HireQuest, Inc.

Good afternoon, everyone, and thank you for participating in today's conference call to discuss HireQuest's financial results for the first quarter ended March 31st, 2022. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during this conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to Jennifer Bellido of IMS Investor Relations. Please go ahead.

Thank you, Operator. I would like to welcome everybody to the call. Hosting the call today are HireQuest CEO Rick Herman and CFO David S. Burnett. I would like to take a moment to read the Safe Harbor Statement. This conference call contains forward-looking statements as defined within Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended. These forward-looking statements in terms such as anticipate, expect, intend, may, will, should, or other comparable terms involve risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. Those statements include statements regarding the intent, belief, or current expectations of higher requests and members of its management, as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those described in higher requests periodic reports filed at the SEC, and that actual results may differ materially from those contemplated by such forward-looking statements. Except as required by federal securities law, HireQuest undertakes no obligation to update or revise forward-looking statements to reflect change conditions. I would now like to turn the call over to the CEO of HireQuest, Rick Herman. Go ahead, Rick.

Thank you for joining us for today's call. To begin, I will provide an overview of financial and strategic highlights for the quarter and then David will share more details surrounding first quarter results. This was a strong quarter for us. We continued momentum with both our existing and acquired franchisees generating growth year over year. Franchise royalties grew 102% to 6.6 million and organic franchise royalties grew 30% compared to the first quarter of 2021. Overall, total revenues increased by 139% to $8.1 million compared to the prior year period. This revenue growth and the operating leverage of our business model resulted in a record quarterly adjusted EBITDA of $5.3 million, a 246% increase from the first quarter of 2021. Historically, Q1 is often our lowest quarter, as is common in the temporary and direct dispatch labor industry. Our Q1 results show the receding impacts of the pandemic, as well as the contributions from the expanded offerings we acquired in the past 12 months, some of which have less seasonality to their operations. We added four new franchise locations this past quarter in addition to the locations we acquired. As many of you know, we offer numerous incentives to our franchisees to alleviate financial and logistical obstacles that can limit their potential for growth. Beyond the attractive economics provided by our franchise model, we support our franchisees in multiple ways, including payroll and accounts receivable financing, back-end operations and IT support, access to affordable workers' compensation insurance, and access to national accounts, all of which help to lower operating expenses and save managerial time. Finally, we also support organic growth by financing expansion projects costs into new territories or through acquisitions, an important value add that is unique to our company. The time and resources we dedicate to making franchise expansion a reasonable endeavor differentiates us from our peers. On the acquisition front, through 2021 and into the first quarter of 2022, we strategically expanded our end markets and geographic footprint. We continue to remain active on the M&A front and we believe there is substantial opportunity for us to build out existing offerings as well as enter new service verticals beyond traditional staffing. A cornerstone of our strategy is to convert acquisitions into franchises. Conversion activity may generate transaction related expenses and to that point we saw $3.6 million of these costs in the first quarter. So while reported income net income was $603,000 or four cents a share, excluding the $3.6 million charge and related tax effects net income for the first quarter would have been significantly higher. We are pleased with the progress made and key developments achieved in the first quarter and we are energized to drive continued success as we move through 2022. We're optimistic about the opportunities we're seeing to continue the growth of our business, and I look forward to sharing more details as our locations and service offerings grow. With that, I'll pass it along to our CFO, David Burnett, for a closer look at our first quarter results. David?