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Good Start For General Employment Enterprises

Good Start For General Employment Enterprises

General Employment Enterprises, Inc has 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."


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