DISCONTINUED OPERATIONS

6 Months Ended

Jun. 29, 2025

Discontinued Operations and Disposal Groups [Abstract]

On June 14, 2025, the Company entered into an Equity Purchase Agreement (“EPA”) with INSPYR Solutions Intermediate, LLC, (“INSPYR”), pursuant to which the Company will sell to INSPYR substantially all of the outstanding equity interest pertaining to BGSF Professional. Under the EPA, INSPYR will pay $99.0 million in cash at the closing of the transaction and assume certain assets, equity interests, liabilities, and obligations of the Company pertaining to BGSF Professional. The EPA further provides for customary purchase price adjustments, including a net working capital adjustment.

The EPA contains customary representations and warranties, covenants (including certain non-competition and non-solicitation covenants restricting the Company with respect to the professional staffing business), closing conditions, and indemnification provisions. The EPA also includes a payment obligation related to the June 10, 2025 letter agreement with Arroyo Consulting, LLC related to the payout of $2.5 million in contingent consideration where by the Company will assume a portion of this obligation to be paid by $1.2 million at closing and $0.6 million in monthly installments. After the closing of the transaction, the Company will provide certain back-office services to INSPYR for a limited period of time.

The BGSF Professional financial results for periods prior to the sale have been reflected in our Unaudited Consolidated Balance Sheet, Unaudited Consolidated Statements of Operations, Unaudited Consolidated Statement of Changes in Stockholders’ Equity and Unaudited Consolidated Statements of Cash Flows as discontinued operations.

The financial results of BGSF Professional are as follows (in thousands):


		Thirteen Weeks Ended				Twenty-six Weeks Ended
		June 29, 2025		June 30, 2024		June 29, 2025		June 30, 2024
Revenue		$	40,268	$	42,411	$	82,619	$	86,630
Cost of services		28,024		28,377		57,015		58,501
	Gross profit	12,244		14,034		25,604		28,129
Selling, general, and administrative expenses		10,000		10,828		19,908		21,582
Gain on contingent consideration		(450)		—		(450)		—
Depreciation and amortization		1,336		1,649		2,678		3,317
	Income from discontinued operations	1,358		1,557		3,468		3,230
Interest (expense) benefit		(49)		44		(91)		89
	Income from discontinued operations before taxes	1,309		1,601		3,377		3,319
Income tax expense		(183)		(280)		(737)		(742)
	Income from discontinued operations, net of income taxes	$	1,126	$	1,321	$	2,640	$	2,577

Carrying amount of assets, liabilities, and equity included as part of discontinued operations (in thousands):