BGSF, INC. — Call Transcript 2026

Good morning, everyone. Welcome to the BGSF, Inc. Fiscal 2025 third quarter financial results conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference call is being recorded. Now I'll turn the call over to Sandy Martin, Three Part Advisors. Please go ahead. Good morning. Thank you for joining us today for BGSF's 2025 fourth quarter and full year earnings conference call. On the call with me are Keith Schroeder, CFO, and Kelly Brown, President and Co-CEO. 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. 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. Management will refer to non-GAAP measures, including adjusted EPS and adjusted EBITDA. Reconciliations to the nearest GAAP measures are available at the end of our earnings release. I'll now turn the call over to Keith Schroeder. Keith. Thank you, Sandy, and thank you all for joining us in today's call. Fiscal 2025 was a transformational year for the company. After the sale of the professional division, we retired all outstanding debt, returned a meaningful amount of capital to shareholders via a $2 per share special dividend, and announced a $5 million share buyback. As a result of those actions, today we are a solely focused property management staffing organization, debt-free with a strong cash position. The fourth quarter was a very busy quarter for our team. As discussed in our third quarter earnings call, there are three major directives where we have been strategically focused. First, we utilized the findings from an independent consulting firm to help shape our top-line revenue initiatives as we finalized our budget for 2026 and beyond. Kelly will discuss those in more detail following my remarks. Second, we continue to take aggressive actions to resize our general administrative expenses to be more in line with our standalone property staffing business. We are now estimating ongoing G&A costs to be in the $12 million range, with public company costs estimated at approximately $2 million. Third, we are utilizing results of an external organizational and incentive compensation study to take further actions to reduce SG&A costs, primarily in the selling cost area. Those actions have been identified, and we started taking action in late Q1 with the full effect benefiting us in Q3 of this year. The annualized cost savings are approximately $1 million. Additionally, we continue to operate under the TSA agreement following the sale of the professional division. That process is going very well and expect to wrap it up by the end of Q1. With that, I will now turn it over to Kelly to cover the strategic initiatives that are underway. Thank you, Keith, and good morning, everyone. Before we discuss our fourth quarter sales and 2026 initiatives, I'd like to highlight an important change to our go-to-market strategy with clients and candidates. At the completion of our TSA agreement in April, we will transition our website to BGStaffing.com. Our analysis of search trends and AI activity proved that including staffing in our name consistently ranks us in the top three results for both clients seeking talent and job seekers exploring opportunities. We believe this change will significantly improve SEO performance, clarify our brand positioning, and enhance the overall effectiveness of our marketing efforts. As Keith mentioned, we are executing on our 2026 top-line strategic initiatives, leveraging insights from the market study completed late last year. A key opportunity identified through that work and reinforced through internal discussions is our expansion into the PropTech support market. In February, we announced our first software partnership with Yardi, an industry-leading property management technology platform. Through the Yardi Independent Consultant Network, we are pairing our industry expertise with technology-enabled talent solutions. PropTech is a sizable adjacent market to our core business and further enhances our differentiated positioning across multifamily and commercial property management staffing. Turning to technology-enabled solutions, we continue to optimize our AI investments to further differentiate our platform and deepen engagement with our clients. Our focus is on elevating the overall client and candidate experience, which positions BG Staffing as an innovative workforce solutions partner. These technology and AI-driven enhancements have improved front and back office efficiency while reinforcing our people-first culture. We believe the right combination of talent and technology suite enables us to deliver quality candidates faster and more efficiently, driving better outcomes for our clients. We continue to advance the operational performance initiatives discussed last quarter, and early insights indicate progress in strengthening our competitive differentiation. These efforts and strategic partnerships are beginning to support incremental top-line revenue growth and improve overall financial performance. Finally, we are excited to participate as an exhibitor at Apartmentalize hosted by the National Apartment Association, as well as the Building Owners and Managers Association International Conference, both of which are held in June. As two of the premier gatherings in the rental housing and commercial real estate industries, we expect the events to be a strong platform for customer engagement and lead generation. With that, I will turn the call back to Keith to cover our fourth quarter financial results. Thank you, Kelly. Our comments today mostly refer to continuing operations unless otherwise noted. Fourth quarter revenues were $22 million, a 9.4% decline compared to the prior year, driven by the lower billable hours and weak demand due to overall cost pressures on property management companies and property owners. Gross profit in the fourth quarter was $7.7 million compared to $8.7 million in the prior year quarter. Gross profit as a percentage of revenue was 35% and was negatively affected by $147,000 in out-of-period workers' comp costs. Adjusted for those costs, our gross profit as a percentage of revenue was 35.6% in the quarter, consistent with the prior year's quarter and the year of 2025 in total. SG&A expenses for the fourth quarter were $9.3 million compared to $10.5 million in the prior year's quarter. SG&A this quarter included strategic review costs of $403 thousand compared to $88 thousand in the prior year quarter. SG&A expenses in the fourth quarter of 2025 were negatively affected by approximately $460 thousand of out-of-period expenses, mostly related to the medical expenses under our self-insurance plan and the process of finalizing our closing balance sheet for the sale of the professional division. Fourth quarter adjusted EBITDA was a loss of $947 thousand, inclusive of a medical insurance adjustment mentioned above, compared to an EBITDA loss of $1.6 million in the prior year. This reduction in EBITDA loss came in spite of $1 million of lower gross profit due to lower sales. Significant cost-cutting measures implemented in selling, general, and administrative expenses during 2025 were the main drivers behind the improved EBITDA loss. We reported fourth quarter GAAP net loss from continuing operations of $0.11 per diluted share, compared to a non-GAAP adjusted EPS loss from continuing operations of $0.09 per share. Consolidated adjusted non-GAAP EPS for the quarter was $0.09 per share. For the full year of 2025, net cash provided by continuing operating activities was $117,000, which included a $5.2 million escrow receivable from the sale of the professional division. We expect to finalize the settlement of this cash escrow amount during Q2. Our capital expenditures were minimal at $138,000. During 2025, we purchased 351,200 shares of stock, totaling approximately $1.5 million. Our purchases to date total 522,000 shares at a total of $2.4 million. Finally, the team remains focused on executing our strategic priorities and our new roadmap, while also managing the transitional work related to the sale of the professional division. Kelly and I want to thank everyone across the organization for their continued dedication and hard work over the past year. The execution of the TSA was a particularly heavy lift and we are deeply grateful to the entire BG Staffing team for their thoughtful planning, strong execution, and sustained commitment. We look forward to updating investors each quarter on our progress and hope today's discussion has been valuable. With that, now we would like to open the call for questions. Operator? Certainly. At this time, we will be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, that is star one to ask a question. One moment please while we poll for questions. Your first question for today is from William Dezellem with Tieton Capital. Thank you, and good morning. A couple of questions. Let's just start, if we could please, with the Yardi relationship and walk us through that relationship, what you are doing with it, and what the potential implications are for the business longer term. Yes. Good morning, William. Thank you for the question. I'll take that one. The Yardi partnership is an exciting one for our group because Yardi as a company has established an independent consultant network. What that means is that Yardi as a company will obviously sell and implement software to our property management customers that they use for their day-to-day operations. When and if there's gaps between what Yardi provides as a company and the implementation or training that is needed to actually have the end user fully implemented into the software, they'll leverage independent consultants to do that work. That's exactly where we'll come in with our consultant base to be able to fill those requests. Yardi essentially serves as a referral base when they know they have needs among their clients so that we can then pick that up. It's a really basic model of hiring the consultant, placing them, and then billing accordingly. Kelly, what's the potential size of that business? Or is it just more important, the relationship enhancement that it leads with your customers? Yeah. You know, we chose Yardi as our first, partnership of this nature because they are the most widely used software in the property management space. The potential is very large, across all of our customer base. They're certainly not the only software used, but they are the most widely used. When you look at potential, you know, you think about all the properties that we build with across the country, they all have software that they use. Every single one of them would have some type of support that they could need at any given point in time. In addition to that, even at the corporate office level, when you think about their accounting needs and things like that, Yardi is also leveraged for those types of services. There's potential at both the corporate office level as well as the on-site end user level. All right, great. Thank you. I appreciate that. Keith, would you please walk through your comments about SG&A on an ongoing basis? I didn't catch all the numbers, number one, but maybe relate it to the $9.3 million of SG&A that was reported in the fourth quarter. Okay. The G&A costs that we are estimating going forward once we're clear the TSA and all of that is around $12 million, okay? Then the number obviously continues to unfold as we continue to look for ways to, you know, cut costs and software costs and, you know, things like that. That's kind of an ongoing work that we have. There's about $2.5 million or so of public company costs in that number. All right? The Q4 number that you cited, which was SG&A, that number is higher than what we expect in 2026 because we were still, you know, supporting the sale and we weren't able to get out of all those software changes that we, you know, expect to change. The Q4 number is not reflective of what we expect in 2026. Does that help? Yeah. That is helpful. Following up on that, the SG&A that includes or is the $9.3 million, how much of that is the G&A number? The G&A number for the quarter, it's actually in the press release. It's about $3.5 million, but there's about $460,000 that hit in Q4 that did not relate to Q4, and that was the things that I cited that we, as we broke apart, you know, the balance sheet for the sale. Yes. We looked at our IBNR and in our reserve, we ended up taking $460,000 of expense in Q4. That is included in those numbers. Great. That is helpful. One additional question, please. Relative to the overall market environment, how would you characterize it today versus what you were seeing a year ago at this time? Yeah. You know, what we're seeing today, based on customer feedback, there is definitely an interest and a budget to spend on our services. This year is much more optimistic of a sentiment as what we were experiencing last year. I think our customers have navigated a lot the last couple of years economically. This year the feedback is absolutely, look, you know, we plan to leverage staffing as well as PropTech support services. We're finding from a willingness to spend perspective, there certainly is a lot more positive feedback this year than what we were navigating this time a year ago. Kelly, is it your sense that since we've had a couple of years of tight or conservative spending, that there is some catch up and delayed or deferred maintenance that could lead to a higher than average level of activity, maybe not in 2026, but as we push further into 2027 and you just start to see some catch-up? I think it's reasonable to assume that there could be a certain level of that. What we've heard from customers is that as much as possible during times when they have to be conservative on their spending, they'll do their best to just leverage the existing employee base that they have, even if that means one employee that may typically work at one property needing to float or visit several properties and try to help. To an extent, there may be a little bit of that. Nothing like what we saw, you know, after COVID or anything like that. There may be a small amount, but I think as much as possible, they really have tried to make it work with the existing employees that they have. Great. Thank you both for taking all the questions. Absolutely. Thank you. Oh, William, there's one other thing, just to kind of back that up. Our top-line sales through the first two months are slightly ahead of 2025, so it's been off to a you know solid start for this year. Just to be clear, what you're saying is this will be if March continues the trend that you saw in January and February, the first quarter revenues would be up, which would be the first time in many quarters that that's the case, correct? Yes, that is correct. Great. Thank you for that additional perspective. Do you want to share a percentage change that you saw in January and February, combined? No, but I will say that we do expect full-year sales in 2026 to be over 2025, you know, kinda in the mid-single digits. If that helps. That is helpful, and I'm gonna take the bait and go one step further. Thank you, William. You're welcome. Relative to the monthly trends, when you look at the fourth quarter, was November decline less than October, and was December better than November, and then January being better than December, and then was February up more than March? Are we seeing that sort of trend each and every month improving? You're going sequentially, right? Yeah. Basically, Keith, I'm essentially saying let's just take, for example, if October was down 6%, then November being down 4%, December being down 2%, January being up 2%. I totally just made those numbers up for illustration. Right. Yep. I think the best way to answer that is that as we ended 2025, the seasonality effects that we would expect, we were better than those in the last month of last year. We have started out where we are higher in sales than last year for January and February, so it's a positive trend. That's helpful. Did that positive trend begin in late in the fourth quarter in December or is it really- Yes. Yes. Yes. Yes, it did. Of course, we had one really tough week, you know, in February because, you know, a snowstorm basically shut down the entire country for a few days. Still we came out pretty strong in February. Yeah, that's very helpful. Appreciate that additional color. Anything else you'd like to add on that front before I turn it back to the operator? No, I think that's it. Thank you. Great. Yeah, thank you again. Your next question is from George Melis with MKH Management. Thank you. Good morning. Good morning, George. Good morning. Maybe trying to clarify on the answer that you guys gave, that Kelly you gave to William regarding PropTech. Mm-hmm. Yeah. It seems like it's a very different line of business, right? It's not your regular consultants or staffing that is more focused on maintenance and leasing. Is that sort of a kind of a new segment of the business, could we say? And how many consultants you have, and what kind of revenue are you expecting in 2026 from PropTech? Yeah. Well, good morning, George. Yeah. Thank you for the question. Yes, it is different from the type of staffing that we've delivered in the past. You're correct. The reason why we selected PropTech as an adjacent market that we were interested in is because it's a need that the people that we place and our existing customers have on all of their properties. They're leveraging technology, as all of us are, in their day-to-day. We saw an opportunity to explore the support of that technology, and it really does two things. It helps solve customer problems that exist today, but it also helps lift up our candidate base, as we know they're gonna be, you know, when they're out to work, leveraging the same technology. You know, learning about how Yardi structures their independent consultant network really became of interest to us because, you know, we're building that consultant base. To answer your question, we're gonna start with, you know, a pool of, you know, 8-12 consultants and, you know, get them out working, and it'll just grow organically over the year. You know, early projections for 2026, we expect to be able to organically grow the revenue and ramp up through the year. You know, first year top line may be $1 million-$2 million, you know, but we really just are launching it organically this quarter. You know, we're gonna look at the next quarter, couple quarters very carefully as sales accelerate, and we'll be able to give much more accurate forecasting after that point. Okay, that's exciting. How many people do you have on staff now? How many consultants do you have? Do you train them in Yardi tech, or are they pretty much already trained and ready to go? Yeah. They tend to come in with existing Yardi experience. If we're gonna hire them, they have existing Yardi knowledge. We're not hiring folks to come in and then train on them. Now, I will add that Yardi does provide really impressive resources to make sure their consultant base has access to training and to knowledge and continuing education. Yardi does a really great job making sure that their consultant network is very well equipped to stay knowledgeable on their technology. That's another reason why we selected Yardi as a partner, those resources that they have, the knowledge base that they offer. Therefore, that's not really a lift that we have to take on internally, that type of training. We will hire consultants that have existing knowledge and then leverage Yardi's resources to make sure that they stay fresh on that knowledge. Great. Maybe I'm digging too much into the weeds, but I'm really curious. Are you starting in Texas, for example? Are you starting in one market? How do you see sort of the ramp of that, you know, business segment unfolding? Fortunately, this service is not necessarily geographically driven because a lot of the work that these consultants can deliver is remote. We won't be a geographically-based expansion. It'll really be more of a customer-by-customer based expansion. You know, we'll grow that way between both our own internal sales initiatives and Yardi's referral base. It won't necessarily have a geographic component. Okay, great. That sounds like an exciting initiative. It's nice to see having these growth initiatives. Maybe just also trying to clarify a little bit to what you said at the end regarding, you know, a solid start to the year. The fourth quarter year-over-year was down 9.4%, right? I think the top line. Yes, that's correct. If part of December was a positive comp, it sort of means that actually maybe October and November were down double digits. That seems like a very dramatic change from down double digits in a few months to going up, you know, up comp. How do you explain this change? To what extent is this change market driven? To what extent is it your own execution and what you guys are doing internally that is driving that, in your opinion? Yeah. I think this is, well, there's some market improvement in there, but really from our perspective, it's more driven by execution. You know, the things that we learned from one of the studies is the speed to fill, getting the right candidate in the right spot quickly. Those things all make a big difference, and we have changed some things up, and we are laser-focused on that stuff. Okay. Let's see if we can try to extrapolate that to the year. You expect mid- to single-digit growth. Does that mean that you expect growth pretty much in every year-over-year growth, I mean, in every quarter of 2026? Yes. Um. That is correct. Okay. Great. That's really good to know. To what extent is that driven by I think, Kelly, you mentioned that you feel like customers have a slightly greater propensity to purchase and to spend. You have that on the one hand. On the other hand, you have better execution on your side. Mm-hmm. Is that the way one would look at it? Yeah. It is definitely a mixture of both of those factors, that would lead to the year-over-year performance being more favorable. Okay, great. Good. Then on the cost side, thank you very much for what you have as the property management segment. It's super helpful, and it really helps us, I think, understand the, you know, the model much better. If we look at the G&A, it's $3.9. But if we take out the medical and the cost of the review, it comes down to pretty much $3.1, let's say $3-$3.1. If we annualize that, it's roughly $12, which I think is what you said, Keith, as kind of the ongoing expenses of G&A. Does that mean- Yes. That if we take out those two one-time things, we are pretty much at a steady-state level for G&A? Yes. Just to make clear that we are looking at ways ongoing to bring down those costs. It's not a done deal. That's kinda like where we are now, but we are constantly looking at ways to bring down those costs. Okay. With, of course, seasonality, your second and third quarter are your best quarters from a revenue perspective. That impacts somewhat selling expenses. Would that have an impact on G&A, or is G&A basically flattish from quarter to quarter to quarter? No, G&A is pretty flat. Selling would go up some. You have more sales, you have more, you know, bonus dollars, commission dollars, things like that. With the G&A, it's basically pretty fixed across all four quarters. Okay, great. Okay, thank you very much for taking my questions. Sure. Thank you. Thanks, George. We have reached the end of the question and answer session, and I will now turn the call over to Kelly for closing remarks. Thank you for your time today. We appreciate your continued support and look forward to providing an update on our first quarter in a couple of months. Have a great day. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

Speaker 4: Good morning, everyone. Welcome to the BGSF, Inc. Fiscal 2025 third quarter financial results conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference call is being recorded. Now I'll turn the call over to Sandy Martin, Three Part Advisors. Please go ahead. Good morning, everyone. good morning everyone Welcome to the BGSF, Inc. Fiscal 2025 third quarter financial results conference call. welcome to the bgsf inc fiscal 2025 third quarter financial results conference call At this time, all participants are in a listen-only mode. at this time all participants are in a listen-only mode A question and answer session will follow the formal presentation. a question and answer session will follow the formal presentation If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. if anyone should require operator assistance during the conference please press star zero on your telephone keypad As a reminder, this conference call is being recorded. as a reminder this conference call is being recorded Now I'll turn the call over to Sandy Martin, Three Part Advisors. now i'll turn the call over to sandy martin three part advisors Please go ahead. please go ahead

Speaker 5: Good morning. Thank you for joining us today for BGSF's 2025 fourth quarter and full year earnings conference call. On the call with me are Keith Schroeder, CFO, and Kelly Brown, President and Co-CEO. 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. Good morning. good morning Thank you for joining us today for BGSF's 2025 fourth quarter and full year earnings conference call. thank you for joining us today for bgsf's 2025 fourth quarter and full year earnings conference call On the call with me are Keith Schroeder, CFO, and Kelly Brown, President and Co-CEO. on the call with me are keith schroeder cfo and kelly brown president and co-ceo After our prepared remarks, there will be a Q&A session. after our prepared remarks there will be a q&a session As noted, today's call is being webcast live. 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. 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. 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. 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 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. Management will refer to non-GAAP measures, including adjusted EPS and adjusted EBITDA. Reconciliations to the nearest GAAP measures are available at the end of our earnings release. I'll now turn the call over to Keith Schroeder. Keith. 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. 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 Management will refer to non-GAAP measures, including adjusted EPS and adjusted EBITDA. management will refer to non-gaap measures including adjusted eps and adjusted ebitda Reconciliations to the nearest GAAP measures are available at the end of our earnings release. reconciliations to the nearest gaap measures are available at the end of our earnings release I'll now turn the call over to Keith Schroeder. i'll now turn the call over to keith schroeder Keith. keith

Speaker 2: Thank you, Sandy, and thank you all for joining us in today's call. Fiscal 2025 was a transformational year for the company. After the sale of the professional division, we retired all outstanding debt, returned a meaningful amount of capital to shareholders via a $2 per share special dividend, and announced a $5 million share buyback. As a result of those actions, today we are a solely focused property management staffing organization, debt-free with a strong cash position. The fourth quarter was a very busy quarter for our team. As discussed in our third quarter earnings call, there are three major directives where we have been strategically focused. First, we utilized the findings from an independent consulting firm to help shape our top-line revenue initiatives as we finalized our budget for 2026 and beyond. Kelly will discuss those in more detail following my remarks. Thank you, Sandy, and thank you all for joining us in today's call. thank you sandy and thank you all for joining us in today's call Fiscal 2025 was a transformational year for the company. fiscal 2025 was a transformational year for the company After the sale of the professional division, we retired all outstanding debt, returned a meaningful amount of capital to shareholders via a $2 per share special dividend, and announced a $5 million share buyback. after the sale of the professional division we retired all outstanding debt returned a meaningful amount of capital to shareholders via a $2 per share special dividend and announced a $5 million share buyback As a result of those actions, today we are a solely focused property management staffing organization, debt-free with a strong cash position. as a result of those actions today we are a solely focused property management staffing organization debt-free with a strong cash position The fourth quarter was a very busy quarter for our team. the fourth quarter was a very busy quarter for our team As discussed in our third quarter earnings call, there are three major directives where we have been strategically focused. as discussed in our third quarter earnings call there are three major directives where we have been strategically focused First, we utilized the findings from an independent consulting firm to help shape our top-line revenue initiatives as we finalized our budget for 2026 and beyond. first we utilized the findings from an independent consulting firm to help shape our top-line revenue initiatives as we finalized our budget for 2026 and beyond Kelly will discuss those in more detail following my remarks. kelly will discuss those in more detail following my remarks Second, we continue to take aggressive actions to resize our general administrative expenses to be more in line with our standalone property staffing business. We are now estimating ongoing G&A costs to be in the $12 million range, with public company costs estimated at approximately $2 million. Third, we are utilizing results of an external organizational and incentive compensation study to take further actions to reduce SG&A costs, primarily in the selling cost area. Those actions have been identified, and we started taking action in late Q1 with the full effect benefiting us in Q3 of this year. The annualized cost savings are approximately $1 million. Additionally, we continue to operate under the TSA agreement following the sale of the professional division. That process is going very well and expect to wrap it up by the end of Q1. Second, we continue to take aggressive actions to resize our general administrative expenses to be more in line with our standalone property staffing business. second we continue to take aggressive actions to resize our general administrative expenses to be more in line with our standalone property staffing business We are now estimating ongoing G&A costs to be in the $12 million range, with public company costs estimated at approximately $2 million. we are now estimating ongoing g&a costs to be in the $12 million range with public company costs estimated at approximately $2 million Third, we are utilizing results of an external organizational and incentive compensation study to take further actions to reduce SG&A costs, primarily in the selling cost area. third we are utilizing results of an external organizational and incentive compensation study to take further actions to reduce sg&a costs primarily in the selling cost area Those actions have been identified, and we started taking action in late Q1 with the full effect benefiting us in Q3 of this year. those actions have been identified and we started taking action in late q1 with the full effect benefiting us in q3 of this year The annualized cost savings are approximately $1 million. the annualized cost savings are approximately $1 million Additionally, we continue to operate under the TSA agreement following the sale of the professional division. additionally we continue to operate under the tsa agreement following the sale of the professional division That process is going very well and expect to wrap it up by the end of Q1. that process is going very well and expect to wrap it up by the end of q1 With that, I will now turn it over to Kelly to cover the strategic initiatives that are underway. With that, I will now turn it over to Kelly to cover the strategic initiatives that are underway. with that i will now turn it over to kelly to cover the strategic initiatives that are underway

Speaker 3: Thank you, Keith, and good morning, everyone. Before we discuss our fourth quarter sales and 2026 initiatives, I'd like to highlight an important change to our go-to-market strategy with clients and candidates. At the completion of our TSA agreement in April, we will transition our website to BGStaffing.com. Our analysis of search trends and AI activity proved that including staffing in our name consistently ranks us in the top three results for both clients seeking talent and job seekers exploring opportunities. We believe this change will significantly improve SEO performance, clarify our brand positioning, and enhance the overall effectiveness of our marketing efforts. As Keith mentioned, we are executing on our 2026 top-line strategic initiatives, leveraging insights from the market study completed late last year. A key opportunity identified through that work and reinforced through internal discussions is our expansion into the PropTech support market. Thank you, Keith, and good morning, everyone. thank you keith and good morning everyone Before we discuss our fourth quarter sales and 2026 initiatives, I'd like to highlight an important change to our go-to-market strategy with clients and candidates. before we discuss our fourth quarter sales and 2026 initiatives i'd like to highlight an important change to our go-to-market strategy with clients and candidates At the completion of our TSA agreement in April, we will transition our website to BGStaffing.com. at the completion of our tsa agreement in april we will transition our website to bgstaffing.com Our analysis of search trends and AI activity proved that including staffing in our name consistently ranks us in the top three results for both clients seeking talent and job seekers exploring opportunities. our analysis of search trends and ai activity proved that including staffing in our name consistently ranks us in the top three results for both clients seeking talent and job seekers exploring opportunities We believe this change will significantly improve SEO performance, clarify our brand positioning, and enhance the overall effectiveness of our marketing efforts. we believe this change will significantly improve seo performance clarify our brand positioning and enhance the overall effectiveness of our marketing efforts As Keith mentioned, we are executing on our 2026 top-line strategic initiatives, leveraging insights from the market study completed late last year. as keith mentioned we are executing on our 2026 top-line strategic initiatives leveraging insights from the market study completed late last year A key opportunity identified through that work and reinforced through internal discussions is our expansion into the PropTech support market. a key opportunity identified through that work and reinforced through internal discussions is our expansion into the proptech support market In February, we announced our first software partnership with Yardi, an industry-leading property management technology platform. Through the Yardi Independent Consultant Network, we are pairing our industry expertise with technology-enabled talent solutions. PropTech is a sizable adjacent market to our core business and further enhances our differentiated positioning across multifamily and commercial property management staffing. Turning to technology-enabled solutions, we continue to optimize our AI investments to further differentiate our platform and deepen engagement with our clients. Our focus is on elevating the overall client and candidate experience, which positions BG Staffing as an innovative workforce solutions partner. These technology and AI-driven enhancements have improved front and back office efficiency while reinforcing our people-first culture. In February, we announced our first software partnership with Yardi, an industry-leading property management technology platform. in february we announced our first software partnership with yardi an industry-leading property management technology platform Through the Yardi Independent Consultant Network, we are pairing our industry expertise with technology-enabled talent solutions. through the yardi independent consultant network we are pairing our industry expertise with technology-enabled talent solutions PropTech is a sizable adjacent market to our core business and further enhances our differentiated positioning across multifamily and commercial property management staffing. proptech is a sizable adjacent market to our core business and further enhances our differentiated positioning across multifamily and commercial property management staffing Turning to technology-enabled solutions, we continue to optimize our AI investments to further differentiate our platform and deepen engagement with our clients. turning to technology-enabled solutions we continue to optimize our ai investments to further differentiate our platform and deepen engagement with our clients Our focus is on elevating the overall client and candidate experience, which positions BG Staffing as an innovative workforce solutions partner. our focus is on elevating the overall client and candidate experience which positions bg staffing as an innovative workforce solutions partner These technology and AI-driven enhancements have improved front and back office efficiency while reinforcing our people-first culture. these technology and ai-driven enhancements have improved front and back office efficiency while reinforcing our people-first culture We believe the right combination of talent and technology suite enables us to deliver quality candidates faster and more efficiently, driving better outcomes for our clients. We continue to advance the operational performance initiatives discussed last quarter, and early insights indicate progress in strengthening our competitive differentiation. These efforts and strategic partnerships are beginning to support incremental top-line revenue growth and improve overall financial performance. Finally, we are excited to participate as an exhibitor at Apartmentalize hosted by the National Apartment Association, as well as the Building Owners and Managers Association International Conference, both of which are held in June. As two of the premier gatherings in the rental housing and commercial real estate industries, we expect the events to be a strong platform for customer engagement and lead generation. With that, I will turn the call back to Keith to cover our fourth quarter financial results. We believe the right combination of talent and technology suite enables us to deliver quality candidates faster and more efficiently, driving better outcomes for our clients. We continue to advance the operational performance initiatives discussed last quarter, and early insights indicate progress in strengthening our competitive differentiation. we believe the right combination of talent and technology suite enables us to deliver quality candidates faster and more efficiently driving better outcomes for our clients. we continue to advance the operational performance initiatives discussed last quarter and early insights indicate progress in strengthening our competitive differentiation These efforts and strategic partnerships are beginning to support incremental top-line revenue growth and improve overall financial performance. these efforts and strategic partnerships are beginning to support incremental top-line revenue growth and improve overall financial performance Finally, we are excited to participate as an exhibitor at Apartmentalize hosted by the National Apartment Association, as well as the Building Owners and Managers Association International Conference, both of which are held in June. finally we are excited to participate as an exhibitor at apartmentalize hosted by the national apartment association as well as the building owners and managers association international conference both of which are held in june As two of the premier gatherings in the rental housing and commercial real estate industries, we expect the events to be a strong platform for customer engagement and lead generation. as two of the premier gatherings in the rental housing and commercial real estate industries we expect the events to be a strong platform for customer engagement and lead generation With that, I will turn the call back to Keith to cover our fourth quarter financial results. with that i will turn the call back to keith to cover our fourth quarter financial results

Speaker 2: Thank you, Kelly. Our comments today mostly refer to continuing operations unless otherwise noted. Fourth quarter revenues were $22 million, a 9.4% decline compared to the prior year, driven by the lower billable hours and weak demand due to overall cost pressures on property management companies and property owners. Gross profit in the fourth quarter was $7.7 million compared to $8.7 million in the prior year quarter. Gross profit as a percentage of revenue was 35% and was negatively affected by $147,000 in out-of-period workers' comp costs. Adjusted for those costs, our gross profit as a percentage of revenue was 35.6% in the quarter, consistent with the prior year's quarter and the year of 2025 in total. Thank you, Kelly. thank you kelly Our comments today mostly refer to continuing operations unless otherwise noted. our comments today mostly refer to continuing operations unless otherwise noted Fourth quarter revenues were $22 million, a 9.4% decline compared to the prior year, driven by the lower billable hours and weak demand due to overall cost pressures on property management companies and property owners. fourth quarter revenues were $22 million a 9.4% decline compared to the prior year driven by the lower billable hours and weak demand due to overall cost pressures on property management companies and property owners Gross profit in the fourth quarter was $7.7 million compared to $8.7 million in the prior year quarter. gross profit in the fourth quarter was $7.7 million compared to $8.7 million in the prior year quarter Gross profit as a percentage of revenue was 35% and was negatively affected by $147,000 in out-of-period workers' comp costs. gross profit as a percentage of revenue was 35% and was negatively affected by $147,000 in out-of-period workers' comp costs Adjusted for those costs, our gross profit as a percentage of revenue was 35.6% in the quarter, consistent with the prior year's quarter and the year of 2025 in total. adjusted for those costs our gross profit as a percentage of revenue was 35.6% in the quarter consistent with the prior year's quarter and the year of 2025 in total SG&A expenses for the fourth quarter were $9.3 million compared to $10.5 million in the prior year's quarter. SG&A this quarter included strategic review costs of $403 thousand compared to $88 thousand in the prior year quarter. SG&A expenses in the fourth quarter of 2025 were negatively affected by approximately $460 thousand of out-of-period expenses, mostly related to the medical expenses under our self-insurance plan and the process of finalizing our closing balance sheet for the sale of the professional division. Fourth quarter adjusted EBITDA was a loss of $947 thousand, inclusive of a medical insurance adjustment mentioned above, compared to an EBITDA loss of $1.6 million in the prior year. This reduction in EBITDA loss came in spite of $1 million of lower gross profit due to lower sales. SG&A expenses for the fourth quarter were $9.3 million compared to $10.5 million in the prior year's quarter. sg&a expenses for the fourth quarter were $9.3 million compared to $10.5 million in the prior year's quarter SG&A this quarter included strategic review costs of $403 thousand compared to $88 thousand in the prior year quarter. sg&a this quarter included strategic review costs of $403 thousand compared to $88 thousand in the prior year quarter SG&A expenses in the fourth quarter of 2025 were negatively affected by approximately $460 thousand of out-of-period expenses, mostly related to the medical expenses under our self-insurance plan and the process of finalizing our closing balance sheet for the sale of the professional division. sg&a expenses in the fourth quarter of 2025 were negatively affected by approximately $460 thousand of out-of-period expenses mostly related to the medical expenses under our self-insurance plan and the process of finalizing our closing balance sheet for the sale of the professional division Fourth quarter adjusted EBITDA was a loss of $947 thousand, inclusive of a medical insurance adjustment mentioned above, compared to an EBITDA loss of $1.6 million in the prior year. fourth quarter adjusted ebitda was a loss of $947 thousand inclusive of a medical insurance adjustment mentioned above compared to an ebitda loss of $1.6 million in the prior year This reduction in EBITDA loss came in spite of $1 million of lower gross profit due to lower sales. this reduction in ebitda loss came in spite of $1 million of lower gross profit due to lower sales Significant cost-cutting measures implemented in selling, general, and administrative expenses during 2025 were the main drivers behind the improved EBITDA loss. We reported fourth quarter GAAP net loss from continuing operations of $0.11 per diluted share, compared to a non-GAAP adjusted EPS loss from continuing operations of $0.09 per share. Consolidated adjusted non-GAAP EPS for the quarter was $0.09 per share. For the full year of 2025, net cash provided by continuing operating activities was $117,000, which included a $5.2 million escrow receivable from the sale of the professional division. We expect to finalize the settlement of this cash escrow amount during Q2. Our capital expenditures were minimal at $138,000. During 2025, we purchased 351,200 shares of stock, totaling approximately $1.5 million. Significant cost-cutting measures implemented in selling, general, and administrative expenses during 2025 were the main drivers behind the improved EBITDA loss. significant cost-cutting measures implemented in selling general and administrative expenses during 2025 were the main drivers behind the improved ebitda loss We reported fourth quarter GAAP net loss from continuing operations of $0.11 per diluted share, compared to a non-GAAP adjusted EPS loss from continuing operations of $0.09 per share. we reported fourth quarter gaap net loss from continuing operations of $0.11 per diluted share compared to a non-gaap adjusted eps loss from continuing operations of $0.09 per share Consolidated adjusted non-GAAP EPS for the quarter was $0.09 per share. consolidated adjusted non-gaap eps for the quarter was $0.09 per share For the full year of 2025, net cash provided by continuing operating activities was $117,000, which included a $5.2 million escrow receivable from the sale of the professional division. for the full year of 2025 net cash provided by continuing operating activities was $117,000 which included a $5.2 million escrow receivable from the sale of the professional division We expect to finalize the settlement of this cash escrow amount during Q2. we expect to finalize the settlement of this cash escrow amount during q2 Our capital expenditures were minimal at $138,000. our capital expenditures were minimal at $138,000 During 2025, we purchased 351,200 shares of stock, totaling approximately $1.5 million. during 2025 we purchased 351,200 shares of stock totaling approximately $1.5 million Our purchases to date total 522,000 shares at a total of $2.4 million. Finally, the team remains focused on executing our strategic priorities and our new roadmap, while also managing the transitional work related to the sale of the professional division. Kelly and I want to thank everyone across the organization for their continued dedication and hard work over the past year. The execution of the TSA was a particularly heavy lift and we are deeply grateful to the entire BG Staffing team for their thoughtful planning, strong execution, and sustained commitment. We look forward to updating investors each quarter on our progress and hope today's discussion has been valuable. With that, now we would like to open the call for questions. Operator? Our purchases to date total 522,000 shares at a total of $2.4 million. our purchases to date total 522,000 shares at a total of $2.4 million Finally, the team remains focused on executing our strategic priorities and our new roadmap, while also managing the transitional work related to the sale of the professional division. finally the team remains focused on executing our strategic priorities and our new roadmap while also managing the transitional work related to the sale of the professional division Kelly and I want to thank everyone across the organization for their continued dedication and hard work over the past year. kelly and i want to thank everyone across the organization for their continued dedication and hard work over the past year The execution of the TSA was a particularly heavy lift and we are deeply grateful to the entire BG Staffing team for their thoughtful planning, strong execution, and sustained commitment. the execution of the tsa was a particularly heavy lift and we are deeply grateful to the entire bg staffing team for their thoughtful planning strong execution and sustained commitment We look forward to updating investors each quarter on our progress and hope today's discussion has been valuable. we look forward to updating investors each quarter on our progress and hope today's discussion has been valuable With that, now we would like to open the call for questions. with that now we would like to open the call for questions Operator? operator

Speaker 4: Certainly. At this time, we will be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, that is star one to ask a question. One moment please while we poll for questions. Your first question for today is from William Dezellem with Tieton Capital. Certainly. certainly At this time, we will be conducting a question-and-answer session. at this time we will be conducting a question-and-answer session If you would like to ask a question, please press star one on your telephone keypad. if you would like to ask a question please press star one on your telephone keypad A confirmation tone will indicate your line is in the question queue. a confirmation tone will indicate your line is in the question queue You may press star two if you would like to remove your question from the queue. you may press star two if you would like to remove your question from the queue For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. for participants using speaker equipment it may be necessary to pick up your handset before pressing the star keys Once again, that is star one to ask a question. once again that is star one to ask a question One moment please while we poll for questions. one moment please while we poll for questions Your first question for today is from William Dezellem with Tieton Capital . your first question for today is from william dezellem with tieton capital

Speaker 6: Thank you, and good morning. A couple of questions. Let's just start, if we could please, with the Yardi relationship and walk us through that relationship, what you are doing with it, and what the potential implications are for the business longer term. Thank you, and good morning. thank you and good morning A couple of questions. a couple of questions Let's just start, if we could please, with the Yardi relationship and walk us through that relationship, what you are doing with it, and what the potential implications are for the business longer term. let's just start if we could please with the yardi relationship and walk us through that relationship what you are doing with it and what the potential implications are for the business longer term

Speaker 3: Yes. Good morning, William. Thank you for the question. I'll take that one. The Yardi partnership is an exciting one for our group because Yardi as a company has established an independent consultant network. What that means is that Yardi as a company will obviously sell and implement software to our property management customers that they use for their day-to-day operations. When and if there's gaps between what Yardi provides as a company and the implementation or training that is needed to actually have the end user fully implemented into the software, they'll leverage independent consultants to do that work. That's exactly where we'll come in with our consultant base to be able to fill those requests. Yardi essentially serves as a referral base when they know they have needs among their clients so that we can then pick that up. Yes. yes Good morning, William. good morning william Thank you for the question. thank you for the question I'll take that one. i'll take that one The Yardi partnership is an exciting one for our group because Yardi as a company has established an independent consultant network. the yardi partnership is an exciting one for our group because yardi as a company has established an independent consultant network What that means is that Yardi as a company will obviously sell and implement software to our property management customers that they use for their day-to-day operations. what that means is that yardi as a company will obviously sell and implement software to our property management customers that they use for their day-to-day operations When and if there's gaps between what Yardi provides as a company and the implementation or training that is needed to actually have the end user fully implemented into the software, they'll leverage independent consultants to do that work. when and if there's gaps between what yardi provides as a company and the implementation or training that is needed to actually have the end user fully implemented into the software they'll leverage independent consultants to do that work That's exactly where we'll come in with our consultant base to be able to fill those requests. that's exactly where we'll come in with our consultant base to be able to fill those requests Yardi essentially serves as a referral base when they know they have needs among their clients so that we can then pick that up. yardi essentially serves as a referral base when they know they have needs among their clients so that we can then pick that up It's a really basic model of hiring the consultant, placing them, and then billing accordingly. It's a really basic model of hiring the consultant, placing them, and then billing accordingly. it's a really basic model of hiring the consultant placing them and then billing accordingly

Speaker 6: Kelly, what's the potential size of that business? Or is it just more important, the relationship enhancement that it leads with your customers? Kelly, what's the potential size of that business? kelly what's the potential size of that business Or is it just more important, the relationship enhancement that it leads with your customers? or is it just more important the relationship enhancement that it leads with your customers

Speaker 3: Yeah. You know, we chose Yardi as our first, partnership of this nature because they are the most widely used software in the property management space. The potential is very large, across all of our customer base. They're certainly not the only software used, but they are the most widely used. When you look at potential, you know, you think about all the properties that we build with across the country, they all have software that they use. Every single one of them would have some type of support that they could need at any given point in time. In addition to that, even at the corporate office level, when you think about their accounting needs and things like that, Yardi is also leveraged for those types of services. Yeah. yeah You know, we chose Yardi as our first, partnership of this nature because they are the most widely used software in the property management space. you know we chose yardi as our first partnership of this nature because they are the most widely used software in the property management space The potential is very large, across all of our customer base. the potential is very large across all of our customer base They're certainly not the only software used, but they are the most widely used. they're certainly not the only software used but they are the most widely used When you look at potential, you know, you think about all the properties that we build with across the country, they all have software that they use. when you look at potential you know you think about all the properties that we build with across the country they all have software that they use Every single one of them would have some type of support that they could need at any given point in time. every single one of them would have some type of support that they could need at any given point in time In addition to that, even at the corporate office level, when you think about their accounting needs and things like that, Yardi is also leveraged for those types of services. in addition to that even at the corporate office level when you think about their accounting needs and things like that yardi is also leveraged for those types of services There's potential at both the corporate office level as well as the on-site end user level. There's potential at both the corporate office level as well as the on-site end user level. there's potential at both the corporate office level as well as the on-site end user level

Speaker 6: All right, great. Thank you. I appreciate that. Keith, would you please walk through your comments about SG&A on an ongoing basis? I didn't catch all the numbers, number one, but maybe relate it to the $9.3 million of SG&A that was reported in the fourth quarter. All right, great. all right great Thank you. thank you I appreciate that. i appreciate that Keith, would you please walk through your comments about SG&A on an ongoing basis? keith would you please walk through your comments about sg&a on an ongoing basis I didn't catch all the numbers, number one, but maybe relate it to the $9.3 million of SG&A that was reported in the fourth quarter. i didn't catch all the numbers number one but maybe relate it to the $9.3 million of sg&a that was reported in the fourth quarter

Speaker 2: Okay. The G&A costs that we are estimating going forward once we're clear the TSA and all of that is around $12 million, okay? Then the number obviously continues to unfold as we continue to look for ways to, you know, cut costs and software costs and, you know, things like that. That's kind of an ongoing work that we have. There's about $2.5 million or so of public company costs in that number. All right? The Q4 number that you cited, which was SG&A, that number is higher than what we expect in 2026 because we were still, you know, supporting the sale and we weren't able to get out of all those software changes that we, you know, expect to change. Okay. okay The G&A costs that we are estimating going forward once we're clear the TSA and all of that is around $12 million, okay? the g&a costs that we are estimating going forward once we're clear the tsa and all of that is around $12 million okay Then the number obviously continues to unfold as we continue to look for ways to, you know, cut costs and software costs and, you know, things like that. then the number obviously continues to unfold as we continue to look for ways to you know cut costs and software costs and you know things like that That's kind of an ongoing work that we have. that's kind of an ongoing work that we have There's about $2.5 million or so of public company costs in that number. there's about $2.5 million or so of public company costs in that number All right? all right The Q4 number that you cited, which was SG&A, that number is higher than what we expect in 2026 because we were still, you know, supporting the sale and we weren't able to get out of all those software changes that we, you know, expect to change. the q4 number that you cited which was sg&a that number is higher than what we expect in 2026 because we were still you know supporting the sale and we weren't able to get out of all those software changes that we you know expect to change The Q4 number is not reflective of what we expect in 2026. Does that help? The Q4 number is not reflective of what we expect in 2026. the q4 number is not reflective of what we expect in 2026 Does that help? does that help

Speaker 6: Yeah. That is helpful. Following up on that, the SG&A that includes or is the $9.3 million, how much of that is the G&A number? Yeah. yeah That is helpful. that is helpful Following up on that, the SG&A that includes or is the $9.3 million, how much of that is the G&A number? following up on that the sg&a that includes or is the $9.3 million how much of that is the g&a number

Speaker 2: The G&A number for the quarter, it's actually in the press release. It's about $3.5 million, but there's about $460,000 that hit in Q4 that did not relate to Q4, and that was the things that I cited that we, as we broke apart, you know, the balance sheet for the sale. The G&A number for the quarter, it's actually in the press release. the g&a number for the quarter it's actually in the press release It's about $3.5 million, but there's about $460,000 that hit in Q4 that did not relate to Q4, and that was the things that I cited that we, as we broke apart, you know, the balance sheet for the sale. it's about $3.5 million but there's about $460,000 that hit in q4 that did not relate to q4 and that was the things that i cited that we as we broke apart you know the balance sheet for the sale

Speaker 6: Yes. Yes. yes

Speaker 2: We looked at our IBNR and in our reserve, we ended up taking $460,000 of expense in Q4. That is included in those numbers. We looked at our IBNR and in our reserve, we ended up taking $460,000 of expense in Q4. we looked at our ibnr and in our reserve we ended up taking $460,000 of expense in q4 That is included in those numbers. that is included in those numbers

Speaker 6: Great. That is helpful. One additional question, please. Relative to the overall market environment, how would you characterize it today versus what you were seeing a year ago at this time? Great. great That is helpful. that is helpful One additional question, please. one additional question please Relative to the overall market environment, how would you characterize it today versus what you were seeing a year ago at this time? relative to the overall market environment how would you characterize it today versus what you were seeing a year ago at this time

Speaker 3: Yeah. You know, what we're seeing today, based on customer feedback, there is definitely an interest and a budget to spend on our services. This year is much more optimistic of a sentiment as what we were experiencing last year. I think our customers have navigated a lot the last couple of years economically. This year the feedback is absolutely, look, you know, we plan to leverage staffing as well as PropTech support services. We're finding from a willingness to spend perspective, there certainly is a lot more positive feedback this year than what we were navigating this time a year ago. Yeah. yeah You know, what we're seeing today, based on customer feedback, there is definitely an interest and a budget to spend on our services. you know what we're seeing today based on customer feedback there is definitely an interest and a budget to spend on our services This year is much more optimistic of a sentiment as what we were experiencing last year. this year is much more optimistic of a sentiment as what we were experiencing last year I think our customers have navigated a lot the last couple of years economically. i think our customers have navigated a lot the last couple of years economically This year the feedback is absolutely, look, you know, we plan to leverage staffing as well as PropTech support services. this year the feedback is absolutely look you know we plan to leverage staffing as well as proptech support services We're finding from a willingness to spend perspective, there certainly is a lot more positive feedback this year than what we were navigating this time a year ago. we're finding from a willingness to spend perspective there certainly is a lot more positive feedback this year than what we were navigating this time a year ago

Speaker 6: Kelly, is it your sense that since we've had a couple of years of tight or conservative spending, that there is some catch up and delayed or deferred maintenance that could lead to a higher than average level of activity, maybe not in 2026, but as we push further into 2027 and you just start to see some catch-up? Kelly, is it your sense that since we've had a couple of years of tight or conservative spending, that there is some catch up and delayed or deferred maintenance that could lead to a higher than average level of activity, maybe not in 2026, but as we push further into 2027 and you just start to see some catch-up? kelly is it your sense that since we've had a couple of years of tight or conservative spending that there is some catch up and delayed or deferred maintenance that could lead to a higher than average level of activity maybe not in 2026 but as we push further into 2027 and you just start to see some catch-up

Speaker 3: I think it's reasonable to assume that there could be a certain level of that. What we've heard from customers is that as much as possible during times when they have to be conservative on their spending, they'll do their best to just leverage the existing employee base that they have, even if that means one employee that may typically work at one property needing to float or visit several properties and try to help. To an extent, there may be a little bit of that. Nothing like what we saw, you know, after COVID or anything like that. There may be a small amount, but I think as much as possible, they really have tried to make it work with the existing employees that they have. I think it's reasonable to assume that there could be a certain level of that. i think it's reasonable to assume that there could be a certain level of that What we've heard from customers is that as much as possible during times when they have to be conservative on their spending, they'll do their best to just leverage the existing employee base that they have, even if that means one employee that may typically work at one property needing to float or visit several properties and try to help. what we've heard from customers is that as much as possible during times when they have to be conservative on their spending they'll do their best to just leverage the existing employee base that they have even if that means one employee that may typically work at one property needing to float or visit several properties and try to help To an extent, there may be a little bit of that. to an extent there may be a little bit of that Nothing like what we saw, you know, after COVID or anything like that. nothing like what we saw you know after covid or anything like that There may be a small amount, but I think as much as possible, they really have tried to make it work with the existing employees that they have. there may be a small amount but i think as much as possible they really have tried to make it work with the existing employees that they have

Speaker 6: Great. Thank you both for taking all the questions. Great. great Thank you both for taking all the questions. thank you both for taking all the questions

Speaker 3: Absolutely. Absolutely. absolutely

Speaker 2: Thank you. Oh, William, there's one other thing, just to kind of back that up. Our top-line sales through the first two months are slightly ahead of 2025, so it's been off to a you know solid start for this year. Thank you. thank you Oh, William, there's one other thing, just to kind of back that up. oh william there's one other thing just to kind of back that up Our top-line sales through the first two months are slightly ahead of 2025, so it's been off to a you know solid start for this year. our top-line sales through the first two months are slightly ahead of 2025 so it's been off to a you know solid start for this year

Speaker 6: Just to be clear, what you're saying is this will be if March continues the trend that you saw in January and February, the first quarter revenues would be up, which would be the first time in many quarters that that's the case, correct? Just to be clear, what you're saying is this will be if March continues the trend that you saw in January and February, the first quarter revenues would be up, which would be the first time in many quarters that that's the case, correct? just to be clear what you're saying is this will be if march continues the trend that you saw in january and february the first quarter revenues would be up which would be the first time in many quarters that that's the case correct

Speaker 2: Yes, that is correct. Yes, that is correct. yes that is correct

Speaker 6: Great. Thank you for that additional perspective. Do you want to share a percentage change that you saw in January and February, combined? Great. great Thank you for that additional perspective. thank you for that additional perspective Do you want to share a percentage change that you saw in January and February, combined? do you want to share a percentage change that you saw in january and february combined

Speaker 2: No, but I will say that we do expect full-year sales in 2026 to be over 2025, you know, kinda in the mid-single digits. If that helps. No, but I will say that we do expect full-year sales in 2026 to be over 2025, you know, kinda in the mid-single digits. no but i will say that we do expect full-year sales in 2026 to be over 2025 you know kinda in the mid-single digits If that helps. if that helps

Speaker 6: That is helpful, and I'm gonna take the bait and go one step further. That is helpful, and I'm gonna take the bait and go one step further. that is helpful and i'm gonna take the bait and go one step further

Speaker 2: Thank you, William. Thank you, William. thank you william

Speaker 6: You're welcome. Relative to the monthly trends, when you look at the fourth quarter, was November decline less than October, and was December better than November, and then January being better than December, and then was February up more than March? Are we seeing that sort of trend each and every month improving? You're welcome. you're welcome Relative to the monthly trends, when you look at the fourth quarter, was November decline less than October, and was December better than November, and then January being better than December, and then was February up more than March? relative to the monthly trends when you look at the fourth quarter was november decline less than october and was december better than november and then january being better than december and then was february up more than march Are we seeing that sort of trend each and every month improving? are we seeing that sort of trend each and every month improving

Speaker 2: You're going sequentially, right? You're going sequentially, right? you're going sequentially right

Speaker 6: Yeah. Basically, Keith, I'm essentially saying let's just take, for example, if October was down 6%, then November being down 4%, December being down 2%, January being up 2%. I totally just made those numbers up for illustration. Yeah. yeah Basically, Keith, I'm essentially saying let's just take, for example, if October was down 6%, then November being down 4%, December being down 2%, January being up 2%. basically keith i'm essentially saying let's just take for example if october was down 6% then november being down 4% december being down 2% january being up 2% I totally just made those numbers up for illustration. i totally just made those numbers up for illustration

Speaker 2: Right. Yep. I think the best way to answer that is that as we ended 2025, the seasonality effects that we would expect, we were better than those in the last month of last year. We have started out where we are higher in sales than last year for January and February, so it's a positive trend. Right. right Yep. yep I think the best way to answer that is that as we ended 2025, the seasonality effects that we would expect, we were better than those in the last month of last year. i think the best way to answer that is that as we ended 2025 the seasonality effects that we would expect we were better than those in the last month of last year We have started out where we are higher in sales than last year for January and February, so it's a positive trend. we have started out where we are higher in sales than last year for january and february so it's a positive trend

Speaker 6: That's helpful. Did that positive trend begin in late in the fourth quarter in December or is it really- That's helpful. that's helpful Did that positive trend begin in late in the fourth quarter in December or is it really- did that positive trend begin in late in the fourth quarter in december or is it really-

Speaker 2: Yes. Yes. yes

Speaker 6: Yes. Yes. yes

Speaker 2: Yes. Yes, it did. Of course, we had one really tough week, you know, in February because, you know, a snowstorm basically shut down the entire country for a few days. Still we came out pretty strong in February. Yes. yes yes Yes, it did. yes it did Of course, we had one really tough week, you know, in February because, you know, a snowstorm basically shut down the entire country for a few days. of course we had one really tough week you know in february because you know a snowstorm basically shut down the entire country for a few days Still we came out pretty strong in February. still we came out pretty strong in february

Speaker 6: Yeah, that's very helpful. Appreciate that additional color. Anything else you'd like to add on that front before I turn it back to the operator? Yeah, that's very helpful. yeah that's very helpful Appreciate that additional color. appreciate that additional color Anything else you'd like to add on that front before I turn it back to the operator? anything else you'd like to add on that front before i turn it back to the operator

Speaker 2: No, I think that's it. Thank you. No, I think that's it. no i think that's it Thank you. thank you

Speaker 6: Great. Yeah, thank you again. Great. great Yeah, thank you again. yeah thank you again

Speaker 4: Your next question is from George Melis with MKH Management. Your next question is from George Melis with MKH Management. your next question is from george melis with mkh management

Speaker 1: Thank you. Good morning. Thank you. thank you Good morning. good morning

Speaker 2: Good morning, George. Good morning, George. good morning george

Speaker 1: Good morning. Maybe trying to clarify on the answer that you guys gave, that Kelly you gave to William regarding PropTech. Good morning. good morning Maybe trying to clarify on the answer that you guys gave, that Kelly you gave to William regarding PropTech. maybe trying to clarify on the answer that you guys gave that kelly you gave to william regarding proptech

Speaker 3: Mm-hmm. Yeah. Mm-hmm. mm-hmm Yeah. yeah

Speaker 1: It seems like it's a very different line of business, right? It's not your regular consultants or staffing that is more focused on maintenance and leasing. Is that sort of a kind of a new segment of the business, could we say? And how many consultants you have, and what kind of revenue are you expecting in 2026 from PropTech? It seems like it's a very different line of business, right? it seems like it's a very different line of business right It's not your regular consultants or staffing that is more focused on maintenance and leasing. it's not your regular consultants or staffing that is more focused on maintenance and leasing Is that sort of a kind of a new segment of the business, could we say? is that sort of a kind of a new segment of the business could we say And how many consultants you have, and what kind of revenue are you expecting in 2026 from PropTech? and how many consultants you have and what kind of revenue are you expecting in 2026 from proptech

Speaker 3: Yeah. Well, good morning, George. Yeah. Thank you for the question. Yes, it is different from the type of staffing that we've delivered in the past. You're correct. The reason why we selected PropTech as an adjacent market that we were interested in is because it's a need that the people that we place and our existing customers have on all of their properties. They're leveraging technology, as all of us are, in their day-to-day. We saw an opportunity to explore the support of that technology, and it really does two things. It helps solve customer problems that exist today, but it also helps lift up our candidate base, as we know they're gonna be, you know, when they're out to work, leveraging the same technology. Yeah. yeah Well, good morning, George. well good morning george Yeah. yeah Thank you for the question. thank you for the question Yes, it is different from the type of staffing that we've delivered in the past. yes it is different from the type of staffing that we've delivered in the past You're correct. you're correct The reason why we selected PropTech as an adjacent market that we were interested in is because it's a need that the people that we place and our existing customers have on all of their properties. the reason why we selected proptech as an adjacent market that we were interested in is because it's a need that the people that we place and our existing customers have on all of their properties They're leveraging technology, as all of us are, in their day-to-day. they're leveraging technology as all of us are in their day-to-day We saw an opportunity to explore the support of that technology, and it really does two things. we saw an opportunity to explore the support of that technology and it really does two things It helps solve customer problems that exist today, but it also helps lift up our candidate base, as we know they're gonna be, you know, when they're out to work, leveraging the same technology. it helps solve customer problems that exist today but it also helps lift up our candidate base as we know they're gonna be you know when they're out to work leveraging the same technology You know, learning about how Yardi structures their independent consultant network really became of interest to us because, you know, we're building that consultant base. To answer your question, we're gonna start with, you know, a pool of, you know, 8-12 consultants and, you know, get them out working, and it'll just grow organically over the year. You know, early projections for 2026, we expect to be able to organically grow the revenue and ramp up through the year. You know, first year top line may be $1 million-$2 million, you know, but we really just are launching it organically this quarter. You know, we're gonna look at the next quarter, couple quarters very carefully as sales accelerate, and we'll be able to give much more accurate forecasting after that point. You know, learning about how Yardi structures their independent consultant network really became of interest to us because, you know, we're building that consultant base. you know learning about how yardi structures their independent consultant network really became of interest to us because you know we're building that consultant base To answer your question, we're gonna start with, you know, a pool of, you know, 8-12 consultants and, you know, get them out working, and it'll just grow organically over the year. to answer your question we're gonna start with you know a pool of you know 8-12 consultants and you know get them out working and it'll just grow organically over the year You know, early projections for 2026, we expect to be able to organically grow the revenue and ramp up through the year. you know early projections for 2026 we expect to be able to organically grow the revenue and ramp up through the year You know, first year top line may be $1 million-$2 million, you know, but we really just are launching it organically this quarter. you know first year top line may be $1 million-$2 million you know but we really just are launching it organically this quarter You know, we're gonna look at the next quarter, couple quarters very carefully as sales accelerate, and we'll be able to give much more accurate forecasting after that point. you know we're gonna look at the next quarter couple quarters very carefully as sales accelerate and we'll be able to give much more accurate forecasting after that point

Speaker 1: Okay, that's exciting. How many people do you have on staff now? How many consultants do you have? Do you train them in Yardi tech, or are they pretty much already trained and ready to go? Okay, that's exciting. okay that's exciting How many people do you have on staff now? how many people do you have on staff now How many consultants do you have? how many consultants do you have Do you train them in Yardi tech, or are they pretty much already trained and ready to go? do you train them in yardi tech or are they pretty much already trained and ready to go

Speaker 3: Yeah. They tend to come in with existing Yardi experience. If we're gonna hire them, they have existing Yardi knowledge. We're not hiring folks to come in and then train on them. Now, I will add that Yardi does provide really impressive resources to make sure their consultant base has access to training and to knowledge and continuing education. Yardi does a really great job making sure that their consultant network is very well equipped to stay knowledgeable on their technology. That's another reason why we selected Yardi as a partner, those resources that they have, the knowledge base that they offer. Therefore, that's not really a lift that we have to take on internally, that type of training. We will hire consultants that have existing knowledge and then leverage Yardi's resources to make sure that they stay fresh on that knowledge. Yeah. yeah They tend to come in with existing Yardi experience. they tend to come in with existing yardi experience If we're gonna hire them, they have existing Yardi knowledge. if we're gonna hire them they have existing yardi knowledge We're not hiring folks to come in and then train on them. we're not hiring folks to come in and then train on them Now, I will add that Yardi does provide really impressive resources to make sure their consultant base has access to training and to knowledge and continuing education. now i will add that yardi does provide really impressive resources to make sure their consultant base has access to training and to knowledge and continuing education Yardi does a really great job making sure that their consultant network is very well equipped to stay knowledgeable on their technology. yardi does a really great job making sure that their consultant network is very well equipped to stay knowledgeable on their technology That's another reason why we selected Yardi as a partner, those resources that they have, the knowledge base that they offer. that's another reason why we selected yardi as a partner those resources that they have the knowledge base that they offer Therefore, that's not really a lift that we have to take on internally, that type of training. therefore that's not really a lift that we have to take on internally that type of training We will hire consultants that have existing knowledge and then leverage Yardi's resources to make sure that they stay fresh on that knowledge. we will hire consultants that have existing knowledge and then leverage yardi's resources to make sure that they stay fresh on that knowledge

Speaker 1: Great. Maybe I'm digging too much into the weeds, but I'm really curious. Are you starting in Texas, for example? Are you starting in one market? How do you see sort of the ramp of that, you know, business segment unfolding? Great. great Maybe I'm digging too much into the weeds, but I'm really curious. maybe i'm digging too much into the weeds but i'm really curious Are you starting in Texas, for example? are you starting in texas for example Are you starting in one market? are you starting in one market How do you see sort of the ramp of that, you know, business segment unfolding? how do you see sort of the ramp of that you know business segment unfolding

Speaker 3: Fortunately, this service is not necessarily geographically driven because a lot of the work that these consultants can deliver is remote. We won't be a geographically-based expansion. It'll really be more of a customer-by-customer based expansion. You know, we'll grow that way between both our own internal sales initiatives and Yardi's referral base. It won't necessarily have a geographic component. Fortunately, this service is not necessarily geographically driven because a lot of the work that these consultants can deliver is remote. fortunately this service is not necessarily geographically driven because a lot of the work that these consultants can deliver is remote We won't be a geographically-based expansion. we won't be a geographically-based expansion It'll really be more of a customer-by-customer based expansion. it'll really be more of a customer-by-customer based expansion You know, we'll grow that way between both our own internal sales initiatives and Yardi's referral base. you know we'll grow that way between both our own internal sales initiatives and yardi's referral base It won't necessarily have a geographic component. it won't necessarily have a geographic component

Speaker 1: Okay, great. That sounds like an exciting initiative. It's nice to see having these growth initiatives. Maybe just also trying to clarify a little bit to what you said at the end regarding, you know, a solid start to the year. The fourth quarter year-over-year was down 9.4%, right? I think the top line. Okay, great. okay great That sounds like an exciting initiative. that sounds like an exciting initiative It's nice to see having these growth initiatives. it's nice to see having these growth initiatives Maybe just also trying to clarify a little bit to what you said at the end regarding, you know, a solid start to the year. maybe just also trying to clarify a little bit to what you said at the end regarding you know a solid start to the year The fourth quarter year-over-year was down 9.4%, right? the fourth quarter year-over-year was down 9.4% right I think the top line. i think the top line

Speaker 2: Yes, that's correct. Yes, that's correct. yes that's correct

Speaker 1: If part of December was a positive comp, it sort of means that actually maybe October and November were down double digits. That seems like a very dramatic change from down double digits in a few months to going up, you know, up comp. How do you explain this change? To what extent is this change market driven? To what extent is it your own execution and what you guys are doing internally that is driving that, in your opinion? If part of December was a positive comp, it sort of means that actually maybe October and November were down double digits. if part of december was a positive comp it sort of means that actually maybe october and november were down double digits That seems like a very dramatic change from down double digits in a few months to going up, you know, up comp. that seems like a very dramatic change from down double digits in a few months to going up you know up comp How do you explain this change? how do you explain this change To what extent is this change market driven? to what extent is this change market driven To what extent is it your own execution and what you guys are doing internally that is driving that, in your opinion? to what extent is it your own execution and what you guys are doing internally that is driving that in your opinion

Speaker 2: Yeah. I think this is, well, there's some market improvement in there, but really from our perspective, it's more driven by execution. You know, the things that we learned from one of the studies is the speed to fill, getting the right candidate in the right spot quickly. Those things all make a big difference, and we have changed some things up, and we are laser-focused on that stuff. Yeah. yeah I think this is, well, there's some market improvement in there, but really from our perspective, it's more driven by execution. i think this is well there's some market improvement in there but really from our perspective it's more driven by execution You know, the things that we learned from one of the studies is the speed to fill, getting the right candidate in the right spot quickly. you know the things that we learned from one of the studies is the speed to fill getting the right candidate in the right spot quickly Those things all make a big difference, and we have changed some things up, and we are laser-focused on that stuff. those things all make a big difference and we have changed some things up and we are laser-focused on that stuff

Speaker 1: Okay. Let's see if we can try to extrapolate that to the year. You expect mid- to single-digit growth. Does that mean that you expect growth pretty much in every year-over-year growth, I mean, in every quarter of 2026? Okay. okay Let's see if we can try to extrapolate that to the year. let's see if we can try to extrapolate that to the year You expect mid- to single-digit growth. you expect mid- to single-digit growth Does that mean that you expect growth pretty much in every year-over-year growth, I mean, in every quarter of 2026? does that mean that you expect growth pretty much in every year-over-year growth i mean in every quarter of 2026

Speaker 2: Yes. Yes. yes

Speaker 1: Um. Um. um

Speaker 2: That is correct. That is correct. that is correct

Speaker 1: Okay. Great. That's really good to know. To what extent is that driven by I think, Kelly, you mentioned that you feel like customers have a slightly greater propensity to purchase and to spend. You have that on the one hand. On the other hand, you have better execution on your side. Okay. okay Great. great That's really good to know. that's really good to know To what extent is that driven by I think, Kelly, you mentioned that you feel like customers have a slightly greater propensity to purchase and to spend. to what extent is that driven by i think kelly you mentioned that you feel like customers have a slightly greater propensity to purchase and to spend You have that on the one hand. you have that on the one hand On the other hand, you have better execution on your side. on the other hand you have better execution on your side

Speaker 3: Mm-hmm. Mm-hmm. mm-hmm

Speaker 1: Is that the way one would look at it? Is that the way one would look at it? is that the way one would look at it

Speaker 3: Yeah. It is definitely a mixture of both of those factors, that would lead to the year-over-year performance being more favorable. Yeah. yeah It is definitely a mixture of both of those factors, that would lead to the year-over-year performance being more favorable. it is definitely a mixture of both of those factors that would lead to the year-over-year performance being more favorable

Speaker 1: Okay, great. Good. Then on the cost side, thank you very much for what you have as the property management segment. It's super helpful, and it really helps us, I think, understand the, you know, the model much better. If we look at the G&A, it's $3.9. But if we take out the medical and the cost of the review, it comes down to pretty much $3.1, let's say $3-$3.1. If we annualize that, it's roughly $12, which I think is what you said, Keith, as kind of the ongoing expenses of G&A. Does that mean- Okay, great. okay great Good. good Then on the cost side, thank you very much for what you have as the property management segment. then on the cost side thank you very much for what you have as the property management segment It's super helpful, and it really helps us, I think, understand the, you know, the model much better. it's super helpful and it really helps us i think understand the you know the model much better If we look at the G&A, it's $3.9. if we look at the g&a it's $3.9 But if we take out the medical and the cost of the review, it comes down to pretty much $3.1, let's say $3-$3.1. but if we take out the medical and the cost of the review it comes down to pretty much $3.1 let's say $3-$3.1 If we annualize that, it's roughly $12, which I think is what you said, Keith, as kind of the ongoing expenses of G&A. if we annualize that it's roughly $12 which i think is what you said keith as kind of the ongoing expenses of g&a Does that mean- does that mean-

Speaker 2: Yes. Yes. yes

Speaker 1: That if we take out those two one-time things, we are pretty much at a steady-state level for G&A? That if we take out those two one-time things, we are pretty much at a steady-state level for G&A? that if we take out those two one-time things we are pretty much at a steady-state level for g&a

Speaker 2: Yes. Just to make clear that we are looking at ways ongoing to bring down those costs. It's not a done deal. That's kinda like where we are now, but we are constantly looking at ways to bring down those costs. Yes. yes Just to make clear that we are looking at ways ongoing to bring down those costs. just to make clear that we are looking at ways ongoing to bring down those costs It's not a done deal. it's not a done deal That's kinda like where we are now, but we are constantly looking at ways to bring down those costs. that's kinda like where we are now but we are constantly looking at ways to bring down those costs

Speaker 1: Okay. With, of course, seasonality, your second and third quarter are your best quarters from a revenue perspective. That impacts somewhat selling expenses. Would that have an impact on G&A, or is G&A basically flattish from quarter to quarter to quarter? Okay. okay With, of course, seasonality, your second and third quarter are your best quarters from a revenue perspective. with of course seasonality your second and third quarter are your best quarters from a revenue perspective That impacts somewhat selling expenses. that impacts somewhat selling expenses Would that have an impact on G&A, or is G&A basically flattish from quarter to quarter to quarter? would that have an impact on g&a or is g&a basically flattish from quarter to quarter to quarter

Speaker 2: No, G&A is pretty flat. Selling would go up some. You have more sales, you have more, you know, bonus dollars, commission dollars, things like that. With the G&A, it's basically pretty fixed across all four quarters. No, G&A is pretty flat. no g&a is pretty flat Selling would go up some. selling would go up some You have more sales, you have more, you know, bonus dollars, commission dollars, things like that. you have more sales you have more you know bonus dollars commission dollars things like that With the G&A, it's basically pretty fixed across all four quarters. with the g&a it's basically pretty fixed across all four quarters

Speaker 1: Okay, great. Okay, thank you very much for taking my questions. Okay, great. okay great Okay, thank you very much for taking my questions. okay thank you very much for taking my questions

Speaker 2: Sure. Sure. sure

Speaker 3: Thank you. Thank you. thank you

Speaker 2: Thanks, George. Thanks, George. thanks george

Speaker 4: We have reached the end of the question and answer session, and I will now turn the call over to Kelly for closing remarks. We have reached the end of the question and answer session, and I will now turn the call over to Kelly for closing remarks. we have reached the end of the question and answer session and i will now turn the call over to kelly for closing remarks

Speaker 3: Thank you for your time today. We appreciate your continued support and look forward to providing an update on our first quarter in a couple of months. Have a great day. Thank you for your time today. thank you for your time today We appreciate your continued support and look forward to providing an update on our first quarter in a couple of months. we appreciate your continued support and look forward to providing an update on our first quarter in a couple of months Have a great day. have a great day

Speaker 4: This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation. This concludes today's conference, and you may disconnect your lines at this time. this concludes today's conference and you may disconnect your lines at this time Thank you for your participation. thank you for your participation