- Revenue of $9.1 million for the quarter ended March 31, 2022, up 66% from Q1-2021.
- Gross margin of $4.5 million was almost double the $2.3 million reported for the first quarter of 2021.
- Adjusted EBITDA1 was $1.0 million ($0.1 million - March 31, 2021). EBITDA loss was $0.8 million for the period before normalizing adjustments (EBITDA of $2.6 million - March 31, 2021).
- Adjusted net income2 was $0.4 million for the quarter (adjusted net loss of $0.3 million - March 31, 2021). Before adjustments, net loss for the quarter was $1.5 million (net income of $2.2 million - March 31, 2021).
TORONTO, ON / ACCESSWIRE / May 30, 2022 - HIRE Technologies Inc. (TSXV:HIRE.V)(OTCQB:HIRRF) ("HIRE" or the "Company"), a company focused on modernizing and digitizing human resources solutions, announces its financial results for the quarter ended March 31, 2022. All financial figures are in Canadian dollars unless otherwise noted.
"Q1 showcased the potential of the HIRE portfolio companies and what we have achieved across the network over the last two years," said Simon Dealy, HIRE's Chief Executive Officer. "A strong hiring climate and our ability to deliver on client demands across the country resulted in a 66% increase on our top-line and produced solid operating performance."
Q1-2022 Financial Highlights
- Revenue of $9.1 million, up from $5.5 million in Q1-2021, with over 75% of the increase attributable to organic growth on the recurring contract book (up $1.7 million or $44%) and on-occurrence permanent placement book (up $1.0 million or 64%). Executive search revenue, attributable to the Leaders acquisition in Q3-2021, added another $0.9 million to the revenue increase. For more details on the Leaders acquisition, please see our news release dated August 30, 2021.
- Gross margin was 49% on a percentage of revenue basis, a seven-point improvement over Q1-2021. On-occurrence permanent and executive search revenue now proportionally accounts for 39% of HIRE's revenue, up from 29% a year earlier.
- HIRE reported positive adjusted EBITDA of $1.0 million for the three months ended March 31, 2022 ($0.1 million - March 31, 2021). For further details regarding the Company's use of non-GAAP financial measures, please see the sections below under the headers "Non-IFRS Measures and Footnotes" and "Non-IFRS Reconciliations".
- Adjusted EBITDA excluded the impact of earn-out obligations treated as contingent remuneration of $1.3 million, $0.7 million in losses on the revaluation of contingent consideration, and net unrealized mark-to-market gains of $0.1 million. Unadjusted EBITDA loss for the quarter was $0.8 million (EBITDA of $2.6 million - March 31, 2021).
Outlook
HIRE anticipates continued growth in 2022. The Company sees strong hiring intentions across all industry verticals into Q2 and a continuation of the first quarter's client demand, even with the traditional seasonality in the staffing space that typically tempers growth and the current and emerging economic and geopolitical uncertainties facing HIRE's clients. Further optimization of operating spend will also be a key area of focus for the remainder of the year.
"We are confident that HIRE's broad range of services, national footprint, and continued investment in our brands will enable us to benefit from the labour market's structural supply and demand forces," stated Mr. Dealy. "Our operational flexibility allows us to react swiftly and effectively to market changes, even in an uncertain macroeconomic environment."
Professional Services
HIRE announces the appointment of LaBarge Weinstein LLP as their virtual general counsel following the recent announcement of the departure of its Chief Legal Officer. "With their technology-focus and client-centricity at the core of their firm, we look forward to working with the partners, lawyers, and staff at LaBarge Weinstein LLP as we continue our growth story," said Mr. Dealy.
Conference Call & Webcast Details
Date: Tuesday, May 31, 2022
Time: 12:00 PM Eastern Time / 9:00 AM Pacific Time
Dial-in: (+1) 416-764-8658 (Toronto local) or (+1) 888-886-7786 (Toll-Free, North America)
The conference call will be simultaneously webcast with presentation slides at: http://momentum.adobeconnect.com/hireq1/
Please join 10 minutes before the start of the call.
A recording of the conference call will be made available on hire.company.
Selected Quarterly Information
Period ended | 3 months ended March 31, 2022 | 3 months ended March 31, 2021 | ||||||
$ | $ | |||||||
REVENUE | 9,108,602 | 5,490,329 | ||||||
Cost of services | 4,616,081 | 3,162,926 | ||||||
GROSS MARGIN | 4,492,521 | 2,327,403 | ||||||
Gross margin (% of revenue) | 49 | % | 42 | % | ||||
Operating expenses: | ||||||||
Selling, general and administrative | 4,821,430 | 2,763,275 | ||||||
Amortization of intangible assets | 184,355 | 124,212 | ||||||
Interest | 127,769 | 73,298 | ||||||
Loss on revaluation of contingent consideration, net | 672,447 | - | ||||||
OPERATING EXPENSES | 5,806,001 | 2,960,785 | ||||||
Loss from operations | (1,313,480 | ) | (633,382 | ) | ||||
Realized gain on convertible debenture derivatives | - | 421,461 | ||||||
Unrealized gains on mark-to-market, net | 125,401 | 2,570,662 | ||||||
Income tax expense | 283,344 | 111,271 | ||||||
NET INCOME (LOSS) | (1,471,423 | ) | 2,247,470 | |||||
Basic earnings (loss) per share | (0.02 | ) | 0.04 | |||||
Weighted number of shares | 83,888,640 | 58,678,642 | ||||||
The Audit Committee of the Board of Directors of the Company reviewed this press release as well as the condensed consolidated interim financial statements (unaudited) for March 31, 2022 ("Financial Statements") and related Management's Discussion and Analysis for the three months ended March 31, 2022 ("MD&A") and recommended they be approved by the Board. Following review by the Board, the Financial Statements, MD&A, and the contents of this press release were approved.
This earnings press release should be read in conjunction with the Financial Statements and MD&A, which have been posted on SEDAR at www.sedar.com as of the date hereof.
Non-IFRS Measures and Footnotes
This news release refers to certain financial measures that are not defined by International Financial Reporting Standards ("IFRS"), including earnings before interest, taxes, depreciation, and amortization ("EBITDA"), adjusted earnings before interest, taxes, depreciation, and amortization ("adjusted EBITDA"), and adjusted net earnings (loss).
- EBITDA and adjusted EBITDA are non-GAAP financial measures and are not standardized financial measures under IFRS and might not be comparable to similar financial measures disclosed by other issuers. EBITDA is defined as net income (loss) adjusted to exclude interest, taxes, depreciation, and amortization. Adjusted EBITDA is defined as EBITDA, excluding restructuring and other non-operating items, unrealized gains or losses on derivative financial instruments recognized as part of financings, other unrealized fair value through profit or loss mark-to-market gains or losses, goodwill impairment losses, earn-out payments treated as future contingent remuneration from acquisitions, and share-based compensation expenses. Adjusted EBITDA also includes rent payments, which are not accounted for in EBITDA following the adoption of IFRS 16 Leases. The Company believes that EBITDA and adjusted EBITDA are useful measures in evaluating the performance of the Company, because it provides management and investors with insight into HIRE's operating performance without the impact of significant accounting policies related to depreciation and amortization, financing, and taxes.
- Adjusted net income (loss) is a non-GAAP financial measure and is not a standardized financial measure under IFRS and might not be comparable to similar financial measures disclosed by other issuers. The Company defines adjusted net income (loss) as net income (loss) excluding restructuring and other non-operating items, unrealized gains or losses on derivative financial instruments recognized as part of financings, other unrealized fair value through profit or loss mark-to-market gains or losses, goodwill impairment losses, earn-out payments treated as future contingent remuneration from acquisitions, and share-based compensation expenses. The Company believes that adjusted net earnings (loss) is a meaningful metric for the Company and investors in assessing the Company's financial performance, because it provides management and investors with insight into performance without the impact of non-operating items.
Non-IFRS Reconciliations
EBITDA and Adjusted EBITDA Reconciliation
Period ended | 3 months ended March 31, 2022 | 3 months ended March 31, 2021 | ||||||
$ |
|
| $ | |||||
NET INCOME (LOSS) | (1,471,423 | ) | 2,247,470 | |||||
Interest | 127,769 | 73,298 | ||||||
Amortization | 184,355 | 124,212 | ||||||
Depreciation | 55,510 | 33,291 | ||||||
Tax | 283,344 | 111,271 | ||||||
EBITDA (LOSS) | (820,445 | ) | 2,589,542 | |||||
Transaction, restructuring & non-operating items | 21,565 | 297,058 | ||||||
Realized gain on convertible debenture derivatives | - | (421,461 | ) | |||||
Unrealized gain on mark-to-market, net | (125,401 | ) | (2,570,662 | ) | ||||
Future contingent remuneration from acquisitions | 1,250,378 | 100,534 | ||||||
Share-based consideration | 34,025 | 82,956 | ||||||
Loss on revaluation of contingent consideration, net | 672,447 | - | ||||||
Rent expense | (25,731 | ) | (27,812 | ) | ||||
ADJUSTED EBITDA | 1,006,838 | 50,155 | ||||||
Adjusted EBITDA (loss) as a % of revenue | 11.1 | % | 0.9 | % | ||||
Adjusted Net Income Reconciliation
Period ended | 3 months ended March 31, 2022 | 3 months ended March 31, 2021 | ||||||
$ |
|
| $ | |||||
NET INCOME (LOSS) | (1,471,423 | ) | 2,247,470 | |||||
Transaction, restructuring & non-operating items | 21,565 | 297,058 | ||||||
Realized gain on convertible debenture derivatives | - | (421,461 | ) | |||||
Unrealized gain on mark-to-market, net | (125,401 | ) | (2,570,662 | ) | ||||
Future contingent remuneration from acquisitions | 1,250,378 | 100,534 | ||||||
Share-based compensation expense | 34,025 | 82,956 | ||||||
Loss on revaluation of contingent consideration, net | 672,447 | - | ||||||
ADJUSTED NET INCOME (LOSS) | 381,591 | (264,105 | ) | |||||
Basic adjusted net income (loss) per share | 0.00 | (0.00 | ) | |||||
Weighted number of shares | 83,888,640 | 58,678,642 | ||||||
About HIRE Technologies Inc.
HIRE is a growing capital allocator that is rapidly establishing itself as a market leader in workforce management and staffing. HIRE's mission is to create a world-class portfolio of brands that will define the future of human resources through synergies, scale, and reach. The Company has extensive experience in building and growing staffing and executive search companies and is supported by a large recurring revenue base and a highly scalable shared services platform. This structure enables HIRE to create value for partners and shareholders. For more information, visit hire.company.
Contacts
Simon Dealy
Chief Executive Officer
(647) 264-9196
[email protected]
Caroline Sawamoto
Investor Relations
(647) 556-4498
[email protected]
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
Forward Looking Information
This press release contains "forward-looking statements" or "forward-looking information" (collectively referred to hereafter as "forward-looking statements") within the meaning of applicable Canadian securities legislation.
All statements that address activities, events or developments that HIRE expects or anticipates will, or may, occur in the future, including statements about HIRE's future growth, business prospects, future trends, plans and strategies, expected benefits from business activities and the Company's prospects for completion of additional acquisitions, including those under the heading "Outlook" are forward-looking statements. In some cases, forward-looking statements are preceded by, followed by or include words such as "may", "will", "would", "could", "should", "believes", "estimates", "projects", "potential", "expects", "plans", "intends", "proposes", "anticipates", "targeted", "continues", "forecasts", "designed", "goal", or the negative of those words or other similar or comparable words. Although the management of HIRE believes that the assumptions made and the expectations represented by such statements are reasonable, including the continued favourable market conditions, there can be no assurance that a forward-looking statement herein will prove to be accurate.
Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance, or achievements of HIRE to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Risks and uncertainties applicable to the Company, as well as trends identified by the Company affecting it and the staffing industry can be found in the Company's MD&A and its continuous disclosure record available on SEDAR. Although HIRE has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated, or intended.
All forward-looking statements herein are qualified by this cautionary statement. Accordingly, readers should not place undue reliance on forward-looking statements. HIRE undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
SOURCE: HIRE Technologies Inc.