OAKBROOK TERRACE, Ill., Jan 29 /PRNewswire-FirstCall/ -- General Employment Enterprises, Inc. reported consolidated net revenues for the quarter ended December 31, 2007 of $3,964,000, compared with revenues of $4,844,000 reported for the same period last year.
Placement services revenues for the quarter were $2,162,000, down 18% from the same period last year. Contract service revenues of $1,802,000, decreased 18% from $2,200,000 last year.
As a result of the lower revenues, the Company had a net loss of $227,000, or $.04 per share, in the first fiscal quarter of this year, compared with net income of $296,000, or $.06 per share, last year.
Commenting on the Company's performance, Herbert F. Imhoff, Jr., board chairman and CEO said, "The declining first quarter revenues and the resulting net loss were disappointments for the Company and reflect a general slowing of the economy."
Mr. Imhoff continued, "National statistics indicate that job creation was down, unemployment was up and credit was tightening. I believe many of our prospects and clients decided to delay hiring decisions, evaluating the economy and its potential impact on their own companies before moving forward. We also found it difficult to recruit enough well-qualified candidates, in large part because of the uncertain economy."
Business Information
General Employment provides professional staffing services through a network of 20 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 OPERATIONS (In Thousands, Except Per Share) Three Months Ended December 31 2007 2006 Net revenues: Contract services $1,802 $2,200 Placement services 2,162 2,644 Net revenues 3,964 4,844 Operating expenses: Cost of contract services 1,235 1,476 Selling 1,375 1,604 General and administrative 1,631 1,551 Total operating expenses 4,241 4,631 Income (loss) from operations (277) 213 Investment income 50 83 Net income (loss)(1) $ (227) $ 296 Average number of shares: Basic 5,159 5,148 Diluted 5,159 5,334 Net income (loss) per share - basic and diluted $ (.04) $ .06 (1) There was no credit for income taxes as a result of the pretax losses in the 2007 period, because there was not sufficient assurance that a future tax benefit would be realized. There was no provision for income taxes in the 2006 period because of the availability of operating losses carried forward from prior years. GENERAL EMPLOYMENT ENTERPRISES, INC. SUMMARIZED CONSOLIDATED BALANCE SHEET INFORMATION (In Thousands) December 31 September 30 2007 2007 Assets: Cash and cash equivalents $5,759 $6,344 Other current assets 1,782 2,167 Total current assets 7,541 8,511 Property and equipment, net 914 929 Other assets 446 436 Total assets $8,901 $9,876 Liabilities and shareholders' equity: Current liabilities $1,849 $2,116 Other liabilities 446 436 Shareholders' equity (2) 6,606 7,324 Total liabilities and shareholders' equity $8,901 $9,876 (2) During the quarter ended December 31, 2007, the board of directors declared a cash dividend of $.10 per common share, resulting in a $517,000 charge to retained earnings during the period.
