Exhibit
99.01
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News Release
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General
Employment Enterprises, Inc., Oakbrook Terrace Tower, Suite 2200, Oakbrook
Terrace, IL 60181, (630) 954-0400
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FOR IMMEDIATE RELEASE:
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January
8, 2010
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COMPANY:
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General
Employment Enterprises, Inc.
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CONTACT:
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Salvatore
J. Zizza
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Chief
Executive Officer
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Phone:
(630) 954-0403 Fax: (630)
954-0595
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E-mail:
invest@genp.com
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General Employment Reports
Fourth Quarter and Fiscal 2009 Results
General
Employment Enterprises, Inc. (NYSE Amex: JOB) reported consolidated net revenues
for the quarter ended September 30, 2009 of $2,515,000, which were down 33%
compared with consolidated net revenues of $3,760,000 reported for the same
period last year. It was the fourth quarter of the Company’s 2009
fiscal year. Contract service revenues for the quarter were
$1,847,000, up 2% from the same period last year. Placement service revenues of
$668,000 decreased 66% from last year.
The
Company had a net loss of $69,000 or $.01 per share, in the fourth quarter of
this year, compared with a net loss of $474,000, or $.09 per share, in the
fourth quarter last year.
Commenting
on the Company's performance, Salvatore J. Zizza, CEO said, “It was an extremely
challenging environment in the staffing industry, particularly for full-time
placement services. Employment conditions in the United States
continued to deteriorate during the quarter, as 700,000 Americans lost their
jobs and the national unemployment rate rose to 9.8%.”
Mr. Zizza
continued, “Despite the 33% decline in consolidated net revenues, we were able
to reduce the quarterly net loss by 85% by controlling costs. On July
1st we
implemented a major restructuring of corporate and field operations, and
throughout the fourth quarter we continued to take actions to reduce and control
our cost structure. As a result, we reduced our selling, general and
administrative expenses by 56% from the same quarter last year. As a result, we
were able to reduce the quarterly net loss to $69,000.”
Fiscal Year
Results
For the
year ended September 30, 2009, the Company had a net loss of $4,228,000, or $.58
per share, compared with a net loss of $1,806,000, or $.35 per share, for the
same period last year. Consolidated net revenues for year were $10,394,000, down
32% compared with $15,235,000 last year.
During
the year ended September 30, 2009, the Company recorded additional compensation
expense of $1,070,000 under a consulting agreement with the Company’s former
Chairman, Chief Executive Officer and President (the “former CEO”) that became
effective on July 1, 2009. Under the consulting agreement, the
former CEO resigned from those positions and his employment agreement with the
Company was terminated, and the Company became obligated to make monthly
payments over a five-year period and to issue 500,000 shares of common stock to
the former CEO. The additional compensation expense is included in
selling, general and administrative expenses on the consolidated statement of
operations. The results for the year also include a provision for the
cost of closing branch offices of $330,000. During the period, the
Company consolidated ten branch offices in four metropolitan areas.
Excluding
the provision for additional compensation and the provision for the cost of
closing branch offices, the Company’s net loss for the year was $2,828,000, or
$.39 per share.
Business
Information
General
Employment provides professional staffing services, 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.
Forward-Looking
Statements
The
statements made in this press release which are not historical facts are
forward-looking statements. Such forward-looking statements often
contain or are prefaced by words such as “will” and “expect.” As a result of a
number of factors, our actual results could differ materially from those set
forth in the forward-looking statements. Certain factors that might cause our
actual results to differ materially from those in the forward-looking statements
include, without limitation, those factors set forth under the heading
“Forward-Looking Statements” in our annual report on Form 10-KSB for the fiscal
year ended September 30, 2008, and in our other filings with the SEC. General
Employment is under no obligation to (and expressly disclaims any such
obligation to) and does not intend to update or alter its forward-looking
statements whether as a result of new information, future events or
otherwise.
GENERAL EMPLOYMENT
ENTERPRISES, INC.
CONSOLIDATED STATEMENT OF
OPERATIONS
(In
Thousands, Except Per Share)
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Three
Months
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Year
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|||||||||||||||
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Ended
September 30
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Ended
September 30
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|||||||||||||||
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2009
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2008
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2009
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2008
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|||||||||||||
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Net
revenues:
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||||||||||||||||
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Contract
services
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$ | 1,847 | $ | 1,811 | $ | 6,280 | $ | 7,476 | ||||||||
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Placement
services
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668 | 1,949 | 4,114 | 7,759 | ||||||||||||
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Net
revenues
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2,515 | 3,760 | 10,394 | 15,235 | ||||||||||||
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Cost
of contract services
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1,281 | 1,221 | 4,374 | 5,037 | ||||||||||||
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Selling,
general and administrative expenses (1)
(2)
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1,303 | 2,986 | 10,198 | 12,041 | ||||||||||||
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Loss
from operations
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(69 | ) | (447 | ) | (4,178 | ) | (1,843 | ) | ||||||||
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Investment
income (loss)
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— | (27 | ) | (50 | ) | 37 | ||||||||||
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Net
loss (3)
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$ | (69 | ) | $ | (474 | ) | $ | (4,228 | ) | $ | (1,806 | ) | ||||
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Average
number of shares - basic and diluted
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13,369 | 5,165 | 7,232 | 5,163 | ||||||||||||
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Net
loss per share - basic and diluted
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$ | (.01 | ) | $ | (.09 | ) | $ | (.58 | ) | $ | (.35 | ) | ||||
________________________________________
(1) During
the year ended September 30, 2009, the Company recorded additional compensation
expense of $1,070,000 under a consulting agreement with the Company’s former
Chairman, Chief Executive Officer and President (the “former CEO”) that became
effective on July 1, 2009. Under the consulting agreement, the former
CEO resigned from those positions and his employment agreement with the Company
was terminated, and the Company became obligated to make monthly payments over a
five-year period and to issue 500,000 shares of common stock to the former
CEO. The additional compensation expense is included in selling,
general and administrative expenses for the twelve months ended September 30,
2009, and it is comprised of a liability for the future payments in the amount
of $790,000 and additional common stock in the amount of $280,000.
(2) Selling,
general and administrative expenses for the twelve months ended September 30,
2009 include a provision for the cost of closing branch offices of
$330,000. During the period, the Company consolidated ten branch
offices into four branch offices in four metropolitan areas.
(3) There
were no credits of income taxes as a result of the pretax losses during the
periods, because there was not sufficient assurance that future tax benefits
would be realized.
GENERAL EMPLOYMENT
ENTERPRISES, INC.
NON-GAAP RESULTS OF
OPERATIONS AND RECONCILIATION
(In
Thousands, Except Per Share)
The
Company's results of operations, excluding the additional compensation expense
under the consulting agreement and excluding the provision for the cost of
closing offices from selling, general and administrative expenses, are shown in
the table below. Management believes that this information provides a
meaningful measurement of the results of operations on an ongoing basis, without
the one-time charges.
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Three
Months
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Year
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|||||||||||||||
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Ended
September 30
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Ended
September 30
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|||||||||||||||
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2009
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2008
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2009
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2008
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|||||||||||||
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Net
revenues:
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||||||||||||||||
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Contract
services
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$ | 1,847 | $ | 1,811 | $ | 6,280 | $ | 7,476 | ||||||||
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Placement
services
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668 | 1,949 | 4,114 | 7,759 | ||||||||||||
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Net
revenues
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2,515 | 3,760 | 10,394 | 15,235 | ||||||||||||
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Cost
of contract services
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1,281 | 1,221 | 4,374 | 5,037 | ||||||||||||
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Selling,
general and administrative expenses (4)
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1,404 | 2,986 | 8,798 | 12,041 | ||||||||||||
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Loss
from operations
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(170 | ) | (447 | ) | (2,778 | ) | (1,843 | ) | ||||||||
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Investment
income (loss)
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— | (27 | ) | (50 | ) | 37 | ||||||||||
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Net
loss
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$ | (170 | ) | $ | (474 | ) | $ | (2,828 | ) | $ | (1,806 | ) | ||||
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Average
number of shares - basic and diluted
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13,369 | 5,165 | 7,232 | 5,163 | ||||||||||||
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Net
loss per share - basic and diluted
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$ | (.01 | ) | $ | (.09 | ) | $ | (.39 | ) | $ | (.35 | ) | ||||
________________________________________
(4) A
reconciliation of selling, general and administrative expenses is as
follows:
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Three
Months
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Year
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|||||||||||||||
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Ended
September 30
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Ended
September 30
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2009
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2008
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2009
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2008
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Non-GAAP
expenses
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$ | 1,404 | $ | 2,986 | $ | 8,798 | $ | 12,041 | ||||||||
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Additional
compensation under consulting agreement
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(55 | ) | — | 1,070 | — | |||||||||||
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Provision
for cost of closing offices
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(46 | ) | — | 330 | — | |||||||||||
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As
reported
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$ | 1,303 | $ | 2,986 | $ | 10,198 | $ | 12,041 | ||||||||
GENERAL EMPLOYMENT
ENTERPRISES, INC.
SUMMARIZED CONSOLIDATED
BALANCE SHEET INFORMATION
(In
Thousands)
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September
30
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September
30
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2009
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2008
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Assets:
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||||||||
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Cash
and cash equivalents
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$ | 2,810 | $ | 4,165 | ||||
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Other
current assets
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1,287 | 1,627 | ||||||
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Total
current assets
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4,097 | 5,792 | ||||||
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Property
and equipment, net
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570 | 791 | ||||||
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Other
assets
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— | 419 | ||||||
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Total
assets
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$ | 4,667 | $ | 7,002 | ||||
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Liabilities
and shareholders' equity:
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||||||||
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Current
liabilities
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$ | 1,488 | $ | 1,507 | ||||
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Other
liabilities
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575 | 419 | ||||||
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Shareholders'
equity
(5)
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2,604 | 5,076 | ||||||
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Total
liabilities and shareholders' equity
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$ | 4,667 | $ | 7,002 | ||||
________________________________________
(5) During
the year ended September 30, 2009, the Company recorded the sale of 7,700,000
newly-issued shares of common stock to PSQ, LLC for $1,925,000 in cash, pursuant
to a Securities Purchase and Tender Offer Agreement that had been entered into
by the Company on March 30, 2009. The net proceeds to the Company
from the share issuance , after deducting related costs, were
$1,384,000.