General Employment Reports Third Quarter and Nine Month Results

General Employment Reports Third Quarter and Nine Month Results

OAKBROOK TERRACE, Ill., July 30 /PRNewswire-FirstCall/ -- General Employment Enterprises, Inc. (Amex: JOB) 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.

                       (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.

                                (In Thousands)

                                                     June 30      September 30
                                                       2007            2006

      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

SOURCE General Employment Enterprises, Inc.