8-K
HireQuest, Inc. (HQI)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 27, 2025
HIREQUEST, INC.
(Exact name of registrant as specified in its Charter)
| Delaware | 000-53088 | 91-2079472 |
|---|---|---|
| (State or Other Jurisdiction of<br><br> <br>Incorporation or Organization) | (Commission<br><br> <br>File Number) | (I.R.S. Employer<br><br> <br>Identification No.) |
| 111 Springhall Drive, Goose Creek, SC | 29445 | |
| --- | --- | |
| (Address of Principal Executive Offices) | (Zip Code) |
(843) 723-7400
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered |
|---|---|---|
| Common Stock, $0.001 par value | HQI | The NASDAQ Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On March 27, 2025, HireQuest, Inc. (the "Company") issued a press release (the "Press Release") reporting its financial results for the quarter and year ended December 31, 2024, a copy of which is attached hereto as Exhibit 99.1.
The information included in this Current Report on Form 8-K (including Exhibit 99.1 hereto) is furnished pursuant to Item 2.02 and shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that Section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"). In addition, the information included in this Current Report on Form 8-K (including Exhibit 99.1 hereto) shall not be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference into such filing.
Item 9.01 Financial Statements and Exhibits.
Exhibit Index
| Exhibit | Description |
|---|---|
| 99.1 | Press Release dated March 27, 2025 (furnished only). |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, hereunto duly authorized.
| HIREQUEST, INC. | ||
|---|---|---|
| (Registrant) | ||
| Date: March 27, 2025 | /s/ John McAnnar | |
| John McAnnar | ||
| Chief Legal Officer, Vice President, and Corporate Secretary |
ex_795476.htm
Exhibit 99.1
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
| ● | Franchise royalties decreased 14.0% to $7.6 million compared to $8.9 million in the prior year period. |
|---|---|
| ● | Total revenue decreased 17.2% to $8.1 million compared to $9.8 million in the prior year period. |
| --- | --- |
| ● | Selling, general and administrative (“SG&A”) expenses were $5.1 million, a decrease of 22.7% compared to $6.6 million in the prior year period. |
| --- | --- |
| ● | Income from operations was $2.3 million, compared to income from operations of $2.4 million in the fourth quarter of 2023. |
| --- | --- |
| ● | Net income was $2.2 million, or $0.16 per diluted share compared to net income of $15,000, or $0.00 per diluted share in the prior year period. Adjusted net income for the quarter was $2.6 million, or $0.19 per diluted share compared to adjusted net income of $2.5 million, or $0.18 per diluted share in the fourth quarter of 2023. |
| --- | --- |
| ● | Adjusted EBITDA was $3.8 million compared to $4.3 million in the prior year period. |
| --- | --- |
Full Year 2024 Summary
| ● | Franchise royalties decreased 8.8% to $32.7 million compared to $35.8 million in the full year 2023. |
|---|---|
| ● | Total revenue decreased 8.7% to $34.6 million compared to $37.9 million in the prior year period. |
| --- | --- |
| ● | SG&A expenses decreased 12.4% to $21.4 million compared to $24.4 million in the prior year period. |
| --- | --- |
| ● | Income from operations decreased to $4.4 million compared to $10.6 million in the prior year period. Income from operations for the full year of 2024 included a non-cash impairment charge of $6.0 million in the third quarter. |
| --- | --- |
| ● | Net income was $3.7 million, or $0.26 per diluted share, compared to net income of $6.1 million, or $0.45 per diluted share in the prior year period. Adjusted net income was $9.9 million, or $0.71 per diluted share compared to adjusted net income of $9.9 million, or $0.72 per diluted share in the prior year period. |
| --- | --- |
| ● | Adjusted EBITDA was $16.1 million compared to $16.5 million in the prior year period. |
| --- | --- |
System-wide sales for the fourth quarter of 2024 decreased 6.0% to $134.8 million compared to $143.5 million for the same period in 2023. System-wide sales for the full year ended December 31, 2024, decreased 6.9% to $563.6 million compared to $605.1 million in the prior year period.
Rick Hermanns, HireQuest’s President and Chief Executive Officer, commented, “Our fourth quarter results are reflective of the challenging environment that impacted the staffing industry throughout 2024. That said, we achieved profitability in the fourth quarter and full fiscal year of 2024, demonstrating the underlying strength of our franchise model. Additionally, we continued to drive our expense reduction initiatives resulting in a 22.7% decrease in SG&A expenses in the fourth quarter and a 12.4% decrease in the full year 2024.
“Cost reduction and our M&A strategy were key priorities in 2024. Workers’ compensation expense, which had a substantial impact on our business during fiscal 2023, has come down significantly, and we believe it will continue to decline further in 2025. Moreover, we continue to closely monitor the market for acquisition opportunities with the potential to be accretive to our existing business.
“We made encouraging progress in 2024, but the economic environment remains unpredictable. As we begin to move through 2025, we are focused on leveraging our flexible staffing model, client relationships and enhanced balance sheet to position our business to meet strengthened demand as the economy improves,” Mr. Hermann’s concluded.
Fourth Quarter 2024 Financial Results
Franchise royalties in the fourth quarter of 2024 were $7.6 million compared to $8.9 million in the prior-year period. Service revenue was $439,000 compared to $871,000 in the prior-year period. Service revenue for the fourth quarter 2023 included $515,000 of pass-through revenue related to the MRINetwork advertising fund, which was for the full year, while fourth quarter 2024 only included advertising fund revenue for the quarter. Total revenue in the fourth quarter of 2024 was $8.1 million compared to $9.8 million in the year-ago quarter, a decrease of 17.2%.
SG&A expenses in the fourth quarter of 2024 were $5.1 million compared to $6.6 million in the fourth quarter of 2023, a decrease of 22.7%. SG&A expense for the fourth quarter of 2023 included $515,000 of expense related to the MRINetwork advertising fund, which was for the full year, while fourth quarter 2024 only included advertising fund revenue for the quarter. Net workers’ compensation expense for the quarter decreased to $335,000, compared to $1.3 million in the prior year period.
Depreciation and amortization in the fourth quarter of 2024 was approximately $697,000, compared to $698,000 in the fourth quarter of 2023.
Interest and other financing expense in the fourth quarter of 2024 was approximately $160,000 compared to $230,000 for the fourth quarter of 2023. Interest and other financing expense will fluctuate as the Company utilizes the line of credit for acquisitions or other short-term liquidity needs.
Net income in the fourth quarter of 2024 was $2.2 million, or $0.16 per diluted share, compared to net income of $15,000, or $0.00 per diluted share, in the fourth quarter last year. Adjusted net income for the quarter was $2.6 million, or $0.19 per diluted share compared to adjusted net income of $2.5 million, or $0.18 per diluted share in the fourth quarter last year.
Adjusted EBITDA for the fourth quarter of 2024 was $3.8 million compared to $4.3 million in the fourth quarter of 2023.
Full Year 2024 Financial Results
Franchise royalties were $32.7 million compared to $35.8 million for the same period in 2023. Service revenue was $1.9 million, compared to $2.1 million in the prior year period. Total revenue was $34.6 million compared to $37.9 million in 2023.
SG&A expenses in 2024 were $21.4 million compared to $24.4 million in 2023. Net workers’ compensation expense for the year decreased to $2.0 million, compared to $3.7 million in 2023.
Interest and other financing expense was approximately $923,000 compared to $1.4 million in 2023. Included in full year interest and other financing expense are fees and expenses related to switching our credit facility to a new financial institution. Interest and other financing expense will fluctuate as the Company utilizes the line of credit for acquisitions or other short-term liquidity needs.
Net income in 2024 was $3.7 million, or $0.26 per diluted share, compared to net income of $6.1 million, or $0.45 per diluted share, in the same year-ago period. Included in the net income in 2024 was a non-cash impairment charge of $6.0 million recognized in the third quarter related to industry and market conditions affecting the overall financial performance of MRINetwork. Adjusted net income for the full year was $9.9 million, or $0.71 per diluted share compared to adjusted net income of $9.9 million, or $0.72 per diluted share in the same prior-year period.
Adjusted EBITDA for the full year was $16.1 million compared to $16.5 million in 2023.
Balance Sheet and Capital Structure
Cash was $2.2 million as of December 31, 2024, compared to $1.3 million as of December 31, 2023. Total assets were $94.0 million as of December 31, 2024, compared to $103.8 million as of December 31, 2023. Total liabilities were $29.2 million as of December 31, 2024, compared to $41.1 million as of December 31, 2023.
Working capital as of December 31, 2024, was $25.1 million compared to $15.7 million as of December 31, 2023.
As of December 31, 2024, assuming continued covenant compliance, availability under the line of credit was approximately $33.4 million based on eligible collateral, less letter of credit reserves, bank product reserves, and current advances.
On March 17, 2025, the Company paid a quarterly cash dividend of $0.06 per share of common stock to shareholders of record as of March 3, 2025. The Company intends to pay a $0.06 cash dividend on a quarterly basis, but the declaration of any dividend and the exact amount each quarter will be based on its business results and financial position and is subject to board of director discretion.
Conference Call
HireQuest will hold a conference call to discuss its financial results.
| Date: | Thursday, March 27, 2025 |
|---|---|
| Time: | 4:30 p.m. Eastern Time |
| Toll-free dial-in number: | 888-506-0062 |
| International dial-in number: | 973-528-0011 |
| Entry code: | 760591 |
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/2359/52155 and via the investor relations section of HireQuest’s website at https://hirequest.com/.
A replay of the conference call will be available through Thursday, April 10, 2025.
| Toll-free replay number: | 877-481-4010 |
|---|---|
| International replay number: | 919-882-2331 |
| Replay passcode: | 52155 |
About HireQuest
HireQuest is a franchisor of staffing solutions with a presence across the U.S. and international markets. Through its primary divisions—HireQuest Direct, HireQuest Health, MRINetwork, Snelling, and TradeCorp - the company provides temporary, direct-hire, and contract staffing solutions across industries, including construction, light industrial, healthcare, finance, manufacturing, cybersecurity, and engineering. From on-demand staffing to executive search, HireQuest’s divisions operate as one team for our customers -delivering workforce solutions that drive growth and change lives. 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 acquisitions, or the status of integration of those entities; the declaration, or not, of future dividends; and other similar statements. 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; economic uncertainty caused by macroeconomic trends including potential inflation or a recessionary environment; uncertainty in the supply chain or economy caused by Russia’s invasion of Ukraine, the war between Israel and Palestine, or other global conflict; the relative success or failure of acquisitions and new franchised offerings; our success in reducing workers’ compensation expenses; 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 any of our various acquisitions; success or failure in determining how to allocate capital; 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 and the quarterly reports on Form 10-Q filed thereafter.
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.
Non-U.S. GAAP Financial Measures
This document contains supplemental financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Management uses these non-U.S. GAAP measures in its analysis of the Company’s performance. These measures should not be considered a substitute for U.S. GAAP basis measures nor should they be viewed as a substitute for operating results determined in accordance with U.S. GAAP. Management believes the presentation of non-U.S. GAAP financial measures that exclude the impact of specified items provide useful supplemental information that is essential to a proper understanding of the Company’s financial condition and results. Non-U.S. GAAP measures are not formally defined under U.S. GAAP, and other entities may use calculation methods that differ from those used by us. As a complement to U.S. GAAP financial measures, our management believes these non-U.S. GAAP financial measures assist investors in comparing the financial condition and results of operations of financial institutions due to the industry prevalence of such non-U.S. GAAP measures. See the tables below for a reconciliation of these non-U.S. GAAP measures to the most directly comparable U.S. GAAP financial measures.
Company Contact: ****
HireQuest, Inc.
David Hartley, Vice President of Corporate Development
(800) 835-6755
Email: cdhartley@hirequest.com
Investor Relations Contact:
IMS Investor Relations
John Nesbett/Jennifer Belodeau
(203) 972-9200
Email: hirequest@imsinvestorrelations.com
- Tables Follow -
HireQuest, Inc.
Consolidated Balance Sheets
| (in thousands, except par value data) | December 31, 2024 | December 31, 2023 |
|---|---|---|
| ASSETS | ||
| Current assets | ||
| Cash | $ 2,219 | $ 1,342 |
| Accounts receivable, net of allowance of $275 and $199, respectively | 42,348 | 44,394 |
| Notes receivable | 1,167 | 1,788 |
| Prepaid expenses, deposits, and other assets | 2,413 | 3,283 |
| Prepaid workers' compensation | 1,094 | 646 |
| Total current assets | 49,240 | 51,453 |
| Property and equipment, net | 4,149 | 4,280 |
| Workers' compensation claim payment deposit | 1,127 | 1,469 |
| Franchise agreements, net | 19,737 | 21,440 |
| Other intangible assets, net | 8,442 | 10,162 |
| Goodwill | 1,633 | 5,870 |
| Deferred tax asset | 2,073 | 325 |
| Other assets | 57 | 102 |
| Notes receivable, net of current portion and allowance of $773 and $623, respectively | 6,664 | 7,834 |
| Intangible assets held for sale - discontinued operations | 891 | 891 |
| Total assets | $ 94,013 | $ 103,826 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities | ||
| Accounts payable | $ 174 | $ 137 |
| Line of credit | 6,829 | 14,119 |
| Term loans payable | 88 | 514 |
| Other current liabilities | 2,018 | 2,338 |
| Accrued payroll, benefits, and payroll taxes | 2,557 | 4,286 |
| Due to franchisees | 7,579 | 9,881 |
| Risk management incentive program liability | 1,252 | 565 |
| Workers' compensation claims liability | 3,599 | 3,871 |
| Total current liabilities | 24,096 | 35,711 |
| Term loans payable, net of current portion | - | 132 |
| Workers' compensation claims liability, net of current portion | 2,707 | 2,766 |
| Franchisee deposits | 2,406 | 2,485 |
| Total liabilities | 29,209 | 41,094 |
| Commitments and contingencies (Note 12) | ||
| 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; 14,073 and 13,997 shares issued, respectively | 14 | 14 |
| Additional paid-in capital | 36,286 | 34,527 |
| Treasury stock, at cost – 44 shares | (146) | (146) |
| Retained earnings | 28,650 | 28,337 |
| Total stockholders' equity | 64,804 | 62,732 |
| Total liabilities and stockholders' equity | $ 94,013 | $ 103,826 |
HireQuest, Inc.
Consolidated Statement of Income
| Three month ended | Twelve months ended | |||
|---|---|---|---|---|
| (in thousands, except per share data) | December 31, 2024 | December 31, 2023 | December 31, 2024 | December 31, 2023 |
| (unaudited) | (unaudited) | |||
| Franchise royalties | $ 7,644 | $ 8,892 | $ 32,673 | $ 35,813 |
| Service revenue | 439 | 871 | 1,925 | 2,069 |
| Total revenue | 8,083 | 9,763 | 34,598 | 37,882 |
| Selling, general and administrative expenses | 5,120 | 6,624 | 21,406 | 24,448 |
| Goodwill and intangible asset impairment charge | - | - | 6,035 | - |
| Depreciation and amortization | 697 | 698 | 2,789 | 2,793 |
| Income from operations | 2,266 | 2,441 | 4,368 | 10,641 |
| Other miscellaneous income (expense) | 132 | (1,997) | 145 | (1,738) |
| Interest income | 132 | 67 | 556 | 263 |
| Interest and other financing expense | (160) | (230) | (923) | (1,386) |
| Net income before income taxes | 2,370 | 281 | 4,146 | 7,780 |
| Provision (benefit) for income taxes | 49 | (185) | 221 | 1,345 |
| Net income from continuing operations | 2,321 | 466 | 3,925 | 6,435 |
| Loss from discontinued operations, net of tax | (102) | (451) | (253) | (300) |
| Net income | $ 2,219 | $ 15 | $ 3,672 | $ 6,135 |
| Basic earnings (loss) per share | ||||
| Continuing operations | $ 0.17 | $ 0.03 | $ 0.29 | $ 0.47 |
| Discontinued operations | (0.01) | (0.03) | (0.02) | (0.02) |
| Total | $ 0.16 | $ 0.00 | $ 0.27 | $ 0.45 |
| Diluted earnings (loss) per share | ||||
| Continuing operations | $ 0.17 | $ 0.03 | $ 0.28 | $ 0.47 |
| Discontinued operations | (0.01) | (0.03) | (0.02) | (0.02) |
| Total | $ 0.16 | $ 0.00 | $ 0.26 | $ 0.45 |
| Weighted average shares outstanding | ||||
| Basic | 13,900 | 13,783 | 13,838 | 13,733 |
| Diluted | 13,987 | 13,830 | 13,920 | 13,801 |
HireQuest, Inc.
Non-U.S. GAAP - Reconciliation of Net Income to Adjusted EBITDA
(unaudited)
| Three month ended | Twelve months ended | |||
|---|---|---|---|---|
| (in thousands) | December 31, 2024 | December 31, 2023 | December 31, 2024 | December 31, 2023 |
| Net income | $ 2,219 | $ 15 | $ 3,672 | $ 6,135 |
| Interest expense | 160 | 230 | 923 | 1,386 |
| Provision for income taxes | 49 | (185) | 221 | 1,345 |
| Depreciation and amortization | 697 | 698 | 2,789 | 2,793 |
| EBITDA | 3,125 | 758 | 7,605 | 11,659 |
| WOTC related costs | 157 | 122 | 483 | 461 |
| Non-cash compensation | 510 | 555 | 1,759 | 1,483 |
| Goodwill and intangible asset impairment | - | - | 6,035 | - |
| Acquisition related charges, net | (139) | 2,618 | (28) | 2,344 |
| Write down of notes receivable | 150 | 240 | 275 | 540 |
| Adjusted EBITDA | $ 3,803 | $ 4,293 | $ 16,129 | $ 16,487 |
HireQuest, Inc.
Non-U.S. GAAP - Reconciliation of Net Income to Adjusted Net Income
(unaudited)
| Three month ended | Twelve months ended | |||
|---|---|---|---|---|
| (in thousands, except per share data) | December 31, 2024 | December 31, 2023 | December 31, 2024 | December 31, 2023 |
| Net income | $ 2,219 | $ 15 | $ 3,672 | $ 6,135 |
| Amortization of acquired intangible assets | 541 | 541 | 2,159 | 2,162 |
| Goodwill and intangible asset impairment | - | - | 6,035 | - |
| Acquisition related charges, net | (139) | 2,618 | (28) | 2,344 |
| Write down of notes receivable | 150 | 240 | 275 | 540 |
| Tax effect of adjustments (1) | (144) | (884) | (2,195) | (1,312) |
| Adjusted net income | $ 2,627 | $ 2,530 | $ 9,918 | $ 9,869 |
| Adjusted net income per diluted share | $ 0.19 | $ 0.18 | $ 0.71 | $ 0.72 |
| Diluted shares outstanding | 13,987 | 13,830 | 13,920 | 13,801 |
| (1) the tax effect includes the application of our statutory rate of 26% to all taxable / deductible adjustments. |