Toronto, Ontario--(Newsfile Corp. - May 26, 2021) - HIRE Technologies Inc. (TSXV: HIRE) ("HIRE" or the "Company"), a company focused on modernizing and digitizing human resources solutions, announces its financial results for the quarter ended March 31, 2021.
- Revenue growth of 89.1% in Q1-2021 versus Q1-2020.
- Recurring contract placement revenue growth of 43% in Q1-2021 over Q1-2020.
- Gross Margin of 42.4% for Q1-2021, the third consecutive quarter of increased margins.
- Net income of $2.2 million, $0.04 per share ($0.03 on a diluted basis).
- EBITDA of $2.6 million.
- Organic Growth of 7% for this quarter more than double the growth rate achieved by industry peers (1.8%)1.
"Our business model, ability to execute, and the strength of our brands across Canada were fully demonstrated in the first quarter of 2021," said Simon Dealy, HIRE's Chief Executive Officer. "To date, in 2021, economic growth is evident and signals a significant rise in demand for staffing solutions. Organic growth was very strong, with our subsidiaries reporting a 219% increase in job requests, a 28% increase in client acquisitions, and a 21% increase in completed placements. We are very optimistic about the next steps in the execution of our strategic plan, with continued organic growth and profitability across our subsidiaries and a steady pipeline of acquisitions."
Q1 2021 Financial Highlights
- Record revenue of $5.5 million was 89.1% higher than $2.9 million in Q1-2020 with $3.1 million contributed from acquisitions made in 2020.
- Revenue Diversification: 53% of the incremental YoY revenue from acquisitions was driven by recurring revenue contracts.
- Recurring contract placement revenue of $3.9 million ($2.7 million in Q1-2020) comprised 71% of Q1-2021 revenue (93% in Q1-2020).
- High margin on-occurrence placements now comprise 29% of our book (7% in Q1-2020).
- Record Gross Margin: $2.3 million in gross profit for Q1-2021 ($0.7 million in Q1-2020). As a percentage of revenue this is an 18.6 point improvement to 42.4%. This is the third consecutive quarter of improvement and is attributable to our rebalanced portfolio mix.
- Strong bottom line performance: EBITDA of $2.6 million exceeded Q1-2020 by over $3.2 million. This included $0.4 million in realized gains on convertible debenture derivatives and $2.5 million in unrealized gains on mark-to-market. Adjusted EBITDA of $0.05 million was in-line with the prior year. Net income of $2.2 million ($0.04 per share or $0.03 fully diluted) was $3.0 million higher than Q1-2020 (net loss of $0.7 million or $0.02 per share).
- Adjusted net loss was $0.3 million ($0.00 per share) for Q1-2021, versus $0.03 million for Q1-2020 ($0.00 per share).
- See notes 2, 3 & 4 below for additional details.
Outlook
- HIRE plans to add more partners inspired to join the "Powered by HIRE Technologies" growth platform from our strong pipeline of acquisition opportunities. Our acquisition pipeline has expanded meaningfully year-to-date.
- HIRE looks to strategically add to its technology offerings, to enhance organic growth opportunities for our partners and grow our recurring revenue streams.
Other Updates
- On April 1, 2021, the Company acquired Pulsify, a cloud-based people management application designed around data analytics, meeting facilitation, immediate feedback, predictive insights, and the proprietary Net Manager ScoreTM.
- On May 12, 2021, the Company announced a brokered private placement of up to $5,000,000 convertible debenture units.
Conference Call Details
HIRE will host a conference call to review its earnings results on Thursday, May 27, 2021 at 10:00 a.m. ET. The conference call will be webcast at: http://services.choruscall.ca/links/hirecompany20210527.html.
The conference call will also be available by dialing 1-800-319-4610 or 1-604-638-5340. Please dial in 10 minutes before the start of the call.
Selected Financial Highlights
| Period ended >> | 3 months ended | 3 months ended |
| March 31, 2021 | March 31, 2020 | |
| $ | $ | |
| Net income (loss) | 2,247,470 | (744,965) |
| Interest | 73,298 | 16,559 |
| Amortization | 124,212 | 22,650 |
| Depreciation | 33,291 | 69,452 |
| Tax | 111,271 | (4,660) |
| EBITDA | 2,589,542 | (640,964) |
| Add: | ||
| Restructuring & Other Non-operating items | 297,058 | 717,531 |
| Realized (gain) loss on convertible debenture derivatives | (421,461) | - |
| Unrealized (gain) loss on mark-to- market | (2,570,662) | - |
| Future contingent remuneration from acquisitions | 100,534 | - |
| Share based compensation expense | 82,956 | - |
| Rent expense | (27,812) | (26,548) |
| Adjusted EBITDA | 50,155 | 50,019 |
| Period ended >> | 3 months ended | 3 months ended |
| March 31, 2021 | March 31, 2020 | |
| $ | $ | |
| Net income (loss) for the Period | 2,247,470 | (744,965) |
| Add: | ||
| Restructuring & other non-operating items | 297,058 | 717,531 |
| Realized (gain) loss on convertible debenture derivatives | (421,461) | - |
| Unrealized (gain) loss on mark-to-market | (2,570,662) | - |
| Future contingent remuneration from acquisitions | 100,534 | - |
| Share based compensation expense | 82,956 | - |
| Adjusted net loss | (264,105) | (27,434) |
| Adjusted net loss per share | (0.00) | (0.00) |
This earnings press release, which was approved by the Company's Board of Directors on the Audit Committee's recommendation should be read in conjunction with HIRE's Annual Financial Statements and MD&A, which have been posted on SEDAR at www.sedar.com.
All financial figures are in Canadian dollars unless otherwise noted.
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"), adjusted net earnings (loss), and gross margin.
- Randstad N.V., The Adecco Group, Robert Half International Inc., Upwork Inc., ManpowerGroup, Learning Technologies Group, Kforce Inc., TrueBlue, Resources Connection Inc., and The Caldwell Partners International Inc.
- Gross margin is a non-IFRS measure that does not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers. The Company defines Gross margin as revenue less cost of services. Gross margin should not be construed as an alternative for revenue or net earnings (loss) determined in accordance with IFRS. The Company believes that Gross margin is a meaningful metric in assessing the financial performance and operational efficiency of the Company and its subsidiaries (the "Group").
- EBITDA and adjusted EBITDA are non-IFRS financial measures that do not have standardized meanings prescribed by IFRS. EBITDA is defined as net income (loss) adjusted to exclude interest, taxes, depreciation, and amortization. It provides management with insight into HIRE Technologies' operating performance without the impact of significant accounting policies related to depreciation and amortization, financing, and taxes. 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, 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 Group.
- Adjusted net income (loss) is a non-IFRS measure that does not have a standardized meaning prescribed by IFRS. 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, 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 in assessing the Group's financial performance.
About HIRE Technologies Inc.
HIRE is investing in and shaping the future of human resource management with a technology- first focus, by consolidating and modernizing the staffing marketplace. The Company owns and operates staffing firms as well as platform technology that it uses to help those firms become more technologically advanced. The Company is a disciplined capital allocator due to its technology DNA and extensive experience in building and growing staffing companies of all types. HIRE has a large recurring revenue base and helps our clients manage change in the workplace in order to achieve success.
For further information, please contact:
HIRE Technologies Inc.
Simon Dealy, Chief Executive Officer
Phone: (647) 868-9611
Email: sdealy@hire.company
Web: hire.company
Nikhil Thadani, Investor Relations (Sophic Capital)
Phone: (647) 670-0997
Email: nik@SophicCapital.com
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 press 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 Technologies expects or anticipates will, or may, occur in the future, including statements about HIRE's business prospects, future trends, plans, and strategies, including those under the heading "Outlook", the Company's prospects for completion of additional acquisitions and future organic growth, and expected benefits from business activities 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, there can be no assurance that a forward-looking statement herein will prove to be accurate. In making such forward looking statements, the Company has assumed that it be able to continue to complete acquisitions on terms favorable to the Company.
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 March 31, 2021 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.
Such cautionary statements qualify all forward-looking statements made in this press release. 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.
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