Toronto, Ontario--(Newsfile Corp. - August 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 June 30, 2021.
- Revenue growth of 146% in Q2-2021 versus Q2-2020.
- Organic Growth1 of 44% in Q2-2021 over Q2-2020.
- EBITDA loss improved to $0.07 million in Q2-2021 versus loss of $1.0 million in Q2-2020.
- Industry leading year-to-date revenue growth of 116% for the six months ended June 30, 2021 far exceeds industry peers (16%2).
"Execution of our business strategy along with solid organic growth propelled our business to record top-line results," said Simon Dealy, HIRE's Chief Executive Officer. "With a 173% increase in job orders and a 31% increase in placements, our managing directors across the Company demonstrated their commitment to meeting client demands despite the ongoing uncertainty with COVID-19. Hire led the industry in Organic growth, with our newest partners and team members, at Taylor Ryan, The Kavin Group, and The Headhunters, generating 165%, 76% and 29% year-over-year organic growth rates respectively. As we look to continue to add leading enterprises to our portfolio, market conditions are conducive to immediate value creation and will serve to accelerate our acquisition program."
Q2 2021 Financial Highlights
Another since-inception record quarter of revenue at $6.4 million; higher by 146% over the $2.6 million for Q2-2020 with $3.5 million contributed from acquisitions made in 2020.
Recurring contract placement revenue of $4.6 million ($2.5 million Q2-2020).
High margin on-occurrence placements continue to climb and comprise 28% of our book (5% in Q2-2020).
Gross margin trending up: $2.5 million in gross margin for Q2-2021, $1.9 million higher than Q2-2020. Gross margin was 38% as a percentage of revenue; a 17 point improvement over Q2-2020 however 4 points below Q1-2021, as unprecedented demand and the resulting higher cost of services from higher wages in the IT sector in the recurring contract book has squeezed margins.
Continued improvement on the bottom line: EBITDA loss of $0.07 million in Q2-2021 versus an EBITDA loss of $1.0 million in Q2-2020. Q2-2021 included $0.9 million in net unrealized mark-to-market gains.
Adjusted EBITDA loss of $0.6 million in Q2-2021 versus an adjusted EBITDA loss of $0.2 million in Q2-2020 due in part to investments in additional shared services staff to support near-term acquisitions and the tightening margins discussed previously.
Net loss of $0.5 million ($0.01 per share) improved in Q2-2021 against the net loss of $1.1 million ($0.02 per share) reported for Q2-2020. Adjusted net loss for Q2-2021 was $1.0 million ($0.02 per share) versus the adjusted net loss of $0.3 million ($0.01 per share) for Q2-2020 due to the aforementioned investment in shared services staff and tightening margins in the IT recurring contract space.
See notes 3, 4 & 5 below for additional details.
Outlook
- With the previously announced acquisition of Leaders and Co., Consulting in Governance and Leadership Inc. ("Leaders") and favourable prevailing market conditions, we expect organic and acquisitive growth will continue to positively influence financial performance moving forward.
Conference Call & Webcast Details
HIRE will host a conference call and webcast to review its earnings results on Thursday, August 26, 2021 at 12:00 p.m. ET.
To join the webcast:
http://meetingconnectsales.adobeconnect.com/hire2021/
To join the conference call:
(+1) 416 764 8658 (Toronto local)
(+1) 888-886-7786 (Toll-Free, North America).
Please join 10 minutes before the start of the call.
Selected Financial Highlights
| 3 months ended | 3 months ended | 6 months ended | 6 months ended | |||||||||
| Period ended >> | June 30, 2021 | June 30, 2020 | June 30, 2021 | June 30, 2020 | ||||||||
| $ | $ | $ | $ | |||||||||
| Net income (loss) | (463,530 | ) | (1,066,548 | ) | 1,783,940 | (1,811,513 | ) | |||||
| Interest | 136,627 | 7,667 | 209,925 | 24,226 | ||||||||
| Amortization | 165,991 | 22,650 | 290,203 | 45,300 | ||||||||
| Depreciation | 34,442 | 36,602 | 67,733 | 106,055 | ||||||||
| Taxes | 55,759 | (6,675 | ) | 167,030 | (11,335 | ) | ||||||
| EBITDA | (70,711 | ) | (1,006,304 | ) | 2,518,831 | (1,647,267 | ) | |||||
| Add: |
| Restructuring & other non-operating items | 323,128 | 783,611 | 620,186 | 1,501,142 | ||||||||
| Realized (gain) loss on convertible debenture derivatives | (2,354 | ) | - | (423,815 | ) | - | ||||||
| Net unrealized (gain) loss on mark-to-market | (924,712 | ) | - | (3,495,374 | ) | - | ||||||
| Future contingent remuneration from acquisitions | 100,534 | - | 201,067 | - | ||||||||
| Share based compensation expense | 9,882 | - | 92,838 | - | ||||||||
| Rent expense | (27,812 | ) | (26,548 | ) | (55,624 | ) | (53,096 | ) | ||||
| Adjusted EBITDA | (592,045 | ) | (249,241 | ) | (541,891 | ) | (199,221 | ) |
| 3 months ended | 3 months ended | 6 months ended | 6 months ended | |||||||||
| Period ended >> | June 30, 2021 | June 30, 2020 | June 30, 2021 | June 30, 2020 | ||||||||
| $ | $ | $ | $ | |||||||||
| Net income (loss) | (463,530 | ) | (1,066,548 | ) | 1,783,940 | (1,811,513 | ) | |||||
| Add: |
| Restructuring & other non-operating items | 323,128 | 783,611 | 620,186 | 1,501,142 | ||||||||
| Realized (gain) loss on convertible debenture derivatives | (2,354 | ) | - | (423,815 | ) | - | ||||||
| Net unrealized (gain) loss on mark-to-market | (924,712 | ) | - | (3,495,374 | ) | - | ||||||
| Future contingent remuneration from acquisitions | 100,534 | - | 201,067 | - | ||||||||
| Share based compensation expense | 9,882 | - | 92,838 | - | ||||||||
| Adjusted net loss | (957,052 | ) | (282,937 | ) | (1,221,158 | ) | (310,371 | ) | ||||
| Adjusted net loss per share | (0.02 | ) | (0.01 | ) | (0.02 | ) | (0.01 | ) |
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 condensed consolidated interim 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.
- Percentage change in revenue for the period as compared to revenue from the same entities in the prior period irrespective of the acquisition date by HIRE.
- 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
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, including the continued favourable market conditions, 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 June 30, 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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