GEE Group Reports $692,000 Net Loss, Revenue Decline Amid Staffing Industry Challenges

GEE Group Inc. reported a net loss of $692,000 for the first fiscal quarter ending December 31, 2024, a decrease from a net loss of $1,555,000 in the same period the previous year. The company's total revenues fell by 15% to $26.0 million, down from $30.6 million in the prior year. This decline was primarily attributed to adverse economic conditions affecting the staffing industry, which has seen a significant reduction in job orders and qualified candidates available for placement. Contract staffing services, which accounted for approximately 90% of total revenues, decreased by 15% to $23.5 million, while direct hire placement services dropped 18% to $2.5 million.

In terms of operational performance, GEE Group's gross profit margin remained relatively stable, increasing slightly to 31.9% from 31.8% year-over-year. The company reported a loss from operations of $781,000, an improvement from the $1.7 million loss recorded in the same quarter of 2023. This improvement was largely due to a 17% reduction in selling, general, and administrative (SG&A) expenses, which totaled $8.8 million compared to $10.6 million in the prior year. The company attributed these cost reductions to strategic initiatives aimed at streamlining operations and enhancing efficiency.

GEE Group's workforce as of December 31, 2024, remained stable, with no significant changes in employee headcount reported. The company operates 23 branch offices across 11 states, maintaining a strong presence in major U.S. cities. The company has also paused its share repurchase program, which had seen the repurchase of over 6.1 million shares, or approximately 5.4% of its outstanding shares, as management seeks to conserve cash amid uncertain market conditions.

Looking ahead, GEE Group has outlined a strategic plan that includes both organic growth and potential acquisitions. The company recently completed the acquisition of Hornet Staffing, Inc., a staffing solutions provider, for $1.5 million, which is expected to enhance its competitive position and ability to secure new business from larger clients. Management anticipates that this acquisition will contribute positively to earnings and help navigate the current economic challenges facing the staffing industry. The company remains focused on optimizing its operations and exploring further acquisition opportunities to bolster its market position.