HireQuest(US:HQI)2025-11-06 22:15Revenue Performance - For the three months ended September 30, 2025, total revenue was $8,497,000, a decrease of 9.7% from $9,416,000 for the same period in 2024[107]. - Total revenue for the three months ended September 30, 2025 was approximately $8.5 million, a decrease of approximately 9.8% from $9.4 million for the same period in 2024[113]. - Total revenue for the nine months ended September 30, 2025 was approximately $23.6 million, a decrease of approximately 11.0% from $26.5 million for the same period in 2024[132]. Franchise Royalties - Franchise royalties accounted for 95.4% of total revenue in Q3 2025, totaling $8,110,000, compared to 95.5% and $8,988,000 in Q3 2024[107]. - Franchise royalties for the three months ended September 30, 2025 were approximately $8.1 million, a decrease of approximately 9.8% from $9.0 million for the same period in 2024[114]. - Franchise royalties for the nine months ended September 30, 2025 were approximately $22.4 million, a decrease of approximately 10.7% from $25.0 million for the same period in 2024[133]. Net Income and EBITDA - Net income for the three months ended September 30, 2025, was $2,304,000, compared to a net loss of $2,207,000 in the same period of 2024[107]. - Adjusted EBITDA for Q3 2025 was $4,651,000, representing 54.7% of total revenue, compared to $4,926,000 or 52.3% in Q3 2024[107]. - Adjusted EBITDA for the three months ended September 30, 2025 was $4.7 million, compared to $4.9 million for the same period in 2024[111]. Operating Expenses - Selling, general, and administrative expenses for Q3 2025 were $5,070,000, representing 59.7% of total revenue, compared to 57.1% in Q3 2024[107]. - Total operating expenses for the three months ended September 30, 2025 were approximately $6.1 million, a significant decrease from $12.1 million for the same period in 2024[118]. - Total operating expenses for the nine months ended September 30, 2025 were approximately $18.6 million, a decrease of $5.8 million from $24.4 million in the same period of 2024[136]. Impairment Charges - The company reported a goodwill and intangible asset impairment charge of $230,000 for Q3 2025, significantly lower than $6,035,000 in Q3 2024[107]. - The company recorded a goodwill and intangible asset impairment charge of $330 thousand for the three months ended September 30, 2025, compared to $6.0 million for the same period in 2024[111]. Employment and Operations - The company employed approximately 65,000 temporary employees annually across various industries, including construction, healthcare, and logistics[103]. - The company operates 399 franchisee-owned offices and 1 company-owned office in 43 states and 13 countries as of September 30, 2025[103]. - The total number of offices decreased from 425 at the end of 2024 to 400 by September 30, 2025, reflecting a net closure of 25 offices[171]. Strategic Initiatives - Management is pursuing both organic growth and acquisition strategies, focusing on expanding existing client business and identifying strategic acquisitions[104]. - The company anticipates future growth opportunities through national and global account opportunities for franchisees and new franchise offerings[104]. Financial Metrics - Interest and other financing expense decreased from $268 thousand for the three months ended September 30, 2024 to $63 thousand for the same period in 2025[126]. - Cash provided by continuing operations was approximately $5.5 million for the nine months ended September 30, 2025, compared to $3.5 million in the same period of 2024[155]. - Income tax expense was approximately $362 thousand for the nine months ended September 30, 2025, with an effective tax rate of 6.9%[145]. Market Conditions - The ongoing geopolitical conflicts and economic sanctions have led to rising energy prices and inflationary pressures, potentially impacting demand for labor services[165]. - The company does not expect the recent changes in federal tax law to have a material impact on its financial position or results of operations[163]. - The company is currently evaluating the potential effects of U.S. government policy shifts on its operations and market conditions[164].