Hirequest, Inc. · NASDAQ:HQI
Hirequest — Investor Presentation (January 2021)
24 slides from Hirequest's investor presentation, Jan 19, 2021
Slide 1: HireQuest Inc. Investor Presentation January 2021
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation and other documents referenced herein include, and our officers and representatives may from time to time make or provide, certain estimates and other forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Li
Slide 3: Who We Are
Who We Are > a) 2) Nasdaq: HQ) Nationwide franchisor of on-demand labor solutions in 3Q20 Trailing 12 Months 3Q20 Trailing 12 Months the light industrial and blue-collar segments of the Net theome (Adjusted for EBITDA Lossistie for staffing industry merger: costs) merger costs)? Profitable franchise
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 (Public) 2018 System Wide Sales $189.3M $97.4M 2018 Revenue $13.0M $97.4M , 2018 Opera
Slide 5: Value Proposition
Value Proposition For our Candidates For our Customers Trusted name with a national footprint matches qualified candidates with + Flexibility to meet staffing needs allowing available work customers to focus on their operations + Flexible schedules and benefits for Value * Quality workers’ compensat
Slide 6: Value Creation: Converting from Branch Model to Franchise Model
Value Creation: Converting from Branch Model to Franchise Model Facilitating the purchase of offices by franchisees enables recovery of a majority of our investment and adds to our revenue streams >» Acquisition of offices includes intangible assets (customer relationships and related customer lists
Slide 7: Well-Positioned for Future
Well-Positioned for Future Integration of Command Center Increase National Accounts Add New Franchises and Expand Geographically Acquisitions Converted branches to franchise model within one quarter On-going rationalization of the footprint of the new combined entity Leveraged scale to attract new c
Slide 8: Resilient Business Model
Resilient Business Model >» HQI’s strong financial position and diversified business model has enabled the Company to react quickly to the rapidly changing environment while prioritizing the health and safety of our employees, franchisees and customers >» Broad Geographic Reach: 138 franchised locat
Slide 9: Light Industrial / Blue Collar
u light industrial / blue collar U.S. Staffing Market by Segment Light Industrial/ Blue-Collar 36% Healthcare 8% Office 24% Source: American Staffing Association - 2018 National Staffing Statistics - measured by sales. Nasdaq: HQ) e Demand for day labor remains strong Industry Trends within staffing
Slide 10: On-demand labor offers employers
On-demand labor offers employers: > Immediate reaction and flexibility to changing staffing needs > Lower costs associated with recruitment, interviewing, and employment obligations v Elimination of unemployment and workers’ compensation exposure > Relief from administrative and compliance burdens i
Slide 11: Attractive Branch Locations
Attractive Branch Locations Our more than 130 franchised offices are located in healthy job markets across 30 states and the District of Columbia Nasdaq: HQ! Strong concentration of branches in established and emerging regions Regional branch concentrations allow , for greater local brand recognitio
Slide 12: Compelling Revenue Model
Compelling Revenue Model Illustrative : ; Revenue by Source Interest Income Franchise Royalties + Premiums earned for + Interest from Franchisees + Royalty from Franchisees =) deductible reimbursement for the following for back-office support % * Deductible reimbursement activities: services includi
Slide 13: Branch-level Economics
Branch-level Economics Our unique approach to franchise model creates a strong barrier to entry for competitors and enables potentially higher operating margins at the franchise level Illustrative Revenue Model >» HireQuest’s office-level operating margins are (Operating margin as a % of revenue) ty
Slide 14: Post-Merger: Near-term Strategic Objectives
Post-Merger: Near-term Strategic Objectives > All Command Center branches were converted to franchise model within a single quarter > Exited California marketplace > Sold four CA locations >» On-going rationalization of the footprint of the new combined entity > Expanding into new, un-served markets
Slide 15: Enterprise Value
Enterprise Value $ in millions, except price per share Unaudited Stock price (as of close 1/15/2021) $ 10.25 Shares outstanding 13,595,583 Equity Market Cap (as of close 1/15/2021) S 139.4 Plus: Debt! -0- Less: Cash! (10.3) Less: Notes Receivable Net of Reserve! (8.5) Enterprise Value? $ 120.5 2 as
Slide 16: System-Wide Sales
System-Wide Sales Total Revenue Total Cost of Revenue Gross Profit Total Operating Expenses Total Operating Income Total Other Income Interest Expense Depreciation & Amortization Pre-tax Income Combined 80,513,787 47,283,224 33,230,563 30,558,634 2,131,679 757,082 559,985 540,250 2,328,776 Statement
Slide 17: Balance Sheets
Balance Sheets 9/30/2020 12/31/2019 Cash $ 10,297,147 $ 4,187,450 Accounts Receivable - Trade 24,024,564 28,201,279 Total Current Assets 39,623,671 37,021,125 Net Property and Equipment 2,958,998 1,900,686 Total Assets $ 49,147,153 $ 46,912,062 Due to Franchisees 2,311,372 3,610,596 Risk Management
Slide 18: Rick Hermanns, President and CEO
Rick Hermanns, President and CEO Mr. Hermanns has served as Chairman of the Board, President and Chief Executive Officer of HireQuest, Inc. since July 2019. Mr. Hermanns has nearly thirty years of experience in the temporary staffing industry. He previously served as Chief Executive Officer and Secr
Slide 19: John McAnnar, Executive Vice President & General Counsel
John McAnnar, Executive Vice President & General Counsel Mr. McAnnar is the General Counsel, Vice President, and Secretary of HireQuest, Inc. He has served as General Counsel and Vice President for HireQuest, Inc. and its predecessor, Hire Quest, LLC since 2014. In that capacity, he manages a broad
Slide 20: Investor Highlights
Investor Highlights v Franchise operating model: Reduced risk and potentially greater profitability Attractive A Y Centralized rt Business Model SU ee Eli Y Limited capital investment needed for corporate operations Experienced management team Quality workers’ compensation insurance program Strong C
Slide 21: Contact Us
Contact Us HireQuest, Inc. Rick Hermanns, CEO 111 Springhall Drive Goose Creek, SC 80235 Tel (843) 723-7400 Hayden IR Investor Relations Brett Maas, Managing Director Tel (646) 536-7331 brett@haydenir.com Nasdaq: HQ)
Slide 22: Appendix
Appendix
Slide 23: Board of Directors
Board of Directors + Founder of HireQuest Richard Hermanns + Nearly 30 years of experience in the staffing industry. Chairman + Former CFO of Outsource International. Jack A: Olmstead + President Tri-City Electrical Contractors, Inc. ° + 37 years of experience in electrical construction. Director +
Slide 24: Reconciliation of Non-GAAP Financial Measure
Reconciliation of Non-GAAP Financial Measure For the Trailing Twelve Months (TTM) Net Income to EBITDA ended September 30, 2020 Net Income $ 7,466,144 Interest 76,922 Taxes (849,836) Depreciation & Amortization 421,156 EBITDA —_ 7,114,386 Stock-based compensation 1,361,438 Merger Costs* 772,892 Adju