2021 Q2 Form 10-Q Financial Statement

#000165495421008640 Filed on August 09, 2021

View on sec.gov

Income Statement

Concept 2021 Q2 2020 Q2 2020 Q1
Revenue $5.706M $2.901M $4.120M
YoY Change 96.7% -10.46% 18.73%
Cost Of Revenue
YoY Change
Gross Profit
YoY Change
Gross Profit Margin
Selling, General & Admin $2.041M $1.931M $3.250M
YoY Change 5.67% 121.96% 109.68%
% of Gross Profit
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $366.0K $30.00K $30.00K
YoY Change 1120.0% 0.0% 200.0%
% of Gross Profit
Operating Expenses $2.041M $1.931M $3.290M
YoY Change 5.67% 116.97% 109.55%
Operating Profit $3.300M $937.5K
YoY Change 251.96%
Interest Expense -$20.32K $17.85K -$10.00K
YoY Change -213.84% -107.76% -94.44%
% of Operating Profit -0.62% 1.9%
Other Income/Expense, Net $126.3K $290.0K $250.0K
YoY Change -56.45% 31.82% 733.33%
Pretax Income $3.406M $1.208M $1.070M
YoY Change 181.81% -48.13% -38.86%
Income Tax $685.9K $51.50K $200.0K
% Of Pretax Income 20.14% 4.26% 18.69%
Net Earnings $2.720M $1.157M $880.0K
YoY Change 135.07% -49.91% -48.84%
Net Earnings / Revenue 47.66% 39.88% 21.36%
Basic Earnings Per Share $0.20 $0.09
Diluted Earnings Per Share $0.20 $0.09 $64.99K
COMMON SHARES
Basic Shares Outstanding 13.61M shares 13.55M shares
Diluted Shares Outstanding 13.86M shares 13.55M shares

Balance Sheet

Concept 2021 Q2 2020 Q2 2020 Q1
SHORT-TERM ASSETS
Cash & Short-Term Investments $2.205M $13.75M $10.04M
YoY Change -83.97% 98.99% 36.78%
Cash & Equivalents
Short-Term Investments
Other Short-Term Assets $2.370M $3.000M $2.660M
YoY Change -21.01% 265.85% 192.31%
Inventory
Prepaid Expenses $952.6K
Receivables $35.06M $19.65M $24.43M
Other Receivables $1.520M $2.190M $3.490M
Total Short-Term Assets $41.15M $38.58M $40.62M
YoY Change 6.66% 114.81% 134.53%
LONG-TERM ASSETS
Property, Plant & Equipment $3.837M $2.790M $2.550M
YoY Change 37.53% 49.2% 22.6%
Goodwill
YoY Change
Intangibles $667.9K
YoY Change
Long-Term Investments
YoY Change
Other Assets $1.317M
YoY Change
Total Long-Term Assets $28.57M $9.610M $8.660M
YoY Change 197.28% 35.54% 11.6%
TOTAL ASSETS
Total Short-Term Assets $41.15M $38.58M $40.62M
Total Long-Term Assets $28.57M $9.610M $8.660M
Total Assets $69.72M $48.19M $49.28M
YoY Change 44.68% 92.38% 96.49%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $1.393M $90.00K $240.0K
YoY Change 1447.79% -83.02% -73.33%
Accrued Expenses $3.721M $1.520M $1.610M
YoY Change 144.79% -39.2% -35.86%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $97.81K
YoY Change
Total Short-Term Liabilities $19.66M $10.40M $12.09M
YoY Change 89.05% 110.53% 132.05%
LONG-TERM LIABILITIES
Long-Term Debt $3.056M $0.00 $0.00
YoY Change
Other Long-Term Liabilities $4.149M $3.300M $3.700M
YoY Change 25.74% 106.25% 102.19%
Total Long-Term Liabilities $7.205M $3.300M $3.700M
YoY Change 118.33% 106.25% 102.19%
TOTAL LIABILITIES
Total Short-Term Liabilities $19.66M $10.40M $12.09M
Total Long-Term Liabilities $7.205M $3.300M $3.700M
Total Liabilities $27.82M $14.31M $16.80M
YoY Change 94.42% 118.81% 138.64%
SHAREHOLDERS EQUITY
Retained Earnings $12.65M
YoY Change
Common Stock $13.67K
YoY Change
Preferred Stock
YoY Change
Treasury Stock (at cost) $146.5K
YoY Change
Treasury Stock Shares 33.09K shares
Shareholders Equity $41.90M $33.88M $32.48M
YoY Change
Total Liabilities & Shareholders Equity $69.72M $48.19M $49.28M
YoY Change 44.68% 92.38% 96.49%

Cashflow Statement

Concept 2021 Q2 2020 Q2 2020 Q1
OPERATING ACTIVITIES
Net Income $2.720M $1.157M $880.0K
YoY Change 135.07% -49.91% -48.84%
Depreciation, Depletion And Amortization $366.0K $30.00K $30.00K
YoY Change 1120.0% 0.0% 200.0%
Cash From Operating Activities -$533.8K $4.170M $5.500M
YoY Change -112.8% -6057.14% 239.51%
INVESTING ACTIVITIES
Capital Expenditures -$590.7K -$300.0K -$680.0K
YoY Change 96.89% 200.0% 325.0%
Acquisitions
YoY Change
Other Investing Activities -$516.6K -$170.0K $1.000M
YoY Change 203.86% -180.95% -2.91%
Cash From Investing Activities -$1.107M -$460.0K $320.0K
YoY Change 140.71% -560.0% -63.64%
FINANCING ACTIVITIES
Cash Dividend Paid $817.0K
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 1.870M 10.00K 30.00K
YoY Change 18596.5% -102.38% -100.88%
NET CHANGE
Cash From Operating Activities -533.8K 4.170M 5.500M
Cash From Investing Activities -1.107M -460.0K 320.0K
Cash From Financing Activities 1.870M 10.00K 30.00K
Net Change In Cash 228.6K 3.720M 5.850M
YoY Change -93.85% -1053.85% -757.3%
FREE CASH FLOW
Cash From Operating Activities -$533.8K $4.170M $5.500M
Capital Expenditures -$590.7K -$300.0K -$680.0K
Free Cash Flow $56.88K $4.470M $6.180M
YoY Change -98.73% 14800.0% 247.19%

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us-gaap Net Cash Provided By Used In Financing Activities
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us-gaap Cash And Cash Equivalents Period Increase Decrease
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Cash
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Cash
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hqi Notes Received For Sale Of Branches
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us-gaap Nature Of Operations
NatureOfOperations
<p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">HireQuest, Inc. (together with its subsidiaries, “HQI,” the “Company,” “we,” us,” or “our”) is a nationwide franchisor of offices providing on-demand labor solutions in the light industrial and blue-collar segments of the staffing industry and traditional commercial staffing. Our franchisees provide various types of temporary personnel through two business models operating under the trade names “HireQuest Direct,” “HireQuest,” “Snelling,” “LINK Staffing,” and “DriverQuest.” HireQuest Direct specializes primarily in unskilled and semi-skilled industrial and construction personnel. HireQuest, Snelling, and Link specialize primarily in skilled and semi-skilled industrial personnel, clerical and administrative personnel, and permanent placement services. DriverQuest specializes in commercial drivers serving a variety of industries and applications.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">On March 1, 2021, we completed our acquisition of Snelling Staffing and affiliates (“Snelling”). We acquired substantially all of the operating assets and assumed certain liabilities of Snelling for a purchase price of approximately $17.7 million subject to customary adjustments for net working capital. On March 22, 2021, we completed our asset acquisition of Link Staffing and affiliates (“Link”) in which we acquired all of the franchise relationships and certain other assets of Link for a purchase price of approximately $11.2 million. For additional information related to these transactions, see <em>Note 2 – Acquisitions</em>.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">As of June 30, 2021 we had 212 franchisee-owned offices in 35 states and the District of Columbia. We are the employer of record to approximately 80,000 employees annually, who in turn provide services to thousands of clients in various industries including construction, recycling, warehousing, logistics, auctioneering, manufacturing, hospitality, landscaping, and retail. We provide staffing, marketing, working capital funding, software, and administrative services to our franchisees.</p>
CY2021Q1 us-gaap Payments For Purchase Of Other Assets1
PaymentsForPurchaseOfOtherAssets1
11200000 USD
hqi Covid19 Pandemic Policy Tect Block
COVID19PandemicPolicyTectBlock
<p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">In December 2019, a novel strain of coronavirus disease ("COVID-19") was first reported in Wuhan, China. Less than four months later, on March 11, 2020, the World Health Organization declared COVID-19 a pandemic. The extent of COVID-19's ultimate effect on our operational and financial performance and the collectability of our notes receivable will depend on future developments, including the duration, spread, and intensity of the pandemic, all of which are uncertain and difficult to predict. As a result, it is not currently possible to ascertain the overall impact of COVID-19 on our business. However, the pandemic has so far had a material adverse effect on our business and results of operations. If the pandemic continues to be a severe worldwide health crisis, it could continue to have a material adverse effect on our future business, results of operations, financial condition, and cash flows.</p>
us-gaap Use Of Estimates
UseOfEstimates
<p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. Actual results could differ from those estimates.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Significant estimates and assumptions underlie our workers’ compensation claim liabilities, our workers’ compensation risk management incentive program accrual, our deferred taxes, the reserve for losses on notes receivable, and the estimated fair value of assets acquired and liabilities assumed.</p>
CY2021Q2 us-gaap Revenue From Contract With Customer Including Assessed Tax
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hqi Non Vested Endings
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WeightedAverageNumberOfDilutedSharesOutstanding
13834013 shares
hqi Non Vested Beginning
NonVestedBeginning
258456 shares
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212 integer
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WeightedAverageGrantDatePriceBeginning
7.21
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19.74
CY2021Q2 hqi Franchise Royaltiy
FranchiseRoyaltiy
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DueToFranchisees
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hqi Share Based Compensation Arrangement By Share Based Payments Award Equity Instruments Other Than Options Vested In Period
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us-gaap Line Of Credit Facility Description
LineOfCreditFacilityDescription
The line of credit and swingline loans bear interest at a variable rate equal to: (a) for LIBOR index rate loans,] the Daily One Month London Interbank Offering Rate, or LIBOR, plus a margin between 1.25% and 1.75% per annum or; (b), for base rate loans, the then applicable base rate plus a margin between 0.25% and 0.75% per annum. The margin is determined based on our average excess availability, which is generally equal to our total collateral less the outstanding balance, if any, under the loan agreement. At June 30, 2021 the effective interest rate was approximately 2.7%. A non-use fee of 0.250% accrues on the unused portion of the line of credit. As collateral for repayment of any and all obligations under this agreement, we granted Truist a security interest in substantially all of our operating assets and the operating assets of our subsidiaries. This agreement, and other loan documents, contain customary representations and warranties, affirmative and negative covenants, including without limitation, those covenants governing indebtedness, liens, fundamental changes, restrictions on certain payments, including dividends, unless certain conditions are met, transactions with affiliates, investments, and the sale of assets. This agreement requires us to comply with a fixed charge coverage ratio of at least 1.25:1.00, and a leverage ratio of not more than 3.0:1.0
us-gaap Officers Compensation
OfficersCompensation
500000 USD
hqi Estimated Future Claims Losses And Expenses At The End Of The Period
EstimatedFutureClaimsLossesAndExpensesAtTheEndOfThePeriod
500000 USD
hqi Snelling Transaction Amount
SnellingTransactionAmount
7200000 USD
CY2019Q3 us-gaap Restricted Stock Shares Issued Net Of Shares For Tax Withholdings
RestrictedStockSharesIssuedNetOfSharesForTaxWithholdings
42211 shares
CY2019Q3 us-gaap Restricted Stock Value Shares Issued Net Of Tax Withholdings
RestrictedStockValueSharesIssuedNetOfTaxWithholdings
845000 USD
CY2021Q2 us-gaap Sharebased Compensation Arrangement By Sharebased Payment Award Options Vested Number Of Shares
SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedNumberOfShares
40176 shares
CY2019Q3 us-gaap Stock Issued During Period Shares Acquisitions
StockIssuedDuringPeriodSharesAcquisitions
2035 shares
us-gaap Restricted Stock Shares Issued Net Of Shares For Tax Withholdings
RestrictedStockSharesIssuedNetOfSharesForTaxWithholdings
2280 shares
us-gaap Restricted Stock Value Shares Issued Net Of Tax Withholdings
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34000 USD
CY2020 us-gaap Stock Issued During Period Shares Acquisitions
StockIssuedDuringPeriodSharesAcquisitions
20075 shares
CY2020Q4 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Outstanding Number
ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber
17082 shares
CY2020Q4 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Outstanding Weighted Average Exercise Price
ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice
6.10
CY2021Q2 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Outstanding Number
ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber
17082 shares
CY2021Q2 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Outstanding Intrinsic Value
ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingIntrinsicValue
212072 USD
us-gaap Description Of Interest Rate Risk Exposure
DescriptionOfInterestRateRiskExposure
Notes receivable generally bear interest at a fixed rate between 6.0% and 10.0%. Notes receivable are generally secured by the assets of each office and the ownership interests in the franchise

Files In Submission

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