Q1 2025 HireQuest Inc Earnings Call

Good afternoon, everyone and thank you for participating in today's conference call to discuss high Quest financial result for the first quarter ended March 31 2025.

Operator: Good afternoon everyone and thank you for participating in today's conference call to discuss Hirequest's financial results for the first quarter ended March 31, 2025. At this time, all participants are in a listen-only mode.

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.

Operator: 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. As a reminder, this conference is being recorded.

Speaker Change: As a reminder, this conference is being recorded I would now like to turn nickel over to Jennifer <unk> of IMS Investor Relations. Please go ahead.

Jennifer Belladau: I would now like to turn the call over to Jennifer Belladau of IMS Investor Relations. Please go ahead. Thank you, Jenny.

Speaker Change: Thank you Jenny I would like to welcome everybody to the call today how.

Jennifer Belladau: I would like to welcome everybody to the call.

Jennifer Belladau: Hosting the call today are Hirequest CEO Rick Hermanns and CFO Steve Crane.

Speaker Change: Hosting the call today are harder quest, CEO, Rick Hermanns, and CFO, Steve Crane, I would like to take a moment to read the Safe Harbor statement. This conference call contains forward looking statements as defined in section 27, a of the Securities Act of 1933 has amended and section 21 E of the Securities Exchange Act of 1934 as amended these forward looking.

Jennifer Belladau: I would like to take a moment to read the Safe Harbor 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.

Speaker Change: 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 higher quest and members of its management as well as the assumptions on which.

Speaker Change: 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 <unk> periodic reports filed with the SEC and actual results may differ materially from those contemplated by such forward looking statements, except as required by federal Securities Law.

Jennifer Belladau: 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.

Jennifer Belladau: Except as required by federal securities law, Hirequest undertakes no obligation to update or revise forward-looking statements to reflect changed conditions.

Rick Hermanns: <unk> undertakes no obligation to update or revise forward looking statements to reflect changed conditions, but that is the way I'd like to turn the call over to CEO. The CEO of higher Quest recurrence go ahead Rick.

Rick Hermanns: With that out of the way, I'd like to turn the call over to the CEO of Hirequest, Rick Hermanns. Go ahead, Rick.

Rick Hermanns: Good afternoon, and thank you for joining our call today, our first quarter results are reflective of the broader staffing industry, which continues to be impacted by macroeconomic headwinds that are causing employers to slow or even suspend their hiring decisions as they weighed out this uncertain market as many of you know this has been a trend for several quarters.

Rick Hermanns: Good afternoon, and thank you for joining our call today. Our first quarter results are reflective of the broader staffing industry, which continues to be impacted by macroeconomic headwinds that are causing employers to slow or even suspend their hiring decisions as they wait out this uncertain market. As many of you know, this has been a trend for several quarters now, and despite this challenging environment, we continue to achieve solid margins and profitability, supported by the resiliency and strength of our franchise model. Expense management remains a key focus for us as well, and we continue to drive cost reduction initiatives across our business, and I'm pleased to report that we're making progress on our expense management goals, supported by consistent reductions in SG&A expense on a year-over-year basis.

Rick Hermanns: Now despite this challenging environment, we continue to achieve solid margins and profitability supported by the resiliency and strength of our franchise model expense management remains a key focus for us as well and we continue to drive cost reduction initiatives across our business and I'm pleased to report that we're making progress on our expense management goals.

Rick Hermanns: Worded by consistent reductions in SG&A expense on a year over year basis, we will continue to strategically reduce costs and reallocate capital in ways that position us for sustained long term growth. Our M&A pipeline is strong and we're encouraged by the many opportunities that we're seeing in the market acquisitions are a key part.

Rick Hermanns: We will continue to strategically reduce costs and reallocate capital in ways that position us for sustained long-term growth. Our M&A pipeline is strong and we're encouraged by the many opportunities that we're seeing in the market. Acquisitions are a key part of our strategy and allow us to expand into new geographic regions and market verticals more quickly than we're typically able to through organic growth. With our visibility today, we believe that we are well positioned with a strong pipeline of potential deals and the resources needed to execute our strategy. While the industry as a whole experienced a challenging first quarter, we continue to see encouraging progress on the legislative front as more stringent immigration laws are enforced under the Trump administration.

Rick Hermanns: Part of our strategy and allow us to expand into new geographic regions and market verticals more quickly than we're typically able to through organic growth with our visibility today, we believe that we're well positioned with a strong pipeline of potential deals and the resources needed to execute our strategy.

Rick Hermanns: While the industry as a whole experienced a challenging first quarter, we continue to see encouraging progress on the legislative front as more stringent immigration laws are enforced under the Trump administration as we mentioned last quarter relaxed immigration policies throughout the previous administration had a negative impact on our temporary and day labor offer.

Rick Hermanns: As we mentioned last quarter, relaxed immigration policies throughout the previous administration had a negative impact on our temporary and day labor offerings as employers frequently chose to hire undocumented workers at lower costs, therefore reducing demand for staffing services that comply with E-Verify regulations. Enhanced immigration enforcement by ICE is now requiring employers to hire documented workers and as an E-Verify employer, we are ideally positioned to benefit from this increased demand.

Rick Hermanns: <unk> is employee as employers frequently chose to hire undocumented workers at lower costs, therefore, reducing demand for staffing services that comply with E. Verify regulations enhanced immigration enforcement by ice is now requiring employers to hire documented workers and is in either a phy employer we are I.

Rick Hermanns: <unk> positioned to benefit from this increased demand.

Rick Hermanns: I'd like to take a moment to thank Steve Crane for his contributions as Chief Financial Officer of Hirequest. Steve has been a valuable member of our leadership team since he joined as CFO in November of 2023.

Rick Hermanns: I'd like to take a moment to thank Steve Creed Crane for his contributions as Chief financial Officer of higher Quest, Steve has been a valuable member of our leadership team. Since you joined as CFO in November of 2023, we wish him well in his retirement steeve will be succeeded by David Hartley, Our current vice president of operational finance and corporate development.

Rick Hermanns: We wish him well in his retirement.

Rick Hermanns: Steve will be succeeded by David Hartley, our current Vice President of Operational Finance and Corporate Development, effective May 31st. David has extensive financial experience and a deep understanding of both our business and staffing industry, making him ideally suited to take over as CFO in a planned transition that follows. multiple years of preparation and planning. Importantly, in his current role, David has served as the main architect of more than 15 acquisitions completed over the past several years, giving him the experience and knowledge needed to continue growth and shareholder value.

Rick Hermanns: Effective may 31st David has extensive financial experience and a deep understanding of both business and staffing industry, making him ideally suited to take over as CFO in a planned transition that follows.

Rick Hermanns: Multiple years of preparation and planning importantly in his current role David has served as the main architect more than 15 acquisitions completed over the past several years, giving them the experience and knowledge needed to continue growth.

Rick Hermanns: And shareholder value to conclude we're pleased to have the delivered another.

Rick Hermanns: To conclude, we're pleased to have delivered another quarter of profitability, and we're energized about what is on the horizon for our business. We believe that we are well positioned with a strong team and a flexible model to drive enhanced value for our shareholders in 2025.

Rick Hermanns: Quarter of profitability and we're energized about what is on the horizon for our business. We believe that we're well positioned with a strong team and a flexible model to drive enhanced value for our shareholders in 2025 with that I'll now turn over the call to Steve to provide a closer look at our first quarter financial results.

Steve Crane: With that, I'll now turn over the call to Steve to provide a closer look at our first quarter financial results. Thank you, Rick, for the well wishes and good afternoon, everyone. Thank you for joining us today. Total revenue for the first quarter of 2025 was $7.5 million, compared with revenue of $8.4 million in the same quarter last year, a decrease of 11.2%. 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, as well as other miscellaneous revenue.

Steve Crane: Thank you Rick for the well wishes and good afternoon, everyone. Thank you for joining US today total revenue for the first quarter of 2025 was $7 $5 million compared with revenue of $8 $4 million in the same quarter last year, a decrease of 11, 2%.

Steve Crane: 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 in interest charged for franchisees as well as other miscellaneous revenue French.

Steve Crane: Franchise royalties for the first quarter were $7 million compared to $7.8 million for the same quarter last year. Underlying franchise royalties are system-wide sales, which are not part of our revenue, but are a helpful contextual performance System-wide sales reflect sales at all offices, including those classified as System-wide sales for the first quarter were $118.4 million compared to $134 million in the first quarter of 2024. Service revenue was $512,000 for the first quarter compared to $588,000 in the year-ago period. Selling General Administrative Expenses for the fourth quarter were $5.3 million compared to $5.6 million in the prior year period, a decrease of $6.5 million.

Steve Crane: Franchise royalties for the first quarter were $7 million compared to seven $8 million for the same quarter of last year.

Steve Crane: Underlying franchise royalties our system wide sales, which are not part of our revenue, but are a helpful contextual performance indicator.

Steve Crane: Some wide sales reflect sales at all offices, including those classified as discontinued cysts.

Steve Crane: System wide sales for the first quarter were $118 $4 million compared to $134 million in the first quarter of 2024.

Steve Crane: Service revenue was $512000 for the first quarter compared to $588000 in the year ago period.

Steve Crane: Selling general and administrative expenses for the fourth quarter were $5 $3 million compared to $5 $6 million in the prior year period, a decrease of six 5%.

Steve Crane: Shifting to our profitability metrics, net income after tax was $1.4 million in the first quarter of 2025, or $0.10 . Share, compared to a net income of $1.6 million for earnings per diluted share of $0.12 in the first quarter of 2024. Adjusted net income for the quarter, which excludes amortization of inquired intangibles and other non-recurring one-time expenses, was $1.8 million, or $0.13 per diluted share, compared to adjusted net income of $2 million or 15 cents per diluted share in the first quarter of 2024. We have provided a table and the press release issued earlier this afternoon with a detailed reconciliation of adjusted net income to net.

Steve Crane: Shifting to our profitability metrics net income after tax was $1 $4 million in the first quarter of 2025 or 10 cents per diluted share compared to a net income of $1 $6 million for earnings per diluted share of <unk> 12 cents in the first quarter of 2024.

Steve Crane: Adjusted net income for the quarter, which excludes amortization of inquired intangibles and other nonrecurring one time expenses was $1 $8 million or 13 cents per diluted share compared to adjusted net income of $2 million or 15 cents per diluted share in the first.

Steve Crane: Quarter of 2024, we have provided a table in the press release issued earlier. This afternoon with a detailed reconciliation of adjusted net income to net income.

Steve Crane: Adjusted EBITDA was $2.8 million compared to $3.4 million in the prior year period. Adjusted EBITDA margin for the quarter was 37%, compared to 40% in the first quarter. We believe Adjusted EVA does a relevant metric for us due to the size of non-cash operating expenses running through our program.

Steve Crane: Adjusted EBITDA was $2 $8 million compared to $3 $4 million in the prior year period.

Steve Crane: Adjusted EBITDA margin for the quarter was 37% compared to 40% in the first quarter of 2024, we believe adjusted EBITDA is a relevant metric for us due to the size of noncash operating expenses running through our P&L a detailed reconciliation of adjusted EBITDA to net income.

Steve Crane: A Detailed Reconciliation of Adjusted EBITDA to Net Income is provided in our 10-Q, which we filed this afternoon.

Steve Crane: As provided in our 10-Q, which we filed this afternoon.

Steve Crane: Moving now to the ballot. Total assets as of March 31, 2025 were $93.7 million compared to $94 million at December 31, 2024. Current assets as of March 31, 2025, included $2.1 million in cash and $42.2 million of net accounts receivable, while current assets at December 31, 2024, including $2.2 million of cash and $42.3 million of net accounts receivable. Current assets exceeded current liabilities by $27.4 million at March 31, 2025, versus December 31, 2024, when working capital was $25.1 million. Current liabilities were 46% of current assets at March 31, 2025, versus 49% of current assets at December 31, 2020.

Steve Crane: Moving now to the balance sheet.

Steve Crane: Our total assets as of March 31, 2025 were $93 $7 million compared to $94 million at December 31, 2024.

Steve Crane: Current assets as of March 31, 2025 included $2 $1 billion in cash and $42 $2 million of net accounts receivable, while current assets at December 31, 2024, including $2 $2 million of cash and $42 3 million.

Steve Crane: Net accounts receivable.

Steve Crane: Current assets exceeded current liabilities by $27 $4 million at March 31st 2025 versus December 31, 2024, when working capital was $25 $1 million.

Steve Crane: Current liabilities were 46% of current assets at March 31, 2025 versus 49% of current assets at December 31 2024.

Steve Crane: As of March 31, 2025, we had $5 $5 million drawn on our credit facility and another $34 $8 million in availability, assuming continued covenant compliance. We believe our credit facility provides us with the flexibility and room for short term working capital needs.

Steve Crane: As of March 31st, 2025, we had $5.5 million drawn on our credit facility and another $34.8 million in availability, assuming continued covenant We believe our credit facility provides us with the flexibility and room for short-term working capital needs, as well as the capacity to capitalize on potential. We have paid a regular quarterly dividend since the third quarter of 2020. As stated on our fourth quarter call, we most recently paid a six cent common share dividend on March 17, 2025 to shareholders of record as of March 3.

Steve Crane: As well as the capacity to capitalize on potential acquisitions.

Steve Crane: We have paid a regular quarterly dividend since the third quarter of 2020 as stated on our fourth quarter call. We most recently paid a six cent per common share dividend on March 17, 2025 to shareholders of record as of March 3rd we expect to continue to pay a dividend each quarter subject to the board's disk.

Rick Hermanns: We expect to continue to pay a dividend each quarter subject to the board's With that, I'll turn the call back over to Rick for some closing comments. Thank you, Steve.

Steve Crane: Brushing.

Rick Hermanns: With that I'll turn the call back over to Rick for some closing comments.

Speaker Change: Thank you, Steve as always I'd like to thank our employees and franchisees for their hard work and commitment.

Rick Hermanns: As always, I'd like to thank our employees and franchisees for their hard work and commitment, and we look forward to speaking with you again when we report our second quarter results.

Speaker Change: We look forward to speaking with you again, when we report our second quarter results with that we can now open the line to questions. Thank you.

Rick Hermanns: With that, we can now open the line to questions. Thank you. Thank you very much Rick.

Speaker Change: Keith I might shrink at this time, we'll be conducting a question and answer session. If he would like to ask a question you can do so by pressing star one on your saying keep putting out a confirmation tone will indicate that you'll find us and Nicky you May press star two if you would like to repeat your question for Nicky.

Operator: At this time we'll be conducting our question and answer session. If you would like to ask a question...

Operator: So by pressing star 1 on your phone keypad now, a confirmation tone will indicate that you'll You may press star 2 if you would like to remove Anyone using speaker equipment, MSWordDoc Word.Document.8 Please wait a moment while we poll Thank you very much.

Speaker Change: One using speaker equipment, it may be necessary to pick up your handset before pressing the keys.

Speaker Change: Wait a moment lusby poll for questions.

Speaker Change: Thank you very much. Your first question is coming from Kevin Steinke. He of Barrington Research Kevin Your line is life.

Kevin Steinke: Your first question is coming from Kevin Steinke of Barrington, Kevin, your line is Great, thank you. We just wanted to start off by asking about Recent trends you may be seeing in your business. You know, obviously, you reference the macroeconomic headwinds impacting the broader industry, as well as your results in the first quarter. But we, you know, started to see a lot of the major headlines around tariffs, etc, at the beginning of April. So I don't know if you have any commentary on maybe what you've seen in April and, you know, the second quarter. Yeah, there's, thanks for the question, Kevin, it there hasn't really, there's has been no dramatic shift either way, you know, since the second quarter began.

Speaker Change: Great. Thank you.

Speaker Change: Just wanted to start off by asking about.

Speaker Change: <unk>.

Speaker Change: Recent trends you may be seeing in your business.

Speaker Change: You know, obviously you reference the macroeconomic headwinds.

Speaker Change: Impacting the broader industry.

Speaker Change: As well as your results in the first quarter, but we you know started to see a lot of the <unk>.

Speaker Change: A major headlines around tariffs et cetera at the beginning of April so I don't know.

Speaker Change: You have any commentary on maybe what you've seen in April and.

Speaker Change: The first several weeks of the second quarter.

Speaker Change: Yeah. Thanks.

Speaker Change: Thanks for the question Kevin It at there Hasnt really there has been no dramatic shift either way.

Speaker Change: Since the second quarter began so it's.

Rick Hermanns: So it's You know that there hasn't necessarily been a tangible impact from the from the tariff standoffs in sort of in the real in the real world that we work in, but it and yet it's still holding people at bay. I mean, frankly, as I said in the last earnings call, you know, we had started to pick up a bit towards the end of the year. And so, you know, but then that stopped. And so that's just continuing on.

Speaker Change: You know the the.

Speaker Change: There hasn't necessarily been a tangible impact from the from the tariff standoffs in sort of in the real and the real world that we work in but it did better and yet it's still holding people at Bay I mean, frankly.

Speaker Change: As I said in the last earnings call, we have started to.

Speaker Change: Pick up a bit towards the end of the year and so.

Speaker Change: But then that stopped and so that's just continuing on.

Speaker Change: Okay understood.

Kevin Steinke: Okay, understood. And you referenced again, as you did last quarter, more stringent immigration policies. Just helping the overall market for your services. And I believe, you know, Mitt, you've referenced in the recent past that you've actually, I think you've picked up some new business because of that. I don't know if you start, continue to see more of that in terms of your pipeline or new business wins related to, you know, if you think you could tie that pretty directly to the district or immigration. Oh, there's, yeah, there's no question that there are some wins that we're definitely getting as a result of it.

Speaker Change: And.

Speaker Change: You referenced again as you you're just last quarter.

Speaker Change: More springer at our immigration policies.

Speaker Change: Just helping the overall market for your services.

Speaker Change: And I believe.

Speaker Change: You've referenced in the recent past that you've actually think you've picked up some new business because of that I I don't know if you you'd start continue to see more of that in terms of your pipeline or new business wins.

Speaker Change: Related to yeah.

Speaker Change: If you think you could tie that pretty directly to the stricter integration.

Speaker Change: Oh, there's yeah. There's no question that there are some wins that were definitely getting as a result of it it'll it you know there are this week we had.

Rick Hermanns: It'll, you know, there are, this week we had A lot of our franchisees in Charleston for basically a training seminar and just in talking with some of them, there are a lot of stories of clients coming back or clients that are saying, yeah, we were raided or they know of somebody who was raided. And so it's definitely opening, you know, it's reopening doors for us that had been kind of closed off to us for four years. So it's happening. I'm not saying that, you know, it's not obviously every client because we still had a lot, a lot of clients.

Speaker Change: A lot of our franchisees in Charleston.

Speaker Change: Four.

Speaker Change: Basically training.

Speaker Change: Training seminar.

Speaker Change: And just in talking with with some of them. There are there are.

Speaker Change: A lot of stories of clients coming back or clients that are saying, yeah. We were rated or they know somebody who was rated and so it's it's definitely opening.

Speaker Change: No its reopening doors for us that had been kind of closed off to us for four years. So it's it's happening I'm not saying that you know it you know it.

Speaker Change: It's not.

Speaker Change: Every client because we still had a lot a lot of clients, but but again there is good movement that way and.

Rick Hermanns: But but again, there is good movement that way. And. you know, good positive movement. And there are certain companies that are very large users of staffing that, you know, historically haven't taken much care as far as whether they were hiring documented workers or undocumented workers. And so we're very hopeful about immigration helping us.

Speaker Change: Good positive movement and there are certain companies that are very large users of staffing that you know historically you haven't.

Speaker Change: Taken much care as far as whether they were hiring documented workers, who are undocumented workers and so where we're very hopeful.

Speaker Change: About about immigration helping us.

Speaker Change: Okay.

Kevin Steinke: Okay, that's helpful.

Speaker Change: That's helpful wanted to ask also about.

Kevin Steinke: Wanted to ask also about The trend in SG&A, and you mentioned continuing to work on cost reduction and expense management. You know, I wanted to hear more about that, but also specifically to the first quarter SG&A 5.3 million was up sequentially from the fourth quarter, although you had a Unknown Executive, Keegan Cox, Steven Crane, Hirequest Kind of wondering what influenced the trend quarter to quarter and then, you know, what you're working on from a cost management perspective. So there were a few different. anomalous numbers within the first quarter. And so it that probably masks. that mastered.

Speaker Change: The trend in SG&A and you mentioned are continuing to work on cost reduction and expense management.

Speaker Change: Okay.

Speaker Change: You know wanted to hear more about that but also specifically to.

Speaker Change: The first quarter SG&A, a $5 3 million.

Speaker Change: It was up sequentially from the fourth quarter, Although you had a sequential decline in workers' comp expense of about 300000, you know fourth quarter to first quarter. So just.

Speaker Change: I'm kind of wondering what the.

Speaker Change: Influenced the trend quarter to quarter, and then you know what you're working on from a cost management perspective.

Speaker Change: So there were a few different.

Speaker Change: Anomalous.

Speaker Change: The numbers within the first quarter and so it it.

Speaker Change: That probably mask.

Speaker Change: That mastered in particular there was in the prior year there was about a $190000 of professional fees that had fallen into the second quarter of 24 that actually fell in 24 that were the equivalent charge.

Steve Crane: In particular, there was in the prior year, there was about $190,000 of professional fees that had fallen into the second quarter of 24 that actually fell in 24 that were the equivalent charge was in the first quarter of 20, you know, 25. So there was a timing difference on that from a comparative standpoint, and that, you know, which would have then put us right back to where we really needed to be. And again, there were a couple of other smaller things, we, we did a, you know, a minor riff in the first quarter, also, but, you know, there were a couple of people who had pretty long tenure.

Speaker Change: In the first quarter of 'twenty.

Speaker Change: 25, so there was a timing difference on that from a comparative standpoint in that.

Speaker Change: You know, which would've been put us right back to where we really needed to be and again there were a couple of other smaller things, we we did oh.

Speaker Change: A minor risk in the first quarter also but you know.

Speaker Change: There were a couple of people, who had pretty long tenure and so in reality. It had the effect of increasing the expense in the first quarter versus you know again, we're you know by the by the second quarter, obviously that will all be off so.

Steve Crane: And so in reality, it had the effect of increasing the expense in the first quarter, versus, you know, again, where, you know, by the, you know, by the second quarter, obviously, it'll all be off. So, you know, there's a few items like that. So we're, it probably masked it in a negative way, the improvement was masked a bit by, like I said, the timing difference on the professional fees, and, you know, a little bit on the RIF costs.

Speaker Change: You know, there's a few items like that so we're at probably masked it in a negative way the improvement was masked a bit by like I said, the timing difference on the professional fees and a you know a little bit on the risk costs.

Speaker Change: Alright, yeah that makes sense.

Kevin Steinke: All right, yeah, that makes sense. You mentioned that the strong M&A pipeline. feel like you're well positioned to make some deals. It sounded to me, maybe I'm reading into it a little bit too much, but it sounds like maybe you're a little more confident of getting some deals done. So, you know, any comment on. Andrew Mattson, William A. Aleston, Rachel Quickly, Dean O'Grady, Daniel Britt, Colin Pipers, Aaron Roman, four Gossett administration, Thomas Edison, Colin Coopers, Michael Zeldowitz, Joel Zob葬, James Bond Foundation, Agent Ag Sukon, Dan Campbell, Peter McIntosh, Jack Thank you.

Speaker Change: And.

Speaker Change: You mentioned that the strong M&A pipeline.

Speaker Change: You feel like you're well positioned to make some deals.

Speaker Change: And <unk>.

Speaker Change: It sounded to me, maybe I'm reading into it a little bit too much but it sounds like maybe you're a little more confident of getting some deals done.

Speaker Change: So any comment on just the pipeline or.

Speaker Change:

Rick Hermanns: and John McAnnar, Unknown Executive, Keegan Cox, Steven Crane, Hirequest Well, I think that's it. It's a lot of it is definitely driven by. through the ongoing weakness in demand. And, you know, for a staffing company that's not very well capitalized, so I'm not talking about us, I'm talking about, let's say, the people who we may well have opportunities to acquire. It's one thing to go through one or two quarters of. You know, suppressed demand. But now we're in, you know, we just finished basically quarter nine of, you know, fairly muted demand. And so it's just showing up now where we're starting to see ones that are, you know, that are more distressed and are becoming more realistic with their prices.

Speaker Change: Potential near term opportunities and you know if the environment continues to create more.

Speaker Change: Opportunities for you.

Speaker Change: Well I think that's it.

A lot of it is definitely driven by.

Speaker Change: So the ongoing weakness in demand and you know for a staffing company theres not very well capitalized so I'm not talking about us I'm talking about let's say the people who we are.

Speaker Change: May well have opportunities to acquire.

Speaker Change: It's one thing to go through one or two quarters of.

Speaker Change: Suppressed demand, but now we're in you know, we just finished basically quarter nine of fairly muted demand and so it's just showing up now where we're starting to see ones that are.

Speaker Change: That are more distressed and R. B.

Speaker Change: Becoming more realistic with their prices and so we are you know.

Rick Hermanns: And so we are, you know, we are definitely more hopeful of, you know, not just the number of deals we're seeing, those are those are always fairly consistent. But at price points that make a lot more sense for us.

Speaker Change: We are.

Speaker Change: Definitely more hopeful of not just the number of deals. We're seeing those are those are always fairly consistent but.

Speaker Change: At price points that make a lot more sense for us.

Speaker Change: Okay.

Kevin Steinke: OK. That's helpful.

Speaker Change: That's helpful and just lastly.

Kevin Steinke: And just lastly, and the.

Speaker Change: On the.

Kevin Steinke: EFO transition. Congratulations to Steven on your upcoming retirement, but You know, with David taking over the DFO role, as you mentioned, he's done a lot of that on the corporate development side and, you know, sourcing deals and acquisitions. And I was wondering if you're maybe looking to backfill that a little bit. Now that David's going to take on more responsibility, if you'd like to maybe add on the corporate development side. Well, that's a possibility. It's more apt to be filled, not at his level, but more at a level of you know, but still finding a deal sourcer.

Speaker Change: D F O transition congratulations this even on your upcoming retirement, but.

David Hartley: You know with David taking over the.

David Hartley: CFO role as you imagine he's he's done a lot of the corporate development side, and you know sourcing deals and acquisitions and.

David Hartley: I was wondering if you're maybe looking to backfill that a little bit now that.

David Hartley: David is going to take on more responsibility, if you'd like to maybe add on the corporate development side.

David Hartley: Well, that's a possibility it's it's more apt to be filled now not at his level, but more at a level of.

David Hartley: But still finding a deal source or I mean, keeping in mind. David came from you know came from the investment bank that represented.

Rick Hermanns: I mean, keeping in mind, David came from, you know, came from the investment bank that represented command center in our merger. So, you know, he, you know, he served as a classic investment banker. And so we don't necessarily need another full on dealmaker on our staff. But to your point is, in fact, we've already had that discussion is is that we will, you know, we will almost certainly add a person to, you know, sort of source deals and at least get them to, you know, I'm saying get them to a point, but will we see another VP of corporate development?

Speaker Change: Command Center in our merger so you know he.

Speaker Change: He served as a classic investment banker and so we don't necessarily need another full on dealmaker on our staff.

Speaker Change: But to your point is in fact, we've already had that discussion is that we will we will almost certainly add a person to.

Speaker Change: You know sort of source deals and at least get them too.

Speaker Change: Get them to a point, but will we see another VP of corporate development no. That's unlike but not in the short run that's not likely.

Kevin Steinke: You know, no, that's unlikely, not in the short run. That's not All right.

Speaker Change: Alright, well thanks for all the good answers I appreciate the comments I'll turn it back over.

Kevin Steinke: Well, thanks for all the good answers. I appreciate the comments.

Rick Hermanns: I'll turn it back over. Thank you. Thank you very much.

Speaker Change: Thank you.

Speaker Change: Thank you very much while we appear to have reached the end of our question and answer session I will now hand back over to Rick for any further closing comments.

Rick Hermanns: Well, we appear to have reached the end of our question. Over to Rick for any further clothing. Thank you, Jenny. So I just thank everybody for tuning in. And we, you know, we are we remain optimistic and confident of our model. And one of the things that we're seeing in these difficult times, and certainly hope the investment community sees is that Through our franchise model, we are very, very well situated to remain profitable at other times while some of our competitors are really struggling with maintaining profitability. And so it's a great time to see that value.

Rick Hermanns: Thank you Jenny.

Rick Hermanns: So I just thank everybody for tuning in and we.

Rick Hermanns: We are we remain optimistic and confident of our model and.

Rick Hermanns: One of the things that we're seeing in these difficult times and certainly hope the investment community sees is that big.

Rick Hermanns: Through a franchise model, we are very very well situated to remain profitable at other times, while some of our competitors are really struggling with maintaining profitability and so its a great time to see that value and as I've said going back to as long ago as you know really.

Rick Hermanns: And as I've said, going back to as long ago as, you know, really 2019, is that The one. The one good point of a suppressed demand is the fact that it does tend to create buying opportunities and so we're, again, hopeful and confident that, you know, that that will prove itself to be true.

Rick Hermanns: 2019 is that.

Rick Hermanns: The one.

Rick Hermanns: The one good point.

Rick Hermanns: Of a.

Speaker Change: Of suppressed demand is the fact that it does tend to create buying opportunities and so we're again hopeful and confident that.

Rick Hermanns: You know.

But that will prove itself to be true.

Rick Hermanns: And so again, thank you for joining today. Thanks for the questions, Kevin. And thanks and talk to you again in a few months. Thank you very much.

Kevin: So again, thank you for joining today and thank you for the questions Kevin and.

Rick Hermanns: And talk to you again in a few months.

Speaker Change: Thank you very much. This does conclude today's conference call. You may disconnect. Your phone lines at this time and have a wonderful day, we thank you for your participation.

Operator: This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. We thank you for your...