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HIREQUEST, INC. : Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant, Financial Statements and Exhibits (form 8-K)

07/02/2021 | 04:06pm EDT

Item 1.01. Entry into a Material Definitive Agreement.

On June 29, 2021 HireQuest, Inc. (the "Company") and all of its subsidiaries as borrowers (collectively with the Company, the "Borrowers") entered into a Revolving Credit and Term Loan Agreement with Truist Bank, as Administrative Agent, the lenders from time to time made a party thereto, and Truist Securities, Inc. as Sole Lead Arranger and Sole Book Runner (the "Credit Agreement") for (i) a $60 million revolving line of credit with a $20 million sublimit for letters of credit (the "Line of Credit") and (ii) a $3,153,500 term loan (the "Term Loan"). Truist Bank may also make Swingline Loans available in its discretion. The Credit Agreement replaces the Company's prior $30 million credit facility with BB&T, now Truist. The Credit Agreement provides for a borrowing base on the Line of Credit that is derived from the Borrowers' accounts receivable subject to certain reserves and other limitations. Interest will accrue on the outstanding balance of the Line of Credit and Swingline Loans at a variable rate equal to (a) the LIBOR Index Rate plus a margin between 1.25% and 1.75% per annum or (b) the then applicable Base Rate, as that term is defined in the Credit Agreement plus a margin between 0.25% and 0.75% per annum. In each case, the applicable margin is determined by the Company's Average Excess Availability on the Line of Credit, as defined in the Credit Agreement. Interest will accrue on the Term Loan at a variable rate equal to (a) the LIBOR Index Rate plus 2.0% per annum or (b) the then applicable Base Rate plus 1.0% per annum. In addition to interest on outstanding principal under the Credit Agreement, the Borrowers will pay a commitment fee on the unused portion of the Line of Credit in an amount equalt to 0.25% per annum. All loans made pursuant to the Line of Credit mature on June 29, 2026. The Term Loan will be paid in equal monthly installments based upon a 15-year amortization of the original principal amount of the Term Loan and will be payable in monthly installments with the remaining principal balance due and payable in full on the earlier of the date of termination of the committments on the Line of Credit and June 29, 2036.

The Credit Agreement and other loan documents contain customary representations and warranties, affirmative, and negative covenants, including without limitation, those covenants governing indebtedness, liens, fundamental changes, restricting certain payments including dividends unless certain conditions are met, transactions with affiliates, investments, engaging in business other than the current business of the Borrowers and business reasonably related thereto, sale/leaseback transactions, speculative hedging, and sale of assets. The Credit Agreement and other loan documents also contain customary events of default including, without limitation, payment default, material breaches of representations and warranties, breach of covenants, cross-default on material indebtedness, certain bankruptcies, certain ERISA violations, material judgments, change in control, termination or invalidity of any guaranty or security documents, and defaults under other loan documents. The Credit Agreement also requires the Borrowers, on a consolidated basis, to comply with a fixed charge coverage ratio of at least 1.25:1.00 and a leverage ratio of not more than 3.0:1.0. The obligations under the Credit Agreement and other loan documents are secured by substantially all of the assets of the Borrowers as collateral including, without limitation, their accounts and notes receivable, stock of the Company's subsidiaries, and intellectual property and the real estate owned by HQ Real Property Corporation.

The Company utilized the proceeds of the Term Loan (i) first to pay off its existing credit facility with BB&T, now Truist, and (ii) second, to pay transaction fees and expenses incurred in connection with closing the transactions described above. The Company intends to utilize the proceeds of any loans made under the Line of Credit and the remainder of the Term Loan for working capital, required letters of credit, and general corporate purposes in accordance with the terms of the Credit Agreement.

The foregoing summary of the Credit Agreement and the transactions contemplated thereby is qualified in its entirety by reference to the text of such agreement, a copy of which is attached hereto as Exhibit 10.1 and incorporated by reference herein.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The description of the Credit Agreement and the transactions contemplated thereby under Item 1.01 above is incorporated by reference herein in its entirety.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits

Exhibit No. Description

                Revolving Credit and Term Loan Agreement dated as of June 29, 2021 among
             HireQuest, Inc., Hire Quest, L.L.C., HQ LTS Corporation, HQ Snelling
             Corporation, HQ Link Corporation, HQ Financial Corporation, HQ Real Property
   10.1      Corporation, HQ Franchising Corporation, HQ Insurance Corporation,
             DriverQuest 2, LLC, HireQuest Security, LLC and the other subsidiaries of
             HireQuest, Inc. from time to time party hereto as "Borrowers", the Lenders
             from time to time party hereto, and Truist Bank, as Administrative Agent.

© Edgar Online, source Glimpses

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Financials (USD)
Sales 2020 13,8 M - -
Net income 2020 5,36 M - -
Net cash 2020 13,6 M - -
P/E ratio 2020 26,2x
Yield 2020 0,98%
Capitalization 278 M 278 M -
EV / Sales 2019 5,76x
EV / Sales 2020 9,07x
Nbr of Employees 40
Free-Float 36,6%
Duration : Period :
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Managers and Directors
Richard F. Hermanns Chairman, President & Chief Executive Officer
Cory Smith Chief Financial Officer & Treasurer
David Gerstner Vice President-Operations
Edward Jackson Independent Director
Payne D. Brown Independent Director
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