HireQuest, Inc.

Greetings. Welcome to the HireQuest, Inc. fourth quarter and year-end 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 in terms such as anticipate, expect, intend, may, will, should, or other comparable terms involve risks and uncertainties because they relate to events and dependent 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 team, 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 involves risks and uncertainties, including those described in HireQuest 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 the CEO of HireQuest, Rick Hermans. Go ahead, Rick.

Good afternoon, and thank you for joining our call today. Our fourth quarter and full year results are reflective of the challenging environment that impacted the entire staffing industry in 2024. While HireQuest was not immune to these market conditions, our flexible franchise model has allowed us to drive profitable results in both the fourth quarter and the full fiscal year. We achieved profitability in the fourth quarter of 2024, supported by total revenues of $8.1 million. The timing of the holiday season impacted the quarter as we saw less temporary staffing, and day labor demand during the roughly two-week period that encompassed the holidays, which fell on a Wednesday. For the full year, we recognized total revenue of $34.6 million and net income of $3.7 million. The market for permanent placement and executive search solutions has been weak and continued to impact the performance of MRI Network, which has fallen short of our internal expectations. A combination of staffing headwinds and an unpredictable economy have caused employers to slow down or even halt their hiring decisions entirely, which has had a particularly negative impact on permanent placement and executive search. During this market slowdown, we've taken the opportunity to evaluate, reorganize, and refine certain operations and processes within MRI. We're controlling what we can control and believe that we've positioned MRI to benefit when demand levels for permanent placement and executive search return. Our temporary staffing and day labor offerings have performed better relative to the MRI network, though this segment has not been immune to recent market conditions. Relaxed immigration policies and lessened enforcement throughout the previous administration has reduced the demand for temporary and day labor services, as some employers chose to exploit undocumented workers for cheaper labor. As an E-Verify employer, we believe that HireQuest could experience an increase in demand due to enhanced enforcement of immigration laws by ICE, requiring employers to hire documented workers. Operationally, cost reduction remains a key priority for us, and we made solid progress on this initiative in both the fourth quarter and the full fiscal year. Notably, we saw a 22.7% decline in SG&A compared to the fourth quarter of 2023, and a decline of 12.4% for the full year. This improvement was driven largely by a reduction in our workers' compensation expense, which, as many of you already know, had a significant impact on our business in 2023. Steve will provide a more detailed update in his prepared remarks, but we're pleased to report that this expense has meaningfully come down in 2024, and we're confident that it will go down further in 2025. We continue to stay active on the M&A front. Acquisitions are a key part of our broader strategy, and our franchise model allows us to identify and efficiently acquire businesses that expand our staffing footprint and enhance our scope of offerings. We're monitoring the market for accretive opportunities, and we execute each transaction with capital preservation and value enhancement at the forefront of our decision-making process. While this was a difficult quarter and year for both HireQuest and the industry overall, I'm proud of the resilience and flexibility that our business has demonstrated to drive positive results and profitability in the fourth quarter and fiscal year. As we all know, staffing markets won't recover overnight, but we are well equipped with a demonstrated ability to drive profitable results in diverse markets, and we believe that we are ideally positioned to benefit when demand returns. With that, I'll now turn over the call to Steve Crane, our Chief Financial Officer, to provide a closer look at our fourth quarter and full year results.