Q2 2024 BGSF Inc Earnings Call

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Speaker Change: Good morning, everyone welcome to the B G. S F Inc. Fiscal 2024 second quarter financial results Conference call. All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.

After todays presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one on your telephone keypad to withdraw your question. Please press Star then two.

Operator: Please note, this event is being recorded. Now I would like to turn the call over to Sandy Martin, one of our three-part advisors. Please go ahead.

Operator: Please note this event is being recorded. Now I would like to turn the call over to Sandy Martin, one of our three-part advisors. Please go ahead.

Speaker Change: Please note this event is being recorded.

Now I would like to turn the call over to Sandy Martin three part advisors. Please go ahead.

Sandy Martin: Good morning. Thank you for joining us today for BGSF's second quarter 2024 earnings conference call. With me on the call are Beth Garvey, Chair, President, and Chief Executive Officer, and John Barnett, Chief Financial Officer. After our prepared remarks, there will be a Q&A session. As noted, today's call is being webcast live. A replay will be available later today and archived on the company's investor relations page at investor

Sandy Martin: Good morning. Thank you for joining us today for BGSF's second quarter 2024 earnings conference call. With me on the call are Beth Garvey, Chair, President, and Chief Executive Officer, and John Barnett, Chief Financial Officer. After our prepared remarks, there will be a Q&A session. As noted, today's call is being webcast live, and a replay will be available later today and archived on the company's investor relations page at investor.bgsf.com. Have a great day!

Speaker Change: Good morning, Thank you for joining us today for Bgs that second quarter 'twenty 'twenty four earnings conference call with me on the call are Beth Garvey Chair, President and Chief Executive Officer, and John Barnett Chief Financial Officer. After our prepared remarks, there will be a Q&A session. As noted today's call is being <unk>.

Speaker Change: Webcast live.

Speaker Change: Replay will be available later today and archived on the company's Investor Relations page at Investor Dot D. J S F Dot com.

Sandy Martin: Today's discussion will include forward-looking statements that are based on certain assumptions made by the company under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. However, 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.

Sandy Martin: Today's discussion will include forward-looking statements that are based on certain assumptions made by the company under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. However, 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.

Speaker Change: 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.

Speaker Change: Those listed in the company's filings with the Securities and Exchange Commission.

Speaker Change: Management's statements are made as of today and the company assumes no obligation to update these statements publicly even if new information becomes available in the future. During the call management will also reference certain non-GAAP financial measures, which can be useful in evaluating the company's operations related to the financial condition and result.

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

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

Beth Garvey: These non-GAAP measures are intended tended to supplement GAAP financial information and should not be considered a substitute GAAP and non-GAAP measures are reconciled in today's earnings press release, I'll now turn the call over to Beth Garvey.

Beth Garvey: Thank you, Sandy, and thank you all for joining us. Welcome to our second quarter earnings conference call. In May, we announced a review of strategic alternatives, and as part of that ongoing process to maximize shareholder value, the board and I will continue to evaluate all options. While I cannot provide an update today, the process is ongoing, and we look forward to sharing the results in the future. Also, we will not take questions regarding the strategic alternatives or our process in today's Q&A. Thank you so much for understanding.

Beth Garvey: Thank you, Sandy, and thank you all for joining us. Welcome to our second quarter earnings conference call. However, business indicators began to shift on positive momentum in the quarter. Notably, new contract wins outpaced contract ends by approximately 25% through June. The sustained acceleration was primarily seen in IT workforce solutions, managed solutions, and near and offshore engagement.

Beth Garvey: Thank you Sandy and thank you all for joining US welcome to our second quarter earnings Conference call.

Speaker Change: In May we announced a review of strategic alternatives and its part of that ongoing process to maximize shareholder value. The board and I will continue to evaluate all options, while I cannot provide an update today. The process is ongoing and we look forward to sharing our results in the future also we will not take questions regarding the strategic alternatives or our profit.

Beth Garvey: While I cannot provide an update today, the process is ongoing, and we look forward to sharing the results in the future.

Beth Garvey: Also, we will not take questions regarding the strategic alternatives or our process in today's Q&A.

Speaker Change: In today's Q&A. Thank you so much for understanding.

Beth Garvey: Thank you so much for understanding. Before we cover our results, I am pleased to share that we have been recognized by Staffing Industry Analyst as the 49th largest IT staffing firm in the U.S., an improvement from 52nd, as well as the 97th largest staffing firm, an improvement from 121st place in 2023. Moving up in SIA's annual rankings is an important milestone recognizing our team's hard work and dedication to delivering value and excellence to our customers and strategic partners.

Beth Garvey: Before we cover our results, I am pleased to share that we have been recognized by staffing industry analysts, naming us the 49th largest IT staffing firm in the U.S., an improvement from 52nd, as well as the 97th largest staffing firm, an improvement from 121st place in 2023. Moving up in SIA's annual rankings is an important milestone, recognizing our team's hard work and dedication to delivering value and excellence to our customers and strategic partners.

Speaker Change: We cover our results I am pleased to share that we have been recognized by staffing industry analysts 90, nasty 49th largest I T staffing firm in the U S. An improvement from 52nd as well as the 97th largest staffing firm unemployed met from 121st place in 2023, moving up in S. A as annual rank.

Speaker Change: <unk> is an important milestone recognizing our team's hard work and dedication to delivering value and excellence to our customers and strategic partners.

John Barnett: Over the last 12 months, challenging macro pressures have significantly impacted our entire industry due to higher interest rates and inflationary pressures that have negatively impacted most businesses in the U.S. For the second quarter, our total revenues were 68 million, comprised of approximately 26 million for property management and 42 million for the professional segment. Year-over-year comparisons, although still meaningful, may not measure our incremental progress this year compared to sequential comparisons.

Beth Garvey: Over the last 12 months, challenging macro pressures have significantly impacted our entire industry due to higher interest rates and inflationary pressures that have negatively impacted most businesses in the U.S. For the second quarter, our total revenues were $68 million, comprised of approximately $26 million for property management and $42 million for the professional segment. Year-over-year comparisons, although still meaningful, may not measure our incremental progress this year compared to sequential comparisons. Property management revenues were down year over year and up sequentially compared to the first quarter.

Speaker Change: Over the last 12 months challenging macro pressures have significantly impacted our entire industry due to higher interest rates and inflationary pressures that have negatively impacted most businesses in the U S.

Speaker Change: For the second quarter. Our total revenues were $68 million comprised of approximately 26 million for property management and 42 million for the professional segment.

Speaker Change: Year over year comparisons, although still meaningful may not measure our incremental progress this year compared to sequential comparisons.

John Barnett: Property management revenues were down year-over-year and subsequently compared to the first quarter. Although we have not yet returned to normal seasonality, albeit trending in the right direction, we were pleased to report a sequential sales lift in the second quarter of 4.8% versus the first quarter.

Speaker Change: Pretty management revenues were down year over year and up sequentially compared to the first quarter. Although we have not yet returned to normal seasonality, albeit trending in the right direction. We were pleased to report a sequential sales lift in the second quarter of four 8% versus the first quarter and.

Beth Garvey: Although we have not yet returned to normal seasonality, albeit trending in the right direction, we were pleased to report a sequential sales lift in the second quarter of 4.8% versus the first quarter. In the professional segment, revenues declined in the second quarter over both the sequential and year-over-year periods, mainly because project ends exceeded project starts. However, business indicators began to shift on positive momentum in the quarter. Notably, new contract wins outpaced contract ends by approximately 25% through June.

John Barnett: In the professional segment, revenues declined in the second quarter over both the sequential and year-over-year periods, mainly because projects in exceeded project starts. However, business indicators began to shift on a positive momentum in the quarter, notably new contract wins outpaced contract in by approximately 25% through June. This sustained acceleration was primarily seen in the IT workforce solutions, managed solutions, and near and offshore engagement. These projects will generate revenue and cash in the second half of the year. This is very encouraging, and I will speak more about our outlook in a moment. We continue to manage costs and to prudent action in the second quarter should reduce headcount and lower fixed costs.

Speaker Change: In the professional segment revenues declined in the second quarter over both the sequential and year over year period, mainly because projects and exceeded project starts. However business indicators began to shift on a positive momentum in the quarter, notably new contract wins outpaced contract begins by approximately 25%.

Beth Garvey: This sustained acceleration was primarily seen in IT workforce solutions, managed solutions, and near and offshore engagement. These projects will generate revenue and cash flow in the second half of the year. This is very encouraging, and I will speak more about our outlook in a moment. We continue to manage costs and take prudent action in the second quarter to reduce headcount and lower fixed costs. These actions will benefit our short-term profitability goals while supporting our strategic growth plans. After John walks through the detailed financial results for the quarter, I will return to discuss significant operational initiatives and our outlook. John?

Speaker Change: Three gene.

Speaker Change: The sustained acceleration was primarily seen in the I T workforce solutions managed solutions and near and offshore engagements.

Speaker Change: These projects will generate revenue and cash flow in the second half of the year. This is very encouraging and I will speak more about our outlook in a moment.

Speaker Change: We continue to manage.

Speaker Change: Manage cost and prudent action in the second quarter should reduce head count and lower fixed costs. These actions will benefit our short term profitability goals, while supporting our strategic growth plans. After John walks through the detailed financial results for the quarter I will return to discuss significant operational initiatives and our outlook John.

John Barnett: These actions will benefit our short-term profitability goals while supporting our strategic growth plans.

Beth Garvey: After Don walks through the detailed financial results for the quarter, I will return to discuss significant operational initiatives and our outlooks.

John Barnett: Thank you, Beth, and good morning, everyone. As Beth mentioned, the challenging environment impacting our industry has made year-over-year financial comparisons more difficult to see our progress. Although year-over-year comparisons are important, I plan to focus on a few sequential comparisons to highlight current trends.

John Barnett: Thank you, Beth, and good morning, everyone. As Beth mentioned, the challenging environment impacting our industry has made year over year financial comparisons more difficult to see our progress. Although year-over-year comparisons are important, I plan to focus on a few sequential comparisons to highlight current trends. Second quarter revenues were $68.1 million versus $80.8 million in the prior year quarter and flat sequential. On a sequential basis, property management revenues reflected seasonal lift with an increase of 4.8% from the first quarter of 2024.

John: Thank you Beth and good morning, everyone.

John: As Beth mentioned, the challenging environment impacting our industry has made year over year financial comparisons more difficult to see our progress.

John: Although year over year comparisons are important I plan to focus on a few sequential comparisons to highlight current trends.

John Barnett: Second quarter revenues were 68.1 million versus 80.8 million in the prior year quarter, and flat sequentially. On a sequential basis, property management revenues reflected seasonal lift with an increase of 4.8% from the first quarter of 2024. For the second quarter, revenues in our professional segment remained soft compared to the first quarter and were down in line with competitors versus the prior year period.

John: Second quarter revenues were $68 1 million versus $80 8 million in the prior year quarter and flat sequentially.

Speaker Change: On a sequential basis property management revenues reflected seasonal lift with an increase of four 8% from the first quarter of 2024.

John Barnett: For the second quarter, revenues in our professional segment remain soft compared to the first quarter, and we're down in line with competitors versus the prior year period. However, as Beth mentioned, we are seeing sequential improvement in new contract wins. Professional project wins in the second quarter will begin to show up in revenue in the third and fourth quarters. We are encouraged by an improving demand environment, an uptick in contract wins, and are cautiously optimistic that BGSS and perhaps the industry are nearing a positive inflection.

Speaker Change: For the second quarter revenues in our professional segment remained soft compared to the first quarter and were down in line with competitors versus the prior year period.

John Barnett: Foundation. However, as Beth mentioned, we are seeing sequential improvement in new contract wins. Professional project wins in the second quarter will begin to show up in revenue in the third and fourth quarters. We encourage by an improving demand environment, an uptick in contract wins, and are cautiously optimistic that VGSF and perhaps the industry are nearing a positive inflection.

Speaker Change: However, as Beth mentioned, we are seeing sequential improvement.

Beth Garvey: And new contract wins.

Beth Garvey: Professional project wins in the second quarter will begin to show up in revenue in the third and fourth quarters. We are encouraged by an improving demand environment.

Beth Garvey: An uptick in contract win and are cautiously optimistic that BG, SaaS and perhaps the industry or nearing a positive inflection.

John Barnett: Growth profit and margins in the second quarter were 23.6 million and 34.7 percent compared to 29.6 million and 36.6 percent in the prior year period. The year-over-year decrease in growth profit margin is attributed to lower margins and property management driven by market competition and lower permanent placement, which has no cost of sales. Compared to the first quarter, growth profit margins improved by 60 basis points. As we discussed last quarter, we expect professional segment growth margins to improve sequentially due to actions we were taking. SG&A expenses for the second quarter were 21.6 million compared to 21 million in the first quarter and 22.6 million in the prior year's quarter.

John Barnett: Gross profit and margins in the second quarter were $23.6 million and 34.7% compared to $29.6 million and 36.6% in the prior year period. The year over year decrease in gross profit margin is attributed to lower margins and property management driven by market competition and lower permanent placement, which has no cost of sales. Compared to the first quarter, gross profit margins improved by 60 basis points. As we discussed last quarter, we expect professional segment gross margins to improve sequentially due to actions we are taking.

Beth Garvey: Gross profit and margins in the second quarter were $23 6 million and 34, 7% compared to $29 6 million.

Beth Garvey: And 36, 6% in the prior year period.

Beth Garvey: The year over year decrease in gross profit margin is attributed to lower margins in property management derivatives, driven by market competition and lower permanent placement, which has no cost of sales.

Beth Garvey: Compared to the first quarter gross profit margins improved by 60 basis points.

Beth Garvey: As we discussed last quarter, we expect professional segment gross margins to improve sequentially due to actions we were taking.

Beth Garvey: SG&A expenses for the second quarter were $21 6 million compared to 21 million in the first quarter and $22 6 million in the prior year's quarter.

John Barnett: SG&A expenses for the second quarter were $21.6 million, compared to $21 million in the first quarter and $22.6 million in the prior year's quarter. With top-line sales compression persisting, we continue to manage our cost structure, reducing fixed costs where it is prudent, balancing short-term gains and long-term benefits.

Beth Garvey: With topline sales compression persisting, we continue to manage our cost structure, reducing fixed costs, where it is prudent balancing short term gains and long term benefits.

John Barnett: With we continue to manage our cost structure, reducing fixed costs where it is prudent, balancing short-term gains and long-term benefits. Second quarter, adjusted EBITDA was 2.6 million or 3.8 percent of revenue, sequentially compared to 2.7 million or 3.9 percent in the first quarter. The 2023 second quarter adjusted EBITDA was 7.5 million, or 9.3 percent of revenue. We reported adjusted earnings of $0.7 per diluted share even with $0.7 per share in the 2024 first quarter, which compares to $0.37 per share in the second quarter of 2023. We generated cash from operating activities for the first six months of $0.14.7 million, which enabled us to reduce funded debt from $0.63 million at the end of 2023 to $52 million at the end of the second quarter.

John Barnett: Second quarter adjusted EBITDA was $2.6 million, or 3.8% of revenue, sequentially compared to 2.7 million or 3.9% in the first quarter. The 2023 second quarter adjusted EBITDA was $7.5 million, or 9.3% of revenue. We reported adjusted earnings of $0.07 per diluted share, even with $0.07 per share in the 2024 first quarter, which compares to $0.37 per share in the second quarter of 2023. We generated cash from operating activities for the first six months of $14.7 million, which enabled us to reduce funded debt from $63 million at the end of 2023 to $52 million at the end of the second quarter.

Beth Garvey: Second quarter, adjusted EBITDA was $2 6 million or three 8% of revenue sequentially compared to $2 7 million or three 9% in the first quarter.

Beth Garvey: The 2023 second quarter, adjusted EBITDA was $7 5 million or nine 3% of revenue.

Beth Garvey: We reported adjusted earnings of seven cents per diluted share even with seven cents per share in the 'twenty 'twenty four first quarter, which compares to 37 cents per share in the second quarter of 2023.

Beth Garvey: We generated cash from operating activities for the first six months of $14 7 million, which enabled us to reduce funded debt from $63 million at the end of 2000 $23 million to $52 million at the end of the second quarter.

John Barnett: Capital expenditures were 1 million for the first half and reflects our expected run rate spend. At June 30th, our funded debt to trailing 12-month pro forma adjusted EBITDA was 2.8 times.

John Barnett: Capital expenditures were 1 million for the first half and reflected our expected run rate spend. At June 30th, our funded debt to trailing 12-month pro forma adjusted EBITDA was 2.8 times. With that, I would like to turn the call back to Beth.

Beth Garvey: Capital expenditures were $1 million for the first half reflects our expected run rate spend.

Beth Garvey: At June 30th our funded debt to trailing 12 month pro forma adjusted EBITDA was two eight times.

John Barnett: Compared to the first quarter, gross profit margins improved by 60 basis points. Second quarter adjusted EBITDA was $2.6 million, or 3.8% of revenue, sequentially compared to 2.7 million or 3.9% in the first quarter. With that, I would like to turn the call back to Beth.

Beth Garvey: With that, I would like to turn the call back to Beth.

Beth Garvey: With that I would like to turn the call back to Beth.

Beth Garvey: Thank you, John. As expected, we communicated last quarter. The first half of 2024 was difficult, but we began seeing positive momentum late in the second quarter that should improve our results starting in the third quarter. We expect our fourth quarter revenues to increase compared to the fourth quarter of 2023. Although macro headwinds and recession fears continue to challenge our industry, we are cautiously optimistic given our developing backlog of professional projects and early traction in property management.

Beth Garvey: Thank you, John. As expected, we communicated last quarter. The first half of 2024 was difficult, but we began seeing positive momentum late in the second quarter that should improve our results starting in the third quarter. Although macro headwinds and recession fears continue to challenge our industry, we are cautiously optimistic given our developing backlog of professional projects and early traction in property management. We are actively deploying project teams on many engagements and are more encouraged about the revenue outlook for the Professional Division than we have been in more than a year.

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

Beth Garvey: Thank you John as expected, we communicated last quarter. The first half of 'twenty 'twenty four with difficult, but we began seeing positive momentum late in the second quarter. It should improve our results starting in the third quarter, we expect our fourth quarter revenues to increase compared to fourth quarter of 2023.

Beth Garvey: Although macro headwinds and recession fears continue to challenge our industry. We are cautiously optimistic given our developing backlog of professional projects and early traction and property management.

Beth Garvey: We are actively preparing for the return to elevated seasonal work with our property management team. With a more robust sales enablement process bolstered by our system upgrades, we have been able to strategically target properties with targeted campaigns around our customers' operating realities, driving leads to the sales teams, increasing relationship touch points, and closing deals. This year, unit owners and property management groups felt rate and occupancy pressures, as well as increased operating expenses. As a result, several property management groups are opting for a short list of preferred dependable suppliers rather than a larger pool of vendors.

Beth Garvey: We are actively preparing for a return to elevated seasonal work with our property management teams.

Speaker Change: A more robust sales enablement process bolstered by our system upgrades, we have been able to strategically target properties with targeted campaigns around our customers' operating realities driving leads to the sales teams increasing relationship touch points and closing deals. This year unit owners and property management groups felt right and.

Beth Garvey: This year, unit owners and property management groups felt right and occupancy pressures, as well as increased operating expense. As a result, several property management groups are opting for a short list of preferred, dependable suppliers rather than a larger pool of vendors. As a leader in the industry with a reputation of delivering exceptional talent, our strategic sales team has been able to secure positions on these lists as a preferred provider. This is the win-win for our client partners as well as for us. The industry shift to a narrow list of trusted property management suppliers allows our teams to showcase our people and culture as a competitive advantage at BGSF.

Beth Garvey: Occupancy pressures as well as increased operating expense as a result, several property management grapes are opting for a short list of preferred dependable suppliers, rather than a larger pool of vendors as a later in the industry with a reputation of delivering exceptional talent. Our strategic sales team has been able to secure positions on these lists.

Beth Garvey: As a leader in the industry with a reputation for delivering exceptional talent, our strategic sales team has been able to secure positions on these lists as a preferred provider. This is a win-win for our client partners as well as for us. The industry shift to a narrow list of trusted property management suppliers allows our teams to showcase our people and culture as a competitive advantage at BGSF. In the industry, last year, the multifamily sector experienced higher M&A of property management companies, which created delays in capital decisions and higher deferred maintenance levels.

Beth Garvey: As a preferred provider.

Beth Garvey: This is a win win for our client partners as well as for us.

Speaker Change: The industry shift to narrow list of trusted property management suppliers allows our teams to showcase our people and culture as a competitive advantage at B G. S F.

Beth Garvey: In the industry, last year, the multifamily sector experienced higher M&A of property management companies, which created delays in capital decisions and higher deferred maintenance levels. We believe this was created a backlog on repairs and capital improvement, which will benefit us in the second half of 2024, especially as the Fed lowers interest rates as expected. For property management, we also see measurable traction as we executed our territory mapping strategy in an effort to increase market share. Our pilot market saw a 19% increase in revenue year over year, and we were actively rolling out the process in additional markets.

Beth Garvey: In the industry last year, the multifamily sector experienced higher M&A and property management companies, which created delays in capital decisions and higher deferred maintenance levels. We believe this was created a backlog on repairs and capital improvement, which will benefit us in the second half of 2024, especially at the fed.

Beth Garvey: We believe this created a backlog on repairs and capital improvements, which will benefit us in the second half of 2024, especially if the Fed lowers interest rates as expected. For property management, we also see measurable traction as we executed our territory mapping strategy in an effort to increase market share. Our pilot market saw a 19% increase in revenue year over year, and we are actively rolling out the process in additional markets.

Beth Garvey: Lower interest rates as expected.

Beth Garvey: The property management, we also see measurable traction as we executed our territory mapping strategy in an effort to increase market share our pilot market saw a 19% increase in revenue year over year, and we are actively rolling out the process in additional markets. In addition, as our strategic partnerships gained traction we aligned management.

Beth Garvey: In addition, as our strategic partnerships gained traction, we aligned management to strengthen those relationships and brought on a seasoned SVP of Sales to lead the local sales teams in the markets. Andrew Hill joined us in June, and his strong track record of building powerful sales teams in a competitive environment.

Beth Garvey: In addition, as our strategic partnerships gain traction, we aligned management to strengthen those relationships and brought on a seasoned SVP of sales to lead the local sales teams in the market. Andrew Hill joined us in June and has a strong track record of building powerful sales teams in a competitive environment.

Speaker Change: To strengthen those relationships and brought on a seasoned S V. P of sales to lead the local sales teams in the market Andrew Hill joined US in June and his strong track record of building powerful sales teams and a competitive environment.

Beth Garvey: Andrew's expertise coupled with our enhanced efforts around sales training and development will improve the effectiveness and speed with which we onboard and train our sales teams. As discussed last quarter, we know this industry is evolving and changing, and we are proud to be on the leading edge of innovation with an expanding industry of apartments, luxury communities, and commercial conversions to residential. On the professional side, we began to see declines in customer spending in the first quarter of last year that accelerated for the remainder of 2023.

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

Beth Garvey: Andrew's expertise, coupled with our enhanced efforts around sales training and development will improve the effectiveness and speed with which we onboard and train our sales teams as discussed last quarter. We know this industry is evolving and changing and we are proud to be on the leading edge of innovation with an expanding industry of apartments luxury.

Speaker Change: Ts and commercial conversion to residential.

Speaker Change: On the professional side, we began to see declines in customer spending in the first quarter of last year that accelerated for the remainder of 2023.

Beth Garvey: Typical engagements with three or four resources tightened to one or two with project ends exceeding project starts almost every quarter starting with Q3 in 2023. Despite these trends, our strategic IT partnerships and software development opportunity pipelines began to expand, accelerating project quotes and awards related to managed services and IT consulting engagements. As I mentioned earlier, Project WINS exceeded Project ENDS, starting in the last few weeks of the second quarter.

Speaker Change: Typical in debt engagements with three or four resources tightened to one or two with project and exceeding project starts almost every quarter starting with Q3 in 2023 <unk>.

Beth Garvey: Despite these trends, our strategic IT partnerships and software development opportunity pipelines began to expand, accelerating project quotes and awards related to managed services and IT consulting engagements. As I mentioned earlier, project wins exceeded project ends starting in the last few weeks of the second quarter. We also won the most significant project in our company's history, a major IT transformation project for a large international client, which will begin contributing to our financials in Q3. Where actively deploying project teams to many engagements are more encouraged about the revenue outlook for the professional divisions than we have been in more than a year.

Beth Garvey: Despite these trends our strategic partnerships and software development opportunity pot lines began to expand accelerating project quotes and awards related to managed services and I T consulting engagements.

Beth Garvey: As I mentioned earlier project wins exceeded project and starting in the last few weeks of the second quarter. We also won the most significant project in our company's history major I T transformation project for a large international client, which will begin contributing to our financials and Q3.

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

Beth Garvey: We're actively deploying project teams to many engagements are more encouraged about the revenue outlook for the professional division than we have been in more than a year.

Beth Garvey: While our first half results did not fully capture the momentum from these recent business wins, we anticipate a strong revenue ramp up in the professional divisions starting in the third quarter and continuing with more client engagements and billable work in the fourth quarter. In addition, we are seeing an increase in our perm placement activities for financing accounting services, with recent double-digit growth sequentially, which we know is a positive signal about hiring for the US businesses. Our industry has indicated that businesses that operate it in a more consultive versus staffing manner in IT services will benefit in the long term, which aligns with the strategic shift we put into play over two years ago.

Beth Garvey: While our first half results do not fully capture the momentum from these recent business wins, we anticipate a strong revenue ramp up in our professional division starting in the third quarter and continuing with more client engagements and billable work in fourth quarter in.

Beth Garvey: In addition, we are seeing an increase in our perm placement activity for finance and accounting services, with recent double-digit growth sequentially, which we know is a positive signal about hiring for the US business. Our industry has indicated that businesses that operate in a more consultative versus staffing manner in IT services will benefit in the long term, which aligns with the strategic shift we put into place over two years ago. Our collective IT expertise in BGSF is highly valuable to our clients as we bring an unbiased approach to every part of the technology cycle.

Beth Garvey: In addition, we are seeing an increase in our Perm placement activity for finance and accounting services with recent double digit growth sequentially, which we know is a positive signal about hiring for the U S businesses.

Beth Garvey: Our industry has indicated that businesses that operate in a more consultative versus staffing manner in I T services will benefit in the long term, which aligns with the strategic shift we put into play up two years ago.

Beth Garvey: Our collective IT expertise in VGSF is highly valuable to our clients as we bring an unbiased approach to every part of the tech cycle. Our recent technology partnerships with Workday, SAP, and others has bolstered our reputation in the market, which will continue to benefit us in the second half of 2024 and beyond. Management Solutions continues to grow and innovate with our Royal Teams, which delivers onshore and offshore work, important AI solutions and valuable ERP connector products. This is an exciting area for us with software engineers delivering intelligence, product development, cloud initiatives, and delivery excellence.

Beth Garvey: Our collective IT expertise in BGSF is highly valuable to our clients as we bring an unbiased approach to every part of the tech cycle. Our recent technology partnerships with Workday, SAP, and others have bolstered our reputation in the market, which will continue to benefit us in the second half of 2024 and beyond.

Speaker Change: Our collective I T expertise and B G. S. F is highly valuable to our clients as we bring on unbiased approach to every part of the tech cycle.

Beth Garvey: Our recent technology partnerships with Workday, SAP, and others have bolstered our reputation in the market, which will continue to benefit us in the second half of 2024 and beyond. Managed Solutions continues to grow and innovate with our Arroyo teams, which deliver onshore and offshore work, important AI solutions, and valuable ERP connector products. This is an exciting area for us, with software engineers delivering intelligence, product development, cloud initiatives, and delivery excellence. I am pleased with BGSF's near-term growth prospects.

Beth Garvey: Our recent technology partnerships with Workday S E T and others has bolstered our reputation in the market, which will continue to benefit us in the second half of 'twenty 'twenty four and beyond.

Speaker Change: Man installations continues to grow and innovate with our Arroyo teams, which delivers onshore and offshore work important AI solutions and valuable ERP connector products. This is an exciting area for us with software engineers, delivering intelligence product development cloud initiatives and delivery excellence.

Beth Garvey: I am pleased with BG-SF's near-term growth prospects. We will continue to focus on reducing and optimizing costs to drive higher profitability and improve our structural margins. We know we have worked to do, that we are relentlessly focused on sales, profitability, and cash flow growth. Thank you for your time today. I want to thank all of our stakeholders, employees, clients, partners, and investors for their continued support and belief in our vision at BG-SF. We would now like to open the call for questions. Are you ready? Thank you. We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad.

Beth Garvey: We will continue to focus on reducing and optimizing costs to drive higher profitability and improve our structural margins. We know we have work to do, but we are relentlessly focused on sales, profitability, and cash flow growth. Thank you for your time today. I want to thank all of our stakeholders, employees, clients, partners, and investors for their continued support and belief in our vision at BGSF. We would now like to open the call for questions. Thank you. We will do so now.

Speaker Change: I am pleased with B G. S. Fs near term growth prospects, we will continue to focus on reducing and optimizing costs to drive higher profitability and improve our structural margins. We know we have work to do but we are relentlessly focused on sales profitability and cash flow growth.

Speaker Change: Thank you for your time today I want to thank all of our stakeholders employees clients partners and investors for their continued support and belief in our vision that P. J S. F. We would now like to open the call for questions operator.

Operator: Thank you. We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. And at this time, we will pause momentarily to assemble our roster. And our first question will be from Jeff Martin from Roth Capital. Please go ahead. Thanks. Good morning.

Speaker Change: Thank you we will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad, if youre using a speakerphone. Please pick up your handset before pressing the keys if at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.

Unknown Shareholder: If you are using a speaker phone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. And at this time, we will pause momentarily to assemble our roster.

Speaker Change: And at this time, we will pause momentarily to assemble our roster.

Jeffrey Martin: And our first question will be from Jeff Martin from Roth's Capitol. Please go ahead. Thanks. Good morning, Beth and John. Beth, I missed your comments about the 34th quarter by real estate and professional. I did catch that the 4th quarter to be up year over year.

Speaker Change: And our first question will be from Jeff Martin from Roth Capital. Please go ahead.

Unknown Shareholder: Thanks. Good morning, Beth and John.

Jeff Martin: Thanks. Good morning, Beth and John. Beth, I missed your comments about the third and fourth quarter by real estate and professionals. I did catch that you expect the fourth quarter to be up, year over year. If you could just repeat those comments, I apologize.

Unknown Shareholder: Thanks, Good morning.

Speaker Change: Thanks, Good morning, Jeff and John.

Unknown Shareholder: Beth I missed your comments about.

Speaker Change: The third and fourth quarter.

Speaker Change: Our real estate and professional I did catch that you expect fourth quarter to be up.

Beth Garvey: But if you can just repeat those comments, I apologize and missed them. In regards to property management? Professional and Property Management. We believe that the second half of the year is going to be far better than the first half of the year in both segments. We've got a lot of positive momentum going on in the professional side in regards to the wins that we won in May and June. Start dates kind of stagger out between starting in August, September, and October. So we see those things coming in, and then property management goes into their normal seasonality uptick, coupled with the building out of this territory mapping tool that we've seen success.

Speaker Change: Year over year.

Speaker Change: If you could just repeat those comments I apologize I missed.

Operator: in regards to property management

Speaker Change: In regards to property management.

Unknown Shareholder: Professional Land Property Management, 3rd and 4th floor. We believe that the second half of the year is going to be far better than the first half of the year in both segments.

Beth Garvey: Professional Land Property Management, 3rd and 4th floor. We believe that the second half of the year is going to be far better than the first half of the year in both segments.

Speaker Change: Professional and property management third and fourth quarter.

Speaker Change: We believe that the second half of the year and be far better than the first half of the year in both segments.

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

Speaker Change: We've got a lot of positive momentum going on in the professional side and in regards to wins that we one in May and June start dates kind of stagger out between starting in August September and October and.

Unknown Shareholder: So we see those things coming in and then property management goes into there and normal seasonality uptick and coupled with the building out of its territory mapping tool that we've seen success and we think the quarters, but at the end of the year is definitely going to be better than the first half of the year.

Unknown Shareholder: [inaudible] John Barnett, John Barnett, John Barnett John Barnett, John Barnett, John Barnett Thank you, Sandy, and thank you all for joining us.

Beth Garvey: And we think the quarter is going to end of the year is definitely going to be better than the first half of the year.

Beth Garvey: Great. And then you talked about some large contracts last quarter. It was an SAP cloud contract, and I think a couple of the best of yours, just to see if those are often running or if those are delayed a little bit in the 7th quarter in terms of start. Some of them have started running, but the big one that we've been working on, our teams right now are actually doing discovery this week, and so we shall start seeing some of that revenue coming in in late August and into September. We should start wrapping up. Okay.

Beth Garvey: And then you've talked about, you know, some large contracts last quarter, there was an SAP cloud contract, and I think a couple divestitures. I was just curious if those are off and running or if those were delayed a little bit in the seventh quarter in terms of start.

Speaker Change: Great and then you talked about some large contracts last quarter. It was an SAP cloud contractor I think a couple of divestitures. Just curious if those are often running or if those were delayed a little bit in the second quarter NIM to start.

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

Speaker Change: And some of them have started running but the big one that we've been working on and I think our teams right now are actually doing discovery. This week and so we should start seeing some of that revenue coming in and light.

Speaker Change: Late August and into September we.

Speaker Change: To start ramping up.

Beth Garvey: Okay, great. And then with respect to, you know, the new wins exceeding project ends. We mentioned that it started late in the quarter, but how does that dovetail with the 25% higher win-versus-ends rate?

Speaker Change: Okay, Great and then with respect to the new wins.

Beth Garvey: Great. And then with respect to the new wins exceeding project ends, you mentioned that started late in the quarter, but how does that dovetail with the 25% higher win versus end straight? The win is going into the second half of the year. Again, it's sprinkling, and we have many customers, chef, that we... The start, the win is basically we've signed the paper, and so some of them start in August, some start in September, some start in October, so it's just a matter of when those start dates get implemented. We haven't seen anything push from the initial agreements that we have, so that's the positive sign right now. So they're just getting ramped up.

Speaker Change: Seeding project ends.

Speaker Change: You mentioned that started late in the quarter, but.

Speaker Change: How does that dovetail with the 25% higher wind versus ends right.

Beth Garvey: The wind's going into 20 into the second half of the year. Again, they sprinkle in We have many customers, Jeff, that we The when is basically when we've signed the paper. And so some of them start in August, some start in September, some start in October. So it's just a matter of when those start dates are implemented. We haven't seen anything push back from the initial agreements that we have, so that's a positive sign right now. So they're just getting ramped up. Yeah.

Speaker Change: The wins going into 'twenty into the second half of the year.

Speaker Change: Again, it's that sprinkle in we have many customers Jeff that we.

Unknown Shareholder: The when is basically that we've signed the paper. And so some of them start in August, some start in September, some start in October. So it's just a matter of when those start dates get implemented. We haven't seen anything push back from the initial agreements that we have. So that's a positive sign right now. So they're just getting ramped up. Yeah.

Speaker Change: They're starting to win is basically we've sat in the paper and so some of them starting in August I'm, sorry September seven start in August and October. So it's just a matter of when those start dates get implemented we haven't seen anything push from the initial agreements that we have so that's a positive sign right now so they're just getting ramped up.

Beth Garvey: Yeah, Jeff, we haven't seen this consistency on a weekly basis, right? that we are consistently winning more contracts, then we're seeing an end. And we haven't seen that in quite a while.

Unknown Shareholder: Yeah, Jeff, we haven't seen this consistency on a weekly basis, right? But what we've seen in the quarter has been encouraging, your comfort with your capital availability, you know, as things ramp back up and you start to build that working capital. Structure of the Organization, Training, and then we also implemented DAPAY, which is a really helpful tool to give us a daily guide for what we should be doing and a lot more visibility into our AR balances. And so that's really allowed us to accelerate.

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

Unknown Shareholder: Yes, Jeff we haven't seen this consistency on a week ago weekly basis right.

Speaker Change: We are.

Speaker Change: Consistently winning more contracts than we're seeing and and we haven't seen that in quite a while so.

Operator: So what we've seen in the quarter has been encouraging and continued through this beginning of this. Yep, yep. Okay, that's helpful.

Unknown Shareholder: Well, what we've seen in the quarter has been encouraging.

Unknown Shareholder: And continued through this.

Unknown Shareholder: Beginning of this quarter.

John Barnett: Yeah, yeah, okay, that's helpful, mix a lot of sense, and then just curious on in terms of working capital, you've generated quite a bit of operating cash flow for a half of the year, mainly due to collection of receivables. Just curious, you're comfort with your capital availability as things ramp back up and you start to build that working capital again. Yeah, we feel comfortable with where we are today. I think we've worked very hard in our accounts receivable team, has done a great job. Over the last year, we've really focused on the structure of the organization, training, and then we also implemented DAPA, which is a really helpful tool to automate a lot of the AR functions and then also just provide a daily guide for what we should be doing, and a lot more visibility into our AR balances.

John Barnett: Makes a lot of sense. And then just curious, in terms of working capital, you've generated quite a bit of operating cash flow in the first half of the year, mainly due to the collection of receivables. Just curious about your capital availability, you know, as things ramp back up and you start to build that working capital. Yeah, we feel comfortable with where we are today. I think well, you know, we've worked very hard on it and our accounts receivable team has done a great job.

Speaker Change: Yep Yep. Okay. That's helpful makes a lot of sense and then just.

Speaker Change: Just curious in terms of working capital you generated quite a bit of operating cash flow first half of the year, mainly due to collection of receivables just curious here.

Unknown Shareholder: Your comfort with your capital availability.

Unknown Shareholder: As things ramp back up and you start to build that working capital again.

Jeff: Yeah, we feel comfortable with where we are today.

Speaker Change: I think well you know we've worked very hard on.

Unknown Shareholder: Our accounts receivable team has done a great job.

John Barnett: Over the last year, we've really focused on the structure of the organization, training, and then we also implemented DAPAY, which is a really helpful tool to automate a lot of the accounts receivable functions and then also just provide a daily guide for what we should be doing and a lot more visibility into our AR balances. And so that's really allowed us to accelerate collections, which is, you know, the decline in AR is a combination of revenue, right, less revenue, less AR, but we also made great strides to push down our DSO.

Unknown Shareholder: Over the last year, we've really focused on.

Unknown Shareholder: Structure of the organization.

Unknown Shareholder: Training and then we also implemented pay which is.

Unknown Shareholder: A really helpful tool to.

John Barnett: Welcome to our second quarter earnings conference call. In May, we announced a review of strategic alternatives and as part of that ongoing process to maximize shareholder value, the board and I will continue to evaluate all options. While I cannot provide an update today, the process is ongoing and we look forward to sharing the results in the future.

Unknown Shareholder: Automate a lot of the E. R functions and then also just provide.

Unknown Shareholder: A daily guide for what we should be doing it a lot more visibility into.

Unknown Shareholder: Our AR balances.

John Barnett: And so that's really allowed us to accelerate collections, which is, you know, the decline in AR is a combination of the revenue, right, less revenue, less AR, but also we made great strides to push down our DSO.

Unknown Shareholder: And so that's really allowed us to accelerate collections, which is that the.

John Barnett: Also, we will not take questions regarding the strategic alternatives or our process in today's Q&A. Thank you so much for understanding.

Speaker Change: The decline in <unk> is the combination of.

John Barnett: Before we cover our results, I am pleased to share that we have been recognized by Staffing Industry Analyst 49th largest IT Staffing firm in the U.S., an improvement from 52nd, as well as the 97th largest Staffing firm, an improvement from 121st place in 2023. Moving up in SIA's annual rankings is an important milestone recognizing our team's hard work and dedication to delivering value and excellence to our customers and strategic partners.

Unknown Shareholder:

Unknown Shareholder: The.

Speaker Change: Revenue less less revenue less they are but also we've made great strides to push down our DSO.

John Barnett: Okay, well, thank you.

Jeff: That's helpful. Thank you.

Howard Halpern: And the next question will be from Howard Halpern from Taglitch Brothers. Please go ahead. Good morning, guys. Morning, Howard.

Operator: And the next question will be from Howard Halpern from Taglich Brothers. Please go ahead.

Howard Halpern: And the next question will be from Howard Halpern from Taglich Brothers. Please go ahead.

Unknown Shareholder: And the next question will be from Howard Halpern from Tag, which brothers. Please go ahead.

Beth Garvey: Good morning, guys. Good morning, Howard. If you could talk a little bit about, I guess, the pipeline that you have and the type of verticals that the projects will... will be, you'll be engaging in.

Howard Halpern: Good morning, guys.

Beth Garvey: Mostly in our technology space, so it's a lot of managed solutions and bringing in Arroyo. You know, as we talked about getting Arroyo up to speed and integrated, we've got more and more deals where we're doing what we call a plus one campaign, which means that we have customers that are buying one thing from us. And so we're going out and asking them to buy other types of services from us. Since we launched that in 11 months, I think we have started to. I love Musco.

Operator: Alright.

Howard Halpern: If you could talk a little bit about, I guess, the pipeline that you have and the type of verticals that the projects will be, you'll be engaging in. And mostly in our technology space, so it's a lot of managed solutions in bringing in a royal. You know, as we talked about getting a Royal up to speed and integrated, we've got more and more deals where we're doing what we call a plus one campaign, which means that we have customers that are buying one thing from us. And so we're going out and asking them to buy other types of services from us.

Howard Halpern: If you could talk a little bit about I guess.

John Barnett: Over the last 12 months, challenging macro pressures have significantly impacted our entire industry due to higher interest rates and inflationary pressures that have negatively impacted most businesses in the U.S. For the second quarter, our total revenues were 68 million comprised of approximately 26 million for property management and 42 million for the professional segment. Year-over-year comparisons, although still meaningful, may not measure our incremental progress this year compared to sequential comparisons. Property management revenues were down year-over-year and subsequently compared to the first quarter.

Howard Halpern: The pipeline that you haven't in the type of verticals.

Howard Halpern: The projects.

Speaker Change: You'll be engaging in.

Operator: And.

Unknown Shareholder: Mostly in our technology space, so it's a lot of managed solutions and bringing in Arroyo. You know, as we talked about getting Arroyo up to speed and integrated, we've got more and more deals where we're doing what we call a plus one campaign, which means that we have customers that are buying one thing from us. And so we're going out and asking them to buy other types of services from us. Since we launched that in 11 months, I think we have started to.

Speaker Change: Mostly in our technology.

Unknown Shareholder: So it's a lot of managed solutions and bringing in our ROI are you know as we talked about them getting our ROI all up to speed and integrate in and we've got more and more deals where we're doing what we call a plus one campaign, which means that we have customers that are buying one thing from us and so we're going out and asking them to buy other types of services from us since we launched that in <unk>.

Beth Garvey: Since we launched that in 11 months, I think we started it. Love must go. We were about 12. We had 69 customers now that are buying multiple services from us. So it's those kinds of engaged. and that.

Unknown Shareholder: 11 months I think we started it.

John Barnett: Although we have not yet returned to normal seasonality, albeit trending in the right direction, we were pleased to report a sequential sales lift in the second quarter of 4.8% versus the first quarter. In the professional segment, revenues declined in the second quarter over both the sequential and year-over-year periods, mainly because projects in exceeded project starts. However, business indicators began to shift on a positive momentum in the quarter, notably new contract wins outpaced contract in by approximately 25% through June. This sustained acceleration was primarily seen in the IT workforce solutions, managed solutions, and near and offshore engagement. These projects will generate revenue and cash in the second half of the year.

Beth Garvey: We were about 12, and we have 69 customers now that are buying multiple services from us. So it's those kinds of engagements.

Speaker Change: Loved mascot when we were about 12, we had 69.

Unknown Shareholder: <unk> customers now that are buying multiple services from us.

Unknown Shareholder: So it's those kinds of engagements.

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

Unknown Shareholder: Okay. And in terms of, you know, you're seeing the ramp-up, but you also, I guess, talked about in the press release you being, you know, right-sized.

Beth Garvey: Okay. And in terms of, you know, you're seeing the ramp up, but you also, I guess, talked about an oppressed release, you know, right-sized costs. And so, are you leveraged enough now where you're not going to have to increase costs that much to accomplish the ramp in activity that's coming in the second half? A lot of the, a lot of the activity we expect in the second half is actually under contract. Obviously, we have to continue to add to that. It's a matter of timing of the start of the projects and how fast they ramp up.

Speaker Change: Okay and in terms of you're seeing the ramp up but you also I guess talked about in the press release.

Unknown Shareholder: Press release you.

Unknown Shareholder: Right sized.

Speaker Change: It costs.

Unknown Shareholder: <unk>.

Speaker Change: So are you leveraged enough now where youre not going to have to increase cost that much to accomplish the ramp in <unk>.

Speaker Change: <unk>, that's coming in the second half.

Unknown Shareholder: A lot of the activity we expect in the second half is actually under contract. But yes, we don't, we don't expect, in the near term, to add to our, you know, sales cost structure or GNA cost structure to deliver our expected second half results. Okay.

Beth Garvey: A lot of the activity we expect in the second half is actually under contract. Obviously, we have to continue to add to that. It's a matter of the timing of the start of the projects and how fast they ramp up. But yes, we don't expect, in the near term, to add to our, you know, sales cost structure or G&A cost structure to deliver our expected second half results. Okay.

Unknown Shareholder: But one of the lovely activity, we expect in the second half is actually under contract.

John Barnett: This is very encouraging, and I will speak more about our outlook in a moment. We continue to manage costs and to prudent action in the second quarter should reduce headcount and lower fixed costs. These actions will benefit our short-term profitability goals while supporting our strategic growth plans.

Unknown Shareholder: Obviously, we have to continue to add to that.

Speaker Change: As a matter of timing of this.

Unknown Shareholder: Started the projects and how fast they ramp up.

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

Unknown Shareholder: Okay.

Unknown Shareholder: Yes, we don't we don't expect near term that we would add to our sales cost structure, our G&A cost structure to deliver our expected second half results.

John Barnett: After Don walks through the detailed financial results for the quarter, I will return to discuss significant operational initiatives and our outlooks.

Don: Thank you, Beth, and good morning, everyone. As Beth mentioned, the challenging environment impacting our industry has made year-over-year financial comparisons more difficult to see our progress. Although year-over-year comparisons are important, I plan to focus on a few sequential comparisons to highlight current trends.

Howard Halpern: Okay.

Beth Garvey: And then just one last one, that at least in your term or initial trends in permanent placements, what is that like and what does that indicate to you potentially for, you know, the upcoming quarters? Some placement is usually when the economy softs something that is not very active, and we saw that last year. We're seeing that pick up in our finance and accounting teams right now, which usually is an indicator that people have a little bit more confidence as they move into the quarters. And so, we're just following that. I think we had double-digit growth in sequential growth and what they had done the first six months of the year, the last six months of last year, and the first six months of this year.

Unknown Shareholder: Okay, and then just one last one Beth.

Unknown Shareholder: At least the near term and initial trends in.

Speaker Change: In permanent placements what is that.

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

Speaker Change: Look like and what does that indicate to you potentially for the.

Unknown Shareholder: The upcoming quarters.

Don: Second quarter revenues were 68.1 million versus 80.8 million in the prior year quarter, and flat sequentially. On a sequential basis, property management revenues reflected seasonal lift with an increase of 4.8% from the first quarter of 2024. For the second quarter, revenues in our professional segment remained soft compared to the first quarter, and were down in line with competitors versus the prior year period. Foundation. However, as Beth mentioned, we are seeing sequential improvement in new contract wins.

Unknown Shareholder: Okay.

Beth Garvey: Placement is usually when the economy is soft, something that is not very active. And we saw that last year; we're seeing that pick up in our finance and accounting teams right now, which usually is an indicator that people have a little bit more confidence as they move into the quarters. And so we're just following that. I think we had double-digit growth in sequential growth and what they did the first six months of the year, the last six months of last year, and the first six months of this year.

Speaker Change: Placement is usually when the economy soft something that is not very active and we saw that last year and we're seeing that pick up in our finance and accounting teams right now, which usually is an indicator that people have a little bit more confidence is that move into the quarters and so we're just we're just following that I think we had double digit growth and sequential growth.

Speaker Change: And what they had done in the first six months of the.

Unknown Shareholder: The year over the last six months of last year didn't parse expenses this year. So.

Beth Garvey: So we just find that to be positive and usually trends with the industry. So, you know, when parm is down, you can kind of, you kind of know things are tough. And when parm starts to come back, it's a little bit, it's a glimmer of hope.

Beth Garvey: So, we just find that to be positive and usually trends with the industry. So, you know, when parms down, you can kind of know things are tough, and when parms start to come back into a little bit, it's a glimmer of hope.

Speaker Change: And we just find that to be positive and usually trends with the industry. So you know when when parents are down you can kind of you kind of know things are tough and wind farm starts to come back into a little bit of a glimmer of hope.

Don: Professional project wins in the second quarter will begin to show up in revenue in the third and fourth quarters. We encourage by an improving demand environment, an uptick in contract wins, and are cautiously optimistic that VGSF and perhaps the industry are nearing a positive inflection.

Operator: Okay, well. Keep up the good work, and look forward to the second half.

Howard Halpern: Okay. Well, keep up the good work and look forward to the second here. Thanks, Howard.

Howard Halpern: Okay.

Speaker Change: Okay well.

Speaker Change: Keep up the good work and I look forward to the second half.

Eric: Thanks, Eric.

Unknown Shareholder: Again, if you have a question, please press star, then one.

Bill Dellezem: Again, if you have a question, please press star then 1. The next question is from Bill Dellezem from Titan Capital. Please go ahead.

Speaker Change: Again, if you have a question. Please press Star then one.

Bill Dellsam: The next question is from Bill Dellsam from Titan Capital. Please go ahead. Thank you. I have a group of questions.

Speaker Change: The next question is from Bill does them from Titan capital. Please go ahead.

Don: Growth profit and margins in the second quarter were 23.6 million and 34.7 percent compared to 29.6 million and 36.6 percent in the prior year period. The year-over-year decrease in growth profit margin is attributed to lower margins and property management driven by market competition and lower permanent placement, which has no cost of sales. Compared to the first quarter, growth profit margins improved by 60 basis points. As we discussed last quarter, we expect professional segment growth margins to improve sequentially due to actions we were taking.

Bill Dellezem: Thank you. I have a couple of questions. First of all, what changed? And in the spirit of why are you now seeing the winds ramping up?

Speaker Change: Hi, Thank you I have a group of questions first of all.

Beth Garvey: First of all, what changed? And so, in the spirit of why are you now seeing the winds ramping up? I think those had changed, you know, how they outlook. You know, people held on to their cash last year, and at some point in these ERP systems, people actually in the plant, hi, we've held along, and as we have to move forward. And so, I think we're seeing that shift where people held last year and, you know, people see our P systems as kind of an important part of their business. So, since that's where we play, we're seeing a lot of that pent-up demand start to release.

Speaker Change: What changed and.

Speaker Change: And so in the spirit of why are you now seeing the wins ramping up.

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

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

Speaker Change: I think there was a change in the outlook.

Unknown Shareholder: People held off until like their cash last year and at some point and these ERP systems people actually end up saying, Hey, we've held long enough. We have to move board and so I think we're seeing that shift where people held last year.

Unknown Shareholder: And you know.

Unknown Shareholder: People's ERP systems, there's kind of an important part of their business. So since that's where we play we're seeing a lot of that pent up demand start to release.

Don: SGNA expenses for the second quarter were 21.6 million compared to 21 million in the first quarter and 22.6 million in the prior year's quarter. With we continue to manage our cost structure, reducing fixed costs where it is prudent, balancing short-term gains and long-term benefits. Second quarter, adjusted EBITDA was 2.6 million or 3.8 percent of revenue sequentially compared to 2.7 million or 3.9 percent in the first quarter. The 2023 second quarter adjusted EBITDA was 7.5 million or 9.3 percent of revenue. We reported adjusted earnings of $0.7 per deluded share even with $0.7 per share in the 2024 first quarter, which compares to $0.37 per share in the second quarter of 2023.

Beth Garvey: And any further insight at why so much of that demand seemed to be released specifically in the second quarter, as opposed to maybe gradually coming back in. I don't know that we could speculate what the buyer is thinking. What's happening in that regard? I just think our teams have done a really good job in our trainees' relationships and making sure that we're reaching out and having our partnerships in place. And when they were ready, when our customers were ready to go, we were there to help.

Unknown Shareholder: And any further insight as to why so much of that demand seemed to be released specifically in the second quarter, as opposed to maybe gradually coming back in?

Beth Garvey: And any further insight as to why so much of that demand seemed to be released specifically in the second quarter, as opposed to maybe gradually coming back in?

Unknown Shareholder: And any.

Speaker Change: A further insight why so much of that demand seem to be released specifically in in.

Speaker Change: In the second quarter as opposed to maybe gradually coming back in.

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

Speaker Change: I don't know that we could speculate what the buyer is what's happening in that regard I just think our teams. Our teams have done a really good job and nurturing these relationships and making sure that we're reaching out.

Speaker Change: And having our partnerships in place and and when they were ready when our customers are ready to go we were there to Ted to help.

Unknown Shareholder: Yeah, on the professional side of business, these are long sales cycles, too, right? So we've been working on, you know, a lot of the wins that we had. We've been working on for some time. It's just got to the point where our customers said, okay, let's let's go. Let's move forward with it.

John Barnett: Yeah, on the professional side of this, these are long sales cycles, too, right? So we've been working on, you know, a lot of the wins that we had. We've been working on for some time. It's just got to the point where our customers said, okay, let's let's go. Let's move forward with.

Beth Garvey: Yeah, on the professional side of this, these are long sales cycles too, right? So we've been working on a lot of the wins that we had. We've been working on for some time. It's just got to the point where our customers said, okay, let's go, let's move forward with this.

Speaker Change: Yeah on the professional side of the business. These are long sales cycles too right. So we've been working on yeah, a lot a lot of the wins that we had.

Don: We generated cash from operating activities for the first six months of $0.14.7 million, which enabled us to reduce funded debt from $0.63 million at the end of 2023 to 52 million at the end of the second quarter. Capital expenditures were 1 million for the first half and reflects our expected run rate spend. At June 30th, our funded debt to trailing 12-month pro forma adjusted EBITDA was 2.8 times.

Unknown Shareholder: We've been working on for some time.

Unknown Shareholder: It's just got to the point, where our customers said, okay, let's let's go let's move forward with this.

Beth Garvey: Great, thank you. And then the large deal, I guess you said it was the largest in the firm's history. Why did you win that versus the competition, and maybe you could lay out who the competition was? I'm not sure who we were competing against. I know there was an international company, so it was an international player. And we got called; we met the chairman of their board at an event that we were at, and we're talking to him about our capabilities. And he wasn't very happy with the incumbent. And so he asked us to come in at the 11th hour and to present.

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

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

Speaker Change: Great. Thank you and then.

Unknown Shareholder: The large deal I guess, you said it was the largest in the firm's history.

Unknown Shareholder: Why did you win that versus the competition and maybe you could lay out who the competition wise.

Beth Garvey: I'm not sure who we were competing against. I know there was an international company, so it was an international player.

Speaker Change: I'm not sure who we were competing against I know there was a it was an international company. So it was an international player.

Beth Garvey: With that, I would like to turn the call back to Beth.

Beth Garvey: Thank you, John. As expected, we communicated last quarter the first half of 2024 was difficult, but we began seeing positive momentum light in the second quarter that should improve our results starting in the third quarter. We expect our fourth quarter revenues to increase compared to fourth quarter of 2023.

Beth Garvey: And we got called, met the chairman of their board at an event that we were at, and we talked to him about our capabilities. And he wasn't very happy with the incumbent. And so he asked us to come in at the 11th hour and to present. And our team did an amazing job coming in and figuring out what the needs were and presenting the need. And It was a very, very long and tedious process for them.

Unknown Shareholder: And we got called we'd met the chairman of their board at an event and.

Speaker Change: That we were at and were talking to them about our capabilities and he was not very happy with the incumbent and so he asked us to come in at the 11th hour and repo and to prove that and our team did an amazing job coming in and figuring out what their needs were and presenting the need and it was a very very.

Beth Garvey: Although macro headwinds and recession fears continue to challenge our industry, we are cautiously optimistic given our developing backlog of professional projects and early traction in property management. We are actively preparing for return to elevated seasonal work with our property management teams. With a more robust sales enablement process, bolstered by our system upgrades, we have been able to strategically target properties with targeted campaigns around our customers operating realities, driving leads to the sales teams, increasing relationship touch points and closing deals.

Beth Garvey: And our team did an amazing job coming in and figuring out what the needs were and presenting the need. And it was a very, very long and tedious process for them. But we ended up beating out the incumbent and taking over the and winning the deal, which was good. It's the biggest one we've ever done. And an international player too. So it's very exciting.

Beth Garvey: But we ended up beating out the incumbent and taking over and winning the deal, which was good. It was the biggest one we've ever done and an international player too, so it's very exciting. I'm very proud of the team for that.

Speaker Change: Long and tedious process for them and that we.

Unknown Shareholder: We ended up beating out the incumbent and taking over the and winning it.

Speaker Change: [noise] deal, which was good it was a very it's the biggest one we've ever done and an international player case. So it it's very exciting I'm very proud of the team for that.

Beth Garvey: I'm very proud of the team for that. And in that case, are you implementing for the US operations? And so if you do meet their expectations, that there would be other countries that you could then do implementations for, or how do you see the opportunity for additional business with this customer? It's an international company. So they're there. It's we're already going to be helping them in 19 countries. So I believe that, you know, there's the team when they met with the chairman. Last week, I believe it was. We believe that the deal we have now is just the beginning.

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

Speaker Change: And invest in that case, Oh are you implementing four.

Beth Garvey: This year, unit owners and property management groups felt right and occupancy pressures as well as increased operating expense. As a result, several property management groups are opting for a short list of preferred dependable suppliers rather than a larger pool of vendors. As a leader in the industry with a reputation of delivering exceptional talent, our strategic sales team has been able to secure positions on these lists as a preferred provider. This is the win-win for our client partners as well as for us. The industry shift to narrow list of trusted property management suppliers allows our teams to showcase our people and culture as a competitive advantage at BGSF.

Speaker Change: The U S operations and so if you do.

Speaker Change: Meet their expectations that there would be other countries that you could then do implementations for or how do you see the opportunity for additional business with this customer.

Beth Garvey: It's an international company, so we're already going to be helping them in 19 countries. So I believe that there was a team when they met with the chairman last week. We believe that the deal we have now is just the beginning. We think it'll definitely open the doors to more business with this customer.

Speaker Change: It's an international company so they're there.

Speaker Change: We're already going to be helping them in 19 countries. So I believe that you know there's the.

Unknown Shareholder: It came when I met with the chairman.

Speaker Change: Last week I believe it was we believed they did the deal. We have now is just the beginning we think it'll definitely open the doors for more business with this customer in the future.

Beth Garvey: We think it will definitely open the doors for more business with this customer in the future.

Beth Garvey: In the industry, last year, the multifamily sector experienced higher M&A of property management companies which created delays in capital decisions and higher deferred maintenance levels. We believe this was created a backlog on repairs and capital improvement, which will benefit us in the second half of 2024, especially as the Fed, lower interest rates as expected. For property management, we also see measurable traction as we executed our territory mapping strategy in an effort to increase market share.

Beth Garvey: Great. Thank you.

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

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

Speaker Change: Great. Thank you and then relative to the property management business that you referenced that the M&A had led to deferred maintenance.

Beth Garvey: And then, relative to the property management business, you referenced that the MNA had led to deferred maintenance. Are you finding that this year, with the pressure on rate and occupancy, that that is leading to a continuation or additional maintenance deferral? As they're trying to preserve cash, what's the dynamic that you're sensing there? There is a lot of cash being held in that segment. And I think a lot of it has to do with, you know, the properties' insurance is higher. They're all their operational costs are higher. So we definitely are seeing them hold cash. But at some point, again, people can only hold maintenance for a certain amount of time before they have to deal with it.

Unknown Shareholder: Great, thank you.

Unknown Shareholder: Are you finding that this year with the pressure on rate and occupancy that that is leading to a continuation or additional maintenance deferral as theyre trying to peers.

Beth Garvey: Our pilot market saw a 19% increase in revenue year over year and we were actively rolling out the process in additional markets. In addition, as our strategic partnerships gained traction, we aligned management to strengthen those relationships and brought on a seasoned SVP of sales to lead the local sales teams in the markets. Andrew Hill joined us in June and his strong track record of building powerful sales teams in a competitive environment.

Speaker Change: Preserve cash what what's the dynamic that you're that you're sensing there.

Beth Garvey: There is a lot of cash being held in that segment, and I think a lot of it has to do with, you know, the property insurance is higher, all their operational costs are higher.

Speaker Change: There there is a lot of cash being held in that checkmate him and I think a lot of it has to do with you know the properties insurance.

Beth Garvey: So we definitely are seeing them hold cash. But at some point, again, people can only hold off maintenance for a certain amount of time before they have to deal with it. And so we do believe that there's lots of pent-up demand there that will eventually break free. It's just not completely started yet.

Speaker Change: It's higher there all their operational costs are higher so we definitely are seeing them hold cash, but at some point again, we and people can only hold maintenance for a certain amount of time before they have to deal with it and so we do believe that there's lots of pent up demand there.

Bill Dellezem: Great, thank you.

Beth Garvey: Andrew's expertise coupled with our enhanced efforts around sales, training and development will improve the effectiveness and speed with which we onboard and train our sales teams. As discussed last quarter, we know this industry is evolving and changing and we are proud to be on the leading edge of innovation with an expanding industry of apartments, luxury communities and commercial conversions to residential. On the professional side, we began to see declines in customer spending in the first quarter of last year that accelerated for the remainder of 2023.

Beth Garvey: And so we do believe that there's lots of pin-up demand there that will eventually break free.

Speaker Change: It will eventually break frame, we're just not it's just not completely started yet.

Beth Garvey: It's just not completely started yet.

Beth Garvey: Great. Thank you. You're welcome.

Unknown Shareholder: Great. Thank you.

Speaker Change: Youre welcome.

Unknown Shareholder: And ladies and gentlemen, this concludes our question-and-answer session.

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

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

Beth Garvey: I would like to turn the conference back over to Beth Garvey for any closing remarks. Thank you for your time today. We appreciate your continued support. We look forward to talking to you in November. Thanks.

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

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

Speaker Change: Thank you for your time today and we appreciate your continued support we look forward to talking to you in November thanks.

Beth Garvey: Typical engagements with three or four resources tightened to one or two with project ends exceeding project starts almost every quarter starting with Q3 in 2023. Despite these trends, our strategic IT partnerships and software development opportunity pipelines began to expand accelerating project quotes and awards related to managed services and IT consulting engagements. As I mentioned earlier, project wins exceeded project ends starting in the last few weeks of the second quarter. We also won the most significant project in our company's history, a major IT transformation project for a large international client which will begin contributing to our financials in Q3.

Unknown Shareholder: The conference has now concluded. Thank you for attending today's presentation.

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

Unknown Shareholder: You may now disconnect.

Beth Garvey: Okay.

Beth Garvey: Yeah.

Beth Garvey: [music].

Beth Garvey: Where actively deploying project teams to many engagements are more encouraged about the revenue outlook for the professional divisions than we have been in more than a year. While our first half results did not fully capture the momentum from these recent business wins, we anticipate a strong revenue ramp up in the professional divisions starting in the third quarter and continuing with more client engagements and billable work in the fourth quarter. In addition, we are seeing an increase in our perm placement activities for financing accounting services with recent double-digit growth sequentially, which we know is a positive signal about hiring for the US businesses.

Beth Garvey: Our industry has indicated that businesses that operate it in a more consultive versus staffing manner in IT services will benefit in the long term, which aligns with the strategic shift we put into play over two years ago. Our collective IT expertise in VGSF is highly valuable to our clients as we bring an unbiased approach to every part of the tech cycle. Our recent technology partnerships with workday SAP and others has bolstered our reputation in the market, which will continue to benefit us in the second half of 2024 and beyond.

Beth Garvey: Management Solutions continues to grow and innovate with our Royal Teams, which delivers onshore and offshore work important AI solutions and valuable ERP connector products. This is an exciting area for us with software engineers delivering intelligence, product development, cloud initiatives, and delivery excellence.

Beth Garvey: I am pleased with BG-SF's near-term growth prospects. We will continue to focus on reducing and optimizing costs to drive higher profitability and improve our structural margins. We know we have worked to do that we are relentlessly focused on sales, profitability, and cash flow growth.

Beth Garvey: Thank you for your time today. I want to thank all of our stakeholders, employees, clients, partners, and investors for their continued support and belief in our vision at BG-SF.

Beth Garvey: We would now like to open the call for questions. Are you ready? Thank you.

Unknown Shareholder: We will now begin the question and answer session to ask a question you may press star than one on your telephone keypad. If you are using a speaker phone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star than two.

Unknown Shareholder: And at this time, we will pause momentarily to assemble our roster.

Jeffrey Martin: And our first question will be from Jeff Martin from Roth's Capitol. Please go ahead. Thanks.

Beth Garvey: Good morning, Beth and John. Beth, I missed your comments about the 34th quarter by real estate and professional. I did catch that the 4th quarter to be up year over year. But if you can just repeat those comments I apologize and missed them. In regards to property management? Professional and property management. We believe that the second half of the year is going to be far better than the first half of the year in both segments.

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

Beth Garvey: Great. And then you talked about some large contracts last quarter. It was an SAP cloud contract and I think a couple of the best of yours just to see if those are often running or if those are delayed a little bit in the 7th quarter in terms of start. Some of them have started running but the big one that we've been working on, our teams right now are actually doing discovery this week and so we shall start seeing some of that revenue coming in in late August and into September. We should start wrapping up. Okay.

Beth Garvey: Great. And then with respect to the new wins exceeding project ends, you mentioned that started late in the quarter but how does that dovetail with the 25% higher win versus end straight? The win is going into the second half of the year. Again, it's sprinkling and we have many customers, chef, that we... The start, the win is basically we've signed the paper, and so some of them start in August, some start September, some start in October, so it's just a matter of when those start dates get implemented.

Beth Garvey: We haven't seen anything push from the initial agreements that we have, so that's the positive sign right now, so they're just getting ramped up. Yeah, Jeff, we haven't seen this consistency on a weekly basis, right? That we are consistently winning more contracts than we're seeing end, and we haven't seen that in quite a while. So it's what we've seen in the quarter has been encouraging and continue through this beginning of this quarter.

Beth Garvey: Yeah, yeah, okay, that's helpful, mix a lot of sense, and then just curious on in terms of working capital, you've generated quite a bit of operating cash flow for a half of the year, mainly due to collection of receivables, just curious, you're comfort with your capital availability as things ramp back up and you start to build that working capital again. Yeah, we feel comfortable with where we are today. I think we've worked very hard in our accounts receivable team, has done a great job.

Beth Garvey: Over the last year, we've really focused on structure of the organization, training, and then we also implemented DAPA, which is a really helpful tool to automate a lot of the AR functions and then also just provide a daily guide for what we should be doing, and a lot more visibility into our AR balances. And so that's really allowed us to accelerate collections, which is, you know, the decline in AR is a combination of the revenue, right, less revenue, less AR, but also we made great strides to push down our DSO.

Unknown Shareholder: Okay, well, thank you.

Howard Halpern: And the next question will be from Howard Halpern from Taglitch Brothers. Please go ahead. Good morning, guys. Morning, Howard.

Beth Garvey: If you could talk a little bit about, I guess, the pipeline that you have and the type of verticals that the projects will be, you'll be engaging in. And mostly in our technology space, so it's a lot of managed solutions in bringing in a Royal. You know, as we talked about getting a Royal up to speed and integrated, we've got more and more deals where we're doing what we call a plus one campaign, which means that we have customers that are buying one thing from us.

Beth Garvey: And so we're going out and asking them to buy other types of services from us. Since we launched that in 11 months, I think we started it. Love must go. We were about 12. We had 69 customers now that are buying multiple services from us. So it's those kinds of engaged, and that. Okay.

Beth Garvey: And in terms of, you know, you're seeing the ramp up, but you also, I guess, talked about an oppressed release, you know, right-sized costs. And so, are you leveraged enough now where you're not going to have to increase costs that much to accomplish the ramp in activity that's coming in the second half? A lot of the, a lot of the activity we expect in the second half is actually under contract. Obviously, we have to continue to add to that.

Beth Garvey: It's a matter of timing of the start of the projects and how fast they ramp up. Okay. But yes, we don't, we don't expect near-term that we would add to our, you know, structure or GNA cost structure to deliver our expected second half results. Okay.

Beth Garvey: And then just one last one, that at least in your term or initial trends in, in permanent placements, what is that, what like and what does that indicate to you potentially for, you know, the upcoming quarters? Some placement is usually when the economy softs something that is not very active, and we saw that last year. We're seeing that pick up in our finance and accounting teams right now, which usually is an indicator that people have a little bit more confidence as they move into the quarters.

Beth Garvey: And so, we're just following that. I think we had double digit growth in sequential growth and what they had done the first six months of the year, the last six months of last year and first six months of this year. So, we just find that to be positive and usually trends with the industry. So, you know, when, when parms down, you can kind of know things are tough and when parms start to come back into a little bit, it's a glimmer of hope. Okay.

Unknown Shareholder: Well, keep up the good work and look forward to the second here. Thanks, Howard. Again, if you have a question, please press star then one.

Bill Dellsam: The next question is from Bill Dellsam from Titan Capital. Please go ahead. Thank you.

Beth Garvey: I have a group of questions. First of all, what changed? And so, in the spirit of why are you now seeing the winds ramping up? I think those had changed, you know, how they outlook. You know, people held on to their cash last year and at some point in these ERP systems, people actually in the plant, hi, we've held along and as we have to move forward. And so, I think we're seeing that shift where people held last year and, you know, people see our P systems as kind of an important part of their business.

Beth Garvey: So, since that's where we play, we're seeing a lot of that pent up demand start to release. And any further insight at why so much of that demand seemed to be released specifically in the second quarter, as opposed to maybe gradually coming back in. I don't know that we could speculate what the buyer is think what's happening in that regard. I just think our teams have done a really good job in our trainees' relationships and making sure that we're reaching out and having our partnerships in place.

Beth Garvey: And when they were ready, when our customers were ready to go, we were there to help. Yeah, on the professional side of this, these are long sales cycles too, right? So we've been working on a lot of the wins that we had. We've been working on for some time. It's just got to the point where our customers said, okay, let's let's go, let's move forward with this.

Beth Garvey: Great, thank you. And then the large deal, I guess you said it was the largest in the firm's history. Why did you win that versus the competition and maybe you could lay out who the competition was? I'm not sure who we were competing against. I know there was an international company, so it was an international player. And we got called, we met the chairman of their board at an event that we were at, and we're talking to him about our capabilities.

Beth Garvey: And he wasn't very happy with the incumbent. And so he asked us to come in at the 11th hour and to present. And our team did an amazing job coming in and figuring out what the needs were and presenting the need. And it was a very, very long and tedious process for them. But we ended up beating out the incumbent and taking over the and winning the deal, which was good. It's the biggest one we've ever done.

Beth Garvey: And an international player too. So it's very exciting. I'm very proud of the team for that. And in that case, are you implementing for the US operations? And so if you do meet their expectations that there would be other countries that you could then do implementations for or how do you see the opportunity for additional business with this customer? It's an international company. So they're there. It's we're already going to be helping them in 19 countries.

Beth Garvey: So I believe that, you know, there's the team when they met with the chairman. Last week, I believe it was. We believe that the deal we have now is just the beginning. We think it will definitely open the doors for more business with this customer in the future.

Beth Garvey: Great. Thank you.

Beth Garvey: And then relative to the property management business, you referenced that the MNA had led to deferred maintenance. Are you finding that this year with the pressure on rate and occupancy that that is leading to a continuation or additional maintenance deferral? As they're trying to preserve cash, what's the dynamic that you're sensing there? There is a lot of cash being held in that segment. And I think a lot of it has to do with, you know, the properties insurance is higher.

Beth Garvey: They're all their operational costs are higher. So we definitely are seeing them hold cash. But at some point, again, people can only hold maintenance for a certain amount of time before they have to deal with it. And so we do believe that there's lots of pin-up demand there that will eventually break free. It's just not completely started yet.

Unknown Shareholder: Great. Thank you. You're welcome.

Beth Garvey: And ladies and gentlemen, this concludes our question and answer session.

Beth Garvey: I would like to turn the conference back over to Beth Garvey for any closing remarks. Thank you for your time today. We appreciate your continued support. We look forward to talking to you in November. Thanks.

Unknown Shareholder: The conference has now concluded. Thank you for attending today's presentation.

Unknown Shareholder: You may now disconnect.