HireQuest, Inc.

assistance during the conference, please press star zero on your phone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, John Nesbitt, IMS Investor Relations. John, the floor is yours.

Thank you. I'd like to welcome everyone to the call. Hosting the call today are HireQuest CEO 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 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 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, 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 changed conditions. I would now like to turn the call over to the Chief Executive Officer of HireQuest, Rick Hermans. Please go ahead, Rick.

Good afternoon. Our second quarter of 2024 was characterized by sustained profitability as we continue to mitigate costs, leverage our unique franchising model, and execute on our business strategy. We are focused on driving enhanced results as the market for staffing solutions slowly recovers from what has been a particularly difficult environment for the industry overall. Despite these headwinds, HireQuest has performed well compared to its peers. We believe that we are beginning to see a leveling out of this downward trend on the daily pay and commercial staffing side of our business as year-over-year declines have lessened compared to recent quarters. HireQuest Direct, in particular, generated franchise royalties that exceeded Q2 23 levels, and system-wide sales were only just a little bit below last year. We're not where we'd like to be, but we're noticing some encouraging trends that suggest that the market is finally beginning to find a baseline. We continued to prioritize Expense reduction in the quarter as well, reducing our SG&A by 6% to $5.3 million compared to $5.6 million in the second quarter of 2023. Core SG&A, which excludes workers' comp, the MRI network ad fund, and non-recurring charges declined 7.6% to $4.6 million. Workers' compensation expense in particular decreased by $143,000 in the quarter as the changes we made earlier this year begin to flow through. Our SG&A in the latter half of 2023 was impacted by negative development of our 22-23 workers' comp policy year. And at this point, we do not see anything that would suggest that our workers' comp will reach those levels this year. As always, M&A is a key part of our growth strategy. Our track record of acquisitions includes numerous businesses that have allowed us to penetrate both new geographic regions and staffing verticals, significantly expanding our addressable market. Moreover, we've seen increased opportunities for M&A related to the current market environment and continue to evaluate these as they are made available to us. In December of 2022, we acquired MRI Network with the intention of expanding our business into the higher margin executive search segments. overall this has been a positive acquisition for us despite the industry headwinds it's faced when we acquired the business it had been declining and we stated that we expected the trend to continue in the near to medium term unfortunately we couldn't have predicted the extended downturn the executive search market has experienced which has exasperated exacerbated the problem we are encouraged by the sequential growth in system sales over Q1 2024 following five straight quarters of decline. And we've realized some of the revenue and operational synergies we expected. But again, the state of the market has been an impediment and the business is down significantly from where it was at the end of 2022. It's difficult to try to time the economy as well we all know, but we have a very strong understanding of the staffing market and believe that a strategic combination of organic growth and M&A allows us to most efficiently grow our business. We continue to diligently evaluate opportunities that have the potential to enhance our staffing offerings and create meaningful value for our shareholders regardless of the economic environment. We take a long-term approach to our business which allows us to deliver improved results in changing market environments. In the time since our command center merger back in the summer of 2019, so literally we're five years after the merger, we've driven strong growth that has consistently outpaced the broader staffing industry. Our five-year adjusted EBITDA CAGR, for example, has considerably exceeded the industry average. And our five-year system sales CAGR of 17% from 2018 to 2023 is more than double almost all the other commercial or professional staffing companies in our peer group. This progress is a validation of several key aspects of our business. One, that our model is not only working, but outperforming the broader staffing sector. A franchising model provides HireQuest and our franchisees with the flexibility to meet the needs of a wide spectrum of customers that can differ based on size, location, staffing vertical, therefore maximizing our addressable market and the value of our offerings. Two, we have very strong economics despite a down market and are well positioned to take full advantage of opportunities once the industry recovers. While we are not immune to market conditions, our consistent performance across differing economic landscapes demonstrates the strength of our business and ability to capitalize on a strong market. The staffing industry is cyclical and we have a strong track record of staying the course regardless of the economic landscape. We have a proven growth strategy and believe that we are very well positioned to weather short-term headwinds such as the soft employment market or down economy and forge ahead on the path to long-term value creation. I'll now pass the call over to our Chief Financial Officer, Steve Crane, who will provide a closer look at our second quarter results. Steve?