HireQuest, Inc.

Good afternoon, everyone, and thank you for participating in today's conference call to discuss HireQuest's financial results for the fourth quarter and year ended December 31st, 2023. 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 the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the call over to John Nesbitt of IMS Investor Relations. Please go ahead.

Thank you. I'd like to welcome everybody to the call. Hosting the call today are HireQuest's Chief Executive Officer, Rick Hermans, and Chief Financial Officer, Steve Krann. I'd 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. These statements include statements regarding 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 HireQuest's periodic reports filed with the Securities and Exchange Commission, 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 CEO of HireQuest, Rick Kermans. Please go ahead, Rick.

Thank you everyone for joining today's call. I'll begin by providing an overview of our financial and strategic highlights from the fourth quarter and full year of 2023, and then I'll turn the call over to Steve, who will share more details around our fourth quarter and full year financial results. Both our fourth quarter and full year 2023 results were characterized by the continued execution of our growth strategy and demonstrated strength of our business model as we achieve revenue growth and profitability despite a challenging economic environment that continues to impact the staffing and recruiting industry. Our fourth quarter revenue increased 21.3% to $9.8 million and franchise royalties increased 15.9% to $8.9 million. System-wide sales in the fourth quarter increased to $143.5 million compared to $127.9 million in 2022. For the full year, total revenue increased 22.4% to $37.9 million, and franchise royalties grew 23.9% to $35.8 million. Full year system-wide sales were $605.1 million, compared to $472.2 million in 2022. While our top line grew in the fourth quarter and for the full year 2023, primarily as a result of the MRI network acquisition, the state of the staffing and recruitment industry hampered organic growth. We were encouraged by the resiliency of our HireQuest Direct franchisees who were down for the year by only 2.7% and our Snelling franchisees who finished the year down 9%. These results compare very favorably to both our public and private competitors and really demonstrates the strength, not only of our franchise model, but also speaks to the customer and geographic diversification cultivated by our franchisees. Our recently launched skilled trades offering, Trade Corps, really started to gain some traction this last year, though starting from a very small base, and we're excited to continue to see its momentum into 2024. MRI Network wasn't immune to the headwinds of the professional staffing and executive recruiting markets either. But as we've said in the past, MRI historically has had less standardized royalty model, so decreases in system-wide sales don't necessarily translate to decreases in royalty revenues. Our reported SG&A expenses continue to impact our bottom line. However, our core SG&A expense were effectively flat in Q4 2023 at $4.5 million. compared to $4.4 million in Q4 2022. We provide details in today's press release on core SG&A, which excludes workers' compensation expense, the MRI ad fund expenses, which are really just a pass-through with corresponding services revenue, and one-time charges. In fact, this core SG&A expense decreased in both absolute dollars and as a percentage of total revenue for each of the past three quarters. we believe the current level provides us with plenty of capacity to take advantage of increased system-wide sales, either driven organically or through additional acquisitions, without a linear increase in fixed costs. Over the past couple of quarters, I've spent a fair amount of time talking about our net workers' compensation expense. Total net workers' compensation expense for 2023 was $3.7 million, compared to a net benefit of $1.9 million in 2022. As I've mentioned on previous calls, there are two primary factors that impact this number. First is the difference between our net premium amounts collected and our expected losses for the policy year. And the second is any changes to the expected losses, up or down, for prior policy years. Unfortunately for us, last year, our comp rates were below our expected loss rates, accounting for approximately two-thirds of the expense. and we had a particularly bad loss experience in a prior policy year, which accounted for the remaining third of the expense. While we can't predict future loss experiences, the 22-23 policy year was historically bad for us, but we haven't seen anything in the 23-24 policy year to date that would lead us to expect a repeat this year. Additionally, we've taken steps with our carrier to address the shortfall component of the expense, and expect to see some relief on that side of the equation starting in Q2 2024. We believe these actions will help normalize our margins as we progress through the year and the changes take effect. We continue to believe that we are a leader in the staffing industry with regards to our ability to manage workers' compensation expense, and it continues to be a core competency and competitive advantage. M&A continues to be a key component of our growth strategy, and we continued executing on it in 2023 while keeping our leverage low and maintaining a strong balance sheet. Most recently, we announced the acquisition of Tech Staffing Services in the fourth quarter of 2023. This acquisition is an excellent example of the accretive opportunities that we looked for in the market as it expanded our selling operations in Northwest and Central Arkansas. while restoring some of the operating leverage that we've lost due to the challenging economic environment. MRI network has proven to be a solid acquisition for us as well. While revenues have been down as a result of industry headwinds, MRI has demonstrated healthy profitability this past year. Additionally, as it relates to M&A, I'd like to point out that we've been able to maintain a healthy balance sheet and low leverage throughout all these transactions. Since the beginning of 2021, we've increased system-wide sales by just shy of $400 million. We've invested over $75 million in acquisitions and finished 2023 with net debt of $13.4 million. I'll also highlight that fully diluted shares over that time have increased from about $13.7 million to only $13.8 million at the end of 2023. That is, we financed our growth almost exclusively with cash flow from operations. We believe that as demand for staffing solutions recovers, HireQuest will be well positioned with premier staffing and executive search capabilities that we can leverage to enhance our offerings and operations, improve our bottom line, and drive increased value for our shareholders. I'll now pass the call over to our Chief Financial Officer, Steve Crane, who will provide a closer look to our fourth quarter and full year results. Steve?

Thank you, Rick, and good afternoon, everyone. As Rick mentioned earlier, total revenue for the fourth quarter of 2023 was $9.8 million compared to $8 million for the same quarter last year, an increase of 21.3%. Total revenue for the full year of 2023 increased 22.4% to $37.9 million compared to $31 million in 2022. Our total revenue is made up of two components, franchise royalties, which is our primary source of revenue, and service revenue, which is generated from certain services and interest charged to our franchisees, other miscellaneous revenue, and starting this past quarter, it also includes the pass-through revenue from MRI Network's advertising fund. Franchise royalties for the fourth quarter were $8.9 million, compared to $7.7 million for the same quarter last year, an increase of 15.9%. For the full year of 2023, franchise royalties increased 23.9% to $35.8 million, compared to $28.9 million in 2022. Underlying the growth in royalties are system-wide sales, which are not part of our revenue, but are a helpful contextual performance indicator. System-wide sales reflect sales at all offices, including those classified as discontinued. System-wide sales for the fourth quarter were $143.5 million, compared to $127.9 million for the same period in 2022, which is an increase of 12.1%. Service revenue was $871,000 for the fourth quarter, compared to $378,000 for the same quarter a year ago. Service revenue is composed of interest charged to our franchisees on overdue accounts receivable, service fees, other miscellaneous revenue, and MRI networks advertising fund revenue. The ad fund revenue contributed $515,000 in Q4 of 2023 and is offset by a corresponding expense in SG&A. Service revenue can fluctuate from quarter to quarter based on a number of factors, including growth in system-wide sales, changes in accounts receivable, insurance renewals, and similar dynamics. Selling general and administrative expenses for the fourth quarter were $6.6 million compared to $4.7 million in the prior year period. For the full year, SG&A expenses were $24.4 million compared to $12.9 million in 2022. The increase in SG&A for the year is attributable to three primary drivers, increased workers' compensation expense, increased expenses to support the growth in system-wide sales and acquisition, integration expense, which we incurred during the first and second quarters, and the MRI network advertising fund expense of $515,000 are included in our fourth quarter and full-year SG&A. For the fourth quarter in 2023, workers' compensation expense was approximately $1.3 million compared to $166,000 in the fourth quarter of 2022. For the full year, workers' compensation expense was approximately $3.7 million compared to a net benefit of $1.9 million in the full year of 2022. Beyond workers' compensation, the largest component of SG&A is employee salaries and benefits. Salaries and benefits for the fourth quarter of 2023 were $3 million versus $3.2 million in the prior year period. For the full year of 2023, salaries and benefits were $13 million versus $10.4 million in 2022. Also included in our full-year SG&A were increased salaries and benefits related to personnel costs as we integrated the MRI network as well as SG&A expenses from MRI, including marketing, IT, insurance, professional fees, and similar costs. We had largely completed MRI's integration by third quarter, and this most recent quarter reflects an expected level based upon current revenue volumes for executive recruiting services. We don't anticipate the need for additional increased expenses looking ahead to 2024. Net income includes income from operations adjusted for miscellaneous items, interest, income taxes, and discontinued operations. Net income for the quarter was $16,000 compared to $2.7 million in the prior year period. Net income from continuing operations for the quarter was $467,000 or 3 cents per diluted share compared to net income from continuing operations of $2.6 million or 19 cents per diluted share in the fourth quarter last year. Besides increased SG&A, net income in the fourth quarter was negatively impacted by a $2.6 million charge related to the resale of the tech offices to franchisees For the full year of 2023, net income was $6.1 million compared to $12.5 million in the prior year period. Net income for continuing operations for the full year 2023 was $6.4 million or 47 cents per diluted share combined with $12 million or 87 cents per diluted share in 2022. Adjusted EBITDA in the fourth quarter of 2023 was $4.3 million compared to $4.4 million in the fourth quarter of last year. For the full year, adjusted EBITDA was $16.5 million compared to $22 million in 2022. We believe adjusted EBITDA is a relevant metric for us due to the size of non-cash operating expenses running through our P&L. A detailed reconciliation of adjusted EBITDA to net income is provided in our 10-K, which will be filed shortly. Moving on now to the balance sheet. Our current assets at December 31st, 2023 were $51.5 million compared to $51.9 million at December 31st, 2022. Current assets as of December 31st, 2023 included $1.3 million of cash and $44.4 million of net accounts receivable, while current assets at December 31, 2022 included $3 million of cash and $45.7 million of net accounts receivable. Current assets exceeded current liabilities by $15.7 million at December 31, 2023, versus year in 2022 when working capital was $15.2 million. Current liabilities were 69.4% of current assets at December 31, 2023 versus 70.8% of current assets at December 31, 2022. At December 31, 2023, we had $14.1 million drawn on our credit facility and another $26.2 million in availability assuming continued covenant compliance. We believe our credit facility provides us with flexibility and room for short-term working capital needs, as well as the capacity to capitalize on potential acquisitions. We have paid a regular quarterly dividend since the third quarter of 2020. Continuing that pattern, we paid a $0.06 per common share dividend on March 15, 2024 to shareholders of record as of March 1st. For the full year 2023, we pay dividends in the amount of 24 cents per common share, and we expect to continue to pay a dividend each quarter subject to the board's discretion. With that, I will turn the call back over to Rick for some closing comments.

Thank you, Steve. Our performance in both the fourth quarter and full year of 2023 demonstrates our ability to drive growth and profitability despite the challenging economic environment that is currently impacting the overall staffing and recruiting industry. Our focus right now is on controlling what we can control and reducing expenses to improve our bottom line. Looking long term, insiders and board members own a substantial percentage of the company, and we will manage the company with a view on allocating capital to its best and highest use and maximizing growth of earnings per share. As always, I would like to thank our employees and franchisees for their hard work and dedication this past quarter and throughout all of 2023. We're excited for 2024 and believe that we are well positioned to continue driving long-term value to our shareholders. With that, we can now open the line to questions.

Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your line from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Once again, please press star one if you have a question or a comment. The first question comes from Kevin Stanky with Barrington Research. Please proceed.

Good afternoon. I want to start off by saying asking about the March 1st insurance policy renewal and in terms of workers' compensation and how much do you think you accomplished with that relative to what you'd maybe like to accomplish going forward?

Thanks, Kevin. So I would say two things. One is if you as far as what we accomplished, I do believe that, you know, we've, I think that in the remaining 10 months of the year, our policy, as you stated, renewed on March 1st, is that the, there'll be, it'll be, it's structured in such a way that the rates will be somewhat more adequate. Frankly, we've had rate inadequacy for, for really probably two years and it won't be as bad so it i'm not saying that we're going to you know as as we pointed out there's about a 3.6 million dollar net expense and obviously you know that that's not something you know something we can obviously sustain or want to sustain um and so i think that the the new structure will allow us to recover somewhere around half of that. Now, part of what was in my remarks as well is 2023 also had some just, you know, had some bad development from the policy that ended on March 1st of 2023. That's the type of expense you, you know, really, it's difficult to control for. We, for 30 years, we've done what I think is an excellent job In controlling our expenses, we close claims quickly. We work them very hard. We have incentives for our franchisees to make sure that we're working together to close claims quickly and at a reasonable amount. But at the end of the day, you can never completely control what happens. And as I stated, there is nothing that there's nothing that I've seen thus far in the 23-24 policy that just expired that comes anything close to what the 22-23 policy was. So I don't know if that answers your question, but I would like to think that we will certainly narrow that gap in 24. You know, will we achieve, you know, breakeven or profitability on the workers' comp program? Probably not. But again, that's probably not.

But much closer. Got it. No, thank you. That did answer my question. So I also wanted to ask about the core G&A expenses, $4.5 million in the quarter. I believe you mentioned the... no need for additional expenses in 2024. So is that 4.5 million of core SG&A a good run rate, or would you potentially look to reduce expenses if the demand environment continues to be soft?

So I think that the 4.5 million per quarter is a good number. Now, can it be reduced still? Frankly, we literally already have taken steps that by the end of this month, we'll have reduced PERM payroll by about another $550,000, which of course would hit SG&A. So can we cut more? Well, yeah. You know what I'm saying? We already have. That being said, I think the more important The more important way of looking at it is to the extent that we can grow, it's harder to cut at this point without cutting things that will impair our future. And, you know, so the answer to your question is if we had something that really started, you know, if our sales really dropped off a cliff, yes, there are things that we could cut. We could probably cut an additional – $500,000 to $800,000 a quarter if we needed to. The thing is, is it's stuff like, you know, let's say software development. We can stop, you know, we can absolutely, you know, slow down or shut some of those programs off. The problem is, you know, and still run the business exactly the way we are. The impact will be a year from now, three years from now. And so to the extent that we're able to maintain profitability and that while the environment is absolutely weak it is absolutely weak for demand we're still profitable and you know we're still taking the viewpoint that you know you know that the economy will recover at some point whether it's in the you know whether it's in the second half of 2024 or even if it's in 2025 we want to be positioned to take advantage of you know of that uptick and as alluded to in my remarks, well, not even alluded to, really stated, is we're in a position to grow sort of like with the tech acquisition without adding any additional staff. So do we have, we're at a weird point. Do we have, let's say, slack capacity where we have five people doing what three people should be doing? No, we don't do, we would never, we would never ever do that. On the other hand, if you have something like franchise sales. It's like, okay, we're not selling franchise sale, you know, our franchise sales level isn't what we would expect in a really good environment. But we only have one, you know, we have one person selling franchises. So it's, you literally go from a franchise sales effort to no effort, right? So it's like, do you do that when it's a little bit weak? And the answer is, in my opinion, not at this point. But if you were truly getting to a point where your viability was being threatened, absolutely. Then you get rid of it. I don't know if that answers your question, but that's how we see things.

Yes, it does answer the question. Thanks. I also wanted to just ask about, I know you gave the... the declines organic clients for higher quest direct and Snelling for the full year. I don't know if you had an organic number percentage number for either system-wide sales or franchise royalties in the fourth quarter. Um, and you know, the reason I asked him just trying to gauge things kind of stabilized or worsened or where you, where the demand environment stands.

So what I would say to you, and this is more anecdotal, I don't have the exact number, and I'd be happy to have Steve reach back out to you with, you know what I'm saying, with the exact number. I would say anecdotally, we had a really decent, if you recall, and you cover a bunch of companies, so it's not like you should recall this, but our first quarter of last year was actually really strong. While a lot of our competitors were down 10% already from the first quarter of 2022, we we were actually flat last year. So we were way ahead. But then right around this time last year, then we saw that 10, 12% drop. And so I would just simply say is that the fourth quarter was pretty much consistent with Q2 and Q3 as far as being down about let's say 10% or so overall from the prior period. Now, given that there were some tech sales mixed in into the fourth quarter, you certainly could take the approach that the fourth quarter was the weakest of the four.

Okay, all right, understood. Lastly, you mentioned in the earnings release that you continue to monitor the market for accretive M&A opportunities. Just wondering what the pipeline of opportunities looks like in the current economic environment.

I would say that there is clearly I almost say this every quarter. There's always plenty of acquisition opportunities out there. It's always about price. There are I would just simply say there's probably a bit more distressed properties available now. That doesn't mean they're going to sell for what they should sell, you know what I'm saying, for what they should sell. Because you still have people looking at, you know, a longer timeframe and thinking that they're, you know, they're worth what they were in 2022. But I believe that there will be you know, there'll be no shortage of opportunities. If, you know, if the staffing and recruiting industry doesn't recover by the second half of this year, like I said, I suspect that there will be a fairly, you know, a pretty strong increase in opportunities at realistic prices.

Okay, great. That's helpful. Thanks for the commentary. I will turn it over.

Once again, if you have a question or a comment, please indicate so by pressing star one on your touchtone phone. The next question comes from Peter Robover from Artco Capital. Please proceed.

Hey, Rick. Hi, Peter. I think my questions were sort of answered, but I'll ask again. Sure. One is maybe if you could give some comments on, you know, how the year is progressing and how the economy, you know, is doing, you always get pretty good comments on that. And then, you know, you touched on capacity, you know, maybe I can ask it another way, but, you know, where do you think, you know, you guys have about 600 million in system wide revenue, 580. What do you think your capacity is, you know, in a good economy? So just, just a. Any ballpark you can give us would be great. Thanks.

Yeah, no, appreciate it. And so to answer your questions, number one, you know, and again, what makes it a little more difficult to make those comparisons is our first quarter of last year really was pretty good. You know, compared to the industry, it was great. And so therefore, you know, in making comparisons, we're really almost comparing it to 2022 numbers. And so there is still weakness out there. There's absolutely weakness that's extended into the beginning of the year. The, you know, I'm really loathe to say this. I mean, the last week or two, I'd say, am I seeing a couple of green shoots? You know, yeah, I'm seeing a couple of green shoots, but it could just as easily be a false positive. So, you know, but the way, you know, the way I view things and admittedly, I could be completely wrong. But, you know, when you think about, let's say during the staffing industry was obviously incredibly sensitive to the pandemic. And, you know, we had drop offs of sales during the pandemic of 40, 45 percent, certain jurisdictions way more. And then 2021, especially the second half of 2021, you had the most unbelievable market for staffing and recruiting, you know, really in my 34 years in the industry. I've never seen 35 years. I've never seen anything like it. And, you know, and so I think part of what 23, it's interesting, you got a lot of companies that are out there. 2023 was a decent year. And then there are other ones where it's bad. I was just reading a story this morning. It was called Oh, shoot. It was in the Wall Street Journal. It was talking about a company that had a pandemic upswing and a pandemic downswing in how they handled their perm payroll. Or even, I guess a better example would be, let's just say, Peloton. During the pandemic, all of a sudden, they couldn't make enough of them. And then all of a sudden, it's like, well, a lot of people bought these things. And then when life returned to more normal... Really, it turned out it was just, you know, 21 and 22 was really more of a cannibalization, you know, was just a cannibalization of what maybe would have occurred in 2023. I would argue that that's what happened to the staffing and recruiting industry in 2023 is a lot of companies went out and, you know, brought in huge amounts of, you know, huge amounts of staffing and recruiting because you couldn't find people. And now as things have eased off of it and normalized a bit more, it's become, you know, 23 for the staffing industry feels like a recession, even though the overall economy is certainly not in what could be described as recession. So all that being said, I do believe that as long as the economy, you know, writ large doesn't go into a recession, is that we'll get back to a more normal position. regardless of what happens because then things will find their equilibrium. All that's an incredibly long way of saying so far we haven't, so far first quarter hasn't really, has been no great shakes. Although there might be a false positive or then again it might be green shoots really literally in the last week or two. As far as the Gosh, dang, that was such a filibustering answer that I forgot the second part of your question.

It was great. No, I love it. The second question was, you know, I'm just kind of curious, you know, especially... Oh, I remember.

Never mind. Sorry, I don't mean to cut you off. I remember now. So as far as capacity, look, when we did the acquisition of MRI at the end of 2022, I just sat there and if you just added back what their system-wide sales were, what ours were kind of running at that point, you know, I'd have, you know, if the economy would have stayed normal, I'd have said, well, shoot, I don't know how we'd have missed 700 million of system wide sales in 2023. Well, obviously that didn't happen. You know what I mean? You know, clearly that didn't happen. Now we've, we've made, you know, we made certain cuts that, you know, had that not happened, we might've kept staffing levels a bit higher than what they, than what they were. But, you know, I would argue that we could, you know, so long as it's, let's say like a tech staffing type deal where it's like right down the fairway for us, I could easily see us being able to, you know, to add 50 to a hundred million dollars of sales without materially adding any, you know, without materially adding any staff. Okay. Realizing because realizing that probably a quarter of our staff is IT, you know, and sort of like, and so you, you, you, you know, that's one of those things where that's where like you start getting into, you know, obviously a decline in sales, you know, really hurts us from that perspective because you don't quickly let go of programmers. You just don't, you know what I'm saying? You just don't do it because they're so hard to find. And so you, you, and, and again, obviously you're, you're really fighting for your future. And but anyway, I, I would, I would definitely argue that we could, we could, like I said, 50 to 100 million without adding any significant amount of fixed costs.

Okay, great. I mean, I appreciate all the colors. That was great. I'll let somebody else take their question.

Next question comes from Mike Baker with DA Davidson. Please proceed.

Hey, thanks. Hey, since you brought it up, wondering if you care to talk about any of the green shoots that you might be or potentially false positives that you're seeing. which business lines, et cetera. Just curious what you meant by that comment.

Well, you know, we looked very carefully, obviously, at how our sales track with the prior year. And, you know, clearly it's kind of funny we got spoiled because over, you know, mostly the last, most of the last 30 years, it's always up, up, up, up, and up. And all of a sudden it's like, well, This kind of, you know what I'm saying? It's not nearly as fun being on the downside of that. And, you know, but that gap has, you know what I'm saying? That gap has closed rapidly. And now this is where it could be a false, you know, it could be a false positive because obviously I'm talking one or two weeks. I'm not talking, you know what I'm saying? I'm not talking the first quarter. So, you know, maybe we finally crossed that Rubicon. Maybe the staffing industry is reaching more of its historic norm versus, you know, saying, and people are, let's say, because I really do believe in 2023, a lot of what happened is that temporary employees were being replaced with perm staff and, you know, driving down the staffing industry's, Revenues. That's what I think. And again, I could be 100 percent wrong, you know, but there was, in fact, an article I read in the Wall Street Journal again. It was talking about two different measures of, you know, how how the government accounts for the unemployment rate, because you sit there and think of three point six percent, three point seven percent unemployment rate is amazing. Historically, you know, and in almost by any definition, you sit there and say, well, why know why is it then that employment companies are down and there are two different surveys that take place there's a household survey and there's a business survey and they really come up with a lot different internal dynamics and one of them i don't recall which one it is one of them skews you know kind of lumps together you know i'll say gig you know gig work and temporary work It treats it more like a traditional permanent job. But the results were a lot different when you looked at it differently. And I really think that is part of, once again, really what we experienced in 2023. But like I said, at least to me, economically, things always manage to find their level. And I just think sooner or later, we're going to hit that level again. And I'm just hoping it's in March of 2024 and not, you know what I'm saying, not six months from now. Right.

Understood. So if I can clarify, your point of the two different measures of employment is that perhaps the employment situation isn't quite as strong as it looks like in the, you know, the 3.9 was the latest number for unemployment. Was that what you were saying?

Well, or what what happened is, is that it like the overall unemployment rate maybe went up a little bit, you know, but there are actually that there are more permanent jobs, you know, that basically there are more permanent employees than there are temporary employees now or that some of the gig employees went away. It's just how you define it. And like the three point nine percent may include a lot less temporary employees than the other survey. And I wish I had the article in front of me. I probably shouldn't have brought it up. But I'm just simply saying there are absolutely two different ways of looking at it. And I'm just saying if you really – if you think about it, why in the world – and you can look at any staffing company's numbers. They're all down. Well, why are we all down when in reality the economy is still growing? That shouldn't happen in absence of – you know, in a, you know, really in absence of either a shift away from temporary workers, which may be part, you know, again, which I would call it the Peloton effect, or, you know, or it's just the way things have been, you know, again, it was just that surge in demand and unquestionably 2022 was, you know, was an incredible year for temporary staffing simply because nobody could find employees. And so it's, you know, and maybe it's just a decrease off of a false high. That's, you know, that's a possibility. And like I said, it could be explained within how the numbers are because, again, because then you would go back and ask that question. But unemployment hasn't gone up that much. Why in the world are you down 10%? Yep.

Got it. Makes sense. Appreciate the caller. Sure. Sure.

Okay, we have no further questions in queue. I'd like to turn the floor back to management for any closing remarks.

Again, I want to thank each of you for joining us today. The economy remains a challenge for the staffing industry, and as I alluded to, the first quarter isn't shaping up significantly better, but I think that one of the important parts of my remarks to just keep in perspective is, is that since the beginning of 2021, you know, we have grown, we've done $76 million of acquisitions, $400 million increase in system-wide sales and keeping in mind that $400 million into, into 23, which was actually a relatively weak year. And yet we retain only a little more than 13 million bucks of debt on our balance sheet. And so we are generating, nice amounts of cash flow. And while many of our peers have lost money in 23, we remain profitable the same way we did during the pandemic. And, you know, we're set up great for the future. And so we appreciate your continued interest in the company and your continued, you know, partnership with us. And so with that, I want to, again, thank you and look forward to speaking to you in another six or eight weeks. Thanks a lot.

Thank you. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.