Good afternoon, ladies and gentlemen, and welcome to the HireQuest, Inc. fourth quarter and year-end 2020 earnings event. At this time, all participants have been placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Brett Maas with Hayden IR. Sir, the floor is yours. Thank you, operator. I would like to welcome everybody to the call. Hosting the call today is HireQuest CEO, Rick Hermanns, and CFO, Cory Smith. Please be aware, some of the comments made during their call include forward-looking statements, which within the meaning of federal securities laws. Statements about our beliefs and expectations containing words such as may, could, would, will, should, believe, expect, anticipate, and similar expressions constitute forward-looking statements. These statements involve risks and uncertainties regarding our operations and our future results that could cause HireQuest results to differ materially from management's current expectations. We encourage you to review the safe harbor statements and risk factors contained in the company's earnings release and its filed SEC, including without limitation, the most recent annual report on Form 10-K and other periodic reports, which identify specific risk factors that may also cause actual results or events to differ materially from those described in the forward-looking statements. Copies of the company's most recent reports on Form 10-K and 10-Q may be obtained on the company's website at hirequest.com or the SEC's website at sec.gov. The company does not undertake to publicly update or revise any forward-looking statements after the call or date of this call. I'd also like to remind everyone that this call will be available for replay through March 25th. A link to the website replay of the call was also provided in the earnings release and is available on the company's website at hirequest.com. I'd like now to turn the call over to HireQuest CEO, Rick Hermanns. Rick? Thank you for joining us. This has certainly been an eventful period for HireQuest. Over the last 120 days, we have taken advantage of our balance sheet and our profitable business model to make two highly strategic and accretive acquisitions during what continues to be a challenging period for our industry. The result of these two acquisitions is that we have additional revenue streams and a stronger national presence. We have augmented our on-demand staffing model, provided through HireQuest Direct franchises nationwide, by adding traditional commercial staffing, which will be sold by franchisees of the well-respected 70-year-old Snelling Staffing name. These two models are complementary, and they deliver several benefits for us, including, one, first, they increase our national scale, making it easier to sell to national accounts and making our various trade names more recognizable. Second, adding commercial or weekly pay staffing models to our existing on-demand staffing operations significantly diversifies our approach. Third, we were able to meaningfully grow our system-wide sales at attractive valuations, taking advantage of the inherent leverage in our business model. Fourth, as it relates to Snelling, we acquired a 70-year-old brand name that is well-regarded throughout the industry. Finally, they enable us to efficiently leverage our corporate resources and our workers' compensation efforts, creating incremental profitability. Combined, our system-wide sales should exceed $340 million, even without a return to pre-COVID system-wide sales levels. In addition, we have licensed our trademarks for 10 offices in California, which should produce at least another $20 million in system-wide sales. HireQuest was built on a risk-mitigated business model, positioning us to deliver consistent profits even in challenging environments. Indeed, this was as challenging an environment for the on-demand staffing sector as we are likely to see in our lifetimes, with the cancellation of sporting events, concerts, auto auctions, and many other events which provide significant volume for our franchisees. Nevertheless, we remain profitable, and while it has been a difficult time for many of our franchisees, most of them have performed admirably and are well-positioned to come out on the other side stronger for the challenge. Similarly, we took steps to de-risk these two transactions. We expect to further reduce any risk involved in these acquisitions in the future. First, we acquired Snelling Staffing, purchasing 47 locations, which generated approximately $87 million of system-wide sales in 2020. We determined that it was in our best strategic interest to sell certain Snelling locations to third parties and have done so. As mentioned before, four of these offices were transitioned to a third party in California who will license the Snelling trademark and pay us a royalty. Second, we have closed the acquisition of LINK Staffing, acquiring 35 locations in nine states, adding incremental $57 million in system-wide sales. In line with our California strategy, we transferred the franchise agreements of six of these offices to be operated pursuant to the trademark license agreement. We expect these locations to convert to the Snelling name, as it is well-known in the industry. Financially, our royalty revenue reflects the challenges related to the pandemic. The temporary employment market began to find its footing following the bottoming out that we experienced over the spring and summer months. That we were able to navigate through the shutdowns and construction delays and the other effects of the pandemic speak to our franchisees' resilience and professionalism. The staffing industry is subject to economic and business cycle risk, even under the best of conditions. Our franchise business model was designed with this in mind to reduce quarter-to-quarter volatility and insulate us from extreme swings in economic activity. Over the course of 2020, we demonstrated the value of our approach and remained profitable on double-digit declines in system-wide sales and revenues. Our franchisees rose to the serious challenge of adjusting staffing levels and expenses to align with the current economic conditions and a steep decline in system-wide sales. Looking ahead, we are encouraged by the increasing availability of vaccines and what appears to be a moderation in the number of COVID-19 cases over the last several weeks. As a reminder, as the economy as a whole shows signs of recovery, there are certain sectors like leisure and hospitality, where we have exposure that will most likely be later to recover, which highlights the significance of our recent acquisitions. Going forward, we will continue to evaluate additional strategic transactions, screening for fit within our existing business structure and solid economics that contribute to our financial results in a positive and meaningful way. Deploying a disciplined approach to M&A, we are focused on opportunities that provide an entree into new and attractive geographies, strengthen the presence of our existing franchisees, provide access to targeted national accounts, or place us in industries with similar employment dynamics. Any deals we accept will need to demonstrate an ability to be absorbed into our franchise model quickly and provide a positive financial contribution in a short amount of time. We are not interested in chasing scale or growth that does not fit within our existing profile. For the year, we delivered more than $5 million of net income, or $0.39 per diluted share, despite the nearly 13% in system-wide sales and significant reserves placed on the notes receivable. Importantly, we generated positive cash flow of more than $9 million, adding to our cash reserves and providing us with the resources and flexibility to selectively pursue the two strategic transactions I just discussed. Subsequent to these transactions, our balance sheet remains solid, and we expect again to be debt-free following the integration of the 80 new locations in a relatively short time. Disciplined and responsible capital allocation remains a critical cornerstone to our strategic framework and the overall health of the company. Simultaneously, we are allocating a portion of our cash flow to our shareholders in the form of regular quarterly cash dividends. Beginning in the third quarter of 2020, we declared a cash dividend of $0.05 per common share, which was followed by additional dividends at the same rate in December and March. We intend to continue to pay this dividend on a quarterly basis, based on our business results and financial position at the discretion of the board. Our commitment to regular cash dividends underscores our confidence in our business model and our franchisees and the quality of the services they provide. Let me turn the call over now to Cory to discuss the financial results further. Cory? Thank you, Rick, good afternoon, everyone. Thank you for joining us. Total revenue in 2020 was $13.8 million, compared to $15.9 million in 2019, a decrease of 13%, and was primarily due to the economic shutdown caused by COVID-19. Total revenue consists of two components, franchise royalties, which make up roughly 90% of total revenue, and service revenue. Franchise royalties in 2020 were $12.8 million, compared to $14.7 million in 2019, a decrease of 12.8%. Service revenue, which is generated from interest charged to our franchisees on overdue accounts receivable and fees for various optional services, was $1 million, compared to $1.2 million in 2019, a decrease of 15.5%, which was largely due to a decrease in miscellaneous fees charged for optional services. Selling, General and Administrative expenses in 2020 were down 33.7% to $8.7 million, compared to $13.1 million in 2019. This $4.4 million decrease was primarily due to $5.1 million in merger-related expenses that were incurred in 2019, but not present in 2020. This decrease was partially offset by an increase in stock-based compensation and a reserve placed on our notes receivable that were issued to finance the sale of the offices acquired in the 2019 merger. This reserve was directly related to the negative impact COVID-19 has had on the economy, the financial condition of our borrowers, and the value of the underlying collateral. Net income in 2020 was $5.4 million, or $0.39 per diluted share, compared to a net loss from continuing operations of $505,000, or - $0.05 per diluted share in 2019. Taking a look at the fourth quarter. Total revenue in the fourth quarter of 2020 was $3.4 million, compared to $5.9 million in the fourth quarter of 2019, a decrease of 42%, again related to the economic shutdown caused by COVID-19. Franchise royalties in the fourth quarter of 2020 were $3.2 million, compared to $5.4 million in the fourth quarter of 2019, a decrease of 40.2%. Service revenue was $176,000, compared to $476,000 in the fourth quarter of 2019, a decrease of 63%. This decrease is largely due to a decrease in miscellaneous fees charged for optional services. Selling general and administrative expenses in the fourth quarter of 2020 were down 31.5% to $2.2 million, compared to $3.1 million in the fourth quarter of 2019. This $973,000 decrease was primarily due to a decrease in payroll costs and lower stock-based compensation. Net income was $1.4 million, or $0.10 per diluted share in the fourth quarter of 2020, compared to $3.5 million or $0.26 per diluted share in the fourth quarter of 2019. The fourth quarter of 2019 included a loss from continuing operations of $315,000, or a - $0.02 per diluted share. Beginning in the third quarter, our board approved and the company paid its first quarterly dividend of $0.05 per common share to shareholders of record as of September 1st, 2020. Subsequently, the board approved a $0.05 cash dividend for payment in December and again in March of 2021. In 2020, we returned approximately $1.4 million in cash to our shareholders in the form of dividends. We expect to continue this practice and pay a cash dividend each quarter at the board's discretion. Moving on to the balance sheet. We have grown our current assets to $39 million at December 31st, 2020, from $37 million at December 31st, 2019. Current assets at December 31st, 2020, included $13.7 million of cash and $21.3 million of accounts receivable, while current assets at December 31st, 2019, included $4.2 million of cash and $28.2 million of accounts receivable. Property and equipment increased by $1.3 million since the end of 2019 to $3.2 million at the end of 2020, as we continue the construction on a new building adjacent to our corporate headquarters, which will give us additional room for growth. We also began an IT project updating our front office software in 2020 that resulted in an intangible asset of $343,000 at December 31st, 2020. Our notes receivable balance net of reserve at December 31st, 2020, was $5.9 million. During 2020, we collected approximately $2.1 million in cash from these notes. With that, I will turn the call back over to the operator for Q&A. Certainly. Ladies and gentlemen, the floor is now open for questions. If you have any questions or comments, please press star one on your phone at this time. We do ask that while posing your question, please pick up your handset if you're listening on speakerphone to provide optimum sound quality. Once again, if you have any questions or comments, please press star one on your phone. Your first question is coming from Aaron Edelheit. Your line is live. Hi, Rick. I wanted to ask you a question about the two acquisitions. Even in the press release, I think you alluded to it in your comments of them having $133 million or so in system-wide sales. When I look inside the 8-Ks that you provided, Snelling, which did $95 million in 2020, actually did $123 million in 2019 and $135 million in 2018. LINK did, instead of $57 million that they did last year, in 2019, they did $85 million, and the previous year, over $100 million. Just thinking about a post-COVID kind of return to normal world, is there any reason to think that these two companies couldn't get back to what they were doing previously? I've got to think, especially with your management and with really investing and paying attention, that maybe you could even exceed those. I'm curious if you could comment. I know you can't comment to the timing of when that may happen, but assuming we went back to normal, is there any reason we couldn't go back? You're talking about 30% to potentially 100% higher revenue rates for these companies you just acquired. Yeah, Aaron, I appreciate the question. I think that you're right. If your philosophy is that the economy, whether it's in 2022 or 2023 or the second half of 2021, returns essentially to 2019, there's really no reason to believe that. There's nothing structurally. It's not like a bunch of offices have been closed so that those old results can't or shouldn't be achieved. As an example, using just HireQuest numbers, our system-wide sales in 2019 were nearly, when you include the first half of the year from Command Center, was around $291 million. We ended up at around basically 30% less, around $210 million. Again, it's not as though we closed multiple offices in multiple markets that we could never go back to that $291 million. To answer your question is no. As much as our system-wide sales, even at 2020 levels, let's say assuming a full 12 months of Snelling and LINK and HireQuest combined, would be in that $350 million-$360 million range. If you assume even a 25% reversion back to 2019, you're pushing somewhere in the $450 million-$460 million range. For total system sales- Got you. whenever the economy recovers. Of course, there's a lot of reasons why it may not ever get back to that are outside of our control. Again, there's nothing structurally that would stop us. Got you. My hat's off to you to really acquire these two companies. If I understand correctly, one of them was a subsidiary of a bankrupt or a troubled company. Just for you to acquire these companies right before, in my opinion, the economy reopens, my hat's off to you as a shareholder. Do you see more opportunities? One of the things I see you make these incredible acquisitions, even the one of Command Center that brought HireQuest public. I'm just curious if you could talk to kind of the opportunity set to continue to consolidate the industry and put them underneath your management and the superior model that you have at HireQuest. Well, it's a good question. Part of it is, I will say a lot of companies have tried to sort of quote-unquote, "consolidate" the staffing industry over time, and frankly, it hasn't necessarily gone very well, which fundamentally goes back to the point of our model literally turns that on its head. Really our goal is to have local ownership, right? It does put a little bit Sometimes it puts limits on it, right? Because once we have a franchisee in a market, it's harder to buy another one in it. I wouldn't necessarily see us. We're not out there just to buy new companies. It's not really what we're looking for. That said, we now have an entirely separate platform from which to develop. I think that's one of the key parts of these acquisitions, is really that historically, HireQuest had a very, very limited presence in the traditional commercial staffing market. While Snelling and LINK obviously had much larger presences, they were still, by national standards, relatively small. By putting them together, now we have more than 80 offices, which creates its own momentum because now the name has more value, and the network has more value, which makes it easier to grow. We've already have more sort of commitments for people to open new offices in 2021 than we did in 2020. That was even, let's say, before COVID hit. What I don't want people to overlook is the fact that these acquisitions are really important for setting up organic growth as well. They're very important for setting up organic growth. Look, we're always looking for additional opportunities. I think that now it's just become clear to a lot of people sort of what the status of the market is. The market really froze, frankly, in the end of 2020. Nobody wanted to sell, nobody wanted to buy. Whereas now, like I said, opportunities have started to present themselves. Again, we'll continue to be active where the opportunity is appropriate. Another question is just beyond staffing, are there kind of longer-term visions? Are there other verticals that you could utilize HireQuest's franchise model, such as like security guards or trucking? Like how far do you think you could take the model? Well, that's a critical question, and it was alluded to in my remarks, talking about expanding into markets or industries that have similar employment dynamics, and security guards is a perfect example. Realistically, a security guard isn't significantly different from a lot of employment characteristics as a traditional, let's say, as a welder who's working as a temporary employee. As a result, there are numerous industries that are like that we can absolutely go into. That's why rather than chasing bad acquisitions or moving into, let's say, weak markets or getting involved in accounts with really low margins just to drive growth, frankly, the more realistic option for growth is to go into heavy, basically fragmented industries. Again, like the security guard business, where it's hard for a person who, they may be a great operator of a security guard company, but they don't have access to the cash to finance that type of payroll, or maybe not have the requisite skills to employ 50 or 75 guards. Yes, there are a lot of opportunities for us to grow. The runway for us is, frankly, it's almost unlimited, really. Then just the last question, I won't monopolize more time, but when I look at Live Nation, which owns Ticketmaster and runs concerts, they're at all-time highs. I think about your business, and when we've talked before, you do a lot of concerts and stadiums and sport events and things like that. I look at the vaccine distribution schedule, pretty much every adult having access to vaccines by May, the latest, maybe June. I've got to think that your Q3, if concerts, and I'm not asking you to predict when it's going to happen, but if concerts and sports, and we go back to normal, you're set up for a pretty strong third quarter in that scenario. Is that correct in your mind? There's no question. There's two main factors in that, and undoubtedly, obviously, I'm a football fan, and you watch the Super Bowl where I live here in the Tampa Bay area, and there's what? Like 15,000 people in the stadium. As a result, the amount of business that we would have otherwise had, basically, we got no business out of the Super Bowl, whereas in a normal year, we would have gotten a large amount of business. Obviously, if there are people in the stands in, let's say, for college football this fall, then that will be very good for us. Because that is a big component of our business. I will say, but what I do need to temper this with is right now there is a challenge finding employees. All of our franchisees, almost all of our franchisees are struggling to find employees right now. I suspect that's true of almost every company in the U.S. right now. I think that as basically people's tax refunds get spent and as their stimulus checks get spent, and as the $300 a week extra supplemental unemployment benefits go away, we'll actually also see a real improvement in our system-wide sales as well as people return to the workforce that right now have the liquidity to not work. Got you. Thank you so much, and appreciate it. Thank you, Aaron. Thank you. Once again, ladies and gentlemen, if you have any questions or comments, please press star one on your phone at this time. Your next question is coming from Peter Rabover. Your line is live. Hey, Rick. Congratulations on the acquisitions. Great job. I was wondering if you could maybe update us on how that sort of changes your industrial and geographic mix from year-end 2020. That's a good question, Peter, and good to talk to you. Obviously, from a geographical standpoint, we're probably the acquisitions, especially LINK, puts us far heavier in Texas than what we used to be, which, to be honest with you, was one of the attractions of LINK, was to be heavier in Texas. Now our two largest states by far are Florida and Texas, which are two of the most dynamic states in the country. We're very happy with that. The characteristic of the employees obviously changed significantly now is probably about 40% of our business now represents people who you would typically think of as they're blue collar, but whereas the on-demand staffing would tend and trend more towards construction and recycling facilities and cleanup of stadiums, has now we've transitioned to where we're significantly heavier in manufacturing and logistics. Which again, to me is attractive, especially logistics, as one of the things I believe the pandemic will leave sort of a permanent mark on retailing, and it'll go more towards online, which will increase the need for logistics companies, and that shift will help our newfound product line. That takes us where, again, we're pretty much a lot more in the traditional commercial staffing. The other part is Snelling in particular, did a lot or does a lot of executive search, and one of our plans is to develop that further. We certainly will hope to see a lot more permanent placement fee income by our franchisees moving forward as we make more investments to grow that segment. The same is true with medical. Snelling had a kind of an emerging medical staffing unit. We will also spend the resources to properly develop that as well. We're excited that it's created a number of new avenues for growth for us. Yet, again, it positioned us geographically stronger in a couple of the most dynamic markets. Again, I think it'll put us stronger into logistics, which will have very positive effects on our bottom line in the long run. Okay, great. Thanks so much for the color. I guess a second question would be, there's been a big push toward minimum wage increase and, as you said, more of our blue-collar workers, whose wages tend to increase off of minimum wage. I'm curious whether that's a tailwind to your system-wide sales. Do you get to charge more and get to take a higher percentage, and so on? Yeah, that's a great question. I think that the funny part about it is, when you look at companies, our competitors, let's say like Manpower, Adecco, the funny thing about it is that their largest markets are Europe. If you think of rigid labor laws and high costs, it's Europe. To the extent that if that becomes the future of the United States, it doesn't necessarily hurt temporary staffing that way. Personally, I think that higher wages may, in the long run, depress manufacturing activity in the country, and that's not necessarily a good thing. I would just say that I think it's hit or miss in some respects to the extent that it forces more automation. Obviously, that's not good unemployment at all, which is bad for us. Candidly, I think it's a mixed bag. Okay. A couple of kind of housekeeping questions. You had, I think last year, your blended kind of royalty rate was I think 12.8 on $210 million, which is about 6%. On that $340 that you were discussing, is that something that we can kind of expect as well, 6%? Is there a different dynamic or something else that we should look for? Yeah. I would simply say to you is that the tricky part, I can't really give you a good answer on that other than it'll change quite a bit because Snelling in particular, has probably half of the Snelling franchisees have a completely different royalty model than what Link and HireQuest did. The numbers are going to look a little bit screwy. I wish I could tell you that you can look at that and know whether it's good or bad, it's going to be jacked because of that. I would say to you, though, as a general rule, is it will probably drift down a little bit because light industrial staffing tends to have lower markups, and therefore our royalty is not as high. In order for our franchisees to be competitive, our royalty is lower on low-margin accounts. I would actually anticipate it to drift downwards a bit, notwithstanding even, like I said, the set of franchisees that have franchise agreements that are completely non-standard. Okay. Would that affect the other revenue? Will there be less accounts receivable financing and all that stuff, or more? Just a general question. Yes. There are a certain number of offices, again, I'm using the Snelling ones, where their royalty is, in essence, to utilize the Snelling network and the Snelling name. They don't receive workers' compensation, they don't receive all of the back office support, they don't receive the cash. It'll alter everything. That's what I'm trying to say. Yeah it's going to muddle things that way. In theory, that would sort of. We're still targeting the same net margin as what we always have. In theory, that would sort of de-risk the balance sheet a little bit with less workers' compensation liability. Is that the other thing that I heard you say? That's true, I will have to say, as much as it might do that, to be honest with you, one of the biggest advantages that we offer as a franchisor is access to A-rated workers' compensation. That's a big deal because it's one of the hardest things to get, is if you're a small staffing company, is to get workers' compensation at all. Yeah other than through the state pools, which are generally catastrophic in the long run to run your business. While it is certainly less risky for us, we can lose money on providing workers' compensation to a franchisee. On the flip side of it is, it really is one of the primary reasons why I myself would sit there and say, "This is why our product is so darn good," is because of the access to workers' compensation at a very attractive rate. Got it. Maybe moving down the bottom line, I think you guys had about $2.2 million in SG&A per your press release. Was that cash? Is that a good run rate to think about it? With these acquisitions, will there be addition to that? Just kind of curious on all that. Oh, there's no question. Actually, I want to step back from that for a second. Yeah. My senior management team did an amazing job with both these acquisitions of minimizing the amount of outside costs. We didn't spend heavily on all sorts of outside advisors or anything like that. We did the work ourselves mostly. As a result, thinking of the fact that we made acquisitions that totaled almost 60% of our existing system-wide sales, you would expect huge amounts of transaction costs. Fortunately, again, due to the efforts of the management team, we were able to keep those costs at a minimum. Even in both instances, they were both asset purchases, and as a result, we'll have far less lingering costs to absorb these acquisitions. To give you an idea, when we merged with Command Center, we were still paying rent six months later on their corporate headquarters. We have none of that in either of these deals. That said, first quarter is going to contain a boatload of deal expenses. No, I understand that. I guess I'm just thinking more of a run rate for it to think about. Just kind of for modeling purposes. Like off the system-wide sales, what's your cost base? What's your cash cost base going forward? I was just curious whether the fourth quarter was a good number or not. No, fourth quarter's not a good number simply because obviously we've increased our size by 60%. That alone requires additional SG&A to handle it. I do think, and one of the most important parts of these acquisitions, again, was also to restore a lot of the operating leverage we lost during the pandemic. We lost a ton of operating leverage. We're back up to where we get our operating leverage back. That was very important, but again, for us to be able to hold that fourth quarter, I would say that it would be proportional. The increase in SG&A would be proportional, you know what I'm saying? It would fit within a 60% increase in sales. Got it. I understand. I guess the last question, just maybe, I know you have been kind of loath to talk about, but give us some detail on your building in South Carolina. I know you're adding stuff to it. How big is the building, et cetera? Just kind of curious, is it more valuable now? Can you borrow against it to make more acquisitions and all that stuff? Look, the building's not going to be the white knight that's going to allow us to buy acquisitions or to buy other companies. The building is nearly complete. I don't know. We have a really slow builder, I'll tell you. We have a really slow builder. We expect it to be done relatively soon. The building, because of commercial real estate being what it is, and I would say that there's no big hidden equity in it. I'll just say that. It's not like we built it for $4 million and it's worth $8 million or anything like that. It's proportionate to what we paid for. It's nearly complete. It's about, I think, the total buildings, once they're done, will be like 25,000 square feet of office space. We have leases in part of it to outside parties as well, and we won't occupy the whole thing. We don't have enough need for all of it. We have room to grow within it. If you want to rent some office space in Goose Creek, South Carolina, call me afterwards and we'll get you set up with a lease. Got it. Well, that's great. I really appreciate all the color you're giving us today, and congratulations on growing the company so much. Thank you. Thank you. Your next question is coming from Bill Chen. Your line is live. Bill Chen, your line is live. Hi. I was wondering if you could comment on the cadence of that organic growth after the acquisition. How do you think about it? Do you think about it from X number of locations that you can open? Do you think about it in terms of X% of incremental products that you could offer, services that you could offer? Any commentary on that would be helpful. Sure. I guess just so you know, the way I view it is sort of how many new offices we sell franchises for. Frankly, after that, I look at it as our typical franchisee will hopefully be doing $2 million-$3 million worth of revenue two, three years down the road. That's how I look at it. Of course, it doesn't always work that way because someone will do four and one will do $1 million of revenue. That's how I look at it, is the number of units that we sell. I expect there to be a pickup in units. That being said, it might be a little bit slow because everybody will be focused on transitioning to the new system. I do think by the third or fourth quarter, though, there will hopefully, and I expect there to be people who, let's say, right now they're running a HireQuest Direct, and then they say, "Gosh, I'd like to run a Snelling as well in my market." "I run a Snelling, and there's a lot of opportunity in the direct dispatch business." I do expect and hope that we will go back to a faster organic growth rate. As I said before, the pandemic really hurt us, frightfully so, in 2020 as far as new office openings. I would expect that to increase pretty significantly in 2021 and the beginning of 2022. I do want to point out is that one of the things that we do that makes us fairly unique as a franchisor is frequently, we'll actually offer incentives for our franchisees to open new offices. Rather than spending a bunch of money trying to find people that are sort of outside of the industry to open offices, we offer cash incentives to our franchisees typically to go out and expand. With the vaccination rates going up and with, again, a little bit more of an impetus for people to open, let's say, again, a Snelling office if they already have a HireQuest Direct, we do think that'll pick up. It's a long answer for saying, yes, I do think that it'll pick up. It's a very important aspect to our growth plan, is just organic growth. What is kind of the upfront cost to you and also working capital needs to get a new office started? Let me say categorically that I can't really say anything from the standpoint of because that would be deemed as like selling a franchise, right? I would give you a range that would be almost meaningless. As far as, let's say, for example, working capital, that's one of the primary benefits of our model, is that we provide the pay. We're the employer of record for our franchisees, so we provide the vast majority of the working capital. The main thing that a franchisee, let's say a new franchisee, is responsible for is they have to hire and develop their own staff. They pay the occupancy costs of their office, and they pay the lights, the communications, internet, et cetera, and that's what they're responsible for. The startup costs are actually pretty low. When we give a $50,000 incentive for somebody to open in Ogallala, Nebraska, that $50,000 goes a long ways towards opening that branch. Mm-hmm. Is there a typical square foot for the office? I'm assuming a lot of them are located in fairly low rent locations. I'm just kind of thinking from a retail box perspective, what that dynamic is like. That's a fair question. There's a difference between a traditional commercial staffing office like Snelling or LINK versus HireQuest Direct. HireQuest Direct definitely tends to be in more transitory neighborhoods. Size-wise, it's pretty typical for an office to be between 900 and 2,000 sq ft. Again, a direct dispatch office would tend to be, again, in a more downscale neighborhood than a Snelling office would. M m-hmm. I don't know if that answers your question, but there are certain Snelling offices, for example, that are in really nice areas. It also depends on, even within, let's say, Snelling or LINK, each office, each franchisee has their own sweet spot. For one person, they might focus on I'm thinking of one now where their largest client is a big cheese plant, and they're in a relatively downscale neighborhood, but it's a tremendous office. On the other hand, you have some that mostly all they send out is administrative people or medical-oriented people. Of course, that's going to be in a much nicer neighborhood. Mm-hmm. There's no clear-cut answer, except for the HireQuest Directs. Pretty standard. Mm-hmm. I guess the follow-up question would be, culturally, the Command Center HireQuest, that's a very blue-collar industrial kind of staffing solution. With Snelling and LINK, is there any challenges being the franchisor of both light industrial and more of the admin medical? With my limited understanding of the staffing business, it seems like it's a different kind of franchisee who's going to be handling that office. As a franchisor, culturally, are there different challenges that we face with Snelling and LINK? That's a good question. The answer is, I would say in most of the LINK and Snelling offices, there's certainly a difference between, let's say, is a typical commercial staffing business and, let's say, a direct dispatch office. That being said, the people who run them are really frankly pretty similar. Again, there are certain, let's say, Snelling and LINK franchisees that definitely focus on more of the administrative or medical side. Those people, there would be a bit of a cultural difference. Again, obviously, we only closed LINK on Monday, so we're sorting through things. We're in the process of developing a management team. The management team for them will be separate as well. Supplying money and workers' compensation and back office support, frankly, there's really no difference between LINK, Snelling, HireQuest Direct. An unemployment claim is an unemployment claim. On the other hand. Mm-hmm. the sort of supporting recruiting is a lot different for a LINK or a Snelling than it is for HireQuest Direct, and therefore, the management teams for those divisions will be separate to account for what you're saying. Got you. Thank you. That's great color. My last question would be, could you talk a little bit about the software or the technology aspect that you provide to these franchisees? Are there anything that's kind of custom-built in-house? Do we need to have different systems for the more light industrial versus the Snelling and the LINK? There's no question there are certain differences. Applicant tracking systems, not tend, they are far more important for traditional commercial staffing than what they are for direct dispatch staffing. Our core software works for either. I know Cory put it in his remarks, we had already embarked on a sort of a rewrite of our in-house software. We started it Well, actually, at the beginning of last year, and it started picking up more towards the end of last year. We're always revising, and obviously technology is changing, we continue to do it. The point is that it doesn't really require anything significantly different. I don't want to say that. There's a lot of nuances, and if you were in the business, you would say there are definitely differences, but not of an order of magnitude either. Most softwares at their core, again, it requires that you pay the worker, that you keep track of their information, that you gather all the applicant information. Traditional staffing requires certainly more applicant tracking because you're doing more. Your vetting process before placing a person, you have far more upfront vetting for that employee than what you do on a direct dispatch. Therefore, again, the software requires a more robust ability to sort through employees. I don't know if that answers your question. No, that's helpful. I have no further questions. Thank you very much for your feedback. Thank you. Your next question is coming from Aaron Edelheit. Your line is live. Hi, Rick. I just have two follow-up questions. One is just speaking on margins, and when I think about your business, I think about kind of normalized earnings power. My first question was just about what would system-wide revenue be in a more normalized world for all the cross-currents from COVID and et cetera. When I think about $450 million or maybe $500 million of system-wide revenue on a normalized basis when things return to normal, based on past conversations we had, this is before your acquisitions, we were thinking about a 4% net margin. I'm getting numbers that would indicate to me that HireQuest has earnings power of $1.30 to possibly $1.50 per share. I just want to make sure, just based on one of the other caller's questions, is that the right framework to think about just in terms of the new underlying earnings power of the business when things go back to normal? Well, if you exclude, let's say, the pandemic itself, and again, it destroyed our operating leverage. I think to think of net earnings between 3.5% - 4.5%, that hasn't changed. That hasn't changed. That's not even having to get to $450 million, $500 million of revenues, that or of system-wide sales. Just adding the acquisitions gets us back more to where we should be, meaning in that 3.5% - 4.5% range. Yeah. Basically, but even though in terms of when you think about these new businesses, especially in the commercial side, is that when things get back there, just doing that calculation of where HireQuest could be, it's the same of what we've discussed before. Is that right? Yeah. Okay. That's certainly what we hope. I guess that's what I'd say. That was certainly what we would hope. Like I said, the margins might be a little bit on the lower side because a little bit on the lower side, then again, we'll have more scale. We hopefully can squeeze a little bit more out of it from an operating, you only have to pay me once. That gets spread over a much bigger base, that's obviously going to help some. Gotcha. In terms of your acquisitions, how should I think about the integration of these two acquisitions? You mentioned it's like 60% of existing revenue. Have you been able to do work already? How long could this take for you to get your system in place? Again, due to the efforts of the franchisees and to my management team, to be honest with you, a lot of it's done. Basically everybody, as of this week, is operating on our software, as an example. For the last six weeks, we've been tearing our, well, me, very limited amount of hair, but we've been tearing our hair out to get set up. A lot of the immediate integrate, the sort of the hard parts, a lot of them are done. There's still a long ways to go. There's a lot of things to go. Frankly, the most difficult things are done. It's more now just settling in and again, refining things. We're well along the way on integrating everything. Great. Phenomenal job. Thanks so much. Sure thing. Thank you. There are no further questions in the queue at this time. Okay. Well, I want to thank everybody for joining us on this call. I hope you are as excited as I am about the future of the company, and I appreciate the thoughtful questions and appreciate you joining us. Thank you and have a good day. Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your lines at this time and have a wonderful day. Thank you for your participation.