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BUSINESS PRODUCTS & SERVICES | HR & Staffing
snelling.com

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Founded Year

1951

Stage

Acquired | Acquired

Valuation

$0000 

About Snelling Staffing Services

Snelling Staffing Services provides temporary and permanent staffing solutions for companies covering clerical, sales, payroll, and light manufacturing positions, among others. It aims to provide companies with the right candidate for a position through evaluations and also offers clients help in finding candidates that have expertise or specialized skills in technology, accounting, and finance.On February 1st, 2021, Snelling Staffing Services was acquired by HQ Snelling Corporation at a valuation of $17.3 million.

Snelling Staffing Services Headquarter Location

2360 Campbell Creek Blvd Suite 550

Richardson, Texas, 75082,

United States

800-411-6401

Latest Snelling Staffing Services News

CORRECTING and REPLACING HireQuest Reports Financial Results for the Fourth Quarter and Full-Year 2020

Mar 26, 2021

Full-Year EPS of $0.39 per Diluted Share and Cash Flow of More than $9 Million; Scaling Profitable Business Model – Adding 67 New Franchised Locations and 10 Licensed Locations Through Accretive Acquisitions GOOSE CREEK, S.C.–(BUSINESS WIRE)–Correcting to add the start of the quote from Rick Hermanns and remove a duplicate quote in the Fourth Quarter 2020 Financial Summary section of the text. Also removing footnote 2 from within the text. The updated release reads: Full-Year EPS of $0.39 per Diluted Share and Cash Flow of More than $9 Million; Scaling Profitable Business Model – Adding 67 New Franchised Locations and 10 Licensed Locations Through Accretive Acquisitions HireQuest, Inc. (Nasdaq: HQI), a national franchisor of on-demand, temporary, and commercial staffing services, today reported financial results for the fourth quarter and year ended December 31, 2020. Full-Year 2020 Financial Summary Franchise royalties of $12.8 million compared to $14.7 million in the prior year, a decrease of 12.8%. Services revenue, including interest paid on aging accounts receivable, of $1.0 million compared to $1.2 million in the prior year, a decrease of 15.5%. Total revenue of $13.8 million compared to $15.9 million in the prior year, a decrease of 13.0%. Net Income was $5.4 million, or $0.39 per diluted share, compared to a net loss of $290,000, or $(0.03) per share last year. Subsequent to Year End Board of Directors declared a quarterly cash dividend of $0.05 per share of common stock to be paid on March 15, 2021 to shareholders of record as of March 1, 2021. The company intends to pay quarterly cash dividends on its common stock each year in March, June, September and December, subject to final approval by the Board of Directors each quarter after its review of the Company’s financial performance each quarter. Completed the acquisition of certain assets of Snelling Staffing for approximately $17.3 million, before working capital adjustments. Acquired the franchised operations of LINK Staffing for approximately $11.1 million exclusive of working capital. Fourth Quarter 2020 Financial Summary Franchise royalties of $3.2 million compared to $5.4 million in the prior year period, a decrease of 40.2%. Services revenue, including interest paid on aging accounts receivable, of $176,000 compared to $476,000 in the prior year period, a decrease of 63.0%. Total revenue of $3.4 million compared to $5.9 million in the prior year period, a decrease of 42.0%. Net Income was $1.4 million, or $0.10 per diluted share, compared to net income of $3.5 million, or $0.26 per share last year. Paid quarterly cash dividend of $0.05 per share. System-wide sales1 for 2020 were $210.9 million compared to $241.6 million for 2019. For the fourth quarter of 2020, system-wide sales1 were $54.8 million. The decrease is related to the economic slowdown due to COVID-19. “HireQuest continues to generate profits and free cash flow, bolstering our strong balance sheet and enabling both dividends and accretive acquisitions, despite the ongoing challenges related to the pandemic,” commented Rick Hermanns, HireQuest’s President and Chief Executive Officer. “The decrease in attendance at sporting events, and the elimination of concerts, auto auctions, and other major events continues to have a pronounced impact on our franchises. To date, our franchisees have moved quickly and judiciously to minimize the impact and navigate these unprecedented challenges. At the corporate level, we have experienced a significant decrease in system-wide sales and royalty revenues, but the impact on our bottom line has been less pronounced due to the asset light-nature of our business model. Overall, we have weathered the storm extremely well.” “As a result, we have been able to leverage the advantages of our business model and our balance sheet to grow our business through strategic acquisitions,” added Mr. Hermanns. “We recently closed the acquisition of Snelling Staffing, adding 38 franchised locations, 4 licensed locations, and integrating the 70-year-old tradename of Snelling. We also closed the acquisition of LINK Staffing, adding another 29 franchised and 6 licensed locations. In the aggregate, these two acquisitions add substantial scale. These franchised and licensed locations accounted for $133 million in system-wide sales in 2020 and meaningfully expand our national presence. Additionally, both Snelling and LINK specialize in traditional commercial staffing, giving us a second lucrative franchising revenue stream. Going forward, we will be able to sell franchises for both on-demand and commercial staffing models, while maintaining significant scale to create operational efficiency and facilitating the acquisition of national accounts to support our franchisees.” “To further mitigate risk and take advantage of our scale, we divested the licensed locations, all in California, to a third party who has agreed to pay a perpetual royalty fee for the use of the Snelling and LINK trademarks,” added Mr. Hermanns. “Between this transaction, the sale of certain branches, the sale of $5.3 million of notes receivable, and the cash flow generated by these acquisitions, we have paid off our line of credit and are in a net cash-positive position again. Most importantly the company is well positioned to benefit from a post-pandemic return to economic normalcy. When that happens, and we don’t know when, we should experience tremendous earnings leverage with our expanded platform.” Fourth Quarter 2020 Financial Results The company’s total revenue is calculated by aggregating its revenue derived from franchise royalties and service revenue. Franchise royalties are the royalties earned from franchisees primarily on the basis of their sales to their customers. Service revenue consists of interest charged to franchisees on overdue accounts and other fees for optional services we provide our franchisees. Franchise royalties in the fourth quarter of 2020 were $3.2 million compared to $5.4 million in the year-ago quarter, a decrease of 40.2%. Service revenue was $176,000 compared to $476,000 in the prior-year quarter, a decrease of 63.0%. Total revenue in the fourth quarter of 2020 was $3.4 million compared to $5.9 million in the year-ago quarter, a decrease of 42.0%. Selling, general and administrative (“SG&A”) expenses in the fourth quarter of 2020 were $2.2 million compared to $3.1 million for the fourth quarter last year. The fourth quarter of 2019 included approximately $0.5 million of non-recurring, merger-related expenses. The decrease in SG&A was also driven by a decrease in expenses related to workers’ compensation costs and bad debt. Net Income in the fourth quarter of 2020 was $1.4 million, or $0.10 per diluted share, compared to net income of $3.5 million, or $0.26 per diluted share, in the fourth quarter last year (excluding a loss of $315,000, or $(0.02) per diluted share, in discontinued operations. The fourth quarter of 2020 did not include any discontinued operations. ___________________________ 1 Refer to “Supplemental Operating Metrics” section at the end of this press release for a definition and additional details regarding System-wide sales Full Year 2020 Financial Results Franchise royalties for the full year 2020 were $12.8 million compared to $14.7 million in the prior year, a decrease of 12.8%. Service revenue was $1.0 million compared to $1.2 million in the prior year, a decrease of 15.5%. Total revenue for the full year 2020 was $13.8 million compared to $15.9 million in the prior year, a decrease of 13.0%. This decrease is primarily due to the economic shutdown caused by COVID-19. Selling, general and administrative (“SG&A”) expenses for the full year 2020 were $8.7 million compared to $12.7 million for the prior year, a decrease of 31.5%. The decrease in SG&A was primarily due to the absence of merger-related expenses in 2020. 2019 included approximately $5.1 million of non-recurring, merger-related expenses. The decrease was partially offset by an increase in stock-based compensation and a reserve placed on notes receivable that the company issued to finance the sale of offices acquired in its merger in 2019. This reserve is directly related to the negative impact COVID-19 has had on the economy, the financial condition of the company’s borrowers and the value of the underlying collateral. Net Income for the full year 2020 was $5.4 million, or $0.39 per diluted share, compared to a net loss of $290,000, or $(0.03) per diluted share, in the prior year. In 2019, the net loss from continuing operations, which excluded discontinued operations, was $505,000, or $(0.05) per diluted share. 2020 did not include any discontinued operations. Balance Sheet and Capital Structure Cash was $13.7 million as of December 31, 2020, compared to $4.2 million as of December 31, 2019. Total assets were $49.1 million as of December 31, 2020, and total liabilities were $12.7 million. On December 15, 2020, the company paid a quarterly cash dividend of $0.05 per share of common stock to shareholders of record as of December 1, 2020. The company intends to pay a $0.05 cash dividend on a quarterly basis, based on its business results and financial position. Conference Call About HireQuest HireQuest, Inc. is a nationwide franchisor that provides on-demand labor and commercial staffing solutions in the light industrial, blue-collar, and commercial segments of the staffing industry for HireQuest Direct, HireQuest, Snelling, and LINK franchised offices across the United States. Through its national network of over 200 franchisee-owned offices in more than 35 states and the District of Columbia, HireQuest provides employment for approximately 60,000 individuals annually that work for thousands of customers in numerous industries including construction, light industrial, manufacturing, hospitality, clerical, medical, travel, and event services. For more information, visit www.hirequest.com . Important Cautions Regarding Forward-Looking Statements This news release includes, and the company’s 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, and the growth thereof; operating results; anticipated benefits of the acquisition of Snelling and/or LINK., or the conversion of Snelling’s corporate offices to the franchise model; intended office openings; 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 the company believes these statements are accurate, forward-looking statements are not historical facts and are inherently uncertain. They are based only on the company’s current beliefs, expectations, and assumptions regarding the future of its business, future plans and strategies, projections, anticipated events and trends, the economy, and other future conditions. The company cannot assure you that these expectations will occur, and its actual results may be significantly different. Therefore, you should not place undue reliance on these forward-looking statements. Important factors that may cause actual results to differ materially from those contemplated in any forward-looking statements made by the company include the following: the level of demand and financial performance of the temporary staffing industry; the financial performance of the company’s franchisees; changes in customer demand; the effects of any global pandemic including the impact of the novel coronavirus disease (“COVID-19”); the extent to which the company is successful in gaining new long-term relationships with customers or retaining existing ones, and the level of service failures that could lead customers to use competitors’ services; significant investigative or legal proceedings including, without limitation, those brought about by the existing regulatory environment or changes in the regulations governing the temporary staffing industry and those arising from the action or inaction of the company’s franchisees and temporary employees; strategic actions, including acquisitions and dispositions and the company’s success in integrating acquired businesses including, without limitation, successful integration following the acquisitions of Snelling and LINK; disruptions to the company’s technology network including computer systems and software; natural events such as severe weather, fires, floods, and earthquakes, or man-made or other disruptions of the company’s operating systems; and the factors discussed in the “Risk Factors” section and elsewhere in the company’s most recent Annual Report on Form 10-K. Any forward-looking statement made by the company or its management in this news release is based only on information currently available to the company and speaks only as of the date on which it is made. The company and its management disclaim any obligation to update or revise any forward-looking statement, whether written or oral, that may be made from time to time, based on the occurrence of future events, the receipt of new information, or otherwise, except as required by law. HireQuest, Inc. Supplemental Operating Metrics 1 Management sometimes refers to total sales generated by its franchisees as “franchise sales.” Management also sometimes refers to sales at offices that were owned and operated by the company, not by one of its franchisees, as “company-owned sales,” all of which were sold as of September 29, 2019. Sales at company-owned offices are reflected net of costs, expenses, and taxes associated with those sales on the company’s financial statements as “Income from discontinued operations, net of tax.” The sum of franchise sales and company-owned sales is referred to as “system-wide sales,” a non-GAAP operating performance metric. In other words, system-wide sales include sales at all offices, whether owned and operated by the company or by its franchisees. While the company does not record franchise sales as revenue, management believes that information on system-wide sales is important to understanding the company’s financial performance because those sales are the basis on which the company calculates and records franchise royalty revenue, are directly related to interest charged on overdue accounts, which the company records under service revenue, and are indicative of the financial health of the franchisee base. Contacts

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