HireQuest, Inc. Files 2023 Annual Report on Form 10-K

TL;DR

<b>HireQuest, Inc. filed its 2023 10-K, detailing financial health with $13.9M in assets and $13.9M in debt.</b>

AI Summary

HireQuest, Inc. (HQI) filed a Annual Report (10-K) with the SEC on March 21, 2024. HireQuest, Inc. reported total assets of $13,997,000 for the fiscal year ended December 31, 2023. The company's total debt was $13,918,000 as of December 31, 2023. Operating margin for the period was 44%. Gross margin stood at 40%. The company's net income was not explicitly stated in the provided data, but EPS was $1.25.

Why It Matters

For investors and stakeholders tracking HireQuest, Inc., this filing contains several important signals. The filing provides a clear snapshot of HireQuest's financial position at the end of 2023, allowing investors to assess its asset base and leverage. Key financial metrics like operating and gross margins offer insights into the company's profitability and operational efficiency.

Risk Assessment

Risk Level: — HireQuest, Inc. shows moderate risk based on this filing. The company has a significant amount of debt relative to its assets, indicating potential financial risk.

Analyst Insight

Investors should analyze the company's debt repayment strategy and its ability to generate sufficient cash flow to service its debt obligations.

Financial Highlights

operating Margin

44%

total Assets

13,997,000

total Debt

13,918,000

eps

1.25

gross Margin

40%

Key Numbers

• 13,997,000 — Total Assets (As of December 31, 2023)
• 13,918,000 — Total Debt (As of December 31, 2023)
• 44 — Operating Margin (For the fiscal year ended December 31, 2023)
• 40 — Gross Margin (For the fiscal year ended December 31, 2023)
• 1.25 — EPS (For the fiscal year ended December 31, 2023)

Key Players & Entities

• HireQuest, Inc. (company) — FILER
• 111 SPRINGHALL DRIVE (address) — BUSINESS ADDRESS
• GOOSE CREEK (location) — BUSINESS ADDRESS
• SC (location) — BUSINESS ADDRESS
• 29445 (postal_code) — BUSINESS ADDRESS
• Command Center, Inc. (company) — FORMER COMPANY
• TEMPORARY FINANCIAL SERVICES INC (company) — FORMER COMPANY

FAQ

Industry Context

HireQuest operates in the services sector, specifically within help supply services, indicating a focus on providing temporary and permanent staffing solutions.

Regulatory Implications

The filing is a standard 10-K annual report required by the Securities and Exchange Commission (SEC) for publicly traded companies.

What Investors Should Do

1. Review the company's debt-to-equity ratio to understand its financial leverage.
2. Analyze the trends in operating and gross margins to assess profitability over time.
3. Examine the company's cash flow statements to understand its ability to generate cash and manage its debt.

Key Dates

• 2023-12-31: Fiscal Year End — End of reporting period for the 10-K filing
• 2024-03-21: Filing Date — Date the 10-K was officially submitted to the SEC

Year-Over-Year Comparison

This filing represents the annual report for the fiscal year ending December 31, 2023, providing a comprehensive update compared to previous filings.

Key Financial Figures

• $0.001 — ection 12(b) of the Act: Common Stock, $0.001 par value HQI The NASDAQ Stock Mark
• $17.9 million — s for a purchase price of approximately $17.9 million (the "Snelling Acquisition"). Also on M
• $2.1 million — which HireQuest, Inc. agreed to advance $2.1 million to be paid to the sellers at closing to
• $11.1 million — K for a purchase price of approximately $11.1 million (the "LINK Acquisition"). We funded thi
• $4.4 million — tock of Recruit Media for approximately $4.4 million. We funded this acquisition with existi
• $1.9 million — ted November 2, 2021, for approximately $1.9 million. DPI was a 46-year-old dental staffing
• $7.0 m — Texas and New Mexico for approximately $7.0 million, inclusive of a prescribed amount
• $2.5 m — ated January 19, 2022 for approximately $2.5 million, inclusive of a prescribed amount
• $11.4 m — ted January 25, 2022, for approximately $11.4 million, inclusive of a $1.5 million note
• $1.5 million — oximately $11.4 million, inclusive of a $1.5 million note payable and a prescribed amount of
• $1.5 m — sting cash on hand, seller financing of $1.5 million, and a draw on our existing line
• $13.3 million — ed November 16, 2022, for approximately $13.3 million. MRI has been a leader in the recruitme
• $50 million — ary / contract labor division with over $50 million in annual billings. We funded this acqu
• $9.8 million — ated October 23, 2023 for approximately $9.8 million. TEC has been a provider of industrial
• $35.8 million — ees on overdue accounts receivable, was $35.8 million in 2023. This does not include revenue

Filing Documents

• hqi20231231_10k.htm (10-K) — 1633KB
• ex_584203.htm (EX-21.1) — 5KB
• ex_584204.htm (EX-23.1) — 3KB
• ex_628302.htm (EX-23.2) — 2KB
• ex_584205.htm (EX-31.1) — 10KB
• ex_584206.htm (EX-31.2) — 10KB
• ex_584207.htm (EX-32.1) — 5KB
• ex_640083.htm (EX-97.1) — 23KB
• a01.jpg (GRAPHIC) — 108KB
• logo01.jpg (GRAPHIC) — 17KB
• 0001437749-24-008879.txt (&nbsp;) — 9348KB
• hqi-20231231.xsd (EX-101.SCH) — 77KB
• hqi-20231231_cal.xml (EX-101.CAL) — 74KB
• hqi-20231231_def.xml (EX-101.DEF) — 559KB
• hqi-20231231_lab.xml (EX-101.LAB) — 472KB
• hqi-20231231_pre.xml (EX-101.PRE) — 597KB
• hqi20231231_10k_htm.xml (XML) — 1527KB

Business

Business 3 Item 1A.

Risk Factors

Risk Factors 13 Item 1B. Unresolved Staff Comments 21 Item 1C. Cybersecurity Item 2. Description of Properties 22 Item 3.

Legal Proceedings

Legal Proceedings 23 Item 4. Mine Safety Disclosure 23 PART II Item 5. Markets for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 23 Item 6. Reserved 24 Item 7.

Management's Discussion and Analysis of Financial Conditions and Results of Operations

Management's Discussion and Analysis of Financial Conditions and Results of Operations 24 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 32 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 33 Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure 59 Item 9A.

Controls and Procedures

Controls and Procedures 59 Item 9B. Other Information 60 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 57 PART III Item 10. Directors, Executive Officers, and Corporate Governance 60 Item 11.

Executive Compensation

Executive Compensation 60 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 60 Item 13. Certain Relationships and Related Transactions, and Director Independence 60 Item 14. Principal Accountant Fees and Services 60 PART IV Item 15. Exhibits, Financial Statement Schedules 61

Signatures

Signatures 62 2 Table of Contents Special Note Regarding Forward-Looking Statements This Annual Report on Form 10-K for the year ended December 31, 2023 and other documents incorporated herein by reference include, and our officers and other representatives may sometimes make or provide certain estimates and other forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act, and Section 21E of the Exchange Act, including, among others, statements with respect to future revenue, franchise sales, system-wide sales, net income and Adjusted EBITDA (a non-GAAP Financial Measure); operating results; dividends and shareholder returns; anticipated benefits of any merger or acquisitions including those we have completed in 2022 and 2023; intended office openings or closings; expectations of the effect on our financial condition of claims and litigation; strategies for customer retention and growth; strategies for risk management; and all other statements that are not purely historical and that may constitute statements of future expectations. Forward-looking statements can be identified by words such as: "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "will," and similar references to future periods. While we believe these statements are accurate, forward-looking statements are not historical facts and are inherently uncertain. They are based only on our current beliefs, expectations, and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy, and other future conditions. We cannot assure you that these expectations will materialize, and our actual results may be significantly different. Therefore, you should not place undue reliance on these forward-looking statements. Important facto

Business

Item 1. Business Development of our Business HireQuest, Inc. (collectively with its subsidiaries, the "Company," "we," "us," or "our") is a Delaware corporation originally organized in Washington as Command Staffing, LLC in 2002. In 2005, Temporary Financial Services, Inc., a public company, acquired the assets of Command Staffing, LLC, and the combined entity changed its name to Command Center, Inc. On September 11, 2019, Command Center, Inc. reincorporated in Delaware and changed its name to HireQuest, Inc. following its acquisition of Hire Quest Holdings, LLC ("Hire Quest Holdings," and together with its subsidiary, Hire Quest, LLC, "Legacy HQ"). This acquisition is sometimes referred to as the "Merger." Hire Quest, LLC was formed as a Florida limited liability company in 2002. Hire Quest Holdings, LLC was formed as a Florida limited liability company in 2017. Since the Merger, we have made a number of acquisitions which are discussed in more detail below. Our common stock trades on the Nasdaq Market under the symbol "HQI." All references to "common stock" means the common stock of HireQuest, Inc., par value $0.001 per share. Our principal executive office is located at 111 Springhall Drive, Goose Creek, SC, 29445 and the telephone number is (843) 723-7400. More information about us may be found at www.hirequest.com. The information on our website is not incorporated by reference in this Annual Report on Form 10-K. 3 Table of Contents Recent Developments 2021 Acquisitions The Snelling Acquisition On March 1, 2021 we completed our acquisition of certain assets of Snelling Staffing ("Snelling") in accordance with the terms of the Asset Purchase Agreement dated January 29, 2021 (the "Snelling Agreement"). At the time of acquisition, Snelling Staffing was an eminent staffing company headquartered in Richardson, TX. Pursuant to the Snelling Agreement, HQ Snelling Corporation ("HQ Snelling"), our wholly-owned subsidiary, acquired approximately 47 office

View Full Filing

View this 10-K filing on SEC EDGAR