OAKBROOK TERRACE, Ill., July 30 /PRNewswire-FirstCall/ -- General Employment Enterprises, Inc. reported consolidated net revenues for the quarter ended June 30, 2007 of $4,864,000, down 9% from revenues of $5,321,000 reported for the same period last year.
Placement service revenues for the quarter were $2,922,000, a 6% improvement over $2,755,000 for the same period last year. Contract service revenues of $1,942,000 decreased 24% from $2,566,000 last year.
Net income for the quarter was $184,000, or $.03 per diluted share, compared with $400,000, or $.08 per diluted share, for the same period last year.
Commenting on the Company's performance for the quarter, Herbert F. Imhoff, Jr., board chairman and CEO, said, "The Company's quarterly financial results were disappointing. We had challenges in finding enough well-qualified applicants to fill our clients' demands both for placement and contract assignments."
Continuing, Mr. Imhoff said, "Although there was an improvement in placement service revenues, it was not enough to offset increases in selling, general and administrative (SG&A) expenses and the effects of a decrease in contract service revenues. The increase in SG&A expenses reflects a number of initiatives that we have taken to improve our business. They include increasing the level of recruitment advertising, adding consulting staff and upgrading computer systems. The decline in contract service revenues can be attributed to a shift in the Company's marketing focus toward placement services as well as the difficulty in finding qualified contract employees."
For the nine months ended June 30, 2007, the Company reported net income of $570,000, or $.11 per diluted share, compared with net income of $703,000, or $.13 per diluted share, for the same period last year. Consolidated net revenues for the nine-month period were $14,668,000, down 2% compared with $15,034,000 last year.
Business Information
General Employment provides professional staffing services through a network of 19 branch offices located in 9 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 Nine Months
Ended June 30 Ended June 30
2007 2006 2007 2006
Net revenues:
Contract services $1,942 $2,566 $6,255 $7,889
Placement services 2,922 2,755 8,413 7,145
Net revenues 4,864 5,321 14,668 15,034
Operating expenses:
Cost of contract services 1,306 1,848 4,224 5,606
Selling 1,856 1,664 5,308 4,354
General and administrative 1,601 1,453 4,791 4,509
Total operating expenses 4,763 4,965 14,323 14,469
Income from operations 101 356 345 565
Investment income 83 44 225 138
Net income (1) $184 $400 $570 $703
Average number of shares:
Basic 5,151 5,148 5,149 5,148
Diluted 5,399 5,313 5,372 5,340
Net income per share:
Basic $.04 $.08 $.11 $.14
Diluted $.03 $.08 $.11 $.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)
June 30 September 30
2007 2006
Assets:
Cash and cash equivalents $6,072 $5,904
Other current assets 2,542 2,570
Total current assets 8,614 8,474
Property and equipment, net 962 801
Total assets $9,576 $9,275
Liabilities and shareholders' equity:
Current liabilities $2,617 $2,423
Shareholders' equity 6,959 6,852
Total liabilities and shareholders' equity $9,576 $9,275
