BGSF (NYSE:BGSF) Q2 2026 Earnings Call

0:00 That is really helpful. And actually, I do have one additional question. Circling back to the staffing side, have you seen signs with rents improving and fewer incentives for move ins, essentially a healthier industry that your candidate list, not your candidate list, but your prospective customer list is growing and that there are more firms that maybe aren't ready to engage in hiring, but that are interested in conversations, essentially your prospect pipeline growing is really the right way to ask that? Sure. The great thing is, Bill, certainly, the usage of staffing is still there. Our communities out there still need people.

0:55 What we're really working with our customer partners on is, hey, let's figure out how we can best have those needs fit into the limited budget that you have. So year over year, we're seeing the sheer volume of requests actually up whenever you compare year over year. However, how many hours of work that translates to is what we're really having to work very carefully on with our customers because of that limited budget piece that we mentioned earlier in the call. So short answer to your question, we've already seen just the sheer volume of requests improving year over year. However, where we're having to really work is, okay, how many hours of work can that translate to? And that might be something that we need to see improve as we continue on in the industry, seeing those glimpses of optimism with the rent improvement and with pockets where we're seeing concessions go down, etcetera, etcetera. And that will loosen up some of those operating dollars that the communities can put towards services such as ours.

1:58 Kelly, does that imply that there is a backlog of work that is taking is building up? And maybe this is my ignorance to not understanding the business well. If there's an air conditioner that's out, that needs to be replaced right now if it's summer. We understand that. But is there are there other activities that your candidates work on that can be deferred. And therefore, this idea that the volume of request is up indicates that there is a backlog of deferred work? I'm hesitant to believe that there is a large backlog of work bill because feedback from customers also indicate that, hey, let's be very careful in how we can leverage the team members that we have if they can maybe take a team member that would have typically worked at one community and have them work at maybe two or three others that are within a reasonable proximity.

2:59 So, as they sort of float that staff around their portfolio, that's a strategy that's been used to try to, again, be mindful of the dollars that are going out for help that we may fill in with. So I think, our operators are making it work. They're making it happen, maybe with more limited resources. So could there be maybe a small backlog of work out there? Possibly, but I don't want to necessarily assume that because I really think our operators are just doing what they can to with the resources they have, keep up as much as possible.

3:38 Great. Thank you for the time, Kelly. Of course. Good to hear from you, Bill. And the next question today will come from Michael Taglich of Aegis Capital. Please go ahead. Good morning, everyone. Quick question. You broke out strategic alternatives review. Could you give me a little more detail on that spend? Yes. That was restructuring costs, Mike, because there's things like when we finished the TSA in March, we had to sever people. And so those those costs fell into Q2. There's some consulting type costs that were part of the studies that we had done early part of the year. There was a final bill came through there. So those were the types of costs that came through in the quarter.

4:33 Okay. And from a go forward standpoint, do you have any thoughts about how that spend is going to work? So that's all restructuring costs basically? Yes. Yes, it is. So going forward, that cost will be very small. Okay. All right. The any does management want to discuss at all any particular any additional opportunities to bring more of the gross margin down to the bottom line from a cost reduction standpoint?

5:12 Well, yes, that is something I think I mentioned in my remarks. We are always looking at ways to bring down costs, whether it be people wise, whether it be software wise, both in G and A and in selling. So, yes, while we've made a lot of steps so far over the last, call it, six to nine months, we are constantly looking at ways to put those costs down. We action them all the time. Okay. Thanks. Thank you, Michael. Take care, Keith. At this time, we will conclude our question and answer session. I'd like to turn the conference back over to Kelly Brown for closing remarks. Thank you for your time today. We appreciate your interest in BGSF and look forward to providing an update on our third quarter in a few months. Have a great day.

6:07 Thank you all. The conference has now concluded. Thank you for attending today's presentation and you may now disconnect your lines.