General Employment Announces Results for the Fiscal 2016 First Quarter
Adjusted EBITDA of $942,000; Revenue up 82% to $17.6 Million
(firmenpresse) - NAPERVILLE, IL -- (Marketwired) -- 02/16/16 -- (NYSE MKT: JOB) ("the Company" or "General Employment"), a provider of professional staffing services and solutions, today announced results for the first quarter ended December 31, 2015.
Revenue for the fiscal 2016 first quarter was $17.6 million up 82% over the first quarter of fiscal 2015. Contract staffing services contributed $16 million or 91% of revenue and direct placement services contributed $1.6 million or 9% of revenue. This compares to contract staffing services of $8.2 million or 85% of revenue and direct placement services of $1.5 million or 15% of revenue respectively for the same quarter of fiscal 2015. Revenue from the combined professional contract and professional direct placement services revenue which is comprised of staffing and solutions in the information technology, engineering, healthcare and finance & accounting specialties was $11.6 million and represents 66% of total revenue for the 2016 first quarter compared to $3.1 million or 33% of total revenue for first quarter of 2015. The revenue mix shift is due to the execution of the Company''s strategic plan to focus on the higher margin professional staffing and solutions services sectors through organic growth and acquisitions.
Gross margin for the first quarter ended December 31, 2015 ( including direct placement services) was 30% compared to approximately 28.3% (as adjusted for an Ohio workers compensation rebate; gross margin 31.1% with rebate) for the first quarter ended December 31, 2014. Professional contract staffing services gross margin (excluding direct placement services) for the 2016 first quarter was 29.6% compared to 33.7% for the 2015 first quarter. The change in professional contract staffing services gross margin was primarily due to increased revenue, specialty revenue mix change and gross margin differential from revenue contributed by acquisitions. Industrial contract services gross margin for the 2016 first quarter was 11.7% compared to approximately 11% (as adjusted for an Ohio workers compensation rebate; 15.2% gross margin with rebate) for the 2015 first quarter.
Selling, general and administrative expenses (SG&A) as a percentage of revenue for the 2016 first quarter was approximately 25.6% compared to 31% of revenue for the 2015 first quarter; a decline of approximately 5.4 percentage points.
Adjusted earnings before interest, taxes, depreciation, amortization, noncash stock and stock option expense, acquisition, merger & integration expenses and loss on change in derivative liability (adjusted EBITDA, a non-GAAP financial measure) for the first quarter ended December 31, 2015 was approximately $942,000 vs. approximately $59,000 for the comparable prior year first quarter.
Adjusted net working capital as of December 31, 2015 and the adjusted current ratio (non-GAAP financial measures) were approximately $1.5 million and 1.1 respectively compared to an adjusted negative net working capital and adjusted current ratio of approximately $1 million and .86 as of December 31, 2014. The 2016 first quarter adjusted net working capital and adjusted current ratio were computed eliminating $1.5 million in potential noncash payments (earn outs and purchase price adjustments payable in the Company''s common stock) included in current liabilities on General Employment''s balance sheet as of December 31, 2015. The adjusted negative net working capital and adjusted current ratio for the first quarter of 2015 was computed by eliminating a noncash derivative liability (related to convertible debt) of approximately $3.2 million included in current liabilities on the Company''s balance sheet as of December 31, 2014.
Shareholders'' equity as of December 31, 2015 was approximately $21.8 million up from a deficiency of approximately $1.3 million as of December 31, 2014.
The Company reported consolidated revenue of $17.6 million for the first quarter ended December 31, 2015 up 82% as compared to revenue of $9.7 million for the first quarter ended December 31, 2014. Contract staffing services contributed $16 million or 91% of consolidated revenue and direct placement services contributed $1.6 million or 9% of consolidated revenue for the 2016 first quarter versus $8.2 million or 85% of consolidated revenue and $1.5 million or 15% of consolidated revenue respectively for the 2015 first quarter. The increase in contract staffing services revenue of $7.8 million for the first quarter ended December 31, 2015 over the comparable prior year first quarter was primarily due to an increase of approximately $8.3 million in professional contract staffing services revenue including significant contributions from the acquisitions made during the fiscal year ended September 30, 2015 and the first quarter of 2016. The professional contract services revenue for the quarter includes staffing and solutions in the information technology, engineering, healthcare and finance and accounting specialties. General Employment''s strategic plan contemplates both internal and acquisition growth in the aforementioned higher margin and more profitable professional services sectors of staffing. Industrial contract services revenue for the 2016 first quarter was $6 million compared to $6.5 million for the 2015 first quarter. The decrease in revenue of approximately $500,000 was attributed to the Company''s focus on improved profitability and movement away from lower margin and less profitable staffing customers.
General Employment''s overall contract staffing services gross profit margin including direct placement services (recorded at 100% gross margin) for the first quarter ended December 31, 2015 was 30% versus approximately 28.3% (as adjusted for an Ohio workers compensation rebate which lowered the cost of contract services in the industrial staffing segment; overall gross margin with the rebate included was approximately 31.1%) for first quarter ended December 31, 2014. Professional contract staffing services gross margin (excluding direct placement services) was 29.6% for the 2016 first quarter compared to 33.7% for the 2015 first quarter. The change in professional contract staffing services gross margin was primarily due to increased revenue, specialty revenue mix composition (information technology, engineering, healthcare and finance and accounting) and gross margin differential from revenue contributed by acquisitions which may have a lower gross margin percentage but a higher dollar gross profit spread (the difference between the bill rates and pay rates) which contributed to greater profitability in professional contract staffing services for the 2016 first quarter versus the 2015 first quarter. The Company''s industrial staffing services gross margin for the 2016 first quarter was 11.7% versus 15.2% for the 2015 first quarter which includes the impact of a significant Ohio workers compensation rebate received which lowered workers compensation expense in that quarter. Without the Ohio workers compensation rebate included in the gross margin computation, the first quarter 2015 industrial staffing services gross margin would be approximately 11.0%.
The Company''s selling, general and administrative expenses (SG&A) for the first quarter ended December 31, 2015 declined as a percentage of revenue and was approximately 25.6% compared to 31% of revenue for the first quarter ended December 31, 2014. The Company''s increase in revenue for the 2016 first quarter, elimination of duplicative costs and expense controls put in place during the quarter and the prior fiscal year contributed to the economies of scale. SG&A increased by approximately $1.5 million to approximately $4.5 million for the 2016 first quarter compared to approximately $3 million for the first quarter ended December 31, 2014. The increase in SG&A in the 2016 first quarter was primarily related to the inclusion of selling, general and administrative expenses of the acquired companies (Scribe Solutions, Agile & Access Data) and an increase of approximately $110,000 over the 2015 first quarter in noncash stock and stock option compensation expenses.
General Employment''s adjusted earnings before interest, taxes, depreciation, amortization, noncash stock and stock option expense, acquisition, integration and restructuring expenses and loss on change in derivative liability (adjusted EBITDA, a non-GAAP financial measure) was approximately $942,000 for the first quarter ended December 31, 2015 compared to $59,000 for the first quarter ended December 31, 2014.
General Employment recorded a GAAP loss from operations of approximately $69,000 for the first quarter ended December 31, 2015 compared to a GAAP loss from operations of approximately $145,000 for the first quarter ended December 31, 2014. After eliminating the noncash stock and stock option expenses and the acquisition, integration and restructuring expenses included in the GAAP loss from operations, non-GAAP adjusted income (loss) from operations (a non-GAAP financial measure) was approximately $539,000 for the 2016 first quarter and approximately $(63,000) for the 2015 first quarter. GAAP net loss for the first quarter ended December 31, 2015 was approximately $394,000 compared to a GAAP net loss for the first quarter ended December 31, 2014 of approximately $3.4 million. After eliminating the loss on the change in derivative liability, the noncash stock and stock option expenses and the acquisition, integration and restructuring expenses included in the GAAP net loss, the Company had an adjusted non-GAAP net income (a non-GAAP financial measure) of approximately $214,000 for the first quarter ended December 31, 2015 compared to an adjusted non-GAAP net loss (a non-GAAP financial measure) of approximately $210,000 for the first quarter ended December 31, 2014.
Derek E. Dewan, Chairman and Chief Executive Officer of General Employment, commented, " We are most pleased with achieving adjusted EBITDA of approximately $942,000 for the first quarter of 2016, an 82% increase in revenue compared to the prior year first quarter and increasing our professional staffing services and solutions revenue to 66% of total revenue for the quarter. Also, with the recent addition of Dallas based Paladin Consulting we continued to build out our geographic footprint, expand our national delivery network and broaden our service offerings in the information technology, engineering and finance and accounting specialty staffing sectors as well as enhance General Employment''s capabilities in providing services to companies utilizing managed service providers (MSP) and vendor management systems (VMS)."
Mr. Dewan added, "We still see strong demand for our professional specialty staffing services and solutions propelled by a very low U.S. unemployment rate for highly skilled labor, a healthy domestic job market for many professional occupations and secular drivers fueling the increased use of flexible on demand staffing."
General Employment Enterprises, Inc. was incorporated in the State of Illinois in 1962, is a provider of specialized staffing solutions and is the successor to employment offices doing business since 1893. The Company operates in two industry segments, providing professional staffing services and solutions, and light industrial staffing services through the names of General Employment, Access Data Consulting, Agile Resources, Ashley Ellis, Triad, Omni-One and Paladin Consulting. Also, in the healthcare sector, General Employment through its Scribe Solutions brand staffs medical scribes who assist physicians in emergency departments of hospitals and in medical practices by providing required documentation for patient care in connection with electronic medical records (EMR).
In addition to historical information, this press release contains statements relating to the Company''s future results (including certain projections, pro forma financial information and business trends) that are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended, (the "Exchange Act"), and are subject to the "safe harbor" created by those sections. The statements made in this press release that are not historical facts are forward-looking statements that are predictive in nature and depend upon or refer to future events. Such forward-looking statements often contain or are prefaced by words such as "will", "may," "plans," "expects," "anticipates," "projects," "predicts," "estimates," "aims," "believes," "hopes," "potential," "intends," "suggests," "appears," "seeks," or variations of such words or similar words and expressions. Forward-looking statements are not guarantees of future performance, are based on certain assumptions, and are subject to various known risks and uncertainties, many of which are beyond the Company''s control, and cannot be predicted or quantified and consequently, as a result of a number of factors, the Company''s actual results could differ materially from those expressed or implied by such forward-looking statements. Certain factors that might cause the Company''s actual results to differ materially from those in the forward-looking statements include, without limitation: (i) the loss, default or bankruptcy of one or more customers; (ii) changes in general, regional, national or international economic conditions; (iii) an act of war or terrorism or cyber security breach that disrupts business; (iv) changes in the law and regulations; (v) the effect of liabilities and other claims asserted against the Company; (vi) changes in the size and nature of the Company''s competition; (vii) the loss of one or more key executives; (viii) increased credit risk from customers; (ix) the Company''s failure to grow internally or by acquisition or the failure to successfully integrate acquisitions; (x) the Company''s failure to improve operating margins and realize cost efficiencies and economies of scale ; (xi) the Company''s failure to attract, hire and retain quality recruiters, account managers and salesmen; (xii) the Company''s failure to recruit qualified candidates to place at customers for contract or full-time hire; and such other factors as set forth under the heading "Forward-Looking Statements" in the Company''s annual reports on Form 10-K, its quarterly reports on Form 10-Q and in the Company''s other filings with the Securities and Exchange Commission (SEC). More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company''s filings with the SEC. Investors and security holders are urged to read these documents free of charge on the SEC''s web site at . The Company is under no obligation to (and expressly disclaims any such obligation to) and does not intend to publicly update, revise or alter its forward-looking statements whether as a result of new information, future events or otherwise.
General Employment Enterprises, Inc.
Andrew J. Norstrud
813.803.8275
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Datum: 16.02.2016 - 05:00 Uhr
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