Revenue up 85% in Q2 2018 for GEE Group
GEE Group Inc. has released its results for the second quarter ended 31st March 2018.
The company reported consolidated revenue of approximately $39.9m, up 85%, for the fiscal second quarter ended 31st March 2018, compared to revenue of approximately $21.6m for the fiscal second quarter ended 31st March 2017. Contract staffing services contributed approximately $34.5m or approximately 87% of consolidated revenue, up by approximately 72% over the comparable prior year second quarter, and direct hire placement services contributed approximately $5.3m or approximately 13% of consolidated revenue, up by approximately 253% over the second quarter of fiscal 2017. This compares to the fiscal 2017 second quarter contract staffing services revenue of approximately $20.1m or approximately 93% of consolidated revenue and direct hire placement revenue of approximately $1.5m+6 or approximately 7% of consolidated revenue respectively for the 2017 fiscal second quarter.
GEE Group's overall staffing services gross profit margin, including direct placement services (recorded at 100% gross margin) for the 2018 fiscal second quarter, was approximately 34.2% versus approximately 26.2% for the comparable 2017 prior year fiscal second quarter.
The company's selling, general and administrative expenses (SG&A) for the fiscal second quarter ended 31st March 2018 increased as a percentage of revenue and was approximately 29.8% compared to approximately 22.3% of revenue for the fiscal second quarter ended 31st March 2017. SG&A increased by approximately $7.1m from the 2017 fiscal second quarter to approximately $11.9m for the 2018 fiscal second quarter.
GEE Group recorded GAAP income from operations of approximately $15,000 for the fiscal second quarter ended 31st March 2018, compared to GAAP income from operations of approximately $327,000 for the fiscal second quarter ended 31st March 2017. GAAP net loss for the fiscal second quarter ended 31st March 2018 was approximately $2.8m, compared to GAAP net loss for the fiscal second quarter ended 31st March 2017 of approximately $129,000.
Higher interest expense and the amortization of intangible assets related to the fiscal third quarter 2017 acquisition of the SNI companies contributed to the lower GAAP income from operations and the increase in GAAP net loss for the fiscal 2018 second quarter compared with the fiscal 2017 second quarter.
The company's adjusted earnings before interest, taxes, depreciation, amortization, noncash stock and stock option expenses, acquisition, integration, and restructuring expenses (adjusted EBITDA, a non-GAAP financial measure) was approximately $2.02m for the fiscal second quarter ended 31st March 2018, compared to approximately $1.04m for the fiscal second quarter ended 31st March 2017.
Derek E. Dewan, chairman and chief executive officer of GEE Group, commented, "The Company gained momentum across all of its lines of business late in the second quarter that carried over into April. We are optimistic that it will continue for the remainder of GEE's fiscal year ending September 30, 2018."
"We are encouraged about the increased use of contingent labor in the 'gig economy'. Secular changes in the workforce coupled with a very tight domestic job market are driving the demand for all of our services. GEE's enhanced service capability in providing professional staffing services and human resource solutions together with its expanded geographic footprint will help the Company achieve continued growth in revenue and profitability while providing outstanding customer service and rewarding careers for our employees and associates."
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