Q3 2021 EPS of $0.23 per Diluted Share, Net
Income of $3.2 million, and Adjusted EBITDA of $5.3 million
HireQuest, Inc. (Nasdaq: HQI), a national franchisor of
on-demand, temporary, and commercial staffing services, today
reported financial results for the third quarter ended September
30, 2021.
Third Quarter 2021 Summary
- Franchise royalties of $6.5 million compared to $3.2 million in
the prior year period, an increase of 103.2%. Organic royalty
revenue increased 52% over the prior year period and the branches
acquired from Link and Snelling in the first quarter of 2021
comprised approximately $1.6 million of the revenue.
- Services revenue, including interest paid on aging accounts
receivable, of $341,000 compared to $164,000 in the prior year
period, an increase of 108.0%.
- Total revenue of $6.9 million compared to $3.4 million in the
prior year period, an increase of 103.4%.
- Net Income, inclusive of miscellaneous income, was $3.2
million, or $0.23 per diluted share, compared to net income of $2.0
million, or $0.15 per share last year.
- Adjusted EBITDA of $5.3 million compared to $2.9 million in the
prior year period.
Subsequent to Quarter End
- HireQuest acquired Recruit Media, Inc., an HR tech start-up
with a next-gen SaaS recruitment platform.
- HireQuest announced it has entered into a definitive agreement
to acquire the Dental Power Staffing division of Dental Power, a
leading provider of temporary, long-term contract, and direct-hire
staffing services to private sector dental practices across the
United States.
- The Company’s Board of Directors declared a quarterly cash
dividend of $0.06 per share of common stock to be paid on December
15, 2021 to shareholders of record as of December 1, 2021.
System-wide sales (a key performance indicator) for the third
quarter of 2021 were $99.6 million compared to $55.6 million for
the same period in 2020. The growth was due to a 22% increase in
sales from existing franchisees as well as new sales from the
acquired Snelling and Link networks.
“This past quarter was our strongest since the beginning of the
pandemic,” commented Rick Hermanns, HireQuest’s President and Chief
Executive Officer. “Organic growth from our legacy franchisees as
well as the addition of the Snelling and Link locations acquired
earlier in the year combined to drive system-wide sales to just shy
of $100 million for the quarter. We were happy to see our organic
weekly system-wide sales rebound to pre-pandemic 2019 levels by the
end of the quarter compared to trailing 10% to 15% in June.”
“The acquisitions of Snelling and Link earlier this year have
played an important part in growing overall profitability by adding
scale in tandem with rebounding organic performance,” added Mr.
Hermanns. “Furthermore, as Link and Snelling demonstrate we are
able to quickly integrate acquisitions with minimal increases to
corporate overhead. The operating leverage inherent in our
asset-light model is just beginning to become evident. We continue
to see opportunities to expand our offerings into other verticals,
growing the total addressable market serviced by our franchise
offerings. Our pending acquisition of Dental Power is just one
example and will provide us with a strong base to build an offering
in the dental staffing industry. We are excited about the
possibilities for organic and acquisitive growth in this vertical
and others.”
Third Quarter 2021 Financial Results
The company’s total revenue is calculated by aggregating its
revenue derived from franchise royalties and service revenue.
Franchise royalties are the royalties earned from franchisees
primarily on the basis of their sales to their customers. Service
revenue consists of interest charged to franchisees on overdue
accounts and other fees for optional services we provide our
franchisees.
Franchise royalties in the third quarter of 2021 were $6.5
million compared to $3.2 million in the year-ago quarter.
Organically, excluding the contribution from recently acquired
Snelling and Link branches, franchise royalties increased 52%.
Service revenue was $341,000 compared to $164,000 in the prior-year
quarter, an increase of 108.0%. Total revenue in the third quarter
of 2021 was $6.9 million compared to $3.4 million in the year-ago
quarter, an increase of 103.4%.
Selling, general and administrative (“SG&A”) expenses in the
third quarter of 2021 were $3.0 million compared to $1.4 million
for the third quarter last year. Some items that contributed to the
year-over-year increase included an additional $460 thousand in
non-cash compensation as well as a non-recurring $307 thousand
charge to notes receivable related to the sale of Command Center
locations in California back in 2019.
Net Income in the third quarter of 2021 was $3.2 million, or
$0.23 per diluted share, compared to net income of $2.0 million, or
$0.15 per diluted share, in the third quarter last year.
Adjusted EBITDA in the third quarter of 2021 was $5.3 million
compared to $2.9 million in the third quarter last year.
Balance Sheet and Capital Structure
Cash was $4.8 million as of September 30, 2021, compared to
$13.7 million as of December 31, 2020. The decrease reflects the
purchase price for recent acquisitions.
Total assets were $74.8 million as of September 30, 2021. Total
liabilities were $29.6 million.
On September 15, 2021, the company paid a quarterly cash
dividend of $0.06 per share of common stock to shareholders of
record as of September 1, 2021. The company intends to pay a $0.06
cash dividend on a quarterly basis, based on its business results
and financial position.
Conference Call
HireQuest will hold a conference call to discuss its financial
results.
Date:
Thursday, November 11, 2021
Time:
4:30 p.m. Eastern time
Toll-free dial-in number:
877-545-0523
International dial-in number:
973-528-0016
Please call the conference telephone number 5-10 minutes prior
to the start time. An operator will register your name and
organization.
The conference call will be broadcast live and available for
replay at https://www.webcaster4.com/Webcast/Page/2359/43398 and
via the investor relations section of HireQuest’s website at
www.hirequest.com.
A replay of the conference call will be available through
November 25, 2021.
Toll Free: 877-481-4010
International: 919-882-2331
Replay Passcode: 43398
About HireQuest
HireQuest, Inc. is a nationwide franchisor that provides
on-demand labor and commercial staffing solutions in the light
industrial, blue-collar, and commercial segments of the staffing
industry for HireQuest Direct, HireQuest, Snelling, and Link
franchised offices across the United States. Through its national
network of over 210 franchisee-owned offices in more than 35 states
and the District of Columbia, HireQuest provides employment for
approximately 60,000 individuals annually that work for thousands
of customers in numerous industries including construction, light
industrial, manufacturing, hospitality, clerical, medical, travel,
and event services. For more information, visit
www.hirequest.com.
Important Cautions Regarding Forward-Looking
Statements
This news release includes, and the company’s officers and other
representatives may sometimes make or provide certain estimates and
other forward-looking statements within the meaning of the safe
harbor provisions of the U.S. Private Securities Litigation Reform
Act of 1995, Section 27A of the Securities Act, and Section 21E of
the Exchange Act, including, among others, statements with respect
to future economic conditions, future revenue or sales and the
growth thereof; operating results; anticipated benefits of the
acquisition of Snelling and/or Link, or the status of integration
of those entities. Forward-looking statements can be identified by
words such as: “anticipate,” “intend,” “plan,” “goal,” “seek,”
“believe,” “project,” “estimate,” “expect,” “strategy,” “future,”
“likely,” “may,” “should,” “will,” and similar references to future
periods.
While the company believes these statements are accurate,
forward-looking statements are not historical facts and are
inherently uncertain. They are based only on the company’s current
beliefs, expectations, and assumptions regarding the future of its
business, future plans and strategies, projections, anticipated
events and trends, the economy, and other future conditions. The
company cannot assure you that these expectations will occur, and
its actual results may be significantly different. Therefore, you
should not place undue reliance on these forward-looking
statements. Important factors that may cause actual results to
differ materially from those contemplated in any forward-looking
statements made by the company include the following: the level of
demand and financial performance of the temporary staffing
industry; the financial performance of the company’s franchisees;
changes in customer demand; the effects of any global pandemic
including the impact of COVID-19; the relative success or failure
of acquisitions and new franchised offerings; the extent to which
the company is successful in gaining new long-term relationships
with customers or retaining existing ones, and the level of service
failures that could lead customers to use competitors’ services;
significant investigative or legal proceedings including, without
limitation, those brought about by the existing regulatory
environment or changes in the regulations governing the temporary
staffing industry and those arising from the action or inaction of
the company’s franchisees and temporary employees; strategic
actions, including acquisitions and dispositions and the company’s
success in integrating acquired businesses including, without
limitation, successful integration following the acquisitions of
Snelling, Link, and Dental Power; disruptions to the company’s
technology network including computer systems and software; natural
events such as severe weather, fires, floods, and earthquakes, or
man-made or other disruptions of the company’s operating systems;
and the factors discussed in the “Risk Factors” section and
elsewhere in the company’s most recent Annual Report on Form
10-K.
Any forward-looking statement made by the company or its
management in this news release is based only on information
currently available to the company and speaks only as of the date
on which it is made. The company and its management disclaim any
obligation to update or revise any forward-looking statement,
whether written or oral, that may be made from time to time, based
on the occurrence of future events, the receipt of new information,
or otherwise, except as required by law.
HireQuest, Inc. Consolidated Statements of Operations
(unaudited) Three months ended September
30, 2021 September 30, 2020 Franchise royalties
$
6,540,125
$
3,218,606
Service revenue
341,258
164,074
Total revenue
6,881,383
3,382,680
Selling, general and administrative expenses
3,044,358
1,357,725
Depreciation and amortization
366,027
32,438
Income from operations
3,470,998
1,992,517
Other miscellaneous income
89,774
392,709
Interest and other financing expense
(41,943
)
(10,035
)
Net income before income taxes
3,518,829
2,375,191
Provision (benefit) for income taxes
324,638
404,058
Net income
$
3,194,191
$
1,971,133
Earnings per share Basic
$
0.24
$
0.15
Diluted
$
0.23
$
0.15
Weighted average shares outstanding Basic
13,482,303
13,573,086
Diluted
13,621,938
13,574,863
HireQuest, Inc. Consolidated Balance Sheets
September 30, 2021 December 31, 2020 ASSETS
(unaudited)
Current assets Cash
$
4,789,400
$
13,667,434
Accounts receivable, net of allowance for doubtful accounts
38,433,759
21,344,499
Notes receivable
1,380,704
2,178,299
Prepaid expenses, deposits, and other assets
947,845
344,091
Prepaid workers' compensation
1,161,025
1,434,583
Total current assets
46,712,733
38,968,906
Property and equipment, net
3,848,260
3,193,379
Workers compensation claim payment deposit
947,650
623,452
Deferred tax asset
-
79,379
Franchise agreements, net
19,179,530
-
Other intangible assets, net
780,524
342,697
Other assets
357,944
-
Notes receivable, net of current portion and reserve
2,931,371
5,887,229
Total assets
$
74,758,012
$
49,095,042
LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities Accounts payable
$
537,193
$
457,490
Term loan payable
210,233
-
Other current liabilities
4,052,078
1,322,764
Accrued benefits and payroll taxes
2,078,659
743,431
Due to affiliates
95,959
67,398
Due to franchisees
7,305,952
3,228,777
Risk management incentive program liability
1,164,598
858,482
Workers' compensation claims liability
6,359,143
2,777,734
Total current liabilities
21,803,815
9,456,076
Workers' compensation claims liability, net of current portion
2,400,955
1,806,334
Deferred tax liability
511,238
-
Term loan payable, net of current portion
2,908,228
-
Franchisee deposits
2,012,026
1,468,359
Total liabilities
29,636,262
12,730,769
Commitments and contingencies (Note 8)
Stockholders' equity
Preferred stock - $0.001 par value, 1,000,000 shares authorized;
none issued
-
-
Common stock - $0.001 par value, 30,000,000 shares authorized;
13,726,884 and 13,628,675 shares issued, respectively
13,727
13,629
Additional paid-in capital
30,231,201
28,811,389
Treasury stock, at cost - 33,092 shares
(146,465
)
(146,465
)
Retained earnings
15,023,287
7,685,720
Total stockholders' equity
45,121,750
36,364,273
Total liabilities and stockholders' equity
$
74,758,012
$
49,095,042
HireQuest, Inc. Reconciliation of Net Income to Adjusted
EBITDA (unaudited) Three months ended
September 30, 2021 September 30, 2020 Net income
$
3,194,191
$
1,971,133
Interest expense
41,943
10,035
Provision for income taxes
324,638
404,058
Depreciation and amortization
366,027
32,438
Non-cash compensation
851,049
391,435
WOTC related costs
174,648
113,332
Non-recurring acquisition related charges, net
34,133
-
Non-recurring charge to notes receivable
307,440
-
Adjusted EBITDA
$
5,294,069
$
2,922,431
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211111005807/en/
Company Contact: HireQuest, Inc. Cory Smith, CFO (800)
835-6755 Email: cssmith@hirequest.com
Investor Relations Contact: Hayden IR Brett Maas (646)
536-7331 Email: brett@haydenir.com
Grafico Azioni HireQuest (NASDAQ:HQI)
Storico
Da Mag 2024 a Giu 2024
Grafico Azioni HireQuest (NASDAQ:HQI)
Storico
Da Giu 2023 a Giu 2024