8-K
BGSF, INC. (BGSF)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
September 8, 2025
BGSF, INC.
(Exact Name of Registrant as Specified in its Charter)
| Delaware | 001-36704 | 26-0656684 |
|---|---|---|
| (State or Other Jurisdiction of<br>Incorporation) | (Commission File Number) | (I.R.S. Employer Identification<br>Number) |
5850 Granite Parkway, Suite 730
Plano, Texas 75024
(Address of principal executive offices, including zip code)
(972) 692-2400
(Registrant’s telephone number, including area code)
Not applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | | --- | --- || ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | | --- | --- || ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | | --- | --- || ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | | --- | --- |
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | |||
|---|---|---|---|---|---|
| Common Stock | BGSF | NYSE | Item 1.02 | Termination of a Material Definitive Agreement. | |
| --- | --- |
The information in Item 2.01 of this Current Report on Form 8-K is incorporated by reference into this Item 1.02.
| Item 2.01 | Completion of Acquisition or Disposition of Assets. |
|---|
As previously disclosed in the Current Report on Form 8-K filed by BGSF, Inc. (“BGSF” or the “Company”) with the Securities and Exchange Commission (the “SEC”) on June 23, 2025, the Company entered into an Equity Purchase Agreement (the “Equity Purchase Agreement”), dated as of June 14, 2025, by and among INSPYR Solutions Intermediate, LLC, a Delaware limited liability company (“Purchaser”), the Company, BG Finance and Accounting, Inc., a Delaware corporation and subsidiary of the Company (“BG F&A”), and BGSF Professional, LLC, a Delaware limited liability company and subsidiary of the Company (“BGSF Professional”), pursuant to which, among other things, the Company agreed to (i) transfer, and cause its subsidiaries to transfer, to BGSF Professional certain assets, and cause BGSF Professional to assume, certain liabilities related to the Company’s Professional Division, (ii) cause BGSF Professional to sell all of the issued and outstanding equity interests of the foreign subsidiaries of the Company (other than a 1% equity interest of a subsidiary of the Company located in India) to INSPYR Solutions Holdings Corporation, an affiliate of Purchaser, and (iii) sell all of the issued and outstanding equity interests of BG F&A and BGSF Professional to Purchaser, for $99 million in cash (subject to adjustment as provided in the Equity Purchase Agreement) and otherwise upon and subject to the terms and conditions set forth in the Equity Purchase Agreement (the “Transaction” or the “Sale”). On September 8, 2025, the Company completed the closing of the Transaction.
In connection with the closing of the Transaction, on September 8, 2025, the Company repaid all outstanding amounts (approximately $43 million) under, and terminated, that certain Amended and Restated Credit Agreement, dated as of March 12, 2024, as amended, by and among the Company, the guarantors party thereto, the lenders party thereto, and BMO Bank, N.A., as administrative agent. The Company also paid all outstanding amounts (approximately $4.4 million) under, and terminated, that certain Amended and Restated Convertible Subordinated Note, dated December 12, 2024, made by BGSF Professional and the Company to HSI Holdings, Inc. (f/k/a Horn Solutions, Inc.) and HSI Holdings Dallas, LLC (f/k/a Horn Solutions Dallas, LLC). A description of the material terms of the foregoing agreements is included in our Quarterly Report on Form 10-Q filed with the SEC on August 7, 2025 and is incorporated by reference herein.
The foregoing description of the Equity Purchase Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Equity Purchase Agreement. A copy of the Equity Purchase Agreement was filed as Exhibit 2.1 to the Current Report on Form 8-K filed by the Company with the SEC on June 23, 2025 and is incorporated by reference into this Item 2.01.
| Item 7.01 | Regulations FD Disclosure. |
|---|
On September 8, 2025, the Company issued a press release announcing the closing of the Transaction. The press release is furnished hereto as Exhibit 99.1 and is incorporated by reference herein.
| Item 9.01 | Financial Statements and Exhibits. |
|---|
(b) Pro forma financial information.
The unaudited pro forma consolidated statements of operations for the twenty-six week period ended June 29, 2025 and for the fiscal years ended December 29, 2024, December 31, 2023, and January 1, 2023, and the unaudited pro forma consolidated balance sheet as of June 29, 2025, and the notes thereto, are filed as Exhibit 99.2 hereto and incorporated by reference herein.
(d)Exhibits.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| BGSF, INC. | |||
|---|---|---|---|
| Date: | September 12, 2025 | /s/ Keith Schroeder | |
| Name:<br>Title: | Keith Schroeder<br>Interim-Co Chief Executive Officer, Chief Financial Officer and Secretary<br>(Principal Executive Office and Principal Financial Officer) |
Document
BGSF, Inc. Closes on Divestiture of Its
Professional Division in $99 Million All-Cash Deal
PLANO, TX / ACCESS Newswire / September 8, 2025 – BGSF, Inc. (NYSE: BGSF), (“BGSF” or “the Company”), a leading provider of workforce solutions for the specialized property management industry, today announced the closing of its previously announced divestiture of its Professional Division to INSPYR Solutions, a portfolio company of A&M Capital Partners, for cash of $99 million.
Interim Co-CEOs Kelly Brown and Keith Schroeder, in a joint statement, commented, “BGSF’s next chapter is exciting as we invest, with disciplined focus, on the continued geographical expansion of our property management solutions and continue to develop strategic initiatives to differentiate ourselves from our competitors. Our key imperatives are to strengthen BGSF’s unique specializations, mobilize our extensive talent pool to support the operational needs of our customers, and quickly scale and right-size the business to maintain financial strength and generate long-term shareholder value. We are also excited for our Professional team as they join INSPYR Solutions to help lead its next phase of growth and we wish them continued success on their journey.”
BGSF intends to use the net proceeds from the transaction to substantially eliminate its outstanding debt and to make high return investments in its Property Management business. The Board will work with its financial advisors to determine the best use of the remaining proceeds to maximize shareholder value.
About BGSF
BGSF provides best-in-class property management resources and solutions to growing apartment and luxury communities, as well as commercial properties, and was awarded Supplier Company of the Year by the National Apartment Association in recent years. Through its exclusive and semi-exclusive agreements with some of the largest property management companies in North America, BGSF offers differentiated advantages to clients, including trained talent and unique technological platforms that maximize efficiencies in the growing residential and commercial leased property industries. For more information on the Company and its services, please visit its website at www.bgsf.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of U.S. federal securities laws. Such forward-looking statements include, but are not limited to, statements regarding the use of proceeds of the recent sale, the execution under its Transition Services Agreement with INSPYR Solutions, the projected operational and financial performance of BGSF’s offerings of services and solutions and developments and reception of its services and solutions by client partners, and BGSF’s expectations, hopes, beliefs, intentions, plans, prospects, or strategies regarding the future revenue and the business plans of BGSF’s management team. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. In addition, any statements that refer to projections, forecasts, or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “endeavor,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would,” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. The forward-looking statements contained in this press release are based on certain assumptions and analyses made by the management of BGSF considering their respective experience and perception of historical trends, current conditions, and expected future developments and their potential effects on BGSF as well as other factors they believe are appropriate in the circumstances. There can be no assurance that future developments affecting BGSF will be those anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond the control of the parties), or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-
looking statements, the ability of BGSF to service or otherwise pay its debt obligations, the mix of services or solutions utilized by BGSF’s client partners and such client partners’ needs for these services or solutions, market acceptance of new offerings of services or solutions, the ability of BGSF to expand what it does for existing client partners as well as to add new client partners, whether BGSF will have sufficient capital to operate as anticipated, the impact the transaction may have on BGSF’s operations, team members, field talent, client partners, and other constituents, the demand for BGSF’s services and solutions, economic activity in BGSF’s industry and in general, and certain risks, uncertainties, and assumptions described in BGSF’s most recently filed Annual Report on Form 10-K under the heading “Risk Factors.” Should one or more of these risks or uncertainties materialize or should any of the assumptions being made prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. BGSF undertakes no obligation to update or revise any forward-looking statements, whether because of new information, future events, or otherwise, except as may be required under applicable securities laws.
CONTACTS:
Steven Hooser or Sandy Martin
Three Part Advisors
IR@BGSF.com 214.872.2710 or 214.616.2207
SOURCE: BGSF, INC.
Document
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The following unaudited pro forma consolidated financial information is presented to provide an understanding of the historical financial results of operations and financial position as adjusted to reflect the disposition of the Professional Segment. These unaudited pro forma consolidated financial statements are presented for informational purposes only and are not intended to represent what the actual results of operations or financial condition would have been had the Sale (as defined in the Current Report on Form 8-K to which this exhibit is attached) occurred on the indicated dates, nor are they necessarily indicative of the future results of operations or financial position. Further, these unaudited pro forma consolidated financial statements do not reflect all actions that BGSF may undertake following the closing of the Sale.
The Sale has been accounted for in the unaudited pro forma consolidated statement of operations (the “pro forma statement of operations”) for the twenty-six week period ended June 29, 2025 and for the years ended December 29, 2024, December 31, 2023, and January 1, 2023 as if it had been completed on December 27, 2021. The unaudited pro forma consolidated balance sheet as of June 29, 2025 gives effect to the Sale as if it occurred on June 29, 2025.
The following unaudited pro forma consolidated financial statements and related notes as of and for the twenty-six week period ended June 29, 2025, and for the years ended December 29, 2024, December 31, 2023, and January 1, 2023, have been derived from, and should be read in conjunction with, (i) the historical audited consolidated financial statements of BGSF and accompanying notes included in BGSF’s Annual Report on Form 10-K for the years ended December 29, 2024, December 31, 2023, and January 1, 2023, and (ii) the historical unaudited consolidated financial statements of BGSF and related notes included in BGSF’s Quarterly Report on Form 10-Q for the twenty-six week period ended June 29, 2025.
The unaudited pro forma consolidated financial statements were prepared by management in accordance with Article 11 of Regulation S-X for illustrative and informational purposes only and are not intended to represent what the results of operations or financial position would have been had the Sale occurred on the dates noted above, nor what they will be for any future periods. The pro forma adjustments are based on available information and certain assumptions that management believes are factually supportable. In the opinion of management, all adjustments necessary to present fairly the unaudited pro forma consolidated financial statements have been made. The unaudited pro forma consolidated financial statements do not include the realization of any cost savings from operating efficiencies or synergies that might result from the Sale. Additionally, BGSF anticipates that certain nonrecurring charges will be incurred in connection with the Sale, the substantial majority of which consist of fees paid to legal counsel and other professional advisors. Any such charge could affect the future results of BGSF in the period in which such charges are incurred; however, these costs are not expected to be incurred in any period beyond the closing date of the Sale. Accordingly, the unaudited pro forma consolidated statement of operations for the twenty-six week period ended June 29, 2025 reflects the effects of these non-recurring charges, which are not included in the historical statements of operations of BGSF for the twenty-six week period ended June 29, 2025.
In connection with the Sale, the unaudited pro forma consolidated financial statements have been prepared using the discontinued operation method of accounting for dispositions under generally accepted accounting principles in the United State of America (“US GAAP”), in accordance with Accounting Standards Codifications (ASC) 205-20, Discontinued Operations.
The unaudited pro forma consolidated financial statements contain certain reclassification adjustments to conform the historical BGSF financial statement presentation. For purposes of the unaudited pro forma consolidated financial statements presented below, BGSF will pay off debt using the proceeds from the Sale.
In connection with the Sale, the unaudited pro forma consolidated financial statements have been prepared using the guidance in ASC 810, Consolidations. Under ASC 810, a parent shall deconsolidate a subsidiary as of the date the parent ceases to have a controlling financial interest in the subsidiary by recognizing a gain or loss in net income measured as the difference between the fair value of any consideration received and the carrying amount of the subsidiary’s assets and liabilities at the date of sale. Components of the gain/loss calculation are described in further detail in the notes to the unaudited pro forma consolidated financial statements. BGSF has historically been managed and operated in the normal course with other BGSF businesses and has been identified as the Professional segment in BGSF’s SEC filings.
Therefore, the accompanying adjustments to the consolidated financial statements have been derived from the accounting records of BGSF and are in accordance with US GAAP.
The transaction costs incurred for the Sale are included in the unaudited pro forma consolidated financial statements reflecting terms and rates BGSF has agreed to with the third parties.
BGSF, Inc. and Subsidiaries
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
June 29, 2025
(in thousands, except share amounts)
| Historical | Professional Segment | Other | Pro Forma | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
| BGSF, Inc. | Discontinued | Accounting | BGSF, Inc. | |||||||
| Consolidated | Operations {a} | Adjustments | Consolidated | |||||||
| ASSETS | ||||||||||
| Current assets | ||||||||||
| $ | 3,288 | $ | (511) | $ | 44,242 | {b} | $ | 47,019 | ||
| 39,357 | (25,719) | — | 13,638 | |||||||
| 2,792 | (1,105) | — | 1,687 | |||||||
| 616 | — | — | 616 | |||||||
| 1,550 | (138) | — | 1,412 | |||||||
| 47,603 | (27,473) | 44,242 | 64,372 | |||||||
| Property and equipment, net | 867 | (568) | — | 299 | ||||||
| Other assets | ||||||||||
| 2,081 | (85) | — | 1,996 | |||||||
| 4,011 | (360) | — | 3,651 | |||||||
| 9,867 | (640) | {c} | — | 9,227 | ||||||
| 4,532 | (3,676) | — | 856 | |||||||
| 21,579 | (17,668) | — | 3,911 | |||||||
| 59,152 | (58,078) | — | 1,074 | |||||||
| 101,222 | (80,507) | — | 20,715 | |||||||
| $ | 149,692 | $ | (108,548) | $ | 44,242 | $ | 85,386 | |||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||
| Current liabilities | ||||||||||
| $ | 1,368 | $ | — | $ | — | $ | 1,368 | |||
| 15,422 | (8,336) | — | 7,086 | |||||||
| 3,807 | — | (3,807) | {d} | — | ||||||
| 510 | — | (510) | {d} | — | ||||||
| 295 | — | — | 295 | |||||||
| 1,696 | (1,696) | 304 | {e} | 304 | ||||||
| 4,368 | — | (4,368) | {f} | — | ||||||
| 1,535 | (1,061) | — | 474 | |||||||
| 29,001 | (11,093) | (8,381) | 9,527 | |||||||
| Line of credit, net | 7,744 | — | (7,744) | {d} | — | |||||
| Long-term debt, less current portion, net | 30,664 | — | (30,664) | {d} | — | |||||
| Contingent consideration, long-term | 608 | (608) | 304 | {e} | 304 | |||||
| Lease liabilities, less current portion | 3,389 | (2,883) | — | 506 | ||||||
| Other long-term liabilities (Intercompany) | — | (29,221) | 29,221 | {g} | — | |||||
| 71,406 | (43,805) | (17,264) | 10,337 | |||||||
| Commitments and contingencies | ||||||||||
| Preferred stock, 0.01 par value per share issued and outstanding | — | — | — | — | ||||||
| Common stock, 0.01 par value per share net of treasury stock, at cost | 55 | — | — | 55 | ||||||
| Additional paid in capital | 70,733 | — | — | 70,733 | ||||||
| Retained earnings | 7,498 | (64,743) | 61,506 | {h} | 4,261 | |||||
| 78,286 | (64,743) | 61,506 | 75,049 | |||||||
| $ | 149,692 | $ | (108,548) | $ | 44,242 | $ | 85,386 |
All values are in US Dollars.
BGSF, Inc. and Subsidiaries
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Twenty-six Week Period Ended June 29, 2025
(in thousands)
| Historical | Professional Segment | Other | Pro Forma | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| BGSF, Inc. | Discontinued | Accounting | BGSF, Inc. | ||||||||
| Consolidated | Operations {i} | Adjustments | Consolidated | ||||||||
| Revenues | $ | 127,008 | $ | (82,619) | $ | — | $ | 44,389 | |||
| Cost of services | 85,434 | (57,015) | — | 28,419 | |||||||
| Gross profit | 41,574 | (25,604) | — | 15,970 | |||||||
| Selling, general, and administrative expenses | 41,038 | (19,458) | — | 21,580 | |||||||
| Depreciation and amortization | 3,265 | (2,677) | — | 588 | |||||||
| Operating loss | (2,729) | (3,469) | — | (6,198) | |||||||
| Interest expense, net | (3,023) | 92 | 3,290 | {k} | 359 | ||||||
| Loss before income taxes | (5,752) | (3,377) | 3,290 | (5,839) | |||||||
| Income tax benefit | 1,294 | 737 | {j} | — | 2,031 | ||||||
| Net loss | $ | (4,458) | $ | (2,640) | $ | 3,290 | $ | (3,808) |
See accompanying notes to the Unaudited Pro Forma Consolidated Financial Statements.
BGSF, Inc. and Subsidiaries
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
Year ended December 29, 2024
(in thousands)
| Historical | Professional Segment | Other | Pro Forma | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| BGSF, Inc. | Discontinued | Accounting | BGSF, Inc. | ||||||||
| Consolidated | Operations {i} | Adjustments | Consolidated | ||||||||
| Revenues | $ | 272,499 | $ | (168,097) | $ | — | $ | 104,402 | |||
| Cost of services | 179,636 | (113,603) | — | 66,033 | |||||||
| Gross profit | 92,863 | (54,494) | — | 38,369 | |||||||
| Selling, general, and administrative expenses | 85,333 | (42,405) | — | 42,928 | |||||||
| Gain on contingent consideration | (1,452) | 1,452 | — | — | |||||||
| Depreciation and amortization | 7,769 | (6,434) | — | 1,335 | |||||||
| Operating income (loss) | 1,213 | (7,107) | — | (5,894) | |||||||
| Interest expense, net | (4,921) | — | 4,482 | {k} | (439) | ||||||
| Loss before income taxes | (3,708) | (7,107) | 4,482 | (6,333) | |||||||
| Income tax benefit | 370 | 710 | {j} | — | 1,080 | ||||||
| Net loss | $ | (3,338) | $ | (6,397) | $ | 4,482 | $ | (5,253) |
See accompanying notes to the Unaudited Pro Forma Consolidated Financial Statements.
BGSF, Inc. and Subsidiaries
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
Year ended December 31, 2023
(in thousands)
| Historical | Professional Segment | Other | Pro Forma | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| BGSF, Inc. | Discontinued | Accounting | BGSF, Inc. | ||||||||
| Consolidated | Operations {i} | Adjustments | Consolidated | ||||||||
| Revenues | $ | 313,167 | $ | (188,090) | $ | — | $ | 125,077 | |||
| Cost of services | 201,383 | (126,091) | — | 75,292 | |||||||
| Gross profit | 111,784 | (61,999) | — | 49,785 | |||||||
| Selling, general, and administrative expenses | 88,650 | (43,248) | — | 45,402 | |||||||
| Impairment losses | 22,545 | (22,545) | — | — | |||||||
| Depreciation and amortization | 7,774 | (6,461) | — | 1,313 | |||||||
| Operating (loss) income | (7,185) | 10,255 | — | 3,070 | |||||||
| Interest expense, net | (5,976) | — | 4,841 | {k} | (1,135) | ||||||
| Loss (income) before income taxes | (13,161) | 10,255 | 4,841 | 1,935 | |||||||
| Income tax benefit | 2,938 | (2,289) | {j} | — | 649 | ||||||
| Net (loss) income | $ | (10,223) | $ | 7,966 | $ | 4,841 | $ | 2,584 |
See accompanying notes to the Unaudited Pro Forma Consolidated Financial Statements.
BGSF, Inc. and Subsidiaries
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
Year ended January 1, 2023
(in thousands)
| Historical | Professional Segment | Other | Pro Forma | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| BGSF, Inc. | Discontinued | Accounting | BGSF, Inc. | ||||||||
| Consolidated | Operations {i} | Adjustments | Consolidated | ||||||||
| Revenues | $ | 298,422 | $ | (177,329) | $ | — | $ | 121,093 | |||
| Cost of services | 194,874 | (121,476) | — | 73,398 | |||||||
| Gross profit | 103,548 | (55,853) | — | 47,695 | |||||||
| Selling, general, and administrative expenses | 83,211 | (37,551) | — | 45,660 | |||||||
| Depreciation and amortization | 4,054 | (2,693) | — | 1,361 | |||||||
| Operating income | 16,283 | (15,609) | — | 674 | |||||||
| Interest expense, net | (1,363) | — | 1,102 | {k} | (261) | ||||||
| Income from continuing operation before income taxes | 14,920 | (15,609) | 1,102 | 413 | |||||||
| Income tax (expense) benefit from continuing operations | (3,659) | 3,828 | {j} | — | 169 | ||||||
| Income from continuing operations | 11,261 | (11,781) | 1,102 | 582 | |||||||
| Income from discontinued operations: | |||||||||||
| Income | 1,235 | — | — | 1,235 | |||||||
| Gain on sale | 17,675 | — | — | 17,675 | |||||||
| Income tax expense | (4,810) | — | — | (4,810) | |||||||
| Net income | $ | 25,361 | $ | (11,781) | $ | 1,102 | $ | 14,682 |
See accompanying notes to the Unaudited Pro Forma Consolidated Financial Statements.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(Dollar amounts in Thousands, Except Share Amounts)
- BASIS OF PRESENTATION
The following unaudited pro forma consolidated financial statements were derived from the historical consolidated financial statements, which were prepared in accordance with US GAAP. The unaudited pro forma consolidated financial statements should be read in conjunction with the historical consolidated financial statements, the accompanying notes to those historical consolidated financial statements, and Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Quarterly Report on Form 10-Q for twenty-six week period ended June 29, 2025, filed with the SEC on August 7, 2025.
Beginning with the quarter ending June 29, 2025, the historical results of the Professional Segment are reflected in the consolidated financial statements as discontinued operations.
The unaudited pro forma consolidated statements of operations have been prepared as if the Sale occurred on December 27, 2021, and the unaudited pro forma consolidated balance sheet has been prepared as if the Sale occurred on June 29, 2025.
The “Professional Segment Discontinued Operations” columns in the unaudited pro forma consolidated financial statements were derived from the consolidated financial statements included in the Quarterly Report on Form 10-Q for twenty-six week period ended June 29, 2025 and from the consolidated financial statements included in Annual Report on Form 10-K for the years ended December 29, 2024, December 31, 2023, and January 1, 2023.
BGSF believes that the adjustments included within the “Professional Segment Discontinued Operations” columns of the unaudited pro forma consolidated financial statements are consistent with the guidance for discontinued operations under US GAAP. The current estimates are preliminary and could change as BGSF finalize the accounting for discontinued operations, which will be reported in future filings. The adjustments do not include any allocation of the corporate costs or other costs do not transfer upon the Sale. The adjustments also do not include any fees that may be earned or incurred under the transition services agreement as BGSF is unable to forecast the fees that may be due or payable under the transition services agreement.
The unaudited pro forma consolidated financial statements are presented based on assumptions, adjustments, and currently available information and are intended for illustrative and informational purposes only. The unaudited pro forma consolidated financial statements are not intended to reflect or be necessarily indicative of what the results of operations or financial condition would have been had the divestiture been completed on the dates assumed. In addition, it is not necessarily indicative of the future results of operations or financial condition. Actual adjustments may differ materially from the information presented.
The unaudited pro forma consolidated balance sheet and consolidated statements of operations include the following adjustments:
{a} Reflects the elimination of the assets, liabilities, and equity of the Professional Segment that are to be sold under the terms of the Sale.
{b} Reflects the estimated net cash proceeds equal to $99.0 million, less the estimate for the payoff of debt for $47.6 million on June 29, 2025, and less the estimate for transaction expenses incurred of $5.0 million. The final net cash proceeds may differ materially from the amounts above due to adjustments resulting from the post-closing purchase price adjustment process, a difference in the cash held by the Professional Segment at closing, and changes to the estimate for transaction expenses incurred.
{c} Reflects the Professional Segment’s calculated historical deferred tax asset adjustments not recorded at the segment level but was posted to BGSF.
{d} Reflects the payoff of debt of $42.7 million related to the credit agreement led by BMO Bank N.A.
{e} Represents the amount of contingent consideration for the Arroyo Consulting acquisition to be paid in monthly installments.
{e} Represents the amount of convertible note for the Horn acquisition.
{g} Reflects the portion of any account balance outstanding between BGSF or any of its subsidiaries (“intercompany transactions”) eliminated through retained earnings.
{h} Reflects the net proceeds generated from the Sale, elimination of intercompany transactions, and contingent consideration.
| Sales price | $ | 99,000 |
|---|---|---|
| Other long-term liabilities (Intercompany) | (29,221) | |
| Estimated transaction costs | (4,983) | |
| Interest expense | (3,290) | |
| Retained earnings | $ | 61,506 |
{i} Reflects the elimination of revenues, expenses, and the income tax benefit (expense) calculated using the historical effective rate associated with the Professional Segment.
{j} Reflects income tax benefit (expense) calculated using the historical effective rate associated with BGSF.
{k} Reflects the amount of interest expense related to the payoff of debt.