It is my pleasure to welcome you to the BG Staffing Conference Call to discuss the Q2 Financial and Operating Results and a Progress Report on the Company’s business strategy. With me today on our call is Dan Hollenbach, Chief Financial Officer; and Allen Baker, President and CEO. By now you should have seen a copy of today’s press release announcing BG’s Q2 2018 financial results. If you do not have a copy of the press release, you can find it in the Investor Relations section of BG’s website at www.bgstaffing.com. I’ll remind you that this call is being webcast live and recorded. A replay of the event will be available later today on the BG’s website and will remain available for at least 90 days following the call. I would 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 Securities and Exchange Commission. All 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 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 the 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 expressed written permission. During our call, we will discuss some non-GAAP measures which we use for internal evaluation and to report the results of the business as useful information to management, our Board of Directors and investors about our operating activities and business trends related to our financial conditions and results of operations. These non-GAAP measures are intended to be supplement to the GAAP financial information and should not be considered in isolation, as a substitute for or superior to, financial measures calculated in accordance with GAAP. For a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures, please see today’s earnings release, posted on BG’s website. I would now like to turn our call over to Dan Hollenbach, BG Staffing’s Chief Financial Officer. Please go ahead, Dan?

Thanks, Ben. Good afternoon, everyone. Thank you for joining us today, and thank you for your interest in BG Staffing. We are extremely pleased with the performance of BG Staffing for the second quarter and first six months of 2018. And I would like to start by taking a moment to recognize our people at each of the BG Staffing business units for their hard work and dedication to the Company’s continued success and strong gross profit margins. We are very proud of the job they have done. BG Staffing provides temporary staffing services within three industry segments; Real Estate which we previously referred to as Multifamily, Professional which includes our finance and accounting and IT division, and Light Industrial, which we previously referred to as Commercial. The change with respect to the Real Estate segment reflects the expansion of the Company’s go-to-market strategy with the addition of commercial real estate service offering. The Real Estate segment now includes the Company’s BG multifamily division in addition to the Company’s commercial real estate division which we refer to as BG Talent. In conjunction with the new Real Estate market segmentation, we believe it was important to change our branding for the Company’s Light Industrial segment to eliminate the use of the Commercial name, as we believe Light Industrial name identifies the segment’s service offerings as distinct from those related to the commercial real estate. Now, I would like to spend a few minutes commenting on BG’s financial results and then turn the call over to Allen for his comments on the quarter, the Company’s strategic -- strategy execution and current industry conditions. Our revenues for the second quarter of 2018 were $70.9 million, up 3.2% from the second quarter of 2017 with a very strong gross profit percentage of 27.1%, up…

Thanks, Dan. Good afternoon, everybody, and thank you for joining us today. I am very pleased to review our financial results with you. A continuation of strong demand, a 3.2% increase in revenue, and solid operational performance by our managers in the field resulted in our highest quarterly consolidated gross profit percentage on record at 27.1% and our fifth consecutive quarter with consolidated gross profit percentages in excess of 25%. BG Staffing’s gross margin percentage has steadily increased from 19.1% as of fiscal year-end ‘13 to 27.1% for the most recent quarter. Needless to say, we’re very proud of this achievement. We sometimes hear the assertion that if a company’s revenues grow, its return on capital will naturally increase. Therefore, low margin companies should strive of revenue growth. However, that argument does not appeal to us. The foundation of value creation for BG Staffing consists of generating higher cash flows through a combination of revenue growth and return on capital. And while the Company’s revenue growth over the past several years has certainly been impressive, we believe our focus on the strategic priority of growing returns is measured by gross profit margin percentage, adjusted EBITDA, and adjusted EBITDA margin has benefited our shareholders with sustained value creation. Simply put, for any level of revenue growth, we believe value increases with improved return. As such, our focus has been on creating value by increasing margins through operational discipline, organic growth initiative and through M&A, where we believe our insights into how certain market segments and the staffing industry itself will evolve has demonstrated our successful strategic execution as a value-creating, serial acquirer. The acquisitions we have completed in our Professional segment over the past several years have allowed us to create market access across all the divisions with the segment for…

Thank you. We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Jeff Martin of ROTH Capital Partners. Please go ahead, sir.

Congratulations on a nice quarter. Allen, can you give us some update on the commercial side of the Real Estate business, the new venture for you? I think you were on record saying that you are hopeful to generate $5 million to $6 million of revenue from that this year. So, looking…

We’re probably not going to hit the $5 million to $6 million but we’re going to hit our profitability goals, which I think in the second quarter we did 15% contribution to overhead is what I call it, which is basically through selling expenses. So, we’re probably going to come in for the year at $3 million to $4 million in sales. But, there’s been a lot of bumps in the road, a lot of things that we learned. But, I think that it’s here to stay. And we’re hopeful that next year will be bigger than this -- this year.

On Professional and Light Industrial segments, just curious if you could provide any detail you can around for Light Industrial return to growth in the segment. I know that was about 9% growth. And then Professional looks like, both on the IT and finance and accounting, there’s some headwinds. You also mentioned some projects ramps that were delayed. Curious any details you can provide around those two segments?

Correct. Which one do you want first?

Let’s start with Professional.

In the professional area, we think, number one, we’ve put a person in-charge of that. He has got a history with Robert Half. He has done an excellent. He has gotten rid of a lot of people. And that’s probably why the downturn I’ll say in Q2 happened. But, we are looking forward. And we think that by the first quarter of next year, we’ll be a serious competitor in this particular market. But for now, we had to just put the brakes on and do some things and pick some things. And we’re now operating more closely in terms of cross-selling than we ever have before. And I feel really good about the division. I know, it looks flat, but it’s really on the uptick from my vantage point. As far as Light Industrial goes, Light Industrial goes Light Industrial goes. I mean, the good news is, we’ve got a customer back at a higher margin than what we had them exit at. And so, therefore, we’ve got some growth in that particular segment.

Okay. And then, on the delayed project. Could you give us a sense of magnitude and timing on when those will come on and what kind of contribution they’ll have? I would imagine those are in the Professional segment?

Yes. We had a very large project going on last year in one of our IT divisions at a health services company that had multiple locations; they were implementing SAP. And early part of third quarter last year sort stepped back and said this project needs to be reevaluated and sort of put the brakes on it. It was supposed to start up in Q1 and then supposed to start up in Q2 and we’re waiting for it start up in Q3. It’s about a $4 million impact year-over-year. And in addition, Allen mentioned…

For the first half in aggregate or just per quarter?

First half in aggregate. Yes. The other thing that Allen mentioned about was the cross-selling, and we had a large cross-selling opportunity that came our way in the Dallas market. And due to delays in the office construction for that client, that was supposed to start in Q2, and it’s starting to ramp up probably we’re expecting in the next two to three weeks.

The next question comes from Howard Halpern with Taglich Brothers. Please go ahead, sir.

Congratulations on the quarter, guys. Just going back to what you were just talking about on the delays and when you see them flowing throw on the Professional segment. Are they going to sell, continue to boost the margins, gross margins?

Well, I’ll talk about the F&A part of it. The project that is declining off was a relatively low margin piece of our business, probably in the upper teens. Although it was the significant amount of volume year or two ago when we had close to 200 people out there. And the new business we’re bringing on to replace that, volume wise is coming on not quite as fast as it rolled off, is much more in line with our professional margins in the upper 20s to 30%. So, we should see a continued increase in margin percentage as that business completely is eliminated and our new business rolls on. On the IT side, we continue to probably manage it at about the same level.

And when you talk about ramping up, who or the cross-selling opportunities that you see, are those projects mostly going to be higher margin business to drive it up or drive it or at least maintain what you achieved in Q2?

I would say, at least maintain. Yes.

And in terms of the Real Estate and the commercial side of it, how many officers are actually actively marketing commercial real estate part of your business?

We have approximately five offices actively marketing currently. And then, we have some resources that are marketing into other areas where we do have offices. But, the bottom line there is, we feel good about it. It’s not going to be as we had projected it, but we do feel good about it because it’s hit the profit goals.

And just one last one, in your Real Estate you talked about adding four more offices this year. Are they going to be in existing states or are you going to -- are you being called into other states here?

I don’t know.

So, two of it is new states, new geography, and two of them are splits of existing offices.

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

Thank you, operator. And thanks to all of you for joining our call today, and have a good afternoon.