Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $7.5 million, a decrease of 11.2% from $8.4 million in Q1 2024 [11] - Franchise royalties decreased to $7 million from $7.8 million year-over-year [11] - Net income after tax was $1.4 million or $0.10 per diluted share, down from $1.6 million or $0.12 per diluted share in the previous year [13] - Adjusted EBITDA was $2.8 million, compared to $3.4 million in the prior year, with an adjusted EBITDA margin of 37% versus 40% [13] Business Line Data and Key Metrics Changes - Service revenue for Q1 2025 was $512,000, down from $588,000 in the same period last year [12] - System-wide sales for Q1 2025 were $118.4 million, compared to $134 million in Q1 2024 [12] Market Data and Key Metrics Changes - The staffing industry continues to face macroeconomic headwinds, leading to slower hiring decisions by employers [6] - Stricter immigration policies are expected to increase demand for staffing services that comply with E-Verify regulations [8] Company Strategy and Development Direction - The company is focused on expense management and cost reduction initiatives, with a consistent decrease in SG&A expenses year-over-year [6][12] - M&A is a key part of the company's strategy, with a strong pipeline of potential deals to expand into new geographic regions and market verticals [7][29] - The company is optimistic about the potential for acquisitions due to the ongoing weakness in demand affecting less capitalized competitors [29] Management's Comments on Operating Environment and Future Outlook - Management noted that the first quarter results reflect broader industry challenges but emphasized the company's solid margins and profitability [6] - The company remains confident in its ability to maintain profitability during difficult times, leveraging its franchise model [36] Other Important Information - The CFO transition is planned, with David Hartley succeeding Steve Crane effective May 31, 2025 [9] - The company has paid a regular quarterly dividend since Q3 2020, with the most recent dividend of $0.06 per share paid on March 17, 2025 [15] Q&A Session Summary Question: Recent trends in business and impact of tariffs - Management indicated no dramatic shift in business trends since the start of Q2, with ongoing uncertainty holding employers back [20][21] Question: Impact of stricter immigration policies on new business - Management confirmed that stricter immigration policies are opening new business opportunities, with clients returning due to increased enforcement [22][24] Question: Trends in SG&A expenses and cost management - Management explained that some anomalies in the first quarter masked the true trend in SG&A expenses, with ongoing efforts to manage costs [25][26] Question: M&A pipeline and near-term opportunities - Management expressed optimism about the M&A pipeline, noting that ongoing demand weakness is leading to more realistic pricing from potential acquisition targets [28][29] Question: Transition of CFO and corporate development staffing - Management confirmed plans to add a deal sourcer to support corporate development, but not at the VP level [30][32]

[PART I. FINANCIAL INFORMATION](index=2&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section covers HireQuest, Inc.'s Q1 2025 financial statements, management's analysis, market risk, and internal controls [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) HireQuest, Inc.'s Q1 2025 financial statements show a slight asset decrease, lower revenue and net income, but improved operating cash flow [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets slightly decreased, liabilities fell, and stockholders' equity rose, with a reduced line of credit Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$93,737** | **$94,013** | | Cash | $2,087 | $2,219 | | Accounts receivable, net | $42,218 | $42,348 | | Goodwill | $1,633 | $1,633 | | **Total Liabilities** | **$28,173** | **$29,209** | | Line of credit | $5,456 | $6,829 | | Total current liabilities | $23,268 | $24,096 | | **Total Stockholders' Equity** | **$65,564** | **$64,804** | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Q1 2025 total revenue and net income declined due to lower franchise royalties compared to the prior-year period Q1 2025 vs Q1 2024 Performance (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Franchise royalties | $6,960 | $7,831 | | **Total revenue** | **$7,472** | **$8,419** | | Income from operations | $1,483 | $2,102 | | **Net income** | **$1,363** | **$1,619** | | Diluted earnings per share | $0.10 | $0.12 | [Consolidated Statements of Changes in Stockholders' Equity](index=5&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) Stockholders' equity increased in Q1 2025, driven by net income and stock-based compensation, partially offset by dividends - Key changes in stockholders' equity for Q1 2025 included net income of **$1.36 million** and dividend payments of **$842 thousand**[14](index=14&type=chunk) [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Q1 2025 saw improved operating cash flow, significant cash used in financing, resulting in a slight decrease in the overall cash balance Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $1,854 | $(967) | | Net cash provided by investing activities | $316 | $213 | | Net cash (used in) provided by financing activities | $(2,302) | $981 | | **Net (decrease) increase in cash** | **$(132)** | **$227** | [Notes to Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail accounting policies, recent acquisitions, and financial instruments, including the franchise model, RTS acquisition, and credit facility status - As of March 31, 2025, the company had **424** franchisee-owned offices and **1** company-owned office across **43** states, D.C., and **13** other countries[21](index=21&type=chunk) - On December 30, 2024, the company acquired Ready Temporary Staffing, LLC (RTS) for **$1.4 million** in cash[20](index=20&type=chunk)[37](index=37&type=chunk) - The company has a **$50 million** revolving credit facility with Bank of America, with approximately **$5.4 million** drawn and **$9.2 million** utilized for letters of credit as of March 31, 2025[56](index=56&type=chunk)[61](index=61&type=chunk) - The company paid a quarterly dividend of **$0.06 per share**, totaling **$842 thousand** in Q1 2025[68](index=68&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 revenue decline due to lower system-wide sales, reduced operating expenses, decreased Adjusted EBITDA, and strong liquidity [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Q1 2025 total revenue decreased due to lower system-wide sales, while operating expenses fell, leading to reduced income from operations - Total revenue decreased **11.2%** year-over-year, driven by an **11.7%** (**$15.6 million**) decrease in system-wide sales, led by MRI, HQ Direct, and Snelling/HQ brands[117](index=117&type=chunk) Franchise Royalties by Brand (in thousands) | Brand | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | HireQuest Direct | $3,587 | $3,823 | | Snelling and HireQuest | $1,953 | $2,110 | | Northbound, MRI, and SearchPath | $1,158 | $1,649 | | **Total Franchise Royalties** | **$6,960** | **$7,831** | - Workers' compensation expense decreased significantly to **$28 thousand** in Q1 2025 from **$572 thousand** in Q1 2024[123](index=123&type=chunk) - The effective tax rate for continuing operations was **10.5%** in Q1 2025, compared to **16.7%** in Q1 2024, primarily due to the federal Work Opportunity Tax Credit (WOTC)[88](index=88&type=chunk)[132](index=132&type=chunk) [Use of Non-GAAP Financial Measure: Adjusted EBITDA](index=24&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measure%3A%20Adjusted%20EBITDA) Adjusted EBITDA, a non-GAAP measure, decreased to $2.8 million in Q1 2025, reflecting adjustments to net income for various items Adjusted EBITDA Reconciliation (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income | $1,363 | $1,619 | | Interest expense | $144 | $243 | | Provision for income taxes | $169 | $340 | | Depreciation and amortization | $734 | $698 | | EBITDA | $2,410 | $2,900 | | Non-cash compensation | $239 | $362 | | Acquisition related (gains) charges, net | $(103) | $11 | | **Adjusted EBITDA** | **$2,799** | **$3,358** | [Key Performance Indicator: System-Wide Sales](index=32&type=section&id=Key%20Performance%20Indicator%3A%20System-Wide%20Sales) System-wide sales decreased by 11.7% in Q1 2025, with significant declines in the Northbound, MRI, SearchPath, and HireQuest Health segments System-Wide Sales by Brand (in thousands) | Brand | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | HireQuest Direct | $51,572 | $54,333 | (5.1)% | | Snelling and HireQuest | $33,660 | $36,559 | (7.9)% | | Northbound, MRI, and SearchPath | $28,675 | $38,350 | (25.2)% | | HireQuest Health | $1,143 | $1,728 | (33.9)% | | **Total System-wide sales** | **$118,391** | **$134,035** | **(11.7)%** | [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with $27.3 million in working capital and $34.8 million available under its credit facility - At March 31, 2025, working capital (current assets minus current liabilities) was approximately **$27.3 million**[138](index=138&type=chunk) - Cash provided by continuing operations was **$1.9 million** in Q1 2025, compared to cash used of **$0.9 million** in Q1 2024[142](index=142&type=chunk) - As of March 31, 2025, availability under the Senior Credit Facility was approximately **$34.8 million**[149](index=149&type=chunk) [Number of Offices](index=33&type=section&id=Number%20of%20Offices) The total number of offices decreased by one in Q1 2025, with two new openings offset by three closures Office Count Reconciliation | Period | Count | | :--- | :--- | | Offices, December 31, 2024 | 425 | | Opened in 2025 | 2 | | Closed in 2025 | (3) | | **Offices, March 31, 2025** | **424** | [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, HireQuest is exempt from providing quantitative and qualitative market risk disclosures - As a "smaller reporting company" defined by Rule 12b-2 of the Exchange Act, HireQuest is not required to provide quantitative and qualitative disclosures about market risk[157](index=157&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective due to a material weakness in accounting resources, with remediation efforts underway - Management concluded that disclosure controls and procedures were not effective as of March 31, 2025, due to a continuing material weakness[158](index=158&type=chunk) - The material weakness stems from insufficient accounting resources to handle technical accounting issues and provide adequate review; remediation efforts are underway[159](index=159&type=chunk) - Despite the material weakness, management concluded that the financial statements are fairly presented in all material respects[160](index=160&type=chunk) [PART II. OTHER INFORMATION](index=35&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section addresses legal proceedings, risk factors, equity sales, and other required disclosures [Item 1. Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings but does not anticipate any material uninsured losses from these matters - The company does not expect current legal proceedings to have a material adverse effect on its business, financial condition, or results of operations[164](index=164&type=chunk) [Item 1A. Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred in the company's risk factors since the filing of its 2023 Annual Report on Form 10-K - No material changes have occurred in the company's risk factors since the filing of its 2023 Form 10-K[165](index=165&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=35&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None[166](index=166&type=chunk) [Item 5. Other Information](index=35&type=section&id=Item%205.%20Other%20Information) The company reported no other information for this item - None[167](index=167&type=chunk) [Item 6. Exhibits](index=35&type=section&id=Item%206.%20Exhibits) The report includes various exhibits, notably CEO and CFO certifications and Inline XBRL data files - Filed exhibits include CEO and CFO certifications (Exhibits **31.1**, **31.2**, **32.1**) and Inline XBRL documents (Exhibit **101** series)[168](index=168&type=chunk)

[Financial Highlights](index=1&type=section&id=First%20Quarter%202025%20Summary) HireQuest reported a decline in key financial metrics for Q1 2025 compared to the prior year, with system-wide sales, total revenue, and net income all decreasing. The company attributes this to macroeconomic headwinds affecting the staffing industry, but notes it maintained solid margins and profitability | Financial Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | System-wide Sales | $118.4 million | $134.0 million | -11.7% | | Total Revenue | $7.5 million | $8.4 million | -11.2% | | Net Income | $1.4 million | $1.6 million | -12.5% | | Diluted EPS | $0.10 | $0.12 | -16.7% | | Adjusted Net Income | $1.8 million | $2.0 million | -10.0% | | Adjusted EBITDA | $2.8 million | $3.4 million | -17.6% | - The company's first-quarter results reflect the broader staffing industry's challenges, which continue to be impacted by macroeconomic headwinds[5](index=5&type=chunk) [Management Commentary & Strategy](index=1&type=section&id=Management%20Commentary%20%26%20Strategy) The CEO highlighted the company's resilience due to its franchise model and expense management, despite industry-wide headwinds. Acquisitions remain a key growth strategy, with a strong M&A pipeline. A change in CFO was also announced, with David Hartley succeeding the retiring Steve Crane - Despite macroeconomic challenges, the company achieved **solid margins and profitability**, attributed to the strength of its franchise model and a focus on expense management[5](index=5&type=chunk) - Acquisitions are a key component of the long-term growth plan to expand the company's geographic footprint and market verticals. The M&A pipeline is reported to be strong[5](index=5&type=chunk) - David Hartley has been appointed as the new Chief Financial Officer, succeeding Steve Crane, who is retiring[6](index=6&type=chunk) [Detailed Financial Performance](index=1&type=section&id=First%20Quarter%202025%20Financial%20Results) In Q1 2025, total revenue decreased by 11.2% to $7.5 million, primarily due to a drop in franchise royalties. The company successfully reduced SG&A expenses by 6.5% and saw a significant decrease in net workers' compensation expense. Consequently, income from operations was $1.5 million, down from $2.1 million in the prior-year period | Revenue & Expenses (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Franchise Royalties | $7,000 | $7,800 | | Service Revenue | $512 | $588 | | **Total Revenue** | **$7,500** | **$8,400** | | SG&A Expenses | $5,300 | $5,600 | | Net Workers' Compensation Expense | $28 | $572 | | Depreciation and Amortization | $734 | $698 | | Profitability (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Income from Operations | $1,500 | $2,100 | | Net Income | $1,400 | $1,600 | [Balance Sheet and Capital Structure](index=1&type=section&id=Balance%20Sheet%20and%20Capital%20Structure) As of March 31, 2025, HireQuest maintained a stable balance sheet with total assets of $93.7 million and total liabilities of $28.2 million. The company had $2.1 million in cash and approximately $34.8 million available under its line of credit. A quarterly cash dividend of $0.06 per share was paid in March 2025, with the intention to continue this quarterly payment, subject to board approval | Balance Sheet Item (in millions) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash | $2.1 | $2.2 | | Total Assets | $93.7 | $94.0 | | Total Liabilities | $28.2 | $29.2 | - Working capital increased to **$27.4 million** as of March 31, 2025, from **$25.1 million** at the end of 2024[12](index=12&type=chunk) - The company has approximately **$34.8 million** available under its line of credit, assuming continued covenant compliance[12](index=12&type=chunk) - A quarterly cash dividend of **$0.06 per share** was paid on March 17, 2025. The company intends to continue this quarterly dividend, subject to board discretion[13](index=13&type=chunk) [Non-GAAP Financial Measures](index=3&type=section&id=Non-U.S.%20GAAP%20Financial%20Measures) The company reported non-GAAP adjusted EBITDA of $2.8 million and adjusted net income of $1.8 million for Q1 2025, both showing a decrease from the prior year. These figures adjust for items like amortization of acquired intangible assets, acquisition-related charges, and non-cash compensation to provide what management believes is a clearer view of core operational performance | Non-GAAP Metric (in millions) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Adjusted EBITDA | $2.8 | $3.4 | | Adjusted Net Income | $1.8 | $2.0 | - Management uses non-GAAP measures, which exclude certain items, to supplement U.S. GAAP results and provide a better understanding of the company's financial condition and performance[24](index=24&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) This section contains the detailed, unaudited consolidated financial statements for the period ended March 31, 2025, including the Balance Sheets, Statement of Income, and reconciliations of GAAP to non-GAAP measures such as Adjusted EBITDA and Adjusted Net Income [Consolidated Balance Sheets](index=4&type=section&id=HireQuest%2C%20Inc.%20Consolidated%20Balance%20Sheets) | Key Balance Sheet Items (in thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $50,640 | $49,240 | | Total assets | $93,737 | $94,013 | | Total current liabilities | $23,268 | $24,096 | | Total liabilities | $28,173 | $29,209 | | Total stockholders' equity | $65,564 | $64,804 | [Consolidated Statement of Income](index=5&type=section&id=HireQuest%2C%20Inc.%20Consolidated%20Statement%20of%20Income) | Income Statement (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total revenue | $7,472 | $8,419 | | Income from operations | $1,483 | $2,102 | | Net income | $1,363 | $1,619 | | Diluted earnings per share | $0.10 | $0.12 | [Reconciliation of Net Income to Adjusted EBITDA](index=6&type=section&id=HireQuest%2C%20Inc.%20Non-U.S.%20GAAP%20-%20Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDA) | Reconciliation to Adjusted EBITDA (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income | $1,363 | $1,619 | | Adjustments (Interest, Taxes, D&A, etc.) | $1,436 | $1,739 | | **Adjusted EBITDA** | **$2,799** | **$3,358** | [Reconciliation of Net Income to Adjusted Net Income](index=7&type=section&id=HireQuest%2C%20Inc.%20Non-U.S.%20GAAP%20-%20Reconciliation%20of%20Net%20Income%20to%20Adjusted%20Net%20Income) | Reconciliation to Adjusted Net Income (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income | $1,363 | $1,619 | | Adjustments (Amortization, acquisition charges, etc.) | $400 | $408 | | **Adjusted net income** | **$1,763** | **$2,027** | [Conference Call Information](index=2&type=section&id=Conference%20Call) HireQuest will host a conference call on May 8, 2025, at 4:30 p.m. Eastern Time to discuss the Q1 2025 financial results. Dial-in numbers and a webcast link are provided for participation, with a replay available until May 22, 2025 - The conference call to discuss financial results is scheduled for Thursday, May 8, 2025, at **4:30 p.m. Eastern Time**[15](index=15&type=chunk) - A live broadcast and replay of the call will be available via webcast[16](index=16&type=chunk) - A telephone replay of the conference call will be available through Thursday, May 22, 2025[17](index=17&type=chunk)[18](index=18&type=chunk)

HireQuest, Inc. (NASDAQ:HQI) Q4 2024 Results Conference Call March 27, 2025 4:30 PM ET Company Participants John Nesbett - IMS, Investor Relations Rick Hermanns - Chief Executive Officer Steve Crane - Chief Financial Officer Conference Call Participants Kevin Steinke - Barrington Research Keegan Cox - D.A. Davidson Operator Greetings. Welcome to the HireQuest Inc. Fourth Quarter and Year-End 2024 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will foll ...

HireQuest (HQI) Q4 2024 Earnings Call March 27, 2025 09:33 PM ET Company Participants John Nesbitt - Investor RelationsRick Hermanns - President and Chief Executive OfficerSteve Crane - CFOKevin Steinke - Managing DirectorKeegan Cox - Research Associate Operator Greetings. Welcome to the Hire Quest Inc. Fourth Quarter and Year End twenty twenty four Earnings Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. Please note this con ...

Financial Performance - The company's revenue for 2024 was $34.6 million, with system-wide sales reaching $563.6 million, primarily from franchisee-owned offices[27]. - Total revenue declined by 8.7% from $37.9 million in 2023 to $34.6 million in 2024, with income from operations dropping from $10.6 million to $4.4 million[173]. - Franchise royalties for the year ended December 31, 2024 were approximately $32.7 million, down 8.8% from $35.8 million in 2023, primarily due to a decline in total system-wide sales from $605.1 million in 2023 to $563.6 million in 2024[183]. - Service revenue for the year ended December 31, 2024 was approximately $1.9 million, a decrease from $2.1 million in 2023, with interest on overdue accounts decreasing from $850 thousand to $788 thousand[185]. - Net income for the year ended December 31, 2024 was $3.7 million, a decrease of 40.1% from $6.1 million in 2023[178]. - Adjusted EBITDA for the year ended December 31, 2024 was $16.1 million, representing 46.6% of total revenue, compared to $16.5 million or 43.5% in 2023[179]. - Operating expenses for the year ended December 31, 2024 were approximately $30.2 million, an increase of $3.0 million compared to $27.2 million in 2023, driven by a $6.0 million goodwill and intangible asset charge[186]. - The blended effective royalty rate for 2024 was 5.8%, slightly down from 5.9% in 2023, reflecting changes in franchisee performance[183]. - Income tax expense for 2024 was approximately $0.2 million, down from $1.3 million in 2023, with effective tax rates of 5.3% and 17.3% respectively[193]. - System-wide sales decreased by 6.9% to $563.6 million in 2024 from $605.1 million in 2023, primarily due to a decrease in demand in the staffing and recruiting industry[207]. Acquisitions and Expansion - The company completed several acquisitions in 2022, including Temporary Alternatives for $7.0 million, Dubin for $2.5 million, Northbound for $11.4 million, and MRINetwork for $13.3 million[18][19][20][21]. - In 2023, the company acquired TEC Staffing Services for approximately $9.8 million, expanding its presence in Arkansas[22]. - The company also completed the acquisition of Ready Temporary Services for $1.4 million in December 2024[23]. - The company plans to continue evaluating strategic acquisition opportunities to expand its franchisee base and diversify its national footprint[39]. - The company’s growth strategy includes new office development by franchisees, which may face challenges outside of its control[100]. Staffing Operations - Approximately 65,000 temporary employees were employed, and 173 independent contractors were contracted during 2024[27]. - The company operates approximately 425 franchisee-owned offices and one company-owned office across 44 states and 13 countries[27]. - The company focuses on local ownership and direct dispatch staffing solutions, which enhance customer satisfaction and operational efficiency[29]. - The company has established itself as a top permanent placement firm in the U.S. following the MRI acquisition, enhancing its service offerings[24]. - The staffing and recruiting industry in the U.S. generated record annual revenue of approximately $220 billion in 2023, with 85% from temporary and contract employee staffing services[30]. - Seasonal fluctuations affect demand for temporary staffing, with activity peaking in spring and summer[73]. - The company maintains a strong presence in the Southern United States, which mitigates seasonal fluctuations[73]. - The company is vulnerable to seasonal fluctuations, particularly lower demand in winter months, which can significantly impact royalty and service revenue[91]. - The company has experienced shortages of qualified candidates, impacting its ability to meet client needs[90]. Franchisee Relations - The company operates under 169 executed franchise agreements for temporary staffing, charging a royalty fee of 4.5% to 8% of gross temporary labor sales depending on sales volume[50]. - The company has a Franchise Expansion Incentive Program to assist franchisees with startup costs and encourage expansion into new markets[39]. - The Risk Management Incentive Program rewards franchisees for maintaining low workers' compensation loss ratios, promoting workplace safety[39]. - Approximately 15% of franchisees owned multiple offices, with the largest franchisee operating 12 offices[46]. - The company’s financial results are closely tied to the success of its franchisees, and their inability to operate profitably could adversely affect overall performance[112]. - The company has placed a reserve of approximately $773,000 on notes receivable from franchisees due to financial impacts from COVID-19[112]. - As of December 31, 2024, there were 35 "Worlds Franchisees" operating 69 of approximately 417 franchised offices, with significant ownership concentrated among a few individuals[119]. - Approximately one-third of franchisees own multiple offices, indicating potential risks if large ownership groups face financial difficulties[120]. - The company plans to continue opening new franchised offices in existing markets, but this may lead to sales cannibalization affecting existing offices[118]. Financial Position and Risks - The company ended 2024 with assets exceeding liabilities by over $64.8 million, maintaining a strong liquidity position with current assets of $49.2 million[171]. - The company had current assets exceeding current liabilities by approximately $25.1 million as of December 31, 2024, with $2.2 million in cash and $42.3 million in accounts receivable[197]. - The company expects that its current cash balance and future cash generated from operations will be sufficient to meet working capital needs for the next 12 months[199]. - The company recorded a loss on debt extinguishment of approximately $310,000 in 2023 as part of refinancing activities[203]. - The average borrowing rate for the year ended December 31, 2024, was 6.5%, with approximately $33.6 million available under the Senior Credit Facility[205]. - The company has a significant workers' compensation reserve that can be volatile, affecting reported earnings and stock price[95]. - The company faces risks related to franchisees, including financial distress that could lead to reduced royalty payments and operational challenges[112]. - The company relies heavily on workers' compensation insurance, and any unexpected changes in claim trends could negatively affect its financial condition[92]. - A loss of workers' compensation insurance coverage would hinder the company's ability to operate in most markets, potentially increasing costs[93]. - Economic and political conditions, including tariffs and international conflicts, may adversely affect the company's operations and financial results[86][87]. Cybersecurity and Technology - The company has developed proprietary software for operations, including payroll and invoicing, which enhances customer interaction[75]. - The company has developed proprietary software to manage operations, which is crucial for tracking financial performance and customer trends[114]. - The company has invested in off-site backup systems to protect its electronic information systems[75]. - The company has experienced cyber-attacks and unauthorized access attempts, which could materially harm its business if not adequately protected[125]. - The company has not experienced material cybersecurity incidents in the past, but maintains policies and procedures to manage cybersecurity risks[151]. Market Trends - The staffing industry is highly fragmented with no single company dominating, and competition increases as the economy grows[69]. - The company aims to increase brand awareness to drive repeat customers and expand service usage across multiple markets[39]. - The company has a strong concentration of offices in established and emerging regions, enhancing brand recognition and market trend awareness[42].

HireQuest Reports Financial Results for Fourth Quarter and Full Year 2024 GOOSE CREEK, South Carolina – March 27, 2025 – HireQuest, Inc. (Nasdaq: HQI), a national franchisor of direct dispatch, executive search, and commercial staffing services, today reported financial results for the fourth quarter and year ended December 31, 2024. Fourth Quarter 2024 Summary Full Year 2024 Summary System-wide sales for the fourth quarter of 2024 decreased 6.0% to $134.8 million compared to $143.5 million for the same per ...

Company Overview - HireQuest (NASDAQ: HQI) has experienced a rangebound stock performance over the past year, facing multiple quarters of revenue declines since 2023 [1] - The company operates in a tight US labor market, which has impacted its financial performance [1] Financial Performance - The company has reported consecutive quarters of revenue declines, indicating potential challenges in maintaining growth [1] Market Context - The current labor market conditions in the US are characterized as tight, which may affect the company's operational capabilities and revenue generation [1]

Group 1 - HireQuest (NASDAQ:HQI) is a fast-growing national staffing franchisor with a proven, profitable asset-light model [2] - The company has impressive historical operating margins and strong free cash flow [2] - The CEO's net worth is invested in over 22% of HQI's outstanding shares [2]

HireQuest, Inc. (HQI) came out with quarterly earnings of $0.20 per share, beating the Zacks Consensus Estimate of $0.16 per share. This compares to earnings of $0.12 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 25%. A quarter ago, it was expected that this company would post earnings of $0.12 per share when it actually produced earnings of $0.15, delivering a surprise of 25%.Over the last four quarters, the company has sur ...