UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Exact name of registrant as specified in its charter) ☒ QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 1-05707 GEE GROUP INC. (State or other jurisdiction of incorporation or organization) Illinois 36-6097429 (I.R.S. Employer Iden ...

Financial Data and Key Metrics Changes - For fiscal year 2022, the company reported revenue of $165.1 million, an increase of 11% compared to $148.9 million in fiscal 2021 [8][5] - The fourth quarter revenue was $41.5 million, showing a slight increase compared to the same quarter in fiscal 2021 [8] - Gross profits for the fiscal year were $61.7 million, with a gross margin of 37.4%, while the fourth quarter gross profit was $15.1 million with a margin of 36.3% [17][5] - Non-GAAP adjusted EBITDA for fiscal 2022 was $12.5 million, up 2% from fiscal 2021, with a margin of 7.5% [6][22] - The company achieved a net income of $19.6 million for fiscal 2022, compared to a near breakeven result in fiscal 2021 [20] Business Line Data and Key Metrics Changes - Contract staffing services contributed $138.5 million (84% of total revenue) for the fiscal year, while direct hire placement revenues were $26.6 million (16%) [9] - Contract staffing services revenues increased by $8.7 million (7%) year-over-year, while direct hire placement revenues rose by $7.5 million (39%) [10][11] - Professional staffing services, including both contract staffing and direct hire placement, accounted for 90% of total revenue, with revenues up 13% for the fiscal year [13][14] - Industrial staffing services revenues decreased by 8% for the fiscal year, attributed to pandemic-related conditions [15][16] Market Data and Key Metrics Changes - The demand for professional staffing services increased as the negative effects of COVID-19 lessened, leading to higher revenues in direct hire placement services [12] - The company noted a shift in hiring patterns, with full-time hires decreasing and contract hiring expected to increase during economic downturns [46][49] Company Strategy and Development Direction - The company aims to maintain a strong liquidity position with no outstanding debt and a focus on judicious cash management [27][30] - Discussions regarding stock buybacks are ongoing, with plans to address this after the earnings release [41][44] - The company is optimistic about future growth despite potential macroeconomic challenges, indicating a strategy to adapt SG&A expenses based on revenue fluctuations [50][65] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate economic uncertainties, citing past experiences during recessions [55][56] - The outlook for fiscal 2023 is cautious, with expectations that full-time hiring may not reach the levels seen in fiscal 2022 [58][62] - The company is actively recruiting talent, particularly from layoffs in the tech sector, to strengthen its workforce [60] Other Important Information - The company reported a working capital ratio of 2.7 to 1 and days' sales outstanding (DSO) of approximately 49 days [24] - Positive net cash flow from operating activities was reported at $1.4 million for the fourth quarter and $9.2 million for the fiscal year [25][26] Q&A Session Summary Question: Why was EBITDA lower and what caused SG&A to increase? - SG&A increased due to accrued additional incentive compensation and bonuses for outstanding performance [35][36] Question: Is there stock manipulation observed with large trades? - The company is unaware of any manipulation and does not have a large short position [40] Question: What will be done with the large cash position? - Discussions on stock buybacks are ongoing, and the company is not in need of cash for working capital [41][44] Question: How will recession affect the company? - The company expects to manage cash flow effectively during downturns, as staffing companies typically collect cash faster than they spend on payroll [55][56] Question: Will the company activate a buyback? - The company is considering stock buybacks and will address this after the earnings are digested [52][53] Question: What is the outlook for direct hire? - Direct hire business is expected to be at levels similar to fiscal 2018 or 2019, with a decline from the high levels of fiscal 2022 [62]

Part I [Business](index=3&type=section&id=Item%201.%20Business) GEE Group Inc, a US-based firm, provides professional and industrial human resources solutions through its two primary staffing divisions - The company provides human resources solutions, including temporary and permanent personnel, across the United States through a network of 28 branch offices and 4 virtual locations[11](index=11&type=chunk) - Services are delivered through two primary operating segments: Professional Staffing Services and Industrial Staffing Services[14](index=14&type=chunk) Revenue Breakdown by Service (Fiscal Years 2022 vs. 2021) | Service Line | Fiscal 2022 Revenue % | Fiscal 2021 Revenue % | | :--- | :--- | :--- | | Professional direct hire placement | 16.1% | 12.8% | | Professional contract services | 74.2% | 75.5% | | Industrial contract services | 9.7% | 11.7% | - The company's growth strategy is twofold: organic growth by expanding services and market penetration, and strategic acquisitions of complementary businesses[17](index=17&type=chunk)[20](index=20&type=chunk) - The staffing industry is highly fragmented with low barriers to entry, featuring competitors ranging from sole proprietorships to large national firms[25](index=25&type=chunk)[27](index=27&type=chunk) - As of September 30, 2022, the company had approximately **309 regular employees** and a variable number of contract service employees, ranging from **1,880 to 2,579** during fiscal 2022[48](index=48&type=chunk) [Risk Factors](index=11&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from macroeconomic conditions, financial covenants, operational dependencies, and cybersecurity threats - The U.S. economy is facing **significant inflation and a potential recession**, which could negatively impact the company's business if the economy contracts[51](index=51&type=chunk)[52](index=52&type=chunk) - The company's **$20 million asset-based senior secured revolving credit facility** with CIT Bank contains restrictive covenants that may limit operational and financial flexibility[57](index=57&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk) - Material intangible assets, including goodwill, are subject to impairment risks, which could lead to **future material impairment charges**[62](index=62&type=chunk)[63](index=63&type=chunk) - The business requires **significant working capital** to fund the payroll of temporary workers before receiving client payments, making it vulnerable to cash shortfalls[64](index=64&type=chunk) - Success is highly dependent on retaining senior management and attracting qualified personnel in a competitive market[74](index=74&type=chunk)[76](index=76&type=chunk) - On February 1, 2022, the company detected and stopped a network security incident where an unauthorized third party gained access and encrypted systems[89](index=89&type=chunk)[91](index=91&type=chunk) - The company's ability to use its net operating loss (NOL) carryforwards may be limited by Section 382 of the Internal Revenue Code if an "ownership change" occurs[102](index=102&type=chunk)[103](index=103&type=chunk) [Unresolved Staff Comments](index=27&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) There are no unresolved staff comments to report for the period - Not applicable[135](index=135&type=chunk) [Properties](index=27&type=section&id=Item%202.%20Properties) The company leases all its office spaces, operating from 28 branch offices and 4 remote locations across eleven states - The company's policy is to lease, not purchase, its office spaces, with its headquarters in Jacksonville, Florida, under a lease expiring in 2026[136](index=136&type=chunk) - As of September 30, 2022, the company operated from **28 branch offices and 4 remote locations** in eleven states[137](index=137&type=chunk) [Legal Proceedings](index=27&type=section&id=Item%203.%20Legal%20Proceedings) The company settled two lawsuits in March 2022 for a one-time payment of $1.175 million - The company settled two lawsuits with Sands Brothers Venture Capital II, LLC on March 23, 2022[140](index=140&type=chunk) - The settlement involved a one-time payment of approximately **$1.175 million**, with the company's portion being **$975,000**, recognized as a pre-tax charge in fiscal 2022[141](index=141&type=chunk) [Mine Safety Disclosures](index=27&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company's operations - Not applicable[143](index=143&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=28&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on the NYSE American under the symbol "JOB," and no dividends were paid in fiscal 2021 or 2022 - The company's common stock is listed on the NYSE American under the symbol **"JOB"**[145](index=145&type=chunk) - **No dividends were paid** in fiscal 2022 or 2021, and none are anticipated for the foreseeable future[146](index=146&type=chunk) Securities Authorized for Issuance under Equity Compensation Plans (as of Sep 30, 2022) | Plan Category | Securities to be issued upon exercise (thousands) | Weighted average exercise price | Securities remaining available for future issuance (thousands) | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 3,619 | $1.24 | 9,931 | [[Reserved]](index=28&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Fiscal 2022 revenue grew 11% to $165.1 million, while net income surged to $19.6 million due to PPP loan forgiveness and lower interest expense Consolidated Net Revenues (Fiscal 2022 vs. 2021) | Revenue Source | 2022 ($ thousands) | 2021 ($ thousands) | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Professional contract services | 122,562 | 112,470 | 10,092 | 9% | | Industrial contract services | 15,945 | 17,332 | (1,387) | -8% | | **Total contract services** | **138,507** | **129,802** | **8,705** | **7%** | | Direct hire placement services | 26,605 | 19,078 | 7,527 | 39% | | **Consolidated net revenues** | **165,112** | **148,880** | **16,232** | **11%** | - The combined gross profit margin increased to **37.4%** in fiscal 2022 from 35.3% in fiscal 2021, mainly due to a higher mix of 100% margin direct hire placement revenue[166](index=166&type=chunk) - SG&A expenses increased to **$51.9 million** (31% of revenue) in fiscal 2022 from $41.7 million (28% of revenue) in fiscal 2021, driven by higher incentive compensation and one-time charges[169](index=169&type=chunk) - A non-cash goodwill impairment charge of **$2.15 million** was recognized in the first quarter of fiscal 2022[173](index=173&type=chunk) - Net income for fiscal 2022 was **$19.6 million**, a significant increase from $6,000 in fiscal 2021, primarily driven by a **$16.8 million gain on the forgiveness of PPP loans** and a **$5.5 million decrease in interest expense**[178](index=178&type=chunk) Consolidated Cash Flow Data (Fiscal 2022 vs. 2021) | Cash Flow Activity | 2022 ($ thousands) | 2021 ($ thousands) | | :--- | :--- | :--- | | Cash flows provided by operating activities | 9,229 | 370 | | Cash flows used in investing activities | (328) | (126) | | Cash flows used in financing activities | - | (4,371) | - Working capital increased substantially to **$26.6 million** as of September 30, 2022, from $2.5 million a year prior, mainly due to strong cash flow and PPP loan forgiveness[180](index=180&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not applicable to the company - Not applicable[223](index=223&type=chunk) [Financial Statements and Supplementary Data](index=40&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section provides an index to the company's consolidated financial statements and independent auditor reports - This item serves as an index to the detailed Consolidated Financial Statements and Supplementary Data, which are located in the latter part of the report, starting on page F-1[224](index=224&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=53&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) There were no changes in or disagreements with the company's accountants - None[357](index=357&type=chunk) [Controls and Procedures](index=54&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of September 30, 2022 - Management, including the CEO and PFO, concluded that the company's disclosure controls and procedures and internal control over financial reporting were **effective** as of September 30, 2022[357](index=357&type=chunk)[360](index=360&type=chunk)[361](index=361&type=chunk) - Following a network security incident on February 1, 2022, an investigation was conducted and **no material weaknesses** in internal controls were identified as a result[362](index=362&type=chunk)[364](index=364&type=chunk) [Other Information](index=55&type=section&id=Item%209B.%20Other%20Information) There is no other information to report under this item - None[365](index=365&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=55&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The company is led by a combined Chairman/CEO, an independent board, and five standing committees, all governed by a Code of Ethics - The executive officers include Derek E. Dewan (CEO), Alex Stuckey (COO), and Kim Thorpe (CFO)[368](index=368&type=chunk) - The Board of Directors has determined that all directors, except for CEO Derek E. Dewan, are **independent** under NYSE American listing standards[393](index=393&type=chunk) - The company combines the roles of Chairman of the Board and CEO, held by Mr. Dewan, believing it enables decisive leadership and clear accountability[389](index=389&type=chunk) - The Board has five standing committees: Nominating, Audit, Corporate Governance, Mergers and Acquisitions, and Compensation[395](index=395&type=chunk) - The company has adopted a Code of Ethics for all directors and employees to promote honest conduct and compliance with laws[420](index=420&type=chunk) [Executive Compensation](index=62&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation in fiscal 2022 featured base salaries, performance bonuses, and equity awards under a new incentive program Summary Compensation Table (Fiscal 2022) | Name and Principal Position | Salary ($) | Bonus ($) | All Other Compensation ($) | Total ($) | | :--- | :--- | :--- | :--- | :--- | | **Derek Dewan**, CEO | 350,000 | 498,750 | 2,800 | 851,550 | | **Alex Stuckey**, COO | 250,000 | 267,188 | 2,800 | 519,988 | | **Kim Thorpe**, SVP & CFO | 270,000 | 288,563 | 2,800 | 561,363 | - The company has employment agreements with its named executive officers, which include provisions for salary, bonus eligibility, and standard termination clauses[423](index=423&type=chunk)[424](index=424&type=chunk)[425](index=425&type=chunk) - In fiscal 2022, the company adopted a formal **Annual Incentive Compensation Program (AICP)** which includes performance-based short-term cash incentives and long-term equity incentives[427](index=427&type=chunk)[428](index=428&type=chunk) - Non-employee directors were compensated with quarterly cash fees for board and committee service, with increased compensation and stock option grants beginning in fiscal 2023[434](index=434&type=chunk)[435](index=435&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=64&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) As of December 2022, directors and executives owned 5.26% of common stock, while Raffle Associates, L.P. held 7.79% Security Ownership as of December 19, 2022 | Name of Beneficial Owner | Amount of Beneficial Ownership | Percent of Class | | :--- | :--- | :--- | | Derek Dewan (CEO) | 2,091,017 | 1.83% | | Alex Stuckey (COO) | 1,666,624 | 1.46% | | Current directors and executive officers as a group (9 individuals) | 6,018,525 | 5.26% | | Raffle Associates, L.P. (5% Holder) | 8,913,857 | 7.79% | [Certain Relationships and Related Transactions, and Director Independence](index=66&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Six of the seven board members are independent, and no material related party transactions were reported beyond executive compensation and director stock purchases - The Board has determined that six directors (William Isaac, Darla Moore, Carl Camden, Matthew Gormly, Thomas Vetrano, and Peter Tanous) are **independent**[442](index=442&type=chunk) - In April 2021, six directors and officers collectively acquired **678,765 shares** of common stock by participating in the company's follow-on public offering or through open market purchases[445](index=445&type=chunk) [Principal Accountant Fees and Services](index=66&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) FORVIS, LLP served as the independent auditor for fiscal 2022, with total fees of approximately $276,000 for audit and related services - FORVIS, LLP was engaged as the independent registered public accounting firm for fiscal year 2022, succeeding Friedman, LLP[446](index=446&type=chunk) Accountant Fees (Fiscal 2022 vs. 2021) | Fee Type | Fiscal 2022 ($) | Fiscal 2021 ($) | | :--- | :--- | :--- | | Audit fees | 244,000* | 212,000 | | Audit-related fees | 32,000 | 77,500 | *Fiscal 2022 includes $192,000 billed by FORVIS and $52,000 by Friedman for prior period services. - The Audit Committee's policy is to pre-approve all audit and non-audit services provided by the independent accounting firm[450](index=450&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=67&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all exhibits filed with the Form 10-K, including corporate documents, material contracts, and required certifications - This item provides a list of all exhibits filed with the annual report, including articles of incorporation, bylaws, material contracts, and required certifications[452](index=452&type=chunk)

Financial Data and Key Metrics Changes - The company reported net income of $2.6 million or $0.02 per diluted share for Q3 2022, and for the nine-month period, net income was $20.4 million or $0.18 per diluted share, compared to net losses in the same periods of the previous year [5][20]. - Consolidated revenues for Q3 2022 were $41.1 million, up 8% year-over-year, and for the nine-month period, revenues were $123.6 million, up 15% year-over-year [6][9]. - Non-GAAP adjusted EBITDA for Q3 2022 was $4.1 million, a 34% increase from the prior year, representing a 10% margin to revenue [7][22]. Business Line Data and Key Metrics Changes - Contract staffing services contributed $33.1 million (80% of revenues) for Q3 2022, with a 2% increase year-over-year, while direct placement services contributed $8 million (20% of revenues), showing a 45% increase year-over-year [9][10][11]. - Total revenues from the professional staffing services segment were $37 million, representing 90% of total revenue, with an 8% increase year-over-year [13]. - Industrial staffing services revenues were $4.1 million for Q3 2022, compared to $3.8 million in Q3 2021, indicating a slight increase despite pandemic-related challenges [15]. Market Data and Key Metrics Changes - The IT services end markets accounted for 48% of professional services business segment revenues for the nine-month period, with a 27% year-over-year increase [13]. - Other professional services markets accounted for 52% of revenues, with a 14% year-over-year increase [14]. Company Strategy and Development Direction - The company aims for sustainable growth and has a target of reaching $1 billion in sales, focusing on creating shareholder value and opportunities for employees [29][46]. - There is a strong emphasis on maintaining a clean balance sheet with no outstanding debt, which positions the company well for future growth and acquisitions [26][29]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate potential economic downturns, citing a strong labor market and ongoing demand for staffing services [56][96]. - The company is actively hiring and filling job orders, indicating a bullish outlook despite economic uncertainties [56][57]. Other Important Information - The company reported a working capital ratio of 3.0 to 1 and positive cash flow from operating activities of $3.4 million for Q3 2022 [24]. - The liquidity position is strong, with over $17 million in cash and $14 million available under a bank credit facility [29]. Q&A Session Summary Question: Why not use cash for stock buybacks? - Management indicated that while stock buybacks are considered, maintaining cash reserves for M&A opportunities is prioritized [31][33]. Question: What is the company's plan regarding undervaluation? - Management acknowledged the company's undervaluation and mentioned ongoing discussions about stock buybacks and potential acquisitions [44][66]. Question: How much cash is needed to run operations? - The company has historically operated on $3 million to $4 million in cash, which covers payroll cycles effectively [35][36]. Question: How will acquisitions be funded? - Acquisitions will be funded through available cash, financing, or seller financing, with a focus on not over-leveraging the company [41][42]. Question: What is the outlook for the labor market? - Management noted that the labor market remains tight, with more job orders than candidates, indicating continued demand for staffing services [56][57]. Question: How does the company view competition? - The company monitors various competitors across different verticals, emphasizing its unique positioning in the market [77][78].

Financial Performance - Consolidated net revenues for the three months ended June 30, 2022, were $41,113, an increase of $3,045 or 8% compared to $38,068 for the same period in 2021[113]. - The Company's net income for the nine-month period ended June 30, 2022, was $20,388, compared to a net loss of $(2,987) for the same period in 2021, primarily due to gains from PPP loan forgiveness[149]. - Consolidated net revenues for the nine-month period ended June 30, 2022, were $123,589, representing a 15% increase from $107,429 in 2021[132]. Revenue Breakdown - Direct hire placement services revenues increased by $2,497, or approximately 45%, to $8,026 for the three months ended June 30, 2022, compared to $5,529 in the prior year[115]. - Professional contract services revenue increased by $9,649, or 12%, while direct hire placement services revenue surged by $7,494, or 60%, for the nine-month period ended June 30, 2022[131][134]. Profitability Metrics - The overall gross profit margin improved to approximately 40.1% for the three months ended June 30, 2022, up from 36.3% in the same period of 2021, largely due to a higher mix of direct hire revenues[119]. - The Company's combined gross profit margin improved to 37.7% for the nine-month period ended June 30, 2022, up from 34.7% in 2021, driven by a higher mix of direct hire revenues[138]. - Professional contract services gross margin was approximately 26.9% for the three months ended June 30, 2022, compared to 26.8% in the same period of 2021[120]. - Industrial contract services gross margin improved to approximately 16.6% for the three months ended June 30, 2022, from 15.4% in the prior year[121]. Expenses - Selling, general and administrative expenses (SG&A) increased by $1,747 for the three months ended June 30, 2022, with SG&A as a percentage of revenues rising to approximately 31% from 29% in the prior year[122]. - Selling, general and administrative expenses (SG&A) increased by $7,668 for the nine-month period ended June 30, 2022, with SG&A as a percentage of revenues rising to approximately 30% from 28% in 2021[144]. - The cost of contract services for the three months ended June 30, 2022, totaled $24,612, an increase of $370 or approximately 2% compared to $24,242 in the prior year[117]. - The cost of contract services for the nine-month period ended June 30, 2022, totaled $76,992, reflecting a 10% increase from $70,115 in 2021[136]. Operational Efficiency - The income from operations increased by $1,205 for the three months ended June 30, 2022, compared to the same period in 2021[127]. - Interest expense decreased to $96 for the three months ended June 30, 2022, down by $443 from $539 in the same period of 2021, primarily due to the retirement of the Former Credit Agreement[128]. Cash Flow and Liquidity - As of June 30, 2022, the Company had cash of $17,540, an increase of $7,593 from $9,947 as of September 30, 2021[152]. - Net cash provided by operating activities for the nine-month period ended June 30, 2022 was $7,818, compared to $(2,276) for the same period in 2021[153]. - The Company had working capital of $26,521 as of June 30, 2022, a significant increase from $2,528 as of September 30, 2021, primarily due to free cash flow generation and PPP loan forgiveness[152]. - The Company had approximately $14,317 in availability for borrowings under its CIT Facility as of June 30, 2022, with no outstanding borrowings[160]. Debt Management - The Company repaid $56,022 in aggregate outstanding indebtedness under the Former Credit Agreement on April 20, 2021, using proceeds from a public offering[156]. - The CIT Facility, established on May 14, 2021, provides a $20 million asset-based senior secured revolving credit facility, maturing on May 14, 2026[158]. Business Adaptation - The company continues to adapt its business model in response to COVID-19, including implementing flexible work-from-home arrangements and converting certain branch offices to virtual locations[116]. - Management aims to increase revenue through organic growth in professional contract services and direct hire placement, focusing on higher-margin sectors such as IT, engineering, healthcare, and finance[150]. Tax and Impairment - The effective tax rate for the nine-month periods ended June 30, 2022, and 2021, was lower than the statutory rate, primarily due to the valuation allowance on the net DTA position[148]. - The Company recognized a non-cash goodwill impairment charge of $2,150 during the nine-month period ended June 30, 2022, with no additional impairment charge taken as of June 30, 2022[145][149]. Payroll Tax Deferral - The Company deferred $3,654 in payroll taxes under the CARES Act, with $1,827 paid during the nine-month period ending June 30, 2022[167].

Financial Data and Key Metrics Changes - The company reported net income of $1.1 million or $0.01 per diluted share for Q2 2022 and $17.8 million or $0.15 per diluted share for the first half of 2022 [7][22] - Consolidated revenues were $39.6 million for Q2 2022 and $82.5 million for the first half of 2022, representing increases of 14% and 19% respectively [8][12] - Non-GAAP adjusted EBITDA for Q2 2022 was $3.4 million, up 69% year-over-year, and for the first half, it was $7.3 million, up 31% [9][24] - The company's working capital ratio at March 31, 2022, was 2.7:1, with positive cash flow from operating activities of $2.1 million for Q2 2022 [26][27] Business Line Data and Key Metrics Changes - Contract staffing services contributed $33.7 million and $70.4 million, accounting for 85% of total revenue for both Q2 and the first half of 2022 [12] - Direct placement services revenues were $5.9 million and $12 million, up 61% and 71% respectively [14] - Professional Staffing Services segment revenues were $35.9 million and $74.7 million, representing 91% of total revenue, with increases of 17% and 24% year-over-year [15] Market Data and Key Metrics Changes - IT services accounted for 47% of Professional Services Business segment revenues, up 21% year-over-year, while other professional services accounted for 53% and were up 36% [16] - Industrial staffing service revenues were $3.7 million and $7.8 million, showing a decline compared to the previous year due to pandemic-related conditions [17] Company Strategy and Development Direction - The company aims to sustain momentum from previous quarters and anticipates continued good results for the remainder of 2022, barring unforeseen events [29] - Management is considering share buybacks and smaller tuck-in acquisitions, emphasizing a cautious approach to leverage and high-interest debt [39][49] - The company is focused on enhancing profitability and exploring strategic acquisitions in high-demand sectors like IT and cybersecurity [71] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate economic conditions, noting that staffing companies often perform well during downturns [88] - The company is optimistic about revenue growth, projecting between $160 million and $165 million for the upcoming quarters [90] - Management highlighted the importance of maintaining a strong balance sheet and avoiding over-leverage in future acquisitions [84] Other Important Information - The company has no outstanding debt and a strong liquidity position with $14 million in cash and over $13 million available under its bank facility [27][29] - The company has been able to offset taxable income using net operating loss carryforwards, resulting in a near-zero tax rate [34] Q&A Session Summary Question: Tax rate explanation and realistic cash tax rate range - The tax rate is near nil due to significant NOL carryforwards, which are expected to offset taxable income for about a year and a half [34] Question: Share buybacks versus acquisitions - Management is considering share buybacks but is restricted from doing so until December 2022 due to CARES Act provisions [40] Question: Management's approach to leverage and acquisitions - The company will not over-leverage and is focused on smaller, profitable acquisitions without high-interest debt [44] Question: Reporting additional metrics - Management indicated that bill rates and other metrics are available in investor presentations and are open to further discussions [48] Question: Future growth targets and acquisition landscape - The company is focused on smaller tuck-in acquisitions and is well-positioned to pursue them without significant leverage [50][71] Question: Impact of rising interest rates and recession risks - Rising interest rates may affect acquisition financing, but the company is positioned to benefit from potential downturns [84] Question: Demand trends in IT hiring - While some tech firms are slowing hiring, the company has not seen a slowdown in demand from its client base, which is primarily in industrial sectors [85] Question: Headwinds and tailwinds facing the company - The company is well-positioned with strong leadership and talent, while economic conditions may present some headwinds [87]

Company Overview - GEE Group operates in the ~$180 billion staffing services and HR solutions industry[5] - The company's strategy involves organic growth and acquisitions of high-margin businesses[8] - GEE Group aims to reach $1 billion in U S professional revenue[31] Financial Performance - GEE Group's revenue was $162 million for the trailing twelve months (TTM) ending March 31, 2022[9] - Gross profit for the same period was $59 million, representing a 36% gross margin[9] - Non-GAAP Adjusted EBITDA was $14 million, with a 9% margin[9] - The company eliminated $127 million in high-cost debt, resulting in ~$12 million in annual interest savings[5, 18, 46] - In Q2 2022, revenue grew by 14% and professional revenue grew by 17%[38] - Q2 2022 Non-GAAP Adjusted EBITDA was $3.4 million, compared to $2.0 million in Q2 2021[38, 40, 43] Revenue Breakdown - Temporary staffing accounted for 85% of revenue, while permanent placement accounted for 15%[10, 35] - IT contributed 43% to revenue, Finance, Accounting & Office also contributed 43%, Professional Other 4%, and Light Industrial 10%[35]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q ☒ QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 1-05707 GEE GROUP INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or Illinois 36-6097429 (I.R.S. Employer Identification Number ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q ☒ QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 1-05707 GEE GROUP INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) Illinois 36-6097429 (I.R.S. Employer Iden ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-K ☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended September 30, 2021 ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File Number 1-05707 GEE GROUP INC. (Exact name of registrant as specified in its charter) | Illinois | 36-6097429 | | --- | --- | | (State or other jurisdiction of | (I.R.S. Employer | | incorporati ...