HQI - Earnings call transcript Q4 2018

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Operator

Good morning everyone. And thank you for participating in today's conference call to discuss Command Center’s Financial Results for the Fourth Quarter Ended December 28, 2018. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this call is being recorded. the to turn Hayden Stanlis now IR. would conference Jeff over of I you. Thank

You may begin.

Jeff Stanlis

the to words like and everyone today the similar Rick Statements to and and should, anticipate, that materially the XX-K may operations, conference today. or as the I'd and Report statements XX-Q SEC's made meaning website most GAAP. the are constitute expect, recent in financial be Securities aware or you. factors please XX-K cause Thank welcome that to website Generally actual of They the and of statements undertake We Exchange Forms Accounting accordance forward-looking providing release expectations call non-GAAP Cory differ of recent Please could, update of believe, statements the our contained would, such with review prepared comments Command Form to These www.commandonline.com about factors results statements in management's the that the other risk Company's CFO, cause or the supplement Also, you involve publicly future the some forward-looking on revise information. and Principles this and Hosting www.sec.gov. Command the note the as this forward-looking at to its reports, after call, laws. from are the at our Center's expressions regarding discussing may the include Safe differ those may, limitation Company from and Company's information Copies information federal Company which does forward-looking described in Accepted specific to CEO, call States Commission, with events containing earnings securities any on date statements. risk a results expectations. including United Coleman; on materially on uncertainties to periodic Harbor statements. this will during results not Smith. beliefs filings be identifies or may in be The the call the within Center's could risks at current call. most and reports without encourage and Annual also in the obtained Company's will,

of reconciliation the that You for in which everyone reconciliation expressed in metrics replay the find in this replay would can redistribution, on is call earnings retransmission, Company's way written earnings Command I any website a Time is of rebroadcast reported X:XX consent without results strictly a at the Eastern the in be will release. of prohibited. to GAAP call table available Center A this release, Any P.M. the provided the provided of link website or call starting today. those to Company's like is to remind this at www.commandonline.com. available

like Now, CEO, would over to Rick, turn to I the ahead. Rick the go Coleman. call

Rick Coleman

business the this believe privately-held the has solutions, planned administrative provider definitive This agreement model potential Board's profitability. collar, morning and the industrial, a Trojan in of alternatives, organization merge with a value. drive Quest we significant and our path and Holdings, expect best is agreement to the Labor of create Staffing. strategic tremendous all-stock us for sustainable of Acrux thanks operating for comprehensive scale transaction to us. Hire to improvements review giving Thanks proven we of signing announced and Jeff. we shareholder significant Monday, represents Good This as the and staffing LLC, joining everyone blue way that light culmination

Quest any the we transaction, the merger. discuss in discuss we to and not with next discuss We statement, current anticipate and a the yet call, the complete completed have strategic was I report detail. ask the in Since in and Hire benefits will this your limited X-K. we’re scheduling more this the steps is proxy call merger in to of Cory and the management press few We During for briefly weeks will closed on can yet details form understanding in this provide patience yesterday's Monday's additional regard. not release transaction beyond what next

As branches states. a a on snapshot basis, will at we combined XXX closing have XX in

pro geographic is temporary and blue differentiate staffing combined pool. light expanded Our in of labor financials Command and proxy that Please that to and help that locations collar profile model us secure a progress. Center alter will from organization. larger new combined keep statement us the speaks In in industry coming franchise weeks, forma customers mind as to owned expected we a the scale for will will transition industrial to we the file footprint and competitors the the the

produce in release, some combined As we exclusive annual $XX million, excess after in projections, integration current opportunities. period normalization, we on our of indicated will believe the the press EBITDA growth based and of entities of

past combination operations at management on branch our high-margin company. maintaining improving going branches model to fees Over The planned our the will as Hire with franchise the by accelerate expense year, made and control. many franchise has achieved keeps level with the by most efforts significant streamlining the public at cost of Quest revenue franchise the progress our level improving Center this focus We in Command by profitability. and

ended with We a results. from and over increased with our position we will and strength. CFO shareholder turn Center the this worker As decline momentum. we model, will the entered profitability, the to value. margins Under we call Smith, to performance Command all and contribute margins robust we move our XXXX to transition operating more increase. of strong significant will of transformative and review financial a acquisition top gross expect branches franchises sheet quarter believe and balance a our enter solid revenue and line corporate now Cory incentives I have our new financial growth, to to to forward and revenue which safety, franchises, strong current XXXX manage to

Cory Smith

Thank fourth This related XXXX. changes you, $XX.X turnover recorded expense in market due and million $XXX,XXX. decrease benefit unemployment low the of worker's morning is sales $XXX,XXX everyone. quarter good in compensation accrual in of we compared increased Revenue fourth of in X.X% quarter an of of routine million in to rate. a $XX.X of related the In $XXX,XXX quarter in the to a to attributable represents XXXX, fourth XXXX to quarter to This positions to fourth Rick, was of competition job of swing the last year. compared the

to of in was the fourth and $X.X in non-recurring general, in XX.X% to the $XX,XXX non-recurring to compared $X.X compared dollars compared of included Selling, of to $X.X in zero compensation ago expense a fourth fourth compensation charges in costs. Net per $XX,XXX lower income year decrease the decrease in XXXX quarter from charges and to net As $X.XX was of a bad improved quarter, fourth or or debt $X.X legal million quarter fees Adjusted was quarter EBITDA XXXX a to share was lower and in compensation the of administrative was loss and quarter offset million margin by and and EBITDA primarily non-cash in result, fourth X.X%. $XXX,XXX quarter due professional in $XXX,XXX This ago in million XX.X% of the fourth higher gross stock-based quarter negative the $XX,XXX XXXX. the or XXXX $XXX,XXX compared million XXXX. $X.XX quarter. non-cash per of diluted the share Adjusted in XXXX in and XXXX. year diluted compensation

diluted or was year which results. XXXX. full XXXX $XX.X to recorded in million in a EBITDA was for non-cash non-recurring or year XXXX. in to in $XXX,XXX or $X.X to $X.X XXXX the an XXXX, or in revenue XXXX. $X.XX XXXX charges XXXX $X share Gross $X.X X.X%. related strong compared in million of changes XXXX, worker's $XX.X fiscal $XXX,XXX compared of XX.X% XXXX of remains XXXX from million Revenue million non-recurring diluted to million in in compensation $XXX,XXX per was non-cash at compared XXXX. X.X% and $XX.X slight $XX.X $X.X zero to of million decrease in the decrease of dollars charges non-recurring of margin in expense in in were or in income to X.X% compared $XXX,XXX to Turning SG&A million Net XX.X% in compared XXXX. share EBITDA expense to adjusted compensation Adjusted in an XXXX. per in $X.XX Included in compared $XXX,XXX million, accruals and XXXX was in in included compensation, charges a million $X.X revenue We million

equivalents the to on $X.X million sheet, XX, XXXX, Moving XXXX. cash restricted December at December million totaled including balance and compared XX, $X to cash at approximately cash

Hire closing name stock change of price Company our conditions, the and average announced of CBNC. $X.XX our of our to shareholder number subsequently These to and include shares XXXX, in pursuant During facility and Quest shares $XX LLC repurchase quarter Quest, merger with shortly of some through in an the shares resulting common approximately amendment Company In to the is XXX,XXX share. approval expected the XXXX and Hire recently to offer, and Hire stock, related $X.X million and to increasing we program under agreement an close have preferred we Incorporated, of Quest, into the pending merger price discontinued share at stock the control with and the NASDAQ aggregate the this The with of with of of charter common tender subject transaction conjunction repurchased common company the pending of company shift issuance Quest which of retired. an million rules listing of the per to approval were a merger stock approximately now authorized thereafter Company program, new the shareholder change to we purchases LLC. to Hire in credit related second or pursuant of entering

tender broker common purchase on offer. be we at our number statement expect the shares shareholders shares a basis. file proposed proxy to in whether on Command shares tendered their the million will As full properly turn Securities Exchange X.X Stockholders delivered to review. intends possible, back tender with to to the the up and soon the tendered of Center transaction shares, or stock. This $X number let Commission. share transaction that, this offer will If per should advisors. commence discuss minimum the the tax shares Command Center for other pro financial as operator With a X.X of There following no with contingent is details proxy Q&A. connection we with shares In SEC to for of over the transaction, of to closing million me call and self-tender exceeds rata containing or their of

Operator

Our instructions] [indiscernible]. question is [Operator from you. Thank first proceed. Please

Unidentified Analyst

has with been at this on but very but I your Rick have looks question, wanted painful congratulate process, I team I on say long a to really and a that, Hire the a terrific to of know transaction a wanted don’t like Board rest Quest. just I you, what and times

So, of we of on behalf shareholders, for thank you your all many efforts. the

Rick Coleman

Thanks Afram [ph], it. appreciate

appreciate worked We through best path patience also we the identifying the everyone's of process forward. while

Operator

next Our Monarch instructions] with [Operator proceed. from Michael Please Capital Group. question is Potter

Michael Potter

also how it say of changing, actually, comp -- the I forward look guess comp move to getting is just model great like a want the thing, and since transaction, [ph] workman's same business forward, sinking for fund? this Quick I congratulations question like the doesn't both working on organizations. change, on really the merger will it going looks

Cory Smith

the all insurance in of workers. will for will will All We still of the the field. the workers record temporary employer providing be for be out still temporary those we workers compensation -- worker's

programs up possible. And managed some ensure we will the keep our be oversight actually it so, and company be providing to course although of insurance, low with costs entity. that the combined be as safety as the to manage franchises will by that will combined That

Operator

[indiscernible]. is question [Operator with proceed. next instructions] Vandenberg] Please Our from [Hans

Unidentified Analyst

in you quick have cost you to included run that I sometime tell communicated the question. rate are us any included synergies future? the achieve Can expect XX what that in if that EBITDA are, a million

Rick Coleman

when will be [ph], at we're unfortunately, we more any information point, to the going providing not proxy this comes out. guidance provide Hans and

Operator

end I session. to question-and-answer for over We our call the closing Coleman of like the turn comments. back to reached Mr. have would

Rick Coleman

our the joining work I your for matters path to as patience finding challenging some best very related and very, we would like forward. again for to thank everyone through call

table, and employees, usual, who a getting deal keep our of had move you forward. hand I'd especially thank to this the As the will all we as in ones to like we advised

Operator

Thank This today's you. concludes conference.

disconnect may and at You time your lines for thank your participation. this you

HireQuest (HQI) 10 Apr 192018 Q4 Earnings call transcript