Financial Highlights 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 headwinds5 Management Commentary & Strategy 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 management5 - 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 strong5 - David Hartley has been appointed as the new Chief Financial Officer, succeeding Steve Crane, who is retiring6 Detailed Financial Performance 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 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 202412 - The company has approximately $34.8 million available under its line of credit, assuming continued covenant compliance12 - 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 discretion13 Non-GAAP Financial Measures 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 performance24 Financial Statements 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 | 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 | 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 | 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 | 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 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 Time15 - A live broadcast and replay of the call will be available via webcast16 - A telephone replay of the conference call will be available through Thursday, May 22, 20251718
HireQuest(HQI) - 2025 Q1 - Quarterly Results