General Employment Reports First Quarter Results
OAKBROOK TERRACE, Ill., Jan. 29 /PRNewswire-FirstCall/ -- General Employment Enterprises, Inc. (Amex: JOB) reported net income of $296,000, or $.06 per share, for the quarter ended December 31, 2006, compared with net income of $128,000, or $.02 per share, for the same quarter last year.
The Company's consolidated net revenues for the quarter were $4,844,000, up 3% from $4,713,000 last year. Contract service revenues of $2,200,000 were down 17% from last year, while placement service revenues of $2,644,000 increased 27%.
Commenting on the Company's performance, Herbert F. Imhoff, Jr., board chairman and CEO said, "The quarter's revenue mix showed continuing improvement in the demand for our placement services, while the use of contract services decreased. The higher placement service revenues were the result of a 10% increase in the number of placements and a 17% increase in the average placement fee. Contract service revenues decreased because of a 20% decline in the number of billable contract hours."
Mr. Imhoff added, "Because placement services have a higher profit margin than contract services, there was a marked improvement in profitability for the quarter. Income from operations was up 151%. That increase, together with higher investment income, resulted in a quarterly net income that was more than double the same period last year."
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 Ended December 31 2006 2005 Net revenues: Contract services $2,200 $2,638 Placement services 2,644 2,075 Net revenues 4,844 4,713 Operating expenses: Cost of contract services 1,476 1,856 Selling 1,604 1,270 General and administrative 1,551 1,502 Total operating expenses 4,631 4,628 Income from operations 213 85 Investment income 83 43 Net income(1) $ 296 $ 128 Average number of shares: Basic 5,148 5,148 Diluted 5,334 5,369 Net income per share - basic and diluted $ .06 $ .02 (1) There was no provision for income taxes in either year 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 2006 2006 Assets: Cash and cash equivalents $5,656 $5,904 Other current assets 2,529 2,570 Total current assets 8,185 8,474 Property and equipment, net 916 801 Total assets $9,101 $9,275 Liabilities and shareholders' equity: Current liabilities $2,457 $2,423 Shareholders' equity(2) 6,644 6,852 Total liabilities and shareholders' equity $9,101 $9,275 (2) During the quarter ended December 31, 2006, the board of directors declared a cash dividend of $.10 per common share, resulting in a $515,000 charge to retained earnings during the period.
SOURCE General Employment Enterprises, Inc.
Released January 29, 2007