On August 8, 2024, HireQuest Inc (HQI, Financial) released its 8-K filing detailing the financial results for the second quarter ended June 30, 2024. HireQuest Inc is a nationwide franchisor providing direct-dispatch, executive search, and commercial staffing solutions in the light industrial and blue-collar segments of the staffing industry. The company's franchisees operate under various trade names, including HireQuest Direct, HireQuest, Snelling, DriverQuest, HireQuest Health, Northbound Executive Search, and MRI.
Performance Overview
HireQuest Inc (HQI, Financial) reported a net income from continuing operations of $2.1 million, or $0.15 per diluted share, for Q2 2024, matching the net income from the same period last year. This result exceeded the analyst estimate of $0.13 per share. However, total revenue for the quarter was $8.7 million, a 3.4% decrease from $9.0 million in Q2 2023, exceeding the estimated $8.50 million.
Financial Achievements and Challenges
Despite a challenging economic environment, HireQuest Inc (HQI, Financial) managed to maintain profitability. The company took steps earlier this year to lower workers’ compensation expenses, which contributed to sustained profitability. However, system-wide sales for Q2 2024 decreased to $146.1 million from $157.0 million in Q2 2023, reflecting broader industry challenges.
“Our second quarter results were highlighted by sustained profitability as we continue to manage costs and execute on our business strategy,” said Rick Hermanns, HireQuest’s President and Chief Executive Officer.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Franchise Royalties | $8.2 million | $8.7 million |
| Service Revenue | $479,000 | $245,000 |
| Total Revenue | $8.7 million | $9.0 million |
| SG&A Expenses | $5.3 million | $5.6 million |
| Net Income from Continuing Operations | $2.1 million | $2.1 million |
| Adjusted EBITDA | $4.0 million | $3.9 million |
Balance Sheet and Cash Flow
As of June 30, 2024, HireQuest Inc (HQI, Financial) reported cash of $614,000, down from $1.3 million as of December 31, 2023. Total assets increased to $107.6 million from $103.8 million at the end of 2023, while total liabilities rose slightly to $42.2 million from $41.1 million. Working capital improved to $20.6 million from $15.7 million at the end of 2023.
Analysis and Outlook
HireQuest Inc (HQI, Financial) has demonstrated resilience in a tough economic climate, maintaining profitability and managing costs effectively. The company's focus on reducing expenses and driving revenue growth positions it well for the latter half of 2024. However, the decline in system-wide sales and franchise royalties indicates ongoing challenges in the staffing market.
“We believe that we are well positioned in the back half of this year with an improving staffing market, reduced expenses, and a superior business model to drive continued growth and value for our shareholders,” added Mr. Hermanns.
For more detailed insights and to access the full earnings report, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from HireQuest Inc for further details.
