Financial Data and Key Metrics Changes - The company reported a net income of $2.3 million, or $0.16 per share, compared to a net loss of $2.2 million, or a loss of $0.16 per share in the same quarter last year [4][11] - Total revenue decreased by 9.8% to $8.5 million from $9.4 million in the prior year [9] - Adjusted net income increased to $3.4 million, or $0.24 per diluted share, compared to $2.8 million, or $0.20 per diluted share last year [12] - Adjusted EBITDA was $4.7 million, down from $4.9 million last year, but the adjusted EBITDA margin rose to 55% from 52% [12] Business Line Data and Key Metrics Changes - Franchise royalties were $8.1 million compared to $9 million for the same quarter last year, while service revenue was $387,000 compared to $428,000 last year [9] - System-wide sales in the third quarter were $133.6 million, down from $148.6 million last year, but showed a sequential increase of 6.1% over Q2 [10] - The Snelling division performed well, indicating a slight increase in demand for longer-term staffing in light industrial and administrative fields [6] Market Data and Key Metrics Changes - The overall staffing market has shown mixed signals throughout 2025, influenced by macroeconomic factors such as tariffs and immigration policies [5] - Demand for temporary and day labor staffing is outperforming permanent placement and executive search services [5] Company Strategy and Development Direction - M&A remains a key part of the company's growth strategy, with several opportunities being explored that could be immediately accretive [8] - The company is focused on maintaining profitability and flexibility in a challenging market environment, which has been demonstrated over the past 11 quarters [33] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the stabilization of the day labor business, noting that while there are still challenges, there are signs of improvement [19][20] - The company is skeptical about the impact of immigration enforcement on demand, despite some business wins attributed to it [27][29] Other Important Information - The company has maintained a regular quarterly dividend since Q3 2020, with the most recent dividend being $0.06 per common share [15] - Total assets as of September 30, 2025, were $94.9 million, with working capital increasing to $31.5 million [13][14] Q&A Session Summary Question: Improvement in day labor business - Management indicated that the day labor market is stabilizing, with some regions showing reasonable demand, although overall performance is still below desired levels [19][20] Question: Competitive wins for Snelling franchisees - The large wins for Snelling franchisees were attributed to exceptional performance rather than overall market improvement, with a stable environment noted [21][22] Question: Non-renewals of MRI franchisee agreements - Management confirmed that there were significant non-renewals in previous quarters, but active MRI franchisees showed signs of stabilization by the end of the quarter [23][24] Question: M&A opportunities in the current market - The pipeline for M&A opportunities remains stable, with expectations for increased activity in the coming months as companies prepare for year-end results [25][26] Question: Impact of tighter immigration enforcement - Management acknowledged some business wins due to immigration enforcement but expressed skepticism about the overall demand increase, noting that the effects may take time to materialize [27][29]

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 [12] - Net income after tax was $1.4 million or $0.10 per diluted share, compared to $1.6 million or $0.12 per diluted share in Q1 2024 [14] - Adjusted EBITDA was $2.8 million, down from $3.4 million in the prior year, with an adjusted EBITDA margin of 37% compared to 40% in Q1 2024 [14] Business Line Data and Key Metrics Changes - Franchise royalties for Q1 2025 were $7 million, down from $7.8 million in the same quarter last year [12] - Service revenue was $512,000 for Q1 2025, compared to $588,000 in the year-ago period [12] Market Data and Key Metrics Changes - System-wide sales for Q1 2025 were $118.4 million, down from $134 million in Q1 2024 [13] - Current liabilities were 46% of current assets as of March 31, 2025, compared to 49% at the end of 2024 [16] Company Strategy and Development Direction - The company is focused on expense management and cost reduction initiatives, with consistent reductions in SG&A expenses year over year [6][7] - 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][10] - The company is positioned to benefit from increased demand due to stricter immigration laws, which may lead to new business opportunities [8][24] Management's Comments on Operating Environment and Future Outlook - The staffing industry is facing macroeconomic headwinds, causing employers to slow or suspend hiring decisions [6] - Despite the challenging environment, the company continues to achieve solid margins and profitability [6] - Management remains optimistic about the future, citing the potential for acquisitions and the strength of the franchise model to maintain profitability [36] Other Important Information - 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 [16] - A planned transition in the CFO role will occur with David Hartley succeeding Steve Crane effective May 31, 2025 [10] Q&A Session Summary Question: Recent trends in business and impact of tariffs - Management noted no dramatic shift in business trends since the start of Q2, with ongoing macroeconomic challenges still affecting hiring [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 compliance needs [23][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 effectively [25][27] Question: M&A pipeline and near-term opportunities - Management expressed confidence in the M&A pipeline, noting that ongoing weak demand is leading to more realistic pricing from potential acquisition targets [28][29] Question: Transition of CFO role and corporate development - Management indicated plans to add a deal sourcer to support corporate development, but not at the VP level [30][32]