BGSF Q2 2024 Earnings Report

BGSF EPS Results

• Actual EPS: -$0.07
• Consensus EPS: $0.08
• Beat/Miss: Missed by -$0.15
• One Year Ago EPS: $0.24

BGSF Revenue Results

• Actual Revenue: $68.14 million
• Expected Revenue: $74.00 million
• Beat/Miss: Missed by -$5.86 million
• YoY Revenue Growth: N/A

BGSF Announcement Details

• Quarter: Q2 2024
• Date: 8/7/2024
• Time: After Market Closes
• Conference Call Date: Thursday, August 8, 2024
• Conference Call Time: 9:00AM ET

BGSF (NYSE:BGSF) (NYSE:BGSF) is a provider of comprehensive workforce management and professional staffing services. The company specializes in designing and administering programs that help organizations optimize their contingent labor, direct hire recruiting and managed service solutions. Through an integrated approach, BGSF delivers end-to-end support that encompasses the planning, deployment and oversight of talent across multiple business functions.

BGSF’s service offerings include strategic workforce planning, vendor management, compliance and risk management, onboarding, timekeeping and payroll administration. The company leverages proprietary technology platforms and process-driven methodologies to monitor worker performance, ensure regulatory compliance and manage overall program costs. BGSF’s flexible delivery model supports on-site program management, remote service delivery and hybrid arrangements tailored to client requirements.

Founded in 1992 and headquartered in Sioux Falls, South Dakota, BGSF serves a broad range of industries, including energy, healthcare, financial services, manufacturing and technology. The company works with mid-market and enterprise clients across North America, helping them streamline their contingent labor programs and direct hire processes. As a publicly traded entity on the New York Stock Exchange, BGSF maintains a focus on operational excellence and scalable solutions that address evolving workforce challenges.

BGSF Q2 2024 Earnings Call Transcript

Key Takeaways

• The Board has launched a strategic alternatives review to maximize shareholder value, with no further details disclosed at this time.
• 2Q revenues were $68.1 million flat sequentially, with Property Management up 4.8% versus Q1 but the Professional segment down on both sequential and year-over-year comparisons.
• Professional new contract wins outpaced project ends by 25% through June, including the company’s largest IT transformation deal, expected to drive H2 revenue and cash flow.
• Prudent cost actions—headcount reductions and lower fixed expenses—helped sustain a 3.8% adjusted EBITDA margin and support short-term profitability goals.
• Operating cash flow of $14.7 million in H1 enabled funded debt reduction from $63 million to $52 million, lowering leverage to 2.8x trailing adjusted EBITDA.

Presentation

[Operator]

Welcome to the BGSF, Inc. fiscal 2024 second quarter financial results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press Star then one on your telephone keypad. To withdraw your question, please press Star then two. Please note, this event is being recorded. Now, I would like to turn the call over to Sandy Martin, Three Part Advisors. Please go ahead.

[Sandy Martin, MBA,CPA and Strategic Advisor at Three Part Advisors]

Good morning. Thank you for joining us today for BGSF's second quarter 2024 earnings conference call. With me on the call are Beth Garvey, Chair, President, and Chief Executive Officer, and John Barnett, Chief Financial Officer. 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.

[Sandy Martin, MBA,CPA and Strategic Advisor at Three Part Advisors]

Management 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. During the call, management will also reference certain non-GAAP financial measures, which can be useful in evaluating the company's operations related to the financial conditions and results. These non-GAAP measures are intended to supplement GAAP financial information and should not be considered a substitute. GAAP and non-GAAP measures are reconciled in today's earnings press release. I'll now turn the call over to Beth Garvey.

[Beth Garvey, Chair,President and,CEO at BGSF Inc.]

Thank you, Sandy, and thank you all for joining us. Welcome to our second quarter earnings conference call. In May, we announced a review of strategic alternatives, and as part of that ongoing process to maximize shareholder value, the board and I will continue to evaluate all options. While I cannot provide an update today, the process is ongoing and we look forward to sharing the results in the future. Also, we will not take questions regarding the strategic alternatives or our process in today's Q&A. Thank you so much for understanding. Before we cover our results, I am pleased to share that we have been recognized by Staffing Industry Analysts, naming us the 49th largest IT staffing firm in the US, an improvement from 52nd, as well as the 97th largest staffing firm, an improvement from 121st place in 2023.

[Beth Garvey, Chair,President and,CEO at BGSF Inc.]

Moving up in SIA's annual rankings is an important milestone, recognizing our team's hard work and dedication to delivering value and excellence to our customers and strategic partners. Over the last 12 months, challenging macro pressures have significantly impacted our entire industry due to higher interest rates and inflationary pressures that have negatively impacted most businesses in the US. For the second quarter, our total revenues were $68 million, comprised of approximately $26 million for property management and $42 million for the professional segment. Year-over-year comparisons, although still meaningful, may not measure our incremental progress this year compared to sequential comparisons. Property management revenues were down year over year and up sequentially compared to the first quarter.

[Beth Garvey, Chair,President and,CEO at BGSF Inc.]

Although we've not yet returned to normal seasonality, I will be trending in the right direction, we were pleased to report a sequential sales lift in the second quarter of 4.8% versus the first quarter. In the Professional Segment, revenues declined in the second quarter over both the sequential and year-over-year periods, mainly because project ends exceeded project starts. However, business indicators began to shift on a positive momentum in the quarter. Notably, new contract wins outpaced contract ends by approximately 25% through June. This sustained acceleration was primarily seen in the IT Workforce Solutions, Managed Solutions, and nearshore and offshore engagements. These projects will generate revenue and cash flow in the second half of the year. This is very encouraging, and I will speak more about our outlook in a moment.

[Beth Garvey, Chair,President and,CEO at BGSF Inc.]

We continue to manage costs and took prudent action in the second quarter to reduce headcount and lower fixed costs. These actions will benefit our short-term profitability goals while supporting our strategic growth plans. After John walks through the detailed financial results for the quarter, I will return to discuss significant operational initiatives and our outlook. John?

[John Barnett, CFO at BGSF Inc.]

Thank you, Beth, and good morning, everyone. As Beth mentioned, the challenging environment impacting our industry has made year-over-year financial comparisons more difficult to see our progress. Although year-over-year comparisons are important, I plan to focus on a few sequential comparisons to highlight current trends. Second quarter revenues were $68.1 million versus $80.8 million in the prior year quarter, and flat sequentially. On a sequential basis, Property Management revenues reflected seasonal lift with an increase of 4.8% from the first quarter of 2024. For the second quarter, revenues in our Professional Segment remained soft compared to the first quarter and were down in line with competitors versus the prior year period. However, as Beth mentioned, we are seeing sequential improvement in new contract wins.

[John Barnett, CFO at BGSF Inc.]

Professional project wins in the second quarter will begin to show up in revenue in the third and fourth quarters. We are encouraged by an improving demand environment, an uptick in contract wins, and are cautiously optimistic that BGSF and perhaps the industry are nearing a positive inflection. Gross profit and margins in the second quarter were $23.6 million and 34.7%, compared to $29.6 million and 36.6% in the prior year period. The year-over-year decrease in gross profit margin is attributed to lower margins in property management, driven by market competition and lower permanent placement, which has no cost of sales. Compared to the first quarter, gross profit margins improved by 60 basis points. As we discussed last quarter, we expect professional segment gross margins to improve sequentially due to actions we were taking.

[John Barnett, CFO at BGSF Inc.]

SG&A expenses for the second quarter were $21.6 million, compared to $21 million in the first quarter, and $22.6 million in the prior year's quarter. With top line sales compression persisting, we continue to manage our cost structure, reducing fixed costs where it is prudent, balancing short-term gains and long-term benefits. Second quarter Adjusted EBITDA was $2.6 million, or 3.8% of revenue, sequentially compared to $2.7 million or 3.9% in the first quarter. The 2023 second quarter Adjusted EBITDA was $7.5 million, or 9.3% of revenue. We reported adjusted earnings of $0.07 per diluted share, even with $0.07 per share in the 2024 first quarter, which compares to $0.37 per share in the second quarter of 2023.

[John Barnett, CFO at BGSF Inc.]

We generated cash from operating activities for the first 6 months of $14.7 million, which enabled us to reduce funded debt from $63 million at the end of 2023 to $52 million at the end of the second quarter. Capital expenditures were $1 million for the first half and reflects our expected run rate spend. At June 30, our funded debt to trailing 12-month pro forma Adjusted EBITDA was 2.8 times. With that, I would like to turn the call back to Beth.

[Beth Garvey, Chair,President and,CEO at BGSF Inc.]

Thank you, John. As expected, we communicated last quarter, the first half of 2024 was difficult, but we began seeing positive momentum late in the second quarter that should improve our results starting in the third quarter. We expect our fourth quarter revenues to increase compared to fourth quarter of 2023. Although macro headwinds and recession fears continue to challenge our industry, we are cautiously optimistic given our developing backlog of professional projects and early traction in property management. We are actively preparing for a return to elevated seasonal work with our property management teams. With a more robust sales enablement process, bolstered by our system upgrades, we have been able to strategically target properties with targeted campaigns around our customers' operating realities, driving leads to the sales teams, increasing relationship touch points, and closing deals.

[Beth Garvey, Chair,President and,CEO at BGSF Inc.]

This year, unit owners and property management groups felt rate and occupancy pressures, as well as increased operating expenses. As a result, several property management groups are opting for a short list of preferred, dependable suppliers rather than a larger pool of vendors. As a leader in the industry with a reputation of delivering exceptional talent, our strategic sales teams has been able to secure positions on these lists as a preferred provider. This is a win-win for our client partners as well as for us. The industry shift to a narrow list of trusted property management suppliers allows our teams to showcase our people and culture as a competitive advantage at BGSF. In the industry, last year, the multifamily sector experienced higher M&A of property management companies, which created delays in capital decisions and higher deferred maintenance levels.

[Beth Garvey, Chair,President and,CEO at BGSF Inc.]

We believe this was created a backlog on repairs and capital improvement, which will benefit us in the second half of 2024, especially as the Fed lowers interest rates as expected. For property management, we also see measurable traction as we executed our territory mapping strategy in an effort to increase market share. Our pilot market saw a 19% increase in revenue year-over-year, and we are actively rolling out the process in additional markets. In addition, as our strategic partnerships gained traction, we aligned management to strengthen those relationships and brought on a seasoned SVP of sales to lead the local sales teams in the markets. Andrew Hill joined us in June, and a strong track record of building powerful sales teams in a competitive environment.

[Beth Garvey, Chair,President and,CEO at BGSF Inc.]

Andrew's expertise, coupled with our enhanced efforts around sales training and development, will improve the effectiveness and speed with which we onboard and train our sales teams. As discussed last quarter, we know this industry is evolving and changing, and we are proud to be on the leading edge of innovation with an expanding industry of apartments, luxury communities, and commercial conversions to residential. On the professional side, we began to see declines in customer spending in the first quarter of last year that accelerated for the remainder of 2023. Typical engagements with three or four resources tightened to one or two, with project ends exceeding project starts almost every quarter, starting with Q3 in 2023. Despite these trends, our strategic IT partnerships and software development opportunity pipelines began to expand, accelerating project quotes and awards related to managed services and IT consulting engagements.

[Beth Garvey, Chair,President and,CEO at BGSF Inc.]

As I mentioned earlier, project wins exceeded project ends starting in the last few weeks of the second quarter. We also won the most significant project in our company's history, a major IT transformation project for a large international client, which will begin contributing to our financials in Q3.... We are actively deploying project teams to many engagements, are more encouraged about the revenue outlook for the professional division than we have been in more than a year. While our first half results did not fully capture the momentum from these recent business wins, we anticipate a strong revenue ramp-up in the professional division starting in the third quarter and continuing with more client engagements and billable work in the fourth quarter.

[Beth Garvey, Chair,President and,CEO at BGSF Inc.]

In addition, we are seeing an increase in our perm placement activity for finance and accounting services, with recent double-digit growth sequentially, which we know is a positive signal about hiring for the U.S. businesses. Our industry has indicated that businesses that operate in a more consultative versus staffing manner in IT services will benefit in the long term, which aligns with the strategic shift we put into play over two years ago. Our collective IT expertise in BGSF is highly valuable to our clients as we bring an unbiased approach to every part of the tech cycle. Our recent technology partnerships with Workday, SAP, and others has bolstered our reputation in the market, which will continue to benefit us in the second half of 2024 and beyond.

[Beth Garvey, Chair,President and,CEO at BGSF Inc.]

Managed Solutions continues to grow and innovate with our Arroyo teams, which delivers onshore and offshore work, important AI solutions, and valuable ERP connector products. This is an exciting area for us, with software engineers delivering intelligence, product development, cloud initiatives, and delivery excellence. I am pleased with BGSF's near-term growth prospects. We will continue to focus on reducing and optimizing costs to drive higher profitability and improve our structural margins. We know we have work to do, but we are relentlessly focused on sales, profitability, and cash flow growth. Thank you for your time today. I want to thank all of our stakeholders, employees, clients, partners, and investors for their continued support and belief in our vision at BGSF. We would now like to open the call for questions. Operator?

[Operator]

Thank you. We will now begin the question-and-answer session. To ask a question, you may press star, then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question will be from Jeff Martin from Roth Capital. Please go ahead.

[Jeff Martin, Co-Director of Research at Roth Capital Partners]

Thanks. Good morning, Beth and John.

[Beth Garvey, Chair,President and,CEO at BGSF Inc.]

Good morning.

[Jeff Martin, Co-Director of Research at Roth Capital Partners]

Beth, I missed your comments about the third and fourth quarter by real estate and professional. I did catch that you expect the fourth quarter to be up year-over-year. But if you could just repeat those comments, I apologize I missed them.

[Beth Garvey, Chair,President and,CEO at BGSF Inc.]

In regards to property management?

[Jeff Martin, Co-Director of Research at Roth Capital Partners]

Professional and Property Management, third and fourth quarter.

[Beth Garvey, Chair,President and,CEO at BGSF Inc.]

We believe that the second half of the year is going to be far better than the first half of the year in both segments. We've got a lot of positive momentum going on in the professional side in regards to wins that we won in May and June. Start dates kind of stagger out between starting in August, September, and October. So we see those things coming in, and then property management goes into their normal seasonality uptick and coupled with the building out of this territory mapping tool that we've seen success in, we think the end of the year is definitely gonna be better than the first half of the year.

[Jeff Martin, Co-Director of Research at Roth Capital Partners]

Great. And then you talked about, you know, some large contracts last quarter. There was an SAP Cloud contract and I think a couple of divestitures. Just curious if those are off and running or if those were delayed a little bit in the second quarter in terms of start?

[Beth Garvey, Chair,President and,CEO at BGSF Inc.]

Some of them have started running, but the big one that we've been working on, I think our teams right now are actually doing discovery this week, and so we should start seeing some of that revenue coming in, in late August and into September, we should start ramping up.

[Jeff Martin, Co-Director of Research at Roth Capital Partners]

Okay, great. And then with respect to, you know, the new wins, exceeding project ends, you mentioned that started late in the quarter, but, how does that dovetail with the 25% higher win versus end state?

[Beth Garvey, Chair,President and,CEO at BGSF Inc.]

The wins going into the second half of the year? Again, they sprinkle in. We have many customers, Jeff, that we, a win is basically we've signed the paper, and so, some of them start in August, some start in September, some start in October. So it's just a matter of when those start dates get implemented. We haven't seen anything push from the initial agreements that we have, so that's a positive sign right now. So they're just getting ramped up.

[John Barnett, CFO at BGSF Inc.]

Yeah, and Jeff, we haven't seen this consistency on a weekly basis, right? That we are consistently winning more contracts than we're seeing end. And we haven't seen that in quite a while. So it's what we've seen in the quarter has been encouraging and continued through this beginning of this quarter.

[Jeff Martin, Co-Director of Research at Roth Capital Partners]

Yep. Yep. Okay, that's helpful. Makes a lot of sense. And then, just curious on, in terms of working capital, you, you've, you know, generated quite a bit of operating cash flow first half of the year, mainly due to collection of receivables. Just curious, your, your comfort with your capital availability, you know, as, as things ramp back up and you start to build that working capital again.

[John Barnett, CFO at BGSF Inc.]

Yeah, we feel comfortable with where we are today. I think we'll. You know, we've, we've worked very hard on, and our accounts receivable team has done a great job. Over the last year, we've really focused on structure of the organization, you know, training, and then we also implemented DadePay, which is a really helpful tool to automate a lot of the AR functions, and then also just provide a daily guide for what we should be doing, and a lot more visibility into our AR balances. And so that's really allowed us to accelerate collections, which is, you know, the, the, the decline in AR is a combination of the revenue, right? Less, less revenue, less AR, but also we made great strides to push down our DSO.

[Jeff Martin, Co-Director of Research at Roth Capital Partners]

That's helpful. Thank you.

[Operator]

The next question will be from Howard Halpern from Taglich Brothers. Please go ahead.

[Howard Halpern, Principal Equity Analyst at Taglich Brothers]

Good morning, guys.

[Beth Garvey, Chair,President and,CEO at BGSF Inc.]

Morning, Howard.

[Howard Halpern, Principal Equity Analyst at Taglich Brothers]

If you could talk a little bit about, I guess, the pipeline that you have and the type of verticals that the projects will be you'll be engaging in.

[Beth Garvey, Chair,President and,CEO at BGSF Inc.]

Mostly in our technology space, so it's a lot of Managed Solutions and bringing in Arroyo. You know, as we talked about, getting Arroyo up to speed and integrated, we've got more and more deals where we're doing what we call a plus one campaign, which means that we have customers that are buying one thing from us, and so we're going out and asking them to buy other types of services from us. Since we launched that in 11 months, I think we started it, 12 months ago, and we were about 12. We had 69, customers now that are buying multiple services from us. So it's those kinds of engagements.

[Howard Halpern, Principal Equity Analyst at Taglich Brothers]

Okay. And in terms of, you know, you're seeing the ramp-up, but you also, I guess, talked about in the press release, you know, right-sized costs. And so are you leveraged enough now where you're not going to have to increase costs that much to accomplish the ramp in activity that's coming in the second half?

[John Barnett, CFO at BGSF Inc.]

A lot of the activity we expect in the second half is actually under contract. Obviously, we have to continue to add to that. It's a matter of timing of the start of the projects and how fast they ramp up.

[Howard Halpern, Principal Equity Analyst at Taglich Brothers]

Okay.

[John Barnett, CFO at BGSF Inc.]

But yes, we don't expect near-term that we would add to our, you know, sales cost structure or GNA cost structure to deliver our expected second half results.

[Howard Halpern, Principal Equity Analyst at Taglich Brothers]

Okay. And then just one last one. At least the near term or initial trends in permanent placements, what does that look like and what does that indicate to you potentially for, you know, the upcoming quarters?

[Beth Garvey, Chair,President and,CEO at BGSF Inc.]

Permanent placement is usually when the economy is soft, something that is not very active, and we saw that last year. We're seeing that pick up in our finance and accounting teams right now, which usually is an indicator that people have a little bit more confidence as they move into the quarters. And so, we're just following that. I think we had double-digit growth and sequential growth in what they had done the first six months of the year, the last six months of last year and the first six months of this year. So, we just find that to be a positive. And it usually trends with the industry. So you know, when perms are down, you can kind of know things are tough, and when perm starts to come back, it's a little bit of...

[Beth Garvey, Chair,President and,CEO at BGSF Inc.]

It's a glimmer of hope.

[Howard Halpern, Principal Equity Analyst at Taglich Brothers]

Okay. Well, keep up the good work, and look forward to the second half.

[Beth Garvey, Chair,President and,CEO at BGSF Inc.]

Thanks, Howard.

[Operator]

Again, if you have a question, please press star, then one. The next question is from Bill Dezellem from Tieton Capital. Please go ahead.

[Bill Dezellem, President and Chief Investment Officer at Tieton Capital]

Thank you. I have a group of questions. First of all, what changed? And so in the spirit of why are you now seeing the wins ramping up?

[Beth Garvey, Chair,President and,CEO at BGSF Inc.]

I think there's a change in, you know, how the outlook. You know, people held on to their cash last year, and at some point in these ERP systems, people actually end up saying: "Hey, we've held long enough. We have to move forward." And so I think we're seeing that shift where people held last year and, you know, people's ERP systems are kind of an important part of their business. So since that's where we play, we're seeing a lot of that pent-up demand start to release.

[Bill Dezellem, President and Chief Investment Officer at Tieton Capital]

Any further insight into why so much of that demand seemed to be released specifically in the second quarter, as opposed to maybe gradually coming back in?

[Beth Garvey, Chair,President and,CEO at BGSF Inc.]

I don't know that we could speculate what the buyer is think- what's happening in that regard. I just think our teams have done a really good job in nurturing these relationships and making sure that we're reaching out and having our partnerships in place. And when they were ready- when our customers were ready to go, we were there to help.

[John Barnett, CFO at BGSF Inc.]

Yeah, on the professional side of the business, these are long sales cycles, too, right?

[Beth Garvey, Chair,President and,CEO at BGSF Inc.]

Very.

[John Barnett, CFO at BGSF Inc.]

So we've been working on a lot, a lot of the wins that we had. We've been working on for some time. It's just got to the point where our customers said, "Okay, let's go. Let's move forward with this.

[Bill Dezellem, President and Chief Investment Officer at Tieton Capital]

Great. Thank you. And then, the large deal, I guess you said it was the largest in the firm's history. Why did you win that, versus the competition? And maybe you could lay out who the competition was?

[Beth Garvey, Chair,President and,CEO at BGSF Inc.]

... I'm not sure who we were competing against. I know there was an international company, so it was an international player, and we got called. We'd met the chairman of their board at an event that we were at, and we were talking to him about our capabilities, and he wasn't very happy with the incumbent. And so he asked us to come in at the eleventh hour and to present. And our team did an amazing job coming in and figuring out what the needs were and presenting the need. And it was a very, very long and tedious process for them. But we ended up beating out the incumbent and taking over and winning the deal, which was good.

[Beth Garvey, Chair,President and,CEO at BGSF Inc.]

It's the biggest one we've ever done, and an international player, too. So it's very exciting. I'm very proud of the team for that.

[Bill Dezellem, President and Chief Investment Officer at Tieton Capital]

Beth, in that case, are you implementing for the US operations? And so if you do meet their expectations, that there would be other countries that you could then do implementations for? Or how do you see the opportunity for additional business with this customer?

[Beth Garvey, Chair,President and,CEO at BGSF Inc.]

It's an international company, so, there-- it's, we're already gonna be helping them in 19 countries. So, I believe that, you know, there's, I... The team, when they met with the chairman last week, I believe it was, we believe that it, the deal we have now is just, the beginning. We think it'll definitely open the doors for more business with this customer in the future.

[Bill Dezellem, President and Chief Investment Officer at Tieton Capital]

Great. Thank you. And then, relative to the property management business, you referenced that the M&A had led to deferred maintenance. Are you finding that this year, with the pressure on rate and occupancy, that that is leading to a continuation or additional, maintenance deferral as they're trying to, preserve cash? What’s the dynamic that you're sensing there?

[Beth Garvey, Chair,President and,CEO at BGSF Inc.]

There is a lot of cash being held in that segment. I think a lot of it has to do with, you know, the property's insurance is higher. All their operational costs are higher, so we definitely are seeing them hold cash. But at some point, again, you know, people can only hold maintenance for a certain amount of time before they have to deal with it. So we do believe that there's lots of pent-up demand there that will eventually break free. We're just not... it's just not completely started yet.

[Bill Dezellem, President and Chief Investment Officer at Tieton Capital]

Great. Thank you.

[Beth Garvey, Chair,President and,CEO at BGSF Inc.]

You're welcome.

[Operator]

Ladies and gentlemen, this concludes our question and answer session. I would like to turn the conference back over to Beth Garvey for any closing remarks.

[Beth Garvey, Chair,President and,CEO at BGSF Inc.]

Thank you for your time today, and we appreciate your continued support. We look forward to talking to you in November. Thanks.

[Operator]

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

Participants

Executives

• Beth Garvey, Chair,President and,CEO
• John Barnett, CFO

Analysts

• Bill Dezellem, President and Chief Investment Officer at Tieton Capital
• Howard Halpern, Principal Equity Analyst at Taglich Brothers
• Jeff Martin, Co-Director of Research at Roth Capital Partners
• Sandy Martin, MBA,CPA and Strategic Advisor at Three Part Advisors