Steve Coleby

Steve Coleby from Mangrove inquired about the proportion of business from exclusive versus non-exclusive agreements and its competitive advantage. He also asked about the incremental margin profile of the business above breakeven and sought to understand the composition of G&A costs, specifically regarding office lease expenses.

Answer

Interim Co-CEO Kelly Brown stated that the strategic portfolio, which includes exclusive and semi-exclusive agreements, comprises roughly 11-15% of total revenue and that BGSF's national footprint is a key competitive advantage. Interim Co-CEO & CFO Keith Schroeder explained that there is significant operating leverage, with about 35% of incremental revenue dollars expected to fall to the bottom line. He also clarified that property management office costs are included in 'selling costs,' not the corporate G&A line item.

Inquired about the status and revenue contribution of exclusive client agreements, the competitive advantage of these agreements, the incremental margin on revenue above breakeven, and the breakdown of G&A costs related to office leases.

Answer

The strategic portfolio, including exclusive agreements, comprises roughly 11-15% of total revenue. The company's national footprint is a significant competitive advantage in securing these deals. They stated that about 35% of new revenue dollars should fall straight through to the bottom line due to operating leverage. They also clarified that office costs for the property management group are categorized under "selling costs," not corporate G&A.