Hirequest, Inc. · NASDAQ:HQI
Hirequest — Investor Presentation (September 2019)
23 slides from Hirequest's investor presentation, Sep 26, 2019
Slide 1: Investor Presentation September 2019
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation includes, and our officers and representatives may from time to time make, 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, induding, among oth
Slide 3: Who We Are
nes We Are y 2) Nationwide franchisor of on-demand labor solutions in the light industrial and blue collar segment of the staffing industry Profitable franchise-centric model Created by a merger of HireQuest and Command Center in July 2019 140+ franchised and corporately-owned field offices in 30 st
Slide 4: Strategic Merger Creates Meaningful Scale
Strategic Merger Creates Meaningful Scale All-stock transaction valued at ~$26.7 million was completed in July 2019 to combine business operations of HireQuest and Command Center HireQuest Command (Private) Center Nr e e (Public) 2018 System WWideiRevente $189.3M $97.4M. 2018 Revenue $13.0M $97.4M :
Slide 5: Value Proposition
Value Proposition For our Candidates Convenient one-stop shop that match qualified candidates with available work + Provide candidates with the proper training to succeed + Invest in numerous programs to motivate and reward candidates for performance and safety For our Franchisees + Finance up to 10
Slide 6: Value Creation: Converting from Branch Model to Franchise Model
Value Creation: Converting from Branch Model to Franchise Model Facilitating the purchase of branch office businesses by franchisees enables recovery of a majority of our investment and incrementally adds to our three revenue streams >» Acquisition of branch offices includes intangible assets (custo
Slide 7: Well-Positioned for Growth
Well-Positioned for Growth Integration of Command Center (2) Increase National Accounts Add New Franchises and Expand Geographically (4] Acquisition: Convert branches to franchise model (expected to be completed by the end of Q3 2019) On-going rationalization of the footprint of the new combined ent
Slide 8: Targeting the largest segment of $128B staffing market
Targeting the largest segment of $128B staffing market... light industrial / blue collar U.S. Staffing Market by Segment Light Industrial/ Blue-Collar 37% ‘Source: American Staffing Association — 2016 National Staffing Statistics — measured by sales. Nasdaq: HOI Industry Trends Demand for day labor
Slide 9: Attractive Industry Dynamics
4 Attractive Industry Dynamics On-demand labor offers employers: > Immediate reaction and flexibility to changing staffing needs Vv Lower costs associated with recruitment, interviewing, and employment obligations > Elimination of unemployment and workers’ compensation exposure > Relief from adminis
Slide 10: Attractive Branch Locations
Attractive Branch Locations Our more than 140 franchised and corporately-owned field offices are located in healthy job markets across 30 states and the District of Columbia >» Strong concentration of branches in established and emerging regions > Regional branch concentrations allow for greater loc
Slide 11: Compelling Revenue Model
Compelling Revenue Model Illustrative é a Revenue by Source Interest Income Franchise Royalties + Premiums earned for + Interest from Franchisees + Royalty from Franchisees ~35 deductible reimbursement for the following for back-office support % * Deductible reimbursement activities: services includ
Slide 12: Branch-level Economics
Branch-level Economics Our unique approach to franchise model creates a strong barrier to entry and enables potentially higher operating margins at the branch level Wlustrative Revenue Model > HireQuest’s branch-level operating margins are (Operating margin as a % of revenue) typically 150 to 350 ba
Slide 13: Post-Merger: Near-term Strategic Objectives
Post-Merger: Near-term Strategic Objectives > Convert branches to franchise model by the end of Q3 2019 >» Approximately 50% of the Command Center branches were converted to the franchise model in July >» Remaining are awaiting state regulatory approval which is expected in Q3 of 2019 > On-going rat
Slide 14: Enterprise Value
Enterprise Value Sin millions, except price per share Stock price (as of 8/25/2019) $6.96 Shares outstanding” 13,071,846 Equity Market Cap $91.0 Plus: Debt! $6.6 Less: Cash! $0.7 Enterprise Value? $96.9 as of August27, 2019 2 Excludes an additional 150,488 shares related to a stock register correcti
Slide 15: Statements of Income
Statements of Income System Wide Revenue $189,328,950 $97,388,820$168,262,854 $98,072,198$147,460,775 $93,259,508 Total Revenue $12,965,711 $97,388,820 $11,277,700 $98,072,198 $10,354,542 $93,259,508 Total Cost of Revenue $629,449 $72,450,295 $501,953 $72,641,609 $1,008,121 $69,580,410 Gross Profit
Slide 16: Balance Sheets
Balance Sheets 6/28/2019 2018 HQ CCNI HQ CCNI Cash $7,015,251 Cash $1,291,317 $8,003,710 Accounts Receivable - Accounts Receivable - Tece $10,230,897 Tae $20,725,170 $9,041,361 Total Current Assets $17,959,572 Total Current Assets $22,311,672 $17,638,198 NEB and ezeqceo Newuropertviend $2,045,881 $1
Slide 17: Rick Hermanns, President and CEO
Rick Hermanns, President and CEO Mr. Hermanns was appointed CEO effective July 15, 2019. Mr. Hermanns has nearly thirty years of experience in the temporary staffing industry. He has served as Chief Executive Officer and Secretary of Hire Quest, LLC since the Company's founding in 2002. He served in
Slide 18: John McAnnar, Executive Vice President & General Counsel
John McAnnar, Executive Vice President & General Counsel Mr. McAnnar previously served as General Counsel and Vice President of Administration for Hire Quest, LLC beginning in 2014. In that capacity, he managed a broad range of legal affairs in the employment, construction, insurance and finance, wo
Slide 19: Investor Highlights
Investor Highlights ¥ Franchise operating model: Reduced risk and potentially greater profitability Attractive Business Model Y Centralized support Y Limited capital investment needed for corporate operations Experienced management team Quality workers? compensation insurance program Strong Competit
Slide 20: Contact Us
Contact Us HireQuest, Inc. Cory Smith, CFO 111 Springhall Drive Goose Creek, SC 80235 Tel (866) 464-5844 Hayden IR Investor Relations Brett Maas, Managing Director Tel (646) 536-7331 brett@haydenir.com Nasdaq: HOI
Slide 21: Appendix
Appendix
Slide 22: Board of Directors
Board of Directors + Founder of HireQuest Richard Hermanns + Nearly 30 years of experience in the staffing industry. Galena, + Former CFO of Outsource international. + Since 1982, worked in real estate investment, construction and development. JD Smith + In 1990, formed his first operating company t
Slide 23: Reconciliation of Non-GAAP Financial Measure
Reconciliation of Non-GAAP Financial Measure For the Trailing Twelve Months (TTM) Net Income to EBITDA ended June 28, 2019 Net Income $7,299,435, Interest 433,434 Taxes 124,028 Depreciation & Amortization 110,109 EBITDA $7,967,006 Nasdaq: HOI