URMs. Our focus is to ensure BGSF is cultivating equality and equity, while recognizing and celebrating our differences at work, in our homes, and out in the communities. Community Involvement In 2025, 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 144 individuals volunteer over 1,400 hours and donated over $60,000 for philanthropic purposes, including volunteer hours from our first Service Week, which was spearheaded by our Employee Resource Groups (ERGs). Our ongoing dedication to community service was also emphasized by adding an “S” for Service to our GIIFTS (Growth Integrity Innovation Fun Teamwork 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 also continued to be involved with student development through the Junior Achievement organization. Our global investment in professional development initiatives delivered over 10,000 educational hours to 2,200 individuals. During 2026, we will remain dedicated to sustainability, employee development, and community impact. Team Engagement As part of BGSF’s continued initiative to provide its team members with feedback opportunities, in 2025, we conducted several pulse surveys to understand team member needs and provide support. Survey results were analyzed and reviewed by our senior leadership, as well as shared with individual managers, who were then tasked with taking action based on their team members’ confidential feedback (both quantitative and qualitative). By paying close attention to the results, both at an aggregate enterprise level as well as at a department/business/workgroup level, we have been able to continue the enhancement of our culture of rewards and recognition, drive efforts to promote inclusion and diversity, increase communication in support of team member well-being and modernize our approach to foster a culture of continuous learning and feedback. In 2025, team members recognized our BGSF values through our “BIG Deal” platform by sending over 3,300 awards to their fellow team members. Learning and Development We emphasize team member development and learning as a priority for the organization. We believe learning and development are key elements to overall retention, engagement, and team member experience strategy. Our strategy is designed to empower team members to reach their full potential, and we provide a wide range of development programs, opportunities, and resources needed to be successful. As we continue to develop the BGSF University, our goal is to provide a variety of learning channels including instructor-led, facilitated custom workshops, leader-led, cohort and mentorships, self-paced, e-learning and a catalog of vendor-provided courses, videos, resources, and books. 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 2025, we had over 10,000 hours spent in upskilling the workforce, with over 3,200 going through our training programs. 9 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, BG Temporary Staffing, BG Multifamily, BG Talent, bgsf.com, and bgstaffing.com. In 2023, the Board of Directors (“Board”) approved, and we completed, management’s plan to rebrand as BGSF, eliminating various current trade names. Regulation 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. We are subject to the laws and regulations of the jurisdictions within which we operate. While the specific laws and regulations vary among these jurisdictions, some require some form of licensing and often have statutory requirements for workplace safety and notice of change in obligation of workers’ compensation coverage in the event of contract termination. Although compliance with these requirements imposes some additional financial risk on us, particularly with respect to those client partners who breach their payment obligation to us, such compliance has not had a material adverse effect on our business to date. Increased government regulation of the workplace or of the employer-employee relationship, or judicial or administrative proceedings related to such regulation, could also materially harm our business. Available Information We file electronically with the SEC our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended. Our website address is www.bgsf.com. The information included on our website is not included as a part of, or incorporated by reference into, this Annual Report on Form 10-K. We will make available free of charge through our website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we have filed or furnished such material to the SEC. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov. Furthermore, we will provide electronic or paper copies of filings free of charge upon written request to our Corporate Secretary.