Thank you for standing by. This is the conference operator. And welcome to the BG Staffing second quarter results conference call. [Operator Instructions] I would now like to turn the conference over to Terri MacInnis, Vice President of Investor Relations with Bibicoff + MacInnis. Please go ahead.

Thank you, operator, and good afternoon, everyone. As VP of Investor Relations representing BG Staffing, it's my pleasure to welcome you to the company's conference call to discuss Q2 financial and operating results and a progress report on the company's business strategy. With me today on our call is Allen Baker, Chief Executive Officer; and Dan Hollenbach, Chief Financial Officer. By this time, you should have seen a copy of yesterday's press release announcing BG's Q2 2016 financial results. If you don't have a copy of the press release, you can find it in the Investor Relations section on BG's website at bgstaffing.com. I remind you that this call is being webcast live and recorded. A replay of the event will be available later today on BG's website and will remain available for at least 90 days following the call. I'd also like to remind you that our discussions today include forward-looking statements. These statements are based on certain assumptions made by BG Staffing based on and are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The company's actual results could differ materially from those indicated by the forward-looking statements because of various risks and uncertainties, including those listed in Item 1A of the company's annual report on Form 10-K and in the company's other filings and reports with the SEC. All of the risks and uncertainties are beyond the ability of the company to control, and in many cases, the company cannot predict the risks and uncertainties that could cause its actual results to differ materially from those indicated by the forward-looking statements. These forward-looking statements are made as of the date of this call, and BG Staffing assumes no obligation to update these statements publicly, even if new information becomes available in the future. This broadcast is covered by U.S. copyright laws, and any use or rebroadcast of all or any portion of this conference call may only be done with the company's express written permission. On today's call, Dan will provide an overview of BG's Q2 and first 6 months operating results, and Allen will update you on the progress of BG's business strategy to provide temporary staffing services to a variety of industries. Afterwards, the operator will open the call for your questions. Dan?

Thank you, Terri. As evidenced in the financials contained in our quarter report on Form 10-Q filing yesterday, we are very pleased with our operating results for the second quarter and the first 6 months ended June 26, 2016. BG Staffing provides temporary staffing services within 3 segments: Multifamily, Professional and Commercial. As we will discuss, all 3 segments reported record revenue and gross profit compared with previous second quarters. We are focused on continuing to grow our staffing business organically while also looking to build through accretive acquisitions. I will now discuss our consolidated and segment results from operations. First, our second quarter results. Revenues for Q2 2016 were $62.6 million, an increase of 25.8% when compared with revenues from Q2 2015 of $49.8 million. Multifamily increased 41.5% over Q2 2015, which is all organic. Professional increased 36.1% over Q2 2015, and Commercial increased 7.5% over Q2 2015, which was also all organic. Gross profit increased $4.3 million, an increase of 39.7% over 2015. Multifamily increased 48.4% over Q2 '15, Professional increased 52.7% over Q2 '15, and Commercial increased 8.8% over Q2 2015. Q2 growth in the Professional segment was bolstered by our acquisition of Vision Technology Services at the beginning of Q4 2015. Gross profit percent was 24.3% for Q2 '16 compared with 21.8% for Q2 '15. Operating income exceeded Q2 2015 by $1.3 million, an increase of 48.8%. Q2 2016 net income was $1.4 million or $0.17 per diluted share compared with net income of $1.46 million or $0.20 per diluted share for Q2 2015. Earnings per share for Q2 2016 was affected by an approximate $404,000 net of tax, onetime debt extinguishment expense or 5% -- $0.05 per diluted share. And now for year-to-date results. Revenues for the 6 months 2016 were $122.2 million, an increase…

Thanks, Dan. I'm pleased to note that in Q2 this year, all 3 of our segments continued to successfully grow revenues and gross profits. We expect to do more of the same in Q3 and expect revenues to peak for the year for that quarter as they have done in the past. We continue to see demand for our service offerings even though our operating teams are reporting a continuing tight market for skilled resources. Our outlook remains optimistic, and we are comfortable with our annual guidance provided at year-end and maintain our expectation of at least 6% growth on fiscal 2016 pro forma revenue of $246 million. Duff & Phelps recently released an article in The Staffing Stream, which pointed out that EBITDA, not revenue, drives staffing company valuations. So even though we're predicting a revenue uptick, the real goal is -- that we're focused on is the adjusted EBITDA that Dan alluded to. As a part of our initiative to make a good business even better, we are making changes in our Professional segment. In the first quarter, we made a key hire. You may recall this individual has deep staffing industry experience, including several executive roles at Robert Half. We opened a new Dallas office in the Dallas market to support the Professional segment. We also plan to evaluate our commission structure in order to provide an incentive for our people to initiate more cross-selling. We have also initiated our plan to implement a single software solution in our Professional segment to streamline and support these internal efforts. Currently, we provide temporary staffing in 3 business segments through 50 branches, 60 on-site locations in 22 states. Our Multifamily segment distinguishes our staffing company in the marketplace. This group provides temporary staffing needed to run an apartment complex,…

[Operator Instructions] The first question today comes from Jeff Martin with Roth Capital Partners.

Could you give us an update on how that new branch is operating on the Professional segment in Dallas?

Yes, I can. We're in the hole so far this year, but we have the offices in place. It's fully staffed. I think -- I'm not sure exactly how many tips but we began generating a little revenue in July. So we anticipate that we'll be in a breakeven mode by the end of the year.

Okay. And then could you touch on the Professional segment in general, excluding Vision? The performance was down a little bit in the quarter. What drove that? And what's your outlook for the second half of the year in terms of growth in the segment?

As far as the first part of the year goes, the bottom line is we've lost a couple of customers. It probably equals somewhere in the 25 to 30 temps range outside of -- it's just the daily temps, the lower-end temps, and several of those customers happen to be in the energy sector. I think we've seen all of the clean out there that we're going to see, and it should level off going on to the end of the year. As far as what the outlook is for the total year, I don't really have that information available.

Okay. And then could you talk about pricing and spreads that you're seeing across the 3 segments currently? You'd mentioned the tightness of labor out there in the market today. Is that allowing for increased spreads at all? Or are you seeing challenges there?

Well, first of all, let me just say that when you're renting a staffing company, you're going to have 1 of 2 problems: You're either going to have more temps than you have orders, or you're going to have more orders than you have temps. I prefer the latter problem to have, which is the problem that we have today. I think with unemployment going down, professional unemployment is typically tied to the unemployment rate for college graduates, which is -- I know it's under 3%. It's approaching 2%, and I think -- I just read an article where the majority of employees working today in the workplace for the first time in history, college graduates are now in the top area in that particular work force that we have. And so I think we're seeing a strategic change in that, and we're continuing to try to monitor our pricing and spreads and things of that nature. But we do not try to gouge the customer or take advantage of that just because we can't find the people to fill the order.

Got it, okay. Then could you give us an update on the expansion of Multifamily and how that's going for this year? I know you talked a little bit about -- you and I have talked a little bit about opening 5 to 6 a year. I think you're ahead of that pace today. But could you give us an update on how that stands? Because it's growing at an acceleratingly increasing pace it seems. And just curious just how many branches you've opened this year and if there's any more to open for the balance of the year, and what maybe the outlook gets for '17.

As far as this year goes, we had planned on 5 new offices. They are all up and running. We also split some markets. For example, Houston, we've created 2 offices there. Now combined, those are doing better than they did last year. So we've got 4 splits there, 4 more offices as a result of splits. And then we're planning on opening up possibly 2 more this year. That's going to depend on our ability to find the right person to be connected in that particular market. But we're -- 5 or 6 a year that we used to try to do, we're trying to exceed that. And of course, what that does is accelerate growth going into the following year. So we haven't looked out as far as next year yet, but it looks -- everything I can see looks like it's going to continue to expand for us.

[Operator Instructions] The next question comes from Howard Halpern with Taglich Brothers.

I guess first question is regarding -- I guess, the financial flexibility that you have going forward with your ability to pay down debt and the value of your stock appreciating, how much flexibility does that give you in going forward with potential acquisitions out there?

Well, I guess it gives us quite a bit. Not too sure what you're asking me. Flexibility is kind of a...

Will deals be structured maybe a little bit differently now that your balance sheet is even stronger than it was before?

That's certainly a possibility. Every deal that we've ever done is always negotiated. Everybody wants to have some type of recipe on step 1, step 2, step 3. I don't really operate that way. I look at every individual deal individually, and I try to make a determination on whether or not it can help us. But yes, we certainly have a lot less debt on the books after the equity raise, and it's opened up some options for us on the financing side.

Okay. I did notice that as a percentage of sales, SG&A ticked up a little bit. Was there some increased spending that is sort of going to flow through and make things a little more efficient down the road?

Well, if you're comparing Q-over-Q, remember that last year did not include any SG&A from Vision.

Did he say SG&A?

SG&A is what you were talking about, correct? Yes.

Correct, yes.

Then the same thing year-to-date, last year did not include any Vision. So that's a big piece of it, and I think we gleaned that out in our MD&A. And then -- well, to my -- as Allen discussed earlier, the growth in the Multifamily offices produces additional SG&A from that side. So those are the 2 biggest drivers in the increase in SG&A year-over-year -- in both quarter and year-to-date.

Okay, and you talked a little bit about, I guess, the software -- one platform. Is that complete or you're still implementing that process?

We've just begun that, Howard.

There are no more questions at this time. That concludes the question-and-answer session. I would now like to turn the conference over back to Allen Baker for closing remarks.

Thanks, operator. And thanks to all of you for joining our call today. A key takeaway for you today is that we continue to expect a robust year again in '16, and we are looking forward to finishing the year as one of our strongest. We continue to grow business in all segments and firmly manage our corporate cost with a target of 2% to 2.5% of revenue. That's -- all that cost is contained in our centralized back office. I'm looking forward to reporting progress and speaking with you again when we report our third quarter results. Thank you, and have a good afternoon.

This concludes today's conference call. You may disconnect your lines. Thank you for participating. Have a pleasant day.