General Employment Enterprises, Inc. today announced the financial results for the first quarter ended December 31, 2012, and several other events - 14.5% REVENUE GROWTH - INCREASED PROFITABILITY - COMPLIANCE WITH NYSE MKT LLC - AMENDMENT TO ASSET PURCHASE AGREEMENT WITH RFFG OF CLEVELAND LLC - SETTLEMENT AGREEMENT AND RELEASE WITH BWC PR Newswire OAKBROOK TERRACE, Ill., April 23, 2013 OAKBROOK TERRACE, Ill., April 23, 2013 /PRNewswire/ -- General Employment Enterprises, Inc. (the "Company") (NYSE MKT: JOB) today announced the financial results for the first quarter ended December 31, 2012, and several other events. Net revenues for the first quarter ended December 31, 2012, increased over 14.5% to approximately $14.6 million, compared to approximately $12.8 million for the same period in the prior year. The increase in revenue was due to a significant increase in revenue from contract services and direct hire placements, which was partially offset by the loss of a major customer in the Agriculture division. The increase in contract services was attributable to Hurricane Sandy cleanup efforts, the opening of a new office and growing our customer base. Cost of contract services for the first quarter ended December 31, 2012, increased by approximately 12% to approximately $10.4 million compared with the prior period of approximately $9.3 million. The overall increase in cost of contract services was directly related to the increase in revenue. The decrease of approximately 1.6% of cost of contract services as a percentage of contract services revenue was related to the increase in Professional Contract services and the decrease in the agricultural business, the amount was slightly off-set by an increase of Industrial Contract services to one customer that has a lower than average margin. With the filing of the financial statements for the first quarter ended December 31, 2012, on form 10-Q, the Company received notice from the NYSE MKT LLC ("NYSE MKT" or the "Exchange") staff stating that the Company has resolved the continued listing deficiency with respect to Sections 134 and 1101 of the NYSE MKT Company Guide referenced in a the Exchange's letter dated February 21, 2013. On April 22, 2013 the Company finalized an Amendment to the Asset Purchase Agreement by and among DMCC Staffing, LLC, an Ohio limited liability company, RFFG of Cleveland, LLC an Ohio limited liability company (each a "Seller" and together, "Sellers"), General Employment Enterprises, Inc., an Illinois corporation ("Parent"), and Triad Personnel Services, Inc., an Illinois corporation and wholly owned subsidiary of Parent ("Buyer"). In summary, the Company has agreed to pay Sellers additional cash consideration of between $550,000 and $650,000 depending on payment schedule and 1,100,000 shares of Parent common stock, which at the time was valued at approximately $320,000 for full satisfaction of all amounts owed to Seller, related to the Asset Purchase Agreement. The Company completed a settlement with WORKERS COMP CLAIMS BWC PREMIUM CLAIMS ("BWC") with the payment of $56,501.05 on April 15, 2013. BWC and its agents, attorneys, representatives and assigns, released and forever discharged BMPS, Inc., Triad Personnel Services, Inc., and the Company from any and all claims, rights, demands, actions, causes of action, debts and liabilities, whether fixed or contingent, matured or unmatured, anticipated or unanticipated, known or unknown, arising out of or in any way connected with any successor claim involving RFFG or Cleveland, LLC and Ameritemps owed to the BWC and/or BWC Policy/Risk No. 1570005-01. Michael Schroering, Chief Executive Officer of General Employment Enterprises, Inc., commented, "Since joining the Company late last year we have been working to clean up the past issues, while also growing the Company. This hard work is beginning to show in our financial results and with the resolution of these issues. Management will continue our strategic initiatives that are intended to return General Employment Enterprises to sustained profitability and rapidly grow the Company over the next three years." Andrew J. Norstrud, Chief Financial Officer of General Employment Enterprises, Inc., commented, "During tough economic conditions we were able to continue to grow the Company and maintain profitability. Our general and administrative expenses are expected to be significantly higher than usual in the second quarter ended March 31, 2013, due to the significant professional fees incurred, including, but not limited to audit fees, consulting fees and legal fees of more than $500,000." Mr. Norstrud also commented, "We are now able to move on to the future and can focus our efforts on our strategic business plan." Business Information General Employment Enterprises, Inc. (the "Company") was incorporated in the State of Illinois in 1962 and is the successor to employment offices doing business since 1893.The Company's segments consist of the following: (a) professional placement services specializing in the placement of information technology, engineering, and accounting professionals for direct hire and contract staffing, (b) temporary staffing services in the agricultural industry and (c) temporary staffing services in light industrial staffing. Forward-Looking Statements The statements made in this press release which are not historical facts, including the preliminary financial results, 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-K for the fiscal year ended September 30, 2011, 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. -Tables Follow- GENERAL EMPLOYMENT ENTERPRISES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (In Thousands, Except Per Share Data) Three Months Ended December 31, 2012 2011 NET REVENUES: Contract staffing services $ 12,487 $ 10,907 Direct hire placement services 2,156 1,873 NET REVENUES 14,643 12,780 Cost of contract services 10,437 9,322 Selling, general and administrative expenses 3,871 3,283 Amortization of intangible assets 79 100 INCOME FROM OPERATIONS 256 75 Interest expense (70) (52) NET INCOME $ 186 $ 23 NET INCOME PER SHARE - BASIC $ 0.01 $ 0.00 NET INCOME PER SHARE - DILUTED $ 0.01 $ 0.00 WEIGHTED AVERAGE NUMBER OF SHARES - BASIC 21,699 21,699 WEIGHTED AVERAGE NUMBER OF SHARES - DILUTED 22,107 21,928 GENERAL EMPLOYMENT ENTERPRISES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (In Thousands) December 31, September 30, 2012 2012 ASSETS CURRENT ASSETS: Cash $ 247 $ 364 Accounts receivable, less allowances (December 7,611 6,761 - $220; September - $259) Other 216 246 Total current assets 8,074 7,371 Property and equipment, net 563 518 Goodwill 1,106 1,106 Intangible assets, net 2,125 2,204 TOTAL ASSETS $ 11,868 $ 11,199 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Short-term debt $ 3,095 $ 2,404 Accounts payable 121 173 Accrued compensation 2,952 3,068 Other current liabilities 1,216 1,196 Total current liabilities 7,384 6,841 Long-term liabilities 191 253 Commitments and Contingencies SHAREHOLDERS' EQUITY Preferred stock; authorized - 100 shares; no - - par value;issued and outstanding - none Common stock, no-par value; authorized - 50,000 shares; issued and outstanding - 21,699 shares 10,455 10,453 at December 31, 2012 and September 30, 2012 Accumulated deficit (6,162) (6,348) Total Shareholders' Equity 4,293 4,105 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 11,868 $ 11,199 SOURCE General Employment Enterprises, Inc. Website: http://www.generalemployment.com Contact: Michael K. Schroering, Chairman of the Board & Chief Executive Officer, (630) 954-0400, Fax, (630) 954-0595, email@example.com
General Employment Enterprises, Inc. today announced the financial results for the first quarter ended December 31, 2012, and
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