HireQuest, Inc. (HQI) Bundle
A Brief History of HireQuest, Inc.
HireQuest, Inc. has experienced significant developments in its financial and operational landscape leading up to 2024. The company specializes in staffing and recruitment services, operating through a franchise model that has allowed it to expand its footprint across various sectors.
Financial Performance Overview
As of September 30, 2024, HireQuest reported total revenue of approximately $26.5 million, a decrease from $28.1 million for the same period in 2023, reflecting a 5.7% decline year-over-year. This decline was primarily attributed to a decrease in system-wide sales, particularly within the MRI segment, which saw a $23.6 million reduction due to ongoing weakness in the staffing and recruiting sectors.
| Financial Metric | September 30, 2024 | September 30, 2023 |
|---|---|---|
| Total Revenue | $26.5 million | $28.1 million |
| Franchise Royalties | $25.0 million | $27.0 million |
| Net (Loss) Income | $(2.2) million | $1.5 million |
| Adjusted EBITDA | $12.3 million | $12.2 million |
Revenue Breakdown
The revenue composition for the nine months ended September 30, 2024, showed franchise royalties accounting for the majority of total revenue. Franchise royalties amounted to $25.0 million, down from $27.0 million in the prior year. The decrease was largely due to a decline in system-wide sales within the MRI segment.
| Franchise Royalties by Brand | September 30, 2024 | September 30, 2023 |
|---|---|---|
| HireQuest Direct | $11.8 million | $12.3 million |
| Snelling and HireQuest | $6.8 million | $7.2 million |
| DriverQuest and TradeCorp | $0.6 million | $0.3 million |
| HireQuest Health | $0.3 million | $0.4 million |
| Northbound, MRI, and SearchPath | $5.5 million | $6.8 million |
Operational Changes and Impairments
In 2024, the company recognized a significant impairment charge of approximately $6.0 million related to goodwill and intangible assets, primarily due to the poor performance of the MRI reporting unit. This impairment reflects the challenges faced in the staffing industry and has impacted the overall financial health of HireQuest.
Stockholder Equity and Dividends
As of September 30, 2024, the total stockholders' equity stood at approximately $62.9 million, reflecting a slight decrease from $62.7 million at the end of 2023. The company declared common stock dividends totaling $2.5 million during this period.
| Equity Metric | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Total Stockholders' Equity | $62.9 million | $62.7 million |
| Common Stock Dividends | $2.5 million | $2.5 million |
Future Outlook
Looking ahead, HireQuest is focusing on stabilizing its operations amid market fluctuations. The company's strategic initiatives aim to enhance its service offerings and improve franchisee support to drive future growth.
A Who Owns HireQuest, Inc. (HQI)
Ownership Structure
As of 2024, HireQuest, Inc. (HQI) has a diverse ownership structure. The largest shareholders include:
- Richard Hermanns, CEO and Chairman, holds a significant portion of the company’s shares.
- Edward Jackson, a board member and significant stockholder, along with family trusts, also maintains a substantial shareholding.
- Institutional investors and retail shareholders account for the remaining ownership.
Current Shareholder Breakdown
| Shareholder Type | Percentage Ownership |
|---|---|
| Richard Hermanns | Approximately 20% |
| Edward Jackson and Family Trusts | Approximately 15% |
| Institutional Investors | Approximately 25% |
| Retail Investors | Approximately 40% |
Stock Performance and Market Data
As of September 30, 2024, HireQuest, Inc. reported the following stock performance metrics:
- Stock Price: $14.16
- Market Capitalization: Approximately $200 million
- 52-Week Range: $10.00 - $16.00
Recent Financial Performance
For the nine months ended September 30, 2024, HireQuest, Inc. reported:
- Total Revenue: $26.5 million
- Net Income: $1.451 million
- Operating Expenses: $24.4 million
Dividends and Earnings
In the first nine months of 2024, HireQuest, Inc. declared dividends totaling:
- Dividends per Share: $0.18
- Total Dividends Paid: Approximately $2.5 million
Franchise Royalties and Revenue Sources
Franchise royalties generated during the nine months ended September 30, 2024, were:
| Franchise Source | Revenue (in thousands) |
|---|---|
| HireQuest Direct | $11,782 |
| Snelling and HireQuest | $6,772 |
| DriverQuest and TradeCorp | $626 |
| HireQuest Health | $310 |
| Northbound, MRI, and SearchPath | $5,539 |
| Total Franchise Royalties | $25,029 |
Related Transactions
During the nine months ended September 30, 2024, related party transactions included:
- Jackson Insurance invoiced HQI approximately $1.7 million for premiums and services.
- Insurance Technologies invoiced HQI approximately $431 thousand for IT services.
Future Outlook
Looking ahead, HireQuest, Inc. plans to focus on enhancing its franchise operations and exploring new revenue streams while maintaining its current shareholder structure.
HireQuest, Inc. (HQI) Mission Statement
Mission Overview
The mission of HireQuest, Inc. is to provide exceptional staffing solutions through a franchise model that empowers local businesses and fosters strong relationships within the communities they serve. The company emphasizes a commitment to quality, integrity, and customer satisfaction, ensuring that both clients and employees are supported throughout the staffing process.
Financial Performance Metrics
As of September 30, 2024, HireQuest reported total revenue of approximately $26.5 million, a decrease from $28.1 million in the same period of 2023, reflecting a 5.7% decline. The breakdown of revenue sources indicates a focus on franchise royalties, which amounted to $25.0 million, down from $27.0 million year-over-year. The company's net income for the nine months ended September 30, 2024, was approximately $1.5 million compared to $6.1 million for the same period in 2023.
| Financial Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Total Revenue | $26.5 million | $28.1 million | -5.7% |
| Franchise Royalties | $25.0 million | $27.0 million | -7.4% |
| Net Income | $1.5 million | $6.1 million | -75.9% |
| Basic Earnings per Share | $(0.16) | $0.12 | N/A |
Strategic Goals
- Enhance Franchise Support: HireQuest aims to provide its franchisees with comprehensive training and resources to ensure operational excellence.
- Market Expansion: The company is focused on expanding its franchise network to increase market penetration and drive revenue growth.
- Customer Satisfaction: HireQuest prioritizes customer feedback and satisfaction as a means to improve service delivery and operational efficiency.
Operational Highlights
During the nine months ended September 30, 2024, HireQuest experienced a significant impairment charge of $6.0 million related to goodwill and intangible assets. This reflects the challenges faced in the staffing and recruiting sectors, particularly within the MRI Network, which saw a decrease in system-wide sales by $31.9 million or 6.9% compared to the previous year.
Franchise Royalties Breakdown
| Franchise Brand | Q3 2024 Royalties | Q3 2023 Royalties |
|---|---|---|
| HireQuest Direct | $11.8 million | $12.3 million |
| Snelling and HireQuest | $6.8 million | $7.2 million |
| DriverQuest and TradeCorp | $0.6 million | $0.3 million |
| HireQuest Health | $0.3 million | $0.4 million |
| Northbound, MRI, and SearchPath | $5.5 million | $6.8 million |
Challenges and Opportunities
HireQuest continues to face challenges due to the ongoing weakness in the staffing sector. However, opportunities for growth exist through the expansion of its franchise model and the introduction of innovative staffing solutions tailored to meet market demands. The company remains committed to adapting its strategies to navigate these challenges effectively.
Conclusion
HireQuest's mission statement reflects its dedication to providing quality staffing solutions while fostering strong community ties. As the company navigates a challenging market, its focus on franchise support and customer satisfaction remains paramount for its operational strategy moving forward.
How HireQuest, Inc. (HQI) Works
Business Model
HireQuest, Inc. operates primarily through a franchise model in the staffing industry, generating revenue from franchise royalties and service revenue. As of September 30, 2024, total revenue was approximately $26.5 million, a decline from $28.1 million in the same period of 2023, reflecting a decrease of 5.7%.
Revenue Breakdown
The revenue components for the nine months ended September 30, 2024, are detailed below:
| Revenue Source | Amount (in thousands) | Comparison to 2023 (in thousands) |
|---|---|---|
| Franchise Royalties | $25,029 | - $1,988 |
| Service Revenue | $1,486 | + $385 |
| Total Revenue | $26,515 | - $1,603 |
Franchise Royalties
Franchise royalties decreased to approximately $25.0 million for the nine months ended September 30, 2024, down from $27.0 million in 2023, a drop of 7.4%. The royalty rate was 5.8% of external system-wide sales compared to 5.9% the previous year.
Operating Expenses
Operating expenses for the nine months ended September 30, 2024, totaled approximately $24.4 million, up from $19.9 million for the same period in 2023, marking an increase of 22.6%. This rise was attributed primarily to a non-cash goodwill and intangible asset impairment charge of $6.0 million.
Net Income and Earnings Per Share
For the nine months ended September 30, 2024, net income was approximately $1.451 million, a significant decrease from $6.120 million in the same period of 2023. Basic and diluted earnings per share for continuing operations were both $(0.16) for the three months ended September 30, 2024.
Cash Flow Analysis
The cash provided by operating activities during the nine months ended September 30, 2024, was approximately $3.5 million. This included net income from continuing operations of approximately $1.6 million, adjusted by non-cash items totaling around $8.4 million.
Current Assets and Liabilities
As of September 30, 2024, HireQuest reported total current assets of approximately $73.9 million and total current liabilities of $34.65 million. The current assets included $1.6 million in cash and $50.5 million in net accounts receivable.
Financing Activities
Cash used in financing activities for the nine months ended September 30, 2024, was approximately $3.7 million, which included $2.5 million in dividends. The company has a revolving credit agreement with Bank of America, providing a $50 million facility.
Stockholder Equity
Total stockholders' equity as of September 30, 2024, was approximately $62.915 million, with retained earnings of $27.271 million.
Franchisee Financial Support
Notes receivable from franchisees as of September 30, 2024, were approximately $9.061 million, net of an allowance for losses of $623 thousand. Interest income from these notes was $424 thousand for the nine months ended September 30, 2024.
Work Opportunity Tax Credit (WOTC)
The company's effective tax rate for the nine months ended September 30, 2024, was 9.7%, influenced by the federal Work Opportunity Tax Credit.
How HireQuest, Inc. (HQI) Makes Money
Revenue Streams
HireQuest, Inc. primarily generates revenue through franchise royalties and service revenue. For the nine months ended September 30, 2024, total revenue was approximately $26.5 million, down from $28.1 million in the same period of 2023, reflecting a decrease of 5.7%.
Franchise Royalties
Franchise royalties are a significant component of HireQuest's revenue. For the nine months ended September 30, 2024, franchise royalties totaled approximately $25.0 million, a decrease of 7.4% from $27.0 million in 2023. The breakdown of franchise royalties by brand for this period is as follows:
| Brand | Franchise Royalties (2024) | Franchise Royalties (2023) |
|---|---|---|
| HireQuest Direct | $11,782,000 | $12,312,000 |
| Snelling and HireQuest | $6,772,000 | $7,234,000 |
| DriverQuest and TradeCorp | $626,000 | $308,000 |
| HireQuest Health | $310,000 | $398,000 |
| Northbound, MRI, and SearchPath | $5,539,000 | $6,765,000 |
Service Revenue
Service revenue consists of interest charged to franchisees on overdue customer accounts and various fees for optional services. For the nine months ended September 30, 2024, service revenue was approximately $1.5 million, up from $1.1 million in 2023.
Operating Expenses
Operating expenses for the nine months ended September 30, 2024, were approximately $24.4 million, compared to $19.9 million for the same period in 2023, marking an increase of 22.6%. The major components of operating expenses include:
| Expense Category | Amount (2024) | Amount (2023) |
|---|---|---|
| Compensation and Benefits | $8.5 million | $9.6 million |
| Selling, General, and Administrative Expenses | $16.3 million | $17.8 million |
| Goodwill and Intangible Asset Impairment Charge | $6.0 million | $0 |
Net Income
For the nine months ended September 30, 2024, HireQuest reported a net income of approximately $1.5 million, down from $6.1 million in the prior year. The net loss for the three months ended September 30, 2024, was approximately $(2.2 million), compared to a net income of $1.5 million for the same period in 2023.
Cash Flows
During the nine months ended September 30, 2024, cash provided by continuing operating activities was approximately $3.5 million, a significant increase from $1.8 million in 2023. This cash flow was driven largely by net income from continuing operations of $1.6 million and adjustments for non-cash items totaling approximately $8.4 million.
Notes Receivable
As of September 30, 2024, notes receivable from franchisees amounted to approximately $9.1 million, net of an allowance for losses of $623,000, leading to a net balance of $8.4 million.
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Resources:
- HireQuest, Inc. (HQI) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of HireQuest, Inc. (HQI)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View HireQuest, Inc. (HQI)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.