OAKBROOK TERRACE, Ill., Nov. 20 /PRNewswire-FirstCall/ -- General Employment Enterprises, Inc. reported net income of $299,000, or $.06 per share, for the quarter ended September 30, 2006, compared with net income of $272,000, or $.05 per share, for the same quarter last year.
The Company's consolidated net revenues for the quarter were $5,034,000, down 7% from $5,395,000 for the same quarter last year. Placement service revenues of $2,670,000 were up 12%, while contract service revenues of $2,364,000 decreased 22%.
Commenting on the Company's performance for the quarter, Herbert F. Imhoff, Jr., board chairman and CEO, said, "The improvement in our placement service revenues this quarter resulted from a 6% increase in the number of placements and a 6% increase in the average placement fee. The downturn in contract service revenues reflects a 24% decrease in billable contract hours."
Fiscal Year Results
For the fiscal year ended September 30, 2006, the Company had net income of $1,002,000, or $.19 per share, compared with net income of $671,000, or $.13 per share, last year.
There was no provision for income taxes in either year, because of the availability of losses carried forward from prior years.
Consolidated net revenues for the year were $20,068,000, down 1% compared with $20,348,000 last year.
Mr. Imhoff concluded his comments by saying, "During fiscal 2006, we experienced a shift in the demand for our services, which led to a 14% increase in placement service revenues and a 13% decrease in contract service revenues. The Company took advantage of the stronger demand for placement services and focused its efforts on that business, while experiencing the lower level of contract business during the year. Because placement services have a higher profit margin than contract services, the change in revenue mix resulted in a 37% improvement in income from operations. That plus higher investment income contributed to a 49% increase in net income."
Special Cash Dividend
The Company also reported today that its Board of Directors declared a special cash dividend of $.10 per share, payable on January 9, 2007 to shareholders of record as of December 15, 2006. Commenting on the dividend, Mr. Imhoff said, "The Board believes that it is appropriate at this time to return a portion of the Company's earnings to its shareholders. Due to a period of operating losses in the past, no cash dividends had been declared since 2000."
Business Information
General Employment provides professional staffing services through a network of 20 branch offices located in 10 states, and specializes in information technology, accounting and engineering placements.
The Company's business is highly dependent on national employment trends in general and on the demand for professional staff in particular. Because long-term contracts are not a significant part of the Company's business, future results cannot be reliably predicted by considering past trends or by extrapolating past results. Some of the factors that could affect the Company's future performance include, but are not limited to, general business conditions, the demand for the Company's services, competitive market pressures, the ability of the Company to attract and retain qualified personnel for regular full-time placement and contract assignments, the possibility of incurring liability for the Company's business activities, including the activities of contract employees and events affecting its contract employees on client premises, and the ability of the Company to attract and retain qualified corporate and branch management.
GENERAL EMPLOYMENT ENTERPRISES, INC.
CONSOLIDATED STATEMENT OF INCOME
(In Thousands, Except Per Share)
Three Months Year
Ended September 30 Ended September 30
2006 2005 2006 2005
Net revenues:
Contract services $ 2,364 $ 3,013 $10,253 $11,754
Placement services 2,670 2,382 9,815 8,594
Net revenues 5,034 5,395 20,068 20,348
Operating expenses:
Cost of contract services 1,650 2,142 7,256 8,335
Selling 1,744 1,436 6,098 5,250
General and administrative 1,416 1,582 5,925 6,186
Total operating expenses 4,810 5,160 19,279 19,771
Income from operations 224 235 789 577
Investment income 75 37 213 94
Net income (1) $ 299 $ 272 $ 1,002 $ 671
Average number of shares:
Basic 5,148 5,147 5,148 5,142
Diluted 5,333 5,337 5,338 5,355
Net income per share -
basic and diluted $ .06 $ .05 $ .19 $ .13
(1) There was no provision for income taxes in either year, because
of the availability of losses carried forward from prior years.
GENERAL EMPLOYMENT ENTERPRISES, INC.
SUMMARIZED CONSOLIDATED BALANCE SHEET INFORMATION
(In Thousands)
September 30 September 30
2006 2005
Assets:
Cash and cash equivalents $ 5,904 $ 5,236
Accounts receivable, net, and
other current assets 2,570 2,496
Total current assets 8,474 7,732
Property and equipment, net 801 632
Total assets $ 9,275 $ 8,364
Liabilities and shareholders' equity:
Current liabilities $ 2,423 $ 2,514
Shareholders' equity 6,852 5,850
Total liabilities and shareholders' equity $ 9,275 $ 8,364
