HireQuest, Inc.

Good afternoon, ladies and gentlemen, and welcome to the HireQuest Incorporated second quarter 2022 earnings call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Jennifer Bellido. The floor is yours.

Thank you, Operator. I would like to welcome everybody to the call. Hosting the call today are HireQuest CEO Rick Hermans and CFO David Burnett. I'll 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 HireQuest 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 HireQuest periodic reports filed with 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. With that out of the way, I'll now turn the call over to the CEO of HireQuest, Rick Hermans. Go ahead, Rick.

Thank you for joining us for today's call. To begin with, I will provide an overview of financial and strategic highlights for the quarter, and then David will share more details surrounding our second quarter results. This was a very strong quarter for us across the board. We continue to see revenue growth both from recent acquisitions and organically from our existing franchisees. Franchise royalties grew 32.5% to $7.2 million and organic franchise royalties grew 40.7% compared to the second quarter of 2021. Overall, total revenues increased by 62.8% to $9.3 million compared to the prior year period. Keep in mind that last year's Q2 was still impacted by the pandemic, making for a favorable comparison. But nonetheless, this was an exceptional quarter. This revenue growth resulted in another quarter of strong profitability for the business with adjusted EBITDA of $5.9 million, a 34.2% increase from the second quarter of 2021. Multiple factors drove our strong performance for the quarter. First, a number of the franchise locations that were opened within the past 12 months are starting to hit their stride and contributed to our results. A key component of our model is supporting our franchisees as they build their own businesses and the strength of this model for the staffing sector continues to be reinforced. The economic recovery from the pandemic, as well as the addition of a strong commercial staffing offering with Snelling, provided expansion opportunities for franchisees. Second, we are seeing the benefit of the strategic diversification of our geographic coverage and end markets. The three acquisitions we consummated in Q1 significantly advanced this strategy. Just to remind everyone, the staffing division of D.M. Dickinson expanded our franchise base in West Texas and New Mexico. The Dubin Group and Dubin Workforce Solutions marked our entry into Pennsylvania, and Northbound Executive Search adds New York to our map and expands our franchise offerings into higher margin executive placement vertical. With these acquisitions, we have substantially expanded our geographic and industry coverage and now have a foothold in a majority of the segments of the $168 billion staffing and recruiting marketplace. Third, the current economic backdrop of rising wages and labor shortages is creating a favorable demand environment. By utilizing HireQuest, companies are reducing the costs of permanent hiring while gaining access to quality workers in a supply-constrained environment. Fourth, the team here has become quite adept at executing and integrating acquisitions, utilizing the experience of our management team and asset-light platform we have in place. Our processes enable us to very quickly integrate acquisitions and provide the support and tools that help both new and experienced franchisees succeed. With that, I'll pass it along to our CFO, David Burnett, for a closer look at our second quarter results. David?