HireQuest, Inc.

Greetings. Welcome to the HireQuest, Inc. first quarter 2024 earnings call. 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. Please note, this conference is being recorded. I will now turn the conference over to your host, John Nesbitt of IMS Investor Relations. You may begin.

Thank you, operator. I'd like to welcome everyone to the call. Hosting the call today are HireQuest Chief Executive Officer Rick Hermans and Chief Financial Officer Steve Crane. 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 And 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 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. I would now like to turn the call over to the CEO of HireQuest, Rick Hermans. 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 first quarter of 2024, and then I'll turn the call over to Steve, who will share more details around our first quarter financial results. Our first quarter results were in line with our expectations with franchise royalties of $7.8 million, total revenue of $8.4 million, and net income from continuing operations of $1.7 million, or 12 cents a share. Overall, we delivered a solid performance given the current economic headwinds that continue to affect the U.S. staffing market. While the overall environment for staffing solutions in the United States is currently a difficult one, the impact on our individual franchisees varies by geography and industry focus. During the first quarter, our HireQuest direct franchisees fared the best of the three primary offerings due in part to geographic factors. while MRI networks, specifically perm placements, struggled the most, consistent with what we've seen from our peers in that segment. We expect to see general demand increase as we move into the second and third quarters, which are traditionally stronger for our business as demand for temporary staffing tends to increase as a result of normal seasonal factors. Our diverse group of staffing solutions is well positioned to capitalize on increased demand with employers becoming more comfortable adding headcount to their operations. As we've done effectively for several quarters now, our focus is on controlling what we can control. Our core SG&A decreased year over year in the quarter to $4.9 million from $5.7 million in the first quarter of 2023. In the first quarter of 2024, workers' compensation expense was $572,000, which represented a significant sequential decrease from $1.3 million in the fourth quarter of 2023. We stated we started our new policy year at the beginning of March, and we're encouraged by the results from the changes we implemented this year. As I explained on last quarter's call, there are two primary factors that impact our workers' compensation levels. First, the difference between our net premium amounts collected and ours and our expected losses for the policy year. And second, any changes to the expected losses up or down for prior policy years. The 2023 policy year was historically bad for our business and negatively impacted our bottom line over the last several quarters. That said, at this point, with the visibility that we have today, we see no indication of the 23-24 policy year repeating the same trend. Additionally, we proactively worked with our carrier to adjust our plan for the current policy year, which began March 1st, to mitigate the factors in our control that contributed to the large expenses we experienced last calendar year. We are intently focused on reducing our workers' compensation expense, and as we progress through 2024, we believe that we are well positioned to continue mitigating the impact of workers' compensation on our business as these numbers return to normalized levels. M&A remains a key part of our business as well. Our strategy around M&A is to identify accretive acquisitions that allow us to expand and strengthen our diverse group of staffing offerings while simultaneously keeping our debt leverage low and maintaining a strong balance sheet. Over the past several years, we made numerous acquisitions that have significantly expanded our staffing offerings, geographic presence, and addressable market. Our focus on organic growth combined with strategic acquisitions has driven significant revenue growth, enhanced our product offerings, and expanded our addressable market, and we remain intently focused on scanning the market for other opportunities that will benefit our business. Overall, we're pleased with the results that we were able to deliver in this quarter, given the circumstances. As demand for staffing solutions continue to recover, we believe that we are ideally positioned to leverage our proven and growing model of over 400 franchise-owned offices across the United States and the world and to drive increased value for our shareholders. Now I'll pass on the call to our chief financial officer, Steve Crane, who will provide a closer look at the first quarter results. Steve?