Good morning, ladies and gentlemen. Thank you for attending today's BGSF Inc. Q2 fiscal 2022 financial results conference call. My name is Jaquita. I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star followed by one on your telephone keypad. I would now like to pass the conference over to your host, Sandy Martin, Three Part Advisors. Sandy, please go ahead. Thank you. Good morning and welcome to the BGSF Q2 2022 earnings conference call. With me on the call today are Beth Garvey, Chair, President, and Chief Executive Officer, and Dan Hollenbach, Chief Financial Officer. After the speaker's opening 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 for 90 days on the company's investor relations page. I now wanna take a moment to remind you that today's discussion will include forward-looking statements which are based on certain assumptions made by BGSF under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The company's 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 and reports with the Securities and Exchange Commission. All risks and uncertainties are beyond the ability of the company to control, and actual results may differ materially from those indicated by the forward-looking statements. Management statements are made as of today, August 4, 2022, 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 operating activities and business trends related to the financial condition and results of operations. These non-GAAP measures are intended to supplement GAAP financial information and should not be considered as a substitute. Reconciliations of GAAP to non-GAAP measures are provided in today's earnings release posted on the company's website. I'll now turn the call over to Beth Garvey. Beth? Thank you, Sandy. Hello, everyone, and thank you for joining us. I'll begin today's call with a few operational highlights for the Q2. Then I'll turn the call over to Dan to provide more details around our Q2 financial results, followed by an update to the company launch of our enterprise-wide technology upgrade and discuss our pipeline, strategic initiatives, and M&A. We are delighted to again report very strong results, which continues to give us confidence regarding the U.S. labor market and client demand. The Real Estate segment leads the way with an overall stronger demand environment. The Professional segment, which includes IT and finance and accounting, reported strong double-digit growth over last year. We remain laser-focused on solving business challenges for our clients while growing market share with our well-aligned team. I also would like to provide a recent update on Momentum Solutionz acquisition. We cycled past the one-year anniversary in February, and we are happy to report that we have more than doubled revenues in Q2 versus the Q2 of last year. Regarding new markets this year for Real Estate segment, we successfully opened four of the six markets targeted for 2022 and will add the final two by the end of Q3. After a market is fully staffed, our goal is to be cash flow positive within four to five months, so we are forecasting the new markets to be profitable in early 2023. According to a recent study released by the National Apartment Association and the National Multifamily Housing Council, there is a current deficit of 600,000 apartment homes in the U.S. due to underbuilding. The study also states that the U.S. faces a pressing need to build 4.3 million new apartments by 2035 to address demographic shifts and lingering pandemic impacts on the population and the broader economy. If significant investments are made in new construction for multifamily units over the next several years, this will support additional tailwinds for our Real Estate segment for years to come. With that said, I'll now turn the call over to Dan to discuss the company's financial results in more detail. Dan? Thank you, Beth, and good morning, everyone. First, I wanna remind you that we completed the sale of our light industrial segment late in the Q1. As a result, our financial results discussed today are from continuing operations, and except where noted, exclude operating results for the light industrial segment for this year and last year. For additional details on the sale transaction, please refer to our Form 8-K filed on March 24. Moving to our financial highlights from continuing operations. Strong momentum continued into the Q2 with total revenues up 29.1% to $74.1 million compared to 2021. By segment, Real Estate grew 41% and Professional increased 22%. We continue to see better efficiencies in submittals, and while wage rates began to level out during the quarter, they were up 9% Q over Q. In addition to year-over-year improvements, both segments showed sequential growth between Q1 and Q2. Real Estate revenues grew 15.7%, and Professional segment revenues increased 3.5%. The Professional segment 2022 revenue growth over 2021 was impacted by strong double-digit growth in finance and accounting, IT consulting, and managed services. We continue to see solid demand for digital transformation work and enterprise modernization projects. As talent resources remain in high demand, our clients look for ways to enhance systems to automate processes and leverage less manual functions. Gross profit increased by 30.2% compared to the prior quarter, growing to $25.1 million, primarily due to revenue expansion and increased spread in both segments. As a percentage of revenue, total gross profit increased 30 basis points to 33.8% compared to 33.5% in 2021. Operating leverage in selling, general, and administrative costs improved by 140 basis points to 26.9% of revenue, compared to 28.3% a year ago. SG&A dollars increased to $3.6 million, or 22.3%, which compared favorably to our revenue growth. Q2 net income from continuing operations was $3.2 million, or $0.30 per diluted share, compared to net income from continuing operations of $2.6 million, or $0.25 per diluted share in the same quarter a year ago. As a reminder, last year's Q2 income included a pre-tax credit of $1.2 million associated with contingent consideration recorded from an acquisition in 2019. Adjusted EBITDA from continuing operations for Q2 was $5.4 million, or 7.3% of revenues, compared to $3.2 million or 5.6% of revenues in 2021. Our Q2 effective tax rate was 23.6% for 2022, compared to 16% in last year's Q2. Now turning to year-to-date results. Revenues for the H1 were $142.6 million, up 33.1% from 2021, while gross profit was $48.5 million, up 36.7%. Although selling, general, and administrative dollars increased 25.5%, they improved as a percentage of revenues, resulting in a nice operating leverage of 170 basis points. Net income from continuing operations for the first six months was $5.2 million, or $0.50 per diluted share, compared to $2.3 million, or $0.23 per diluted share for the 2021 period. A reminder, the prior period included a $1.2 million pre-tax contingent consideration credit. Adjusted EBITDA for the H1 of 2022 totaled $10.3 million, or 7.2% of revenue, compared to the prior year of $6.7 million, or 6.3% of revenue. Finally, the year-to-date effective tax rate was 22.7% for 2022, compared to 16.2% in the year ago period. Turning to the company's IT investment roadmap. As we discussed last quarter, we expect significant productivity improvements and competitive advantages in our business when the IT platform upgrades. Assuming a modest 5% efficiency in order fulfillment, the projected payback period for the roadmap is approximately three years. Future IT spend will represent incremental enhancements to improve systems, provide a more robust platform to grow and scale our business, and Beth will provide further updates from our go live launch in a few moments. Moving on to our financial position. The company's balance sheet is strong, and we continue to maintain a prudently conservative liquidity position. At the end of the Q2, our accounts receivable balance was $50.1 million, up 4% compared to year-end, while days sales outstanding, or DSO, improved by 6 days from year-end, and our working capital ratio strengthened to 2.45 from 1.95 at year-end. Net cash provided from operations was $1.2 million, a $3.6 million increase from 2021. We utilized the proceeds of the sale of InStaff to pay down our debt, and our leverage ratio of funded debt to trailing twelve-month EBITDA was 0.7x as of the June balance sheet date. Finally, the board of directors approved our thirty-first consecutive quarterly dividend at $0.15 per share in support of our strategic initiatives. Our solid balance sheet position and deleverage efforts are expected to continue to provide ample flexibility to fund our operations while investing for future growth, as well as returning value to our shareholders through cash dividends and stock appreciation. I will now turn the call back to Beth. Thank you, Dan. Now I'd like to provide you with an update of our strategic IT roadmap initiative. The company went live at the end of Q2 with our enterprise-wide CRM, HRIS, payroll, invoicing, and applicant tracking system. Although we continue to tweak back-office interfaces, the operational modules are in good shape. As we discussed last quarter, we fully expect productivity improvements and competitive advantages in our business from this modernization project. Further IT spend will represent incremental enhancements to improve current systems, which provide us with much more robust platform to grow and scale our business. Our pipeline continues to be active in both segments. We continue to win business in a challenging labor environment and credit our successes largely to the continued success of our cross-sell opportunities that allow us to solve our client needs across multiple business units, a commitment to communities and organizations supporting education and workforce, a robust structure around the redeployment of our extremely seasoned field talent, and a strong commitment to culture and success for all of our stakeholders. These distinct operational performance differentiators set us apart from the competition, and this makes us a best-in-class workforce solution model. Based on recent workforce stats and trends, if the U.S. experiences what The Wall Street Journal refers to as a full employment recession due to longer-term changes in the American labor force Our company is operationally well-positioned for this type of unusual or unprecedented period of our economy in the U.S. Turning to our continuing work on the M&A front, deal flow continues to be strong and although many of the potential acquisitions are U.S.-based, approximately 20% of the deals we are seeing are global. Given the geopolitical pressures and potential of global recessionary influences, we will be conservative in our approach and leadership will continue to be patient and prudent in our evaluations. Our capital allocation strategy remains unchanged and we will look for fair valuations as we seek possible businesses that fit our long-term strategy. With that, we would like to open the call for questions. Operator? Absolutely. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by two. Again, to ask a question, press star one. As a reminder, if you're using a speakerphone, please remember to pick up your handset before asking your question. We will pause here briefly as questions are registered. The first question comes from the line of Howard Halpern with Taglich Brothers. You may proceed. Congratulations. Great quarter. Great H1. Thanks. And- Thanks, Howard. Is the momentum continuing into the Q3? As history tells us, the Q3 tends to be the strongest revenue quarter. Is that trend still intact as far as you can see? I would say that we are very optimistic about where we sit right now at the beginning of August in terms of what the quarter is going to shape up like. Okay. How are you seeing the balance between, you know, your client requests, client orders and the ability to recruit talent? Well, recruiting is still our number one, you know, challenge that we have right now. We are doing a really good job in being able to redeploy resources that we currently have so that we can make sure that we are fitting our clients' needs as well as the consultants' needs on both sides. We have very robust programs that we are working across the channels for, referral programs to get people in the door and working with colleges and high schools and programs to get people that we can actually train up for the positions that we have. There's been a lot of focus around those things, and we are seeing some of the fruits of the labor that come out of that. A lot in the building phase on that. You know, I think I've mentioned before, we've got to build the talent for tomorrow. Today's youth is tomorrow's workforce, and we're really kind of focusing in on how to make sure that we are training people up and upskilling them for tomorrow. Okay. In terms of the multifamily too, you're able to find enough talent and redeploy them to meet the demand, the ever-growing demand for that segment? In both segments, Howard, we always have open positions that we haven't been able to fill. That number is less than what it was a quarter ago. We feel optimistic about that. We always have open orders in both segments. Okay. In the press release you talked about, you know, I guess, finding additional revenue streams. Do you have an example that you could elaborate on what you mean with finding additional revenue streams within the context of what operations you're doing? Well, we always are looking for different types of technology, you know, emerging technology that's coming out of the gates. We look for different things within. We're doing a lot in the municipality space right now, so our team is really kind of building on that, writing white papers and making sure that we are presenting it to different municipalities in different parts of the country. Our real estate division is looking at different things to help with the segment that they have in upskilling some of the talent that they have, which has been able to allow them to charge more for enhanced talent that comes with some skill sets that we train them. A lot of those things are just looking for opportunities and looking forward instead of waiting for things to happen. I mean, the teams go to conferences and look for avenues of up-and-coming things that may happen. I know we took our professional group to the National Apartment Association conference in San Diego this past year. That has never happened before, but what ended up coming out of that is the professional group was able to sit down with many different companies within the real estate segment and identify technologies that we are currently not in and start to try to build a platform around that. Okay, that sounds good. Just lastly, any update on the move or entrance into Canada? We will be opening Canada sometime before the end of this quarter, or we're hoping by the end of August, Howard, to be honest with you. Okay. Fingers crossed. That sounds good. Just keep up the good work, guys. Thanks. Thank you. The next question comes from the line of Jeff Martin with Roth. You may proceed. Thanks. Good morning, Beth and Dan. Hope you're doing well. Beth, could you go? We have a lot, but Yeah, I thought a lot of places. Was curious if you could go into some detail on real estate in the context of, you know, where it is now. I mean, we're basically back to peak levels for the segment. If you look—go back to 2019, I think Q3 was the peak for that segment. You know, how much room for growth do you think there is within existing locations versus, you know, opening up new markets? You know, I would imagine that's fairly easily scalable. But, you know, just curious if you could kinda give us a sense of where the growth was coming from year-over-year. Was it more new markets, or was it more existing markets? Thanks. 0. Historically, it's been new markets, Jeff, but I think that, you know, we've talked about in the past that in the U.S. we're kind of getting to the end of the rope on how many new markets we can open. However, one of the exciting things with the new technology is how we're gonna be able to segment the markets that we're in. So, in Houston, for example, we will be able to take and instead of there being 1 salesperson there, we could actually have 3 salespeople there, and we will be able to track activity a lot better. So we feel like in those cases, the growth will now start to come from existing markets that we have open, that we are allowing to put additional resources in to expand the growth there. Okay, great. On the professional side, I would imagine IT is among the strongest. Maybe you could kind of, you know, segregate which areas are growing the fastest, which you feel have the most growth potential going forward. I think that, you know, we've talked about the success of the managed solutions, Momentum Solutionz that we bought earlier. That really leads all of our conversations now. They do a really good job in being able to put us to a level to say, we can project manage a plan. We can put our consultants up underneath that. I think as we continue to build out the managed solutions program, it supports everybody in the IT infrastructure. It's kind of one of those, you know, all boats rise situations, and it kinda starts with the Momentum Solutionz gang. Great. Well, congratulations on getting your technology platform up and running live in Q2. It's a big deal. Just curious what kind of reaction you're getting internally. Are people relieved? Are they excited? Are they, you know, feeling more productive? That'd be helpful. Thanks. Well, it's only been 5 weeks, there's. We did a lot of work in regards to, you know, change management to get ready to go live. A lot of people knew, you know, what to expect going forward. We aren't seeing efficiencies yet. We, you know, as a reminder, we told everybody we would be going in with a minimum viable product. We just wanted to be able to pay and bill an invoice. That was the most important part of what we needed to do. The efficiencies come after we get all that kind of situated. I think there's something like 142 fast follow projects that we'll start layering in two-week sprints that allows us to be able to continue to build and get efficiencies out of it. We expect that to start really seeing that in Q1 of next year. Okay. Final question. I was curious if you have noticed any change in the labor availability, you know, over the past 12 months. I would imagine you're starting to see, you know, people come back into the workforce that maybe, you know, had still been sitting on sidelines a year ago. Maybe you could comment on that. There is some of that, Jeff, but part of it is, you know, there's such a shift that hasn't leveled out yet in regards to what the employee wants and what the employer wants. You know, there's a whole group of employers now that are wanting people to come back into the office. There's a whole group of employees that are doubling down on the fact that they don't, especially now with the inflation and the price of gas going forward. So we continue to educate and talk to people and make sure that. I mean, it's a dance. We have to make sure that we're taking care of both sides. In regards to are there more people, I think there are more people, but I think that, you know, we continue to come up against challenges in making sure that we match the right talent based off of everybody's needs and understanding of how that works going forward. I don't think that is completely leveled out as what the future of work looks like in those regards. Great. Thanks for sharing. Sure. Thank you. The next question comes from the line of Brian Kinstlinger with Alliance Global Partners. You may proceed. Great. Thanks, guys, for taking my questions. My first question is, what was the impact on the margins over the last quarter or two based on the new systems implemented? What is the near and long-term impact on your margin profile based on the efficiencies generated from this new system? Finally, on the new system, how might this help you with business development? On the first part, we just went live five weeks ago, right? Not quite sure we know the margin impact. As I mentioned sort of in my call, we're just sort of using a sort of optimistic estimate of a 5% efficiency. But as Beth mentioned, we'll probably start seeing those later part of this year and certainly in the Q1 of next year. I'll let Beth answer the last part of it. Yeah. In regards to business development, Brian, what it really does is it allows us to get rid of the noise between trying to find a candidate and getting them out to the customer faster. Before we were having to go through multiple systems, you know, we had Bullhorn, we had eRecruit, then you have to go to the job boards. You have LinkedIn, you have Dice, you know. The team was having to go to multiple places to find stuff. One of the fast follows we have is a tool that's gonna be able to take all of that data and dump it into one. When our recruiters need somebody, they'll be able to grab it. The second thing it does is it allows our sales team to be able to move things faster. Because right now, recruiting is a problem, right? We can get sales, but recruiting is there. If the recruiting team can move faster, it gives the sales team the ability to be able to go, "We're faster to the market. We have a better candidate. We have this tool to be able to get us through the door." It's kind of a marriage that works together knowing on what side of the aisle you need to be. I think that as we move through getting those systems in place, it really does reduce the amounts of steps and the amount of data that comes in for people to actually do their jobs. Great. That's insightful. Looking at the trailing, the first part of the question that's trailing, did you do it yourself? Did you have a third party do it? What was the cost of implementation? I'm just trying to understand. I take it margins were marginally depressed, or you had some sort of cost related to this that's gonna go away. We started this three years ago, Brian, with an initial budget of around $10 million. We're probably closer to $11.5 million-$12 million on a total project, which we had multiple partners helping us implement this between all of the. We essentially replaced every piece of software that we were using in the company. As Beth mentioned, we still have some add-ons to come on later part of this year. We'll continue to spend money to enhance the products, not to the level that we spent this year for primarily on third-party professional fees. We will see some efficiencies beginning in Q4 and into 2023 on that. Brian, we already started reducing the outside consulting for partners that we had. We had several that dropped off last week. We have another group that will drop off this week. Our goal is to, in the next, you know, six weeks, get down to where any of the future builds are primarily being done on our team that we have internally and not having to use outside resources. We may have to use one or two every now and then, depending on what the add-on is. Our goal is already. Well, we've already started to reduce, and our goal is to get to where we actually can do it with our internal staff. Great. Last question I have is, you mentioned the company's position for a potential recessionary period. Are you beginning to see fewer professional staffing requests? I'm just curious if there's any change in what you're seeing in terms of client behavior. Our pipeline continues to be very strong. One of the things that we did do this past quarter is we actually added a contracts person who's able to push our contracts faster than we were before. You know, if you talk to the teams, that gives them the ability to close deals faster. We've got many things in the pipeline. We're not seeing things slow down at all in either segment. There's maybe a little bit of a slowdown in regards to if somebody's gonna pull the trigger on making a decision on a candidate, but it's not significant. The flip side of that is if a client slows down the process in making a decision on somebody, since it is still a candidate's world out there, the candidate just moves on. We can put him somewhere else. You have to move fast. I think if clients slow down, they're gonna lose out. I think that continues to be an education. Great. Thanks, guys. You're welcome. Thank you. The final question comes from the line of Michael Taglich with Taglich Brothers. You may proceed. Good morning, Dan. Good morning, Beth. Good morning. Congratulations. Morning. Good quarter. Okay. Thank you. A bunch of questions here. Okay. First on the tech platform, if you will, whose name escapes me at the moment as a program. All right, you're $12 million into it. You started three years ago. If I hear correctly, you got a three-year payback that we start seeing in the financials in Q1 of next year. That's it. Is it three- Yes, sir. That's correct, okay. Three years from. If I was throwing around numbers. 2023, 2024, 2025. Yeah. It should start adding $1 million a quarter in EBITDA, if you will. How much? $1 million. $1 million a quarter. There's four quarters in a year, three years, three-year payback. Your math's good. Yeah, I was very good in math when I was a child, so. If I hear correctly, it doesn't start until next year. Correct. Okay, good. Okay. All right, I'll take that in mind. Okay, other assets doubled in the last six months. You wanna speak to that? Other assets. Hold on just a second. Oh, yeah. That includes the receivable related to the sale of InStaff. $2 million was deferred for a year. That's $2 million. Are you talking other current assets or? Yes. Other current assets rose. It's $47 at June and $23 at December. $2 million of that. The other $400,000, I don't know that, Michael. I'd have to pull that detail. $2 million of it is the receivable on InStaff. We have a $2 million receivable on that. That's most of the increase, so yeah. Right. Okay. Well, other and total was $11.3 million, up from $6.6 million. Two million of that 11 is InStaff, right, receivables. That'll go against it. That'll go into- You're looking at the summary in the earnings release. Yeah, I'm looking at the actual balance sheet. Yeah. It's all I got in front of me. I'm sorry. Deposits actually came down $1 million. Other assets are flat. Deferred taxes are down $1 million. Right-of-use are down $1 million. Prepaids are down $500,000, and receivables are up $2 million. I can provide you an analysis, Michael, but- We can talk offline on that. Okay. Yeah, yeah. Get it. Okay. All right. A couple more questions. Just so I understand, the real estate offices, how much of an expense hit do we take in the quarter, if you will, from the new offices? Well, keep in mind, in real estate, and we don't call it an office, it's a market, 'cause the market consists of a person. We hire a person to go do sales in that market. Worst case scenario, it's a person and a half because we have to have a recruiter that starts out, so. Right. They're what? You're gonna make me. I don't wanna say because then I'm gonna tell everybody what I pay everybody. Okay, okay. Well, that's fine. That's fine. I'm just wondering about the It's a person and a half, Mike. Okay. My next question then is, if you would spend a little bit of time talking about, and we're gonna be done with offices in the United States of America within 12 months, okay? I'm summarizing what I heard, if you will. You talk about growth by adding people in offices, which probably is more accretive. Do you wanna talk about the opportunity you see there, and what investments need to be made and what the payoff is, if you will? Should we go from one person per office to five or what are your thoughts on that? I don't know that we completely understand what the answer is on that. Part of it is we don't know exactly what the efficiencies we're gonna get out of the system. For example, right now a market consists of a person that does sales and a person who does recruiting. A minute ago when I answered you that it would be a person and a half to open a market, I'm making the assumption that I'm gonna get a half a person efficiencies out of the new system, right? If we go through and add three salespeople in Houston, I only need one and a half recruiters to support those three salespeople. We're trying to build that out right now. Part of that is we didn't have the ability in the old system to be able to really go in and say in real estate. In professional, we had it, but in real estate we did not have the ability to be able to say what each person produced. In the new system, we are gonna be changing the model to be able to understand what each person produces, and then we'll be able to build that out and know what the efficiencies we get in that, as well as what the potential new revenue would be going forward. Okay. Last question. M&A. Your BGSF's currently trading just above 6x EBITDA, if I look at what a pretty conservative estimate what the EBITDA should be this year, okay? You've got your best quarter coming ahead of you and the best half coming ahead of you, okay? Are you seeing M&A at multiples that are accretive to that or no? And also qualifying with the quality of the business. Multiples are all over the board. Yeah. Um. We've seen, looking in the IT world, which is primarily where we've been focused, we've seen reasonable multiples in the seven-eight-ish range, maybe 8.5-ish range. We did decline a bit on a few that were in the 10-16 range. Okay. I guess, what are your thoughts about our multiple versus everybody else's? Well, I believe that the industry multiple overall is down. I believe that we are a turn or two less than the industry. I believe the multiples for some of the companies that are for sale, pardon the expression, are crazy, so. All right. Well, okay. All right. That's all I've got. Thanks. Great quarter. I'm looking forward to a strong H2. Thanks. Thank you. I would now like to pass the conference back over to Beth for closing remarks. Thank you everyone for your time today, and we appreciate your continued support. We look forward to updating you on our Q3 results in a few months. Have a great day. That concludes the BGSF Inc. Q2 fiscal 2022 financial results call, conference call. Thank you for your participation. You may now disconnect your line.